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 Pocessing Run

Commencement Date shall be no later than fourteen (14) days after Akorn's

receipt of the

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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

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