Document:

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                                                                     EXHIBIT 4.8

                                WARRANT AGREEMENT

                  WARRANT AGREEMENT, dated as of October 7, 2003 (this
"Agreement"), between Akorn, Inc., a Louisiana corporation (the "Company"), and
Argent Fund Management Ltd. (the "Initial Holder"). Capitalized terms used but
not defined herein shall have the meanings ascribed to them in the Purchase
Agreement.

                              W I T N E S S E T H:

                  WHEREAS, pursuant to 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 (the "Purchase Agreement"), the
Company will issue a note (the "Purchased Note"), to the Initial Holder.

                  WHEREAS, pursuant to the terms of the Purchased Note, the
Company desires to grant to the Initial Holder warrants to purchase up to 5,000
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.

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

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                  "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.

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

                  "Exchange Act" means the United States Securities Exchange Act
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

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Convertible Security outstanding as of the Closing Date, including, without
limitation, 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, (8) the issuance of securities
pursuant to any financing from a bank or similar financial or lending
institution approved by the Board; or (9) the issuance of warrants to purchase
Common Stock pursuant to the Guaranty Warrant Agreements; 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 the third anniversary of the date of
this Agreement.

                  "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 Warrant Agreement" means (a) the Warrant Agreement,
dated as of October 7, 2003, between the Company and The John N. Kapoor Trust,
dtd 9/20/89 and (b) the Warrant Agreement, dated as of October 7, 2003, between
the Company and Arjun Waney, whereby in consideration for having such parties
enter into a personal guaranty under the Company's credit facility, the Company
will grant warrants to such parties.

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

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

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

                  "Purchased Note" has the meaning specified in the recitals to
this Agreement.

                  "Purchaser Representative" means the person designated to act
as the representative of the purchasers listed on the signature pages of the
Purchase Agreement, pursuant to the Purchaser Representative Agreement, dated as
of the date hereof, who initially will be John N. Kapoor.

                  "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.

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

                  "Warrants" has the meaning specified in Section 2.1 hereof.

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

                                   ARTICLE II

                                ISSUE OF WARRANTS

         Section 2.1. Issuance of Warrants.

                  The Company hereby agrees to issue to the Initial Holder on
the Closing Date warrants (the "Warrants") to purchase from the Company 5,000
shares of the Company's Common Stock at the Exercise Price.

         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 Closing 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.

         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

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         (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 Closing 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 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

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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 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

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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.

                  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

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         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 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

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         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).

                  (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

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         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;

                                    (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,

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                  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 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

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         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 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,

                                       13
<PAGE>

         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, 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

                                       14
<PAGE>

         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 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

                                       15
<PAGE>

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 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

                                       16
<PAGE>

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 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

                                       17
<PAGE>

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, 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

                                       18
<PAGE>

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 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

                                       19
<PAGE>

                  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.

         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.

                                       20
<PAGE>

                  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

                                         Argent Fund Management Ltd.

                                         By: /s/ K.B. Ramchand
                                             -----------------------------------
                                             Name:  K.B. Ramchand
                                             Title: Director

                                       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 4.9

                          REGISTRATION RIGHTS AGREEMENT

                                  by and among

                                   AKORN, INC.

                                       and

               THE PURCHASERS LISTED ON THE SIGNATURE PAGES HERETO

                                   dated as of

                                 October 7, 2003

<PAGE>

                  REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
October 7, 2003, by and among AKORN, INC. a Louisiana corporation (the
"Company") and the purchasers listed on the signatures pages hereto (the
"Purchasers").

                  WHEREAS, the Purchaser and the Company have entered into a
Preferred Stock and Note Purchase Agreement (the "Purchase Agreement"), dated as
of September 25, 2003, pursuant to which, upon the terms and subject to the
conditions contained therein, the Purchasers have agreed to acquire 247,172
shares of the Company's Series A 6.0% Participating Convertible Preferred Stock,
par value $1.00 per share; and

                  WHEREAS, to induce the Purchasers to execute and deliver the
Purchase Agreement and to consummate the transactions contemplated thereby the
Company has agreed to provide the Purchasers with the registration rights set
forth in this Agreement.

                  Accordingly, the parties hereto agree as follows:

1.       Definitions.

         As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:

         "Adverse Disclosure" means public disclosure of material, non-public
information, disclosure of which, in the Board of Directors' good faith
judgment, after consultation with independent outside counsel to the Company,
(i) would be required to be made in any registration statement filed with the
SEC by the Company so that such registration statement would not be materially
misleading; (ii) would not be required to be made at such time but for the
filing of such registration statement; and (iii) the Company has a bona fide
business purpose for not disclosing publicly.

         "AEG Agreement" has the meaning set forth in Section 2.1(i) below.

         "Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) with respect to any
individual, shall also mean the spouse or child of such individual; provided,
that neither the Company nor any Person controlled by the Company shall be
deemed to be an Affiliate of any Holder.

         "Assignee" has the meaning set forth in Section 6.2 below.

         "Articles of Incorporation" means the Articles of Incorporation of the
Company, as it may be amended or restated hereafter from time to time.

         "Common Stock" means any shares of common stock, no par value per
share, of the Company, now or hereafter authorized to be issued, and any and all
securities of any kind whatsoever of the Company or any successor thereof which
may be issued on or after the date hereof in respect of, in exchange for, or
upon conversion of shares of Common Stock pursuant to

<PAGE>

a merger, consolidation, stock split, reverse split, stock dividend,
recapitalization of the Company or otherwise.

         "Company" has the meaning set forth in the introductory paragraph.

         "Demand Exercise Notice" has the meaning set forth in Section 2.1(a)
below.

         "Demand Registration" has the meaning set forth in Section 2.1(h)
below, subject to 2.1(e) below.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the SEC
thereunder, all as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar Federal statute.

         "Form S-3" means a Form S-3 registration statement under the Securities
Act, and any successor or similar form thereto.

         "Holder" means any holder of Registrable Securities who is (i) a
signatory to this Agreement or (ii) an Assignee.

         "Holder Demand" has the meaning set forth in Section 2.1(a) below.

         "indemnified party" means any Person seeking indemnification pursuant
to Section 2.7.

         "indemnifying party" means any Person from whom indemnification is
sought pursuant to Section 2.7.

         "Indemnitees" has the meaning set forth in Section 2.7(a) below.

         "Initiating Holder" means the party or parties delivering a Holder
Demand as provided for under Section 2.1(a).

         "Kapoor Agreement" has the meaning set forth in Section 2.1(i) below.

         "Losses" has the meaning set forth in Section 2.7(a) below.

         "Majority Participating Holders" means Participating Holders holding at
least a majority of the Registrable Securities proposed to be included in any
offering of Registrable Securities by such Participating Holders pursuant to
Section 2.1 or Section 2.2 hereto.

         "Majority Voting Holders" means the holders of at least 50.01% of the
shares of Common Stock that are also Registrable Securities (assuming all shares
of Series A Preferred Stock have been converted into shares of Common Stock).

         "NASD" means National Association of Securities Dealers, Inc.

                                       3

<PAGE>

         "Participating Holders" means any Holder participating in any offering
of Registrable Securities pursuant to Section 2.1 or Section 2.2 hereto.

         "Partner Distribution" has the meaning set forth in Section 2.1(a)
below.

         "Person" means a corporation, an association, a partnership, an
organization, a business, a trust, an individual, or any other entity or
organization, including a government or political subdivision or an
instrumentality or agency thereof.

         "Postponement Period" has the meaning set forth in Section 2.1(j)
below.

         "Registrable Securities" means (i) any shares of Common Stock issued or
issuable, directly or indirectly, upon conversion of any shares of Series A
Preferred Stock, (ii) any shares of Common Stock issued or issuable, directly or
indirectly, upon exercise of any Warrants, or (iii) any shares of Common Stock
issued or issuable, directly or indirectly, in exchange for or with respect to
the Common Stock referenced in clauses (i) or (ii) above by way of stock
dividend, stock split or combination of shares or in connection with a
reclassification, recapitalization, merger, consolidation or other
reorganization. As to any particular Registrable Securities, such securities
shall cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement or (b) when such securities shall have been
sold as permitted by, and in compliance with, the Securities Act.

