Document:

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                                                                    EXHIBIT 10.2

                 TWELFTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT

THIS TWELFTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT dated as of June 30, 2003
(this "Twelfth Amendment"), by and among AKORN, INC., a Louisiana corporation
("Akorn"), AKORN (NEW JERSEY), INC., an Illinois corporation ("Akorn NJ") (Akorn
and Akorn NJ being sometimes referred to herein individually as a "Borrower" and
collectively as the "Borrowers"), and THE NORTHERN TRUST COMPANY, an Illinois
banking corporation (the "Lender");

                                   WITNESSETH:

                  WHEREAS, the parties heretofore entered into the
Pre-Negotiation Agreement dated as of September 20, 2002, as amended by the
First Amendment dated as of October 18, 2002, the Second Amendment dated as of
November 26, 2002, the Third Amendment dated as of December 30, 2002, the Fourth
Amendment dated as of January 16, 2003, the Fifth Amendment dated as of January
31, 2003, the Sixth Amendment, dated as of February 14, 2003, the Seventh
Amendment dated as of February 28, 2003, the Eighth Amendment dated as of March
14, 2003, the Ninth Amendment dated as of April 4, 2003, the Tenth Amendment
dated as of May 1, 2003 and the Eleventh Amendment dated as of May 9, 2003 (the
"Prior Agreement"); and

                  WHEREAS, the Borrowers have requested an amendment to Section
4.1 of the Prior Agreement;

                  WHEREAS, the Lender has agreed to the Borrowers' request, but
only on the terms set forth herein;

                  NOW, THEREFORE, in consideration of the premises and the
covenants, agreements and acknowledgments contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

                  Section 1. Defined Terms. All capitalized terms used and not
otherwise defined in this Twelfth Amendment shall have the same meanings as in
the Prior Agreement.

                  Section 2. Amendments.

                  2.1 Section 1.1 of the Prior Agreement is hereby amended by
replacing the following defined terms to read as follows:

                  "Loans" shall mean the Tranche A Loans, the Tranche B Loans
         and the Tranche C Loans. This definition amends and restates the
         definition contained in the Credit Agreement for all purposes.

                  "Tranche B Loans" shall have the meaning provided in Section
         8.1(a).

                  "Tranche B Note" shall have the meaning provided in Section
         8.2(a).

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                  2.2 Section 1.1 of the Prior Agreement is hereby amended by
inserting the following defined terms in appropriate alphabetical order:

                  "Cash Receipts" shall mean all cash (including, without
         limitation, cash received in respect of checks, drafts, bank credits
         and other similar instruments and receivables) received by any of the
         Borrowers from any source.

                  "Tranche C Commitment" shall mean, at any time, the commitment
         of the Lender to make Tranche C Loans during the Forbearance Period,
         which commitment shall be equal to the greater of (a) $150,000 and (b)
         110% of the "Tranche C Balance" set forth in the Budget for such time;
         provided, however, that at no time shall the Tranche C Commitment
         exceed $1,000,000.

                  "Tranche C Loans" shall have the meaning provided in Section
         8.1(b).

                  "Tranche C Note" shall have the meaning provided in Section
         8.2(b).

                  "Unutilized Commitment" shall mean, at any time, the
         difference between (i) $2,750,000 and (ii) the aggregate principal
         amount of all Tranche B Loans and Tranche C Loans then outstanding.

                  2.3 Section 4.1 of the Prior Agreement is hereby amended to
read as follows:

                  4.1 Forbearance Period. Subject to compliance by each Borrower
         with each of the terms and conditions of this Agreement, and without
         waiving the Existing Events, the Lender hereby agrees to forbear from
         enforcing its rights or remedies pursuant to the Loan Documents and
         applicable law (including, without limitation, to make a demand for
         payment as a result of the Payment Default) as a result of the Existing
         Events from the Agreement Closing Date until the earlier to occur of
         the following (as the case may be, the "Forbearance Termination Date"):
         (i) July 31, 2003 and (ii) the date on which a Borrowing Condition
         Failure occurs.

                  2.4 Section 6.6 of the Prior Agreement is hereby amended to
read as follows:

                  6.6 Budget; Reconciliation.

                  (a) Starting July 1, 2003, on or before the first day of each
         month until the Forbearance Termination Date, the Borrowers shall
         deliver to the Lender a budget, in form and substance satisfactory to
         the Lender, detailing the Borrowers' anticipated Cash Receipts and
         disbursements for such month (broken down on a weekly basis during such
         month) and setting forth the anticipated drawings and uses of Tranche C
         Loans during such month (the "Budget").

                  (b) Starting July 9, 2003, on each Wednesday until the
         Forbearance Termination Date, the Borrowers shall deliver to the Lender
         a report, in form and substance satisfactory to the Lender, detailing
         the Borrowers' actual Cash Receipts and disbursements (and borrowings
         and repayment of Tranche C Loans) during the immediately prior week,
         and showing the variance of such amounts from the

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         corresponding amounts projected in the Budget for such week (the
         "Weekly Reconciliation Report").

