UNITED STATES
            SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C.  20549
                             
                                               
                             
                         FORM 10-Q
                             
                             
     (X)   Quarterly Report Pursuant to Section 13 or 15(d)
          of the Securities Exchange Act of 1934
     For the quarterly period ended December 31, 1995
                             
     ( )   Transition Report Pursuant to Section 13 or 15(d)
          of the Securities Exchange Act of 1934
     For the transition period from _______ to _______
                             
                                            
                             
             Commission File Number:   0-13976
                             
                                            
                             
                             
                        AKORN, INC.
     (Exact Name of Registrant as Specified in its Charter)
              
              
              
              
              
              LOUISIANA                        72-0717400 
     (State or Other Jurisdiction of          (I.R.S. Employer
   Incorporation or Organization)            Identification No.)

             100 Akorn Drive
       Abita Springs, Louisiana                    70420
(Address of Principal Executive Offices)         (Zip Code)



                       (504) 893-9300
                (Inssuer's telephone number)
                                             

Indicate by check mark whether the issuer (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes  X               No        

 At February 9, 1996 there were 14,964,982 shares of common
stock, no par value, outstanding.


<PAGE>
               

               PART I.  FINANCIAL INFORMATION
 




Item 1.  Financial Statements (Unaudited)




The following financial statements are provided on the page
numbers indicated below:


Condensed Consolidated Balance Sheets -
  December 31, 1995 and June 30, 1995                 2


Condensed Consolidated Statements of Income -
  Three months and six months ended 
  December 31, 1995 and 1994                          4


Condensed Consolidated Statements of Cash Flows -
  Six months ended December 31, 1995 and 1994         5


Notes to Condensed Consolidated Financial 

  Statements                                          6





Item 2.  Management's Discussion and Analysis 
          of Financial Condition and Results of
          Operations

           

The information called for by this item is provided on page 8.


<PAGE>
                            AKORN, INC.

               CONDENSED CONSOLIDATED BALANCE SHEETS

                            (UNAUDITED)

                                         December 31,         June 30,     
                                            1995               1995*      
                                         ____________      _____________

ASSETS


CURRENT ASSETS
 Cash and cash equivalents             $    456,053        $     767,286 
 Short-term investments                   1,495,971            1,568,793 
 Accounts receivable
  (less allowance for bad debts of
  $269,811 and $266,329 at December 31
  and June 30, respectively)              4,462,914            4,918,753 
 Inventory                                6,921,028            5,979,707 
 Prepaid expenses and other assets        1,523,002            1,068,338 
                                        ____________        _____________
  TOTAL CURRENT ASSETS                   14,858,968           14,302,877 
 


OTHER ASSETS                              1,099,841              957,099 



PROPERTY, PLANT AND EQUIPMENT            18,011,438           13,820,135 
Accumulated depreciation                 (7,081,287)          (6,750,743)
                                       ______________        _____________
                                         10,930,151            7,069,392 
Construction in progress                    259,150            3,926,553 
                                       ______________        _____________
                                         11,189,301           10,995,945 
                                       ______________        _____________

TOTAL ASSETS                         $   27,148,110      $    26,255,921 
                                       ==============        =============


<PAGE>

                                       December 31,         June 30,  
                                           1995              1995*    
                                       ______________     _______________

LIABILITIES AND SHAREHOLDERS'
EQUITY

CURRENT LIABILITIES
 Short-term borrowings                $      262,400      $       -      
 Current installments of long-term 
  debt and capital lease obligations         826,831           641,994 
 Current portion of pre-funded development
  costs                                      500,000           667,000 
 Trade accounts payable                    1,496,880         1,718,893 
 Income taxes payable                      1,094,657           781,824 
 Accrued payroll and commissions             588,743           625,839 
 Accrued reorganization costs                654,532           727,423 
 Accrued expenses and other liabilities    1,400,254         1,237,232 
                                        ______________     _______________
  TOTAL CURRENT LIABILITIES                6,824,297         6,400,205 

LONG-TERM DEBT AND                                   
  CAPITAL LEASE OBLIGATIONS                3,516,729         3,900,389 
 
OTHER LONG-TERM LIABILITIES                  874,481           957,043 

SHAREHOLDERS' EQUITY
 Common stock, no par value--
  authorized 20,000,000 shares; issued 
  15,115,673 shares at December 31 and
  June 30; outstanding 14,964,982 and
  14,904,653 shares at December 31 and 
  June 30, respectively                   13,701,845        13,701,845 
 Treasury stock, at cost--150,781 and 
  211,020 shares at December 31 and 
  June 30, respectively                     (170,589)         (291,067)
 Retained earnings                         2,401,347         1,500,109 
 Unrealized gain on marketable equity 
   securities                                   -               87,397 
                                         _____________    _____________
  TOTAL SHAREHOLDERS' EQUITY              15,932,603        14,998,284 
                                         _____________    ______________

TOTAL LIABILITIES AND
  SHAREHOLDERS' EQUITY                $   27,148,110     $  26,255,921 
                                         =============    ==============


*Condensed from audited consolidated financial statements.
  See notes to condensed consolidated financial statements.


<PAGE>

                                AKORN, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                (UNAUDITED)


<TABLE>
<CAPTION>

                                    Three months ended                         Six months ended
                                         December 31,                            December 31,
                               1995                   1994                   1995              1994 
                        _________________     __________________        _______________  _______________

<S>                     <C>                     <C>                      <C>              <C>
Net sales               $     7,387,217         $   8,384,252            $   15,275,765   $  16,925,378  
Cost of sales                 4,576,624             4,773,140                 9,577,838       9,692,933  
                        _________________     __________________        ________________  _______________
  GROSS PROFIT                2,810,593             3,611,112                 5,697,927       7,232,445  

Selling, general and
 administrative expenses      1,963,062             2,486,079                 3,900,915       4,718,258  
Research and development        228,289               181,000                   463,589         350,364  
                        _________________     __________________        ________________  _______________
                              2,191,351             2,667,079                 4,364,504       5,068,622  
                        _________________     __________________        ________________  _______________
  OPERATING INCOME              619,242               944,033                 1,333,423       2,163,823  
 
Interest expense                (98,099)                 -                     (184,664)           - 
Interest and other income, net  177,971                23,252                   281,799          51,658
                        _________________     __________________        ________________  _______________
                                 79,872                23,252                    97,135          51,658
                        _________________     __________________        ________________  _______________
  INCOME BEFORE                         
   INCOME TAXES                 699,114               967,285                 1,430,558       2,215,481  
  

 Income taxes                   258,882               362,531                   529,516         824,364
                        _________________     __________________        ________________  _______________

  NET INCOME               $    440,232       $       604,754        $          901,042    $  1,391,117
                        =================      =================        ================  ===============

Per Share:
                                                                                        
  NET INCOME               $        .03        $          .04        $              .06    $        .09
                        =================      =================        ================  ===============
  WEIGHTED AVERAGE 
    SHARES OUTSTANDING       15,302,490            15,542,895                15,281,342      15,410,163  
                        =================      =================         ===============  ===============
See notes to condensed consolidated financial statements.
</TABLE>


<PAGE>
                                  AKORN, INC.

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (UNAUDITED)
                                                Six months ended December 31,
                                                   1995               1994 
                                                _____________   ______________
OPERATING ACTIVITIES                                 
 Net income                                      $   901,042     $  1,391,117 
 Adjustments to reconcile net income to net
  cash provided by (used in) operating activities:
   Depreciation and amortization                     362,641          441,337 
   Gain on sale of investments                       (79,859)            -
   Changes in operating assets and liabilities    (1,138,120)      (3,513,704)
                                                _______________  ______________
NET CASH PROVIDED BY (USED IN)
 OPERATING ACTIVITIES                                 45,704       (1,681,250)

INVESTING ACTIVITIES
 Purchases of property, plant and equipment         (523,900)      (3,528,197)
 Net maturities of investments                        65,284          561,719 
 Product licensing costs                             (82,572)        (232,385)
                                                _______________  ______________
NET CASH USED IN INVESTING ACTIVITIES               (541,188)      (3,198,863)

FINANCING ACTIVITIES
 Repayment of long-term debt                        (155,662)        (862,005)
 Proceeds from sale of stock                         120,674           96,031 
 Proceeds from issuance of long-term debt                -          3,500,000 
 Reductions in capital lease obligations             (43,161)         (10,318)
 Short-term borrowings                               262,400          804,200 
                                                 _______________  ______________
NET CASH PROVIDED BY
  FINANCING ACTIVITIES                               184,251        3,527,908 
                                                _______________  ______________
DECREASE IN CASH
 AND CASH EQUIVALENTS                               (311,233)      (1,352,205)
 
 Cash and cash equivalents at beginning of period    767,286        1,914,735 
                                                _______________  ______________
CASH AND CASH EQUIVALENTS
 AT END OF PERIOD                                $   456,053      $   562,530 
                                                ===============  ==============
SUPPLEMENTAL DISCLOSURE
 OF CASH FLOW INFORMATION:

 Interest paid, net of amount capitalized        $   184,588      $      - 
                                                ===============  ==============
 Income taxes paid, net of refunds               $   149,956      $ 1,092,750 
                                                ===============  ==============

See notes to condensed consolidated financial statements.


<PAGE>                           
                           
                           AKORN, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                           (UNAUDITED)



NOTE A - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial
statements include the accounts of Akorn, Inc. (the Company) and
its wholly owned subsidiaries, Spectrum Scientific Pharmaceuticals,
Inc. , Walnut Pharmaceuticals, Inc. and Akorn Manufacturing, Inc.
Intercompany transactions and balances have been eliminated in
consolidation.

These financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q.  Accordingly,
they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial
statements.  In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair presentation have been included.  Operating results for the
six-month period ended December 31, 1995 are not necessarily
indicative of the results that may be expected for the year ending
June 30, 1996.  For further information, refer to the consolidated
financial statements and footnotes for the year ended June 30,
1995, included in the Company's Annual Report on Form 10-KSB.

NOTE B - INCOME TAXES

The Company is currently in discussions with the Internal Revenue
Service (IRS) regarding the examination of tax returns for years
1988 through 1993.  The IRS has proposed adjustments to such
returns which would result in additional taxes and interest due of
approximately $1.5 million.  Although the Company does agree with
approximately $600,000 of the proposed adjustments, the Company
does intend to appeal the remainder of the assessment.  The Company
does not currently anticipate any adverse financial statement
effect from this proposed assessment as accruals for the financial
statement effects of these proposed adjustments have been
previously recorded.

NOTE C - EARNINGS PER SHARE

Earnings per share are based upon the weighted average number of
common shares outstanding.  The computation of the weighted average
number of shares outstanding for all periods presented includes the
dilutive effect of stock options and warrants using the treasury
stock method.  

NOTE D - INVENTORY

The components of inventory are as follows:
                                   
                                   December 31,       June 30,   
                                       1995            1995 
                                 ________________  ________________

Finished goods                    $    3,899,405     $  3,742,411
Work in process                        1,138,518        1,042,922
Raw materials and supplies             1,883,105        1,194,374
                                 ________________  _________________
                                   $   6,921,028     $  5,979,707
                                 ================  =================

The inventories are reported net of reserves for unsaleable items
of $307,126 and $344,443 as of December 31, 1995 and June 30, 1995,
respectively. 

NOTE E - INVESTMENTS

At June 30, 1995, the market value of the Company's marketable
equity securities exceeded the cost by $87,397; therefore, an
unrealized gain was recorded as a component of shareholders' equity
to reflect this increase in value.  Subsequent to year end, the
Company sold the investment and recorded a realized gain of $79,859
during the first quarter of fiscal 1996.  This amount is included
in interest and other income, net in the accompanying statement of
income for the six months ended December 31, 1995.

NOTE F - INTEREST CAPITALIZATION

Interest incurred during construction periods is capitalized as
part of the cost of the expansion project.  During the six-month
periods ended December 31, 1995 and 1994, the Company capitalized
$34,682 and $43,725, respectively, in interest costs. During the
quarter ended December 31,1994, interest costs totaling $30,291 
were capitalized. No interest costs were capitalized during the
second quarter of fiscal 1996.

NOTE G - LITIGATION

The Company is involved in various litigation and claims arising in
the normal course of business.  The Company's management believes
that any liability the Company may have in these matters would not
have a material effect on the consolidated financial statements. 

<PAGE>
                           AKORN, INC.

 
             MANAGEMENT'S  DISCUSSION AND ANALYSIS

         OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


RESULTS OF OPERATIONS

Net Sales
The following table sets forth, for the periods indicated, net
sales by segment (in thousands), excluding intersegment sales:

                        Three Months Ended     Six Months Ended
                            December 31,          December 31,
                           1995      1994      1995        1994   
                        _________  __________ _________  __________

Ophthalmic distribution $   5,503   $  6,286   $ 11,120   $  12,358
Contract manufacturing      1,884      2,098      4,156       4,567 
                        __________  _________ __________  __________

Total net sales         $   7,387   $  8,384   $ 15,276   $  16,925 
                        ==========  ========= ==========  ==========    
                        
Total net sales declined 12% in the quarter ended December 31, 1995
compared to the same period in 1994, with sales of $7.4 million
versus $8.4 million.  For the first six months of fiscal 1996,
sales of $15.3 million were 10% lower than the prior-year sales of
$16.9 million. 

For the quarter ended December 31, 1995, ophthalmic distribution
sales declined 12% from the comparable period in 1994.  For the
six-month period ended December 31, 1995, net sales for this
segment declined 10% as compared to the same period in the prior
fiscal year.  These declines in sales are primarily the result of
the absence, since the second quarter of fiscal 1995, of AK-Con-A,
the Company's lead allergy product, which accounted for sales of
approximately $700,000 and $2 million in the prior-year quarter and
six-month period, respectively.

Ophthalmic distribution sales, exclusive of AK-Con-A sales, were
$5.5 million and $10.4 million, respectively, for the quarter and
six-month period ended December 31, 1994.  Excluding AK-Con-A
sales, ophthalmic distribution sales for the quarter ended December
31, 1995 were flat as compared to the same period in 1994 while
sales for the six-month period were 7% higher than the previous
year.  The flat sales for the quarter were primarily due to several
product backorders and the stocking in of several products in the
prior-year second quarter.      

As previously announced, AK-Con-A was converted to over-the-counter
(OTC) from prescription status by the Food and Drug Administration
(FDA).  The Company recently obtained FDA approval of its OTC
version of AK-Con-A which has been licensed to Pfizer Inc.(Pfizer). 
The Company will begin to recognize royalty income and
manufacturing margins on this product beginning in the fourth
quarter of fiscal 1996.  Such amounts are expected to bring
additional profits of approximately one to two cents per share per
quarter.

The Company has recently received several Abbreviated New Drug
Application approvals (ANDAs) for ophthalmic products at its Akorn
Manufacturing, Inc. (AMI) facilities.  These approvals are expected
to add incremental revenues to the ophthalmic distribution segment
commencing in the fourth quarter of fiscal 1996, as the Company
plans to introduce "commodity generic" labels for these products. 
These commodity generic sales will be in addition to the brand name
sales of the products currently being recognized.

For the quarter ended December 31, 1995, contract manufacturing
sales declined 10% over the comparable period in 1994.  For the
six-month period ended December 31, 1995, this segment's sales were
9% lower than the same period in 1994.  These declines in contract
manufacturing sales reflect fluctuations in ordering patterns from
contract customers which is common to this segment.  In addition,
these declines are due to a recent shift by several contract
customers who, based on economic evaluation, have opted to transfer
the manufacture of their injectable products in-house, or to
discontinue the product line entirely.
  
As noted in previous Company disclosures, one of these customers is
Akorn's largest contract customer, which accounted for 15% and 14%
of consolidated net sales for the quarter and six-month period
ended December 31, 1995, respectively.  This customer has
transferred a portion of its contract business to its own
facilities and has decided to discontinue the remaining products
currently being manufactured by AMI.  

The transferred and discontinued products accounted for
approximately $1.4 million and $2.9 million in sales, respectively,
for AMI in fiscal 1995.  The Company is in late stage negotiations
to acquire the discontinued products.  Pending such negotiations,
this customer is continuing to order these products to keep them in
the marketplace.  The acquisition of these products would help to
continue the current plant throughput and will provide Akorn an
entre into the injectable distribution business, which would be
synergistic with the ophthalmic distribution business.

In October 1995, the Company signed an agreement with Jordan
Pharmaceuticals, Inc. (Jordan) to develop and manufacture three new
generic injectable pharmaceutical products.  In addition, the
agreement secured the long-term manufacture of three generic
injectables currently produced by AMI for Jordan.  The three new
products are exempt from FDA approval under "grandfather" rules,
and, as such, the first of the three new products should be in
commercial production by the fourth quarter of fiscal 1996.  The
combined contractual payments in the first year of the contract,
including fees for product development, are expected to approximate
$2 million.  Previously, Jordan represented approximately $900,000
of the Company's contract manufacturing business.  This additional
throughput will help offset declines from other contract customers
noted above.

The Jordan agreement allows Akorn to use information supporting the
development of the products to pursue recently announced strategies
in the injectable marketplace.  The agreement further provides that
best efforts will be used by both parties to develop two new
products each year, under the same terms and conditions.

Gross Profit
Consolidated gross profit declined 22% to $2.8 million in the
quarter ended December 31, 1995 compared to $3.6 million for the
same period of the previous year, with gross margins declining five
percentage points.  For the first six months of fiscal 1996, gross
profit of $5.7 million was 21% lower than the comparable fiscal
1995 amount of $7.2 million, with gross margins also declining six
percentage points.

The loss of AK-Con-A sales (Akorn's highest margin product at 75%),
decreased overhead absorption in manufacturing and higher product
costs imposed by suppliers were the primary reasons for the decline
in gross profit and margins for the quarter and six-month period. 
Gross margins are expected to remain relatively stable for the
remainder of fiscal 1996.

Selling, General and Administrative Expenses
Selling, general and administrative (S,G&A) expenses declined 21%
during the quarter ended December 31, 1995 as compared to the same
period in 1994.  For the first six months of fiscal 1996, S,G&A
expenses were 17% lower than the comparable period in fiscal 1995. 
The reduction in S,G&A expenses is partly due to lower sales and
partly due to the plan, which the Company implemented in the
quarter ended March 31, 1995, to reduce certain S,G&A expenses.

The percentage of S,G&A expenses to sales declined to 27% for the
quarter ended December 31, 1995 from 30% in the comparable prior-year 
quarter.  For the first six months ended December 31, 1995,
the percentage of S,G&A expenses to sales declined to 26%, from 28%
in 1994.

Research and Development
Research and development expenses increased 26% and 32% for the
quarter and six months ended December 31, 1995 as compared to the
same periods in 1994.  This increase reflects an acceleration in
the Company's R&D activities and a change in the mix of products
under development to a lower concentration of products for which
costs have been previously accrued.

Interest and Other Income/Expense
Interest costs incurred during the entire 1995 fiscal year and
through July 1995 were capitalized as part of the cost of
construction related to the Company's expansion project at AMI. 
The expansion is now complete and the first production of product
from the new clean room (which initially will primarily be for
production under the Pfizer contract) has begun.  Consequently,
interest costs for the current periods charged to results of
operations increased compared to prior year periods during which
time such costs were being capitalized

Included in interest and other income, net for the quarter ended
December 31, 1995 is $150,000 in fees associated with the licensing
to Chauvin Pharmaceuticals, Inc., a French-based sterile products
manufacturer, of certain technologies on two currently approved
ANDAs.   Under the agreement, Akorn will provide product
information to be used in obtaining regulatory approvals for these
products for manufacture and distribution in Europe.  In addition,
Akorn will manufacture the products for European distribution for
a period of time and will receive a royalty stream on European
sales of the product.  The Company is in discussions with other
companies regarding similar arrangements in other international
markets.

Included in interest and other income for the six-month period
ended December 31, 1995 are the fees from Chauvin discussed above
and a $80,000 gain recognized on the sale of the Company's only
equity investment.

Income Taxes
The effective tax rates for all periods presented remained stable
at 37%.  The Company has been in discussions with the Internal
Revenue Service (IRS) regarding the examination of tax returns for
the periods 1988 through 1993.  The IRS has proposed adjustments to
such returns, some of which the Company has agreed to and some
which the Company will appeal.  The financial statement effects of
these proposed agreed upon adjustments have been previously
recorded.

Net Income 
As a result of the factors noted above, net income for the quarter
ended December 31, 1995 declined to $440,000 or three cents per
share compared to the prior year amount of $605,000 or four cents
per share.  Net income for the first six months of fiscal 1995
declined to $901,000 or six cents per share versus $1.4 million or
nine cents per share in the comparable 1994 period.  Weighted
average shares used in the calculation of per share amounts were
relatively unchanged from period to period.

Financial Condition and Liquidity
The net cash provided by operating activities for the six months
ended December 31, 1995 was $46,000 compared to net cash used of
approximately $1.7 million for the corresponding period in 1994. 
During the period, significant investments in inventory, primarily
for raw materials and components associated with new ophthalmic
products, were made.  As a contract manufacturer, AMI's raw
material and component inventories were relatively insignificant
since such inventories were generally supplied by contract
customers.  All ophthalmic manufacturing, however, requires AMI to
purchase the raw materials and components, thus resulting in the
noted increases. Further increases in raw material and component
inventory will be based on future product approvals and product
sales.

In the prior year, in addition to inventory build up associated
with the new product additions, final estimated tax payments for
the fiscal year ended June 30, 1994 were made.  

The Company has begun the development for ophthalmic use of a 
non-steroidal anti-inflammatory drug (NSAID) licensed from Pfizer.  It
is anticipated that the majority of the development costs, which
are expected to be funded substantially by Pfizer, will be incurred
over the next 15 to 18 months.  In addition to ophthalmics, the
Company recently announced its intention to enter the generic
injectable business.  This entree includes the plan to file two
Abbreviated New Drug Applications (ANDAs) for injectable products
over the next twelve months.  Management believes that existing
cash, cash flows from operations, and available working capital
lines of credit are sufficient to handle the funding of these
research projects.

In addition to these short-term needs, the Company may be required
to pay additional interest and taxes in connection with the
examination by the IRS of tax returns for the periods 1988 through
1993.  The proposed adjustments by the IRS would result in
additional interest and taxes currently due of approximately $1.5
million.  To date, the Company and the IRS have agreed upon issues
resulting in approximately $600,000 of current net taxes and
interest due.  Payment of the agreed upon items is expected to be
made over the next nine months to one year under an agreement with
the IRS pursuant to an arrangement with a commercial bank.  Payment
of the remaining unsettled issues, if any, would be based on the
timing of the appeals process and the success of the Company in
arguing its position with the IRS.  The Company does not currently
anticipate any adverse financial statement effect from this
proposed assessment.  The income statement effects of these
proposed adjustments have been previously accrued. 

The Company invested $524,000 in new property, plant and equipment
during the six-month period ended December 31, 1995 compared to
$3.5 million in the prior year comparable period.  The current year
additions were primarily related to expansion of the Company's R&D
facilities, while the prior year additions were associated with the
expansion of the Company's manufacturing facilities, including the
addition of a high-speed ophthalmic line.

On September 30, 1994, the Company entered into a $6.3 million
credit facility with a commercial bank.  The credit facility
includes the following:

    -    a $1.3 million Term loan for the payout of existing debt
         and reimbursement for the early payout of a capital lease
         on the AMI manufacturing facility.

    -    a $3.5 million Revolver/Term construction loan to
         finance the expansion of the AMI facilities.

    -    a $1.5 million Line of Credit for working capital
         purposes.

