8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: March 31, 2009
(Date of earliest event reported)

Akorn, Inc.

(Exact name of registrant as specified in its charter)

Louisiana	001-32360	72-0717400
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1925 W. FIELD COURT, SUITE 300
LAKE FOREST, ILLINOIS 60045
(Address of principal executive offices, zip code)

(847) 279-6100
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240. 13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

     On March 31, 2009, Akorn, Inc. (“Akorn”), and Akorn (New Jersey), Inc. (“Akorn NJ”, and with Akorn, the “Borrowers”) consented to an Assignment Agreement (“Assignment”) between General Electric Capital Corporation (“GE”) and EJ Funds LP (“EJ”). The Assignment transfers to EJ all of GE’s rights and obligations under the Credit Agreement (“Credit Agreement”), dated January 7, 2009, among Akorn, Akorn NJ, and GE as agent for the several financial institutions from time to time party to the Credit Agreement. Pursuant to the Assignment, EJ has become the agent and lender under the Credit Agreement. Accordingly, GE is no longer the Borrowers’ lender. EJ is affiliated with EJ Financial Enterprises, Inc., whose President is Dr. John N. Kapoor, Akorn’s Chairman, largest shareholder and subordinated lender.

     In connection with the Assignment, on March 31, 2009, EJ and the Borrowers entered into a Memorandum of Agreement (the “MOA”) (i) to provide that EJ shall forbear from exercising any rights it may have under the Credit Agreement that result from any defaults or events of default through April 10, 2009, (ii) that Akorn shall pay EJ’s expenses in connection with the Assignment, the MOA and the transactions contemplated in the MOA and (iii) to outline on a non-binding basis, certain anticipated terms of the parties’ relationship moving forward. The non-binding terms in the MOA provide that EJ and the Borrowers will work together in good faith to negotiate and execute a definitive agreement that is expected to provide, among other things: (i) that EJ will forbear through the end of 2009 from exercising any of its newly assigned rights under the Credit Agreement in respect of certain defaults to be agreed to by the parties; (ii) for changes to the Credit Agreement to make compliance less burdensome to the Borrowers; (iii) that Akorn will issue warrants to purchase approximately 1,695,000 shares of common stock of Akorn to EJ; (iv) that Akorn will file and keep effective a shelf registration statement on Form S-3, permitting the resale of shares of Akorn’s common stock by EJ or its affiliates, including the shares of common stock issuable upon the exercise of the warrants; (v) that EJ shall have the right to nominate three directors to serve on Akorn’s Board of Directors, including Dr. Kapoor, and to increase the Board of Directors from seven to nine members; (vi) that, absent an Event of Default, interest shall accrue on the principal balance of all loans and obligations outstanding under the Credit Agreement at an annual rate of 10%, and (vii) that the Subordinated Promissory Note dated July 28, 2008 in the principal amount of $5,000,000 issued by Akorn to The John N. Kapoor Trust Dated September 20, 1989, will be entitled to the benefit of the security interest in and lien upon all of the collateral of the Borrowers under the Credit Agreement. Dr. Kapoor is the beneficiary and sole trustee of the John N. Kapoor Trust.

     Prior to the Assignment, GE restricted the ability to borrow funds under the Credit Agreement to the balance outstanding as of February 19, 2009, which was $5,523,620. While the MOA provides EJ has no obligation to loan funds to the Borrowers in excess of $5,650,000, it is anticipated the definitive agreement will provide that EJ will be entitled to receive additional warrants should EJ permit the Borrowers to borrow funds that exceed that amount.

     These descriptions of the Assignment and the MOA are only summaries. They are qualified in their entirety by the full text of those documents, which are filed as exhibits hereto and are incorporated by reference herein.

