Negative Pledge Letter

TEVA PHARMACEUTICALS USA, INC.
650 CATHILL ROAD
SELLERSVILLE, PA 18960


September 13, 1999


Bank Leumi USA 564 Fifth Avenue, 5th Floor New York, New York 10036
Attention: Michaela Klein, Senior Vice President


Re: Teva Pharmaceuticals USA, Inc. ("BORROWER")


Dear Ms. Klein:


In consideration of financial accommodations extended or about to be extended by Bank Leumi USA (the "BANK") to Borrower (the "CREDIT EXTENSIONS"), pursuant to the Credit Agreement dated as of September 13, 1999 by and among the Bank, the Borrower and Teva Pharmaceutical Industries Ltd. as guarantor (the "GUARANTOR"), the Borrower agrees that so long as any part of the Credit Extensions are outstanding, the Borrower shall not create, incur, assume or suffer to exist any Lien in or upon any of its property or assets, whether now owned or hereafter acquired, or assign or otherwise convey any contract rights, accounts receivable or other right to receive income (unless it makes, or causes to be made, effective provision whereby the obligations of the Borrower under the Loan Documents will be equally and ratably secured with any and all other obligations thereby secured, such security to be pursuant to one or more agreements reasonably satisfactory to the Bank and, in any such case, the Credit Extensions shall have the benefit, to the fullest extent that, and with such priority as, the Bank may be entitled under applicable law, of an equitable Lien on such property), except:


(1) Liens for taxes, assessments or other governmental charges (i) that
are not yet due and payable (ii) the amount, applicability or validity
thereof is contested by the Borrower on a timely basis in good faith
and in appropriate proceedings, and the Borrower has established
adequate reserves therefor in accordance with US GAAP on the books of
the Borrower or (iii) the nonpayment of which in the aggregate would
not reasonably be expected to have a Material Adverse Effect;


(2) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred
in the ordinary course of business for sums not yet due and payable or
the nonpayment of which in the aggregate would not reasonably be
expected to have a Material Adverse Effect;


(3) Liens incurred or deposits made in the ordinary course of business,
in each case not incurred or made in connection with the borrowing of
money, the obtaining of 2
advances or credit or the payment of the deferred purchase price of
property, (i) in connection with workers' compensation, unemployment
insurance and other types of social security or retirement benefits, or
(ii) to secure (or to obtain letters of credit that secure) the
performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capital Leases), performance bonds,
purchase, construction, service, technical assistance or sales
contracts and other similar obligations;


(4) Liens securing judgments that are being stayed or contested, in
each case on a timely basis in good faith and in appropriate
proceedings and with respect to which the Borrower has established
adequate reserves in accordance with US GAAP;


(5) licenses, leases or subleases granted to others, easements,
rights-of-way, defects and irregularities in title, restrictions and
other similar charges or encumbrances, in each case incidental to, and
not interfering with, the ordinary conduct of the business of the
Borrower, provided that such Liens do not, in the aggregate, materially
detract from the value of such property;


(6) Liens on property or assets of the Borrower or any of its
Subsidiaries securing obligations owing to the Borrower or to any of
its Subsidiaries;


(7) Liens existing on the date hereof, which secure Debt of certain
Subsidiaries of the Borrower, the nonpayment of which would not
reasonably be expected to have a Material Adverse Effect;


(8) any Lien created to secure all or any part of the purchase price,
or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of property (or any improvement
thereon) acquired or constructed by the Borrower afte ...