EXHIBIT 10.43

Execution Copy


















                             Dated December 11, 2001
                              ELAN CORPORATION PLC.
                                       AND
                            PAR PHARMACEUTICAL, INC.

                    DEVELOPMENT, LICENSE AND SUPPLY AGREEMENT




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THIS AGREEMENT is made on December 11, 2001.

BETWEEN:
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(1)       ELAN CORPORATION, PLC., a company incorporated in Ireland having its
registered office at Lincoln House, Lincoln Place, Dublin 2, Ireland; and

(2)       PAR  PHARMACEUTICAL,  INC., a company  organized under the laws of New
Jersey,  with  offices at One Ram Ridge  Road,  Spring  Valley,  New York 10977,
United States of America

RECITALS:
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A.        Elan is beneficially entitled to the use of various patents which have
been granted or are pending under the International Convention in relation to
the development and production of drug specific dosage forms for pharmaceutical
products and processes.

B.        In each of the following 5 years, Par wishes for Elan to develop a
formulation of two of the Compounds (as agreed between Par and Elan) and
thereafter for Par to market the same, on the terms and conditions set out
herein.

C.        Accordingly, Par wishes to enter into this Agreement to obtain the
right to utilize the Elan Intellectual Property to import, use, offer for sale
and sell the Products in the Territory.

NOW IT IS HEREBY AGREED AS FOLLOWS:

                              CLAUSE 1 PRELIMINARY

1.1.      DEFINITIONS:
          -----------

"AB RATEABLE" shall have the meaning as defined and accepted by the FDA.

"AFFILIATE" shall mean any corporation or entity controlling or controlled or
under common control with Elan or Par, as the case may be. For the purposes of
this Agreement, "control" shall mean the direct or indirect ownership of more
than 50% of the issued voting shares or other voting rights of the subject
entity to elect directors or the governing body, or if not meeting the preceding
criteria, any entity owned or controlled by or owning or controlling at the
maximum control or ownership right permitted in the country where such entity
exists.

"ANDA" shall mean an abbreviated new drug application filed with the FDA,
including any supplements or amendments thereto which may be filed.

"cGCP, cGMIP, cGLP" shall mean respectively current Good Clinical Practice,
current Good Manufacturing Practice and current Good Laboratory Practice as

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defined in the U.S. Federal Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, as may be amended from time to time.

"CFR" shall mean the US Code of Federal Regulations 21, as amended from time to
time.

"CMC Section" shall mean the chemistry, manufacturing, and controls section of
the Regulatory Application as defined in CFR Section 314.50 (1), as may be
amended from time to time.

"COMPETING PRODUCT" shall mean a product AB Rateable to any Product.

"COMPOUND" shall mean one of the active drug products listed in Schedule 2, all
of which are AB Rateable to another product, which Schedule may be added to by
mutual agreement of the parties, provided that any such additions shall be AB
Rateable to another product.

"DEVELOPMENT COSTS" shall mean the fully allocated cost of developing the
Products calculated in accordance with Elan's normal accounting practice and in
a manner consistent with expenses and overhead allocated to other controlled
release products developed by Elan. Development Costs shall include the total
costs of developing the Products which is the sum total of all direct (including
external contracted activities, biostudies, API etc.) and indirect costs
including attributable overheads.

"DMF" shall mean Drug Master File, as defined in the CFR Section 314.420 and/or
its equivalent in the other countries of the Territory.

"EFFECTIVE DATE" shall mean the date of this Agreement.

"ELAN" shall mean Elan Corporation, plc., a public limited company
incorporated under the laws of Ireland.

"ELAN IMPROVEMENTS" shall mean any and all improvements to the Elan Patents, the
Elan Know-How and/or the Elan Technology and/or the Product that have been
conceived, created, developed and/or otherwise invented by Elan and/or Par under
the R&D Program, or otherwise pursuant to this Agreement.

"ELAN INTELLECTUAL PROPERTY" shall mean the Elan Know-How, the Elan Patents, the
Elan Technology and the Elan Improvements.

For the avoidance of doubt, Elan Intellectual Property shall exclude inventions,
patents and know-how owned, licensed or controlled by the Excluded Entities.

"ELAN KNOW-HOW" shall mean any and all rights owned, licensed or controlled by
Elan to any scientific, pharmaceutical or technical information (including
information in the CMC Section), data, discovery, invention (whether patentable
or not), know-how, substances, techniques, processes, systems, formulations,
designs and expertise relating to controlled release formulation or other Elan
Technology (as defined in the R&D Program).


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For the avoidance of doubt, Elan Know-How shall exclude any know-how owned,
licensed or controlled by one or more of the Excluded Entities.

In the event that Elan acquires or merges with a third party entity, Elan
Know-How shall not include any know-how to the extent that such know-how relates
to a product containing the same active ingredient as a Product which has been
approved for marketing or is in development by the said third party entity at
the time of such acquisition or merger. For the avoidance of doubt, the
occurrence of any such acquisition or merger shall not affect the license of the
Elan Know-How granted to Par hereunder.

"ELAN PATENTS" shall mean any and all rights under any and all patent
applications and/or patents, now existing, currently pending or hereafter filed
or obtained or licensed by Elan relating to controlled release formulations as
set forth in Schedule 1, or to other Elan Technology (as defined in the R&D
Program) and any foreign counterparts thereof and all divisionals,
continuations, continuations-in-part, any foreign counterparts thereof and all
patents issuing on any of the foregoing, and any foreign counterparts thereof,
together with all registrations, reissues, re-examinations, supplemental
protection certificates, or extensions thereof, and any foreign counterparts
thereof.

For the avoidance of doubt, Elan Patents shall exclude any patents owned,
licensed or controlled by one or more of the Excluded Entities.

In the event that Elan acquires or merges with a third party entity, Elan
Patents shall not include any know-how to the extent that such know-how relates
to a product containing the same active ingredient as a Product which has been
approved for marketing or is in development by the said third party entity at
the time of such acquisition or merger. For the avoidance of doubt, the
occurrence of any such acquisition or merger shall not affect the license of the
Elan Patents granted to Par hereunder.

"ELAN TECHNOLOGY" shall have the meaning defined in the R&D Program for a
Nominated Compound.

"EXCLUDED ENTITIES" shall mean The Liposome Company, Inc. and its
subsidiaries; Athena Neurosciences Finance LLC; Axogen Limited;
Neuralab Limited; Dura Pharmaceuticals, Inc. and its subsidiaries;
Quadrant Healthcare PLC; Delsys; Elan Pharmaceuticals Research
Corporation and its subsidiaries; and Affiliates (present or
future) of Elan Corp within the division of Elan Corp carrying on
business as Elan Pharmaceuticals which incorporates, inter alia,
EPIL (only to the extent that it is the owner of patents, know-how
or other intellectual property or technology invented and/or
developed within the division of Elan Corp carrying on business as
Elan Pharmaceuticals), Athena Diagnostics Inc., Athena
Neurosciences, Inc., Elan Pharmaceuticals, Inc. and Elan Europe
Limited and its subsidiaries.

"ELAN'S FACILITY" shall mean Elan's manufacturing facility at Athlone, Ireland,
or such other facility as Elan may from time to time specify.


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"EX WORKS" shall have the meaning as such term is defined in the ICC Incoterms,
2000, International Rules for the Interpretation of Trade Terms, ICC Publication
No. 560.

"FDA" shall mean the United States Food and Drug Administration or any other
successor agency whose approval is necessary to market the Product in the USA.

"FIRST COMMERCIAL SALE" shall mean in respect of a Product the first sale under
this Agreement in an arm's length transaction to an independent third party. Par
will provide Elan with written notice of the date of such sale.

"FORCE MAJEURE" shall mean causes beyond a party's reasonable control,
including, without limitation, acts of God, fires, strikes, acts of war, or
intervention of a Governmental Authority or non-availability of raw materials.

"GROSS PROFIT" in respect of a Product shall mean Net Sales of that Product less
Product Manufacturing Cost.

"GOVERNMENTAL AUTHORITY" shall mean and include all governmental and regulatory
bodies, agencies, departments or entities, whether or not located in the
Territory, which regulate, direct or control commerce in or with the Territory.

"IN MARKET" shall mean the sale of the Product in the Territory by Par and/or
its Affiliates, or where applicable by a permitted sub-licensee, to an
unaffiliated third party such as (i) the end-user consumer of the Product; or
(ii) a wholesaler, distributor, managed care organization, hospital or pharmacy
or other unaffiliated third party which effects the final commercial sale to the
end-user consumer of the Product, and shall exclude the transfer pricing of the
Product by Par to an Affiliate or a permitted sub-licensee.

