Document:

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                                                                    EXHIBIT 10.6

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of the 7th
day of September, 2004, between UTi Services, Inc., a California corporation
(the "Company"), and Peter Thorrington ("Employee").

WHEREAS, the Company and Employee entered into a certain Employment Agreement
(the "Prior Agreement") dated September 25, 2000 and the Prior Agreement
terminated on August 15, 2004; and

WHEREAS, since August 15, 2004 Employee has been employed as a special advisor
and the Company and Employee now desire to enter into this Agreement in order to
memorialize Employee's employment as a special advisor in accordance with the
terms set forth herein.

In consideration of the promises and covenants set forth below, the parties
hereto agree as follows:

         1.       Employment.

                  The Company hereby agrees to employ Employee, and Employee
                  hereby agrees to accept such employment with the Company, on
                  the terms and conditions set forth herein. Employee agrees to
                  act as a special advisor to UTi Worldwide Inc. (UTi
                  Worldwide") and the related group of companies (such group is
                  referred to herein as the UTi Group") without receiving
                  separate consideration for such services.

         2.       Term.

                  The term of employment of Employee as provided in this
                  Agreement commences on the date hereof and ends on August 31,
                  2006, unless sooner terminated as hereafter provided.

         3.       Position and Duties.

                  Employee shall perform his duties and obligations which shall
                  be determined jointly between the Company and the Employee
                  from time to time and he shall then perform such duties and
                  obligations faithfully and diligently and shall devote the
                  agreed upon time, attention and efforts to UTi Worldwide and
                  the UTi Group. Employee agrees not to work for any competitor
                  of UTi Group. Employee shall industriously perform Employee's
                  duties and coordinate the performance of such services and
                  duties with the Chief Executive Officer of the Company.
                  Employee shall adhere to the policies and procedures generally
                  applicable to employees of the Company and UTi Group.

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         4.       Place of Performance.

                  In connection with Employee's employment by the Company and
                  except for required travel on Company business, Employee shall
                  be based at the Company's executive offices, or such other
                  location agreed to by Employee and the Company.

         5.       Compensation and Related Metrics.

                  (a)      Salary. During the term of Employee's employment
                           hereunder, the Company shall pay to Employee a salary
                           of $125,000 per annum. Such salary shall be paid in
                           equal semi-monthly installments (or such shorter
                           intervals as the Company may elect and shall accrue
                           from day to day).

                  (b)      Performance Bonus. During the term of Employee's
                           employment hereunder, Employee shall not be eligible
                           to participate in any bonus programs.

                  (c)      Vacations. During the term of Employee's employment
                           hereunder, Employee shall not be entitled to accrue
                           or earn paid vacation days.

                  (d)      Expenses. During the term of Employee's employment
                           hereunder, Employee shall be entitled to receive
                           reimbursement for reasonable out of pocket travel and
                           other expenses (excluding ordinary commuting
                           expenses) incurred by Employee in performing
                           Employee's services hereunder, provided that:

                           i.       Such expenditure qualifies as a proper
                                    business expenditure; and

                           ii.      Employee furnishes adequate documentary
                                    evidence for the substantiation of such
                                    expenditures and Employee complies with
                                    applicable policies with respect to expense
                                    reimbursement.

                  (e)      Medical Insurance and Other Benefits. During the term
                           of Employee's employment hereunder, Employee will be
                           entitled to participate in applicable medical, dental
                           and disability insurance plans, life insurance plans,
                           retirement and 401(k) plans and other employee
                           welfare and benefit plans or programs made available
                           to the Company's employees generally, in accordance
                           with the terms of such plans and programs as may be
                           in effect from time to time.

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         6.       Termination.

                  (a)      Termination by the Company for "Cause."

                           (1)      The Company may at any time terminate
                                    Employee's employment hereunder, for
                                    "Cause," pursuant to the provisions of this
                                    Section 6(a). Employee shall be given notice
                                    by the Company of its intention to terminate
                                    Employee for "Cause."

                                    For purposes of this Agreement, the Company
                                    shall have "Cause" to terminate Employee's
                                    employment hereunder upon (a) the breach by
                                    Employee of any material provision of this
                                    Agreement (and if such breach is susceptible
                                    to cure by Employee, the failure to effect
                                    such cure by Employee within thirty (30)
                                    days after written notice of such breach is
                                    given to Employee), (b) an act or acts of
                                    dishonesty on the part of Employee which are
                                    intended to result in Employee's substantial
                                    personal enrichment at the expense of the
                                    Company, UTi Worldwide or the UTi Group, or
                                    (c) Employee engaging or participating in a
                                    violation of law which results in a material
                                    liability or penalty to the Company, UTi
                                    Worldwide or the UTi Group.

                           (2)      If Employee is terminated by the Company for
                                    "Cause" pursuant to this Section 6(a), the
                                    Company shall have no further obligation or
                                    liability to Employee, except that Employee
                                    shall be entitled to receive (i) the portion
                                    of Employee's salary which has been earned
                                    up to the Date of Termination and (ii)
                                    reimbursement for business expenses properly
                                    incurred up to the Date of Termination
                                    (collectively, the "Minimum Payments").

                  (b)      Death.

                           (1)      Employee's employment hereunder shall
                                    terminate automatically upon Employee's
                                    death.