     The references to the Credit Agreement herein are qualified in their entirety by Akorn’s previous disclosure in its Current Report on Form 8-K filed with the Securities and Exchange Commission on January 9, 2009, which is incorporated herein by reference, and the full text of the Credit Agreement, which is incorporated herein by reference to Exhibit 10.1 to such Current Report on Form 8-K.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

     The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1	Memorandum of Agreement, dated March 31, 2009, among EJ Funds LP, Akorn, Inc., and Akorn (New Jersey), Inc.
10.2	Assignment, dated March 31, 2009, among General Electric Capital Corporation, EJ Funds LP, Akorn, Inc., and Akorn (New Jersey), Inc.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Current Report on Form 8-K, including the exhibit hereto, contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this Current Report on Form 8-K are not historical facts, do not constitute guarantees of future performance and are based on numerous assumptions which, while believed to be reasonable, may not prove to be accurate. These forward-looking statements include, but are not limited to, future interest rates, the availability of credit under Akorn’s credit facilities and certain assumptions upon which such forward-looking statements are based. The forward-looking statements in this Current Report on Form 8-K do not constitute guarantees of future performance and involve a number of factors that could cause actual results to differ materially, including risks associated with Akorn’s business involving its products, the development and distribution of Akorn’s products and related services, economic and competitive factors, Akorn’s key strategic relationships, changes in regulations affecting Akorn’s business and other risks more fully described in Akorn’s most recently filed Quarterly Report on Form 10-Q and Annual Report on Form 10-K. Akorn assumes no obligation to update any forward-looking information contained in this Current Report or with respect to the announcements described herein.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Akorn, Inc.
By:	/s/ Jeffrey A. Whitnell
	Jeffrey A. Whitnell
	Interim Chief Executive Officer, Chief Financial Officer, Treasurer and Secretary

Date: April 6, 2009

EX-10.1

Exhibit 10.1

Execution Version

MEMORANDUM OF AGREEMENT

     THIS MEMORANDUM OF AGREEMENT (this “Memorandum”), is made and entered into as of March 31, 2009, by and among EJ FUNDS LP (the “Investor”), AKORN, INC., a Louisiana corporation (“Akorn”), AKORN (NEW JERSEY), INC., an Illinois corporation (“Akorn NJ”, and together with Akorn, collectively, the “Borrowers”, and the Borrowers together with the Investor, each a “Party” and collectively, the “Parties”).

     WHEREAS, the Borrowers are parties to a certain Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), dated as of January 7, 2009, by and among the Borrowers, General Electric Capital Corporation, a Delaware corporation, in its capacity as Agent (the “Agent”) for the lenders from time to time parties thereto (the “Lenders”), and each of such Lenders party thereto, pursuant to which the Lenders have made certain financial accommodations available to the Borrowers as described therein (the “Credit Facility”) (unless otherwise specifically defined herein, each term used herein which is defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement); and

     WHEREAS, concurrently with the execution and delivery of this Memorandum, the Investor is purchasing, assuming and acquiring from the Agent, and the Agent is selling, transferring and assigning to the Investor, all of the Agent’s and the Lenders’ rights, title and interest in and to the Credit Agreement, including, without limitation, the loans and other obligations of the Borrowers outstanding thereunder (such assignment, the “Credit Agreement Assignment”).

     NOW, THEREFORE, the Parties hereby enter into this Memorandum on a non-binding basis (except for Sections 2 through 8 hereof, which shall be binding and enforceable upon the Parties) to set forth their expectations with respect to certain ongoing negotiations relating to the Credit Facility:

          1. The Investor and the Borrowers shall move forward in good faith to negotiate and execute a Forbearance, Registration and Investor Rights Agreement, in form reasonably acceptable to the Parties (the “Forbearance Agreement”), which the Parties anticipate will provide for the following terms, effective from and after the date the Forbearance Agreement is executed:

          (a) The Investor will agree, through the earlier of December 31, 2009 and the occurrence of any Default or Event of Default (other than a Stipulated Default (as defined below)), (i) to forbear from exercising any rights it may have under the Credit Facility that result from certain Defaults or Events of Default to be agreed to by the Parties (collectively, the “Stipulated Defaults”), and (ii) to fund requested Loans in accordance with the procedures of the Credit Agreement provided that such Loans would not cause the aggregate outstanding principal balance of the Revolving Credit Exposure to exceed the combined Revolving Loan Commitments of the Lenders, in the amount of $5,650,000 (the “Aggregate Revolving Loan Commitment”).