"LAUNCH STOCKS" shall mean the quantities of stocks of a Product required by Par
to support the commercial introduction of that Product following Regulatory
Approval.

"MARKETING COMMITTEE" shall mean the committee to be established pursuant to
Clause 10.

"NET SALES" shall mean in the case of Product sold by Par or an Affiliate or a
permitted sub-licensee, that sum determined by deducting from the aggregate
gross In Market sales proceeds billed for the Product by Par or, its Affiliate
or a permitted sub-licensee, as the case may be, in accordance with generally
accepted accounting principles:

(i)       customs duties or other taxes (excluding income or corporation tax),
directly related to the sale of the Product which are paid by Par or its
Affiliate or permitted sub-licensees as the case may be;

(ii)      a discount from the gross sales proceeds to cover such normal costs as
are incurred by Par or its Affiliates or permitted sub-licensees, as the case
may be, in respect of (A) returns, rebates (including Medicaid rebates), cash
discounts (including discounts attributable to lowered prices due to the
introduction of less expensive competitive products), advertising costs that are

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mutually agreed to by the Marketing Committee, and allowances offered to, and
actually taken by, third parties in the ordinary course of business, (B)
applicable freight and shipping costs, and (C) applicable insurance costs, in
each case directly related to the sale of the Product.

"NOMINATED COMPOUND" shall mean a Compound nominated pursuant to Clause 3.2.

"PAR" shall mean Par Pharmaceutical, Inc., a company organized under the laws of
New Jersey, with offices at One Ram Ridge Road, Spring Valley, New York 10977,
United States of America, and its Affiliates.

"PRODUCT" shall mean an active pharmaceutical form of a Nominated Compound that
was created using or incorporates the Elan Intellectual Property.

"PRODUCT MANUFACTURING COST" shall mean the fully allocated cost which is the
sum total of all production related costs, packaging and labeling for the
Product (direct labor, direct materials, facility overhead, other overhead and
expenses, including but not limited to manufacturing charges for material
adjustments, handling losses, physical adjustments, salvage and start-up costs,
QA/QC and analytical charges, packaging and regulatory compliance costs for the
Product including, but not limited to, stability and FDA fees), together with
insurance costs accounted for in accordance with United States Generally
Accepted Accounting Principles and in manner consistent with expenses and
overhead allocated to other products manufactured by Elan.

"PRODUCT SPECIFICATIONS" shall mean in relation to a Product, the specifications
set forth in the R&D Program or the Regulatory Application, such specifications
as may from time to time be established by the applicable regulatory
authorities, including without limitation, cGCPs, eGMPs and cGLPs, and such
additional specifications for the Product as may be agreed by the parties in
writing

"REGULATORY APPLICATION" shall mean any regulatory application or any other
application for marketing approval for the Product, which Elan will file in the
Territory, including any supplements or amendments thereto which Elan will file.

"REGULATORY APPROVAL" shall mean the final approval to market the Product in the
Territory, including pricing and reimbursement approval and any other approval
which is required to launch the Product in the normal course of business.

"TECHNOLOGICAL COMPETITOR" shall mean a person or entity listed in Schedule 3,
and divisions, subsidiaries and successors thereof, or any additional broadbased
technological competitor of Elan added to such Schedule from time to time upon
mutual agreement of Par and Elan.

"TERM" shall mean the term of this Agreement, as set out in Clause 14.

"TERRITORY" shall mean the United States of America, its territories,
protectorates and possessions.

"$" shall mean United States Dollars.
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1.2.      FURTHER DEFINITIONS:

In addition, the following definitions have the meanings in the Clauses
corresponding thereto, as set forth below.

------------------------------------------------------------------------
Definition                           Clause
------------------------------------------------------------------------
"Confidential Information"           17.1.1
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"Due Date"                           12.4
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"Elan License"                       2.1
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"First Approval"                     8.1.1
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"Initial Period"                     14.1
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"Joined Party"                       4.2.6
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"Monthly Sales Estimate"             12.1
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"Non-Joined Party"                   4.2.6
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"R&D Program"                        6.1
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"Statement"                          12.1
------------------------------------------------------------------------

1.3.      INTERPRETATION: In this Agreement:

     1.3.1     the singular include the plural and vice versa, the masculine
     includes the feminine and vice-versa and references to natural persons
     include corporate bodies, partnerships and vice versa.

     1.3.2     any reference to a Clause or Schedule, unless otherwise
     specifically provided, shall be respectively to a Clause or Schedule of
     this Agreement.

     1.3.3     the headings of this Agreement are for ease of reference only and
     shall not affect its construction or interpretation

     1.3.4     the expressions "include" and "including" shall be construed
     without limitation.

                              CLAUSE 2 THE LICENSE

2.1.      LICENSE TO PAR:
          --------------

     2.1.1     Subject to the terms of this Agreement, Elan hereby grants to Par
     for the Term an exclusive license (the "Elan License") to the Elan
     Intellectual Property for the sole purpose of, and to the extent necessary
     for, importing, using, offering for sale and selling the Products in the
     Territory, subject (in respect of each Product) to any contractual
     obligations that Elan has as of the date on which the Compound in question
     becomes a Nominated Compound. For the avoidance of doubt (a) nothing in
     this Agreement shall prevent Elan or Par from entering into agreements
     and/or negotiations with third parties in respect of any Compound unless
     and until such time as that Compound becomes a Nominated Compound, and (b)
     Par acknowledges and understands that Elan makes no representations or
     warranties regarding Elan's freedom from contractual obligations to develop
     any of the Compounds.


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     2.1.2     Elan shall possess all rights including, without limitation, the
     right to research, develop, experiment with, manufacture, sell, license or
     otherwise market the Products outside the Territory.

2.2.      SUB-LICENSING BY PAR:

     2.2.1     Par shall be entitled, subject to the prior written consent of
     Elan which shall not be unreasonably withheld or delayed, to grant
     sublicenses in respect of the intellectual property rights licensed by Elan
     to Par under Clause 2.1, provided that Par shall grant one sub-license only
     per Product and Par shall not grant a sub-license to a Technological
     Competitor.

     2.2.2     Any sub-license granted hereunder shall be in the same terms
     mutatis mutandis as the terms of this Agreement insofar as they are
     applicable, but excluding the right to grant a further sub-license.

     2.2.3     For the avoidance of doubt, Par shall ensure that Elan shall have
     the same rights of audit and inspection vis-a-vis a sub-licensee, as Elan
     has pursuant to this Agreement concerning Par.

     2.2.4     Par shall be liable to Elan for all acts and omissions of any
     sublicensee as though such acts and omissions were by Par but only to the
     extent that Par would have been liable for such acts and omissions.

     2.2.5     Where a sub-license has been granted under Clause 2.2.1, such
     sublicense shall automatically terminate if this Agreement terminates.

     2.2.6     Par shall not disclose any Confidential Information of Elan in
     its dealings with permitted sub-licensees without the prior written consent
     of Elan, which consent shall not be unreasonably withheld or delayed.

     2.2.7     For the avoidance of doubt:

          2.2.7.1   the parties agree that any sub-license granted pursuant to
          this Clause shall not be capable of surviving the termination of this
          Agreement and Par shall promptly notify any sub-licensee of the
          termination of this Agreement; and

          2.2.7.2   In Market sales of the Products by the sub-licensee shall be
          included in calculating Net Sales for the purposes of this Agreement.

                         CLAUSE 3 SELECTION OF COMPOUNDS

3.1.      At any given time or at least in the fourth calendar quarter of each
of the first 5 calendar years of the Term, authorized representatives of the
parties shall meet and discuss in good faith, having regard to the prevailing
market conditions and their then existing contractual obligations and market
strategies:

<PAGE>

     3.1.1     which two of the Compounds (and in the case of the second to
     fifth calendar years, whether two of the Compounds) shall be selected for
     the commencement of development work in the following calendar year; and

     3.1.2     whether, and if so how, the list of Compounds ought to be
     revised.

3.2.      Pursuant to such discussions, unless otherwise agreed, the parties
shall select in writing two Compounds for development pursuant to this Agreement
during the following calendar year. Such discussions shall take into account
whether the Compound is subject to contractual obligations of Elan or Par which
would restrict the conduct of the R&D Program, the scope of the Elan License or
the ability of Par to market the Product.

