Document:

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                                                                     EXHIBIT 4.4

                                WARRANT AGREEMENT

                  WARRANT AGREEMENT, dated as of October 7, 2003 (this
"Agreement"), between Akorn, Inc., a Louisiana corporation (the "Company"), and
The John N. Kapoor Trust dtd 9/20/89 (the "Initial Holder").

                              W I T N E S S E T H:

                  WHEREAS, La Salle Bank National Association requires the
personal guaranty of the Initial Holder (the "Guaranty") in order to provide to
the Company credit facilities (the "Credit Facilities") under the credit
agreement to be entered into among the Company, Akorn (New Jersey), Inc., La
Salle Bank National Association and the financial institutions that are or may
from time to time become parties thereto (as may be amended, the "Credit
Agreement"), and the Company desires to have the Initial Holder enter into that
Guaranty;

                  WHEREAS, in consideration for having the Initial Holder enter
into the Guaranty, the Company desires to grant to the Initial Holder warrants
to purchase shares of Common Stock (as defined below);

                  WHEREAS, this Agreement governs the issuance of the Warrant
Certificates (as defined below) and the other matters as provided herein,
including, without limitation, for the purpose of defining the terms and
provisions of the Warrants (as defined below) and the respective rights and
obligations thereunder of the Company and the Initial Holder together with any
subsequent record holders thereof (together with the holders of shares of Common
Stock (or other securities) received upon exercise thereof, the "Holders").

                  NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements contained herein, the Company and the Initial Holder hereby
agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

                  "Above Market Repurchase" means any purchase (by tender or
exchange offer, open market purchase, privately negotiated purchased or
otherwise) for all or any portion of the Company's Common Stock where such
purchase is for aggregate consideration having a Fair Market Value as of the
earlier (i) the date of such purchase or (ii) the date immediately prior to the
date of the public announcement of such purchase, that exceeds the product of
(x) the aggregate number of shares being purchased, multiplied by (y) the
Current Market Value of the Common Stock on such date.

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                  "Additional Shares" has the meaning specified in Section
4.1(a)(ii) hereof.

                  "Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

                  "Available Shares" means the 12,883,000 shares of Common Stock
the Company currently has duly authorized and available to be reserved for
issuance upon exercise of the Warrants.

                  "Board" means the board of directors of the Company from time
to time.

                  "Business Day" means a day except a Saturday, Sunday or other
day on which commercial banks in The City of New York, are authorized by law to
close.

                  "Cashless Exercise" has the meaning specified in Section 3.3
hereof.

                  "Cashless Exercise Ratio" has the meaning specified in Section
3.3 hereof.

                  "Closing Date" means the date hereof.

                  "Common Stock" means the common stock, no par value per share,
of the Company, and any other capital stock of the Company into which such
Common Stock may be converted or reclassified or that may be issued in respect
of, in exchange for, or in substitution of, such Common Stock by reason of any
stock splits, stock dividends, distributions, mergers, consolidations or other
like events.

                  "Convertible Securities" means any options or warrants to
purchase or rights to subscribe for shares of Common Stock, securities by their
terms convertible into or exchangeable for shares of Common Stock, or options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities.

                  "Credit Agreement" has the meaning specified in the recitals
to this Agreement.

                  "Credit Facilities" has the meaning specified in the recitals
to this Agreement.

                  "Current Market Value" has the meaning specified in Section
3.3 hereof.

                  "Exchange Act" means the United States Securities Exchange Act

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of 1934, as amended.

                  "Excluded Issuances" means the issuance or reissuance of any
shares of Common Stock or Convertible Securities (whether treasury shares or
newly issued shares) pursuant to or in connection with (1) a dividend or
distribution on, or subdivision, combination, consolidation or reclassification
of, the outstanding Common Stock requiring an adjustment in the Exercise Price
pursuant to Section 4(a)(i), (2) any Convertible Security outstanding as of the
Closing Date, including, without limitation, the Note Warrants and the Preferred
Stock Warrants (except as otherwise provided in Section 4.1(a)(iv)(5)(D)), (3)
the exercise of Warrants, (4) the grant or exercise of any stock or stock
options to employees, directors or consultants of the Company that may be
granted to or exercised by any employee, director or consultant under any stock
option or similar benefit plan of the Company now existing or to be implemented
in the future, (5) any transaction involving the Company's issuance of
securities in connection with an acquisition (the primary purpose of which is
not to raise equity capital), (6) any transaction involving the Company's
issuance of securities in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), (7) any
issuance of securities by the Company as consideration for the acquisition of a
license by the Company, or (8) the issuance of securities pursuant to any
financing from a bank or similar financial or lending institution approved by
the Board; provided, however, that issuances of securities described in the
forgoing sub-clauses (4), (6), (7) and (8) subsequent to the Closing Date which
exceed, in the aggregate, 10% of the outstanding Common Stock of the Corporation
outstanding as of the Closing Date (as adjusted for any split, subdivision,
combination, consolidation, recapitalization or similar event with respect to
the Common Stock), as determined on a fully-diluted basis, shall not be deemed
to be Excluded Issuances.

                  "Exercise Date" means the date upon which a Holder exercises a
Warrant or Warrants in accordance with Section 3.2.

                  "Exercise Price" has the meaning specified in Section 3.1
hereof.

                  "Expiration Date" means for each Warrant, the third
anniversary of the Issue Date of such Warrant.

                  "Fair Market Value" with respect to any securities, assets or
property means the fair value thereof as determined by an independent investment
banking or appraisal firm experienced in the valuation of such securities or
property; provided that the value of any securities that trade on a national
securities exchange or inter-dealer quotation system shall be the Current Market
Value thereof as of the date such value is determined.

                  "Guaranty" has the meaning specified in the recitals to this
Agreement.

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                  "Holders" has the meaning specified in the recitals to this
Agreement.

                  "Issue Date" shall mean with respect to each Warrant, the date
of issuance of such Warrant.

                  "Laws" shall include all foreign, federal, state and local
laws, statutes, ordinances, rules, regulations, orders, judgments, decrees and
bodies of law.

                  "Note Warrants" has the meaning ascribed thereto in the
Purchase Agreement.

                  "Parent" means any Person of which the Company is a direct or
indirect subsidiary.

                  "Person" means an individual, corporation, partnership,
limited liability company, joint venture association, joint-stock company trust,
unincorporated organization, government or agency thereof.

                  "Preferred Stock Warrants" has the meaning ascribed thereto in
the Purchase Agreement.

                  "Private Placement Legend" means the legend set forth on the
Warrant Certificates in the form set forth in Section 2.3.

                  "Purchase Agreement" shall mean the Preferred Stock and Note
Purchase Agreement, dated as of September 25, 2003, by and among the Company and
the purchasers listed on the signature pages thereto.

                  "Proxy Statement" means the proxy statement distributed to the
Company's stockholders in connection with the Stockholder's Meeting.

                  "SEC" means the Securities and Exchange Commission.

                  "Securities Act" means the United States Securities Act of
1933, as amended.

                  "Stockholder Approval" shall have the meaning ascribed thereto
in the Purchase Agreement.

                  "Subscription Form" means the form on the reverse side of the
Warrant Certificate substantially in the form of Exhibit A hereto.

                  "Subsidiaries" or "Subsidiary" shall mean the collective
reference to all direct or indirect subsidiaries of the Company.

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                  "Surviving Person" means the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or a substantial part of the properties and assets of the
Company, or the Person consolidating with or merging in the Company in a merger,
consolidation or other corporate combination in which the Company is the
continuing surviving Person, but in connection with which the preferred stock or
Common Stock of the Company is exchanged, converted or reinstated into the
securities of any other Person or cash or any other property; provided, however,
if such Surviving Person is a direct or indirect subsidiary of a Person, the
parent entity shall be deemed to be a Surviving Person.

                  "Termination Date" means the date on which the Credit
Agreement is no longer in effect.

                  "Transaction" has the meaning specified in Section 4.1(b)(i)
hereof.

                  "Warrants" has the meaning specified in Section 2.1(a) hereof.

                  "Warrant Certificates" has the meaning specified in Section
2.2 hereof.

                                   ARTICLE II

                                ISSUE OF WARRANTS

         Section 2.1. Issuance of Warrants.

                  (a)      The Company hereby agrees to issue to the Initial
Holder on the Closing Date warrants (the "Warrants") to purchase from the
Company 880,000 shares of Common Stock with an exercise price equal to the
Exercise Price.

                  (b)      The Company hereby agrees that on each anniversary of
the Closing Date prior to the Termination Date, it will issue to the Initial
Holder, Warrants on the terms set forth herein to purchase from the Company the
number of shares of Common Stock equal to the product obtained by multiplying
(x) 0.08 by (y) the portion of the Credit Facilities guaranteed by the Initial
Holder.

         Section 2.2. Form of Warrant Certificates.

                  Certificates representing the Warrants (the "Warrant
Certificates") shall be in the form attached hereto as Exhibit A, shall be dated
the Issue Date and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification and such legends and endorsements stamped, printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any Laws or to conform to custom or usage.

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         Section 2.3. Restrictive Legends.

                  The Warrant Certificates shall bear the following legend on
the face thereof:

         THE SECURITIES EVIDENCED HEREBY ARE NOT TRANSFERABLE, EXCEPT IN
         ACCORDANCE WITH THE WARRANT AGREEMENT.

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

                                   ARTICLE III

    EXERCISE PRICE, EXERCISE, REPURCHASE OF WARRANTS AND REGISTRATION RIGHTS

         Section 3.1. Exercise Price.

                  Each Warrant Certificate shall initially entitle the Holder
thereof, subject to the provisions of this Agreement, to purchase the number of
shares of Common Stock indicated thereon at a per share purchase price (the
"Exercise Price") equal to $1.10, subject to adjustment as provided in Section
4.1 and Article V hereof.

         Section 3.2. Exercise; Restrictions on Exercise.

                  At any time after the Issue Date and prior to 5:00 p.m. (New
York City time) on the Expiration Date, any outstanding Warrants may be
exercised on any Business Day; provided that Holders of Warrants will be able to
exercise their Warrants only if the exercise of such Warrants is exempt from the
registration requirements of the Securities Act, as reasonably determined by the
Company, and such securities are qualified for sale or exempt from qualification
under the applicable securities laws of the states or other jurisdictions in
which such Holders reside. Any Warrants not exercised by 5:00 p.m., New York
City time, on the Expiration Date shall expire and all rights of the Holders of
such Warrants shall terminate. Additionally, pursuant to Section 4.1(b)(ii)
hereof, the Warrants shall expire and all rights of the Holders of such Warrants
shall terminate in the event the Company merges or consolidates with or sells
all or substantially all of its property and assets to a Person (other than an
Affiliate of the Company) if the consideration payable to holders of Common
Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale consists solely of

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cash or in the event of the dissolution, liquidation or winding up of the
Company.

         Section 3.3. Method of Exercise; Payment of Exercise Price.

                  In order to exercise all or any of the Warrants represented by
a Warrant Certificate, the Holder thereof must surrender for exercise the
Warrant Certificate to the Company at its principal executive office, with the
Subscription Form set forth on the reverse of the Warrant Certificate duly
executed, together with payment in full of the Exercise Price then in effect for
each share of Common Stock (or other securities) purchasable upon exercise of
the Warrants as to which a Warrant is exercised; such payment may be made (i) in
cash or by certified or official bank check payable to the order of the Company
or by wire transfer of immediately available funds to an account designated by
the Company for such purpose, (ii) without the payment of cash (a "Cashless
Exercise"), by reducing the number of shares of Common Stock that would be
obtainable upon the exercise of a Warrant and payment of the Exercise Price in
cash so as to yield a number of shares of Common Stock upon the exercise of such
Warrant equal to the product of (a) the number of shares of Common Stock for
which such Warrant is exercisable as of the date of exercise (if the Exercise
Price were being paid in cash) and (b) the Cashless Exercise Ratio, or (iii) a
combination of (i) and (ii).

                  The "Cashless Exercise Ratio" shall equal a fraction, the
numerator of which is the excess of the Current Market Value per share of Common
Stock on the Exercise Date over the Exercise Price per share as of the Exercise
Date and the denominator of which is the Current Market Value per share of the
Common Stock on the Exercise Date. Upon surrender of a Warrant Certificate
representing more than one Warrant in connection with the Holder's option to
elect a Cashless Exercise, the number of shares of Common Stock deliverable upon
a Cashless Exercise shall be equal to the number of shares of Common Stock
issuable upon the exercise of Warrants that the Holder specifies are to be
exercised pursuant to a Cashless Exercise multiplied by the Cashless Exercise
Ratio. All provisions of this Agreement shall be applicable with respect to a
surrender of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby.