                           (2)      If Employee's employment is terminated
                                    because of Employee's death pursuant to this
                                    Section 6(b), the Company shall have no
                                    further obligation or liability to Employee,
                                    except that Employee shall be entitled to
                                    receive (i) the Minimum Payments, and (ii)
                                    and life insurance proceeds Employee is
                                    otherwise entitled to under any applicable
                                    life insurance then in effect.

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                  (c)      Disability.

                           (1)      If Employee becomes disabled during
                                    Employee's employment hereunder, Employee's
                                    employment hereunder shall terminate on the
                                    date of the determination of the disability
                                    by the Board of Directors of the Company of
                                    such disability. As used herein,
                                    "disability" shall mean any condition that
                                    qualifies as a disability under the
                                    Company's long-term disability plan as in
                                    effect on the date of determination or which
                                    renders Employee incapable of performing
                                    substantially all of his services hereunder
                                    for one hundred twenty (120) days or more in
                                    the aggregate during any calendar year, and
                                    which at any time after such one hundred
                                    twenty (120) days the Company's Board of
                                    Directors shall determine continues to
                                    render Employee incapable of performing his
                                    services hereunder.

                           (2)      If Employee's employment is terminated
                                    because of Employee's disability pursuant to
                                    this Section 6(c), Employee shall be
                                    entitled to receive (i) the Minimum
                                    Payments, and (ii) any benefits to which
                                    Employee is entitled under the Company's
                                    long-term disability plan as in effect on
                                    the Date of Termination.

                  (d)      Resignation by Employee.

                           (1)      Employee shall be entitled to terminate
                                    Employee's employment hereunder for any
                                    reason, or no reason, at any time on thirty
                                    (30) days prior written notice delivered by
                                    Employee to the Company.

                           (2)      If Employee's employment is terminated by
                                    Employee pursuant to this Section 6(d), the
                                    Company shall have no further obligation or
                                    liability to Employee, except that Employee
                                    shall be entitled to receive the Minimum
                                    Payments.

         7.       Exclusivity of Payments.

                  Upon termination of Employee's employment hereunder, Employee
                  shall not be entitled to any severance payments or severance
                  benefits from the Company, UTi Worldwide or the UTi Group,
                  other than the payments and benefits explicitly provided in
                  Section 6, except for any benefits which may be due to
                  Employee in the normal course under any employee benefit plan
                  or program of the Company or UTi Worldwide which provides for
                  benefits after termination of employment in accordance with
                  the terms of such plan or program. Employee's right to receive
                  payments or benefits

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                  under this Agreement upon termination of employment will cease
                  if Employee breaches any provision of Sections 8 or 9 below.

         8.       Proprietary Information.

                  (a)      Definition. Employee hereby acknowledges that
                           Employee possesses and may make use of, acquire,
                           create, develop or add certain confidential and/or
                           proprietary information regarding the Company, UTi
                           Worldwide and UTi Group and their businesses and
                           affiliates (whether in existence prior to, as of or
                           after the date hereof, collectively, "Proprietary
                           Information"), which Proprietary Information shall
                           include, without limitation, all of the following
                           materials and information (whether or not reduced to
                           writing and whether or not patentable or protected by
                           copyright): trade secrets, inventions, processes,
                           formulae, programs, technical data, "know-how",
                           procedures, manuals, confidential reports and
                           communications, marketing methods, product sales or
                           cost information, new product ideas or improvements,
                           new packaging ideas or improvements, research and
                           development programs, identities or lists of
                           suppliers, vendors or customers, financial
                           information and financial projections or any other
                           confidential or proprietary information relating to
                           the UTi Group and/or its business. The term
                           "Proprietary Information" does not include any
                           information that (i) at the time of disclosure is
                           generally available to and known by the public (other
                           than as a result of its disclosure by Employee), (ii)
                           becomes available to Employee on a lawful,
                           non-confidential basis from a person other than the
                           UTi Group or its representatives, provided that the
                           source of such information was not known by Employee
                           to be subject to an obligation of confidentiality to
                           the UTi Group.

                  (b)      Nondisclosure. During the term of this Agreement and
                           thereafter, Employee will not, without the prior
                           express written consent of the Board of Directors of
                           UTi Worldwide, disclose or make any use of
                           Proprietary Information except as may be required in
                           the course of the performance of Employee's services
                           under this Agreement.

                  (c)      Agreement Not to Solicit Employees and Customers. To
                           protect the Proprietary Information and trade secrets
                           of the UTi Group, Employee agrees, during the term of
                           this Agreement and for a period of two (2) years
                           after termination of this Agreement, not to, directly
                           or indirectly, either on Employee's own behalf or on
                           behalf of any other person or entity, solicit or
                           employ any person who is an employee of the UTi Group
                           or attempt to persuade any customer of the UTi Group
                           to cease to do business or to reduce the amount of
                           business which any customer of the UTi Group has
                           customarily done or contemplates doing with the UTi
                           Group.

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                           Employee agrees that the covenants contained in this
                           paragraph are reasonable and desirable.

         9.       Protection of Property.

                  All records, files, manuals, documents, specifications, lists
                  of customers, forms, materials, supplies, computer programs
                  and other materials furnished to the Employee by the UTi
                  Group, used on its behalf or generated or obtained during the
                  course of the performance of the Employee's services
                  hereunder, shall at all times remain the property of the
                  Company. Upon termination of Employee's employment with the
                  UTi Group, Employee shall immediately deliver to the UTi
                  Group, or its authorized representative, all such property,
                  including all copies, remaining in Employee's possession or
                  control.

