Document:

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                                                                    EXHIBIT 10.2

                  FORM OF CREDITOR WAIVER AND CONSENT AGREEMENT

<PAGE>

                      CREDITOR WAIVER AND CONSENT AGREEMENT

         AGREEMENT made this ____ day of August, 2004 by and among FRONTRUNNER
NETWORK SYSTEMS CORP. ("Company"), CAPITAL GROWTH SYSTEMS, Inc. a Florida
corporation ("CGSI"), and the person or entity named on the signature line below
as "Creditor."

                                    RECITALS:

         A. Creditor has provided funds and/or services to Company in one or
more increments, and is a creditor and/or stockholder of Company.

         B. Company concurrently herewith is entering into an Agreement and Plan
of Merger in the form attached hereto as Exhibit A ("Merger Agreement") with
CGSI and Frontrunner Acquisition Inc. ("Acquisition").

         C. CGSI has filed the following documents with the Securities and
Exchange Commission ("SEC"), which have been made available for review by
Creditor: (i) registration statement to register shares of certain selling
shareholders of common stock and of the shares of common stock underlying
warrants issued by CGSI; (ii) Form 10-K for the year ended December 31, 2003;
(iii) Form 10-Q for the quarter ended March 31, 2004; and (iv) proxy statement
in connection with 2004 annual meeting, which meeting has been adjourned pending
provision of certain supplemental disclosures to the proxy statement.

         D. Creditor is desirous of entering into this Agreement in order to
induce CGSI to close the merger contemplated by the Merger Agreement (the
"Merger"), which will benefit Creditor due to the issuance of shares called for
hereunder either directly to Creditor or to an entity or person affiliated with
Creditor.

         E. Concurrently herewith, other similarly situated creditors referenced
on Exhibit B (collectively, the "Creditors") are entering agreements similar to
this form of Agreement, calling for the issuance of an aggregate of 1,000,000
shares of CGSI Common Stock. The percentage of said 1,000,000 shares to be
issued to Creditor on the closing of this Agreement constitutes Creditor's "Pro
Rata Share."

         F. Creditor is desirous of appointing Frontrunner Representative, Inc.,
a corporation controlled by Philip B. Kenny ("Representative") to act as agent
on behalf of Creditor for resolution of any disputes between CGSI on the one
hand and Company or Creditor on the other hand with respect to the subject
matter of Section 3 below. Losses or liability that CGSI incurs as a result of a
breach or an inaccuracy of any of the representations or warranties made by
Company to CGSI pursuant to the Merger Agreement shall constitute the "Merger
Agreement Losses."

         NOW THEREFORE, in consideration of the premises and covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:

         1. Recitals. The recitals set forth above are incorporated by reference
herein and made a part hereof as if fully rewritten.

<PAGE>

         2. Agreement. Creditor represents and warrants that as of the date of
this Agreement: (i) the principal amount of funds provided to or for the benefit
of the Company and for which capital stock of the Company has not been issued to
Creditor (inclusive of all interest and other applicable charges thereon) equals
the amount set forth opposite his or its name in the first two columns of
Exhibit B; the aforesaid amount allocable to Creditor plus such other sums owing
to Creditor from Company for current obligations or for claims accrued or
potentially accruing through the "Closing Date" (as defined below) are
collectively referred to as the "Total Indebtedness" owing to Creditor; (ii) the
number of shares of Company's common stock and preferred stock set forth
opposite his or its name in the fourth, fifth and sixth columns on Exhibit B
constitute all of the shares of Company capital stock owned (or to which
Creditor has rights to ownership) by Creditor (collectively, the "Creditor
Company Shares"), and (iii) there are no monies owing the Creditor or Creditor's
affiliates, directly or indirectly, from Company other than the Total
Indebtedness. Creditor agrees to:

                  (a) vote all Creditor Company Shares to approve the Merger
         Agreement substantially in the form of Exhibit A and all of the
         transactions contemplated thereby, including the Merger;

                  (b) sign such shareholder written consents and/or proxies as
         the Company may request from time to time approve the Merger and Merger
         Agreement;

                  (c) not sell, pledge, grant any rights in, transfer or
         encumber in any manner any of the Creditor Shares prior to November 30,
         2004;

                  (d) effective as of the effective date of the Merger (the
         "Closing Date"), the Total Indebtedness owing to Creditor shall be
         deemed excused and satisfied in full in exchange for that number of
         shares of CGSI Common Stock (the "Creditor CGSI Shares") allocable to
         Creditor for the Total Indebtedness. Creditor effective as of the
         Closing Date shall release the Company from any and all claims of
         Creditor outstanding as of such date, known or unknown; and

                  (e) to take such other actions reasonably necessary to effect
         the closing of the Merger.