                  The "Current Market Value" per share of Common Stock on any
date shall be the closing sale price on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock or such other securities are listed or
admitted to trading or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the Common Stock or such other securities are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker, selected by the Board and reasonably
acceptable to the Holder, making a market in the Common Stock

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or such other securities of the Company.

                  If less than all the Warrants represented by a Warrant
Certificate are exercised, such Warrant Certificate shall be surrendered and a
new Warrant Certificate of the same tenor and for the number of Warrants which
were not exercised shall be executed by the Company and delivered to the Holder.
Upon the exercise of any Warrants following the surrender of a Warrant
Certificate in conformity with the foregoing provisions, the Company shall
transfer promptly to the Holder appropriate evidence of ownership of any shares
of Common Stock or other securities or property to which the Holder is entitled
as a result of exercise, at the Company's option, an amount in cash, in lieu of
any fractional shares, as provided in Section 4.3 hereof.

                  Upon the exercise of a Warrant or Warrants, the Company shall
as promptly as practicable but not later than 14 Business Days after such
exercise enter, or cause any transfer agent of the shares of Common Stock to
enter, the name of the person entitled to receive the shares of Common Stock
upon exercise of such Warrants into the Company's register of stockholders.
Thereupon, the Company or the applicable transfer agent shall issue certificates
for the necessary number of shares of Common Stock to which said Holder is
entitled.

                  A Warrant shall be deemed by the Company to be exercised
immediately prior to the close of business on the date of surrender for
exercise, as provided above, of the Warrant Certificate representing such
Warrant and, for all purposes under this Agreement, the Holder shall receive the
shares of Common Stock the Holder would have been entitled to had it been the
registered Holder on such date, except that for purposes of transferring the
shares of Common Stock or voting in a general stockholders' meeting, the Holder
shall, in its relation with the Company, be deemed to be the Holder thereof only
when such shares of Common Stock are entered in the register of stockholders in
the name of such person; provided, however, that, with respect to Warrants which
have been exercised but for which the corresponding shares of Common Stock have
not been recorded in the register of stockholders, the provisions of Article IV
shall continue to apply as if the number of Warrants held prior to exercise
remained outstanding on the date of any action or event of the type giving rise
to an adjustment under Article IV.

         Section 3.4. Registration Rights.

                  The shares of Common Stock issuable upon exercise of the
Warrants shall have the registration rights as set forth in the Registration
Rights Agreement, dated as of October 7, 2003, by and among the Company and the
parties listed on the signature pages thereto.

                                   ARTICLE IV

                                   ADJUSTMENTS

         Section 4.1. Adjustments.

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                  The Exercise Price and the number of shares of Common Stock
(or other securities) purchasable upon exercise of each Warrant shall be subject
to adjustment from time to time as follows (subject in each case to Section
4.1(a) (vi) hereof):

                  (a)      Adjustment of Exercise Price. The Exercise Price
shall be subject to adjustment from time to time as follows:

                           (i)      Stock Dividends, Splits, etc. In case the
         Company shall at any time or from time to time after the Closing Date
         (A) declare a dividend or make a distribution on the outstanding shares
         of Common Stock or securities convertible into Common Stock, in either
         case, in shares of Common Stock or (B) effect a subdivision,
         combination, consolidation or reclassification of the outstanding
         shares of Common Stock into a greater or lesser number of shares of
         Common Stock, then, and in each such case, the Exercise Price in effect
         immediately prior to such event or the record date therefor, whichever
         is earlier, shall be adjusted by multiplying such Exercise Price by a
         fraction of which (x) the numerator is the number of shares of Common
         Stock that were outstanding immediately prior to such event and (y) the
         denominator is the number of shares of Common Stock outstanding
         immediately after such event. An adjustment made pursuant to this
         Section 4(a)(i) shall become effective (x) in the case of any such
         dividend or distribution, immediately after the close of business on
         the date for the determination of holders of shares of Common Stock
         entitled to receive such dividend or distribution, or (y) in the case
         of any such subdivision, combination, consolidation or
         reclassification, at the close of business on the day upon which such
         corporate action becomes effective.

                           (ii)     Below Market or Conversion Price Issuances.
         In case the Company shall at any time or from time to time after the
         Closing Date issue or sell any Common Stock or Convertible Security
         (collectively, "Additional Shares") without consideration or for a
         consideration per share (or having a conversion, exchange or exercise
         price per share) less than the greater of (A) the Current Market Value
         per share of Common Stock on the Business Day immediately preceding the
         earlier of the issuance, or public announcement of the issuance, of
         such Additional Shares and (B) the Exercise Price as of the date of
         such issuance then, and in each such case, the Exercise Price shall be
         reduced to an amount determined by multiplying the Exercise Price in
         effect on the day immediately prior to such date by a fraction of which
         (x) the numerator is the sum of (i) the product of (A) the number of
         shares of Common Stock outstanding immediately prior to such sale or
         issuance multiplied by (B) the greater of (1) the then applicable
         Exercise Price per share and (2) the Current Market Value per share of
         Common Stock on the date preceding the earlier of the issuance or
         public announcement of the issuance of such Additional Shares (the
         greater of (1) and (2) above hereinafter referred to as the "Adjustment
         Price") and (ii) the aggregate consideration receivable

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         by the Company for the total number of shares of Common Stock so issued
         (or into or for which the Convertible Securities are convertible,
         exercisable or exchangeable), and (y) the denominator equals the
         product of (i) the sum of (A) the total number of shares of Common
         Stock outstanding immediately prior to such sale or issue and (B) the
         number of additional shares of Common Stock issued (or into or for
         which the Convertible Securities may be converted, exercised or
         exchanged), multiplied by (ii) the Adjustment Price. An adjustment made
         pursuant to this subsection (ii) shall be made on the next Business Day
         following the date on which any such issuance is made and shall be
         effective retroactively to the close of business on the date of such
         issuance. Notwithstanding the foregoing, no adjustment (other than as
         provided for in Section 4(a)(iv)(5)(D)) shall be made pursuant to this
         Section 4(a)(ii) in connection with any Excluded Issuances.

                           (iii)    Special Dividends; Repurchases. In case the
         Company after the Closing Date shall (1) distribute to all holders of
         shares of Common Stock evidences of its indebtedness, assets (excluding
         any regular periodic cash dividend but including any extraordinary cash
         dividend), capital stock (other than Common Stock) or rights to
         subscribe for capital stock (other than Common Stock), or (2) purchase
         or otherwise acquire for value any shares of Common Stock in an Above
         Market Repurchase, in each such case the Exercise Price in effect
         immediately prior to the date of such distribution (or the date
         immediately prior to the date of the public announcement of such
         distribution, whichever is earlier) or date of such purchase (or the
         date immediately prior to the date of the public announcement of such
         purchase), as applicable, shall be adjusted by multiplying such
         Exercise Price by a fraction of which (x) the numerator is the
         remainder (if greater than zero) of (i) the Current Market Value per
         share of Common Stock on such date, minus (ii) the Fair Market Value as
         of such date of the portion of assets, evidences of indebtedness,
         capital stock or subscription rights so distributed or paid applicable
         to one share of Common Stock, and (y) the denominator is the Current
         Market Value per share of Common Stock on such date, such adjustment to
         become effective immediately prior to the opening of business on the
         day following the date of distribution or purchase; provided, however,
         that no adjustment shall be made pursuant to clause (1) of this
         subparagraph (a)(iii) (A) if such issuance is an Excluded Issuance or
         (B) if an adjustment shall otherwise be made with respect to such
         distribution or issuance pursuant to Section 4.1(a)(ii); and further
         provided, however, that if in any case the numerator of such fraction
         shall be zero or less than zero, no adjustment shall be made in such
         case. The Company shall provide any Holder, upon receipt of a written
         request therefor, with any indenture or other instrument defining the
         rights of the holders of any indebtedness, assets, subscription rights
         or capital stock referred to in this subparagraph (a)(iii).

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                           (iv)     General. For the purposes of any adjustment
         of the Exercise Price pursuant to paragraph (ii) of this Section
         4.1(a), the following provisions shall be applicable:

                                    (1)      In the case of the issuance of
         Common Stock or Convertible Securities for cash in a public offering or
         private placement, the aggregate consideration shall be deemed to be
         the amount of cash paid before deducting any discounts, commissions or
         placement fees payable by the Company to any underwriter or placement
         agent in connection with the issuance and sale thereof.

                                    (2)      In the case of the issuance of
         Common Stock for a consideration in whole or in part other than cash,
         such consideration shall be deemed to be the Fair Market Value thereof.

                                    (3)      Subparagraph (2) above
         notwithstanding, in the case of the issuance of Additional Shares to
         the owners of the non-surviving entity in connection with any merger in
         which the Company is the surviving corporation, the amount of
         consideration therefore shall be deemed to be the Fair Market Value of
         such portion of the net assets and business of the non-surviving entity
         as is attributable to such Common Stock or Convertible Securities, as
         the case may be.

                                    (4)      If Common Stock is sold as a unit
         with other securities, the aggregate consideration received for such
         Common Stock shall be deemed to be net of the Fair Market Value of such
         other securities.

                                    (5)      In the case of the issuance of
         Convertible Securities:

                                             (A)        The aggregate maximum
                  number of shares of Common Stock (as set forth in the
                  instruments relating thereto, without regard to any provision
                  contained therein for a subsequent reduction of such number)
                  deliverable upon conversion of or in exchange for, or upon the
                  exercise of, such Convertible Securities and subsequent
                  conversion, exchange or exercise thereof shall be deemed to
                  have been issued at the time such Convertible Securities were
                  issued and for a consideration equal to the consideration
                  received by the Company for any such Convertible Securities,
                  plus the minimum amount of consideration (as set forth in the
                  instruments relating thereto, without regard to any provision
                  contained therein for a subsequent increase of consideration),
                  if any, to be received by the Company upon the conversion,
                  exercise or exchange of such Convertible Securities;

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                                             (B)        With respect to any
                  Convertible Securities issued after the Closing Date for which
                  an adjustment to the Exercise Price previously has been made
                  pursuant to Section 4.1(a)(ii), on any increase in the number
                  of shares of Common Stock deliverable upon exercise,
                  conversion or exchange of, or a decrease in the exercise price
                  of, such Convertible Securities other than a change resulting
                  from the anti-dilution provisions thereof, the applicable
                  Exercise Price shall forthwith be readjusted retroactively to
                  give effect to such increase or decrease;

                                             (C)        With respect to any
                  Convertible Securities issued after the Closing Date for which
                  an adjustment to the Exercise Price has previously not been
                  made pursuant to Section 4.1(a)(ii), if there is any increase
                  in the number of shares of Common Stock deliverable upon
                  exercise, conversion or exchange of, or a decrease in the
                  exercise price of, such Convertible Securities other than a
                  change resulting from the anti-dilution provisions thereof,
                  such Convertible Securities shall be treated as if they had
                  been cancelled and reissued and an adjustment to the Exercise
                  Price with respect to such deemed issuance shall be made
                  pursuant to Section 4.1(a)(ii), if applicable;

                                             (D)        With respect to any
                  Convertible Securities issued prior to the Closing Date, if
                  there is any increase in the number of shares of Common Stock
                  deliverable upon exercise, conversion or exchange of, or a
                  decrease in the exercise price of, such Convertible Securities
                  other than a change resulting from the anti-dilution
                  provisions thereof, such Convertible Securities shall be
                  treated as if they had been cancelled and reissued and an
                  adjustment to the Exercise Price with respect to such deemed
                  issuance shall be made pursuant to Section 4.1(a)(ii), if
                  applicable; and

                                             (E)        No further adjustment of
                  the Exercise Price adjusted upon the issuance of any such
                  Convertible Securities shall be made as a result of the actual
                  issuance of Common Stock upon the exercise, conversion or
                  exchange of any such Convertible Securities.

                           (v)      Rights Distributions. Rights or warrants
         issued by the Company to all holders of Common Stock entitling the
         holders thereof to subscribe for or purchase capital stock of the
         Company, which rights or warrants (1) are deemed to be transferred with
         such shares of Common Stock, (2) are not exercisable and (3) are also
         issued in respect of future

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         issuances of Common Stock, including shares of Common Stock issued upon
         exercise of the warrants, in each case in clauses (1) through (3) until
         the occurrence of a specified event, shall for purposes of
         subparagraphs (b)(ii) and (b)(iii) not be deemed issued until the
         occurrence of the earliest such specified event.

