REGISTRATION RIGHTS AGREEMENT

                          dated as of November 28, 2000



                                      among



                            IMPAX LABORATORIES, INC.



                                       and



                           THE INVESTORS NAMED HEREIN




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                                TABLE OF CONTENTS

SECTION 1.DEFINITIONS....................................................1

1.1.       Defined Terms.................................................1
1.2.       General Interpretive Principles...............................3

SECTION 2.REGISTRATION RIGHTS............................................3

2.1.       Shelf Registration............................................3

2.2.       Black-out Periods.............................................4

2.3.       Registration Procedures.......................................5

2.4.       Underwritten Offerings........................................9

2.5.       No Inconsistent Agreements; Additional Rights.................9

2.6.       Registration Expenses.........................................9

2.7.       Indemnification..............................................10

2.8.       Rules 144 and 144a...........................................13

SECTION 3.MISCELLANEOUS.................................................13

3.1.       Term.........................................................13

3.2.       Injunctive Relief............................................13

3.3.       Attorneys' Fees..............................................13

3.4.       Notices......................................................14

3.5.       Successors, Assigns and Transferees..........................14

3.6.       Governing Law; Service of Process; Consent to Jurisdiction...15

3.7.       Headings.....................................................15

3.8.       Severability.................................................15

3.9.       Amendment; Waiver............................................15

3.10.      Counterparts.................................................16






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                          REGISTRATION RIGHTS AGREEMENT

            REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
November 28, 2000 by and among IMPAX LABORATORIES, INC., a Delaware corporation
(the "ISSUER") and the persons named on the signature pages hereto (the
"INVESTORS").

                                    RECITALS

            WHEREAS, the Issuer and the Investors have entered into various
stock purchase agreements, (the "STOCK PURCHASE AGREEMENTS") pursuant to which
the Investors have purchased shares of the common stock, par value $.01 per
share of the Issuer; and

            WHEREAS, as an inducement to the Investors to enter into the Stock
Purchase Agreements, the Issuer has agreed to provide the registration rights
set forth in this Agreement;

                                    AGREEMENT

            NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements of the parties hereto, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

            SECTION 1. DEFINITIONS

            1.1. DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:

            "ADVERSE DISCLOSURE" means public disclosure of material non-public
information, which disclosure in the good faith judgment of the Board of
Directors of the Issuer after consultation with counsel to the Issuer (i) would
be required to be made in any Registration Statement so that such Registration
Statement would not be materially misleading, (ii) would not be required to be
made at such time but for the filing of such Registration Statement and (iii)
would have a material adverse effect on the Company or its business or on the
Company's ability to effect a material acquisition, disposition or financing.

            "AGREEMENT" has the meaning set forth in the preamble hereto.

            "ISSUER" has the meaning set forth in the preamble and shall include
the Issuer's successors by merger, acquisition, reorganization or otherwise.

            "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and any successor thereto, and any rules and regulations promulgated
thereunder, all as the same shall be in effect from time to time.

            "HOLDER" or "HOLDERS" means any holder or holders of Registrable
Securities who is a party hereto or who otherwise agrees in writing to be bound
by the provisions of this Agreement pursuant to Section 3.5.


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<PAGE>

            "INVESTOR" has the meaning set forth in the preamble hereto.

            "LOSS" has the meaning set forth in Section 2.7(a).

            "NASD" means the National Association of Securities Dealers, Inc.

            "PERSON" means any individual, firm, limited liability company or
partnership, joint venture, corporation, joint stock company, trust or
unincorporated organization, incorporated or unincorporated association,
government (or any department, agency or political subdivision thereof) or other
entity of any kind.

            "PROSPECTUS" means the prospectus included in any Registration
Statement, all amendments and supplements to such prospectus and all material
incorporated by reference in such prospectus.

            "REGISTRABLE SECURITIES" means the securities of the Issuer issued
to the Investors pursuant to the Stock Purchase Agreements, and any securities
that may be issued or distributed or be issuable in respect thereof by way of
stock dividend, stock split or other distribution, merger, consolidation,
exchange offer, recapitalization or reclassification or similar transaction or
exercise or conversion of any of the foregoing; PROVIDED, HOWEVER, that any of
the foregoing securities shall cease to be "Registrable Securities" to the
extent (i) a Registration Statement with respect to their sale has been declared
effective under the Securities Act and they have been disposed of pursuant to
such Registration Statement, (ii) they have been distributed pursuant to Rule
144 (or any similar provision then in force) under the Securities Act or (iii)
they shall have been otherwise transferred and (A) new certificates for them not
bearing a legend restricting transfer under the Securities Act shall have been
delivered by the Issuer and (B) may be publicly resold (without volume or method
of sale restrictions) without registration under the Securities Act. For
purposes of this Agreement, a "percentage" (or a "majority") of the Registrable
Securities (or, where applicable, of any other securities) shall be determined
(x) based on the number of shares of such securities, in the case of Registrable
Securities which are equity securities, and (y) based on the principal amount of
such securities, in the case of Registrable Securities which are debt
securities.

            "REGISTRATION" means a registration of the Issuer's securities for
sale to the public under a Registration Statement.

            "REGISTRATION STATEMENT" means any registration statement of the
Issuer filed with, or to be filed with, the SEC under the rules and regulations
promulgated under the Securities Act, including the Prospectus, amendments and
supplements to such registration statement, including post-effective amendments,
and all exhibits and all material incorporated by reference in such registration
statement.

