Common use of Adjustment of Exercise Price upon Issuance of Common Stock Clause in Contracts

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if and whenever during the term of this Warrant the Company issues or sells Common Stock, options for common stock, or convertible securities for a consideration per share (the “New Exercise Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Exercise Price. For the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units or convertible securities issued or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basis, the purpose of which is not to raise additional capital. Notwithstanding the foregoing, any Common Stock issued or issuable to raise capital for the Company or its subsidiaries, directly or indirectly, in connection with any transaction contemplated by clause (ii) above, including, without limitation, securities issued in one or more related transactions or that result in similar economic consequences, shall not be deemed to be Excluded Securities.

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if and whenever during the term of this Warrant the Company issues or sells Common Stock, options for common stock, or convertible securities for a consideration per share (the “New Exercise Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Exercise Price. For the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units or convertible securities issued or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basis, the purpose of which is not to raise additional capital. Notwithstanding the foregoing, any Common Stock issued or issuable to raise capital for the Company or its subsidiaries, directly or indirectly, in connection with any transaction contemplated by clause (ii) above, including, without limitation, securities issued in one or more related transactions or that result in similar economic consequences, shall not be deemed to be Excluded Securities. Provided, however, no adjustment shall occur under this Section 7(a) as a result of the issuance of that certain Convertible Promissory Note by the Company to Holder as of an even date herewith.

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if and whenever during the term of this Warrant the Company issues or sells Common Stock, options for common stock, or convertible securities for a consideration per share (the “New Exercise Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Exercise Price. For the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units or convertible securities issued Stock of the Company issuable pursuant to warrants and options outstanding as of the date hereof or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basis, pursuant to presently existing benefit plans of the purpose of which is not to raise additional capital. Notwithstanding the foregoing, any Common Stock issued or issuable to raise capital for the Company or its subsidiaries, directly or indirectly, in connection with any transaction contemplated by clause (ii) aboveCompany, including, without limitation, securities issued in one the Akorn, Inc. Employee Stock Purchase Plan, as amended (the "Purchase Plan"), the Amended and Restated Akorn, Inc. 1988 Incentive Compensation Program, as heretofore amended and which is proposed for further amendment and approval by Company shareholders at their 2001 annual meeting (the "Incentive Plan"), and the 1991 Stock Option Plan for Directors (the "Directors Plan"), if and whenever after the date hereof the Company shall issue or more related transactions sell Additional Shares of Common Stock (as defined below) without consideration or that result in similar economic consequencesfor a consideration per share equal to the greater of (i) the Exercise Price and (ii) the Fair Value (as defined below) per share (except upon exercise of this Warrant), successively upon each such issuance or sale, the Exercise Price immediately prior to such issuance or sale of such shares shall be reduced to the lowest price determined by multiplying each such Exercise Price by a fraction, (x) 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 (y) 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 $.01 per share, but any such lesser adjustment shall be carried forward and shall be made at the time and together with the new subsequent adjustment which, together with any adjustments so carried forward, shall amount to $.01 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. The provisions of this Paragraph 4(b) shall not be deemed apply to be Excluded Securities.any Additional Shares of Common Stock that 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:

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if (a) (i) If and whenever during after the term of this Warrant date hereof the Company issues shall issue or sells sell any Common Stock, options Stock for common stock, no consideration or convertible securities for a consideration per share (less than the “New Exercise Price”) less than a price equal to the Exercise Price in effect immediately prior to such issue, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after forthwith upon such Dilutive Issuanceissue or sale, the Exercise Price then in effect shall be reduced (but not increased, except as otherwise specifically provided in SECTION 3.2 hereof), to the price (calculated to the nearest one-ten thousandth of a cent) determined by dividing (x) an amount equal to the New Exercise Price. For sum of (i) the avoidance aggregate number of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units Stock Outstanding immediately prior to such issue or convertible securities issued sale multiplied by the consideration received by the Company upon such issuance or issuable (i) in connection with any approved stock plan and sale on a per share basis plus (ii) the consideration received by the Company upon such issue or sale by (y) the aggregate number of shares of Common Stock Outstanding immediately after such issue or sale. (ii) Notwithstanding the provisions of this SECTION 3.2, no adjustment shall be made in connection with mergersthe Exercise Price in the event that the Company issues, acquisitionsin one or more transactions, strategic licensing arrangements(A) Common Stock or Convertible Securities upon exercise of any options issued to officers, strategic business partnerships directors or joint venturesemployees of the Company pursuant to a stock option plan or an employment, severance or consulting agreement as now or hereafter in effect, in each case with non-affiliated third parties approved by the Board of Directors (provided that the aggregate number of shares of Common Stock which may be issuable, including options issued prior to the date hereof, under all such employee plans and agreements shall at no time exceed the number of such shares of Common Stock that are issuable under currently effective employee plans and agreements); (B) Common Stock upon exercise of the Warrants or any other Warrant issued pursuant to the terms of the Agreement or otherwise issued to the Holder; (C) Common Stock upon exercise of any stock purchase Warrant or option (other than the options referred to in clause "(A)" above) or other convertible security outstanding on an arm’s-length basis, the purpose date hereof; (D) Common Stock upon conversion of which is not to raise additional capital. Notwithstanding the foregoing, any Note; or (E) Common Stock issued or as consideration in acquisitions. In addition, for purposes of calculating any adjustment of the Exercise Price as provided in this SECTION 3.2, all of the shares of Common Stock issuable pursuant to raise capital for any of the Company or its subsidiariesforegoing shall be assumed to be Outstanding prior to the event causing such adjustment to be made. (b) For purposes of this SECTION 3.2, directly or indirectly, in connection with any transaction contemplated by clause (iithe following SECTIONS 3.2(B)(I) above, including, without limitation, securities issued in one or more related transactions or that result in similar economic consequencesTO 3.2(B)(V) inclusive, shall not be deemed to be Excluded Securities.applicable:

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded SecuritiesIf, if and whenever during the term of this Warrant period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Issue Date, the Company issues or sells Common Stock, options for common stocksells, or is deemed to have issued or sold, any shares of Common Stock (other than the Debenture Shares or Warrant Shares (each as defined in the Purchase Agreement) or shares of Common Stock deemed to have been issued by the Company in connection with a Stock Plan (as defined below), shares of Common Stock issuable upon the exercise of any options or warrants outstanding on the date hereof or upon conversion of convertible securities outstanding on the date hereof, in each case as listed in Schedule 2.1(c) of the Purchase Agreement (as defined below), shares of Common Stock issued or deemed to have been issued in a Strategic Venture (as defined below), or shares of common Stock issued or deemed to have been issued as consideration for an acquisition by the Company of a division, assets or business (or stock constituting any portion thereof) from another person) for a consideration per share (the “"New Exercise Issuance Price”") less than a price equal to the Exercise Price in effect immediately prior to such issue$26.95, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuanceissue or sale, the Exercise Price then in effect shall be reduced to an amount equal to 120% of the New Exercise Issuance Price. For A "Strategic Venture" shall mean a venture between the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units Company and a pharmaceutical or convertible securities issued biotechnology company or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basisAffiliate thereof, the primary purpose of which is not to raise additional capitalcapital in the form of equity (including without limitation through the issuance of warrants, convertible securities, phantom stock rights, stock appreciation rights or other rights with equity features) and pursuant to which the Company contributes or issues securities of the Company valued at less than 50% of the entire contribution of the Company. Notwithstanding If the foregoingRegistered Holder and the Company cannot agree on the value of the components of such contribution, the last two sentences of subsection (F)(I) entitled "Calculation of Consideration" shall apply. If, during the period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Issue Date, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than Debenture Shares or Warrant Shares, shares of Common Stock deemed to have been issued or issuable to raise capital for by the Company or its subsidiaries, directly or indirectly, in connection with a Stock Plan or shares of Common Stock issuable upon the exercise of any transaction contemplated by clause (iioptions or warrants outstanding on the date hereof and listed in Schedule 2.1(c) aboveof the Purchase Agreement) then, includingfor purposes of determining the adjusted Exercise Price under this Section 6(h)(i), without limitation, securities issued in one or more related transactions or that result in similar economic consequences, the following shall not be deemed to be Excluded Securities.applicable:

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded SecuritiesIf, if and whenever during the term of this Warrant period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Authorization Date, the Company issues or sells Common Stock, options for common stocksells, or is deemed to have issued or sold, any shares of Common Stock (other than the Debenture Shares or Warrant Shares (each as defined in the Purchase Agreement) or shares of Common Stock deemed to have been issued by the Company in connection with a Stock Plan (as defined below), shares of Common Stock issuable upon the exercise of any options or warrants outstanding on the date hereof or upon conversion of convertible securities outstanding on the date hereof, in each case as listed in Schedule 2.1(c) of the Purchase Agreement (as defined below), shares of Common Stock issued or deemed to have been issued in a Strategic Venture (as defined below), or shares of common Stock issued or deemed to have been issued as consideration for an acquisition by the Company of a division, assets or business (or stock constituting any portion thereof) from another person) for a consideration per share (the “"New Exercise Issuance Price”") less than a price equal to the Exercise Price in effect immediately prior to such issue$10.00, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuanceissue or sale, the Exercise Price then in effect shall be reduced to an amount equal to 120% of the New Exercise Issuance Price. For A "Strategic Venture" shall mean a venture between the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units Company and a pharmaceutical or convertible securities issued biotechnology company or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basisAffiliate thereof, the primary purpose of which is not to raise additional capitalcapital in the form of equity (including without limitation through the issuance of warrants, convertible securities, phantom stock rights, stock appreciation rights or other rights with equity features) and pursuant to which the Company contributes or issues securities of the Company valued at less than 50% of the entire contribution of the Company. Notwithstanding If the foregoingRegistered Holder and the Company cannot agree on the value of the components of such contribution, the last two sentences of subsection (F)(I) entitled "Calculation of Consideration" shall apply. If, during the period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Authorization Date, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than Debenture Shares or Warrant Shares, shares of Common Stock deemed to have been issued or issuable to raise capital for by the Company or its subsidiaries, directly or indirectly, in connection with a Stock Plan or shares of Common Stock issuable upon the exercise of any transaction contemplated by clause (iioptions or warrants outstanding on the date hereof and listed in Schedule 2.1(c) aboveof the Purchase Agreement) then, includingfor purposes of determining the adjusted Exercise Price under this Section 6(h)(i), without limitation, securities issued in one or more related transactions or that result in similar economic consequences, the following shall not be deemed to be Excluded Securities.applicable:

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded Securities, if and whenever If at any time during the term of this Warrant Exercise Period, the Company issues or sells Common Stock, options for common stocksells, or convertible securities is deemed to have issued or sold, any shares of Common Stock (other than the Underlying Shares (as defined in the Purchase Agreement) or shares of Common Stock deemed to have been issued by the Company in connection with an Approved Stock Plan (as defined below), shares of Common Stock issuable upon the exercise of any options or warrants outstanding on the date hereof and listed in Schedule 2.1(c) of the Purchase Agreement (as defined below), shares of Common Stock issued or deemed to have been issued in a Strategic Venture (as defined below), or shares of Common Stock issued or deemed to have been issued as consideration for an acquisition by the Company of a division, assets or business (or stock constituting any portion thereof) from another person) for a consideration per share (the “"New Exercise Issuance Price”") less than a price equal to the Exercise Conversion Price (as defined in the Debenture issued on the Tranche A Closing Date in connection with the transactions contemplated by the Purchase Agreement) in effect immediately prior to such issue, conversion, or sale or deemed issuance or sale (such Exercise Price sale, then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuanceissue or sale, the Exercise Price then in effect shall be reduced to an amount equal to 120% of the New Exercise Issuance Price. For A "Strategic Venture" shall mean a venture between the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units Company and a pharmaceutical or convertible securities issued biotechnology company or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basisAffiliate thereof, the primary purpose of which is not to raise additional capital. Notwithstanding capital in the foregoingform of equity (including without limitation through the issuance of warrants, any Common Stock issued convertible securities, phantom stock rights, stock appreciation rights or issuable other rights with equity features) and pursuant to raise capital for which the Company or its subsidiaries, directly or indirectly, in connection with any transaction contemplated by clause (ii) above, including, without limitation, securities issued in one or more related transactions or that result in similar economic consequences, shall not be deemed to be Excluded Securities.contributes or