                           (vi)     Calculations. All calculations of the
         Exercise Price shall be made to the nearest five decimal places.
         Anything in Section 4.1(a) to the contrary notwithstanding, in no event
         shall the then current Exercise Price be increased as a result of any
         calculation made at any time pursuant to Sections 4.1(a)(ii) through
         4.1(a)(iv). No adjustment to the Exercise Price pursuant to paragraph
         4.1(a) shall be required unless such adjustment would require an
         increase or decrease of at least 1% in the Exercise Price; provided,
         however, that any adjustments which by reason of this paragraph
         4.1(a)(vi) are not required to be made shall be carried forward and
         taken into account in any subsequent adjustment. Notwithstanding any
         other provision of this Section 4.1(a), no adjustment to the Exercise
         Price shall reduce the Exercise Price below $0.01, and any such
         purported adjustment shall instead reduce the Exercise Price to $0.01.

                           (vii)    Outstanding Shares. The number of shares of
         Common Stock at any time outstanding shall include all shares of Common
         Stock outstanding at such time and any shares of Common Stock issuable
         upon conversion of or in exchange for any convertible or exchangeable
         security or upon the exercise of any option. The number of shares of
         Common Stock at any time outstanding shall not include any shares of
         Common Stock then owned or held by or for the account of the Company or
         any Subsidiary, and the disposition of any shares so owned or held
         shall be considered an issue or sale of Common Stock.

                           (viii)   Successive Adjustments. Successive
         adjustments in the Exercise Price shall be made, without duplication,
         whenever any event specified in Sections 4.1(a)(i) through 4.1(a)(iii)
         shall occur.

                  (b)      Reorganization, Consolidation, Merger, Asset Sale.

                           (i)      In case of any capital reorganization or
         reclassification of outstanding shares of Common Stock (other than a
         reclassification covered by Section 4.1(a)), or in case of any
         consolidation or merger of the Company with or into another Person, or
         in case of any sale, lease, transfer, conveyance or other disposition
         (other than by way of merger or consolidation) of all or substantially
         all of the Company's assets, on a consolidated basis, in one
         transaction or a series of related transactions, to any Person
         (including any group that is deemed to be a Person) (each of the
         foregoing being referred to as a "Transaction"), in each case which is
         effected in such a manner that the holders of Common Stock are entitled
         to receive (either directly or upon subsequent liquidation) stock or
         other

                                       13

<PAGE>

         securities or property (including cash) with respect to or in exchange
         for Common Stock, Warrants then outstanding shall thereafter be
         convertible into, in lieu of the Common Stock issuable upon such
         conversion prior to the consummation of such Transaction, the kind and
         amount of shares of stock and other securities and property (including
         cash) receivable upon the consummation of such Transaction by a holder
         of that number of shares of Common Stock into which such Holder's
         Warrants were exercisable (without regard to any limitation on exercise
         contained herein, the availability of authorized and unissued shares
         for issuance upon exercise, or otherwise) immediately prior to the
         consummation of such Transaction. In any such case, the Company or the
         Person formed by the consolidation or resulting from the merger or
         which acquires such assets or which acquires the Company's shares, as
         the case may be, shall make or cause to be made appropriate provisions
         (as determined in good faith by the Board) in the applicable agreement
         of merger or consideration, its certificate or articles of
         incorporation or other constituent documents to ensure that the
         provisions of this Agreement will continue to be applicable to the
         Warrants or any such other shares of stock and other securities (other
         than Common Stock) and property deliverable upon exercise of the
         Warrants remaining outstanding following the Transaction. In case
         securities or property other than Common Stock shall be issuable or
         deliverable upon conversion as aforesaid, then all references in this
         Section 4.1 shall be deemed to apply, so far as appropriate and as
         nearly as may be, to such other securities or property. The provisions
         of this Section 4.1(b) shall similarly apply to successive
         Transactions. The Company shall give written notice to the Holders at
         least 30 days prior to the date on which any Transaction or similar
         transaction affecting the Company shall take place.

                           (ii)     Notwithstanding the foregoing, (x) if the
         Company merges or consolidates with, or sells all or substantially all
         of its property and assets to, another Person and consideration is
         payable to holders of Common Stock in exchange for their shares of
         Common Stock in connection with such merger, consolidation or sale
         which consists solely of cash, or (y) in the event of the dissolution,
         liquidation or winding up of the Company, then the Holders of Warrants
         shall be entitled to receive payments or distributions as of the date
         of such event on an equal basis with, and on the same day as, holders
         of shares of Common Stock (or other securities purchasable upon
         exercise of the Warrants) as if the Warrants had been exercised
         immediately prior to such event, less an amount equal to the Exercise
         Price. Upon receipt of such payment, if any, the rights of a Holder
         shall terminate and cease and such Holder's Warrants shall expire. In
         case of any such merger, consolidation or sale of assets, the surviving
         or acquiring Person or, in the event of any dissolution, liquidation or
         winding up of the Company, after receipt of surrendered Warrant
         Certificates from the Holder, the Company shall make payment by
         delivering a check in such amount as is appropriate (or,

                                       14

<PAGE>

         in the case of consideration other than cash, such other consideration
         as is appropriate) to the Holder.

                           (iii)    Notwithstanding anything contained herein to
         the contrary, the Company will not effect any Transaction unless, prior
         to the consummation thereof, the Surviving Person, if other than the
         Company, shall mail, by first-class mail, postage prepaid, to each
         Holder at such Holder's address as it appears on the transfer books of
         the Company, (A) a written instrument assuming the obligation to
         deliver to such Holder such cash, property and securities to which, in
         accordance with the foregoing provisions, such Holder is entitled, and
         (B) an opinion of outside counsel for such Surviving Person stating
         that such assumption agreement is a valid, binding and enforceable
         agreement of the Surviving Person.

                           (iv)     Nothing contained in this Section 4.1(b)
         shall limit the rights of the Holders to exercise the Warrants.

         Section 4.2. Notice of Consolidation, Merger, Etc.

                  In case at any time after the date hereof and prior to 5:00
p.m., New York City time, on the Expiration Date, there shall be any (i)
consolidation or merger involving the Company or sale, transfer or other
disposition of all or substantially all of the Company's property, assets or
business (except a merger or other reorganization in which the Company shall be
the surviving corporation and holders of Common Stock receive no consideration
in respect of their shares) or (ii) any other transaction contemplated by
Section 4.1(b)(i) above, then, in any one or more of such cases, the Company
shall mail, at the Company's expense, to the Holders, at the earliest
practicable time (and, in any event, not less than 20 days before any date set
for definitive action), notice of the date on which such reorganization, sale,
consolidation, merger, dissolution, liquidation or winding up shall take place,
as the case may be. Such notice shall also set forth such facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
shares of Common Stock and other securities, money and other property
deliverable upon exercise of the Warrants. Such notice shall also specify the
date as of which the holders of record of the shares of Common Stock or other
securities or property purchasable upon exercise of the Warrants shall be
entitled to exchange their shares for securities, money or other property
deliverable upon such reorganization, sale, consolidation, merger, dissolution,
liquidation or winding up, as the case may be.

         Section 4.3. Fractional Interests.

                  In connection with the exercise of any Warrant pursuant to
Section 4.1, no fractions of shares of Common Stock shall be issued, but in lieu
thereof the Company shall pay a cash adjustment in respect of such fractional
interest in an amount equal to such fractional interest multiplied by the
Current Market Value per share of Common Stock on the day on which such Warrants
are deemed to have been exercised. If more

                                       15

<PAGE>

than one Warrant shall be surrendered for exercise at one time by the same
Holder, the number of full shares of Common Stock issuable upon exercise thereof
shall be computed on the basis of the total number of Warrants so surrendered.

         Section 4.4. When Issuance or Payment May Be Deferred.

                  In any case in which this Article IV shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the Holder of any Warrant exercised after such record date
the shares of Common Stock and other shares in the capital of the Company, if
any, purchasable upon such exercise over and above the shares of Common Stock
and other shares in the capital of the Company, if any, purchasable upon such
exercise and (ii) paying such Holder any amount in cash in lieu of a fractional
share; provided, however, that the Company shall deliver to such Holder a due
bill or other appropriate instrument evidencing such Holder's right to receive
such additional shares of Common Stock, other shares and cash upon the
occurrence of the event requiring such adjustment.

         Section 4.5. Par Value; Valid Issuance.

                  The Company will not increase the par value of the shares of
Common Stock above the Exercise Price (as adjusted hereunder from time to time),
except to the extent required by applicable law. The Company will take all such
corporate action, to the extent permitted by applicable law (including, without
limitation, reducing the par value thereof), as may be necessary or appropriate
in order that the Company may validly and legally issue stock upon the exercise
of Warrants.

                                    ARTICLE V

                           DECREASE IN EXERCISE PRICE

                  The Board, in its sole discretion, shall have the right at any
time, or from time to time, to decrease the Exercise Price of the Warrants
and/or increase the number of shares issuable upon the exercise of the Warrants.

                                   ARTICLE VI

                               LOSS OR MUTILATION

                  Upon receipt by the Company of evidence satisfactory to it of
the ownership and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity or bond satisfactory to it and (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company that the Warrants represented thereby have been acquired
by a bona fide purchaser, the Company shall execute and deliver to the
registered Holder of the lost, stolen, destroyed or mutilated Warrant
Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of
the

                                       16

<PAGE>

same tenor and for a like aggregate number of Warrants. Upon the issuance of any
new Warrant Certificate under this Article VI, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and other expenses in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this Article VI
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute a
contractual obligation of the Company whether or not the allegedly lost, stolen
or destroyed Warrant Certificates shall be at any time enforceable by anyone and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Article VI are exclusive and shall preclude
(to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.

                                   ARTICLE VII

                                    COVENANTS

         Section 7.1. Covenants.

                  The Company agrees that (a) prior to the date of the
Stockholder Approval, (i) it will at all times reserve and keep available, free
from liens, charges and security interests and not subject to any preemptive
rights, solely for issuance and delivery upon exercise of the Warrants, the
Available Shares and (ii) the Available Shares shall be duly authorized and,
when issued upon such exercise, shall be validly issued, fully paid and
nonassessable, and (b) from and after the date of the Stockholder Approval (i)
it will at all times reserve and keep available, free from liens, charges and
security interests and not subject to any preemptive rights, solely for issuance
and delivery upon exercise of the Warrants, the number of shares of Common Stock
from time to time issuable upon exercise of the Warrants at the time outstanding
and (ii) all shares of Common Stock issuable upon exercise of the Warrants shall
be duly authorized and, when issued upon such exercise, shall be validly issued,
fully paid and nonassessable.

                                  ARTICLE VIII

                WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER

         Section 8.1. Transfer and Exchange.

                  The Warrant Certificates shall be issued in registered form
only. The Warrants shall not be transferable, except as provided in the next
paragraph. The Company shall keep at its office a register for the registration
of Warrant Certificates and transfers or exchanges of Warrant Certificates as
herein provided.

                  A Holder may transfer its Warrants only to the Initial Holder
and Affiliates of the Initial Holder and only by written application to the
Company stating the name of the proposed transferee and otherwise complying with
the terms of this

                                       17

<PAGE>

Agreement. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Company in the register. Prior to the registration of any
transfer of Warrants by a Holder as provided herein, the Company and any agent
of the Company may treat the person in whose name the Warrants are registered as
the owner thereof for all purposes and as the person entitled to exercise the
rights represented thereby, any notice to the contrary notwithstanding. When
Warrant Certificates are presented to the Company with a request to register the
transfer or to exchange them for an equal amount of Warrants of other authorized
denominations, the Company shall register such transfer or make such exchange as
requested if its requirements for such transactions are met.

         Section 8.2. Special Transfer Provisions.

                  By its acceptance of any Warrants represented by a Warrant
Certificate, each Holder of such Warrants acknowledges the restrictions on
transfer of such Warrants set forth in this Agreement and in the Private
Placement Legend and agrees that it will transfer such Warrants only as provided
in this Agreement. The Company shall not register a transfer of any Warrants
unless such transfer complies with the restrictions on transfer of such Warrants
set forth in this Agreement. In connection with any transfer of Warrants, each
Holder agrees by its acceptance of Warrants to furnish the Company such evidence
that the transferee is the Initial Holder or an Affiliate of the Initial Holder
and, if such transfer is not being made pursuant to an effective registration
statement under the Securities Act, with such certifications, legal opinions or
other information as the Company may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act and otherwise in
compliance with this Agreement.

