EXHIBIT 10.3
EQUIPMENT SECURITY AGREEMENT

     This Equipment Security Agreement dated as of December 28,
1995 (this "Equipment Schedule"), is entered into pursuant to and
incorporates by this reference all of the terms and provisions of
that certain Master Security Agreement dated as of December 28,
1995 (the "Master Security Agreement"), by and between the
undersigned parties hereto. All capitalized terms used herein and
not defined herein shall have the meanings set forth or referred to
in the Master Security Agreement. By its execution and delivery of
this Equipment Schedule, Customer hereby reaffirms all of the
representations, warranties and covenants contained in the Master
Security Agreement as of the date hereof, and further represents
and warrants to Lender that no Default has occurred and is
continuing as of the date hereof. 

     1. Grant of Security Interest; Equipment Financed. Subject to
the terms and provisions of the Security Agreement and the Guaranty
attached hereto as Exhibit "A" executed and delivered by Customer
to Lender which specifically refer to this Equipment Schedule (the
"Guaranty"), Lender has agreed to provide financing in an amount
not to exceed $1,500,000.00 (unless otherwise permitted by Lender
in writing) on or before December 28, 1995, to Pharmaceutical
Resources, Inc., a New Jersey corporation, in connection with the
equipment and property described in Schedule "A" attached hereto
(the "Equipment"). Customer has agreed and does hereby grant a
security interest in and to the Equipment and the Collateral
related thereto, whether now owned or hereafter acquired and
wherever located, in order to secure all Obligations owing to
Lender, including but not limited to the Guaranty. Lender's
agreement to provide the financing contemplated herein shall be
subject to Lender's prior receipt of all documentation required by
Lender in respect of the Security Agreement and in connection with
the financing of any Equipment, in form and substance satisfactory
to Lessor in its sole and absolute discretion, including but not
limited to verified, completed and properly executed Guaranty,
Secretary Certificates, Landlord/Mortgagee Waivers, Disclaimers of
Interest and/or Intercreditor Agreements from other creditors or
parties, disbursement and payment authorizations, invoices, bills
of sale, proof of delivery, acceptance and ownership of the
Equipment, lien, tax and judgment searches, legal opinions and UCC
financing statements as Lender may reasonably request. 

     2. Guaranty. By its execution and delivery of the Guaranty,
the Guaranty shall constitute: 

          (a) Customer's acknowledgment that each item of Equipment
has been unconditionally accepted by the Customer for all purposes
under the Security Agreement; 

          (b) Customer's reaffirmation of all of the
representations, warranties and covenants as set forth in the
Security Agreement as of the date of the Guaranty (the "Acceptance Date"), 
and Customer's certification that no Default has occurred
and is continuing as of the date thereof; 

          (c) Customer's representation, warranty and agreement
that: (i) the Equipment has been delivered and is in an operating
condition and performing the operation for which it is intended to
the satisfaction of the Customer; and (ii) if requested by Lender,
the Equipment has been marked or labeled evidencing Lender's
interest therein; 

          (d) Customer's absolute and unconditional obligation and
agreement to pay Lender at the times and in the manner set forth in
the Guaranty. 

     3. Equipment Location(s). The Equipment will be located at the
location(s) set forth in Schedule A-1 attached hereto (the
"Equipment Location(s)"). 

Dated as of: December 28, 1995.

 FLEET BANK, N.A.             PAR PHARMACEUTICAL, INC.

 By: /s/John Raleigh          By: /s/Robert I. Edinger 
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 Name: John Raleigh           Name:  Robert I. Edinger 
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 Title: Vice President        Title: Executive Vice President
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