The entire Term loan was drawn in October 1994 and, as of December
31, 1995, $2.6 million had been drawn on the Revolver/Term
construction loan.  In addition, approximately $262,000 had been
drawn on the Line of Credit at December 31, 1995.  
The construction project at the Decatur facilities allows for new
high-speed ophthalmic production, as well as the capabilities to
add suspensions, ointments and unit-dose products with some
additional investments.  The total cost of the expansion project,
including additional equipment, was approximately $5.4 million. 
The Company has plans for capital improvements of approximately
$1.5 million to $2 million during calendar 1996.  It is currently
anticipated that such expenditures will be financed through
internal cash flows, $900,000 remaining availability under the
Revolver/Term loan and an additional $500,000 loan obtained from
the same commercial bank.  The timing of such expenditures will be
staged to ensure compliance with debt covenant requirements.

Financing activities provided $184,000 and $3.5 million in the 
six-month periods ended December 31, 1995 and 1994, respectively.  The
prior year amount is primarily related to draws on the various bank
financing arrangements in support of the Company's expansion
project.

In connection with the negotiations with its lead contract customer
regarding the acquisition of a line of discontinued injectable
products, the Company has a commitment from its commercial bank to
lend up to $1.5 million.


 
                  PART II.  OTHER INFORMATION



Item 1.         Legal Proceedings

                Certain legal proceedings in which the registrant, Akorn,
                Inc. (the "Company"), is involved are described in Item 3 to
                the Company's Form 10-KSB for the fiscal year ended June 30,
                1995 and in Note R to the consolidated financial statements
                included in that report.


Item 2.         Changes in Securities

                Not applicable.


Item 3.         Defaults Upon Senior Securities

                Not applicable.


Item 4.         Submission of Matters to a Vote of Security Holders

                None.


Item 5.         Other Information
         
                Not applicable.


Item 6.         Exhibits and Reports on Form 8-K

                (a)    Exhibits

                (10.1)  Development and Supply Agreement with Jordan
                        Pharmaceuticals, Inc. dated October 18, 1995

                (10.2)  Employment Agreement dated January 1, 1996 --
                        Barry D. LeBlanc

                (10.3)  Employment Agreement dated January 1, 1996 --
                        Harold O. Koch

                (10.4)  Employment Agreement dated January 1, 1996 --
                        Tim J. Toney
              
                (99.1)   Press release issued by Akorn, Inc. on
                         February 7, 1996  announcing its second
                         quarter 1996 financial results.

                (b)    Reports on Form 8-K

                       None.

<PAGE>                            

                            SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

                           AKORN, INC.

                       /s/ Barry D. LeBlanc 
                      _______________________
                         Barry D. LeBlanc
              President and Chief Executive Officer
                    (Duly Authorized Officer)

                     /s/ Eric M. Wingerter  
                     ________________________
                        Eric M. Wingerter
           Vice President - Finance and Administration
                  (Principal Financial Officer)

Date:   February 9, 1996


<PAGE>

                             EXHIBIT INDEX

                                                                

                                                               Sequentially
Exhibit                                                          Numbered    
Number               Description                                   Pages 
  


(10.1)         Development and Supply Agreement with Jordan 
               Pharmaceuticals, Inc. dated October 18, 1995

(10.2)         Employment Agreement dated January 1, 1996 -- 
               Barry D. LeBlanc

(10.3)         Employment Agreement dated January 1, 1996 -- 
               Harold O. Koch

(10.4)         Employment Agreement dated January 1, 1996 -- 
               Tim J. Toney

(99.1)         Press release issued by Akorn, Inc. on February 7, 1996
               announcing its second quarter 1996 financial results.






          October 18, 1995



          Mr. Tim J. Toney
          President
          Akorn Manufacturing, Inc.
          150 South Wyckles Road
          P.O. Box 1220
          Decatur, IL 62525

 
          Re: Development Of: Sodium Chloride   Injection,  U.S.P.  0.9%,
          Tetracaine  Hydrochloride  Injection,  U.S.P.  1%  &  Epinephrine
          Injection, U.S.P.

          Supply Of: Sodium Chloride Injection, U.S.P.  0.9%,  Tetracaine
          Hydrochloride  Injection,  U.S.P.   1%,   Epinephrine  Injection,
          U.S.P.,   Dextrose  Injection,  U.S.P.  10%,  Ephedrine   Sulfate
          Injection, U.S.P. and Sterile Water for Injection, U.S.P.


          Dear Tim:

          In connection  with  our  recent  discussions and correspondence,
          this letter is intended as a binding  agreement  relative  to (i)
          the  development by Akorn Manufacturing, Inc. ("Akorn") of Sodium
          Chloride  Injection,  U.S.P. 0.9% ("Sodium Chloride"), Tetracaine
          Hydrochloride Injection,  U.S.P.  1% ("Tetracaine Hydrochloride")
          and Epinephrine Injection, U.S.P. ("Epinephrine"),  to  include a
          complete  Product  Development  Report  on  each  of  those three
          products,   and   (ii)   the   provision   by   Akorn  to  Jordan
          Pharmaceuticals,  Inc. ("Jordan") of Sodium Chloride,  Tetracaine
          Hydrochloride,  Epinephrine,   Dextrose   Injection,  U.S.P.  10%
          ("Dextrose"),  Ephedrine  Sulfate Injection,  U.S.P.  ("Ephedrine
          Sulfate")  and  Sterile Water  for  Injection,  U.S.P.  ("Sterile
          Water") in specified  sizes  and formats.  The proposed terms and

          conditions of the agreement (the "Agreement") are as follows:

          Product Development.

          Subject  to the terms and conditions  of  this  Agreement,  Akorn
          agrees to  perform  the  necessary  development  work in order to
          manufacture and supply Sodium Chloride, Tetracaine  Hydrochloride
          and  Epinephrine  (the  "Development  Products")  to  Jordan   in
          accordance  with  the respective specifications for such products
          set  forth  in Exhibit  1  attached  hereto.   As  part  of  such
          development work,  Akorn  shall  prepare  and properly document a
          complete Product Development Report for each Development Product,
          and  shall  produce three (3) lots of each of  the  Products  for
          stability studies,  consisting of the number of units per lot for
          each Development Product  set forth in Exhibit 2 attached hereto.
          The Product Development Report shall contain the data relating to
          the  development work for each  Development  Product,  and  shall
          contain,  at a minimum, the information summarized in the section
          headings of  the  report  as listed in Exhibit 9 attached hereto,
          and  any  other  development  work   reasonably   necessary   for
          marketable product.

          Jordan  agrees  to  pay  Akorn the amounts set forth in Exhibit 3
          attached hereto (the "Development  Cost")  for the development of
          each of the Development Products.  Development  Costs  shall  not
          include  the  costs of the three lots of each of the Products for
          stability studies  produced  during  the  development work, which
          Products shall be paid for by Jordan pursuant  to Paragraph 2(b),
          below.   Akorn shall invoice Jordan for thirty percent  (30%)  of
          the specified  Development  Cost  for  a Development Product upon
          Akorn's commencement of development work,  an  additional  thirty
          percent  (30%) of the specified Development Cost at such time  as
          Akorn commences  stability  studies  of  such  Product,  and  the
          balance  of  the  Development  Cost  at  such  time  as Akorn has
          submitted  a  Product  Development  Report  for  such Development
          Product to Jordan indicating successful completion of all product
          development activities, and Jordan has accepted such report.

          Akorn  will  use  its  commercial  best  efforts to complete  its
          development work with respect to all three  Development  Products
          by  March  31,  1996.   In performing its development work, Akorn
          shall give first priority  to  the  development of the Tetracaine
          Hydrochloride,  second  priority  to the  development  of  Sodium
          Chloride, and third priority to the  development  of Epinephrine.
          Akorn  will  also  use  its  best  efforts  to  ensure  that  its
          development  work  and  stability  studies  satisfy Food and Drug
          Administration ("FDA") requirements.

          Akorn  agrees  that Jordan shall be entitled to  all  information
          pertaining  to  the   development  work  and  stability  studies,
          including  master  batch   records  and  analytical  methods  and
          results.  Akorn shall, at Akorn's  expense,  promptly provide all
          of  such information to Jordan upon its request.   All  stability
          batch test data and all actual Product(s) produced as a result of
          said  tests  shall be the exclusive property of Jordan, and Akorn
          shall not have  the right to use said test data or Product(s) for
          or on behalf of itself  (except  for  meeting  its obligations to
          Jordan)  or  any  other  party  without  Jordan's  prior  written
          consent.   All  other information obtained in the development  of
          the Products shall  be  the  non-exclusive property of Jordan and
          Akorn shall be entitled to use  any  such  information to produce
          the Products for any other party, including  Akorn.  However,  in
          the  event  Akorn does generate its own stability data, stability
          batch records  and stability batches for the purpose of marketing
          and selling the Product (s) to any party other than Jordan, Akorn
          shall refund to  Jordan  fifty  (50%) per cent of the Development
          cost (as set out in Exhibit 3), attributable to such Product(s).

          Agreements to Purchase and Supply Products.

          Subject to the terms and conditions  of  this  Agreement,  Jordan
          hereby  agrees  to  purchase  from  Akorn,  for  the term of this
          Agreement,  one  hundred  percent  (100%)  of  Jordan's  purchase
          requirements   for  Sodium  Chloride,  Tetracaine  Hydrochloride,
          Epinephrine, Dextrose,  Ephedrine  Sulfate and Sterile Water (the
          "Products") in accordance with the respective  specifications for
          such products set forth in Exhibit 1 attached hereto,  and  Akorn
          hereby  agrees  to  supply  to  Jordan,  during  the term of this
          Agreement,  all  of  Jordan's  purchase  requirements  for   such
          Products. Notwithstanding the foregoing, Jordan may terminate its
          obligations  under this Paragraph, as to any Development Product,
          should Akorn fail  to  provide  Jordan  with  a  complete Product
          Development Report as to that Product.

          Jordan hereby agrees to provide Akorn, within thirty (30) days of
          execution  of  this  Agreement, and thereafter ninety  (90)  days
          prior to each year for which this Agreement is in effect, with an
          annual forecast of its  estimated  purchase  requirements for the
          Products  for  such  year.  Thereafter,  Jordan agrees  to  place
          irrevocable  rolling  90-day  purchase  orders   for  its  actual
          purchase  requirements.   Such  forecasts shall enable  Akorn  to
          manufacture the Products in whole  batch  increments as specified
          in  Exhibit 4 attached hereto.  Marketable Products  produced  by
          Akorn  in  the  stability runs shall be deemed part of an initial
          purchase order and  shall  be  purchased  by  Jordan as any other
          Product.

          Jordan agrees that its purchases of each Product  within any year
          shall not be less than the minimum annual purchase commitment for
          such  Product  specified in Exhibit 5; provided, however,  Jordan
          shall have no obligation  to purchase the minimum annual purchase
          commitment of Sterile Water specified in Exhibit 5 after December
          31, 1997 unless and to the extent it has purchase orders for such
          minimum  quantities  from  its   customers   after   such   date.
          Satisfaction   of  the  minimum  purchase  commitments  shall  be
          determined on a basis corresponding with the anniversary dates of
          this Agreement.  The minimum purchase order for Sterile Water for
          the  period  in  which   December  1997  falls  within  shall  be
          appropriately  prorated.   Notwithstanding   anything   in   this
          Subparagraph  (c) to the contrary, Jordan may purchase quantities
          of one or more  Products within a year without being in violation
          of its minimum purchase  commitments  so  long  as  the aggregate
          dollar  volume  of  purchases for all of the Products exceed  the
          aggregate minimum purchase  commitments  specified  in Exhibit 5.
          Additionally,  Jordan agrees to use its best efforts to  purchase
          additional sizes of Sterile Water from Akorn, and to purchase new
          development sizes  of  Sterile  Water  and  Calcium  Chloride for
          Injection,  USP  from  Akorn,  provided  Akorn  is  able  to meet
          Jordan's specifications.

          Akorn  agrees  to  use its commercial best efforts to accommodate
          Jordan's request to  change  the  amount of Products specified in
          its purchase orders and/or the delivery  dates for such Products,
          and   anticipates   that   all   reasonable  requests   will   be
          accommodated.   Nevertheless,  Jordan  understands  that  Akorn's
          ability to source Product purchases  within  any  pending  90-day
          period  are  subject  to  limitations based upon lead times it is
          required to give its suppliers,  and  that Akorn therefore cannot
          guarantee that any requested changes in quantities ordered and/or
          delivery dates within such 90-day period  following the requested
          change can be effectuated.  Jordan agrees to  pay  any additional
          costs incurred by Akorn to accommodate Jordan's request.

          Notwithstanding  anything  in this Agreement to the contrary,  to
          the   extent   that  Akorn  cannot   supply   Jordan's   purchase
          requirements,  Jordan  shall  have  the  right  to  purchase  any
          shortfall  in  its  purchase  requirements  from  another  vendor
          without  restriction.    Should   Akorn  fail  to  fill  any  two
          consecutive purchase orders for any  Product  within  one hundred
          twenty  (120) days of the order, it shall be deemed to be  unable
          to supply  Jordan's purchase requirements for the purposes of the
          preceding sentence.

          Notwithstanding  anything  in  this  Agreement  to  the contrary,
          Jordan  shall  have the right to manufacture any of the  Products
          should it acquire  the  facilities to do so provided Jordan gives
          Akorn at least twelve (12)  months prior written notice.  If such
          notice is provided by Jordan,  it  shall  be  released  from  its
          purchase obligations for such Products hereunder.

          Additional Products.

          Commencing  April  1,  1996,  Akorn  agrees that it shall use its
          commercial best efforts to perform the necessary development work
          in order to manufacture and supply to Jordan two new products per
          year which shall be jointly agreed to  by  Akorn  and Jordan (the
          "Additional Products").  The parties agree to negotiate  in  good
          faith  as  to  the  development  cost,  minimum  annual  purchase
          commitments, and pricing for each of the Additional Products, and
          such   agreement  shall  be  a  condition  precedent  to  Akorn's
          obligation   to  develop  the  Additional  Products.   Upon  such
          agreement, this Agreement and Exhibits 1 though 8 hereof shall be
          amended to make appropriate reference to the Additional Products.
          The development  of the Additional Products (including payment of
          the  development  costs)  shall  be  governed  by  the  terms  of
          Paragraph 1, and the  Additional  Products  shall be deemed to be
          Development Products for the purposes of Paragraph  1  as well as
          any   other   applicable   provisions  of  this  Agreement.   The
          Additional Products shall also  be  deemed  to  be Products under
          Paragraph 2 and, as such, shall be governed by the  provisions of
          Paragraph  2 as well as any other applicable provisions  of  this
          Agreement.

          (b) Jordan may specify that one of the two Additional Products per
          year specified  in  Paragraph  3(a) above be an ANDA Product. Any
          such  ANDA  Additional  Product,  shall  be  considered  for  all
          purposes as a Development Product,  and subject to the provisions
          of Paragraph 1 above, with the following  modifications.   Jordan
          shall  own,  exclusively,  the  stability  data,  stability batch
          records, stability batches as well as Jordan's ANDA  filing  with
          the  FDA  for the ANDA Additional Product.  Jordan's ownership of
          the remaining  data  and information comprising the ANDA shall be
          non-exclusive and subject  to  the  provisions of Paragraph 1(d),
          except that should Akorn use the non-exclusive  ANDA  data  along
          with  its  own  stability  data,  stability  batch  records,  and
          stability  batches  to  file  its own ANDA to market and sell any
          Additional Products to any party  other  than Jordan, Akorn shall
          refund  to  Jordan forty (40%) per cent of the  development  cost
          attributable to such Additional Product.

          4. Quality Standards. The Products  shall  meet  all applicable
          United   States   Pharmacopeia   ("U.S.P.")  and  Food  and  Drug
          Administration    ("F.D.A.")    regulations,    including    Good
          Manufacturing Practices, as such  regulations  may be in place at
          the time of delivery.

          5.  Manufacturing, Packaging and Labeling  Standards.    Akorn
          warrants  that the Products shall  be  manufactured,  packed  and
          labeled in  accordance  with  the  standards and requirements set
          forth  in  Exhibit 6 attached hereto.   Akorn  shall  assume  the
          responsibility  for  the sourcing and purchasing of raw materials
          and components for the  manufacture and packaging of the Products
          excepting labels and inserts, which will be provided by Jordan at
          its cost.  Labels and inserts  may  be either in Jordan's name or
          that of its customers.  Akorn and Jordan  shall  jointly  develop
          label  copy,  with Akorn being responsible for ensuring that  the
          label  copy,  including   both   content  and  layout,  satisfies
          applicable  U.S.P.  and  FDA  regulations.   Notwithstanding  the
          foregoing,  Akorn  shall  retain  the   responsibility  and  sole
          authority to select label stock and insert  stock compatible with
          its machinery.

          6.  Price. Jordan agrees to pay Akorn with respect to its supply
          of  the  Products  the  applicable  price specified in Exhibit  7
          attached hereto, subject to adjustment  as  hereinafter provided.
          Beginning  on  the  second  annual  anniversary  date   of   this
          Agreement,  and  on  each annual anniversary date thereafter, the
          specific price for the  Products  shall be increased by an amount
          equal  to  the  percentage  increase, if  any,  in  the  rate  of
          inflation  for  the expiring year  relative  to  the  prior  year
          thereto, but not  to  exceed  five  percent  (5%).   The  rate of
          inflation  shall  be  determined  using  the Producer Price Index
          (#063) published by the United States Bureau  of Labor Statistics
          (the "Index").  In order to avoid any delays in  calculating  the
          increase,  the  percentage increase in the Index for any expiring
          year shall be determined by comparing the published Index for the
          month which occurs  three  months  prior to the expiration of the
          year to the Index for the corresponding month for the immediately
          preceding  year.   For  purposes  of  making   calculations,  all
          percentages  shall  be  rounded  to  the  nearest  tenth   of   a
          percentage,  and  all  monetary  amounts  shall be rounded to the
          cent.

          7.Delivery and Payment Terms.

          (a) The Products shall be delivered F.O.B. place of origin to the
          Jordan warehouse located in California or any designee  of Jordan
          located  within  the  continental  United  States,  provided said
          shipments are in whole batch increments as specified in Exhibit 4
          attached  hereto.   Freight method and carrier shall be  selected
          and directly paid by  Jordan.  All customs, duties, costs, taxes,
          insurance premiums and  other expenses relating to transportation
          and delivery shall be arranged and directly paid by Jordan.

          (b) Akorn shall invoice Jordan  no  earlier than the shipment date
          for such order.  Payment terms for an  order  shall be net forty-
          five (45) days of the date of the invoice.  All  invoiced amounts
          not paid within said forty-five (45) days shall bear  interest at
          the  rate  of one and one-half percent (1.5%) per month from  the
          date due until  paid.   Except  as such terms may be inconsistent
          with the terms of this Agreement,  all  of  such  orders shall be
          delivered  in  accordance  with conditions set forth on  purchase
          orders submitted by Jordan to  Akorn.   If a conflict between the
          purchase  order  and  the  terms  of  this  Agreement  exists  or
          develops, the terms of this Agreement shall prevail.

          8. Rejected Products.  If any of the delivered  Products fail to
          meet  quality standards as determined by U.S.P. or any applicable
          FDA standards,  as well as any other specifications stipulated by
          the terms of this  Agreement, then Akorn shall take possession of
          the rejected products  at  its  cost  and,  at  Jordan's  option,
          reimburse  Jordan  the  price  of  any  rejected products, extend
          credit to Jordan for future purchases, or  replace  the  rejected
          Products  at Akorn's cost.  Notwithstanding the foregoing,  Akorn
          shall not be liable for any lost profits or consequential damages
          as a result  of  defective  Products (with the exception of those
          matters set forth in Paragraph  11  of  this  Agreement).  In the
          event of the operation of this Paragraph 8, Jordan agrees to give
          Akorn  thirty  (30)  days from the shipment date to  resolve  any
          problem before returning the rejected Products.

          9. Warranties and Remedies.  Akorn  warrants  that  the Products,
          when shipped to Jordan, (i) will conform in all respects  to  the
          specifications  by  the  parties with respect to such Products as
          then in effect, (ii) will  meet  U.S.P. quality standards and all
          applicable F.D.A. regulations, and  (iii) will not be adulterated
          or  misbranded within the meaning of F.D.A  regulations.   EXCEPT
          FOR  THE   FOREGOING  WARRANTIES,  AKORN  DOES  NOT  WARRANT  THE
          MERCHANTABILITY  OR  FITNESS  FOR  A  PARTICULAR  PURPOSE  OF THE
          PRODUCTS  OR THE PERFORMANCE THEREOF, DOES NOT MAKE ANY WARRANTY,
          EXPRESS OR  IMPLIED,  WITH  RESPECT  TO PRODUCTS, SPECIFICATIONS,
          SUPPORT, SERVICE OR ANYTHING ELSE, AND DOES NOT MAKE ANY WARRANTY
          TO  OR  FOR  THE BENEFIT OF JORDAN OR ITS  CUSTOMERS  OR  AGENTS.
          AKORN HAS NOT  AUTHORIZED  ANYONE  TO MAKE ANY REPRESENTATIONS OR
          WARRANTY OTHER THAN AS PROVIDED ABOVE.   NEITHER  PARTY  SHALL IN
          ANY  EVENT  BE LIABLE WITH RESPECT TO THE SUBJECT MATTER OF  THIS
          LETTER AGREEMENT  OR  ANY  PORTION  THEREOF  UNDER  ANY CONTRACT,
          NEGLIGENCE,  STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE  THEORY
          (A) FOR ANY SPECIAL  INCIDENTAL  OR CONSEQUENTIAL DAMAGES, OR (B)
          SO LONG AS IT USED ITS DILIGENT COMMERCIAL  EFFORTS,  FOR FAILURE
          OR DELAY IN DELIVERY OF PRODUCTS.

          10. Product Liability Insurance. Effective January 1, 1996,  each
          party agrees to carry products liability insurance coverage in an
          amount  not  less  than  $3  million,  naming  the other party as
          additional  insured under said policies, and to promptly  provide
          proof of insurance upon demand by the other party.

          11. Product Liability Claims.

          (a) Akorn agrees to  indemnify,  defend  and hold Jordan harmless
          from and against any and all liabilities,  damages  losses, costs
          and expenses (including reasonable attorneys' fees and  costs  of
          litigation  regardless of outcome) with respect to all claims for
          personal injury,  wrongful  death  or  property  damage  by third
          parties  which  arise  from Akorn's negligence or a manufacturing
          defect in Products purchased  from  Akorn  or  resold  by  Jordan
          hereunder   or   a   failure   of   such  Products  to  meet  all
          specifications required by this Agreement  or  any  deficiency in
          the Products's packaging, labelling or inserts.

          (b) Jordan  agrees to  indemnify, defend and hold Akorn  harmless
          from and against any and  all  liabilities, damages losses, costs
          and expenses (including reasonable  attorneys'  fees and costs of
          litigation  regardless  of  outcome) with respect to  all  claims
          (other than those specified in  Subparagraph  (a))  for  personal
          injury, wrongful death or property damage by third parties  which
          arise  from  Products  purchased  or  resold  by Jordan hereunder
          including,  without  limitation,  those  alleged  to  arise  from
          misstatements or misrepresentations made by Jordan  in the course
          of  selling  such Products that are outside of or different  from
          the approved labeling or package inserts.

          Each party will  promptly notify the other of any claim or action
          by reason of the manufacture,  use  or  sale  of  any Products of
          which   it  becomes  aware,  and  shall  instruct  its  attorneys
          defending  the case to share all information bearing on the claim
          and its defense with the other party.