                                   ARTICLE IX

                                 WARRANT HOLDERS

         Section 9.1. Warrant Holder Deemed Not a Stockholder.

                  The Company may deem and treat the registered Holder(s) of the
Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for the purpose
of any exercise thereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary. Accordingly, the Company shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to recognize any equitable or other claim to or interest in the Warrants
on the part of any person other than such registered Holder, whether or not it
shall have express or other notice thereof. Prior to the exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to any
rights of a stockholder of the Company, including, without limitation, the right
to vote or to consent to any action of the stockholders, except as otherwise
provided in this Agreement, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of meetings of
stockholders and, except as otherwise provided in this Agreement,

                                       18

<PAGE>

shall not be entitled to receive any notice of any proceedings of the Company.

         Section 9.2. Right of Action.

                  All rights of action with respect to this Agreement are vested
in the Holders of the Warrants, and any Holder of any Warrant, may, on such
Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's right to exercise
such Warrants in the manner provided in the Warrant Certificate representing
such Warrants and in this Agreement.

                                    ARTICLE X

                                  MISCELLANEOUS

         Section 10.1. Payment of Taxes.

                  Subject to Article VI hereof, all shares of Common Stock
purchasable upon the exercise of Warrants shall be validly issued, fully paid
and not subject to any calls for funds, and the Company shall pay any taxes and
other governmental charges that may be imposed under the laws of the United
States of America or any political subdivision or taxing authority thereof or
therein in respect of the issue or delivery thereof upon exercise of Warrants
(other than taxes on or measured by income imposed on any Holder). The Company
shall not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for shares
of Common Stock (including other securities or property purchasable upon the
exercise of the Warrants) or payment of cash to any Person other than the Holder
of a Warrant Certificate surrendered upon the exercise of a Warrant and in case
of such transfer or payment, the Company shall not be required to issue any
share certificate or pay any cash until such tax or charge has been paid or it
has been established to the Company's satisfaction that no such tax or charge is
due.

         Section 10.2. No Merger, Consolidation or Sale of Assets of the
Company.

                  Except as otherwise provided herein, the Company will not
merge into or consolidate with any other Person, or sell or otherwise transfer
all or substantially all of its property and assets to any Person, unless the
entity resulting from such merger or consolidation, or such Person, shall
expressly assume the due and punctual performance and observance of each and
every covenant and condition of this Agreement or contained in the Warrants to
be performed and observed by the Company.

         Section 10.3. Notices; Payment.

                  (a)      Any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made when mailed, if sent by first
class mail, postage prepaid, addressed to any Holder of a Warrant at such
Holder's last known address appearing on

                                       19

<PAGE>

the register of the Company and to the Company as follows:

                  To the Company:

                  Akorn, Inc.
                  2500 Millbrook Drive
                  Buffalo Grove, Illinois  60089
                  Fax No.:  (347) 279-6191
                  Attention:  Jerry Ellis

or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.

                  (b)      Payment of the Exercise Price shall be made in
accordance with the provisions of this Agreement at the principal executive
office of the Company set forth above.

                  (c)      Any notice required to be given by the Company to the
Holders shall be made by mailing by registered mail, return receipt requested,
to the Holders at their last known addresses appearing on the register
maintained by the Company. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.

         Section 10.4. Binding Effect.

                  This Agreement shall be binding upon and inure to the benefit
of the Company and its respective successors and assigns, and the Holders from
time to time of the Warrants. Nothing in this Agreement is intended or shall be
construed to confer upon any Person, other than the Company and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.

         Section 10.5. Counterparts.

                  This Agreement may be executed manually or by facsimile in any
number of counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.

         Section 10.6. Amendments.

                  Any provision of this Agreement may be amended or modified in
whole or in part at any time by an agreement in writing among the Company and
the Holder of the Warrant. No Failure on the part of either the Company or the
Holder of the Warrant to exercise, and no delay in exercising, any right shall
operate as a waiver thereof nor shall any single or partial exercise by either
the Company or the Holder of the Warrant of any right preclude any other or
future exercise thereof or the exercise of any other right.

                                       20

<PAGE>

         Section 10.7. Headings.

                  The descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

         Section 10.8. Common Stock Legend.

                  Unless and until the Common Stock purchasable upon the
exercise of the Warrants are registered under the Securities Act, or unless
otherwise agreed by the Company and the Holder thereof, such shares of Common
Stock will bear a legend to the following effect:

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

         Section 10.9. Termination.

                  Unless terminated earlier pursuant to this Agreement, this
Agreement shall terminate at 5:00 p.m. (New York City time) on the Expiration
Date. Notwithstanding the foregoing, this Agreement shall terminate on any
earlier date as of which all Warrants have been exercised.

         Section 10.10. Method of Payment.

                  The U.S. dollar is the sole currency of account and payment
for all sums payable by the Company or the Holders under or in connection with
the Warrants, including damages.

         Section 10.11. Governing Law.

                  This Agreement shall be governed by the laws of the State of
New York. The Company and the Holders agree to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
related to this Agreement or the Warrants.

                            (signature page follows)

                                       21

<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed,
as of the day and year first above written.

                                      AKORN, INC.

                                      By:  /s/ Bernard J. Pothast
                                          -------------------------------------
                                            Bernard J. Pothast, Senior Vice
                                            President, Chief Financial Officer,
                                            Secretary and Treasurer

                                      The John N. Kapoor Trust dtd 9/20/89

                                      By:  /s/ John N. Kapoor
                                           -------------------------------------
                                           Name:  John N. Kapoor
                                           Title: Trustee

                                       22

<PAGE>

                                                                       EXHIBIT A

                           FORM OF WARRANT CERTIFICATE

         THE SECURITIES EVIDENCED HEREBY ARE NOT TRANSFERABLE, EXCEPT IN
         ACCORDANCE WITH THE WARRANT AGREEMENT.

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

                                   AKORN, INC.

                                  [___________]

No. _____

                        WARRANTS TO PURCHASE COMMON STOCK

                  This certifies that [___________] or its registered assigns,
is the owner of ______ Warrants, each of which represents the right to purchase
from Akorn, Inc., a Louisiana corporation (the "Company"), at any time beginning
___________ __, 200_ and prior to the Expiration Date (as defined in the Warrant
Agreement referred to below), _______ shares of the common stock, no par value
per share, of the Company (the "Common Stock") at a per share exercise price
(the "Exercise Price") equal to $______ (subject to adjustment as provided in
the Warrant Agreement), upon surrender hereof at the Company, with the
Subscription Form on the reverse hereof duly executed with simultaneous payment
in full by wire transfer of immediately available funds or by certified or
official bank or bank cashier's check payable to the order of the Company. At
any time on or before the Expiration Date, any outstanding Warrants may be
exercised on any Business Day (as defined in the Warrant Agreement); provided
that the Holders of Warrants shall be able to exercise their Warrants only if
the exercise of such Warrants is exempt from the registration requirements of
the Securities Act of 1933, as amended, as reasonably determined by the Company,
and such securities are qualified for sale or exempt from qualification under
the applicable securities laws of the states or other jurisdictions in which
such Holder resides.

                  This Warrant Certificate is issued under and in accordance
with a Warrant

                                       23

<PAGE>

Agreement dated as of October [ ], 2003 (the "Warrant Agreement"), between the
Company and [  ], and is subject to the Articles of Incorporation of the Company
and to the terms and provisions contained therein, to all of which terms and
provisions the holder of this Warrant Certificate consents by acceptance hereof.
The terms of the Warrant Agreement and the Registration Rights Agreement are
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Company and the Holders of the Warrants. The summary of the terms of the Warrant
Agreement and the Registration Rights Agreement contained in this Warrant
Certificate is subject to and qualified in its entirety by express reference to
the Warrant Agreement and the Registration Rights Agreement. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Warrant and the terms of the Warrant Agreement, the terms of the Warrant
Agreement shall govern. All terms used in this Warrant Certificate that are
defined in the Warrant Agreement and the Registration Rights Agreement shall
have the meanings assigned to them in such agreements.

                  This Warrant Certificate shall be void and all rights
evidenced hereby shall cease on the Expiration Date, unless sooner terminated by
the liquidation, dissolution or winding-up of the Company or as otherwise
provided in the Warrant Agreement upon the consolidation or merger of the
Company with, or sale of the Company to, another Person or unless such date is
extended as provided in the Warrant Agreement.

                                       24

<PAGE>

                  The Warrant Agreement and the Warrants shall be governed by
the laws of the State of New York. The Company and the Holders agree to submit
to the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or related to this Agreement or the Warrants.

                                                   AKORN, INC.

                                                   By: _________________________
                                                   Name:
                                                   Title:

Dated:  _________, 200_

                                       25

<PAGE>

                     FORM OF REVERSE OF WARRANT CERTIFICATE

                                SUBSCRIPTION FORM

                 (To be executed only upon exercise of Warrant)

To: Akorn, Inc.
    2500 Millbrook Drive
    Buffalo Grove, Illinois 60089
    Telecopier No.:  (847) 279-6191

Attention: Jerry Ellis

                  The undersigned irrevocably exercises ________ of the Warrants
represented by this Warrant Certificate and herewith makes payment of $ _______
(such payment being in cash or by certified or official bank or bank cashier's
check payable to the order or at the direction of Akorn, Inc. or pursuant to a
Cashless Exercise on the terms and conditions specified in this Warrant
Certificate and in the Warrant Agreement referred to herein) and surrenders this
Warrant Certificate and all right, title and interest therein to and directs
that the common stock, no par value per share, of Akorn, Inc. (the "Common
Stock") deliverable upon the exercise of such Warrants be registered or placed
in the name and at the address specified below and delivered thereto.

Dated: _______                                   _______________________________
                                                 (Signature of Owner)

                                                 _______________________________
                                                 (Street Address)

                                                 _______________________________
                                                 (City) (State)       (Zip Code)

                                       26

<PAGE>

                               FORM OF ASSIGNMENT

                  The undersigned registered Holder of this Warrant Certificate
hereby sells, assigns, and transfers unto the Assignee(s) named below (including
the undersigned with respect to any Warrants constituting a part of the Warrants
evidenced by this Warrant Certificate not being assigned hereby) all of the
right of the undersigned under this Warrant Certificate, with respect to the
number of Warrants set forth below:

Name(s) of Assignee(s): _____________________________________

Address: ____________________________________________________

No. of Warrants: ____________________________________________

Please insert social security or other identifying number of assignee(s):

and does hereby irrevocably constitute and appoint the Secretary of Akorn, Inc.
the undersigned's attorney to make such transfer on the books of Akorn, Inc.
maintained for the purposes, with full power of substitution in the premises.

In connection with any transfer of Warrants, the undersigned confirms that the
transfer of the Warrants is exempt from registration under the Securities Act of
1933, as amended, and that the Assignee(s) is the Initial Holder or an Affiliate
of the Initial Holder. The undersigned understands that the Company shall not be
obligated to register the Warrants in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article VIII of the Warrant Agreement shall
have been satisfied.

Dated: _______
                                                ________________________________
                                                (Signature of Owner)

                                                ________________________________
                                                (Street Address)

                                                ________________________________
                                                (City) (State)        (Zip Code)

                                       27<PAGE>

                                                                     EXHIBIT 4.5

                                WARRANT AGREEMENT

                  WARRANT AGREEMENT, dated as of October 7, 2003 (this
"Agreement"), between Akorn, Inc., a Louisiana corporation (the "Company"), and
Arjun Waney (the "Initial Holder").

                              W I T N E S S E T H:

                  WHEREAS, La Salle Bank National Association requires the
personal guaranty of the Initial Holder (the "Guaranty") in order to provide to
the Company credit facilities (the "Credit Facilities") under the credit
agreement to be entered into among the Company, Akorn (New Jersey), Inc., La
Salle Bank National Association and the financial institutions that are or may
from time to time become parties thereto (as may be amended, the "Credit
Agreement"), and the Company desires to have the Initial Holder enter into that
Guaranty;

                  WHEREAS, in consideration for having the Initial Holder enter
into the Guaranty, the Company desires to grant to the Initial Holder warrants
to purchase shares of Common Stock (as defined below);

                  WHEREAS, this Agreement governs the issuance of the Warrant
Certificates (as defined below) and the other matters as provided herein,
including, without limitation, for the purpose of defining the terms and
provisions of the Warrants (as defined below) and the respective rights and
obligations thereunder of the Company and the Initial Holder together with any
subsequent record holders thereof (together with the holders of shares of Common
Stock (or other securities) received upon exercise thereof, the "Holders").