          (b) Effective upon execution and delivery of the Forbearance Agreement, (i) the Unused Commitment Fee will retroactively cease to accrue with respect to periods from and after the execution of this Memorandum, and (ii) no Unused Commitment Fee shall henceforth be payable with respect to periods from and after the date hereof. For the avoidance of doubt, the Investor shall be entitled to receive all Unused Commitment Fees payable with respect to periods prior to the date hereof.

          (c) The Investor will permanently waive the requirement, under Section 4.16(a) of the Credit Agreement and paragraph (a) of Exhibit 4.11 thereto, that Borrowers obtain a control agreement with respect to Disbursement Account #5590069497 with Bank of America, N.A., provided that the Borrowers provide the Investor with reasonable assurances that such Disbursement Account is a zero-balance account used solely as a payments account, to which funds are transferred only as and to the extent that funds are required to honor checks presented for payment or the execution of payment orders.

          (d) The Parties will amend the terms of the Credit Facility (i) to amend the financial covenants in Article 6 of the Credit Agreement, in light of recent financial results and revised financial projections, to make them less burdensome to Borrowers, and (ii) otherwise to make compliance with its provisions less burdensome to the conduct by the Borrowers of their day-to-day operation.

          (e) Akorn shall issue to the Investor a warrant (the “Warrant”), which shall provide for and be subject to the following terms and conditions:

               (i) The Warrant shall be immediately exercisable upon issuance and remain exercisable for a period of five years, have a cashless exercise feature and a per share exercise price equal to the closing trading price of Akorn’s common stock on the trading day immediately prior to signing the Forbearance Agreement.

               (ii) The Warrant shall be exercisable for an aggregate number of shares equal to the product of (i) a quotient (carried to the 9th decimal place) equal to (A) the Aggregate Revolving Loan Commitment divided by (B) 1,000,000 times (ii) 300,000.

               (iii) The Warrant shall include typical registration rights (the terms of which shall be set forth in the Forbearance Agreement) including, without limitation, the obligation of Akorn, upon the Investor’s request, to file and keep effective a shelf Registration Statement on Form S-3 (the “Shelf”), permitting resales and other transfers by the Investor and its affiliates of any or all shares of capital stock of Akorn now held by the Investor or its affiliates including the shares of common stock issuable upon the exercise or conversion of warrants and other securities. The Forbearance Agreement shall include an undertaking for Akorn to keep the Shelf effective at all times through the date that the Investor and its affiliates no longer hold any shares of capital stock or securities convertible or exercisable into capital stock of Akorn.

               (iv) The Warrant shall also provide for standard dilution protection in the event of stock dividends, stock-splits, reverse stock-splits, exchanges, reclassifications and other similar events.

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          (f) In lieu of and not in addition to the board representation rights provided for in Section 2(b) of that certain Stock Purchase Agreement dated November 15, 1990 (the “Stock Purchase Agreement”) between Akorn and John N. Kapoor Trust dated September 20, 1989, until the occurrence of such conditions as the Parties, negotiating in good faith, may agree will cause such rights to terminate (provided that the conditions, if any, resulting in the termination of the Investor’s right to designate at least one director as set forth in this Section 1(f) shall be no less beneficial to the Investor than the conditions provided for in Section 2(b) of the Stock Purchase Agreement):

               (i) The Investor shall have the right to nominate three directors to serve on Akorn’s Board of Directors, including current director Dr. John N. Kapoor and two other individuals reasonably satisfactory to Akorn’s Board of Directors, (together with any successors that may be designated by the Investor from time to time, collectively, the “Investor Designees”).

