Document:

EX-10.2

Exhibit 10.2

EXECUTION COPY

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

AKORN, INC.

COMMON STOCK PURCHASE WARRANT

To Purchase 1,650,806 Shares of Common Stock

     THIS COMMON STOCK PURCHASE WARRANT (this “Warrant”) certifies that, for value
received, EJ FUNDS, LP, a Delaware limited partnership (the “Holder”), is entitled, upon
the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at
any time on or after August 17, 2009 (the “Initial Exercise Date”) and on or prior to the
close of business on the fifth (5th) anniversary following the Initial Exercise Date (the
“Termination Date”) but not thereafter, to subscribe for and purchase from Akorn, Inc., a
Louisiana corporation (the “Company”), up to One Million Six Hundred Fifty Thousand Eight
Hundred Six (1,650,806) shares, subject to adjustment as set forth herein (the “Warrant
Shares”) of Common Stock, no par value per share, of the Company (the “Common Stock”).
The purchase price of one share of Common Stock (the “Exercise Price”) under this Warrant
shall be $1.16 per share, subject to adjustment hereunder. The Exercise Price and the number of
Warrant Shares for which the Warrant is exercisable shall be subject to adjustment as provided
herein. Capitalized terms used and not otherwise defined herein shall have the meanings set forth
in that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated
as of August 17, 2009, between the Company and Holder.

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

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

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

     3. Exercise of Warrant.

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

 

 

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

	 	 	 	 	 	 	 	 	 
	Where:
	 	 	X =	 	 	Y (A – B) 
	 	 
	 	 	 	 	A	 	 

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

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

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

     B = The Exercise Price.

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

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

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

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

2

 

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

          (d) Reporting and Waiting Requirements.

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

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

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

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

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

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

3

 

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

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

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

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

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

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

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

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

     7. Transfer, Division and Combination.

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

4

 

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

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

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

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

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

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

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

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

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

5

 

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

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

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

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

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

6

 

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

     16. Miscellaneous.

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

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

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

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

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

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

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

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

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

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

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

7

 

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

Dated: August 17, 2009

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signature Page to Common Stock Purchase Warrant]

 

 

NOTICE OF EXERCISE

To: Akorn, Inc.

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

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

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

The Warrant Shares shall be delivered to the following:

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

	 	 	 	 	 
	 	[PURCHASER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title: 
 	 	 
	 	 	Dated:  

 

 

ASSIGNMENT FORM

(To assign the foregoing Warrant, execute

this form and supply required information.

Do not use this form to exercise the Warrant.)

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

	 
	 	whose address is

 

	 
	.

Dated:                          ,           

Holder’s Signature:

Holder’s Address:

Signature Guaranteed:

NOTE: The signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change whatsoever, and
must be guaranteed by a bank or trust company. Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of authority to
assign the foregoing Warrant.EX-10.3

Exhibit 10.3

Execution Copy

AMENDED AND RESTATED

SUBORDINATED PROMISSORY NOTE

THIS INSTRUMENT AND THE RIGHTS AND OBLIGATIONS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND
TO THE EXTENT SET FORTH IN THAT CERTAIN AMENDED AND RESTATED SUBORDINATION AGREEMENT (AS AMENDED,
RESTATED, MODIFIED OR REPLACED FROM TIME TO TIME, THE “SUBORDINATION AGREEMENT”) DATED AS
OF AUGUST 17, 2009, AMONG THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989, AKORN, INC.
(“AKORN”), AKORN (NEW JERSEY), INC. (“AKORN NEW JERSEY” AND TOGETHER WITH AKORN,
THE “COMPANIES”, AND EACH A “COMPANY”), AND EJ FUNDS, LP (“AGENT”), TO THE
INDEBTEDNESS (INCLUDING INTEREST) OWED BY THE COMPANIES PURSUANT TO THAT CERTAIN CREDIT AGREEMENT
DATED AS OF JANUARY 9, 2009 AMONG THE COMPANIES, GENERAL ELECTRIC CAPITAL CORPORATION, AS A LENDER
AND AS AGENT FOR THE LENDERS (“GE CAPITAL”) AND THE LENDERS FROM TIME TO TIME PARTY
THERETO, AS SUCH CREDIT AGREEMENT HAS BEEN (I) ASSIGNED BY GE CAPITAL AND THE OTHER LENDERS A PARTY
THERETO TO EJ FUNDS LP, AS AGENT AND LENDER PURSUANT TO AN ASSIGNMENT AGREEMENT DATED AS OF MARCH
31, 2009, (II) AMENDED PURSUANT TO A MODIFICATION WARRANT AND INVESTOR RIGHTS AGREEMENT DATED AS OF
THE APRIL 13, 2009 AMONG THE COMPANIES AND EJ FUNDS LP, AS AGENT AND LENDER, AS FURTHER AMENDED AND
RESTATED BY THE (III) AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF AUGUST [•], 2009 AMONG THE
COMPANIES AND EJ FUNDS LP, AS AGENT AND LENDER, AND (IV) HEREAFTER MAY BE AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME AND TO INDEBTEDNESS REFINANCING THE
INDEBTEDNESS UNDER THAT AGREEMENT AS CONTEMPLATED BY THE SUBORDINATION AGREEMENT; AND EACH HOLDER
OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF
THE SUBORDINATION AGREEMENT.