                  NOW, THEREFORE, in consideration of the foregoing and of the
mutual agreements contained herein, the Company and the Initial Holder hereby
agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

                  "Above Market Repurchase" means any purchase (by tender or
exchange offer, open market purchase, privately negotiated purchased or
otherwise) for all or any portion of the Company's Common Stock where such
purchase is for aggregate consideration having a Fair Market Value as of the
earlier (i) the date of such purchase or (ii) the date immediately prior to the
date of the public announcement of such purchase, that exceeds the product of
(x) the aggregate number of shares being purchased, multiplied by (y) the
Current Market Value of the Common Stock on such date.

                                       1
<PAGE>

                  "Additional Shares" has the meaning specified in Section
4.1(a)(ii) hereof.

                  "Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.

                  "Available Shares" means the 12,883,000 shares of Common Stock
the Company currently has duly authorized and available to be reserved for
issuance upon exercise of the Warrants.

                  "Board" means the board of directors of the Company from time
to time.

                  "Business Day" means a day except a Saturday, Sunday or other
day on which commercial banks in The City of New York, are authorized by law to
close.

                  "Cashless Exercise" has the meaning specified in Section 3.3
hereof.

                  "Cashless Exercise Ratio" has the meaning specified in Section
3.3 hereof.

                  "Closing Date" means the date hereof.

                  "Common Stock" means the common stock, no par value per share,
of the Company, and any other capital stock of the Company into which such
Common Stock may be converted or reclassified or that may be issued in respect
of, in exchange for, or in substitution of, such Common Stock by reason of any
stock splits, stock dividends, distributions, mergers, consolidations or other
like events.

                  "Convertible Securities" means any options or warrants to
purchase or rights to subscribe for shares of Common Stock, securities by their
terms convertible into or exchangeable for shares of Common Stock, or options or
warrants to purchase or rights to subscribe for such convertible or exchangeable
securities.

                  "Credit Agreement" has the meaning specified in the recitals
to this Agreement.

                  "Credit Facilities" has the meaning specified in the recitals
to this Agreement.

                  "Current Market Value" has the meaning specified in Section
3.3 hereof.

                  "Exchange Act" means the United States Securities Exchange Act
of

                                       2
<PAGE>

1934, as amended.

                  "Excluded Issuances" means the issuance or reissuance of any
shares of Common Stock or Convertible Securities (whether treasury shares or
newly issued shares) pursuant to or in connection with (1) a dividend or
distribution on, or subdivision, combination, consolidation or reclassification
of, the outstanding Common Stock requiring an adjustment in the Exercise Price
pursuant to Section 4(a)(i), (2) any Convertible Security outstanding as of the
Closing Date, including, without limitation, the Note Warrants and the Preferred
Stock Warrants (except as otherwise provided in Section 4.1(a)(iv)(5)(D)), (3)
the exercise of Warrants, (4) the grant or exercise of any stock or stock
options to employees, directors or consultants of the Company that may be
granted to or exercised by any employee, director or consultant under any stock
option or similar benefit plan of the Company now existing or to be implemented
in the future, (5) any transaction involving the Company's issuance of
securities in connection with an acquisition (the primary purpose of which is
not to raise equity capital), (6) any transaction involving the Company's
issuance of securities in connection with any strategic partnership or joint
venture (the primary purpose of which is not to raise equity capital), (7) any
issuance of securities by the Company as consideration for the acquisition of a
license by the Company, or (8) the issuance of securities pursuant to any
financing from a bank or similar financial or lending institution approved by
the Board; provided, however, that issuances of securities described in the
forgoing sub-clauses (4), (6), (7) and (8) subsequent to the Closing Date which
exceed, in the aggregate, 10% of the outstanding Common Stock of the Corporation
outstanding as of the Closing Date (as adjusted for any split, subdivision,
combination, consolidation, recapitalization or similar event with respect to
the Common Stock), as determined on a fully-diluted basis, shall not be deemed
to be Excluded Issuances.

                  "Exercise Date" means the date upon which a Holder exercises a
Warrant or Warrants in accordance with Section 3.2.

                  "Exercise Price" has the meaning specified in Section 3.1
hereof.

                  "Expiration Date" means for each Warrant, the third
anniversary of the Issue Date of such Warrant.

                  "Fair Market Value" with respect to any securities, assets or
property means the fair value thereof as determined by an independent investment
banking or appraisal firm experienced in the valuation of such securities or
property; provided that the value of any securities that trade on a national
securities exchange or inter-dealer quotation system shall be the Current Market
Value thereof as of the date such value is determined.

                  "Guaranty" has the meaning specified in the recitals to this
Agreement.

                                       3
<PAGE>

                  "Holders" has the meaning specified in the recitals to this
Agreement.

                  "Issue Date" shall mean with respect to each Warrant, the date
of issuance of such Warrant.

                  "Laws" shall include all foreign, federal, state and local
laws, statutes, ordinances, rules, regulations, orders, judgments, decrees and
bodies of law.

                  "Note Warrants" has the meaning ascribed thereto in the
Purchase Agreement.

                  "Parent" means any Person of which the Company is a direct or
indirect subsidiary.

                  "Person" means an individual, corporation, partnership,
limited liability company, joint venture association, joint-stock company trust,
unincorporated organization, government or agency thereof.

                  "Preferred Stock Warrants" has the meaning ascribed thereto in
the Purchase Agreement.

                  "Private Placement Legend" means the legend set forth on the
Warrant Certificates in the form set forth in Section 2.3.

                  "Purchase Agreement" shall mean the Preferred Stock and Note
Purchase Agreement, dated as of September 25, 2003, by and among the Company and
the purchasers listed on the signature pages thereto.

                  "Proxy Statement" means the proxy statement distributed to the
Company's stockholders in connection with the Stockholder's Meeting.

                  "SEC" means the Securities and Exchange Commission.

                  "Securities Act" means the United States Securities Act of
1933, as amended.

                  "Stockholder Approval" shall have the meaning ascribed thereto
in the Purchase Agreement.

                  "Subscription Form" means the form on the reverse side of the
Warrant Certificate substantially in the form of Exhibit A hereto.

                  "Subsidiaries" or "Subsidiary" shall mean the collective
reference to all direct or indirect subsidiaries of the Company.

                                       4
<PAGE>

                  "Surviving Person" means the continuing or surviving Person of
a merger, consolidation or other corporate combination, the Person receiving a
transfer of all or a substantial part of the properties and assets of the
Company, or the Person consolidating with or merging in the Company in a merger,
consolidation or other corporate combination in which the Company is the
continuing surviving Person, but in connection with which the preferred stock or
Common Stock of the Company is exchanged, converted or reinstated into the
securities of any other Person or cash or any other property; provided, however,
if such Surviving Person is a direct or indirect subsidiary of a Person, the
parent entity shall be deemed to be a Surviving Person.

                  "Termination Date" means the date on which the Credit
Agreement is no longer in effect.

                  "Transaction" has the meaning specified in Section 4.1(b)(i)
hereof.

                  "Warrants" has the meaning specified in Section 2.1(a) hereof.

                  "Warrant Certificates" has the meaning specified in Section
2.2 hereof.

                                   ARTICLE II

                                ISSUE OF WARRANTS

         Section 2.1. Issuance of Warrants.

                  (a)      The Company hereby agrees to issue to the Initial
Holder on the Closing Date warrants (the "Warrants") to purchase from the
Company 80,000 shares of Common Stock with an exercise price equal to the
Exercise Price.

                  (b)      The Company hereby agrees that on each anniversary of
the Closing Date prior to the Termination Date, it will issue to the Initial
Holder, Warrants on the terms set forth herein to purchase from the Company the
number of shares of Common Stock equal to the product obtained by multiplying
(x) 0.08 by (y) the portion of the Credit Facilities guaranteed by the Initial
Holder.

         Section 2.2. Form of Warrant Certificates.

                  Certificates representing the Warrants (the "Warrant
Certificates") shall be in the form attached hereto as Exhibit A, shall be dated
the Issue Date and shall have such insertions as are appropriate or required or
permitted by this Agreement and may have such letters, numbers or other marks of
identification and such legends and endorsements stamped, printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any Laws or to conform to custom or usage.

                                       5
<PAGE>

         Section 2.3. Restrictive Legends.

                  The Warrant Certificates shall bear the following legend on
the face thereof:

         THE SECURITIES EVIDENCED HEREBY ARE NOT TRANSFERABLE, EXCEPT IN
         ACCORDANCE WITH THE WARRANT AGREEMENT.

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

                                   ARTICLE III

              EXERCISE PRICE, EXERCISE, REPURCHASE OF WARRANTS AND
                               REGISTRATION RIGHTS

         Section 3.1. Exercise Price.

                  Each Warrant Certificate shall initially entitle the Holder
thereof, subject to the provisions of this Agreement, to purchase the number of
shares of Common Stock indicated thereon at a per share purchase price (the
"Exercise Price") equal to $1.10, subject to adjustment as provided in Section
4.1 and Article V hereof.

         Section 3.2. Exercise; Restrictions on Exercise.

                  At any time after the Issue Date and prior to 5:00 p.m. (New
York City time) on the Expiration Date, any outstanding Warrants may be
exercised on any Business Day; provided that Holders of Warrants will be able to
exercise their Warrants only if the exercise of such Warrants is exempt from the
registration requirements of the Securities Act, as reasonably determined by the
Company, and such securities are qualified for sale or exempt from qualification
under the applicable securities laws of the states or other jurisdictions in
which such Holders reside. Any Warrants not exercised by 5:00 p.m., New York
City time, on the Expiration Date shall expire and all rights of the Holders of
such Warrants shall terminate. Additionally, pursuant to Section 4.1(b)(ii)
hereof, the Warrants shall expire and all rights of the Holders of such Warrants
shall terminate in the event the Company merges or consolidates with or sells
all or substantially all of its property and assets to a Person (other than an
Affiliate of the Company) if the consideration payable to holders of Common
Stock in exchange for their Common Stock in connection with such merger,
consolidation or sale consists solely of

                                       6
<PAGE>

cash or in the event of the dissolution, liquidation or winding up of the
Company.

         Section 3.3. Method of Exercise; Payment of Exercise Price.

                  In order to exercise all or any of the Warrants represented by
a Warrant Certificate, the Holder thereof must surrender for exercise the
Warrant Certificate to the Company at its principal executive office, with the
Subscription Form set forth on the reverse of the Warrant Certificate duly
executed, together with payment in full of the Exercise Price then in effect for
each share of Common Stock (or other securities) purchasable upon exercise of
the Warrants as to which a Warrant is exercised; such payment may be made (i) in
cash or by certified or official bank check payable to the order of the Company
or by wire transfer of immediately available funds to an account designated by
the Company for such purpose, (ii) without the payment of cash (a "Cashless
Exercise"), by reducing the number of shares of Common Stock that would be
obtainable upon the exercise of a Warrant and payment of the Exercise Price in
cash so as to yield a number of shares of Common Stock upon the exercise of such
Warrant equal to the product of (a) the number of shares of Common Stock for
which such Warrant is exercisable as of the date of exercise (if the Exercise
Price were being paid in cash) and (b) the Cashless Exercise Ratio, or (iii) a
combination of (i) and (ii).

                  The "Cashless Exercise Ratio" shall equal a fraction, the
numerator of which is the excess of the Current Market Value per share of Common
Stock on the Exercise Date over the Exercise Price per share as of the Exercise
Date and the denominator of which is the Current Market Value per share of the
Common Stock on the Exercise Date. Upon surrender of a Warrant Certificate
representing more than one Warrant in connection with the Holder's option to
elect a Cashless Exercise, the number of shares of Common Stock deliverable upon
a Cashless Exercise shall be equal to the number of shares of Common Stock
issuable upon the exercise of Warrants that the Holder specifies are to be
exercised pursuant to a Cashless Exercise multiplied by the Cashless Exercise
Ratio. All provisions of this Agreement shall be applicable with respect to a
surrender of a Warrant Certificate pursuant to a Cashless Exercise for less than
the full number of Warrants represented thereby.

                  The "Current Market Value" per share of Common Stock on any
date shall be the closing sale price on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Stock or such other securities are listed or
admitted to trading or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the Common Stock or such other securities are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker, selected by the Board and reasonably
acceptable to the Holder, making a market in the Common Stock

                                       7
<PAGE>

or such other securities of the Company.

