Document:

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                                                                   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

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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

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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.

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         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

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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

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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).

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         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

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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.

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                                    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

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                                   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

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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<PAGE>
                                                                   Exhibit 10.18

                              PROCESSING AGREEMENT

      THIS PROCESSING AGREEMENT (the "Agreement") is made and entered into this
20th day of December, 2001, between Akorn, Inc., a Louisiana Corporation
("Akorn") and NeoPharm, Inc., a Delaware Corporation ("NeoPharm").

      WHEREAS, NeoPharm is a pharmaceutical company which has developed certain
chemotherapeutic agents (the "Products");

      WHEREAS, Akorn owns and operates a lyophilization facility located at 1222
West Grand Avenue, Decatur, Illinois (the "Facility") and has the ability and
capacity to process and finish pharmaceutical products; and

      WHEREAS, NeoPharm desires to contract with Akorn to process and finish the
Products at the Facility, and Akorn desires to provide such services, on the
terms and conditions set forth herein

      NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein, the parties agree as follows:

                                    ARTICLE I
                    PROCESSING ESTIMATE/DELIVERY OF PRODUCTS

      Section 1.1. Processing Estimate. At least thirty (30) days prior to the
Effective Date (as defined herein), and at least thirty (30) days prior to the
commencement of each twelve (12) month period thereafter, NeoPharm shall deliver
to Akorn its good faith estimate (the "Estimate") of the quantity of Products to
be Processed (as defined herein) by Akorn hereunder for the upcoming twelve (12)
month period. Such estimate shall be non-binding, and NeoPharm shall update the
Estimate quarterly based upon its expected Processing needs. Akorn agrees to
allocate to the Processing of NeoPharm's Products no less than fifteen percent
(15%) of the Facility's Processing capacity during every twelve (12) month
period during the Term of this Agreement; the actual allocation of the
Facility's capacity to NeoPharm for such period shall be agreed upon by the
parties and is referred to herein as the "Processing Maximum". Processing
Capacity shall be measured in terms of hours usage of the Facility. NeoPharm
shall have the right to audit Akorn's books and records to ascertain compliance
with this Section 1.1.

      Section 1.2. Purchase Orders. From time to time, NeoPharm shall provide
Akorn with a purchase order (the "Purchase Order") which shall set forth the
Product to be Processed and the quantity of Bulk Product to be Processed by
Akorn (the "Batch"). Akorn shall provide NeoPharm with written acceptance of the
Purchase Order, which acceptance shall set forth the date the Processing Run (as
defined herein) for the Batch covered by such Purchase Order shall commence (the
"Processing Run Commencement Date"). Akorn agrees that the Processing Run
Commencement Date shall be no later than fourteen (14) days after Akorn's
receipt of the
<PAGE>
Purchase Order. Akorn shall use its best efforts to accommodate NeoPharm's
request to amend a Purchase order to modify the size of a Batch to be Processed.

      Section 1.3. Estimated Yield. Upon Akorn's acceptance of a Purchase Order,
Akorn shall calculate the estimated Final Product to be manufactured (the
"Estimated Yield") from the Batch that is the subject of the Purchase Order. The
Estimated Yield factor to be applied to each Purchase Order shall be based upon
the optimum yield determined from the first (3) Processing Runs of a particular
Product. Such determination and each such Processing Run shall be performed and
conducted in the presence of a NeoPharm representative. In the event NeoPharm
disagrees with Akorn's Estimated Yield, the Parties shall in good faith agree
upon a third party to review the data Akorn utilized to calculate the Estimated
Yield. The findings of such third party shall be binding on both parties. In the
event that the actual yield of any Batch is less than ninety-five percent (95%)
of the Estimated Yield, NeoPharm shall be entitled to an investigation of the
reason(s) for the reduced yield of the Batch, and NeoPharm shall be entitled to
an equitable reduction (the "Yield Credit") in the Processing Fee (as defined
herein).

      Section 1.4. Delivery of Bulk Products. At least fifteen (15) business
days prior to each Processing Run Commencement Date, NeoPharm shall deliver to
Akorn sufficient amounts of Bulk Product for such Processing Run along with any
applicable vial labeling materials. For purposes of this Agreement, Bulk Product
shall mean formulated solutions of the Products. NeoPharm warrants that all Bulk
Product provided hereunder shall meet all applicable specifications and shall
have been produced in compliance with applicable federal, state and local laws
and regulations, including, without limitation, the Good Manufacturing Practices
Regulations ("GMPs") of the United States Food and Drug Administration ("FDA"),
21 C.F.R. part 211, in effect at the time of Processing. In connection with the
delivery of Bulk Product, NeoPharm shall provide Akorn with written
certification of the sterility of Bulk Product.

