EXHIBIT 10.4  



    
      EXECUTION
        COPY

    

     

    AMENDMENT
      AND WAIVER

     

    This
      AMENDMENT AND WAIVER (this “Amendment”),
      dated
      as of May 30, 2008, is made by and between RxElite, Inc., a Delaware corporation
      (the “Company”),
      and
      Castlerigg Master Investments Ltd., a British Virgin Islands company (the
“Holder”
or
      “Castlerigg”).
      The
      Company and the Holder are, collectively, the “Parties.”
      Capitalized terms used herein and not otherwise defined shall have the meanings
      ascribed to them in that certain Senior Secured Convertible Note, issued by
      the
      Company to the Holder on December 31, 2007 in the principal amount of
      $10,500,000, as may have been previously amended (the “Note”),
      pursuant to that certain Securities Purchase Agreement dated as of December
      31,
      2007 by and between the Company and the Holder (the “Securities
      Purchase Agreement”).

     

    RECITALS

     

    WHEREAS,
      Section 14(b) of the Note provides that the Company shall not, and the Company
      shall not permit any of its Subsidiaries to, directly or indirectly, incur
      or
      guarantee, assume or suffer to exist any Indebtedness, other than (i) the
      Indebtedness evidenced by the Note and the Other Notes and (ii) other Permitted
      Indebtedness; 

     

    WHEREAS,
      Section 14(c) of the Note provides that the Company shall not, and the Company
      shall not permit any of its Subsidiaries to, directly or indirectly, allow
      or
      suffer to exist any Liens other than Permitted Liens and Permitted Vaporizer
      Liens;

     

    WHEREAS,
      the Company desires to enter into a Loan and Security Agreement with NPIL Pharma
      Inc., a Delaware corporation (“NPIL”),
      in
      the form attached hereto as Exhibit
      A
      (the
“Loan
      and Security Agreement”),
      pursuant to which NPIL shall lend the Company $5,000,000 (the “NPIL
      Loan”)
      in
      exchange for a promissory note and a junior lien in substantially all of the
      Company’s assets (the “NPIL
      Lien”);

     

    WHEREAS,
      the NPIL Loan is not Permitted Indebtedness and the NPIL Lien is not a Permitted
      Lien; and

     

    WHEREAS,
      at the request of the Company, the Holder has agreed to consent to the NPIL
      Loan
      and the granting of the NPIL Lien, and treat them as Permitted Indebtedness
      and
      a Permitted Lien, respectively, subject to the terms and conditions set forth
      in
      the subordination agreement, in the form attached hereto as Exhibit
      B
      (the
“Subordination
      Agreement”),
      by
      and among NPIL, the Company and Castlerigg in its capacity as collateral agent
      for the Holder.

     

    NOW,
      THEREFORE, in consideration of the promises and covenants made herein, and
      for
      such other good and valuable consideration, the receipt and sufficiency of
      which
      are hereby acknowledged, the Parties hereby agree as follows:

     

    1. Amendment
      to the Note.

     

    (a) Section
      (4) of the Note is hereby amended by (i) deleting the word “or” appearing at the
      end of clause (xviii) thereof, (ii) redesignating clause (xix) as new clause
      (xx) and (iii) adding new clause (xix) to read as follows:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “(xix) any
      default or event of default shall have occurred under the Loan and Security
      Agreement; or”

    


    (b) The
      definition of “Permitted Indebtedness” set forth in Section (28)(dd) of the Note
      is hereby amended by
      (i)
      deleting the word “and” appearing therein immediately before clause (v) thereof
      and (ii) adding the following new clause (vi) to read as follows:

     

    “and
      (vi)
      Indebtedness incurred under that certain Loan and Security Agreement, dated
      as
      of May 30, 2008 (the “Loan
      and Security Agreement”),
      by
      and between the Company and NPIL Pharma Inc., a Delaware corporation (the
“Subordinated
      Lender”),
      to
      the extent that such Indebtedness and the Liens that secure such Indebtedness
      are subject to the terms of the Subordination Agreement, dated as of May 30,
      2008 (the “Subordination
      Agreement”),
      by
      and among the Subordinated Lender, the Company and Castlerigg Master Investments
      Ltd., in its capacity as collateral agent for the Holder.”

     

    (c) The
      definition of “Permitted Vaporizer Liens” set forth in Section (28)(ff) of the
      Note is hereby amended and restated in its entirety to read as
      follows:

     

    “Permitted
      Vaporizer Liens”
means
      Liens incurred by the Company pursuant to the Loan and Security Agreement (as
      in
      effect on the date hereof), securing Indebtedness permitted under clause (vi)
      of
      the definition of Permitted Indebtedness, to the extent that such Liens are
      subject to the terms of the Subordination Agreement.”

