<PAGE>

                                                                    Exhibit 10.4


                        SEVENTH AMENDMENT AND WAIVER TO
                          LOAN AND SECURITY AGREEMENT
                          ---------------------------


          SEVENTH AMENDMENT AND WAIVER, dated as of August 13, 1999 (this
"Amendment"), to the Loan and Security Agreement referred to below by and among
----------
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation ("Lender"), PAR
                                                               ------
PHARMACEUTICAL, INC., a New Jersey corporation ("Borrower"), PHARMACEUTICAL
                                                 --------
RESOURCES, INC., a New Jersey corporation ("Parent"), NUTRICEUTICAL RESOURCES,
                                            ------
INC., a New York corporation ("NRI"), and PARCARE, LTD., a New York corporation
                               ---
("ParCare").  Parent, NRI and ParCare are hereinafter referred to as
  -------
"Guarantors".
 ----------

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

          WHEREAS, Lender, Borrower and Guarantors are parties to that certain
Loan and Security Agreement, dated as of December 15, 1996 (as amended,
supplemented or otherwise modified prior to the date hereof, the "Loan
                                                                  ----
Agreement"); and

          WHEREAS, Lender has agreed to amend, and to waive certain violations
of, the Loan Agreement in the manner, and on the terms and conditions, provided
for herein.

          NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties to this Amendment hereby agree as follows:

          1.   Definitions.  Capitalized terms not otherwise defined herein
               -----------
shall have the meanings ascribed to them in the Loan Agreement.

          2.   Amendment to Schedule F of the Loan Agreement.   Schedule F of
               ---------------------------------------------    ----------
the Loan Agreement is hereby amended as of Amendment Effective Date (as
hereinafter defined) by deleting Section 1 in its entirety and inserting in lieu
thereof the following new section:

               "1.  Minimum EBIT.   Parent and its Subsidiaries on a
                    ------------
          consolidated basis shall maintain for each four Fiscal Quarter period,
          commencing with the four Fiscal Quarter period ending on or about
          December 31, 1998, EBIT for such period of not less than the amount
          for such period set forth below:

          Four Fiscal Quarter Period Ending
          ---------------------------------
          on or about:                                  Minimum EBIT
          -----------                                   ------------

          December 31, 1998                             $(17,000,000)
          March 30, 1999                                 (13,000,000)
          June 30, 1999                                  (13,000,000)
          September 30, 1999                              (8,600,000)
          December 31, 1999                               (3,000,000)"

          3.   Waiver.  Lender hereby waives as of the Amendment Effective Date
               ------
all Events of Default under Section 8.1(b) of the Loan Agreement solely arising
                            --------------
out of the failure of Parent and its Subsidiaries to maintain, on a consolidated
basis, the minimum EBIT required by Section 4.2 of the Loan Agreement and
                                    -----------
paragraph 1 of Schedule F to the Loan Agreement for the four Fiscal Quarter
               ----------
period ended June 30, 1999.


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<PAGE>

          4.   Representations and Warranties.  To induce Lender to enter into
               ------------------------------
this Amendment, each Credit Party hereby represents and warrants that:

               A.  The execution, delivery and performance of this Amendment and
     the performance of the Loan Agreement, as amended hereby (the "Amended Loan
                                                                    ------------
     Agreement"), by each Credit Party: (i) are within their respective
     ---------
     corporate powers; (ii) have been duly authorized by all necessary corporate
     and shareholder action; and (iii) are not in contravention of any provision
     of their respective certificates or articles of incorporation or by-laws or
     other organizational documents.

               B.  This Amendment has been duly executed and delivered by or on
     behalf of each Credit Party.

               C.  Each of this Amendment and the Amended Loan Agreement
     constitutes a legal, valid and binding obligation of each Credit Party
     enforceable against each Credit Party in accordance with its terms, except
     as enforceability may be limited by applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting creditors' rights
     generally and by general equitable principles (whether enforcement is
     sought by proceedings in equity or at law).

               D.  No Default (other than those waived pursuant hereto) has
     occurred and is continuing both before and after giving effect to this
     Amendment.

               E.  No action, claim or proceeding is now pending or, to the
     knowledge of each Credit Party, threatened against any Credit Party, at
     law, in equity or otherwise, before any court, board, commission, agency or
     instrumentality of any federal, state, or local government or of any agency
     or subdivision thereof, or before any arbitrator or panel of arbitrators,
     which challenges any Credit Party's right, power, or competence to enter
     into this Amendment or, to the extent applicable, perform any of its
     obligations under this Amendment, the Amended Loan Agreement or any other
     Loan Document, or the validity or enforceability of this Amendment, the
     Amended Loan Agreement or any other Loan Document or any action taken under
     this Amendment, the Amended Loan Agreement or any other Loan Document.

