EXHIBIT 10.9.9

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (this “Agreement”), dated as of December 3, 2008, by and
between Par Pharmaceutical, Inc., a Delaware corporation (“Par” or “Employer”),
and Lawrence Kenyon (“Executive”).

R E C I T A L S :

A.

WHEREAS, Executive desires to provide services to Par in the capacity of Chief
Financial Officer.

B.

WHEREAS, Executive and Employer agree and acknowledge that the Agreement set
forth herein contains the terms and conditions that govern Executive’s
employment.

In consideration of the mutual promises herein contained, the parties hereto
hereby agree as follows:

1.

Employment.

1.1

General.  Par hereby employs Executive effective December 15, 2008 (the
“Effective Date”) in the capacity of Executive Vice President.  Upon resignation
of Employer’s present Chief Financial Officer, Executive’s term as Executive
Vice President shall terminate and Par will employ Executive in the capacity of
Executive Vice President and Chief Financial Officer (“CFO”).  Executive shall
perform and carry out such duties and responsibilities that are reasonably
consistent with Executive’s position and responsibilities and this Agreement,
and as may be assigned to him by Employer.  Executive shall report to Employer’s
Chief Executive Officer.  Executive hereby accepts such employment, subject to
the terms and conditions herein contained.

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.   Once Executive becomes the CFO, whenever the CFO 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 Board, with
such exceptions as Executive deems necessary to make such certifications
accurate and not misleading.  

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 to be rendered by him during such period to Employer in all capacities,
including, but not limited to,

  

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all services that may be rendered by him to any of Employer’s subsidiaries,
entities and organizations presently existing or hereafter formed, organized or
acquired, directly or indirectly, by Employer (each, a “Subsidiary” and
collectively, the “Subsidiaries”), the following: (i) a Base Salary at the
annual rate of $340,000 (Three Hundred and Forty Thousand Dollars); and (ii) any
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.

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, in its sole discretion, 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.  Although this section does not
guarantee any specific bonus figures, it is understood that Executive’s annual
bonus target shall be equal to fifty  percent (50%) of his Base Salary.  At the
time the Board determines the Executive’s eligibility for a bonus, the Board
shall set forth all material terms of the bonus arrangement in a written
document.  The Employer shall pay the bonus by March 1 following the end of the
calendar year in which the bonus is earned.

2.3

Equity Awards.  Executive shall be entitled to participate in long-term
incentive plans, including, without limitation, stock option, restricted stock,
and similar equity plans of Employer as may be offered from time to time.  In
connection herewith, Employer will issue Executive’s equity award in January
2009.  It is anticipated that such equity award will have economic value ranging
from $700,000 (Seven Hundred Thousand Dollars) to $800,000 (Eight Hundred
Thousand) (the “issued amount”).  The issued amount shall be determined by
Employer in its own discretion and subject to the terms and conditions set forth
in the 2004 Performance Equity Plan, Executive’s January 2009 Stock Option
Agreement, and the January 2009 Award Agreement relating to such shares.  

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 in accordance with the terms and conditions of such plans and
programs.

2.4.3

Vacation.  Executive shall be entitled to four (4) weeks of paid vacation per
calendar year, prorated for any partial year.

  

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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
Executive’s estate, or as otherwise directed by Executive, in the amount of $1
million throughout the Employment Term.

2.5

Relocation Benefit.  Executive will have access to the services set forth in
Par’s relocation policy.  Such benefits will be made available to Executive for
up to eighteen (18) months after Executive’s first date of employment.

2.6

Signing Bonus.  On the date hereof, Employer shall pay to Executive a one-time
signing bonus (the “Signing Bonus”) in the amount of $25,000 (Twenty-Five
Thousand Dollars), less such deductions as shall be required to be withheld by
applicable law and regulations.  In the event Executive’s employment is
terminated during the first year of the Initial Term by Executive pursuant to
Section 3.2.2 hereof or by Employer pursuant to Section 3.2.4 hereof, Executive
shall repay to Employer the Signing Bonus, less one-twelfth (1/12) of such
amount for each full thirty (30) day period during which Executive has been
employed hereunder.

3.

Employment Term; Termination.

3.1

Employment Term.  Executive’s employment hereunder shall commence on the
Effective Date (as defined in Section 1.1 hereof) and, except as otherwise
provided in Section 3.2 hereof, shall continue until the third (3rd) anniversary
of the Effective Date (the “Initial Term”).  Thereafter, this Agreement shall
automatically be renewed for successive one-year periods commencing on the third
(3rd) anniversary of the Effective Date (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 written
notice of termination in respect of its or his election not to renew the
Employment Term to the other party at least thirty (30) days prior to the end of
the current Employment Term.  Upon non-renewal of the Employment Term pursuant
to this Section 3.1 or termination pursuant to Sections 3.2.1 through 3.2.6
inclusive, Executive shall be released from any duties hereunder (except as set
forth in Sections 2.5 and 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 or no reason whatsoever by giving a written
notice of termination to Employer.  The Executive’s decision not to renew the
Employment Term before the end of the Term, or before the end of any renewal
period in which the Executive has not attained age sixty-five (65), is a
termination of the Employment Term without Cause by the Executive.  The date of
termination for this Section 3.2.2 shall be thirty (30) days after the notice of
termination is given.  

