EXHIBIT 10.9.3
EMPLOYMENT AGREEMENT
     EMPLOYMENT AGREEMENT (this “Agreement”), dated as of March 27, 2007, by and
between Par Pharmaceutical, Inc., a Delaware corporation (“Par” or “Employer”),
and Paul Campanelli (“Executive”).
RECITALS:
     A. WHEREAS, Executive is presently employed in the capacity of Executive
Vice President, Business Development; and
     B. WHEREAS, Employer and Executive desire to cancel and replace Executive’s
existing Employment Agreement, dated September 17, 2005, and enter into this
Agreement in order for Executive to assume the position of President, Generic
Products Division and to perform the duties associated with this position with
Employer on the terms and conditions set forth herein.
     In consideration of the mutual promises herein contained, the parties
hereto hereby agree as follows:
     1. Employment.
          1.1. General. Employer hereby employs Executive in the capacity of
President, Generics Division at the compensation rate and benefits set forth in
Section 2 hereof for the Employment Term (as defined in Section 3.1 hereof).
Executive hereby accepts such employment, subject to the terms and conditions
herein contained. In all such capacity, Executive shall perform and carry out
such duties and responsibilities as may be assigned to him from time to time by
the Board and by the Chief Executive Officer of Par reasonably consistent with
Executive’s position and this Agreement, and shall report to the Board and the
Chief Executive Officer of Par.
          1.2. Time Devoted to Position. Executive, during the Employment Term,
shall devote substantially all of his business time, attention and skills to the
business and affairs of Employer.
          1.3. Certifications. Whenever the Chief Executive Officer of Par is
required by law, rule or regulation or requested by any governmental authority
or by Par’s auditors to provide certifications with respect to Par’s financial
statements or filings with the Securities and Exchange Commission or any other
governmental authority, Executive shall sign such certifications as may be
reasonably requested by the Chief Executive Officer of Par and/or Employer, with
such exceptions as Executive deems necessary to make such certifications
accurate and not misleading.

 

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     2. Compensation and Benefits.
          2.1. Salary. At all times Executive is employed hereunder, Employer
shall pay to Executive, and Executive shall accept, as full compensation for any
and all services rendered and to be rendered by him during such period to
Employer in all capacities, including, but not limited to, all services that may
be rendered by him to any of Employer’s existing subsidiaries, entities and
organizations hereafter formed, organized or acquired by Employer, directly or
indirectly (each, a “Subsidiary” and collectively, the “Subsidiaries”), the
following: (i) a base salary at the annual rate of $350,000 (Three Hundred and
Fifty Thousand Dollars), or at such increased rate as the Board (through its
Compensation and Equity Awards Committee), in its sole discretion, may hereafter
from time to time grant to Executive hereof (as so adjusted, the “Base Salary”);
and (ii) any additional bonus and the benefits set forth in Sections 2.2, 2.3
and 2.4 hereof. The Base Salary shall be payable in accordance with the regular
payroll practices of Employer applicable to senior executives, less such
deductions as shall be required to be withheld by applicable law and regulations
or otherwise.
          2.2. Bonus. Subject to Section 3.3 hereof, Executive shall be entitled
to an annual bonus during the Employment Term in such amount (if any) as
determined by the Board based on such performance criteria as it deems
appropriate, including, without limitation, Executive’s performance and
Employer’s earnings, financial condition, rate of return on equity and
compliance with regulatory requirements. The target amount of Executive’s Bonus
shall be equal to 50% of his Base Salary.
          2.3. Equity Awards. Executive shall be entitled to participate in
long-term incentive plans commensurate with his titles and positions, including,
without limitation, stock option, restricted stock, and similar equity plans of
Employer as may be offered from time to time.
          2.4. Executive Benefits.
               2.4.1. Expenses. Employer shall promptly reimburse Executive for
expenses he reasonably incurs in connection with the performance of his duties
(including business travel and entertainment expenses) hereunder, all in
accordance with Employer’s policies with respect thereto as in effect from time
to time.
               2.4.2. Employer Plans. Executive shall be entitled to participate
in such employee benefit and welfare plans and programs as Employer may from
time to time generally offer or provide to executive officers of Employer or its
Subsidiaries, including, but not limited to, participation in life insurance,
health and accident, medical plans and programs and profit sharing and
retirement plans.
               2.4.3. Vacation. Executive shall be entitled to four (4) weeks of
paid vacation per calendar year, prorated for any partial year.
               2.4.4. Life Insurance. Employer shall obtain (provided, that
Executives qualifies on a non-rated basis) a term life insurance policy, the
premiums of which shall be borne by Employer and the death benefits of which
shall be payable to