         "Registration Expenses" means all fees and expenses incurred in
connection with the Company's performance of or compliance with Section 2
hereof, including, without limitation, (i) all registration, filing and
applicable SEC fees, NASD fees, national securities exchange or inter-dealer
quotation system fees, all fees and expenses of complying with state securities
or blue sky laws (including fees and disbursements of counsel to the
underwriters and the Participating Holders in connection with "blue sky"
qualification of the Registrable Securities and determination of their
eligibility for investment under the laws of the various jurisdictions), (ii)
all printing (including printing certificates for the Registrable Securities in
a form eligible for deposit with The Depository Trust Company and printing
preliminary and final prospectuses), word processing, duplicating, telephone and
facsimile expenses, all messenger and delivery expenses, (iii) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of "cold comfort" letters or any special
audits required by, or incident to, such registration, (iv) the fees and
expenses of one law firm or other counsel selected by the Majority Participating
Holders, (v) all fees and expenses of one firm of accountants selected by the
Majority Participating Holders, (vi) all fees and expenses of any special
experts or other Persons retained by the Company in connection with any
registration, (vii) Securities Act liability insurance or similar insurance if
the Company so desires or the underwriters so require in accordance with
then-customary underwriting practices, (viii) all applicable rating agency fees
with respect to the Registrable Securities, (ix) fees and expenses of a
Qualified Independent Underwriter (as such term is defined in Schedule E to the
By-Laws of the NASD) and its counsel, (x) all fees and disbursements of the
underwriters (other than

                                       4

<PAGE>

underwriting discounts and commissions), (xi) all transfer taxes and (xii) all
expenses incurred in connection with promotional efforts or "roadshows";
provided, however, that Registration Expenses shall exclude underwriting
discounts and commissions in respect of the Registrable Securities being
registered for such Participating Holders.

         "SEC" means the Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.

         "Section 2.2 Sale Amount" has the meaning set forth in Section 2.2(c)
below.

         "Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time. References to a particular
section of the Securities Act shall include a reference to the comparable
section, if any, of any such similar Federal statute.

         "Selected Courts" has the meaning set forth in Section 6.4(b) below.

         "Series A Preferred Stock" means the Company's Series A 6.0%
Participating Convertible Preferred Stock, par value $1.00 per share, any and
all securities of any kind whatsoever of the Company or any successor thereof
which may be issued on or after the date hereof in respect of, in exchange for,
or upon conversion of shares of Series A Preferred Stock pursuant to a merger,
consolidation, stock split, reverse split, stock dividend, recapitalization of
the Company or otherwise.

         "Shelf Registration Statement" has the meaning set forth in Section
2.3(a).

         "Shelf Suspension" has the meaning set forth in Section 2.3(b).

         "Purchase Agreement" has the meaning set forth in the recitals.

         "Warrants" means the Preferred Stock Warrants, the Note Warrants and
the Guaranty Warrants (each as defined in the Purchase Agreement).

2.       Registration Under Securities Act.

         2.1.     Registration on Demand.

                  (a)      Demand. At any time or from time to time, a Holder or
Holders holding at least 5,000,000 shares of Common Stock (determined as of the
date the demand is made and as adjusted for any split, subdivision, combination,
consolidation, recapitalization or similar event with respect to the Common
Stock) may require the Company to effect the registration under the Securities
Act of all or part of their respective Registrable Securities, by delivering a
written request (a "Holder Demand") therefor to the Company specifying the
number of shares of Registrable Securities to be registered and the intended
method of distribution thereof. As promptly as practicable, but no later than 10
days after receipt of a Holder Demand, the Company shall give written notice
(the "Demand Exercise Notice") of the Holder Demand to all Holders.

                                       5

<PAGE>

The Holders, other than the Initiating Holder, shall have the option, within 30
days after the receipt of the Demand Exercise Notice (or, 15 days if, at the
request of the Initiating Holder, the Company states in such written notice or
gives telephonic notice to each Holder, with written confirmation to follow
promptly thereafter, stating that (i) such registration will be on Form S-3 and
(ii) such shorter period of time is required because of a planned filing date),
to request, in writing, that the Company include in such registration any
Registrable Securities held by such Holder (which request shall specify the
maximum number of Registrable Securities intended to be disposed of by such
Holder). The Company shall as expeditiously as possible (but in any event within
90 days of receipt of a Holder Demand), use its reasonable best efforts to
effect the registration under the Securities Act of the Registrable Securities
which the Company has been so requested to register by the Initiating Holder and
any other Holders which have made such written request. The Company shall use
its reasonable best efforts to (i) effect the registration of Registrable
Securities for distribution in accordance with the intended method of
distribution set forth in a written request delivered by the Majority
Participating Holders, which may include, at the option of such Majority
Participating Holders, a distribution to, and resale by, the partners, members
or beneficiaries of such Holder or Holders (a "Partner Distribution"), and (ii)
if requested by the Majority Participating Holders, obtain acceleration of the
effective date of the registration statement relating to such registration.

                  (b)      Partner Distributions. Notwithstanding anything
contained herein to the contrary, the Company shall, at the request of any
Participating Holder seeking to effect a Partner Distribution, file any
prospectus supplement or post-effective amendments and otherwise take any action
necessary to include such language, if such language was not included in the
initial registration statement, or revise such language if deemed necessary by
such Participating Holder, to effect such Partner Distribution.

                  (c)      Registration Statement Form. Registrations under this
Section 2.1 shall be on such appropriate form of the SEC (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Majority
Participating Holders and (ii) as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in such Participating Holders' requests for such
registration , including, without limitation, a Partner Distribution. The
Company agrees to include in any such registration statement all information
which, in the opinion of counsel to the Participating Holders and counsel to the
Company, is necessary or desirable to be included therein.

                  (d)      Expenses. The Company shall pay, and shall be
responsible for, all Registration Expenses in connection with any registration
requested pursuant to this Section 2.1. Notwithstanding the foregoing, the
provisions of this Section 2.1(d) shall be deemed amended to the extent
necessary to cause these expense provisions to comply with "blue sky" laws of
each state or the securities laws of any other jurisdiction in the United States
and its territories in which the offering is made.

                  (e)      Effective Registration Statement. A registration
requested pursuant to this Section 2.1 shall not be deemed a Demand Registration
(including for purposes of Section 2.1(h)) unless a registration statement with
respect thereto has become effective and has been kept continuously effective
for a period of at least 180 days (or such shorter period which shall

                                       6

<PAGE>

terminate when all the Registrable Securities covered by such registration
statement have been sold pursuant thereto) or if such registration statement
relates to an underwritten offering, such longer period as in the opinion of
counsel for the underwriter or underwriters a Prospectus is required by law to
be delivered in connection with sales of Registrable Securities by an
underwriter or dealer. Should a Demand Registration not become effective due to
the failure of a Participating Holder to perform its obligations under this
Agreement, or in the event the Majority Participating Holders withdraw or do not
pursue the request for the Demand Registration as provided for in Section 2.1(g)
below (in each of the foregoing cases, provided that at such time the Company is
in compliance in all material respects with its obligations under this
Agreement), then, such Demand Registration shall be deemed to have been effected
(including for purposes of Section 2.1(h)); provided, that, if (i) the Demand
Registration does not become effective because a material adverse change has
occurred, or is reasonably likely to occur, in the condition (financial or
otherwise), business, assets or results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the delivery of the
Demand Exercise Notice, (ii) after the Demand Registration has become effective,
such registration is interfered with by any stop order, injunction, or other
order or requirement of the SEC or other governmental agency or court, (iii) the
Demand Registration is withdrawn at the request of the Majority Participating
Holders due to the advice of the managing underwriter(s) that the Registrable
Securities covered by the registration statement could not be sold in such
offering within a price range acceptable to the Majority Participating Holders,
or (iv) the Participating Holders reimburse the Company for any and all
Registration Expenses incurred by the Company in connection with such request
for a Demand Registration that was withdrawn or not pursued, then the Demand
Registration shall not be deemed to have been effected and will not count as a
Demand Registration).

                  (f)      Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities pursuant to this Section 2.1
shall be selected by the Majority Participating Holders, subject to the
Company's approval which shall not be unreasonably withheld.