         CGSI agrees to issue one day prior to the scheduled Closing Date the
number of Creditor CGSI Shares to Creditor shown on Exhibit B, subject to the
escrow holdback set forth in Section 3 below. Notwithstanding anything to the
contrary contained herein, if the Merger is not effected by November 30, 2004
through no fault of Creditor, Creditor shall reconvey the Creditor CGSI Shares
to CGSI and Company shall reinstate the Total Indebtedness to Creditor.

         3. Indemnification.

                  (a) Scope. Creditor agrees to indemnify and hold harmless CGSI
         from and against Creditor's Pro Rata Share of any Merger Agreement
         Losses incurred by CGSI, provided that this indemnity shall be limited
         to and satisfied solely from the Creditor CGSI Shares held in escrow.
         CGSI's Merger Agreement Losses shall be deemed to include any legal
         fees, costs and expenses CGSI may incur in seeking enforcement of its
         indemnification rights hereunder. CGSI shall have the right to seek
         indemnification for

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         Merger Agreement Losses as provided herein notwithstanding that the
         Merger Agreement provides that the representations and warranties set
         forth therein terminate as of the Closing Date. Accordingly, for
         purposes of indemnification under this Agreement, the representations
         and warranties of the Company set forth in the Merger Agreement shall
         survive for a period of twelve months.

                  (b) Period. The indemnification provided for herein shall
         terminate twelve months after the Closing Date, except that the
         indemnification shall continue as to any loss or expense of which CGSI
         has notified the Escrow Agent in accordance with this Section 3 on or
         prior to the date such indemnification would otherwise terminate in
         accordance with this Section 3, as to which CGSI's right to be
         indemnified hereunder shall continue until CGSI has been reimbursed the
         full amount of such loss and expense in accordance with this Section 3.

                  (c) Shareholder Representative. Frontrunner Representative,
         Inc. (the "Representative") is hereby appointed the shareholder
         representative, to act as the true and lawful attorney(s) in fact, and,
         as such, to act, as the Creditor's agent (with full power of
         substitution), to take such action on Creditor's behalf with respect to
         all matters relating to indemnification claims made pursuant to Section
         3 hereof and the terms of an escrow agreement, in the form attached
         hereto as Exhibit C (the "Escrow Agreement"). The Escrow Agreement
         shall provide that the Representative shall act as Escrow Agent for a
         stock certificate representing fifteen percent (15%) of the Shares
         issuable to Creditor on the Closing Date (the "Escrow Shares"). All
         such determinations, agreements, settlements and compromises made by
         the Representative shall be binding on Creditor. The Company shall be
         entitled to conclusively rely on the instructions, decisions and acts
         of the Representative required, permitted or contemplated to be taken
         by the Representative hereunder or under the Escrow Agreement, and the
         Company is relieved from any liability to any person for any acts done
         by them in accordance with any instructions, decisions or acts of the
         Representative. The Company shall be entitled to treat as genuine, and
         as the document it purports to be, any letter, paper or other document
         furnished to it by or on behalf of the Representative, and reasonably
         believed by the Company to be genuine and to have been signed and
         presented by the proper party or parties.

                  (d) Notice of Claims.

                           (i) If CGSI seeks indemnification hereunder it shall
                  give the Representative on behalf of the Creditor (the
                  "Indemnitor") a notice (a "Claim Notice") describing in
                  reasonable detail the facts giving rise to any claim for
                  indemnification hereunder and shall include in such Claim
                  Notice (if then known) the amount or the method of computation
                  of the amount of such claim, and a reference to the provision
                  of this Agreement or any agreement, document or instrument
                  executed pursuant hereto or in connection herewith upon which
                  such claim is based; provided, that a Claim Notice in respect
                  of any action at law or suit in equity by or against a third
                  person as to which indemnification will be sought shall be
                  given promptly after the action or suit is commenced; provided
                  further that failure to give such notice shall not relieve the
                  Indemnitor of its

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<PAGE>

                  obligations hereunder except to the extent it shall have been
                  prejudiced by such failure.

                           (ii) After the giving of any Claim Notice pursuant
                  hereto, the amount of indemnification to which CGSI shall be
                  entitled shall be determined: (A) by the written agreement
                  between the Representative and CGSI; or (B) by a final
                  judgment or decree of any court of competent jurisdiction. The
                  judgment or decree of a court shall be deemed final when the
                  time for appeal, if any, shall have expired and no appeal
                  shall have been taken or when all appeals taken shall have
                  been finally determined.

                           (iii) If CGSI is entitled to indemnification
                  hereunder, and the amount of indemnification to which CGSI is
                  entitled has been determined as provided for this Section 3,
                  CGSI shall satisfy such claim from the Escrow Shares in
                  accordance with the terms of the Escrow Agreement. For
                  purposes of this Indemnification Agreement, an Escrow Share
                  shall have a value of $1.35.