         10.      Notice.

                  For purposes of this Agreement, notices, demands and all other
                  communications provided for in the Agreement shall be in
                  writing and shall be deemed to have been duly given when
                  personally delivered, or if sent by overnight, commercial air
                  courier service, o n the second business day after being
                  delivered to the air courier service, or if mailed, on the
                  fifth day after being sent by first class, certified, or
                  registered mail, return receipt requested, postage prepaid,
                  addressed as follows:

                  If to Employee:   At Employee's address as indicated on the
                                    books and records of the company.

                  If to Company:    At the Company's executive headquarters
                                    (with a copy to UTi Worldwide Inc. at its
                                    executive headquarters).

                  Or to such other address as any party may have furnished to
                  the other in writing in accordance herewith, except that
                  notices of change of address shall be effective only upon
                  receipt thereof.

         11.      Entire Agreement.

                  This Agreement, together with the documents referenced herein,
                  contains the entire agreement of the parties hereto with
                  respect to the subject matter hereof. It supersedes any and
                  all other agreements, either oral or in writing, between the
                  parties here to with respect to the employment of Employee by
                  the Company. Each party to this Agreement acknowledges that no
                  representations, inducements, promises or agreements, written,
                  oral or otherwise, have been made by any party, or anyone
                  acting on behalf of any party, which are not embodied herein,
                  and that no other agreement, statement or promise not
                  contained in this agreement shall be valid or binding.

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         12.      Amendment; Waiver; Governing Law.

                  No provisions of this Agreement may be modified, waived or
                  discharged unless such waiver, modification or discharge is
                  agreed to in writing signed by Employee and by such officer of
                  the Company. No waiver by either party hereto at any time of
                  any breach by the other party hereto of, or compliance with
                  any condition or provision of this Agreement to be performed
                  by such other party shall be deemed a waiver of similar or
                  dissimilar provisions or conditions at the same or at any
                  prior subsequent time. The validity, interpretation,
                  construction and performance of this Agreement shall be
                  governed by the laws of jurisdiction where Employee is
                  employed by the Company.

         13.      Validity.

                  The invalidity or unenforceability of any provision or
                  provisions of the Agreement shall not affect the validity or
                  enforceability of any other provision of this Agreement, which
                  shall remain in full force and effect.

         14.      Counterparts.

                  This Agreement may be executed in one or more counterparts,
                  each of which shall be deemed to be an original, but all of
                  which together will constitute one and the same instrument.

         15.      Survivability.

                  The provisions in Sections 8, 9, 16 and 17 of this Agreement
                  shall survive any termination of this Agreement.

         16.      Specific Performance.

                  In the event of the breach by Executive of any of the
                  provisions of Sections 8 or 9, the Company and the UTi Group,
                  in addition to all other rights and remedies they may have,
                  may apply to any court of law or equity of competent
                  jurisdiction for specific performance and/or injunctive or
                  other relief to the extent authorized by law in order to
                  enforce or prevent any violations of the provisions thereof.

         17.      Arbitration.

                  The parties hereto acknowledge that it is in their best
                  interests to facilitate the informal resolution of any
                  disputes arising out of this Agreement or otherwise by mutual
                  cooperation and without resorting to litigation. As a result,
                  if either party has a legally recognized claim or dispute
                  arising hereunder or otherwise, including but not limited to
                  any claim for breach of any contract or covenant (express or
                  implied), any dispute regarding Executive's termination of
                  employment from the Company, tort claims, claims for
                  harassment or discrimination (including, but not limited to,
                  race, sex, religion, national origin, age, handicap or
                  disability), claims for

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                  compensation or benefits (except where a benefit plan or
                  pension plan or insurance policy specifies a different claims
                  procedure) and claims for violation of public policy or, any
                  federal, state or other governmental law, statute, regulation
                  or ordinance (except for claims involving workers'
                  compensation benefits), and the parties are unable to reach
                  agreement among themselves within thirty (30) days, then the
                  parties agree to submit the dispute to JAMS for binding
                  arbitration in accordance with its then-current employment
                  rules and applicable law. If the parties are unable to agree
                  to an arbitrator, JAMS will provide the names of seven
                  potential arbitrators, giving each party the opportunity to
                  strike three names. The remaining arbitrator will serve as the
                  arbitration panel. The parties agree that the arbitration must
                  be initiated within the time period of the statute of
                  limitations applicable to the claim(s) if the claim(s) had
                  been filed in Court. Arbitration may be initiated by the
                  aggrieved party by sending written notice of an intent to
                  arbitrate by registered certified mail to all parties and to
                  JAMS. The notice must contain a description of the dispute,
                  the amount involved and the remedies sought. All fees and
                  expenses of the arbitration will be borne by the Company. Each
                  party will pay for the fees and expenses of its own attorneys,
                  experts, witnesses, and preparation and presentation of proofs
                  and post-hearing briefs, unless the party prevails on a claim
                  for which attorneys' fees are recoverable by statute, in which
                  case the arbitrator may award attorneys' fees and costs to the
                  prevailing party.