                  2.5 Section 7.1 of the Prior Agreement is hereby amended to
read as follows:

                  7.1 Payments. The Lender (a) shall, and the Borrowers hereby
         irrevocably authorize the Lender to, withdraw on the Agreement Closing
         Date all cash amounts on deposit (including arising from the
         liquidation of any cash equivalent then on deposit and from the
         transfer on such date of cash from the Lock-Box Account to the
         Concentration Account) and apply same to (i) the payment of the
         $200,000 fee referred to in Section 5.1(c) and (ii) thereafter repay
         outstanding Tranche A Loans and (b) may in its sole discretion (but
         shall be under no obligation to), and the Borrowers hereby irrevocably
         authorize the Lender at any time and from time to time to, on each
         Business Day after the Agreement Closing Date, withdraw all cash
         amounts on deposit in the Concentration Account (including any cash
         transferred thereto on such date from the Lock-Box Account) in excess
         of the Minimum Balance and apply same to (i) first, to all Obligations
         (other than principal of the Loans) then due and payable, (ii) second,
         to the outstanding principal amount of all Tranche C Loans, (iii)
         third, to the outstanding principal amount of all Tranche B Loans and
         (iv) thereafter, to the outstanding principal amount of all Tranche A
         Loans.

                  2.6 Article VIII of the Prior Agreement is hereby amended to
read as follows:

                                  ARTICLE VIII
                       TRANCHE B AND TRANCHE C FACILITIES

                  8.1 Tranche B and Tranche C Loans.

                  (a) Subject to the terms and conditions of this Agreement and
         the Loan Documents, the Lender agrees to make advances (each, a
         "Tranche B Loan" and, collectively, the "Tranche B Loans") to the
         Borrowers, from time to time during the Forbearance Period, at such
         times and in such amounts as the Borrowers may request, not to exceed
         in the aggregate at any one time outstanding the Tranche B Commitment
         at such time. During such time, the Borrowers may from time to time
         borrow, repay and reborrow under this Section 8.1(a). Each Tranche B
         Loan to a Borrower shall be made on notice by such Borrower to the
         Lender at its principal banking office at 50 South LaSalle Street,
         Chicago, Illinois 60675, given no later than 10:00 a.m. (Chicago time)
         on the Business Day of the proposed Tranche B Loan; provided, however,
         that any Tranche B Loan requested shall be in a minimum amount of
         $100,000. Each such notice (a "Notice of Tranche B Borrowing") shall be
         substantially in the form of Exhibit A-1, co-signed by the Consultant,
         specifying therein the requested date and the amount of such Tranche B
         Loan, and such other information as may be required by Lender and shall
         be given in writing (by telecopy or overnight courier) or by telephone
         (to the extent the Consultant is part of such telephonic notice)
         confirmed immediately in writing if requested by the Lender. Lender
         shall be entitled to rely upon, and shall be fully protected under this
         Agreement and the Loan Documents in relying upon, any Notice of

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<PAGE>

         Tranche B Borrowing believed by Lender to be genuine and to assume that
         each Person executing and delivering the same was duly authorized.

                  (b) Subject to the terms and conditions of this Agreement and
         the Loan Documents, the Lender agrees to make advances (each, a
         "Tranche C Loan" and, collectively, the "Tranche C Loans") to the
         Borrowers, from time to time during the Forbearance Period, at such
         times and in such amounts as the Borrowers may request, not to exceed
         in the aggregate at any one time outstanding the Tranche C Commitment
         at such time. During such time, the Borrowers may from time to time
         borrow, repay and reborrow under this Section 8.1(b). Each Tranche C
         Loan to a Borrower shall be made on notice by such Borrower to the
         Lender at its principal banking office at 50 South LaSalle Street,
         Chicago, Illinois 60675, given no later than 10:00 a.m. (Chicago time)
         on the Business Day of the proposed Tranche C Loan; provided, however,
         that any Tranche C Loan requested shall be in a minimum amount of
         $100,000. Each such notice (a "Notice of Tranche C Borrowing") shall be
         substantially in the form of Exhibit A-2, co-signed by the Consultant,
         specifying therein the requested date and the amount of such Tranche C
         Loan, and such other information as may be required by Lender and shall
         be given in writing (by telecopy or overnight courier) or by telephone
         (to the extent the Consultant is part of such telephonic notice)
         confirmed immediately in writing if requested by the Lender. Lender
         shall be entitled to rely upon, and shall be fully protected under this
         Agreement and the Loan Documents in relying upon, any Notice of Tranche
         C Borrowing believed by Lender to be genuine and to assume that each
         Person executing and delivering the same was duly authorized.

                  8.2 Tranche B and Tranche C Notes.

                  (a) Borrowers shall execute and deliver to the Lender a note
         to evidence the Tranche B Loans, such note to be in the maximum amount
         of the Tranche B Commitment, dated the date hereof and in form and
         content acceptable to the Lender (the "Tranche B Note"). The Tranche B
         Note shall represent the joint and several obligation of each Borrower
         to pay the amount of the Tranche B Commitment or, if less, the
         aggregate unpaid principal amount of all Tranche B Loans made by the
         Lender to the Borrowers with interest thereon us prescribed in Section
         8.5. The date and amount of each Tranche B Loan and each payment of
         principal with respect thereto shall be recorded on the books and
         records of the Lender, which books and records shall constitute prima
         facie evidence of the accuracy of the information therein recorded. The
         entire unpaid balance of the Tranche B Loans shall be immediately due
         and payable on the Forbearance Termination Date.

