Document:

exv4w12

 

EXHIBIT 4.12

STOCK REGISTRATION RIGHTS AGREEMENT

     STOCK REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of
November 15, 1990 between Akorn, Inc., a Louisiana corporation (“Akorn”), and
the John N. Kapoor Trust dated September 20, 1989 (the “Trust”).

Recitals

     WHEREAS, Akorn desires to sell to the Trust, and the Trust is
contemplating acquiring from Akorn, 1,000,000 shares of Akorn Common Stock,
pursuant to the terms and conditions of a Stock Purchase Agreement dated as of
November 15, 1990 between the Trust and Akorn;

     WHEREAS, Akorn desires to issue to the Trust, and the trust is
contemplating obtaining from Akorn, warrants to purchase up to 2,000,000 shares
of Akorn Common Stock (the “Warrants”) pursuant to the terms and conditions of
a Common Stock Purchase Warrant dated as of November 15, 1990 between the Trust
and Akorn; and

     WHEREAS, as inducement to the Trust to acquire the shares of Common Stock
and Warrants from Akorn referred to above, Akorn has agreed to provide the
registration rights set forth in this Agreement.

     NOW, THEREFORE, in consideration of the above recitals and the covenants
and agreements contained herein, the Trust and Akorn hereby agree as follows:

     1. Definitions.

          1.01 The following capitalized terms have the following definitions:

          “Agreement” means this Stock Registration Rights Agreement.

          “Akorn” means Akorn, Inc., a Louisiana corporation, or its successor.

          “Common Stock” means, without duplication, (i) shares of Akorn common
stock, no par value per share, and (ii) shares of capital stock issued by Akorn
in respect of such common stock by reason of a stock-split, stock dividend or
other recapitalization of Akorn.

          “Demand Registration” shall have the meaning specified in Section 2.01.

          “Exchange Act” means the Securities Exchange Act of 1934, as

 

 

amended.

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

          “Piggyback Registration” shall have the meaning specified in Section 3.01.

          “Registrable Securities” means (a) any shares of Common stock held by the
Trust, (b) the authorized but unissued shares of Common Stock issuable by Akorn
to the Trust pursuant to the exercise of the Warrants and (C) any warrants or
options to purchase shares of Common Stock, securities of Akorn convertible
into shares of Common Stock and any and all other equity securities of Akorn
held by the Trust; provided, however, that Registrable Securities shall cease
to be Registrable Securities when (i) a registration statement covering such
Registrable Securities has been declared effective and they have been disposed
of pursuant to such effective registration statement, (ii) they are transferred
pursuant to Rule 144 or (iii) they have been otherwise transferred and Akorn
has delivered new certificates or other evidences of ownership for them not
subject to any legal or other restrictions on transfer, and provided further,
however, that any warrants or options to purchase shares of Common Stock or
securities of Akorn convertible into shares of Common Stock shall not, without
the prior consent of Akorn, be distributed pursuant to an effective
registration statement in such a manner that would cause any class of any such
securities to become held by the public.

          “Registration Expenses” shall have the meaning specified in Section 5.01.

          “Rule 144” means Rule 144 (or any successor thereto) under the Securities
Act.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Warrants” shall have the meaning specified in the second Recital.

     2. Demand Registration.

          2.01 Requests for Registration. At any time and from time to time, the
Trust may request registration under the Securities Act of all or part of its
Registrable securities on Form S-2 or Form S-3 or any similar registration
available to Akorn (a “Demand Registration”).

          2.02 Demand Registration. The Trust will be entitled to request one
Demand Registration, and Akorn will pay all Registration Expenses in connection
with such registration; provided, that Akorn shall not be responsible for such
expenses, and fees and disbursements of counsel referred to in Section 5.02,
which exceed $100,000 in the aggregate. A registration will not count as the
permitted Demand

 

 

Registration until it has become effective (unless such Demand
Registration has not become effective at the request of the Trust other than in
accordance with Section 2.04).

          2.03 Priority on Demand Registration. Akorn will not include in the
Demand Registration any securities which are not Registrable Securities without
the written consent of the Trust which consent shall not be unreasonably
withheld. If the Demand Registration is an underwritten offering, and the
managing underwriters advise Akorn in writing that in their opinion the number
of Registrable Securities and other securities requested to be included exceeds
the number of Registrable Securities and other securities which can be sold in
such offering, Akorn will include in such registration prior to the inclusion
of any securities which are not Registrable Securities the number of
Registrable Securities requested to he included which in the opinion of such
underwriters can be sold. Any Persons other than the Trust who participate in
the Demand Registration must pay their share of the Registration Expenses that
are not paid for by Akorn as provided in Section 5.03.

          2.04 Restrictions on Demand Registration. Akorn may postpone for up to
three months the filing or the effectiveness of the registration statement for
the Demand Registration (but no more than once in any twelve-month period or
twice in total) if (i) Akorn’s board of directors determines in good faith that
such Demand Registration might reasonably be expected to have an adverse effect
on any proposal or plan by Akorn to engage in any acquisition of assets (other
than in the ordinary course of business) or any merger, consolidation, tender
offer or similar transaction or any financing (including, without limitation, a
primary registration) or (ii) such demand is within 60 days of Akorn’s fiscal
year-end and before availability of its audited annual financial statements;
providing, however, that in such event, the Trust will be entitled to withdraw
such request and, if such request ii withdrawn, such demand will not count as
the Demand Registration.

          2.05 Selection of Underwriters. The Trust will have the right to select
the investment banker(s) and manager(s) to administer the offering in the
Demand Registration; provided, however, that engagement of such investment
banker(s) and manager(s) shall be subject to the prior written consent of Akorn
which consent shall not be unreasonably withheld.

          2.06 Other Registration Rights. Except as provided in this Agreement,
Akorn will not grant to any Persons the right to request Akorn to register any
equity securities of Akorn, or any securities convertible or exchangeable into
or exercisable for such securities, without the written consent of the Trust
which consent shall not be unreasonably withheld; provided, however, that Akorn
may without such consent grant rights to other Persons to (i) participate in
Piggyback Registrations so long as such rights are subordinate to the rights of
the holders of Registrable Securities with respect to such Piggyback
Registration and (ii) require registrations so long as the Trust is entitled to
participate in any such registration on the terms set forth in section 3.04.

     3. Piggyback Registrations.

 

 

          3.01 Right to Piggyback. Whenever Akorn proposes to register any of its
securities under the Securities Act (other than pursuant to the Demand
Registration) and the registration form to be used is other than Form S-4 or
S-8 (and other than a registration filed in connection with an exchange
offering or an offering of securities solely to existing holders of Akorn’s
securities) and may be used for the registration of Registrable Securities (a
“Piggyback Registration”), Akorn will give prompt written notice to the Trust
of its intention to effect such a registration and will include in such
registration all Registrable Securities with respect to which Akorn has
received written request for inclusion therein within 15 days after the receipt
of Akorn’s notice.

          3.02 Piggyback Expenses. If Akorn proposes to sell any of its securities
in a Piggyback Registration, the Registration Expenses of the Trust in
connection with such Piggyback Registration will be paid by Akorn. In all
other Piggyback Registrations, the Trust will pay its share of the Registration
Expenses of such registration as provided in Section 5.03.

          3.03 Priority on Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of Akorn, and the managing
underwriters advise Akorn in writing that, in their opinion, the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, Akorn will include in such registration (i)
first, the aggregate number of securities to be issued by Akorn, (ii) second,
the Registrable Securities requested to be included in such registration, and
(iii) third, other securities requested to be included in such registration;
provided, however, in the event that such priority would result in the
inclusion in such registration of less than all Registrable Securities
requested to be included therein, the Test shall have the right, exercisable
within 30 days after receipt of such advice of such managing underwriters, to
locate other investment banker(s) or underwriter(s) in whose opinion a higher
number of securities may be included in such registration; and provided
further, however, that to the extent that such priority violates an agreement
of Akorn with certain persons relating to Akorn’s acquisition of Spectrum
Scientific Pharmaceutical, Inc., the 232,668 shares covered in such agreement
shall be treated on a pro rata basis with the Registrable Securities requested
to be included in such registration.

          3.04 Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of Akorn’s
securities, and the managing underwriters advise Akorn in writing that, in
their opinion, the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, Akorn will
include in such registration (1) first, the aggregate number of (x) securities
requested to be included therein by the holders requesting such registration
and (y) the Registrable Securities requested to be included in such
Registration, which aggregate number, in the opinion of such underwriters, can
be sold, pro rata among the holders requesting such registration and the Trust
based on a fraction, with respect to each holder, the numerator of which is the
number of securities requested to be included in such registration by such
holder, and the denominator of which is the number of securities requested to
be included in such registration by the

 

 

holders requesting such registration plus the Trust, and (ii) second,
other securities requested to be included in such registration.

          3.05 Other Registrations. If Akorn has previously filed a registration
statement with respect to Registrable Securities pursuant to Section 2 or
pursuant to this Section 3, and if such previous registration has not been
withdrawn or abandoned, Akorn will not file or cause to be effected any other
registration of any of its equity securities or securities convertible or
exchangeable into or exercisable for its equity securities under the Securities
Act (except on Form S-8), whether on its own behalf or at the request of any
holder or holders of such securities, until a period of at least six months has
elapsed from the effective date of such previous registration.

     4. Registration Procedures.

     Whenever the Trust has requested that any Registrable Securities be
registered pursuant to this Agreement, Akorn will use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto Akorn will as expeditiously as possible:

     (a) prepare and file with the Securities and Exchange commission a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such Registration statement to become effective (provided
that before filing a registration statement or prospectus or any amendments or
supplements thereto, Akorn will furnish to counsel selected by the Trust copies
of all such documents proposed to be filed);

     (b) prepare and file with the Securities and Exchange Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such registration
statement effective for a period of not less than three months (or such shorter
period as may be required if all Registrable Securities covered by such
registration statement are sold prior to the expiration of such period) and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement;

     (c) furnish to the Trust such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as the Trust may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by the Trust;

     (d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as the Trust reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable the Trust to consummate the
disposition in such jurisdictions of the

 

 

Registrable Securities owned by the Trust (provided that Akorn will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (d), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction);

     (e) notify the Trust at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the request of
the Trust, Akorn will prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make statements therein not misleading (the
Trust hereby agreeing not to offer for sale, following any such notice, any of
such Registrable Securities pursuant to the prospectus that contains such
untrue statement or omission until so supplemented or amended);

     (f) cause all such Registrable Securities to be listed on the NASDAQ
National Market System or such other securities exchange or market on which
similar securities listed by Akorn are then listed;

     (g) provide a transfer agent and registrar for all of such Registrable
Securities not later than the effective date of such registration statement;

     (h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the Trust or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;

     (i) subject to customary confidentiality protections, make available for
inspection by the Trust, any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by the Trust or underwriter, all financial and other records,
pertinent corporate documents and properties of Akorn, and cause Akorn’s
officers, directors, employees and independent accountants to supply all
information reasonably requested by the Trust, underwriter, attorney,
accountant or agent in connection with such registration statement;

     (j) in the event such sale is pursuant to an underwritten offering, use
its best efforts to obtain a “cold comfort” letter from Akorn’s independent
accountants in customary form and covering such matters of the type customarily
covered by “cold comfort” letters as the Trust or the managing underwriter
reasonably request;

     (k) use its best efforts to obtain an opinion or opinions from counsel for
Akorn in customary form; and

     (l) otherwise use its best efforts to comply with all applicable rules and
regulations of the Securities and Exchange Commission, and make available to
the stockholders of Akorn, as soon as reasonably practicable, an earnings
statement covering

 

 

a period of 12 months, beginning within three months after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.

     5. Registration Expenses.

          5.01 Generally. All expenses incident to Akorn’s performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for Akorn and independent accountants, underwriters
(excluding discounts and commissions) and other Persons retained by Akorn (all
such expenses being herein called “Registration Expenses”), will be borne as
provided in this Agreement; except that Akorn will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, the expense of any liability insurance and the expenses
and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by Akorn are then listed.

          5.02 Counsel for Stockholders. In connection with the Demand
Registration, Akorn will reimburse the Trust for the reasonable fees and
disbursements of counsel chosen by the Trust.

          5.03 Expenses Not Borne by Company. To the extent Registration Expenses
are not required to be paid by Akorn, each holder of securities included in any
registration hereunder will pay those Registration Expenses allocable to the
registration of such holder’s securities so included, and any Registration
Expenses not so allocable will be borne by all sellers of securities included
in such registration in proportion to the aggregate selling price of the
securities to be so registered.

     6. Indemnification.

          6.01 Indemnification by Akorn. Akorn agrees to indemnify, to the extent
permitted by law, the Trust, each trustee and beneficiary thereof and each
Person who controls any of the foregoing (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and expenses caused by
any untrue or alleged untrue statement of material fact contained in any
registration statement, prospectus or preliminary prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are caused by or contained in any
information furnished in writing to Akorn by such holder expressly for use
therein or by such holder’s failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after Akorn
has furnished the Trust with a sufficient number of copies of the same. In
connection with an underwritten offering, Akorn will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification

 

 

of the holders of Registrable Securities.

          6.02 Indemnification by the Trust. In connection with any registration
statement in which the Trust is participating, the Trust will furnish to Akorn
in writing such information and affidavits as Akorn reasonably requests for use
in connection with any such registration statement or prospectus and, to the
extent permitted by law, will indemnify Akorn, its directors and officers and
each Person who controls Akorn (within the meaning of the Securities Act)
against any losses, claims, damages, liabilities and expenses resulting from
any untrue or alleged untrue statement of material fact contained in the
registration statement, prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by the Trust; provided,
however, that the obligation to indemnify will be limited to the net amount
received by the Trust from the sale of Registrable Securities pursuant to such
registration statement.

          6.03 Conduct of Indemnification Proceeding. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(provided that failure to give or delay giving such notice shall not relieve
the indemnifying party of any indemnification obligation hereunder or otherwise
except to the extent that the indemnifying party is prejudiced by such failure
or delay), and (ii) unless in such indemnified party’s reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party will not be subject
to any liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel for
all parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.