            "SEC" means the Securities and Exchange Commission.

            "SECURITIES ACT" means the Securities Act of 1933, as amended, and
any successor thereto, and any rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.


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            "SHELF REGISTRATION" means a registration effected pursuant to
Section 2.1.

            "SHELF REGISTRATION STATEMENT" means a Registration Statement of the
Issuer filed with the SEC on Form S-3 (or any successor form or other
appropriate form under the Securities Act) for an offering to be made on a
continuous or delayed basis pursuant to Rule 415 under the Act (or any similar
rule that may be adopted by the SEC) covering the Registrable Securities.

            "STOCK PURCHASE AGREEMENTS" has the meaning set forth in the
recitals hereto.

            "UNDERWRITTEN OFFERING" means a registration in which securities of
the Issuer are sold to an underwriter or underwriters on a firm commitment basis
for reoffering to the public.

            1.2. GENERAL INTERPRETIVE PRINCIPLES. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms "hereof," "herein," "hereunder" and
similar terms refer to this Agreement as a whole (including the schedules
hereto), and references herein to Sections refer to Sections of this Agreement.

                         SECTION 2. REGISTRATION RIGHTS

            2.1. SHELF REGISTRATION.
                 ------------------

            (a) FILING. Subject to Section 2.1(c), the Issuer shall file with
the SEC on or before the twentieth day following the date hereof a Shelf
Registration Statement relating to the offer and sale of the Registrable
Securities by the holders thereof from time to time in accordance with the
methods of distribution elected by such holders and shall use its reasonable
best efforts to cause such Shelf Registration Statement to be declared effective
under the Securities Act.

            (b) CONTINUED EFFECTIVENESS. Subject to Section 2.1(c), the Issuer
shall use its reasonable best efforts to keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming a part thereof
to be usable by the holders during the term of this Agreement. The Issuer shall
not be deemed to have used its reasonable best efforts to keep the Shelf
Registration Statement effective if the Issuer voluntarily takes any action or
omits to take any action that would result in the inability of any holder of
Registrable Securities covered by such Registration Statement to be able to
offer and sell any such Registrable Securities during the term of this
Agreement, unless such action or omission is required by applicable law.

            (c) SUSPENSION OF REGISTRATION. If the filing, initial effectiveness
or continued use of the Shelf Registration Statement at any time would require
the Issuer to make an Adverse Disclosure, the Issuer may, upon giving prompt
written notice of such action to the holders, delay the filing or initial
effectiveness of, or suspend use of, the Shelf Registration Statement; PROVIDED,
HOWEVER, that the Issuer shall not be permitted to do so (A) more than two times
during any six month period, (B) for a period exceeding thirty days on any one
occasion or (C) for a period exceeding sixty days in any 12 month period. In the
event the Issuer exercises its rights under the preceding sentence, the holders
agree to suspend, immediately upon their receipt of the notice referred to


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<PAGE>


above, their use of the Prospectus relating to the Shelf Registration in
connection with any sale or offer to sell Registrable Securities. The Issuer
shall immediately notify the holders upon the expiration of any period during
which it exercised its rights under this Section 2.1(c). The Issuer represents
that it has no knowledge of any circumstance that would reasonably be expected
to cause the Issuer to exercise its rights under this Section 2.1(c).

            (d) UNDERWRITTEN OFFERING. If the holders of not less than a
majority of the Registrable Securities included in any offering pursuant to the
Shelf Registration Statement so elect, such offering shall be in the form of an
Underwritten Offering and the Issuer, if necessary, shall amend or supplement
the Shelf Registration Statement for such purpose. The holders of a majority of
the Registrable Securities included in such Underwritten Offering shall, after
consulting with the Issuer, have the right to select the managing underwriter or
underwriters for the offering.

            2.2. BLACK-OUT PERIODS

            (a) BLACK-OUT PERIODS FOR HOLDERS. In the event of a registration by
the Issuer, the holders of Registrable Securities agree, if requested by the
Issuer (or, in the case of an Underwritten Offering, by the managing underwriter
or underwriters), not to effect any public sale or distribution (excluding any
sale pursuant to Rule 144 under the Securities Act) of any securities (except,
in each case, as part of the applicable registration, if permitted) which
securities are the same as or similar to those being registered in connection
with such registration, or which are convertible into or exchangeable or
exercisable for such securities, during the period beginning seven days before,
and ending 90 days (or such lesser period as may be permitted by the Issuer or
such managing underwriter or underwriters) after, the effective date of the
Registration Statement filed in connection with such registration, to the extent
such holders are timely notified in writing by the Issuer or the managing
underwriter or underwriters.