                  (b) Borrowers shall execute and deliver to the Lender a note
         to evidence the Tranche C Loans, such note to be in the maximum amount
         of the Tranche C Commitment, dated the date hereof and in form and
         content acceptable to the Lender (the "Tranche C Note"). The Tranche C
         Note shall represent the joint and several obligation of each Borrower
         to pay the amount of the Tranche C Commitment or, if less, the
         aggregate unpaid principal amount of all Tranche C Loans made by the
         Lender to the Borrowers with interest thereon as prescribed in Section
         8.5. The date and amount of each Tranche C Loan and each payment of
         principal with respect thereto shall be

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<PAGE>

         recorded on the books and records of the Lender, which books and
         records shall constitute prima facie evidence of the accuracy of the
         information therein recorded. The entire unpaid balance of the Tranche
         C Loans shall be immediately due and payable on the Forbearance
         Termination Date.

                  8.3 Designated Borrower. Each Borrower hereby irrevocably
         designates Akorn as its sole agent for the purposes of (a) issuing
         Notices of Tranche B Borrowings and Notices of Tranche C Borrowings and
         (b) receiving notices and consents in respect of Tranche B Loans and
         Tranche C Loans.

                  8.4 Payments; Prepayment, Commitment Reduction; Commitment
         Fee.

                  (a) The Borrowers shall repay all outstanding principal of the
         Tranche B Loans and the Tranche C Loans on the Forbearance Termination
         Date.

                  (b) On any date on which the sum of the aggregate outstanding
         principal amount of the Tranche B Loans exceeds the Tranche B Loan
         Commitment then in effect, the Borrowers shall repay Tranche B Loans in
         an amount equal to such excess.

                  (c) On any date on which the sum of the aggregate outstanding
         principal amount of the Tranche C Loans exceeds the Tranche C Loan
         Commitment then in effect, the Borrowers shall repay Tranche C Loans in
         an amount equal to such excess.

                  (d) On any date on which any Borrower receives notice (which
         notice, absent manifest error, shall be conclusive and binding on all
         parties) from the Lender that any expenditures made by the Borrowers
         during any calendar month exceed the amounts allocated for such
         expenditures in the Budget for such month, the Borrowers shall repay
         all outstanding Tranche C Loans and the Tranche C Commitment (and the
         Borrowers' right to receive Tranche C Loans) shall be immediately
         terminated.

                  (e) Borrowers shall have the right at any time to voluntarily
         prepay all or part of the Tranche B Loans or the Tranche C Loans and
         permanently reduce or terminate the Tranche B Commitment or the Tranche
         C Commitment, and no prepayment fee, premium or penalty shall be
         payable in connection with any such voluntary prepayment. Upon any such
         prepayment and permanent reduction or termination of (i) the Tranche B
         Commitment, the Tranche B Commitment (and the Borrowers' right to
         receive Tranche B Loans) shall simultaneously terminate or be
         permanently reduced, as the case may be, and (ii) the Tranche C
         Commitment, the Tranche C Commitment (and the Borrowers' right to
         receive Tranche C Loans) shall simultaneously terminate or be
         permanently reduced, as the case may be.

                  (f) Borrowers shall pay to Lender, in arrears on the last
         Business Day of each calendar month and on the Forbearance Termination
         Date, a commitment fee computed at a rate equal to 0.5% per annum of
         the daily average Unutilized Commitment.

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<PAGE>

                  8.5 Interest on Tranche B Loans and Tranche C Loans.

                  (a) Borrowers shall pay interest to Lender, in arrears on the
         last Business Day of each calendar month (and on any date of repayment
         or prepayment of principal of Tranche B Loans), based on the amounts
         outstanding from time to time under the Tranche B Loans, at a rate
         equal to the sum of the Prime Rate and 3.0% per annum.

                  (b) Borrowers shall pay interest to Lender, in arrears on the
         last Business Day of each calendar month (and on any date of repayment
         or prepayment of principal of Tranche C Loans), based on the amounts
         outstanding from time to time under the Tranche C Loans, at a rate
         equal to the sum of the Prime Rate and 3.0% per annum.

                  (c) If any payment on the Tranche B Loans or the Tranche C
         Loans becomes due and payable on a day other than a Business Day, the
         maturity thereof shall be extended to the next succeeding Business Day
         and, with respect to payments of principal, interest thereon shall be
         payable at the then applicable rate during such extension.

                  (d) All computations of interest and fees shall be made by the
         Lender on the basis of a three hundred sixty (360) day year, in each
         case for the actual number of days occurring in the period for which
         such interest is payable. The Prime Rate shall be determined each day
         based upon the Prime Rate as in effect each day. Each determination by
         the Lender of an interest rate hereunder shall be conclusive and
         binding for all purposes, absent manifest error or bad faith.