THIS SUBORDINATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE
OFFERED, SOLD, ENCUMBERED OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH STATE SECURITIES LAWS, OR AN EXEMPTION FROM REGISTRATION
THEREUNDER.

			
	 	 	 
	US $5,853,266.68 (includes all accrued interest through the date hereof)
August 17, 2009

     FOR VALUE RECEIVED, AKORN, INC., a Louisiana corporation (“Akorn”) and AKORN (NEW JERSEY),
INC., an Illinois corporation (“Akorn New Jersey”) and collectively with Akorn, the “Makers” and
each a “Maker”), hereby promise jointly and severally to pay to the order of THE JOHN N. KAPOOR
TRUST DATED SEPTEMBER 20, 1989, or its permitted successors or assigns (“Payee”), the aggregate
principal sum equal to $5,853,266.68 (equal to the sum of (i) the stated principal amount
outstanding of the Prior Note (as defined below) of Five Million Dollars ($5,000,000), (ii)
$804,892.58 of outstanding accrued but unpaid interest under the Prior Note as of its stated date
of maturity and (iii) $48,374.10 of additional outstanding accrued but unpaid interest arising from
and after the stated date of maturity of the Prior Note through and including the date hereof), on
the terms and conditions set forth below, and to pay to Payee interest on the unpaid principal
balance hereof at the rate and on the terms and conditions set forth herein.

     1. Payment of Principal. The principal amount of this Subordinated Promissory Note
(the “Note”), together with all unpaid interest accrued hereon, shall be due and payable on the
five year anniversary of the date hereof (the “Maturity Date”).

     2. Payment of Interest. The unpaid principal balance due hereunder shall bear
interest at a fixed annual rate (based on a 360-day year) of fifteen percent (15%) (the “Interest
Rate”) and such interest shall accrue monthly in arrears (each, whether at the Interest Rate or
Default Interest Rate (as defined below), an “Interest

 

 

Payment”) on the first day of each month (each, an “Interest Payment Date”) commencing on
September 1, 2009; provided that upon the occurrence of a Default, the outstanding principal
balance hereunder shall accrue at a fixed annual rate (based on a 360-day year) of twenty percent
(20%) (the “Default Interest Rate”). All accrued interest (including any interest at the Default
Interest Rate) shall be paid in kind, and the amount thereof shall be added to the outstanding
principal balance of this Note on such Interest Payment Date and, thereafter, for all purposes
under this Note, references to the “principal amount” of this Note shall include the amount of any
Interest Payment that has been added to the outstanding principal balance of this Note.

     3. Subordination. Pursuant to the terms of the Subordination Agreement, this Note and
the indebtedness evidenced hereby shall at all times be and remain subordinated to any indebtedness
owed to such senior lenders (any such indebtedness being collectively referred to herein as the
“Senior Indebtedness”).

     4. Prepayment. Makers may, at their option at any time and from time to time
hereafter, to the extent not prohibited by the Subordination Agreement, prepay, in whole but not in
part, this Note by making payment to Payee of an amount equal to one hundred ten percent (110%) of
the total amount of all outstanding obligations under this Note (including, without limitation, all
principal and accrued but unpaid interest thereon to the date of prepayment).

     5. Defaults. Makers shall be deemed in default hereunder upon the occurrence of any
of the following (a “Default”):

     (a) The failure of Makers to make the payment due hereunder on the Maturity Date;

     (b) Either Maker becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or either Maker applies for, consents to, or
acquiesces in the appointment of a trustee, receiver or other custodian for such Maker or any
property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of
such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for
either Maker or for a substantial part of the property of either Maker and is not discharged within
60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect
of either Maker, and if such case or proceeding is not commenced by such Maker, it is consented to
or acquiesced in by such Maker, or remains for 60 days undismissed; or either Maker takes any
action to authorize, or in furtherance of, any of the foregoing; or

     (c) An “Event of Default” under and as defined in the senior credit agreement of Makers has
occurred and is continuing and the lenders of any Senior Indebtedness thereunder have accelerated
the maturity of such Senior Indebtedness.

     6. Consequence of Default. Upon the occurrence of a Default, the entire then unpaid
principal balance hereof and all interest then accrued and unpaid thereon and all other sums
payable hereunder shall, at the option of Payee, become immediately due and payable.
Notwithstanding the foregoing, if there shall occur a Default under Section 5(a) or
(b) above, the entire then unpaid principal balance hereof and all interest then accrued
and unpaid thereon and all other sums payable hereunder, shall become immediately due and payable
without any action on the part of Payee.

