<PAGE>
                                                                   Exhibit 10.17


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE
SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OFFERED,
PLEDGED OR OTHERWISE DISTRIBUTED UNLESS REGISTERED UNDER THE SECURITIES ACT OF
1933 AND APPLICABLE STATE SECURITIES LAWS OR SUCH SALE, TRANSFER, ASSIGNMENT,
OFFER, PLEDGE OR OTHER DISTRIBUTION FOR VALUE IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT AND SUCH LAWS.


                                 PROMISSORY NOTE


$3,250,000.00                                                  December 20, 2001
                                                         Buffalo Grove, Illinois



         FOR VALUE RECEIVED, AKORN, INC., a Louisiana corporation ("Borrower"),
promises to pay to the order of NEOPHARM, INC., a Delaware corporation
("NeoPharm," together with any person or entity to whom all or any portion of
this Note may be transferred being hereinafter referred to as "Lender"), at its
principal offices located at 150 Field Drive, Suite 195, Lake Forest, Illinois
60045, or at such other place as Lender may direct, the principal sum of THREE
MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS ($3,250,000.00), and to
pay interest thereon in accordance with the terms hereof, on December 20, 2006
(the "Maturity Date").

         This Promissory Note (this "Note") has been executed in connection with
(a) that certain Processing Agreement, of even date herewith (the "Processing
Agreement"), between Lender and Borrower; and (b) that certain Subordination and
Intercreditor Agreement, of even date herewith (the "Subordination Agreement"),
between Borrower and John N. Kapoor, as Trustee under The John N. Kapoor Trust,
dated September 20, 1989, (the trustee and the trust, together, "Kapoor"), to
which reference is hereby made.


                                   ARTICLE 1
                                    INTEREST

         1.1 Calculation of Interest Rate. Interest shall begin to accrue on the
date hereof in accordance with the terms of this Section 1.1 and shall be
compounded as of the first business day of each calendar quarter until all
principal and accrued interest is paid. Commencing on the date hereof, interest
shall accrue at a rate of 3.6% per annum. As of the first business day of each
calendar quarter (each, a "Change Date"), commencing on January 1, 2002, Lender
shall adjust the interest rate charged on all amounts of outstanding principal
and interest accrued during the previous calendar quarter to a rate which is
equal to the average return on all of



<PAGE>

Lender's cash and readily tradable long- and short-term securities during such
previous calendar quarter; thereafter, interest shall accrue on the unpaid
outstanding principal and accrued interest at the most recently adjusted
interest rate until the next Change Date. Lender shall furnish to Borrower a
statement showing all such cash and securities and the return thereon for the
prior calendar quarter in support of each adjustment to the interest rate.
Interest shall be computed for the actual number of days elapsed on the basis of
a year consisting of 365 days, including the date the loan is made and excluding
the date the loan or any portion thereof is paid or prepaid.

         1.2 Default Rate. After an Event of Default, interest shall accrue and
be payable at a rate equal to (a) the interest rate calculated in accordance
with Section 1.1, plus (b) three percent (3%) (the "Default Rate").

                                   ARTICLE 2
                                    PAYMENTS

         2.1 Required Repayment. Borrower shall pay all amounts of outstanding
principal and accrued but unpaid interest hereunder on the Maturity Date.
Borrower may prepay all outstanding principal and accrued but unpaid interest at
any time without penalty or premium.


         2.2 Manner of Payments. All payments made by Borrower hereunder shall
be made to Lender at its principal offices located at 150 Field Drive, Suite
195, Lake Forest, Illinois 60045, Attn: Chief Financial Officer or at such other
places as Lender may designate. All payments hereunder shall be made in
immediately available funds, and shall be applied first to accrued interest and
then to principal; however, if an Event of Default occurs, Lender may, in its
sole discretion, and in such order as it may choose, apply any payment to
interest, principal and/or lawful charges and expenses then accrued. All
payments shall be made without deduction for or on account of any present or
future taxes, duties or other charges levied or imposed on this Note or the
proceeds thereof by any government or political subdivision thereof, except as
required by law.