          The indemnification provided for under this Agreement will remain in full
force and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling Person or such
indemnified party and will survive the transfer of securities.

     7. Participation in Underwritten Registrations.

     No Person may participate in any underwritten registration hereunder
unless such Person (a) agrees to sell such Person’s securities on the basis
provided in any underwriting arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.

 

 

     8. Miscellaneous.

          8.01 No Inconsistent Agreements. Akorn will not hereafter enter into any
agreement with respect to its securities which is inconsistent with the rights
granted to the holders of Registrable Securities in this Agreement.

          8.02 Remedies. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to recover
damages caused by reason of any breach of any provision of this Agreement and
to exercise all other rights granted by law.

          8.03 Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties hereto with respect to the matters contemplated
herein, supersedes all prior agreements and negotiations and oral
understandings, if any, and may not be amended, supplemented or discharged
except by an instrument in writing signed by the parties hereto.

          8.04 Beneficiaries. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective beneficiaries, successors and permitted assigns, as the case may be.
In addition, the provisions of this Agreement which are for the benefit of the
Trust are also for the benefit of, and enforceable by, the beneficiaries
thereof. In the event that the Trust shall distribute Registrable Securities
to one or more of the beneficiaries of the Trust who are members of John N.
Kapoor’s immediate family or to not more than eight employees of EJ Financial
Enterprises, Inc. or its affiliates, the persons receiving such distribution
shall succeed to the rights of the Trust under this Agreement and shall
exercise such rights by action of a majority thereof (measured by ownership of
Registrable Securities).

          8.05 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

          8.06 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana without regard to principles
of conflicts of law.

          8.07 Headings. Section headings are inserted herein for convenience only
and do not form a part of this Agreement.

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

          8.09 Notices. All notices, statements, instructions or other documents
required to be given hereunder shall be in writing and shall be given

 

 

personally, by courier, by mailing the same in a sealed envelope,
first-class mail, postage prepaid and either certified or registered, return
receipt requested, or by confirmed telecopy addressed to Akorn at its principal
office, 100 Akorn Drive, Abita Springs, LA 70420, Attn: Barry LeBlanc,
president, and to the Trust, do Dr. John N. Kapoor, 225 East Deerpath Road,
Suite 250, Lake Forest, IL 60045. Akorn and the Trust, by written notice given
in accordance with this Section 8.09, may change the address to which notices,
statements, instructions or other documents are to be sent to Akorn or the
Trust, as the case may be. All notices, statements, instructions and other
documents hereunder that are mailed shall be deemed to have been given when
actually received or five (5)days after deposited in the United States mails.

 

 

     IN WITNESS WHEREOF, the parties have caused this Stock Registration Rights
Agreement to be duly executed as of the date first written above.

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Doyle S. Gaw 	 
	 	 	Chairman 	 
	 
	 	JOHN N. KAPOOR TRUST

DATED SEPTEMBER 20, 1989

 	 
	 	By:  	 	 
	 	 	John N. Kapoor as 	 
	 	 	Trusteeexv4w13

 

Exhibit 4.13

STOCK PURCHASE AGREEMENT

     This STOCK PURCHASE AGREEMENT, dated as of November 15, 1990
(“Agreement”), is entered into by and between the John N. Kapoor Trust dated
September 20, 1989 (the “Trust”) and Akorn, Inc., a Louisiana corporation
(“Akorn”).

WITNESSETH:

     WHEREAS,
Norbrook Holdings, B.V., a Netherlands corporation (“Norbrook”)
is the owner of one million (1,000,000) shares of the outstanding common stock
of Akorn (the “Norbrook Common Stock”);

     WHEREAS, Akorn desires to repurchase the Norbrook Common Stock and
simultaneously sell to the Trust one million (1,000,000) shares of common stock
of Akorn (the “Stock”); and

     WHEREAS, the Trust is willing to purchase the Stock from Akorn, subject to
the terms and conditions set forth herein;

     NOW, THEREFORE, to induce the Trust to purchase the Stock and in
consideration of the above recitals and the covenants and agreements contained
herein and in the Exhibits hereto, the Trust and Akorn hereby agree as follows:

     1. Purchase of Shares by Trust. Upon receipt of the items listed in
Section 2(a) hereof and subject to the satisfaction of the other covenants set
forth in Section 2 hereof to be performed by Akorn at or prior to the Closing
and the conditions precedent hereto, the Trust agrees that it will purchase
from Akorn, and Akorn agrees that it will sell to the Trust, the Stock for One
Million Five Hundred Thousand Dollars ($1,500,000) payable in immediately
available funds by, at Akorn’s option, certified or bank cashier’s check or by
wire transfer to an account or accounts designated by Akorn at 10:00 A.M. on
November 15, 1990 or at such other time and date thereafter as shall be
mutually acceptable to the Trust and Akorn (the “Closing”). Akorn may cause
such funds to be delivered directly to Norbrook in payment of the purchase
price for the Norbrook Shares. If Akorn requests the Trust to obtain
expeditious confirmation of any wire transfer, the cost thereof shall be
payable by Akorn.

     2. Covenants of Akorn.

          (a) Deliveries by Akorn. Akorn agrees that at or prior to the closing,
Akorn shall deliver, or cause to be delivered, the following items:

               (i) a Common Stock Purchase Warrant in the form of Exhibit A
attached hereto and made a part hereof, dated the date of the
Closing (“Closing Date”), duly executed by Akorn (the “Warrant”);

               (ii) a Consulting Agreement in the form of Exhibit B attached
hereto and made a part hereof, dated the Closing Date, duly

 

 

executed by Akorn (the “Consulting Agreement”);

               (iii) a Stock Registration Rights Agreement in the form of
Exhibit C attached hereto and made a part hereof, dated the
Closing Date, duly executed by Akorn (the “Stock Registration
Rights Agreement”);

               (iv) an opinion of counsel addressed to the Trust and dated
the Closing Date, of Jones, Walker, Waechter, Poitevent, Carrere &
Denegre, counsel for Akorn, in the form of Exhibit D attached
hereto;

               (v) a copy of the Norbrook Agreement (as defined in Section
3(n)) executed by Akorn, Norbrook and certain of Norbrook’s
affiliates;

               (vi) certificate(s) representing an aggregate of one million
(1,000,000) shares of the common stock of Akorn, duly issued in
the name of the Trust; and

               (vii) a certificate of the Secretary of Akorn certifying
copies of Akorn’s charter, bylaws and all resolutions adopted by
its Board of Directors in connection with this Agreement and all
other agreements and transactions contemplated hereby.

          (b) Trust’s Designation of Director. Akorn agrees that, so long as the
Trust owns at least 600,000 shares of common stock of Akorn (subject to
appropriate adjustment in the case of stock splits or stock dividends), the
Trust shall have the right to designate one director to serve on Akorn’s Board
of Directors and that, at the request of the Trust, Akorn’s management shall
take such action as may be necessary to cause Dr. John N. Kapoor (“Kapoor”)
to be named as a director of Akorn, effective within ten days of such request
and continuing until the next shareholder election of directors. Akorn agrees
that, at the request of the Trust, so long as the Trust owns at least such
number of shares of common stock of Akorn, Akorn’s management will nominate
Kapoor, or another person designated by the Trust who is reasonably
satisfactory to Akorn’s Board of Directors, and recommend to shareholders that
they vote for such person as a director of Akorn, and Akorn will use its best
efforts to cause such person to be elected a director. The Trust shall have
the further right to designate a representative, other than the person
appointed by the Board of Directors or elected by the shareholders, to attend
any meeting of the Board of Directors of Akorn, except that such additional
designated representative shall not have any voting rights at any such meeting.
Akorn agrees to take no action that would cause its Board of Directors to
exceed fifteen in number without the consent of Kapoor or any other Akorn
director designated by the Trust.

          (c) Indemnification of the Director Designated by Trust.
Akorn agrees to indemnify and hold harmless Kapoor and such other person
designated from time to time by the Trust to serve as a director of Akorn (an
“Indemnified Person”),

 

 

to the fullest extent permissible under law, from and
against any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (collectively, an
“Action”) to which the Indemnified Person is, was or is threatened to be made a
party by a reason of the fact that the Indemnified Person is or was a director,
officer, employee or agent of Akorn, or is or was serving at the request of
Akorn as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and judgments, fines and amounts paid in settlement
incurred by the Indemnified Person in connection with such action, suit or
proceeding. Akorn shall advance the reasonable costs and expenses, as they
become payable, including reasonable attorneys’ fees arising from the
investigation of any claim, preparation for the defense or defense or
settlement of an Action. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnified Person may have under any provision of law,
Akorn’s corporate charter or by-laws, the vote of Akorn’s shareholders or
directors, other agreements, or otherwise. The Indemnified Person’s rights
shall continue after the Indemnified Person has ceased acting as a director,
officer, employee or agent and shall inure to the benefit of the successors and
assigns of the Indemnified Person. If any payment, advance or indemnification
of the Indemnified Person under this Agreement or otherwise shall require that
he shall have acted in good faith, in a manner reasonably believed to be for or
not opposed to the best interests of Akorn or without reasonable cause to
believe his conduct was unlawful, then it shall be presumed that he so acted
unless proven otherwise by clear and convincing evidence.

          (d) Insurance. Akorn agrees that, from and after December 31, 1990 and
for so long thereafter as Kapoor or any other person designated by the Trust
serves as a director of Akorn, Akorn will maintain in effect policies of
directors’ and officers’ liability insurance in an amount of coverage of at
least $2,000,000 and a deductible of no greater than $200,000.

          (e) Public Announcements. Akorn agrees to consult with the Trust before
issuing any press release or otherwise making any public disclosures or
statements with respect to the transactions contemplated hereby or the service
by Kapoor as a director of Akorn and shall not issue any such press release or
make any such public statement prior to such consultation or if reasonably
objected to by the Trust, except as may be required by law.

          (f) Director Information. Akorn agrees that, for so long as the Trust
continues to own at least 240,000 shares of common stock of Akorn (subject to
appropriate adjustment in the case of stock splits or stock dividends), Akorn
will, at the request of the Trust, promptly provide to the Trust copies of all
documents and other information and materials provided to, or made available
to, its directors in connection with their service as directors.

          (g) Right of First Refusal. For so long as the Trust owns at
least 600,000 shares of common stock of Akorn (subject to appropriate
adjustment in the case of stock splits or stock dividends), if at any time or
from time to time Akorn

 

 

proposes to issue, sell, transfer or otherwise dispose
of any shares of its capital stock (other than (i) shares issued or issuable to
employees or directors pursuant to employee benefit plans and director stock
options in existence at the date hereof, (ii) shares issued in stock splits or
dividends, (iii) shares issued in connection with the acquisition of the stock
or assets of other businesses and (iv) shares issued other than for cash in a
number not exceeding 300,000 shares), Akorn agrees to notify the Trust in
writing of the terms of any offer or proposal relating thereto (which notice
shall identify all parties in interest to, and the precise terms of, such offer
or proposal), and the Trust shall thereupon be entitled to purchase or
otherwise acquire, subject to Section 4(h), all or any portion of the shares
proposed to be issued, sold, transferred or otherwise disposed of on the same
terms contained in such offer or proposal, upon notification in writing by the
Trust to Akorn within 30 days following receipt of such notification from
Akorn, with a closing of the transaction to be consummated within 60 days
following the Trust’s notification to exercise its right to purchase. If the
Trust tails to exercise its right to purchase the shares proposed to be
disposed of, Akorn shall be tree to dispose of such shares in accordance with
the terms of the offer or proposal submitted to the Trust. If such transaction
is not completed within 90 days following the expiration of the Trust’s option,
the Trust’s option shall be reinstated as if the notification to the Trust had
not been made in the first instance.

          (h) Capital Stock. Akorn agrees that it will not create any class of, or
issue any, voting stock with voting rights unequal to those which currently
inure to its common stock without the prior written consent of the Trust,
except to the extent permitted by Section 2(i).

          (i) Rights Plan. Until such time as (i) the Warrant has expired
unexercised and (ii) Kapoor is no longer a director of Akorn, Akorn agrees that
it will not (x) create any class of, or issue any, “poison pill” or other
similar rights relating to any class of stock which could become exercisable
upon acquisition by the Trust of beneficial ownership of 25% or less of
outstanding shares of common stock of Akorn or, if greater, 3,352,327 shares or
less of common stock of Akorn or (y) take any other action which could directly
or indirectly adversely affect the Trust’s ability to exercise the Warrant
without significant adverse effects to its economic interest or its rights
(including voting rights) as a shareholder of Akorn so long as the Trust does
not have, and has no pending offer to acquire, beneficial ownership of
securities having more than 25% of the voting power respecting the election of
directors of Akorn, or, if greater, more than 3,352,327 shares of common stock
of Akorn, or rights to acquire securities convertible into such securities.
Par purposes of this Section 2(1), “beneficial ownership” has the moaning
assigned to that term in Rule 13d-3 under the Securities Exchange Act of 1934
or any successor provision.

          (j) Rights of Trust’s Beneficiaries. In the event that the Trust shall
distribute the shares of common stock of Akorn owned by it or its rights under
the Warrant to one or more of the beneficiaries of the Trust who are members of
Kapoor’s immediate family or to not more than eight employees of EJ Financial
or its affiliates, the
persons receiving such distribution shall succeed to the rights of the
Trust under this Section 2 and shall exercise such rights by action of a
majority thereof (measured by

 

 

ownership of outstanding
shares of common stock
of Akorn), and the ownership requirements of subsections (b), (f), (g) and (k)
shall be satisfied by and the beneficial ownership limitation of subsection (1)
shall include the aggregate holdings of such persons. In the event that the
Trust shall make a partial distribution of the shares of common stock of Akorn
owned by it and the Warrant to one or more of such persons, the Trust shall
retain its rights under this Section 2, but the ownership requirements of
subsection (b), (f), (g) and (k) shall be satisfied by and the beneficial
ownership limitation of subsection (1) shall include the aggregate holdings of
the Trust and such persons.

