Exhibit 10.32

SUBORDINATION AND INTERCREDITOR AGREEMENT
(LaSalle Bank National Association/Neopharm, Inc.)

THIS SUBORDINATION AND INTERCREDITOR AGREEMENT dated as of October 7, 2003 (this "Agreement") is entered
into among AKORN, INC., a Louisiana corporation ("Akorn"), AKORN (NEW JERSEY), INC., an Illinois corporation
("Akorn NJ"; together with Akorn, each a "Company" and collectively, the
"Companies"), LASALLE BANK NATIONAL ASSOCIATION, as Senior Agent (as hereinafter defined) for Senior Lenders under the Credit Agreement (as hereinafter
defined), and NEOPHARM, INC., a Delaware corporation (the "Subordinated Lender"").

RECITALS

A.    The
Senior Agent, certain financial institutions (together with the successors and assigns thereof, "Senior Lenders") and
the Companies have entered into a Credit Agreement, dated as of the date hereof (as from time to time amended, modified, extended, renewed, refinanced, or restated, the "Credit
Agreement"), together with the other Loan Documents (as defined in the Credit Agreement), whereby the Senior Lenders have made and shall make available to each of the Companies
certain loans and other financial accommodations therein set forth. All of the Companies' obligations under the Senior Loan Documents (as hereinafter defined) are secured by assignments of and
security interests in substantially all of the now or hereafter acquired assets of the Companies and their Subsidiaries, all as more fully set forth in the Loan Documents.

B.    Akorn
has issued that certain Amended and Restated Promissory Note dated October 7, 2003 in the principal amount of $3,250,000 (the
"Subordinated Note", together with all guarantees and other documents or instruments executed in connection therewith (as from time to time modified,
extended, renewed, refinanced or restated to the extent permitted by the terms of this Agreement, collectively the "Subordinated Documents")) in favor
of the Subordinated Lender.

C.    As
a condition of the financing accommodations under the Loan Documents, the parties hereto are required to enter into this Agreement to establish the relative rights and
priorities of the Senior Agent, the Senior Lenders and the Subordinated Lender under the Senior Loan Documents and the Subordinated Documents.

D.    The
Subordinated Lender will benefit from the financing accommodations made by the Senior Lenders under the Credit Agreement and the other Loan Documents. The
Subordinated Lender and the Companies desire to enter into this Agreement in order to induce the Senior Lenders to enter into the Credit Agreement. The Subordinated Lender acknowledges that the Senior
Lenders would not enter into the Senior Loan Documents but for the execution of this Agreement.

In
consideration of the mutual agreements herein contained, the parties hereto agree as follows:

1.Definitions.Except as otherwise provided herein, all capitalized terms used in this Agreement shall have the
meanings ascribed to such terms in the Credit Agreement, provided that the following terms shall have the meanings set forth below:

"Bankruptcy Code"means Title 11 of the United States Code (11 U.S.C. § 101 et. seq.) or any replacement or supplemental
federal statute dealing with the bankruptcy of debtors.

"Company"and"Companies"shall have the meaning set forth in the recitals hereof.

"Company Property"means all assets, property and property rights, of any kind or nature, tangible or intangible, now or hereafter
existing, in which either Company or any Obligor owns, asserts or maintains an interest.

"Credit Agreement"shall have the meaning set forth in the recitals hereof.

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"Finally Paid"or"Final Payment,"when used in connection with the Senior Indebtedness,
means the full and indefeasible payment in cash of all of the Senior Indebtedness and the irrevocable termination of all Commitments of all the Senior Lenders under the Senior Loan Documents.

"Liens"means any mortgage, deed of trust, pledge, lien, security interest, charge, set-off right or other encumbrance,
whether now existing or hereafter created, acquired or arising.

"Obligor"means any guarantor or obligor of any Senior Indebtedness.