         18.      Withholding of Taxes; Tax Reporting.

                  The Company may withhold from any amounts payable under this
                  Agreement all such taxes, and may file with appropriate
                  governmental authorities all such information, returns or
                  other reports with respect to the tax consequence of any
                  amount payable under this Agreement, as may in its reasonable
                  judgment, be required by law.

                            [Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

"Company"                              UTi Services Inc.,
                                       a California corporation

                                       By: /s/ Roger MacFarlane
                                           -------------------------------------
                                       Name:  Roger MacFarlane
                                       Title:  Chief Executive Officer

"Employee"                                 /s/ Peter Thorrington
                                           -------------------------------------
                                       Name:  Peter  Thorrington
                                       Title:  Special Advisor

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Exhibit 4.1

This Warrant was originally issued on August 31, 2004,
and such issuance was not registered under the
Securities Act of 1933, as amended. The transfer of
this Warrant and the securities obtainable upon
exercise thereof is subject to the conditions on
transfer specified in the Warrant Purchase and
Registration Agreement, dated as of June 18, 2003 (as
amended and modified from time to time), between the
issuer hereof (the “Company”) and the initial holder
hereof, and the Company reserves the right to refuse
the transfer of such security until such conditions
have been fulfilled with respect to such transfer.
Upon written request, a copy of such conditions shall
be furnished by the Company to the holder hereof
without charge.

AKORN, INC.

STOCK PURCHASE WARRANT

	 	 	 
	Date of Issuance: August 31, 2004

	 	Certificate No. D-l

     THIS CERTIFIES THAT, for value received, AEG Partners LLC, an Illinois
limited liability company, or its registered assigns (the “Registered Holder”)
is entitled to subscribe for and purchase on or before August 31, 2008 from
Akorn, Inc., a Louisiana corporation (the “Company”), an aggregate of 1,250,000
fully paid and nonassessable shares of the Company’s Common Stock at a price
per share of $0.75 (as adjusted from time to time hereunder, the “Exercise
Price”). This Warrant is issued by the Company pursuant to the Warrant Purchase
and Registration Agreement, dated as of June 18, 2003 (the “Purchase
Agreement”), by and between the Company and AEG Partners LLC. Certain
capitalized terms used herein are defined in Section 5 hereof. The amount of
securities obtainable pursuant to the rights granted hereunder and the purchase
price for such securities are subject to adjustment pursuant to the provisions
contained in this Warrant.

     This Warrant is subject to the following provisions:

     Section 1. Exercise of Warrant.

     1A. Exercise Period. The Registered Holder may exercise, in whole or in
part (but not as to a fractional share of Common Stock), the purchase rights
represented by this Warrant at any time and from time to time after the Date of
Issuance to and including the fourth anniversary thereof (the “Exercise
Period”). The “Date of Issuance” shall be the Effective Date under the Purchase
Agreement.

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     1B. Exercise Procedure.

          (i) This Warrant shall be deemed to have been exercised when there shall
have been delivered to the office of the Company, 2500 Milbrook Drive, Buffalo
Grove, Illinois 60089, marked to the attention of the Company’s chief financial
officer, the following items (the “Exercise Time”):

          (a) a completed Exercise Agreement, as described in paragraph 1C
below, executed by the Person exercising all or part of the purchase
rights represented by this Warrant (the “Purchaser”);

          (b) this Warrant;

          (c) if this Warrant is not registered in the name of the Purchaser,
an Assignment or Assignments in the form set forth in Exhibit II hereto
evidencing the assignment of this Warrant to the Purchaser, in which case
the Registered Holder shall have complied with the provisions set forth
in Section 8 hereof; and

          (d) either (1) a check payable to the Company in an amount equal to
the Exercise Price multiplied by the number of shares of Common Stock
being purchased upon such exercise (the “Aggregate Exercise Price”) or
(2) a written notice to the Company that the Purchaser is exercising the
Warrant (or a portion thereof) by authorizing the Company to withhold
from issuance a number of shares of Common Stock issuable upon such
exercise of the Warrant which when multiplied by the Market Price of the
Common Stock is equal to the Aggregate Exercise Price (and such withheld
shares shall no longer be issuable under this Warrant).

          (ii) Certificates for shares of Common Stock purchased upon exercise of
this Warrant shall be delivered by the Company to the Purchaser within seven
business days after the date of the Exercise Time. Unless this Warrant has
expired or all of the purchase rights represented hereby have been exercised,
the Company shall prepare a new Warrant, substantially identical hereto,
representing the rights formerly represented by this Warrant which have not
expired or been exercised and shall, within such seven-day period, deliver such
new Warrant to the Person designated for delivery in the Exercise Agreement.

          (iii) The Common Stock issuable upon the exercise of this Warrant shall be
deemed to have been issued to the Purchaser at the Exercise Time, and the
Purchaser shall be deemed for all purposes to have become the record holder of
such Common Stock at the Exercise Time.

          (iv) The issuance of certificates for shares of Common Stock upon exercise
of this Warrant shall be made without charge to the Registered Holder or the
Purchaser for any issuance tax in respect thereof or other cost incurred by the
Company in connection with such exercise and the related issuance of shares of
Common Stock. Each share of Common Stock issuable upon exercise of this Warrant
shall, upon payment of the Exercise Price therefor, be fully paid and
nonassessable and free from all liens and charges (other than any created by
the Registered Holder) with respect to the issuance thereof or otherwise.