          (d) If either party  intends  to  claim  indemnification from the
          other  party  pursuant  to this Paragraph 11,  it  shall  not  be
          entitled to settle any of  the  claims  for  which  it  claims or
          intends  to  claim  indemnification  without  the consent of such
          other party, which consent shall not be unreasonably withheld.

          (e) The indemnities of this Paragraph 11 shall not  apply (i)  if
          the indemnified party fails to give the indemnifying party prompt
          written  notice  of  any  claim  it  receives  and  such  failure
          materially prejudices the indemnifying party, or (ii) unless  the
          indemnifying  party  is  given  the  opportunity  to  approve any
          settlement,  which  approval  shall not be unreasonably withheld.
          Furthermore,  the indemnifying party  shall  not  be  liable  for
          attorneys' fees  or  expenses  of  litigation  of the indemnified
          party  unless the indemnified party gives the indemnifying  party
          the opportunity  to  assume control of the defense or settlement.
          In addition, if the indemnifying  party  assumes such control, it
          shall  only  be  responsible  for the legal fees  and  litigation
          expenses of the attorneys it designates  to assume control of the
          litigation.   In  no  event shall the indemnifying  party  assume
          control of the defense  of  the  indemnified  party  without  the
          consent of the indemnified party (which consent shall be given or
          not at its sole discretion).

          12. Force Majeure.   The  failure  or  omission by a party in the
          performance of an obligation contained in  this  Agreement  shall
          not  be  deemed  a  breach and the performance of said obligation
          shall be suspended if  the  same  shall  arise  from  any  of the
          following  ("Events  of  Force Majeure"): provided, however, such
          cause was beyond the reasonable  control and without the fault or
          negligence of such party: acts or  orders  of  foreign,  federal,
          state, or local governments or any officer, department, agency or
          instrumentality  thereof; acts of God such as, by way of example,
          fire, earthquake,  storm,  flood,  perils  of  the sea or waters;
          explosion or accident; acts of the public enemy,  war, rebellion,
          insurrection,   riot   or  other  civil  disturbances,  sabotage,
          epidemic, or quarantine;  labor  disputes  such  as  strikes;  or
          transportation embargoes or failures or delays in transportation.
          Each  party  shall  use its best efforts to minimize the duration
          and consequences of any  failure  or  delay caused by an Event of
          Force Majeure.  The affected part shall  notify  the  other party
          promptly of the existence of the Force Majeure and its  estimated
          duration.   Should  performance of any party be suspended due  to
          Force Majeure for more  than six (6) months, then the other party
          shall  have  the  right to terminate  this  Agreement.   However,
          should the Event of  Force  Majeure  affect  less than all of the
          Products, the foregoing right to terminate shall  apply  only  to
          those  Products  affected,  and  this  Agreement  shall otherwise
          remain in effect as to the other Products not so affected.

          13.Term.

          (a) The initial  term of this Agreement shall be five  (5)  years
          from the date of execution  by  Akorn.   Thereafter,  Jordan  may
          renew  this Agreement for three consecutive one (1) year periods,
          providing  it  gives written notice to Akorn no later than ninety
          (90) days prior  to  the  end  of the expiring year.  Thereafter,
          unless a party shall notify the  other  party  in  writing of its
          termination  of  this  Agreement within ninety (90) days  of  the
          expiration   of  the  expiring   year,   this   Agreement   shall
          automatically renew for additional one (1) year periods.

          (b) This Agreement may  be terminated at any time by either party
          in the event the other party  commits  a  breach of the terms and
          conditions  of  this Agreement and fails to substantially  remedy
          such breach within  sixty (60) days after written notice thereof.
          Termination for breach  hereunder shall not relieve the breaching
          party from its liability for damages.

          (c) Either party may terminate this Agreement with respect to any
          Product at any time upon written  notice to the other without any
          liability at law or equity if any of the following events occur:

          (i) Governmental health authorities prohibit  such  Product  from
          being sold and distributed.

          (ii) Serious unexpected  adverse  reactions  occur  which  cause
          removal of such Product from sale and distribution.

          In the event of  termination  under  this  Subparagraph (c), this
          Agreement shall remain in force and effect as  to all Products to
          which the termination does not apply.

          (d) Akorn may terminate this Agreement at any time in  the  event
          Jordan  does  not  meet  its total minimum dollar annual purchase
          commitment in any one contract year.

          In the event of termination  under  Subparagraphs  13(a),  13(b),
          13(c)(i)  or  13(d),  Akorn  shall  fill all outstanding purchase
          orders received before the effective  date  of  termination which
          orders are for delivery dates ninety (90) days or  less  from the
          date of the purchase order.

          (f) The provisions  of  Paragraphs 8  through  12, 13(e), and 14
          through  26  hereof,  shall  survive  the  termination   of  this
          Agreement.

          (g) All notices of termination must be in writing and delivered in
          accordance   with   the   notice   provisions  of  Paragraph  25.
          Termination under Paragraphs 2(a), 12  and  13(d) hereof shall be
          effective as of the date specified in the notice, but in no event
          shall the effective date be less than ninety  (90)  days from the
          date  of  the notice.  If the notice does not state an  effective
          date, termination  shall  be  deemed  effective  ninety (90) days
          after the deemed delivery date of the notice.  Terminations under
          any other provisions hereof shall be effective as  of the date of
          the notice.

          (h) In the event of early termination of this Agreement by Jordan,
          Jordan   agrees  to  reimburse  Akorn  for  all  unused  in-house
          components and materials related to the manufacture and packaging
          of the products  at Akorn's cost, unless such termination relates
          to Akorn's wrongful  failure  to  provide  Products  to Jordan in
          accordance with the terms of this Agreement.

          14. Covenant  Not  to  Compete.   To protect and preserve Jordan's
          business opportunities with Jordan's customers, Akorn agrees that
          it will not, during the term of this  Agreement  or  any  renewal
          thereof,   either   directly   or  indirectly,  or  knowingly  by
          distribution means under Akorn's control, solicit and/or contract
          with any of Jordan's "Customers"  (as  such persons are listed on
          Exhibit 8 attached hereto) to meet their  needs for the Products.
          The parties agree to update this list from  time  to  time.  This
          prohibition  shall include the sale or provision of the  Products
          to  any  of  Jordan's  Customers  through  intermediaries.   This
          prohibition may  be  waived by the written consent of Jordan, but
          such waiver may be arbitrarily and unreasonably withheld.

          15. Confidentiality.

          (a) Each party (a "receiving  party") shall maintain in confidence
          all information disclosed by the  other  (the "disclosing party")
          which  such  party  knows or has reason to know  comprises  trade
          secrets and other proprietary information of the other including,
          by way of example and not limitation, information relating to the
          names of the disclosing  party's  customers  (whether  or  not  a
          customer for the Products or any other product), the names of the
          disclosing party's suppliers, the names of the disclosing party's
          distributors   or   sales  representatives,  and  any  marketing,
          competitive, or financial  or  other information to come into the
          receiving party's possession as  a consequence of this Agreement,
          and shall not use such trade secrets  or  proprietary information
          except  as permitted by this Agreement or disclose  the  same  to
          anyone other  than those of its employees, consultants and agents
          as are necessary  in  connection  with  such  party's permissible
          activities  as  contemplated in this Agreement.   To  the  extent
          permitted by applicable  law,  each  party  shall  have  obtained
          written   agreement   prior  to  disclosure  to  such  employees,
          consultants, and agents to hold in confidence and not make use of
          such trade secrets or proprietary  information  for  any  purpose
          other  than  those permitted by this Agreement.  Each party shall
          use its best efforts  to  ensure  that its employees, consultants
          and agents do not disclose or make  any  unauthorized use of such
          trade  secrets  or  proprietary information.   Each  party  shall
          notify the other promptly  upon discovery of any unauthorized use
          or  disclosure  of  the  other's  trade  secrets  or  proprietary
          information.    Each   party  shall   return   all   confidential
          information upon termination of this Agreement.

          (b) The obligation of confidentiality  contained in this Agreement
          shall not apply to the extent that (i)  the  receiving  party  is
          required to disclose 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 information  was  at  the time of disclosure already in
          the public domain or has since come  into the public domain other
          than as a result of actions or failure  to  act  by the receiving
          party  in  violation hereof; (iii) the disclosed 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; (iv) the disclosed information
          was developed by the receiving  party  (as  shown  by its written
          records) without access to the disclosed information;  or (v) the
          disclosed information was received by the receiving party  on  an
          unrestricted  basis  from a source other than the receiving party
          and  which  is  not  under  a  duty  of  confidentiality  to  the
          disclosing party.

          16. Relationship of Parties.   Anything  else in this Agreement to
          the contrary notwithstanding, this Agreement does not establish a
          partnership,  joint  venture,  association,   agency   or   other
          relationship  between  the  parties  except as that of vendor and
          vendee.   Neither  party, nor such party's  officers,  employees,
          directors, shareholders  and/or  representatives, shall be deemed
          an employee or agent of the other  party,  or  have  any right or
          authority to act for and/or bind the other party in any  way,  or
          represent that the other party is in any way responsible for acts
          of  the other.  Each party shall have exclusive liability for the
          payment  of  all  taxes imposed on such party or its employees or
          agents which arise  in  connection  with  the performance of this
          Agreement  including,  without  limitation,  the  payment  and/or
          withholding, as the case may be, of income taxes, property taxes,
          sales  or  use  taxes, social security and other  payroll  taxes,
          workmen's compensation  insurance,  disability  benefits  and the
          like   which  are  measured  by  the  wages,  salaries  or  other
          remunerations to the extent applicable to the personnel involved,
          and neither party shall be liable for any such payments which may
          be assessed  against  the  other  party.   No  right,  express or
          implied, is granted by this Agreement to either party to  use  in
          any  manner  the  name  of  the  other or any other trade name or
          trademark of the other in connection with the performance of this
          Agreement.

          17. Assignability.   Neither  party  to   this   Agreement   shall
          transfer,  sell,  assign, pledge or otherwise encumber any of its
          rights or obligations  under  this  Agreement,  without the prior
          written consent of the other parties hereto, which  consent shall
          not be unreasonably withheld; provided, however, that  each party
          may,  without  the prior written consent of the other party,  (a)
          assign  any  or all  of  its  right  or  obligations  under  this
          Agreement to any Affiliate (as such term is hereinbelow defined),
          which assignment  shall  not release the assigning party from any
          of its obligations under this  Agreement,  or  (b)  assign all of
          such  party's rights or obligations under this Agreement  to  any
          other person or entity in connection with the transfer or sale of
          all or  substantially all of its business to any person or entity
          or the merger  or  consolidation  of  the assigning party with or
          into any other entity, so long as such  transferee,  purchaser or
          surviving  entity shall assume such obligations of the  assigning
          party.  The term "Affiliate" is defined as any person controlling
          a party, controlled  by  a  party, or under common control with a
          party.  Any transfer, sale, assignment,  pledge or encumbrance in
          violation of this Paragraph 17 shall be null  and  void.  Subject
          to  the  foregoing,  this Agreement shall bind and inure  to  the
          benefit  of  the  parties  hereto  and  their  respective  heirs,
          executors, administrators,  legal representatives, successors and
          assigns.

          18. Interpretation.    This  Agreement  is  an  agreement  between
          financially  sophisticated  and   knowledgeable  parties  and  is
          entered into by the parties in reliance  upon  the  economic  and
          legal  bargains  contained  herein  and  shall be interpreted and
          construed in a fair and impartial manner without  regard  to such
          factors as the party who prepared (or caused the preparation  of)
          this instrument or the relative bargaining power of the parties.


          19. Entire  Agreement.   Each  party  expressly  acknowledges  and
          agrees  that  this  Agreement,  including  all  exhibits attached
          hereto, (1) is the final, complete and exclusive statement of the
          agreement  of  the  parties  with  respect to the subject  matter
          hereof; (2) supersedes any prior or contemporaneous agreements or
          understandings of any kind, oral or  written,  and  that any such
          prior  agreements  are of no force or effect except as  expressly
          set forth herein; and  (3)  may  not  be  varied, supplemented or
          contradicted by evidence of prior agreements,  or  by evidence of
          subsequent oral agreements.

          Amendment; Waiver; Forbearance.  This Agreement nor any provision
          contained herein may be amended or modified or terminated  (other
          than  by  performance), except by a written instrument signed  by
          all of the parties to this Agreement.  No waiver of any breach of
          any provision herein contained, or of the performance of any acts
          or obligations  under  this  Agreement,  shall  be  effective and
          binding  unless  such  waiver  shall  be  in a written instrument
          signed by each party.  No such waiver shall be deemed a waiver of
          any  other provision under this Agreement, or  any  preceding  or
          subsequent  breach  thereof.  No forbearance by a party to seek a
          remedy for any noncompliance  or  breach  by another party hereto
          shall  be  deemed  to be a waiver by such forbearing  party  with
          respect to such noncompliance  or breach unless such waiver shall
          be in a written instrument signed by the forbearing party.

          21. Governing Law/Venue. This Agreement  shall be governed by and
          construed in accordance with the laws of the  State  of Illinois.
          Subject  to  Paragraph  21,  any legal action or other proceeding
          brought  by  any of the parties  to  enforce  or  interpret  this
          Agreement shall  be  filed  only in the County of Macon, State of
          Illinois.

          22. Arbitration.  Any controversy  or  claim  arising  out  of  or
          relating  to this Agreement or the breach thereof will be settled
          by arbitration  in  accordance  with  the  rules  of the American
          Arbitration Association, and with the arbitration taking place in
          Macon  County, Illinois.  All awards shall be final  and  binding
          and may  be filed with the clerk of any court having jurisdiction
          over the parties.   The  arbitrator shall have the power to issue
          any award or decree that a  court  of  law or equity could issue,
          including  specific  performance  and/or injunctive  relief,  and
          shall  also have the same power to compel  discovery  and  impose
          sanctions,  including  attorneys' fees and court cost, as a court
          of law or equity.

          23. Attorneys' Fees.  In the  event of any litigation between the
          parties due to breach of this Agreement,  the  unsuccessful party
          agrees  to  pay  the successful party all costs and  expenses  of
          litigation incurred  by  the  successful party including, but not
          limited to, reasonable attorneys'  fees  for  all  legal counsel,
          depositions,   witness  fees  and  other  expenses  incurred   in
          connection with  such  litigation,  and  if  the successful party
          shall  recover  judgment  in  any action proceeding,  the  costs,
          expenses and attorneys' fees shall  be  included  as  part of the
          judgment.

          24. Severability.  If all or any portion of any of the provisions
          of this Agreement shall  be  invalid, illegal or unenforceable by
          laws applicable thereto, then  the  performance of said offending
          provision or provisions shall be excused  by  the  parties hereto
          and such invalidity, illegibility, or unenforceability  shall not
          affect any other provision of this Agreement.
         
          25. Notices.   Unless  otherwise  specifically  provided  in  this
          Agreement, all notices, demands, requests, consents, approvals or
          other   communications   (collectively   and   severally   called
          "notices")  required or permitted to be given hereunder, or which
          are given with  respect  to  this Agreement, shall be in writing,
          and  shall  be given: (A) by personal  delivery  (which  form  of
          notice shall  be deemed to have been given upon delivery), (B) by
          telegraph  or  by  private  airborne/overnight  delivery  service
          (which forms of  notice  shall  be deemed to have been given upon
          confirmed delivery by the delivery  agency), (C) by electronic or
          facsimile  or  telephonic transmission,  provided  the  receiving
          party has a compatible  device or confirms receipt thereof (which
          forms  of  notice  shall  be   deemed  delivered  upon  confirmed
          transmission or confirmation of  receipt),  or  (D) by mailing in
          the  United States mail by registered or certified  mail,  return
          receipt  requested,  postage prepaid (which forms of notice shall
          be deemed to have been  given  upon  the fifth {5th} business day
          following  the date mailed).  Each party,  and  their  respective
          counsel, hereby  agree that if notice is to be given hereunder by
          such party's counsel,  such counsel may communicate directly with
          all principals, as required  to  comply with the foregoing notice
          provisions.   Notices  shall  be  addressed   at   the  addresses
          hereinabove set forth on the cover page of this Agreement  or  to
          such  other  address  as the receiving party shall have specified
          most recently by like notice,  with  a  copy to the other parties
          hereto.  Notices to each party shall be directed to the attention
          of  such  party's  President,  by  name  if known  or  reasonably
          ascertainable.

          26. Counterparts.   This  Agreement  may  be executed  in  several
          counterparts, including facsimile copies,  each of which shall be
          deemed an original, and all of such counterparts  together  shall
          constitute one agreement, binding on all parties hereto.

          If  the  terms and conditions of this Agreement are satisfactory,
          then indicate  your  approval by executing and dating this letter
          below and delivering it  to  the  undersigned.   In the event the
          terms and conditions described above are not satisfactory, or you
          have any question or comments, then please refrain  from  signing
          this   Agreement  and  call  me  at  your  earliest  convenience.
          Finally,  please note that this Agreement is legally binding upon
          your execution thereof.

          Very truly yours,

           JORDAN PHARMACEUTICALS, INC.


          By:
              Earl Jordan, its President



          By signature  below  in  the space provided, Akorn Manufacturing,
          Inc. evidences its agreement with the terms of this Agreement and
          its intention to be legally bound hereby.

          AKORN MANUFACTURING, INC.


          By:
             Tim J. Toney, its President

          Date:                  , 1995




<PAGE>
                                       Exhibit 1

                                  Product Description
                                  ____________________


Sodium Chloride:            Sodium Chloride  Injection, U.S.P. 0.9%, 
                            10 mL Ampul

Tetracaine Hydrochloride:   Tetracaine Hydrochloride  Injection,
                            U.S.P. 1%, 2mL Ampul

Epinephrine:                Epinephrine Injection, U.S.P., 1 mL Ampul
                            (Preservative Free)

Dextrose:                   Dextrose Injection, U.S.P. 10%, 3 mL Ampul

Ephedrine Sulfate:          Ephedrine Sulfate Injection, U.S.P., 
                            1 mL Ampul

Sterile Water:              Sterile Water for Injection, U.S.P., 
                            192 mL Vial


<PAGE>
                                       Exhibit 2

                              Stability Batch Size (Units)
                              ____________________________




          Sodium Chloride*                             65,000

          Tetracaine Hydrochloride*                    50,000

          Epinephrine*                                100,000



         *Approximately  1,000 units will be removed per batch for
          stability studies.


<PAGE>
                                       Exhibit 3

                                Product Development Cost
                                _________________________


          Sodium Chloride                              $ 49,275

          Tetracaine Hydrochloride                     $ 94,169

          Epinephrine                                  $100,285



<PAGE>
                                       Exhibit 4

                             Commercial Batch Sizes (Units)
                             ______________________________


          Sodium Chloride                           65,000 Ampuls

          Tetracaine Hydrochloride                  50,000 Ampuls

          Epinephrine                              100,000 Ampuls

          Dextrose                                  48,500 Ampuls

          Ephedrine Sulfate                         47,500 Ampuls

          Sterile Water                              6,750 Vials


<PAGE>

                                       Exhibit 5

                                Minimum Annual Purchase
                                ________________________

                               Units             Price           Total

Sodium Chloride            400,000 Ampuls        .437           $174,800

Tetracaine Hydrochloride   600,000 Ampuls        .388           $232,800

Epinephrine              1,000,000 Ampuls        .309           $309,000

Dextrose                   600,000 Ampuls        .359           $215,400

Ephedrine Sulfate          500,000 Ampuls        .312           $156,000

Sterile Water       1996 - 250,000 Vials         2.65           $662,500
                    1997 - 125,000 Vials         2.65           $331,250


<PAGE>
                                       Exhibit 6

                                 Packing Specifications
                                 ________________________


Sodium Chloride -           Labeled Ampuls in Gross Pack Boxes 
                            (Master Case to be Defined)

Tetracaine  Hydrochloride - Labeled  Ampuls  in  100  Pack  Boxes
                            (Master Case to be Defined)

Epinephrine -               Labeled Ampuls in 100 Pack Boxes
                            (Master Case to be Defined)

Dextrose -                  Labeled Ampuls in Gross Pack Boxes
                            (Master Case to be Defined)

Ephedrine Sulfate -         Labeled Ampuls in 100 Pack Boxes
                            (Master Case to be Defined)

 Sterile Water -            Labeled Vials in 20 Pack Boxes


<PAGE>

                               Exhibit 7

                                Pricing
                                ________


Sodium Chloride                         $437.00 per thousand Ampuls

Tetracaine Hydrochloride                $388.00 per thousand Ampuls

Epinephrine                             $309.00 per thousand Ampuls

Dextrose                                $359.00 per thousand Ampuls

Ephedrine Sulfate                       $312.00 per thousand Ampuls

Sterile Water                           $  2.65 per Vial
                                        (Akorn Mfg. Supplies Vial, 
                                         Stopper,& Cap)


<PAGE>

                                 Exhibit 8

                             Jordan Customer List
                             ____________________
                             


          1.    Baxter Healthcare Corporation
                Surgical Group Division

          2.    Baxter Healthcare Corporation
                I.V. System Division

          3.    Baxter Healthcare Corporation
                Biotech Group
                Hyland Division

          4.    Kendall Healthcare Products Company

          5.    B. Braun Medical, Inc.

          6.    Arrow International

          7.    Sherwood Medical

          8.    Alpha Therapeutic Corporation

          9.    Becton Dickinson and Company
                Becton Dickinson Division

         10.    UDL Laboratories, Inc.


<PAGE>

                         Exhibit 9

                 Product Development Report

                 ____________________________


          SECTION I              CERTIFICATIONS

          SECTION II             LABELING

          SECTION III            FORMULATION JUSTIFICATION

          SECTION IV             RAW MATERIAL CONTROLS

          SECTION V              MANUFACTURING & PROCESSING

          SECTION VI             MICROBIOLOGICAL CONTROLS

          SECTION VII            IN-PROCESS CONTROLS

          SECTION VIII           CONTAINER/CLOSURES

          SECTION IX             FINISHED PRODUCT CONTROLS

          SECTION X              ANALYTICAL METHODS

          SECTION XI             STABILITY







                        EMPLOYMENT AGREEMENT--BARRY D. LEBLANC

               This Employment Agreement ("Agreement") between Akorn, Inc.,
          a  Louisiana  corporation  (the  "Company"), and Barry D. LeBlanc
          (the "Employee") is dated as of January  1,  1996 (the "Agreement
          Date").

               WHEREAS, Employee currently is employed by the Company;

               WHEREAS,  the  Company  desires  to retain the  services  of
          Employee  pursuant to the terms of this  Agreement  and  Employee
          desires to continue in the service of the Company on such terms;

               NOW, THEREFORE,  for  and  in consideration of the continued
          employment of Employee by the Company  and  the payment of wages,
          salary  and other compensation to Employee by  the  Company,  the
          parties hereto agree as follows:


          Section 1.Employment Capacity and Term

               1.1  Capacity  and  Duties  of  Employee.   The  Employee is
          employed  by  the  Company  to  render services on behalf of  the
          Company  as  President  and  Chief  Executive  Officer.   As  the
          President and Chief Executive Officer, the Employee shall perform
          such duties as are assigned to the individual  holding such title
          by  the  Company's Bylaws and such other duties, consistent  with
          the Employee's  job title, as may be prescribed from time to time
          by the Board of Directors of the Company (the "Board").