"Proceeding"means any voluntary or involuntary proceeding commenced by or against either Company or any Obligor under any provision of
the Bankruptcy Code, or under any other bankruptcy or insolvency law, including assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with its
creditors, or proceedings seeking dissolution, receivership, reorganization, arrangement, or other similar relief.

"Senior Agent"means LaSalle Bank National Association, as Administrative Agent for Senior Lenders, or any other Person appointed by the
holders of the Senior Indebtedness as administrative agent for purposes of the Senior Loan Documents and this Agreement, together with the successors and assigns of all of the foregoing.

"Senior Indebtedness"means all obligations, liabilities and indebtedness of every nature of either Company or any Obligor from time to
time owed to the Senior Agent or any Senior Lender under the Senior Loan Documents, including the principal amount of all debts, claims and indebtedness, accrued and unpaid interest and all premium,
fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or after the filing
of a Proceeding, including any Hedging Obligations and Bank Product Obligations at any time due and owing to any Senior Lender, together with (a) any amendments, modifications, renewals,
restatements or extensions thereof and (b) any interest accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest is allowed in any Proceeding.
Senior Indebtedness shall be deemed to be outstanding until it is Finally Paid.

"Senior Loan Documents"means the Credit Agreement, the other Loan Documents and all other agreements, documents and instruments executed
from time to time in connection therewith, in each case as from time to time renewed, extended, amended, restated or modified by the parties thereto and all agreements and instruments evidencing full
or partial refundings of the indebtedness thereunder.

"Subordinated Indebtedness"means all obligations, liabilities and indebtedness of every nature of either Company or any Obligor from time
to time owed to any Subordinated Lender under the Subordinated Documents, including the principal amount of all debts, claims and indebtedness, accrued and unpaid
interest and all premium, fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether
before or after the filing of a Proceeding (including any amounts payable by either Company or any Obligor in connection with put, redemption, repurchase or repurchase rights under any warrants or any
Capital Securities of either Company or any Obligor held by any Subordinated Lender), together with (a) any amendments, modifications, renewals, restatements or extensions thereof by the
parties thereto and (b) any interest accruing thereon after the commencement of a Proceeding, without regard to whether or not such interest is allowed in any Proceeding.

"Subordinated Lender Remedies"means any action (a) to take from or for the account of either Company, any Obligor, any other
guarantor of the Subordinated Indebtedness or any other Person, by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by either Company
(other than receipt of payments of Subordinated Indebtedness to the extent permitted by this Agreement), any Obligor, any such guarantor or any other Person with respect to the

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Subordinated
Indebtedness, (b) to sue for payment of, or to initiate or participate with others in any suit, action or proceeding (including any Proceeding) against either Company, any Obligor,
any such guarantor or any other Person to (i) enforce payment of or to collect the whole or any part of the Subordinated Indebtedness or (ii) commence judicial enforcement of any of the
rights and remedies under the Subordinated Documents or applicable law with respect to the Subordinated Indebtedness, (c) to accelerate the Subordinated Indebtedness, (d) to exercise any
put, repurchase or similar option or to cause either Company, any Obligor, any such guarantor or any other Person to honor any redemption or mandatory prepayment obligation under any Subordinated
Document or (e) to take any action under the provisions of any state or federal law, including the UCC, or under any contract or agreement, to enforce, foreclose upon, take possession of or
sell any Company Property or any property or assets of any such guarantor or any other Person.

"Subordinated Lender"shall have the meaning set forth in the recitals hereof.

"Subordinated Note"shall have the meaning set forth in the recitals hereof.

"UCC"means Article 9 of the Uniform Commercial Code, as in effect in any relevant jurisdiction.