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          (v) The Company shall not close its books against the transfer of this
Warrant or of any share of Common Stock issued or issuable upon the exercise of
this Warrant in any manner which interferes with the timely exercise of this
Warrant. The Company shall from time to time take all such action as may be
necessary to ensure that the par value per share of the unissued Common Stock
acquirable upon exercise of this Warrant is at all times equal to or less than
the Exercise Price then in effect.

          (vi) The Company shall use reasonable efforts to assist and cooperate with
any Registered Holder or Purchaser required to make any governmental filings or
obtain any governmental approvals prior to or in connection with any exercise
of this Warrant (including, without limitation, making any filings required to
be made by the Company).

          (vii) Notwithstanding any other provision hereof, if an exercise of any
portion of this Warrant is to be made in connection with a registered public
offering or the sale of the Company, the exercise of any portion of this
Warrant may, at the election of the holder hereof and upon delivery of the
items required by Section 1 B(i), be conditioned upon the consummation of the
public offering or sale of the Company in which case such exercise shall not be
deemed to be effective until, and the Effective Time shall be deemed to occur
upon, the consummation of such transaction.

          (viii) The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the purpose of
issuance upon the exercise of the Warrants, such number of shares of Common
Stock issuable upon the exercise of all outstanding Warrants. All shares of
Common Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
(other than any created by the Registered Holder). The Company shall take all
such actions as may be necessary to ensure that all such shares of Common Stock
may be so issued without violation by the Company of any applicable law or
governmental regulation or any requirement of any domestic securities exchange
upon which shares of Common Stock may be listed (except for official notice of
issuance which shall be immediately delivered by the Company upon each such
issuance).

     1C. Exercise Agreement. Upon any exercise of this Warrant, the Exercise
Agreement shall be substantially in the form set forth in Exhibit I hereto,
except that if the shares of Common Stock are not to be issued in the name of
the Person in whose name this Warrant is registered, the Exercise Agreement
shall also state the name of the Person to whom the certificates for the shares
of Common Stock are to be issued, and if the number of shares of Common Stock
to be issued does not include all the shares of Common Stock purchasable
hereunder, it shall also state the name of the Person to whom a new Warrant for
the unexercised portion of the rights hereunder is to be delivered. Such
Exercise Agreement shall be dated the actual date of execution thereof.

     1D. Fractional Shares. If a fractional share of Common Stock would, but
for the provisions of Section lA, be issuable upon exercise of the rights
represented by this Warrant, the Company shall, within seven business days
after the date of the Exercise Time, deliver to the Purchaser a check payable
to the Purchaser in lieu of such fractional share in an amount equal to

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the
difference between the Market Price of such fractional share as of the date of
the Exercise Time and the Exercise Price of such fractional share.

     Section 2. Adjustment of Exercise Price and Number of Shares. In order to
prevent dilution of the rights granted under this Warrant, the Exercise Price
shall be subject to adjustment from time to time as provided in this Section 2,
and the number of shares of Common Stock obtainable upon exercise of this
Warrant shall be subject to adjustment from time to time as provided in this
Section 2.

     2A. Reclassification. If the Company, at any time or from time to time
while this Warrant is outstanding and unexpired, shall reclassify or otherwise
change the securities issuable upon exercise of this Warrant (other than as a
result of a subdivision or combination, stock dividend, or reorganization,
merger, consolidation or sale of assets, each as provided for below), the
Company shall, as a condition precedent to such transaction, execute a new
Warrant providing that the Registered Holder shall have the right to exercise
such new Warrant and upon such exercise to receive, in lieu of each share of
Common Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock or other securities, money or property receivable
upon such reclassification or change which such Registered Holder would have
received for one share of Common Stock had such Registered Holder exercised
this Warrant in full immediately prior to such reclassification or change. Such
new Warrant shall provide for adjustments which shall be as nearly equivalent
as practicable to the adjustments provided for in this Section 2A. The
provisions of this Section 2A shall similarly apply to successive
reclassifications or changes.

     2B. Subdivisions or Combination of Warrant Shares. If the Company at any
time or from time to time while this Warrant is outstanding and unexpired shall
subdivide or combine its Common Stock, the Exercise Price shall be adjusted to
that price determined by multiplying the Exercise Price in effect immediately
prior to such subdivision or combination by a fraction, (i) the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to such subdivision or combination and (ii) the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately after such subdivision or combination.

     2C. Reorganizations. Mergers. Consolidations or Sale of Assets. If at any
time or from time to time while this Warrant is outstanding and unexpired there
shall be a capital reorganization of the Company’s Common Stock (other than a
combination, subdivision, reclassification or change of shares provided for
elsewhere in this Warrant) or merger or consolidation of the Company with or
into another entity, or the sale of all or substantially all of the Company’s
assets to another corporation then, as a part of such reorganization, merger,
consolidation or sale, lawful provision shall be made so that the Registered
Holder shall thereafter be entitled to receive upon exercise of this Warrant,
during the Exercise Period and upon payment of the Exercise Price then in
effect, the number and type of shares of stock, other securities or property to
which a holder of the Common Stock issuable upon exercise of this Warrant would
have been entitled in such reorganization, merger, consolidation or sale if
this Warrant had been exercised immediately before that reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Registered Holder after such

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reorganization, merger,
consolidation or sale so that the provisions of this Warrant (including
adjustment of the Exercise Price and the number of shares purchasable upon
exercise) shall be applicable in relation to any shares or other property
deliverable after such event upon exercise of this Warrant. This provision
shall apply to any successive reorganization, merger, consolidation or sale.