                                    ARTICLE 3
                        OPERATIONS/LYOPHILIZATION RAMP-UP

         3.1 Use of Proceeds. Borrower agrees that the proceeds from the loan
evidenced by this Note shall be used solely (a) to achieve removal of all
warning letter sanctions pursuant to Form 483 or current Good Manufacturing
Practice regulations issued or imposed by the Food and Drug Administration
("FDA") with regard to Borrower's ability to handle and manufacture sterile
pharmaceuticals and provide lyophilization services; (b) to obtain FDA
validation for Borrower's operation of its facility located at 1222 West Grand
Avenue, Decatur, Illinois (the "Facility") to offer and provide lyophilization
services for the handling and manufacturing of sterile pharmaceuticals; (c) to
obtain any other required license, consent, permit or approval from the FDA or
any other governmental authority in the United States or its political
subdivisions as shall be required to establish operations at the Facility to
handle and manufacture sterile pharmaceuticals and provide lyophilization
services; (d) to establish operations at the Facility to provide lyophilization
services and to handle and manufacture sterile pharmaceuticals; and (e) to


                                       2
<PAGE>

make any capital expenditure necessary to provide lyophilization services (the
items set forth in subsections (a), (b), (c), (d), and (e) collectively, the
"Lyophilization Ramp-Up").

         3.2 Additional Costs. Borrower shall be responsible for all costs
whatsoever related to the Lyophilization Ramp-Up in excess of the proceeds
hereunder and shall not require, request or demand additional amounts from
Lender to fund the Lyophilization Ramp-Up other than the amounts loaned by
Lender to Borrower or evidenced by this Note.

         3.3 June 30, 2003. By June 30, 2003, Borrower shall (a) complete the
Lyophilization Ramp-Up; (b) maintain the continued removal of all warning letter
sanctions pursuant to Form 483 related to the Facility; and (c) be prepared to
immediately begin development of the procedures for manufacture of Lender's
products.

         3.4 Change in Control. If Borrower experiences (a) a change in control
of greater than fifty percent (50%) of Borrower's voting securities or (b) a
change in control through a merger or the sale of all or substantially all of
Borrower's assets, then Lender may declare all amounts of principal and interest
under this Note immediately due and payable and/or terminate the Processing
Agreement.

                                    ARTICLE 4
                                 REPRESENTATIONS

         4.1 Organization and Qualification. Borrower is duly organized, validly
existing and in good standing under the laws of the State of Louisiana, its
state of incorporation. Borrower is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the failure to
receive or retain such qualification would have a material adverse effect on the
business, operations or financial condition of Borrower.

         4.2 Corporate Authority and Authorization. Borrower has all requisite
corporate, power, authority and legal right to execute and deliver and perform
its obligations under this Note and all of Borrower's obligations described
herein have been duly and validly authorized by all necessary corporate
proceedings on the part of Borrower.

         4.3 Execution and Binding Effect. This Note has been or shall be duly
and validly executed and delivered by Borrower and this Note when executed and
delivered shall constitute the legal, valid and binding obligations of Borrower
enforceable in accordance with the terms hereof and thereof, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
receivership, moratorium or other laws affecting creditors' rights generally.

         4.4 Absence of Conflicts. The execution and delivery of this Note,
consummation of the transactions herein or Borrower's performance of or
compliance with the terms and conditions hereof or in the Processing Agreement
shall not (a) materially violate any applicable law or regulation; (b) conflict
with or result in a material breach of or a default under the certificate of
incorporation or bylaws of Borrower, or any agreement or instrument to which
Borrower is a party or by which Borrower or its properties is bound; or (c)
result in the creation or imposition of any lien upon any property (now owned or
hereafter acquired) of Borrower except as otherwise contemplated by this Note.