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Executive’s estate, or as otherwise directed by Executive, in the amount of
$1 million throughout the Employment Term.
               2.4.5 Automobile. Employer shall provide Executive with an
automobile cash allowance of one thousand and fifty dollars ($1,050) (gross) per
month.
     3. Employment Term; Termination.
          3.1. Employment Term. Executive’s employment hereunder shall commence
on the date hereof and, except as otherwise provided in Section 3.2 hereof,
shall continue until the third (3rd) anniversary of the date of this Agreement
(the “Initial Term”). Thereafter, this Agreement shall automatically be renewed
for successive one-year periods commencing on the third (3rd) anniversary of the
date of this Agreement (the Initial Term, together with any such subsequent
employment period(s), being referred to herein as the “Employment Term”), unless
Executive or Employer shall have provided a Notice of Termination (as defined in
Section 3.4.2 hereof) in respect of its or his election not to renew the
Employment Term to the other party at least 90 days prior to such termination.
Upon nonrenewal of the Employment Term pursuant to this Section 3.1 or
termination pursuant to Sections 3.2.1 through 3.2.6 hereof, inclusive,
Executive shall be released from any duties hereunder (except as set forth in
Section 4 hereof) and the obligations of Employer to Executive shall be as set
forth in Section 3.3 hereof only.
          3.2. Events of Termination. The Employment Term shall terminate upon
the occurrence of any one or more of the following events:
               3.2.1. Death. In the, event of Executive’s death, the Employment
Term shall terminate on the date of his death.
               3.2.2. Without Cause By Executive. Executive may terminate the
Employment Term at any time during such Term for any reason whatsoever by giving
a Notice of Termination to Employer. The Date of Termination pursuant to this
Section 3.2.2 shall be thirty (30) days after the Notice of Termination is
given.
               3.2.3. Disability. In the event of Executive’s Disability (as
hereinafter defined), Employer may, at its option, terminate the Employment Term
by giving a Notice of Termination to Executive. The Notice of Termination shall
specify the Date of Termination, which date shall not be earlier than thirty
(30) days after the Notice of Termination is given. For purposes of this
Agreement, “Disability” means disability as defined in any long-term disability
insurance policy provided by Employer and insuring Executive, or, in the absence
of any such policy, the inability of Executive for 180 days in any twelve (12)
month period to substantially perform his duties hereunder as a result of a
physical or mental illness, all as determined in good faith by the Board.