                  (g)      Right to Withdraw. Any Participating Holder shall
have the right to withdraw its request for inclusion of Registrable Securities
in any registration statement pursuant to this Section 2.1 at any time prior to
the effective date of such registration statement by giving written notice to
the Company of its request to withdraw. Upon receipt of notices from all
Participating Holders to such effect, the Company shall cease all efforts to
obtain effectiveness of the applicable registration statement, and whether the
Initiating Holder's request for registration pursuant to this Section 2.1 shall
be counted as a Demand Registration for purposes of Section 2.1(h) shall be
determined in accordance with Section 2.1(e) above.

                  (h)      Limitations on Registration on Demand. The Holders
shall be entitled to require the Company to effect, and the Company shall be
required to effect, three registrations in the aggregate, and no more that two
registrations in any twelve-month period, pursuant to this Section 2.1 (each, a
"Demand Registration"). The aggregate number of shares to be registered pursuant
to any such registration shall be at least 5,000,000 shares of Common Stock
(determined as of the date the demand is made and as adjusted for any split,
subdivision, combination, consolidation, recapitalization or similar event with
respect to the Common Stock).

                                       7

<PAGE>

                  (i)      Priority in Registrations on Demand. Except for
piggyback rights granted pursuant to (i) the Registration Rights Agreement dated
as of July 12, 2002 between the Company and The John N. Kapoor Trust Dated
September 20, 1989 (the "Kapoor Agreement") and (ii) the Warrant Purchase and
Registration Agreement dated as of June 18, 2003 between the Company and AEG
Partners LLC (the "AEG Agreement"), which rights shall be subject to the
priority set forth in this Section 2.1(i), whenever the Company effects a
registration pursuant to this Section 2.1 in connection with an underwritten
offering by Holders, no securities other than Registrable Securities shall be
included among the securities covered by such registration unless the Majority
Participating Holders consent in writing to the inclusion therein of such other
securities, which consent will not be unreasonably withheld. If any registration
pursuant to a Holder Demand involves an underwritten offering and the managing
underwriter(s) of such offering shall inform the Company in writing of its
belief that the number of Registrable Securities requested to be included in
such registration pursuant to this Section 2.1, when added to the number of any
other securities to be offered in such registration, would materially adversely
affect such offering, if any, the Company shall include in such registration (i)
first, the Registrable Securities requested to be included in such registration
pursuant to this Section 2.1 and the securities requested to be included in such
registration pursuant to the Kapoor Agreement and the AEG Agreement, pro rata
based on the number of shares requested to be included in the offering by each
such holder and (ii) second, other securities requested to be included in such
registration or that the Company proposes to sell.

                  (j)      Postponement. The Company shall be entitled no more
than twice in any twelve-month period to postpone for a reasonable period of
time (but not exceeding 90 days) (the "Postponement Period") the filing of any
registration statement required to be prepared and filed by it pursuant to this
Section 2.1 if the Company determines, in its reasonable judgment, upon advice
of counsel, as authorized by a resolution of its Board of Directors, that such
registration and offering would require premature disclosure of any material
financing, material corporate reorganization or other material transaction or
information involving the Company, and promptly gives the Participating Holders
written notice of such determination, containing a specific statement of the
reasons for such postponement and an approximation of the anticipated delay.

         2.2.     Incidental Registration.

                  (a)      Right to Include Registrable Securities. If the
Company at any time proposes to register any of its equity securities under the
Securities Act by registration on Form S-1, S-2 or S-3, or any successor or
similar form(s) (except registrations (i) pursuant to Section 2.1, (ii) solely
for registration of equity securities in connection with an employee benefit
plan or dividend reinvestment plan on Form S-8 or any successor form thereto, or
(iii) relating to a transaction under Rule 145 of the Securities Act), whether
or not for sale for its own account, it will each such time give prompt written
notice (but in no event less than 30 days prior to the initial filing of a
registration statement with respect thereto) to each of the Holders of its
intention to do so and such notice shall offer the Holders the opportunity to
register under such registration statement such number of Registrable Securities
as each such Holder may request in writing; provided, that, if such registration
statement was filed by the Company pursuant to a Required Registration (as
defined in the AEG Agreement) or Demand Registrations (as defined in the AEG
Agreement), then no Registrable Securities shall be included in such
registration without

                                       8

<PAGE>

the consent of AEG Partners LLC, pursuant to the AEG Agreement. Upon the written
request of any of the Holders (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Holder), made as
promptly as practicable and in any event within 30 days after the receipt of any
such notice (or, 15 days if the Company states in such written notice or gives
telephonic notice to each Holder, with written confirmation to follow promptly
thereafter, stating that (i) such registration will be on Form S-3 and (ii) such
shorter period of time is required because of a planned filing date), the
Company shall include in such registration under the Securities Act all
Registrable Securities which the Company has been so requested to register by
each Holder; provided, however, that if, at any time after giving written notice
of its intention to register any equity securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to delay
registration of such equity securities, the Company shall give written notice of
such determination and its reasons therefor to the Holders requesting
registration of any Registrable Securities and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any obligation of the Company to pay the Registration Expenses in connection
therewith as provided for in Section 2.2(d)), without prejudice, however, to the
rights of the Holders to request that such registration be effected as a
registration under Section 2.1 and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities,
for the same period as the delay in registering such other securities. No
registration effected under this Section 2.2 shall relieve the Company of its
obligation to effect any registration upon request under Section 2.1.

                  (b)      Right to Withdraw; Option to Participate in Shelf
Takedowns. Any Holder shall have the right to withdraw its request for inclusion
of Registrable Securities in any registration statement pursuant to this Section
2.2 at any time prior to the effective date of such registration statement by
giving written notice to the Company of its request to withdraw. In the event
that a Holder has requested inclusion of Registrable Securities in a shelf
registration, such Holder shall have the right, but not the obligation, to
participate in any offering of the Company's equity securities under such shelf
registration.

                  (c)      Priority in Incidental Registrations. If any
registration pursuant to this Section 2.2 involves an underwritten offering and
the managing underwriter(s) of such offering shall inform the Company in writing
of its belief that the number of Registrable Securities requested to be included
in such registration or offering, when added to the number of other equity
securities to be included in such registration or offering, would materially
adversely affect such offering, then the Company shall include in such
registration or offering, to the extent of the number and type which the Company
is so advised can be sold in (or during the time of) such offering without so
materially adversely affecting such registration or offering (the "Section 2.2
Sale Amount"), (i) all of the securities proposed by the Company to be sold for
its own account; (ii) thereafter, to the extent the Section 2.2 Sale Amount is
not exceeded, the securities requested to be included in such registration
pursuant to the Kapoor Agreement (except with respect to the Required
Registration (as defined in the AEG Agreement) and the Demand Registrations (as
defined in the AEG Agreement) under the AEG Agreement, which shall have the
priorities as set forth therein); (iii) thereafter, to the extent the Section
2.2 Sale Amount is not exceeded, the securities requested to be included in such
registration pursuant to the AEG Agreement (except

                                       9

<PAGE>

with respect to the Required Registration (as defined in the AEG Agreement) and
the Demand Registrations (as defined in the AEG Agreement) under the AEG
Agreement, which shall have the priorities as set forth therein); (iv)
thereafter, to the extent the Section 2.2 Sale Amount is not exceeded, the
Registrable Securities requested by the Participating Holders (provided that if
all of the Registrable Securities requested by the Participating Holders may not
be included, the Participating Holders shall be entitled to participate on a pro
rata basis based on the aggregate number of shares of Registrable Securities
requested by the Participating Holders to be registered); and (v) thereafter, to
the extent the Section 2.2 Sale Amount is not exceeded, any other securities of
the Company requested to be included by Company stockholders holding other such
registration rights.

                  (d)      Expenses. The Company shall pay, and shall be
responsible for, all Registration Expenses in connection with any registration
requested pursuant to this Section 2.2. Notwithstanding the foregoing, the
provisions of this Section 2.2(d) shall be deemed amended to the extent
necessary to cause these expense provisions to comply with "blue sky" laws of
each state or the securities laws of any other jurisdiction in the United States
and its territories in which the offering is made.

                  (e)      Selection of Underwriters. The underwriters of each
underwritten offering of the Registrable Securities pursuant to this Section 2.2
shall be selected by the Company.