                  If less than all the Warrants represented by a Warrant
Certificate are exercised, such Warrant Certificate shall be surrendered and a
new Warrant Certificate of the same tenor and for the number of Warrants which
were not exercised shall be executed by the Company and delivered to the Holder.
Upon the exercise of any Warrants following the surrender of a Warrant
Certificate in conformity with the foregoing provisions, the Company shall
transfer promptly to the Holder appropriate evidence of ownership of any shares
of Common Stock or other securities or property to which the Holder is entitled
as a result of exercise, at the Company's option, an amount in cash, in lieu of
any fractional shares, as provided in Section 4.3 hereof.

                  Upon the exercise of a Warrant or Warrants, the Company shall
as promptly as practicable but not later than 14 Business Days after such
exercise enter, or cause any transfer agent of the shares of Common Stock to
enter, the name of the person entitled to receive the shares of Common Stock
upon exercise of such Warrants into the Company's register of stockholders.
Thereupon, the Company or the applicable transfer agent shall issue certificates
for the necessary number of shares of Common Stock to which said Holder is
entitled.

                  A Warrant shall be deemed by the Company to be exercised
immediately prior to the close of business on the date of surrender for
exercise, as provided above, of the Warrant Certificate representing such
Warrant and, for all purposes under this Agreement, the Holder shall receive the
shares of Common Stock the Holder would have been entitled to had it been the
registered Holder on such date, except that for purposes of transferring the
shares of Common Stock or voting in a general stockholders' meeting, the Holder
shall, in its relation with the Company, be deemed to be the Holder thereof only
when such shares of Common Stock are entered in the register of stockholders in
the name of such person; provided, however, that, with respect to Warrants which
have been exercised but for which the corresponding shares of Common Stock have
not been recorded in the register of stockholders, the provisions of Article IV
shall continue to apply as if the number of Warrants held prior to exercise
remained outstanding on the date of any action or event of the type giving rise
to an adjustment under Article IV.

         Section 3.4. Registration Rights.

                  The shares of Common Stock issuable upon exercise of the
Warrants shall have the registration rights as set forth in the Registration
Rights Agreement, dated as of October 7, 2003, by and among the Company and the
parties listed on the signature pages thereto.

                                   ARTICLE IV

                                   ADJUSTMENTS

         Section 4.1. Adjustments.

                                       8
<PAGE>

                  The Exercise Price and the number of shares of Common Stock
(or other securities) purchasable upon exercise of each Warrant shall be subject
to adjustment from time to time as follows (subject in each case to Section
4.1(a) (vi) hereof):

                  (a)      Adjustment of Exercise Price. The Exercise Price
shall be subject to adjustment from time to time as follows:

                           (i)      Stock Dividends, Splits, etc. In case the
         Company shall at any time or from time to time after the Closing Date
         (A) declare a dividend or make a distribution on the outstanding shares
         of Common Stock or securities convertible into Common Stock, in either
         case, in shares of Common Stock or (B) effect a subdivision,
         combination, consolidation or reclassification of the outstanding
         shares of Common Stock into a greater or lesser number of shares of
         Common Stock, then, and in each such case, the Exercise Price in effect
         immediately prior to such event or the record date therefor, whichever
         is earlier, shall be adjusted by multiplying such Exercise Price by a
         fraction of which (x) the numerator is the number of shares of Common
         Stock that were outstanding immediately prior to such event and (y) the
         denominator is the number of shares of Common Stock outstanding
         immediately after such event. An adjustment made pursuant to this
         Section 4(a)(i) shall become effective (x) in the case of any such
         dividend or distribution, immediately after the close of business on
         the date for the determination of holders of shares of Common Stock
         entitled to receive such dividend or distribution, or (y) in the case
         of any such subdivision, combination, consolidation or
         reclassification, at the close of business on the day upon which such
         corporate action becomes effective.

                           (ii)     Below Market or Conversion Price Issuances.
         In case the Company shall at any time or from time to time after the
         Closing Date issue or sell any Common Stock or Convertible Security
         (collectively, "Additional Shares") without consideration or for a
         consideration per share (or having a conversion, exchange or exercise
         price per share) less than the greater of (A) the Current Market Value
         per share of Common Stock on the Business Day immediately preceding the
         earlier of the issuance, or public announcement of the issuance, of
         such Additional Shares and (B) the Exercise Price as of the date of
         such issuance then, and in each such case, the Exercise Price shall be
         reduced to an amount determined by multiplying the Exercise Price in
         effect on the day immediately prior to such date by a fraction of which
         (x) the numerator is the sum of (i) the product of (A) the number of
         shares of Common Stock outstanding immediately prior to such sale or
         issuance multiplied by (B) the greater of (1) the then applicable
         Exercise Price per share and (2) the Current Market Value per share of
         Common Stock on the date preceding the earlier of the issuance or
         public announcement of the issuance of such Additional Shares (the
         greater of (1) and (2) above hereinafter referred to as the "Adjustment
         Price") and (ii) the aggregate consideration receivable

                                       9
<PAGE>

         by the Company for the total number of shares of Common Stock so issued
         (or into or for which the Convertible Securities are convertible,
         exercisable or exchangeable), and (y) the denominator equals the
         product of (i) the sum of (A) the total number of shares of Common
         Stock outstanding immediately prior to such sale or issue and (B) the
         number of additional shares of Common Stock issued (or into or for
         which the Convertible Securities may be converted, exercised or
         exchanged), multiplied by (ii) the Adjustment Price. An adjustment made
         pursuant to this subsection (ii) shall be made on the next Business Day
         following the date on which any such issuance is made and shall be
         effective retroactively to the close of business on the date of such
         issuance. Notwithstanding the foregoing, no adjustment (other than as
         provided for in Section 4(a)(iv)(5)(D)) shall be made pursuant to this
         Section 4(a)(ii) in connection with any Excluded Issuances.

                           (iii)    Special Dividends; Repurchases. In case the
         Company after the Closing Date shall (1) distribute to all holders of
         shares of Common Stock evidences of its indebtedness, assets (excluding
         any regular periodic cash dividend but including any extraordinary cash
         dividend), capital stock (other than Common Stock) or rights to
         subscribe for capital stock (other than Common Stock), or (2) purchase
         or otherwise acquire for value any shares of Common Stock in an Above
         Market Repurchase, in each such case the Exercise Price in effect
         immediately prior to the date of such distribution (or the date
         immediately prior to the date of the public announcement of such
         distribution, whichever is earlier) or date of such purchase (or the
         date immediately prior to the date of the public announcement of such
         purchase), as applicable, shall be adjusted by multiplying such
         Exercise Price by a fraction of which (x) the numerator is the
         remainder (if greater than zero) of (i) the Current Market Value per
         share of Common Stock on such date, minus (ii) the Fair Market Value as
         of such date of the portion of assets, evidences of indebtedness,
         capital stock or subscription rights so distributed or paid applicable
         to one share of Common Stock, and (y) the denominator is the Current
         Market Value per share of Common Stock on such date, such adjustment to
         become effective immediately prior to the opening of business on the
         day following the date of distribution or purchase; provided, however,
         that no adjustment shall be made pursuant to clause (1) of this
         subparagraph (a)(iii) (A) if such issuance is an Excluded Issuance or
         (B) if an adjustment shall otherwise be made with respect to such
         distribution or issuance pursuant to Section 4.1(a)(ii); and further
         provided, however, that if in any case the numerator of such fraction
         shall be zero or less than zero, no adjustment shall be made in such
         case. The Company shall provide any Holder, upon receipt of a written
         request therefor, with any indenture or other instrument defining the
         rights of the holders of any indebtedness, assets, subscription rights
         or capital stock referred to in this subparagraph (a)(iii).

                                       10
<PAGE>

                           (iv)     General. For the purposes of any adjustment
         of the Exercise Price pursuant to paragraph (ii) of this Section
         4.1(a), the following provisions shall be applicable:

                                    (1)      In the case of the issuance of
         Common Stock or Convertible Securities for cash in a public offering or
         private placement, the aggregate consideration shall be deemed to be
         the amount of cash paid before deducting any discounts, commissions or
         placement fees payable by the Company to any underwriter or placement
         agent in connection with the issuance and sale thereof.

                                    (2)      In the case of the issuance of
         Common Stock for a consideration in whole or in part other than cash,
         such consideration shall be deemed to be the Fair Market Value thereof.

                                    (3)      Subparagraph (2) above
         notwithstanding, in the case of the issuance of Additional Shares to
         the owners of the non-surviving entity in connection with any merger in
         which the Company is the surviving corporation, the amount of
         consideration therefore shall be deemed to be the Fair Market Value of
         such portion of the net assets and business of the non-surviving entity
         as is attributable to such Common Stock or Convertible Securities, as
         the case may be.

                                    (4)      If Common Stock is sold as a unit
         with other securities, the aggregate consideration received for such
         Common Stock shall be deemed to be net of the Fair Market Value of such
         other securities.

                                    (5)      In the case of the issuance of
         Convertible Securities:

                                             (A)      The aggregate maximum
                  number of shares of Common Stock (as set forth in the
                  instruments relating thereto, without regard to any provision
                  contained therein for a subsequent reduction of such number)
                  deliverable upon conversion of or in exchange for, or upon the
                  exercise of, such Convertible Securities and subsequent
                  conversion, exchange or exercise thereof shall be deemed to
                  have been issued at the time such Convertible Securities were
                  issued and for a consideration equal to the consideration
                  received by the Company for any such Convertible Securities,
                  plus the minimum amount of consideration (as set forth in the
                  instruments relating thereto, without regard to any provision
                  contained therein for a subsequent increase of consideration),
                  if any, to be received by the Company upon the conversion,
                  exercise or exchange of such Convertible Securities;

                                       11
<PAGE>

                                             (B)      With respect to any
                  Convertible Securities issued after the Closing Date for which
                  an adjustment to the Exercise Price previously has been made
                  pursuant to Section 4.1(a)(ii), on any increase in the number
                  of shares of Common Stock deliverable upon exercise,
                  conversion or exchange of, or a decrease in the exercise price
                  of, such Convertible Securities other than a change resulting
                  from the anti-dilution provisions thereof, the applicable
                  Exercise Price shall forthwith be readjusted retroactively to
                  give effect to such increase or decrease;

                                             (C)      With respect to any
                  Convertible Securities issued after the Closing Date for which
                  an adjustment to the Exercise Price has previously not been
                  made pursuant to Section 4.1(a)(ii), if there is any increase
                  in the number of shares of Common Stock deliverable upon
                  exercise, conversion or exchange of, or a decrease in the
                  exercise price of, such Convertible Securities other than a
                  change resulting from the anti-dilution provisions thereof,
                  such Convertible Securities shall be treated as if they had
                  been cancelled and reissued and an adjustment to the Exercise
                  Price with respect to such deemed issuance shall be made
                  pursuant to Section 4.1(a)(ii), if applicable;

                                             (D)      With respect to any
                  Convertible Securities issued prior to the Closing Date, if
                  there is any increase in the number of shares of Common Stock
                  deliverable upon exercise, conversion or exchange of, or a
                  decrease in the exercise price of, such Convertible Securities
                  other than a change resulting from the anti-dilution
                  provisions thereof, such Convertible Securities shall be
                  treated as if they had been cancelled and reissued and an
                  adjustment to the Exercise Price with respect to such deemed
                  issuance shall be made pursuant to Section 4.1(a)(ii), if
                  applicable; and

                                             (E)      No further adjustment of
                  the Exercise Price adjusted upon the issuance of any such
                  Convertible Securities shall be made as a result of the actual
                  issuance of Common Stock upon the exercise, conversion or
                  exchange of any such Convertible Securities.

                                    (v)      Rights Distributions. Rights or
         warrants issued by the Company to all holders of Common Stock entitling
         the holders thereof to subscribe for or purchase capital stock of the
         Company, which rights or warrants (1) are deemed to be transferred with
         such shares of Common Stock, (2) are not exercisable and (3) are also
         issued in respect of future

                                       12
<PAGE>

         issuances of Common Stock, including shares of Common Stock issued upon
         exercise of the warrants, in each case in clauses (1) through (3) until
         the occurrence of a specified event, shall for purposes of
         subparagraphs (b)(ii) and (b)(iii) not be deemed issued until the
         occurrence of the earliest such specified event.

                                    (vi)     Calculations. All calculations of
         the Exercise Price shall be made to the nearest five decimal places.
         Anything in Section 4.1(a) to the contrary notwithstanding, in no event
         shall the then current Exercise Price be increased as a result of any
         calculation made at any time pursuant to Sections 4.1(a)(ii) through
         4.1(a)(iv). No adjustment to the Exercise Price pursuant to paragraph
         4.1(a) shall be required unless such adjustment would require an
         increase or decrease of at least 1% in the Exercise Price; provided,
         however, that any adjustments which by reason of this paragraph
         4.1(a)(vi) are not required to be made shall be carried forward and
         taken into account in any subsequent adjustment. Notwithstanding any
         other provision of this Section 4.1(a), no adjustment to the Exercise
         Price shall reduce the Exercise Price below $0.01, and any such
         purported adjustment shall instead reduce the Exercise Price to $0.01.