               (ii) At the request of the Investor, as soon as practicable but in no event later than ten days after the request of the Investor, Akorn shall take such actions as may be necessary to (i) amend Akorn’s Bylaws to increase the number of directors on the Board of Directors from seven to nine and (ii) appoint the two Investor Designees (other than current director Dr. John N. Kapoor) to fill the vacancies created by such increase until the next shareholder election of directors.

               (iii) With respect to each shareholder election of directors thereafter, including at each annual or special meeting of shareholders of Akorn at which directors are elected, Akorn shall cause its Board of Directors and management to (i) include each of the Investor Designees in the slate of nominees recommended by the Board of Directors to Akorn’s shareholders for election as directors, (ii) recommend to its shareholders that they vote for the Investor Designees as directors of Akorn, (iii) vote all proxies it may hold in favor of the election of the Investor Designees, except as otherwise directed by any shareholder who submits such proxy and (iv) use its best efforts to cause the Investor Designees to be elected as directors.

               (iv) Akorn shall take no action that would cause its Board of Directors to exceed fifteen in number without the consent of the Investor.

               (v) Notwithstanding the foregoing, Akorn shall not be required to nominate any Investor Designees that may not, by virtue of any securities laws or rules of any exchange upon which Akorn’s securities are listed or traded become a director of Akorn.

          (g) Unless accelerated by the Investor in accordance with the Credit Agreement, interest shall accrue on the principal balance of all Loans and other obligations outstanding under the Credit Facility from time to time at an annual rate of ten percent (10%), regardless of the absence or existence of any Default or Event of Default, and shall be payable to the Investor, in arrears, on the first Business Day of each calendar month.

          (h) As security for the obligations of Akorn to the Subordinated Lender under the Subordinated Note and for the express benefit of the Subordinated Lender, the Borrowers will (i) grant to the Investor, in its capacity as the Agent appointed pursuant to the Credit

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Agreement Assignment, a security interest in and lien upon all of the Collateral, and (ii) acknowledge and agree that the Subordinated Note shall be entitled to the benefit of each and all of the Collateral Documents.

          (i) If Akorn requests, and the Investor (and/or any of its affiliates then holding any portion of the Aggregate Revolving Loan Commitment) elects, in its sole and absolute discretion, to make Loans to the Borrowers under the Credit Agreement in amounts that exceed the Aggregate Revolving Loan Commitment, the Investor or its affiliate, as the case may be, will be entitled to receive additional warrants in the same proportions and with the same terms provided for in Section 1(e) above; provided, however, that the exercise price will be the closing price on the trading day immediately prior to the date such additional loan is extended.

          2. Akorn shall reimburse the Investor and its affiliates for its documented fees and expenses relating to the negotiation, execution and performance of the Credit Agreement Assignment, this Memorandum, the Forbearance Agreement and any other agreements contemplated hereby or thereby, including, without limitation, their attorneys’ fees and any exit fees and other expenses charged by the Agent or the Lenders in connection with the Credit Agreement Assignment.

          3. The Investor hereby agrees, through April 10, 2009, (i) to forbear from exercising any rights it may have under the Credit Facility that result from any Defaults or Events of Default, and (ii) to fund requested Loans in accordance with the procedures of the Credit Agreement provided that such Loans would not cause the aggregate outstanding principal balance of the Revolving Credit Exposure to exceed the Aggregate Revolving Loan Commitment.

          4. This Memorandum may not be amended except by an instrument in writing signed on behalf of each of the Parties. This Memorandum may be executed and delivered (including by facsimile or e-mail transmission) in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Except as expressly provided for herein, all of the terms and conditions of the Credit Agreement shall remain in full force and effect and shall not be deemed to have been modified or amended by this Memorandum and the Investor’s purchase of the Credit Facility shall not be deemed to be a novation of the Borrowers’ obligations thereunder.