                  (e) Notwithstanding anything to the contrary set forth in this
         Section 8.5, if, at any time until payment in full of all of the
         Obligations, the rate of interest payable in respect of the Tranche B
         Loans or the Tranche C Loans hereunder exceeds the highest rate of
         interest permissible under any law which a court of competent
         jurisdiction shall, in a final determination, deem applicable hereto
         (the "Maximum Lawful Rate"), then in such event and so long as the
         Maximum Lawful Rate would be so exceeded, the rate of interest payable
         in respect of the Tranche B Loans or Tranche C Loans, as the case may
         be, hereunder shall be equal to the Maximum Lawful Rate; provided,
         however, that if at any time thereafter the rate of interest payable
         hereunder is less than the Maximum Lawful Rate, Borrowers shall
         continue to pay interest hereunder at the Maximum Lawful Rate until
         such time as the total interest received by Lender from the making of
         Tranche B Loans or Tranche C Loans, as the case may be, hereunder is
         equal to the total interest which would have been received had the
         interest rate payable hereunder been (but for the operation of this
         paragraph) the interest rate payable since the Agreement Closing Date
         as otherwise provided in this Agreement. Thereafter, the interest rate
         payable hereunder shall be the rate of interest provided in Sections
         8.5(a) through (d) of this Agreement, unless and until the rate of
         interest again exceeds the Maximum Lawful Rate, in which event this
         paragraph shall again apply. In no event shall the total interest
         received by Lender pursuant to the terms hereof exceed the amount which
         Lender could lawfully have received had the interest due hereunder been
         calculated for the full term hereof at the Maximum Lawful Rate. In the
         event the Maximum Lawful Rate is calculated pursuant to this paragraph,
         such interest shall be calculated at a daily rate equal to the Maximum
         Lawful Rate divided by the number of days in the year in which such

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         calculation is made. In the event that a court of competent
         jurisdiction, notwithstanding the provisions of this Section 8.5(c),
         shall make a final determination that Lender has received interest
         hereunder or under any of the other Loan Documents in excess of the
         Maximum Lawful Rate, Lender shall, to the extent permitted by
         applicable law, promptly apply such excess first to any interest due
         and not yet paid hereunder in respect of the Tranche B Loans or Tranche
         C Loans, as the case may be, then to the outstanding principal of the
         Tranche B Loans or Tranche C Loans, as the case may be, then to Fees
         and any other unpaid Obligations and thereafter shall refund any excess
         to Borrowers or as a court of competent jurisdiction may otherwise
         order.

                  8.6 Application and Allocation of Payments. Lender is
         authorized to, and at its option may, make or cause to be made Tranche
         B Loans and/or Tranche C Loans on behalf of the Borrowers for payment
         of all Fees, expenses, Charges, costs, principal, interest, or other
         Obligations owing by any Borrower under this Agreement or any of the
         other Loan Documents if and to the extent any such Borrower fails to
         promptly pay any such amounts as and when due. At Lender's option and
         to the extent permitted by applicable law, any advances so made shall
         be deemed Tranche B Loans or Tranche C Loans, as the case may be,
         constituting part of the Tranche B Loans or Tranche C Loans, as the
         case may be, hereunder. Borrowers hereby irrevocably waive the right to
         direct the application of any and all payments at any time or times
         hereafter received from or on behalf of any such Borrower, and each
         Borrower hereby irrevocably agrees that Lender shall have the
         continuing exclusive right to apply any and all such payments against
         the then due and payable Obligations of Borrowers and in repayment of
         the Loans as Lender may deem advisable notwithstanding any previous
         entry by Lender upon the Loan Account or any other books and records.

                  8.7 Conditions Precedent to Tranche B and Tranche C
         Borrowings. Notwithstanding any other provision of this Agreement and
         without affecting in any manner the rights of Lender hereunder,
         Borrowers shall have no rights under this Agreement (but shall have all
         applicable obligations hereunder), and Lender shall not be obligated to
         make any Tranche B Loan or Tranche C Loan, or to take, fulfill, or
         perform any other action hereunder, until the following conditions have
         been satisfied, in Lender's sole discretion, or waived in writing by
         Lender:

                  (a) Accuracy of Representations and Warranties. All of each
         Borrowers' representations and warranties contained herein or in any of
         the other Loan Documents shall be true and correct on and as of the
         Agreement Closing Date and the date on which each such Tranche B Loan
         or Tranche C Loan, as the case may be, is made as though made on and as
         of such date, except, to the extent that any such representation or
         warranty expressly relates to an earlier date.

                  (b) No Material Adverse Change. Except for the Existing
         Events, no Material Adverse Effect shall have occurred since the
         Agreement Closing Date (including, without limitation, in respect of
         events or circumstances that commenced prior to the Agreement Closing
         Date).

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<PAGE>

                  (c) No Default. Except for the Existing Events, no event shall
         have occurred and be continuing, or would result from the making of any
         Tranche B Loan or Tranche C Loan, which constitutes or would constitute
         a Default or an Event of Default.

         The request and acceptance by any Borrower of the proceeds of any
         Tranche B Loan or Tranche C Loan shall be deemed to constitute, as of
         the date of such request or acceptance, a representation and warranty
         by the Borrowers to the Lender that the conditions in this Section 8.7
         have been satisfied.

                  2.7 Section 11.18 of the Prior Agreement is hereby amended to
read as follows:

                  11.18 WAIVER OF JURY TRIAL. EACH OF THE BORROWERS AND THE
         LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT
         ANY OF THEM MAY HAVE TO A TRIAL BY JURY OF, UNDER OR IN CONNECTION WITH
         THIS AGREEMENT OR ANY DOCUMENTS OR INSTRUMENTS EXECUTED AND DELIVERED
         IN CONNECTION HEREWITH (INCLUDING WITHOUT LIMITATION, THE TRANCHE B
         NOTE AND THE TRANCHE C NOTE), OR ANY COURSE OF CONDUCT, COURSE OF
         DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY
         RELATING HERETO OR THERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
         THE LENDER TO ENTER INTO THIS AGREEMENT.