                                    (vii)    Outstanding Shares. The number of
         shares of Common Stock at any time outstanding shall include all shares
         of Common Stock outstanding at such time and any shares of Common Stock
         issuable upon conversion of or in exchange for any convertible or
         exchangeable security or upon the exercise of any option. The number of
         shares of Common Stock at any time outstanding shall not include any
         shares of Common Stock then owned or held by or for the account of the
         Company or any Subsidiary, and the disposition of any shares so owned
         or held shall be considered an issue or sale of Common Stock.

                                    (viii)   Successive Adjustments. Successive
         adjustments in the Exercise Price shall be made, without duplication,
         whenever any event specified in Sections 4.1(a)(i) through 4.1(a)(iii)
         shall occur.

                  (b)      Reorganization, Consolidation, Merger, Asset Sale.

                           (i)      In case of any capital reorganization or
         reclassification of outstanding shares of Common Stock (other than a
         reclassification covered by Section 4.1(a)), or in case of any
         consolidation or merger of the Company with or into another Person, or
         in case of any sale, lease, transfer, conveyance or other disposition
         (other than by way of merger or consolidation) of all or substantially
         all of the Company's assets, on a consolidated basis, in one
         transaction or a series of related transactions, to any Person
         (including any group that is deemed to be a Person) (each of the
         foregoing being referred to as a "Transaction"), in each case which is
         effected in such a manner that the holders of Common Stock are entitled
         to receive (either directly or upon subsequent liquidation) stock or
         other

                                       13
<PAGE>

         securities or property (including cash) with respect to or in exchange
         for Common Stock, Warrants then outstanding shall thereafter be
         convertible into, in lieu of the Common Stock issuable upon such
         conversion prior to the consummation of such Transaction, the kind and
         amount of shares of stock and other securities and property (including
         cash) receivable upon the consummation of such Transaction by a holder
         of that number of shares of Common Stock into which such Holder's
         Warrants were exercisable (without regard to any limitation on exercise
         contained herein, the availability of authorized and unissued shares
         for issuance upon exercise, or otherwise) immediately prior to the
         consummation of such Transaction. In any such case, the Company or the
         Person formed by the consolidation or resulting from the merger or
         which acquires such assets or which acquires the Company's shares, as
         the case may be, shall make or cause to be made appropriate provisions
         (as determined in good faith by the Board) in the applicable agreement
         of merger or consideration, its certificate or articles of
         incorporation or other constituent documents to ensure that the
         provisions of this Agreement will continue to be applicable to the
         Warrants or any such other shares of stock and other securities (other
         than Common Stock) and property deliverable upon exercise of the
         Warrants remaining outstanding following the Transaction. In case
         securities or property other than Common Stock shall be issuable or
         deliverable upon conversion as aforesaid, then all references in this
         Section 4.1 shall be deemed to apply, so far as appropriate and as
         nearly as may be, to such other securities or property. The provisions
         of this Section 4.1(b) shall similarly apply to successive
         Transactions. The Company shall give written notice to the Holders at
         least 30 days prior to the date on which any Transaction or similar
         transaction affecting the Company shall take place.

                           (ii)     Notwithstanding the foregoing, (x) if the
         Company merges or consolidates with, or sells all or substantially all
         of its property and assets to, another Person and consideration is
         payable to holders of Common Stock in exchange for their shares of
         Common Stock in connection with such merger, consolidation or sale
         which consists solely of cash, or (y) in the event of the dissolution,
         liquidation or winding up of the Company, then the Holders of Warrants
         shall be entitled to receive payments or distributions as of the date
         of such event on an equal basis with, and on the same day as, holders
         of shares of Common Stock (or other securities purchasable upon
         exercise of the Warrants) as if the Warrants had been exercised
         immediately prior to such event, less an amount equal to the Exercise
         Price. Upon receipt of such payment, if any, the rights of a Holder
         shall terminate and cease and such Holder's Warrants shall expire. In
         case of any such merger, consolidation or sale of assets, the surviving
         or acquiring Person or, in the event of any dissolution, liquidation or
         winding up of the Company, after receipt of surrendered Warrant
         Certificates from the Holder, the Company shall make payment by
         delivering a check in such amount as is appropriate (or,

                                       14
<PAGE>

         in the case of consideration other than cash, such other consideration
         as is appropriate) to the Holder.

                           (iii)    Notwithstanding anything contained herein to
         the contrary, the Company will not effect any Transaction unless, prior
         to the consummation thereof, the Surviving Person, if other than the
         Company, shall mail, by first-class mail, postage prepaid, to each
         Holder at such Holder's address as it appears on the transfer books of
         the Company, (A) a written instrument assuming the obligation to
         deliver to such Holder such cash, property and securities to which, in
         accordance with the foregoing provisions, such Holder is entitled, and
         (B) an opinion of outside counsel for such Surviving Person stating
         that such assumption agreement is a valid, binding and enforceable
         agreement of the Surviving Person.

                           (iv)     Nothing contained in this Section 4.1(b)
         shall limit the rights of the Holders to exercise the Warrants.

         Section 4.2. Notice of Consolidation, Merger, Etc.

                  In case at any time after the date hereof and prior to 5:00
p.m., New York City time, on the Expiration Date, there shall be any (i)
consolidation or merger involving the Company or sale, transfer or other
disposition of all or substantially all of the Company's property, assets or
business (except a merger or other reorganization in which the Company shall be
the surviving corporation and holders of Common Stock receive no consideration
in respect of their shares) or (ii) any other transaction contemplated by
Section 4.1(b)(i) above, then, in any one or more of such cases, the Company
shall mail, at the Company's expense, to the Holders, at the earliest
practicable time (and, in any event, not less than 20 days before any date set
for definitive action), notice of the date on which such reorganization, sale,
consolidation, merger, dissolution, liquidation or winding up shall take place,
as the case may be. Such notice shall also set forth such facts as shall
indicate the effect of such action (to the extent such effect may be known at
the date of such notice) on the Exercise Price and the kind and amount of the
shares of Common Stock and other securities, money and other property
deliverable upon exercise of the Warrants. Such notice shall also specify the
date as of which the holders of record of the shares of Common Stock or other
securities or property purchasable upon exercise of the Warrants shall be
entitled to exchange their shares for securities, money or other property
deliverable upon such reorganization, sale, consolidation, merger, dissolution,
liquidation or winding up, as the case may be.

         Section 4.3. Fractional Interests.

                  In connection with the exercise of any Warrant pursuant to
Section 4.1, no fractions of shares of Common Stock shall be issued, but in lieu
thereof the Company shall pay a cash adjustment in respect of such fractional
interest in an amount equal to such fractional interest multiplied by the
Current Market Value per share of Common Stock on the day on which such Warrants
are deemed to have been exercised. If more

                                       15
<PAGE>

than one Warrant shall be surrendered for exercise at one time by the same
Holder, the number of full shares of Common Stock issuable upon exercise thereof
shall be computed on the basis of the total number of Warrants so surrendered.

         Section 4.4. When Issuance or Payment May Be Deferred.

                  In any case in which this Article IV shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the Holder of any Warrant exercised after such record date
the shares of Common Stock and other shares in the capital of the Company, if
any, purchasable upon such exercise over and above the shares of Common Stock
and other shares in the capital of the Company, if any, purchasable upon such
exercise and (ii) paying such Holder any amount in cash in lieu of a fractional
share; provided, however, that the Company shall deliver to such Holder a due
bill or other appropriate instrument evidencing such Holder's right to receive
such additional shares of Common Stock, other shares and cash upon the
occurrence of the event requiring such adjustment.

         Section 4.5. Par Value; Valid Issuance.

                  The Company will not increase the par value of the shares of
Common Stock above the Exercise Price (as adjusted hereunder from time to time),
except to the extent required by applicable law. The Company will take all such
corporate action, to the extent permitted by applicable law (including, without
limitation, reducing the par value thereof), as may be necessary or appropriate
in order that the Company may validly and legally issue stock upon the exercise
of Warrants.

                                    ARTICLE V

                           DECREASE IN EXERCISE PRICE

                  The Board, in its sole discretion, shall have the right at any
time, or from time to time, to decrease the Exercise Price of the Warrants
and/or increase the number of shares issuable upon the exercise of the Warrants.

                                   ARTICLE VI

                               LOSS OR MUTILATION

                  Upon receipt by the Company of evidence satisfactory to it of
the ownership and the loss, theft, destruction or mutilation of any Warrant
Certificate and of indemnity or bond satisfactory to it and (in the case of
mutilation) upon surrender and cancellation thereof, then, in the absence of
notice to the Company that the Warrants represented thereby have been acquired
by a bona fide purchaser, the Company shall execute and deliver to the
registered Holder of the lost, stolen, destroyed or mutilated Warrant
Certificate, in exchange for or in lieu thereof, a new Warrant Certificate of
the

                                       16
<PAGE>

same tenor and for a like aggregate number of Warrants. Upon the issuance of any
new Warrant Certificate under this Article VI, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and other expenses in connection therewith.
Every new Warrant Certificate executed and delivered pursuant to this Article VI
in lieu of any lost, stolen or destroyed Warrant Certificate shall constitute a
contractual obligation of the Company whether or not the allegedly lost, stolen
or destroyed Warrant Certificates shall be at any time enforceable by anyone and
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. The provisions of this Article VI are exclusive and shall preclude
(to the extent lawful) all other rights or remedies with respect to the
replacement of mutilated, lost, stolen, or destroyed Warrant Certificates.

                                   ARTICLE VII

                                    COVENANTS

         Section 7.1. Covenants.

                  The Company agrees that (a) prior to the date of the
Stockholder Approval, (i) it will at all times reserve and keep available, free
from liens, charges and security interests and not subject to any preemptive
rights, solely for issuance and delivery upon exercise of the Warrants, the
Available Shares and (ii) the Available Shares shall be duly authorized and,
when issued upon such exercise, shall be validly issued, fully paid and
nonassessable, and (b) from and after the date of the Stockholder Approval (i)
it will at all times reserve and keep available, free from liens, charges and
security interests and not subject to any preemptive rights, solely for issuance
and delivery upon exercise of the Warrants, the number of shares of Common Stock
from time to time issuable upon exercise of the Warrants at the time outstanding
and (ii) all shares of Common Stock issuable upon exercise of the Warrants shall
be duly authorized and, when issued upon such exercise, shall be validly issued,
fully paid and nonassessable.

                                  ARTICLE VIII

                WARRANT TRANSFER BOOKS; RESTRICTIONS ON TRANSFER

         Section 8.1. Transfer and Exchange.

                  The Warrant Certificates shall be issued in registered form
only. The Warrants shall not be transferable, except as provided in the next
paragraph. The Company shall keep at its office a register for the registration
of Warrant Certificates and transfers or exchanges of Warrant Certificates as
herein provided.

                  A Holder may transfer its Warrants only to the Initial Holder
and Affiliates of the Initial Holder and only by written application to the
Company stating the name of the proposed transferee and otherwise complying with
the terms of this

                                       17
<PAGE>

Agreement. No such transfer shall be effected until, and such transferee shall
succeed to the rights of a Holder only upon, final acceptance and registration
of the transfer by the Company in the register. Prior to the registration of any
transfer of Warrants by a Holder as provided herein, the Company and any agent
of the Company may treat the person in whose name the Warrants are registered as
the owner thereof for all purposes and as the person entitled to exercise the
rights represented thereby, any notice to the contrary notwithstanding. When
Warrant Certificates are presented to the Company with a request to register the
transfer or to exchange them for an equal amount of Warrants of other authorized
denominations, the Company shall register such transfer or make such exchange as
requested if its requirements for such transactions are met.

         Section 8.2. Special Transfer Provisions.

                  By its acceptance of any Warrants represented by a Warrant
Certificate, each Holder of such Warrants acknowledges the restrictions on
transfer of such Warrants set forth in this Agreement and in the Private
Placement Legend and agrees that it will transfer such Warrants only as provided
in this Agreement. The Company shall not register a transfer of any Warrants
unless such transfer complies with the restrictions on transfer of such Warrants
set forth in this Agreement. In connection with any transfer of Warrants, each
Holder agrees by its acceptance of Warrants to furnish the Company such evidence
that the transferee is the Initial Holder or an Affiliate of the Initial Holder
and, if such transfer is not being made pursuant to an effective registration
statement under the Securities Act, with such certifications, legal opinions or
other information as the Company may reasonably require to confirm that such
transfer is being made pursuant to an exemption from, or a transaction not
subject to, the registration requirements of the Securities Act and otherwise in
compliance with this Agreement.