                                       3
<PAGE>

         4.5 No Event of Default; Compliance with Instruments Corporate
Documents and Material Agreements. As of the date hereof Borrower is not in
violation of any term of its certificate of incorporation and/or bylaws and
Borrower is not in violation of any term of its material agreements or
instruments including, without limitation, (a) that certain Amended and Restated
Credit Agreement, dated September 15, 1999, as most recently amended by that
certain Forbearance Agreement (the "Forbearance Agreement"), dated July 12, 2001
(the Amended and Restated Credit Agreement and the Forbearance Agreement,
together, the "Northern Trust Credit Facility"), among Borrower, Borrower's
wholly owned subsidiary, Akorn (New Jersey), Inc., an Illinois corporation and
the Northern Trust Company ("Northern Trust"); (b) that certain Junior Mortgage,
dated March 21, 2001 between Borrower and Northern Trust (the "Northern
Mortgage"); (c) two Mortgage Notes (together, the "Primary Mortgage"), each
dated April 27, 1997, by and between Borrower and Standard Mortgage Investors
("Standard Investors"); (d) that certain Master Equipment Lease Agreement No.
08197, dated December 9, 1999, as amended December 26, 2000 (the "Asset Lease"),
by and between Borrower and National City Leasing Corporation ("National City");
(e) that certain Convertible Bridge Loan and Warrant Agreement, dated July 12,
2001, by and between Borrower and the John N. Kapoor Trust, dated September 20,
1989 (the "Kapoor Loans"), or (f) any other material agreement or instrument to
which Borrower is a party or by which it or its properties is bound.

         4.6 Litigation. There is no pending action, suit or threatened
proceeding by or before any governmental authority against or affecting Borrower
which if adversely decided would have a material adverse effect on its financial
condition or on its ability to comply with its obligations herein, except those
disclosed on Exhibit A attached hereto.

         4.7 Rights to Property. Except for the security interests (a) granted
by Borrower to Northern Trust under the terms of the Northern Credit Facility
and the Northern Mortgage; (b) granted to Standard Investors under the terms of
the Primary Mortgage; and (c) retained by National City under the terms of the
Asset Lease, Borrower has good and marketable title to all personal and real
property purported to be owned by it.

         4.8 Taxes. All tax returns required to be filed by Borrower have been
properly prepared, executed and filed, and all taxes, assessments, fees and
other governmental charges levied upon Borrower or upon any of its properties,
incomes, sales or franchises which are shown to be due and payable thereon have
been paid, other than taxes or assessments the validity or amount of which
Borrower is contesting in good faith. The reserves and provisions for taxes on
the books of Borrower are adequate for all open years and for its current fiscal
period.

         4.9 Financial Accounting Practices. Borrower and each of its
subsidiaries have made and kept books, records and accounts which, in reasonable
detail, accurately and fairly reflect their respective dealings or transactions
of or in relation to the plants, properties, business and affairs of the
Borrower and of each subsidiary, and Borrower shall keep, and cause each of its
subsidiaries to keep, proper books of account, in which full and correct entries
shall be made of all dealings or transactions of or in relation to the plants,
properties, business and affairs of the Borrower and of each subsidiary in
accordance with generally accepted accounting principles applied on a consistent
basis. The Borrower will at any and all times, upon the written request of the
Lender and at the Lender's expense, permit the Lender by its representatives to
inspect the plants and properties, books of account, records, reports and other
papers of the Borrower and of


                                       4
<PAGE>

each subsidiary, and to take copies and extracts therefrom, and will afford and
procure a reasonable opportunity to make any such inspection.

