WAIVER AND CONSENT TO CREDIT AGREEMENT
WAIVER AND CONSENT TO CREDIT AGREEMENT
THIS AMENDMENT, WAIVER AND CONSENT TO CREDIT AGREEMENT (this “Waiver and Consent”) is
executed and delivered as of this 13th day of September, 2006 among LASALLE BANK NATIONAL
ASSOCIATION, as administrative agent (the “Administrative Agent”), the financial
institutions party hereto (the “Lenders”), AKORN, INC., a Louisiana corporation
(“Akorn”) and AKORN (NEW JERSEY), INC., an Illinois corporation (“Akorn New
Jersey”).
W I T N E S S E T H :
A. The Administrative Agent, Akorn, Akorn New Jersey and the Lenders entered into a Credit
Agreement dated as of October 7, 2003 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”). Capitalized terms used but not defined herein
shall have the meanings attributed to them in the Credit Agreement.
B. Akorn intends to (i) enter into that certain Securities Purchase Agreement dated as of
September 13, 2006 (the “Purchase Agreement”, a copy of which is attached hereto as
Exhibit A) with the investors named therein pursuant to which Akorn will issue Capital
Securities in Akorn as contemplated thereunder (the foregoing referred to herein in as the
“Transaction”).
C. The Companies have requested that the Administrative Agent and the Required Lenders consent
to the action to be taken by the Companies in connection with the Transaction with respect to the
Credit Agreement, subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
hereby agree as follows:
1. Waiver and Consent. Subject to the terms and conditions herein, the Required
Lenders hereby (a) consent to Akorn’s the issuance of the Capital Securities in accordance with the
Purchase Agreement and (b) waive any Event of Default which, if not for the execution of this
Waiver and Consent, would arise under Sections 13.1.1, 13.1.5(a) or 13.1.5(b) of the Credit
Agreement resulting solely from (A) the failure or inability to reduce the Revolving Commitment
Amount in violation of Section 6.1.2 of the Credit Agreement and (B) the Company’s issuance of
Capital Securities in violation of Sections 11.5(b) and 11.10 of the Credit Agreement;
provided, that the foregoing clauses (a) and (b) are expressly conditioned upon the
satisfaction of the conditions to effectiveness set forth in Section 3 hereof.
2. Representations and Warranties. To induce the Administrative Agent and the Lenders
to execute this Waiver and Consent, each Company jointly and severally represents and warrants to
the Administrative Agent and the Lenders as follows:
(a) Each Company is in good standing under the laws of its jurisdiction of formation
and in each jurisdiction where, because of the nature of its activities or properties, such
qualification is required, except for such jurisdictions where the failure to so qualify
would not have a Material Adverse Effect.
(b) Each Company is duly authorized to execute and deliver this Waiver and Consent and
is duly authorized to perform its obligations hereunder.
(c) The execution, delivery and performance by the Companies of this Waiver and Consent
do not and will not (i) require any consent or approval of any governmental agency or
authority (other than any consent or approval which has been obtained and is in full force
and effect), (ii) conflict with (A) any provision of law, (B) the charter, by-laws or other
organizational documents of any Company or (C) any agreement, indenture, instrument or other
document, or any judgment, order or decree, which is binding upon any Company or any of its
properties or (iii) require, or result in, the creation or imposition of any Lien on any
asset of any Company.
(d) This Waiver and Consent is the legal, valid and binding obligation of each Company,
enforceable against such Company in accordance with its terms, subject to bankruptcy,
insolvency and similar laws affecting enforceability of creditors’ rights generally and to
general principals of equity.
(e) The representations and warranties in the Loan Documents (including but not limited
to Section 9 of the Credit Agreement) are true and correct in all material respects with the
same effect as though made on and as of the date of this Waiver and Consent (except to the
extent stated to relate to a specific earlier date, in which case such representations and
warranties were true and correct as of such earlier date).
(f) Except as specifically waived in this Waiver and Consent, no Event of Default or
Unmatured Event of Default has occurred and is continuing.
