EXHIBIT 4.1
FIRST AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement (this "First
Amendment") is entered into as of October 7, 2003, by and between Akorn, Inc., a
Louisiana corporation (the "Company"), and The Xxxx X. Xxxxxx Trust dtd 9/20/89
(the "Investor").
RECITALS
A. The Company and the Investor entered into a Registration
Rights Agreement, dated as of July 12, 2001 (the "Original Registration Rights
Agreement"), pursuant to which the Company agreed, upon the terms and conditions
set forth in the Original Registration Rights Agreement, to provide registration
rights for Warrants (as defined in the Original Registration Rights Agreement)
and Common Stock (as defined in the Original Registration Rights Agreement)
issued to the Investor pursuant to the terms and conditions of the Original
Registration Rights Agreement to induce the Investor to loan the Company an
aggregate principal amount of $5,000,000.
B. The Company and AEG Partners LLC, an Illinois limited
liability company ("AEG"), entered into a Warrant and Registration Agreement,
dated as of June 18, 2003, (as amended, the "Warrant and Registration
Agreement"), pursuant to which the Company agreed, upon the terms and conditions
set forth in the Warrant and Registration Agreement, to register for sale by AEG
the shares of Common Stock (as defined in the recitals to the Warrant and
Registration Agreement) received by AEG upon exercise of the Warrants (as
defined in the recitals to the Warrant and Registration Agreement).
C. The Company and the Investor, Xxxxxx X. Xxxxxxx ("Xxxxxxx"),
Xxxxx Xxxxxx ("Xxxxxx"), Abu Xxxx ("Xxxx"), Xxxx Xxxxx ("Xxxxx"), Xxxx Xxxxxxxx
("Xxxxxxxx"), Xxxxxxx Xxxx ("Xxxx"), JRJay Public Investments, LLC ("JRJay"),
Pequot Healthcare Fund, L.P. ("Pequot Healthcare"), Pequot Healthcare
Institutional Fund, L.P. ("Pequot Institutional"), Pequot Healthcare Offshore
Fund, Inc. ("Pequot Offshore"), Pequot Scout Fund, L.P. ("Pequot Scout"), Pequot
Navigator Onshore Fund, L.P. ("Pequot Navigator"), Arjun Waney ("Waney"), Xxx
Xxxxx ("X. Xxxxx"), Xxxx X. Xxxx Living Trust ("Puri Trust"), Argent Fund
Management Ltd. ("Argent"), Kapwan Investments, LLP ("Kapwan") and Gulu Waney
("X. Xxxxx" and, collectively with the Investor, Przybyl, Trepel, Xxxx, Sabat,
Shanahan, Shah, JRJay, Pequot Healthcare, Pequot Institutional, Pequot Offshore,
Pequot Scout, Pequot Navigator, Waney, X. Xxxxx, Puri Trust, Argent and Kapwan,
referred to herein as the "Investors") entered into a Preferred Stock and Note
Purchase Agreement dated as of September 25, 2003 (the "Purchase Agreement"),
pursuant to which the Company agreed to redeem from the Investors the Senior
Debt Note (as defined in the recitals to the Purchase Agreement) in exchange for
(a) an aggregate of 257, 172 shares of the Company's Series A 6% Participating
Convertible Preferred Stock, par value $1.00 per share (the "Preferred Stock")
having the terms set forth in the Articles of Amendment to Articles of
Incorporation of the Company attached to the Purchase Agreement as Exhibit A,
(b) the Purchased Notes (as defined in the Purchase Agreement), (c) the
Preferred Stock Warrants (as defined in the recitals to the Purchase Agreement)
and (d) $6,000,000 in cash.
D. The Company and the Investor have agreed to amend the Original
Registration Rights Agreement to permit the Company to include, pursuant to the
terms and conditions of the Original Registration Rights Agreement, as amended,
in any Demand Registration (as defined in the Original Registration Rights
Agreement) those securities which are not Registrable Securities (as defined in
the Original Registration Rights Agreement) issued to (i) AEG pursuant to the
Warrant and Registration Agreement and (ii) the Investors pursuant to the
Purchase Agreement.
AGREEMENT
ACCORDINGLY, in consideration of the mutual covenants and agreements
set forth herein, the parties hereby agree as follows:
1. Definitions. Capitalized terms not otherwise defined in this
First Amendment shall have the meanings ascribed thereto in the Original
Registration Rights Agreement.