               1.2  Employment  Term.   The  term  of  this
  Agreement (the
          "Employment Term") shall commence on the Agreement Date and shall
          continue until and terminate one year after either the Company or
          the  Employee has notified the other of such termination  of  the
          Employment  Term; and provided, further, that the Employment Term
          is subject to extension as provided in Section 5.2 and Employee's
          status as an  employee  is  subject to earlier termination to the
          extent provided in this Agreement.

               1.3  Devotion to Responsibilities.   During  the  Employment
          Term, the Employee shall devote all of his business time  to  the
          business  of  the  Company  and  its  subsidiaries and affiliated
          companies,  shall  use  his reasonable best  efforts  to  perform
          faithfully and efficiently  his  duties under this Agreement, and
          shall  not  engage  in  or be employed  by  any  other  business;
          provided, however, that nothing  contained  herein shall prohibit
          the  Employee  from  (a) serving  as  a member of  the  board  of
          directors, board of trustees or the like  of  any  for-profit  or
          non-profit  entity  that  does  not  compete with the Company, or
          performing  services  of  any  type for any  civic  or  community
          entity,  whether  or  not  the  Employee   receives  compensation
          therefor,  (b) investing  his assets in such form  or  manner  as
          shall require no more than  nominal  services  on the part of the
          Employee in the operation of the business of or property in which
          such  investment  is  made, or (c) serving in various  capacities
          with, and attending meetings  of,  industry  or  trade groups and
          associations,   as  long  as  the  Employee's  engaging  in   any
          activities permitted  by virtue of clauses (a), (b) and (c) above
          does not materially interfere with the ability of the Employee to
          perform the services and  discharge the responsibilities required
          of him under this Agreement.   Notwithstanding  clause (b) above,
          during  the Employment Term, the Employee shall not  perform  any
          services  for  and shall not beneficially own more than 2% of the
          equity interests  of  a  business organization that competes with
          the Company or its affiliates.   For  purposes of this paragraph,
          "beneficially own" shall have the meaning  given  to that term in
          Rule  13d-3  under  the  Securities  Exchange  Act  of 1934  (the
          "Exchange Act").

          Section 2.Compensation and Benefits

               During  the  Employment Term, the Company shall provide  the
          Employee with the compensation and benefits described below:

               2.1  Salary.   A  salary  ("Base  Salary")  at  the  rate of
          $210,000 per year; provided, however, that Employee's Base Salary
          shall increase to $225,000 per year if the closing price at which
          the  Company's  common  stock  is  traded  on the Nasdaq National
          Market or other exchange on which such stock  may  be  designated
          for  trading,  equals or exceeds $4.00 per share for ten or  more
          consecutive trading  days  and shall increase to $250,000 if such
          price  equals or exceeds $5.50  per  share  for  ten  consecutive
          trading  days; and provided, further, that Employee's Base Salary
          shall increase  as of each anniversary of the Agreement Date by a
          factor  equal  to  the  increase  in  the  Consumer  Price  Index
          maintained by the United  States Department of Labor.  Employee's
          Base Salary shall be payable to the Employee at such intervals as
          the salaries of other salaried employees of the Company are paid.
          Any increase in Employee's  Base Salary shall take effect for the
          payroll period next following  the date on which the condition to
          such increase is met.

               2.2  Bonus.  Employee shall  be  eligible  to  receive  such
          bonuses  and  supplementary   compensation   as   the  Board  may
          determine.

               2.3  Benefits.  The Company shall provide the  Employee and,
          if  applicable,  his family members, with the following  benefits
          and perquisites:

                    (a)  The   Company   will   continue   to  provide  for
          Employee's use a new Oldsmobile Ninety-Eight or other  equivalent
          new  automobile  of  his  choice,  such automobile to be replaced
          every other year, and to provide or  reimburse  Employee  for all
          gasoline, maintenance, repairs and insurance for such automobile.

                    (b)  All  such  (i)  incentive,  savings and retirement
          plans,  practices,  policies and programs, (ii)  welfare  benefit
          plans,  practices,  policies  and  programs  (including,  without
          limitation, medical,  prescription,  dental, disability, employee
          life, group life, accident health and  travel  accident insurance
          plans  and  programs)  and (iii) paid vacation and  other  fringe
          benefits,  plans,  practices,   policies   and  programs  as  are
          applicable generally to other peer employees  of  the Company and
          its affiliated companies.

               2.4  Office and Support Staff.  Employee shall  be  entitled
          to  an  office  or  offices  of the size and with furnishings and
          other  appointments,  and  to  personal   secretarial  and  other
          assistance, at least equal to the those provided  to  him  on the
          Agreement Date.

               2.5  Expenses.    The   Employee  shall  be  reimbursed  for
          reasonable out-of-pocket expenses  incurred  from time to time on
          behalf of the Company or any subsidiary in the performance of his
          duties  under  this  Agreement,  upon  the presentation  of  such
          supporting  invoices,  documents  and  forms   as   the   Company
          reasonably requests.

          Section 3.Termination of Employment

               3.1  Death.   The  Employee's  status  as  an employee shall
          terminate immediately and automatically upon the Employee's death
          during the Employment Term.

               3.2  Disability.  The Employee's status as an  employee  may
          be terminated for "Disability" as follows:

                    (a)  The   Employee's   status  as  an  employee  shall
          terminate if the Employee has a disability that would entitle him
          to  receive  benefits  under the Company's  long-term  disability
          insurance policy in effect  at  the  time  either  because  he is
          Totally Disabled or Partially Disabled, as such terms are defined
          in the Company's policy in effect as of the Agreement Date or  as
          similar  terms  are  defined  in  any successor policy.  Any such
          termination shall become effective  on the first day on which the
          Employee is eligible to receive payments under such policy (or on
          the first day that he would be so eligible,  if  he  had  applied
          timely for such payments).

                    (b)  If the Company has no long-term disability plan in
          effect,  the Employee's status as an employee shall terminate  if
          (i) the Employee  is  rendered  incapable  because of physical or
          mental  illness  of  satisfactorily discharging  his  duties  and
          responsibilities  under   this  Agreement  for  a  period  of  90
          consecutive days and (ii) a  duly  qualified  physician chosen by
          the  Company  and  acceptable  to  the  Employee  or  his   legal
          representative so certifies in writing, the Board shall have  the
          power to determine that the Employee has become disabled.  If the
          Board  makes  such  a  determination,  the Company shall have the
          continuing  right  and  option,  during  the   period  that  such
          disability continues, and by notice given in the  manner provided
          in  this  Agreement,  to terminate the status of Employee  as  an
          employee.  Any such termination  shall  become  effective 30 days
          after such notice of termination is given, unless within such 30-
          day period, the Employee becomes capable of rendering services of
          the character contemplated hereby (and a physician  chosen by the
          Company   and   acceptable   to   the   Employee   or  his  legal
          representative so certifies in writing) and the Employee  in fact
          resumes such services.

                    (c)  The  "Disability  Effective  Date"  shall mean the
          date on which termination of employment becomes effective  due to
          Disability.

               3.3  Cause.  The Company may terminate the Employee's status
          as  an  employee  for  Cause.  As used herein, termination by the
          Company of the Employee's status as an employee for "Cause" shall
          mean termination as a result of (a) the Employee's breach of this
          Agreement, or (b) the willful  engaging  by the Employee in gross
          misconduct injurious to the Company, which  in either case is not
          remedied within 10 days after the Company provides written notice
          to the Employee of such breach or willful misconduct.

               3.4  Good Reason.  The Employee may terminate  his status as
          an  employee  for  Good  Reason.  As used herein, the term  "Good
          Reason" shall mean:

                    (a)  The occurrence of any  of the following during the
          Employment Term:

                         (i)  the  assignment  by  the   Board  or  by  any
          authorized   person   to   the   Employee   of   any  duties   or
          responsibilities   that  are  inconsistent  with  the  Employee's
          status,  title and position  as  President  and  Chief  Executive
          Officer;

                         (ii) any  removal  of  the  Employee  from, or any
          failure to reappoint or reelect the Employee to, the position  of
          President  and  Chief Executive Officer of the Company, except in
          connection with a termination of Employee's status as an employee
          as permitted by this Agreement;

                         (iii)the  Company's  requiring  the Employee to be
          based anywhere other than at or within 50 miles  of the Company's
          headquarters  in  Abita  Springs, Louisiana, except for  required
          travel in the ordinary course of the Company's business;

                    (b)  any breach  of  this Agreement by the Company that
          continues for a period of 10 days after written notice thereof is
          given by the Employee to the Company;

                    (c)  the  failure  by  the   Company   to   obtain  the
          assumption  of  its  obligations  under  this  Agreement  by  any
          successor or assignee as contemplated by Section 6.1(c); or

                    (d)  any  purported  termination  by the Company of the
          Employee's status as an employee for Cause that  is  not effected
          pursuant  to  a Notice of Termination satisfying the requirements
          of this Agreement.

               3.5  Voluntary  Termination  by the Company.  Subject to the
          terms and conditions provided herein,  the  Company may terminate
          the Employee's status as an employee during the  Employment  Term
          for reasons other than death, Disability or Cause.

               3.6  Voluntary  Termination by the Employee.  Subject to the
          terms and conditions provided  herein, the Employee may terminate
          the Employee's status as an employee  during  the Employment Term
          for reasons other than Good Reason.

               3.7  Notice of Termination.  Any termination  by the Company
          for  Disability  or  Cause,  or by the Employee for Good  Reason,
          shall be communicated by Notice of Termination to the other party
          hereto given in accordance with  Section  6.2.   For  purposes of
          this Agreement, a "Notice of Termination" means a written  notice
          that  (a)  indicates  the  specific termination provision in this
          Agreement relied upon, (b) to  the  extent applicable, sets forth
          in  reasonable  detail  the  facts and circumstances  claimed  to
          provide  a basis for termination  of  the  Employee's  employment
          under the  provisions  so  indicated  and  (c)  if  the  Date  of
          Termination  (as defined below) is other than the date of receipt
          of such notice,  specifies the termination date (which date shall
          be not more than 30  days  after the giving of such notice).  The
          failure by the Employee or the Company to set forth in the Notice
          of Termination any fact or circumstance  that  contributes  to  a
          showing  of Good Reason, Disability or Cause shall not negate the
          effect of  the  notice nor waive any right of the Employee or the
          Company, respectively,  hereunder or preclude the Employee or the
          Company, respectively, from  asserting  such fact or circumstance
          in enforcing the Employee's or the Company's rights hereunder.

               3.8  Date of Termination.  "Date of  Termination"  means (a)
          if Employee's employment is terminated by reason of his death  or
          Disability, the Date of Termination shall be the date of death of
          Employee  or  the  Disability Effective Date, as the case may be,
          (b) if Employee's employment  is  terminated  by  the Company for
          Cause,  or by Employee for Good Reason, the date of  delivery  of
          the Notice  of  Termination  or any later date specified therein,
          (which date shall not be more  than  30  days after the giving of
          such notice) as the case may be, (c) if the Employee's employment
          is terminated by the Company prior to the  end  of the Employment
          Term for reasons other than death, Disability or  Cause, the Date
          of  Termination  shall be the date on which the Company  notifies
          the  Employee  of  such   termination,   (d) if   the  Employee's
          employment is terminated by the Employee prior to the  end of the
          Employment Term for reasons other than Good Reason, the  Date  of
          Termination  shall be the date on which the Employee notifies the
          Company of such  termination,  and  (e)  if  the  Employment Term
          terminates upon notice by the Company or the Employee as provided
          for in Section 1.2 or Section 5.2, the Date of Termination  shall
          be the date on which the Employment Term ends.

          Section 4.Obligations Upon Termination

               4.1  Death.    If   Employee's  status  as  an  employee  is
          terminated by reason of Employee's  death,  this  Agreement shall
          terminate   without  further  obligations  to  Employee's   legal
          representatives  under  this Agreement, other than the obligation
          to  make any payments due  pursuant  to  employee  benefit  plans
          maintained by the Company or its subsidiaries.

               4.2  Disability.   If  Employee's  status  as an employee is
          terminated  by  reason  of Employee's Disability, this  Agreement
          shall terminate without further  obligation  to  Employee,  other
          than the obligation to make any payments due pursuant to employee
          benefit plans maintained by the Company or its subsidiaries.

               4.3  Termination  by  Company  for Reasons other than Death,
          Disability or Cause; Termination by Employee for Good Reason.  If
          the Company terminates the Employee's status as an employee prior
          to the end of the Employment Term for  reasons  other than death,
          Disability  or  Cause, or the Employee terminates his  employment
          prior to the end of the Employment Term for Good Reason, then

                    (a)  within  30  days  of  the  Date of Termination the
          Company shall pay to the Employee in a lump  sum  an amount equal
          to  the Employee's Base Salary through the end of the  Employment
          Term  had the notice contemplated by Section 1.2 been given as of
          the Date of Termination; and

                    (b)  the  amount  of  any  performance-based  bonus  or
          options  granted to the Employee shall be deemed to be the amount
          to which the  Employee  would  have been entitled if the budgeted
          goals or other performance goals  applicable thereto had been met
          but not exceeded and, whether or not  the  performance goals have
          been  met  as  of the Date of Termination, such  bonus  shall  be
          payable within 30  days  of  the  Date  of  Termination  and such
          options (if not already exercisable) shall become exercisable  as
          of  the  Date  of  Termination  and  shall  expire on the date of
          expiration  of the options as provided in the  applicable  option
          agreement.

               4.4  Termination for Cause, Without Good Reason or at End of
          Employment Term.   This Agreement shall terminate without further
          obligation to the Employee  other than obligations imposed by law
          and obligations imposed pursuant  to  any  employee  benefit plan
          maintained  by  the  Company  or  its  subsidiaries  (a)  if  the
          Employee's status as an Employee is terminated by the Company for
          Cause  or  by  the Employee for reasons other than Good Reason or
          (b), except as otherwise  provided  in Section 5.2, at the end of
          the Employment Term.  If the Company or the Employee gives notice
          of termination of the Employment Term  as provided for in Section
          1.2, the Company may, at its option, terminate  Employee's status
          as an employee, in which case such termination shall  be deemed a
          termination  by  the  Company  without Cause for purposes of  all
          provisions of this Agreement.

               4.5  Resignation as Director.   If Employee is a director of
          the Company and his employment is terminated for any reason other
          than  death,  the Employee shall, if requested  by  the  Company,
          immediately resign  as  a  director  of  the  Company.   If  such
          resignation is not received when so requested, the Employee shall
          forfeit  any  right  to  receive  any  payments  pursuant to this
          Agreement.

               4.6  Accrued   Obligations   and   Other   Benefits.    Upon
          termination  of employment for any reason the Employee  shall  be
          entitled to receive  promptly,  and  in  addition  to  any  other
          benefits  specifically  provided,  (a) the Employee's Base Salary
          through  the Date of Termination to the  extent  not  theretofore
          paid, (b) any accrued vacation pay, to the extent not theretofore
          paid, and  (c)  any other amounts or benefits required to be paid
          or provided or which  the  Employee  is entitled to receive under
          any plan, program, policy practice or agreement of the Company.

               4.7  Stock Options.  The foregoing  benefits are intended to
          be  in  addition to the value of any options  to  acquire  Common
          Stock  of   the  Company  the  exercisability  of  which  may  be
          accelerated pursuant  to the terms of any stock option, incentive
          or other similar plan heretofore  or  hereafter  adopted  by  the
          Company.

          Section 5.Change of Control

               5.1  Definitions.   For  purposes  of  this  Section  5, the
          following terms shall have the meanings indicated below.

                    (a)  Company.   In  the  event  of  any  assignment  or
          succession  as described in Section 6.1(c), the term "Company" as
          used in this  Agreement  shall  refer  also  to such successor or
          assignee.

                    (b)  Change of Control.  A Change of Control shall mean
          the occurrence of any of the following events:

                         (i)  the acquisition by any individual,  entity or
          "person"  (within the meaning of Section 13(d)(3) or 14(d)(2)  of
          the Exchange Act) of beneficial ownership of more than 30% of the
          outstanding  shares  of  the Company's common stock, no par value
          per  share  (the "Common Stock");  provided,  however,  that  for
          purposes of this subsection (i), the following acquisitions shall
          not constitute a Change of Control:

                              (A)  any acquisition of Common Stock directly
          from the Company,

                              (B)  any  acquisition  of Common Stock by the
          Company,
                              (C)  any acquisition of  Common  Stock by any
          employee benefit plan (or related trust) sponsored or  maintained
          by the Company or any corporation controlled by the Company, or

                              (D)  any acquisition of Common Stock  by  any
          corporation  pursuant to a transaction that complies with clauses
          (A), (B) and (C) of subsection (b)(iii) of this Section 5.1; or

                         (ii) individuals  who,  as  of the Agreement Date,
          constitute the Board (the "Incumbent Board") cease for any reason
          to  constitute  at  least  a  majority  of  the Board;  provided,
          however,  that any individual becoming a director  subsequent  to
          the Agreement  Date whose election, or nomination for election by
          the Company's shareholders,  was approved by a vote of at least a
          majority of the directors then  comprising  the  Incumbent  Board
          shall  be considered a member of the Incumbent Board, unless such
          individual's  initial  assumption of office occurs as a result of
          an actual or threatened  election  contest  with  respect  to the
          election  or  removal  of directors or other actual or threatened
          solicitation of proxies  or  consents by or on behalf of a person
          other than the Incumbent Board; or

                         (iii)the consummation  of a reorganization, merger
          or  consolidation,  or  sale  or  other  disposition  of  all  or
          substantially  all  of  the  assets of the Company  (a  "Business
          Combination"), in any such case,  unless, following such Business
          Combination,

                              (A)  all   or  substantially   all   of   the
          individuals  and  entities  who  were   the  direct  or  indirect
          beneficial owners of the Company's outstanding  common  stock and
          the Company's voting securities entitled to vote generally in the
          election   of   directors  immediately  prior  to  such  Business
          Combination  have   direct   or  indirect  beneficial  ownership,
          respectively, of more than 50%  of the then outstanding shares of
          common stock, and more than 50% of  the  combined voting power of
          the then outstanding voting securities entitled to vote generally
          in the election of directors, of the corporation  resulting  from
          such  Business Combination (which, for purposes of this paragraph
          (A) and paragraphs (B) and (C), shall include a corporation which
          as a result  of  such  transaction controls the Company or all or
          substantially all of the  Company's  assets  either  directly  or
          through one or more subsidiaries), and

                              (B)  except to the extent that such ownership
          existed  prior  to the Business Combination, no person (excluding
          any corporation resulting  from  such Business Combination or any
          employee benefit plan or related trust  of  the  Company  or such
          corporation    resulting    from   such   Business   Combination)
          beneficially owns, directly or  indirectly,  20%  or  more of the
          then  outstanding  shares  of  common  stock  of  the corporation
          resulting from such Business Combination or 20% or  more  of  the
          combined  voting  power of the then outstanding voting securities
          of such corporation, and

                              (C)  at  least  a  majority of the members of
          the  board of directors of the corporation  resulting  from  such
          Business  Combination  were  members of the board of directors of
          the  Company  at the time of the  initial  action  of  the  Board
          providing for such Business Combination; or

                         (iv) approval  by  the shareholders of the Company
          of a complete liquidation or dissolution of the Company.
                    (c)  Affiliate.  The term  "affiliate"  or  "affiliated
          companies" shall mean any company or other entity controlled  by,
          controlling, or under common control with, the Company.

                    (d)  Cause.   After  a  Change  of Control, "Cause," as
          used in this Agreement, shall have the following  meaning and not
          the meaning given in Section 3.3:

                         (i)  the  willful  and  continued failure  of  the
          Employee to perform substantially the Employee's duties hereunder
          (other  than any such failure resulting from  incapacity  due  to
          physical   or   mental  illness),  after  a  written  demand  for
          substantial performance is delivered to the Employee by the Board
          of the Company which  specifically identifies the manner in which
          the  Board  believes that  the  Employee  has  not  substantially
          performed the Employee's duties, or

                         (ii) the  willful  engaging  by  the  Employee  in
          illegal  conduct  or  gross  misconduct  which  is materially and
          demonstrably injurious to the Company or its affiliates.

          For purposes of this provision, no act or failure  to act, on the
          part of the Employee, shall be considered "willful"  unless it is
          done,  or  omitted  to  be done, by the Employee in bad faith  or
          without reasonable belief  that the Employee's action or omission
          was in the best interests of  the Company or its affiliates.  Any
          act, or failure to act, based upon  authority given pursuant to a
          resolution duly adopted by the Board  or upon the instructions of
          a  senior  officer of the Company or based  upon  the  advice  of
          counsel for  the  Company or its affiliates shall be conclusively
          presumed to be done,  or  omitted  to be done, by the Employee in
          good  faith  and in the best interests  of  the  Company  or  its
          affiliates.  The  cessation  of  employment of the Employee shall
          not be deemed to be for Cause unless  and  until there shall have
          been  delivered  to  the  Employee  a  copy of a resolution  duly
          adopted by the affirmative vote of not less  than  three-quarters
          of the entire membership of the Board at a meeting of  the  Board
          called  and  held  for  such  purpose (after reasonable notice is
          provided  to  the  Employee  and  the   Employee   is   given  an
          opportunity,  together  with  counsel,  to  be  heard  before the
          Board), finding that, in the good faith opinion of the Board, the
          Employee has engaged in the conduct described in subparagraph (i)
          or (ii) above, and specifying the particulars thereof in detail.

                    (e)  Good  Reason.   After  a Change of Control,  "Good
          Reason,"  as  used in this Agreement, shall  have  the  following
          meaning and not the meaning given in Section 3.4:

                         (i)  Any  failure of the Company or its affiliates
          to provide the Employee with  the position, authority, duties and
          responsibilities at least equivalent  in  all  material  respects
          with  the  most significant of those held, exercised and assigned
          at any time  during  the 120-day period immediately preceding the
          Change of Control;

                         (ii) The  assignment to the Employee of any duties
          inconsistent in any respect  with  Employee's position (including
          status, offices, titles and reporting  requirements),  authority,
          duties or responsibilities as contemplated by Section 1.1, or any
          other  action  that  results  in  a  diminution in such position,
          authority, duties or responsibilities, excluding for this purpose
          an isolated, insubstantial and inadvertent  action  not  taken in
          bad  faith  that  is  remedied  within  10  days after receipt of
          written notice thereof from the Employee to the Company;

                         (iii)Any failure by the Company  or its affiliates
          to  comply  with  any of the provisions of this Agreement,  other
          than  an  isolated, insubstantial  and  inadvertent  failure  not
          occurring in  bad  faith  that  is  remedied within 10 days after
          receipt  of  written  notice thereof from  the  Employee  to  the
          Company;

                         (iv) The  Company  or its affiliates requiring the
          Employee to be based at any office  or  location  other  than  as
          provided  in Section 3.4(a)(iii) hereof or requiring the Employee
          to travel on  business  to  a  substantially  greater extent than
          required immediately prior to the Change of Control;

                         (v)  Any purported termination of  the  Employee's
          employment   otherwise   than  as  expressly  permitted  by  this
          Agreement; or

                         (vi) Any failure by the Company to comply with and
          satisfy Sections 6.1(c) and (d) of this Agreement.

          For purposes of this Section  5,  any good faith determination of
          "Good Reason" made by the Employee shall be conclusive.  Anything
          in this Agreement to the contrary notwithstanding,  a termination
          by   the  Employee  for  any  reason  during  the  30-day  period
          immediately  following  the  first  anniversary  of the Change of
          Control shall be deemed to be a termination for Good Reason.

                    (f)    Beneficial  Ownership.   The  terms  "beneficial
          ownership," "beneficial  owner," "beneficially owns," and similar
          terms shall have the meanings  set  forth in Rule 13d-3 under the
          Exchange Act.