          5. Except for Sections 2 through 8 hereof, which shall be binding and enforceable upon the Parties, this Memorandum is non-binding and is not intended to constitute a contract, or an offer to enter into a contract, be binding upon the parties, or create legal obligations or rights whatsoever.

          6. Subject to such disclosure obligations of either Party as the relevant Party believes, in its good faith opinion, are required or prudent under any law or regulation or the rules of any stock exchange upon which its securities are listed, each of the Parties will cooperate with each other in the development and distribution of all news releases and other public information disclosures with respect to this Memorandum and any of the transactions contemplated by this Memorandum, and no Party will make any such news release or public

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disclosure without first consulting with the other Party and receiving its consent (which shall not be unreasonably withheld or delayed) and each Party shall coordinate with the other with respect to any such news release or public disclosure.

          7. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          8. This Memorandum shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State.

[The remainder of this page has been left blank intentionally.]

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

INVESTOR	EJ FUNDS LP, a Delaware Limited Partnership
	By: EJ Financial Enterprises, Inc., its General Partner
	By:	/s/John N. Kapoor
	Name:	John N. Kapoor
	Title:	President
BORROWERS	AKORN, INC., a Louisiana corporation
	By:	/s/Jeffrey A. Whitnell
	Name:	Jeffrey A. Whitnell
	Title:	Chief Financial Officer
	AKORN (NEW JERSEY), INC., an Illinois corporation
	By:	/s/Jeffrey A. Whitnell
	Name:	Jeffrey A. Whitnell
	Title:	Chief Financial Officer

[Signature Page to Memorandum of Agreement]

EX-10.2

Exhibit 10.2

Execution Version

ASSIGNMENT

     This ASSIGNMENT, dated as of the Effective Date, is entered into between General Electric Capital Corporation (“the Assignor”) and EJ Funds LP (“the Assignee”).

     The parties hereto hereby agree as follows:

Borrowers:	Akorn, Inc., a Louisiana corporation, and Akorn (New Jersey), Inc., an Illinois corporation (the “Borrowers”)
Agent:	General Electric Capital Corporation, as agent for the Lenders and L/C Issuers (in such capacity and together with its successors and permitted assigns, the “Agent”)
Credit Agreement:	Credit Agreement, dated as of January 7, 2009, among the Borrowers, the other Credit Parties party thereto, the Lenders and L/C Issuers party thereto and the Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms used herein without definition are used as defined in the Credit Agreement)
Trade Date:	March 31, 2009
Effective Date:	March 31, 2009

	Aggregate amount of		Aggregate amount of
Revolving Loan/	Commitments or		Commitments or
Commitment	principal amount of		principal amount of
Assigned	Loans for all Lenders		Loans Assigned		Percentage Assigned
Revolving Commitment	$	25,000,000	$	25,000,000		100.00	%

     Section 1. Assignment. Assignor hereby sells and assigns to Assignee, and Assignee hereby purchases and assumes from Assignor, Assignor’s rights and obligations in its capacity as Lender under the Credit Agreement (including Liabilities owing to or by Assignor thereunder) and the other Loan Documents, in each case to the extent related to the amounts identified above (the “Assigned Interest”), for an amount equal to $5,508,704.11 (the “Purchase Price”), which constitutes 100% of the principal amount outstanding under the Revolving Commitment as of the date hereof, together with (a) all accrued and unpaid interest, fees, expenses and other Obligations due and owing to the Assignor on the date hereof in any capacity and (b) an exit fee in the amount of $25,000 (the “Exit Fee”). The Purchase Price shall be paid in immediately available funds by wire transfer to the following account (the “Collection Account”):

Deutsche Bank Trust Company Americas
New York, New York
ABA No. 021-001-033

Account Number: 50271079
Account Name: Akorn/HFS3010

The consummation of the assignment contemplated above is herein referred to as the “Assignment”.