                  (f)      Plan of Distribution; Partner Distributions. Any
participation by Holders in a registration by the Company shall be in accordance
with the Company's plan of distribution, which shall include, upon the written
request of such Holder or Holders, a Partner Distribution. Notwithstanding
anything contained herein to the contrary, the Company shall, at the request of
any Holder seeking to effect a Partner Distribution, file any prospectus
supplement or post-effective amendments and to otherwise take any action
necessary to include such language, if such language was not included in the
initial registration statement, or revise such language if deemed reasonably
necessary by such Holder to effect such Partner Distribution.

         2.3.     Shelf Registration.

                  (a)      Registration Statement. As promptly as practicable
and in no event later than 30 days after the date on which the Company qualifies
under the Securities Act to file a registration statement on Form S-3 with the
SEC for the purpose of registering the sale of securities by a selling security
holder in a secondary offering, the Company shall file with the SEC a
registration statement on Form S-3 (the "Shelf Registration Statement") relating
to the offer and sale of Registrable Securities by the Holders to the public,
from time to time in accordance with the methods of distribution elected by the
Holders and set forth in the Shelf Registration Statement. The Company shall use
its reasonable best efforts to cause the Shelf Registration Statement to be
declared effective by the SEC as soon as practicable thereafter.

                  (b)      Suspension of Registration. If the continued use of
such Shelf Registration Statement at any time would require the Company to make
an Adverse Disclosure, the Company may, upon giving prompt written notice of
such action to the Holders, suspend use

                                       10

<PAGE>

of the Shelf Registration Statement (a "Shelf Suspension"); provided, however,
that the Company shall not be permitted to exercise a Shelf Suspension (i) more
than once during any 12 month period or (ii) for a period exceeding 90 days on
any one occasion. In the case of a Shelf Suspension, the Holders agree to
suspend use of the applicable prospectus in connection with any sale or purchase
of, or offer to sell or purchase, Registrable Securities, upon receipt of the
notice referred to above. Upon the written request of any Holder, the Company
shall provide such Holder in writing with a general statement of the reasons for
such postponement and an approximation of the anticipated delay. The Company
shall immediately notify the Holders upon the termination of any Shelf
Suspension, amend or supplement the prospectus, if necessary, so it does not
contain any untrue statement or omission and furnish to the Holders such numbers
of copies of the prospectus as so amended or supplemented as the Holders may
reasonably request. The Company agrees, if necessary, to supplement or make
amendments to the Shelf Registration Statement, if required by the registration
form used by the Company for the shelf registration or by the instructions
applicable to such registration form or by the Securities Act or as may
reasonably be requested by the Majority Voting Holders. The Company represents
that, as of the date hereof, it has no knowledge of any circumstance that would
reasonably be expected to cause it to exercise its rights under this Section
2.3(b).

                  (c)      Underwritten Offering. If the Majority Voting Holders
so elect, such offering of Registrable Securities shall be in the form of an
underwritten offering, and the Company shall amend or supplement the Shelf
Registration Statement for such purpose. The Majority Voting Holders shall have
the right to select the managing underwriter or underwriters to administer such
offering; provided, that, such managing underwriter or underwriters shall be
reasonably acceptable to the Company.

         2.4.     Registration Procedures.

                  (a)      If and whenever the Company is required to effect the
registration of any Registrable Securities under the Securities Act pursuant to
Section 2.1, Section 2.2 or Section 2.3 hereof, the Company shall as
expeditiously as possible:

                           (i)      before filing a registration statement or
prospectus or any amendments or supplements thereto, furnish to the
Participating Holders and the underwriters, if any, copies of all such documents
proposed to be filed, which documents will be made available for review by such
Participating Holders and managing underwriters, and the Company will not file
any registration statement or amendment thereto or any prospectus or any
supplement thereto to which the Majority Participating Holders or underwriters,
if any, shall reasonably object;

                           (ii)     prepare and file with the SEC as soon as
practicable (and in accordance with the timing requirements set forth in this
Agreement) a registration statement on an appropriate registration form of the
SEC for the disposition of such Registrable Securities in accordance with the
intended method of disposition thereof including, without limitation, a Partner
Distribution which registration statement shall comply as to form in all
material respects with the requirements of the applicable form and include all
financial statements required by the SEC to be filed therewith, and thereafter
use its reasonable best efforts to cause such registration

                                       11

<PAGE>

statement to become and remain effective (A) with respect to an underwritten
offering, for a period of at least 180 days, and (B) with respect to a shelf
registration, until the earlier of (1) the date all Participating Holders can
sell shares free of any volume limitations imposed by Rule 144 under the
Securities Act; (ii) the date all Participating Holders have disposed of all
Registrable Securities and (iii) the tenth anniversary of the effective date of
such Shelf Registration Statement. Subject to Section 2.3(b), the Company shall
be deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action or omits to take any action that would result in Participating
Holders not being able to offer and sell any Registrable Securities during that
period, unless such action or omission is required by applicable law, rule or
regulation;

                           (iii)    prepare and file with the SEC any amendments
and supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such registration
statement in accordance with the intended methods of disposition by the
Participating Holders set forth in such registration statement for such period
as provided for in Section 2.4(a)(ii) above;

                           (iv)     furnish, without charge, to each
Participating Holder and each underwriter such number of conformed copies of
such registration statement and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents, as the Majority Participating Holders and such
underwriters may request (it being understood that the Company consents to the
use of such prospectus or any amendment or supplement thereto by each
Participating Holder and the underwriters in connection with the offering and
sale of the Registrable Securities covered by such prospectus or any amendment
or supplement thereto);

                           (v)      use its reasonable best efforts (A) to
register or qualify all Registrable Securities and other securities covered by
such registration statement under such state securities or blue sky laws where
an exemption is not available and as the Majority Participating Holders or any
managing underwriter shall reasonably request, (B) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and (C) to take any other action which may be reasonably necessary or
advisable to enable the Participating Holders or underwriters to consummate the
disposition in such jurisdictions of the securities to be sold by the
Participating Holders or underwriters, except that the Company shall not for any
such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not, but for the requirements
of this Section 2.4(a)(v), be obligated to be so qualified;

                           (vi)     use its reasonable best efforts to cause all
Registrable Securities covered by such registration statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company and counsel to the
Participating Holders to consummate the disposition of such Registrable
Securities;

                                       12

<PAGE>

                           (vii)    furnish to each Participating Holder and
each underwriter a signed counterpart of (A) an opinion of counsel for the
Company and (B) a "comfort" letter signed by the independent public accountants
who have certified the Company's financial statements included or incorporated
by reference in such registration statement, in each case, addressed to each
Participating Holder and each underwriter covering matters with respect to such
registration statement (and the prospectus included therein) as such Majority
Participating Holders and managing underwriter(s) shall reasonably request;

                           (viii)   promptly notify each Participating Holder
and each managing underwriter (A) when such registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement related
thereto or post-effective amendment to such registration statement has been
filed, and, with respect to such registration statement or any post-effective
amendment, when the same has become effective; (B) of the receipt by the Company
of any comments from the SEC or receipt of any request by the SEC for additional
information with respect to any registration statement or the prospectus related
thereto or any request by the SEC for amending or supplementing the registration
statement and the prospectus used in connection therewith; (C) of the issuance
by the SEC of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose; (D) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose; (E) at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this clause (E),
promptly prepare and furnish, at the Company's expense, to each Participating
Holder and each managing underwriter a number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and (F)
at any time when the representations and warranties of the Company contemplated
by Section 2.5(a) or (b) hereof cease to be true and correct;

                           (ix)     otherwise comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as soon
as practicable (and in any event within 16 months after the effective date of
the registration statement), an earnings statement covering the period of at
least twelve consecutive months beginning with the first full calendar month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 promulgated thereunder;

                           (x)      provide and cause to be maintained a
transfer agent and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the effective date
of such registration statement;

                                       13

<PAGE>

                           (xi)     (A) use its reasonable best efforts to cause
all Registrable Securities covered by such registration statement to be listed
on the principal securities exchange or quotation system on which similar
securities issued by the Company are then listed or quoted (if any), if the
listing or quotation of such Registrable Securities is then permitted under the
rules of such exchange or quotation system, or (B) if no similar securities are
then so listed or quoted, use its reasonable best efforts to arrange for at
least two market makers to register as such with respect to such shares with the
NASD;