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               3.2.4. For Cause By Employer. Employer may terminate the
Employment Term for “Cause” based on objective factors determined in good faith
by a majority of the Board as set forth in a Notice of Termination to Executive
specifying the reasons for termination and the failure of the Executive to cure
the same within ten (10) days after Employer shall have given the Notice of
Termination; provided, however, that in the event the Board in good faith
determines that the underlying reasons giving rise to such determination cannot
be cured, then the ten (10) day period shall not apply and the Employment Term
shall terminate on the date the Notice of Termination is given. For purposes of
this Agreement, “Cause” shall mean (i) Executive’s conviction of, guilty or no
contest plea to, or confession of guilt of, a felony, or other crime involving
moral turpitude; (ii) an act or omission by Executive in connection with his
employment that constitutes fraud, criminal misconduct, breach of fiduciary
duty, dishonesty, gross negligence, malfeasance, willful misconduct or other
conduct that is materially harmful or detrimental to Employer; (iii) a material
breach by Executive of this Agreement; (iv) continuing failure to perform such
duties as are assigned to Executive by Employer in accordance with this
Agreement, other than a failure resulting from a Disability; (v) Executive’s
knowingly taking any action on behalf of Employer or any of its affiliates
without appropriate authority to take such action; (vi) Executive’s knowingly
taking any action in conflict of interest with Employer or any of its affiliates
given Executive’s position with Employer; and/or (vii) the commission of an act
of personal dishonesty by Executive that involves personal profit in connection
with Employer.
               3.2.5. Without Cause By Employer. Employer may terminate the
Employment Term for any reason or no reason whatsoever (other than for the
reasons set forth elsewhere in this Section 3.2) by giving a Notice of
Termination to Executive. The Notice of Termination shall specify the Date of
Termination, which date shall not be earlier than thirty (30) days after the
Notice of Termination is given or such shorter period if Employer shall pay to
Executive that amount of the Base Salary amount that would have been earned
between the thirty (30) day period and such shorter period.
               3.2.6. Employer’s Material Breach. Executive may terminate the
Employment Term upon Employer’s material breach of this Agreement and the
continuation of such breach for more than ten (10) days after written demand for
cure of such breach is given to Employer by Executive (which demand shall
identify the manner in which Employer has materially breached this Agreement).
Employer’s material breach of this Agreement shall mean (i) the failure of
Employer to make any payment that it is required to make hereunder to Executive
when such payment is due or within two (2) business days thereafter; (ii) the
assignment to Executive, without Executive’s express written consent, of duties
inconsistent with his positions, responsibilities and status with Employer, or a
change in Executive’s reporting responsibilities, titles or offices or any plan,
act, scheme or design to constructively terminate the Executive, or any removal
of Executive from his positions with Employer, except in connection with the
termination of the Employment Term by Employer for Cause, without Cause or
Disability or as a result of Executive’s death or voluntary resignation or by
Executive other than pursuant to this Section 3.2.6; (iii) a reduction by
Employer in Executive’s Base Salary; or (iv) a permanent reassignment of
Executive’s

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primary work location, without the consent of Executive, to a location more than
35 miles from Employer’s executive offices in Woodcliff Lake, New Jersey.
          3.3. Certain Obligations of Employer Following Termination of the
Employment Term. Following termination of the Employment Term under the
circumstances described below, Employer shall pay to Executive or his estate, as
the case may be, the following compensation and provide the following benefits
in full satisfaction and final settlement of any and all claims and demands that
Executive now has or hereafter may have hereunder against Employer. In
connection with Executive’s receipt of any or all monies and benefits to be
received pursuant to this Section 3.3, Executive shall not have a duty to seek
subsequent employment during the period in which he is receiving severance
payments and the Severance Amount (as defined in Section 3.3.2 hereof) shall not
be reduced solely as a result of Executive’s subsequent employment by an entity
other than Employer.
               3.3.1. For Cause. In the event that the Employment Term is
terminated by Employer for Cause, Employer shall pay to Executive, in a single
lump-sum within 30 days of the Date of Termination, an amount equal to any
unpaid but earned Base Salary through the Date of Termination.
               3.3.2. Without Cause by Employer; Material Breach by Employer;
Non-Renewal by Employer. In the event that the Employment Term is terminated by
Employer pursuant to Section 3.2.5 hereof or by Executive pursuant to
Section 3.2.6 hereof, or is not renewed by Employer pursuant to Section 3.1
hereof, Employer shall pay to Executive severance in an amount equal to two
(2) times his Base Amount, and Executive shall retain all vested benefits
granted pursuant to Section 2.3 hereof. For purposes hereof, “Base Amount” shall
mean the Base Salary in effect at such applicable time plus, if Executive’s
termination is not a result of, in whole or in part, Executive’s performance in
respect of his duties hereunder, the amount of Executive’s last annual cash
bonus pursuant to Section 2.2 hereof. Any payments made in accordance with this
Section 3.3.2 shall be made in twenty-four (24) equal monthly installments from
the Date of Termination in accordance with Employer’s regular payroll practices,
or, if upon agreement of Executive and Employer, in a lump sum within 30 days of
the Date of Termination, subject to Executive’s continued compliance with the
terms of Section 4 hereof and the execution by Executive of Employer’s standard
form Release Agreement in effect at the time.
               3.3.3. Without Cause By Executive; Election Not to Renew by
Executive. In the event that the Employment Term is terminated by Executive
pursuant to Section 3.2.2 hereof or Executive elects not to renew this Agreement
pursuant to Section 3.1 hereof, Employer shall pay to Executive, in a single
lump-sum within 30 days of the Date of Termination, an amount equal to any
unpaid but earned Base Salary through the Date of Termination.
               3.3.4. Death, Disability. In the event that the Employment Term
is terminated by reason of Executive’s death pursuant to Section 3.2.1 hereof or
by Employer by reason of Executive’s Disability pursuant to Section 3.2.3
hereof, Employer