            (b) BLACK-OUT PERIOD FOR THE ISSUER AND OTHERS. (i) In the case of a
registration of Registrable Securities pursuant to Section 2.1 involving the
offering and sale of equity securities or securities convertible into or
exchangeable for equity securities, the Issuer agrees, if requested by the
holders of a majority of such Registrable Securities to be sold pursuant to the
such registration (or, in the case of an Underwritten Offering, by the managing
underwriter or underwriters in such Underwritten Offering), not to effect (or
register for sale) any public sale or distribution of any securities which are
the same as or similar to those being registered, or which are convertible into
or exchangeable or exercisable for such securities, during the period beginning
seven days before, and ending 90 days (or such lesser period as may be permitted
by such holders or such underwriter or underwriters) after, the effective date
of the Registration Statement filed in connection with such registration (or, in
the case of an Underwritten Offering under the Shelf Registration, the date of
the closing under the underwriting agreement in connection therewith), to the
extent the Issuer is timely notified in writing by a holder of Registrable
Securities covered by such Registration Statement or the managing underwriter or
underwriters. Notwithstanding the foregoing, the Issuer may effect a public sale
or distribution of securities of the type described above and during the periods
described above if the same (A) is made pursuant to registrations on Forms S-4
or S-8 or any successor form to such forms, or (B) as part of any registration
of securities for offering and sale to employees or directors of the Issuer
pursuant to any employee stock plan or other employee benefit plan arrangement.


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<PAGE>

            (ii) Subject to Section 2.5, if after the date hereof the Issuer
grants any Person (other than a holder of Registrable Securities) any rights to
demand or participate in a registration, any agreement with respect thereto
shall include such Person's agreement not to effect any public sale or
distribution of such securities (other than securities purchased in a public
offering), during any period referred to in this Section 2.2(b) except as part
of any such registration if permitted.

            2.3. REGISTRATION PROCEDURES.

            (a) In connection with the Issuer's registration obligations in this
Agreement, the Issuer will, subject to the limitations set forth herein, use its
reasonable best efforts to effect any such registration so as to permit the sale
of the applicable Registrable Securities in accordance with the intended method
or methods of distribution thereof as expeditiously as reasonably practicable,
and in connection therewith the Issuer will:

            (i) before filing a Registration Statement or Prospectus, or any
amendments or supplements thereto and in connection therewith, furnish to the
underwriter or underwriters, if any, and to one representative of the holders of
each class of the Registrable Securities covered by such Registration Statement,
copies of all documents prepared to be filed, which documents will be subject to
the review of such underwriters and such holders and their respective counsel
and, not file any Registration Statement or Prospectus or amendments or
supplements thereto to which the holders of a majority of the class of
Registrable Securities covered by the same or the underwriter or underwriters,
if any, shall reasonably object;

            (ii) prepare and file with the SEC such amendments or supplements to
the applicable Registration Statement or Prospectus as may be (A) reasonably
requested by any participating holder (to the extent such request relates to
information relating to such holder), (B) necessary to keep such registration
effective for the period of time required by this Agreement or (C) reasonably
requested by the holders of a majority of any class of the participating
Registrable Securities;

            (iii) notify the selling holders of Registrable Securities and the
managing underwriter or underwriters, if any, and (if requested) confirm such
advice in writing, as soon as reasonably practicable after notice thereof is
received by the Issuer (A) when the applicable Registration Statement or any
amendment thereto has been filed or becomes effective and when the applicable
Prospectus or any amendment or supplement thereto has been filed, (B) of any
written comments by the SEC or any request by the SEC or any other federal or
state governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information, (C) of the issuance by
the SEC of any stop order suspending the effectiveness of such Registration
Statement or any order preventing or suspending the use of any preliminary or
final Prospectus or the initiation or threat of any proceedings for such
purposes and (D) of the receipt by the Issuer of any notification with respect
to the suspension of the qualification of the Registrable Securities for
offering or sale in any jurisdiction or the initiation or threat of any
proceeding for such purpose;


<PAGE>


            (iv) promptly notify each selling holder of Registrable Securities
and the managing underwriter or underwriters, if any, when the Issuer becomes
aware of the happening of any event as a result of which the applicable
Registration Statement or Prospectus (as then in effect) contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein (in the case of the Prospectus and any preliminary
Prospectus, in light of the circumstances under which they were made) not
misleading or, if for any other reason it shall be necessary to amend or
supplement such Registration Statement or Prospectus in order to comply with the
Securities Act and, in either case as promptly as reasonably practicable
thereafter, prepare and file with the SEC an amendment or supplement to such
Registration Statement or Prospectus which will correct such statement or
omission or effect such compliance;

            (v) make every reasonable effort to prevent or obtain at the
earliest possible moment the withdrawal of any stop order with respect to the
applicable Registration Statement or other order suspending the use of any
preliminary or final Prospectus;

            (vi) promptly incorporate in a Prospectus supplement or
post-effective amendment to the applicable Registration Statement such
information as the managing underwriter or underwriters, if any, or the holders
of a majority of the Registrable Securities of the class being sold agree should
be included therein relating to the plan of distribution with respect to such
Registrable Securities; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably practicable after
being notified of the matters to be incorporated in such Prospectus supplement
or post-effective amendment;

            (vii) furnish to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, as many conformed copies as
such holder or managing underwriter may reasonably request of the applicable
Registration Statement;

            (vii) deliver to each selling holder of Registrable Securities and
each managing underwriter, if any, without charge, as many copies of the
applicable Prospectus (including each preliminary Prospectus) as such holder or
managing underwriter may reasonably request (it being understood that the Issuer
consents to the use of the Prospectus by each of the selling holders of
Registrable Securities and the underwriter or underwriters, if any, in
connection with the offering and sale of the Registrable Securities covered by
the Prospectus) and such other documents as such selling holder or managing
underwriter may reasonably request in order to facilitate the disposition of the
Registrable Securities by such holder or underwriter;