     2D. Stock Dividends. If the Company at any time and from time to time
while this Warrant is outstanding and unexpired shall pay a dividend with
respect to its Common Stock payable in, or make any other distribution without
consideration of, shares of Common Stock (except any distribution specifically
provided for above), then the Exercise Price shall be adjusted, from and after
the record date fixed for the determination of stockholders entitled to receive
such dividend or distribution, to that price determined by multiplying the
Exercise Price in effect immediately prior to such date of determination by a
fraction, (i) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to such distribution or dividend,
and (ii) the denominator of which shall be the total number of shares of Common
Stock outstanding immediately after such dividend or distribution.

     2E. Other Dividends. If the Company at any time and from time to time
while this Warrant is outstanding and unexpired shall pay a dividend other than
a regular cash dividend with respect to its Common Stock other than in the form
of Common Stock, then the Exercise Price shall be adjusted, from and after the
record date fixed for the determination of holders of Common Stock entitled to
receive such dividend or distribution, to that price determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, (i) the numerator of which shall be the Market Price of a share of
Common Stock as of such record date less the amount of the dividend or
distribution applicable to one share of Common Stock and (ii) the denominator
of which shall be the Market Price of one share of Common Stock as of such
record date; provided, however, if the amount of a dividend that would
otherwise require adjustment pursuant to this Section 2E is equal to or greater
than such Market Price, then, in lieu of the foregoing adjustment, adequate
provision shall be made so that the Registered Holder shall receive a pro rata
share of such dividend based upon the maximum number of shares of Common Stock
issuable to such Registered Holder under this Warrant at such time.

     2F. Adjustment of Exercise Price Upon Issuance of Common Stock. If the
Company at any time and from time to time while this Warrant is outstanding and
unexpired issues or sells, or in accordance with paragraph 2F(i) is deemed to
have issued or sold, any share of Common Stock, other than any share of Common
Stock issued or issuable (1) pursuant to Options or Convertible Securities
outstanding as of the Date of Issuance or (2) to employees of the Company
pursuant to an incentive plan authorized by the board of directors of the
Company, for a consideration per share less than the Exercise Price in effect
immediately prior to such time, then immediately upon such issue or sale the
Exercise Price shall be reduced to an amount equal to the quotient determined
by dividing (x) the sum of (1) the product derived by multiplying the Exercise
Price in effect immediately prior to such issue or sale by the number of shares
of Common Stock outstanding immediately prior to such issue or sale, plus (2)
the consideration, if any, received by the Company upon such issue or sale, by
(y) the number of shares of Common Stock outstanding immediately after such
issue or sale.

5

 

          (i) For purposes of determining the adjusted Exercise Price under
paragraph 2F, the following shall be applicable:

          (a) Issuance of Rights or Options. If the Company in any manner
grants or sells any Options, then the share or shares of Common Stock
issuable upon exercise of such Option shall be deemed to have been issued
and sold by the Company at such time for the lowest price per share for
which any one share of Common Stock is issuable with respect to such
Option. For purposes of this paragraph, the “lowest price per share for
which any one share of Common Stock is issuable” shall be equal to the
sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to any one share of Common Stock
upon the granting or sale of the Option, upon exercise of the Option and
upon conversion or exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the Exercise Price
shall be made upon the actual issue of such Common Stock or of such
Convertible Security upon the exercise of such Options or upon the actual
issue of such Common Stock upon conversion or exchange of such
Convertible Security.

          (b) Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Security , then the share or shares of
Common Stock issuable upon conversion or exchange of such Convertible
Security shall be deemed to have been issued and sold by the Company at
such time for the lowest price per share for which any one share of
Common Stock is issuable with respect to such Convertible Security. For
the purposes of this paragraph, the “lowest price per share for which any
one share of Common Stock is issuable” shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the issuance
of the Convertible Security and upon the conversion or exchange of such
Convertible Security. No further adjustment of the Exercise Price shall
be made upon the actual issue of such Common Stock upon conversion or
exchange of any Convertible Security, and if any such issue or sale of
such Convertible Security is made upon exercise of any Options for which
adjustments of the Exercise Price had been or are to be made pursuant to
other provisions of this Section 2, no further adjustment of the Exercise
Price shall be made by reason of such issue or sale.

          (c) Change in Option Price or Conversion Rate. If the purchase price
provided for in any Options, the additional consideration, if any,
payable upon the issue, conversion or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock changes at any time,
the Exercise Price in effect at the time of such change shall be adjusted
immediately to the Exercise Price which would have been in effect at such
time had such Options or Convertible Securities still outstanding
provided for such changed purchase price, additional consideration or
changed conversion rate, as the case may be, at the time initially
granted, issued or sold and the number of shares of Common Stock issuable
hereunder shall be correspondingly adjusted. For purposes of this
paragraph 2F, if the terms of any Option or Convertible Security which
was outstanding as of the date of issuance of this Warrant are changed in
the manner described in the immediately preceding sentence, then such
Option or Convertible Security and the Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have

6

 

been issued as of the date of such change; provided that no such change shall
at any time cause the Exercise Price hereunder to be increased.