     Section 2. Representations, Warranties and Covenants of Assignor. Assignor (a) represents and warrants to Assignee and the Agent that (i) it has full power and authority, and has taken all actions necessary for it, to execute and deliver this Agreement and to consummate the transactions contemplated hereby, (ii) it is the legal and beneficial owner of its Assigned Interest and that such Assigned Interest is free and clear of any Lien and other adverse claims, and (iii) by executing, signing and delivering this Agreement, the Person signing, executing and delivering this Agreement on behalf of the Assignor is a duly authorized signatory for the Assignor and is authorized to execute, sign and deliver this Agreement, (b) makes no other representation or warranty and assumes no responsibility, including with respect to the aggregate amount of the Loans and Commitments, the percentage of the Loans and Commitments represented by the amounts assigned, any statements, representations and warranties made in or in connection with any Loan Document or any other document or information furnished pursuant thereto, the execution, legality, validity, enforceability or genuineness of any Loan Document or any document or information provided in connection therewith, the existence, nature or value of any Collateral, the projected financial performance of the Borrowers, and the existence of any Default or Event of Default under any Loan Document, (c) assumes no responsibility (and makes no representation or warranty) with respect to the financial condition of any Credit Party or the performance or nonperformance by any Credit Party of any obligation under any Loan Document or any document provided in connection therewith and (d) attaches any Notes held by it evidencing at least in part the Assigned Interest of such Assignor (or, if applicable, an affidavit of loss or similar affidavit therefor) and requests that the Agent exchange such Notes for new Notes in accordance with Section 1.2 of the Credit Agreement.

     Section 3. Representations, Warranties and Covenants of Assignee. Assignee (a) represents and warrants to Assignor and the Agent that (i) it has full power and authority, and has taken all actions necessary for Assignee, to execute and deliver this Agreement and to consummate the transactions contemplated hereby, (ii) it is not an Affiliate of a Lender, (iii) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest assigned to it hereunder and either Assignee or the Person exercising discretion in making the decision for such assignment is experienced in acquiring assets of such type, (iv) by executing, signing and delivering this Agreement, the Person signing, executing and delivering this Agreement on behalf of the Assignee is a duly authorized signatory for the Assignee and is authorized to execute, sign and deliver this Agreement and (v) both before and after giving effect to this Agreement and the transactions contemplated hereby, it is Solvent and (b) appoints and authorizes the Agent to take such action as administrative agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (c) shall perform in accordance with their terms all obligations that, by the terms of the Loan Documents, are required to be performed by it as a Lender, (d) confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and shall continue to make its own credit decisions in taking or not taking any action under any Loan

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Document independently and without reliance upon Agent, any L/C Issuer, any Lender or any other Indemnitee and based on such documents and information as it shall deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Credit Parties and their Affiliates and their Stock and agrees to use such information in accordance with Section 9.10 of the Credit Agreement, (f) specifies as its applicable lending offices (and addresses for notices) the offices at the addresses set forth beneath its name on the signature pages hereof and (g) to the extent required pursuant to Section 10.1(f) of the Credit Agreement, attaches two completed originals of Forms W-8ECI, W-8BEN, W-8IMY or W-9 and, if applicable, a portfolio interest exemption certificate. The assignment fee of $3,500 required to be paid to the Agent under Section 9.9 of the Credit Agreement is hereby waived by the Agent.

     Section 4. Representations, Warranties and Covenants of Borrowers. Attached hereto as Exhibit A is the Borrowing Base Certificate delivered by the Borrowers to the Agent pursuant to the Credit Agreement for the fiscal period ending February 28, 2009. Each Borrower represents and warrants that the Borrowing Base, without giving effect to any Reserve and calculated as of the date hereof, is not less than $18,049,369.