         4.10 Accurate and Complete Disclosure. To the best of Borrower's
knowledge, no representation made by Borrower under this Note and no statement
made by Borrower in any financial statement, report filed with the Securities
and Exchange Commission, certificate, exhibit or document furnished by Borrower
to Lender pursuant to or in connection with this Note is false or misleading as
of the date made in any material respect (including by omission of material
information necessary to make such representation, warranty or statement not
misleading). Lender has had adequate access to Borrower's management and
opportunity to conduct it own due diligence examination of the plants and
properties, books of account, records, reports and other papers of the Borrower
and each of its subsidiaries.

         4.11 Other Indebtedness. With the exception of (a) the Northern Credit
Facility together with the Northern Mortgage; (b) the Primary Mortgage; (c) the
Asset Lease; and (d) the Kapoor Loans, Borrower has no Indebtedness in excess of
$100,000.

         4.12 Capital Stock. All of the outstanding capital stock of Borrower
has been duly authorized and validly issued, and is non-assessable.

         4.13 Environmental Warranties. To the best of Borrower's knowledge,
Borrower and each of its subsidiaries is in substantial compliance with all
environmental laws, regulations, rules, ordinances, permits, orders, and other
requirements applicable to it, the operations of each or the real or personal
property owned, leased or operated by each, including without limitation, all
such laws governing employment, the generation, use, storage, disposal or
transportation of toxic or hazardous substances or wastes. Borrower has not
received notice of, and is not aware of, any violations or alleged violations,
or any liability or asserted liability, under any such environmental laws, with
respect to Borrower, its subsidiaries, or their respective businesses or
properties.

                                    ARTICLE 5
                                    COVENANTS

         Except as otherwise permitted under the Northern Trust Credit Facility
or consented to in writing by Northern Trust, Borrower covenants and agrees
that, without the prior written consent of Lender, from and after the date
hereof until all amounts of principal and interest hereunder are repaid and
discharged:

         5.1 Indebtedness. Borrower shall not create, incur, assume or permit to
exist any Indebtedness, after the date hereof except (a) deferred taxes; (b)
unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law; (c) existing Indebtedness, which includes (i) amounts outstanding under the
Northern Credit Facility and any additional advances or borrowings under the
Northern Credit Facility in accordance with the terms thereof, (ii) the Primary
Mortgage, (iii) the Northern Mortgage and any additional advances or borrowings
under the Northern Mortgage, in accordance with the terms thereof, (iv) the
Asset Lease, (v) the Kapoor Loans, and (vi) the loans made by Lender evidenced
by this Note, or the refinancing of any of the documents or


                                       5
<PAGE>

facilities set forth in subparagraphs (i) through (vi), the refinanced terms of
which shall in any event be on terms no less favorable to Borrower or Lender
than the terms of the Indebtedness being refinanced; (d) any financing secured
by any real estate owned by Borrower; and (e) the unsecured financing by a
seller of product lines to Borrower.

         "Indebtedness" shall mean (a) any obligation for the repayment of
borrowed money or, with respect to the purchase price of property, any payment
which is deferred six (6) months or more after the date of acquisition, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith; (b) reimbursement and all other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured; (c) all obligations evidenced by notes, bonds, debentures or similar
instruments; (d) any obligation for the payment of money created or arising
under any conditional sale or other title retention agreement; (e) all capital
leases; and (f) any agreement to guarantee the indebtedness of a subsidiary of
Borrower or any other person or business entity.

         5.2 Business. Borrower shall not make any changes in its business
objectives, purposes or operations which could in any way adversely affect the
repayment of this Note or Borrower's ability to comply with its obligations
contained in the Processing Agreement.

         5.3 Liens. Borrower shall not create, incur, assume or permit to exist
any Lien on or with respect to any of its properties or assets whether now owned
or hereafter acquired, except (a) presently existing or hereafter created Liens
in favor of Lender; (b) Liens created after the date hereof by conditional sale
or other title retention agreements (including, without limitation, capital
leases) or in connection with purchase money Indebtedness with respect to
properties acquired by Borrower in the ordinary course of business, involving
the incurrence of an aggregate amount of purchase money Indebtedness and capital
lease obligations of not more than $1,000,000 outstanding at any one time for
all such Liens (provided that such Liens attach only to the assets subject to
such purchase money Indebtedness and such Indebtedness is incurred within twenty
(20) days following such purchase and does not exceed 100% of the purchase price
of the subject assets); (c) Liens in connection with any financing secured by
any real estate owned by Borrower; and (d) Liens existing on the date hereof and
described in Exhibit A hereto.