                  Section 3. Pre-Negotiation Agreement and Documents to Remain
In Effect; Confirmation of Obligations; References. Except as expressly modified
and amended by this Twelfth Amendment, the Prior Agreement shall remain in full
force and effect as originally executed and delivered by the parties. In order
to induce the Lender to enter into this Twelfth Amendment, the Borrowers hereby
(i) confirm and reaffirm all of their obligations under the Documents, as
modified and amended as described above and under the Pre-Negotiation Agreement,
as modified and amended as described above; (ii) acknowledge and agree that the
Lender, by entering into this Twelfth Amendment, does not waive any existing or
future default or event of default under any of the Documents or the Prior
Agreement, or any rights, powers or remedies under any of the Documents or the
Pre-Negotiation Agreement; (iii) acknowledge and agree that the Lender has not
heretofore waived any Borrowing Condition Failure, or any rights or remedies
under any of the Documents or the Prior Agreement; and (iv) acknowledge that
they do not have any defense, set-off or counterclaim to the payment or
performance of any of their obligations under the Documents or the Prior
Agreement, as amended hereby. All references to the Prior Agreement shall
henceforth be deemed to refer to the Prior Agreement as modified by this Twelfth
Amendment and as hereafter modified by any amendment, modification or supplement
thereto.

                  Section 4. Confirmation of Certifications, Representations and
Warranties. In order to induce the Lender to enter into this Twelfth Amendment
the Borrowers hereby certify, represent and warrant to the Lender that, except
as otherwise disclosed to the Lender in writing prior to the date hereof,
including in the Pre-Negotiation Agreement and in the Exhibits and Schedules
attached thereto and/or in documents submitted to the Lender prior to the date
hereof (including, but not limited to, any and all financial statements and
reports, budgets, statements of

                                      -8-
<PAGE>

cash flow and governmental reports and filings) (collectively referred to herein
as "Disclosures"), all certifications, representations and warranties contained
in the Documents and in the Pre-Negotiation Agreement and in all certificates
heretofore delivered to the Lender are true and correct as of the date hereof in
all material respects, and, subject to such Disclosures, all such
certifications, representations and warranties are hereby remade and made to
speak as of the date of this Twelfth Amendment.

                  Section 5. RELEASE. EACH BORROWER ON BEHALF OF ITSELF AND ITS
AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS, SHAREHOLDERS,
BENEFICIARIES, OFFICERS, MANAGERS, DIRECTORS, AGENTS, REPRESENTATIVES, ADVISORS,
EMPLOYEES AND ATTORNEYS, HEREBY JOINTLY AND SEVERALLY RELEASES, WAIVES AND
FOREVER DISCHARGES EACH OF THE LENDER AND ITS AFFILIATES, SUBSIDIARIES,
SUCCESSORS, ASSIGNS, PRINCIPALS, SHAREHOLDERS, BENEFICIARIES, OFFICERS,
MANAGERS, DIRECTORS, AGENTS, REPRESENTATIVES, ADVISORS, EMPLOYEES AND ATTORNEYS
OF, FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTIONS, CAUSES OF ACTIONS,
SUITS, DISPUTES, CLAIMS, COUNTERCLAIMS AND/OR LIABILITIES, CROSS CLAIMS,
DEFENSES THAT ARE KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR PRESENT,
ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL FOUNDED IN
FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN EQUITY,
BASED UPON, RELATING TO OR ARISING OUT OF ANY AND ALL TRANSACTIONS,
RELATIONSHIPS OR DEALINGS WITH OR LOANS MADE TO THE BORROWERS PURSUANT TO THE
LOAN DOCUMENTS AND/OR THE PRIOR AGREEMENT PRIOR TO THE EFFECTIVENESS HEREOF.

                  Section 6. Entire Agreement. This Twelfth Amendment sets
forth all of the covenants, promises, agreements, conditions and understandings
of the parties relating to the subject matter of this Twelfth Amendment, and
there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them relating to the subject matter of this
Twelfth Amendment other than as are herein set forth.

                  Section 7. Successors. This Twelfth Amendment shall inure to
the benefit of and shall be binding upon the parties and their respective
successors, assigns and legal representatives.

                  Section 8. Severability. In the event any provision of this
Twelfth Amendment shall be held invalid or unenforceable by any court of
competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.

                  Section 9. Amendments, Changes and Modifications. This Twelfth
Amendment may be amended, changed, modified, altered or terminated only by a
written instrument executed by all of the parties hereto:

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<PAGE>

                  Section 10. Construction.

                  (a) The words "hereof," "herein," and "hereunder," and other
         words of a similar import refer to this Twelfth Amendment as a whole
         and not to the individual Sections in which such terms are used.

                  (b) References to Sections and other subdivisions of this
         Twelfth Amendment are to the designated Sections and other subdivisions
         of this Twelfth Amendment as originally executed.

                  (c) The headings of this Twelfth Amendment are for convenience
         only and shall not define or limit the provisions hereof.

                  (d) Where the context so requires, words used in singular
         shall include the plural and vice versa, and words of one gender shall
         include all other genders.