2.Subordination of Subordinated Indebtedness to Senior Indebtedness.Each Company covenants and agrees, and the
Subordinated Lender by its acceptance of the Subordinated Documents (whether upon original issue or upon transfer or assignment) likewise covenants and agrees, notwithstanding anything to the contrary
contained in any of the Subordinated Documents, that the payment of any and all of the Subordinated Indebtedness shall be subordinate and subject in right and time of payment, to the extent and in the
manner hereinafter set forth, to the Final Payment of all Senior Indebtedness. Each
holder of Senior Indebtedness, whether now outstanding or hereafter created, incurred, assumed or guaranteed, shall be deemed to have acquired Senior Indebtedness in reliance upon the provisions
contained in this Agreement.

3.Subordination of Liens.



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4.Warranties and Representations of Companies and Subordinated Lender.



5.Negative Covenants.Until all of the Senior Indebtedness has been Finally Paid: (A) the Subordinated
Lender shall not demand, accept or acquire from either Company or any Obligor any security interest in or Lien on any assets of either Company or any Obligor or any Company Property, nor any
collateral from either Company or any Obligor; (B) neither Company shall discharge the Subordinated Indebtedness other than in accordance with the terms of the Subordinated Documents;
(C) the Subordinated Lender shall not demand or accept from either Company, any Obligor or other Person any consideration which would result in a discharge of the Subordinated Indebtedness;
(D) the Subordinated Lender shall not hereafter give any subordination in respect of the Subordinated Indebtedness; and (E) neither Company shall hereafter issue any instrument, security
or other writing evidencing any part of the Subordinated Indebtedness, and the Subordinated Lender shall not receive any such writing, except upon the condition that such security shall bear the
legend referred to inSection 25below and a true copy thereof shall be thereupon promptly furnished to the Senior Agent.

6.Permitted Payments.Notwithstanding the terms of the Subordinated Documents, each Company hereby agrees that
it shall not make (and will not permit any other Obligor to make), and the Subordinated Lender hereby agrees that it will not accept, any payment or distribution with respect to the Subordinated
Indebtedness including any payment or distribution received through the exercise of any right of setoff, counterclaim or crossclaim, until the Senior Indebtedness is Finally Paid; providedthat the
Companies may make to the Subordinated Lender and the Subordinated Lender may accept payments in kind (but not in cash) including,
without limitation, services in connection with that certain Processing Agreement, between Akorn and the Subordinated Lender, dated as of December 20, 2001 (the
"Processing Agreement");providedfurther that notwithstanding anything hereunder to the contrary, the
Subordinated Lender shall retain all of its rights as a purchaser of Akorn's goods and services under the Processing Agreement, and nothing hereunder shall be construed as the Subordinated

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Lender's
relinquishment or waiver, or assignment to the Senior Agent or the Senior Lenders of the Subordinated Lender's right to reject Akorn's noncorming goods or services, if any, or to assert and
contest claims against Akorn for damages resulting therefrom.

7.Forbearance of Legal Remedies.



8.Dissolution, Liquidation, Reorganization or Bankruptcy.(a) In the event of any Proceeding involving
either Company or any Obligor:



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9.Obligation of Company Unconditional.Nothing contained herein or in the Senior Loan Documents is intended to
or shall impair, as between either Company and the Subordinated Lender only, the obligation of the Companies, which is absolute and unconditional, to pay to the Subordinated Lender the Subordinated
Indebtedness as and when the same shall become due and payable in accordance with their terms, or to affect the relative rights of the Subordinated Lender and creditors of the Companies other than the
Senior Lenders.

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10.Subordination Rights Not Impaired by Acts or Omissions of either Company or Holders of Senior Indebtedness.



11.Waivers.Each Company and the Subordinated Lender each hereby waive, to the fullest extent permitted by law,
any defense based on the adequacy of a remedy at law which might be asserted as a bar to the remedy of specific performance of this Agreement in any action brought therefor by the Senior Lenders. To
the fullest extent permitted by law and except as to any notices specified in this Agreement, notices regarding the intended sale or disposition of any portion of the collateral held by the Senior
Lenders, or any notice which may not be waived in accordance with the UCC, each Company and the Subordinated Lender each hereby further waive: (a) presentment, demand, protest and notice of
protest in connection with all negotiable instruments evidencing all or any portion of the Senior Indebtedness or the Subordinated Indebtedness to which the Companies or the Subordinated Lender may be
a party and (b) prior notice of and consent to any loans made or

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extensions
granted. The Subordinated Lender consents to any release, renewal, extension, compromise or postponement of the time of payment of the Senior Indebtedness, to any substitution, exchange or
release of collateral therefor, and to the addition or release of any person primarily or secondarily liable thereon.