         In addition, Borrower shall not become a party to any agreement, note,
indenture or instrument, or take any other action, which would prohibit the
creation of a Lien on any of its properties or other assets in favor of Lender,
as collateral for payment and satisfaction of the outstanding principal and
accrued interest under this Note, except operating leases, capital leases or
intellectual property licenses which prohibit liens upon the assets that are
subject thereto.

         "Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).


                                       6
<PAGE>

         5.4 Cancellation of Indebtedness. Borrower shall not cancel any claim
or debt owing to it, except for reasonable consideration negotiated on an
arm's-length basis and in the ordinary course of its business consistent with
past practices.

                                    ARTICLE 6
                     EVENTS OF DEFAULT: RIGHTS AND REMEDIES

         6.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder: (a) Borrower shall fail to make any payment of principal
of, or interest on, or any other amount owing in respect of this Note when due
and payable; (b) Borrower shall fail to pay any costs or expenses payable or
reimbursable by Borrower under this Note, and such failure shall have remained
unremedied for a period of thirty (30) days or more; (c) Borrower shall fail or
neglect to perform, keep or observe any of the provisions of this Note (and not
constituting an Event of Default under any of the other subsections of this
Section 6.1) and such failure shall have remained unremedied for a period of
thirty (30) days or more; (d) Borrower shall fail to perform, keep or observe
any provision of the Processing Agreement after the grace period (if any) set
forth therein or the Processing Agreement shall not be effective on or before
June 30, 2003; (e) a default or breach that is not waived in writing shall occur
under the Northern Credit Facility, The Northern Mortgage, the Primary Mortgage,
the Asset Lease or the Kapoor Loans; (f) a default under any agreement, document
or instrument, excluding those specified in subsection 6.1(e), to which Borrower
is a party and such default is not cured or waived within any applicable grace
period and such default or breach (i) involves the failure to make any payment
when due in respect of any Indebtedness of Borrower or any subsidiary of
Borrower in excess of $50,000 in the aggregate, or (ii) causes such Indebtedness
or a portion thereof in excess of $100,000 in the aggregate to become due prior
to its stated maturity or prior to its regularly scheduled dates of payment, or
(iii) entitles any holder of such Indebtedness to cause such Indebtedness or a
portion thereof in excess of $100,000 in the aggregate to become due prior to
its stated maturity or prior to its regularly scheduled dates of payment,
regardless of whether such right is exercised or waived by such holder or
trustee; (g) The Forbearance Agreement expires, unless the same expires without
Borrower being in breach or default thereof; (h) Kapoor breaches or repudiates
or attempts to breach or repudiate, the Subordination Agreement or the
Subordination Agreement is terminated by operation of its terms or operation of
law; (i) any representation or warranty herein or in any written statement,
report filed with the Securities and Exchange Commission, financial statement or
certificate made or delivered to Lender by Borrower shall be untrue or incorrect
in any material respect, as of the date when made or deemed made; (j) assets of
Borrower or any subsidiary thereof with a fair market value of $100,000 or more
shall be attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of Borrower or any subsidiary thereof and
such condition shall continue for thirty (30) days or more; (k) a case or
proceeding shall have been commenced against Borrower or any subsidiary thereof
in a court having competent jurisdiction seeking a decree or order in respect of
Borrower or any subsidiary thereof (i) under Title 11 of the United States Code,
as now constituted or hereafter amended or any other applicable federal, state
or foreign bankruptcy or other similar law, (ii) appointing a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for Borrower or any subsidiary thereof or of any substantial part of the assets
thereof, or (iii) ordering the winding-up or liquidation of the affairs of
Borrower or any subsidiary thereof and


