Document:

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                                                                    EXHIBIT 10.3

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAWS.

                          SUBORDINATED PROMISSORY NOTE

$600,000.00                                                         New York, NY

                                                               Date of Issuance:
                                                                 October 7, 2003

         FOR VALUE RECEIVED, Akorn, Inc., a Louisiana corporation (the
"COMPANY"), promises to pay to the order of Arjun Waney or his administrators,
representatives, successors or assigns ("HOLDER"), the principal sum of SIX
HUNDRED THOUSAND DOLLARS AND ZERO CENTS ($600,000.00), and to pay interest on
the outstanding principal balance of this Subordinated Promissory Note (this
"NOTE") in accordance with Section 2 of this Note.

         1.       Maturity. The Company shall repay the outstanding principal
balance of this Note and interest accrued thereon in full on April 7, 2006 (the
"MATURITY DATE"). All payments received shall be applied first against costs of
collection (if any), then against accrued and unpaid interest on this Note, then
against the outstanding principal balance of this Note.

         2.       Interest. Interest on the outstanding principal balance of
this Note shall accrue from the date hereof at the Prime Rate plus 1.75% (the
"INTEREST RATE"), calculated on the basis of a 360 day year of twelve 30 day
months and such accrued interest shall be due and payable quarterly in arrears
beginning on December 31, 2003 and thereafter on March 31, June 30, September 30
and December 31 of each year (each, an "INTEREST PAYMENT DATE"). The accrued
interest shall be payable in cash in arrears on each Interest Payment Date, to
the extent permitted to be paid in cash under the credit facility entered into
among the Company, Akorn (New Jersey), Inc., La Salle Bank National Association
("LASALLE BANK") and the financial institutions that are or may from time to
time become parties thereto, dated as of October 7, 2003 (the "CREDIT FACILITY")
and to the extent such accrued interest is not paid in cash it shall accrue and
be added to the outstanding principal balance of this Note; provided, however,
that upon the occurrence of an Event of Default (as defined herein) interest on
the outstanding principal balance of this Note will accrue from the date of such
Event of Default at a rate per annum equal to two (2 %) plus the Interest Rate
then in effect. "PRIME RATE" shall mean a rate per year equal to that rate of
interest per year announced from time to time by LaSalle Bank called its prime
rate, which rate at any time may not be the lowest rate charged by LaSalle Bank.
Changes in the prime rate shall take effect on the date set forth in each
announcement for a change in the Prime Rate.

<PAGE>

         3.       Prepayment. To the extent permitted under the Credit Facility,
the outstanding principal balance and all accrued interest payable to Holder
hereunder may be prepaid at any time. All prepayments so permitted shall be
applied in the order provided in Section 1.

         4.       Warrant Coverage. Simultaneously herewith, the Company will
issue to the Holder warrants to purchase Common Stock with the terms described
in the form of warrant agreement attached hereto as Exhibit A.

         5.       Defaults and Remedies. An "EVENT OF DEFAULT" with respect to
this Note occurs if:

         (a)      the Company defaults in the payment of interest on this Note
when the same becomes due and payable and the default continues for a period of
5 days;

         (b)      The Company defaults in the payment of the principal amount
hereof when the same becomes due and payable;

         (c)      (i) The Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to the Company or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for the Company or for
all or any substantial part of the Company's assets, or the Company shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 30 days; or (iii) there shall be
commenced against the Company any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 30 days from the entry thereof; or (iv)
the Company shall take any action in furtherance of, or indicating his consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii) or (iii) above; or (v) the Company shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become
due.

                  If an Event of Default occurs then, (in addition to any other
rights or remedies the Holder may have hereunder), (a) if such event is an Event
of Default specified in (c) above, automatically all the amounts outstanding
under this Note shall immediately become due and payable and (b) if such event
is any other Event of Default, so long as any such Event of Default shall be
continuing, the Holder may by notice of default to the Company declare all or a
portion of the amounts outstanding under this Note as due and payable forthwith.