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shall pay to Executive, subject to, in the case of Disability, Executive’s
continued compliance with Section 4 hereof, the Severance Amount, less any life
insurance and/or disability insurance received by Executive or his estate
pursuant to insurance policies provided by Employer (including pursuant to
Section 2.4.4 hereof), payable in accordance with Section 3.3.2 hereof, and
Executive shall retain all vested benefits granted pursuant to Section 2.3
hereof.
               3.3.5. Post-Employment Term Benefits. In the event Executive is
terminated pursuant to Sections 3.2.1 through 3.2.6 hereof, inclusive, or either
Employer or Executive elects not to renew this Agreement pursuant to Section 3.1
hereof, Employer shall reimburse Executive for any unpaid expenses pursuant to
Section 2.4.1 hereof, and Executive will have the opportunity and responsibility
to elect COBRA continuation coverage pursuant to the terms of that law and will
thus be responsible for the execution of the continuation of coverage forms upon
termination of his insurance coverage. Except as provided immediately below,
Executive will be responsible for all COBRA payments. Specifically, if Executive
is terminated pursuant to Sections 3.2.3, 3.2.5 or 3.2.6 hereof, or Employer
elects not to renew this Agreement pursuant to Section 3.1 hereof, Executive
shall be entitled to participate, at Employer’s expense, in all medical and
health plans and programs of Employer in accordance with COBRA for a period of
eighteen (18) months (the “Benefits Period”), subject to the execution by
Executive of Employer’s standard form Release Agreement in effect at the time
and Executive’s continued compliance with the terms of Section 4 hereof;
provided, that Executive’s continued participation is legally possible under the
general terms and provisions of such plans and programs; and provided, further,
that in the event Executive is entitled to equal or comparable benefits from a
subsequent employer during the Benefits Period, Employer’s obligation with
respect thereto pursuant to this Section 3.3.5 shall end as of such date.
               3.3.6. Equity Awards.
               (a) If, within twelve (12) months following a Change of Control
(as defined in Section 3.4.1 hereof) of Employer, the Employment Term is
terminated other than for Cause, then Executive (or his estate) shall have
twenty-four (24) months from the date of termination to exercise any vested
equity awards; provided, that the relevant equity award plan remains in effect
and such equity awards shall not have otherwise expired in accordance with the
terms thereof. In connection therewith, Employer agrees to use commercially
reasonable efforts to amend Executive’s Equity Award Agreements if necessary to
effectuate the provisions of this Section 3.3.6(a).
               (b) In the event the Employment Term is terminated (i) by
Employer pursuant to Section 3.2.5 hereof and the reason for such termination is
not related to the performance of Executive in his duties with respect to
Employer, or (ii) by Executive pursuant to Section 3.2.6 hereof, then all equity
awards theretofore granted to Executive shall thereupon vest and Executive shall
have twenty-four (24) months from such date to exercise such options; provided,
that the relevant equity award plan remains in effect and such equity awards
shall not have otherwise expired in accordance with the terms thereof. In
connection therewith, Employer agrees to use commercially reasonable