3.3.      For the avoidance of doubt, during the first 5 calendar years of the
Term, Elan shall not be obliged to commence development work in respect of a
third or subsequent Compound unless Elan expressly agrees to do so.

3.4.      The parties may by mutual written agreement abandon development of a
Product at any time. In that event the Compound in question shall cease to be a
Nominated Compound, but without prejudice to Elan's right to payment for the
work conducted prior to that date, and Par shall have no further Elan License
rights to such Product. Par shall reimburse Elan for work conducted within 60
days of that date.

                         CLAUSE 4 INTELLECTUAL PROPERTY

4.1.      Ownership of Intellectual Property:
          ----------------------------------

Elan shall be the owner of the Elan Intellectual Property.

4.2.      Infringements and Misappropriation:
          ----------------------------------

     4.2.1     As the holder of the Regulatory Approval for a Product, Elan
     shall be responsible for making any required certifications under Section
     5050(j) of the U.S. Federal Food, Drug and Cosmetic Act ("Certification").
     Elan will not make such Certification without first notifying, consulting
     and reaching mutual agreement with Par. If Par does not agree within 30
     days of Elan's notification, the Product will be deemed abandoned pursuant
     to Clause 3.4. Par agrees to cooperate with Elan in all respects including
     providing any prior art or other information known to Par that is relevant
     to the Certification. If Elan elects to use outside counsel in connection
     with the Certification, such outside counsel shall be mutually agreed to by
     the parties and neither party shall unreasonably withhold its agreement to
     same. The parties shall share equally the cost of such outside counsel,
     including costs associated with patent review and invalidity and
     infringement analyses.

     4.2.2     Par and Elan shall promptly inform the other in writing of any
     Defense Infringement or Enforcement Infringement (as those terms are
     defined below) of which it shall become aware in the Territory. The Party
     with such knowledge shall provide the other Party with any available
     evidence of alleged infringement or misappropriation. "Defense
     Infringement" shall mean any alleged infringement or misappropriation by

<PAGE>

     the filing of the ANDA or by the Product of a third party's intellectual
     property rights. "Enforcement Infringement" shall mean any alleged
     infringement or misappropriation by a third party of any rights within the
     Elan Intellectual Property or any affirmative challenge by a third party of
     the validity or enforceability of the Elan Intellectual Property.

     4.2.3     In the event of any alleged Enforcement Infringement, Elan shall
     be entitled to institute, carry on and control proceedings (in its own name
     and/or that of Par) for Enforcement Infringement, including any
     counterclaims that may be raised in Defense Infringement. Elan shall pay
     the litigation costs and expenses of Enforcement Infringement, unless such
     proceeding is a counterclaim raised in Defense Infringement, in which case
     the parties shall share equally the litigation costs and expenses and also
     share equally in any recovery from such proceeding.

     4.2.4     In the event of any alleged Defense Infringement, the following
     provisions shall apply. If a third party institutes proceedings against Par
     and/or Elan separately, the party named in such proceeding will name the
     other party as co-defendant if permitted by the court or, if required by
     the court, will not oppose and will support a motion to intervene by the
     other party. Whether or not such third party institutes proceedings, and
     regardless of whether Par is joined or not, Par shall control the Defense
     Infringement but Par shall not engage in communications with the plaintiff
     that could adversely impact Elan nor shall Par settle the Defense
     Infringement without first consulting and reaching mutual agreement with
     Elan. Outside counsel used in the Defense Infringement shall be mutually
     agreed to by the parties and neither party shall unreasonably withhold its
     agreement to same. Either party may elect to have separate legal
     representation. The Parties shall share equally the litigation costs and
     expenses in defending such an action (including the reasonable legal costs
     and expenses incurred by a Party who elects to have separate legal
     representation), including reasonable attorney fees, experts fees etc. In
     the event that Par decides in writing that it does not wish to conduct such
     defense, Elan may at its option elect to do so instead of Par, without
     prejudice to Elan's rights and Par's obligations under 4.2.5. For the
     avoidance of doubt, after consultation with Par, Elan shall decide whether
     to bring a counterclaim for Enforcement Infringement raised in Defense
     Infringement and Elan shall have sole control over such proceedings.

     4.2.5     Par shall bear all and any liability to one or more third parties
     for Defense Infringement (including a claim, court order or judgment for a
     lump sum, ongoing royalties or a settlement to one or more third parties)
     and shall indemnify and keep indemnified Elan against any claim, judgment
     or court order made against Par or Elan in respect of the same; provided
     however Par has the sole right to decide whether to launch a particular
     Product.

     4.2.6     In each case where only one of the Parties (the "Joined Party")
     is a party to proceedings, whether in respect of an alleged Enforcement
     Infringement or an alleged Defense Infringement, the Joined Party shall
     provide to the other Party (the "Non-Joined Party"):

          (i)       updates as to its progress on a regular basis; and

          (ii)      such other information concerning the litigation as the Non-
          Joined Party may reasonably request, subject always to the Non-Joined
          Party having provided undertakings as to confidentiality and the non-
          waiver of privilege to the reasonable satisfaction of the Joined Party


<PAGE>

          PROVIDED THAT the Joined Party shall be under no obligation to
          disclose to the Non-Joined Party any advice of outside attorneys.
          Furthermore the Joined Party shall discuss litigation strategy at
          reasonable times with the Non-Joined Party (but shall not be bound to
          follow any recommendation of the Non-Joined Party) and shall keep the
          Non-Joined Party informed of any actual or proposed change in outside
          counsel used in respect of the said litigation.

     4.2.7     The Non-Joined Party shall provide all reasonable co-operation in
     the litigation, including without limitation Product technical expertise to
     the other Party to support any Defense Infringement litigation or
     Enforcement Infringement litigation (including complying with requests for
     orders for discovery and depositions). Any expenses incurred by Elan or Par
     in providing such Product technical expertise shall be included in the
     total patent review and legal expenses, in accordance with Clause 4.2.4.

     4.2.8     Costs which are shared pursuant to Clauses 4.2.1, 4.2.3 and 4.2.4
     shall be paid in the first instance by Elan. Par shall pay its share of
     such costs to Elan as and when sufficient Profit becomes available to it to
     discharge such share PROVIDED THAT in the event of (i) the termination of
     this Agreement, howsoever arising; or (ii) Par not having effected full
     scale commercial launch of the Product in the Territory on or before the
     Date For Launch (whether or not Elan exercises its right of termination in
     respect of the same), the entire balance of Par's share of such costs shall
     become immediately due and payable.

4.3.      Trademarks:
          ----------

     4.3.1     Par may market, sell and/or distribute each Product under any
     trademark or trademarks and trade dress as Par or its customers may from
     time to time select. Such trademarks shall remain the sole property of Par
     or its customers as the case may be, and Elan shall not use any such
     trademark(s) whether during the term or thereafter, and whether in the
     Territory or outside the Territory, without the prior written consent of
     Par.

     4.3.2     For the term of this Agreement Par shall grant Elan a
     royalty-free non-exclusive license to the applicable Par trademarks solely
     to enable Elan to fulfill its obligations pursuant to the terms of this
     Agreement.

4.4.      Cessation of Development or Manufacture:
          ---------------------------------------

Without prejudice to any other remedy it may have hereunder, Elan shall be
entitled to cease development and/or manufacture of the Product at any time
where a matter comes to its attention such that, in Elan's reasonable opinion,
the development and/or manufacture of the Product would constitute a material
risk of the infringement of the intellectual property rights of any third party.

                            CLAUSE 5 NON-COMPETITION

Par shall not develop, market or sell any Competing Product in the Territory
during the term of the Agreement as it relates to the Product in question (and
for one year after such termination of this Agreement if the Agreement is

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terminated solely due to Par's default of its obligations hereunder beyond any
applicable cure period). The parties may develop, market or sell any Compound
that was the subject of a Product abandoned pursuant to Clause 3.4.

                      CLAUSE 6 DEVELOPMENT OF EACH PRODUCT

6.1.      In respect of each Nominated Compound, Elan shall prepare a
development plan, setting out inter alia milestones, time lines and
specification of the Product in question (the "R&D Program"). Such development
plan shall take into account the reasonable comments of Par, but shall otherwise
be in Elan's sole discretion.