  

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3.2.3

Disability.  In the event of Executive’s Disability (as hereinafter defined),
Employer may terminate the Employment Term by giving a written 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.

3.2.4

For Cause By Employer.  Employer may terminate the Employment Term for “Cause,”
based on factors determined in good faith by Employer as set forth in a notice
of termination to Executive.  For purposes of this Agreement, “Cause” shall mean
() Executive’s conviction of, guilty or no contest plea to, or confession of
guilt of, a felony or crime involving moral turpitude; () 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; () a material breach by Executive of this Agreement; () a
continuing or other failure by Executive to perform such duties as are assigned
to Executive by Employer in accordance with this Agreement, other than a failure
resulting from a Disability; () Executive’s knowingly taking any action on
behalf of Employer or any of its affiliates without appropriate authority to
take such action; () 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 () the commission of an act of personal dishonesty by Executive
in connection with Employer that involves personal profit.

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 in accordance with Employer’s regular payroll practices.

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; (ii) the
assignment to Executive, without Executive’s express written consent, of duties
materially inconsistent with his position and responsibilities with Employer, or
a significant change in Executive’s reporting responsibilities, titles or
offices; (iii) a reduction of more than 20% by Employer in Executive’s Base
Salary; or (iv) a permanent reassignment of Executive's primary work location,
without the consent of Executive, to a location more than seventy-five (75)
miles from Employer's executive offices in Woodcliff Lake, New Jersey.

  

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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 addition, the
Company shall pay the following compensation and provide the following benefits
only if the Executive incurs a separation from service under Treas. Reg. §
1.409A-1(b) (a “Separation of Service”).  All lump-sum payments owed by Employer
shall be made to Executive within forty-five (45) days of the date of
termination in accordance with Employer’s regular payroll practices.  The
Executive must execute within thirty (30) days after the date of termination
Employer’s standard form of Release Agreement substantially in the form attached
as Exhibit A hereto.

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 thirty (30)
days of the date of termination an amount equal to any unpaid but earned Base
Salary through the date of termination in accordance with Employer’s regular
payroll practices.  The Employer shall also pay any annual bonus earned but
unpaid as of the date of termination for any previously completed fiscal year in
accordance with the terms of the bonus, and such employee benefits as to which
Executive may be entitled under the employee benefit plans of Employer.

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 Executive
severance in the amount of Executive’s Base Salary in effect on the date of
termination (the “Severance Amount I”).  If a termination as described in the
prior sentence occurs within two (2) years after a Change of Control (as defined
in Section 3.3.6(d) hereof), the Employer shall pay to Executive severance in an
amount equal to the product of two (2) multiplied by the sum of Executive’s Base
Salary in effect on the date of termination, and 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 (the “Severance Amount II”).  The Employer shall pay the
Severance Amount I in installments, and shall first determine the amount of each
installment if the Severance Amount I were paid in equal semimonthly
installments for twelve (12) months (the “Installment Payment I”) commencing on
the forty-fifth (45th) day after the date of termination.  The Employer shall
pay the Severance Amount II in installments, and shall first determine the
amount of each installment if the Severance Amount II were paid in equal
semimonthly installments for two (2) years (the “Installment Payment II”)
commencing on the forty-fifth (45th) day after the date of termination.  From
the forty-fifth (45th) day after the date of termination through the end of the
sixth (6th) month after the date of termination, the Employer shall pay in equal
semimonthly installments an amount equal to two (2) times the lesser of (a) the
sum of the Executive’s annualized compensation based on the annual rate of pay
for services provided to the Employer for the calendar year preceding the
calendar year in which the Executive has a termination of employment (adjusted
for any increase during that year that was expected to continue indefinitely if
the Executive did not have a termination of employment, and (b) the maximum
amount that may be taken into account under a qualified plan under Code Section
401(a)(17) for the year in which the Executive has a termination of employment
(each payment, the “Initial Installment Payment”).  The amount of each Initial
Installment Payment shall not exceed the amount of each Installment Payment I or

  