                  (e) Direct Representations and Warranties. In addition to
         CGSI's rights to indemnification per Section 3(a) above, it shall be
         entitled to seek damages at law directly from a Creditor with respect
         to any breach of any direct representation or warranty or agreement
         made by Creditor to CGSI hereunder; provided, however, in no event
         shall Creditor's aggregate liability under this Agreement exceed the
         value of the total number CGSI Shares received by Creditor pursuant to
         this Agreement (including Creditor's portion of the Escrowed Shares).
         Any such action shall be directly between CGSI and Creditor and shall
         not involve Representative. Creditor shall have the right to satisfy
         any liability hereunder by conveying its CGSI Shares back to CGSI.

         4. Confidentiality. Creditor agrees to maintain any financial
information regarding CGSI which is not generally publicly available in strict
confidence pending such information becoming generally publicly available
through no fault of Creditor.

         5. Creditor Representations. Creditor makes the following
representations, warranties, covenants and acknowledgments to CGSI and the
Company with respect to this Agreement and the Creditor CGSI Shares if any
subject hereto:

                  (a) Authorization. Creditor has full legal right, power,
         capacity and authority to execute and deliver this Agreement and the
         instruments contemplated hereby and perform his or its obligations
         hereunder. This Agreement has been duly executed and delivered by the
         Creditor and this Agreement is the legal and binding obligation of the
         Creditor, enforceable in accordance with its terms.

                  (b) Title to Creditor Shares and Indebtedness. Creditor is the
         legal and beneficial holder of the Total Indebtedness and the Creditor
         Shares, free and clear of all liens, claims, options or other
         encumbrances, and Creditor has not assigned or otherwise transferred
         any rights to receive payment under the Total Indebtedness to any
         person.

                  (c) Accredited Investor Status. Creditor is an "accredited
         investor" as defined in Rule 501 of Regulation D of the Securities Act.

                                       4
<PAGE>

                  (d) Investment Intent. The Creditor CGSI Shares are being
         acquired solely by and for the account of Creditor, for investment, and
         are not being purchased for subdivision, fractionalization, resale or
         distribution. Creditor has no contract, undertaking, agreement or
         arrangement with any person to sell, transfer or pledge all or any part
         of the Creditor CGSI Shares, and Creditor has no present plans or
         intentions to enter into any such contract, undertaking or arrangement.

                  (e) Transfer Restrictions. Creditor acknowledges that it
         generally must hold the Creditor CGSI Shares for a minimum period of
         one year and may not sell, transfer, pledge or otherwise dispose of
         such shares without registration under the Securities Act of 1933, as
         amended (the "Securities Act"), or the securities acts of any states
         (the "Laws") unless an exemption from registration is available.
         Further, Creditor shall provide, if CGSI so requires, an opinion of
         counsel satisfactory to CGSI, that the intended disposition of Creditor
         CGSI Shares will not violate the Securities Act or the rules and
         regulations of the Securities and Exchange Commission or of any state
         securities commission promulgated under such statutes.

                  (f) Sophistication and Experience. Creditor expressly
         represents that: (i) Creditor has such knowledge and experience in
         financial and business matters in general and in investments in
         privately held companies in particular, and that Creditor is capable of
         evaluating the merits, risks and other facets of the subject
         investment; (ii) Creditor's financial condition is such that Creditor
         has no need for liquidity with respect to the investment in the
         Creditor CGSI Shares to satisfy any existing or contemplated
         undertaking or indebtedness; (c) Creditor is able to bear the economic
         risk of the investment in the Creditor CGSI Shares for an indefinite
         period of time, including the risk of losing the entire investment; (d)
         Creditor has either secured independent tax advice with respect to the
         investment in the Creditor CGSI Shares, or Creditor is sufficiently
         familiar with the income taxation of equity instruments that he deemed
         such independent advice to be unnecessary; and (e) Creditor has
         participated in other privately placed investments, has such knowledge
         and experience in business and financial matters, has the capacity to
         protect its interest in investments like the subject investment, and is
         capable of evaluating the risks, merits and other facets of the subject
         investment.

                  (g) Access to Information. Creditor acknowledges that the CGSI
         has made available all documents pertaining to the Merger, and
         investment opportunity in CGSI, and has allowed Creditor an opportunity
         to ask questions and receive answers thereto and to verify and clarify
         any information provided to Creditor by the Company and CGSI.

         6. Miscellaneous.

                  (a) Survival. All representations, warranties and covenants of
         the parties contained in this Agreement or made pursuant hereto, shall
         survive the date of execution of this Agreement and remain in full
         force and effect, and shall survive the termination or expiration of
         this Agreement.

                                       5
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                  (b) Counsel. All parties hereto have been represented by
         counsel, and no inference shall be drawn in favor of or against any
         party by virtue of the fact that such party's counsel was or was not
         the principal draftsman of this Agreement.