      Section 1.5. Ownership/Risk of Loss. NeoPharm shall own all Bulk Product
delivered by NeoPharm and all Finished Product (as defined herein) Processed by
Akorn and, except in a case giving rise to Akorn's indemnification
responsibilities hereunder, NeoPharm shall bear the risk of loss with respect to
such materials.

                                   ARTICLE II
                           PROCESSING OF BULK PRODUCTS

      Section 2.1. Processing Obligations. Commencing with each Processing Run
Commencement Date, Akorn shall Process the Bulk Product corresponding to the
applicable Purchase Order in accordance with the terms of this Article II (each
a "Processing Run"). For purposes of this Agreement, "Processing" shall mean
filling into vials, lyophilizing, inspecting and packaging the Bulk Product in
order to produce finished pharmaceutical dosage forms of the Products (the
"Finished Product"). The parameters (the "Processing Parameters") under which
Akorn shall Process the Bulk Product shall be mutually agreed upon by the
Parties at least thirty (30) days prior to the Effective Date and shall be
attached hereto as Schedule 2.1. Any amendments and/or additions to the
Processing Parameters or the equipment, test methods,

                                       2
<PAGE>
specifications or any other requirement of this Agreement or with respect to the
operation of the Facility, must be mutually agreed to by the parties in writing
and shall be attached to Schedule 2.1. Notwithstanding the foregoing and in
addition to any supplemental parameters agreed to by the parties with respect to
a particular Processing Run, Akorn's Processing at a minimum shall consist of
the following components:

            (a)   Preparation and retention of the master production and control
                  records required by the FDA for each Product pursuant to 21
                  CFR 600.12 (the "Batch Records") as approved by Akorn and
                  NeoPharm.

            (b)   Compliance with the applicable standards from the USP-NF
                  guidelines.

            (c)   Furnishing vials, stoppers and seals for the Products and
                  conducting the appropriate inspection, testing and release
                  thereof.

            (d)   Preparation and sterilization of vials and stoppers in
                  accordance with Akorn's Standard Procedures;

            (e)   Aseptically filling vials within tolerance limits set by
                  NeoPharm and holding filled vials under specified conditions
                  which shall be provided by NeoPharm until loaded in
                  lyophilizer;

            (f)   Aseptically stopping and sealing lyophilized product vials.

            (g)   Performance of Quality Control Testing of finished dosage
                  forms in accordance with NeoPharm's specifications.

            (h)   Inspection of the finished dosage form.

            (i)   Storage of quarantined vials at mutually agreed upon
                  temperatures until instructed by NeoPharm to ship the Finished
                  Product.

            (j)   Shipping of the Finished Product in accordance with NeoPharm's
                  specifications.

      Section 2.2. Addition of Other Products to the Agreement. NeoPharm may add
additional pharmaceutical products to be Processed by Akorn. The parties shall
mutually agree upon any Processing Parameters and the Processing Fee for such
additional products.

      Section 2.3. Representations and Warranties of Akorn. Akorn agrees that in
performing the Processing services hereunder, it shall comply with applicable
GMPs and that it shall use its best efforts to maintain the Facility in such a
fashion as to be in compliance with all applicable federal, state and local
rules and regulations. Akorn agrees that it shall maintain all licenses and
permits required by any applicable federal, state or local agency, including but
not limited to the FDA, in order to operate the Facility and provide the
Processing services required hereunder. Without limiting the generality of the
foregoing, Akorn agrees that it will cause its

                                       3
<PAGE>
employees and agents to follow all procedures developed and implemented in
connection with the removal of the warning letter sanctions pursuant to Form 483
or current GMP regulations issued or imposed by the FDA with regard to the
Facility. Akorn also agrees to store all manufacturing and laboratory records on
the site where the Processing is performed and to keep such records readily
available. Further, Akorn represents and warrants that it shall use its best
efforts to insure that all filtration, filling and lyophilization of the Product
by Akorn shall be done in an aseptic processing environment and in accordance
with the Processing Parameters.

      Section 2.4. Facilities Inspection. During the Term of this Agreement,
NeoPharm shall have the right, at its expense, to audit the Facility for Akorn's
compliance with GMPs and any other applicable laws. NeoPharm agrees to provide
Akorn with reasonable prior notice of the date of such audit. In addition to the
foregoing, NeoPharm shall have the right to designate an individual to be at the
Facility to monitor each Processing Run. NeoPharm agrees that its employees or
agents who inspect the Facility or who are on site at the Facility during a
Processing Run will comply with Akorn's rules, regulations and GMPs.

      Section 2.5. Akorn Obligation to Meet Requirements. Akorn agrees to
fulfill, in each twelve (12) month period during the Term of this Agreement (as
defined herein), all Purchase Orders placed by NeoPharm up to one hundred
percent (100%) of NeoPharm's most recently updated Estimate. Akorn shall use
reasonable efforts to supply any quantity ordered by NeoPharm of Product in
excess of the Estimate subject to Akorn's production scheduling capabilities and
commitments to other customers.

      Section 2.6. Subcontracting. Akorn shall not pass to a third party any
work entrusted to it under this Agreement without first obtaining NeoPharm's
written approval of such arrangements, which approval shall not be unreasonably
withheld.

      Section 2.7. Quality Assurance Department. Akorn agrees that at all times
during the term of this Agreement, it shall maintain a quality assurance
department (the "Quality Assurance Department") for purposes of monitoring the
quality of Akorn's Processing hereunder and for purposes of approving each Batch
Processed hereunder. Akorn agrees that upon NeoPharm's request, it shall provide
NeoPharm with copies of the policies, procedures and findings of the Quality
Assurance Department.

                                  ARTICLE III
                              SHIPMENT AND STORAGE

      Section 3.1. Storage. Akorn shall store and handle the Bulk Product and
Finished Product as required by the Processing Parameters. Akorn shall take such
actions as are reasonably necessary to protect the Bulk Product and Finished
Product from damage and deterioration. Vials of Finished Product will be stored
at the recommended controlled temperature until shipped as instructed by
NeoPharm.

                                       4
<PAGE>
      Section 3.2. Release of Finished Product. Upon Akorn's Quality Assurance
Department's written release of a Batch of Finished Product, Akorn shall
promptly ship the Finished Product to NeoPharm or, at NeoPharm's discretion,
warehouse Finished Product, in accordance with FDA and GMP warehousing
procedures, for a maximum of thirty (30) days at no cost, and thereafter at
charges to be mutually agreed upon, to the extent warehousing space is
available. Akorn shall provide NeoPharm with properly completed Batch Records,
prepared in conformance with the Processing Parameters, within five (5) days
following Akorn's written release of such Batch but, in no event more than four
(4) weeks from the date the Processing Run is completed (i.e., the date the
filling or lyophilization is completed).

      Section 3.3. Transfer of Finished Product to NeoPharm. Finished Product
shall be shipped to NeoPharm in accordance with NeoPharm's written instructions.
Unless otherwise agreed to in writing by the Parties, there shall be only one
shipment per Batch of Finished Product. NeoPharm shall be responsible for all
costs associated with the shipment of Finished Product

      Section 3.4. Rejection. NeoPharm may reject any Batch of Finished Product
failing to meet any of the Processing Parameters by providing Akorn with written
notice of such rejection (the "Rejection") within sixty (60) days following
NeoPharm's receipt of the applicable Batch Records and written notice from Akorn
stating that Akorn's Quality Assurance Department has approved the Batch. Any
rejection by NeoPharm pursuant to this Section 3.4 shall be accompanied by a
report of analysis, including a product sample from the Batch analyzed.
NeoPharm's failure to reject a Batch of Finished Product in the manner set forth
above shall constitute acceptance thereof except to the extent that any defect
in the Batch was not discovered by NeoPharm after exercising due diligence and
using customary testing procedures accepted in the industry and provided that
NeoPharm notifies Akorn of any such defect within a reasonable time after
NeoPharm discovers or should have discovered the defect and before any
substantial change in the condition of the Batch which is not caused by such
defect. In the event Akorn accepts NeoPharm's Rejection, NeoPharm shall be
entitled to a credit against the Processing Fee (the "Rejection Credit") equal
to the Processing Fee for such Batch and the cost, not to exceed $25,000, of
NeoPharm's Bulk Product. In the event the Parties can not agree upon whether the
Rejection was justified, the Parties shall mutually agree upon a third party to
test samples of such Batch and to review records and test data and other
relevant information developed by both parties relating thereto to ascertain
whether the Batch was manufactured in accordance with the Processing Parameters.
The findings of such third party shall be binding on both parties. If the third
party determines that the Batch was manufactured in accordance with the
Processing Parameters, NeoPharm shall be deemed to have accepted the affected
Batch. If the third party determines that the Batch was not manufactured in
accordance with the Processing Parameters, NeoPharm shall be entitled to the
Rejection Credit. The Parties shall share the costs of any such third party
testing. In the event a Batch was properly Rejected, Akorn agrees that NeoPharm
shall be entitled to a replacement Processing Run, regardless of whether such
replacement Processing Run will cause NeoPharm to exceed the Processing Maximum.

                                       5
<PAGE>
                                   ARTICLE IV
                              PRICE OF MANUFACTURE

      Section 4.1. Price. In consideration of the Processing provided by Akorn
hereunder, NeoPharm agrees to pay Akorn a processing fee (the "Processing Fee"),
as modified by the Yield Credit or the Rejection Credit, if applicable. The
Processing Fee shall be mutually agreed upon by the Parties at least thirty (30)
days prior to the Effective Date based upon the Processing Parameters for each
Product, after a trial run if necessary, and shall be attached hereto as
Schedule 4.1.

      Section 4.2. Most Favored Pricing. Akorn agrees that the Processing Fee
charged to NeoPharm hereunder shall be no higher than the lowest fee charged by
Akorn to any customers with similar processing requirements for Processing at
the Facility, regardless of any discounts afforded to such other customers.
NeoPharm shall have the right to audit Akorn's books and records to ascertain
compliance with this Section 4.2.

                                    ARTICLE V
                              TERM AND TERMINATION

      Section 5.1. Term. This Agreement shall have an initial term (the "Initial
Term") commencing on the date the warning letter sanctions imposed by the FDA
pursuant to Form 483 or current GMP regulations on Akorn and/or the Facility
have been removed (the "Effective Date") and ending on the later of (i) the
fifth (5th) anniversary of the Effective Date, or (ii) two (2) years after the
date on which Akorn pays all amounts of principal and accrued interest under
that certain Promissory Note (the "Note"), dated December 20, 2001, issued by
Akorn to NeoPharm in exchange for a loan in principal amount of Three Million
Two Hundred Fifty Thousand Dollars ($3,250,000) plus interest. This Agreement
will automatically extend for two additional, five-year terms (each, an
"Additional Term") beyond the Initial Term, provided, however, that either
NeoPharm or Akorn may terminate this Agreement at the end of the Initial Term or
an Additional Term, as the case may be, by sending a termination notice ninety
(90) days prior to the end of such Initial Term or Additional Term.
Notwithstanding the foregoing, in the event the warning letter sanctions
pursuant to Form 483 or current GMP regulations have not been removed by June
30, 2003 or in the event the Akorn has not received validation from the FDA with
respect to Processing NeoPharm's Products by such date, NeoPharm may terminate
this Agreement upon written notice to Akorn.

      Section 5.2. Voluntary Termination. NeoPharm or Akorn may terminate this
Agreement for any reason, provided that the terminating party first serves
written notice of such termination on the other party no later than one hundred
eighty (180) days prior to the date of such termination. Notwithstanding the
foregoing, Akorn shall not have the right to voluntarily terminate this
Agreement until the Note has been paid in full and for two (2) years thereafter.

      Section 5.3. Termination for Material Breach. Either party may terminate
this Agreement in the event of a material breach by the other, provided that the
party asserting such

                                       6
<PAGE>
breach first serves written notice of the alleged breach on the offending party
and such alleged breach is not cured within thirty (30) days of the offending
party's receipt of such notice.

      Section 5.4. Termination for Rejected Finished Products. NeoPharm may
terminate this Agreement upon written notice to Akorn in the event NeoPharm
property rejects three (3) consecutive Batches of Finished Product or six (6)
Batches of Finished Product within a two (2) month period.

