Document:

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                                                                   Exhibit 10.19

20095718.3
12-07-01

               SUBORDINATION, STANDBY AND INTERCREDITOR AGREEMENT

      WHEREAS, AKORN, INC., a Louisiana corporation (hereinafter, together with
its successors and assigns, called "Akorn"), and AKORN (NEW JERSEY), INC., an
Illinois corporation ("Akorn NJ"; together with Akorn, the "Borrowers" and each
individually a "Borrower") may from time to time hereafter become indebted to
the undersigned NEOPHARM, INC., a Delaware corporation (the "Junior Lender"),
including, without limitation, indebtedness under the Promissory Note referred
to below, and the Borrowers have requested, and may from time to time hereafter
request, THE NORTHERN TRUST COMPANY, an Illinois banking corporation
(hereinafter, together with its successors and assigns, called the "Bank"), 50
South LaSalle Street, Chicago, Illinois 60675, to make or agree to make loans,
advances or other financial accommodations to the Borrowers pursuant to the
terms of the Credit Agreement (as hereinafter defined); and

      WHEREAS, the Borrowers and the Bank are party to that certain Amended and
Restated Credit Agreement dated as of September 15, 1999 (as amended, restated
or supplemented from time to time, the "Credit Agreement"; capitalized terms not
otherwise defined herein shall have the same meanings herein as in the Credit
Agreement); and

      WHEREAS, Akorn intends to incur an indebtedness to the Junior Lender in
the principal amount of $3,250,000 pursuant to a Promissory Note (the
"Subordinated Note"), in the form attached hereto as Schedule A; and

      WHEREAS, the Junior Lender is a customer of Akorn and as such will benefit
from the continued making of loans, advances and other financial accommodations
from the Bank to the Borrowers;

      NOW, THEREFORE, to induce the Bank, from time to time, at its option, to
make or agree to make loans, advances or other financial accommodations
(including, without limitation, renewals or extensions of, or forbearances with
respect to, any loans or advances heretofore or hereafter made) to Borrowers,
and for other valuable consideration, receipt whereof is hereby acknowledged,
the Junior Lender agrees as follows:

      1. All obligations of each of the Borrowers, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent or now or
hereafter existing, or due or to become due, are hereinafter called
"Liabilities". All Liabilities to the Bank (other than any arising solely by
reason of any pledge or assignment made to the Bank pursuant to paragraph 2(c)
hereof) are hereinafter called "Senior Liabilities"; and all Liabilities to the
Junior Lender, including under the Subordinated Note (including any that may be
pledged or assigned to the Bank pursuant to paragraph 2(c) hereof), other than
trade payables arising in the usual and ordinary course of business between the
Borrowers and the Junior Lender, are hereinafter called "Junior Liabilities"; it
being expressly understood and agreed that
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the term "Senior Liabilities", as used herein, shall include, without
limitation, any and all interest accruing on any of the Senior Liabilities after
the commencement of any proceedings referred to in paragraph 4 hereof,
notwithstanding any provision or rule of law which might restrict the rights of
the Bank, as against the Borrowers or anyone else, to collect such interest.

      2. The Junior Lender will, from time to time, (a) promptly notify the Bank
of the creation of any Junior Liabilities, and of the issuance of any promissory
note or other instrument to evidence any Junior Liabilities, (b) upon request by
the Bank, cause any Junior Liabilities which are not evidenced by a promissory
note or other instrument of either of the Borrowers to be so evidenced, and (c)
if an event of default on any of the Senior Liabilities has occurred and is
continuing beyond any applicable grace period, and if there is no written
forbearance agreement in effect between Akorn and the Bank relating to such
event of default, upon request by the Bank, and as collateral security for all
Senior Liabilities, indorse without recourse, deliver and pledge to the Bank any
or all promissory notes or other instruments evidencing Junior Liabilities, and
otherwise assign to the Bank any or all Junior Liabilities and any or all
security therefor and guaranties thereof, all in a manner satisfactory to the
Bank.