                  (c) Notices. All notices or other communications required or
         permitted under this Agreement shall be in writing and shall be deemed
         to have been duly given if delivered personally or sent by registered
         or certified mail, postage prepaid or via national courier, addressed
         as to the party entitled to notice at the address set forth below, or
         such other address as is subsequently provided by written notice from
         such party to the other parties.

                  (d) No Assignment. Except as expressly noted below, this
         Agreement and the rights of the parties under this Agreement may not be
         sold, assigned or otherwise transferred without the prior written
         consent of the other party.

                  (e) Entire Agreement. This Agreement, the Merger Agreement,
         the Escrow Agreement and the agreements and documents referred to
         herein and therein, sets forth the entire agreement and understanding
         of the parties hereto in respect of the subject matter contemplated
         hereby, and supersedes all prior agreements, arrangements and
         understandings relating to the subject matter hereof.

                  (f) Applicable Law. This Agreement shall be governed by and
         construed in accordance with the laws of the State of Illinois. Should
         any dispute arise under this Agreement, it shall be litigated in the
         state or federal courts situated in Cook County, Illinois, to which
         jurisdiction and venue all parties consent. All parties hereto waive
         their right to jury trial in the determination of any dispute with
         respect to the subject matter hereof.

                  (g) Counterparts. This Agreement may be executed in two or
         more counterparts, each of which, whether photocopy, facsimile or ink,
         shall be deemed an original, but all of which together shall constitute
         one instrument.

                  (h) Approval. This Agreement shall be binding upon the
         parties, their respective heirs, successors and assigns, and each
         entity party represents and warrants that this Agreement has been duly
         approved by proper corporate action.

                  (i) Remedies. No party hereunder shall be entitled to
         consequential damages as a result of the breach by any other party of
         its obligations hereunder. Each party's damages shall be limited to
         actual damages as a result of the breach of any obligation hereunder.

                  (j) Specific Performance. In the event of any breach or
         threatened breach of this Agreement in which the aggrieved party
         desires to protect and enforce its rights by suit in equity for the
         specific performance of any term contained in this Agreement or for an
         injunction against any breach of any such term or in aid of the
         exercise of any power to enforce such performance or to enforce any
         other legal or equitable right of the enforcing party, that party may
         take any one or more of such actions, and shall be paid all costs and
         expenses, including attorneys' fees incurred in connection with any
         such action

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<PAGE>

         or actions should it prevail in such action. Any suit to specifically
         enforce the terms of this Agreement shall be litigated in the state or
         federal courts located in Illinois.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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<PAGE>

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.

CREDITOR:                               Frontrunner Network Systems, Inc.

-----------------------------------
[SIGNATURE]                             BY:
                                                --------------------------------
                                        ITS:
                                                --------------------------------

-----------------------------------
[PRINT NAME OF SIGNATORY]               ADDRESS: 50 EAST COMMERCE DRIVE-SUITE A
                                                 SCHAUMBURG, IL  60173

-----------------------------------
DATE OF EXECUTION
                                        Capital Growth Systems, Inc.
ADDRESS:
                -------------------

                -------------------
                                        BY:
                                                --------------------------------
                                        ITS:
                                                --------------------------------

                                        ADDRESS: 1100 EAST WOODFIELD ROAD-#100
                                                 SCHAUMBURG, IL  60173

                                       8
<PAGE>

                                    EXHIBIT A

                          AGREEMENT AND PLAN OF MERGER

          IDENTICAL TO EXHIBIT 10.1 TO THIS CURRENT REPORT ON FORM 8-K
<PAGE>

                                    EXHIBIT B

               STOCK OWNERSHIP, DEBT HOLDINGS AND NEW CGSI SHARES

<TABLE>
<CAPTION>
                                                                                                     CURRENT CREDITOR OWNERSHIP OF
                                                                                                    -------------------------------
                                                        FUNDS          FUNDS
                                                      PROVIDED        PROVIDED       NEW CGSI       CURRENT     COMPANY    COMPANY
                                                     COMPRISING      COMPRISING       COMMON        COMPANY    PREFERRED  PREFERRED
                                                       COMEXPO        2003-2004   STOCK ISSUABLE    COMMON      STOCK -    STOCK --
NAME OF CREDITOR                                     LIABILITIES      FUNDINGS   FOR OBLIGATIONS(2)  STOCK      JUNIOR     JUNIOR A
----------------                                     -----------      --------   ------------------  -----      ------     --------
<S>                                                  <C>            <C>          <C>                <C>        <C>        <C>
BLUESTEM CAPITAL PARTNERS II, LIMITED PARTNERSHIP             -     $  215,000          113,438              0       -       2,500
MESIROW CAPITAL PARTNERS VI                            $300,802        619,307          326,756     29,202,632     700         181
THE EDGEWATER PRIVATE EQUITY FUND II, L.P.              300,802        519,179          273,928     29,161,031     699         181
21ST CENTURY COMMUNICATIONS PARTNERS L.P.(3)            229,333         46,184           24,368     21,746,758     533          94
21ST CENTURY COMMUNICATIONS T-E PARTNERS, L.P.(3)             -         15,692            8,279              -       -          32
21ST CENTURY COMMUNICATIONS FOREIGN PARTNERS, L.P.(3)         -          6,124            3,231              -       -          12
PHILIP KENNY(2)                                               -              0           75,000              0                   -
JOHN JELLINEK(2)                                              -              0           75,000              0
JAMES CUPPINI(2)                                              -              0          100,000              0       -
                                                       --------     ----------        ---------     ----------   -----       -----
                                              Total:   $830,937(1)  $1,421,486(1)     1,000,000     80,110,421   1,932       3,000
                                                       ========     ==========        =========     ==========   =====       =====
</TABLE>

