0000950142-08-000995.txt : 20080506 0000950142-08-000995.hdr.sgml : 20080506 20080506163530 ACCESSION NUMBER: 0000950142-08-000995 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20080506 DATE AS OF CHANGE: 20080506 GROUP MEMBERS: AISLING CAPITAL II, L.P. GROUP MEMBERS: AISLING CAPITAL PARTNERS LLC GROUP MEMBERS: AISLING CAPITAL PARTNERS, LP GROUP MEMBERS: ANDREW SCHIFF GROUP MEMBERS: DENNIS PURCELL GROUP MEMBERS: STEVE ELMS FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Aisling Capital II LP CENTRAL INDEX KEY: 0001350778 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 88 SEVENTH AVE 30TH FL CITY: NEW YORK STATE: NY ZIP: 10106 MAIL ADDRESS: STREET 1: 88 SEVENTH AVE 30TH FL CITY: NEW YORK STATE: NY ZIP: 10106 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERPHARM HOLDINGS INC CENTRAL INDEX KEY: 0000893970 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 133673965 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-59847 FILM NUMBER: 08806801 BUSINESS ADDRESS: STREET 1: 75 ADAMS AVENUE CITY: HAUPPAGUE STATE: NY ZIP: 11788 BUSINESS PHONE: 6319520214 FORMER COMPANY: FORMER CONFORMED NAME: ATEC GROUP INC DATE OF NAME CHANGE: 19951221 FORMER COMPANY: FORMER CONFORMED NAME: HILLSIDE BEDDING INC DATE OF NAME CHANGE: 19940719 FORMER COMPANY: FORMER CONFORMED NAME: NATIONAL HILLSIDE BEDDING CORP DATE OF NAME CHANGE: 19930115 SC 13D/A 1 sc13da3_interpharm.htm AMENDMENT NO. 3

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule (13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS

FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS

THERETO FILED PURSUANT TO RULE 13-d2(a)

(Amendment No. 3)*

Interpharm Holdings, Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

460588106

(CUSIP Number)

Andrew Nicholson
Aisling Capital
888 Seventh Avenue, 30^th Floor
New York, NY 10106
(212) 651-6380

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

May 1, 2008

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Aisling Capital II, LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER 14,978,763 ⁽¹⁾ SHARED VOTING POWER -0- SOLE DISPOSITIVE POWER 14,978,763 ⁽¹⁾ SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* PN

⁽¹⁾

Includes 548,315 shares of common stock, 2,281,914 shares of common stock issuable upon the exercise of the Warrant (as defined below), 10,960,000 shares of common stock issuable upon the initial conversion of 10,412 shares of Series D-1 Convertible Preferred Stock, 881,517 shares of common stock issuable upon the initial conversion of $861,826 in principal amount of Secured Convertible 12% Notes due 2009 and 307,017 shares of common stock issuable upon the exercise of the Note Warrant (as defined below).

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Aisling Capital Partners, LP
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER 14,978,763 ⁽¹⁾ SHARED VOTING POWER -0- SOLE DISPOSITIVE POWER 14,978,763 ⁽¹⁾ SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* PN

^⁽¹⁾

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Aisling Capital Partners LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER 14,978,763 ⁽¹⁾ SHARED VOTING POWER -0- SOLE DISPOSITIVE POWER 14,978,763 ⁽¹⁾ SHARED DISPOSITIVE POWER -0-
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* OO

^⁽¹⁾

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Steve Elms
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER -0- SHARED VOTING POWER 14,978,763 ⁽¹⁾ SOLE DISPOSITIVE POWER -0- SHARED DISPOSITIVE POWER 14,978,763 ⁽¹⁾
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* IN

^⁽¹⁾

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Dennis Purcell
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER -0- SHARED VOTING POWER 14,978,763 ⁽¹⁾ SOLE DISPOSITIVE POWER -0- SHARED DISPOSITIVE POWER 14,978,763 ⁽¹⁾
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* IN

^⁽¹⁾

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SCHEDULE 13D

1	NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: Andrew Schiff
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) o (b) x
3	SEC USE ONLY
4	SOURCE OF FUNDS (see instructions) OO
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)			o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7 8 9 10	SOLE VOTING POWER -0- SHARED VOTING POWER 14,978,763 ⁽¹⁾ SOLE DISPOSITIVE POWER -0- SHARED DISPOSITIVE POWER 14,978,763 ⁽¹⁾
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 14,978,763 ⁽¹⁾
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (see Instructions)			o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.5% ⁽¹⁾
14	TYPE OF REPORTING PERSON* IN

^⁽¹⁾

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SCHEDULE 13D

Item 1.

Security and Issuer.

This Amendment No. 3 to Schedule 13D relates to the common stock, par value $0.01 per share (the "Common Stock") of Interpharm Holdings, Inc. (the "Issuer"). This Amendment No. 3 (“Amendment No. 3”) supplementally amends the initial statement on Schedule 13D, filed by the Reporting Persons with the Securities and Exchange Commission (the “SEC”) on November 19, 2007, as amended by Amendment No. 1 to the Schedule 13D, filed by the Reporting Persons with the SEC on March 3, 2008, and Amendment No. 2 to the Schedule 13D, filed by the Reporting Persons with the SEC on April 29, 2008 (together, the "Initial Statement"), and is being filed pursuant to Rule 13d-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of the principal executive offices of the Company is 75 Adams Avenue, Hauppauge, New York 11788. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Initial Statement. The Initial Statement is supplementally amended as follows.