6.2.      Elan shall use reasonable commercial efforts to develop the Product in
accordance with the R&D Program.

6.3.      Elan and Par shall undertake their respective obligations under the
R&D Program on a collaborative basis. Accordingly, the parties shall co-operate
in good faith particularly with respect to unknown problems or contingencies and
shall perform their respective obligations in a commercially reasonable,
diligent and workmanlike manner.

6.4.      In the event that Elan believes that significant additional work
and/or additional costs are required over and above that set out in the R&D
Program, Elan shall so inform Par. Before any further work is done, the parties
shall mutually agree regarding such additional work, the necessary changes to
the R&D Program and/or increased costs as the case may be.

6.5.      Elan will have no liability to Par as a result of any failure or delay
of the Product to achieve the Product Specifications or one or more of the
milestones set out in the R&D Program and/or to obtain the Regulatory Approval
in one or more of the countries of the Territory.

6.6.      Unless the parties agree otherwise, Elan will maintain raw material,
clinical supply and analytical samples in storage for a time period based upon
Elan's sample retention policy, or such longer period of time as Par may
reasonably request. Elan agrees to maintain Product batch production and control
records and associated test results until the marketing application is approved
by the FDA or discontinuation of its Regulatory Application in respect of the
same.

                           CLAUSE 7 REGULATORY MATTERS

7.1.      Elan shall be responsible for the compilation and filing of the
Regulatory Applications in respect of the Product with the FDA and shall be the
holder of any Regulatory Approvals granted for the Product and the party
principally responsible for interaction with the FDA.

7.2.      Elan shall notify Par of the date of submission of any Regulatory
Application for the Product in the Territory and shall also notify Par in
writing of the Regulatory Approval as soon as is reasonably possible following
said Regulatory Approval. Elan shall notify Par in writing as soon as possible
of any notification received by Elan from the FDA to conduct an inspection of
its manufacturing, clinical or other facilities as directly related to the
Product. Copies, of all correspondence with the FDA with respect to the Product
post its acceptance for filing shall be provided to the other Party; such

<PAGE>

correspondence shall be subject to redaction by Elan to the extent that such
correspondence relates to the confidential portions of the CMC Section relating
to formulation and manufacturing processes. On or after the date of First
Commercial Sale, Elan shall provide Par with a status update with regard to any
audit or inspection conducted by FDA which relates directly to the Product.

7.3.      Par shall be responsible for obtaining all applicable state and local
regulatory approvals for the distribution of the Product in the Territory. Elan
shall co-operate with Par in obtaining such approvals.

7.4.      It is hereby acknowledged that there are inherent uncertainties
involved in the registration of pharmaceutical products with the FDA and
equivalent bodies in relation to achieving the Product Specifications and
obtaining the Regulatory Approvals and such uncertainties form part of the
business risk involved in undertaking the form of commercial collaboration
outlined in this Agreement.

Accordingly, Elan and Par shall have no liability to the other as a result of
any failure of a Product to obtain Regulatory Approval.

                      CLAUSE 8 FORECASTS, ORDERS AND SUPPLY

8.1       In order to permit Elan to allocate its manufacturing capacity and to
assist Par with its sales and marketing, Par shall provide Elan with bona fide
written forecasts of its requirements of each Product as follows:

     8.l.1     within 120 days of submission of an ANDA for the Product, a
     forecast broken down on a monthly basis, for the period beginning with the
     first anticipated Regulatory Approval ("First Approval");

     8.1.2     thereafter every three months until First Approval, an updated
     forecast prepared on the same basis;

     8.1.3     within 15 days of First Approval, and thereafter each calendar
     month not later than 23rd of the month, a 12 month forecast, broken down on
     a month-by-month basis, for the period commencing at the beginning of the
     following month; and

     8.1.4     not later than 1 August in each year, a 5 year forecast, broken
     down on an annual basis.

8.2.      The first four months of each of the forecasts referred to in Clause
8.1.3 (five months in the case of Launch Stocks) shall be binding on Par and
shall be formalized by a firm purchase order from Par to Elan. Forecasts shall
not otherwise be binding on either party.

8.3.      In respect of each Product, Elan shall notify Par of a minimum batch
size for commercial manufacture and supply.

8.4.      For the avoidance of doubt, Elan shall have no obligation to supply
Product in excess of Par's properly forecast requirements.

<PAGE>

8.5.      Save as otherwise provided in this Agreement, Elan shall use
commercially reasonable efforts to produce and supply to Par (even if in excess
of Par's previously forecasted amounts) its entire requirements of each Product,
for the purposes of both development and commercial supply, within (in the case
of Product for commercial supply) the time for delivery set out in the relative
firm purchase orders. Elan shall be the sole and exclusive supplier of each
Product to Par in the Territory and Par will purchase each Product exclusively
from Elan in the Territory.

8.6.      All Product shall be supplied:

     8.6.1     in accordance with Par's firm purchase orders pursuant to Clause
     8.2;

     8.6.2     in tablet or capsule form as specified in the R&D Program;

     8.6.3     Ex Works Elan's Facility;

     8.6.4     free from any liens or encumbrances;

     8.6.5     in accordance with Product Specifications;

     8.6.6     manufactured in accordance with all prevailing legislative and
     regulatory requirements of the country where it is manufactured, including
     (where the Product is intended for commercial supply) cGMP;

     8.6.7     not adulterated or misbranded; and

     8.6.8     in suitable packaging, in particular as may be required pursuant
     to any Regulatory Approval and so as to permit safe storage and transport.

8.7.      After receipt of a Product shipment, Par shall visually inspect the
Product shipment. The parties agree that Par's visual inspection consists of (i)
comparing the applicable order against the documentation accompanying the
shipment to verify that the delivery date, identity, quantity and exterior
shipment labeling comply with the order and (ii) visually inspecting the
exterior of the Product shipment to verify that the shipment appears to be in
good condition.

8.8.      Elan shall be responsible for the packaging of the Product into final
market packaging based on Par's instructions.

8.9.      The terms of this Agreement are hereby incorporated by reference into
each order of Product submitted by Par and accepted by Elan. In the event of any
conflict between an order or other written instructions and this Agreement, the
terms of this Agreement shall prevail.

8.10.     Product supplied otherwise than for commercial supply shall be used by
Par solely for research and development purposes, including but not limited to
stability studies, packaging studies, and for clinical trials. Subject to the
prior written consent of Elan, which shall not be unreasonably withheld or
delayed, and subject further to the other applicable provisions of this

<PAGE>

Agreement, validation batches may be used towards Launch Stocks and subsequent
commercial supply.

8.11.     In the event Par wishes to supply active pharmaceutical ingredient
("API") for a Product, the  parties agree to discuss in good faith Elan
sourcing such API from Par, but Elan shall be under no obligation to do so.

                       CLAUSE 9 SPECIFICATION AND DISPUTES

9.1.      All claims for failure of any delivery of Product to conform to
Product Specifications must be made by Par to Elan, in writing within 45 days
following delivery except in the case of latent defects. Claims for latent
defects, not discovered during the routine testing protocol (to be agreed by Par
and Elan) shall be made in writing within 30 days of discovery. Failure to make
timely claims in the manner prescribed shall constitute acceptance of the
delivery.

9.2.      If Product has been delivered and has been shown within the period
designated in Clause 9.1 not to conform to Product Specifications, or is
otherwise adulterated, misbranded or defective, then unless such non-conformity
is the result of the negligent acts or omissions of Par:

     9.2.1     it shall be replaced at the cost of Elan within 90 days of the
     receipt by Elan of notification of non-conformity or other failure
     hereunder; and

     9.2.2     Elan shall also be responsible for all costs incurred by Par in
     relation to any testing, handling processing, destruction or return of the
     defective Product.

9.3.      In the event of an unresolved dispute as to conformity of the Product
with the Product Specifications, the parties shall within 30 days appoint an
independent laboratory, mutually acceptable to the parties, to undertake the
relevant testing and its findings shall be conclusive and binding upon the
parties. All costs relating to this process shall be borne solely by the
unsuccessful party.

                CLAUSE 10 MARKETING AND PROMOTION OF THE PRODUCT

10.1.     No later than January 2002 the Parties shall establish a Marketing
Committee consisting of at least one representative from each Party who shall
act as liaison between the Parties to ensure that Elan is up to date on the
prevailing market conditions and Par's efforts at marketing and selling the
Products.

10.2.     Within 90 days of the filing of the Regulatory Application in the
Territory with respect to each Product, Par will outline to Elan the structure
of the promotional activities to be carried out by Par for the period up to the
First Commercial Sale of the Product and annually thereafter.