                                       7
<PAGE>

such case or proceeding shall remain undismissed or unstayed for forty-five (45)
days or more or such court shall enter a decree or order granting the relief
sought in such case or proceeding; (l) Borrower or any subsidiary thereof shall
(i) file a petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable federal, State or
foreign bankruptcy or other similar law, (ii) consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of Borrower or any
subsidiary thereof or of any substantial part of its respective assets, (iii)
make an assignment for the benefit of creditors, or (iv) take any corporate
action in furtherance of any such action; or (m) a final judgment or judgments
for the payment of money in excess of $250,000 in the aggregate shall be
rendered against Borrower or any subsidiary thereof and the same shall not (i)
be fully covered by insurance, or (ii) within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed pending appeal, or
shall not have been paid or otherwise discharged prior to the expiration of any
such stay.

         6.2 Remedies. If any Event of Default shall have occurred and be
continuing (a) all of the outstanding principal and accrued and unpaid interest
under this Note shall be immediately due and payable without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrower; (b) the rate of interest applicable to this Note shall be increased
to the Default Rate; and (c) Borrower may exercise any rights and remedies
provided to Lender under this Note and/or at law or equity.

         6.3 Waivers by Borrower. Except as otherwise provided for in this Note
or by applicable law, Borrower waives presentment, demand and protest and notice
of presentment, dishonor, notice of intent to accelerate, notice of
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Lender on which Borrower may in any way be liable, and hereby
ratifies and confirms whatever Lender may do in this regard. Borrower
acknowledges that it has been advised by counsel of its choice with respect to
this Note and the transactions evidenced by this Note.

                                    ARTICLE 7
                             SUCCESSORS AND ASSIGNS

         This Note shall be binding on and shall inure to the benefit of
Borrower and Lender and their respective successors and assigns, except as
otherwise provided herein. Borrower may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder without
the prior express written consent of Lender. Any such purported assignment,
transfer, hypothecation or other conveyance by Borrower without the prior
express written consent of Lender shall be void. The terms and provisions of
this Note are for the purpose of defining the relative rights and obligations of
Borrower and Lender with respect to the transactions contemplated hereby and
there shall be no third party beneficiaries of any of the terms and provisions
of this Note.


                                       8
<PAGE>

                                    ARTICLE 8
                                  SUBORDINATION

         Anything in this Note to the contrary notwithstanding, the Indebtedness
evidenced by this Note, both principal and interest, and the right to seek
enforcement of any of the rights granted to Lender herein, shall be subordinate
and junior to all obligations of Borrower incurred under the Northern Credit
Facility, between Borrower and Northern Trust.

                                    ARTICLE 9
                                     NOTICES

         All notices, requests, demands and payments of principal and interest
given to or made under this Note shall, except as otherwise specified in this
Note, be in writing and shall be effective upon the earlier of (a) receipt or
(b) the fifth (5th) day following the date such notice was mailed properly
addressed, first class, registered or certified mail, return receipt requested,
postage prepaid, to the other party at the following addresses (which may be
changed at any time by notice under this Article 9):

        If to NeoPharm, Inc.
                                   150 Field Drive, Suite 195
                                   Lake Forest, Illinois 60045
                                   Facsimile No.:  (847) 295-8854
                                   Attn:  James Hussey

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

        If to Akorn, Inc.
                                   Akorn, Inc.
                                   2500 Millbrook Drive
                                   Buffalo Grove, IL 60089-4694
                                   Facsimile No.    (847) 279-6123
                                   Attn: Antonio Pera

        With a copy to:
                                   Tressler, Soderstrom, Maloney & Priess
                                   2100 Manchester Road, Suite 950
                                   Wheaton, Illinois
                                   Facsimile No.:  (630) 668-3003
                                   Attn:  William A. Kindorf, III