      3. Except as the Bank may hereafter otherwise expressly consent in
writing, which consent may be given or withheld by the Bank in its sole and
absolute discretion, the payment of all Junior Liabilities shall be postponed
and subordinated to the payment in full of all Senior Liabilities, and no
payments or other distributions whatsoever in respect of any Junior Liabilities
shall be made by either of the Borrowers, or accepted by the Junior Lender, nor
shall any property or assets of either of the Borrowers be applied by them, or
accepted by the Junior Lender, to or for the purchase or other acquisition or
retirement of any Junior Liabilities.

      4. In the event of any dissolution, winding up, liquidation, readjustment,
reorganization or other similar proceedings relating to any Borrower or its
creditors, as such, or to their property (whether voluntary or involuntary,
partial or complete, and whether in bankruptcy, insolvency or receivership, or
upon an assignment for the benefit of creditors, or any other marshalling of the
assets and liabilities of any Borrower, or any sale of all or substantially all
of the assets of any Borrower, or otherwise), the Senior Liabilities shall first
be paid in full before the Junior Lender shall be entitled to receive and to
retain any payment or distribution in respect of the Junior Liabilities, and, in
order to implement the foregoing, (a) all payments and distributions of any kind
or character in respect of the Junior Liabilities to which the Junior Lender
would be entitled if the Junior Liabilities were not subordinated, or
subordinated and pledged or assigned, pursuant to this Agreement shall be made
directly to the Bank, (b) the Junior Lender shall promptly file a claim or
claims, in the form required in such proceedings, for the full outstanding
amount of the Junior Liabilities, and shall cause said claim or claims to be
approved and all payments and other distributions in respect thereof to be made
directly to the Bank, and (c) the Junior Lender hereby irrevocably agrees that
the Bank may, at its sole discretion, in the name of the Junior Lender or
otherwise, demand, sue for, collect, receive and receipt for any and all such
payments

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or distributions, and file, prove, and vote or consent in any such proceedings
with respect to, any and all claims of the Junior Lender relating to the Junior
Liabilities.

      5. In the event that the Junior Lender receives any payment or other
distribution of any kind or character from any Borrower or from any other source
whatsoever in respect of any of the Junior Liabilities, other than as expressly
permitted by the terms of this Agreement, such payment or other distribution
shall be received in trust for the Bank and promptly turned over by the Junior
Lender to the Bank. The Junior Lender will mark its books and records, and cause
the applicable Borrower to mark its books and records, so as to clearly indicate
that the Junior Liabilities are subordinated in accordance with the terms of
this Agreement, and will cause to be clearly inserted in any promissory note or
other instrument which at any time evidences any of the Junior Liabilities a
statement to the effect that the payment thereof is subordinated in accordance
with the terms of this Agreement. The Junior Lender will execute such further
documents or instruments and take such further action as the Bank may reasonably
from time to time request to carry out the intent of this Agreement.

      6. All payments and distributions received by the Bank in respect of the
Junior Liabilities, to the extent received in or converted into cash, may be
applied by the Bank first to the payment of any and all expenses (including
attorneys fees and legal expenses) paid or incurred by the Bank in enforcing
this Agreement or in endeavoring to collect or realize upon any of the Junior
Liabilities or any security therefor, and any balance thereof shall, solely as
between the Junior Lender and the Bank, be applied by the Bank, in such order of
application as the Bank may from time to time select, toward the payment of the
Senior Liabilities remaining unpaid; but, as between any Borrower and its
respective creditors, no such payments or distributions of any kind or character
shall be deemed to be payments or distributions in respect of the Senior
Liabilities; and, notwithstanding any such payments or distributions received by
the Bank in respect of the Junior Liabilities and so applied by the Bank toward
the payment of the Senior Liabilities, the Junior Lender shall be subrogated to
the then existing rights of the Bank, if any, in respect of the Senior
Liabilities only at such time as this Agreement shall have been discontinued and
the Bank shall have received payment of the full amount of the Senior
Liabilities, as provided for in paragraph 11 hereof.