12.No Estoppel.Neither the failure nor any delay on the part of any Senior Lender to exercise any right,
remedy, power or privilege hereunder shall operate as a waiver thereof or give rise to an estoppel, nor be construed as an agreement to modify the terms of this Agreement, nor shall any single or
partial exercise of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No
waiver by a party hereunder shall be effective unless it is in writing and signed by the party making such waiver, and then only to the extent specifically stated in such writing.

13.Incorrect Payments; Specific Performance.If either Company or any Obligor shall make or the Subordinated
Lender shall collect any payment on account of the principal of, premium or interest on or any other amounts due under the Subordinated Indebtedness in contravention of this Agreement, such payments
shall be held in trust by the Subordinated Lender and not commingled with any assets of any Subordinated Lender and shall be paid over and delivered to the Senior Agent, for the benefit of the Senior
Lenders, promptly upon receipt thereof. At any time any Subordinated Lender fails to comply with any provision of this Agreement, the Senior Lenders may demand specific performance of this Agreement,
whether or not either Company has complied with this Agreement, and may exercise any other remedy available at law or equity.

14.Amendment of the Subordinated Documents and Senior Loan Documents.The Subordinated Lender agrees that it
will not, without the prior written consent of the Senior Agent, agree to any amendment, modification, waiver or supplement to the Subordinated Documents. The Senior Indebtedness may at any time be
amended, extended, modified, restated or waived without limitation, without notice to, or the consent of, the Subordinated Lender.

15.Inconsistent or Conflicting Provisions; Construction.If a provision of the Senior Loan Documents or the
Subordinated Documents is inconsistent or conflicts with the provisions of this Agreement, the
provisions of this Agreement shall govern and prevail. The term "including" is not limiting and means "including without limitation." In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding", and the word "through" means "to and including."

16.Notices.Any notice, consent or other communication provided for in this Agreement shall be in writing and
shall be delivered personally (effective upon delivery), via facsimile (effective upon confirmation of transmission), via overnight courier (effective the next Business Day after dispatch if
instructed to deliver on next business day) or via U.S. Mail (effective 3 days after mailing, postage prepaid, first class) to each party at its address(es) and/or facsimile number(s) set forth
onAnnex Ihereto, or to such other address as either party shall specify to the other in writing from time to time. The Subordinated Lender shall
provide the Senior Agent with written notice promptly upon the occurrence of an event of default under the Subordinated Documents.

17.Entire Agreement.This Agreement constitutes and expresses the entire understanding between the parties
hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, whether express or implied, oral or written.
Neither this Agreement nor any portion or provision hereof may be changed, waived or amended orally or in any manner other than by an agreement in writing signed by the Senior Agent and the
Subordinated Lender;providedthat any such change, waiver or amendment shall be binding upon each Company by their written consent thereto. This
Agreement shall constitute a Loan Document and the recitals hereto shall constitute part of this Agreement.

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18.Additional Documentation.Each Company and the Subordinated Lender shall execute and deliver to the Senior
Agent such further instruments and shall take such further action as the Senior Agent may at any time or times reasonably request in order to carry out the provisions and intent of this Agreement.

19.Expenses.The Companies, joint and severally, agree to pay the Senior Agent and the Senior Lenders on demand
all expenses of every kind, including Attorney Costs, that the Senior Agent or the Senior Lenders incur in enforcing any of their rights against either Company and/or the Subordinated Lender under
this Agreement.