------------------
(1)      DOES NOT INCLUDE ACCRUED, UNPAID INTEREST OR OTHER CLAIMS OF CREDITOR
         AGAINST COMPANY, ALL OF WHICH ARE EXTINGUISHED EFFECTIVE UPON THE
         CLOSING DATE, WHICH OBLIGATIONS EXCEED THE ESTIMATED FAIR MARKET VALUE
         OF THE NEW CGSI COMMON STOCK PER COLUMN 3 ALLOCABLE TO CREDITOR.

(2)      CREDITOR IS A CREDITOR WITH RESPECT TO ANY PAYMENTS MADE TO OR ON
         BEHALF OF THE COMPANY AS A GUARANTOR OF COMPANY OBLIGATIONS AND/OR WITH
         RESPECT TO CLAIMS FROM TIME TO TIME BY COMPANY OF BREACH OF CONTRACT,
         ALL OF WHICH OBLIGATIONS ARE EXTINGUISHED EFFECTIVE AS OF THE CLOSING
         DATE, WHICH OBLIGATIONS EXCEED THE ESTIMATED FAIR MARKET VALUE OF THE
         NEW CGSI COMMON STOCK PER COLUMN 3 ALLOCABLE TO CREDITOR.

(3)      SUBJECT TO REALLOCATION AMONG THE 21ST CENTURY FUNDS TO THE EXTENT
         PROVIDED BY THEM TO COMPANY PRIOR TO THE CLOSING DATE.exv10w1

 

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (“Amendment”) is made as of
August 13, 2004 (the “ Amendment Closing Date”) by and among AKORN, INC., a
Louisiana corporation (the “Akorn”), AKORN (NEW JERSEY), INC., an Illinois
corporation (“Akorn New Jersey”, and together with Akorn, the “Companies” and
each a “Company”), DR. JOHN N. KAPOOR, THE JOHN N. KAPOOR TRUST DTD 9/29/89,
LASALLE BANK NATIONAL ASSOCIATION, a national banking association, as agent for
the Lenders (as hereinafter defined) (in such capacity, the “Administrative
Agent”), and the financial institutions signatory hereto.

RECITALS

     A.     The Administrative Agent, the Companies and certain other financial
institutions (the “Lenders”), entered into a Credit Agreement dated as of
October 7, 2003 (as may be amended, restated, modified, and supplemented, the
“Credit Agreement”).

     B.     The Administrative Agent, the Companies and the Lenders signatory
hereto desire to enter into this Amendment for the purpose of, among other
things, (i) amending and adding certain definitions, (ii) deleting Section
10.13, (iii) amending Section 11.14, (iv) waiving certain “Events of Default”
which have occurred or may occur relating to Sections 10.1.1, 10.11 and 11.14
and (v) amending the Kapoor Guaranty, all of the foregoing subject to
conditions and terms set forth herein.

AGREEMENT

     In consideration of the matters set forth in the recitals and the
covenants and provisions herein set forth, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

     1.     Definitions. Capitalized terms used but not defined herein are used as
defined in the Credit Agreement.

     2.     Amendments. Upon the Effective Date (as defined below), the Credit
Agreement shall be amended as follows:

            (a)     The definition of “EBITDA” set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:

     EBITDA means, for any period, Consolidated Net Income for such
period plus, to the extent deducted in determining such Consolidated Net
Income, Interest Expense, income tax expense, depreciation and
amortization for such period plus, solely for the purposes of determining
EBITDA for the Fiscal Year 2003, the Decatur Add Back and the Refinancing
Expense Add Back.

 

 

            (b)     The definition of “Computation Period” set forth in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:

Computation Period means each period of twelve consecutive calendar
months ending on the last day of a calendar month; provided that
for the purpose of determining compliance with Section 11.14.1, the
Computation Period used in such determination for any Computation
Period ending in the 2004 calendar year, shall be the period
beginning January 1, 2004 and ending on the last day of the
applicable calendar month.

            (c)     The following new definitions are hereby added in Section 1.1 of the
Credit Agreement in proper alphabetical order:

Decatur Add Back means an amount not to exceed $860,000 associated
with the cost of shutting down Akorn’s facility located in Decatur,
Illinois in December 2003.