      7. Notwithstanding anything to the contrary contained in the Subordinated
Note, until such time as this Agreement shall have been discontinued and the
Bank shall have received payment of the full amount of the Senior Liabilities,
as provided for in paragraph 11 hereof, no action or inaction by either of the
Borrowers shall be deemed to be in violation of the provisions contained in
Article 5 of the Subordinate Note if such action or inaction either (i) is not
in violation of any of the provisions of the Credit Agreement, or (ii) has been
consented to in writing by the Bank.

      8. The Junior Lender hereby waives: (a) notice of acceptance by the Bank
of this Agreement; (b) notice of the existence or creation or non-payment of all
or any of the Senior Liabilities; and (c) all

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diligence in collection or protection of or realization upon the Senior
Liabilities or any thereof or any security therefor.

      9. The Junior Lender will not without the prior written consent of the
Bank: (a) cancel, waive, forgive, transfer or assign, or attempt to enforce or
collect, or subordinate to any Liabilities other than the Senior Liabilities,
any Junior Liabilities or any rights in respect thereof; (b) take any collateral
security for any Junior Liabilities; or (c) commence, or join with any other
creditor in commencing, any bankruptcy, reorganization or insolvency proceedings
with respect to any Borrower.

      10. This Agreement shall in all respects be a continuing agreement and
shall remain in full force and effect (notwithstanding, without limitation, the
dissolution of the Junior Lender or that at any time or from time to time all
Senior Liabilities may have been paid in full), subject to discontinuance only
upon receipt by the Bank of payment in full of all Senior Liabilities and
termination of any and all commitments by the Bank to extend credit to either of
the Borrowers.

      11. The Bank may, from time to time, whether before or after any
discontinuance of this Agreement, at its sole discretion and without notice to
the Junior Lender, take any or all of the following actions: (a) retain or
obtain a security interest in any property to secure any of the Senior
Liabilities, (b) retain or obtain the primary or secondary obligation of any
other obligor or obligors with respect to any of the Senior Liabilities, (c)
extend or renew or forbear for one or more periods (whether or not longer than
the original period), alter or exchange any of the Senior Liabilities, or
release or compromise any obligation of any nature of any obligor with respect
to any of the Senior Liabilities, and (d) release its security interest in, or
surrender, release or permit any substitution or exchange for, all or any part
of any property securing any of the Senior Liabilities, or extend or renew or
forbear for one or more periods (whether or not longer than the original period)
or release, compromise, alter or exchange any obligations of any nature of any
obligor with respect to any such property.

      12. The Bank may, from time to time, whether before or after any
discontinuance of this Agreement, without notice to the Junior Lender, assign or
transfer any or all of the Senior Liabilities or any interest therein; and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, such Senior Liabilities shall be and remain Senior Liabilities
for the purposes of this Agreement, and every immediate and successive assignee
or transferee of any of the Senior Liabilities or of any interest therein shall,
to the extent of the interest of such assignee or transferee in the Senior
Liabilities, be entitled to the benefits of this Agreement to the same extent as
if such assignee or transferee were the Bank; provided, however, that, unless
the Bank shall otherwise consent in writing, the Bank shall have an unimpaired
right, prior and superior to that of any such assignee or transferee, to enforce
this Agreement, for the benefit of the Bank, as to those of the Senior
Liabilities which the Bank has not assigned or transferred.

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      13. The Bank shall not be prejudiced in its rights under this Agreement by
any act or failure to act of any Borrower or the Junior Lender, or any
noncompliance of any Borrower or the Junior Lender with any agreement or
obligation, regardless of any knowledge thereof which the Bank may have or with
which the Bank may be charged; and no action of the Bank permitted hereunder
shall in any way affect or impair the rights of the Bank and the obligations of
the Junior Lender under this Agreement.

      14. No delay on the part of the Bank in the exercise of any right or
remedy shall operate as a waiver thereof, and no single or partial exercise by
the Bank of any right or remedy shall preclude other or further exercise thereof
or the exercise of any other right or remedy; nor shall any modification or
waiver of any of the provisions of this Agreement be binding upon the Bank
except as expressly set forth in a writing duly signed and delivered on behalf
of the Bank. For the purposes of this Agreement, Senior Liabilities shall
include all obligations of each of the Borrowers to the Bank, notwithstanding
any right or power of either Borrower or anyone else to assert any claim or
defense as to the invalidity or unenforceability of any such obligation, and no
such claim or defense shall affect or impair the agreements and obligations of
the Junior Lender hereunder.