Item 2.	Identity and Background.
	(a)	No material change.
	(b)	No material change.
	(c)	No material change.
	(d)	No material change.
	(e)	No material change.
	(f)	No material change.
Item 3.	Source and Amount of Funds or Other Consideration.

No material change.

Item 4.	Purpose of Transaction.
	Item 4 is hereby amended by adding the following at the end thereof:

On May 2, 2008, the Issuer entered into Amendment No. 1 (the “Amendment”) to the Asset Purchase Agreement with Amneal Pharmaceuticals of New York, LLC (“Amneal”) and, with respect to certain provisions of the Amendment, certain shareholders of the Issuer, including, but not limited to, Aisling (the “Majority Shareholders”). Under the Amendment, the Issuer agreed to adjust the purchase price for the acquisition by Amneal of substantially all of the assets of the Issuer. In addition, the Issuer

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agreed to deliver a binding written consent signed by the holders of a majority of the outstanding shares of the Series A-1 Preferred Stock, all of the outstanding shares of the Series D-1 Preferred Stock and a majority of the outstanding shares of the Common Stock approving the Amendment, the Issuer’s execution and delivery of the Amendment and the Issuer’s consummation of each of the transactions contemplated by the Asset Purchase Agreement, as amended by the Amendment.

On May 1, 2008, the Series D-1 Holders, including Aisling, the Series A-1 Holders, Ravis Holdings, P&K Holdings, Raj Sutaria, Ravi Sutari and Bhupatalal K. Sutaria, entered into an Amended and Restated Proceeds Sharing Agreement (the "Amended and Restated Proceeds Sharing Agreement"). Under the Amended and Restated Proceeds Sharing Agreement, the parties agreed to, subject to certain exceptions, hold all shares of Common Stock and Preferred Stock currently held by them until the stockholder meeting held for the purposes of approving the Asset Purchase, refrain from exercising any dissenter rights or rights of appraisal under applicable law with respect to the Asset Purchase and vote in favor of the Asset Purchase at such meeting.

Under the Proceeds Sharing Agreement, each of the Series D-1 Holders agreed, severally and not jointly, that, if, as a result of the Asset Purchase (i) all holders of the Issuer’s Common Stock receive aggregate distributions with respect to the Common Stock of less than $3 million and (ii) such Series D-1 Holder receives distributions from the Issuer with respect to its holdings of the Series D-1 Preferred Stock in excess of $6,500,000 (the “Excess Amount”), it shall direct the Issuer to distribute or shall itself distribute, the Excess Amount to all holders of the Common Stock, on a pro rata basis, until the holders of Common Stock have received aggregate proceeds of $3,000,000 as a result of distributions made in connection with the Asset Purchase. In addition, pursuant to the Proceeds Sharing Agreement, subject to certain exceptions, the Preferred Holders agreed, severally and not jointly, that, if, as a result of the Asset Purchase, each of the Series D-1 Holders receives distributions from the Issuer with respect to its holdings of its Series D-1 Preferred Stock in excess of $2,000,000, each Preferred Holder will pay (i) Bhupatalal K. Sutaria its pro rata share of $850,000 (subject to reduction as set forth in the Amended and Restated Proceeds Standby Agreement) and (ii) Raj Sutaria its pro rata share of $350,000 (subject to reduction as set forth in the Amended and Restated Proceeds Standby Agreement). In the event that the Series D-1 Holders receive distributions as a result of the Asset Sale of less than $2,400,000, then the amount that the Preferred Holders would otherwise have to pay to Bhupatalal K. Sutaria and Raj Sutaria pursuant to the Amended and Restated Proceeds Sharing Agreement shall be reduced (ratably between Bhupatalal K. Sutaria and Raj Sutaria) so that each of the Series D-1 Holders will retain, after the payments to Bhupatalal K. Sutaria and Raj Sutaria, at least $2,000,000.

The summaries of each of the Amendment and the Amended and Restated Proceeds Sharing Agreement set forth above do not purport to be complete and are subject to, and are qualified in their entirety by reference to the Amendment and the Amended and Restated Proceeds Sharing Agreement which are filed as Exhibits 11 and 12 hereto, respectively, and incorporated herein by reference.

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As a result of the Amended and Restated Proceeds Sharing Agreement, the Reporting Persons may be deemed to be a member of a group, within the meaning of Rule 13d-5 of the Exchange Act, with the other parties to the Amended and Restated Proceeds Sharing Agreement. Each of the Reporting Persons disclaims membership in such a group, and this statement shall not be construed as an admission that any of the Reporting Persons is, for any or all purposes, a member of such a group.

In addition, as noted in the Initial Statement, as a result of the Proxy, the Reporting Persons may be deemed to be a member of a group, within the meaning of Rule 13d-5 of the Exchange Act, with the other parties to the Proxy. Each of the Reporting Persons disclaims membership in such a group, and this statement shall not be construed as an admission that any of the Reporting Persons is, for any or all purposes, a member of such a group.