Refinancing Expense Add Back means an amount not to exceed
$3,400,000 associated with non-recurring legal and consulting
expenses incurred in the month of October 2003 in connection with
the Loan Documents and the Related Transactions.

            (d)     Section 10.13 of the Credit Agreement is hereby deleted in its
entirety.

            (e)     Section 11.14.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

            “11.14 Financial Covenants.

11.14.1      EBITDA.      Not Permit EBITDA for any Computation
Period to be less than the applicable amount set forth
below for such Computation Period:

	 	 	 	 	 
	Computation	 	 
	Period Ending	 	EBITDA
	March 31, 2004
	 	$	1,100,000	 
	April 30, 2004
	 	$	1,100,000	 
	May 31, 2004
	 	$	1,100,000	 
	June 30, 2004
	 	$	1,800,000	 
	July 31, 2004
	 	$	1,800,000	 
	August 31, 2004
	 	$	1,800,000	 
	September 30, 2004
	 	$	3,600,000	 
	October 31, 2004
	 	$	3,600,000	 
	November 30, 2004
	 	$	3,600,000	 

-2-

 

December 31, 2004, and the last day of each Computation Period
thereafter $5,500,000

     11.14.2     Fixed Charge Coverage Ratio. Not permit
the Fixed Charge Coverage Ratio to be less 1.25:1.00
for the Computation Period ending on December 31, 2004
and for each Computation Period thereafter.

     11.14.3     Senior Debt to EBITDA Ratio. Not permit
the Senior Debt to EBITDA Ratio for any Computation
Period to exceed the applicable ratio set forth below
for such Computation Period:

	 	 	 	 	 
	Computation	 	Senior Debt to
	Period Ending	 	EBITDA Ratio
	December 31, 2004 and the last day of each Computation

Period thereafter ending on or before May 31, 2005
	 	 	1.75	 
	June 30, 2005 and the last day of each Computation Period

thereafter
	 	 	1.50	 

     11.14.4     Total Debt to EBITDA Ratio. Not permit
the Total Debt to EBITDA Ratio to exceed 3.50:1.00 for
the Computation Period ending on December 31, 2004 and
for each Computation Period thereafter.

     11.14.5     Capital Expenditures. Not permit the
aggregate amount of all Capital Expenditures made by
the Loan Parties in Fiscal Year 2003 to exceed
$1,900,000 and in any Fiscal Year thereafter to exceed
$3,200,000.”

     3.     Waiver. Upon the terms and subject to the conditions set forth in this
Amendment, including the satisfaction of the conditions set forth in Section 8
hereof, the Administrative Agent and the Lenders signatory hereto hereby waive
any Event of Default (a) under Section 13.1.5(b) of the Credit Agreement
arising out of (i) the Companies’ noncompliance with Section 10.1.1 of the
Credit Agreement relating solely to the adverse reference to the going concern
value of the Companies contained in the annual audit report delivered by the
Companies for Fiscal Year 2003 and (ii) Section 10.11 of the Credit Agreement
relating solely to the Companies’ failure to comply with provisions of Section
10.11 of the Credit Agreement and (b) Section 13.1.5(a) of the Credit
Agreement relating to the Companies’ failure to comply with Section 11.14.1 of
the Credit Agreement for the Computation Periods ending on December 31, 2003,
January 31, 2004, February 29, 2004 and March 31, 2004. This waiver by the
Administrative Agent and the Lenders party hereto shall not operate as a
consent or waiver of

-3-

 

(y) any other right, power or remedy of the Administrative Agent or the
Lenders under the Loan Documents, or (z) any other Event of Default under the
Credit Agreement.

     4.     Representations and Warranties. To induce the Administrative Agent and
the Lenders to execute this Amendment, each Company jointly and severally
represents and warrants to the Administrative Agent and the Lenders as follows:

            (a)     Each Company is in good standing under the laws of its jurisdiction of
formation and in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect.

            (b)     Each Company is duly authorized to execute and deliver this Amendment
and is duly authorized to perform its obligations hereunder.

            (c)      The execution, delivery and performance by the Companies of this
Amendment do not and will not (i) require any consent or approval of any
governmental agency or authority (other than any consent or approval which has
been obtained and is in full force and effect), (ii) conflict with (A) any
provision of law, (B) the charter, by-laws or other organizational documents of
any Company or (C) any agreement, indenture, instrument or other document, or
any judgment, order or decree, which is binding upon any Company or any of its
properties or (iii) require, or result in, the creation or imposition of any
Lien on any asset of any Company.

            (d)     This Amendment is the legal, valid and binding obligation of each
Company, enforceable against such Company in accordance with its terms, subject
to bankruptcy, insolvency and similar laws affecting enforceability of
creditors’ rights generally and to general principals of equity.