Adjustment of Exercise Price upon Issuance of Common Stock. Except with respect to Excluded SecuritiesIf, if and whenever during the term of this Warrant period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Authorization Date, the Company issues or sells Common Stock, options for common stocksells, or is deemed to have issued or sold, any shares of Common Stock (other than the Debenture Shares or Warrant Shares (each as defined in the Purchase Agreement) or shares of Common Stock deemed to have been issued by the Company in connection with a Stock Plan (as defined below), shares of Common Stock issuable upon the exercise of any options or warrants outstanding on the date hereof or upon conversion of convertible securities outstanding on the date hereof, in each case as listed in Schedule 2.1(c) of the Purchase Agreement (as defined below), shares of Common Stock issued or deemed to have been issued in a Strategic Venture (as defined below), or shares of common Stock issued or deemed to have been issued as consideration for an acquisition by the Company of a division, assets or business (or stock constituting any portion thereof) from another person) for a consideration per share (the “"New Exercise Issuance Price”") less than a price equal to the Exercise Price in effect immediately prior to such issue$10.00, conversion, or sale or deemed issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive Issuanceissue or sale, the Exercise Price then in effect shall be reduced to an amount equal to 120% of the New Exercise Issuance Price. For A "Strategic Venture" shall mean a venture between the avoidance of doubt, if the New Exercise Price is greater than the Applicable Price, there shall be no adjustment to the Exercise Price. For the purposes of this Section 7(a), “Excluded Securities” means any shares of Common Stock, options, restricted stock units Company and a pharmaceutical or convertible securities issued biotechnology company or issuable (i) in connection with any approved stock plan and (ii) in connection with mergers, acquisitions, strategic licensing arrangements, strategic business partnerships or joint ventures, in each case with non-affiliated third parties and otherwise on an arm’s-length basisAffiliate thereof, the primary purpose of which is not to raise additional capitalcapital in the form of equity (including without limitation through the issuance of warrants, convertible securities, phantom stock rights, stock appreciation rights or other rights with equity features) and pursuant to which the Company contributes or issues securities of the Company valued at less than 50% of the entire contribution of the Company. Notwithstanding If the foregoingRegistered Holder and the Company cannot agree on the value of the components of such contribution, the last two sentences of subsection (F)(I) entitled "Calculation of Consideration" shall apply. If, during the period commencing on the Closing Date (as defined in the Purchase Agreement) through and including the date which is 12 months from the Authorization Date, the Company issues or sells, or is deemed to have issued or sold, any shares of Common Stock (other than Debenture Shares or Warrant Shares, shares of Common Stock deemed to have been issued or issuable to raise capital for by the Company or its subsidiaries, directly or indirectly, in connection with a Stock Plan or shares of Common Stock issuable upon the exercise of any transaction contemplated by clause (iioptions or warrants outstanding on the date hereof and listed in Schedule 2.1(c) aboveof the Purchase Agreement) then, including, without limitation, securities issued in one or more related transactions or that result in similar economic consequences, shall not be deemed to be Excluded Securities.for purposes of determining the adjusted Exercise Price