          (d) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any
right to convert or exchange any Convertible Securities without the
exercise of such Option or right, the Exercise Price then in effect shall
be adjusted immediately to the Exercise Price which would have been in
effect at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to
such expiration or termination, never been issued. For purposes of this
paragraph 2F, the expiration or termination of any Option or Convertible
Security which was outstanding as of the date of issuance of this Warrant
shall not cause the Exercise Price hereunder to be adjusted unless, and
only to the extent that, a change in the terms of such Option or
Convertible Security caused it to be deemed to have been issued after the
date of issuance of this Warrant.

          (e) Calculation of Consideration Received. If any Common Stock,
Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor shall
be deemed to be the net amount received by the Company (net of discounts,
commissions and related expenses) therefor. In case any Common Stock,
Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of the consideration other than cash received
by the Company shall be the fair value of such consideration, provided
that where such consideration consists of securities, in which case the
amount of consideration received by the Company shall be the Market Price
thereof as of the date of receipt. In case any Common Stock, Options or
Convertible Securities are issued 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 therefor shall be
deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such Common
Stock, Options or Convertible Securities, as the case may be. The fair
value of any consideration other than cash or securities shall be
determined in good faith jointly by the Company and the Registered
Holder. If such parties are unable to reach agreement within a reasonable
period of time, such fair value shall be determined by an appraiser
jointly selected by the Company and the Registered Holder. The
determination of such appraiser shall be final and binding on the Company
and the Registered Holder, and the fees and expenses of such appraiser
shall be paid by the Company.

          (f) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the
Options shall be deemed to have been issued without consideration.

     2G. Adjustment of Number of Shares. Upon each adjustment in the Exercise
Price (other than pursuant to Section 2E), the number of shares of stock
purchasable hereunder shall be adjusted, to the nearest whole share, to the
product obtained by multiplying the number of shares purchasable immediately
prior to such adjustment in the Exercise Price by a fraction, (i) the

7

 

numerator
of which shall be the Exercise Price immediately prior to such adjustment and
(ii) the denominator of which shall be the Exercise Price immediately after
such adjustment.

     Section 3. Notices. Whenever the number of shares of Common Stock
purchasable hereunder or the Exercise Price thereof shall be adjusted pursuant
to Section 2 hereof, the Company shall provide written notice in accordance
with Section 11 hereof, to the Registered Holder setting forth in reasonable
detail the event requiring adjustment, the amount of the adjustment, the method
by which such adjustment was calculated, and the number of shares of Common
Stock which may be purchased and the Exercise Price therefor after giving
effect to such adjustment.

     Section 4. Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares 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.

     Section 5. Definitions. The following terms have meanings set forth below:

     “Convertible Securities” means any stock or securities (directly or
indirectly) convertible into or exchangeable for Common Stock.

     “Current Market Price” means, as of any date, (i) if at that time, the
principal market for such security is a national securities exchange or the
NASDAQ System, the mean between the lowest and highest reported sale prices of
such security on the immediately preceding business day on the principal
exchange or market on which such security is then listed or admitted to trading
or (ii) if, at that time, the sale prices are not available or the principal
market for the security is not a national securities exchange and such security
is not quoted on the NASDAQ System, the average between the highest bid and
lowest asked prices for such security on the immediately preceding business day
as reported on the NASDAQ OTC Bulletin Board Service or by the National
Quotation Bureau, Incorporated or any similar successor organization.

     “Market Price” means as to any security the average of the closing prices
of such security’s sales on all domestic securities exchanges on which such
security may at the time be listed, or, if there have been no sales on any such
exchange on any day, the average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if on any day such security is
not so listed, the average of the representative bid and asked prices quoted in
the NASDAQ System as of 4:00 P.M., New York time, on such day, or, if on any
day such security is not quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case averaged
over a period of 21 days consisting of the day as of which “Market Price” is
being determined and the 20 consecutive business days prior to such day;
provided that if such security is listed on any domestic securities exchange
the term “business days” as used in this sentence means business days on which
such exchange is open for trading. If at any time such security is not listed
on any domestic securities exchange or quoted in the NASDAQ System or the
domestic over-the-counter market, the “Market Price” shall be the fair value
thereof determined in good faith jointly by the Company and the Registered
Holders of Warrants representing a

8

 

majority of the Common Stock purchasable
upon exercise of all the Warrants then outstanding; provided that if such
parties are unable to reach agreement within a reasonable period of time, such
fair value shall be determined by an appraiser jointly selected by the Company
and the Registered Holders of Warrants representing a majority of the Common
Stock purchasable upon exercise of all the Warrants then outstanding. The
determination of such appraiser shall be final and binding on the Company and
the Registered Holders of the Warrants, and the fees and expenses of such
appraiser shall be paid by the Company.

     “Options” means any rights or options to subscribe for or purchase Common
Stock or Convertible Securities, other than any right or option otherwise
exempted with the approval of the Registered Holder.

     “Person” means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization and a government or any department or agency thereof.

     Other capitalized terms used in this Warrant but not defined herein shall
have the meanings set forth in the Purchase Agreement.