                                       9
<PAGE>

                                   ARTICLE 10
                      GOVERNING LAW & WAIVER OF JURY TRIAL


         This Note and any document or instrument executed in connection
herewith shall be governed by and construed in accordance with the internal law
of the State of Illinois, and shall be deemed to have been executed in the State
of Illinois. Unless the context requires otherwise, wherever used herein the
singular shall include the plural and vice versa, and the use of one gender
shall also denote the other. Captions herein are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof;
references herein to Articles or provisions without reference to the document in
which they are contained are references to this Note. This Note shall bind
Borrower, its trustees (including without limitation successor and replacement
trustees), successors and assigns, and shall inure to the benefit of Lender, its
successors and assigns, except that Borrower may not transfer or assign any of
its rights or interest hereunder without the prior written consent of Lender.

         BORROWER HEREBY IRREVOCABLY AGREES THAT, SUBJECT TO LENDER'S SOLE AND
ABSOLUTE ELECTION, ALL SUITS, ACTIONS OR OTHER PROCEEDINGS WITH RESPECT TO,
ARISING OUT OF OR IN CONNECTION WITH THIS NOTE OR ANY DOCUMENT OR INSTRUMENT
EXECUTED IN CONNECTION HEREWITH SHALL BE SUBJECT TO LITIGATION IN COURTS HAVING
SITUS WITHIN OR JURISDICTION OVER COOK COUNTY, ILLINOIS. BORROWER HEREBY
CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT
LOCATED IN OR HAVING JURISDICTION OVER SUCH COUNTY, AND HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO REQUEST OR DEMAND TRIAL BY JURY, TO TRANSFER OR
CHANGE THE VENUE OF ANY SUIT, ACTION OR OTHER PROCEEDING BROUGHT BY LENDER IN
ACCORDANCE WITH THIS PARAGRAPH, OR TO CLAIM THAT ANY SUCH PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.


                                   ARTICLE 11
                                  MISCELLANEOUS

         11.1 Construction. Wherever possible, each provision of this Note shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Note is 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 such provision
or the remaining provisions of this Note.

         11.2 Amendments. This Note may not be and shall not be deemed or
construed to have been modified, amended, rescinded, canceled, or waived in
whole or in part, except by written instruments signed by Borrower and Lender.

         11.3 No Waiver. Lender's failure at any time or times, to require
strict performance by Borrower of any provision of this Note or Promissory
Agreement shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance therewith. Any suspension or waiver of
an Event of Default under this Note or Promissory Agreement shall


                                       10
<PAGE>

not suspend, waive or affect any other Event of Default under this Note or
Promissory Agreement whether the same is prior or subsequent thereto and whether
of the same or of a different type. None of the undertakings, agreements,
warranties, covenants and representations of Borrower contained in this Note or
Promissory Agreement and no Event of Default by Borrower under this Note or
Promissory Agreement shall be deemed to have been suspended or waived by Lender
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Lender and directed to Borrower
specifying such suspension or waiver.


                                       11
<PAGE>

         IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed
as of the day and year first above written.

                                            AKORN, INC.
                                            By:
                                                --------------------------------
                                            Its:
                                                --------------------------------
Accepted:

NEOPHARM, INC.
By:
   --------------------------------
Its: President and Chief Executive Officer


Acknowledged:

THE NORTHERN TRUST COMPANY
By:
   --------------------------------
Its:
   --------------------------------


                                       12
<PAGE>

                                    EXHIBIT A


1.       LITIGATION.

         1.       Shareholder Class Action Lawsuit - Filed August 9, 2001

                  Class action lawsuit filed against the Company, Mr. Floyd
                  Benjamin, former CEO, and Mr. John Kapoor, current chairman
                  and interim CEO. Potential damages unknown at this time.