               5.2   Employment Capacity and Term  after Change of Control.
          (a) If a Change of Control occurs during the Employment Term, the
          Employee's Employment Term (the "Modified Employment Term") shall
          be extended until and terminate at the close  of  business on the
          later  to  occur  of  the  second  anniversary  of the Change  of
          Control; or the date one year after the date on which  either the
          Company   or   the  Employee  has  notified  the  other  of  such
          termination; and  provided, further, that Employee's status as an
          employee is subject to earlier termination to the extent provided
          in this Agreement.

                    (b)  After  a Change of Control and during the Modified
          Employment Term, (i) the  Employee's  position (including status,
          offices,  titles and reporting requirements),  authority,  duties
          and responsibilities  in and with respect to the Company shall be
          at  least  equivalent  in  all  material  respects  to  the  most
          significant of those held,  exercised  and  assigned  at any time
          during  the  120-day  period immediately preceding the Change  of
          Control and (ii) the Employee's service shall be performed at the
          location where the Employee  was  employed  immediately preceding
          the  Change  of Control or any office or location  less  than  50
          miles from such location.

               5.3  Compensation   and   Benefits.    During  the  Modified
          Employment  Term,  in addition to the compensation  and  benefits
          described in Section  2,  the  Employee  shall be entitled to the
          following compensation and benefits:

                    (a)  Salary.   During  the  Modified  Employment  Term,
          Employee's Base Salary shall be as provided for in Section 2.1.
                    (b)  Benefit  Plans.   During the  Modified  Employment
          Term, the Employee and his family,  if  any, shall be entitled to
          participate in and receive applicable benefits under all such (i)
          incentive, savings and retirement plans,  practices, policies and
          programs,  (ii)  welfare benefit plans, practices,  policies  and
          programs (including,  without  limitation, medical, prescription,
          dental, disability, employee life,  group life, accidental health
          and travel accident insurance plans and  programs) and (iii) paid
          vacation  and other fringe benefits, plans,  practices,  policies
          and programs  as are applicable generally to other peer employees
          of the Company  and  its affiliated companies in effect generally
          after  the  Change  of Control  or,  if  more  favorable  to  the
          Employee, as in effect  for  the  Employee at any time during the
          120-day period immediately preceding the Change of Control.

                    (c)  Expenses.  During the  Modified  Employment  Term,
          the  Employee  shall  be entitled to receive prompt reimbursement
          for  all  reasonable  expenses   incurred   by  the  Employee  in
          accordance  with  the  most  favorable  policies,  practices  and
          procedures of the Company and its affiliated  companies in effect
          generally after the Change of Control with respect  to other peer
          employees of the Company and its affiliated companies or, if more
          favorable to the Employee, as in effect for the Employee  at  any
          time  during  the 120-day period immediately preceding the Change
          of Control.

                    (d)  Office  and  Support  Staff.   During the Modified
          Employment Term, the Employee shall be entitled  to  an office or
          offices  of  a  size and with furnishings and other appointments,
          and to personal secretarial  and other assistance, at least equal
          to the most favorable of the foregoing  provided  generally after
          the Change of Control with respect to other peer employees of the
          Company and its affiliated companies or, if more favorable to the
          Employee,  as in effect for the Employee at any time  during  the
          120-day period immediately preceding the Change of Control.

               5.4  Termination  of  Employment  after a Change of Control.
          After  a  Change  of Control and during the  Modified  Employment
          Term, the Employee's status as an employee shall terminate or may
          be  terminated  as provided  in  Section  3  of  this  Agreement;
          provided, however,  that after a Change of Control and during the
          Modified Employment Term  the terms "Cause" and "Good Reason," as
          used in Section 3 and elsewhere in this Agreement, shall have the
          meanings given to them in this  Section  5  and  not the meanings
          given to them in Section 3.

               5.5  Obligations  of  the Company upon Termination  after  a
          Change of Control.  (a) If,  after  a Change of Control and prior
          to  the  end  of  the  Modified  Employment   Term,  the  Company
          terminates the Employee's employment other than  for Cause, death
          or  Disability,  or the Employee terminates employment  for  Good
          Reason, then

                          (i) within 30 days of the Date of Termination the
          Company shall pay  to  the Employee in a lump sum an amount equal
          to the Employee's Base Salary  through  the  end  of the Modified
          Employment Term had such termination not occurred; and

                         (ii)  Employee  shall be entitled to the  benefits
          provided in Section 4.3(b) and the  amounts, if any, contemplated
          by Sections 4.6 and 4.7.

                    (b)  If, after a Change of Control and prior to the end
          of  the Modified Employment Term, the  Employee's  employment  is
          terminated  (i) for death, (ii) for Disability or (iii) for Cause
          (as defined in this Section 5), by the Employee for reasons other
          than Good Reason  (as defined in this Section 5) or at the end of
          the Modified Employment Term, then the Employee shall be entitled
          to the benefits described  in Section 4.1, Section 4.2 or Section
          4.4, as the case may be, and  shall  be  entitled to the benefits
          described  in  Sections  4.6  and  4.7.  If the  Company  or  the
          Employee gives notice of termination  of  the Modified Employment
          Term  as  provided for in Section 5.2, the Company  may,  at  its
          option, terminate Employee's status as an Employee, in which case
          such termination  shall be deemed a termination without Cause for
          purposes of all provisions of this Agreement.

                    (c)  The  rights  and  obligations  of  the Company and
          Employee  contained  in  Section 4.5 ("Resignation as  Director")
          shall continue to apply after a Change of Control.

               5.6  Certain Additional  Payments.   If  after  a  Change of
          Control Employee is subjected to an excise tax as a result of the
          "excess  parachute  payment"  provisions  of section 4999 of  the
          Internal Revenue Code of 1986, as amended,  whether  by virtue of
          the benefits of this Agreement or by virtue of any other benefits
          provided  to  Employee  in  connection  with  a Change of Control
          pursuant to Company plans, policies or agreements  (including the
          value of any options to acquire Common Stock of the  Company  the
          exercisability  of  which is accelerated pursuant to the terms of
          any  stock  option,  incentive  or  similar  plan  heretofore  or
          hereafter adopted by the  Company),  the  Company  shall  pay  to
          Employee  (whether  or  not  his  employment has terminated) such
          amounts as are necessary to place Employee  in  the same position
          after payment of federal income and excise taxes  and  state  and
          local  income  taxes as he would have been if such provisions had
          not been applicable to him.

          Section 6.Miscellaneous

               6.1  Binding Effect.

                    (a)  This  Agreement shall be binding upon and inure to
          the benefit of the Company and any of its successors or assigns.

                    (b)  This Agreement  is  personal  to  the Employee and
          shall  not be assignable by the Employee without the  consent  of
          the Company  (there  being  no  obligation  to give such consent)
          other than such rights or benefits as are transferred  by will or
          the laws of descent and distribution.

                    (c)  The  Company  shall  require  any successor to  or
          assignee  of  (whether  direct or indirect, by purchase,  merger,
          consolidation or otherwise)  all  or  substantially  all  of  the
          assets or businesses of the Company (i) to assume unconditionally
          and  expressly this Agreement and (ii) to agree to perform all of
          the obligations  under  this  Agreement in the same manner and to
          the same extent as would have been required of the Company had no
          assignment or succession occurred,  such  assumption  to  be  set
          forth  in  a writing reasonably satisfactory to the Employee.  In
          the  event  of  any  such  assignment  or  succession,  the  term
          "Company" as  used  in  this  Agreement  shall refer also to such
          successor or assign.

                    (d)  The  Company  shall  require  all   entities  that
          control,  or  that  after  the  Change  of  Control will control,
          directly or indirectly, any such successor or  assignee  to agree
          to  cause  to  be  performed  all  of  the obligations under this
          Agreement in the same manner and to the same extent as would have
          been  required  of  the Company had no assignment  or  succession
          occurred, such agreement  to  be  set forth in writing reasonably
          satisfactory to the Employee.

               6.2  Notices.  All notices hereunder  must be in writing and
          shall be deemed to have given upon receipt of  delivery  by:  (a)
          personal  delivery to the designated individual, (b) certified or
          registered mail, postage prepaid, return receipt requested, (c) a
          nationally   recognized  overnight  courier  service  (against  a
          receipt therefor) or (d) facsimile transmission with confirmation
          of receipt.  All  such  notices  must  be addressed as follows or
          such other address as to which any party hereto may have notified
          the other in writing:

               If to the Company, to:

               Akorn, Inc.
               100 Akorn Drive
               Abita Springs, Louisiana  70420
               Attn:  Chairman of the Board
               Facsimile transmission No. (504) 893-1257

               If to the Employee, to:

               Barry D. LeBlanc
               15 Neron Place
               New Orleans, Louisiana  70118
               Facsimile transmission No. (504) 861-9649

               6.3  Governing Law.  This Agreement  shall  be construed and
          enforced in accordance with and governed by the internal  laws of
          the State of Louisiana.

               6.4  Withholding.  The Employee agrees that the Company  has
          the  right to withhold, from the amounts payable pursuant to this
          Agreement,  all  amounts required to be withheld under applicable
          income and/or employment  tax  laws,  or  as  otherwise stated in
          documents granting rights that are affected by this Agreement.

               6.5  Severability.  If any term or provision  of this Agree-
          ment  or  the  application thereof to any person or circumstance,
          shall at any time  or  to  any  extent  be  invalid,  illegal  or
          unenforceable in any respect as written, Employee and the Company
          intend for any court construing this Agreement to modify or limit
          such provision temporally, spatially or otherwise so as to render
          it  valid  and  enforceable to the fullest extent allowed by law.
          Any such provision  that  is  not susceptible of such reformation
          shall be ignored so as to not affect  any other term or provision
          hereof, and the remainder of this Agreement,  or  the application
          of such term or provision to persons or circumstances  other than
          those  as  to which it is held invalid, illegal or unenforceable,
          shall not be affected thereby and each term and provision of this
          Agreement shall  be  valid  and  enforced  to  the fullest extent
          permitted by law.

               6.6  Waiver  of  Breach.  The waiver by either  party  of  a
          breach of any provision of this Agreement shall not operate or be
          construed as a waiver of any subsequent breach thereof.

               6.7  Remedies Not  Exclusive.   No  remedy  specified herein
          shall  be  deemed  to  be  such  party's  exclusive  remedy,  and
          accordingly,  in  addition  to  all  of  the  rights and remedies
          provided for in this Agreement, the parties shall  have all other
          rights and remedies provided to them by applicable law,  rule  or
          regulation.

               6.8  Company's Reservation of Rights.  Employee acknowledges
          and  understands  that the Employee serves at the pleasure of the
          Board and that the Company has the right at any time to terminate
          Employee's status as  an employee of the Company, or to change or
          diminish his status during  the  Employment  Term, subject to the
          rights  of the Employee to claim the benefits conferred  by  this
          Agreement.

               6.9  Survival.   Following  the  Date  of  Termination, each
          party shall have the right to enforce all rights,  and  shall  be
          bound  by  all  obligations,  of  such  party that are continuing
          rights and obligations under this Agreement.

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

               IN WITNESS WHEREOF, the Company and the Employee have caused
          this Agreement to be executed as of the Agreement Date.

                                        AKORN, INC.



                                        By:  ____________________________
                                                 George S. Ellis, M.D.
                                            Compensation Committee Chairman

                                        EMPLOYEE:



                                               ____________________________
                                                    Barry D. LeBlanc
          



                         EMPLOYMENT AGREEMENT--HAROLD O. KOCH

               This Employment Agreement ("Agreement") between Akorn, Inc.,
          a  Louisiana corporation (the "Company"), and Harold O. Koch (the
          "Employee")  is  dated  as  of  January  1,  1996 (the "Agreement
          Date").

               WHEREAS, Employee currently is employed by the Company;

               WHEREAS,  the  Company  desires  to retain the  services  of
          Employee  pursuant to the terms of this  Agreement  and  Employee
          desires to continue in the service of the Company on such terms;

               NOW, THEREFORE,  for  and  in consideration of the continued
          employment of Employee by the Company  and  the payment of wages,
          salary  and other compensation to Employee by  the  Company,  the
          parties hereto agree as follows:


          Section 1.Employment Capacity and Term

               1.1  Capacity  and  Duties  of  Employee.   The  Employee is
          employed  by  the  Company  to  render services on behalf of  the
          Company as Senior Vice President.   In that capacity the Employee
          shall  perform  such  duties as are assigned  to  the  individual
          holding any such title  by  the  Company's  Bylaws and such other
          duties,  consistent  with  the Employee's job title,  as  may  be
          prescribed from time to time  by  the  Board  of Directors of the
          Company (the "Board").

               1.2  Employment  Term.   The  term  of  this Agreement  (the
          "Employment Term") shall commence
 on the Agreement Date and shall
          continue until and terminate one year after either the Company or
          the  Employee has notified the other of such termination  of  the
          Employment  Term; and provided, further, that the Employment Term
          is subject to extension as provided in Section 5.2 and Employee's
          status as an  employee  is  subject to earlier termination to the
          extent provided in this Agreement.

               1.3  Devotion to Responsibilities.   During  the  Employment
          Term, the Employee shall devote all of his business time  to  the
          business  of  the  Company  and  its  subsidiaries and affiliated
          companies,  shall  use  his reasonable best  efforts  to  perform
          faithfully and efficiently  his  duties under this Agreement, and
          shall  not  engage  in  or be employed  by  any  other  business;
          provided, however, that nothing  contained  herein shall prohibit
          the  Employee  from  (a) serving  as  a member of  the  board  of
          directors, board of trustees or the like  of  any  for-profit  or
          non-profit  entity  that  does  not  compete with the Company, or
          performing  services  of  any  type for any  civic  or  community
          entity,  whether  or  not  the  Employee   receives  compensation
          therefor,  (b) investing  his assets in such form  or  manner  as
          shall require no more than  nominal  services  on the part of the
          Employee in the operation of the business of or property in which
          such  investment  is  made, or (c) serving in various  capacities
          with, and attending meetings  of,  industry  or  trade groups and
          associations,   as  long  as  the  Employee's  engaging  in   any
          activities permitted  by virtue of clauses (a), (b) and (c) above
          does not materially interfere with the ability of the Employee to
          perform the services and  discharge the responsibilities required
          of him under this Agreement.   Notwithstanding  clause (b) above,
          during  the Employment Term, the Employee shall not  perform  any
          services  for  and shall not beneficially own more than 2% of the
          equity interests  of  a  business organization that competes with
          the Company or its affiliates.   For  purposes of this paragraph,
          "beneficially own" shall have the meaning  given  to that term in
          Rule  13d-3  under  the  Securities  Exchange  Act  of 1934  (the
          "Exchange Act").

          Section 2.Compensation and Benefits

               During  the  Employment Term, the Company shall provide  the
          Employee with the compensation and benefits described below:

               2.1  Salary.   A  salary  ("Base  Salary")  at  the  rate of
          $125,000 per year; provided, however, that Employee's Base Salary
          shall increase as of each anniversary of the Agreement Date  by a
          factor  equal  to  the  increase  in  the  Consumer  Price  Index
          maintained  by the United States Department of Labor.  Employee's
          Base Salary shall be payable to the Employee at such intervals as
          the salaries of other salaried employees of the Company are paid.
          Any increase  in Employee's Base Salary shall take effect for the
          payroll period  next following the date on which the condition to
          such increase is met.

               2.2  Bonus.  Employee  shall  be  eligible  to  receive such
          bonuses   and   supplementary   compensation  as  the  Board  may
          determine.

               2.3  Benefits.  The Company  shall provide the Employee and,
          if applicable, his family members,  with  the  following benefits
          and perquisites:

                    (a)  The   Company   will   continue  to  provide   for
          Employee's use a new Oldsmobile Ninety-Eight  or other equivalent
          new  automobile  of  his choice, such automobile to  be  replaced
          every third year, and  to  provide  or reimburse Employee for all
          gasoline, maintenance, repairs and insurance for such automobile.

                    (b)  All  such (i) incentive,  savings  and  retirement
          plans, practices, policies  and  programs,  (ii)  welfare benefit
          plans,  practices,  policies  and  programs  (including,  without
          limitation,  medical, prescription, dental, disability,  employee
          life, group life,  accident  health and travel accident insurance
          plans and programs) and (iii)  paid  vacation  and  other  fringe
          benefits,   plans,   practices,  policies  and  programs  as  are
          applicable generally to  other  peer employees of the Company and
          its affiliated companies.

               2.4  Office and Support Staff.   Employee  shall be entitled
          to  an  office  or  offices of the size and with furnishings  and
          other  appointments,  and   to  personal  secretarial  and  other
          assistance, at least equal to  the  those  provided to him on the
          Agreement Date.

               2.5  Expenses.    The  Employee  shall  be  reimbursed   for
          reasonable out-of-pocket  expenses  incurred from time to time on
          behalf of the Company or any subsidiary in the performance of his
          duties  under  this  Agreement,  upon the  presentation  of  such
          supporting  invoices,  documents  and   forms   as   the  Company
          reasonably requests.

          Section 3.Termination of Employment

               3.1  Death.   The  Employee's  status  as an employee  shall
          terminate immediately and automatically upon the Employee's death
          during the Employment Term.

               3.2  Disability.  The Employee's status  as  an employee may
          be terminated for "Disability" as follows:

                    (a)  The   Employee's  status  as  an  employee   shall
          terminate if the Employee has a disability that would entitle him
          to  receive benefits under  the  Company's  long-term  disability
          insurance  policy  in  effect  at  the  time either because he is
          Totally Disabled or Partially Disabled, as such terms are defined
          in the Company's policy in effect as of the  Agreement Date or as
          similar  terms  are  defined in any successor policy.   Any  such
          termination shall become  effective on the first day on which the
          Employee is eligible to receive payments under such policy (or on
          the first day that he would  be  so  eligible,  if he had applied
          timely for such payments).

                    (b)  If the Company has no long-term disability plan in
          effect, the Employee's status as an employee shall  terminate  if
          (i)  the  Employee  is  rendered incapable because of physical or
          mental  illness  of satisfactorily  discharging  his  duties  and
          responsibilities  under   this  Agreement  for  a  period  of  90
          consecutive days and (ii) a  duly  qualified  physician chosen by
          the  Company  and  acceptable  to  the  Employee  or  his   legal
          representative so certifies in writing, the Board shall have  the
          power to determine that the Employee has become disabled.  If the
          Board  makes  such  a  determination,  the Company shall have the
          continuing  right  and  option,  during  the   period  that  such
          disability continues, and by notice given in the  manner provided
          in  this  Agreement,  to terminate the status of Employee  as  an
          employee.  Any such termination  shall  become  effective 30 days
          after such notice of termination is given, unless within such 30-
          day period, the Employee becomes capable of rendering services of
          the character contemplated hereby (and a physician  chosen by the
          Company   and   acceptable   to   the   Employee   or  his  legal
          representative so certifies in writing) and the Employee  in fact
          resumes such services.

                    (c)  The  "Disability  Effective  Date"  shall mean the
          date on which termination of employment becomes effective  due to
          Disability.

               3.3  Cause.  The Company may terminate the Employee's status
          as  an  employee  for  Cause.  As used herein, termination by the
          Company of the Employee's status as an employee for "Cause" shall
          mean termination as a result of (a) the Employee's breach of this
          Agreement, or (b) the willful  engaging  by the Employee in gross
          misconduct injurious to the Company, which  in either case is not
          remedied within 10 days after the Company provides written notice
          to the Employee of such breach or willful misconduct.
               3.4  Good Reason.  The Employee may terminate  his status as
          an  employee  for  Good  Reason.  As used herein, the term  "Good
          Reason" shall mean:

                    (a)  The occurrence of any  of the following during the
          Employment Term:

                         (i)  the  assignment  by  the   Board  or  by  any
          authorized   person   to   the   Employee   of   any  duties   or
          responsibilities   that  are  inconsistent  with  the  Employee's
          status, title and position as Senior Vice President;

                         (ii)    any  removal  of the Employee from, or any
          failure to reappoint or reelect the Employee  to, the position of
          Senior Vice President of the Company, except in connection with a
          termination of Employee's status as an employee  as  permitted by
          this Agreement;

                         (iii)  the Company's requiring the Employee  to be
          based  anywhere other than at or within 50 miles of the Company's
          headquarters  in  Abita  Springs,  Louisiana, except for required
          travel in the ordinary course of the Company's business;

                    (b)  any breach of this Agreement  by  the Company that
          continues for a period of 10 days after written notice thereof is
          given by the Employee to the Company;

                    (c)  the   failure   by  the  Company  to  obtain   the
          assumption  of  its  obligations  under  this  Agreement  by  any
          successor or assignee as contemplated by Section 6.1(c); or

                    (d)  any purported termination  by  the  Company of the
          Employee's  status as an employee for Cause that is not  effected
          pursuant to a  Notice  of Termination satisfying the requirements
          of this Agreement.

               3.5  Voluntary Termination  by  the Company.  Subject to the
          terms and conditions provided herein,  the  Company may terminate
          the Employee's status as an employee during the  Employment  Term
          for reasons other than death, Disability or Cause.

               3.6  Voluntary  Termination by the Employee.  Subject to the
          terms and conditions provided  herein, the Employee may terminate
          the Employee's status as an employee  during  the Employment Term
          for reasons other than Good Reason.

               3.7  Notice of Termination.  Any termination  by the Company
          for  Disability  or  Cause,  or by the Employee for Good  Reason,
          shall be communicated by Notice of Termination to the other party
          hereto given in accordance with  Section  6.2.   For  purposes of
          this Agreement, a "Notice of Termination" means a written  notice
          that  (a)  indicates  the  specific termination provision in this
          Agreement relied upon, (b) to  the  extent applicable, sets forth
          in  reasonable  detail  the  facts and circumstances  claimed  to
          provide  a basis for termination  of  the  Employee's  employment
          under the  provisions  so  indicated  and  (c)  if  the  Date  of
          Termination  (as defined below) is other than the date of receipt
          of such notice,  specifies the termination date (which date shall
          be not more than 30  days  after the giving of such notice).  The
          failure by the Employee or the Company to set forth in the Notice
          of Termination any fact or circumstance  that  contributes  to  a
          showing  of Good Reason, Disability or Cause shall not negate the
          effect of  the  notice nor waive any right of the Employee or the
          Company, respectively,  hereunder or preclude the Employee or the
          Company, respectively, from  asserting  such fact or circumstance
          in enforcing the Employee's or the Company's rights hereunder.

               3.8  Date of Termination.  "Date of  Termination"  means (a)
          if Employee's employment is terminated by reason of his death  or
          Disability, the Date of Termination shall be the date of death of
          Employee  or  the  Disability Effective Date, as the case may be,
          (b) if Employee's employment  is  terminated  by  the Company for
          Cause,  or by Employee for Good Reason, the date of  delivery  of
          the Notice  of  Termination  or any later date specified therein,
          (which date shall not be more  than  30  days after the giving of
          such notice) as the case may be, (c) if the Employee's employment
          is terminated by the Company prior to the  end  of the Employment
          Term for reasons other than death, Disability or  Cause, the Date
          of  Termination  shall be the date on which the Company  notifies
          the  Employee  of  such   termination,   (d) if   the  Employee's
          employment is terminated by the Employee prior to the  end of the
          Employment Term for reasons other than Good Reason, the  Date  of
          Termination  shall be the date on which the Employee notifies the
          Company of such  termination,  and  (e)  if  the  Employment Term
          terminates upon notice by the Company or the Employee as provided
          for in Section 1.2 or Section 5.2, the Date of Termination  shall
          be the date on which the Employment Term ends.