      15. This Agreement shall be binding upon the Junior Lender and upon the
heirs, legal representatives, successors and assigns of the Junior Lender; and,
to the extent that either Borrower or the Junior Lender is either a partnership
or a corporation, all references herein to such Borrower and to the Junior
Lender, respectively, shall be deemed to include any successor or successors,
whether immediate or remote, to such partnership or corporation. If more than
one party shall execute this Agreement, the term "undersigned" as used herein
shall mean all parties executing this Agreement and each of them, and all such
parties shall be jointly and severally obligated hereunder.

      16. This Agreement shall be construed in accordance with and governed by
the laws of the State of Illinois. Wherever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

      17. THE JUNIOR LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. THE JUNIOR LENDER HEREBY ABSOLUTELY AND IRREVOCABLY CONSENTS AND SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS HAVING SITUS IN COOK
COUNTY, ILLINOIS OR THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF
ILLINOIS IN CONNECTION WITH ANY SUITS, ACTIONS OR PROCEEDINGS BROUGHT AGAINST
THE JUNIOR LENDER BY THE BANK ARISING OUT OF OR RELATING TO

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THIS AGREEMENT, AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE
JUNIOR LENDER HEREBY WAIVES AND AGREES NOT TO ASSERT IN SUCH SUIT, ACTION OR
PROCEEDING, IN EACH CASE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT (A) THE JUNIOR LENDER IS NOT PERSONALLY SUBJECT TO THE JURISDICTION
OF ANY SUCH COURT; (B) THE JUNIOR LENDER IS IMMUNE FROM SUIT OR ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO IT OR
ITS PROPERTY; (C) ANY SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM; (D) THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER; OR (E) THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY ANY SUCH COURT.
NOTHING CONTAINED HEREIN SHALL AFFECT ANY RIGHT THAT THE BANK MAY HAVE TO BRING
ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE JUNIOR
LENDER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

                       [SIGNATURE PAGE(S) AND EXHIBIT(S),
                            IF ANY, FOLLOW THIS PAGE]

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      IN WITNESS WHEREOF, this Agreement has been made and delivered at Chicago,
Illinois as of the_________day of December, 2001.

                                       NEOPHARM, INC.

                                       By_______________________________________
                                         Name:
                                         Title:

ACCEPTED December_____, 2001

THE NORTHERN TRUST COMPANY

By_________________________________
  Title:

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                         ACKNOWLEDGMENT OF SUBORDINATION

      The Borrowers each hereby acknowledge receipt of a copy of the foregoing
Subordination, Standby and Intercreditor Agreement, waive notice of acceptance
thereof by the Bank, and agree to be bound by the terms and provisions thereof,
to make no payments or distributions contrary to the terms and provisions
thereof, and to do every other act and thing necessary or appropriate to carry
out such terms and provisions. In the event of any violation of any of the terms
and provisions of the foregoing Subordination and Standby Agreement, then, at
the election of the Bank, any and all obligations of each of the Borrowers to
the Bank shall forthwith become due and payable and any and all agreements of
the Bank to make loans, advances or other financial accommodations to the
Borrowers, or to forbear from exercising remedies, shall forthwith terminate,
notwithstanding any provisions thereof to the contrary.

Dated as of December______, 2001       AKORN, INC.

                                       By_______________________________________
                                         Name:
                                         Title:

Dated as of December______, 2001       AKORN (NEW JERSEY), INC.

                                       By_______________________________________
                                         Name:
                                         Title:

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                                   SCHEDULE A

                                 PROMISSORY NOTE<PAGE>
                                                                   Exhibit 10.20

                   SUBORDINATION AND INTERCREDITOR AGREEMENT

            THIS SUBORDINATION AND INTERCREDITOR AGREEMENT (this "Agreement") is
made and entered into as of this 20th day of December, 2001, by John N. Kapoor,
as Trustee under THE JOHN N. KAPOOR TRUST, dated September 20, 1989 (the "Junior
Party") and NEOPHARM, INC., a Delaware corporation (the "Lender").