         2.       NovaDaq Technologies - Filed April 4, 2001

                  The Company was notified by the International Court of
                  Arbitration that NovaDaq filed a request for Arbitration in
                  relation to an Existing agreement between NovaDaq and the
                  company. Potential damages estimated at $4.4 million by
                  NovaDaq.

2.       LIENS.

<TABLE>
<CAPTION>
TRANSACTION             SECURED PARTY          DEBTOR            JURISDICTION    FILE NO.        ACTION          DATE
<S>                     <C>                    <C>               <C>             <C>             <C>             <C>
EQUIPMENT LEASE NO.     THE CIT GROUP/         AKORN             LA and          52-E7167        Filed           11/29/94
OL-8248 WITH                 EQUIPMENT                            St. Tammany    52-E7167        Correction      3/16/95
AMPLICON, INC.;         FINANCING, INC.                          Parrish         52-E8067        Amendment       5/30/95
SECURED BY UCC          1620 W. Fountainhead                                     52-19775        Continuation    10/22/99
FINANCING STATEMENT     Pkwy.
COVERING EQUIPMENT      Tempe, AZ 85282




MORTGAGE LOAN NOS.      STANDARD MORTGAGE      AKORN             Macon Co., IL
98021903 AND 98021904   INVESTORS
DATED 4/27/97;
SECURED BY MORTGAGES
ON DECATUR REAL
PROPERTIES; PRINCIPAL
BALANCE AT 6/30/01
$2,318,214.90, FINAL
PAYMENT DUE JUNE 2008
</TABLE>


                                       13
<PAGE>

<TABLE>
<CAPTION>
TRANSACTION             SECURED PARTY          DEBTOR            JURISDICTION    FILE NO.        ACTION          DATE
<S>                     <C>                    <C>               <C>             <C>             <C>             <C>
Amended and Restated    The Northern Trust     Akorn             CA              9800560381      Filed           12/31/97
Credit Agreement        Company                                                                  Amendment       9/21/99
dated 9/15/99 as        50 South LaSalle                                         9800560407      Filed           12/31/97
amended by              Street                                                                   Amendment       9/21/99
Forbearance Agreement   Chicago, IL 60675                        IL              3780342         Filed           12/30/97
dated 7/12/01 for                                                                4097177         Amendment       9/21/99
$45,000,000 line of                                                              4203325         Partial         4/24/00
credit; secured by                                                                               Release
UCC financing                                  Taylor            IL              3780343         Filed           12/30/97
statements covering                            Pharmaceuticals                   4097192         Amendment       9/21/99
accounts, inventory                            (merged with
and equipment                                  Akorn)

                                               Akorn (New        IL              4096623         Filed           9/21/99
                                               Jersey)
                                                                 NJ              01930630        Filed           9/20/99

Equipment Lease Nos.    Associates Leasing,    Akorn             NJ              01885213        Filed           1/21/99
VJ3317 and W10811       Inc.
with Lincoln Service    8001 Ridgepoint Drive
& Equipment Co.;        Irving, TX 75063
secured by UCC
financing statement
covering equipment

Equipment Lease No.     Deerbart Financial     Akorn             IL              4022989         Filed           4/20/99
5387; secured by UCC    Services Co.
financing statement     2250 E. Devon Ave.,
covering equipment      Ste. 251
                        Des Plaines, IL 60018

Master Equipment        National City          Akorn             IL              4314294         Filed           1/03/01
Lease Agreement No.     Leasing Corp.
08197-0012, dated       P.O. Box 36040
December 9, 1999,       Louisville, KY 40233
as amended
December 26, 2000;
acquisition cost
$3,811,028.93 with
monthly payments
of $52,577.71
through 12/26/07;
secured by UCC
financing statement
covering equipment

Junior Mortgage dated   The Northern Trust     Akorn
3/21/01                 Company 50 South
                        LaSalle Street
                        Chicago, IL 60675
</TABLE>


                                       14