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efforts to amend Executive’s Equity Award Agreements if necessary to effectuate
the provisions of this Section 3.3.6(b).
          3.4. Definitions.
               3.4.1. “Change of Control” Defined. A “Change of Control” of
Employer means (i) the approval by the stockholders of Par of the sale, lease,
exchange or other transfer (other than pursuant to internal reorganization) by
Par of all or substantially all of its respective assets to a single purchaser
or to a group of associated purchasers; (ii) the first purchase of shares of
equity securities of Par pursuant to a tender offer or exchange offer (other
than an offer by Par) for at least fifteen (15%) percent of the equity
securities of Par; (iii) the approval by the stockholders of Par of an agreement
for a merger or consolidation in which Par shall not survive as an independent,
publicly-owned corporation; (iv) the acquisition (including by means of a
merger) by a single purchaser or a group of associated purchasers of securities
of Par from either Par or any third party representing thirty-five (35%) percent
or more of the combined voting power of Par’s then outstanding equity securities
in one or a related series of transactions (other than pursuant to an internal
reorganization) or (v) the change of the membership of a majority of the Board
during any period of two (2) consecutive years, unless the election, or the
nomination for election by Par’s stockholders, of each new director was approved
by a vote of at least two-thirds of the directors of the Board still in office
who were directors of Par at the beginning of the period.
               3.4.2. “Notice of Termination” Defined. “Notice of Termination”
means a written notice that indicates the specific termination provision relied
upon by Employer or Executive and, except in the case of termination pursuant to
Sections 3.2.1, 3.2.2 or 3.2.5 hereof, that sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Employment Term under the termination provision so indicated.
               3.4.3. “Date of Termination” Defined. “Date of Termination” means
such date as the Employment Term is expired if not renewed or terminated in
accordance with Sections 3.1 or 3.2 hereof.
     4. Confidentiality/ Non-Solicitation/Non-Compete.
          4.1. “Confidential Information” Defined. “Confidential Information”
means any and all information (oral or written) relating to Employer or any
Subsidiary or any person or entity controlling, controlled by, or under common
control with Employer or any Subsidiary or any of their respective activities,
including, but not limited to, information relating to: technology, research,
test procedures and results, machinery and equipment; manufacturing processes;
financial information; products; identity and description of materials and
services used; purchasing; costs; pricing; customers and prospects; advertising,
promotion and marketing; and selling, servicing and information pertaining to
any governmental investigation, except such information which becomes public,
other than as a result of a breach of the provisions of Section 4.2 hereof.

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          4.2. Non-disclosure of Confidential Information. Executive shall not
at any time (other than as may be required or appropriate in connection with the
performance by him of his duties hereunder), directly or indirectly, use,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever for the benefit of any person or entity other than Employer (except
as may be required under legal process by subpoena or other court order).
          4.3. Non-Solicitation. Executive shall not, while employed by Employer
and for a period of one (1) year following the Date of Termination, directly or
indirectly, hire, offer to hire, entice away or in any other manner persuade or
attempt to persuade any officer, employee, agent, lessor, lessee, licensor,
licensee, customer, prospective customer, or supplier of Employer or any of its
Subsidiaries to discontinue or alter his or its relationship with Employer or
any of its Subsidiaries.
          4.4. Non-Competition. Executive shall not, while employed by Employer
and for a period of one (1) year following the Date of Termination, directly or
indirectly provide any services (whether in the management, sales, marketing,
public relations, finance, research, development, general office,
administrative, or other areas) as an employee, agent, stockholder, officer,
director, consultant, advisor, investor, or other representative of Employer’s
competitors in the branded or generic pharmaceutical industry in any state or
country in which Employer does or seeks to do business. Employer’s competitors
include any entity, individual, or affiliate of such company or individual that
develops, sells, markets, or distributes any products that compete with or are
the same or similar to those of Employer. However, the restrictions of this
paragraph 4.4 shall not apply if the Employment Term is terminated by Employer
pursuant to Section 3.2.5 hereof or by Executive properly pursuant to
Section 3.2.6 hereof; nor shall this paragraph prohibit Executive from being a
passive owner of not more than one percent (1%) of any publicly-traded class of
capital stock of any entity engaged in a competing business.
          4.5. Injunctive Relief. The parties hereby acknowledge and agree that
(a) the type, scope and periods of restrictions imposed in paragraph 4 are
necessary, fair and reasonable to protect Employer’s legitimate business
interests and to prevent the inevitable disclosure of Employer’s Confidential
Information; (b) Employer will be irreparably injured in the event of a breach
by Executive of any of his obligations under this Section 4; (c) monetary
damages will not be an adequate remedy for any such breach; (d) Employer will be
entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach; and (e) the existence of any claims that
Executive may have against Employer, whether under this Agreement or otherwise,
will not be a defense to the enforcement by Employer of any of its rights under
this Section 4.
          4.6. Non-exclusivity and Survival. The covenants of Executive
contained in this Section 4 are in addition to, and not in lieu of, any
obligations that Executive may have with respect to the subject matter hereof,
whether by contract, as a matter of law or otherwise, and such covenants and
their enforceability shall survive any