            (e)      The representations and warranties in the Loan Documents (including
but not limited to Section 9 of the Credit Agreement) are true and correct in
all material respects with the same effect as though made on and as of the date
of this Amendment (except to the extent stated to relate to a specific earlier
date, in which case such representations and warranties were true and correct
as of such earlier date).

            (f)      Except as specifically waived in this Amendment, no Event of Default
or Unmatured Event of Default shall have then occurred and be continuing.

     5.     Affirmation. Except as expressly amended hereby, the Credit Agreement
and the other Loan Documents are and shall continue in full force and effect
and each Company hereby fully ratifies and affirms each Loan Document to which
it is a party. Reference in any of this Amendment, the Credit Agreement or any
other Loan Document to the Credit Agreement shall be a reference to the Credit
Agreement and the Kapoor Guaranty as amended hereby and as further amended,
modified, restated, supplemented or extended from time to time. This Amendment
shall constitute a Loan Document for purposes of the Credit Agreement and the
other Loan Documents.

-4-

 

     6.     Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one instrument. Delivery of an executed
counterpart of this Amendment by facsimile shall be effective as delivery of an
original counterpart.

     7.     Headings. The headings and captions of this Amendment are for the
purposes of reference only and shall not affect the construction of, or be
taken into consideration in interpreting, this Amendment.

     8.     Conditions to Amendment. This Amendment shall become effective upon
the satisfaction in full of all of the following conditions precedent, each of
which shall be satisfactory to the Administrative Agent and the Lenders:

            (a)     Amendment. The Companies shall have executed and delivered to the
Administrative Agent this Amendment.

            (b)     Payment of Fee. Receipt by the Administrative Agent of a
non-refundable amendment fee in the amount of $25,000.

            (c)     Officer’s Certificate. Each of the Companies shall have delivered a
certificate of an officer of the each Company (i) evidencing that all corporate
proceedings required to authorize the execution and delivery of this Amendment
and all other documents relating hereto on behalf of the Companies have been
duly taken, and (ii) which sets forth the names, offices and specimen
signatures of the officers of such Company who are authorized to execute this
Amendment and such other documents on behalf of such Company.

The date upon which such events have occurred is the “Effective Date.”

     9.     Conditions Subsequent to Effective Date. As promptly as practicable
and in any event prior to September 13, 2004 (or such longer period as the
Administrative Agent shall approve), the Companies shall satisfy in full of all
of the conditions, each of which shall be satisfactory to the Administrative
Agent and the Lenders, set forth in Section 10.11 of the Credit Agreement. The
Companies acknowledge and agree that any breach of this Section 9 shall
constitute an immediate Event of Default under the Credit Agreement.

     10.     Further Assurances. Each Company agrees to execute and deliver in
form and substance satisfactory to the Lender such further documents,
instruments, amendments, financing statements and to take such further action,
as may be necessary from time to time to perfect and maintain the liens and
security interests created by the Loan Documents, as amended hereby.

     11.     APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO
ILLINOIS CHOICE OF LAW DOCTRINE.

     12.     Amendment to the Kapoor Guaranty. Upon the Effective Date, the
Administrative Agent and each of the Lenders consent to and hereby amend the
Kapoor

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Guaranty such that (i) the dollar amount “$5,500,000” set forth in fourth
unnumbered paragraph of the Kapoor Guaranty following Recital (B) is replaced
with the dollar amount “$4,000,000” (such that the “L/C Collateralized Guaranty
Amount” shall hereafter be $4,000,000), and (ii) the fifth unnumbered paragraph
of the Kapoor Guaranty following Recital (B) is hereby amended and restated in
full as follows:

     “Notwithstanding anything to the contrary set forth herein,
the Uncollateralized Guaranty Amount shall be reduced to the
amounts set forth below if EBITDA of Akorn and its Subsidiaries is
at or above the level specified below for the corresponding period
(such reduction to be effective as provided below):

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Uncollateralized
	 	 	 	 	 	 	Guaranty
	“Period
	 	EBITDA
	 	Amount

	1/1/04-6/30/04
	 	$	1,800,000	 	 	$	3,500,000	 
	1/1/04-7/31/04
	 	$	1,800,000	 	 	$	3,500,000	 
	1/1/04-8/31/04
	 	$	1,800,000	 	 	$	3,500,000	 
	1/1/04-9/30/04
	 	$	3,600,000	 	 	$	2,000,000	 
	1/1/04-10/31/04
	 	$	3,600,000	 	 	$	2,000,000	 
	1/1/04-11/30/04
	 	$	3,600,000	 	 	$	2,000,000	 
	Twelve month period ending
12/31/04 and the twelve
month period ending on the
last day of each calendar
month thereafter
	 	$	5,500,000	 	 	$	0”	 