10.3.     Par shall both prior to and subsequent to the launch of the Product
communicate with Elan at meetings of the Marketing Committee regarding its
objectives for and performance of such Product in the Territory. At such
meetings, Par shall report on the ongoing sales performance of the Product in
the Territory, including marketing approaches, educational campaigns,

<PAGE>

promotional and advertising materials and campaigns, sales plans and results,
performance against competitors, its objectives for the Product and its plans
for the next year of the Agreement. In addition the Marketing Committee shall
review the quarterly royalty statements.

10.4.     Unless otherwise agreed by the Parties, the Marketing Committee shall
meet at least once each calendar quarter, such meetings to continue until 2
years after launch of the last Product or such later time as may be agreed.
Thereafter, the Parties shall meet on an annual basis. The Marketing Committee
shall meet alternately at the offices of Elan and Par or as otherwise agreed by
the Parties. Each Party shall bear the cost of its own travel expenses.

10.5.     Par shall control and shall be responsible for all decisions regarding
the pricing policies and strategies with respect to the marketing and sales of
each Product. Par shall control the format of the promotional campaign to be
submitted to the FDA, but shall inform Elan thereof and provide to Elan a copy
of each such promotional material for submission, at latest concurrent with its
submission to the FDA. Par shall use reasonable efforts to obtain approval by
the FDA of the promotional campaign for each Product and will provide to Elan
any FDA correspondence thereto.

10.6.     Par shall use reasonable commercial efforts consistent with its normal
business practices to market and promote each Product throughout the
Territory to all appropriate classes of trade and in doing so, shall use the
same level of effort as with other similar products of similar sales potential
which it markets.

10.7.     Par covenants that it shall not use the Product as a "loss leader" in
its marketing programs and shall at all times use its reasonable efforts in
marketing the Product.

10.8.     Par shall submit layout and designs for all trade packaging, cartons
and labels and other printed materials to Elan at least 6 months prior to First
Commercial Sale of the Product. Elan shall provide label and insert copy in the
Regulatory Application to the FDA in accordance with current FDA requirements
PROVIDED ALWAYS that the provisions of this Clause 10.8 shall be without
prejudice to the obligations and responsibilities of Par under Clause 10.5 and
for the avoidance of doubt, Par shall indemnify and hold harmless Elan against
all claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees) to which Elan may become liable relating to the activities
described in this Clause 10.

10.9.     To the extent permitted by law, such materials shall include due
acknowledgment that the Product is developed and manufactured by Elan. Such
acknowledgment shall take into consideration regulatory requirements and Par's
commercial requirements.

10.10.    Par shall mark or have marked all relevant patent number(s) (if any)
on all relevant packaging and labeling of the Product, subject to FDA control
and regulations of all packaging copy, or otherwise reasonably communicate to
the trade the existence of any patents of Elan for the Territory in such a
manner as to ensure compliance with, and enforceability under, applicable laws
in the Territory.
<PAGE>
             CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                    WITH SECURITIES AND EXCHANGE COMMISSION
                         ASTERISKS DENOTE SUCH OMISSION

10.11.    Par shall effect the full scale commercial launch of each Product in
the Territory as expeditiously as practical when allowed by law, subject to the
receipt of Launch Stocks of the Product and in any event within 120 days of
Regulatory Approval in respect of that Product (the "Date For Launch"). For the
avoidance of doubt, it shall be Par's responsibility to order Launch Stocks in
sufficient time to allow launch within such period.

                         CLAUSE 11 FINANCIAL PROVISIONS

11.1.     Development Royalties:
          ---------------------

The parties agree to the following regarding Development Costs:

(a)       Par shall pay to Elan up to [********] per calendar year for
development of each Product. Such payments will continue each calendar year
until the earlier of total repayment of all Development Costs to Elan or the
launch of the Product. Elan will invoice Par on a monthly basis an amount of
[********] from the date of commencement of the R&D Program until the earlier of
total repayment of all Development Costs to Elan or the launch of the Product.

(b)       The annual payments of [********] per Product will be aggregated and
the Development Costs in any given calendar year for all Products that Par is
obligated to pay Elan will not exceed such aggregated amount in any calendar
year. Elan may offset Development Costs expenditure in excess of [********] in
any calendar year on any individual projects against projects on which
Development Costs expenditure is less than [********] in any calendar year.

(c)       Upon launch, all outstanding Development Costs will be repaid to Elan
out of Par's Gross Profit. Par's Gross Profit shall first be allocated to
repayment to Elan until all outstanding amounts are satisfied. For the
avoidance of doubt, Elan shall be entitled to repayment of all outstanding
Development Costs incurred by Elan on any R&D Program, whether or not that R&D
Program resulted in launch of a Product.

11.2.     Price of Product:
          ----------------

     11.2.1    Elan shall supply each Product to Par at the Product
     Manufacturing Cost in respect of that Product in accordance with the terms
     of this Agreement.

     11.2.2    Subject to Clause 11.2.3, the Product Manufacturing Cost of each
     Product may be reviewed by Elan once per annum and may be adjusted for the
     following calendar year solely to reflect actual changes in Product
     Manufacturing Cost. Elan shall provide Par with written notice and
     reasonable backup documentation of any such increase in the Product
     Manufacturing Cost 60 days before the end of each calendar year to take
     effect in the following calendar year.

     11.2.3    Any increases or decreases in the cost of the active ingredient
     or any other components used in the Product in excess of 3% from the then
     current base are to be passed on in the Product Manufacturing Cost
     manufactured from the effective date of use of such active ingredient or
     any other component.

<PAGE>
             CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
                     WITH SECURITIES AND EXCHANGE COMMISSION
                         ASTERISKS DENOTE SUCH OMISSION

11.3.     Royalty on Sales:
          ----------------

In consideration of the license of the Elan Patents granted to Par under this
Agreement, Par shall pay to Elan a royalty equal to [******] of Gross Profit.

11.4.     Bundling:
          --------

In the event that Par or any Affiliate of Par shall sell the Product together
with other products of Par to third parties (by the method commonly known in the
pharmaceutical industry as "bundling"), Par shall not conduct such bundling in
such a manner as to discount the Product at a greater proportion than the other
products bundled by Par.

11.5.     Method of calculation of royalties and fees:
          -------------------------------------------

The parties acknowledge and agree that the methods for calculating the fees and
payments hereunder are for the purposes of the convenience of the parties, are
freely chosen and not coerced.

                     CLAUSE 12 PAYMENTS, REPORTS AND AUDITS
                     --------------------------------------

12.1.     Records:
          -------

Par shall keep true and accurate records of gross sales of the Product, the
items deducted from the gross amount in calculating the Net Sales, the Net Sales
and the royalties payable to Elan under Clause 11. Par shall deliver to Elan a
written statement (the "Statement") thereof within 30 days following the end of
each calendar quarter, (or any part thereof in the first or last calendar
quarter of this Agreement) for such calendar quarter. The Statement shall
outline the calculation of the Net Sales from gross revenues during that
calendar quarter, the applicable details of deductions incurred, and a
computation of the sums due to Elan. In addition, Par shall deliver to Elan a
written monthly sales estimate (the "Monthly Sales Estimate") within 30 days in
advance of each month setting forth its best estimate of Product sales for such
month. The parties' financial officers shall agree upon the precise format of
the Statement and the Monthly Sales Estimate.

12.2      Taxes:
          -----

Any income or other taxes which Par is required by law to pay or withhold on
behalf of Elan with respect to royalties and any other monies payable to Elan
under this Agreement shall be deducted from the amount of such Net Sales
payments, royalties and other monies due. Par shall furnish Elan with proof of
such payments. Any such tax required to be paid or withheld shall be an expense
of and borne solely by Elan. Par shall promptly provide Elan with a certificate
or other documentary evidence to enable Elan to support a claim for a refund or
a foreign tax credit with respect to any such tax so withheld or deducted by
Par. The parties will reasonably cooperate in completing and filing documents
required under the provisions of any applicable tax treaty or under any other
applicable law, in order to enable Par to make such payments to Elan without any
deduction or withholding.

<PAGE>

12.3      Mode of Payment:
          ---------------

     12.3.1    Payment for development royalties under Clause 11.1 shall be due
     and owing on date of invoicing and in any event payable within 30 days of
     the date of invoice.

     12.3.2    Payment for Product under Clause 11.2 shall be made within 30
     days of the date of the delivery of the Product.