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termination of the Employment Term by either party and any investigation made
with respect to the breach thereof by Employer at any time.
     5. Miscellaneous Provisions.
          5.1. Severability. If, in any jurisdiction, any term or provision
hereof is determined to be invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired; (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction; and (c) the invalid or
unenforceable term or provision shall, for purposes of such jurisdiction, be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
          5.2. Execution in Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
          5.3. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given upon receipt when
delivered by hand, overnight delivery or telecopy (with confirmed delivery), or
three (3) business days after posting, when delivered by registered or certified
mail or private courier service, postage prepaid, return receipt requested, as
follows:
If to Employer, to:
Par Pharmaceutical, Inc.
300 Tice Boulevard
Woodcliff Lake, New Jersey 07677
Attention: Chairman
Telecopy No. 201-802-4620
Copy to:
Christine A. Amalfe, Esq.
Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P.C.
One Riverfront Plaza
Newark, New Jersey 07102-5496
Telecopy No.: (201) 639-6230

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If to Executive, to:
Paul Campanelli
c/o Par Pharmaceutical, Inc.
300 Tice Boulevard
Woodcliff Lake, New Jersey 07677
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
          5.4. Amendment. No provision of this Agreement may be modified,
amended, waived or discharged in any manner except by a written instrument
executed by both Par and Executive.
          5.5. Entire Agreement. This Agreement and, with respect to
Section 3.3.6 hereof, Executive’s Equity Award Agreements and governing equity
award plans constitute the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersede all prior agreements and
understandings of the parties hereto, oral or written, including, but not
limited to, the parties’ Employment Agreement dated December 20, 2004. Executive
and Employer hereby agree that the Employment Agreement dated September 17,
2005, is hereby superseded and of no further force and effect, and that this
Agreement shall be effective as of the date hereof. In the event of any conflict
between Section 3.3.6 hereof and Executive’s Equity Award Agreements and the
governing equity award plans, Section 3.3.6 shall govern.
          5.6. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey applicable to contracts
made and to be wholly performed therein.
          5.7. Headings. The headings contained herein are for the sole purpose
of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
          5.8. Binding Effect; Successors and Assigns. Executive may not
delegate any of his duties or assign his rights hereunder. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
Employer shall require any successor (whether direct or indirect and whether by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Employer, by an agreement in form and substance
reasonably satisfactory to Executive, to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that Employer would be
required to perform if no such succession had taken place.
          5.9. Waiver, etc. The failure of either of the parties hereto to at
any time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto thereafter to enforce each and every provision of this Agreement.
No waiver of any

