**EXHIBIT
      10.3**




**EMPLOYMENT
      AGREEMENT**




**EMPLOYMENT
      AGREEMENT** (this
“Agreement”), dated as of March 4, 2008, by and between Par Pharmaceutical,
      Inc., a Delaware corporation (“Par” or “Employer”), and Thomas Haughey
      (“Executive”).




RECITALS:




A.  WHEREAS,
      Executive is presently employed in the capacities of Executive Vice President,
      General Counsel and Secretary of Employer; and




B.  WHEREAS,
      Employer and Executive desire to cancel and replace Executive’s existing
      Employment Agreement, dated July 2005, and enter into this Agreement in order
      for Executive to continue to perform the duties associated with his positions
      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 capacities of Executive Vice President,
      General Counsel, and Secretary 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 capacities, 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 positions and this Agreement, and shall report to the Board and
      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 the 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 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 subsidiaries, entities and organizations presently existing or
      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 award to Executive (initially and as so increased, 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 fifty (50%) percent 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 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.  Automobile .
      Employer shall provide Executive with an automobile cash allowance commensurate
      with his titles and positions .




2.4.5.  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.




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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 ninety (90) days prior to the end of the Employment
      Term. 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.




3.2.4.  Cause .
      Employer may, at its option, 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.




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3.2.5.  Without
      Cause By Employer .
      Employer may, at its option, 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
      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, at his option, 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 primary work
      location, without the consent of Executive, to a location more than thirty-five
      (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. 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 the Employer’s regular payroll practices.
      In connection with Executive’s receipt of any or all
      compensation and benefits to be received pursuant to this Section 3.3, Executive
      shall not have a duty to seek subsequent employment while he is receiving such
      compensation and benefits, and such compensation and benefits shall not be
      reduced solely as a result of Executive’s subsequent employment by an entity
      other than Employer. The Executive must execute within thirty (30) days after
      the Date of Termination Employer’s standard form of Release Agreement attach as
      Exhibit A hereto.




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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 forty-five (45) days of
      the
      Date of Termination and in accordance with Employer’s regular payroll practices,
      an amount equal to any unpaid but earned Base Salary through the Date of
      Termination. 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 to Executive
      severance in an amount equal to two (2) times his Base Amount. For purposes
      hereof, “Base Amount” shall mean 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 2.3 hereof
      (the “Severance Amount”). The Employer shall pay the Severance Amount in
      installments, and shall first determine the amount of each installment payment
      if the Severance Amount were paid in equal semimonthly installments for two
      (2)
      years (the “Installment Payment”) commencing on the forty-fifth (45th) day after
      the Date of Termination. The Employer shall then withhold and accumulate the
      Installment Payments payable beginning on the forty-fifth (45th) day after
      the
      Date of Termination through the end of the sixth (6th) month after the Date
      of
      Terminaton (the time period, the “Severance Holdback Period”) (the withheld
      payments, the “Severance Holdback Amounts”). The Employer shall pay the
      Severance Holdback Amounts in a single lump sum on the first (1st) day of the
      seventh (7th) month after the Date of Termination (the “Severance Delayed
      Payment Date”). The Severance Holdback Amounts paid to the Executive on the
      Severance Delayed Payment Date are to accrue interest from the date each
      Severance Holdback Amount would have been paid during the Severance Holdback
      Period absent the holdback requirement until the Severance Delayed Payment
      Date.
      The interest rate is the prime rate as published in The Wall Street Journal
      seven (7) days prior to the Severance Delayed Payment Date. The Employer shall
      pay the accrued interest on the Severance Delayed Payment Date. From the
      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 semimonthly. Payment of the Severance Amount 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.




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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 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 as to which Executive
      may be entitled under the employee benefit plans of the Employer.




3.3.4.  Without
      Cause by Executive During Window Period. If a Change of Control (as defined
      in
      Section 3.4.1 hereof) occurs, and the Executive continues employment for six
      (6)
      months after the date of the Change of Control (as defined in Section 3.4.1
      hereof) (the “Stay Period”), the Executive may terminate the Employment Term
      (the “Resignation”) during the ninety (90) days following the Stay Period (the
“Window Period”). The Executive must provide the Resignation in a Notice of
      Termination to the Employer during the Window Period. Upon the Resignation,
      the
      provisions of Sections 3.3.2 and 3.3.6 shall apply as if the Resignation were
      a
      termination of the Employment Term without Cause by the Employer under Section
      3.2.5.




3.3.5.  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, less any life insurance and/or
      disability insurance received by Executive or his estate pursuant to insurance
      policies provided by Employer (including without limitation pursuant to Section
      2.4.5 hereof). In the case of death, the Employer shall pay the Severance Amount
      commencing on the thirtieth (30th) day after the Executive’s date of 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 Severance Amount in accordance with the payment provisions 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 as to which
      Executive may be entitled under the employee benefit plans of the
      Employer.




3.3.6.  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
      or
      3.2.6, or Employer elects not to renew this Agreement pursuant 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 in
      the event Executive becomes entitled to equal or comparable benefits from a
      subsequent employer during the Benefits Period, Employer’s obligations under
      this Section 3.3.6 shall end as of such date. The Employer shall commence
      payment of COBRA premiums on the forty-fifth (45th) day after the Date of
      Termination.




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3.3.7.  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 ,
      however, that the relevant equity award plan remains in effect and such equity
      awards have not 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 3.3.7(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 ,
      however, 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 3.3.7(b).




(c)  For
      grants of performance contingent restricted stock and time-based restricted
      stock made during calendar year 2008 (the “2008 Grants” under the 2008 Long Term
      Incentive Program (the “2008 Program”), (i)(A) if after a Change of Control (as
      defined in Section 3.4.1 hereof) the Employer or its successor requires the
      Executive to remain employed for the Stay Period, (B) the Executive continues
      employment for the Stay Period, and (C) the Change of Control (as defined in
      Section 3.4.1 hereof) occurs within two (2) years after the date of grant of
      the
      2008 Grants, all 2008 Grants shall vest on the last day of the Stay Period;
      or
      (ii) if there is a termination of the Employment Term under Section 3.2.5 or
      3.2.6 after the date of a Change of Control (as defined in Section 3.4.1
      hereof), all 2008 Grants shall vest on the Date of Termination; or (iii) if
      a
      Change of Control (as defined in Section 3.4.1 hereof) occurs two (2) or more
      years after the date of grant of the 2008 Grants, all 2008 Grants shall vest
      on
      the date of the Change of Control (as defined in Section 3.4.1 hereof);
      provided, however, that the 2008 Program remains in effect and the 2008 Grants
      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 2008 Grant Agreements if necessary to effectuate the
      provisions of this Section 3.3.7(c).




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3.4.  Definitions .




3.4.1.  “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:




(a)  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;




(b)  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




(c)  The
      stockholders of the Employer approve (i) 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, (ii) a definitive agreement for the sale,
      exchange or other disposition of all or substantially all of the assets of
      the
      Employer, or (iii) any plan or proposal for the liquidation or dissolution
      of
      the Employer.




Provided,
      however, that 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.




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 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
      and Nonsolicitation .




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, 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 (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 two (2)
      years 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.  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; 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.




4.5.  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 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.




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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 P.C.


One
      Gateway Center


Newark,
      New Jersey 07102-5310


Telecopy
      No.: (973) 639-6230




If
      to
      Executive, to:




Thomas
      Haughey


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 Sections 2.3 and 3.3.7, 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 July 200 5.
      Executive and Employer
      hereby agree that the Employment Agreement dated July 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 Sections 2.3 and
      3.3.7, and Executive’s Equity Award Agreements and the governing equity award
      plans, Sections 2.3 and 3.3.7 shall govern.




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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 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 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 .
      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 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,
      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.




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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 “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.




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 (6) months following the Date of
      Termination shall be accumulated and paid on the first day of the seventh (7th)
      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
      requirement 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 (6) 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
                MontaltoName:
                Stephen MontaltoTitle:  
                Senior Vice President,Human
                Resources/s/
                Thomas
                HaugheyThomas
                Haughey





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