                  (e) Each party to this Twelfth Amendment and legal counsel for
         each party have participated in the drafting of this Twelfth Amendment,
         and accordingly the general rule of construction to the effect that any
         ambiguities in a contract are to be resolved against the party drafting
         the contract shall not be employed in the construction and
         interpretation of this Twelfth Amendment.

                  Section 11. Execution of Counterparts. This Twelfth Amendment
may be simultaneously executed in several counterparts, each of which shall be
an original and all of which shall constitute but one and the same instrument.

                  Section 12. Governing Law. This Twelfth Amendment shall be
governed by and be construed and enforced in accordance with the laws of the
State of Illinois.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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<PAGE>

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

Address for Notices:                             AKORN, INC.

2500 Millbrook Drive
Buffalo Grove, IL  60089                         By /s/ Arthur S. Przybyl
Attention:  Chief Financial Officer                ----------------------
Telecopier No.: (847) 279-6191                      Name:  Arthur S. Przybyl
Telephone No.:  (847) 279-6100                      Title: President and CEO

                                                 AKORN (NEW JERSEY), INC.

                                                 By /s/ Arthur S. Przybyl
                                                    Name:  Arthur S. Przybyl
                                                    Title: President and CEO

50 South LaSalle Street
Chicago, Illinois  60675                         THE NORTHERN TRUST COMPANY
Attention:  Olga Georgiev
Telecopier No.: (312) 630-6105
Telephone No.:  (312) 444-2438                   By /s/ F. M. Burian
                                                   -----------------
                                                    Name:  F. M. Burian
With a copy to                                      Title: Senior V.P.

White & Case LLP
200 S. Biscayne Blvd., Suite 4900
Miami, FL  33131
Attention:  John K. Cunningham, Esq.

                                      -11-
<PAGE>

                                 TRANCHE C NOTE

$1,000,000                                                         June 30, 2003
                                                               Chicago, Illinois

                  FOR VALUE RECEIVED, the undersigned, AKORN, INC., a Louisiana
corporation ("Akorn"), and AKORN (NEW JERSEY), INC., an Illinois corporation
("Akorn NJ"), jointly and severally, promise to pay to the order of THE NORTHERN
TRUST COMPANY (the "Lender"') on the Forbearance Termination Date, the principal
amount of ONE MILLION DOLLARS ($1,000,000), or the amount outstanding as
endorsed on the grid attached to this Tranche C Note or recorded in the Lender's
books and records, if the Lender is the holder hereof. Such endorsement or
recording by the Lender shall, absent manifest error, be rebuttably presumptive
evidence of the principal balance due on this Tranche C Note.

                  This Tranche C Note evidences indebtedness incurred under that
certain Pre-Negotiation Agreement, dated as of September 20, 2002 (as the same
may be subsequently amended, restated, supplemented or otherwise modified, the
"Pre-Negotiation Agreement"), among Akorn, Akorn NJ and the Lender, to which
Pre-Negotiation Agreement reference is hereby made for a statement of its terms
and provisions. All capitalized terms used but not otherwise defined herein
shall have the meanings assigned to them in the Pre-Negotiation Agreement.

                  Unless or until this Tranche C Note shall sooner become due
and payable, whether by acceleration or otherwise, the Borrowers may from time
to time borrow, repay and reborrow in accordance with the terms and conditions
of the Pre-Negotiation Agreement. The unpaid principal amount of this Tranche C
Note from time to time outstanding shall bear interest from the date of this
Tranche C Note at the rate per annum set forth in the Pre-Negotiation Agreement.
Accrued interest on this Tranche C Note shall be payable in accordance with the
terms of the Pre-Negotiation Agreement. After maturity, whether by acceleration
or otherwise, accrued interest shall be payable on demand. Interest on this
Tranche C Note shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days. Payments of both principal and interest
are to be made in immediately available funds in lawful money of the United
States of America.

                  Subject to the terms and conditions of the Pre-Negotiation
Agreement, the undersigned agree to pay all reasonable expenses, including
reasonable attorneys' fees and legal expenses, incurred by the holder of this
Tranche C Note in attempting to collect any amounts payable hereunder. The
undersigned irrevocably waive presentment, protest, demand and notice of any
kind in connection herewith.

<PAGE>

                  This Tranche C Note is made under and governed by the internal
laws of the State of Illinois (without regard to conflict of laws provisions
thereof), and shall be deemed to have been executed in the State of Illinois.

                                         AKORN, INC.,
                                         a Louisiana corporation

                                         By: /s/ Ben Pothast
                                            ----------------
                                           Name:  Ben Pothast
                                           Title: C.F.O.

                                         AKORN (NEW JERSEY), INC.,
                                         an Illinois corporation

                                         By: /s/ Ben Pothast
                                            ----------------
                                           Name:  Ben Pothast
                                           Title: C.F.O.