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breach of any of the provisions of this Agreement shall be effective unless set
forth in a written instrument executed by the party against whom or which
enforcement of such waiver is sought, and no waiver of any such breach shall be
construed or deemed to be a waiver of any other or subsequent breach.
          5.10. Capacity, etc. Executive and Employer hereby represent and
warrant to the other that, as the case may be: (a) he or it has full power,
authority and capacity to execute and deliver this Agreement, and to perform his
or its obligations hereunder; (b) such execution, delivery and performance shall
not (and with the giving of notice or lapse of time or both would not) result in
the breach of any agreements or other obligations to which he or it is a party
or he or it is otherwise bound; and (c) this Agreement is his or its valid and
binding obligation in accordance with its terms.
          5.11. Enforcement; Jurisdiction. If any party institutes legal action
to enforce or interpret the terms and conditions of this Agreement, the
prevailing party shall be awarded reasonable attorneys’ fees at all trial and
appellate levels, and the expenses and costs incurred by such prevailing party
in connection therewith. Any legal action, suit or proceeding, in equity or at
law, arising out of or relating to this Agreement shall be instituted
exclusively in the State or Federal courts located in the State of New Jersey,
and each party agrees not to assert, by way of motion, as a defense or
otherwise, in any such action, suit or proceeding, any claim that such party is
not subject personally to the jurisdiction of any such court, that the action,
suit or proceeding is brought in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or should be transferred, or that this
Agreement or the subject matter hereof may not be enforced in or by any such
court. Each party further irrevocably submits to the jurisdiction of any such
court in any such action, suit or proceeding. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given personally or by registered or certified mail, return
receipt requested or by any other means of mail that requires a signed receipt,
postage prepaid, mailed to such party as herein provided. Nothing herein
contained shall be deemed to affect or limit the right of any party to serve
process in any other manner permitted by applicable law.
          5.12. Arbitration.
               (a) Any dispute under Section 3 hereof, including, but not
limited to, the determination by the Board of a termination for Cause pursuant
to Section 3.2.4 hereof, or in respect of the breach thereof shall be settled by
arbitration in New Jersey. The arbitration shall be accomplished in the
following manner. Either party may serve upon the other party written demand
that the dispute, specifying the nature thereof, shall be submitted to
arbitration. Within ten (10) days after such demand is given in accordance with
Section 5.3 hereof, each of the parties shall designate an arbitrator and
provide written notice of such appointment upon the other party. If either party
fails within the specified time to appoint such arbitrator, the other party
shall be entitled to appoint both arbitrators. The two (2) arbitrators so
appointed shall appoint a third arbitrator. If the two arbitrators appointed
fail to agree upon a third arbitrator within ten (10) days after their
appointment, then an application may be made by either party hereto, upon
written notice to the other party, to the American Arbitration Association (the

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“AAA”), or any successor thereto, or if the AAA or its successor fails to
appoint a third arbitrator within ten (10) days after such request, then either
party may apply, with written notice to the other, to the Superior Court of New
Jersey, Bergen County, for the appointment of a third arbitrator, and any such
appointment so made shall be binding upon both parties hereto.
               (b) The decision of the arbitrators shall be final and binding
upon the parties. The party against whom the award is rendered (the
“non-prevailing party”) shall pay all fees and expenses incurred by the
prevailing party in connection with the arbitration (including fees and
disbursements of the prevailing party’s counsel), as well as the expenses of the
arbitration proceeding. The arbitrators shall determine in their decision and
award which of the parties is the prevailing party, which is the non-prevailing
party, the amount of the fees and expenses of the prevailing party and the
amount of the arbitration expenses. The arbitration shall be conducted, to the
extent consistent with this Section 5.12, in accordance with the then prevailing
rules of commercial arbitration of the AAA or its successor. The arbitrators
shall have the right to retain and consult experts and competent authorities
skilled in the matters under arbitration, but all consultations shall be made in
the presence of both parties, who shall have the full right to cross-examine the
experts and authorities. The arbitrators shall render their award, upon the
concurrence of at least two of their number, not later than thirty (30) days
after the appointment of the third arbitrator. The decision and award shall be
in writing, and counterpart copies shall be delivered to each of the parties. In
rendering an award, the arbitrators shall have no power to modify any of the
provisions of this Agreement, and the jurisdiction of the arbitrators is
expressly limited accordingly. Judgment may be entered on the award of the
arbitrators and may be enforced in any court having jurisdiction.
[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.

            PAR PHARMACEUTICAL, INC.
      By:   /s/ Gerard Martino         Name:   Gerard Martino        Title:  
Executive Vice President and Chief
Financial Officer     

                  /s/ Paul Campanelli       Paul Campanelli           

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