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AMENDMENT NUMBER TWO TO SELECTIVE WAIVER AGREEMENT

THIS SECOND AMENDMENT TO THE SELECTIVE WAIVER AGREEMENT

(the "Second Amendment") is hereby made as of February 7, 2005 by and between
Alpharma, Inc., a Delaware corporation, with offices at One Executive Drive,
Fort Lee, NJ 07024, ("ALO"), and Teva Pharmaceutical Industries Ltd., an Israel
corporation, with offices located at 5 Basel Street, P.O. Box 3190, Petach
Tikva, Israel 49131 ("Teva"). ALO and Teva are sometimes together referred to
herein as the "Parties" and separately as a "Party."

WHEREAS

, ALO and Teva entered into a certain Selective Waiver Agreement dated April 26,
2004 (the "Waiver Agreement") and contemporaneously therewith on April 26, 2004
the Parties respective Affiliates Purepac Pharmaceutical Co. ("Purepac") and
Plantex USA, Inc. ("Plantex") entered into a certain Amended and Restated Supply
Agreement (the "Supply Agreement")(the Waiver Agreement and the Supply Agreement
are collectively referred to as the "Original Agreements");

WHEREAS

, ALO and Teva entered into a certain amendment to the Waiver Agreement dated
September 24, 2004 and letter agreement dated October 7, 2004; and

WHEREAS

, the Parties desire to enter into this Second Amendment to make certain changes
to the terms and conditions of the Waiver Agreement in order to better reflect
the current mutual intent and desire of the Parties.

NOW, THEREFORE

, in consideration of the foregoing premises and the mutual agreements set forth
in the Waiver Agreement and this Second Amendment (and notwithstanding anything
in the Original Agreement to the contrary), the Parties hereby agree as follows:

1.     Definitions. All capitalized terms used herein, unless otherwise defined
herein, are defined in the Original Agreements. For the purposes of this Second
Amendment, the following words and phrases shall bear the respective meanings
assigned to them below (and cognate expressions shall bear corresponding
meanings):

 a. "Lawsuit Termination" shall mean the entry of a final order by the United
    States Court of Appeals for the District of Columbia dismissing with
    prejudice the case entitled, Ivax Pharmaceuticals, Inc.("Ivax") v. Food and
    Drug Administration et al. and Purepac Pharmaceutical Co., Appeal No.
    04-5320, prior to the issuance of a decision in that appeal by that Court.
 b. "Early Payment Sum" shall mean, with respect to each Product, the amount of
    ALO Margin generated during the period starting with the Ivax Launch Date
    through the end of the Margin Period.
 c. "Ivax Launch Date" shall mean, as applicable, the date on which Ivax makes
    its first commercial sale of its Capsule Product or its Tablet Product to an
    unaffiliated Third Party in an arms-length transaction in the Territory,
    provided, however, that in no event whatsoever shall such date be earlier
    than (i) March 23, 2005 for the Capsule Product, and (ii) April 29, 2005 for
    the Tablet Product.

2.     Amendment to Article I Interpretation and Definitions. Section 1.3(o) of
the Waiver Agreement shall hereby be replaced in its entirety with the following
new Section 1.3(o)

"(o) "Competing Product" shall mean, respectively with regard to Capsule
Products and Tablet Products, any finished pharmaceutical product for sale in
the prescription drug marketplace that contains the same active ingredient in
the same dosage form and strength as such Product, other than:

Products sold by ALO or Teva, or their respective Affiliates pursuant to this
Agreement;

finished pharmaceutical products sold under the brand name Neurontin®;

Products sold by Ivax or its Affiliates pursuant to a selective waiver or
Relinquishment agreement with ALO, but in no event whatsoever shall any such
sale be earlier than the Ivax Launch Date for the respective Product ; or

(iv) an Authorized Generic Product.

For example, this would exclude any 100 mg, 300 mg and 400 mg gabapentin tablets
that may be approved for Marketing in the Territory."

3.     Amendment to Article II Principal Terms. Section 2.2(a) of the Waiver
Agreement shall hereby be replaced in its entirety with the following new
Section 2.2(a):

"(a) The "ALO Margin" shall mean for each of the Products sold by Teva in the
Territory during the applicable Margin Period the percentages of Teva's Net
Sales set forth in Section 2.1 hereof, which amounts (less (i) the Early Payment
Sum and (ii) any contributions that have been made pursuant to Section 5.3
hereof) shall only become payable to ALO **** days after a ****, if any."

4.     Amendment to Article II Principal Terms. Section 2.2 of the Waiver
Agreement shall hereby be amended by adding thereto the following new
subsection(h), which reads in its entirety as follows:

"(h) In the event of the Lawsuit Termination prior to the Ivax Launch Date, Teva
shall pay ALO the Early Payment Sum within **** days after the conclusion of the
applicable Margin Period with respect to each Product."

 

**** Indicates that material has been omitted pursuant to a request for
confidential treatment and has been filed separtely with the Securities and
Exchange Commission.

5.     Amendment to Article V Indemnification and Contribution.. Section 5.3 of
the Waiver Agreement shall hereby be amended by adding thereto the following new
subsection (e), which reads in its entirety as follows::

"(e) Notwithstanding the provisions of Sections 5.3(a) or 5.3(c) hereof to the
contrary, in the event that Teva has paid ALO the Early Payment Sum, then the
aggregate amounts payable by Teva pursuant to such Sections shall be reduced by
the amount of such Early Payment Sum payment on a dollar-for dollar basis from
the first sums otherwise required to be contributed by Teva thereunder, and
after the full amount of such reduction has been reached Teva's obligation to
make contributions thereafter pursuant to the terms of such Sections shall not
be affected."

6.     Teva Consent. Teva hereby consents to ALO taking all action, after the
Lawsuit Termination, necessary to permit Ivax, or any Affiliate of such
corporation, to commence the sale of any and all forms of the Product from and
after the respective Ivax Launch Date, including without limitation by way of a
selective waiver in favor of Ivax of ALO's First to File Exclusivity rights or a
Relinquishment of ALO's First to File Exclusivity rights in the event that FDA
refuses to grant the selective waiver in favor of Ivax by the applicable Ivax
Launch Date. For the purposes of clarity, if following the foregoing
Relinquishment a Competing Product is Marketed in the Territory , then as
provided in Section 1.1 (ee)(ii) of the Waiver Agreement, the Margin Period for
such Product shall end (if not sooner terminated pursuant to subsection (i)
thereof.

7.     Effective Date of the Amendment. The amendments to the Waiver Agreement
set forth herein shall only become effective upon the date of the Lawsuit
Termination.

 

IN WITNESS WHEREOF

, each of the Parties has caused this Amendment to be executed in multiple
counterparts by its duly authorized representative.

ALPHARMA, INC.

By:/s/ John Larocca
Title: VP, Law, US Generics

TEVA PHARMACEUTICALS INDUSTRIES LTD.

By /s/ George S. Barrett
Title: President & CEO, Teva North America

 

 

By /s/ Richard Egosi
Title: SVP General Counsel