     Section 5. Conditions Precedent. This Agreement and the assignment contemplated hereby shall not become effective until receipt by Assignor of the following, all of which are material inducements to Assignor to enter into this Agreement:

     (a) a duly executed counterpart of this Agreement from the Borrowers and Assignee;

     (b) a notification letter to Bank of America, N.A. advising of the change of Agent and providing updated collection account information, signed by all parties hereto (the “Bank Account Letter”); and

     (c) the Purchase Price in immediately available funds in the Collection Account no later than 2:00 p.m. on the Effective Date.

     The effective date of the Assignment (the “Effective Date”) shall be March 31, 2009.

     Section 6. Register. This Agreement (including its attachments) will be delivered to the Agent for its acceptance and recording in the Register promptly after this Agreement becoming effective.

     Section 7. Effect. As of the Effective Date, (a) Assignee shall be a party to the Credit Agreement and, to the extent provided in this Agreement, have the rights and obligations of a Lender under the Credit Agreement and (b) Assignor shall, to the extent provided in this Agreement, relinquish its rights (except those surviving the termination of the Commitments and payment in full of the Obligations) and be released from its obligations under the Loan Documents other than those obligations relating to events and circumstances occurring prior to the Effective Date.

     Section 8. Distribution of Payments. Effective immediately after the consummation of the Assignment, the Agent shall make all payments under the Loan Documents in respect of each Assigned Interest to Assignee.

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     Section 9. Resignation of Agent and L/C Issuer. Effective immediately after the consummation of the Assignment, General Electric Capital Corporation resigns as Agent and L/C Issuer under the Credit Agreement (General Electric Capital Corporation, in its capacity as the former Agent, referred to herein as the “Prior Agent”). This Section 9 shall constitute notice of such resignation to the Borrowers and the Assignee for purposes of subsections (a) and (c) of Section 8.9 of the Credit Agreement. Assignee, as the sole Lender under the Credit Agreement, hereby designates itself as the successor Agent under the Credit Agreement pursuant to Section 8.9(a) thereof (“New Agent”). Each Borrower consents to the appointment of Assignee as Agent.

     Section 10. Delivery of Documents. Effective immediately after the consummation of the Assignment, Prior Agent hereby agrees to deliver to New Agent, at the address set forth on the signature pages to this Agreement, via overnight courier for delivery on Wednesday, April 1, 2009, (i) the original stock certificate No. 1 evidencing 100 shares of Akorn (New Jersey), Inc. (the “Stock Certificate”) and (ii) the original Revolving Note issued to Assignor at closing. Promptly after the consummation of the Assignment, Prior Agent shall forward the fully executed Bank Account Letter to Bank of America, N.A. via overnight courier and telecopier. After the consummation of the Assignment, the Prior Agent will execute and delivery to New Agent, at the request and expense of New Agent, such additional documents, instruments or releases (all of which shall be prepared by New Agent, without recourse or warranty to the Prior Agent and otherwise in form and substance reasonably satisfactory to the Prior Agent) as New Agent may reasonably request to further evidence the assignment of all instruments of record in favor of the Prior Agent with respect to the security interests and liens securing the obligations of the Loan Parties under the Credit Agreement and the other related Loan Documents. Prior Agent authorizes New Agent to file such assignments and amendments under the Uniform Commercial Code to reflect the New Agent as secured party of record on all UCC financing statements of record naming Prior Agent as secured party and a Loan Party as debtor.

     Section 11. Forwarding of Payments. Prior Agent hereby agrees to promptly forward any payments received after the Effective Date with respect to the Assigned Interest (together with any and all cash or cash equivalent collateral) to New Agent at:

Bank Name:	Northern Trust Bank
ABA:	071000152
Account No.:	3800553104
Account Name:	EJ Funds LP / Akorn Sweep Account
Bank Contact:	Sander Pahlman
	Tel # (847) 295 4394

     Section 12. Miscellaneous. (a) The parties hereto, to the extent permitted by law, waive all right to trial by jury in any action, suit, or proceeding arising out of, in connection with or relating to, the Assignment and any other transaction contemplated hereby. This waiver applies to any action, suit or proceeding whether sounding in tort, contract or otherwise.