                  If an Event of Default occurs and is continuing, the Holder
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or interest on, this Note or to enforce the performance
of any provisions of this Note. A delay or

<PAGE>

omission by the Holder in exercising any right or remedy arising upon an Event
of Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.

                  The Holder may waive an existing Event of Default and its
consequences. When an Event of Default is waived, it is cured and ceases to
exist for all purposes of this Note.

                  Notwithstanding any other provision of this Note, but subject
to the provisions of Section 1, the right of the Holder to receive payment of
principal on this Note, on or after the Maturity Date or to bring suit for the
enforcement of any such payment on or after such Maturity Date shall not be
impaired or affected without the consent of the Holder.

         6.       Subordination. The Company hereby agrees that, with respect to
the its obligations under this Note and any other obligations of any nature
payable in respect thereof, including, without limitation, any renewals,
rearrangements, or modifications thereof, shall be and hereby are at all times,
and in all respects, subordinate and junior in right of payment to the payment
of the principal and interest under the (i) the Credit Facility or any
replacement or refinancing thereof and (ii) the $3,250,000 Promissory Note,
dated December 20, 2001 from the Company to NeoPharm, Inc. This Note will rank
senior to the Convertible Bridge Loan and Warrant Agreement, dated as of July
12, 2001, by and among the Company and the John N. Kapoor Trust dtd September
20, 1989.

         7.       Miscellaneous.

         (a)      The Company hereby waives presentment, demand, protest, notice
of dishonor, diligence and all other notices, any release or discharge arising
from any extension of time, discharge of a prior party, or other cause of
release or discharge other than actual payment in full hereof.

         (b)      Holder shall not be deemed, by any act or omission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Holder and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event. No delay or omission of Holder to exercise any right, whether before or
after an Event of Default hereunder, shall impair any such right or shall be
construed to be a waiver of any right or Event of Default, and the acceptance at
any time by Holder of any past-due amount shall not be deemed to be a waiver of
the right to require prompt payment when due of any other amounts then or
thereafter due and payable.

         (c)      Time is of the essence hereof. Upon any Event of Default
hereunder, Holder may exercise all rights and remedies provided for herein and
by law or equity, including, but not limited to, the right to immediate payment
in full of this Note.

         (d)      The remedies of Holder as provided herein, or any one or more
of them, in law or at equity, shall be cumulative and concurrent, and may be
pursued singularly, successively or

<PAGE>

together at Holder's sole discretion, and may be exercised as often as occasion
therefore shall occur.

         (e)      It is expressly agreed that if this Note is referred to any
attorney or if suit is brought to collect or interpret this Note or any part
hereof or to enforce or protect any rights conferred upon Holder by this Note or
any other document evidencing or securing this Note, then the Company covenants
and agrees to pay all reasonable costs, including attorneys' fees, incurred by
Holder in connection therewith.

         (f)      If any provisions of this Note would require the Company to
pay interest hereon at a rate exceeding the highest rate allowed by applicable
law, the Company shall instead pay interest under this Note at the highest rate
permitted by applicable law.

         (g)      This Note shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict of law provision or law that would cause the application of the laws of
any other jurisdiction other than the State of New York.

         (h)      This Note and the rights and obligations herein may be
assigned by Holder to any affiliate of Holder, to members of the immediate
family of Holder, or to trusts, partnerships or other beneficiaries of Holder,
with the prior written consent of the Company, which consent shall not be
unreasonably withheld.

<PAGE>

         IN WITNESS WHEREOF, the Company has executed this Subordinated
Promissory Note as of the date first above written.

                                       AKORN, INC.

                                       By: /s/ Bernard J. Pothast
                                           -------------------------------------
                                           Name:  Bernard J. Pothast
                                           Title: Senior Vice President, Chief
                                                  Financial Officer, Secretary
                                                  and Treasurer<PAGE>

                                                                    EXHIBIT 10.4

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE
STATE SECURITIES LAWS.