Item 5.	Interest in Securities of the Issuer.
	Item 5 is hereby amended and restated in its entirety as follows:

(a) The aggregate percentage of shares of Common Stock reported as owned by each Reporting Person is based upon 66,738,422 shares of Common Stock outstanding as of February 11, 2008, which is the total number shares of Common Stock outstanding as of such date as reported by the Issuer in its Quarterly report on Form 10-Q filed with the SEC on February 15, 2008. Based on calculations made in accordance with Rule 13d-3(d), each Reporting Person may be deemed to beneficially own 14,978,763 shares of Common Stock (approximately 18.5% of the outstanding shares of Common Stock), consisting of (i) 548,315 shares of Common Stock, (ii) 2,281,914 shares of Common Stock issuable upon the exercise of the Warrant, (iii) 10,960,000 shares of Common Stock issuable upon the conversion of 10,412 shares of the Series D-1 Preferred Stock, (iv) 881,517 shares of Common Stock upon conversion of the 12% Convertible Note and (v) 307,017 shares of Common Stock upon exercise of the Note Warrant.

(b) (i) Each of Aisling, Aisling Partners and Aisling Partners GP may be deemed to have sole power to direct the voting and disposition of the 14,978,763 shares of Common Stock that may be deemed to be beneficially owned by the Reporting Persons.

(ii) By virtue of the relationships between and among the Reporting Persons described in Item 2 of this Schedule 13D, each of the Messrs. Elms, Purcell and Schiff may be deemed to share the

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power to direct the voting and disposition of the 14,978,763 shares of Common Stock beneficially owned by the Reporting Persons.

(c) No Reporting Person nor, to the best knowledge of each Reporting Person, any person identified in Item 2 of this Schedule 13D, has effected any transaction in shares of Common Stock during the preceding 60 days.

(d) The partners of Aisling have the right to participate in the receipt of dividends from, or proceeds from the sale of, the shares of Common Stock held for the account of Aisling in accordance with their ownership interests in Aisling, to the extent that Aisling Partners, the general partner of Aisling, elects to distribute such dividends or proceeds.

(e)

Not applicable.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The information in Item 4 is incorporated herein by reference; otherwise, the information set forth in Item 6 of the Initial Statement remains unchanged.

	Item 7.	Material to be Filed as Exhibits.
Exhibit 1:			Joint Filing Agreement dated as of November 16, 2007, as required by Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (previously filed).
Exhibit 2			Securities Purchase Agreement, dated May 15, 2006, by and among the Issuer and Aisling Capital II, LP (previously filed).
Exhibit 3			Form of Certificate of Designations, Preferences and Rights of Series C-1 Convertible Preferred Stock (previously filed).
Exhibit 4			Warrant to Purchase Common Stock (previously filed).
Exhibit 5			Registration Rights Agreement, dated May 15, 2006 by and among the Issuer, Tullis-Dickerson Capital Focus III and Aisling Capital II, LP, as amended (previously filed).
Exhibit 6			Consent and Waiver Agreement, dated November 8, 2007, by and among the Issuer, Tullis-Dickerson Capital Focus III and Aisling Capital II, LP. (previously filed).
Exhibit 7			Irrevocable Proxy, date November 8, 2007 (previously filed).
Exhibit 8			Securities Purchase Agreement, dated November 14, 2007, by and among the Issuer, Tullis-Dickerson Capital Focus III, Aisling Capital II, LP, Cameron Reid, P&K Holdings I, LLC, Rametra Holdings I, LLC, Rajs Holdings I, LLC, Perry Sutaria and Raj Sutaria (previously filed).

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Exhibit 9	Asset Purchase Agreement, dated April 24, 2008, by and among Interpharm Holdings, Inc., Amneal Pharmaceuticals of New York, LLC and certain shareholders of Interpharm Holdings, Inc. listed on the signature pages attached thereto (previously filed).
Exhibit 10	Proceeds Sharing Agreement, dated April 24, 2008, by and among Tullis-Dickerson Capital Focus III, L.P, Aisling Capital II, LP, Ravis Holdings I, LLC, P&K Holdings, LLC, Dr. Maganlal K. Sutaria, Perry Sutaria, Raj Holdings I, LLC, Raj Sutaria, Ravi Sutari and Bhupatalal K. Sutaria. (previously filed).
Exhibit 11	Amendment No. 1, dated April 30, 2008, to the Asset Purchase Agreement by and among Interpharm Holdings, Inc., Amneal Pharmaceuticals of New York, LLC and certain shareholders of Interpharm Holdings, Inc. listed on the signature pages attached thereto.
Exhibit 12	Amended and Restated Proceeds Sharing Agreement, dated April 30, 2008, by and among Tullis-Dickerson Capital Focus III, L.P, Aisling Capital II, LP, Ravis Holdings I, LLC, P&K Holdings, LLC, Dr. Maganlal K. Sutaria, Perry Sutaria, Raj Holdings I, LLC, Raj Sutaria, Ravi Sutari and Bhupatalal K. Sutaria.

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: May 6, 2008

AISLING CAPITAL II, LP
By:	Aisling Capital Partners, LP General Partner
By:	Aisling Capital Partners LLC Managing Member
	By:	/s/ Dennis Purcell
		Name: Dennis Purcell Title: Managing Member and Senior Managing Director

AISLING CAPITAL PARTNERS, LP
By:	Aisling Capital Partners LLC Managing Member
	By:	/s/ Dennis Purcell
		Name: Dennis Purcell Title: Managing Member and Senior Managing Director

AISLING CAPITAL PARTNERS LLC
	By:	/s/ Dennis Purcell
		Name: Dennis Purcell Title: Managing Member and Senior Managing Director
	By:	/s/ Steve Elms
		Name: Steve Elms
	By:	/s/ Andrew Schiff
		Name: Andrew Schiff

Attention. Intentional misstatements or omissions of fact constitute Federal criminal violations (see 18 U.S.C. 1001).