                                      -2-
<PAGE>

                    TRANCHE C LOANS AND PRINCIPAL REPAYMENTS

<TABLE>
<CAPTION>
                                Type of Loan         Amount of       Unpaid
                 Amount of      & Applicable         Principal      Principal     Notation
    Date         Loan Made      Interest Rate         Repaid         Balance       Made By
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<S>              <C>            <C>                  <C>            <C>           <C>

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</TABLE>

                                      -3-<PAGE>
                                                                    EXHIBIT 10.3

                THIRTEENTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT

THIS THIRTEENTH AMENDMENT TO PRE-NEGOTIATION AGREEMENT dated as of July 31, 2003
(this "Thirteenth Amendment"), by and among AKORN, INC., a Louisiana corporation
("Akorn"), AKORN (NEW JERSEY), INC., an Illinois corporation ("Akorn NJ") (Akorn
and Akorn NJ being sometimes referred to herein individually as a "Borrower" and
collectively as the "Borrowers"), and THE NORTHERN TRUST COMPANY, an Illinois
banking corporation (the "Lender");

                                   WITNESSETH:

          WHEREAS, the parties heretofore entered into the Pre-Negotiation
Agreement dated as of September 20, 2002, as amended by the First Amendment
dated as of October 18, 2002, the Second Amendment dated as of November 26,
2002, the Third Amendment dated as of December 30, 2002, the Fourth Amendment
dated as of January 16, 2003, the Fifth Amendment dated as of January 31, 2003,
the Sixth Amendment, dated as of February 14, 2003, the Seventh Amendment dated
as of February 28, 2003, the Eighth Amendment dated as of March 14, 2003, the
Ninth Amendment dated as of April 4, 2003, the Tenth Amendment dated as of May
1, 2003, the Eleventh Amendment dated as of May 9, 2003 and the Twelfth
Amendment dated as of June 30, 2003 (the "Prior Agreement");

          WHEREAS, the Borrowers have requested an amendment to Section 4.1 of
the Prior Agreement; and

          WHEREAS, the Lender has agreed to the Borrowers' request, but only on
the terms set forth herein;

          NOW, THEREFORE, in consideration of the premises and the covenants,
agreements and acknowledgments contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

          Section 1. Defined Terms. All capitalized terms used and not otherwise
defined in this Thirteenth Amendment shall have the same meanings as in the
Prior Agreement.

          Section 2. Amendments.

          2.1 Section 1.1 of the Prior Agreement is hereby amended by replacing
the definition of "Existing Events" with the following:

          "Existing Events" shall mean the Payment Default and the Events of
     Default arising under Section 8.1(e) of the Credit Agreement due to
     defaults by the Borrowers under (i) the Promissory Note dated as of
     December 20, 2001 made by Akorn in favor of NeoPharm, Inc., as a result of
     the Borrowers' failure to remove by June 30, 2003 all sanctions arising as
     a result of the 483 M Warning Letter issued by the FDA and (ii) the
     Convertible Bridge Loan and Warrant Agreement dated as of July 12, 2001, as
     amended,

<PAGE>

     between Akorn and the John K. Kapoor Trust Dtd 9/20/89, which are described
     in the letter dated July 21, 2003 from the John K. Kapoor Trust Dtd 9/20/89
     to Akorn.

          2.2 Section 4.1 of the Prior Agreement is hereby amended to read as
     follows:

          4.1 Forbearance Period. Subject to compliance by each Borrower with
     each of the terms and conditions of this Agreement, and without waiving the
     Existing Events, the Lender hereby agrees to forbear from enforcing its
     rights or remedies pursuant to the Loan Documents and applicable law
     (including, without limitation, to make a demand for payment as a result of
     the Payment Default) as a result of the Existing Events from the Agreement
     Closing Date until the earlier to occur of the following (as the case may
     be, the "Forbearance Termination Date"): (i) August 22, 2003 and (ii) the
     date on which a Borrowing Condition Failure occurs.

          Section 3. Pre-Negotiation Agreement and Documents to Remain In
Effect; Confirmation of Obligations; References. Except as expressly modified
and amended by this Thirteenth Amendment, the Prior Agreement shall remain in
full force and effect as originally executed and delivered by the parties. In
order to induce the Lender to enter into this Thirteenth Amendment, the
Borrowers hereby (i) confirm and reaffirm all of their obligations under the
Documents, as modified and amended as described above and under the
Pre-Negotiation Agreement, as modified and amended as described above; (ii)
acknowledge and agree that the Lender, by entering into this Thirteenth
Amendment, does not waive any existing or future default or event of default
under any of the Documents or the Prior Agreement, or any rights, powers or
remedies under any of the Documents or the Pre-Negotiation Agreement; (iii)
acknowledge and agree that the Lender has not heretofore waived any Borrowing
Condition Failure, or any rights or remedies under any of the Documents or the
Prior Agreement; and (iv) acknowledge that they do not have any defense, set-off
or counterclaim to the payment or performance of any of their obligations under
the Documents or the Prior Agreement, as amended hereby. All references to the
Prior Agreement shall henceforth be deemed to refer to the Prior Agreement as
modified by this Thirteenth Amendment and as hereafter modified by any
amendment, modification or supplement thereto.

          Section 4. Confirmation of Certifications, Representations and
Warranties. In order to induce the Lender to enter into this Thirteenth
Amendment the Borrowers hereby certify, represent and warrant to the Lender
that, except as otherwise disclosed to the Lender in writing prior to the date
hereof, including in the Pre-Negotiation Agreement and in the Exhibits and
Schedules attached thereto and/or in documents submitted to the Lender prior to
the date hereof (including, but not limited to, any and all financial statements
and reports, budgets, statements of cash flow and governmental reports and
filings) (collectively referred to herein as "Disclosures"), all certifications,
representations and warranties contained in the Documents and in the
Pre-Negotiation Agreement and in all certificates heretofore delivered to the
Lender are true and correct as of the date hereof in all material respects, and,
subject to such Disclosures, all such certifications, representations and
warranties are hereby remade and made to speak as of the date of this Thirteenth
Amendment.