            (ix) on or prior to the date on which the applicable Registration
Statement is declared effective, use its reasonable best efforts to register or
qualify such Registrable Securities for offer and sale under the securities or
"Blue Sky" laws of each state and other jurisdiction of the United States, as
any such selling holder or underwriter, if any, or their respective counsel
reasonably requests in writing, and do any and all other acts or things
reasonably necessary or advisable to keep such registration or qualification in
effect so as to permit the commencement and continuance of sales and dealings in
such jurisdictions for as long as may be necessary to complete the distribution
of the Registrable Securities covered by the Registration Statement; PROVIDED

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<PAGE>

that the Issuer will not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or to take any action which would
subject it to taxation or general service of process in any such jurisdiction
where it is not then so subject;

            (x) cooperate with the selling holders of Registrable Securities and
the managing underwriter, underwriters or agent, if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends;

            (xi) not later than the effective date of the applicable
Registration Statement, provide a CUSIP number for all Registrable Securities
and provide the applicable transfer agent with printed certificates for the
Registrable Securities which certificates shall be in a form eligible for
deposit with The Depository Trust Company;

            (xii) obtain for delivery to the holders of each class of
Registrable Securities being registered and to the underwriter or underwriters,
if any, an opinion or opinions from counsel for the Issuer dated the effective
date of the Registration Statement or, in the event of an Underwritten Offering,
the date of the closing under the underwriting agreement, in customary form,
scope and substance, which counsel and opinions shall be reasonably satisfactory
to a majority of the holders of each such class and underwriter or underwriters,
if any, and their respective counsel;

            (xiii) in the case of an Underwritten Offering, obtain for delivery
to the Issuer and the underwriter or underwriters, if any, with copies to the
holders of Registrable Securities included in such registration, a cold comfort
letter from the Issuer's independent certified public accountants in customary
form and covering such matters of the type customarily covered by cold comfort
letters as the managing underwriter or underwriters reasonably request, dated
the date of execution of the underwriting agreement and brought down to the
closing under the underwriting agreement;

            (xiv) cooperate with each seller of Registrable Securities and each
underwriter or agent, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the NASD;

            (xv) use its reasonable best efforts to comply with all applicable
rules and regulations of the SEC and make generally available to its security
holders, as soon as reasonably practicable (but not more than 15 months) after
the effective date of the applicable Registration Statement, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act and
the rules and regulations promulgated thereunder;

            (xvi) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by the applicable Registration
Statement from and after a date not later than the effective date of such
Registration Statement;

            (xvii) cause all Registrable Securities of a class covered by the
applicable Registration Statement to be listed on each securities exchange on
which any of the Issuer's securities of such class are then listed or quoted and
on each inter-dealer quotation system on which any of the Issuer's securities of
such class are then quoted;

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<PAGE>


            (xviii) make available upon reasonable notice at reasonable times
and for reasonable periods for inspection by a representative appointed by the
holders of a majority of the Registrable Securities of each class covered by the
applicable Registration Statement, by any managing underwriter or underwriters
participating in any disposition to be effected pursuant to such Registration
Statement and by any attorney, accountant or other agent retained by such
sellers or any such managing underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of the Issuer, and cause
all of the Issuer's officers, directors and employees and the independent public
accountants who have certified its financial statements to make themselves
available to discuss the business of the Issuer and to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement as shall be necessary to
enable them to exercise their due diligence responsibility (subject to the entry
by each party referred to in this clause (xix) into customary confidentiality
agreements in a form reasonably acceptable to the Issuer);

            (xix) in the case of an Underwritten Offering, cause the senior
executive officers of the Issuer to participate in the customary "road show"
presentations that may be reasonably requested by the managing underwriter in
any such Underwritten Offering and otherwise to facilitate, cooperate with, and
participate in each proposed offering contemplated herein and customary selling
efforts related thereto; and

            (xx) promptly after the issuance of an earnings release or upon the
request of any holder, prepare a current report on Form 8-K with respect to such
earnings release or a matter of disclosure as requested by such holder and file
such Form 8-K with the SEC.

            (b) The Issuer may require each selling holder of Registrable
Securities as to which any registration is being effected to furnish to the
Issuer such information regarding the distribution of such Securities and such
other information relating to such holder and its ownership of the applicable
Registrable Securities as the Issuer may from time to time reasonably request.
Each holder of Registrable Securities agrees to furnish such information to the
Issuer and to cooperate with the Issuer as necessary to enable the Issuer to
comply with the provisions of this Agreement. The Issuer shall have the right to
exclude any holder that does not comply with the preceding sentence from the
applicable registration.

            (c) Each holder of Registrable Securities agrees by acquisition of
such Registrable Securities that, upon receipt of any notice from the Issuer of
the happening of any event of the kind described in Section 2.5(a)(iv), such
holder will discontinue disposition of its Registrable Securities pursuant to
such Registration Statement until such holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 2.5(a)(iv), or until
such holder is advised in writing by the Issuer that the use of the Prospectus
may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus and, if so directed
by the Issuer, such holder will deliver to the Issuer (at the Issuer's expense)
all copies, other than permanent file copies then in such holder's possession,
of the Prospectus covering such Registrable Securities which are current at the
time of the receipt of such notice.