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Installment Payment II, as applicable.  The excess, if any, of Installment
Payment I or Installment Payment II, as applicable, over each Initial
Installment Payment shall be accumulated and paid on the first (1st) day of the
seventh (7th) month after the date of termination (the “Severance Delayed
Payment Date”).  In addition, from the first (1st) day of the seventh (7th)
month after the date of termination through the end of twelve (12) months after
the forty-fifth (45th) day after the date of termination, the Employer shall pay
the Installment Payments I semimonthly.  From Severance Delayed Payment Date
through the end of two (2) years after the forty-fifth (45th) day after the date
of termination, the Employer shall pay the Installment Payments II semimonthly.
 Payment of the Severance Amount I or Severance Amount II, as applicable, is
subject to Executive’s continued compliance with the terms of Section 4.  The
Employer shall also pay any annual bonus earned but unpaid as of the date of
termination for any previously completed fiscal year in accordance with the
terms of the bonus, and such employee benefits as to which Executive may be
entitled under the employee benefit plans of the Employer.

3.3.3

Without Cause By Executive.  In the event that the Employment Term is terminated
by Executive pursuant to Section 3.2.2 hereof, Employer shall pay to Executive
in a single lump-sum within forty-five (45) days of the date of termination an
amount equal to any unpaid but earned Base Salary through the date of
termination in accordance with Employer’s regular payroll practices.  The
Employer shall also pay any annual bonus earned but unpaid as of the date of
termination for any previously completed fiscal year in accordance with the
terms of the bonus, and such employee benefits to which Executive may be
entitled under the employee benefit plans of Employer.  

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
shall pay to Executive, subject to, in the case of Disability, Executive’s
continued compliance with Section 4 hereof, the Severance Amount I set forth in
Section 3.3.2, and Executive shall retain all vested rights granted pursuant to
Section 2.3.  In the case of death, the Employer shall pay the applicable
Severance Amount I commencing on the thirtieth (30th) day after the Executive’s
death, and otherwise in accordance with the payment provisions of Section 3.3.2
hereof without the holdback requirement.  In the case of Disability, the
Employer shall pay the applicable Severance Amount in accordance with the
payment provision of Section 3.3.2 hereof.  The Employer shall also pay any
annual bonus earned but unpaid as of the date of termination for any previously
completed fiscal year in accordance with the terms of the bonus, and such
employee benefits to which Executive may be entitled under the employee benefit
plans of Employer.

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 premiums.  If Executive is
terminated pursuant to Sections 3.2.3, 3.2.5, 3.2.6, or Employer elects not to
renew this Agreement pursuant

  

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to Section 3.1, 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 up to eighteen (18) months (the “Benefits Period”),
subject to Executive’s continued compliance with the terms of Section 4 hereof;
provided, however, that Executive’s continued participation is permissible under
the terms and provisions of such plans and programs; and provided, further, that
if Executive becomes entitled to equal or comparable benefits from a subsequent
employer during the Benefits Period, Employer's obligations under this Section
3.3.5 shall end as of such date.  The Employer shall commence payment of COBRA
premiums on the forty-fifth (45) day after the date of termination.

3.3.6

Equity Awards.

(a)

If, within twelve (12) months following a Change of Control (as defined in
Section 3.3.6(d) hereof) of Employer, the Employment Term is terminated other
than for Cause, then Executive (or his estate) shall have ninety (90) days 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 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 by Executive
pursuant to Section 3.2.6 hereof, then all equity awards theretofore granted to
Executive shall thereupon vest and Executive shall have ninety (90) days 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 efforts to amend Executive’s Equity Award
Agreements if necessary to effectuate the provisions of this Section 3.3.6(b).

(c)

To the extent not determined by this Agreement, the terms and conditions of all
equity awards, including without limitation awards of performance contingent
restricted stock under the 2009 Program, shall be determined by the Executive’s
Equity Award Agreements, Grant Agreements, Certificates of Performance Shares,
and the terms of the plans and award documents pursuant to which the equity
awards were made.

(d)

Change of Control” Defined.  A “Change of Control” of the Employer means any of
the following events, unless otherwise defined in an Award Agreement or Grant
Agreement:

(i)

Any individual, firm, corporation or other entity, or any group (as defined in
Section 13(d)(3) of Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) becomes, directly or indirectly, the beneficial owner (as defined in the
General Rules and Regulations of the Securities and Exchange Commission with
respect to Sections 13(d) and 13(g) of the Exchange Act) of more than twenty
(20%) percent of the then outstanding shares entitled to vote generally in the
election of directors of the Employer;

  

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(ii)

The commencement of, or the first public announcement of the intention of any
individual, firm, corporation or other entity or of any group (as defined in
Section 13(d)(3) of the Exchange Act) to commence, a tender or exchange offer
subject to Section 14(d)(1) of the Exchange Act for any class of the Employer’s
capital stock; or