EX-4 2 ex-11sc13da3_interpharm.htm EXHIBIT 11

EXHIBIT 11

FIRST AMENDMENT

ASSET PURCHASE AGREEMENT

THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this “Amendment”) is made this 2nd day of May, 2008 by and among (i) Amneal Pharmaceuticals of New York, LLC, a Delaware limited liability company (“Buyer”), (ii) Interpharm Holdings, Inc., a Delaware corporation, and Interpharm, Inc., a New York corporation (collectively, “Company”), and (iii) the shareholders of Company indicated as “Majority Shareholders”on thesignature pages hereto (the “Majority Shareholders”). All capitalized terms used in this Amendment and not otherwise defined in this Amendment shall have the respective meanings ascribed to them in that certain Asset Purchase Agreement dated as of April 24, 2008 (the “Purchase Agreement”) by and among the parties.

RECITALS:

WHEREAS, as an inducement not to exercise its termination rights pursuant to Section 7.1(e) of the Purchase Agreement, Buyer requires that Company agree to amend certain terms and conditions of the Purchase Agreement, all on the terms and conditions set forth herein.

AGREEMENT:

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

Modifications of Purchase Agreement.

1.1 Modification of Purchase Price and Base Cash Amount. Section 2.5(a) of the Purchase Agreement is hereby deleted and replaced with the following:

“(a) Amount of Purchase Price. In full and complete consideration for the acquisition of the Acquired Assets, at the Closing Buyer shall (i) pay to Company the sum of Sixty One Million Six Hundred Thousand Dollars ($61,600,000.00) (the “Base Cash Amount”), as adjusted pursuant to Section 2.6 below (the Base Cash Amount, as so adjusted, the “Closing Cash Amount”), (ii) deliver to the Escrow Agent the Escrow Amount, and (iii) assume the Assumed Liabilities as set forth in Section 2.3 hereof (clauses (i)-(iii) collectively, the “Purchase Price”).”

1.2 Modifications to Company Indemnity Obligations. Section 8.1 of the Purchase Agreement is hereby modified to add the following new subsections:

“(vii) all reasonable attorneys fees and disbursements or other Losses incurred by Buyer and its Representatives in connection with any pending litigation against the Acquired Assets or the Business which is not set forth on Schedule 2.3(c) (after giving effect to any amendments to said schedule effected in accordance with Section 2.3(c)); provided, however, that in the event that there are more than Two Hundred Thousand Dollars ($200,000) of attorneys’ fee and disbursements, no amount no amount in excess of Two Hundred Thousand Dollars ($200,000) shall be released to Buyer therefor without Company’s written consent, which consent shall not be unreasonably withheld; and in the event that Company reasonably withholds such consent, then Company shall be obligated to provide, at Company’s sold cost and expense, legal counsel reasonably acceptable to Buyer to represent Buyer in connection with any such pending litigation;

(viii) any failure by any Employee or IP Contractor who has contributed to or participated in the conception and development of Sellers Intellectual Property (that is not Licensed Intellectual Property) on behalf of Sellers to either (A) be and have been a party to an enforceable arrangement or agreement with Sellers in accordance with applicable law that has accorded Sellers full, effective, exclusive and original ownership of all tangible property and Intellectual Property thereby arising, or (B) have executed appropriate instruments of assignment in favor of Sellers as assignee that have conveyed to Sellers effective and exclusive ownership of all tangible property and Intellectual Property thereby arising;

(ix) any brokers fees, commissions or similar payments to Greiner-Maltz Company of Long Island, Inc. or any its Affiliates with respect to the sale of the Facility or otherwise;

(x) any failure by Company to pay costs, to the extent such payment is required by Section 6.1(b) of the Purchase Agreement, to remedy deficiencies which Buyer has notified Company (in accordance with Section 6.1(b) of the Purchase Agreement) would be an impediment to the transfer to Buyer of Company’s Drug Enforcement Agency controlled substances Permit; or

(xi) any costs of product recalls, which recalls occur within one hundred eighty (180) days from the Closing Date, for product lots which were manufactured prior to the Closing Date.”

1.3 Additional Covenants. The Purchase Agreement is hereby modified to add the following new Section 5.12:

“5.12.

Additional Covenants.

(a) Company shall, prior to Closing and at Company’s sole cost, cause each of Buyer and Amneal Pharmaceuticals, LLC to be added as additional insureds to Company’s tail insurance coverage.

(b) Company shall, not later than five (5) Business Days prior to Closing, take such action as may be necessary to dismiss with prejudice its first cause of action (titled ‘Rescission of Contract Due to Fraudulent Misrepresentation/Concealment’) in its complaint filed November 2, 2007 in Interpharm, Inc. v. Watson Laboratories, Inc. (Index No: 4600-CV-07, U.S. District Court, Eastern District of New York).

(c) Company shall, prior to Closing and at Company’s sole cost, remove all Materials of Environmental Concern (including, at the request of Buyer, hormonal and controlled substances) from all Sellers Real Property, except that for purposes of this Section 5.12(c) only, Inventory shall not be deemed Materials of Economic Concern.”

1.4 Basket and Ceiling. Notwithstanding anything to the contrary in the Purchase Agreement or this Amendment, Company’s indemnification obligations under clauses (vii) through (xi) of Section 8.1 and, to the extent arising from a breach of Section 5.12 of the Purchase Agreement or Section 3 of this Amendment, under clause (ii) of Section 8.1 shall be subject to the Basket and the Ceiling.