20.Successors and Assigns.



21.Covenant Not to Challenge.This Agreement has been negotiated by the parties with the expectation and in
reliance upon the assumption that the instruments and documents evidencing the Senior Indebtedness are valid and enforceable. In determining whether to enter into this Agreement, the Subordinated
Lender has assumed such validity and enforceability, and has agreed to the provisions contained herein, without relying upon any reservation of a right to challenge or call into question such validity
or enforceability. As between any Senior Lender and any Subordinated Lender, the Subordinated Lender hereby covenants and agrees, to the fullest extent permitted by law, that it shall not initiate in
any proceeding a challenge to the validity or enforceability of the documents and instruments evidencing the Senior Indebtedness or the validity, perfection or priority of any Lien of the Senior Agent
or the Senior Lenders securing the Senior Indebtedness, nor shall the Subordinated Lender instigate other parties to raise any such challenges, nor shall the Subordinated Lender participate in or
otherwise assert any such challenges which are raised by other parties.

22.Subrogation.Subject to the Final Payment of all Senior Indebtedness and the provisions of Section 24hereof, the
Subordinated Lender shall be subrogated to the rights of the Senior Lenders to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness to the extent that distributions otherwise payable to the Subordinated Lender have been applied to the Senior Indebtedness, until all
amounts payable under the Subordinated Indebtedness shall have been paid in full. For purposes of such subrogation, no payments or distributions to the Senior Lenders of any cash, property or
securities to which the Subordinated Lender would be entitled except for the provisions of this Agreement, and no payment pursuant to the provisions of this Agreement to the Senior Lenders by the
Subordinated Lender shall, as among the Companies and their creditors other than the Senior Lenders, be deemed to be a payment or distribution by either

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Company
to or on account of the Senior Indebtedness. If either Company fails to make any payment on account of the Subordinated Indebtedness by reason of any provision contained herein, such failure
shall, notwithstanding such provision contained herein, constitute a default with respect to the Subordinated Indebtedness if and to the extent such failure would otherwise constitute such a default
in accordance with the terms of the Subordinated Indebtedness.

23.Termination of Agreement.This Agreement shall continue and shall be irrevocable until the date all of the
Senior Indebtedness has been Finally Paid or otherwise discharged and released in an express writing to such effect by the Senior Lenders.

24.Reinstatement.The obligations of the Subordinated Lender under the Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time any payment in respect of any Senior Indebtedness is rescinded or must otherwise be restored or returned by any Senior Lender by reason
of any bankruptcy, reorganization, arrangement, composition or similar proceeding or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for,
either Company, any Obligor or any substantial part of its property, or otherwise, all as though such payment had not been made.

25.Legends.Until the termination of this Agreement, the Subordinated Lender will cause to be clearly,
conspicuously and prominently inserted on the face of the Subordinated Note and any other Subordinated Document, as well as any renewals or replacements thereof, the following legend:



Each
Company's books shall be marked to evidence the subordination of all of the Subordinated Indebtedness to the holders of Senior Indebtedness, in accordance with the terms of this
Agreement. Each Senior Lender is authorized to examine such books from time to time in accordance with the terms of the Credit Agreement and to make any notations required by this Agreement.

26.Governing Law.THIS AGREEMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE
OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. EACH COMPANY AND THE SUBORDINATED LENDER HEREBY AGREE THAT ALL
ACTIONS OR PROCEEDINGS INITIATED BY EACH COMPANY OR THE SUBORDINATED LENDER AND ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT SHALL BE LITIGATED IN A

