Document:

ASSIGNMENT OF RENTS AND LEASES

                                     made by

                                INTERPHARM, INC.

                             a New York corporation

                                  ("Assignor")

                                       to

                   WELLS FARGO BANK, NATIONAL ASSOCIATION, acting though its
       Wells Fargo Business Credit operating division

                                  ("Assignee")

                              LOCATION OF PREMISES:

                        Street Address:   50 Horseblock Road
                        Town of:          Yaphank
                        County of:        Suffolk
                        State of:         New York
                        District:         0200
                        Section:          813
                        Block:                  1
                        Lot:              5.005 & 5.006

                             DATED: February 9, 2006

                       AFTER RECORDING, PLEASE RETURN TO:

                         Ruskin Moscou Faltischek, P.C.
                               1425 Reckson Plaza
                             East Tower, 15th Floor
                         Uniondale, New York 11556-1425
                        Att: Patricia M. Schaubeck, Esq.

<PAGE>

                         ASSIGNMENT OF RENTS AND LEASES

      THIS ASSIGNMENT OF RENTS AND LEASES (the "Assignment"), made this 9th day
of February, 2006, by INTERPHARM, INC., a New York corporation, having an
address at 75 Adams Avenue, Commack, New York 11725 ("Assignor"), to WELLS FARGO
BANK, NATIONAL ASSOCIATION, acting through its Wells Fargo Business Credit
operating division, having an address at 119 West 40th Street, New York, New
York 10018 ("Assignee").

                             W I T N E S S E T H:
                             - - - - - - - - - -

      WHEREAS, this Assignment is given in connection with a loan in the
principal sum of up to a maximum of Twelve Million and No/100 Dollars
($12,000,000.00) (the "Loan") made by Assignee to Assignor, as evidenced by that
certain Consolidated Real Estate Term Note, dated the date hereof, made by
Assignor to Assignee in the maximum principal amount of the Loan (as the same
may be amended, extended, restated, replaced, supplemented or otherwise modified
from time to time, the "Note"); and

      WHEREAS, the Note is secured by, among other things, that certain Mortgage
and Security Agreement, as modified and consolidated by a Mortgage
Consolidation, Modification and Extension Agreement, made by Assignor to
Assignee, dated the date hereof (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the "Mortgage")
encumbering the premises known as 50 Horseblock Road in the Town of Yaphank,
County of Suffolk, State of New York, as more fully described as set forth in
Exhibit "A" attached hereto and made a part hereof (the "Property"); and

      WHEREAS, Assignor desires to further secure the Note and the performance
by Assignor of all of its obligations under the Mortgage and the other Loan
Documents (as such term is defined in the Mortgage).

      NOW, THEREFORE, in consideration of the making of the Loan by Assignee and
the covenants, agreements, representations and warranties set forth in this
Assignment, the parties hereto hereby agree as follows:

      1. Assignment of Leases. Assignor hereby conveys, transfers and assigns
unto Assignee, its successors and assigns, all the rights, interest and
privileges, (a) which Assignor as lessor has and may have in the leases now
existing or hereafter made and relating to or affecting the Property or any part
thereof as such leases may from time to time be hereafter, modified, extended
and renewed (collectively the "Leases" or individually a "Lease"), with all
rents, income and profits due and becoming due therefrom (including, but not
limited to, any sums in lieu of rent), and (b) which Assignor has and may have
by virtue of any guaranty or surety agreement (collectively "Guaranties") with
respect to the tenant's obligations under the Leases, as such Guaranties may
have been, or may from time to time be hereafter, modified and extended.
Assignor will, on request of Assignee, execute assignments of any future Leases
and assignments of any Guaranties made in connection therewith. Within five (5)
days after execution thereof, Assignor shall deliver to Assignee a counterpart
original of any Lease, any amendment thereof and any Guaranties and amendment
thereof. Anything to the contrary notwithstanding, Assignor also hereby assigns
to Assignee any award made hereafter to it in any court procedure involving any
of the tenants in any bankruptcy, insolvency, or reorganization proceedings in
any state or Federal court, and any and all payments made by tenants in lieu of
rent. Assignor hereby appoints Assignee as its irrevocable attorney-in-fact
(which appointment is coupled with an interest) to appear in any action and/or
to collect any such award or payment.

<PAGE>

      2. All Obligations. This Assignment shall remain in effect until all of
the Indebtedness has been paid in full. The acceptance of this Assignment and
the collection of rents or the payments under the Leases or any sums under the
Guaranties hereby assigned shall not constitute a waiver of any rights of
Assignee under the terms of the Loan Documents.

      3. Assignor's Rights Notwithstanding Assignment. As used herein, the term
Event of Default shall have the meaning ascribed thereto in the Mortgage. This
Assignment is an absolute assignment of the Leases and Guaranties from Assignor
to Assignee, and is not merely the granting of a security interest in the Leases
and Guaranties. However, unless an Event of Default exists, Assignor shall have
(i) the right to exercise all of the rights of the landlord under the Leases and
Guaranties to the extent not prohibited by the provisions of this Assignment and
the Loan Documents and (ii) a revocable license to collect such rents, income
and profits from the Leases and Guaranties; provided, however, that in no event
may Assignor collect rent more than one (1) month in advance. Upon an Event of
Default, such license shall be automatically revoked without any further action
or notice being required, and Assignee shall thereupon solely be entitled to
collect the rents, income and profits due or to become due under the Leases and
Guaranties whether or not Assignee has taken possession of the Property pursuant
to the other provisions of this Assignment.

      4. Right to Possession. Assignor, upon an Event of Default, hereby
authorizes Assignee, at its option, to collect all or any rents, income, profits
and all or any other sums due or becoming due under the Leases, to collect all
or any sums due or becoming due under the Guaranties, to let or re-let the
Property or any part thereof, to cancel and modify Leases and Guaranties, evict
tenants, bring or defend any suits in connection with the possession of the
Property in its own name or Assignor's name, make repairs as Assignee deems
appropriate, and perform such other acts in connection with the management and
operation of the Property as Assignee, in its discretion, may deem proper,
provided, however, that nothing herein shall limit Assignee's remedies under the
Loan Documents.

      5. Use of Rents. Effective during the continuance of an Event of Default,
Assignor hereby irrevocably constitutes and appoints Assignee or any officer or
agent of Assignee to be Assignor's true and lawful attorney (which appointment
shall be irrevocable and shall be coupled with an interest), in Assignor's name,
place, and stead, (a) to exercise any right which Assignor may have to record
any Lease, (b) to endorse any checks payable to Assignor from tenants or
guarantors for the payment of rents, income or profits from the Property and to
deposit the checks or to further endorse them over to Assignee, and (c) to
demand, collect, sue for, attach, levy, and recover any of the rents and any
premium or penalty payable upon the exercise by any tenant under any Lease of a
privilege of cancellation originally provided in any Lease, and to give proper
receipts and releases therefor and, after deducting all expenses of collection,
to apply the net proceeds as a credit upon any portion of the Indebtedness, in
such order as Assignee may elect, or, at Assignee's option, apply the net
proceeds to pay the costs of operation or maintenance of the Property. Nothing
herein contained shall be construed as constituting Assignee a mortgagee in
possession in the absence of the taking of actual physical possession of the
Property by Assignee. In the exercise of the powers herein granted Assignee, no
liability shall be asserted or enforced against Assignee, all such liability
being expressly waived and released by Assignor. The receipt by Assignee of any
rents, issues or profits pursuant to this Assignment after the institution of
foreclosure or sale proceedings under the Mortgage or execution proceedings
under the Note shall not cure any Event of Default or affect such proceedings or
any sale pursuant thereto.

                                       2
<PAGE>

      6. Assignee Not Bound to Perform Under Leases. Assignee shall not be
obligated to perform or discharge any obligation or duty to be performed or
discharged by Assignor under any of the Leases, and Assignor hereby agrees to
indemnify, defend and hold Assignee harmless of and from any and all liability
or expense (including, but not limited to, reasonable attorneys' fees, court
costs and other disbursements) arising from any of the Leases, Guaranties, this
Assignment, or by reason of any action taken by Assignee pursuant to this
Assignment, except to the extent caused solely by the gross negligence or
willful misconduct of Assignee, and this Assignment shall not place
responsibility for the control, care, management or repair of the Property upon
Assignee, or make Assignee responsible or liable for any negligence in the
management, operation, upkeep, repair or control of the Property resulting in
loss or injury or death to any tenant, licensee, employee or other person. The
amount of any liability or expense with respect to which Assignor is obligated
to indemnify Assignee pursuant to the provisions of this paragraph, together
with interest at the Default Rate (as specified in the Mortgage), shall
immediately and without notice be due and payable by Assignor to Assignee.

      7. Representations and Covenants. Assignor covenants and represents that
(a) Assignor has title to, and full right to assign the Leases, Guaranties, and
the rents, income and profits due or to become due thereunder; (b) no other
assignment of any interest in the Leases and Guaranties has been made which
remains in effect; (c) Assignor shall not discount or compromise any of such
rents, income or profits due or to become due; (d) Assignor will not enter into
any new Lease or renew any existing Lease for the Property without the prior
approval of the Lease by Assignee unless otherwise expressly permitted by the
Mortgage; and (e) Assignor will not hereafter (i) assign or transfer in any
manner any future payment of the rents, income or profits or any of Assignor's
rights under any Lease to any person other than a person lawfully succeeding,
subject to the Mortgage, to all of Assignor's right, title and interest in and
to all or part of the Property (nothing contained in this clause shall be
construed as a modification or waiver of any transfer restrictions contained in
the Mortgage); (ii) waive the performance or observance by the tenant, guarantor
or surety under any Lease or Guarantee of any material covenant or condition, as
determined by Assignee (including, without limitation, any covenant or condition
relating to rent or additional rent or the lease term, all of which terms and
conditions are hereby deemed to be material) to be performed or observed by such
tenant, guarantor or surety thereunder; (iii) amend, modify or in any way alter
the terms of any Lease; (iv) collect any rent (exclusive of security deposits)
more than thirty (30) days in advance of the time when the same shall become
due; or (v) do or permit to be done anything which will cause any Lease to be
subordinate to any mortgage covering any or all of the Property which is
subordinate to the Mortgage. Any act of Assignor enumerated in the immediately
preceding sentence which is done without Assignee's prior written consent
thereto shall be void and of no force or effect and constitute an Event of
Default. Assignor shall not, without prior notice to Assignee and, during an
Event of Default, without the prior written consent of Assignee, (i) commence an
action of ejectment or any summary proceeding for dispossession of any tenant
under any Lease; (ii) exercise any right of recapture provided in any Lease; or
(iii) consent to any subletting of any or all of the portion of the Property or
to any assignment of any Lease by any tenant thereunder or to any assignment or
further subletting of any sublease.

                                       3
<PAGE>

      8. Notice to Tenants. Assignor hereby authorizes Assignee to give notice
in writing of this Assignment at any time after an Event of Default to any
tenant under the Leases and to any guarantor of the Leases. Assignor hereby
consents to any such tenant or guarantor paying all rent, income and profits to
Assignee following receipt by such tenant or guarantor of a notice from Assignee
that an Event of Default exists, and Assignor waives any right to demand from
any such tenant or guarantor, payment to Assignor of such rent, income or
profits after Assignee has sent any such notice to such tenant or guarantor.
Each tenant and guarantor shall be entitled to rely upon any notice from
Assignee and shall be protected with respect to any payment of rent, income and
profits made pursuant to such notice. Irrespective of whether a dispute exists
between Assignor and Assignee with respect to the existence of an Event of
Default or the rights of Assignee under this Assignment, each tenant and
guarantor who receives a notice from Assignee pursuant to this Assignment shall
not be required to investigate or determine the validity or accuracy of such
notice or the validity or enforceability of this Assignment. Assignor hereby
agrees to indemnify, defend and hold each such tenant harmless from and against
any and all loss, claims, damage or liability arising from or related to any
payment of rent, income and profits or performance of obligations under any
Lease by such tenant and guarantor made in good faith in reliance on and
pursuant to such notice. The provisions of this Paragraph are expressly made for
the benefit of, and shall be binding on and enforceable by, each tenant and
guarantor under a Lease.

      9. Cross Default. Violation of any of the covenants, representations and
provisions contained in this Assignment by Assignor (other than those covenants
set forth in paragraph 7 for which no cure period shall exist), after thirty
(30) days' written notice to Assignor (which period shall run concurrently with
any other notice period required), shall be deemed an Event of Default under the
terms of the Loan Documents.

      10. Compliance with Leases. Assignor shall comply with all of the terms
and conditions of the Leases. Any expenditures made by Assignee, after any
notice required by the terms of the Mortgage, in curing Assignor's failure to so
comply with the Leases, with interest thereon at the Default Rate, shall become
part of the Indebtedness. Except to the extent otherwise expressly provided
herein, Assignor shall diligently enforce the tenant's obligations under the
Leases and shall diligently enforce the obligations of any guarantor or surety
under the Guaranties.

      11. Satisfaction. Payment in full of the Indebtedness and the duly
recorded satisfaction of the Mortgage shall render this Assignment automatically
void with respect to the Property.

                                       4
<PAGE>

      12. "Lease" and "Rent" Defined. The term "Lease" shall include any lease
of all or any portion of the Property as well as any sublease of all or any
portion of the Property and any license, concession or other agreement with
respect to the use, occupancy or utilization of all or any portion of the
Property. The term "Rent" shall include all rent, additional rent, license fees
or charges, concession fees or charges, lease cancellation fees and all other
payments of any kind (including, without limitation, security deposits to the
extent that they may be lawfully assigned, and all payments made on account of
operating expenses and real estate taxes and other similar items whether
categorized as rent, additional rent or otherwise) with respect to the use,
occupancy or utilization of all or any portion of the Property.

      13. Miscellaneous.

            (a) Indulgences, Etc. Neither the failure nor any delay of Assignee
to exercise any right, remedy, power or privilege under this Assignment shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.

            (b) Controlling Law. This Assignment and all questions relating to
its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the internal laws of the jurisdiction in which
the Property is located, and without the aid of any canon, custom or rule of law
requiring construction against the draftsman. This Assignment is intended to be,
and shall operate as, the agreement described in Section 291-f of the Real
Property Law of the State of New York and shall be entitled to the benefits
afforded thereby.

            (c) Notices. All notices, requests, demands and other communications
required or permitted under this Assignment between Assignor and Assignee shall
be in writing and shall be deemed to have been duly given, made and received
only when delivered as set forth in the Mortgage.

            (d) Execution in Counterparts. This Assignment may be executed in
any number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Assignment shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

            (e) Provisions Separable. The provisions of this Assignment are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

                                       5
<PAGE>

            (f) Amendment. This Assignment may not be modified or amended other
than by an agreement in writing signed by the party against which enforcement of
the change is sought.

            (g) Paragraphs Headings. The paragraph headings in this Assignment
are for convenience only; they form no part of this Assignment and shall not
affect its interpretation.

            (h) Gender, Etc. Words used herein, regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.

            (i) Definitions. Definitions contained in this Assignment which
identify documents, including the Loan Documents, shall be deemed to include all
amendments and supplements to such documents from the date hereof, and all
future amendments and supplements thereto entered into from time to time with
the consent of Assignee. Reference to this Assignment contained in any of the
foregoing documents shall be deemed to include all amendments and supplements to
this Assignment.

            (j) Effect. This Assignment shall be binding upon and inure to the
benefit of Assignor, Assignee and their respective successors and assigns. If
Assignor consists of more than one person or entity, the obligations of Assignor
under this Assignment shall be joint and several.

            (k) Exhibits. All exhibits attached hereto are hereby incorporated
by reference into, and made a part of, this Assignment.

            (l) Jury Trial. ASSIGNOR, AND BY ITS ACCEPTANCE HEREOF, ASSIGNEE,
EACH HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE ASSIGNMENT, OR ANY CLAIM,
COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF
RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY ASSIGNOR AND
ASSIGNEE, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE
AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. ASSIGNOR AND
ASSIGNEE ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY
PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

                                       6
<PAGE>

            IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly
executed as a sealed instrument the 9th day of February, 2006.

                                    ASSIGNOR:

                                    INTERPHARM, INC.

                                    By: /s/ George Aronson
                                       ---------------------------------------
                                        George Aronson, Chief Financial Officer

                                    With respect to Section 13(l):

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                    acting  through its Wells  Fargo  Business
                                    Credit operating division

                                    By: /s/ Richard Mahtani
                                       ---------------------------------------
                                       Richard Mahtani, Assistant Vice President

                                       7
<PAGE>

                                 ACKNOWLEDGMENTS

STATE OF NEW YORK   )
                    ) ss.:
COUNTY OF NASSAU    )

      On the 9th day of February, in the year 2006, before me, the undersigned,
a Notary Public in and for said State, personally appeared George Aronson,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                          -------------------------------------
                                          Notary Public

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF NASSAU  )

      On the 9th day of February, in the year 2006, before me, the undersigned,
a Notary Public in and for said State, personally appeared Richard Mahtani,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the instrument, the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                          -------------------------------------
                                          Notary Public

<PAGE>

                                   Exhibit "A"

                                Legal DescriptionMORTGAGE CONSOLIDATION,

                      MODIFICATION AND EXTENSION AGREEMENT

                             Dated: February 9, 2006

                                in the amount of

                                 $12,000,000.00

                                      from

                           INTERPHARM, INC., Mortgagor

                             a New York corporation

                              having an address at:

                                 75 Adams Avenue

                             Commack, New York 11725

                                       to

                   WELLS FARGO BANK, NATIONAL ASSOCIATION, acting through its
      Wells Fargo Business Credit operating division

                              having an address at:

                              119 West 40th Street

                            New York, New York 10018

                              LOCATION OF PREMISES:

                        Street Address:   50 Horseblock Road
                        Town of:          Yaphank
                        County of:        Suffolk
                        State of:         New York
                        District:         0200
                        Section:          813
                        Block:                  1
                        Lots:             5.005 & 5.006

                       After recording, please return to:

                         Ruskin Moscou Faltischek, P.C.

                               1425 Reckson Plaza

                             East Tower, 15th Floor

                         Uniondale, New York 11556-1425

                        Attn: Patricia M. Schaubeck, Esq.

<PAGE>

            MORTGAGE MODIFICATION, CONSOLIDATION AND EXTENSION AGREEMENT (the
"Consolidation Agreement"), made as of February 9, 2006, given by Interpharm,
Inc., a New York corporation, having an address at 75 Adams Avenue, Commack, New
York 11725 ("Mortgagor"), in favor of Wells Fargo Bank, National Association,
acting through its Wells Fargo Business Credit operating division, having an
address at 119 West 40th Street, New York, New York 10018 ("Mortgagee").

                              W I T N E S S E T H :

            WHEREAS, Mortgagor is the lawful owner of that certain parcel of
real property known as 50 Horseblock Road, in the Town of Yaphank, County of
Suffolk, State of New York, as more particularly described in Schedule A
attached hereto and made a part hereof (the "Land"), together with all buildings
and other improvements located on the Land (the Land, together with all such
buildings and other improvements, collectively, the "Premises");

            WHEREAS, Mortgagee is now the lawful owner and holder of those
certain promissory notes set forth on Schedule B attached hereto and made a part
hereof (collectively, the "Notes") in the aggregate original principal amount of
Twelve Million and No/100 Dollars ($12,000,000.00), on which Notes there is
currently outstanding, in the aggregate, the principal amount of Twelve Million
and No/100 Dollars ($12,000,000.00);

            WHEREAS, the Notes are secured by those certain mortgages set forth
on Schedule B (collectively, the "Mortgages"), given by Mortgagor, which
Mortgages encumber the Premises;

            WHEREAS, Mortgagor and Mortgagee have agreed in the manner
hereinafter set forth to (i) consolidate and coordinate the respective liens of
the Mortgages, (ii) combine and coordinate the Notes and the principal sums
evidenced thereby and (iii) modify the time and manner of payment and the terms
and provisions of the Notes and the Mortgages.

            NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:

            1. Representations and Warranties. Mortgagor represents and warrants
to Mortgagee that:

                  (a) There is, as of the date hereof, due and owing upon the
Mortgages, the aggregate principal amount of Twelve Million and No/00 Dollars
($12,000,000.00), together with interest thereon and other charges evidenced
thereby, in each case without offset, defense or counterclaim of any kind or
nature whatsoever. (Such outstanding amounts, together with all interest thereon
and such other amounts as may be outstanding from time to time under the Notes
and Mortgages and under the Consolidated Note (as hereafter defined), and any
and all liability, whether liquidated or unliquidated, defined, contingent,
conditional or of any other nature whatsoever, and performance of all other
obligations, arising under any swap, derivative, foreign exchange or hedge
transaction or arrangement howsoever described or defined at any time entered
into with Mortgagee in connection with the Indebtedness being hereinafter
referred to, collectively, as the "Indebtedness").

<PAGE>

                  (b) As of the date hereof, there are no defaults or events of
default under the Notes and Mortgages, nor has any event occurred which would be
a default thereunder with the passage of time, the giving of notice, or both.

                  (c) Mortgagor is the holder of good, marketable, insurable fee
title in and to the Premises, subject to the Permitted Encumbrances (as defined
in Schedule C attached hereto) and has full power, good right and lawful
authority to encumber the Premises in the manner and form set forth in the
Mortgages and to execute and deliver this Consolidation Agreement.

                  (d) The execution and delivery of this Consolidation Agreement
does not and will not violate the terms of Mortgagor's certificate of
incorporation or by-laws, or any other lease, agreement, mortgage, indenture or
instrument affecting Mortgagor or the Premises or any law, rule, order,
ordinance or statute of any governmental authority, purporting to have
jurisdiction over Mortgagor or the Premises.

            2. Consolidation of Notes. The Notes and the respective principal
indebtedness evidenced thereby are hereby combined and consolidated to
constitute a single indebtedness in the aggregate principal amount of Twelve
Million and No/00 Dollars ($12,000,000.00), together with interest heretofore
accrued on each of such Notes.

            3. Consolidated Note. Concurrently herewith, Mortgagor is executing
and delivering to Mortgagee that certain Consolidated Real Estate Term Note (the
"Consolidated Note"), dated of even date herewith, made by Mortgagor, as maker,
in favor of Mortgagee, as payee, evidencing the consolidation of the Notes,
which Consolidated Note amends, modifies and restates the terms, provisions and
time of payment of the Notes in all respects and from and after the date hereof,
the Notes shall be deemed replaced by the Consolidated Note and Mortgagor shall
pay the Indebtedness in accordance with, and shall comply with the terms and
conditions set forth in the Consolidated Note, which Consolidated Note is hereby
substituted for the Notes.

            4. Consolidation of Mortgages. The liens of the Mortgages are hereby
consolidated and coordinated so that together they shall hereafter constitute in
law but one mortgage, a single, first lien upon the Premises securing the
Indebtedness.

            5. Modification of Consolidated Mortgage. The Mortgages, as
consolidated and coordinated hereby, are also modified, extended, amended and
restated in their entirety and the terms, covenants and conditions of the
Mortgages, as consolidated, shall be and hereby are superseded and replaced by
the terms, covenants and conditions set forth in Schedule C annexed hereto and
made a part hereof (the Mortgages, as so consolidated, modified, extended,
amended and restated in Schedule C hereto, together with this Consolidation
Agreement, are referred to, collectively, as the "Consolidated Mortgage").
Mortgagor agrees to comply with and be subject to all of the terms, covenants
and conditions of this Consolidated Mortgage.

            6. Use of Terms. The terms "Improvements" and "Mortgaged Property"
shall have the meanings ascribed to them in Schedule C attached hereto when used
in this Consolidated Mortgage. Whenever the term "note" or "Note", shall be used
in this Consolidated Mortgage or in the Consolidated Note, such terms shall mean

                                       2
<PAGE>

and refer to the Consolidated Note, as such Consolidated Note may be further
modified from time to time. Whenever the terms "mortgage" or "Mortgage" shall be
used in this Consolidated Mortgage (including, without limitation, Schedule C
hereto), or in the Consolidated Note, such terms shall mean and refer to this
Consolidated Mortgage, as this Consolidated Mortgage may be further modified
from time to time. Terms defined in this Consolidation Agreement that are used
in Schedule C hereto that are not otherwise defined in such schedules, shall
have the meaning accorded such terms in this Consolidation Agreement.

            7. Subsequent Modifications. Any written agreement or agreements
hereafter entered into by the Mortgagee which (i) extend the time of payment of
the Indebtedness, (ii) change or modify the time or times of payment or the
amount of the installments or fixed sums or the interest or the rate thereof,
(iii) change, modify, extend, renew or terminate other terms, provisions,
covenants or conditions of the Consolidated Mortgage or the obligations which it
secures or this Agreement, or (iv) consolidate, spread, release or sever the
lien of the Consolidated Mortgage shall be effective in accordance with the
terms and provisions thereof and shall be binding according to the tenor thereof
on the owner or holder of subordinate, intervening or subsequent liens or
security interests on the Premises and any such liens or security interests
shall continue to be subject and subordinate to this Consolidated Mortgage and
any such agreement or agreements.

            8. No New Indebtedness; Maximum Principal Amount. (a) The parties
hereto hereby certify that this Consolidation Agreement secures the same
indebtedness evidenced by the Notes, together with interest thereon, and secured
by this Consolidated Mortgage, and evidences and secures no further or other
indebtedness or obligation.

                  (b) Notwithstanding anything to the contrary contained herein,
the maximum principal sum which is secured by the Consolidated Mortgage as of
the date hereof, or which under any contingency may be secured by the
Consolidated Mortgage at any time in the future, shall not exceed the principal
sum of Twelve Million and 00/100 Dollars ($12,000,000.00).

            9. No Oral Modification. The terms hereof may not be waived,
changed, modified, terminated or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification, termination or discharge is sought.

            10. Ratification. Mortgagor hereby (i) ratifies and confirms the
Indebtedness and the lien, conveyance and grant contained in and created by this
Consolidated Mortgage and (ii) agrees that nothing contained in this
Consolidation Agreement is intended to or shall impair the validity of the
Indebtedness or the lien, conveyance and grant of the Consolidated Mortgage.
Unless specifically modified by the terms hereof, the parties hereto ratify and
confirm each and every term of the Consolidated Mortgage and the Consolidated
Note, which shall continue in full force and effect.

            11. Further Assurances. Mortgagor shall execute and deliver, at
Mortgagor's sole cost and expense, such additional documents as shall be
requested by Mortgagee from time to time to effectuate the terms and conditions

                                       3
<PAGE>

of this Consolidation Agreement, the Consolidated Note and the Consolidated
Mortgage, including, without limitation, such affidavits as shall be necessary
to permit this Consolidation Agreement to be recorded in the appropriate public
records. Mortgagor hereby appoints Mortgagee its attorney-in-fact to execute,
acknowledge and deliver for and in the name of the Mortgagor any and all of the
instruments mentioned in this section, and this power, being coupled with an
interest, shall be, irrevocable as long as any part of the Indebtedness remains
unpaid.

            12. Successors and Assigns. This Consolidation Agreement shall bind,
and inure to the benefit of, the parties hereto, their respective successors and
permitted assigns.

            13. Counterparts. This Consolidation Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.

            IN WITNESS WHEREOF, this Consolidation Agreement has been executed
by the parties hereto as of the day and year first written above.

                                   MORTGAGOR:

                                   INTERPHARM, INC.

                                    By: /s/ George Aronson
                                       ---------------------------------------
                                       George Aronson, Chief Financial
                                       Officer

                                    MORTGAGEE:

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                                    acting  through its Wells  Fargo  Business
                                    Credit operating division

                                    By: /s/ Richard Mahtani
                                       ---------------------------------------
                                       Richard Mahtani, Assistant Vice President

                                       4
<PAGE>

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF NASSAU  )

            On the 9th day of February, in the year 2006, before me, the
undersigned, personally appeared George Aronson, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                          -------------------------------------
                                          Notary Public

STATE OF NEW YORK )
                  ) ss.:
COUNTY OF NASSAU  )

            On the 9th day of February, in the year 2006, before me, the
undersigned, personally appeared Richard Mahtani, personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument and acknowledged to me that he
executed the same in his capacity, and that by his signature on the instrument,
the individual, or the person upon behalf of which the individual acted,
executed the instrument.

                                          -------------------------------------
                                          Notary Public

                                       5
<PAGE>

                                   SCHEDULE A

                               Description of Land

<PAGE>

                                   SCHEDULE B

                         Schedule of Notes and Mortgages

      1.    Mortgage dated June 29, 2004, made by Interpharm Realty, LLC to HSBC
            Bank USA in the principal sum of $7,400,000.00 and recorded on July
            14, 2004 in Liber 20795 page 614 in the office of the Suffolk County
            Clerk.

            Which Mortgage was assumed by an Note and Mortgage Assumption
            Agreement between Interpharm, Inc. and HSBC Bank USA dated as of
            March 14, 2005 and recorded on July 20, 2005 in Liber 21090 page 206
            in the office of the Suffolk County Clerk.

            Which Mortgage was amended and assumed by an Amended and Restated
            Note and Mortgage Assumption Agreement dated April 11, 2005 between
            Interpharm, Inc. to HSBC Bank USA and recorded on May 10, 2005, in
            Liber 21043, Page 932 in the office of the Suffolk County Clerk.

            Which Mortgage was assigned by an Assignment of Mortgage by HSBC
            Bank USA to Wells Fargo Bank, National Association, acting through
            its Wells Fargo Business Credit operating division, and to be
            recorded simultaneously herewith in the office of the Suffolk County
            Clerk.

            Which Mortgage as assigned has an unpaid principal balance in the
            amount of $6,845,000.06.

      2.    Demand Mortgage and Security Agreement dated February 9, 2006 made
            by Interpharm, Inc. to Wells Fargo Bank, National Association,
            acting through its Wells Fargo Business Credit operating division,
            in the principal sum of $5,154,999.94 and to be recorded
            simultaneously herewith in the office of the Suffolk County Clerk.

<PAGE>

                                   SCHEDULE C

                                    Mortgage

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