1.5 EPA Notice of Violation. Section 6.2(q) of the Purchase Agreement is hereby amended to add the following at the end of the first sentence:

“In the event that any violation raised by the U.S. Environmental Protection Agency in such notice also exists as a condition at any other Sellers Real Property, Company shall have resolved, to Buyer’s reasonable satisfaction, all such conditions at such other Sellers Real Property.”

1.6 Information Statement; Public Announcement; SEC Filings. The first sentence of Section5.10 of the Purchase Agreement shall be deleted and replaced with the following:

“Not more than 17 calendar days after the Signing Date, Company shall file with the SEC an Information Statement on Schedule 14C (the “Information Statement”) containing the information required by the Exchange Act with respect to the Transaction Written Consent and the

transactions contemplated by this Agreement.”

1.7 Certain Employee Arrangements. Section 9.1(a) of the Purchase Agreement shall be deleted and replaced with the following:

“Not less than fifteen (15) after the Signing Date, Buyer will provide to Company a list identifying the number of the Employees that will be offered employment (each, a “Specified Employee”) as Buyer determines satisfy Buyer’s needs and hiring criteria (which shall be not less than fifty percent (50%) of Sellers’ employees). Prior to (but conditioned upon) the Closing, Buyer shall offer each of the Specified Employees engagement or employment with Buyer. Other than the Specified Employees, Buyer shall have no obligation to engage or hire any Seller Employees.”

1.8 Amendment to Real Estate Lease Agreement. Section 9.5 of the Purchase Agreement shall be deleted in its entirety.

1.9 Conditions to Buyer’s Obligations – No Material Adverse Effect. Section 6.2(j) of the Purchase Agreement shall be deleted and replaced with the following:

“(j) No Material Adverse Effect. Since the date of the Most Recent Balance Sheet , there shall not have been (i) any change resulting in a Material Adverse Effect, or (ii) any damage, destruction or loss affecting the assets, properties, business, operations or condition of Company or any other Seller or the Business, whether or not covered by insurance, which could reasonably be expected to result in a Material Adverse Effect, or (iii) any FDA Inspection which discloses items that could reasonably be expected to materially and adversely affect Buyer’s ability to manufacture at the Facility or sell one or more Products which, individually or in the aggregate, have resulted in revenues to the Company of in excess of $5 million in the twelve months prior to the Closing and which have been FDA approved.”

1.10 Conditions to Buyer’s Obligations – Tax Clearance Certificates. Section 6.2(m) of the Purchase Agreement shall be deleted in its entirety.

1.11 Covenant - Tax Clearance. The Purchase Agreement is hereby modified to add the following new Section 5.13:

“5.13 Tax Clearance Certificates. At Company’s sole expense, it shall use its best efforts to deliver to Buyer Tax Clearance Certificates from the New York Department of Taxation and Finance by the Closing, and, if not by such date, as soon as practicable thereafter.”

Modifications to Schedules.

2.1 Modifications to Schedule 2.1(c). Schedule 2.1(c) to the Purchase Agreement is hereby amended to add all receivables or other payment obligations owed to Company by Leiner Health Products or its subsidiaries.

2.2 Modifications to Schedule 2.3(c). Schedule 2.3(c) to the Purchase Agreement is hereby deleted in its entirety and replaced with Schedule 2.3(c) hereto.

2.3 Allocation of the Purchase Price. Schedule 2.7 to the Purchase Agreement is hereby deleted and replaced with the following:

“Each of Company and Buyer covenants to endeavor to negotiate in good faith and use its diligent efforts to reach mutual agreement on the terms of this Schedule 2.7 at least five (5) Business Days prior to the Closing Date.”

Additional Covenants.

3.1 Transaction Written Consent. On or before the date of signing of this Amendment, the Company shall have delivered to Buyer executed copies of (i) a binding written consent approving this Amendment and its execution and delivery, and of Company’s consummation of each of the transactions contemplated hereby, signed by the holders of (A) a majority of the outstanding shares of the Series A-1 Preferred Stock, (B) all of the outstanding shares of the Series D-1 Preferred Stock, and (C) a majority of the outstanding shares of the Common Stock; and (ii) reasonable evidence as to the approval by Company’s Board of Directors of this Amendment and its execution and delivery, and of Company’s consummation of each of the transactions contemplated hereby.

3.2 Remediation Plan. Company shall deliver to Buyer, within two (2) Business Days of the date of this Amendment, a plan for remediation of all conditions that are required to be remedied under Section 6.2(q) of the Purchase Agreement for each of the Sellers Real Property, as amended by this Amendment (the “Remediation Plans”). Buyer and Company shall each endeavor to negotiate in good faith, within three (3)) Business Days after receipt by Buyer of the Remediation Plans, any reasonable changes requested by Buyer to the Remediation Plans. Upon the parties final agreement as to the Remediation Plans, it will be annexed hereto as Exhibit A and Sellers’ compliance with the Remediation Plans shall be deemed to satisfy all of the conditions under Section 6.2(q) of the Purchase Agreement, as amended by this Amendment.