3. Conditions to Effectiveness. The effectiveness of this Waiver and Consent is
expressly conditioned upon delivering to the Administrative Agent all of the following in form and
substance acceptable to the Administrative Agent: (a) this Waiver and Consent executed by each
Company, the Administrative Agent and the Required Lenders; (b) an executed copy of the Purchase
Agreement certified by the secretary of Akorn as true, accurate and complete; and (c) a certificate
of the Secretary or Assistant Secretary of each Company evidencing that all corporate proceedings
required to authorize the execution and delivery of this Waiver and Consent and all other documents
relating hereto on behalf of each Company have been duly taken and setting forth the names, offices
and specimen signatures of the officers of each Company who are authorized to execute this Waiver
and Consent and such other documents on behalf of each Company. The date on which such events have
occurred is the “Effective Date”.
4. Affirmation. Except as specifically provided in this Waiver and Consent, the
execution, delivery and effectiveness of this Waiver and Consent shall not operate as a waiver or
forbearance of any Unmatured Event of Default or Event of Default or any right, power or remedy of
the Administrative Agent or any Lender under the Credit Agreement or any of the other Loan
Documents, or constitute a consent, waiver or modification with respect to any provision of the
Credit Agreement or any of the other Loan Documents, and the Company hereby fully ratifies and
affirms each Loan Document to which it is a party. Reference in any of
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this Waiver and Consent, the Credit Agreement or any other Loan Document to the Credit
Agreement shall be a reference to the Credit Agreement as modified hereby and as further amended,
modified, restated, supplemented or extended from time to time. This Waiver and Consent shall
constitute a Loan Document for purposes of the Credit Agreement and the other Loan Documents. In
addition, each of the Companies hereby reaffirms and acknowledges that, notwithstanding anything
contained in the Purchase Agreement or any other document executed in connection with the
Transaction, each is prohibited from making any redemptions, purchases, re-purchases or any other
form of payment with respect to their Capital Securities except as specifically permitted by
Section 11.4 of the Credit Agreement.
5. Counterparts. This Waiver and Consent may be executed in two or more counterparts,
each of which shall constitute an original, but all of which when taken together shall constitute
one instrument. Delivery of an executed counterpart of this Waiver and Consent by facsimile shall
be effective as delivery of an original counterpart.
6. Headings. The headings and captions of this Waiver and Consent are for the
purposes of reference only and shall not affect the construction of, or be taken into consideration
in interpreting, this Waiver and Consent.
7. Further Assurances. Each Company agrees to execute and deliver, or cause to be
executed and delivered, in form and substance satisfactory to the Administrative Agent and the
Lenders, such further documents, instruments, amendments and financing statements and to take such
further action, as may be necessary from time to time to perfect and maintain the liens and
security interests created by the Loan Documents.
8. APPLICABLE LAW. THIS WAIVER AND CONSENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO ILLINOIS CHOICE OF LAW
DOCTRINE.
9. Acknowledgment. Each Company hereby waives, discharges and forever releases the
Administrative Agent and each of the Lenders, and each of said Person’s employees, officers,
directors, attorneys, stockholders and successors and assigns, from and of any and all claims,
causes of action, allegations or assertions that either Company has or may have had at any time
through (and including) the date of this Waiver and Consent, against any or all of the foregoing,
regardless of whether any such claims, causes of action, allegations or assertions are known to
either Company or whether any such claims, causes of action, allegations or assertions arose as a
result of the Administrative Agent’s or any Lender’s actions or omissions in connection with the
Credit Agreement, including any amendments or modifications thereto, or otherwise.
[signature pages follow]
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IN WITNESS WHEREOF, this Waiver and Consent has been duly executed and delivered as of the day
and year first above written.
| AKORN, INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||||
| Title: | CFO | |||||
| AKORN (NEW JERSEY), INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||||
| Title: | CFO | |||||
| LASALLE BANK NATIONAL ASSOCIATION, as Administrative Agent and Lender |
||||||
| By: | /s/ Xxxxxxx X’Xxxxx | |||||
| Title: | First Vice President | |||||