          Section 4.Obligations Upon Termination

               4.1  Death.    If   Employee's  status  as  an  employee  is
          terminated by reason of Employee's  death,  this  Agreement shall
          terminate   without  further  obligations  to  Employee's   legal
          representatives  under  this Agreement, other than the obligation
          to  make any payments due  pursuant  to  employee  benefit  plans
          maintained by the Company or its subsidiaries.

               4.2  Disability.   If  Employee's  status  as an employee is
          terminated  by  reason  of Employee's Disability, this  Agreement
          shall terminate without further  obligation  to  Employee,  other
          than the obligation to make any payments due pursuant to employee
          benefit plans maintained by the Company or its subsidiaries.

               4.3  Termination  by  Company  for Reasons other than Death,
          Disability or Cause; Termination by Employee for Good Reason.  If
          the Company terminates the Employee's status as an employee prior
          to the end of the Employment Term for  reasons  other than death,
          Disability  or  Cause, or the Employee terminates his  employment
          prior to the end of the Employment Term for Good Reason, then

                    (a)  within  30  days  of  the  Date of Termination the
          Company shall pay to the Employee in a lump  sum  an amount equal
          to  the Employee's Base Salary through the end of the  Employment
          Term  had the notice contemplated by Section 1.2 been given as of
          the Date of Termination; and
                    (b)  the  amount  of  any  performance-based  bonus  or
          options  granted to the Employee shall be deemed to be the amount
          to which the  Employee  would  have been entitled if the budgeted
          goals or other performance goals  applicable thereto had been met
          but not exceeded and, whether or not  the  performance goals have
          been  met  as  of the Date of Termination, such  bonus  shall  be
          payable within 30  days  of  the  Date  of  Termination  and such
          options (if not already exercisable) shall become exercisable  as
          of  the  Date  of  Termination  and  shall  expire on the date of
          expiration  of the options as provided in the  applicable  option
          agreement.

               4.4  Termination for Cause, Without Good Reason or at End of
          Employment Term.   This Agreement shall terminate without further
          obligation to the Employee  other than obligations imposed by law
          and obligations imposed pursuant  to  any  employee  benefit plan
          maintained  by  the  Company  or  its  subsidiaries  (a)  if  the
          Employee's status as an Employee is terminated by the Company for
          Cause  or  by  the Employee for reasons other than Good Reason or
          (b), except as otherwise  provided  in Section 5.2, at the end of
          the Employment Term.  If the Company or the Employee gives notice
          of termination of the Employment Term  as provided for in Section
          1.2, the Company may, at its option, terminate  Employee's status
          as an employee, in which case such termination shall  be deemed a
          termination  by  the  Company  without Cause for purposes of  all
          provisions of this Agreement.

               4.5  Resignation as Director.   If Employee is a director of
          the Company and his employment is terminated for any reason other
          than  death,  the Employee shall, if requested  by  the  Company,
          immediately resign  as  a  director  of  the  Company.   If  such
          resignation is not received when so requested, the Employee shall
          forfeit  any  right  to  receive  any  payments  pursuant to this
          Agreement.

               4.6  Accrued   Obligations   and   Other   Benefits.    Upon
          termination  of employment for any reason the Employee  shall  be
          entitled to receive  promptly,  and  in  addition  to  any  other
          benefits  specifically  provided,  (a) the Employee's Base Salary
          through  the Date of Termination to the  extent  not  theretofore
          paid, (b) any accrued vacation pay, to the extent not theretofore
          paid, and  (c)  any other amounts or benefits required to be paid
          or provided or which  the  Employee  is entitled to receive under
          any plan, program, policy practice or agreement of the Company.

               4.7  Stock Options.  The foregoing  benefits are intended to
          be  in  addition to the value of any options  to  acquire  Common
          Stock  of   the  Company  the  exercisability  of  which  may  be
          accelerated pursuant  to the terms of any stock option, incentive
          or other similar plan heretofore  or  hereafter  adopted  by  the
          Company.

          Section 5.Change of Control

               5.1  Definitions.   For  purposes  of  this  Section  5, the
          following terms shall have the meanings indicated below.

                    (a)  Company.   In  the  event  of  any  assignment  or
          succession  as described in Section 6.1(c), the term "Company" as
          used in this  Agreement  shall  refer  also  to such successor or
          assignee.

                    (b)  Change of Control.  A Change of Control shall mean
          the occurrence of any of the following events:

                         (i)  the acquisition by any individual,  entity or
          group (within the meaning of Section 13(d)(3) or 14(d)(2)  of the
          Exchange  Act)  of  beneficial  ownership of more than 30% of the
          outstanding shares of the Company's  common  stock,  no par value
          per  share  (the  "Common  Stock");  provided, however, that  for
          purposes of this subsection (i), the following acquisitions shall
          not constitute a Change of Control:

                              (A)  any acquisition of Common Stock directly
          from the Company,

                              (B)  any acquisition  of  Common Stock by the
          Company,

                              (C)  any acquisition of Common  Stock  by any
          employee  benefit plan (or related trust) sponsored or maintained
          by the Company or any corporation controlled by the Company, or

                              (D)  any  acquisition  of Common Stock by any
          corporation pursuant to a transaction that complies  with clauses
          (A), (B) and (C) of subsection (b)(iii) of this Section 5.1; or

                         (ii) individuals  who,  as of the Agreement  Date,
          constitute the Board (the "Incumbent Board") cease for any reason
          to  constitute  at  least  a  majority  of the  Board;  provided,
          however,  that any individual becoming a director  subsequent  to
          the Agreement  Date whose election, or nomination for election by
          the Company's shareholders,  was approved by a vote of at least a
          majority of the directors then  comprising  the  Incumbent  Board
          shall  be considered a member of the Incumbent Board, unless such
          individual's  initial  assumption of office occurs as a result of
          an actual or threatened  election  contest  with  respect  to the
          election  or  removal  of directors or other actual or threatened
          solicitation of proxies  or  consents by or on behalf of a person
          other than the Incumbent Board; or

                         (iii)the consummation  of a reorganization, merger
          or  consolidation,  or  sale  or  other  disposition  of  all  or
          substantially  all  of  the  assets of the Company  (a  "Business
          Combination"), in any such case,  unless, following such Business
          Combination,

                              (A)  all   or  substantially   all   of   the
          individuals  and  entities  who  were   the  direct  or  indirect
          beneficial owners of the Company's outstanding  common  stock and
          voting  securities entitled to vote generally in the election  of
          directors  immediately  prior  to  such Business Combination have
          direct or indirect beneficial ownership,  respectively,  of  more
          than 50% of the then outstanding shares of common stock, and more
          than  50%  of  the  combined voting power of the then outstanding
          voting securities entitled  to  vote generally in the election of
          directors,  of  the  corporation  resulting  from  such  Business
          Combination  (which,  for  purposes of  this  paragraph  (A)  and
          paragraphs (B) and (C), shall  include  a  corporation which as a
          result  of  such  transaction  controls  the Company  or  all  or
          substantially  all  of the Company's assets  either  directly  or
          through one or more subsidiaries), and

                              (B)  except to the extent that such ownership
          existed prior to the  Business  Combination, no person (excluding
          any corporation resulting from such  Business  Combination or any
          employee  benefit  plan or related trust of the Company  or  such
          corporation   resulting    from    such   Business   Combination)
          beneficially owns, directly or indirectly,  20%  or  more  of the
          then  outstanding  shares  of  common  stock  of  the corporation
          resulting from such Business Combination or 20% or  more  of  the
          combined  voting  power of the then outstanding voting securities
          of such corporation, and

                              (C)  at  least  a  majority of the members of
          the  board of directors of the corporation  resulting  from  such
          Business  Combination  were  members of the board of directors of
          the  Company  at the time of the  initial  action  of  the  Board
          providing for such Business Combination; or

                         (iv) approval  by  the shareholders of the Company
          of a complete liquidation or dissolution of the Company.

                    (c)  Affiliate.  The term  "affiliate"  or  "affiliated
          companies" shall mean any company or other entity controlled  by,
          controlling, or under common control with, the Company.

                    (d)  Cause.   After  a  Change  of Control, "Cause," as
          used in this Agreement, shall have the following  meaning and not
          the meaning given in Section 3.3:

                         (i)  the  willful  and  continued failure  of  the
          Employee to perform substantially the Employee's duties hereunder
          (other  than any such failure resulting from  incapacity  due  to
          physical   or   mental  illness),  after  a  written  demand  for
          substantial performance is delivered to the Employee by the Board
          of the Company which  specifically identifies the manner in which
          the  Board  believes that  the  Employee  has  not  substantially
          performed the Employee's duties, or

                         (ii) the  willful  engaging  by  the  Employee  in
          illegal  conduct  or  gross  misconduct  which  is materially and
          demonstrably injurious to the Company or its affiliates.

          For purposes of this provision, no act or failure  to act, on the
          part of the Employee, shall be considered "willful"  unless it is
          done,  or  omitted  to  be done, by the Employee in bad faith  or
          without reasonable belief  that the Employee's action or omission
          was in the best interests of  the Company or its affiliates.  Any
          act, or failure to act, based upon  authority given pursuant to a
          resolution duly adopted by the Board  or upon the instructions of
          a  senior  officer of the Company or based  upon  the  advice  of
          counsel for  the  Company or its affiliates shall be conclusively
          presumed to be done,  or  omitted  to be done, by the Employee in
          good  faith  and in the best interests  of  the  Company  or  its
          affiliates.  The  cessation  of  employment of the Employee shall
          not be deemed to be for Cause unless  and  until there shall have
          been  delivered  to  the  Employee  a  copy of a resolution  duly
          adopted by the affirmative vote of not less  than  three-quarters
          of the entire membership of the Board at a meeting of  the  Board
          called  and  held  for  such  purpose (after reasonable notice is
          provided  to  the  Employee  and  the   Employee   is   given  an
          opportunity,  together  with  counsel,  to  be  heard  before the
          Board), finding that, in the good faith opinion of the Board, the
          Employee has engaged in the conduct described in subparagraph (i)
          or (ii) above, and specifying the particulars thereof in detail.

                    (e)  Good  Reason.   After  a Change of Control,  "Good
          Reason,"  as  used in this Agreement, shall  have  the  following
          meaning and not the meaning given in Section 3.4:

                         (i)  Any  failure of the Company or its affiliates
          to provide the Employee with  the position, authority, duties and
          responsibilities at least equivalent  in  all  material  respects
          with  the  most significant of those held, exercised and assigned
          at any time  during  the 120-day period immediately preceding the
          Change of Control;

                         (ii) The  assignment to the Employee of any duties
          inconsistent in any respect  with  Employee's position (including
          status, offices, titles and reporting  requirements),  authority,
          duties or responsibilities as contemplated by Section 1.1, or any
          other  action  that  results  in  a  diminution in such position,
          authority, duties or responsibilities, excluding for this purpose
          an isolated, insubstantial and inadvertent  action  not  taken in
          bad  faith  that  is  remedied  within  10  days after receipt of
          written notice thereof from the Employee to the Company;

                         (iii)Any failure by the Company  or its affiliates
          to  comply  with  any of the provisions of this Agreement,  other
          than  an  isolated, insubstantial  and  inadvertent  failure  not
          occurring in  bad  faith  that  is  remedied within 10 days after
          receipt  of  written  notice thereof from  the  Employee  to  the
          Company;

                         (iv) The  Company  or its affiliates requiring the
          Employee to be based at any office  or  location  other  than  as
          provided  in Section 3.4(a)(iii) hereof or requiring the Employee
          to travel on  business  to  a  substantially  greater extent than
          required immediately prior to the Change of Control;

                         (v)  Any purported termination of  the  Employee's
          employment   otherwise   than  as  expressly  permitted  by  this
          Agreement; or

                         (vi) Any failure by the Company to comply with and
          satisfy Sections 6.1(c) and (d) of this Agreement.

          For purposes of this Section  5,  any good faith determination of
          "Good Reason" made by the Employee shall be conclusive.  Anything
          in this Agreement to the contrary notwithstanding,  a termination
          by   the  Employee  for  any  reason  during  the  30-day  period
          immediately  following  the  first  anniversary  of the Change of
          Control shall be deemed to be a termination for Good Reason.
                    (f)    Beneficial  Ownership.   The  terms  "beneficial
          ownership," "beneficial  owner," "beneficially owns," and similar
          terms shall have the meanings  set  forth in Rule 13d-3 under the
          Exchange Act.

               5.2   Employment Capacity and Term  after Change of Control.
          (a) If a Change of Control occurs during the Employment Term, the
          Employee's Employment Term (the "Modified Employment Term") shall
          be extended until and terminate at the close  of  business on the
          later  to  occur  of  the  second  anniversary  of the Change  of
          Control; or the date one year after the date on which  either the
          Company   or   the  Employee  has  notified  the  other  of  such
          termination; and  provided, further, that Employee's status as an
          employee is subject to earlier termination to the extent provided
          in this Agreement.

                    (b)  After  a Change of Control and during the Modified
          Employment Term, (i) the  Employee's  position (including status,
          offices,  titles and reporting requirements),  authority,  duties
          and responsibilities  in and with respect to the Company shall be
          at  least  equivalent  in  all  material  respects  to  the  most
          significant of those held,  exercised  and  assigned  at any time
          during  the  120-day  period immediately preceding the Change  of
          Control and (ii) the Employee's service shall be performed at the
          location where the Employee  was  employed  immediately preceding
          the  Change  of Control or any office or location  less  than  50
          miles from such location.

               5.3  Compensation   and   Benefits.    During  the  Modified
          Employment  Term,  in addition to the compensation  and  benefits
          described in Section  2,  the  Employee  shall be entitled to the
          following compensation and benefits:

                    (a)  Salary.   During  the  Modified  Employment  Term,
          Employee's Base Salary shall be as provided for in Section 2.1.

                    (b)  Benefit  Plans.   During the  Modified  Employment
          Term, the Employee and his family,  if  any, shall be entitled to
          participate in and receive applicable benefits under all such (i)
          incentive, savings and retirement plans,  practices, policies and
          programs,  (ii)  welfare benefit plans, practices,  policies  and
          programs (including,  without  limitation, medical, prescription,
          dental, disability, employee life,  group life, accidental health
          and travel accident insurance plans and  programs) and (iii) paid
          vacation  and other fringe benefits, plans,  practices,  policies
          and programs  as are applicable generally to other peer employees
          of the Company  and  its affiliated companies in effect generally
          after  the  Change  of Control  or,  if  more  favorable  to  the
          Employee, as in effect  for  the  Employee at any time during the
          120-day period immediately preceding the Change of Control.

                    (c)  Expenses.  During the  Modified  Employment  Term,
          the  Employee  shall  be entitled to receive prompt reimbursement
          for  all  reasonable  expenses   incurred   by  the  Employee  in
          accordance  with  the  most  favorable  policies,  practices  and
          procedures of the Company and its affiliated  companies in effect
          generally after the Change of Control with respect  to other peer
          employees of the Company and its affiliated companies or, if more
          favorable to the Employee, as in effect for the Employee  at  any
          time  during  the 120-day period immediately preceding the Change
          of Control.

                    (d)  Office  and  Support  Staff.   During the Modified
          Employment Term, the Employee shall be entitled  to  an office or
          offices  of  a  size and with furnishings and other appointments,
          and to personal secretarial  and other assistance, at least equal
          to the most favorable of the foregoing  provided  generally after
          the Change of Control with respect to other peer employees of the
          Company and its affiliated companies or, if more favorable to the
          Employee,  as in effect for the Employee at any time  during  the
          120-day period immediately preceding the Change of Control.

               5.4  Termination  of  Employment  after a Change of Control.
          After  a  Change  of Control and during the  Modified  Employment
          Term, the Employee's status as an employee shall terminate or may
          be  terminated  as provided  in  Section  3  of  this  Agreement;
          provided, however,  that after a Change of Control and during the
          Modified Employment Term  the terms "Cause" and "Good Reason," as
          used in Section 3 and elsewhere in this Agreement, shall have the
          meanings given to them in this  Section  5  and  not the meanings
          given to them in Section 3.

               5.5  Obligations  of  the Company upon Termination  after  a
          Change of Control.  (a) If,  after  a Change of Control and prior
          to  the  end  of  the  Modified  Employment   Term,  the  Company
          terminates the Employee's employment other than  for Cause, death
          or  Disability,  or the Employee terminates employment  for  Good
          Reason, then

                          (i) within 30 days of the Date of Termination the
          Company shall pay  to  the Employee in a lump sum an amount equal
          to the Employee's Base Salary  through  the  end  of the Modified
          Employment Term had such termination not occurred; and

                         (ii)  Employee  shall be entitled to the  benefits
          provided in Section 4.3(b) and the  amounts, if any, contemplated
          by Sections 4.6 and 4.7.

                    (b)  If, after a Change of Control and prior to the end
          of  the Modified Employment Term, the  Employee's  employment  is
          terminated  (i) for death, (ii) for Disability or (iii) for Cause
          (as defined in this Section 5), by the Employee for reasons other
          than Good Reason  (as defined in this Section 5) or at the end of
          the Modified Employment Term, then the Employee shall be entitled
          to the benefits described  in Section 4.1, Section 4.2 or Section
          4.4, as the case may be, and  shall  be  entitled to the benefits
          described  in  Sections  4.6  and  4.7.  If the  Company  or  the
          Employee gives notice of termination  of  the Modified Employment
          Term  as  provided for in Section 5.2, the Company  may,  at  its
          option, terminate Employee's status as an Employee, in which case
          such termination  shall be deemed a termination without Cause for
          purposes of all provisions of this Agreement.

                    (c)  The  rights  and  obligations  of  the Company and
          Employee  contained  in  Section 4.5 ("Resignation as  Director")
          shall continue to apply after a Change of Control.

               5.6  Certain Additional  Payments.   If  after  a  Change of
          Control Employee is subjected to an excise tax as a result of the
          "excess  parachute  payment"  provisions  of section 4999 of  the
          Internal Revenue Code of 1986, as amended,  whether  by virtue of
          the benefits of this Agreement or by virtue of any other benefits
          provided  to  Employee  in  connection  with  a Change of Control
          pursuant to Company plans, policies or agreements  (including the
          value of any options to acquire Common Stock of the  Company  the
          exercisability  of  which is accelerated pursuant to the terms of
          any  stock  option,  incentive  or  similar  plan  heretofore  or
          hereafter adopted by the  Company),  the  Company  shall  pay  to
          Employee  (whether  or  not  his  employment has terminated) such
          amounts as are necessary to place Employee  in  the same position
          after payment of federal income and excise taxes  and  state  and
          local  income  taxes as he would have been if such provisions had
          not been applicable to him.

          Section 6.Miscellaneous

               6.1  Binding Effect.

                    (a)  This  Agreement shall be binding upon and inure to
          the benefit of the Company and any of its successors or assigns.

                    (b)  This Agreement  is  personal  to  the Employee and
          shall  not be assignable by the Employee without the  consent  of
          the Company  (there  being  no  obligation  to give such consent)
          other than such rights or benefits as are transferred  by will or
          the laws of descent and distribution.

                    (c)  The  Company  shall  require  any successor to  or
          assignee  of  (whether  direct or indirect, by purchase,  merger,
          consolidation or otherwise)  all  or  substantially  all  of  the
          assets or businesses of the Company (i) to assume unconditionally
          and  expressly this Agreement and (ii) to agree to perform all of
          the obligations  under  this  Agreement in the same manner and to
          the same extent as would have been required of the Company had no
          assignment or succession occurred,  such  assumption  to  be  set
          forth  in  a writing reasonably satisfactory to the Employee.  In
          the  event  of  any  such  assignment  or  succession,  the  term
          "Company" as  used  in  this  Agreement  shall refer also to such
          successor or assign.

                    (d)  The  Company  shall  require  all   entities  that
          control,  or  that  after  the  Change  of  Control will control,
          directly or indirectly, any such successor or  assignee  to agree
          to  cause  to  be  performed  all  of  the obligations under this
          Agreement in the same manner and to the same extent as would have
          been  required  of  the Company had no assignment  or  succession
          occurred, such agreement  to  be  set forth in writing reasonably
          satisfactory to the Employee.

               6.2  Notices.  All notices hereunder  must be in writing and
          shall be deemed to have given upon receipt of  delivery  by:  (a)
          personal  delivery to the designated individual, (b) certified or
          registered mail, postage prepaid, return receipt requested, (c) a
          nationally   recognized  overnight  courier  service  (against  a
          receipt therefor) or (d) facsimile transmission with confirmation
          of receipt.  All  such  notices  must  be addressed as follows or
          such other address as to which any party hereto may have notified
          the other in writing:

               If to the Company, to:

               Akorn, Inc.
               100 Akorn Drive
               Abita Springs, Louisiana  70420
               Attn:  President
               Facsimile:  (504) 893-1257

               If to the Employee, to:

               Harold O. Koch
               106 Riverdale
               Covington, Louisiana  70433
               Facsimile:  (504) __________

               6.3  Governing Law.  This Agreement  shall  be construed and
          enforced in accordance with and governed by the internal  laws of
          the State of Louisiana.

               6.4  Withholding.  The Employee agrees that the Company  has
          the  right to withhold, from the amounts payable pursuant to this
          Agreement,  all  amounts required to be withheld under applicable
          income and/or employment  tax  laws,  or  as  otherwise stated in
          documents granting rights that are affected by this Agreement.

               6.5  Severability.  If any term or provision  of this Agree-
          ment  or  the  application thereof to any person or circumstance,
          shall at any time  or  to  any  extent  be  invalid,  illegal  or
          unenforceable in any respect as written, Employee and the Company
          intend for any court construing this Agreement to modify or limit
          such provision temporally, spatially or otherwise so as to render
          it  valid  and  enforceable to the fullest extent allowed by law.
          Any such provision  that  is  not susceptible of such reformation
          shall be ignored so as to not affect  any other term or provision
          hereof, and the remainder of this Agreement,  or  the application
          of such term or provision to persons or circumstances  other than
          those  as  to which it is held invalid, illegal or unenforceable,
          shall not be affected thereby and each term and provision of this
          Agreement shall  be  valid  and  enforced  to  the fullest extent
          permitted by law.

               6.6  Waiver  of  Breach.  The waiver by either  party  of  a
          breach of any provision of this Agreement shall not operate or be
          construed as a waiver of any subsequent breach thereof.

               6.7  Remedies Not  Exclusive.   No  remedy  specified herein
          shall  be  deemed  to  be  such  party's  exclusive  remedy,  and
          accordingly,  in  addition  to  all  of  the  rights and remedies
          provided for in this Agreement, the parties shall  have all other
          rights and remedies provided to them by applicable law,  rule  or
          regulation.

               6.8  Company's Reservation of Rights.  Employee acknowledges
          and  understands  that the Employee serves at the pleasure of the
          Board and that the Company has the right at any time to terminate
          Employee's status as  an employee of the Company, or to change or
          diminish his status during  the  Employment  Term, subject to the
          rights  of the Employee to claim the benefits conferred  by  this
          Agreement.

               6.9  Survival.   Following  the  Date  of  Termination, each
          party shall have the right to enforce all rights,  and  shall  be
          bound  by  all  obligations,  of  such  party that are continuing
          rights and obligations under this Agreement.

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

               IN WITNESS WHEREOF, the Company and the Employee have caused
          this Agreement to be executed as of the Agreement Date.

                                        AKORN, INC.