     (b) On and after the Effective Date, this Agreement shall be binding upon, and inure to the benefit of, the Assignor, Assignee, the Agent and their Related Persons and their successors and assigns.

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     (c) This Agreement shall be governed by, and be construed and interpreted in accordance with, the law of the State of New York.

     (d) This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

     (e) Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.

     (f) In consideration of Assignor entering into this Agreement, each Borrower hereby (a) releases, acquits and forever discharges Assignor, in its capacity as Agent and a Lender, its agents, employees, officers, directors, servants, representatives, attorneys, affiliates, successors and assigns (collectively, the “Released Parties”) from any and all liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages, costs and expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, that such Borrower may have or claim to have now against Assignor or which might arise out of or be connected with any act of commission or omission of Assignor existing or occurring on or prior to the date of this Agreement, including, without limitation, any claims, liabilities or obligations relating to or arising out of or in connection with the Loans, the Credit Agreement or the other Loan Documents (including, without limitation, arising out of or in connection with the initiation, negotiation, closing or administration of the transactions contemplated thereby or related thereto), from the beginning of time until the execution and delivery of this release and the effectiveness of this Agreement (the “Released Claims”) and (b) agree forever to refrain from commencing, instituting or prosecuting any lawsuit, action or other proceeding against the Released Parties with respect to any and all Released Claims.

     (g) In consideration of Assignor entering into this Agreement, Assignee hereby, except with respect to the express representations and warranties made by Assignor under Section 2 hereof, (a) releases, acquits and forever discharges Assignor (in its capacity as a Lender and Assignor and not in its capacity as an Agent), its agents, employees, officers, directors, servants, representatives, attorneys, affiliates, successors and assigns (collectively, the “Assignor Released Parties”) from any and all liabilities, claims, suits, debts, liens, losses, causes of action, demands, rights, damages, costs and expenses of any kind, character or nature whatsoever, known or unknown, fixed or contingent, that Assignee may have or claim to have now against Assignor or which might arise out of or be connected with any act of commission or omission of Assignor existing or occurring on or prior to the date of this Agreement, including, without limitation, any claims, liabilities or obligations relating to or arising out of or in connection with the Loans, the Credit Agreement, this Agreement or the other Loan Documents (including, without limitation, arising out of or in connection with the initiation, negotiation, closing or administration of the transactions contemplated thereby or related thereto), from the beginning of time until the execution and delivery of this release and the effectiveness of this Agreement (the “Assignor Released Claims”) and (b) agree forever to refrain from commencing, instituting or prosecuting any lawsuit, action or other proceeding against the Assignor Released Parties with respect to any and all Assignor Released Claims.

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.

GENERAL ELECTRIC CAPITAL CORPORATION, as Assignor
By:	/s/ Dennis Cloud
	Name: Dennis Cloud
	Title: Duly Authorized Signatory
EJ FUNDS LP, as Assignee
By: EJ Financial Enterprises, Inc.
Its: General Partner
By:	/s/ John N. Kapoor
	Name: John N. Kapoor
	Title: President
Lending Office (and address for notices) for any other purpose:
EJ Funds LP
225 East Deerpath Road, Suite 250
Lake Forest, IL 60045
Attention: Rao Akella
Fax # (847) 295 8680

ACCEPTED and AGREED
this 31^st day of March, 2009:

GENERAL ELECTRIC CAPITAL CORPORATION
as Agent

By:	/s/ Dennis Cloud
	Name: Dennis Cloud
	Title: Duly Authorized Signatory
AKORN, INC.
By:	/s/ Jeffrey A. Whitnell
	Name: Jeffrey A. Whitnell
	Title: Chief Financial Officer
AKORN (NEW JERSEY), INC.
By:	/s/ Jeffrey A. Whitnell
	Name: Jeffrey A. Whitnell
	Title: Chief Financial Officer

Exhibit A

[attach Borrowing Base Certificate]

Exhibit A