     12.3.3    Payment of royalties under Clause 11.3 shall be made once in each
     calendar quarter within 45 days after the expiry of the relevant calendar
     quarter.

     12.3.4    All payments due hereunder shall be made in U.S. Dollars.

     12.3.5    All payments due hereunder shall be made to the designated bank
     account of Elan in accordance with such timely written instructions as Elan
     shall from time to time provide.

12.4      Interest:
          --------

Par shall pay interest to Elan on sums not paid to Elan on the date on which
payment should have been made pursuant to the applicable provisions of this
Agreement ("Due Date") over the period from the Due Date until the date of
actual payment (both before and after judgment) at the Prime Rate publicly
announced by Morgan Guaranty Trust Company of New York at its principal office
on the Due Date (or next to occur business day, if such date is not a business
day) plus 5%, such interest to payable on demand from time to time and
compounded monthly/quarterly.

12.5      Audit:
          -----

     12.5.1    For the 180 day period following the close of each calendar year
     of the Agreement, Elan and Par will, in the event that the other party
     reasonably requests such access, provide each other's independent certified
     accountants (reasonably acceptable to the other party) with access, during
     regular business hours and subject to the confidentiality provisions as
     contained in this Agreement, to such party's books and records relating to
     the Products, solely for the purpose of verifying the accuracy and
     reasonable composition of the calculations hereunder for the calendar year
     then ended.

     12.5.2    In the event of a discovery of a discrepancy which exceeds 5% of
     the amount due or charged by a party for any period (and provided that the
     amount of the discrepancy exceeds $25000), the cost of such accountants
     shall be borne by the audited party; otherwise, such cost shall be borne by
     the auditing party.

12.6      Inspection:
          -----------

At such time as shall be agreed with Elan, such agreement not to be unreasonably
withheld, Elan shall make (and where relevant shall procure that Elan's
subcontractor shall make) that portion of its manufacturing, testing or storage
facility where Product is manufactured, tested or stored, including all record

<PAGE>

and reference samples relating to the Product available for inspection by Par's
duly qualified employee, or by a duly qualified consultant, contractor or agent
of Par with the consent of Elan, which consent shall not be unreasonably
withheld or delayed, or by the relevant governmental or regulatory authority.
The investigation shall be limited to determining whether there is compliance
with the requirements of this Agreement.

                   CLAUSE 13 ADVERSE EVENTS AND PRODUCT RECALL

13.1.     Each party shall give the other immediate notice, which shall be
promptly confirmed in writing, of any occurrence that involves:

     13.1.1    any material complaint about the safety or effectiveness of the
     Product, including a claim for death or injury following administration of
     the Product (that is plausibly related to the administration of the
     Product); and

     13.1.2    any other matter arising out of this Agreement that must be
     reported to a Governmental Authority.

13.2.     The parties agree that within sixty (60) days following the Effective
Date representatives of each party with responsibility for the safety
surveillance and pharmacovigilance of the Product shall meet to develop detailed
procedures regarding the format, timing and content of the safety information to
be exchanged between the parties, and shall meet periodically thereafter to
update the procedures.

13.3.     If a party:

     13.3.1    is notified by a Governmental Authority that a recall of the
     Product is required, requested or otherwise advisable as being probably
     needed; or

     13.3.2    establishes a need to recall the Product for non-conformities
     with the Product Specifications-

it shall promptly give to the other party written notice of the same with full
details.

13.4      Unless otherwise agreed, Par shall take the lead / co-ordinating role
in the recall in a commercially reasonable manner and Elan shall afford all
reasonable assistance. A joint recall administration team shall be established
with an equal number of nominated individuals from both parties participating. A
final report shall be completed by the recall administration team and delivered
promptly to each party.

13.5      If the parties are unable to agree as to whether the Product complies
with Product Specifications, or as to whether Par or Elan is responsible for any
agreed or established non-conformity, the dispute shall be settled as set forth
in Clause 9.

13.6      The costs of a recall of the Product, including the cost of
replacement quantities of Product, shall be borne as follows:


<PAGE>

     13.6.1    in the event that the principal reason for the recall under this
     Clause 13 is Par's negligence or willful misconduct, its failure to supply
     Compound conforming to Compound Specifications, its failure to handle or
     store the Product in conformity with the Product Specifications, or Par's
     failure to comply with applicable laws or regulations, by Par;

     13.6.2    in the event that the principal reason for the recall under this
     Clause 13 of the Product in question is Elan's negligence or willful
     misconduct, its failure to supply Product conforming to the Product
     Specifications, or Elan's failure to comply with applicable laws or
     regulations, by Elan;

     13.6.3    in the event that the reason that the recall of the Product under
     this Clause 13 was legally required is not one of those set forth in
     Clauses 13.6.1 or 13.6.2 by the parties equally.

                       CLAUSE 14 DURATION AND TERMINATION

14.1.     This Agreement shall be deemed to have come into force on the
Effective Date and, subject to the rights of termination outlined in this Clause
14 will expire on a Product by Product basis:

     14.1.1    on the 15th anniversary of First Commercial Sale of that Product;
     or

     14.1.2    upon the expiration of the life of the last to expire patent
     included in the Elan Patents;

whichever date is later to occur (the "Initial Period").

14.2.     At the end of the Initial Period, the Agreement shall continue
automatically for rolling 3 year periods thereafter, unless the Agreement has
been terminated by either of the parties by serving 2 years' written notice on
the other immediately prior to the end of the Initial Period or any additional 3
year period provided for herein.

14.3.     In addition to the rights of termination provided for elsewhere in
this Agreement, either party will be entitled forthwith to terminate this
Agreement by written notice to the other party if:

     14.3.1    that other party commits any material breach of any of the
     provisions of this Agreement, and in the case of a breach capable of cure,
     fails to cure the same within 60 days after receipt of a written notice
     giving full particulars of the breach and requiring it to be remedied;

     14.3.2    that other party goes into liquidation (except for the purposes
     of amalgamation or reconstruction and in such manner that the company
     resulting therefrom effectively agrees to be bound by or assume the
     obligations imposed on that other party under this Agreement);

     14.3.3    an encumbrancer takes possession or a receiver is appointed over
     any of the property or assets of that other party; or

     14.3.4    any proceedings are filed or commenced by that other party under
     bankruptcy, insolvency or debtor relief laws or anything analogous to any
     of the foregoing under the laws of any jurisdiction occurs in relation to
     that other party.


<PAGE>

14.4.     For the purposes of Clause 14.3.1, a breach will be considered
capable of cure if the party in breach can comply with the provision in question
in all respects other than as to the time of performance.

14.5.     In further addition to the rights and termination provided for
elsewhere in this Agreement, and in addition to any other remedy it may have,
Elan shall be entitled to terminate this Agreement in the event that:

     14.5.1    (in respect of a Product) Par notifies Elan that it does not wish
     to commercialize that Product or fails to launch it by the Date For Launch;
     or

     14.5.2    (in respect of a Product) Par does not agree in writing to
     increased costs and/or a change to the R&D Program, as the case may be,
     proposed by Elan under Clause 6.4 within thirty (30) days of delivery of
     Elan's proposal; or

     14.5.3    there is a change in ownership or control of more than 40% of the
     voting rights in Par; or

     14.5.4    a Technological Competitor of Elan or a company with a Competing
     Product acquires 20% or more of Par's voting stock or where 20% or more of
     such company's voting stock is acquired by Par; or

     14.5.5    (in respect of a Product) the net price payable to Elan (that is
     the price of that Product and the percentage of Profit relating thereto) is
     less than Product Manufacturing Cost plus 10% for a period of one year.

                      CLAUSE 15 CONSEQUENCES OF TERMINATION

15.1.     Upon exercise of those rights of termination specified in Clause 14 or
elsewhere in this Agreement, this Agreement shall, subject to the provisions of
the Agreement which survive the termination of the Agreement and Clause 15.2
automatically terminate forthwith and be of no further legal force or effect.

15.2.     Upon termination of the Agreement by either party, in toto or in
respect of a particular Product, the following shall be the consequences in
respect of all Products or that Product, as applicable:-

     15.2.1    any sums that were due from Par to Elan under the provisions of
     Clause I or otherwise howsoever prior to the exercise of the right to
     terminate this Agreement as set forth herein shall be paid in full within
     30 days of termination of this Agreement and Elan shall not be liable to
     repay to Par any amount of money paid or payable by Par to Elan up to the
     date of the termination of this Agreement;

     15.2.2    all representations and warranties shall insofar are appropriate
     remain in full force and effect;


<PAGE>

     15.2.3    the rights of inspection and audit shall continue in force for
     the period referred to in the relevant provisions of this Agreement; and

     15.2.4    for the avoidance of doubt, Elan shall be entitled to research,
     develop and commercialize the Product in question for its own benefit.