3.3 Connection to Public Sewerage System. Company shall, within two (2) days of the date of this Amendment, at its sole expense, deliver to Buyer all materials (including, without limitation, correspondences, engineering details, reports, plans, studies, and contact information to engineers and attorneys retained and/or used by Company) with respect to or in connection with the Company’s analysis, efforts and ability to connect with the local sewage system for the Facility. Buyer shall have until 5:00 p.m. Eastern time on May 16, 2008 to review said materials, contact the county and appropriate municipalities and utility providers, retain and consult with in-house and third party consultants, interview Company’s engineering staff and its third party consultants and attorneys (and Company shall, within such two (2) day period, instruct such

engineering staff, consultants and attorneys to openly discuss with Buyer and its representatives all of such materials and their respective efforts and analysis in connection with such sewerage system connection) to analyze and assess Buyer’s ability to obtain the applicable permits for such sewage system connection, the timing thereof, capacity issues, and feasibility. In the event that Buyer determines, in its reasonable discretion, that it will be unable to obtain any such required permits, or that the sewage capacity required by Buyer for maximum utilization of the Facility will be insufficient, or that the time within which it can obtain such permits and construct the sewage system connection is unacceptable to Buyer, then Buyer may terminate the Purchase Agreement pursuant to Section 7.1(e) thereof (and solely for purposes hereof, the Due Diligence Period shall be deemed to be extended to May 16, 2008 at 5:00 p.m. Eastern time).

4. Miscellaneous. Except as amended pursuant to this Amendment, the Purchase Agreement (including the Schedules and Exhibits thereto) remains in effect in all respects. The provisions of Article X of the Purchase Agreement, to the extent applicable, are hereby incorporated herein by reference.

[SIGNATURES ON NEXT PAGE]

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

Buyer:

		AMNEAL PHARMACEUTICALS OF NEW YORK, LLC
		By:	/s/ Chirag Patel
			Name: Chirag Patel Title: President & Managing Partner

Company:

		INTERPHARM HOLDINGS, INC.
		By:	/s/ Peter Giallorenzo
			Name: Peter Giallorenzo Title: COO/CFO

		INTERPHARM, INC.
		By:	/s/ Peter Giallorenzo
			Name: Peter Giallorenzo Title: COO/CFO

Majority Shareholders:

		TULLIS-DICKERSON CAPITAL FOCUS III, L.P. By: Tullis-Dickerson Partners III, L.L.C., its general partner
		By:	/s/ Joan P. Neuschuler
			Name: Joan P. Neuschuler Title: Principal

EXHIBIT 11

Majority Shareholders (continued):

AISLING CAPITAL II, L.P.

By: AISLING CAPITAL PARTNERS, LP, its

General Partner

By: AISLING CAPITAL PARTNERS, LLC, its General Partner

By:

/s/ Dennis J. Purcell

Name: Dennis J. Purcell
Title: Sr. Managing Director

	RAJS HOLDINGS I, LLC
/s/ P.S.	By:	/s/ Perry Sutaria
initials		Name: Perry Sutaria Title: Manager

	RAVIS HOLDINGS I, LLC
/s/ B.S.	By:	/s/ Bhupatal Sutaria
initials		Name: Bhupatal Sutaria Title: Manager

	P&K HOLDINGS I, LLC
/s/ P.S.	By:	/s/ Perry Sutaria
initials		Name: Perry Sutaria Title: Manager

		/s/ Maganlal K. Sutaria
		Maganlal K. Sutaria

		/s/ Perry Sutaria
		Perry Sutaria

EX-4 3 ex-12sc13da3_interpharm.htm EXHIBIT 12

EXHIBIT 12

AMENDED AND RESTATED PROCEEDS SHARING AGREEMENT

This AMENDED AND RESTATED PROCEEDS SHARING AGREEMENT (this “Agreement”) is made and entered into as of May 1, 2008, by and among certain holders (the “Series A-1 Stockholders”) of InterPharm Holdings, Inc., a Delaware corporation (the “Company”) Series A-1 Preferred Stock, par value $.01 per share (the “Series A-1 Preferred”), the holders (the “Series D-1 Stockholders”) of all of the Company’s Series D-1 Preferred Stock, par value $.01 per share (the “Series D-1 Preferred” and, together with the Series A-1 Preferred, the “Preferred Stock”), and the holders (the “Common Stockholders”) of certain shares of the Company’s Common Stock, par value $.01 per share (the “Common Stock”). The Series A-1 Stockholders and Series D-1 Stockholders are collectively referred to herein as the “Preferred Stockholders.” Such Common Stockholders and Preferred Stockholders are listed on Schedule A hereto and are collectively referred to herein as the “Stockholders” and each a “Stockholder.”

RECITAL:

WHEREAS, the Company and the undersigned entered into an asset purchase agreement (the “Original Asset Purchase Agreement”) with Amneal Pharmaceuticals, LLC (“Amneal”) on April 24, 2008 pursuant to which Amneal agreed to purchase, and the Company agreed to sell, substantially all of the Company’s assets, subject, among other things, to Amneal’s satisfactory completion of its due diligence on or before April 30, 2008 (such purchase the “Amneal Purchase”);

WHEREAS, Amneal has advised the Company that it is willing to proceed with the Amneal Purchase only if the Company and the Stockholders execute and deliver a First Amendment to Asset Purchase Agreement (such Original Asset Purchase Agreement, as amended, the “Asset Purchase Agreement”);

WHEREAS, the Stockholders are willing to execute the Asset Purchase Agreement provided that the Preferred Stockholders enter into this Agreement;

NOW, THEREFORE, in consideration of the foregoing premises and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Stockholders agree as follows:

Proceeds Sharing.

