THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

EXHIBIT 10.1

THIRD AMENDMENT TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT

      THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the “Amendment”) is made effective as of the 31st day of March, 2009, by and among IMPAX LABORATORIES, INC., a Delaware corporation (“Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a Wells Fargo Company ( together with its successors and assigns , “Bank”).

BACKGROUND

     A. Pursuant to that certain Amended and Restated Loan and Security Agreement dated December 15, 2005 by and between Borrower and Bank (as amended by that certain First Amendment to Amended and Restated Loan and Security Agreement dated October 14, 2008, that certain Second Amendment to Amended and Restated Loan and Security Agreement dated December 31, 2008 and as the same may hereafter be further amended, modified, supplemented or restated from time to time, being referred to herein as the “Loan Agreement”), Bank agreed, inter alia, to amend and restate an existing revolving line of credit in the maximum principal amount of Thirty-Five Million Dollars ($35,000,000.00).

     B. Borrower has requested and Bank has agreed to amend the Loan Agreement in accordance with the terms and conditions contained herein.

     C. All capitalized terms contained herein and not otherwise defined herein shall have the meanings set forth in the Loan Agreement.

      NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as follows:

     1.  Termination Date. The reference to “March 31, 2009” contained in the definition of “Termination Date” in Section 1.1 of the Loan Agreement is hereby deleted and replaced with “March 31, 2010”.

     2.  Applicable Margin. The definition of “Applicable Margin” as set forth in Section 1 of the Loan Agreement is hereby amended to read, in its entirety, as follows:

          “ Applicable Margin ” shall mean, at any time, the applicable percentage set forth below if the Fixed Charge Coverage Ratio for the immediately preceding fiscal quarter is at or within the amounts indicated for such percentage:

provided, that the Applicable Margin shall be calculated and established once each fiscal quarter (commencing with the fiscal quarter ending on March 31, 2009) and shall remain in effect until adjusted thereafter during the next fiscal quarter. Each change in the Applicable Margin resulting from a change in the Fixed Charge Coverage Ratio shall be effective on and after the date of delivery to the Bank of the financial statements and certificates required by Section 5.6(b) and Section 5.6(d) , respectively, indicating such change, and until the date immediately preceding the next date of delivery of such financial statements and certificates indicating another such change. In the event that Borrower has failed to deliver the financial statements and certificates required by Sections 5.6(b) or (d) , respectively, and in addition to all other rights and remedies available to Bank, the Applicable Margin shall be the highest percentage set forth above, until receipt by Bank of such information.

     3.  Servicing Fee . Section 2.11.1 of the Loan Agreement is hereby amended to read, in its entirety, as follows:

“2.11.1 Servicing Fee . Borrower shall pay to Bank a monthly non-refundable servicing fee in the amount of One Thousand Five Hundred Dollars ($1,500.00) with respect to any month during which Revolver Loans are outstanding, payable on the first day of each month with respect to the preceding month.”

     4.  Financial Information. Section 5.6(a) of the Loan Agreement is hereby amended to read, in its entirety, as follows:

“(a) Periodic Borrowing Base Information. A completed Borrowing Base Certificate in the form attached hereto as Exhibit 5.6(a) (a “ Borrowing Base Certificate ”) (which shall be certified by the chief financial officer or president of Borrower to be accurate and complete and in compliance with the terms of the Loan Documents) (i) each Business Day of each month if the immediately prior month’s average Excess Availability was less than or equal to Five Million Dollars ($5,000,000.00), (ii) on the last Business Day of each week of each month if the immediately prior month’s average Excess Availability was greater than Five Million Dollars ($5,000,000.00) and (iii) within three (3) days after the end of each month during which there were no Revolver Loans outstanding; provided, however, no Borrowing Base Certificate shall be due during a month immediately following a month during which no Revolver Loans were outstanding and

Borrower had a Net Cash Position (calculated on an average daily basis) of at least Twenty Million Dollars ($20,000,000.00). Bank may, but shall not be required to, rely on each Borrowing Base Certificate delivered hereunder as accurately setting forth the available Borrowing Base for all purposes of this Loan Agreement until such time as a new Borrowing Base Certificate is delivered to Bank in accordance herewith.”

     5.  Fixed Charge Coverage Ratio. Notwithstanding anything in the Loan Agreement to the contrary, the Fixed Charge Coverage Ratio shall be tested only for those Applicable Fiscal Periods during which the Net Cash Position (calculated on an average daily basis for such Applicable Fiscal Period) is less than $50,000,000.00. In addition to all other information currently required under the Loan Agreement, each compliance certificate delivered under Section 5.6(e) of the Loan Agreement shall contain a calculation of the Net Cash Position calculated as described above for the Applicable Fiscal Period covered thereby, in such detail as shall be reasonably satisfactory to Bank.

     6.  Capital Expenditures. Section 7.2 of the Loan Agreement is hereby amended to rea