     Section 6. No Voting Rights: Limitations of Liability. This Warrant shall
not entitle the holder hereof to any voting rights or other rights as a
stockholder of the Company until the Warrant shall have been exercised and the
Common Stock purchasable upon the exercise hereof shall have become
deliverable, as provided herein. No provision hereof, in the absence of
affirmative action by the Registered Holder to purchase Common Stock, and no
enumeration herein of the rights or privileges of the Registered Holder shall
give rise to any liability of such holder for the Exercise Price of Common
Stock acquirable by exercise hereof or as a stockholder of the Company.

     Section 7. Restrictive Legend. The shares issuable upon exercise of this
Warrant (unless registered under the Securities Act of 1933) shall be stamped
or imprinted with a legend in substantially the following form:

“The securities represented by this certificate were
originally issued on August 31, 2004, and have not
been registered under the Securities Act of 1933, as
amended. The transfer of the securities represented by
this certificate is subject to the conditions
specified in the Warrant Purchase and Registration
Agreement, dated as of June 18, 2003, between the
issuer (the “Company”) and certain investors, and the
Company reserves the right to refuse the transfer of
such securities until such conditions have been
fulfilled with respect to such transfer. A copy of
such conditions will be furnished by the Company to
the holder hereof upon written request and without
charge.”

     Section 8. Warrant Transferable. Subject to the transfer conditions
referred to in the legend endorsed hereon, this Warrant and all rights
hereunder are transferable, in whole or in part, without charge to the
Registered Holder, upon surrender of this Warrant with a properly

9

 

executed
Assignment (in the form of Exhibit II hereto) at the principal office of the
Company; provided that any transfer in part shall be of Warrants in minimum
denominations to purchase 100,000 shares of the Company’s Common Stock, subject
to adjustment as provided in Section 2.

     Section 9. Warrant Exchangeable for Different Denominations. This Warrant
is exchangeable, upon the surrender hereof by the Registered Holder at the
principal office of the Company, for new Warrants of like tenor representing in
the aggregate the purchase rights hereunder, and each of such new Warrants
shall represent such portion of such rights as is designated by the Registered
Holder at the time of such surrender. The date the Company initially issues
this Warrant shall be deemed to be the “Date of Issuance” hereof regardless of
the number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued. All Warrants
representing portions of the rights hereunder are referred to herein as the
“Warrants.”

     Section 10. Replacement. Upon receipt of evidence reasonably satisfactory
to the Company (it being acknowledged by the Company that an affidavit of the
Registered Holder is deemed to be reasonably satisfactory) of the ownership and
the loss, theft, destruction or mutilation of this Warrant, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Company, or, in the case of any such mutilation upon
surrender of such Warrant, the Company shall (at its expense, except for the
cost of any lost security indemnity bond required, which shall be paid by the
Registered Holder) execute and deliver in lieu of such Warrant a new Warrant of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated Warrant and dated the date of such lost, stolen,
destroyed or mutilated Warrant.

     Section 11. Notices. Except as otherwise expressly provided herein, all
notices referred to in this Warrant shall be in writing and shall be delivered
personally, sent by reputable overnight courier service (charges prepaid) or
sent by registered or certified mail, return receipt requested, postage prepaid
and shall be deemed to have been given when so delivered or deposited in the
U.S. Mail (i) to the Company, at its principal executive offices and (ii) to
the Registered Holder of this Warrant at such holder’s address as it appears in
the records of the Company (unless otherwise indicated by any such holder).

     Section 12. Amendment and Waiver. Except as otherwise provided herein, the
provisions of the Warrants may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed
by it, only if the Company has obtained the written consent of the Registered
Holder.

     Section 13. Descriptive Headings: Governing Law. The descriptive headings
of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporation
laws of the State of Louisiana shall govern all issues concerning the relative
rights of the Company and its Stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal law of the State of Illinois, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of Illinois.

10

 

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
attested by its duly authorized officers under its corporate seal and to be
dated the Date of Issuance hereof.

	 	 	 	 	 
	 	AKORN, INC.

 	 	 
	 	By:  	/s/ Arthur S. Przybyl
 	 
	 	Its:	Chief Executive Office
	 	 	 
	 

[Corporate Seal]

Attest:

	 	 	 	 	 
	 	 	 
	/s/  Jeffrey A. Whitnell
 	 
	Title:	Chief Financial Officer
	 	 

11

 

	 	 	 	 	 

EXHIBIT I

EXERCISE AGREEMENT

	 	 	 
	To:

	 	Dated:

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. W-    ), hereby agrees to subscribe for the purchase
of    shares of the Common Stock covered by such Warrant and makes payment
herewith in full therefor at the price per share provided by such Warrant and
requests that certificates for the shares of Common Stock hereby purchased be
issued in the name and delivered to    whose address is    .

	 	 	 	 	 
	 	Signature	 
	 
	 	Address	 

 

	 	 	 	 	 

EXHIBIT II

ASSIGNMENT

     FOR
VALUE RECEIVED,                
hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant
(Certificate
No. W-        ) with respect to the number of shares of the Common
Stock covered thereby set forth below, unto:

	 	 	 
	Name of Assignee
	Address
	No. of Shares

	 	 	 	 	 
	 	Signature	 
	 
	 	 	 	 	 
	 
	 	Witness

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