      Section 5.5. Termination for Insolvency. In the event that either party
shall admit in writing that it can not pay its debts, or shall suspend its
business, or shall file a voluntary petition or any answer admitting the
jurisdiction of the court and the material allegations of, or shall consent to,
an involuntary petition pursuant to or purporting to be pursuant to any
reorganization or insolvency law of any jurisdiction, or shall make an
assignment for the benefit of creditors, or shall apply for or consent to the
appointment of a receiver or trustee of all or a substantial part of its
property (such party, upon the occurrence of any such event, a "Bankrupt
Party"), then, to the extent permitted by the law, the other party hereto may
thereafter immediately terminate this Agreement by giving notice of termination
to the Bankrupt Party.

      Section 5.6. Effect of Expiration or Termination. Upon termination or
expiration of this Agreement, neither party shall have any further obligations
to the other party except for those obligations which accrued prior to the date
of termination or those obligations which are intended to survive the
termination or expiration of this Agreement.

      Section 5.7. Akorn Obligations Upon Expiration or Termination. Upon the
expiration of this Agreement or its earlier termination, Akorn shall, at the
request of NeoPharm and at NeoPharm's expense, return or dispose of all Bulk
Product or Finished Product to NeoPharm or to a third party pursuant to the
instructions of NeoPharm.

                                   ARTICLE VI
                                 INDEMNIFICATION

      Section 6.1. Akorn Indemnity. Akorn agrees to indemnify, protect and
defend NeoPharm and hold NeoPharm harmless from and against any claims, damages,
liability, harm, loss, costs, penalties, lawsuits, threats of lawsuit, recalls
or other governmental action, including reasonable attorneys' fees, brought or
claimed by any third party which (i) arise as the result of Akorn's breach of
this Agreement or of any warranty or representation made to NeoPharm under this
Agreement; or (ii) which result from any claim made against NeoPharm in
connection with Akorn's manufacture of defective Finished Product for NeoPharm.
Upon the filing of any such legal claim or lawsuit against NeoPharm, NeoPharm
shall promptly notify Akorn, in writing, of any such claim and Akorn shall, at
its expense, with attorneys reasonably acceptable to NeoPharm, handle, defend
and control such claim or lawsuit. Failure to notify Akorn promptly of the
commencement of any such action, if prejudicial to the ability to defend such
action, shall

                                       7
<PAGE>
relieve Akorn of any liability to NeoPharm under this Section 6.1. NeoPharm
shall have the right to participate in the defense of such action at its expense
with counsel of its choosing.

      Section 6.2. NeoPharm Indemnity. NeoPharm agrees to indemnify, protect and
defend Akorn and hold Akorn harmless from and against any claims, damages,
liabilities, harm, loss, costs, penalties, lawsuits, threats of lawsuit, recalls
or other governmental action, including reasonable attorneys' fees, brought or
claimed by any third party, which (i) arise out of NeoPharm's breach of this
Agreement or of any warranty or representation to Akorn under this Agreement; or
(ii) result from the negligent acts or willful malfeasance on the part of
NeoPharm or employees or agents, in connection with NeoPharm's sale, marketing
or distribution of Product manufactured by Akorn or other activities or actions
in connection with the Finished Product. Upon the filing of any such legal claim
or lawsuit against Akorn, Akorn shall promptly notify NeoPharm, in writing, of
any such claim and NeoPharm shall, at its expense, with attorneys reasonably
acceptable to Akorn, handle, defend and control such claim or lawsuit. Failure
to notify NeoPharm promptly of the commencement of any such action, if
prejudicial to the ability to defend such action, shall relieve NeoPharm of any
liability to Akorn under this Section 6.2. Akorn shall have the right to
participate in the defense of such action at its expense with counsel of its
choosing.

                                  ARTICLE VII
                             RIGHT OF FIRST REFUSAL

      Section 7.1. Grant of Rights. Akorn agrees that in the event it receives a
bona fide third party offer (an "Offer") to acquire the Facility from an
unrelated third party (exclusive of an offer to acquire a controlling interest
in the outstanding shares of stock or substantially all of the assets of Akorn),
it shall provide NeoPharm with written notice of the terms and conditions of
such Offer.

      Section 7.2. Right of First Refusal. Upon its receipt of the notice
contemplated by Section 7.1, NeoPharm shall have the right to acquire the
Facility on the same terms and conditions as are set forth in the Offer (or
their cash equivalent in the event the Offer contains consideration other than
cash). In order to exercise the foregoing right, NeoPharm must provide Akorn
written notice of its exercise within thirty (30) days of its receipt of the
written notice from Akorn.