(a) All Holders of Common Stock. In the event that (i) the holders of the Common Stock of the Company receive aggregate cash distributions from the Company or Amneal with respect to their shares of Common Stock of less than $3 million, and (ii) the Series D-1 Stockholders receive aggregate cash distributions from the Company or Amneal of at least $13 million with respect to their Series D-1 Preferred, each of the Series D-1 Stockholders,

severally and not jointly, hereby agrees to share proceeds with all holders of Common Stock of the Company to the extent that proceeds to such Series D-1 Stockholder with respect to its shares of Series D-1 Preferred are in excess of $6.5 million, until all holders of Common Stock have received proceeds from the Company, Amneal and the Series D-1 Stockholders equal to an aggregate of $3 million. For example, if a Series D-1 Stockholder receives distributions of proceeds of $7.5 million, and the Common Stockholders receive no distributions of proceeds from the Company or Amneal, such Series D-1 Stockholder will pay $1 million in the aggregate to all holders of Common Stock of the Company in proportion to their respective holdings of shares of Common Stock of the Company. No additional proceeds shall be payable to the holders of Common Stock of the Company by the Series D-1 Stockholders once the Common Stockholders have received aggregate proceeds from the Company, Amneal and pursuant to this Section 1(a) equal to $3 million.

(b) Bhupatalal K. Sutaria. Provided that each of the Series D-1 Stockholders has received cash proceeds from the Company or Amneal in connection with the Amneal Purchase of at least $2 million, each of the holders of Preferred Stock agrees, severally and not jointly, to pay to Bhupatalal K. Sutaria their pro rata share (as set forth opposite their names onSchedule A hereto) of $850,000. Notwithstanding the foregoing, in the event that Bhupatalal K. Sutaria receives aggregate proceeds from the Company, Amneal and pursuant to Section 1(a) with respect to his shares of Common Stock in an amount greater than $250,000, then any such excess amount shall reduce, dollar for dollar, the aggregate amount payable to him pursuant to this Section 1(b).

(c) Raj Sutaria. Provided that each of the Series D-1 Stockholders has received cash proceeds from the Company or Amneal in connection with the Amneal Purchase of at least $2 million, each of the holders of Preferred Stock agrees, severally and not jointly, to pay to Raj Sutaria their pro rata share (as set forth opposite their names on Schedule A hereto) of $350,000. Notwithstanding the foregoing, in the event that Raj Sutaria receives aggregate proceeds from the Company, Amneal and pursuant to Section 1(a) with respect to his shares of Common Stock in an amount greater than $200,000, then any such excess amount shall reduce, dollar for dollar, the aggregate amount payable to him pursuant to this Section 1(c).

(d) Limitation on Payments Pursuant to Sections 1(b) and 1(c). Notwithstanding anything to the contrary in Section 1(b) or Section 1(c) above, in the event that the Series D-1 Stockholders have each received cash proceeds from the Company or Amneal in connection with the Amneal Purchase of less than $2.4 million, then the amount payable pursuant to Section 1(b) and Section 1(c) by the holders of the Preferred Stock shall be reduced (ratably as between Bhupatalal K. Sutaria and Raj Sutaria) such that each of the Series D-1 Stockholders will retain, after the payments contemplated by Section 1(b) and Section 1(c), at least $2 million. For example, if each of the Series D-1 Stockholders receive cash proceeds from the Company or Amneal in connection with the Amneal Purchase of $2.2 million, the aggregate

amount payable to both Bhupatalal K. Sutaria and Raj Sutaria would be reduced from $1.2 million to $600,000, payable $425,000 to Bhupatalal K. Sutaria and $175,000 to Raj Sutaria, by the holders of the Preferred Stock in accordance with their pro rata share (as set forth opposite their names on Schedule A hereto).

2. Timing of Payments. Amounts payable pursuant to this Agreement shall be made on the later of (i) as, if and when the Series D-1 Stockholders receive distributions from the Company or Amneal with respect to their Series D-1 Preferred from the proceeds of the Amneal Purchase and (ii) when the amounts so payable can be reasonably determined. Proceeds which are escrowed in the Amneal Purchase shall not be payable under this Agreement until such proceeds have been paid to the Company and have been distributed by the Company or directly by Amneal, if applicable. As proceeds are available for distribution to the Series D-1 Stockholders, in the event that amounts are payable pursuant to this Agreement, the Series D-1 Stockholders may direct the Company to pay a portion of such amounts directly to the holders of Common Stock, Bhupatalal K. Sutaria or Raj Sutaria, as the case may be, pursuant to Section 1 above. The holders of Common Stock, Bhupatalal K. Sutaria and Raj Sutaria are collectively referred to herein as the “Beneficiaries” and each a “Beneficiary.”

3. Condition to Payment. Notwithstanding any other provision of this Agreement, no Beneficiary shall be entitled to any payment hereunder unless such Beneficiary has executed all documents reasonably requested or required by the Company or Amneal in connection with the consummation of the Amneal Purchase, which requirement may be waived by the holders of the Series D-1 Preferred in their reasonable discretion.