     7. Miscellaneous.

     (a) Principal and interest due hereunder shall be payable in lawful money of the United States
of America. All payments shall be applied first to accrued and unpaid interest and thereafter to
principal.

     (b) If any payment due on this Note shall become due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day. “Business Day” means any day on which
banks are generally open for commercial banking business in Chicago, Illinois

     (c) No delay or omission on the part of Payee in the exercise of any right or remedy hereunder
shall operate as a waiver thereof.

2

 

     (d) If a Default shall occur under this Note, Makers shall pay on demand, subject to the terms
of the Subordination Agreement, all reasonable costs and expenses of collection of Payee, including
reasonable attorneys’ fees.

     (e) No amendment, modification, termination or waiver of any provision of this Note shall be
effective unless the same shall be in writing and signed by Makers and Payee.

     (f) All notices hereunder shall be in writing (including facsimile transmission) and shall be
sent to the applicable party at its address shown below or at such other address as such party may,
by written notice received by the other parties, have designated as its address for such purpose.
Notices sent by facsimile transmission shall be deemed to have been given when sent; notices sent
by mail shall be deemed to have been given three Business Days after the date when sent by
registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight
courier service shall be deemed to have been given when received.

Notices shall be addressed as follows:

If to Payee:

The John N. Kapoor Trust

c/o Dr. John N. Kapoor

225 E. Deerpath Road

Suite 250

Lake Forest, Illinois 60045

Telecopy: (847) 295-8680

With a copy to:

McDermott Will & Emery LLP

227 West Monroe Street

Chicago, Illinois 60606

Attention: Thomas Murphy

Telecopy: (312) 984-7700

If to a Maker:

1925 Field Court, Suite 300

Lake Forest, Illinois 60045

Attention: Chief Financial Officer

Telecopy: (847) 353-4936

With a copy to:

Bryan Cave LLP

161 North Clark Street, Suite 4300

Chicago, Illinois 60601

Attention: Donald E. Figliulo

Telecopy: (312) 698-7425

     (g) This Note may not be assigned (by operation of law or otherwise) by any Maker without the
prior written consent of the Payee.

     (h) Makers shall be entitled to deduct and withhold from the amounts payable pursuant to this
Note such amounts as it is required to deduct and withhold with respect to the making of such
payment under any tax law. To the extent that amounts are so withheld or paid over to or deposited
with the relevant taxing authority by Makers, such amounts shall be treated for all purposes of
this Note as having been paid to Payee in respect of which such deduction and withholding was made
by Maker.

3

 

     (i) If interest payable under this Note is in excess of the maximum permitted by law, the
interest chargeable hereunder shall be reduced to the maximum amount permitted by law and any
excess over the maximum amount permitted by law shall be credited to the principal balance of this
Note and applied to the same and not to the payment of interest.

     (j) This Note is to be governed by, and construed and enforced in accordance with, the laws of
the State of Illinois, without regard to conflict of laws principles that would require the
application of the laws of any other jurisdiction.

     (k) This Note amends, restates, renews and replaces a Subordinated Promissory Note dated June
28, 2008 in the principal amount of $5,000,000.00 (the “Prior Note”). The stated principal amount
of this note, which is the sum of (i) the stated principal amount of the Prior Note, (ii)
$804,892.58 of outstanding accrued but unpaid interest under the Prior Note as of its stated date
of maturity and (iii) $48,374.10 of additional outstanding accrued but unpaid interest arising from
and after the stated date of maturity of the Prior Note through and including the date hereof,
shall be deemed as principal amounts hereunder, and all guarantees, security interests and
collateral given to support and/or secure such Prior Note shall continue in full force and effect
from and after the date hereof and guaranty and secure all obligations under this Note. Nothing in
this Note shall be construed to constitute a novation of the obligations of any Maker arising under
the Prior Note, or to release, satisfy, discharge or otherwise affect or impair in any manner
whatsoever (a) the validity or enforceability of the obligations under the Prior Note or (b) the
charges, liens, pledges, security interests, assignments and conveyances effected by the Guaranty
and Security Agreement dated as of May 27, 2009 among the Makers, Payee and each other party
thereto entered into in connection with the Prior Note (the “Subordinated Security
Agreement”) and any other agreement securing the obligations arising under the Prior Note, or
the priority thereof. Each Maker hereby (x) restates, ratifies and reaffirms, subject to the
modifications provided for in this Note, each and every term, covenant and condition set forth in
the Prior Note and the Subordinated Security Agreement effective as of the date hereof, (y)
acknowledges receipt of a copy of this Note, (z) consents to this Note and agrees to be bound
hereby and (w) agrees that its guaranty of all obligations owed by the Makers, as set forth in the
Guaranty and Security Agreement to which it is a party, will continue in full force and effect
without diminution or impairment notwithstanding the execution and delivery of this Note.

[signature page follows]

4

 

IN WITNESS WHEREOF, this Note has been executed as of the date first written above.

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	AKORN (NEW JERSEY), INC.

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 

5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]