(iii)

The stockholders of the Employer approve (A) a definitive agreement for the
merger or other business combination of the Employer with or into another
corporation pursuant to which the stockholders of the Employer do not own,
immediately after the transaction, more than fifty (50%) percent of the voting
power of the corporation that survives and is a publicly owned corporation and
not a subsidiary of another corporation, (B) a definitive agreement for the
sale, exchange or other disposition of all or substantially all of the assets of
the Employer, or (C) any plan or proposal for the liquidation or dissolution of
the Employer.  Notwithstanding the foregoing provisions, a Change of Control
shall not be deemed to have taken place if beneficial ownership is acquired by,
or a tender or exchange offer is commenced or announced by, the Employer, any
profit-sharing, employee ownership or other employee benefit plan of the
Employer, any trustee of or fiduciary with respect to any such plan when acting
in such capacity, or any group comprised solely of such capacity, or any group
comprised solely of such entities.

(iv)

In determining whether a Change of Control of the Employer has occurred,
“Employer” means Par Pharmaceutical, Inc. or Par Pharmaceutical Companies, Inc.

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 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;
business strategies and plans; 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.

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, exploit,
communicate, disclose or disseminate any Confidential Information in any manner
whatsoever (except as may be required under legal process by subpoena or other
court order).

4.3

Certain Activities.  Executive shall not, while employed by Employer and for a
period of one (1) year following the date of termination:  

(a)

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,

  

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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;

(b)

directly or indirectly provide any services (whether in the 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 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  or any other products that are the same or similar to
those of Employer.

4.4

Confidential or Proprietary Information of Third Parties.  Executive shall
promptly inform Employer if he is in possession of any confidential or
proprietary information of a third party relating to any projects and/or
products on which Employer is currently working, or plans to be in the near
future, and Executive and Employer shall cooperate in taking such reasonable
precautionary measures as may be appropriate to avoid any potential violation of
such third party’s rights.

4.5

Injunctive Relief.  The parties hereby acknowledge and agree that (a) Employer
will be irreparably injured in the event of a breach by Executive of any of his
obligations under this Section 4; (b) monetary damages will not be an adequate
remedy for any such breach; (c) Employer will be entitled to injunctive relief,
in addition to any other remedy which it may have, in the event of any such
breach without being required to post a bond; and (d) 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 expiration or 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 two parties hereto in separate counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same

  

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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

If to Executive, to:

Lawrence Kenyon

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 constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties hereto, oral or written, with
respect to the subject matter hereof.

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 any of his rights hereunder.  This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives and

  

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beneficiaries, 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 transaction had taken place.

5.9

Waiver.  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 such breach shall be construed or deemed to be a waiver of any other or
subsequent breach.

5.10

Representations and Warranties.

5.10.1

Capacity.  Each of Executive and Employer hereby represents and warrants 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 or violate the law; and (c) this Agreement is his or
its valid and binding obligation enforceable in accordance with its terms.

5.11

Enforcement; Jurisdiction.  If any party institutes legal action to enforce or
interpret the terms and conditions of Section 4 of this Agreement, the
applicable court shall award the prevailing party reasonable attorneys’ fees at
all trial and appellate levels, and the expenses and costs incurred by such
prevailing party in connection therewith, subject to the requirements of Treas.
Reg. §1.409A-3(i)(1)(iv).  Subject to Section 5.12 hereof, 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 in 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, a termination
for Cause pursuant to Section 3.2.4 hereof, or in respect of the breach of this

  

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Agreement, except Section 4 hereof shall be settled by arbitration.  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 “AAA”), or any successor thereto,  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, subject to the
requirements of Treas. Reg. §1.409A-3(i)(1)(iv).  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.  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 of competent jurisdiction.  

5.13

Specified Employee.  Notwithstanding any other provision of this Agreement, if
the Executive is a specified employee under Treas. Reg. §1.409A-1 as of the date
of termination, all payments to which the Executive would otherwise be entitled
during the first six months following the date of termination shall be
accumulated and paid on the first day of the seventh month following the date of
termination, or if earlier within thirty (30) days of the Executive’s date of
death following the date of termination.  This provision shall not apply to all
payments on separation from service that satisfy the short-term deferral rule of
Treas. Reg. §1.409A-1(b)(4), or to the portion of the payments on separation
from service that satisfy the requirements for separation pay due to an
involuntary separation from service under Treas. Reg. §1.409A-1(b)(9)(iii), or
to any payments that are otherwise exempt from the six month delay requirement
of the Treasury Regulations under Code Section 409A.

  

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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/ Stephen Montalto

Name:

Stephen Montalto

Title:  Senior Vice President, Human Resources

/s/ Lawrence Kenyon

Lawrence Kenyon

  

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