4. Approval of Amneal Purchase. As a condition to the parties entering into this Agreement, each of the Stockholders is simultaneously herewith executing and delivering to the Company a signed written consent of stockholders approving the Asset Purchase Agreement and the transactions contemplated thereby. Each Stockholder, as a holder of Preferred Stock and/or Common Stock, hereby agrees on behalf of itself, any entity he or she controls which holds such Common Stock or Preferred Stock (“Entities”) and any transferee or assignee of any such shares of Preferred Stock or Common Stock (“Transferees”), to hold all of the shares of Preferred Stock and Common Stock registered in his, her or its name or in the name of an Entity or Transferee (and any securities of the Company issued with respect to, upon conversion of, or in exchange or substitution of the Preferred Stock or Common Stock, and any other voting securities of the Company subsequently acquired by such Stockholder, Entity or Transferee) (hereinafter collectively referred to as the “Shares”) subject to, and to vote the Shares at a regular or special meeting of the stockholders (or by written consent) in accordance with, and otherwise:

(i)

to refrain from exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to the Amneal Purchase;

(ii)

to execute and deliver all related documentation and take such other action in support of the Amneal Purchase as shall be requested by the Company which are reasonable and customary for a stockholder in an asset purchase transaction; and

(iii)

except as set forth herein and except as set forth in that certain irrevocable proxy, dated November 7, 2007, neither any of the parties hereto nor any affiliates thereof shall deposit any shares of capital stock of the Company beneficially owned by such person in a voting trust or subject any such shares to any arrangement or agreement with respect to the voting of such shares.

5. Grant of Proxy. Upon the failure of any Stockholder to vote their Shares in accordance with the terms of this Agreement, such Stockholder hereby grants to the Designated Stockholder (as defined below) a proxy coupled with an interest in all Shares owned by such Stockholder, which proxy shall be irrevocable until this Agreement terminated pursuant to its terms or this Section 5 is amended to remove such grant of proxy in accordance with Section 12 hereof, to vote all such Shares in the manner provided in Section 4 hereof. As used in this Section 5, “Designated Stockholder” means a stockholder designated at the time of such failure by the Stockholders holding a majority of the Shares who then voted in accordance with this Agreement.

6. Ownership of Shares. Each of the Stockholders, severally and not jointly, represents and warrants to the other Stockholders that, as of the date hereof, Schedule A accurately sets forth opposite such Stockholder’s name the number of shares of Common Stock and Preferred Stock owned by such Stockholder in all material respects.

7. Specific Enforcement. It is agreed and understood that monetary damages would not adequately compensate an injured Stockholder for the breach of this Agreement by any Stockholder, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each Stockholder hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

8. Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the respective

parties at the addresses set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 8).

9. Manner of Voting. The voting of shares pursuant to this Agreement may be effected in person, by proxy, by written consent, or in any other manner permitted by applicable law.

10. Taxes. The Beneficiaries shall be responsible for and shall pay all federal, state and local taxes with respect to any amounts payable to them pursuant to this Agreement.

11. Successors and Assigns. This Agreement shall be binding upon the parties hereto and each of their respective successors, assigns and transferees.

12. Term. This Agreement shall terminate and be of no further force or effect upon the abandonment or termination of negotiations by the Company for the Amneal Purchase.

13. Amendments and Waivers. Any term hereby may be amended and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of each of the Stockholders party hereto.

14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to conflicts of law principles thereof.

15. Entire Agreement. This Agreement (including the schedules hereto) is intended to be the sole agreement of the Stockholders as it relates to this subject matter and does hereby supersede all other agreements of the Stockholders relating to the subject matter hereof.

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

[Remainder of page intentionally left blank]

P&K HOLDINGS I, LLC

By: /s/ Perry Sutaria

Perry Sutaria, Managing Member

RAJS HOLDINGS I, LLC

	By: /s/ Perry Sutaria
		Perry Sutaria, Managing Member

RAVIS HOLDINGS I, LLC

	By: /s/ Ravi Sutaria
		Ravi Sutaria, Managing Member

	/s/ Perry Sutaria____________________
	PERRY SUTARIA

	/s/ Raj Sutaria______________________
	RAJ SUTARIA

	/s/ Ravi Sutaria_____________________
	RAVI SUTARIA

	/s/ Dr. Maganlal K. Sutaria
	Dr. Maganlal K. Sutaria

	/s/ Bhupatlal K. Sutaria
	BHUPATLAL K. SUTARIA

TULLIS-DICKERSON CAPITAL FOCUS III, L.P. By: Tullis-Dickerson Partners III, L.L.C., its general partner
By:	/s/ Joan P. Neuscheler
Name:	Joan P. Neuscheler
Title:	Principal

AISLING CAPITAL II, L.P. By: AISLING CAPITAL PARTNERS, LP Its General Partner By: AISLING CAPITAL PARTNERS, LLC Its General Partner
By:	/s/ Dennis J. Purcell
Name:	Dennis J. Purcell
Title:	Sr. Managing Director

Schedule A

Stockholder	Common	Series A-1	Series D-1	Series A-1 as converted to Common	Series D-1 as converted to Common	Total as Converted to Common	Pro Rata Share Under Sections 1(b) and 1(c)
Dr. Maganlal K. Sutaria	500,000	2,526,152		2,526,152		3,026,152	22.34%
Bhupatalal K. Sutaria	548,381					548,381
Raj Holdings I LLC	15,526,102	624,225		624,225		16,150,327	5.50%
Raj Sutaria	2,130,946					2,130,946
P& K Holdings LLC	8,014,928					8,014,928
Perry Sutaria	2,019,166	624,225		624,225		2,643,391	5.50%
Ravis Holdings I, LLC	10,518,645					10,492,445
Ravi Sutaria	1,864,800					1,864,800
Aisling Capital II, L.P.	505,561		10,000		10,526,316	11,031,877	33.33%
Tullis-Dickerson Capital Focus III, L.P.	568,647		10,000		10,526,316	11,094,963	33.33%
	42,197,176	3,774,602	20,000	3,774,602	21,052,632	66,998,210	100.00%