                                  ARTICLE VIII
                                 CONFIDENTIALITY

      Section 8.1. Confidential Information. Each party (the "Receiving Party")
shall maintain in confidence all information heretofore or hereafter disclosed
by the other party (the "Disclosing Party") which such party knows or has reason
to know is a trade secret, and other proprietary information owned by or
licensed to the other party, including, but not limited to,

                                       8
<PAGE>
information relating to the Product (including without limitation, information
developed in preclinical and clinical studies) and licenses, patents, patent
applications, technology or processes and business plans of the other party,
including, without limitation, information designated as confidential in writing
from one party to the other (all of the foregoing hereinafter referred to as
"Confidential Information") and shall not use such Confidential Information
except as permitted by this Agreement or disclose the same to anyone other than
those of its officers, directors or employees as are necessary in connection
with such party's activities as contemplated by this Agreement. Each party shall
use the same efforts as such party would use to protect its own information and
to ensure that its officers, directors and employees do not disclose or make any
unauthorized use of such Confidential Information. Each party shall notify the
other promptly upon discovery of any unauthorized use or disclosure of the other
party's Confidential Information.

      Section 8.2. Limitations on Confidentiality. The obligation of
confidentiality contained in this Article VIII shall not apply to the extent
that: i) the Receiving Party is required to disclose Confidential Information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction; ii) the Receiving Party can demonstrate that the
disclosed Confidential Information was, at the time of disclosure, already in
the public domain other than as a result of actions or failure to act of the
Receiving Party, its officers, directors or employees, in violation hereof; iii)
the disclosed Confidential Information was rightfully known by the Receiving
Party (as shown by its written records) prior to the date of disclosure to the
Receiving Party in connection with this Agreement; or iv) the disclosed
Confidential Information was received by the Receiving Party on an unrestricted
basis from a source which is not under a duty of confidentiality to the other
Party.

      Section 8.3. Disclosure Required by Law. In the event that the Receiving
Party shall be required to make disclosure pursuant to the provisions of Section
8.2 (i) as a result of the issuance of a court order or other government
process, the Receiving Party shall promptly, but in no event more than
forty-eight (48) hours after learning of such court order or other government
process, notify, by personal delivery or facsimile, all pursuant to Section 9.4
hereof, the Disclosing Party and, at the Disclosing Party's expense, the
Receiving Party shall: a) take all reasonably necessary steps requested by the
Disclosing Party to defend against the enforcement of such court order or other
government process, and b) permit the Disclosing Party to intervene and
participate with counsel of its choice in any proceeding relating to the
enforcement thereof.

      Section 8.4. Equitable Remedies for Breach of Confidentiality. The parties
acknowledge that their failure to comply with the provisions of Section 8.1 may
cause irreparable harm and damage to the name and reputation of the other party
for which no adequate remedy may be available at law. Accordingly, the parties
agree that upon a breach by a party of such provisions, the non-breaching party
may, at its option, enforce the obligations of the breaching party under those
provisions by seeking equitable remedies in a court of competent jurisdiction.

                                       9
<PAGE>
                                   ARTICLE IX

                                  MISCELLANEOUS

      Section 9.1. Force Majeure. Neither of the parties to this Agreement shall
be liable to the other party for any loss, injury, delay, damage or other
casualty suffered or incurred by such other party due to strikes, lockouts,
accidents, fire, delays in manufacture, transportation or delivery of material,
embargoes, inability to ship, explosions, floods, war, governmental action or
any other cause similar thereto which is beyond the reasonable control of such
other party and any failure or delay by a party in the performance of any of its
obligations under this Agreement shall not be considered a breach of this
Agreement due to, but only so long as there exists, one or more of the foregoing
causes; provided, however, that if Akorn cannot complete a Processing Run within
ninety (90) days of the stated completion date due to any such cause, NeoPharm
may cancel the order without liability to Akorn.

      Section 9.2. Status of the Parties. This Agreement shall not be construed
to create between the parties hereto or their respective successors or permitted
assignees the relationship of principal and agent, joint venturers, copartners
or any other similar relationship, the existence of which is hereby expressly
denied by each party. Neither party shall be liable to any third party in any
way for engagement, obligation, contract, representation or transaction or for
any negligent act or omission to act of the other except as expressly provided.

      Section 9.3. Governing Law. The provisions of this Agreement shall be
governed in all respects by the laws of the State of Illinois.