                          SUBORDINATED PROMISSORY NOTE

$50,000.00                                                          New York, NY

                                                               Date of Issuance:
                                                                 October 7, 2003

         FOR VALUE RECEIVED, Akorn, Inc., a Louisiana corporation (the
"COMPANY"), promises to pay to the order of Argent Fund Management Ltd. or its
administrators, representatives, successors or assigns ("HOLDER"), the principal
sum of FIFTY THOUSAND DOLLARS AND ZERO CENTS ($50,000.00), and to pay interest
on the outstanding principal balance of this Subordinated Promissory Note (this
"NOTE") in accordance with Section 2 of this Note.

         1.       Maturity. The Company shall repay the outstanding principal
balance of this Note and interest accrued thereon in full on April 7, 2006 (the
"MATURITY DATE"). All payments received shall be applied first against costs of
collection (if any), then against accrued and unpaid interest on this Note, then
against the outstanding principal balance of this Note.

         2.       Interest. Interest on the outstanding principal balance of
this Note shall accrue from the date hereof at the Prime Rate plus 1.75% (the
"INTEREST RATE"), calculated on the basis of a 360 day year of twelve 30 day
months and such accrued interest shall be due and payable quarterly in arrears
beginning on December 31, 2003 and thereafter on March 31, June 30, September 30
and December 31 of each year (each, an "INTEREST PAYMENT DATE"). The accrued
interest shall be payable in cash in arrears on each Interest Payment Date, to
the extent permitted to be paid in cash under the credit facility entered into
among the Company, Akorn (New Jersey), Inc., La Salle Bank National Association
("LASALLE BANK") and the financial institutions that are or may from time to
time become parties thereto, dated as of October 7, 2003 (the "CREDIT FACILITY")
and to the extent such accrued interest is not paid in cash it shall accrue and
be added to the outstanding principal balance of this Note; provided, however,
that upon the occurrence of an Event of Default (as defined herein) interest on
the outstanding principal balance of this Note will accrue from the date of such
Event of Default at a rate per annum equal to two (2 %) plus the Interest Rate
then in effect. "PRIME RATE" shall mean a rate per year equal to that rate of
interest per year announced from time to time by LaSalle Bank called its prime
rate, which rate at any time may not be the lowest rate charged by LaSalle Bank.
Changes in the

<PAGE>

prime rate shall take effect on the date set forth in each announcement for a
change in the Prime Rate.

         3.       Prepayment. To the extent permitted under the Credit Facility,
the outstanding principal balance and all accrued interest payable to Holder
hereunder may be prepaid at any time. All prepayments so permitted shall be
applied in the order provided in Section 1.

         4.       Warrant Coverage. Simultaneously herewith, the Company will
issue to the Holder warrants to purchase Common Stock with the terms described
in the form of warrant agreement attached hereto as Exhibit A.

         5.       Defaults and Remedies. An "EVENT OF DEFAULT" with respect to
this Note occurs if:

         (a)      the Company defaults in the payment of interest on this Note
when the same becomes due and payable and the default continues for a period of
5 days;

         (b)      The Company defaults in the payment of the principal amount
hereof when the same becomes due and payable;

         (c)      (i) The Company shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief
with respect to the Company or its debts, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for the Company or for
all or any substantial part of the Company's assets, or the Company shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 30 days; or (iii) there shall be
commenced against the Company any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 30 days from the entry thereof; or (iv)
the Company shall take any action in furtherance of, or indicating his consent
to, approval of, or acquiescence in, any of the acts set forth in clause (i),
(ii) or (iii) above; or (v) the Company shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become
due.

                  If an Event of Default occurs then, (in addition to any other
rights or remedies the Holder may have hereunder), (a) if such event is an Event
of Default specified in (c) above, automatically all the amounts outstanding
under this Note shall immediately become due and payable and (b) if such event
is any other Event of Default, so long as any such Event of Default shall be
continuing, the Holder may by notice of default to the Company declare all or a
portion of the amounts outstanding under this Note as due and payable forthwith.

