DEVELOPMENT AGREEMENT, dated as of August 11, 1998, among
PHARMACEUTICAL RESOURCES, INC. ("PRI"), GENERICS (UK) LIMITED ("G(UK)"), and
ISRAEL PHARMACEUTICAL RESOURCES L.P. (the "Partnership").
WHEREAS, the Partnership is engaged in researching and developing generic pharmaceutical products in Israel;
WHEREAS, PRI and G(UK) and their respective Affiliates (as hereafter defined) are engaged in manufacturing,
marketing and distributing generic pharmaceutical products, and they own and operate approved manufacturing
facilities and possess qualified marketing distribution systems and organizations to enable them to manufacture
and effectively promote, market and distribute products worldwide;
WHEREAS, PRI and G(UK) desire the Partnership to develop pharmaceutical products for manufacture and
distribution by PRI and G(UK) and their respective Affiliates; and
WHEREAS, the parties hereto desire to set forth their mutual agreements with respect to certain matters relating
to the parties hereto, including the development, registration and distribution of products to be developed by the
NOW, THEREFORE, the parties hereto agree as follows:
1.1 Definitions: Wherever used in this agreement the words and terms, "Affiliate", "ANDA", "Bio-Availability
Studies", "Budget", "business day", "Competing Product", "Confidential Information", "FDA", "G(UK) Territory ",
"Gross Sales", "License Fees", "Net Sales", "Partnership Products", "Person", "Product Approval", "Product
Information", "PRI Board", "PRI Territory" and "Unit" shall have the respective meanings set out in Schedule "A"
annexed hereto. In addition, words and expressions parenthetically defined elsewhere in this agreement shall,
throughout this agreement, have the meanings therein provided. Defined terms shall be used in the singular or in
the plural, as sense shall require.
FUNDING AND PRODUCT SELECTION
2.1 Initial Fee: In consideration of the grant of rights by the Partnersh