          (k) Right to Maintain Interest. For so long as the Trust owns at least
600,000 shares of common stock of Akorn (subject to appropriate adjustment in
the case of stock splits or stock dividends), if at any time or from time to
time Akorn issues, sells, transfers or otherwise disposes of (an “Issuance”)
any shares of its capital stock (other than (1) shares issued to employees or
directors pursuant to employee benefit plans and director stock options in
existence at the date hereof, and (2) shares issued in stock splits or
dividends), Akorn agrees to notify the Trust In writing of the terms of the
Issuance (which notice shall identify all parties in interest to, and the
precise terms of, such offer or proposal), and to the extent that the Trustee
has not exercised its right of first refusal as set forth in Section 2(g), the
Trust shall thereupon be entitled to purchase from Akorn up to a number of
shares of common stock of Akorn such that after such purchase and after the
Issuance the ratio of the number of shares of common stock of Akorn then held
by the Trust as compared to the total number of shares of common stock of Akorn
then outstanding, in each case assuming exercise of the Warrant, shall be equal
to the ratio of the number of shares of common stock of Akorn held by the Trust
prior to the Issuance as compared to the total number of shares of common stock
of Akorn outstanding prior to the Issuance, in each case assuming exercise of
the Warrant, at a price per share equal to the price agreed to by the parties
to the Issuance, if specified by them or, if not so specified, at a price equal
on a per share basis to the Fair Value of the consideration received by the
parties to the Issuance, the term “Fair Value” having the meaning Bet forth in
Section 4(b) of the Warrant, upon notification in writing by the Trust to Akorn
within 30 days following receipt of such notification from Akorn, with a
closing of the transaction to be consummated within 60 days following the
Trust’s notification to exercise its right to purchase.

     3. Representations and Warranties of Akorn. Akorn represents and warrants
to the Trust as of the date hereof as follows:

          (a) Corporate Organization. Akorn is a corporation duly organized,
validly existing and in good standing under the laws of the State of Louisiana,
has the power to own its property and carry on its business as now being
conducted, is duly licensed, qualified and authorized to do business and is in
good standing in every state or other jurisdiction in which the nature of its
business or properties make such licensing, qualification, authorization to do
business and good standing necessary, and has the power and authority to enter
into this Agreement, the Consulting Agreement and
the Stock Registration Rights Agreement and to execute and deliver the
Warrant.

 

 

          (b) Authority. The execution and delivery of this Agreement, the Warrant,
the Consulting Agreement and the Stock Registration Rights Agreement by Akorn
and the performance of its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action, and each of this Agreement, the
Consulting Agreement and the Stock Registration Rights Agreement have been duly
executed and delivered by Akorn, and the Warrant has been duly executed, issued
and delivered by Akorn, and each such instrument constitutes the legal, valid
and binding obligation of Akorn, enforceable in accordance with its terms,
subject only to applicable bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally and to general principles of
equity.

          (c) No Conflicts. There is no charter, by-law or capital stock provision
of Akorn, and no provision of any indenture or agreement, written or oral, to
which Akorn is a party or under which Akorn is obligated, nor is there any
statute, rule or regulation or any judgment, decree or order of any court or
agency, binding on Akorn which would be contravened by the execution and
delivery by Akorn of this Agreement, the Warrant, the Consulting Agreement or
the Stock Registration Rights Agreement or by the performance by Akorn of any
provision, condition, covenant or other term hereof or thereof.

          (d) Litigation. No litigation (including, without limitation, derivative
actions), arbitration proceedings or governmental proceedings, or series of
related actions, are pending against or involve as a party or are threatened
against Akorn which could, singly or in the aggregate, materially adversely
affect the condition, financial or otherwise, business, operations or prospects
of Akorn.

          (e) Capitalization. Akorn has an authorized capitalization consisting
solely of 20,000,000 shares of common stock, of which as of the date hereof
(and after giving effect to the consummation of the Norbrook Agreement as
defined in Section 3(n) below) 11,409,309 shares of common stock have been
validly issued and are outstanding, fully paid and non-assessable. At the date
hereof, the common stock to be acquired by the Trust pursuant to this Agreement
represents 22.37% of the outstanding common stock of Akorn (assuming exercise
of the Warrant).

          (f) SEC Reports; No Material Adverse Change. Akorn is a reporting company
under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and is
current in all forms, reports and documents required to be filed pursuant to
the 1934 Act. All such filings at the time they were filed with the Securities
and Exchange Commission complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the Commission thereunder and,
as of the Closing Date, the most recent Form 10-K and Annual Report to
Shareholders of Akorn, when read together with filings made subsequent thereto,
including the Form 10-Q dated November 9, 1990, do not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Since the respective dates as of which information is given in such filings,
(i) there has been no material adverse change in the condition, financial
or otherwise, of Akorn and its subsidiaries considered as a whole, or in the
business, operations, or

 

 

prospects of Akorn and its subsidiaries considered as
a whole, whether or not arising in the ordinary course of business, (ii) there
have been no transactions entered into by Akorn or any of its subsidiaries
which are material to Akorn and its subsidiaries considered as a whole, other
than those in the ordinary course of business and those contemplated by this
Agreement, and (iii) there has been no dividend or distribution of any kind
declared, paid or made by Akorn on any class of its capital stock, except for a
dividend in the amount of $0.017 per share declared at the October 27, 1990
meeting of Akorn’s Board of Directors.

          (g) Capital Stock. The issuance of all outstanding common stock of Akorn,
including the issuance of the common stock to be acquired by the Trust pursuant
to this Agreement, has been duly authorized by all necessary corporate action.
All of the issued and outstanding shares of capital stock of Akorn have been
duly and validly issued and are fully paid and non-assessable and tree of
preemptive rights, and no person has a valid cause of action relating to the
offer, issuance or sale of shares of capital stock of Akorn in violation of the
registration requirements of the Securities Act of 1933, as amended, except as
described in Exhibit E hereto. The shares of common stock of Akorn issuable
upon exercise of the Warrant have been (i) duly and validly authorized and
reserved for issuance upon such exercise and (ii) when issued upon such
exercise in accordance with the terms of the Warrant, will have been duly and
validly issued and fully paid and will be non-assessable and free of preemptive
rights. Except for warrants and options outstanding as of the date hereof as
set forth in Exhibit F hereto, there are no outstanding options, conversion
rights, warrants, preemptive rights, rights of first refusal or other rights,
or agreements or commitments, obligating Akorn to issue, transfer or sell any
shares of its capital stock, except as contemplated by this Agreement.

          (h) Capital Stock of Subsidiaries. All of the outstanding shares of
capital stock of each of Akorn’s subsidiaries have been duly and validly issued
and are fully paid and nonassessable and are owned directly or indirectly by
Akorn, free and clear of all liens, charges, claims or encumbrances. There are
no outstanding options, conversion rights, warrants, preemptive rights, rights
of first refusal or other rights, or other agreements or commitments,
obligating any subsidiary of Akorn to issue, transfer or sell any shares of its
capital stock.

          (i) Exemption from Business Combination Provisions. Set forth below is a
true and correct copy of a resolution adopted by the Board of Directors of
Akorn at a meeting duly called, convened and held on November 9, 1990, at which
meeting a quorum was present and acting throughout; such resolution is the only
resolution which has been adopted by the Board of Directors of Akorn dealing
with the matters specifically dealt with therein and such resolution has not
been rescinded or amended and is in full force and effect on the date hereof:

     “RESOLVED, that this Board of Directors hereby
irrevocably exempts from the requirements of
Louisiana R.S. 12:133 any business combination (as
defined in Louisiana R.S. 12:132) involving transactions
with the John N. Kapoor Trust dated September 20,
1989, or with

 

 

John Kapoor or any of the other
beneficiaries of said trust, or any of its, his or
their existing or future affiliates or associates
(as so defined).”

          (j) No Control Share Acquisition. The acquisition by the Trust of the
Stock, together with receipt of the Warrant and the right to acquire shares of
common stock of Akorn as contemplated thereby, does not constitute a “control
share acquisition” within the meaning of Louisiana R.S. 12:135 through
12:140.2, presuming that the Trust, upon such acquisition and receipt, (i) will
not own any other shares of Akorn common stock and (ii) may not exercise or
direct the exercise, directly or indirectly, alone or as part of a group, of
voting power with respect to any other shares of Akorn common stock.

          (k) Deliveries to Norbrook. No document or other information or material
relating to the condition, financial or otherwise, business, operations and
prospects of Akorn furnished by or on behalf of Akorn to Norbrook on which
Norbrook nay have reasonably relied to make an informed decision relating to
the proposed repurchase of the Norbrook Common Stock by Akorn contains any
untrue statement of a material fact or omits to state a material fact which
will make the statements therein, in light of the circumstances under which
they were made, misleading.

          (l) Finder’s Fees. There is no agreement for the payment of any brokerage
fees, commissions or finder’s fees in connection with this Agreement.

          (m) Disclosure. No financial statement, certification, schedule, exhibit,
list or other written information furnished by or on behalf of Akorn to the
Trust in connection with this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material tact
which will make the statements herein or therein, in light of the circumstances
under which they were made, misleading.

          (n) Repurchase of Norbrook Common Stock. Prior to or simultaneously with
the execution and delivery of this Agreement, Akorn is entering into and
consummating an agreement or agreements with Norbrook (the “Norbrook Agreement)
in the form delivered to the Trust for the repurchase by Akorn of the Norbrook
Common Stock for $1,500,000. Akorn has complied in all material respects with
its obligations to Norbrook and certain of Norbrook’s affiliates as set forth
in the Stock Purchase Agreement dated as of September 1, 1989 among Akorn, on
the one hand, and Norbrook and certain of its affiliates, on the other hand,
and the Common Stock Purchase Warrant dated September 19, 1989 between Akorn
and Norbrook. Except as expressly provided in the Norbrook Agreement, all
obligations of Akorn to Norbrook and Norbrook’s affiliates have now terminated,
and in the Norbrook Agreement Norbrook and its affiliates have executed a
written release of Akorn therefrom. Norbrook’s representative on the Board of
Directors of Akorn has resigned prior to or simultaneously with the Closing.

          (o) Auditors. Akorn has reappointed Ernst & Young as its auditors for its
1991 fiscal year.

 

 

     4. Representations, Warranties and Covenants of the Trust. The Trust
represents and warrants to, and covenants with, Akorn as of the date hereof as
follows:

          (a) Organization. The Trust is a trust validly created and existing under
the laws of the State of Illinois and has the power and authority to purchase
and own shares of Akorn common stock and to enter into and perform its
obligations under this Agreement and the Stock Registration Rights Agreement.

          (b) Authority. The execution and delivery of this Agreement and the Stock
Registration Rights Agreement by the Trust and the performance of its
obligations hereunder and thereunder have been duly authorized in accordance
with the Trust’s instrument of trust, and this Agreement has been and the Stock
Registration Rights Agreement will be duly executed and delivered by the Trust
at the Closing. This Agreement and the Stock Registration Rights Agreement
constitute the legal, valid and binding obligations of the Trust, enforceable
in accordance with their respective terms, subject only to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the rights
of creditors generally and to general principles of equity.

          (c) No Conflicts. There is no provision of the Trust’s governing
instrument, and no provision of any indenture or agreement, written or oral, to
which the Trust is a party or under which the Trust is obligated, nor is there
any statute, rule or regulation or any judgment, decree or order of any court
or agency, binding on the Trust which would be contravened by the execution and
delivery by the Trust of this Agreement or the Stock Registration Rights
Agreement or by the performance by the Trust of any provision, condition,
covenant or other term hereof or thereof.

          (d) Litigation. No litigation, arbitration proceedings or government
proceedings are pending against or involve as a party or are threatened against
the Trust which could materially adversely affect the ability of the Trust to
enter into and to perform its obligations under this Agreement or under the
Stock Registration Rights Agreement.

          (e) Beneficiaries. The sole trustee of the Trust is Kapoor. The sole
beneficiary of the Trust is Kapoor.

          (f) Investment Representation. The Trust acknowledges and agrees that,
except as provided in the Stock Registration Rights Agreement, the Stock, the
Warrant and the shares to be acquired pursuant to the Warrant have not been,
and upon their issuance will not be, registered under the Securities Act of
1933, as amended, or under the securities laws of any state, and are being
issued and sold in reliance upon exemptions from those laws. The Trust is
purchasing such shares and the Warrant for its own account, for investment
purposes only, and (subject to the disposition of its property being at all
times within its control) not with the view to resale or distribution thereof,
or any right or interest therein, and the Trust agrees that it will not offer
or sell any such securities, or any right or interest therein, in the absence
of registration under such laws or an exemption therefrom, that each
certificate representing such shares and the Warrant

 

 

will be stamped or
otherwise imprinted with a legend to that effect and that stock transfer
instructions may be given to Akorn’s transfer agent with respect thereto.

          (g) Qualifications of Trust. The Trust, through its Trustee, has such
knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the investment made pursuant to this
Agreement and of making an informed investment decision with respect thereto.

          (h) Share
Ownership. Until such time as (i) the Warrant has expired
unexercised and (ii) Kapoor is no longer a director of Akorn, the Trust and its
affiliates will not, without the consent of Akorn, acquire beneficial ownership
of securities or other rights having more than 25% of the voting power
respecting the election of directors of Akorn, provided, however, that nothing
in this Section 4(h) shall preclude the Trust from having beneficial ownership
of up to 3,352,327 shares of common stock of Akorn (subject to appropriate
adjustment in the case of stock splits or stock dividends), and provided
further, however, the Trust shall not be deemed to violate this section by
virtue of any repurchase of its capital stock by Akorn.

     5. Conditions Precedent to the Obligation of the Trust to Consummate the
Transaction. The obligation of the Trust to purchase and pay for the Stock is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions.