                           (xii)    deliver promptly to counsel to the
Participating Holders and each underwriter, if any, participating in the
offering of the Registrable Securities, copies of all correspondence between the
SEC and the Company, its counsel or auditors;

                           (xiii)   use its reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of the registration
statement;

                           (xiv)    provide a CUSIP number for all Registrable
Securities, no later than the effective date of the registration statement and
provide the applicable transfer agents with printed certificates for the
Registrable Securities which are in a form eligible for deposit with the
Depository Trust Company;

                           (xv)     cause its officers and employees to
participate in, and to otherwise facilitate and cooperate with, the preparation
of the registration statement and prospectus and any amendments or supplements
thereto (including participating in meetings, drafting sessions, due diligence
sessions and the marketing of the Registrable Securities covered by the
registration statement (including, without limitation, participation in "road
shows")) taking into account the Company's business needs;

                           (xvi)    enter into and perform its obligations under
such customary agreements (including, without limitation, if applicable, an
underwriting agreement as provided for in Section 2.5 herein) and take such
other actions as the Majority Participating Holders or managing underwriter(s)
shall reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;

                           (xvii)   promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriter(s) or Majority Participating Holders reasonably request to be
included therein relating to the plan of distribution with respect to such
Registrable Securities; and make all required filings of such prospectus
supplement or post-effective amendment as soon as reasonably practicable after
being notified of the matters to be incorporated in such prospectus supplement
or post-effective amendment;

                           (xviii)  cooperate with each Participating Holder and
each underwriter, and their respective counsel in connection with any filings
required to be made with the NASD, New York Stock Exchange, or any other
securities exchange on which such Registrable Securities are traded or will be
traded;

                                       14

<PAGE>

                           (xix)    promptly prior to the filing of any document
which is to be incorporated by reference into the registration statement or the
prospectus contained therein (after the initial filing of such registration
statement), provide copies of such document to counsel for the Participating
Holders and to each managing underwriter, and make the Company's representatives
available for discussion of such document and make such changes in such document
concerning the Participating Holders prior to the filing thereof as counsel for
such Participating Holders or underwriters may reasonably request;

                           (xx)     furnish to each Participating Holder and
each managing underwriter, without charge, at least one signed copy, of the
registration statement and any post-effective amendments thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference);

                           (xxi)    cooperate with the Participating Holders and
the managing underwriter(s) to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the Participating Holders at least five business days prior to
any sale of Registrable Securities and instruct any transfer agent and registrar
of Registrable Securities to release any stop transfer orders in respect
thereof;

                           (xxii)   to the extent required by the rules and
regulations of the NASD, retain a Qualified Independent Underwriter, which shall
be acceptable to the Majority Participating Holders; and

                           (xxiii)  take no direct or indirect action prohibited
by Regulation M under the Exchange Act; provided, however, that to the extent
that any prohibition is applicable to the Company, the Company will take such
action as is necessary to make any such prohibition inapplicable.

                  (b)      Each Participating Holder agrees that upon receipt of
any notice from the Company of the happening of any event of the kind described
in Section 2.4(a)(viii)(C) or (E), each Participating Holder will, to the extent
appropriate, discontinue its disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until, in the
case of Section 2.4(a)(viii)(E), its receipt of the copies of the supplemented
or amended prospectus contemplated by Section 2.4(a)(viii)(E) and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in its possession, of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice. If the disposition by a Participating Holder of its
securities is discontinued pursuant to the foregoing sentence, the Company shall
extend the period of effectiveness of the registration statement by the number
of days during the period from and including the date of the giving of such
notice to and including the date when the Participating Holder shall have
received copies of the supplemented or amended prospectus contemplated by
Section 2.4(a)(viii)(E); and, if the Company shall not so extend such period,
the Participating Holder's request pursuant to which such registration statement
was filed shall not

                                       15

<PAGE>

be counted for purposes of the requests for registration to which the
Participating Holder is entitled pursuant to Section 2.1 hereof. If for any
other reason the effectiveness of any registration statement filed pursuant to
Section 2.1, Section 2.2 or Section 2.3 is suspended or interrupted prior to the
expiration of the time period regarding the maintenance of the effectiveness of
such Registration Statement required by Section 2.4(a)(ii) so that Registrable
Securities may not be sold pursuant thereto, the applicable time period shall be
extended by the number of days equal to the number of days during the period
beginning with the date of such suspension or interruption to and ending with
the date when the sale of Registrable Securities pursuant to such registration
statement may be resumed.

                  (c)      If any such registration statement or comparable
statement under "blue sky" laws refers to any Holder by name or otherwise as the
Holder of any securities of the Company, then such Holder shall have the right
to require (i) the insertion therein of language, in form and substance
satisfactory to such Holder and the Company, to the effect that the holding by
such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not in the judgment
of the Company, as advised by counsel, required by the Securities Act or any
similar federal statute or any state "blue sky" or securities law then in force,
the deletion of the reference to such Holder.

                  (d)      Holders may seek to register different types of
Registrable Securities simultaneously and the Company shall use its reasonable
best efforts to effect such registration and sale in accordance with the
intended method or methods of disposition specified by such holders.

         2.5.     Underwritten Offerings.

                  (a)      Demanded Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Participating Holders pursuant
to a registration requested under Section 2.1 or Section 2.3, the Company shall
enter into a customary underwriting agreement with the managing underwriter(s)
selected by the Majority Participating Holders (in accordance with Section
2.1(f) or Section 2.3(c) hereto). Such underwriting agreement shall be
reasonably satisfactory in form and substance to the Majority Participating
Holders and shall contain such representations and warranties by, and such other
agreements on the part of, the Company and such other terms as are generally
prevailing in agreements of that type, including, without limitation, customary
provisions relating to indemnification and contribution which are no less
favorable to the recipient that those provided in Section 2.7 hereof. Each
Participating Holder shall be a party to such underwriting agreement and may, at
their option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of each
Participating Holder and that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement be conditions
precedent to the obligations of each Participating Holder. No Participating
Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,

                                       16

<PAGE>

warranties or agreements regarding such Participating Holder, its ownership of
and title to the Registrable Securities, and its intended method of
distribution; and any liability of any Participating Holder to any underwriter
or other person under such underwriting agreement shall be limited to liability
arising from breach of its representations and warranties and shall be limited
to an amount equal to the proceeds (net of expenses and underwriting discounts
and commissions) that it derives from such registration.

                  (b)      Incidental Underwritten Offerings. In the case of a
registration pursuant to Section 2.2 hereof, if the Company shall have
determined to enter into an underwriting agreement in connection therewith, all
of the Registrable Securities to be included in such registration shall be
subject to such underwriting agreements. The Participating Holders may, at their
option, require that any or all of the representations and warranties by, and
the other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Participating
Holders and that any or all of the conditions precedent to the obligations of
such underwriters under such underwriting agreement be conditions precedent to
the obligations of the Participating Holders. None of the Participating Holders
shall be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such Participating Holder, its ownership of and title to
the Registrable Securities and its intended method of distribution; and any
liability of any Participating Holder to any underwriter or other Person under
such underwriting agreement shall be limited to liability arising from breach of
its representations and warranties and shall be limited to an amount equal to
the proceeds (net of expenses and underwriting discounts and commissions) that
it derives from such registration.

                  (c)      Participation in Underwritten Registrations. In the
case of an underwritten registration pursuant to Section 2.1, Section 2.2 or
Section 2.3 hereof, as the Company may from time to time reasonably request in
writing, the Company may require the Participating Holders (i) to furnish the
Company such information regarding such Participating Holders and the
distribution of the Registrable Securities to enable the Company to comply with
the requirements of applicable laws or regulations in connection with such
registration and (ii) to complete and execute all customary questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements. The
Company shall not be obligated to effect the registration of any Registrable
Securities of a particular Participating Holder unless such information and
documents regarding such Participating Holder and the distribution of such
Participating Holder's Registrable Securities is provided to the Company.

         2.6.     Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Participating Holders, the
managing underwriter(s), and their respective counsel, accountants and other
representatives and agents the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
SEC, and each amendment thereof or supplement thereto or comparable statements
under securities or blue sky laws of any jurisdiction, and give each of the
foregoing parties access (on a confidential basis) to its pertinent books and
records, all pertinent financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and such

                                       17

<PAGE>

opportunities to discuss the business of the Company and its subsidiaries with
their respective directors, officers and employees and the independent public
accountants who have certified the Company and its subsidiaries' financial
statements, and supply all other information and respond to all inquiries
reasonably requested by such Participating Holders, managing underwriter(s), or
their respective counsel, accountants or other representatives or agents in
connection with such registration statement, as shall be necessary or
appropriate, in the opinion of counsel to such Participating Holder or managing
underwriter(s), to conduct a reasonable investigation within the meaning of the
Securities Act, and the Company shall not file any registration statement or
amendment thereto or any prospectus or supplement thereto to which the Majority
Participating Holders or the managing underwriter(s) shall object.

         2.7.     Indemnification.

                  (a)      Indemnification by the Company. The Company agrees
that in the event of any registration of any Registrable Securities under the
Securities Act, the Company shall, and hereby does, indemnify and hold harmless,
to the fullest extent permitted by law, (i) each of the Holders and their
Affiliates, (ii) each of the Holders' and their Affiliates' respective
Affiliates, officers, directors, successors, assigns, members, partners,
shareholders, employees, advisors, representatives, and agents, (iii) each other
Person who participates as an underwriter or Qualified Independent Underwriter
in the offering or sale of such securities, (iv) each Person who controls
(within the meaning of the Securities Act or the Exchange Act) any of the
Persons listed in clauses (i), and (v) any representative (legal or otherwise)
of any of the Persons listed in clauses (i), (ii), (iii) or (iv) (collectively,
the "Indemnitees"), from and against any losses, penalties, fines, liens,
judgments, suits, claims, damages, liabilities, costs and expenses (including
attorney's fees and any amounts paid in any settlement effected with the
Company's consent, which consent shall not be unreasonably withheld or delayed)
or liabilities, joint or several (or actions or proceedings, whether commenced
or threatened, in respect thereof, and whether or not such Indemnitee is a party
thereto) ("Losses"), to which such Indemnitee has become or may become subject
under the Securities Act or otherwise, insofar as such Losses arise out of or
are based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, or any preliminary
prospectus, final prospectus or summary prospectus contained therein, any
amendment or supplement thereto, or any documents incorporated by reference
therein, (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or (iii) any violation by the Company of any
federal, state or common law rule or regulation applicable to the Company and
relating to action required of or inaction by the Company in connection with any
such registration, and the Company shall reimburse such Indemnitee for any legal
or any other fees or expenses incurred by them in connection with investigating
or defending any such Loss; provided that the Company shall not be liable to an
Indemnitee to the extent that any such Loss arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement, or document
incorporated by reference, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Indemnitee, which

                                       18

<PAGE>

specifically states that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement.

                  (b)      Indemnification by Participating Holders. As a
condition to including any Registrable Securities in any registration statement,
the Company shall have received an undertaking reasonably satisfactory to it
from each Participating Holder so including any Registrable Securities to,
severally and not jointly, to the fullest extent permitted by law, indemnify and
hold harmless (i) the Company, each director and officer of the Company, and
each other Person, if any, who controls the Company within the meaning of the
Securities Act or Exchange Act and (ii) any underwriters of the Registrable
Securities, their officers and directors and each person who controls such
underwriters (within the meaning of the Securities Act or the Exchange Act),
with respect to any statement or alleged statement in or omission or alleged
omission from such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, but only to the extent such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company for use therein and such
Participating Holder shall reimburse such indemnified party for any legal or any
other fees or expenses incurred by them in connection with investigating or
defending any such Loss; provided, however, that the liability of such
indemnifying party under this Section 2.7(b) shall be limited to the amount of
proceeds (net of expenses and underwriting discounts and commissions) received
by such indemnifying party in the offering giving rise to such liability. Each
Participating Holder shall also indemnify and hold harmless all other
prospective sellers and Participating Holders, their respective Affiliates,
officers, directors, successors, assigns, members, partners, shareholders,
employees, advisors, representatives, and agents, and each Person who controls
(within the meaning of the Securities Act or the Exchange Act) any such seller
or Participating Holder to the same extent as provided above with respect to
indemnification of the Company and underwriters.

                  (c)      Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 2.7(a) or Section 2.7(b), such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to such indemnifying party of the
commencement of such action or proceeding; provided, however, that the failure
of any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 2.7(a) or Section 2.7(b),
except to the extent that the indemnifying party is actually and materially
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.7.

                  (d)      Defense of Claims. In case any such action or
proceeding is brought against an indemnified party, except as provided for in
the next sentence, the indemnifying party shall be entitled to participate
therein and assume the defense thereof, jointly with any other indemnifying
party, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof and approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified party
for any legal expenses subsequently incurred by such

                                       19

<PAGE>

indemnified party in connection with the defense thereof other than costs of
investigation and the indemnified party shall be entitled to participate in such
defense at its own expense. If (i) the indemnifying party fails to notify the
indemnified party in writing, within 15 days after the indemnified party has
given notice of the action or proceeding, that the indemnifying party will
indemnify the indemnified party from and against all Losses the indemnified
party may suffer resulting from, arising out of, relating to, in the nature of,
or caused by the claim, (ii) the indemnifying party fails to provide the
indemnified party with evidence acceptable to the indemnified party that the
indemnifying party will have the financial resources to defend against the claim
or proceeding and fulfill its indemnification obligations hereunder, (iii) the
indemnifying party fails to defend diligently the action or proceeding within 10
days after receiving notice of such failure from such indemnified party; (iv)
such indemnified party reasonably shall have concluded (upon advice of its
counsel) that there may be one or more legal defenses available to such
indemnified party or other indemnified parties which are not available to the
indemnifying party; or (v) if such indemnified party reasonably shall have
concluded (upon advice of its counsel) that, with respect to such claims, the
indemnified party and the indemnifying party may have different, conflicting, or
adverse legal positions or interests then, in any such case, the indemnified
party shall have the right to assume or continue its own defense and the
indemnifying party shall be liable for any fees and expenses therefor.

                  (e)      Consent to Entry of Judgment and Settlements. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld, provided, that, in the case where the indemnified party
shall have failed to take any of the actions listed in clauses (i), (ii) or
(iii) of the last sentence of Section 2.7(d), the indemnified party shall have
the right to compromise or settle such action on behalf of and for the account,
expense, and risk of the indemnifying party and the indemnifying party will
remain responsible for any Losses the indemnified party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the action or
proceeding to the fullest extent provided in this Section 2.7. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (A) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim, (B) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party and
(C) does not require any action other than the payment of money by the
indemnifying party.

                  (f)      Contribution. If for any reason the indemnification
provided for in Sections 2.7(a), (b) or (g) is unavailable to an indemnified
party or insufficient in respect of any Losses referred to therein, then, in
lieu of the amount paid or payable under Sections 2.7(a), (b) or (g), the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such Loss (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand, and the indemnified party on the other, with respect to the statements or
omissions which resulted in such Loss, as well as any other relevant equitable
considerations, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or if the allocation provided in this clause (ii)
provides a greater amount to the indemnified

                                       20

<PAGE>

party than clause (i) above, in such proportion as shall be appropriate to
reflect not only the relative fault but also the relative benefits received by
the indemnifying party and the indemnified party from the offering of the
securities covered by such registration statement as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
relative benefits received by the parties in connection with the distribution of
the Registrable Securities shall be deemed to be in the same proportion as (i)
the total gross proceeds received by the Company from the sale of the
Registrable Securities by the Company pursuant to the Purchase Agreement to (ii)
the gain, if any, realized by the Participating Holder on the sale of such
Registrable Securities or the underwriting discounts and commissions received by
the underwriter, as the case may be. The parties hereto agree that it would not
be just and equitable if contributions pursuant to this Section 2.7(f) were to
be determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to in the
preceding sentence of this Section 2.7(f). No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The amount paid or payable by an indemnified party
as a result of the Losses referred to in Sections 2.7(a), (b) or (g) shall be
deemed to include, subject to the limitations set forth in Sections 2.7(a), (b)
and (g), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding anything in this Section 2.7(f) to the contrary, no
Participating Holder shall be required to contribute any amount in excess of the
proceeds (net of expenses and underwriting discounts and commissions) received
by such Participating Holder from the sale of the Registrable Securities in the
offering to which the Losses of the indemnified parties relate.