                                        By:  ____________________________
                                                 George S. Ellis, M.D.
                                           Compensation Committee Chairman

                                        EMPLOYEE:


                                               ____________________________

                                                     Harold O. Koch





                                     EXHIBIT 10.4

                          EMPLOYMENT AGREEMENT--TIM J. TONEY

               This   Employment   Agreement  ("Agreement")  between  Akorn
          Manufacturing, Inc., an Illinois corporation (the "Company"), and
          Tim J. Toney (the "Employee") is dated as of January 1, 1996 (the
          "Agreement Date").

               WHEREAS, Employee currently is employed by the Company;

               WHEREAS, the Company  desires  to  retain  the  services  of
          Employee  pursuant  to  the  terms of this Agreement and Employee
          desires to continue in the service of the Company on such terms;

               NOW, THEREFORE, for and in  consideration  of  the continued
          employment of Employee by the Company and the payment  of  wages,
          salary  and  other  compensation  to Employee by the Company, the
          parties hereto agree as follows:


          Section 1.Employment Capacity and Term

               1.1  Capacity  and  Duties  of Employee.   The  Employee  is
          employed  by the Company to render  services  on  behalf  of  the
          Company as  Vice  President  Manufacturing  Operations.   In that
          capacity  the  Employee shall perform such duties as are assigned
          to the individual  holding any such title by the Company's Bylaws
          and such other duties,  consistent with the Employee's job title,
          as may be prescribed from  time to time by the Board of Directors
          of the Company (the "Board").

               1.2  Employment Term.   The  term  of  this  Agreement
  (the
          "Employment Term") shall commence on the Agreement Date and shall
          continue until and terminate one year after either the Company or
          the  Employee  has  notified the other of such termination of the
          Employment Term; and  provided, further, that the Employment Term
          is subject to extension as provided in Section 5.2 and Employee's
          status as an employee is  subject  to  earlier termination to the
          extent provided in this Agreement.

               1.3  Devotion to Responsibilities.   During  the  Employment
          Term, the Employee shall devote all of his business time  to  the
          business  of  the  Company  and  its  subsidiaries and affiliated
          companies,  shall  use  his reasonable best  efforts  to  perform
          faithfully and efficiently  his  duties under this Agreement, and
          shall  not  engage  in  or be employed  by  any  other  business;
          provided, however, that nothing  contained  herein shall prohibit
          the  Employee  from  (a) serving  as  a member of  the  board  of
          directors, board of trustees or the like  of  any  for-profit  or
          non-profit  entity  that  does  not  compete with the Company, or
          performing  services  of  any  type for any  civic  or  community
          entity,  whether  or  not  the  Employee   receives  compensation
          therefor,  (b) investing  his assets in such form  or  manner  as
          shall require no more than  nominal  services  on the part of the
          Employee in the operation of the business of or property in which
          such  investment  is  made, or (c) serving in various  capacities
          with, and attending meetings  of,  industry  or  trade groups and
          associations,   as  long  as  the  Employee's  engaging  in   any
          activities permitted  by virtue of clauses (a), (b) and (c) above
          does not materially interfere with the ability of the Employee to
          perform the services and  discharge the responsibilities required
          of him under this Agreement.   Notwithstanding  clause (b) above,
          during  the Employment Term, the Employee shall not  perform  any
          services  for  and shall not beneficially own more than 2% of the
          equity interests  of  a  business organization that competes with
          the Company or its affiliates.   For  purposes of this paragraph,
          "beneficially own" shall have the meaning  given  to that term in
          Rule  13d-3  under  the  Securities  Exchange  Act  of 1934  (the
          "Exchange Act").

          Section 2. Compensation and Benefits

               During  the  Employment Term, the Company shall provide  the
          Employee with the compensation and benefits described below:

               2.1  Salary.   A  salary  ("Base  Salary")  at  the  rate of
          $120,000 per year; provided, however, that Employee's Base Salary
          shall increase as of each anniversary of the Agreement Date  by a
          factor  equal  to  the  increase  in  the  Consumer  Price  Index
          maintained  by the United States Department of Labor.  Employee's
          Base Salary shall be payable to the Employee at such intervals as
          the salaries of other salaried employees of the Company are paid.
          Any increase  in Employee's Base Salary shall take effect for the
          payroll period  next following the date on which the condition to
          such increase is met.

               2.2  Bonus.  Employee  shall  be  eligible  to  receive such
          bonuses   and   supplementary   compensation  as  the  Board  may
          determine.

               2.3  Benefits.  The Company  shall provide the Employee and,
          if applicable, his family members,  with  all such (i) incentive,
          savings and retirement plans, practices, policies  and  programs,
          (ii)  welfare  benefit  plans,  practices,  policies and programs
          (including,  without  limitation, medical, prescription,  dental,
          disability, employee life, group life, accident health and travel
          accident insurance plans  and  programs)  and (iii) paid vacation
          and  other  fringe  benefits,  plans,  practices,   policies  and
          programs  as are applicable generally to other peer employees  of
          the Company.

               2.4  Office  and  Support Staff.  Employee shall be entitled
          to an office or offices  of  the  size  and  with furnishings and
          other  appointments,  and  to  personal  secretarial   and  other
          assistance,  at least equal to the those provided to him  on  the
          Agreement Date.

               2.5  Expenses.    The   Employee  shall  be  reimbursed  for
          reasonable out-of-pocket expenses  incurred  from time to time on
          behalf of the Company or any affiliate in the  performance of his
          duties  under  this  Agreement,  upon  the presentation  of  such
          supporting  invoices,  documents  and  forms   as   the   Company
          reasonably requests.

          Section 3. Termination of Employment

               3.1  Death.   The  Employee's  status  as  an employee shall
          terminate immediately and automatically upon the Employee's death
          during the Employment Term.

               3.2  Disability.  The Employee's status as an  employee  may
          be terminated for "Disability" as follows:

                    (a)  The   Employee's   status  as  an  employee  shall
          terminate if the Employee has a disability that would entitle him
          to  receive  benefits  under the Company's  long-term  disability
          insurance policy in effect  at  the  time  either  because  he is
          Totally Disabled or Partially Disabled, as such terms are defined
          in the Company's policy in effect as of the Agreement Date or  as
          similar  terms  are  defined  in  any successor policy.  Any such
          termination shall become effective  on the first day on which the
          Employee is eligible to receive payments under such policy (or on
          the first day that he would be so eligible,  if  he  had  applied
          timely for such payments).

                    (b)  If the Company has no long-term disability plan in
          effect,  the Employee's status as an employee shall terminate  if
          (i) the Employee  is  rendered  incapable  because of physical or
          mental  illness  of  satisfactorily discharging  his  duties  and
          responsibilities  under   this  Agreement  for  a  period  of  90
          consecutive days and (ii) a  duly  qualified  physician chosen by
          the  Company  and  acceptable  to  the  Employee  or  his   legal
          representative so certifies in writing, the Board shall have  the
          power to determine that the Employee has become disabled.  If the
          Board  makes  such  a  determination,  the Company shall have the
          continuing  right  and  option,  during  the   period  that  such
          disability continues, and by notice given in the  manner provided
          in  this  Agreement,  to terminate the status of Employee  as  an
          employee.  Any such termination  shall  become  effective 30 days
          after such notice of termination is given, unless within such 30-
          day period, the Employee becomes capable of rendering services of
          the character contemplated hereby (and a physician  chosen by the
          Company   and   acceptable   to   the   Employee   or  his  legal
          representative so certifies in writing) and the Employee  in fact
          resumes such services.

                    (c)  The  "Disability  Effective  Date"  shall mean the
          date on which termination of employment becomes effective  due to
          Disability.

               3.3  Cause.  The Company may terminate the Employee's status
          as  an  employee  for  Cause.  As used herein, termination by the
          Company of the Employee's status as an employee for "Cause" shall
          mean termination as a result of (a) the Employee's breach of this
          Agreement, or (b) the willful  engaging  by the Employee in gross
          misconduct injurious to the Company, which  in either case is not
          remedied within 10 days after the Company provides written notice
          to the Employee of such breach or willful misconduct.

               3.4  Good Reason.  The Employee may terminate  his status as
          an  employee  for  Good  Reason.  As used herein, the term  "Good
          Reason" shall mean:

                    (a)  The occurrence of any  of the following during the
          Employment Term:

                         (i)  the  assignment  by  the   Board  or  by  any
          authorized   person   to   the   Employee   of   any  duties   or
          responsibilities   that  are  inconsistent  with  the  Employee's
          status,  title  and  position  as  Vice  President  Manufacturing
          Operations;

                         (ii) any  removal  of  the  Employee  from, or any
          failure to reappoint or reelect the Employee to, the position  of
          Vice President Manufacturing Operations of the Company, except in
          connection with a termination of Employee's status as an employee
          as permitted by this Agreement;

                         (iii)   the Company's requiring the Employee to be
          based anywhere other than  at or within 50 miles of the Company's
          principal offices in Decatur, Illinois except for required travel
          in the ordinary course of the Company's business;

                    (b)  any breach of  this  Agreement by the Company that
          continues for a period of 10 days after written notice thereof is
          given by the Employee to the Company;

                    (c)  the  failure  by  the  Company   to   obtain   the
          assumption  of  its  obligations  under  this  Agreement  by  any
          successor or assignee as contemplated by Section 6.1(c); or

                    (d)  any  purported  termination  by the Company of the
          Employee's status as an employee for Cause that  is  not effected
          pursuant  to  a Notice of Termination satisfying the requirements
          of this Agreement.

               3.5  Voluntary  Termination  by the Company.  Subject to the
          terms and conditions provided herein,  the  Company may terminate
          the Employee's status as an employee during the  Employment  Term
          for reasons other than death, Disability or Cause.

               3.6  Voluntary  Termination by the Employee.  Subject to the
          terms and conditions provided  herein, the Employee may terminate
          the Employee's status as an employee  during  the Employment Term
          for reasons other than Good Reason.

               3.7  Notice of Termination.  Any termination  by the Company
          for  Disability  or  Cause,  or by the Employee for Good  Reason,
          shall be communicated by Notice of Termination to the other party
          hereto given in accordance with  Section  6.2.   For  purposes of
          this Agreement, a "Notice of Termination" means a written  notice
          that  (a)  indicates  the  specific termination provision in this
          Agreement relied upon, (b) to  the  extent applicable, sets forth
          in  reasonable  detail  the  facts and circumstances  claimed  to
          provide  a basis for termination  of  the  Employee's  employment
          under the  provisions  so  indicated  and  (c)  if  the  Date  of
          Termination  (as defined below) is other than the date of receipt
          of such notice,  specifies the termination date (which date shall
          be not more than 30  days  after the giving of such notice).  The
          failure by the Employee or the Company to set forth in the Notice
          of Termination any fact or circumstance  that  contributes  to  a
          showing  of Good Reason, Disability or Cause shall not negate the
          effect of  the  notice nor waive any right of the Employee or the
          Company, respectively,  hereunder or preclude the Employee or the
          Company, respectively, from  asserting  such fact or circumstance
          in enforcing the Employee's or the Company's rights hereunder.


               3.8  Date of Termination.  "Date of  Termination"  means (a)
          if Employee's employment is terminated by reason of his death  or
          Disability, the Date of Termination shall be the date of death of
          Employee  or  the  Disability Effective Date, as the case may be,
          (b) if Employee's employment  is  terminated  by  the Company for
          Cause,  or by Employee for Good Reason, the date of  delivery  of
          the Notice  of  Termination  or any later date specified therein,
          (which date shall not be more  than  30  days after the giving of
          such notice) as the case may be, (c) if the Employee's employment
          is terminated by the Company prior to the  end  of the Employment
          Term for reasons other than death, Disability or  Cause, the Date
          of  Termination  shall be the date on which the Company  notifies
          the  Employee  of  such   termination,   (d) if   the  Employee's
          employment is terminated by the Employee prior to the  end of the
          Employment Term for reasons other than Good Reason, the  Date  of
          Termination  shall be the date on which the Employee notifies the
          Company of such  termination,  and  (e)  if  the  Employment Term
          terminates upon notice by the Company or the Employee as provided
          for in Section 1.2 or Section 5.2, the Date of Termination  shall
          be the date on which the Employment Term ends.

          Section 4. Obligations Upon Termination

               4.1  Death.    If   Employee's  status  as  an  employee  is
          terminated by reason of Employee's  death,  this  Agreement shall
          terminate   without  further  obligations  to  Employee's   legal
          representatives  under  this Agreement, other than the obligation
          to  make any payments due  pursuant  to  employee  benefit  plans
          maintained by the Company or its affiliates.

               4.2  Disability.   If  Employee's  status  as an employee is
          terminated  by  reason  of Employee's Disability, this  Agreement
          shall terminate without further  obligation  to  Employee,  other
          than the obligation to make any payments due pursuant to employee
          benefit plans maintained by the Company or its affiliates.

               4.3  Termination  by  Company  for Reasons other than Death,
          Disability or Cause; Termination by Employee for Good Reason.  If
          the Company terminates the Employee's status as an employee prior
          to the end of the Employment Term for  reasons  other than death,
          Disability  or  Cause, or the Employee terminates his  employment
          prior to the end of the Employment Term for Good Reason, then

                    (a)  within  30  days  of  the  Date of Termination the
          Company shall pay to the Employee in a lump  sum  an amount equal
          to  the Employee's Base Salary through the end of the  Employment
          Term  had the notice contemplated by Section 1.2 been given as of
          the Date of Termination; and

                    (b)  the  amount  of  any  performance-based  bonus  or
          options  granted to the Employee shall be deemed to be the amount
          to which the  Employee  would  have been entitled if the budgeted
          goals or other performance goals  applicable thereto had been met
          but not exceeded and, whether or not  the  performance goals have
          been  met  as  of the Date of Termination, such  bonus  shall  be
          payable within 30  days  of  the  Date  of  Termination  and such
          options (if not already exercisable) shall become exercisable  as
          of  the  Date  of  Termination  and  shall  expire on the date of
          expiration  of the options as provided in the  applicable  option
          agreement.

               4.4  Termination for Cause, Without Good Reason or at End of
          Employment Term.   This Agreement shall terminate without further
          obligation to the Employee  other than obligations imposed by law
          and obligations imposed pursuant  to  any  employee  benefit plan
          maintained by the Company or its affiliates (a) if the Employee's
          status as an Employee is terminated by the Company for  Cause  or
          by the Employee for reasons other than Good Reason or (b), except
          as  otherwise  provided  in  Section  5.2,  at  the  end  of  the
          Employment  Term.  If the Company or the Employee gives notice of
          termination of  the  Employment  Term  as provided for in Section
          1.2, the Company may, at its option, terminate  Employee's status
          as an employee, in which case such termination shall  be deemed a
          termination  by  the  Company  without Cause for purposes of  all
          provisions of this Agreement.

               4.5  Resignation as Director.   If Employee is a director of
          the Company and his employment is terminated for any reason other
          than  death,  the Employee shall, if requested  by  the  Company,
          immediately resign  as  a  director  of  the  Company.   If  such
          resignation is not received when so requested, the Employee shall
          forfeit  any  right  to  receive  any  payments  pursuant to this
          Agreement.

               4.6  Accrued   Obligations   and   Other   Benefits.    Upon
          termination  of employment for any reason the Employee  shall  be
          entitled to receive  promptly,  and  in  addition  to  any  other
          benefits  specifically  provided,  (a) the Employee's Base Salary
          through  the Date of Termination to the  extent  not  theretofore
          paid, (b) any accrued vacation pay, to the extent not theretofore
          paid, and  (c)  any other amounts or benefits required to be paid
          or provided or which  the  Employee  is entitled to receive under
          any plan, program, policy practice or agreement of the Company.

               4.7  Stock Options.  The foregoing  benefits are intended to
          be  in  addition to the value of any options  to  acquire  common
          stock of  Akorn  the  exercisability  of which may be accelerated
          pursuant  to the terms of any stock option,  incentive  or  other
          similar plan heretofore or hereafter adopted by Akorn.

          Section 5. Change of Control

               5.1  Definitions.   For  purposes  of  this  Section  5, the
          following terms shall have the meanings indicated below.

                    (a)  Company.   In  the  event  of  any  assignment  or
          succession  as described in Section 6.1(c), the term "Company" as
          used in this  Agreement  shall  refer  also  to such successor or
          assignee.   As  used in Section 5.1(b) the term  "Company"  shall
          refer to Akorn and  shall not refer to Akorn Manufacturing, Inc.,
          except as otherwise indicated.
                    
                    (b)  Change  of  Control.   A "Change of Control" shall
          mean the occurrence of any of the following events:

                         (i)  the acquisition by  any individual, entity or
          "person" (within the meaning of Section 13(d)(3)  or  14(d)(2) of
          the Exchange Act) of beneficial ownership of more than 30% of the
          outstanding  shares  of the Company's common stock, no par  value
          per  share (the "Common  Stock");  provided,  however,  that  for
          purposes of this subsection (i), the following acquisitions shall
          not constitute a Change of Control:

                              (A)  any acquisition of Common Stock directly
          from the Company,

                              (B)  any  acquisition  of Common Stock by the
          Company,

                              (C)  any acquisition of  Common  Stock by any
          employee benefit plan (or related trust) sponsored or  maintained
          by the Company or any corporation controlled by the Company, or

                              (D)  any acquisition of Common Stock  by  any
          corporation  pursuant to a transaction that complies with clauses
          (A), (B) and (C) of subsection (b)(iii) of this Section 5.1; or

                         (ii) individuals  who,  as  of the Agreement Date,
          constitute the Board (the "Incumbent Board") cease for any reason
          to  constitute  at  least  a  majority  of  the Board;  provided,
          however,  that any individual becoming a director  subsequent  to
          the Agreement  Date whose election, or nomination for election by
          the Company's shareholders,  was approved by a vote of at least a
          majority of the directors then  comprising  the  Incumbent  Board
          shall  be considered a member of the Incumbent Board, unless such
          individual's  initial  assumption of office occurs as a result of
          an actual or threatened  election  contest  with  respect  to the
          election  or  removal  of directors or other actual or threatened
          solicitation of proxies  or  consents by or on behalf of a person
          other than the Incumbent Board; or

                         (iii)    the  consummation  of  a  reorganization,
          merger or consolidation, or sale  or  other disposition of all or
          substantially  all  of  the assets of the  Company  (a  "Business
          Combination"), in any such  case, unless, following such Business
          Combination,

                              (A)  all   or   substantially   all   of  the
          individuals   and  entities  who  were  the  direct  or  indirect
          beneficial owners  of  the Company's outstanding common stock and
          voting securities entitled  to  vote generally in the election of
          directors  immediately prior to such  Business  Combination  have
          direct or indirect  beneficial  ownership,  respectively, of more
          than 50% of the then outstanding shares of common stock, and more
          than  50%  of the combined voting power of the  then  outstanding
          voting securities  entitled  to vote generally in the election of
          directors,  of  the  corporation  resulting  from  such  Business
          Combination  (which, for  purposes  of  this  paragraph  (A)  and
          paragraphs (B)  and  (C),  shall include a corporation which as a
          result  of  such  transaction controls  the  Company  or  all  or
          substantially all of  the  Company's  assets  either  directly or
          through one or more subsidiaries), and

                              (B)  except to the extent that such ownership
          existed  prior  to the Business Combination, no person (excluding
          any corporation resulting  from  such Business Combination or any
          employee benefit plan or related trust  of  the  Company  or such
          corporation    resulting    from   such   Business   Combination)
          beneficially owns, directly or  indirectly,  20%  or  more of the
          then  outstanding  shares  of  common  stock  of  the corporation
          resulting from such Business Combination or 20% or  more  of  the
          combined  voting  power of the then outstanding voting securities
          of such corporation, and

                              (C)  at  least  a  majority of the members of
          the  board of directors of the corporation  resulting  from  such
          Business  Combination  were  members of the board of directors of
          the  Company  at the time of the  initial  action  of  the  Board
          providing for such Business Combination;

                         (iv)   approval by the shareholders of the Company
          of a complete liquidation or dissolution of the Company or;

                         (v)  the  consummation of a reorganization, merger
          or  consolidation,  sale  or   other   disposition   of   all  or
          substantially  all  of  the  assets,  or  sale, transfer or other
          distribution of more than 50% of the shares  of  common  stock of
          Akorn Manufacturing, Inc. or of the voting securities entitled to
          vote  in  the  election  of  directors thereof, in any such case,
          unless, following such transaction,  at  least  a majority of the
          members of the Board of Directors of Akorn Manufacturing, Inc. or
          other corporation resulting from such transaction were members of
          the  Board of Directors of Akorn Manufacturing, Inc.  or  of  the
          Company  at  the  time  of  the  initial  action  of the Board of
          Directors   of  Akorn  Manufacturing,  Inc.  or  of  the  Company
          providing for such transaction.

                    (c)  Affiliate.   The  term  "affiliate" or "affiliated
          companies" shall mean any company or other  entity controlled by,
          controlling, or under common control with, the Company.

                    (d)  Cause.   After  a Change of Control,  "Cause,"  as
          used in this Agreement, shall have  the following meaning and not
          the meaning given in Section 3.3:

                         (i)  the  willful  and continued  failure  of  the
          Employee to perform substantially the Employee's duties hereunder
          (other than any such failure resulting  from  incapacity  due  to
          physical   or   mental  illness),  after  a  written  demand  for
          substantial performance is delivered to the Employee by the Board
          of the Company which  specifically identifies the manner in which
          the  Board  believes that  the  Employee  has  not  substantially
          performed the Employee's duties, or

                         (ii) the  willful  engaging  by  the  Employee  in
          illegal  conduct  or  gross  misconduct  which  is materially and
          demonstrably injurious to the Company or its affiliates.

          For purposes of this provision, no act or failure  to act, on the
          part of the Employee, shall be considered "willful"  unless it is
          done,  or  omitted  to  be done, by the Employee in bad faith  or
          without reasonable belief  that the Employee's action or omission
          was in the best interests of  the Company or its affiliates.  Any
          act, or failure to act, based upon  authority given pursuant to a
          resolution duly adopted by the Board  or upon the instructions of
          a  senior  officer of the Company or based  upon  the  advice  of
          counsel for  the  Company or its affiliates shall be conclusively
          presumed to be done,  or  omitted  to be done, by the Employee in
          good  faith  and in the best interests  of  the  Company  or  its
          affiliates.  The  cessation  of  employment of the Employee shall
          not be deemed to be for Cause unless  and  until there shall have
          been  delivered  to  the  Employee  a  copy of a resolution  duly
          adopted by the affirmative vote of not less  than  three-quarters
          of the entire membership of the Board at a meeting of  the  Board
          called  and  held  for  such  purpose (after reasonable notice is
          provided  to  the  Employee  and  the   Employee   is   given  an
          opportunity,  together  with  counsel,  to  be  heard  before the
          Board), finding that, in the good faith opinion of the Board, the
          Employee has engaged in the conduct described in subparagraph (i)
          or (ii) above, and specifying the particulars thereof in detail.