          Section 5. RELEASE. EACH BORROWER ON BEHALF OF ITSELF AND ITS
AFFILIATES, SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS,

                                      -2-
<PAGE>

SHAREHOLDERS, BENEFICIARIES, OFFICERS, MANAGERS, DIRECTORS, AGENTS,
REPRESENTATIVES, ADVISORS, EMPLOYEES AND ATTORNEYS, HEREBY JOINTLY AND SEVERALLY
RELEASES, WAIVES AND FOREVER DISCHARGES EACH OF THE LENDER AND ITS AFFILIATES,
SUBSIDIARIES, SUCCESSORS, ASSIGNS, PRINCIPALS, SHAREHOLDERS, BENEFICIARIES,
OFFICERS, MANAGERS, DIRECTORS, AGENTS, REPRESENTATIVES, ADVISORS, EMPLOYEES AND
ATTORNEYS OF, FROM, AND WITH RESPECT TO ANY AND ALL MANNER OF ACTIONS, CAUSES OF
ACTIONS, SUITS, DISPUTES, CLAIMS, COUNTERCLAIMS AND/OR LIABILITIES, CROSS
CLAIMS, DEFENSES THAT ARE KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, PAST OR
PRESENT, ASSERTED OR UNASSERTED, CONTINGENT OR LIQUIDATED, WHETHER OR NOT WELL
FOUNDED IN FACT OR LAW, WHETHER IN CONTRACT, IN TORT OR OTHERWISE, AT LAW OR IN
EQUITY, BASED UPON, RELATING TO OR ARISING OUT OF ANY AND ALL TRANSACTIONS,
RELATIONSHIPS OR DEALINGS WITH OR LOANS MADE TO THE BORROWERS PURSUANT TO THE
LOAN DOCUMENTS AND/OR THE PRIOR AGREEMENT PRIOR TO THE EFFECTIVENESS HEREOF.

          Section 6. Entire Agreement. This Thirteenth Amendment sets forth all
of the covenants, promises, agreements, conditions and understandings of the
parties relating to the subject matter of this Thirteenth Amendment, and there
are no covenants, promises, agreements, conditions or understandings, either
oral or written, between them relating to the subject matter of this Thirteenth
Amendment other than as are herein set forth.

          Section 7. Successors. This Thirteenth Amendment shall inure to the
benefit of and shall be binding upon the parties and their respective
successors, assigns and legal representatives.

          Section 8. Severability. In the event any provision of this Thirteenth
Amendment shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

          Section 9. Amendments, Changes and Modifications. This Thirteenth
Amendment may be amended, changed, modified, altered or terminated only by a
written instrument executed by all of the parties hereto:

          Section 10. Construction.

          (a) The words "hereof," "herein," and "hereunder," and other words of
a similar import refer to this Thirteenth Amendment as a whole and not to the
individual Sections in which such terms are used.

          (b) References to Sections and other subdivisions of this Thirteenth
Amendment are to the designated Sections and other subdivisions of this
Thirteenth Amendment as originally executed.

          (c) The headings of this Thirteenth Amendment are for convenience only
and shall not define or limit the provisions hereof.

                                      -3-
<PAGE>

          (d) Where the context so requires, words used in singular shall
include the plural and vice versa, and words of one gender shall include all
other genders.

          (e) Each party to this Thirteenth Amendment and legal counsel for each
party have participated in the drafting of this Thirteenth Amendment, and
accordingly the general rule of construction to the effect that any ambiguities
in a contract are to be resolved against the party drafting the contract shall
not be employed in the construction and interpretation of this Thirteenth
Amendment.

          Section 11. Execution of Counterparts. This Thirteenth Amendment may
be simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.

          Section 12. Governing Law. This Thirteenth Amendment shall be governed
by and be construed and enforced in accordance with the laws of the State of
Illinois.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -4-
<PAGE>

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

Address for Notices:                                  AKORN, INC.

2500 Millbrook Drive
Buffalo Grove, IL  60089
Attention: Chief Financial Officer                    By /s/ Ben Pothast
                                                        ------------------------
Telecopier No.: (847) 279-6191                          Name: Ben Pothast
Telephone No.: (847) 279-6100                           Title:   C.F.O

                                                      AKORN (NEW JERSEY), INC.

                                                      By /s/ Ben Pothast
                                                        ------------------------
                                                         Name:  Ben Pothast
                                                         Title:    C.F.O.

50 South LaSalle Street                               THE NORTHERN TRUST COMPANY
Chicago, Illinois  60675
Attention:  Olga Georgiev
Telecopier No.: (312) 630-6105
Telephone No.: (312) 444-2438                         By /s/ Olga Georgiev
                                                        ------------------------
                                                         Name:  Olga Georgiev
With a copy to                                           Title:

White & Case LLP
200 S. Biscayne Blvd., Suite 4900
Miami, FL  33131
Attention: John K. Cunningham, Esq.

                                      -5-

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