                                   ARTICLE IX

                                 WARRANT HOLDERS

         Section 9.1. Warrant Holder Deemed Not a Stockholder.

                  The Company may deem and treat the registered Holder(s) of the
Warrant Certificates as the absolute owner(s) thereof (notwithstanding any
notation of ownership or other writing thereon made by anyone), for the purpose
of any exercise thereof and for all other purposes, and the Company shall not be
affected by any notice to the contrary. Accordingly, the Company shall not,
except as ordered by a court of competent jurisdiction as required by law, be
bound to recognize any equitable or other claim to or interest in the Warrants
on the part of any person other than such registered Holder, whether or not it
shall have express or other notice thereof. Prior to the exercise of the
Warrants, no Holder of a Warrant Certificate, as such, shall be entitled to any
rights of a stockholder of the Company, including, without limitation, the right
to vote or to consent to any action of the stockholders, except as otherwise
provided in this Agreement, to receive dividends or other distributions, to
exercise any preemptive right or to receive any notice of meetings of
stockholders and, except as otherwise provided in this Agreement,

                                       18
<PAGE>

shall not be entitled to receive any notice of any proceedings of the Company.

         Section 9.2. Right of Action.

                  All rights of action with respect to this Agreement are vested
in the Holders of the Warrants, and any Holder of any Warrant, may, on such
Holder's own behalf and for such Holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
suitable to enforce, or otherwise in respect of, such Holder's right to exercise
such Warrants in the manner provided in the Warrant Certificate representing
such Warrants and in this Agreement.

                                    ARTICLE X

                                  MISCELLANEOUS

         Section 10.1. Payment of Taxes.

                  Subject to Article VI hereof, all shares of Common Stock
purchasable upon the exercise of Warrants shall be validly issued, fully paid
and not subject to any calls for funds, and the Company shall pay any taxes and
other governmental charges that may be imposed under the laws of the United
States of America or any political subdivision or taxing authority thereof or
therein in respect of the issue or delivery thereof upon exercise of Warrants
(other than taxes on or measured by income imposed on any Holder). The Company
shall not be required, however, to pay any tax or other charge imposed in
connection with any transfer involved in the issue of any certificate for shares
of Common Stock (including other securities or property purchasable upon the
exercise of the Warrants) or payment of cash to any Person other than the Holder
of a Warrant Certificate surrendered upon the exercise of a Warrant and in case
of such transfer or payment, the Company shall not be required to issue any
share certificate or pay any cash until such tax or charge has been paid or it
has been established to the Company's satisfaction that no such tax or charge is
due.

         Section 10.2. No Merger, Consolidation or Sale of Assets of the
                       Company.

                  Except as otherwise provided herein, the Company will not
merge into or consolidate with any other Person, or sell or otherwise transfer
all or substantially all of its property and assets to any Person, unless the
entity resulting from such merger or consolidation, or such Person, shall
expressly assume the due and punctual performance and observance of each and
every covenant and condition of this Agreement or contained in the Warrants to
be performed and observed by the Company.

         Section 10.3. Notices; Payment.

                  (a)      Any notice, demand or delivery authorized by this
Agreement shall be sufficiently given or made when mailed, if sent by first
class mail, postage prepaid, addressed to any Holder of a Warrant at such
Holder's last known address appearing on

                                       19
<PAGE>

the register of the Company and to the Company as follows:

                  To the Company:

                  Akorn, Inc.
                  2500 Millbrook Drive
                  Buffalo Grove, Illinois 60089
                  Fax No.: (347) 279-6191
                  Attention: Jerry Ellis

or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.

                  (b)      Payment of the Exercise Price shall be made in
accordance with the provisions of this Agreement at the principal executive
office of the Company set forth above.

                  (c)      Any notice required to be given by the Company to the
Holders shall be made by mailing by registered mail, return receipt requested,
to the Holders at their last known addresses appearing on the register
maintained by the Company. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given when mailed,
whether or not the Holder receives the notice.

         Section 10.4. Binding Effect.

                  This Agreement shall be binding upon and inure to the benefit
of the Company and its respective successors and assigns, and the Holders from
time to time of the Warrants. Nothing in this Agreement is intended or shall be
construed to confer upon any Person, other than the Company and the Holders of
the Warrants, any right, remedy or claim under or by reason of this Agreement or
any part hereof.

         Section 10.5. Counterparts.

                  This Agreement may be executed manually or by facsimile in any
number of counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.

         Section 10.6. Amendments.

                  Any provision of this Agreement may be amended or modified in
whole or in part at any time by an agreement in writing among the Company and
the Holder of the Warrant. No Failure on the part of either the Company or the
Holder of the Warrant to exercise, and no delay in exercising, any right shall
operate as a waiver thereof nor shall any single or partial exercise by either
the Company or the Holder of the Warrant of any right preclude any other or
future exercise thereof or the exercise of any other right.

                                       20
<PAGE>

         Section 10.7. Headings.

                  The descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.

         Section 10.8. Common Stock Legend.

                  Unless and until the Common Stock purchasable upon the
exercise of the Warrants are registered under the Securities Act, or unless
otherwise agreed by the Company and the Holder thereof, such shares of Common
Stock will bear a legend to the following effect:

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

         Section 10.9. Termination.

                  Unless terminated earlier pursuant to this Agreement, this
Agreement shall terminate at 5:00 p.m. (New York City time) on the Expiration
Date. Notwithstanding the foregoing, this Agreement shall terminate on any
earlier date as of which all Warrants have been exercised.

         Section 10.10. Method of Payment.

                  The U.S. dollar is the sole currency of account and payment
for all sums payable by the Company or the Holders under or in connection with
the Warrants, including damages.

         Section 10.11. Governing Law.

                  This Agreement shall be governed by the laws of the State of
New York. The Company and the Holders agree to submit to the jurisdiction of the
courts of the State of New York in any action or proceeding arising out of or
related to this Agreement or the Warrants.

                            (signature page follows)

                                       21
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed,
as of the day and year first above written.

                                           AKORN, INC.

                                           By: /s/ Bernard J. Pothast
                                               -------------------------------
                                               Bernard J. Pothast, Senior Vice
                                               President, Chief Financial
                                               Officer, Secretary and Treasurer

                                           Arjun Waney

                                           /s/ Arjun Waney
                                           ---------------------------

                                       22
<PAGE>

                                                                       EXHIBIT A

                           FORM OF WARRANT CERTIFICATE

         THE SECURITIES EVIDENCED HEREBY ARE NOT TRANSFERABLE, EXCEPT IN
         ACCORDANCE WITH THE WARRANT AGREEMENT.

         THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
         UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
         ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
         THE STATES OF THE UNITED STATES.

                                   AKORN, INC.

                                  [__________]

No. _____

                        WARRANTS TO PURCHASE COMMON STOCK

                  This certifies that [___________] or its registered assigns,
is the owner of ______ Warrants, each of which represents the right to purchase
from Akorn, Inc., a Louisiana corporation (the "Company"), at any time beginning
___________ __, 200_ and prior to the Expiration Date (as defined in the Warrant
Agreement referred to below), _______ shares of the common stock, no par value
per share, of the Company (the "Common Stock") at a per share exercise price
(the "Exercise Price") equal to $______ (subject to adjustment as provided in
the Warrant Agreement), upon surrender hereof at the Company, with the
Subscription Form on the reverse hereof duly executed with simultaneous payment
in full by wire transfer of immediately available funds or by certified or
official bank or bank cashier's check payable to the order of the Company. At
any time on or before the Expiration Date, any outstanding Warrants may be
exercised on any Business Day (as defined in the Warrant Agreement); provided
that the Holders of Warrants shall be able to exercise their Warrants only if
the exercise of such Warrants is exempt from the registration requirements of
the Securities Act of 1933, as amended, as reasonably determined by the Company,
and such securities are qualified for sale or exempt from qualification under
the applicable securities laws of the states or other jurisdictions in which
such Holder resides.

                  This Warrant Certificate is issued under and in accordance
with a Warrant

                                       23
<PAGE>

Agreement dated as of October [ ], 2003 (the "Warrant Agreement"), between the
Company and [      ], and is subject to the Articles of Incorporation of the
Company and to the terms and provisions contained therein, to all of which terms
and provisions the holder of this Warrant Certificate consents by acceptance
hereof. The terms of the Warrant Agreement and the Registration Rights Agreement
are hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Warrant Agreement for a full description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Company and the Holders of the Warrants. The summary of the terms of the Warrant
Agreement and the Registration Rights Agreement contained in this Warrant
Certificate is subject to and qualified in its entirety by express reference to
the Warrant Agreement and the Registration Rights Agreement. To the extent
permitted by applicable law, in the event of any inconsistency between the terms
of this Warrant and the terms of the Warrant Agreement, the terms of the Warrant
Agreement shall govern. All terms used in this Warrant Certificate that are
defined in the Warrant Agreement and the Registration Rights Agreement shall
have the meanings assigned to them in such agreements.

                  This Warrant Certificate shall be void and all rights
evidenced hereby shall cease on the Expiration Date, unless sooner terminated by
the liquidation, dissolution or winding-up of the Company or as otherwise
provided in the Warrant Agreement upon the consolidation or merger of the
Company with, or sale of the Company to, another Person or unless such date is
extended as provided in the Warrant Agreement.

                                       24
<PAGE>

                  The Warrant Agreement and the Warrants shall be governed by
the laws of the State of New York. The Company and the Holders agree to submit
to the jurisdiction of the courts of the State of New York in any action or
proceeding arising out of or related to this Agreement or the Warrants.

                                             AKORN, INC.

                                             By:______________________________
                                             Name:
                                             Title:

Dated: _________, 200_

                                       25
<PAGE>

                     FORM OF REVERSE OF WARRANT CERTIFICATE

                                SUBSCRIPTION FORM

                 (To be executed only upon exercise of Warrant)

To: Akorn, Inc.
    2500 Millbrook Drive
    Buffalo Grove, Illinois 60089
    Telecopier No.: (847) 279-6191

Attention: Jerry Ellis

                  The undersigned irrevocably exercises ________ of the Warrants
represented by this Warrant Certificate and herewith makes payment of $ _______
(such payment being in cash or by certified or official bank or bank cashier's
check payable to the order or at the direction of Akorn, Inc. or pursuant to a
Cashless Exercise on the terms and conditions specified in this Warrant
Certificate and in the Warrant Agreement referred to herein) and surrenders this
Warrant Certificate and all right, title and interest therein to and directs
that the common stock, no par value per share, of Akorn, Inc. (the "Common
Stock") deliverable upon the exercise of such Warrants be registered or placed
in the name and at the address specified below and delivered thereto.

Dated: _______                               ___________________________________
                                             (Signature of Owner)

                                             ___________________________________
                                             (Street Address)

                                             ___________________________________
                                             (City)      (State)      (Zip Code)

                                       26
<PAGE>

                               FORM OF ASSIGNMENT

                  The undersigned registered Holder of this Warrant Certificate
hereby sells, assigns, and transfers unto the Assignee(s) named below (including
the undersigned with respect to any Warrants constituting a part of the Warrants
evidenced by this Warrant Certificate not being assigned hereby) all of the
right of the undersigned under this Warrant Certificate, with respect to the
number of Warrants set forth below:

Name(s) of Assignee(s): _____________________________________

Address: ____________________________________________________

No. of Warrants: ____________________________________________

Please insert social security or other identifying number of assignee(s):

and does hereby irrevocably constitute and appoint the Secretary of Akorn, Inc.
the undersigned's attorney to make such transfer on the books of Akorn, Inc.
maintained for the purposes, with full power of substitution in the premises.

In connection with any transfer of Warrants, the undersigned confirms that the
transfer of the Warrants is exempt from registration under the Securities Act of
1933, as amended, and that the Assignee(s) is the Initial Holder or an Affiliate
of the Initial Holder. The undersigned understands that the Company shall not be
obligated to register the Warrants in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Article VIII of the Warrant Agreement shall
have been satisfied.

Dated: _______

                                             ___________________________________
                                             (Signature of Owner)

                                             ___________________________________
                                             (Street Address)

                                             ___________________________________
                                             (City)      (State)      (Zip Code)

                                       27

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