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COOK
COUNTY, ILLINOIS COURT OR THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS OR, IF ANY SENIOR LENDER INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING COURTS, ANY COURT IN
WHICH SUCH SENIOR LENDER SHALL INITIATE SUCH ACTION, TO THE EXTENT SUCH COURT HAS JURISDICTION. EACH COMPANY AND THE SUBORDINATED LENDER EACH HEREBY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED BY ANY SENIOR LENDER AND HEREBY WAIVE ANY CLAIM THAT SUCH COURTS ARE AN INCONVENIENT FORUM OR AN IMPROPER FORUM BASED UPON LACK OF VENUE. THE
EXCLUSIVE CHOICE OF FORUM AS SET FORTH IN THIS SECTION SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT, BY ANY SENIOR LENDER, OF ANY JUDGMENT OBTAINED IN ANY OTHER FORUM OR THE TAKING, BY ANY SENIOR
LENDER, OF ANY ACTION TO ENFORCE THE SAME IN ANY OTHER APPROPRIATE JURISDICTION, AND EACH COMPANY AND THE SUBORDINATED LENDER HEREBY WAIVE THE RIGHT TO COLLATERALLY ATTACK SUCH JUDGMENT OR ACTION.

27.Jury Trial.THE SENIOR AGENT, THE SUBORDINATED LENDER AND EACH COMPANY WAIVE TRIAL BY JURY IN ANY DISPUTE
ARISING FROM, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

28.Severability.The provisions of this Agreement are independent of and separable from each other. If any
provision hereof shall for any reason be held invalid or unenforceable, it is the intent of the parties that such invalidity or unenforceability shall not affect the validity or enforceability of any
other provision hereof, and that this Agreement shall be construed as if such invalid or unenforceable provision had never been contained herein.

29.Counterparts.This Agreement may be executed in any number of separate counterparts, all of which, when
taken together, shall constitute one and the same instrument, notwithstanding the fact that all parties did not sign the same counterpart. Receipt of an executed signature page to this Agreement by
facsimile or other electronic transmission shall constitute effective delivery thereof.

30.Sections.The section headings used in this Agreement are for convenience only and shall not affect the
interpretation of any of the provisions hereof.

31.Defines Rights of Creditors.The provisions of this Agreement are solely for the purpose of defining the
relative rights of the Senior Lenders and the Subordinated Lender and shall not be deemed to create any rights or priorities in favor of any other Person, including each Company.



[signature
pages follow]

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The
parties hereto have executed this Agreement as of the date first above written.

|COMPANIES:           |  | AKORN, INC.                      
|-------------------- |  | ---------------------------------
|                     |  |                                  
|                     |  | By:                              
|                     |  | Name:                            
|                     |  | Title:                           
|                     |  |                                  
|                     |  | AKORN (NEW JERSEY), INC.         
|                     |  |                                  
|                     |  | By:                              
|                     |  | Name:                            
|                     |  | Title:                           
|                     |  |                                  
|SENIOR AGENT:        |  | LASALLE BANK NATIONAL ASSOCIATION
|                     |  |                                  
|                     |  |                                  
|                     |  | By:                              
|                     |  | Name:                            
|                     |  | Title:                           
|                     |  |                                  
|SUBORDINATED LENDER: |  | NEOPHARM, INC.                   
|                     |  |                                  
|                     |  | By:                              
|                     |  | Name:                            
|                     |  | Title:                           

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ANNEX I

NOTICE ADDRESSES



COMPANIES:

c/o
Akorn, Inc.
2500 Milbrook Drive
Buffalo Grove, Illinois 60089
Attention:    
Facsimile:



SENIOR
AGENT:

LaSalle
Bank National Association
135 South LaSalle Street
Chicago, Illinois 60603
Attention:    Patrick O'Toole
Facsimile:



SUBORDINATED
LENDER:

Neopharm, Inc.
150 Field Drive, Suite 195
Lake Forest, Illinois 60045
Facsimile No.: (847) 295-8854
Attn: James Hussey, Chief Executive Officer



With
a copy to:

McGuireWoods
Ross & Hardies
150 North Michigan Avenue
Chicago, Illinois 60601-7567
Facsimile No.: (312) 750-8600
Attn: Scott Becker

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