 provided, that if after any such reduction of the Uncollateralized
Guaranty Amount, EBITDA for any twelve month period ceases to be
above $5,500,000, the Uncollateralized Guaranty Amount shall
automatically and without further action by any party increase and
reinstate to the Uncollateralized Guaranty Amount corresponding to
such EBITDA (and if EBITDA for any later twelve-month period falls
below $1,800,000, the Uncollateralized Guaranty Amount shall be
increased back to the full original Uncollateralized Guaranty
Amount) regardless of whether the Uncollateralized Guaranty Amount
had previously been reduced to zero. All calculations of EBITDA
shall be made in accordance with the requirements of the Credit
Agreement. The effective date of any reduction of the
Uncollateralized Guaranty Amount shall be the date which is 10
Business Days after which the Companies deliver a properly
completed Compliance

-6-

 

Certificate for the relevant period specified in the chart above to
the Administrative Agent; provided that if the Administrative Agent
disagrees with any such EBITDA calculation, the Uncollateralized
Guaranty Amount shall not be subject to reduction until Akorn’s
independent auditor has confirmed such EBITDA calculation in
writing as complying with GAAP and the requirements of the Credit
Agreement. The Uncollateralized Guaranty Amount shall not be
subject to reduction at any time that a Default or an Event of
Default has occurred and is continuing under the Credit Agreement
(but such Default or Event of Default shall not affect any prior
reduction in accordance with this Guaranty). No reduction of the
Uncollateralized Guaranty Amount shall affect the undersigned’s
obligations with respect to the full L/C Collateralized Guaranty
Amount or any costs or expenses of collection hereunder (neither of
which shall be subject to reduction).”

     Notwithstanding the foregoing, if prior to a date which is within 91 days
after the receipt of any Novadaq Payoff Amount (as hereinafter defined), there
is then pending a petition in bankruptcy court against either Company and there
is then existing a claim or argument that all or any portion of the Novadaq
Payoff is a fraudulent transfer or a preferential payment, or should otherwise
be set aside, then the amendments to the Kapoor Guaranty set forth in this
Section 12 shall be null and void and the Kapoor Guaranty shall reinstate on
its original terms. As used herein, the “Novadaq Payoff Amount” means all
amounts received by the Administrative Agent, on behalf of the Lenders, in
prepayment of the Term Loans from the Companies as a result of the sale (the
"Novadaq Sale”) of Akorn’s equity interest in Novadaq Technologies Inc. Upon
the Administrative Agent’s receipt of any additional proceeds from the Novadaq
Sale, the Administrative Agent and the Lenders agree to reduce the “L/C
Collateralized Guarantee Amount” (as defined in the Kapoor Guaranty) by the
amount so received. By signing as indicated below, Dr. John N. Kapoor and the
Kapoor Trust hereby (i) acknowledge and consent to this Amendment, (ii) agree
to the amendment and conditions set forth in this Section 12 with respect to
the Kapoor Guaranty, and (iii) ratify, confirm and reaffirm their obligations
under the Kapoor Guaranty (as amended hereby) and agree that the Kapoor
Guaranty (as amended hereby) is in full force and effect.

     13.     Acknowledgment. Each of the Companies, Kapoor and the Kapoor Trust
hereby waives, discharges and forever releases the Administrative Agent and
each of the Lenders, and each of said Person’s employees, officers, directors,
attorneys, stockholders and successors and assigns, from and of any and all
claims, causes of action, allegations or assertions that they have or may have
had at any time through (and including) the date of this Amendment, against any
or all of the foregoing, regardless of whether any such claims, causes of
action, allegations or assertions are known to them or whether any such claims,
causes of action, allegations or assertions arose as a result of the
Administrative Agent’s or any Lender’s actions or omissions in connection with
the Credit Agreement or any other Loan Document, including any amendments or
modifications thereto, or otherwise.

[signature page follows]

-7-

 

     The parties hereto have caused this Amendment to be executed by their duly
authorized officers, all as of the day and year first above written.

	 	 	 	 	 
	 	AKORN, INC., a Louisiana corporation

 	 
	 	By:  	                                                            
 	 
	 	Title:  	                                                             	 
	 	 	 	 
	 

	 	 	 	 	 
	 	AKORN (NEW JERSEY), INC., an Illinois

corporation

 	 
	 	By:  	                                                            
 	 
	 	Title:  	                                                             	 
	 	 	 	 
	 

	 	 	 	 	 
	 	LASALLE BANK NATIONAL ASSOCIATION, as

Administrative Agent, as Issuing Lender and

as a Lender

 	 
	 	By:  	                                                            
 	 
	 	Title:  	                                                             	 
	 	 	 	 
	 

	 	 	 	 	 
	 	                                                            

Dr. John N. Kapoor

 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	THE JOHN N. KAPOOR TRUST DTD 9/20/89

 	 
	 	By:  	                                                            
 	 
	 	Dr. John N. Kapoor, as trustee

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