                    (e)  Good  Reason.   After  a Change of Control,  "Good
          Reason,"  as  used in this Agreement, shall  have  the  following
          meaning and not the meaning given in Section 3.4:

                         (i)  Any  failure of the Company or its affiliates
          to provide the Employee with  the position, authority, duties and
          responsibilities at least equivalent  in  all  material  respects
          with  the  most significant of those held, exercised and assigned
          at any time  during  the 120-day period immediately preceding the
          Change of Control;

                         (ii) The  assignment to the Employee of any duties
          inconsistent in any respect  with  Employee's position (including
          status, offices, titles and reporting  requirements),  authority,
          duties or responsibilities as contemplated by Section 1.1, or any
          other  action  that  results  in  a  diminution in such position,
          authority, duties or responsibilities, excluding for this purpose
          an isolated, insubstantial and inadvertent  action  not  taken in
          bad  faith  that  is  remedied  within  10  days after receipt of
          written notice thereof from the Employee to the Company;

                         (iii)    Any  failure  by  the  Company   or   its
          affiliates  to  comply  with   any  of  the  provisions  of  this
          Agreement, other than an isolated,  insubstantial and inadvertent
          failure not occurring in bad faith that  is  remedied  within  10
          days after receipt of written notice thereof from the Employee to
          the Company;

                         (iv)   The Company or its affiliates requiring the
          Employee to be based at  any  office  or  location  other than as
          provided in Section 3.4(a)(iii) hereof or requiring the  Employee
          to  travel  on  business  to  a substantially greater extent than
          required immediately prior to the Change of Control;
                         (v)   Any purported  termination of the Employee's
          employment  otherwise  than  as  expressly   permitted   by  this
          Agreement; or

                         (vi) Any failure by the Company to comply with and
          satisfy Sections 6.1(c) and (d) of this Agreement.

          For  purposes of this Section 5, any good faith determination  of
          "Good Reason" made by the Employee shall be conclusive.  Anything
          in this  Agreement to the contrary notwithstanding, a termination
          by  the  Employee   for  any  reason  during  the  30-day  period
          immediately following  the  first  anniversary  of  the Change of
          Control shall be deemed to be a termination for Good Reason.

                    (f)    Beneficial  Ownership.   The  terms  "beneficial
          ownership," "beneficial  owner," "beneficially owns," and similar
          terms shall have the meanings  set  forth in Rule 13d-3 under the
          Exchange Act.

               5.2   Employment Capacity and Term  after Change of Control.
          (a) If a Change of Control occurs during the Employment Term, the
          Employee's Employment Term (the "Modified Employment Term") shall
          be extended until and terminate at the close  of  business on the
          later to occur of the second anniversary of the Change of Control
          or the date one year after the date on which either  the  Company
          or  the Employee has notified the other of such termination;  and
          provided,  further,  that  Employee's  status  as  an employee is
          subject  to  earlier termination to the extent provided  in  this
          Agreement.

                    (b)  After  a Change of Control and during the Modified
          Employment Term, (i) the  Employee's  position (including status,
          offices,  titles and reporting requirements),  authority,  duties
          and responsibilities  in and with respect to the Company shall be
          at  least  equivalent  in  all  material  respects  to  the  most
          significant of those held,  exercised  and  assigned  at any time
          during  the  120-day  period immediately preceding the Change  of
          Control and (ii) the Employee's service shall be performed at the
          location where the Employee  was  employed  immediately preceding
          the  Change  of Control or any office or location  less  than  50
          miles from such location.

               5.3  Compensation   and   Benefits.    During  the  Modified
          Employment  Term,  in addition to the compensation  and  benefits
          described in Section  2,  the  Employee  shall be entitled to the
          following compensation and benefits:

                    (a)  Salary.   During  the  Modified  Employment  Term,
          Employee's Base Salary shall be as provided for in Section 2.1.

                    (b)  Benefit  Plans.   During the  Modified  Employment
          Term, the Employee and his family,  if  any, shall be entitled to
          participate in and receive applicable benefits under all such (i)
          incentive, savings and retirement plans,  practices, policies and
          programs,  (ii)  welfare benefit plans, practices,  policies  and
          programs (including,  without  limitation, medical, prescription,
          dental, disability, employee life,  group life, accidental health
          and travel accident insurance plans and  programs) and (iii) paid
          vacation  and other fringe benefits, plans,  practices,  policies
          and programs  as are applicable generally to other peer employees
          of the Company  and  its affiliated companies in effect generally
          after  the  Change  of Control  or,  if  more  favorable  to  the
          Employee, as in effect  for  the  Employee at any time during the
          120-day period immediately preceding the Change of Control.

                    (c)  Expenses.  During the  Modified  Employment  Term,
          the  Employee  shall  be entitled to receive prompt reimbursement
          for  all  reasonable  expenses   incurred   by  the  Employee  in
          accordance  with  the  most  favorable  policies,  practices  and
          procedures of the Company and its affiliated  companies in effect
          generally after the Change of Control with respect  to other peer
          employees of the Company and its affiliated companies or, if more
          favorable to the Employee, as in effect for the Employee  at  any
          time  during  the 120-day period immediately preceding the Change
          of Control.

                    (d)  Office  and  Support  Staff.   During the Modified
          Employment Term, the Employee shall be entitled  to  an office or
          offices  of  a  size and with furnishings and other appointments,
          and to personal secretarial  and other assistance, at least equal
          to the most favorable of the foregoing  provided  generally after
          the Change of Control with respect to other peer employees of the
          Company and its affiliated companies or, if more favorable to the
          Employee,  as in effect for the Employee at any time  during  the
          120-day period immediately preceding the Change of Control.

               5.4  Termination  of  Employment  after a Change of Control.
          After  a  Change  of Control and during the  Modified  Employment
          Term, the Employee's status as an employee shall terminate or may
          be  terminated  as provided  in  Section  3  of  this  Agreement;
          provided, however,  that after a Change of Control and during the
          Modified Employment Term  the terms "Cause" and "Good Reason," as
          used in Section 3 and elsewhere in this Agreement, shall have the
          meanings given to them in this  Section  5  and  not the meanings
          given to them in Section 3.

               5.5  Obligations  of  the Company upon Termination  after  a
          Change of Control.  (a) If,  after  a Change of Control and prior
          to  the  end  of   the  Modified  Employment  Term,  the  Company
          terminates the Employee's employment  other than for Cause, death
          or  Disability, or the Employee terminates  employment  for  Good
          Reason, then

                          (i) within 30 days of the Date of Termination the
          Company  shall  pay to the Employee in a lump sum an amount equal
          to the Employee's  Base  Salary  through  the end of the Modified
          Employment Term had such termination not occurred; and

                         (ii) Employee shall be entitled  to  the  benefits
          provided  in Section 4.3(b) and the amounts, if any, contemplated
          by Sections 4.6 and 4.7.

                    (b)  If, after a Change of Control and prior to the end
          of the Modified  Employment  Term,  the  Employee's employment is
          terminated (i) for death, (ii) for Disability  or (iii) for Cause
          (as defined in this Section 5), by the Employee for reasons other
          than Good Reason (as defined in this Section 5)  or at the end of
          the Modified Employment Term, then the Employee shall be entitled
          to the benefits described in Section 4.1, Section  4.2 or Section
          4.4,  as  the case may be, and shall be entitled to the  benefits
          described in  Sections  4.6  and  4.7.   If  the  Company  or the
          Employee  gives  notice of termination of the Modified Employment
          Term as provided for  in  Section  5.2,  the  Company may, at its
          option, terminate Employee's status as an Employee, in which case
          such termination shall be deemed a termination  without Cause for
          purposes of all provisions of this Agreement.

                    (c)  The  rights  and  obligations of the  Company  and
          Employee  contained in Section 4.5  ("Resignation  as  Director")
          shall continue to apply after a Change of Control.

               5.6  Certain  Additional  Payments.   If  after  a Change of
          Control Employee is subjected to an excise tax as a result of the
          "excess  parachute  payment"  provisions  of section 4999 of  the
          Internal Revenue Code of 1986, as amended,  whether  by virtue of
          the benefits of this Agreement or by virtue of any other benefits
          provided  to  Employee  in  connection  with  a Change of Control
          pursuant to Company plans, policies or agreements  (including the
          value of any options to acquire Common Stock of the  Company  the
          exercisability  of  which is accelerated pursuant to the terms of
          any  stock  option,  incentive  or  similar  plan  heretofore  or
          hereafter adopted by the  Company),  the  Company  shall  pay  to
          Employee  (whether  or  not  his  employment has terminated) such
          amounts as are necessary to place Employee  in  the same position
          after payment of federal income and excise taxes  and  state  and
          local  income  taxes as he would have been if such provisions had
          not been applicable to him.

          Section 6. Miscellaneous

               6.1  Binding Effect.

                    (a)  This  Agreement shall be binding upon and inure to
          the benefit of the Company and any of its successors or assigns.

                    (b)  This Agreement  is  personal  to  the Employee and
          shall  not be assignable by the Employee without the  consent  of
          the Company  (there  being  no  obligation  to give such consent)
          other than such rights or benefits as are transferred  by will or
          the laws of descent and distribution.

                    (c)  The  Company  shall  require  any successor to  or
          assignee  of  (whether  direct or indirect, by purchase,  merger,
          consolidation or otherwise)  all  or  substantially  all  of  the
          assets or businesses of the Company (i) to assume unconditionally
          and  expressly this Agreement and (ii) to agree to perform all of
          the obligations  under  this  Agreement in the same manner and to
          the same extent as would have been required of the Company had no
          assignment or succession occurred,  such  assumption  to  be  set
          forth  in  a writing reasonably satisfactory to the Employee.  In
          the  event  of  any  such  assignment  or  succession,  the  term
          "Company" as  used  in  this  Agreement  shall refer also to such
          successor or assign.
                    
                    (d)  The  Company  shall  require  all   entities  that
          control,  or  that  after  the  Change  of  Control will control,
          directly or indirectly, any such successor or  assignee  to agree
          to  cause  to  be  performed  all  of  the obligations under this
          Agreement in the same manner and to the same extent as would have
          been  required  of  the Company had no assignment  or  succession
          occurred, such agreement  to  be  set forth in writing reasonably
          satisfactory to the Employee.

               6.2  Notices.  All notices hereunder  must be in writing and
          shall be deemed to have given upon receipt of  delivery  by:  (a)
          personal  delivery to the designated individual, (b) certified or
          registered mail, postage prepaid, return receipt requested, (c) a
          nationally   recognized  overnight  courier  service  (against  a
          receipt therefor) or (d) facsimile transmission with confirmation
          of receipt.  All  such  notices  must  be addressed as follows or
          such other address as to which any party hereto may have notified
          the other in writing:

               If to the Company, to:

               Akorn Manufacturing, Inc.
               100 Akorn Drive
               Abita Springs, Louisiana  70420
               Attn:  President
               Facsimile transmission No. (504) 893-1257

               If to the Employee, to:
               Tim J. Toney
               2850 Virt Road
               Decatur, Illinois  62521
               Facsimile transmission No. __________

               6.3  Governing Law.  This Agreement  shall  be construed and
          enforced in accordance with and governed by the internal  laws of
          the State of Louisiana.

               6.4  Withholding.  The Employee agrees that the Company  has
          the  right to withhold, from the amounts payable pursuant to this
          Agreement,  all  amounts required to be withheld under applicable
          income and/or employment  tax  laws,  or  as  otherwise stated in
          documents granting rights that are affected by this Agreement.

               6.5  Severability.  If any term or provision  of this Agree-
          ment  or  the  application thereof to any person or circumstance,
          shall at any time  or  to  any  extent  be  invalid,  illegal  or
          unenforceable in any respect as written, Employee and the Company
          intend for any court construing this Agreement to modify or limit
          such provision temporally, spatially or otherwise so as to render
          it  valid  and  enforceable to the fullest extent allowed by law.
          Any such provision  that  is  not susceptible of such reformation
          shall be ignored so as to not affect  any other term or provision
          hereof, and the remainder of this Agreement,  or  the application
          of such term or provision to persons or circumstances  other than
          those  as  to which it is held invalid, illegal or unenforceable,
          shall not be affected thereby and each term and provision of this
          Agreement shall  be  valid  and  enforced  to  the fullest extent
          permitted by law.

               6.6  Waiver  of  Breach.  The waiver by either  party  of  a
          breach of any provision of this Agreement shall not operate or be
          construed as a waiver of any subsequent breach thereof.

               6.7  Remedies Not  Exclusive.   No  remedy  specified herein
          shall  be  deemed  to  be  such  party's  exclusive  remedy,  and
          accordingly,  in  addition  to  all  of  the  rights and remedies
          provided for in this Agreement, the parties shall  have all other
          rights and remedies provided to them by applicable law,  rule  or
          regulation.

               6.8  Company's Reservation of Rights.  Employee acknowledges
          and  understands  that the Employee serves at the pleasure of the
          Board and that the Company has the right at any time to terminate
          Employee's status as  an employee of the Company, or to change or
          diminish his status during  the  Employment  Term, subject to the
          rights  of the Employee to claim the benefits conferred  by  this
          Agreement.

               6.9  Survival.   Following  the  Date  of  Termination, each
          party shall have the right to enforce all rights,  and  shall  be
          bound  by  all  obligations,  of  such  party that are continuing
          rights and obligations under this Agreement.

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

               IN WITNESS WHEREOF, the Company and the Employee have caused
          this Agreement to be executed as of the Agreement Date.

                                        AKORN MANUFACTURING, INC.



                                        By:  ________________________
                                                   Eric M. Wingerter
                                                       Secretary

                                        EMPLOYEE:



                                               _______________________
                                                      Tim J. Toney


         




<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONSOLIDATED
FINANCIAL STATEMENTS FOR THE PERIOD ENDED DECEMBER 31, 1995 AND IS 
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
       
<S>                             <C>
<PERIOD-TYPE>                   6-MOS
<FISCAL-YEAR-END>                          AUG-30-1995
<PERIOD-END>                               DEC-31-1995
<CASH>                                         456,053
<SECURITIES>                                 1,495,971
<RECEIVABLES>                                4,732,725
<ALLOWANCES>                                 (269,811)
<INVENTORY>                                  6,921,028
<CURRENT-ASSETS>                            14,858,968
<PP&E>                                      18,270,588
<DEPRECIATION>                             (7,081,287)
<TOTAL-ASSETS>                              27,148,110
<CURRENT-LIABILITIES>                        6,824,297
<BONDS>                                      3,516,729
<COMMON>                                    13,701,845
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<OTHER-SE>                                   2,230,758
<TOTAL-LIABILITY-AND-EQUITY>                27,148,110
<SALES>                                     15,275,765
<TOTAL-REVENUES>                            15,275,765
<CGS>                                        9,577,838
<TOTAL-COSTS>                                9,577,838
<OTHER-EXPENSES>                             4,358,504
<LOSS-PROVISION>                                 6,000
<INTEREST-EXPENSE>                             184,664
<INCOME-PRETAX>                              1,430,558
<INCOME-TAX>                                   529,516
<INCOME-CONTINUING>                            901,042
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   901,042
<EPS-PRIMARY>                                      .06
<EPS-DILUTED>                                        0
        


</TABLE>





          AT AKORN                              :AT FRB:
          Barry LeBlanc               Jenifer Estabrook Kathy Brunson
          President & CEO           General Information Analyst Contact
          Eric Wingerter
          Vice President-Finance
          (504) 893-9300                (312) 640-6787 (312) 640-6696


          FOR IMMEDIATE RELEASE
          WEDNESDAY, FEBRUARY 7, 1996


                  AKORN'S 2ND-QTR RESULTS IN LINE WITH EXPECTATIONS;
                       POSITIVE OUTLOOK DUE TO RECENT APPROVALS

          ABITA SPRINGS, LA, February 7, 1996 - Akorn, Inc. (Nasdaq:  AKRN)
          today announced that net income for the second quarter of fiscal
          1996 was $440,000, or 3 cents per share, on sales of $7.4 million
          compared with net income of $605,000, or 4 cents per share, on
          sales of $8.4 million in the year-ago period.  Akorn recognized
          net income of $901,000, or 6 cents per share, on revenues of
          $15.3 million for the first six months of fiscal 1996.  In the
          comparable period for fiscal 1995, Akorn recognized net income of
          $1.4 million, or 9 cents per share, on revenues of $16.9 million.

          "These results were in line with our expectations," said Barry D.
          LeBlanc, president and chief executive officer.  "Although
          second-quarter comparisons continued to be affected by the
          temporary loss of our lead allergy product, AK-Con-A, we are
          happy to have recently received the regulatory approval necessary
          to have an over-the-counter (OTC) version of the
 product back on
          the market through a licensing agreement with Pfizer Inc.  We
          expect to begin recognizing royalties and manufacturing profits
          from this agreement starting in the fourth quarter of fiscal-year
          1996."

          The U.S. Food and Drug Administration (FDA) had switched AK-Con-A
          to OTC status in the second quarter of fiscal 1995.  In response,
          Akorn filed a New Drug Application (NDA) for an OTC version of
          the product, which the company licensed to Pfizer Inc in exchange
          for agreed upon royalties and manufacturing revenue.  As
          announced earlier this week, Akorn has successfully obtained the
          necessary NDA.

          REVIEW OF RESULTS

          Net sales for the quarter ended December 31, 1995, were $7.4
          million, down 12 percent from last year's $8.4 million.  In
          addition to the effects of temporarily losing AK-Con-A, a
          reduction in contract manufacturing revenues also contributed to
          the unfavorable comparisons.  Gross profit declined 22 percent
          from $3.6 million to $2.8 million.  Gross margins declined five
          basis points, primarily resulting from the temporary loss of AK-
          Con-A, Akorn's highest-margin product at nearly 75 percent, and
          the reduction in plant throughput associated with the decline in
          both contract business and production of AK-Con-A.

          Operating expenses declined 21 percent during the quarter, while
          research and development expenditures increased 26 percent,
          reflecting an accelerated program to obtain Abbreviated New Drug
          Applications (ANDAs) and a change in the mix of products in the
          R&D pipeline to a larger percentage of new products versus
          products for which expenses have been previously accrued.
          Operating expenses as a percentage of sales declined to 26.6
          percent for the quarter ended December 31, 1995, from 29.7
          percent for the prior-year period.  This reduction in operating
          expense is a result of certain cost reductions Akorn made in the
          third quarter of fiscal 1995.  The company's effective tax rate
          remained stable at 37 percent.

          Net sales for the six months ended December 31, 1995, were $15.3
          million, or 10 percent lower than the year-ago amount of $16.9
          million.  Gross profit declined 21 percent to $5.7 million from
          $7.2 million in the prior-year period.  Gross margins declined
          five basis points due to the factors previously noted.

          Operating expenses declined 17 percent during the six-month
          period ended December 31, 1995, as compared with the same period
          in the previous year, while research and development expenditures
          increased 33 percent.  Operating expenses as a percentage of
          sales declined to 25.5 percent for the six months ended December
          31, 1995, from 27.9 percent for the prior year.

          OUTLOOK

          Commenting on these results, LeBlanc said, "The absence of AK-
          Con-A continued to have a significant effect on comparative
          results; however, with the recent NDA approval, this effect
          should reverse by the end of the fiscal year."  The company
          expects incremental profits from manufacturing margins and
          royalties to approximate 1 to 2 cents per share per quarter.

          LeBlanc continued, "In addition, the recent approval of
          Tobramycin Ophthalmic Solution U.S.P. 0.3%, announced today,
          should add incremental revenues and profits to the company,
          commencing in the fourth fiscal quarter, when we plan to
          introduce a `commodity generic' label of this product.  This
          would add to Akorn's growing line of generic ophthalmic
          pharmaceuticals sold to generic source programs, formularies of
          national accounts, and managed-care providers."  The annual U.S.
          market for ophthalmic tobramycin is approximately $30 million,
          making it one of the larger ophthalmic pharmaceuticals.

          "The current weakness in the contract segment is due to a recent
          shift by several contract customers who, based on economic
          evaluation, have opted to transfer the manufacture of their
          injectable products in-house, or to discontinue the product line
          entirely," LeBlanc noted.  "While this shift has caused a
          temporary decline in contract revenue, it has created
          opportunities for Akorn as we seek to acquire injectable products
          and product lines for manufacture at our Decatur facility.
          Currently, we are in discussions with several customers to
          acquire such products to support our recent decision to enter the
          generic injectable business in the anesthesia/analgesia market.
          And, we have several ANDAs for injectable products in this market
          currently in process."


          Akorn offers a full line of contract services in the injectable
          area, including product development, stability testing, sterile
          manufacturing, and regulatory assistance.  Akorn's full-service
          capability is best evidenced by the previously announced
          agreement with Jordan Pharmaceuticals, Inc. to develop and
          manufacture three new generic injectable pharmaceutical products.
          In addition, the agreement secured the long-term manufacture of
          three other generic injectables historically produced by Akorn
          for Jordan.

          LeBlanc concluded, "All of these efforts should contribute to
          establishing a profitable injectable presence for Akorn's
          contract manufacturing business as well as for Akorn-owned
          products.  We expect that this injectable presence will better
          leverage Akorn's established positions in the development,
          manufacture, and distribution of sterile pharmaceuticals."

          Akorn, Inc. manufactures sterile ophthalmic and injectable
          pharmaceuticals, and markets and distributes an extensive line of
          ophthalmic products.

                             Financial Tables Follow...

           For additional information about Akorn, Inc. free of charge via
                                        fax,
                        dial 1-800-PRO-INFO and enter "AKRN."



                                                                    
CONSOLIDATED STATEMENT OF EARNINGS                                 
In thousands, except per share amounts                          

<TABLE>
<CAPTION>

                      Three months ended December 31  Six months ended December 31
                          1995      1994      %Chg        1995      1994      %Chg    
                       __________ ________ _________ __________ __________  ________
<S>                      <C>       <C>        <C>       <C>       <C>         <C>
Net sales                $7,387    $8,384     -11.9%    $15,276   $16,925     -9.7% 
Cost of sales             4,577     4,773      -4.1%      9,578     9,693     -1.2% 
                       __________ _________           _________   _________                                                      
Gross profit              2,810     3,611     -22.2%      5,698     7,232     -21.2%
                                                                             
Selling, general 
 and adminstrative        1,963     2,486     -21.0%      3,901     4,718     -17.3%
Research and development    228       181      26.0%        464       350      32.6%
                        __________ __________          __________  __________                                                     
Operating income            619       944     -34.4%      1,333     2,164     -38.4%
Interest & other income
  (expense), net             80        23     247.8%         97        51      90.2%
                        __________ __________         ___________ ___________ 
Pretax income               699       967     -27.7%      1,430     2,215     -35.4%
Income taxes                259       362     -28.5%        529       824     -35.8%
                        __________ __________         ___________ ___________                                              
Net income                 $440      $605     -27.3%       $901    $1,391     -35.2%
                        ========== ==========         =========== =========== 
Per share:                                                                          
  Net income              $0.03     $0.04     -25.0%      $0.06     $0.09     -33.3%
                        ========== ===========        =========== =========== 
Weighted average shares  15,302    15,543      -1.6%     15,281    15,410      -0.8%
                        ========== ===========        =========== =========== 
</TABLE>
                                                        


                                           CONSOLIDATED BALANCE SHEETS
                                             December 31,  June 30,

                                                1994         1995
                                           ____________ ____________
Cash and investments                           $1,952       $2,336
Accounts receivable, net                        4,463        4,919
  Other current assets                          8,444        7,048
                                           ____________ _____________ 
   Total current assets                        14,859       14,303
                                                                             
    Property, plant and equipment, net         11,189       10,996
 Other assets                                   1,100          957
                                           ____________ _____________  
  Total assets                                $27,148      $26,256
                                           ============ =============

Liabilities and shareholders' equity
     Short-term borrowings                    $   262    $      -   
  Current portion of long-term debt an            826          642
 Trade accounts payable                         1,497        1,719
Income taxes payable                            1,095          782
  Accrued reorganization costs                    655          727
  Other accrued expenses                        2,656        2,531
                                           ______________ _____________

  Total current liabilities                     6,991        6,401

Long-term debt and capital leases               3,517        3,900
Other long-term liabilities                       707          957

Shareholders' equity                           15,933       14,998
                                           ______________ ______________
Total liabilites and shareholers' equity     $ 27,148      $26,256
                                           ============== ==============