          (a) Representations True. Each of the representations and warranties of
Akorn contained in this Agreement or in any schedule, exhibit, certificate,
instrument or other document delivered by or on behalf of Akorn in connection
herewith shall be true and correct as of the Closing Date;

          (b) Covenants Performed. Akorn shall have performed and complied with its
covenants, obligations, agreements and conditions required by this Agreement to
be performed and complied with on or prior to the Closing; and

          (c) Norbrook Agreement. Akorn shall have entered into and consummated the
Norbrook Agreement.

     6. Other Activities. Akorn hereby acknowledges that the Trust, Kapoor and
EJ Financial Enterprises, Inc. engage in a wide variety of investment and
financing activities and their relationship with Akorn as set forth in this
Agreement and related agreements is not to be deemed exclusive. Without
limiting the generality of the foregoing, it is expressly agreed that any such
activities relating other than to ophthalmic or injectable pharmaceuticals
shall be deemed not to constitute a usurpation of a corporate opportunity of
Akorn, a breach of fiduciary duty to Akorn or conflict of interest with Akorn.

     7. Miscellaneous.

          (a) Amendments. The provisions of this Agreement nay be amended, modified
or waived only by written instrument executed by each of the Trust

 

 

and Akorn.

          (b) Parties in Interest. This Agreement shall inure to benefit of and be
binding upon permitted successors and assigns of the Trust and Akorn.

          (c) Governing Law. The interpretation, validity and performance of this
Agreement shall be construed and governed in accordance with the laws of the
State of Louisiana, regardless of the law that might be applied under
applicable principles of conflicts of laws.

          (d) Waivers. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege. No waiver by any party hereto at any time of any
breach by any 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 or subsequent time.

          (e) Entire Agreement. This Agreement contains the entire understanding of
the parties and supersedes all prior agreements and understandings relating to
the subject matter hereof, and no agreements or representations, oral or
otherwise, express or implied with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.

          (f) Counterparts. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts together shall constitute one and the same instrument.

          (g) Severability. Any provision in this Agreement or any agreement or
instrument delivered pursuant hereto which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The parties shall endeavor in good faith negotiations to
replace any prohibited or unenforceable provision with a valid provision or
provisions, the effect of which shall reflect the bargain manifested in the
prohibited or unenforceable provision.

          (h) Headings. The headings of the sections herein are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this Agreement.

          (i) Further Assurances. Each party hereto agrees to do such further acts
and things, and to execute and deliver such additional agreements and
instruments, as any party may reasonably request of the other in connection
with the performance, administration or enforcement of this Agreement or the
agreements related hereto.

 

 

          (j) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram or telex, or by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties as follows:

if to Akorn:

Akorn, Inc.

100 Akorn Drive

Abita Springs, LA 70420

Attention: Barry LeBlanc, President

with a copy to:

Jones, Walker, Waechter, Poitevent,

Carrere & Denegre

201 St. Charles Avenue

New Orleans, Louisiana 70170

Attention: Carl C. Haneinann, Esq.

if to the Trust:

John N. Kapoor Trust dated September 20, 1989

225 East Deerpath, Suite 250

Lake Forest, IL 60045

Attention: John N. Kapoor, Trustee

with a copy to:

Sidley & Austin

One First National

Chicago, Illinois 60603

Attention: Thomas A. Cole, Esq.

          (k) Expenses. Akorn hereby agrees to pay up to $10,000 of the expenses
incurred by the Trust in connection with the negotiation, execution and
delivery of this Agreement and related agreements. Except as set forth in the
preceding sentence, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement and related agreements shall be
paid by the party incurring such expenses.

     IN WITNESS WHEREOF, each party has caused this Stock Purchase Agreement to
be executed by its respective officer or trustee thereunto duly authorized as
of the date first above written.

 

 

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	/s/ Doyle S. Gaw
 	 
	 	 	Doyle S. Gaw 	 
	 	 	Chairman of the Board 	 
	 
	 	JOHN N. KAPOOR TRUST

DATED SEPTEMBER 20, 1989

 	 
	 	By:  	/s/ John N. Kapoor
 	 
	 	 	John N. Kapoor, not individually 	 
	 	 	But solely as Trustee 	 

 

 

	 	 	 	 	 

EXHIBIT A

COMMON STOCK PURCHASE WARRANT

between

AKORN, INC., a Louisiana Corporation

and

THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989

Dated: November 15, 1990

 

 

THE SECURITIES EVIDENCED BY THIS CERTIFICATE WERE
ACQUIRED FOR INVESTMENT ONLY PURSUANT TO AN
INVESTMENT REPRESENTATION ON THE PART OF THE HOLDER
HEREOF. THEY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAW AND MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED, DONATED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT,
AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED, OR A NO
ACTION LETTER OR INTERPRETIVE OPINION OF THE STAFF
OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH
REGISTRATION IS NOT REQUIRED.

COMMON STOCK PURCHASE WARRANT

Dated November 15, 1990

Void After November 15, 1993

     AKORN, INC. (the “Company”), a Louisiana corporation, hereby certifies
that, for value received, THE JOHN N. KAPOOR TRUST DATED SEPTEMBER 20, 1989
(the “Trust”), or its registered assigns (sometimes hereinafter collectively
referred to as the Warrantholder or the “Warrantholders”), is entitled, subject
to the terms and conditions set forth in this warrant (said warrant and any
warrants issued in exchange herefor or replacements hereof being hereinafter
collectively referred to as the “Warrants”), to purchase from the Company, two
million (2,000,000) fully paid and nonassessable shares of Common Stock of the
Company, without par value (the “Common Stock,” which term is further defined
in Paragraph 4(i) hereof), at any time or from time to time until 5:00 p.m.
Louisiana local time on November 15, 1993 at the exercise price set forth in
Paragraph 2 hereof (the “Exercise Price”), the number of such shares of Common
Stock and the Exercise Price being subject to adjustment as provided herein.

     1. Exercise of Warrant. The rights represented by this Warrant may be

 

 

exercised by the Warrantholders, in whole or in part (but not as to a
fractional share of Common Stock), by the presentation and surrender of this
Warrant with written notice of Warrantholders’ election to purchase,
substantially in the form of Exhibit A hereto, at the office of the Company,
100 Akorn Drive, Abita Springs, Louisiana 70420, marked to the attention of the
Company’s President, or at such other address as the Company may designate by
notice in writing to the Warrantholders at the address of each Warrantholder
appearing on the books of the Company and upon payment to the Company of the
Exercise Price for such shares of Common Stock. Such payment shall be made by
check payable to the order of the Company. The Company agrees that the shares
so purchased (the “Warrant Shares”) shall be deemed to have been issued to the
Warrantholders who are the record owners of such Warrant Shares as of the close
of business on the date on which this Warrant shall have been surrendered
together with the aforementioned written notice of election to purchase, and
payment for such Warrant Shares shall have been made as aforesaid.
Certificates for the Warrant Shares so purchased shall be delivered to the
Warrantholder within a reasonable time, not exceeding five days, after the
rights represented by this Warrant shall have been so exercised, and, unless
this Warrant has expired, a new Warrant representing the number of shares, if
any, with respect to which this Warrant shall not then have been exercised
shall also be issued to the Warrantholdcr within such time.

     2. Exercise Price. Subject to adjustment as provided herein, the Exercise
Price for the purchase of the Warrant Shares shall be $1.50 per share for
Warrant Shares purchased prior to 5:00 p.m. Louisiana local time on November
15, 1991, $1.75 per share for Warrant Shares purchased after 5:00 p.m.
Louisiana local time on November 15, 1991 but prior to 5:00 p.m. Louisiana
local time on November 15, 1992 and $2.00 per share for Warrant Shares
purchased after 5:00 p.m. Louisiana local time on November 15, 1992 but prior
to 5:00 p.m. Louisiana local time on November 15, 1993.

     3. Warrantholders Not Deemed Stockholders. Subject to the provisions of
the Company’s Articles of Incorporation and By-laws, copies of which have been
delivered to the Warrantholders, the Warrantholders shall not be entitled to
vote or receive dividends or be deemed the holders of Common Stock, nor shall
anything

 

 

contained herein be construed to confer upon the Warrantholders, as
holders of Warrants, any of the rights of a stockholder of the Company or any
right to vote upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issue of stock, reclassification of stock, change of par
value or change of stock to no par value, consolidation, merger, conveyance, or
otherwise) or to receive notice of meetings, or to receive dividends, except as
otherwise provided herein, until this Warrant shall have been exercised and the
Warrant Shares receivable upon the exercise hereof shall have become
deliverable as provided in Paragraph 1 above.

     4. Adjustment of Number of Shares. Exercise Price and Nature of
Securities Issuable Upon Exercise of Warrants.

          a. Exercise Price; Adjustment of Number of Shares. Each of the Exercise
Prices set forth in Paragraph 2 hereof (except for any Exercise Price the
exercise period relating to which has expired) shall be subject to adjustment
from time to time as hereinafter provided. Upon each adjustment of the
Exercise Price, the Warrantholders shall thereafter be entitled to purchase at
the Exercise Price resulting from such adjustment and during the exercise
period relating to such Exercise Price, a number of shares obtained by
multiplying the Exercise Price immediately prior to such adjustment applicable
to such period by the number of shares purchasable pursuant hereto during such
period immediately prior to such adjustment and dividing the product thereof by
the Exercise Price for such period resulting from such adjustment.

          b. Adjustment of Exercise Price Upon Issuance of Common Stock. Except for
shares of Common Stock of the Company issuable pursuant to warrants and options
outstanding as of the date hereof or currently issuable pursuant to presently
existing employee benefit plans of the Company, if and whenever after the date
hereof the Company shall issue or sell Additional Shares of Common Stock (as
defined below) without consideration or for a consideration per share less than
the greater of (i) Exercise Price and (ii) Fair Value (as defined below) per
share (except upon exercise of this Warrant), successively upon each such
issuance or sale, the Exercise Price applicable to

 

 

each exercise period not yet then expired immediately prior to such
issuance or sale of such shares shall be reduced to the lowest price calculated
pursuant to clause (i) or (ii) below of this Paragraph 4(b) and shall be
determined by (i) dividing (A) an amount equal to the sum of (1) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by each such Exercise Price plus (2) the aggregate consideration, if
any, received by the Company upon such issue or sale, by (B) the total number
of shares of Common Stock outstanding immediately after such issue or sale; or
(ii) multiplying each such Exercise Price by a fraction, the numerator of which
is (A) the sum of (1) the number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the Fair Value per share
of Common Stock immediately prior to such issue or sale plus (2) the aggregate
consideration, if any, received by the Company upon such issue or sale, divided
by (B) the total number of shares of Common Stock outstanding immediately after
such issue or sale, and the denominator of which shall be the Fair Value per
share of Common Stock immediately prior to such issue or sale.

     No adjustment of the Exercise Price, however, shall be made in an amount
less than $.0001 per share, but any such lesser adjustment shall be carried
forward and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward, shall
amount to $.0001 per share or more.

     For purposes of this Paragraph 4(b), the date as of which the Fair Value
per share of Common Stock shall be computed shall be the day preceding the
earlier of the date on which the Company shall (i) enter into a firm contract
for the issuance of such shares or (ii) issue such shares. For purposes of
this Paragraph 4(b), if the Current Market Value (as defined in Paragraph 6)
per share of Common Stock is determinable on the date on which the Fair Value
per share of Common Stock is to be determined, the Fair Value per share of
Common Stock shall be deemed to be equal to the Current Market Value per share
of Common Stock as of the day preceding the earlier of the date on which the
Company shall (i) enter a firm contract for the issuance of such shares or (ii)
issue such shares.

 

 

     The provisions of this Paragraph 4(b) shall not apply to any Additional
Shares of Common Stock which are distributed to holders of Common Stock
pursuant to a stock split for which an adjustment is provided for under
Paragraph 4(f).

     As used in this Warrant, the following terms shall have the following
meanings:

     “Additional Shares of Common Stock” shall mean all shares of Common Stock
issued or issuable by the Company after the date of this Warrant.

     “Fair Value” means the Fair Value of the appropriate security, property,
assets, business or entity as determined in accordance with the following
procedure: The Company and the holders of the Warrants and Warrant Shares, as
applicable, shall use their best efforts to mutually agree to a determination
of Fair Value within ten days of the date of the event requiring that such a
determination be made. If the Company and such holders are unable to reach
agreement within said ten day period, such holders shall, in their sole and
absolute discretion, within five days of the expiration of the ten day period
above referred to, retain an independent investment banking firm to determine
(within thirty days of being retained) the Fair Value of the security,
property, assets, business or entity, as the case may be, in question and
deliver its opinion in writing to the Company and to such holders. The
determination so made will be conclusive and binding on the Company and such
holders. The fees and expenses of such determination made by such independent
investment banking firm shall be paid by the Company. If there is more than
one holder of Warrants, or Warrant Shares entitled to determination
of Fair
Value in any particular instance, each action to be taken by the holders of
such Warrants or Warrant Shares under this Paragraph shall be taken by a
majority in interest of such holders and the action taken by the majority
(including as to any mutual agreement with the Company with respect to Fair
Value and as to any selection of investment banking firms) shall be binding
upon all such holders. In case of a determination of the Fair Value per share
of Common Stock (i) the Company and such holders shall not take into
consideration, and shall instruct any investment banking firm, not to take into
consideration, any premium for shares representing control of the Company, any
discount for any minority interest therein or any restrictions on transfer
under Federal and applicable state securities laws or

 

 

otherwise; and (ii) there shall be a rebuttable presumption that the
purchase of a security, property, assets, business or entity which is the
subject of a determination of Fair Value shall establish the Fair Value of such
security, property, assets, business or entity as its purchase price if such
purchase is consummated in a negotiated arm’s-length transaction.

          c. Further Provisions for Adjustment of Exercise Price Upon Issuance of
Additional Shares of Common Stock and Convertible Securities. For purposes of
Paragraph 4(b), the following provisions shall also be applicable:

               (i) In case at any time on or after the date hereof, the Company shall
declare any dividend or any other distribution upon any stock of the Company of
any class, payable in Additional Shares of Common Stock or by the issuance of
evidence of indebtedness, shares of stock or other securities which are at any
time directly or indirectly convertible into or exchangeable for Additional
Shares of Common Stock (all such indebtedness and securities being hereinafter
referred to as “Convertible Securities”) such declaration or distribution shall
be deemed to be an issue or sale (as of the record date) of such Additional
Shares of Common Stock without consideration and shall thereby cause an
adjustment in the Exercise Price as required by Paragraph 4(b).