                        CLAUSE 16 WARRANTY AND INDEMNITY

16.1.     Elan represents and warrants to Par as of the Effective Date, as
follows:

     16.1.1    Elan has the right to grant the Elan License, subject to Clause
     2.1.1;

     16.1.2    it will inform Par if there are any agreements between Elan and
     any third party that conflict with the Elan License at such time as a
     Compound becomes a Nominated Compound;

     16.1.3    each Product supplied by Elan to Par under this Agreement will
     conform to the Product Specifications therefor, and regulations governing
     the conduct of clinical trials and stability requirements, and shall not be
     adulterated or misbranded within the meaning of the US Food, Drug and
     Cosmetics Act.

EXCEPT AS SET FORTH IN THIS CLAUSE 16.1, ELAN IS GRANTING THE ELAN LICENSE
HEREUNDER ON AN "AS IS" BASIS WITHOUT REPRESENTATION OR WARRANTY WHETHER EXPRESS
OR IMPLIED INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, OR INFRINGEMENT OF THIRD PARTY RIGHTS, AND ALL SUCH WARRANTIES ARE
EXPRESSLY DISCLAIMED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAWS.

16.2.     Par represents and warrants to Elan as of the Effective Date, as
follows:

     16.2.1    Par has the right to enter into this Agreement.

     16.2.2    there are no agreements between Par and any third party that
     conflict with this Agreement.

     16.2.3    this Agreement does not require any filings under the Hart-Scott
     Rodino Antitrust Improvements Act of 1976, as amended, and the rules
     promulgated thereunder (16 C.F.R. 801.1 et seq.);

     16.2.4    in storing, transporting, marketing, promoting and selling each
     Product hereunder, Par will exercise all due skill, care and diligence in
     conducting such activities; and Par will comply with the provisions of this
     Agreement, all Regulatory Approvals, and in all material respects all
     applicable laws and regulations.

16.3.     Each of Elan and Par represents and warrants to the other that:


<PAGE>

     16.3.1    it has such permits, licenses and authorizations of governmental
     or regulatory authorities as are necessary to own its respective
     properties, conduct its business and consummate the transactions
     contemplated hereby;

     16.3.2    it is not currently debarred, suspended or otherwise excluded by
     any United States governmental agency from receiving Federal contracts.

16.4.     Each of the parties shall indemnify and hold harmless the other party
against all claims, damages, losses, liabilities and expenses (including
reasonable attorneys' fees) to which the other party may become liable insofar
as they arise out of any breach by the first party of any of its obligations or
warranties under this Agreement.

16.5.     Par shall indemnify Elan against all and any claims (whether
successful or not), damages, losses, liabilities, or expenses (including
reasonable attorneys' fees) made or brought seeking damages for personal injury
(including death) and/or for the costs of medical treatment, caused or
attributed to a Product or a Nominated Compound, except to the relative extent
that the same is attributable to Elan's gross negligence or breach of the
provisions of this Agreement.

16.6.     With reference to Clause 2.2, Par shall indemnify and hold harmless
Elan to the extent that any claims, damages, losses, liabilities, or expenses
arise out of any such acts or omissions of any sub-licensee.

16.7.     The party seeking an indemnity shall:

     16.7.1    fully and promptly notify the other party of any claim or
     proceedings, or threatened claim or proceedings;

     16.7.2    permit the indemnifying party to take full control of such claim
     or proceedings, with counsel of the indemnifying party's choice, provided
     that the indemnifying party shall reasonably and regularly consult with the
     indemnified party in relation to the progress and status of such claim or
     proceedings;

     16.7.3    co-operate in the investigation and defense of such claim or
     proceedings;

     16.7.4    not acknowledge the validity of, compromise or otherwise settle
     any such claim or proceedings without the prior written consent of the
     indemnifying party, which consent shall not be unreasonably withheld or
     delayed; and

     16.7.5    take all reasonable steps to mitigate any loss or liability in
     respect of any such claim or proceedings.

16.8.     WITHOUT PREJUDICE TO THE PROVISIONS OF CLAUSES 4.2.5 (DEFENSE
INFRINGEMENT LIABILITY) AND 16.5 (PRODUCT LIABILITY FOR PERSONAL INJURY),
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ELAN AND PAR SHALL
NOT BE LIABLE TO THE OTHER BY REASON OF ANY REPRESENTATION OR WARRANTY,
CONDITION OR OTHER TERM OR ANY DUTY OF COMMON LAW, OR UNDER THE EXPRESS TERMS OF

<PAGE>

THIS AGREEMENT, FOR ANY CONSEQUENTIAL, SPECIAL OR INCIDENTAL OR PUNITIVE LOSS OR
DAMAGE (WHETHER FOR LOSS OF CURRENT OR FUTURE PROFITS, LOSS OF ENTERPRISE VALUE
OR OTHERWISE) AND WHETHER OCCASIONED BY THE NEGLIGENCE OF THE RESPECTIVE
PARTIES, THEIR EMPLOYEES OR AGENTS OR OTHERWISE.

16.9.     Elan and Par shall maintain comprehensive general liability insurance,
including product liability insurance on each Product respectively in such
prudent amount (but not less than $15 million) as shall be specified in the R&D
Program for the duration of this Agreement and for a period of 5 years
thereafter.

Each party shall provide the other party with a certificate from the insurance
company verifying the above and shall notify the other party in writing at least
30 days prior to the expiration or termination of such coverage.

16.10.    Where this Agreement provides for the indemnification of a party to
this Agreement or for the limitation of a party's liability, such
indemnification and/or limitation (as the case may be) shall also apply for the
benefit of such party's Affiliates and the employees, officers, directors and
agents of any of them.

PROVIDED HOWEVER, for the avoidance of doubt, that such indemnification and/or
limitation (as the case may be) shall not apply for the benefit of a
sub-licensee of a party hereunder.

                       CLAUSE 17 MISCELLANEOUS PROVISIONS

17.1.     Confidentiality:
          ---------------

     17.1.1    The parties agree that it will be necessary, from time to time,
     to disclose to each other confidential and proprietary information,
     including without limitation, inventions, trade secrets, specifications,
     designs, data, know-how and other proprietary information relating to the
     Product, processes, services and business of the disclosing party. The
     foregoing shall be referred to collectively as "Confidential Information".
     For the avoidance of doubt, Elan's Confidential Information shall include
     the Elan Intellectual Property.

     17.1.2    Any Confidential Information disclosed by the disclosing party
     shall be used by the receiving party exclusively for the purposes of
     fulfilling the receiving party's obligations under this Agreement and for
     no other purpose.

     17.1.3    Save as otherwise specifically provided herein, and subject to
     Clauses 17.2 and 17.3, each party shall disclose Confidential Information
     of the other party only to those employees, representatives and agents
     requiring knowledge thereof in connection with fulfilling the party's
     obligations under this Agreement, and not to any other third party.

Each party further agrees to inform all such employees, representatives and
agents of the terms and provisions of this Agreement relating to Confidential
Information and their duties hereunder and to obtain their agreement hereto as a
condition of receiving Confidential Information.


<PAGE>

Each party shall exercise the same standard of care as it would itself exercise
in relation to its own confidential information (but in no event less than a
reasonable standard of care) to protect and preserve the proprietary and
confidential nature of the Confidential Information disclosed to it by the other
party.

Upon termination or expiration of this Agreement, each party shall promptly,
upon request of the other party, return all documents and any copies thereof
containing Confidential Information belonging to, or disclosed by, such other
party, save that it may retain one copy of the same solely for the purposes of
ensuring compliance with the obligations set out in this Clause 17.

     17.1.4    Any breach of this Clause 17 by any person informed by one of the
     parties is considered a breach by the party itself.

     17.1.5    Confidential Information shall be deemed not to include:

          17.1.5.1  information which is in the public domain;

          17.1.5.2  information which is made public through no breach of this
          Agreement;

          17.1.5.3  information which is independently developed by a party, as
          evidenced by such party's records;

          17.1.5.4  information that becomes available to a receiving party on a
          non-confidential basis, whether directly or indirectly, from a source
          other than the other party hereto, which source did not acquire this
          information on a confidential basis.