                  (g)      Other Indemnification. Indemnification and
contribution similar to that specified in the preceding subsections of this
Section 2.7 (with appropriate modifications) shall be given by the Company and
the Participating Holders with respect to any required registration or other
qualification of securities under state or blue sky law or regulation. The
indemnification agreements contained in this Section 2.7 shall be in addition to
any other rights to indemnification or contribution which any indemnified party
may have pursuant to law or contract and shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Indemnitee or other indemnified party and shall survive the transfer of any of
the Registrable Securities by any such party.

                  (h)      Indemnification Payments. The indemnification and
contribution required by this Section 2.7 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as and
when bills are received or a Loss is incurred.

         2.8.     Limitation on Sale of Securities.

                  (a)      For the Company and Others. If the Company receives a
request for registration pursuant to an underwritten offering of Registrable
Securities pursuant to Section

                                       21

<PAGE>

2.1, Section 2.2 or Section 2.3 hereof, and if such a request is being
implemented or has not been withdrawn or abandoned, the Company agrees that (i)
the Company shall not effect any public or private offer, sale, distribution or
other disposition of any of its equity securities or of any security convertible
into or exchangeable or exercisable for any equity security of the Company or
effect any registration of any of such securities under the Securities Act (in
each case, other than as part of such registration and other than as a
registration using Form S-8 or any successor or similar form which is then in
effect), whether or not for sale for its own account, during the period
beginning on the date the Company receives such request until 180 days after the
effective date of such registration (or such shorter period as the managing
underwriter(s) may require) and (ii) the Company shall use its reasonable best
efforts to obtain from each of its officers, directors and beneficial owners of
5% or more of Common Stock, an agreement not to effect any public or private
offer, sale, distribution or other disposition of common stock, or any
securities that are convertible or exchangeable or exercisable for common stock,
during the period referred to in clause (i) of this paragraph, including,
without limitation, a sale pursuant to Rule 144 under the Securities Act.

                  (b)      For the Holders. If the Company receives a request
for registration pursuant to an underwritten offering of Registrable Securities
pursuant to Section 2.1, Section 2.2 or Section 2.3 hereof, and if such a
request is being implemented or has not been withdrawn or abandoned, each Holder
agrees that, to the extent requested in writing by the managing underwriter(s),
it will not effect any public offer, sale, distribution or other disposition of
any Registrable Securities, or any securities convertible into or exchangeable
or exercisable for such Registrable Securities, including, without limitation,
any sale pursuant to Rule 144 under the Securities Act, during the 180
day-period beginning on the effective date of such registration statement (or
such shorter period as the managing underwriter(s) may require), provided that
each Holder has received the written notice required by Sections 2.1(a) and
2.2(a); and further, provided, that in connection with such underwritten
offering each officer and director of the Company and each beneficial owner of
5% or more of Common Stock is subject to restrictions substantially equivalent
to those imposed on the Holders.

         2.9.     No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any of the Holders to sell any
Registrable Securities pursuant to any effective registration statement.

3.       Rule 144; Rule 144A; Regulation S.

         The Company covenants that, at its own expense, it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
(or, if the Company is not required to file such reports, it will, upon the
request of any Holder, make publicly available such necessary information for so
long as necessary to permit sales pursuant to Rules 144, 144A or Regulation S
under the Securities Act or any similar rule or regulation hereafter adopted by
the SEC), and it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S
under the Securities Act or (ii) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of a Holder, the Company, at its own
expense, will promptly deliver

                                       22

<PAGE>

to such Holder (i) a written statement as to whether it has complied with such
requirements (and such Holder shall be entitled to rely upon the accuracy of
such written statement), (ii) a copy of the most recent annual or quarterly
report of the Company and (iii) such other reports and documents as such Holder
may reasonably request in order to avail itself of any rule or regulation of the
SEC allowing it to sell any Registrable Securities without registration.

4.       Subsequent Registration Rights; No Inconsistent Agreements.

         4.1.     Limitations on Subsequent Registration Rights. From and after
the date of this Agreement until the Holders and their respective assigns shall
no longer hold any Registrable Securities, without the prior written consent of
the Majority Voting Holders, the Company shall not enter into an agreement,
other than with a Holder or its assignees or transferees, that grants a holder
or prospective holder of any securities of the Company demand or incidental
registration rights containing cut-back provisions that by their terms are not
subordinate to the registration rights granted to the Holders in this Agreement.
Notwithstanding the foregoing, if after the date of this Agreement the Company
enters into any other agreement with respect to the registration of any of its
equity securities, and the terms contained therein are more favorable to, or
less restrictive on, the other party thereto than the terms and conditions
contained in this Agreement (insofar as they are applicable) with respect to the
Holders, then the terms of this Agreement shall immediately be deemed to have
been amended without further action by the Company or the Holders so that the
Holders shall be entitled to the benefit of any such more favorable or less
restrictive terms or conditions.

         4.2.     No Inconsistent Agreements. The Company will not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities which is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof, other than any
customary lock-up agreement with the underwriters in connection with any
offering effected hereunder, pursuant to which the Company shall agree not to
register for sale, and the Company shall agree not to sell or otherwise dispose
of, Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, for a specified period (not to exceed 180 days)
following such offering. The Company warrants that the rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
any other agreements to which the Company is a party or by which it is bound.
Except for the Kapoor Agreement and the AEG Agreement, the Company has not
previously entered into any agreement with respect to its securities granting
and continuing to grant any registration rights to any Person.

5.       Adjustments. At the request of the Majority Voting Holders, in the
event of any change in the capitalization of the Company as a result of any
stock split, stock dividend, reverse split, combination, recapitalization,
merger, consolidation, or otherwise, the provisions of this Agreement shall be
appropriately adjusted. The Company agrees that it shall not effect or permit to
occur any combination or subdivision of shares which would adversely affect the
ability of the Holders to include any Registrable Securities in any registration
contemplated by this Agreement or the marketability of such Registrable
Securities in any such registration. The Company agrees that it will take all
steps necessary to effect a combination or subdivision of shares if in the

                                       23

<PAGE>

judgment of the Majority Voting Holders or managing underwriter(s) such
combination or subdivision would enhance the marketability of the Registrable
Securities.

6.       Miscellaneous.

         6.1.     Amendments and Waivers. This Agreement and any of the
provisions hereof may be amended, waived (either generally or in a particular
instance and either retroactively or prospectively), modified or supplemented,
in whole or in part, only by written agreement of the Company and the Majority
Voting Holders; provided, however, that any amendment, waiver, modification or
supplement of Section 2.7 or Section 6.1 hereto shall require the written
agreement of the Company and all Holders; provided, that, the observance of any
provision of this Agreement may be waived in writing by the party that will lose
the benefit of such provision as a result of such waiver. Each Holder shall be
bound by any such amendment, waiver, modification or supplement authorized in
accordance with this Section 6.1, whether or not such Registrable Securities
shall have been marked to indicate such amendment, waiver, modification or
supplement. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach, except as
otherwise explicitly provided for in such waiver. Except as otherwise expressly
provided herein, no failure on the part of any party to exercise, and no delay
in exercising, any right, power or remedy hereunder, or otherwise available in
respect hereof at law or in equity, shall operate as a waiver thereof, nor shall
any single or partial exercise of such right, power or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The execution of a counterpart signature page to this
Agreement by an Assignee pursuant to Section 6.2 shall not require consent of
any party hereto and shall not be deemed an amendment to this Agreement.

         6.2.     Assignment; Third Party Beneficiaries. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and any of their respective successors, personal representatives and
permitted assigns who agree in writing to be bound by the terms hereof. The
Company may not assign any of its rights or delegate any of its duties under
this Agreement without the prior written consent of the Majority Voting Holders.
Any Holder may, at its election and at any time or from time to time, assign its
rights under this Agreement, in whole or in part, to any Person to whom the
Holder sells, assigns or otherwise transfers its shares of Registrable
Securities (an "Assignee"); provided that, other than an assignment to a Holder
or an Affiliate of a Holder under this Agreement, no such assignment shall be
binding upon or obligate the Company to any such Assignee unless and until the
Assignee delivers to the Company both a written notice stating the name and
address of the Assignee and identifying the securities with respect to which
such rights are being assigned and a written instrument by which such Assignee
agrees to be bound by the obligations imposed upon Holders under this Agreement
to the same extent as if such Assignee were a party hereto (or executes and
delivers to the Company a counterpart to this Agreement and agrees to be treated
as a "Holder" for all purposes of this Agreement). In the event that the Holder
transfers less than all of its Registrable Securities, the Holder shall retain
its rights with respect to its remaining Registrable Securities.