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<PAGE>

            2.4. UNDERWRITTEN OFFERINGS.

            (a) UNDERWRITING AGREEMENTS. If requested by the underwriters for
any Underwritten Offering, the Issuer and the holders of Registrable Securities
to be included therein shall enter into an underwriting agreement with such
underwriters, such agreement to be reasonably satisfactory in substance and form
to the Issuer, the holders of a majority of each class of the Registrable
Securities to be included in such Underwritten Offering and the underwriters,
and to contain such terms and conditions as are generally prevailing in
agreements of that type, including, without limitation, indemnities no less
favorable to the recipient thereof than those provided in Section 2.7. All of
the representations and warranties by, and the other agreements on the part of,
the Issuer to and for the benefit of such underwriters included in each such
underwriting agreement shall also be made to and for the benefit of such holders
and that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such holders. No holder shall be required in any such
underwriting agreement to make any representations or warranties to or
agreements with the Issuer or the underwriters other than representations,
warranties or agreements regarding such holder, such holders Registrable
Securities, such holder's intended method of distribution and any other
representations required by law.

            (b) PRICE AND UNDERWRITING DISCOUNTS. In the case of an Underwritten
Offering, the price, underwriting discount and other financial terms for each
class of Registrable Securities of the related underwriting agreement shall be
determined by the holders of a majority of such class of Registrable Securities.

            (c) PARTICIPATION IN UNDERWRITTEN OFFERINGS. No Person may
participate in an Underwritten Offering unless such Person (i) agrees to sell
such Person's securities on the basis provided in any underwriting arrangements
approved by the Persons entitled to approve such arrangements and (ii) completes
and executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.

            2.5. NO INCONSISTENT AGREEMENTS; ADDITIONAL RIGHTS. The Issuer will
not enter into, and is not currently a party to, any agreement which is, or
could be, inconsistent with the rights granted to the holders of Registrable
Securities by this Agreement.

            2.6. REGISTRATION EXPENSES. (a) The Issuer shall pay all of the
expenses set forth in this paragraph (a) in connection with a registration under
this Agreement of Registrable Securities. Such expenses are (i) all registration
and filing fees, and any other fees and expenses associated with filings
required to be made with the SEC or the NASD, (ii) all fees and expenses of
compliance with state securities or "Blue Sky" laws, (iii) all printing,
duplicating, word processing, messenger, telephone, facsimile and delivery
expenses (including expenses of printing certificates for the Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing prospectuses), (iv) all fees and disbursements of counsel for the
Issuer and of all independent certified public accountants of the Issuer, (v)
Securities Act liability insurance or similar insurance if the Issuer so desires
or the underwriter or underwriters, if any, so require in accordance with
then-customary underwriting practice, (vi) all fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange or the quotation of the Registrable Securities on any inter-dealer



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<PAGE>

quotation system and (vii) all applicable rating agency fees with respect to any
applicable Registrable Securities. In addition, in all cases the Issuer shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any audit and the fees and expenses of any Person, including
special experts, retained by the Issuer. In addition, the Issuer shall pay up to
$15,000 of one law firm or other counsel selected by the holders of a majority
of the Registrable Securities being registered, not to include any fees and
expenses of any other advisers to the holders of the Registrable Securities
being registered or brokerage fees and commissions incurred by holders of the
Registrable Securities being registered.

            (b) The Issuer shall not be required to pay any other costs or
expenses in the course of the transactions contemplated hereby, including
underwriting discounts and commissions and transfer taxes attributable to the
sale of Registrable Securities and the fees and expenses of counsel to the
underwriters other than pursuant to clause (ii) of paragraph (a) above.

            2.7. INDEMNIFICATION.
                 ---------------

            (a) INDEMNIFICATION BY THE ISSUER. The Issuer agrees to indemnify
and hold harmless, to the full extent permitted by law, each holder of
Registrable Securities and their respective officers, directors, advisors and
agents and employees and each Person who controls (within the meaning of the
Securities Act or the Exchange Act) such Persons from and against any and all
losses, claims, damages, liabilities (or actions or proceedings in respect
thereof, whether or not such indemnified party is a party thereto) and expenses
(including reasonable costs of investigation and legal expenses), joint or
several (each, a "LOSS" and collectively "LOSSES"), arising out of or based upon
(i) any untrue or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Securities were registered
under the Securities Act (including any final, preliminary or summary Prospectus
contained therein or any amendment thereof or supplement thereto or any
documents incorporated by reference therein) or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading; PROVIDED, HOWEVER, that the Issuer shall not be liable to
any indemnified party in any such case to the extent that any such Loss arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any such Registration Statement in reliance
upon and in conformity with written information furnished to the Issuer by such
holder expressly for use in the preparation thereof. This indemnity shall be in
addition to any liability Issuer may otherwise have. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such holder or any indemnified party and shall survive the transfer of such
securities by such holder. The Issuer will also indemnify, if applicable and if
requested, underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in any distribution pursuant hereto, their
officers and directors and each Person who controls such Persons (within the
meaning of the Securities Act and the Exchange Act) to the same extent as
provided above with respect to the indemnification of the Indemnified Persons.


                                       10



<PAGE>


            (b) INDEMNIFICATION BY THE HOLDERS. Each selling holder of
Registrable Securities agrees (severally and not jointly) to indemnify and hold
harmless, to the full extent permitted by law, the Issuer, its directors and
officers and each Person who controls the Issuer (within the meaning of the
Securities Act and the Exchange Act) from and against any Losses resulting from
any untrue statement of a material fact or any omission of a material fact
required to be stated in the Registration Statement under which such Registrable
Securities were registered under the Securities Act (including any final,
preliminary or summary Prospectus contained therein or any amendment thereof or
supplement thereto or any documents incorporated by reference therein), or
necessary to make the statements therein (in the case of a Prospectus or
preliminary Prospectus, in light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that such untrue
statement or omission had been contained in any information furnished in writing
by such selling holder to the Issuer specifically for inclusion in such
Registration Statement. This indemnity shall be in addition to any liability
such holder may otherwise have. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Issuer or any
indemnified party. In no event shall the liability of any selling holder of
Registrable Securities hereunder be greater in amount than the dollar amount of
the proceeds received by such holder under the sale of the Registrable
Securities giving rise to such indemnification obligation. The Issuer shall be
entitled to receive indemnities from, if applicable and if requested,
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as provided
above (with appropriate modification) with respect to information so furnished
in writing by such Persons specifically for inclusion in any Prospectus or
Registration Statement. Each holder also shall indemnify any underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such underwriters (within the meaning of the Securities Act) to the
same extent as provided above with respect to the indemnification of the Issuer.

            (c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
(PROVIDED, that any delay or failure to so notify the indemnifying party shall
relieve the indemnifying party of its obligations hereunder only to the extent,
if at all, that it is actually and materially prejudiced by reason of such delay
or failure) and (ii) permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party;
PROVIDED, HOWEVER, that any Person entitled to indemnification hereunder shall
have the right to select and employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at the
expense of such Person unless (A) the indemnifying party has agreed in writing
to pay such fees or expenses, (B) the indemnifying party shall have failed to
assume the defense of such claim within a reasonable time after having received
notice of such claim from the Person entitled to indemnification hereunder and
to employ counsel reasonably satisfactory to such Person, (C) in the reasonable
judgment of any such Person, based upon advice of its counsel, a conflict of
interest exists between such Person and the indemnifying party with respect to
such claims or (D) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party (in which case, if the Person notifies the indemnifying
party in writing that such Person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the


                                       11


<PAGE>

right to assume the defense of such claim on behalf of such Person). If such
defense is not assumed by the indemnifying party, the indemnifying party will
not be subject to any liability for any settlement made without its consent, but
such consent may not be unreasonably withheld; PROVIDED, that an indemnifying
party shall not be required to consent to any settlement involving the
imposition of equitable remedies or involving the imposition of any material
obligations on such indemnifying party other than financial obligations for
which such indemnified party will be indemnified hereunder. If the indemnifying
party assumes the defense, the indemnifying party shall have the right to settle
such action without the consent of the indemnified party; PROVIDED, that the
indemnifying party shall be required to obtain such consent (which consent shall
not be unreasonably withheld) if the settlement includes any admission of
wrongdoing on the part of the indemnified party or any restriction on the
indemnified party or its officers or directors. No indemnifying party shall
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to each indemnified party of an unconditional release from all liability in
respect to such claim or litigation. The indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other charges
of more than one separate firm (together with one firm of local counsel) at any
one time from all such indemnified party or parties unless (x) the employment of
more than one counsel has been authorized in writing by the indemnifying party
or parties, (y) a conflict or potential conflict exists or may exist (based on
advice of counsel to an indemnified party) between such indemnified party and
the other indemnified parties or (z) an indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it that are different from or in addition to those available to the
other indemnified parties, in each of which cases the indemnifying party shall
be obligated to pay the reasonable fees and expenses of such additional counsel
or counsels.

            (d) CONTRIBUTION. If for any reason the indemnification provided for
in the paragraphs (a) and (b) of this Section 2.7 is unavailable to an
indemnified party or insufficient to hold it harmless as contemplated by
paragraphs (a) and (b) of this Section 2.7, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
such Loss in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the indemnifying party or the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. Notwithstanding anything in this
Section 2.7(d) to the contrary, no indemnifying party (other than the Issuer)
shall be required pursuant to this Section 2.7(d) to contribute any amount in
excess of the amount by which the net proceeds received by such indemnifying
party from the sale of Registrable Securities in the offering to which the
Losses of the indemnified parties relate exceeds the amount of any damages which
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 2.7(d) were determined by
PRO RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation. If

                                       12


<PAGE>

indemnification is available under this Section 2.7, the indemnifying parties
shall indemnify each indemnified party to the full extent provided in Sections
2.7(a) and 2.7(b) hereof without regard to the relative fault of said
indemnifying parties or indemnified party.

            2.8. RULES 144 AND 144A. The Issuer covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder (or, if the Issuer
is not required to file such reports, it will, upon the request of any holder of
Registrable Securities after the transfer date, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 or 144A
under the Securities Act), and it will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 or 144A or Regulation S under the Securities Act, as
such Rules may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the SEC. Upon the request of any holder of
Registrable Securities, the Issuer will deliver to such holder a written
statement as to whether it has complied with such requirements and, if not, the
specifics thereof.

                            SECTION 3. MISCELLANEOUS

            3.1. TERM. This Agreement shall terminate upon termination of the
Stock Purchase Agreements and if the transactions contemplated by the Stock
Purchase Agreements are completed, upon the earlier of (i) the second
anniversary of the date of this Agreement or (ii) the date as of which (A) all
of the Registrable Securities have been sold pursuant to a Registration
Statement (but in no event prior to the applicable period referred to in Section
4(3) of the Securities Act and Rule 174 thereunder) or (B) the holders are
permitted to sell their Registrable Securities under Rule 144(k) under the
Securities Act (or any similar provision then in force permitting the sale of
restricted securities without limitation on the amount of securities sold or the
manner of sale). The provisions of Section 2.7 and Section 2.8 shall survive any
termination.

            3.2. INJUNCTIVE RELIEF. It is hereby agreed and acknowledged that it
will be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved Person will be irreparably
damaged and will not have an adequate remedy at law. Any such Person shall,
therefore, be entitled (in addition to any other remedy to which it may be
entitled in law or in equity) to injunctive relief, including, without
limitation, specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.

            3.3. ATTORNEYS' FEES. In any action or proceeding brought to enforce
any provision of this Agreement or where any provision hereof is validly
asserted as a defense, the successful party shall, to the extent permitted by
applicable law, be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.


                                       13


<PAGE>

            3.4. NOTICES. All notices, other communications or documents
provided for or permitted to be given hereunder, shall be made in writing and
shall be given either personally by hand-delivery, by facsimile transmission, by
mailing the same in a sealed envelope, registered first-class mail, postage
prepaid, return receipt requested, or by air courier guaranteeing overnight
delivery:

                     (a)       if to the Issuer to:

           IMPAX LABORATORIES, INC.
           3735 Castor Avenue
           Philadelphia, PA, 19124

           Attention:          Barry R. Edwards, Co-Chief Executive
           Fax:......          (215) 289-5932

           with copies to:

           Blank Rome Comisky & McCauley LLP
           One Logan Square
           Philadelphia, PA,  19103-6998

           Attention:          Sol B. Genauer
           Fax:......          (215) 569-5628

           (b).......if to the Investors to the addresses set forth on Schedule
1 hereto, with copies to their attorneys, set forth on Schedule 1 hereto.

            Each holder, by written notice given to the Issuer in accordance
with this Section 3.4 may change the address to which notices, other
communications or documents are to be sent to such holder. All notices, other
communications or documents shall be deemed to have been duly given: (i) at the
time delivered by hand, if personally delivered; (ii) when receipt is
acknowledged in writing by addressee, if by facsimile transmission; (iii) five
business days after having been deposited in the mail, postage prepaid, if
mailed by first class mail; and (iv) on the first business day with respect to
which a reputable air courier guarantees delivery; PROVIDED, HOWEVER, that
notices of a change of address shall be effective only upon receipt.

            3.5. SUCCESSORS, ASSIGNS AND TRANSFEREES. (a) The registration
rights of any holder under this Agreement with respect to any Registrable
Securities may be transferred and assigned, PROVIDED that no such assignment
shall be binding upon or obligate the Issuer to any such assignee unless and
until the Issuer shall have received notice of such assignment as herein
provided and a written agreement of the assignee to be bound by the provisions
of this Agreement. Any transfer or assignment made other than as provided in the
first sentence of this Section 3.5 shall be null and void.




                                       14
<PAGE>


            (b) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto, and their respective successors and permitted
assigns.

            3.6. GOVERNING LAW; SERVICE OF PROCESS; CONSENT TO JURISDICTION. (a)
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN
THE STATE.

            (b) To the fullest extent permitted by applicable law, each party
hereto (i) agrees that any claim, action or proceeding by such party seeking any
relief whatsoever arising out of, or in connection with, this Agreement or the
transactions contemplated hereby shall be brought only in the United States
District Court for the Southern District of New York and in any New York State
court located in the Borough of Manhattan and not in any other State or Federal
court in the United States of America or any court in any other country, (ii)
agrees to submit to the exclusive jurisdiction of such courts located in the
State of New York for purposes of all legal proceedings arising out of, or in
connection with, this Agreement or the transactions contemplated hereby and
(iii) irrevocably waives any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any claim
that any such proceeding brought in such a court has been brought in an
inconvenient forum.

            3.7. HEADINGS. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

            3.8. SEVERABILITY. Whenever possible, each provision or portion of
any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
therein.

            3.9. AMENDMENT; WAIVER.

            (a) This Agreement may not be amended or modified and waivers and
consents to departures from the provisions hereof may not be given, except by an
instrument or instruments in writing making specific reference to this Agreement
and signed by the Issuer, the holders of a majority of Registrable Securities of
each class then outstanding. Each holder of any Registrable Securities at the
time or thereafter outstanding shall be bound by any amendment, modification,
waiver or consent authorized by this Section 3.9(a), whether or not such
Registrable Securities shall have been marked accordingly.

            (b) The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a further or continuing
waiver of such breach or as a waiver of any other or subsequent breach. Except
as otherwise expressly provided herein, no failure on the part of any party to


                                       15


<PAGE>



exercise, and no delay in exercising, any right, power or remedy hereunder, or
otherwise available in respect hereof at law or in equity, shall operate as a
waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.