               F.  The representations and warranties of the Credit Parties
     contained in the Loan Agreement and each other Loan Document shall be true
     and correct on and as of the Amendment Effective Date with the same effect
     as if such representations and warranties had been made on and as of such
     date, except that any such representation or warranty which is expressly
     made only as of a specified date need be true only as of such date.

          5.   No Other Amendment/Waivers.  Except as expressly provided in
               --------------------------
Section 2 hereof, the Loan Agreement shall be unmodified and shall continue to
be in full force and effect in accordance with its terms.  Except as expressly
provided in Section 3 hereof, this Amendment shall not be deemed a waiver of any
term or condition of any Loan Document and shall not be deemed to prejudice any
right or rights which Lender may now have or may have in the future under or in
connection with any Loan Document or any of the instruments or agreements
referred to therein, as the same may be amended from time to time.

          6.   Outstanding Indebtedness; Waiver of Claims.  Each Credit Party
               ------------------------------------------
hereby acknowledges and agrees that as of the date hereof the aggregate
outstanding principal amount of the Revolving Credit Loan is -$0- .  Each Credit
Party hereby waives, releases, remises and forever discharges Lender and each
other Indemnified Person from any and all Claims of any kind or character, known
or unknown, which each Credit Party ever had, now has or might hereafter have
against Lender which relates, directly or indirectly, to any acts or omissions
of Lender or any other Indemnified Person on or prior to the date hereof.


                                     -19-
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          7.   Expenses.  Borrower hereby reconfirms its obligations pursuant
               --------
to Section 10.2 of the Loan Agreement to pay and reimburse Lender for all
reasonable out-of-pocket expenses (including, without limitation, reasonable
fees of counsel) incurred in connection with the negotiation, preparation,
execution and delivery of this Amendment and all other documents and instruments
delivered in connection herewith.

          8.   Effectiveness.  This Amendment shall become effective as of the
               -------------
date hereof (the "Amendment Effective Date") only upon satisfaction in full in
                  ------------------------
the judgment of the Lender of each of the following conditions on or prior to
August 19, 1999:

               A.   Amendment.  Lender shall have received two original copies
                    ---------
of this Amendment duly executed and delivered by Lender and each Credit Party.

               B.   Payment of Expenses.  Borrower shall have paid to Lender all
                    --------------------
costs and expenses (including a non-refundable waiver fee in the amount of
$15,000) owing in connection with this Amendment and the other Loan Documents
and due to Lender (including, without limitation, reasonable legal fees and
expenses).

               C.   Representations and Warranties.  The representations and
                    ------------------------------
warranties of each Credit Party contained in this Amendment shall be true and
correct on and as of the Amendment Effective Date.

          9.   GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
               -------------
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          10.  Counterparts.  This Amendment may be executed by the parties
               ------------
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.


                            (SIGNATURE PAGE FOLLOWS)



                                     -20-
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    IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered as of the day and year first above written.


                              Borrower:
                              --------

                              PAR PHARMACEUTICAL, INC.


                              By: /s/ Dennis O'Connor
                                  -------------------
                              Name: Dennis O'Connor
                              Title: VP-CFO


                              Lender:
                              ------

                              GENERAL ELECTRIC CAPITAL
                              CORPORATION


                              By: /s/ Martin S. Greenberg
                                  -----------------------
                              Name: Martin S. Greenberg
                              Its: Duly Authorized Signatory


                              Parent:
                              ------

                              PHARMACEUTICAL RESOURCES, INC.

                              By: /s/ Dennis O'Connor
                                  -------------------
                              Name: Dennis O'Connor
                              Title: VP-CFO



                      (SIGNATURES CONTINUED ON NEXT PAGE)



                                     -21-
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                              Subsidiary Guarantors:
                              ---------------------

                              NUTRICEUTICAL RESOURCES, INC.

                              By: /s/ Dennis O'Connor
                                  -------------------
                              Name: Dennis O'Connor
                              Title: VP-CFO


                              PARCARE, LTD.

                              By: /s/ Dennis O'Connor
                                  -------------------
                              Name: Dennis O'Connor
                              Title: VP-CFO




                                     -22-