     

    2. Waiver
      and Consent.

     

    (a) Subject
      to Section 3 hereof, the Holder consents to, and waives any Event of Default
      that would otherwise arise under Section (4)(x) of the Note as a result of
      the
      Company’s failure to comply with Sections (14)(b) and (c) of the Note due to the
      Company entering into the Loan and Security Agreement and granting a Lien on
      and
      in the Company’s assets under the Loan and Security Agreement.

     

    (b) The
      waiver in this Section 2 shall be effective only in this specific instance
      and
      for the specific purpose set forth herein and does not allow for any other
      or
      further departure from the terms and conditions of the Securities Purchase
      Agreement, the Note or any other Transaction Document (as defined in the
      Securities Purchase Agreement), which terms and conditions shall continue in
      full force and effect.

     

    3. Miscellaneous
      Provisions.

     

    (a) No
      Further Agreements/Waivers.
      The
      Company hereby (i) acknowledges, that except as set forth herein and as may
      have
      been previously amended, the Note shall remain unmodified and in full force
      and
      effect and
      is
      hereby ratified and confirmed in all respects except that on and after the
      date
      hereof all references in the Note to the “Notes”, the “Note”, the “Senior
      Secured Convertible Note”, “thereto”, “thereof”, “thereunder” or words of like
      import referring to the Note shall mean the Note as amended by this Amendment,
      and (ii) confirms and agrees that to the extent that any Transaction
      Document purports to assign or pledge to Castlerigg, individually and in its
      capacity as collateral agent for the Buyers party to the Securities Purchase
      Agreement, or to grant to Castlerigg, individually and in its capacity as
      collateral agent for the Buyers party to the Securities Purchase Agreement,
      a
      security interest in or Lien on, any Collateral (as defined in the Security
      Agreement dated as of December 31, 2007 by and among the Company and the
      subsidiaries of the Company signatories thereto in favor of Castlerigg
      individually and as collateral agent for the Buyers party to the Securities
      Purchase Agreement (the “Security
      Agreement”))
      as
      security for the Company’s obligations under the Securities Purchase Agreement,
      the Note and the Transaction Documents, as the case may be, of the Company
      or
      any Guarantor (as defined in the Security Agreement) from time to time existing
      in respect of the Note (as amended hereby) and the other Transaction Documents,
      such pledge, assignment and/or grant of the security interest or Lien is hereby
      ratified and confirmed in all respects. This
      Amendment may only be modified or amended by a written agreement executed by
      Parties. Each
      Party hereby acknowledges and agrees that this Amendment constitutes a
“Transaction Document” under the Note. 

     

    
      
         

      

      
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    (b) Fees
      and Expenses.
      The
      Company shall pay or cause to be paid all legal fees and expenses of counsel
      for
      the Holder incurred in connection with the execution and delivery of this
      Amendment.

     

    (c) Counterparts.
      This
      Amendment may be executed in one or more counterparts, each of which shall
      be
      deemed an original but all of which when taken together shall constitute one
      and
      the same instrument. Facsimiles or portable document files transmitted by e-mail
      containing original signatures shall be deemed for all purposes to be originally
      signed copies of the documents which are the subject of such facsimiles or
      files.

     

    (d) Binding
      on Successors.
      This
      Amendment shall be binding upon and shall inure to the benefit of the successors
      and permitted assigns of the Parties.

     

    (e) Entire
      Agreement.
      The
      Note, as may have been previously amended, and as reflective of the terms
      hereof, contains the entire understanding between the Parties and supersede
      any
      prior written or oral agreements between them respecting the subject matter
      contained herein. There are no representations, agreements, arrangements or
      understandings, oral or written, between the Parties relating to the subject
      matter hereof that are not fully expressed herein.

     

    [Signature
      Page Follows]

     

    
      
         

      

      
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    [SIGNATURE
      PAGE TO AMENDMENT]

     

    IN
      WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed
      by
      their respective authorized officers as of the date first above
      written.

     

    
      	 	
              RXELITE,
                INC.


              


              By: 
                ___________________________________

              Name:
                Jonathan Houssian

              Title:
                President and Chief Executive Officer


              


               

              CASTLERIGG
                MASTER INVESTMENTS LTD.

              


              By:
                Sandell Asset Management Corp.

              


              By: 
                ___________________________________

              Name:

              Title:

            


    


    


    ACCEPTED
      BY:

    


    
      	
              RXELITE
                HOLDINGS INC.

               

              By:________________________________

              Name:
                

              Title: