EXHIBIT 10.42

June 1, 2004

Jeffrey A. Whitnell
5486 Ranier Drive
Lisle, IL 60532-2060

Dear Jeff,

I am pleased to offer you the position of Vice President, Finance and Chief
Financial Officer based at our headquarters in Buffalo Grove. Your starting
salary will be six thousand nine hundred twenty three dollars and eight cents
($6,923.08) bi-weekly, and you will report to Arthur Przybyl, President,
President and Chief Executive Officer.

You will be eligible to participate in Akorn’s Performance Incentive Plan. As
Vice-President, your potential annual bonus is thirty percent (30%) of base
salary subject to plan details and annual Board of Directors approval of payout.
Any payout for 2004 will be prorated.

In addition, you will receive an initial grant of stock options to purchase one
hundred thousand (100,000) shares of Akorn, Inc. common stock priced at closing
price on the date you begin employment. Stock options are subject to the terms
of the stock option plan and an agreement, which each participant is required to
sign.

In addition, you will receive a car allowance of five hundred dollars ($500)
monthly. In accordance with our car allowance policy, business mileage is
reimbursed at the reduced rate of twenty cents ($.20) per mile.

You will also be eligible for benefits which include medical, dental, vision,
Smart-Choice, Akorn’s (401K) Retirement Savings Program, Akorn Equity, our
Employee Stock Purchase Program, flexible spending accounts, Education
Assistance, an Employee Assistance program, life and disability insurance and
Paid Time Off (PTO).

Your employment at Akorn will be “at-will”, which means that either your or the
Company may terminate employment at any time. Nothing in this letter should be
interpreted as a contract of employment.

 

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Akorn does commit, however, that in the event of your termination without cause,
you will be entitled to six (6) months severance, paid biweekly at the salary in
effect at the time of your termination. “Without cause” is held to mean that the
reason for termination is due to reasons other than inadequate or deficient
performance on your part, misuse or misappropriation of company assets,
violation of company policy or legal statute relevant to your role and
responsibilities at Akorn, or conduct detrimental to the company.

This offer is contingent upon successful completion of both a pre-employment
background check and a drug-screening test. In addition, you will need to sign
our Employee Confidential Information Agreement and our Asset Repayment
Agreement as a condition of employment, which I have enclosed.

Jeffrey, we are very pleased at the prospect of your joining us and look forward
to working closely with you. Should you have any questions about this offer or
any matter related to your employment at Akorn, please do not hesitate to
contact me.

May I request that you sign and date below in acknowledgment of the contents of
this letter and return it to my attention, along with (1) the Employee
Confidential Information Agreement and (2) the Asset Repayment Agreement. Copies
are enclosed for your records.

Respectfully,

/s/ Neill E. Shanahan

Neill E. Shanahan, Vice-President,
Human Resources

Cc: Art Przybyl

I accept this offer of employment and understand the terms and conditions
outlined above.

                 
/s/ Jeffrey Whitnell
          June 1, 2004  
Jeffrey Whitnell
          Date