               (ii) (A) In case at any time on or after the issuance of this Warrant, the
Company shall in any manner issue or sell any Convertible Securities, whether
or not the rights to exchange or convert thereunder are immediately
exercisable, there shall be determined the price per share for which Additional
Shares of Common Stock are issuable upon the conversion or exchange thereof,
such determination to be made by dividing (a) the total amount received or
receivable by the Company as consideration for the issue or sale of such
Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof by (b) the maximum aggregate number of Additional Shares of Common
Stock issuable upon conversion or exchange of all such Convertible Securities
for such minimum aggregate amount of additional consideration; and such issue
or sale shall be deemed to be an issue or sale for cash (as of the date of
issue or sale of such Convertible Securities) of such maximum number of
Additional Shares of

 

 

Common Stock at the price per share so determined, and shall thereby cause
an adjustment in the Exercise Price, if such an adjustment is required by
Paragraph 4(b) hereof.

                    (B) If such Convertible Securities shall by their terms provide for an
increase or increases, with the passage of time, in the amount of additional
consideration, if any, payable to the Company, or in the rate of exchange upon
the conversion or exchange thereof, the adjusted Exercise Price shall, upon any
such increase becoming effective, be increased to such Exercise Price as would
have been in effect had the adjustments made upon the issuance of such
Convertible Securities been made upon the basis of (a) the issuance of the
number of shares of Common Stock theretofore actually delivered upon the
exercise of such Convertible Securities, (b) the issuance of all Common Stock,
all Convertible Securities and all rights and options to purchase Common Stock
issued after the issuance of such Convertible Securities, and (c) the original
issuance at the time of such change of any such Convertible Securities then
still outstanding; provided, however, that any such increase or increases shall
not exceed, in the aggregate, the amount of the original reduction of the
Exercise Price attributable to the Convertible Securities.

                    (C) If any rights of conversion or exchange evidenced by such Convertible
Securities shall expire without having been exercised, the adjusted Exercise
Price shall forthwith be readjusted to such Exercise Price as would have been
in effect bad an adjustment with respect to such Convertible Securities been
made on the basis that the only Additional Shares of Common Stock issued or
sold were those issued upon the conversion or exchange of such Convertible
Securities, and that they were issued or sold for the consideration actually
received by the Company upon such exercise, plus the consideration, if any,
actually received by the Company for the granting of such Convertible
Securities.

               (iii) (A) In case at any time on or after the issuance of this Warrant the
Company shall in any manner grant or issue any rights or options to subscribe
for, purchase or otherwise acquire Additional Shares of Common Stock,

 

 

whether or not such rights or options are immediately exercisable, there
shall be determined the price per share for which Additional Shares of Common
Stock are issuable upon the exercise of such rights or options, such
determination to be made by dividing (a) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or options if the
maximum number of Additional Shares of Common Stock were issued pursuant to
such rights or options for such minimum aggregate amount of additional
consideration, by (b) the maximum number of Additional Shares of Common Stock
of the Company issuable upon the exercise of all such rights or options for
such minimum aggregate amount of additional consideration; and the granting of
such rights or options shall be deemed to be an issue or sale for cash (as of
the date of the granting of such rights or options) of such maximum number of
Additional Shares of Common Stock at the price per share so determined, and
shall thereby cause an adjustment in the Exercise Price, if such an adjustment
is required by Paragraph 4(b) hereof.

                    (B) If such rights or options shall by their terms provide for an increase
or increases, with passage of time, in the amount of additional consideration
payable to the Company upon the exercise thereof, the adjusted Exercise Price
shall, upon any such increases becoming effective, be increased to such
Exercise Price as would have been in effect had the adjustments made upon the
issuance of such rights or options been made upon the basis of (a) the issuance
of the number of shares of Common Stock theretofore actually delivered upon the
exercise of such rights or options, (b) the issuance of all Common Stock, all
rights and options and all Convertible Securities issued after the issuance of
such rights and options, and (c) the original issuance at the time of such
change of any such rights or options then still outstanding; provided, however,
that any such increase or increases in the Exercise Price shall not exceed, in
the aggregate, the amount of the original reduction of the Exercise Price
attributable to the grant of such rights or options.

                    (C) If any such rights or options shall expire without having been
exercised, the adjusted Exercise Price shall forthwith be readjusted to such

 

 

Exercise Price as would have been in effect had an adjustment with respect
to such rights or options been made on the basis that the only Additional
Shares of Common Stock so issued or sold were those issued or sold upon the
exercise of such rights or options and that they were issued or sold for the
consideration actually received by the Company upon such exercise, plus the
consideration, if any, actually received by the Company for the granting of
such rights or options.

               (iv) (A) In case at any time on or after the issuance of this Warrant the
Company shall grant any rights or options to subscribe for, purchase or
otherwise acquire Convertible Securities, there shall be determined the price
per share for which Additional Shares of Common Stock are issuable upon the
exchange or conversion of such Convertible Securities if such rights or options
were exercised, such determination to be made by dividing (a) the total amount,
if any, received or receivable by the Company as consideration for the issuance
of such rights or options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of such rights
or options if the maximum number of Convertible Securities were issued pursuant
to such rights or options for such minimum aggregate amount of additional
consideration, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exchange or conversion of such
Convertible Securities if the maximum number of Additional Shares of Common
Stock were issued pursuant to such Convertible Securities for such minimum
aggregate amount of additional consideration, by (b) the maximum aggregate
number of Additional Shares of Common Stock issuable upon the exchange or
conversion of the Convertible Securities for such minimum aggregate amount of
additional consideration; and the issue or sale of such rights or options shall
be deemed to be an issue or sale for cash (as of the date of the granting of
such rights or options) of such maximum number of Additional Shares of Common
Stock at the price per share so determined, and thereby shall cause an
adjustment in the Exercise Price, if such an adjustment is required by
Paragraph 4(b).

                    (B) If such rights or options to subscribe for or otherwise acquire
Convertible Securities shall by their terms provide for an increase or
increases, with the passage of time, in the amount of additional consideration
payable to

 

 

the Company upon the exercise, exchange or conversion thereof, the
adjusted Exercise Price shall, forthwith upon any such increase becoming
effective, be increased to such Exercise Price as would have been in effect had
the adjustments made upon the issuances of such rights or options been made
upon the basis of (a) the issuance of the number of shares of Common Stock
theretofore actually delivered upon the exchange or conversion of such
Convertible Securities (b) the issuances of all Common Stock and all rights,
options and Convertible Securities issued after the issuance of such rights and
options and (c) the original issuances at the time of such change of any such
rights, options and Convertible Securities issued upon exercise of such rights
or options which are then still outstanding; provided, however, that any such
increase or increases shall not exceed, in the aggregate, the amount of the
original reduction of the Exercise Price attributable to the grant of such
rights or options.

                    (C) If any such rights, options or rights of conversion or exchange of
such Convertible Securities shall expire without having been exercised,
exchanged or converted, the adjusted Exercise Price shall forthwith be
readjusted to such Exercise Price as would have been in effect had an
adjustment been made with respect to such rights, options or rights of
conversion or exchange of such Convertible Securities on the basis that the
only Additional Shares of Common Stock so issued or sold were those issued or
sold upon the exercise of such rights or options and exchange or conversion of
such Convertible Securities and that they were issued or sold for the
consideration actually received by the Company upon exercise of such rights and
options and exchange or conversion of such Convertible Securities, plus the
consideration, if any, actually received by the Company for the granting of
such rights, options or Convertible Securities.

               (v) In any case where an adjustment has been made in the Exercise Price
upon the issuance of Convertible Securities or any rights or options to
purchase Convertible Securities or Additional Shares of Common Stock pursuant
to this Paragraph 4(c), no further adjustment shall be made at the time of the
conversion of any such Convertible Securities or at the time of the exercise of
any such rights or options. Where no such adjustment has been made at the time
of issuance, an adjustment shall be

 

 

made at the time of the conversion of any such Convertible Securities or
at the time of the exercise of any such rights or options if such an adjustment
is required by Paragraph 4(b).

               (vi) In case at any time on or after the issuance of this Warrant shares
of Common Stock or Convertible Securities or any rights or options to acquire
Additional Shares of Common Stock or Convertible Securities shall be issued or
sold for a consideration other than cash, the amount of the consideration other
than cash payable to the Company shall be deemed to be the Fair Value of such
consideration. Whether or not the consideration so received is cash, the
amount thereof shall be determined after deducting therefrom any expenses
incurred or any underwriting commissions or concessions or discounts paid or
allowed by the Company in connection therewith.

               (vii) In case at any time the Company shall fix a record date of the
holders of its Common Stock for the purpose of entitling them (a) to receive a
dividend or other distribution payable in Common Stock, Convertible Securities
or rights or options to purchase either thereof, or (b) to subscribe for or
purchase Common Stock, Convertible Securities or rights or options to purchase
either thereof, then such record date shall be deemed to be the date of the
issue or sale of the shares of Common Stock deemed, pursuant to this Paragraph
4(c), to have been issued or sold upon the declaration of such dividend or the
making of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

               (viii) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company,
and the disposition of any such shares shall be considered an issue or sale of
Common Stock for the purposes of this paragraph 4(c).

          d. Reorganization,
Reclassification, Consolidation, Merger or Sale. If
any capital reorganization or reclassification of the capital stock of the
Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be effected in such a way that holders of Common Stock shall
be entitled to receive stock, securities, cash or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,

 

 

reclassification, consolidation, merger or sale, lawful and adequate
provisions shall be made whereby the Warrantholders shall thereafter have the
right to purchase and receive upon the basis and upon the terms and conditions
specified in this Warrant upon exercise of this Warrant and in lieu of the
Warrant Shares immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby, such shares of stock, securities,
cash or assets as may be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of Warrant
Shares immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby, and in any such case appropriate provision shall
be made with respect to the rights and interest of the Warrantholders to the
end that the provisions hereof (including, without limitation, provisions for
adjustments of the Exercise Price and of the number of Warrant Shares
purchasable and receivable upon the exercise of this Warrant) shall thereafter
be applicable, as nearly as may be, in relation to any shares of stock or
securities thereafter deliverable upon the exercise hereof. The Company shall
not effect any consolidation, merger or sale of all or substantially all of the
assets of the Company unless prior to or simultaneous with the consummation
thereof the successor corporation (if other than the Company) resulting from
such consolidation, merger or purchase of such assets shall assume, by written
instrument executed and mailed or delivered to the Warrantholders, the
obligation to deliver to such Warrantholders such cash (or cash equivalent),
shares of stock, securities, cash or assets as, in accordance with the
foregoing provisions, the Warrantholders may be entitled to receive and
containing the express assumption of such successor corporation of the due and
punctual performance and observance of each provision of this Warrant to be
performed and observed by the Company and of all liabilities and obligations of
the Company hereunder.

     In case any Additional Shares of Common Stock or Convertible Securities or
any rights or options to purchase any Additional Shares of Common Stock or
Convertible Securities shall be issued in connection with any merger of another
corporation into the Company, the amount of consideration therefor shall be
deemed to be the Fair Value of such portion of the assets of such merged
corporation as the Board of Directors of the Company shall in good faith
determine to be attributable to such Additional Shares of Common Stock,
Convertible Securities or rights or options, as the case may be, and the

 

 

Exercise Price shall be adjusted in accordance with this Paragraph 4(d).

          e. Company to Prevent Dilution. In case at any time or from time to time
conditions arise by reason of action taken by the Company which are not
adequately covered by the provisions of this Paragraph 4, and which might
materially and adversely affect the exercise rights of the Warrantholders under
any provision of this Warrant, unless the adjustment necessary shall be agreed
upon by the Company and the Warrantholders, the Board of Directors of the
Company shall appoint a firm of independent certified public accountants of
recognized standing, reasonably acceptable to the Warrantholders, who at the
Company’s expense shall give their opinion upon the adjustment, if any, on a
basis consistent with the standards established in the other provisions of this
Paragraph 4, necessary with respect to the Exercise Price and the number of
Warrant Shares purchasable upon exercise of the Warrants, so as to preserve,
without dilution, the exercise rights of the Warrantholders. Upon receipt of
such opinion, such Board of Directors shall forthwith make the adjustments
described therein.