      Section 9.4. Notice. All notices, proposals, submissions, offers,
approvals, agreements, elections, consents, acceptances, waivers, reports,
plans, requests, instructions and other communications required or permitted to
be made or given hereunder (all of the foregoing hereinafter collectively
referred to as "Communications") shall be in writing and shall be deemed to have
been duly made or given when: a) delivered personally with receipt acknowledged;
b) sent by registered or certified mail or equivalent, return receipt requested;
c) sent by facsimile, cable or telex (which shall promptly be confirmed by a
writing sent by registered or certified mail or equivalent, return receipt
requested); or d) sent by recognized overnight courier for delivery within
twenty-four (24) hours, in each case addressed or sent to the parties at the
following addresses and facsimile numbers or to such other or additional address
or facsimile as any party shall hereafter specify by Communication to the other
parties:

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

            With a Copy to:   Tressler, Soderstrom, Maloney & Priess
                              2100 Manchester Road, Suite 950

                                       10
<PAGE>
                              Wheaton, Illinois 60187
                              Facsimile No.: (630) 668-3003
                              Attn:  William A. Kindorf, III

            To NeoPharm:      Neopharm, Inc.
                              150 Field Drive, 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

Notice of change of address shall be deemed given when actually received, all
other Communications shall be deemed to have been given, received and dated on
the earlier of: (i) when actually received or on the date when delivered
personally; (ii) one (1) day after being sent by facsimile, cable, telex (each
promptly confirmed by a writing as aforesaid) or overnight courier; or (iii)
four (4) business days after mailing (except that in the case of any
communication given to a person with an address outside the United States, then
ten (10) business days after mailing).

      Section 9.5. Legal Construction. In case any one or more of the provisions
contained in this Agreement shall be invalid or unenforceable in any respect,
the validity and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby, and the parties will
attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid and unenforceable provision in light of
the tenor of this Agreement, and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.

      Section 9.6. Entire Agreement, Modifications, Consents, Waivers. This
Agreement, together with the Schedules hereto, contains the entire agreement of
the parties with respect to the subject matter hereof. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Each party hereto may, by an instrument in writing, waive compliance by
the other party hereto with any term or provision of this Agreement to be
performed or complied with by such other party. The waiver by either party
hereto of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach. Neither anything in this
Agreement nor the execution or performance hereof shall be deemed to prejudice
in any way, and each party hereto expressly reserves, any and all rights,
remedies and claims which each party may now or hereafter have against or with
respect to the other party or any of such other party's Affiliates, relating to
any matter which is not expressly covered by this Agreement.

                                       11
<PAGE>
      Section 9.7. Section Headings; Construction. The section headings and
titles contained herein are each for reference only and shall not be deemed to
affect the meaning or interpretation of this agreement. The words "hereby",
"herein", "herein above", "hereinafter", "hereof" and "hereunder", when used
anywhere in this Agreement, refer to this Agreement as a whole and not merely to
a subdivision in which such words appear, unless the context otherwise requires.
The singular shall include the plural, the conjunctive shall include the
disjunctive and the masculine gender shall include the feminine and neuter, and
vice versa, unless the context otherwise requires.

      Section 9.8. Execution Counterparts. This Agreement may be executed in any
number of counterparts and each such duplicate counterpart shall constitute an
original, any one of which may be introduced in evidence or used for any other
purpose without the production of its duplicate counterpart. Moreover,
notwithstanding that any of the parties did not execute the same counterpart,
each counterpart shall be deemed for all purposes to be an original, and all
such counterparts shall constitute one and the same instrument, binding on all
of the parties hereto.

      Section 9.9. Binding Effect, Assignment. Neither party may directly or
indirectly assign, delegate, encumber or in any other manner transfer any of its
rights, remedies, obligations, liabilities or interests in or arising under this
Agreement, without the prior consent of the other party, which consent shall not
be unreasonably withheld or delayed. Any attempted assignment, delegation,
encumbrance or other transfer in violation of this Agreement shall be void and
of no effect and shall be a material breach hereof. In the event Akorn sells the
Facility to a third party, Akorn agrees that it shall cause such third party to
agree in writing to assume Akorn's responsibilities hereunder.

                                 * * * * * * * *

      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first written above.

AKORN, INC.                                 NEOPHARM, INC.

By:_________________________                By:______________________________

Its:________________________                Its:_____________________________

                                       12
<PAGE>
                                  Schedule 2.1
                              Processing Parameters
<PAGE>
                                  Schedule 4.1
                                 Processing Fee

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