<PAGE>

                  If an Event of Default occurs and is continuing, the Holder
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, or interest on, this Note or to enforce the performance
of any provisions of this Note. A delay or omission by the Holder in exercising
any right or remedy arising upon an Event of Default shall not impair the right
or remedy or constitute a waiver of, or acquiescence in, the Event of Default.
No remedy is exclusive of any other remedy. All available remedies are
cumulative.

                  The Holder may waive an existing Event of Default and its
consequences. When an Event of Default is waived, it is cured and ceases to
exist for all purposes of this Note.

                  Notwithstanding any other provision of this Note, but subject
to the provisions of Section 1, the right of the Holder to receive payment of
principal on this Note, on or after the Maturity Date or to bring suit for the
enforcement of any such payment on or after such Maturity Date shall not be
impaired or affected without the consent of the Holder.

         6.       Subordination. The Company hereby agrees that, with respect to
the its obligations under this Note and any other obligations of any nature
payable in respect thereof, including, without limitation, any renewals,
rearrangements, or modifications thereof, shall be and hereby are at all times,
and in all respects, subordinate and junior in right of payment to the payment
of the principal and interest under the (i) the Credit Facility or any
replacement or refinancing thereof and (ii) the $3,250,000 Promissory Note,
dated December 20, 2001 from the Company to NeoPharm, Inc. This Note will rank
senior to the Convertible Bridge Loan and Warrant Agreement, dated as of July
12, 2001, by and among the Company and the John N. Kapoor Trust dtd September
20, 1989.

         7.       Miscellaneous.

         (a)      The Company hereby waives presentment, demand, protest, notice
of dishonor, diligence and all other notices, any release or discharge arising
from any extension of time, discharge of a prior party, or other cause of
release or discharge other than actual payment in full hereof.

         (b)      Holder shall not be deemed, by any act or omission, to have
waived any of its rights or remedies hereunder unless such waiver is in writing
and signed by Holder and then only to the extent specifically set forth in such
writing. A waiver with reference to one event shall not be construed as
continuing or as a bar to or waiver of any right or remedy as to a subsequent
event. No delay or omission of Holder to exercise any right, whether before or
after an Event of Default hereunder, shall impair any such right or shall be
construed to be a waiver of any right or Event of Default, and the acceptance at
any time by Holder of any past-due amount shall not be deemed to be a waiver of
the right to require prompt payment when due of any other amounts then or
thereafter due and payable.

         (c)      Time is of the essence hereof. Upon any Event of Default
hereunder, Holder may exercise all rights and remedies provided for herein and
by law or equity, including, but not limited to, the right to immediate payment
in full of this Note.

<PAGE>

         (d)      The remedies of Holder as provided herein, or any one or more
of them, in law or at equity, shall be cumulative and concurrent, and may be
pursued singularly, successively or together at Holder's sole discretion, and
may be exercised as often as occasion therefore shall occur.

         (e)      It is expressly agreed that if this Note is referred to any
attorney or if suit is brought to collect or interpret this Note or any part
hereof or to enforce or protect any rights conferred upon Holder by this Note or
any other document evidencing or securing this Note, then the Company covenants
and agrees to pay all reasonable costs, including attorneys' fees, incurred by
Holder in connection therewith.

         (f)      If any provisions of this Note would require the Company to
pay interest hereon at a rate exceeding the highest rate allowed by applicable
law, the Company shall instead pay interest under this Note at the highest rate
permitted by applicable law.

         (g)      This Note shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to any choice or
conflict of law provision or law that would cause the application of the laws of
any other jurisdiction other than the State of New York.

         (h)      This Note and the rights and obligations herein may be
assigned by Holder to any affiliate of Holder, to members of the immediate
family of Holder, or to trusts, partnerships or other beneficiaries of Holder,
with the prior written consent of the Company, which consent shall not be
unreasonably withheld.

<PAGE>

         IN WITNESS WHEREOF, the Company has executed this Subordinated
Promissory Note as of the date first above written.

                                       AKORN, INC.

                                       By: /s/ Bernard J. Pothast
                                           -------------------------------------
                                           Name:  Bernard J. Pothast
                                           Title: Senior Vice President, Chief
                                                  Financial

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