                                R E C I T A L S:

            A.    The Lender and Akorn, Inc., a Louisiana corporation (the
"Borrower"), have entered into that certain Processing Agreement, of even date
herewith (the "Processing Agreement"), and, in connection therewith, Borrower
executed and delivered that certain Promissory Note, of even date herewith (the
"Promissory Note"), evidencing a loan made by Lender to Borrower, as of the date
hereof, in aggregate principal amount of THREE MILLION TWO HUNDRED FIFTY
THOUSAND DOLLARS (US$3,250,000.00), plus accrued but unpaid interest (the
"Lender Debt").

            B.    On July 13, 2001, the Borrower and the Junior Party entered
into that certain Convertible Bridge Loan and Warrant Agreement (the "Junior
Agreement"), pursuant to which the Junior Party made certain loans to Borrower
in aggregate principal amount of FIVE MILLION AND 00/100 DOLLARS
($5,000,000.00), plus accrued interest thereon (the aforementioned loans,
accrued interest thereon and any other loans made by the Junior Party to the
Borrower (excluding any consulting fee, chairman's fee and expense
reimbursement, whether or not deferred, owed by Borrower to the Junior Party or
any entity controlled by the Junior Party), presently outstanding or made in the
future, to be collectively referred to as the "Junior Debt"). In connection with
the consummation of the Junior Agreement, the Junior Party entered into a
Subordination Agreement, of even date therewith, whereby the Junior Party agreed
to subordinate the Junior Debt to all outstanding debt owed by Borrower to The
Northern Trust Company ("Northern Trust"), Borrower's senior lender, under the
terms of an Amended and Restated Credit Agreement, as most recently amended by
that certain Forbearance Agreement, dated July 13, 2001, by and among Northern
Trust, the Borrower and the Borrower's wholly-owned subsidiary, Akorn (New
Jersey), Inc, an Illinois corporation.

            C.    Lender was unwilling to enter into the Processing Agreement or
provide Borrower with the Lender Debt unless the Junior Party entered into this
Subordination and Intercreditor Agreement.

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is hereby agreed as follows:

            1.    Recitals. The Recitals of this Agreement are incorporated
herein and made a part hereof by this reference thereto.

            2.    Junior Debt Subordinate to Lender Debt. The Junior Debt is
hereby, and shall continue to be, subject and subordinate in lien and in payment
to the lien and payment of the Lender Debt and any other document evidencing,
securing or guaranteeing the Lender Debt without regard to the application of
such proceeds together with all interest, late fees, default interest, future
principal advances and all other sums due under the Promissory Note. The
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foregoing shall apply notwithstanding the actual date and time of execution,
delivery, recordation, filing or perfection of the Lender Debt or the Junior
Debt, or the lien or priority of payment thereof.

            Until all Lender Debt shall have been paid in full, the Junior Party
shall not, directly or indirectly, demand or accept from the Borrower nor cancel
or otherwise discharge all or any part of the Junior Debt, and the Junior Party
shall not otherwise take or permit any action prejudicial to or inconsistent
with the Lender's priority position over the Junior Party created by this
Agreement. Excluded from the provisions of this paragraph 2 are the conversion
rights under the Junior Debt of principal and interest to an equity interest in
Borrower.

            3.    Allocation of Collateral During Bankruptcy, Etc. In the event
of (a) any proceeding under the Bankruptcy Code or other applicable federal or
state insolvency law relative to the Borrower, or (b) any liquidation,
dissolution or other winding up of the Borrower, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (c) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Borrower, then and in any such event, the Lender shall be
entitled to receive payment in full in cash of all amounts due or to become due
on or in respect of the Lender Debt, and to that end the Lender shall be
entitled to receive as collateral therefor, any payment or distribution of any
kind or character, whether in cash, property or securities which may be payable
or deliverable to the Junior Party in such proceeding, dissolution, liquidation
or other winding up or event until the Lender Debt is fully repaid and
discharged.