            3.10. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts and by the parties hereto in separate counterparts each of
which when so executed shall be deemed to be an original and all of which
together shall constitute one and the same agreement.



                                       16

<PAGE>



                     IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be duly executed as of the date first
written above.

                            IMPAX LABORATORIES, INC.


                            By:
                               ----------------------------------------
                                  Name:
                                  Title:


                            CHARLES HSIAO



                              ----------------------------------------

                            ANVIL INVESTMENT ASSOCIATES, L.P.


                            By: Anvil Management Co. LLC
                                  Its general partner


                            By:
                               ----------------------------------------
                                  Name: Theodore H. Ashford
                                  Title: Member


                            ASHFORD CAPITAL PARTNERS, L.P.


                            By: Ashcap Corp.
                                  Its general partner


                            By:
                               ----------------------------------------
                                  Name: Theodore H. Ashford
                                  Title: President


                            NARRAGANSETT I, L.P.


                            By:
                                  -------------------------------------
                                  Name:  Joseph Dowling III
                                  Title: Managing Member






                                       17


<PAGE>

                            NARRAGANSETT OFFSHORE LTD.


                            By: Leo Holdings LLC,
                                  Investment Manager



                            By:
                               ----------------------------------------
                                  Name: Joseph L. Dowling III
                                  Title:  Managing Member



                            SDS MERCHANT FUND, L.P.


                            By:
                                  -------------------------------------
                                  Name: Steve Derby
                                  Title: General Partner



                            S/G MEDSCIENCE FUND, L.P.


                            By:
                                  ----------------------------------------------
                                  Name: David Saks
                                  Title:


                            ROBERT FLEMING NOMINEES LIMITED


                            By:
                                  ----------------------------------------------
                                  Name:
                                  Title:







                                       18
<PAGE>


                            FLEMING US DISCOVERY FUND III, L.P.


                           By:  FLEMING US DISCOVERY PARTNERS, L.P., its general
                                partner


                           By:  FLEMING US DISCOVERY, LLC, its general partner


                            By:
                                  ----------------------------------------------
                          Name:  Robert L. Burr
                          Title:    Member


                            FLEMING US DISCOVERY OFFSHORE FUND III, L.P.


                           By:  FLEMING US DISCOVERY PARTNERS, L.P., its general
                                partner


                           By:  FLEMING US DISCOVERY, LLC, its general partner


                           By:
                                -----------------------------------------------
                                Name:  Robert L. Burr
                                Title: Member





<PAGE>




<TABLE>
<CAPTION>


                                   SCHEDULE 1

------------------------------------ -------------------------------------------------------- ------------------------------------
INVESTOR                             ADDRESS FOR NOTICES                                      COPY TO:
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
<S>                              <C>                                                   <C>
Charles Hsiao                        Charles Hsiao, Chairman
                                     and Co-CEO
                                     Impax Laboratories
                                     30831 Huntwood Avenue
                                     Hayward, CA 94544
                                     (510) 471-1595 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Fleming US Discovery Fund III, L.P.  David Edwards
                                     and Christopher Jones
                                     Chase Fleming Asset Management
                                     320 Park Avenue, 11th Floor
                                     New York, NY 10022
                                     (212) 508-3928 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Fleming US Discovery Offshore Fund   David Edwards
III, L.P.                            and Christopher Jones
                                     Chase Fleming Asset Management
                                     320 Park Avenue, 11th Floor
                                     New York, NY 10022
                                     (212) 508-3928 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Robert Fleming Nominees Limited      David Edwards
                                     and Christopher Jones
                                     Chase Fleming Asset Management
                                     320 Park Avenue, 11th Floor
                                     New York, NY 10022
                                     (212) 508-3928 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Anvil Investment Associates, L.P.    Joseph Petko
                                     Ashford Capital Management
                                     3801 Kennett Pike, B 107
                                     Wilmington, DE 19807
                                     (302) 655-8690 (fax)]
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Ashford Capital Partners, L.P.       Joseph Petko
                                     Ashford Capital Management
                                     3801 Kennett Pike, B 107
                                     Wilmington, DE 19807
                                     (302) 655-8690 (fax)]
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Narragansett I, L.P.                 Joseph Dowling
                                     Narragansett I, L.P.
                                     153 E. 53rd, 26th Floor,
                                      New York, New York 10022
                                     (212) 521-5029 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
Narragansett Offshore Ltd.           Joseph Dowling
                                     Narragansett Offshore Ltd.
                                     153 E. 53rd, 26th Floor,
                                      New York, New York 10022
                                     (212) 521-5029 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
SDS Merchant Fund, L.P.              Steve Derby                                              SDS Merchant Fund, LP
                                     SDS Merchant Fund, L.P.                                  1 Sound Shore Drive
                                     1 Sound Shore Drive, 2d Floor                            Greenwich, CT 06830
                                     Greenwich, CT 06830                                      Attn: General Counsel
                                     (203) 629-0345 (fax)
------------------------------------ -------------------------------------------------------- ------------------------------------
------------------------------------ -------------------------------------------------------- ------------------------------------
S/G MedScience Fund, L.P.            David Saks
                                     Saks Gruntal Medical Science Fund
                                     1 Liberty Plaza
                                     New York, NY 10006
                                     (212) 820-8077
------------------------------------ -------------------------------------------------------- ------------------------------------
</TABLE>



                                       20