     Nothing contained in this Paragraph 4(e) shall require the Exercise Price
to be adjusted in the event that the Company shall declare or pay any quarterly
cash dividend or distribution upon any stock of the Company of any class which
does not exceed the greater of (i) $.017 per share and (ii) 125% of the amount
of any quarterly cash dividend paid with respect to the same quarter in the
immediately preceding fiscal year of the Company.

          f. Stock Splits and Reverse Stock Splits. In case at any time the Company
shall subdivide its outstanding shares of Common Stock into a greater number of
shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced and the number of Warrant Shares purchasable
pursuant to this Warrant immediately prior to such subdivision shall be
proportionately increased, and conversely, in case at any time the Company
shall combine its outstanding shares of Common Stock into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased and the number of Warrant Shares purchasable
upon the exercise of this Warrant immediately prior to such

 

 

combination shall be proportionately reduced.

          g. Dissolution. Liquidation and Wind-Up. In case the Company shall, at
any time prior to the expiration of this warrant and prior to the exercise
thereof, dissolve, liquidate or wind up its affairs, the Warrantholders shall
be entitled, upon the exercise of this Warrant, to receive, in lieu of the
Warrant Shares which such Warrantholders would have been entitled to receive,
the same kind and amount of assets as would have been issued, distributed or
paid to such Warrantholders upon any such dissolution, liquidation or winding
up with respect to such Warrant Shares, had such Warrantholders been the
holders of record of the Warrant Shares receivable upon the exercise of this
Warrant on the record date for the determination of those persons entitled to
receive any such liquidating distribution. After any such dissolution,
liquidation or winding up which shall result in any cash distribution in excess
of the Exercise Price provided for by this Warrant, the Warrantholders may, at
each such Warrantholder’s option, exercise the same without making payment of
the Exercise Price, and in such case the Company shall, upon the distribution
to said Warrantholders, consider that said Exercise Price has been paid in full
to it and in making settlement to said Warrantholders, shall deduct from the
amount payable to such Warrantholders an amount equal to such Exercise Price.

          h. Accountants’ Certificate. In each case of an adjustment in the number
of Warrant Shares or other stock, securities or property receivable upon the
exercise of this Warrant, the Company at its expense shall compute, and upon
the Warrantholder’s request shall at its expense cause independent public
accountants of recognized standing selected by the Company and acceptable to
the Warrantholders to certify such computation, such adjustment in accordance
with the terms of this Warrant and prepare a certificate setting forth such
adjustment and showing in detail the facts upon which such adjustment is based,
including a statement of (a) the consideration received or to be received by
the Company for any Additional Shares of Common Stock, rights, options or
Convertible Securities issued or sold or deemed to have been issued or sold,
(b) the number of shares of Common Stock of each class outstanding or deemed to
be outstanding, (c) the adjusted Exercise Price and (d) the number of Warrant
Shares

 

 

issuable upon exercise of this Warrant. The Company will forthwith mail a
copy of each such certificate to each Warrantholder.

          i. Definition of Common Stock. As used herein, the term “Common Stock”
shall mean and include the Company’s authorized common stock of any class or
classes and shall also include any capital stock of any class of the Company
hereafter authorized which shall not be limited to a fixed sum or percentage of
par value in respect of the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company, and shall include any
common stock of any class or classes resulting from any reclassification or
reclassifications thereof.

     5. Special Agreements of the Company.

          a. Reservation of Shares. The Company covenants and agrees that all
Warrant Shares will, upon issuance, be validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder, and from
all taxes, liens and charges with respect to the issue thereof (other than
taxes in respect to any transfer occurring contemporaneously with such issue)
and that it will obtain, at its sole expense, all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant. The Company further covenants and agrees that during the
period within which the rights represented by this Warrant may be exercised,
the Company will at all times have authorized and reserved a sufficient number
of shares of Common Stock to provide for the exercise of the rights represented
by this Warrant.

          b. Avoidance of Certain Actions. The Company will not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, issue or sale of securities or otherwise, avoid
or take any action which would have the effect of avoiding the observance or
performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in carrying out all of the
provisions of this Warrant and in taking all of such action as may be necessary
or appropriate in order to protect the rights of the

 

 

Warrantholders against dilution or other impairment of their rights
hereunder.

          c. Securing Governmental Approvals. If any Warrant Shares required to be
reserved for the purposes of exercise of this Warrant require registration with
or approval of governmental authority under any federal law (other than the
Securities Act of 1933, as amended (the “Securities Act”)) or under any state
law before such Warrant Shares may be issued upon exercise of this Warrant, the
Company will, at its expense, as expeditiously as possible, use its best
efforts to cause such Warrant Shares to be duly registered or approved, as the
case may be.

          d. Listing on Securities Exchanges; Registration. If, and so long as, any
class of the Company’s Common Stock shall be listed on any national securities
exchange (as defined in the Securities Exchange Act of 1934 (the “Exchange
Act”)), the Company will, at its expense, obtain and maintain the approval for
listing upon official notice of issuance of all such Common Stock receivable
upon the exercise of Warrants at the time outstanding and will maintain the
listing of such Common Stock after its issuance; and the Company will so list
on such national securities exchange, will register under the Exchange Act (or
any similar statute then in effect), and will maintain such listing of, any
other securities that at any time are issuable upon exercise of this Warrant if
and at the time any securities of the same class shall be listed on such
national securities exchange by the Company.

          e. Communication to Shareholders. Any notice, document or other
communication given or made by the Company to holders of Common Stock as such
shall at the same time be provided to the Warrantholders.

          f. Compliance with Law. The Company shall comply with all applicable
laws, rules and regulations of the United States and of all states,
municipalities and agencies and of any other jurisdiction applicable to the
Company and shall do all things necessary to preserve, renew and keep in full
force and effect and in good standing its corporate existence and authority
necessary to continue its business.

          g. Control Share Acquisition Matters. If any Warrantholder shall

 

 

desire to exercise this Warrant in whole or in part and the effect of such
exercise would be to cause any shares of the Common Stock of the Company owned
by such Warrantholder (including but not limited to shares acquired upon such
exercise) to constitute control shares (as defined in Louisiana R.S. 12:135),
such Warrantholder may request the Board of Directors of the Company to adopt a
bylaw contemplated by Louisiana R.S. 12:140.2 or otherwise take action having
the effect of making Louisiana R.S. 12:135 through 140.2 inapplicable to shares
of Common Stock owned by such Warrantholder, including shares which would be
purchased upon such exercise. If within 30 days from the date of such request
such Warrantholder has not been supplied with (i) certified resolutions of the
Board of Directors, in form and substance reasonably satisfactory to such
Warrantholder, reflecting the adoption of such bylaw or the taking of such
action and (ii) an opinion of counsel, in form and substance reasonably
satisfactory to such Warrantholder, to the effect that the adoption of such
bylaw or the taking of such action has the effect described above, then at any
time within 90 days after the expiration of such 30 day period, such
Warrantholder may tender such Warrant for cancellation in respect of that
number of shares which, when taken together with such Warrantholder’s other
ownership of shares of Common Stock, would cause an exercise of this Warrant as
a whole to result in a control share acquisition (as defined in Louisiana R.S.
12:135) provided, however, that the Warrantholder may not tender such Warrant
for cancellation in respect of any number of shares which exceeds 2.3725% of
the maximum number of shares which the Company has had outstanding (assuming
full exercise of this Warrant) from the date of this Warrant to the date that
the cancellation payment referred to in the next sentence is made. Immediately
upon receipt of such tender for cancellation, the Company shall make to such
Warrantholder a cancellation payment equal to (a) the number of shares in
respect of which this Warrant shall be so cancelled times (b) the difference
between (1) the per share Current Market Value on the date on which the request
contemplated by the first sentence of this subsection shall have been delivered
to the Company and (ii) the per share Exercise Price of tins Warrant in effect
on such day. If within such 30 day period such Warrantholder has been supplied
with such certified resolutions and such opinion of counsel, then at any time
within 90 days after receipt of such items such Warrantholder may tender such
Warrant for exercise at the per share

 

 

Exercise Price of this Warrant on the date on which the request
contemplated by the first sentence of this subsection shall have been delivered
to the Company.

     6. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon exercise hereof, the Company
shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the current market value (the “Current Market Value”) of one
share of Common Stock, determined as follows:

          (i) If the Common Stock is listed on a national securities exchange, is
admitted to unlisted trading privileges on such exchange or is traded on the
NASDAQ/National Market System, the Current Market Value shall be the average of
the closing prices per share of the Common Stock as reported in The Wall Street
Journal for the last 20 business days prior to the date of exercise of this
Warrant;

          (ii) If the Common Stock is not so listed, admitted or traded, the Current
Market Value shall be the average bid and asked prices for the last 20 business
days prior to the date of exercise of this Warrant as furnished by two members
of the National Association of Securities Dealers, Inc. selected for that
purpose from time to time by the Company and reasonably acceptable to the
Warrantholders; or

          (iii) If no such bid and asked prices are available as set forth above,
Current Market value shall be the Fair Value (as defined in Section 4(b)) per
share of Akorn common stock on the day immediately prior to the date of
exercise of this Warrant.

     7. Notices of Stock Dividends, Subscriptions, Reclassification,
Consolidations, Mergers, etc. If at any time: (i) the Company shall declare a
cash dividend that exceeds 125% of the amount of any quarterly cash dividend
paid with respect to the same quarter in the immediately preceding fiscal year
of the Company or a dividend on Common Stock payable otherwise than in cash; or
(ii) the Company shall authorize the granting to the holders of Common Stock of
rights to subscribe for or purchase any shares of capital stock of any class or
of any other rights; or (iii) there shall

 

 

be any capital reorganization, or reclassification, or redemption of the
capital stock of the Company, or consolidation or merger of the Company with,
or sale of all or substantially all of its assets to, another corporation or
firm; or (iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company, then the Company shall give to the
Warrantholders at the addresses of such Warrantholders as shown on the books of
the Company, at least ten days prior to the applicable record data hereinafter
specified, a written notice summarizing such action or event and stating the
record date for any such dividend or rights (or, if a record date is not to be
selected, the date as of which the holders of Common Stock of record entitled
to such dividend or rights are to be determined), the date on which any such
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected the holders of Common Stock of record shall be
entitled to effect any exchange of their shares of Common Stock for cash (or
cash equivalent) securities or other property deliverable upon any such
reorganization, reclassification, consolidation, merger, sale of assets,
dissolution, liquidation or winding up.

     8. Registered Holder; Transfer of Warrants or Warrant Shares; Investment
Representation.

          a. Maintenance of Registration Books; Ownership of this Warrant. The
Company shall keep at its principal office in the City of Abita Springs,
Louisiana, a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration, transfer and
exchange of this Warrant. The Company shall not at any time, except upon the
dissolution, liquidation or winding-up of the Company, close such register so
as to result in preventing or delaying the exercise or transfer of this
Warrant.

     The Company may deem and treat the person in whose name this Warrant is
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration

 

 

or transfer as provided in this Paragraph 8.

          b. Exchange and Replacement. This Warrant is exchangeable upon surrender
hereof by the registered holder to the Company at its principal office for new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of Warrant Shares purchasable hereunder, each of such new
Warrants to represent the right to purchase such number of Warrant Shares as
shall be designated by said registered holder at the time of surrender.
Subject to compliance with the provisions of Paragraph 8 and 9, this Warrant
and all rights hereunder are transferable in whole or in part upon the books of
the Company by the registered holder hereof in person or by duly authorized
attorney, and a new Warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of the
transferee, upon surrender of this Warrant, duly endorsed, to said office of
the Company. Upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant, upon
delivery to the Company by the Warrantholder of an indemnification agreement
satisfactory to the Company, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant, without requiring the posting of any bond or
the giving of any other security. This Warrant shall be promptly cancelled by
the Company upon the surrender hereof in connection with any exchange, transfer
or replacement. The Company shall pay all expenses, taxes and other charges
payable in connection with the preparation, execution and delivery of Warrants
pursuant to this Paragraph 8.

          c. Warrants and Warrant Shares Not Registered. The holder of this
Warrant, by accepting this Warrant, represents and acknowledges that this
Warrant and the Warrant Shares are not being registered under the Securities
Act on the grounds that the issuance of this Warrant and the offering and sale
of such Warrant Shares are exempt from registration under Section 4(2) of the
Securities Act as not involving any public offering.

     Notwithstanding any provisions contained in this Warrant to the contrary,
this

 

 

Warrant and the Warrant Shares shall not be transferable except upon the
conditions specified in Paragraph 8 and 9, which conditions are intended, among
other things, to insure compliance with the provisions of the Securities Act in
respect of the transfer of this Warrant or of such Warrant Shares.

          d. Investment Representations. The Trust represents and warrants to the
Company that this Warrant is being acquired by it for its own account for
investment purposes only and (subject to the disposition of its property being
at all times within its control) not with a view to resale, distribution or
other disposition thereof; any Warrant Shares which may be issued to the Trust,
or its nominee, upon exercise of this Warrant will be acquired by it for its
own account for investment purposes only and (subject to the disposition of its
property being at all times within its control) not with a view to resale,
distribution or other disposition thereof; the Trust is able to bear the
economic risk of investment in this Warrant and said shares, can afford to
sustain a total loss on such investment, and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the proposed investment; and the Trust understands that there is
no public market for this Warrant or the Warrant Shares and that there may
never be a public market for this Warrant or the Warrant Shares, and,
therefore, the Trust may have to bear the risk of its investment in this
Warrant and any Warrant Shares for an indefinite period of time.

     9. Legends; Restrictions on Transfer.

          a. Warrant Legend. Each Warrant shall be stamped or otherwise imprinted
with the legend set forth on the first page of this Warrant.

          b. Warrant Shares Legend. Bach stock certificate representing Warrant
Shares shall be stamped or otherwise imprinted with the following legend:

THE SHARES OF COMMON STOCK REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY TRANSFER

 

 

THEREOF IS SUBJECT TO THE CONDITIONS SPECIFIED IN
THE WARRANT TO PURCHASE SHARES OF STOCK, WITHOUT PAR
VALUE, OF THE COMPANY, DATED AS OF NOVEMBER 15,
1990, ORIGINALLY ISSUED BY AKORN, INC. (“THE
COMPANY”) TO THE JOHN N. KAPOOR TRUST DATED
SEPTEMBER 20, 1989. A COPY OF THE FORM OF SUCH
WARRANT IS ON FILE WITH THE COMPANY’S SECRETARY AT
THE COMPANY’S PRINCIPAL EXECUTIVE OFFICE AND WILL BE
FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS
CERTIFICATE UPON WRITTEN BEQUEST TO THE SECRETARY
AT SUCH OFFICE.

          c. Notice of Proposed Transfer. Prior to any proposed transfer of this
Warrant or any Warrant Shares, the Warrantholder or the holder of Warrant
Shares, as the case may be, shall give written notice to the Company of its
intention to effect such transfer. Each such notice shall describe the manner
of the proposed transfer and, if requested by the Company, shall be accompanied
by an opinion of counsel satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities Act
or qualification under any applicable state securities law (which opinion as to
state securities laws shall be at the expense of the Company), whereupon such
Warrantholder or holder of Warrant Shares shall be entitled to transfer such
securities in accordance with the terms of its notice. Each Warrant and each
certificate for Warrant Shares transferred as above provided shall bear,
respectively, the legends set forth in Paragraph 9(a) and 9(b), except that
such Warrant or certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration
under the Securities Act. In addition, new securities shall be issued without
such legends if such legends may be

 

 

properly removed under the terms of Rule 144(k) promulgated under the
Securities Act.

          d. Further Limitations on Transfer. The Warrantholder shall not transfer
this Warrant to any person except to the beneficiaries of the Trust who are
members of John N. Kapoor’s immediate family or to not more than eight
employees of EJ Financial or its affiliates.

     10. Miscellaneous Provisions.

          a. Governing Law. This Warrant shall be deemed to have been made in the
State of Louisiana and the validity of this Warrant, the construction,
interpretation, and enforcement thereof, and the rights of the parties thereto
shall be determined under, governed by, and construed in accordance with the
internal laws of the State of Louisiana, without regard to principles of
conflicts of law.

          b. Notices. All notices hereunder shall be in writing and shall be deemed
to have been given three days after being mailed by certified mail, addressed
to the address below stated of the party to which notice is given, or to such
changed address as such party may have fixed by notice (provided, however, that
any notice of change of address shall be effective only upon receipt):

	 	 	 	 	 
	 

	 	To the Company:
	 	Akorn, Inc.
	

	 	 	 	100 Akorn Drive
	

	 	 	 	Abita Springs, Louisiana 70420
	

	 	 	 	Attn: Barry LeBlanc, President
	 
	 	 	 	 
	

	 	With a copy to:
	 	Mr. Carl C. Hanernann
	

	 	 	 	Jones, Walker, Waechter, Poitevent,
	

	 	 	 	Carrexc & Demegre
	

	 	 	 	201 St. Charles Avenue, 51st Floor New
	

	 	 	 	Orleans, Louisiana 70170
	 
	 	 	 	 
	

	 	To the Warrantholders or
	 	At the addresses of such
	

	 	holders of Warrant Shares:
	 	holders as they appear on the records of
	

	 	 	 	the Company

 

 

	 	 	 	 	 
	 

	 	With a copy to:
	 	Mr. Thomas A. Cole
	

	 	 	 	Sidley & Austin
	

	 	 	 	One First National Plaza
	

	 	 	 	Chicago, Illinois 60603

          c. Assignment. This Warrant shall be binding upon and inure to the
benefit of the Company, the Warrantholders and the holders of Warrant Shares
and the permitted successors, assigns and transferees of the Company, the
Warrantholders and the holders of Warrant Shares.

          d. Attorneys’ Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Warrant, or because of an
alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Warrant, the successful or prevailing party or
parties shall be entitled to recover such reasonable attorneys’ fees and other
costs incurred in that action or proceeding, in addition to any other relief to
which it or they may be entitled, as may be ordered in connection with such
proceeding.

          e. Entire Agreement; Amendments and Waivers. This Warrant sets forth the
entire understanding of the parties with respect to the transactions
contemplated hereby. The failure of any party to seek redress for the
violation or to insist upon the strict performance of any term of this Warrant
shall not constitute a waiver of such term and such party shall be entitled to
enforce such term without regard to such forbearance. This Warrant may be
amended, the Company may take any action herein prohibited or omit to take
action herein required to be performed by it, and any breach of or compliance
with any covenant, agreement, warranty or representation may be waived, only if
the Company has obtained the written consent or written waiver of the majority
in interest of the Warrantholders, and then such consent or waiver shall be
effective only in the specific instance and for the specific purpose for which
given.

          f. Severability. If any term of this Warrant as applied to any person or
to any circumstance is prohibited, void, invalid or unenforceable in any
jurisdiction, such term shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or

 

 

invalidity without in any way affecting any other term of this Warrant or
affecting the validity or enforceability of this Warrant or of such provision
in any other jurisdiction.

          g. Headings. The headings in this Warrant are inserted only for
convenience of reference and shall not be used in the construction of any of
its terms.

          h. Nonwaiver; Cumulative Remedies. No course of dealing or any delay or
failure to exercise any right hereunder on the part of any Warrantholder or any
holders of Warrant Shares shall operate as a waiver of such right or otherwise
prejudice the rights, powers or remedies of such Warrantholder or such holders
of Warrant Shares. The rights and remedies provided in this Warrant are
cumulative and are in addition to all rights and remedies which each
Warrantholder and each holder of Warrant Shares may have in law or in equity or
by statute or otherwise.

          i. Construction. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, the singular include
the plural, and the part include the whole; the term including is not limiting,
and the term or has the inclusive meaning represented by the phrase “and/or.”
The words “hereof,” “herein,” “hereby,” “hereunder,” and other similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer on the 15th day of November, 1990.

	 	 	 	 	 
	 	Company:

AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Barry D. LeBlanc, President 	 
	 	 	 	 
	 

 

 

EXHIBIT A

NOTICE OF EXERCISE FORM

(To be executed only upon partial or full

exercise of the within Warrant)

     The undersigned registered holder of the within Warrant irrevocably
exercises the within Warrant for and purchases             shares of Common Stock
of Akorn, Inc. and herewith makes payment therefor in the amount of $            ,
all at the price and on the terms and conditions specified in the within
Warrant, and requests that a certificate (or             certificates in
denominations of            shares) for the shares of Common Stock of Akorn, Inc.
hereby purchased be issued in the name of and delivered to (choose one) (a) the
undersigned or (b)                , whose address is                and, if
such shares of Common Stock shall not include all the shares of Common Stock
issuable as provided in the within Warrant, that a new Warrant of like tenor
for the number of shares of Common Stock of Akorn, Inc. not being purchased
hereunder be issued in the name of and delivered to (choose one) (a) the
undersigned or (b)             , whose address is

Dated:                    , 19     

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	(Signature of Registered Holder) 	 
	 	 	Signature Guaranteed: 	 
	 

 

 

EXHIBIT B

CONSULTING AGREEMENT

     This CONSULTING AGREEMENT, dated as of November 15, 1990, is entered into
by and between EJ Financial Enterprises, Inc., a Delaware corporation (“EJ
Financial”), and Akorn, Inc., a Louisiana corporation (“Akorn”).

WITNESSETH

     WHEREAS, Akorn has requested that EJ Financial provide to Akorn certain
consulting services described herein commencing on the date hereof; and

     WHEREAS, EJ Financial is willing to provide to Akorn such services on the
terms and conditions herein provided.

     NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:

          1. Consulting Services. Akorn hereby retains EJ Financial as an independent
consultant to provide management consulting services relating to strategic
corporate objectives of Akorn (the “Consulting Services”), and EJ Financial
hereby agrees to provide Akorn with such Consulting Services, upon the terms
and subject to the conditions hereinafter set forth.

          2. Position and Duties. EJ Financial shall serve only as a consultant to
Akorn with respect to the Consulting Services. Nothing herein shall be deemed
to cause EJ Financial or any of its directors, officers or employees to be
considered an agent of Akorn. Akorn acknowledges that EJ Financial and its
directors, officers and employees may provide consulting services to other
entities, serve as members of certain other corporate boards of directors and
engage in other business activities.

          3. Term. The term of the consulting arrangement hereunder shall commence on
the date hereof and continue until December 31, 1993 (the “Term”), unless
earlier terminated pursuant to Section 6.

          4. Compensation. In consideration for the Consulting Services provided by EJ
Financial hereunder, Akorn shall pay to EJ Financial a fixed monthly consulting
fee equal to $4,167 per calendar month ($50,000 per year) payable in arrears on
the last business day of each month during the Term (collectively, the “Monthly
Payments”). In the case of any month in which this Agreement is not in effect
for the full month, such consulting fee shall he prorated based on the number
of days in the month with respect to which this Agreement is in effect.

          5. Akorn shall promptly reimburse EJ Financial for all reasonable expenses
incurred by EJ Financial or any of its directors, officers or employees in the

 

 

performance of its duties hereunder, including, but not limited to, travel
expenses between Chicago, Illinois and New Orleans, Louisiana, and living
expenses while away from home in the service of Akorn; provided, that such
expenses in excess of $200 shall have been approved in writing by John Kapoor,
Barry LeBlanc and Doyle Gaw prior to the incurrence thereof. In addition, EJ
Financial shall comply with such requirements with respect to expenses as Akorn
may reasonably establish in writing from time to time in respect of Akorn’s
executive officers.

          6. Termination. This Consulting Agreement shall commence on the date hereof
and continue until all of the parties’ obligations hereunder have been
fulfilled, except that this Consulting Agreement (other than Sections 7 and 8)
shall terminate 30 days after the delivery by either party of a notice to the
effect that such party has determined to terminate this Consulting Agreement.
EJ Financial shall not be entitled to any compensation or severance pay or
other termination benefits upon any termination of this Consulting Agreement;
provided, however, that EJ Financial shall be entitled to receive any Monthly
Payments owed to it by Akorn with respect to any period prior to such
termination. Termination pursuant to this Section 6 shall be the sole remedy
of Akorn for a failure of EJ Financial to provide the Consulting Services as
described in Section 1 hereof.

          7. Confidential Information. EJ Financial recognizes and acknowledges that
certain assets of Akorn and its affiliates, including, without limitation,
information regarding customers, pricing policies, methods of operation,
proprietary computer programs, sales, products, profits, costs, markets, key
personnel, formulae, product applications, technical processes, trade secrets
and any reports prepared by EJ Financial or any of its directors, officers or
employees delivered to Akorn hereunder (hereinafter called “Confidential
Information”) are valuable, special, and unique assets of Akorn and its
affiliates. Neither EJ Financial nor any director, officer or employee thereof
shall, during or after the term of this Agreement, disclose any part of the
Confidential Information to any person, firm, corporation, association, or any
other entity for any reason or purpose whatsoever, directly or indirectly,
except as may be directed in writing by the management of Akorn, unless and
until such Confidential Information becomes publicly available other than as a
consequence of the breach by EJ Financial or any director, officer or employee
thereof of their confidentiality obligations hereunder or unless and only to
the extent that such disclosure is required by applicable law.

          8. Indemnification. In the event that EJ Financial or any director, officer
or employee thereof becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, any
threatened, pending or completed claim, action, suit or proceeding or
investigation, whether civil, criminal, administrative, investigative or
otherwise (the “Indemnification Claim”) by reason of or arising out of this
Consulting Agreement, Akorn shall indemnify, defend and hold harmless EJ
Financial or such director, officer or employee thereof to the fullest extent
permitted by law as soon as practicable but in any event no later than thirty
days after written demand is presented to Akorn, against any and all losses,
claims, damages, expenses, liabilities or judgments, fines, penalties and
amounts paid in settlement (including all interest, assessments and other
charges paid or payable in connection with

 

 

or in respect of such losses, claims, damages, expenses, liabilities or
judgments, fines, penalties and amounts paid in settlement) of or arising from
such Indemnification Claim. For purposes of this Section 8, the terms
“expenses” shall include attorney’s fees and all other costs, expenses and
obligations, in each case reasonably paid or incurred in connection with
investigating, defending, prosecuting, being a witness in or participating in
any Indemnification Claim. If so requested by EJ Financial or any director,
officer or employee thereof in writing, Akorn shall advance (within two
business days of such request) any and all such expenses to EJ Financial or
such director, officer or employee thereof.

          Notwithstanding the foregoing, (i) with respect to any Indemnification
Claim brought or made by Akorn or an affiliate thereof, Akorn shall have no
obligation to indemnify EJ Financial or any director, officer or employee
thereof in the event that it is finally judicially determined that such
Indemnification Claim arose primarily out of the gross negligence or
intentional misconduct of EJ Financial or such director, officer or employee
thereof and (ii) with respect to any Indemnification Claim brought or made by
any person or entity other than Akorn or an affiliate thereof, Akorn shall have
no obligation to indemnify EJ Financial or any director, officer or employee
thereof in the event that it is finally judicially determined that such
Indemnification Claim arose primarily out of the intentional misconduct of EJ
Financial or such director, officer or employee thereof.

          In the event that Akorn has advanced expenses to EJ Financial or any
director, officer or employee thereof and it is finally judicially determined,
in the case of any Indemnification Claim referred to in clause (i) of the
preceding paragraph, that such Indemnification Claim arose primarily out of the
gross negligence or intentional misconduct of EJ Financial or such director,
officer or employee thereof, or, in the case of any Indemnification Claim
referred to in clause (ii) of the preceding paragraph, that such
Indemnification claim arose primarily out of the intentional misconduct of EJ
Financial or such director, officer or employee thereof, EJ Financial hereby
undertakes promptly, but in no event later than thirty days following such
final judicial determination, to reimburse Akorn for any such expenses
advanced.

          9. General.

          Notices. All notices and other communication hereunder shall be in
writing or by written telecommunication, and shall be deemed to have been duly
given when delivered by United States certified or registered mail, return
receipt requested, postage prepaid to the relevant address set forth below, or
to such other address as the recipient of such notice or communication shall
have specified to the other party hereto in accordance with this Section 9(a),
except that no notice of change of address shall be effective until receipt
thereof:

if to Akorn, to:

 

 

100 Akorn Drive

Abita Springs, LA. 70420

Attn: Barry LeBlanc, President

with a copy to:

Jones, Walker, Waechter,

Poitevent, Carrere & Denegre

Place St. Charles

201 St. Charles Avenue

New Orleans, LA 70170

Attn: Carl C. Hanemann, Esq.

if to EJ Financial, to:

225 East Deerpath Drive

Suite 250

Lake Forest, IL 60045

Attn: John N. Kapoor, President

with a copy to:

Sidley & Austin

One First National Plaza

Chicago, IL 60603

Attn: Thomas A. Cole, Esq.

          a. Severability. If any provision of this Consulting Agreement is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired and such remaining provisions shall remain in full
force and effect.

          b. Waivers. No delay or omission by either party hereto in exercising any
right, power or privilege hereunder shall impair such right, power or
privilege, nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any other
right, power or privilege. No waiver by any party hereto at any time of any
breach by any other party hereto of, or compliance with, any condition or
provision of this consulting 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 or subsequent time.

          c. Counterparts. This Consulting Agreement may be executed in two
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

 

     d. Entire Agreement. This Consulting Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and no agreements or
representations, oral or otherwise, express or implied with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Consulting Agreement.

     e. Amendment. No provisions of this Consulting Agreement may be modified,
waived or discharged unless such waiver, amendment, modification or discharge
is agreed to in writing signed by each of the parties hereto.

     f. Governing Law. The interpretation, validity and performance of this
Consulting Agreement shall be construed and governed in accordance with the
laws of the State of Louisiana, regardless of the law that might be applied
under applicable principles of conflicts of laws.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have caused this Consulting Agreement to be duly executed as of the date
and year first above written.

	 	 	 	 	 
	 	AKORN, INC.

 	 
	 	By:  	 	 
	 	 	Doyle S. Gaw 	 
	 	 	Chairman of the Board 	 
	 
	 	EJ FINANCIAL ENTERPRISES, INC.

 	 
	 	By:  	 	 
	 	 	John N. Kapoor, 	 
	 	 	President 	 
	 

 

 

EXHIBIT D

[Letterhead of Jones, Walker, Waechter,

Poitevent, Carrere & Denegre]

November 15, 1990

To the John N. Kapoor Trust

dated September 20, 1989

Gentlemen:

     We have acted as counsel for Akorn, Inc., a Louisiana corporation
(“Akorn”), in connection with the negotiation, execution and delivery of the
following agreements and documents:

     (a) the Stock Purchase Agreement dated as of
November 15, 1990 (the “Agreement”) between Akorn
and the John N. Kapoor Trust dated September 20,
1989 (the “Trust”);

     (b) the Common Stock Purchase Warrant dated as
of November 15, 1990, in the form of Exhibit A to
the Agreement (the “Warrant”) executed and delivered
by Akorn;

     (c) the Consulting Agreement dated as of
November 15, 1990, in the form of Exhibit B to the
Agreement (the “Consulting Agreement”) between Akorn
and EJ Financial Enterprises, Inc.; and

     (d) the Stock Registration Rights Agreement
dated as of November 15, 1990, in the form of
Exhibit C to the Agreement (the “Stock Registration
Rights Agreement”) between Akorn and the Trust.

     All capitalized terms used herein without definition shall have the
meanings set forth in the Agreement.

     In rendering the following opinions, we have examined the executed
Warrant, executed counterparts of the Agreement, the Consulting Agreement and
the Stock Registration Rights Agreement, and such other records and documents
as we have deemed necessary for purposes of our opinions hereafter expressed.
As to various questions of fact material to such opinions, we have relied upon
certificates of public officials and certificates of officers of Akorn which
refer to the Agreement, which are

 

 

dated the date hereof and which are attached hereto.

     Based upon such examination and review and having due regard for such
legal considerations as we deem relevant, we are of the opinion that:

     1. Akorn is a corporation duly organized, validly existing and in good
standing under the laws of the State of Louisiana, has the corporate power to
own its property and carry on its business as now being conducted, and has the
corporate power and authority to enter into the Agreement, the Consulting
Agreement and the Stock Registration Rights Agreement and to execute and
deliver the Warrant.

     2. The execution and delivery of the Agreement, the Warrant, the
Consulting Agreement and the Stock Registration Rights Agreement and the
performance by Akorn of its obligations thereunder have been duly authorized by
all necessary corporate action, and the Agreement, the Warrant, the consulting
Agreement and the Stock Registration Rights Agreement have each been duly
executed and delivered by Akorn and each constitutes the legal, valid and
binding obligation of Akorn, enforceable in accordance with its terms, subject
only to applicable bankruptcy, insolvency, moratorium or similar laws affecting
the rights of creditors generally and to general principles of equity.

     3. The Stock has been duly authorized and is validly issued, fully paid,
non-assessable and free of preemptive rights. There are no transfer or similar
taxes with respect to the sale and delivery to you of the Stock or the Warrant.
The shares of common stock of Akorn issuable upon the exercise of the Warrant
have been (i) duly and validly authorized and reserved for issuance upon such
exercise and (ii) when issued upon such exercise in accordance with the terms
of the Warrant will have been duly and validly issued and fully paid and will
be non-assessable and free of preemptive rights.

     4. Akorn has duly authorized the exemption of any business combination
involving transactions with the Trust or John Kapoor or any other beneficiaries
of the Trust or any of its, his or their existing or future affiliates from the
requirements of Louisiana R.S. 12:133, and such authorization is effective to
exempt any such business combination from such requirements.

     5. The acquisition by the Trust of the Stock, together with the Warrant
and the right to acquire shares of common stock of Akorn as contemplated
thereby, does not constitute a “control share acquisition” within the meaning
of Louisiana R.S. 12:135 through 12:140.2., presuming that the Trust, upon its
acquisition of the Stock and of the Warrant, (i) will not own any other shares
of Akorn common stock and (ii) may not exercise or direct the exercise,
directly or indirectly, alone or as part of a group, of voting power with
respect to any other shares of Akorn common stock.

     6. There is no charter, by-law or capital stock provision of Akorn, and no
provision of any indenture or agreement to which Akorn is a party or under
which Akorn is obligated, nor is there any statute, rule or regulation, or any
judgment, decree or order of any court or agency, known to us to be binding on
Akorn which would be

 

 

contravened by the execution and delivery by Akorn of the Agreement, the
Warrant, the Consulting Agreement or the Stock Registration Rights Agreement or
by the performance by Akorn of any provision, condition, covenant or other term
thereof.

     The opinions expressed herein are limited to the federal laws of the
United States and to the internal laws of the State of Louisiana as applied to
commercial transactions within that state.

     This opinion is rendered solely for your benefit and the benefit of the
beneficiaries of the Trust in connection with the subject transactions and may
not be relied upon by you or such beneficiaries for any other purpose or
furnished to, used, circulated, quoted or relied upon by any other person for
any purpose without our prior written consent.

	 	 	 
	 

	 	Very truly yours,

 

 

EXHIBIT E

     Certain shares of capital stock of Akorn may have been issued in violation
of preemptive rights. In the event that Akorn shall make a cash payment or
payments to any third party (including payments of Akorn’s expenses) as a
result of any such alleged or actual violation, Akorn shall deliver to the
Trust (and, in the event of a distribution of shares of common stock of Akorn
owned by the Trust, or an assignment of its rights under the Warrant or the
Warrant, to beneficiaries of the Trust who are members of Kapoor’s immediate
family or up to eight employees of EJ Financial, such distributees or
assignees) that number of additional shares of common stock of Akorn determined
by (i) dividing the amount of each such cash payment by the Current Market
Value and (ii) multiplying the result by the percentage of the outstanding
common stock of Akorn then beneficially owned by the Trust and such
distributees and assignees, assuming full exercise of the Warrant (the
“Applicable Percentage”). In the event that Akorn shall from time to time
issue shares of its common stock to any third party as a result of any such
alleged or actual violation, Akorn shall deliver to the Trust (and such
distributees and assignees) that number of additional shares of common stock of
Akorn such that after each such issuance the ratio of the number of shares of
common stock of Akorn held by the Trust (and such distributees and assignees)
as compared to the total number of shares of common stock of Akorn then
outstanding, in each case assuming exercise of the Warrant, shall be equal to
the ratio of the number of shares of common stock of Akorn held by the Trust
(and such distributees and assignees) prior to such issuance as compared to the
total number of shares of common stock of Akorn outstanding prior to such
issuance. In the event that Akorn shall from time to time make any payment in
property other than in cash or shares of its common stock to any third party as
a result of any such alleged or actual violation, Akorn shall deliver to the
Trust (and such distributees and assignees) that number of additional shares of
common stock of Akorn determined by (1) dividing the Fair Value (as defined in
the Warrant) of such other property by the Current Market Value and (ii)
multiplying the result by the Applicable Percentage. In connection with
issuing any such additional shares in satisfaction of its obligations
hereunder, Akorn shall take all actions necessary to cause (i) the receipt of
such shares not to constitute a control share acquisition (as defined in
Louisiana R.S. 12:135), (ii) the shares received to enjoy full voting and
economic rights attributable to the Akorn common stock generally, (iii) the
percentage limitations in Sections 2(i) and 4(h) of the Stock Purchase
Agreement to be increased to the percentage of the outstanding common stock of
Akorn to be beneficially owned by the. Trust (and such distributees and
assignees), assuming full exercise of the Warrant, immediately after such
issuance and (iv) Paragraph 4(g) of the Warrant to be amended so that the
number of shares permitted to be tendered pursuant to the second sentence of
such Paragraph is increased to include all additional shares to be issued to
the Trust (and such distributees and assignees) pursuant hereto. Current
Market Value as used herein shall be determined as follows:.

	 	(i)	 	If the common stock of Akorn is listed on a national
securities exchange, is admitted to unlisted trading privileges on
such exchange or is traded on the NASDAQ/National Market System, the
Current Market Value shall be

 

 

	 	 	 	the average of the closing prices per share of the common stock as
reported in The Wall Street Journal for the last 20 business days
prior to the earlier of (i) the date of payment to such third
party and (ii) the date of the public announcement of such payment
(the “Valuation Date”); or
	 
	 	(ii)	 	If the common stock of Akorn is not so listed, admitted or
traded, the Current Market Value shall be the average bid and asked
prices for the last 20 business days prior to the Valuation Date, as
furnished by two members of the National Association of Securities
Dealers, Inc. selected for that purpose from time to time by Akorn
and reasonably acceptable to the Trust; or
	 
	 	(iii)	 	If no such bid and asked prices are available as set forth
above, Current Market Value shall be the Fair Value (as defined in
Section 4(b) of the Warrant) per share of common stock of Akorn on
the Valuation Date.

Akorn agrees that each member of the Board of Directors of Akorn who
beneficially owns or who at any time in the past beneficially owned shares with
preemptive rights which may have been violated shall, by November 30, 1990,
execute and deliver to Akorn a waiver of claims in respect of such preemptive
rights with respect to all such shares. Akorn agrees that, by February 15,
1991, it shall either (i) demonstrate to the satisfaction of the Trust that the
potential financial exposure to Akorn of unwaived violations of preemptive
rights is not material to Akorn or (ii) provide evidence satisfactory to the
Trust that Akorn has received binding waivers of claims from persons holding in
excess of 60% (in value) of such claims relating to violations of preemptive
rights. In the event Akorn shall fail to satisfy the obligations of the
preceding sentence, the Trust shall be entitled, at its election, to rescind in
full the transactions contemplated by the Stock Purchase Agreement; provided,
however, that upon such rescission, the Trust shall not be required to return
any expense reimbursements paid under Section 7(k) and the provisions of
Section 2(c) shall not terminate.

 

 

EXHIBIT F

AKORN, INC.

SUMMARY OF STOCK OPTION AND PURCHASE PLANS

AS OF NOVEMBER 13, 1990

	 	 	 	 	 	 	 	 	 
	 	 	ISSUED	 	Issued
	 	 	AS OF	 	As of
	PLAN DESCRIPTION
	 	11/13/90
	 	11/13/90

	STOCK OPTION PLANS:
	 	 	 	 	 	 	 	 
	1988 Incentive Compensation Program
	 	 	243,469	 	 	 	756,531	 
	Stock Option Plan for Directors
	 	 	130,000	 	 	 	870,000	 
	STOCK PURCHASE PLAN:
	 	 	 	 	 	 	 	 
	Employee Stock Purchase Plan
	 	 	6,880	 	 	 	993,120	 
	 
	 	 	
 	 	 	 	
 	 
	 
	 	 	380,349	 	 	 	2,619,651	 
	 
	 	 	
 	 	 	 	
 	 

 

 

AKORN, INC.

STOCK OPTION ROLL FORWARD

AS OF NOVEMBER 13, 1990

1991 Activity

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	OPTION	 	EXERCISE	 	ISSUE	 	EXPIRATION	 	Q/S AT	 	ISSUED	 	EXPIRED/	 	Q/S AT	 	 	 	 
	HOLDER
	 	PRICE
	 	DATE
	 	DATE
	 	6/30/90
	 	
	 	EXERCISED
	 	11/13/90
	 	 	 	 
	Leblanc, B.
	 	 	2.0000	 	 	 	 	 	 	 	11/7/92	 	 	 	50,000	 	 	 	 	 	 	 	 	 	 	 	50,000	 	 	 	 	 
	Leblanc, B.
	 	 	1.7500	 	 	 	 	 	 	 	11/19/98	 	 	 	105,669	 	 	 	 	 	 	 	 	 	 	 	105,669	 	 	 	 	 
	Leblanc, B
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Cummingham, J.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Yazbeck, J
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Ellis, G.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Schimek, R.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Campbell, E.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Turner, D.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Noguchi, H.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Gaw, D.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Yannuzzi, L.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Moel, S.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Hoffman, L
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Bruhl, D.
	 	 	1.9375	 	 	 	 	 	 	 	11/3/98	 	 	 	10,000	 	 	 	 	 	 	 	 	 	 	 	10,000	 	 	 	 	 
	Leblanc, B.
	 	 	1.5000	 	 	 	8/26/89	 	 	 	6/26/99	 	 	 	23,352	 	 	 	 	 	 	 	 	 	 	 	23,352	 	 	 	 	 
	Leblanc, B.
	 	 	1.5000	 	 	 	10/25/90	 	 	 	10/25/90	 	 	 	 	 	 	 	14,448	 	 	 	 	 	 	 	14,448	 	 	 	 	 
	Leblanc, B.
	 	 	1.5000	 	 	 	10/25/90	 	 	 	10/25/95	 	 	 	 	 	 	 	50,000	 	 	 	 	 	 	 	50,000	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	
 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	309,021	 	 	 	64,448	 	 	 	0	 	 	 	373,469

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