            In the event that, notwithstanding the foregoing provisions of this
Section 3, the Junior Party shall have received any cash or assets of any kind
from Borrower as payment for the Junior Debt or to secure, guarantee or
discharge all or any part of the Junior Debt before all Lender Debt is paid in
full, then and in such event such cash or assets shall be delivered forthwith to
the Lender or, if required by law, the trustee in bankruptcy, receiver,
custodian, assignee, agent or other person making payment or distribution of
assets of the Borrower as collateral for the Lender Debt remaining unpaid, to
the extent necessary to pay all the Lender Debt in full, after giving effect to
any concurrent payment or distribution to or for the Lender.

            4.    Certain Matters Relating to Bankruptcy. The Junior Party
hereby waives any objection it may have to the use of cash collateral or the
financing of the Borrower pursuant to either Section 363 or Section 364,
including, without limitation, Section 364(d), of the Bankruptcy Code. Notice of
a proposed financing or use of cash collateral shall be deemed given upon the
sending of such notice by telegraph, telecopy or hand delivery to the Junior
Party at address indicated on the signature page attached hereto. All
allocations of payments between the Lender and the Junior Party, subject to any
court order, continue to be made after the filing of a petition under the
Bankruptcy Code on the same basis that the payments were to be allocated prior
to the date of such filing. To the extent that the Lender receives payments on
the Lender Debt which are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law, or
equitable cause, then, to the extent of such payment or proceeds received, the
Lender Debt, or part thereof, intended to be satisfied shall be reinstated and
continue in full force and effect as if such payments or proceeds had not been
received by the Lender.

                                       2
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            5.    Continuing Nature of Subordination. This Agreement shall be
effective and may not be terminated or otherwise revoked by the Junior Party
until the Lender Debt shall have been fully repaid and discharged and all
financing arrangements between the Borrower and the Lender under the Promissory
Note as amended from time to time, have been terminated. If the Junior Party
shall have any right under applicable law to terminate or revoke this Agreement
which right cannot be waived, such termination or revocation shall not be
effective until written notice of such termination or revocation, signed by the
Junior Party, is delivered to the Lender pursuant to the provisions of Section
10, provided, however, that no such notice of termination or revocation shall
affect or impair any of the agreements and obligations of the Junior Party
hereunder with respect to any and all Lender Debt existing prior to the time of
receipt of such notice by the Lender, any and all Lender Debt created or
acquired thereafter pursuant to any previous commitments made by the Lender
under the Promissory Note, any and all extensions or renewals of any of the
foregoing, any and all interest accruing on any of the foregoing, and any and
all expenses paid or incurred by the Lender in endeavoring to collect or realize
upon any of the foregoing; and all of the agreements and obligations of the
Junior Party under this Agreement shall, notwithstanding any such notice of
termination or revocation, remain fully in effect until such Lender Debt
(including any extensions or renewals thereof and all such interest and
expenses) shall have been paid in full.

            The Junior Party agrees that the Lender shall be entitled to manage
and supervise the Lender's loans to the Borrower in accordance with applicable
law, the terms of the Promissory Note and the Lender's usual practices, modified
from time to time as the Lender deems appropriate under the circumstances,
without regard to the existence of any rights that the Junior Party may now or
hereafter have and that the Lender shall have no liability to the Junior Party
for, and Junior Party hereby waives any claim which the Junior Party may now or
hereafter have against, the Lender arising out of any and all actions which the
Lender, in good faith, takes or omits to take with respect to the Promissory
Note or any other agreement related thereto or to the collection of the Lender
Debt.

            6.    Information Concerning Financial Condition of the Borrower.
The Junior Party hereby assumes responsibility for keeping itself informed of
the financial condition of Borrower and of all other circumstances bearing upon
the risk of nonpayment of the Lender Debt that diligent inquiry would reveal,
and the Junior Party hereby agrees that the Lender shall have no duty to advise
the Junior Party of information known to the Lender regarding such condition or
any such circumstances except as set forth below.