     17.1.6    The provisions relating to confidentiality in this Clause 17
     shall remain in effect during the term of this Agreement, and for a period
     of 7 years following the expiration or earlier termination of this
     Agreement.

     17.1.7    The parties agree that the obligations of this Clause 17 are
     necessary and reasonable in order to protect the parties' respective
     businesses, and each party agrees that monetary damages would be inadequate
     to compensate a party for any breach by the other party of its covenants
     and agreements set forth herein.

The parties agree that any such violation or threatened violation shall cause
irreparable injury to a party and that, in addition to any other remedies that
may be available, in law and equity or otherwise, each party shall be entitled
to seek injunctive relief against the threatened breach of the provisions of
this Clause 17, or a continuation of any such breach by the other party,
specific performance and other equitable relief to redress such breach together
with damages and reasonable counsel fees and expenses to enforce its rights
hereunder.


<PAGE>

17.2.     Announcements:
          -------------

     17.2.1    Subject to Clause 17.2.2 and Clause 17.3, no announcement or
     public statement concerning the existence, subject matter or any term of
     this Agreement shall be made by or on behalf of any party hereto without
     the prior written approval of the other party or parties.

     The terms of any such announcement shall be agreed in good faith by the
     parties.

     17.2.2    For the purpose of demonstrating to third parties the benefits of
     the Elan Technology, Elan shall be entitled, without the prior written
     consent of Par, to disclose to third parties the numerical values
     underlying the Compound Data and other relevant data provided that Elan
     does not disclose Par's name.

17.3.     Required Disclosures:
          --------------------

     17.3.1    A party (the "Disclosing Party") will be entitled to make an
     announcement or public statement concerning the existence, subject matter
     or any term of this Agreement, or to disclose Confidential Information that
     the Disclosing Party is required to make or disclose pursuant to:

          17.3.1.1  a valid order of a court or Governmental Authority; or

          17.3.1.2  any other requirement of law or any securities or stock
          exchange;

          provided that if the Disclosing Party becomes legally required to make
          such announcement, public statement or disclosure hereunder, the
          Disclosing Party shall give the other party or parties hereto prompt
          notice of such fact to enable the other party or parties hereto to
          seek a protective order or other appropriate remedy concerning any
          such announcement, public statement or disclosure.

          The Disclosing Party shall fully co-operate with the other party or
          parties hereto in connection with that other party's or parties'
          efforts to obtain any such order or other remedy.

          If any such order or other remedy does not fully preclude announcement
          public statement or disclosure, the Disclosing Party shall make such
          announcement, public statement or disclosure only to the extent that
          the same is legally required.

     17.3.2    Each party shall notify the other party or parties hereto of any
     request by an Governmental Authority for disclosure of any Confidential
     Information required in connection with a Regulatory Application, provided
     that such party shall not disclose the Confidential Information to the
     Governmental Authority, without the prior written consent of the other
     party or parties hereto, which shall not be unreasonably withheld or
     delayed.

17.4.     Assignments/Sub-contracting:
          ---------------------------

This Agreement shall not be assigned by any party hereto without the prior
written consent of the other party or parties hereto, save that any party may
assign this Agreement in whole or in part and delegate its duties hereunder to
its Affiliate or Affiliates without such consent provided that such assignment

<PAGE>

or delegation has no material adverse tax implications for the other party or
parties hereto. Elan shall also have the right to subcontract and/or delegate
all or any portion of the development, manufacturing or packaging of one or more
of the Products to one or more third parties (including Affiliates). Each Party
shall be responsible for the acts and/or omissions of its respective Affiliates
and subcontractors.

17.5.     Parties bound:
          -------------

This Agreement shall be binding upon and inure for the benefit of parties
hereto, their successors and permitted assigns.

17.6.     Severability:
          ------------

If any provision in this Agreement is deemed to be, or becomes invalid, illegal,
void or unenforceable under applicable laws:

     17.6.1    such provision will be deemed amended to conforming to applicable
     laws so as to be valid and enforceable; or

     17.6.2    if it cannot be so amended without materially altering the
     intention of the parties, it will be deleted the validity, legality and
     enforceability of the remaining provisions of this Agreement shall not be
     impaired or affected in any way.

17.7.     Force Majeure:
          -------------

Neither party to this Agreement shall be liable for failure or delay in the
performance of any of its obligations hereunder if such failure or delay results
from Force Majeure , but any such failure or delay shall be remedied by such
party as soon as practicable.

17.8.     Relationship of the parties:
          ---------------------------

     17.8.1    Nothing contained in this Agreement is intended or is to be
     construed to constitute any of the parties hereto as partners or members of
     a joint venture or any party as an employee of another party.

     17.8.2    No party hereto shall have any express or implied right or
     authority to assume or create any obligations on behalf of or in the name
     of any other party or to bind another party to any contract, agreement or
     undertaking with any third party.

17.9.     Amendments:
          ----------

No amendment, modification or addition hereto shall be effective or binding on
any party hereto unless set forth in writing and executed by a duly authorized
representative of all parties hereto.


<PAGE>

17.10.    Waiver:
          ------

No waiver of any right under this Agreement shall be deemed effective unless
contained in a written document signed by the party charged with such waiver,
and no waiver of any breach or failure to perform shall be deemed to be a waiver
of any future breach or failure to perform or of any other right arising under
this Agreement.

17.11.    Entire agreement /No effect on other agreements:
          -----------------------------------------------

     17.11.1   This Agreement sets forth all of the agreements and
     understandings between the parties with respect to the subject matter
     hereof, and supersedes and terminates all prior agreements and
     understandings between the parties with respect to the subject matter
     hereof. There are no agreements or understandings with respect to the
     subject matter hereof, either oral or written, between the parties other
     than as set forth in this Agreement.

     17.11.2   No provision of this Agreement shall be construed so as to
     negate, modify or affect in any way the provisions of any other agreement
     between the parties unless specifically referred to, and solely to the
     extent provided, in any such other agreement.

17.12.    Governing law and jurisdiction:
          ------------------------------

     17.12.1   This Agreement shall be governed by and construed in accordance
     with the laws of the State of New York.

     17.12.2   For the purposes of this Agreement the parties submit to the
     exclusive jurisdiction of the Federal and State courts located in New York.

17.13.    Notice:

     17.13.1   Any notice to be given under this Agreement shall be sent in
     writing in English by registered or recorded delivery post reputable
     overnight courier or fax to:

                Elan at

                Elan Corporation, plc.
                c/o Elan International Services Ltd.
                102 St. James Court
                Flatts
                Smiths FL04
                Bermuda
                Attn:Secretary
                Fax no.   +144 1292 2224

<PAGE>
                Par at

                Par Pharmaceuticals
                One Ram Ridge Road
                Spring Valley, New York 10977
                USA
                Attention: Office of the President
                Fax: +1845 425 7922

or to such other address(es) and fax numbers as may from time to time be
notified by either party to the other hereunder.

     17.13.2   Any notice sent by mail shall be deemed to have been delivered
     within 7 working days after dispatch or delivery to the relevant courier
     and any notice sent by fax shall be deemed to have been delivered upon
     confirmation of receipt. Notice of change of address shall be effective
     upon receipt.

17.14.    Further assurances:
          ------------------

At the request of any of the parties, the other party or parties shall (and
shall use reasonable efforts to procure that any other necessary third parties
shall) execute and do all such documents, acts and things as may reasonably be
required subsequent to the signing of this Agreement for assuring to or vesting
in the requesting party the fill benefit of the terms hereof.

17.15.    Counterparts:
          ------------

This Agreement may be executed in any number of counterparts, each of which when
so  executed  shall be  deemed to be an  original  and all of which  when  taken
together shall constitute this Agreement.

17.16.    Set-off:
          -------

Each of the parties will be entitled but not obliged to set-off against any
amount of money payable to by the other party hereunder, any amount of money
payable by it to the other party hereunder.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


SIGNED

for and on behalf of

Elan Corporation, plc.

By:    /s/ Kevin Insley
       --------------------

Name:  Kevin Insley
       --------------------

Title: Authorized Signatory
       --------------------


<PAGE>

SIGNED

for and on behalf of

Par Pharmaceutical, Inc.

By:    /s/ Scott Tarriff
       --------------------

Name:  Scott Tarriff
       --------------------

Title: President and CEO
       --------------------