2. Amendment of Section 1(d). Section 1(d) of the Original
Registration Rights Agreement is hereby amended by deleting said Section 1(d) in
its entirety and substituting in lieu thereof, the following Section 1(d):
(d) Priority on Demand Registration. Except for piggyback
rights granted pursuant to the Warrant Purchase and Registration
Agreement dated as of June 18, 2003 by and between the Company and AEG
Partners LLC, an Illinois limited liability company (as amended, the
"Warrant Purchase and Registration Agreement"), and the Registration
Rights Agreement dated as of October 7, 2003, between the Company and
the Investor, Xxxxxx X. Xxxxxxx, Xxxxx Xxxxxx, Abu Xxxx, Xxxx Xxxxx,
Xxxx Xxxxxxxx, Xxxxxxx Xxxx, JRJay Public Investments, LLC, Pequot
Healthcare Fund, L.P., Pequot Healthcare Institutional Fund, L.P.,
Pequot Healthcare Offshore Fund, Inc., Pequot Scout Fund, L.P., Pequot
Navigator Onshore Fund, L.P., Arjun Waney, Xxx Xxxxx, Xxxx X. Xxxx
Living Trust, Argent Fund Management Ltd., Kapwan Investments, LLP and
Gulu Waney (the "Investors' Agreement"), the Company will not include
in any Demand Registration any securities which are not Registrable
Securities without the prior written consent of the holders of a
majority of the Registrable Securities included in such registration,
which consent will not be unreasonably withheld. If a Demand
Registration is an underwritten offering and the managing underwriters
advise the Company in writing (with a copy to each holder of
Registrable Securities requesting registration) that in their opinion
the number of Registrable Securities, securities requested to be
included in such registration pursuant to the Warrant Purchase and
Registration Agreement or the Investors' Agreement and, if permitted
hereunder, other securities requested to be included in such offering
exceeds the number of Registrable Securities, securities requested to
be included in such registration pursuant to the Warrant Purchase and
Registration Agreement or the Investors' Agreement and other
securities, if any, which can be sold therein without adversely
affecting the marketability of the offering, the Company will include
in such registration, prior to the inclusion of any securities which
are not Registrable Securities, the number of Registrable Securities
requested to be included which in the opinion of such underwriters can
be sold without adversely
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affecting the marketability of the offering, pro rata among the
respective holders of the Registrable Securities that each holder of
Registrable Securities has requested to be included in such
registration. Any persons other than holders of Registrable Securities
who participates in Demand Registrations which are not at the Company's
expense must pay their share of the Registration Expenses as provided
in paragraph 5 hereof.
3. Miscellaneous.
(a) No Amendment of Other Terms, Conditions and
Provisions of the Original Registration Rights Agreement. Except as expressly
amended hereby, all of the terms, conditions and provisions of the Original
Registration Rights Agreement shall remain unamended and in full force and
effect in accordance with its terms, and the Original Registration Rights
Agreement, as amended hereby, is hereby ratified and confirmed. The amendments
provided herein shall be limited precisely as drafted and shall not constitute
an amendment of any other term, condition or provision of the Original
Registration Rights Agreement.
(b) Entire Agreement. The Original Registration Rights
Agreement, as amended by this First Amendment, constitutes the entire agreement
and understanding between the parties relating to the subject matter hereof.
(c) No Inconsistent Amendments. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or violates the rights guaranteed to the holders of
Registrable Securities in this First Amendment.
(d) Remedies. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this First Amendment and that any party hereto shall have the
right to injunctive relief, in addition to all of its other rights and remedies
at law or in equity, to enforce the provisions of this First Amendment.
(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this First Amendment may be amended or waived only
upon the prior written consent of the Company and the holders of sixty-six and
two-thirds percent (66 2/3%) of the Registrable Securities.
(f) Successors and Assigns; Permitted Transfers. This
First Amendment shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns;
provided, however, it is understood and agreed that the Investor may assign its
rights hereunder only to Permitted Transferees (as defined below).
Notwithstanding the provisions of this First Amendment to the contrary, it is
understood and agreed that any holder of Registrable Securities may at any time
and from time to time without restriction transfer or recertificate all or a
part of such holder's Registrable Securities (i) to a nominee identified in
writing to the Company as being the nominee of or for such holder, and any
nominee of or for a beneficial owner of Registrable Securities identified in
writing to the Company as being the nominee of or for such beneficial owner may
from time to time transfer or
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recertificate all or a part of the Registrable Securities registered in the name
of such nominee but held as nominee on behalf of such beneficial owner, to such
beneficial owner, (ii) to an affiliate of such holder, (iii) to an estate
planning trust or other vehicle established by or for the benefit of such
holder, or (iv) to the immediate family of Xx. Xxxx X. Xxxxxx. The transfers or
recertifications described in this Section are sometimes referred to herein
collectively as "Permitted Transfers" and the recipient of Registrable
Securities in a permitted Transfer is sometimes referred to herein as a
"Permitted Transferee".
(g) Severability. Whenever possible, each provision of
this First Amendment shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this First Amendment is held
to be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this First Amendment.
(h) Counterparts. This First Amendment may be executed
simultaneously in two or more counterparts, any one of which need not contain
the signatures of more than one party, but all such counterparts taken together
shall constitute one and the same First Amendment. One or more counterparts of
this First Amendment may be delivered by facsimile, with the intention that
delivery by such means shall have the same effect as delivery of an original
counterpart thereof.
(i) Descriptive Headings. The descriptive headings of
this First Amendment are inserted for convenience only and do not constitute a
part of this First Amendment.
(j) Governing Law. All issues concerning this First
Amendment shall be governed by and construed in accordance with the laws of the
State of Illinois without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of Illinois.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Registration Rights Agreement as of the day and year first above
written.
AKORN, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Name Xxxxxxx X. Xxxxxxx
Title Senior Vice President, Chief Financial
Officer, Secretary and Treasurer
THE XXXX X. XXXXXX TRUST DATED
SEPTEMBER 20, 1989
By /s/ Xxxx. X. Xxxxxx
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Name Xxxx X. Xxxxxx
Title: Trustee
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