            7.    Assignment; Refinancing. The Junior Agreement and the rights
and obligations therein may be sold, assigned or transferred by the Junior Party
to an entity controlled by the Junior Party, to members of the immediate family
of the Junior Party, or to trusts, partnerships, S-corporations or other
beneficiaries of the Junior Party. In the event of such transfer, the assignee
shall become subject to the terms of this Agreement. Except for such transfers
described above, the Junior Party shall not sell, assign or otherwise transfer
any interest in the Junior Agreement without the prior written consent of the
Lender, which consent shall not be unreasonably withheld.

            8.    Covenants and Assurances. The Junior Party shall (a) provide
the Lender with a copy of any and all notices of default, event of default or
acceleration which the Junior Party gives Borrower under or in connection with
the Junior Agreement or Junior Debt, which notices to the Lender shall be given
at the same time as the Junior Party gives such notices to the

                                       3
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Borrower, and (b) upon the request of Lender, execute and deliver to the Lender
such other documents and assurances and do or cause to be done all such other
acts and things as may be reasonably required by the Lender in order to give
effect to this Agreement.

            The Lender shall provide the Junior Party with a copy of any and all
notices of default, events of default or acceleration which the Lender gives
Borrower under or in connection with the Lender Debt, which notices to the
Junior Party shall be given at the same time Lender gives such notices to the
Borrower.

            9.    Waivers, Etc. No delay on the part of the Lender in its
respective exercise of any right or remedy shall operate as a waiver thereof,
and no single or partial exercise by the Lender of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other right or
remedy; nor shall any modification or waiver of any of the provisions of this
Agreement be binding upon the Lender or Junior Party except as expressly set
forth in a writing duly signed and delivered on behalf of the Lender.

            10.   Notices. Any notice or other communication to any party in
connection with this Agreement shall be in writing and shall be sent by manual
delivery, facsimile transmission, overnight courier or United States mail
certified mail, return receipt requested (postage prepaid) addressed to such
party at the address specified on the signature page hereof, or at such other
address as such party shall have specified to the other party hereto in writing.
All periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by facsimile
transmission, from the first business day after the date of sending if sent by
overnight courier, or from four days after the date of mailing if mailed;
provided, however, that any notice to the Lender shall be deemed to have been
given only when received by the Lender.

            11.   Governing Law and Construction. The validity, construction and
enforceability of this Agreement shall be governed by the internal laws of the
State of Illinois, without giving effect to conflict of laws principles thereof.

            12.   Consent to Jurisdiction. AT THE OPTION OF THE LENDER, THIS
AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR ILLINOIS STATE COURT SITTING
IN COOK COUNTY, ILLINOIS; AND THE BORROWER AND JUNIOR PARTY EACH CONSENT TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVE ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT. IN THE EVENT THE BORROWER OR JUNIOR PARTY
COMMENCE ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT
THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS
AGREEMENT, THE LENDER AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE
TRANSFERRED TO ONE OF THE JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH
TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE
DISMISSED WITHOUT PREJUDICE.

            13.   Waiver of Jury Trial. BORROWER AND JUNIOR PARTY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT AND ANY

                                       4
<PAGE>
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

            14.   Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns of Borrower, the Junior
Party and the Lender.

            15.   Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original and all of
which shall constitute one and the same instrument.

                                       5
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have executed, or caused this
agreement to be executed by the respective officers thereunto duly authorized,
as of the day and year first above written.

                                John N. Kapoor, as Trustee under
                                THE JOHN N. KAPOOR TRUST,
                                Dated September 20, 1989

                                By:         _______________________________
                                Its:        _______________________________

                                Address:    _______________________________
                                            _______________________________
                                Fax No.:    _______________________________
                                Attn:       John Kapoor

                                NEOPHARM, INC., a Delaware corporation

                                By:   _____________________________________
                                Its:  President and Chief Executive Officer

                                Address:    150 Field Drive, Suite 195
                                            Lake Forest, Illinois  60045
                                            Attn:  President and Chief Executive
                                                   Officer
                                Fax No.:    (847) 295-8854

Acknowledged and Agreed by:

AKORN, INC., a Louisiana corporation

By:   _______________________________
Its:  _______________________________

Address:    Akorn, Inc.
            2500 Millbrook Drive
            Buffalo Grove, IL 60089-4694
            Facsimile No. (847) 279-6123
            Attn:  Ben Pothast

                                       6

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