                                       24

<PAGE>

         6.3.     Notice. Except as otherwise specifically provided herein, all
notices, requests, consents, other communications or documents provided for or
permitted to be given hereunder, shall be made in writing and shall be given
either personally by hand-delivery, by facsimile transmission, by registered
first-class mail, postage prepaid, return receipt requested, or by nationally
recognized courier guaranteeing overnight delivery at the address set forth
below or such other address as may hereafter be designated in writing by such
party to the other parties:

                           (i)      If to any of the Holders, at its last
address as it appears in the Company's transfer books.

                         With a copy to (which shall not constitute notice):

                         Fried, Frank Harris, Shriver & Jacobson
                         One New York Plaza
                         New York, New York  10004
                         Telephone: 212-859-8000
                         Facsimile: 212-859-4000
                         Attention:  Christopher Ewan

                (ii)     If to the Company, to:

                         Akorn, Inc.
                         2500 Millbrook Drive
                         Buffalo Grove, Illinois  60089
                         Telephone: (641) 628-0030
                         Facsimile: (847) 279-6191
                         Attention: Jerry Ellis

                         With a copy to (which shall not constitute notice):

                         Stinson Morrison Hecker LLP
                         1201 Walnut, Suite 2800
                         Kansas City, MO 64106-2150
                         Telephone: (816) 691-2746
                         Facsimile: (816) 474-4208
                         Attention:  Paul M. Hoffman

                           All notices, requests, consents, other communications
or documents shall be deemed to have been duly given: (i) at the time delivered
by hand, if personally delivered; (ii) when receipt is acknowledged in writing
by addressee, if by facsimile transmission; (iii) five business days after being
deposited in the mail, postage prepaid, if mailed by first class mail; OR (iv)
on the business day with respect to which such overnight courier guarantees
delivery.

         6.4.     Governing Law; Waiver of Jury Trials.

                                       25

<PAGE>

                  (a)      Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.

                  (b)      Waiver of Jury Trial. WITH RESPECT TO ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, EACH OF THE PARTIES HEREBY IRREVOCABLY, TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH
ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. SUCH ACTION OR PROCEEDING SHALL INSTEAD BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

         6.5.     Remedies. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or was otherwise breached and
further agree that money damages or other remedy at law would not be a
sufficient or adequate remedy for any breach or violation of, or a default
under, this Agreement by them and that, in addition to all other remedies
available to them, each of them shall be entitled to an injunction restraining
such breach, violation or default or threatened breach, violation or default and
to any other equitable relief, including, without limitation, specific
performance of the terms and provisions of this Agreement. Any requirements for
the securing or posting of any bond with respect to such remedy are hereby
waived by each of the parties hereto. Each party further agrees that, in the
event of any action for an injunction or other equitable remedy in respect of
such breach or enforcement of specific performance, it will not assert the
defense that a remedy at law would be adequate. In any action or proceeding
brought to enforce any provision of this Agreement (including the
indemnification provisions thereof), or where any provision hereof is validly
asserted as a defense, the successful party to such action or proceeding shall
be entitled to recover, to the extent permitted by applicable law, reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.

         6.6.     Further Assurances. Each party hereto shall cooperate with
each other party, shall do and perform or cause to be done and performed all
further acts and things, and shall execute and deliver all other agreements,
certificates, instruments, and documents as any other party

                                       26

<PAGE>

hereto reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

         6.7.     Severability. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but the invalidity or unenforceability
of any provision or portion of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of the remainder of
this Agreement in that jurisdiction or the validity or enforceability of this
Agreement, including that provision or portion of any provision, in any other
jurisdiction. If any provision or portion of any provision of this Agreement is
held unreasonable, invalid, unlawful or unenforceable in any respect, such
provision or portion of any provision will be reformed, construed and enforced
in such jurisdiction as if such unreasonable, invalid, unlawful or unenforceable
provision or portion of any provision had never been contained therein.

         6.8.     Entire Agreement. This Agreement, the Purchase Agreement and
the documents described herein or therein, or attached or delivered hereto or
thereto, constitute the entire agreement between the parties, and supersedes all
prior agreements and understandings, oral and written, between the parties
hereto with respect to the subject matter hereof.

         6.9.     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.

         6.10.    Defaults. A default by any party to this Agreement in such
party's compliance with any of the conditions or covenants hereof or performance
of any of the obligations of such party hereunder shall not constitute a default
by any other party.

         6.11.    Nominees for Beneficial Owners. If Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner thereof
may, at its election (made in writing and delivered to the Company), be treated
as the Holder for purposes of any request or other action by any Holder or
Holders pursuant to this Agreement (or any determination of any number or
percentage of shares constituting Registrable Securities held by any Holder or
Holders contemplated by this Agreement); provided, that the Company shall have
received assurances reasonably satisfactory to it of such beneficial ownership.

         6.12.    General Interpretive Principles. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and headings of the sections, paragraphs, subparagraphs, clauses and subclauses
of this Agreement are for convenience of reference only and shall not in any way
affect the meaning or interpretation of any of the provisions hereof. Unless
otherwise specified, the terms "hereof," "herein" and similar terms refer to
this Agreement as a whole, and references herein to Sections refer to Sections
of this Agreement. Words of inclusion shall not be construed as terms of
limitation herein, so that references to "include", "includes" and "including"
shall not be limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations.

                                       27

<PAGE>

                  IN WITNESS WHEREOF, the parties have caused this Registration
Rights Agreement to be executed and delivered by their respective officers
thereunto duly authorized.

                               AKORN, INC.

                               By: /s/ Bernard J. Pothast
                                   -------------------------------------
                                   Name: Bernard J. Pothast
                                   Title: 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

                               Arthur S. Przybyl

                               /s/ Arthur S. Przybyl
                               -----------------------------------------

                               Jerry Treppel

                               /s/ Jerry Treppel
                               -----------------------------------------

                               Abu Alam

                               /s/ Abu Alam
                               -----------------------------------------

                               John Sabat

                               /s/ John Sabat
                               -----------------------------------------

                               Neil Shanahan

                               /s/ Neil Shanahan
                               -----------------------------------------

<PAGE>

                               Shritin Shah

                               /s/ Shritin Shah
                               -----------------------------------------

                               JRJay Public Investments, LLC

                               By: /s/ Jeffrey R. Jay
                                   -------------------------------------
                                   Name:  Jeffrey R. Jay, M.D.
                                   Title: CEO

                               Pequot Healthcare Fund, L.P.

                               By: /s/ Richard J. Joslin
                                   -------------------------------------
                                   Name:  Richard J. Joslin
                                   Title: Principal

                               Pequot Healthcare Institutional Fund, L.P.

                               By: /s/ Richard J. Joslin
                                   -------------------------------------
                                   Name:  Richard J. Joslin
                                   Title: Principal

                               Pequot Healthcare Offshore Fund, Inc.

                               By: /s/ Richard J. Joslin
                                   -------------------------------------
                                   Name:  Richard J. Joslin
                                   Title: Principal

                               Pequot Scout Fund, L.P.

                               By: /s/ Richard J. Joslin
                                   -------------------------------------
                                   Name:  Richard J. Joslin
                                   Title: Principal

                               Pequot Navigator Onshore Fund, L.P.

                               By: /s/ Richard J. Joslin
                                   -------------------------------------
                                   Name:  Richard J. Joslin
                                   Title: Principal

<PAGE>

                               Arjun Waney

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

                               Jai Waney

                               /s/ Jai Waney
                               -----------------------------------------

                               Arun K. Puri Living Trust

                               By: /s/ Arun K. Puri
                                   -------------------------------------
                                   Name:  Arun K. Puri
                                   Title: Trustee

                               Argent Fund Management Ltd.

                               By: /s/ K.B. Ramchand
                                   -------------------------------------
                                   Name:  K.B. Ramchand
                                   Title: Director

                               Gulu Waney

                               /s/ Gulu Waney
                               -----------------------------------------

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