EXHIBIT 10.9.6

                              EMPLOYMENT AGREEMENT

     EMPLOYMENT  AGREEMENT (this "Agreement"),  dated as of May 28, 2004, by and
between Par  Pharmaceutical,  Inc.,  a Delaware  corporation  ("Employer"),  and
Shankar Hariharan ("Executive").

                                R E C I T A L S :

     A.   WHEREAS, Executive desires to provide services to Employer; and

     B.   WHEREAS,  Employer and  Executive  desire to  formalize  the terms and
conditions of Executive's employment with Employer.

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

     1.   Employment.
          ----------

          1.1.  GENERAL. Employer hereby employs Executive,  effective as of the
Effective Date (as defined in Section 3.1 hereof),  in the capacity of Executive
Vice President and Chief Scientific Officer of Employer 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,  effective as
of the Effective Date, subject to the terms and conditions herein contained.  In
such capacity,  Executive shall be responsible for all aspects of the Employer's
research and development activities,  regulatory affairs, compliance and quality
assurance/quality  control,  and shall  perform  and carry out such  duties  and
responsibilities  that are reasonably  consistent with Executive's positions and
responsibilities  and this  Agreement as may be assigned to him by the President
and the Chief Executive Officer of Employer and Pharmaceutical Resources,  Inc.,
a Delaware  corporation  and Employer's  parent  ("Resources").  Executive shall
report to the President and Chief Executive Officer of Employer and Resources.

          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  and/or
Chief Financial Officer of Resources or the Chief Executive Officer and/or Chief
Financial  Officer  of  Employer  is  required  by law,  rule or  regulation  or
requested by any governmental authority or by Resources's or Employer's auditors
to provide  certifications  with respect to Resources's or Employer'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 such officers,  Resources  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  Resources's or Employer's  subsidiaries,  entities
and organizations presently existing or hereafter formed, organized or acquired,
directly or  indirectly,  by Resources or Employer  (each,  a  "Subsidiary"  and
collectively,  the  "Subsidiaries"),  the  following:  (i) a base  salary at the
annual rate of  $405,000,  or at such  increased  rate as the Board of Directors
(the  "Board")  of  Resources   (through  its   Compensation  and  Stock  Option
Committee),  in its sole  discretion,  may hereafter from time to time (it being
understood that Executive shall have a performance review at least once annually
at the beginning of the calendar  year) grant to Executive (as so adjusted,  the
"Base  Salary");  and (ii) any bonus and the benefits set forth in Sections 2.2,
2.3, 2.4 and 2.5 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 Resources's and Employer's earnings,  financial condition,  rate
of return on equity,  successful  development  of  pharmaceutical  products  and
compliance  with  regulatory  requirements;  PROVIDED,  HOWEVER,  on  the  first
anniversary of the Effective Date,  Executive shall receive a bonus in an amount
not less than  $202,500,  unless the  Employment  Term is terminated  during the
first year of the  Initial  Term by  Employer  pursuant  to Section  3.2.4 or by
Executive  pursuant to Section  3.2.2.  Subject to the preceding  sentence,  the
target  amount of  Executive's  annual bonus shall be fifty (50%) percent of the
Base Salary.

          2.3.  EQUITY COMPENSATION.  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,  consistent  with  Executive's  job grade and  title.  Subject  to
stockholder  approval  of the 2004  Performance  Equity  Plan (the "2004  Equity
Plan"),  Executive shall be granted (a) on the Effective Date,  45,000 shares of
restricted common stock of Resources and (b) on the six (6) month anniversary of
the  Effective  Date,  15,000  shares of  restricted  common  stock of Resources
(together,  the "Protected Restricted Stock"), each of which shall vest in equal
amounts  over a four (4) year  period  on each  anniversary  of the date of such
grant and shall  otherwise be subject to the terms and  conditions  set forth in
the 2004 Equity Plan and the award agreement relating to such shares;  PROVIDED,
HOWEVER,  if for any reason the Employment Term is terminated on or prior to the
six (6) month anniversary of the Effective Date,  Executive shall not be granted
such 15,000 shares of restricted common stock.  Subject to stockholder  approval
of the 2004 Equity Plan and Executive's continued employment by Employer at such
time,  Executive  shall be  granted on or before  January  31,  2005  options to
purchase  50,000  shares of common stock of  Resources  subject to the terms and
conditions set forth in the 2004 Equity Plan and the award agreement relating to
such stock options (the "Protected Stock Options").

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          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, 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.

                2.4.4.  AUTOMOBILE.  Employer  shall provide  Executive  with an
automobile cash allowance in the amount of $1,050 (gross) per month.

                2.4.5.  RELOCATION EXPENSES; CORPORATE APARTMENT. Employer shall
promptly reimburse Executive for reasonable expenses incurred in connection with
his  relocation  to undertake  his duties  hereunder  up to a maximum  amount of
$100,000,  all in accordance with Employer's policies with respect thereto as in
effect from time to time. In connection with  Executive's  relocation,  Employer
shall  provide  Executive  with a corporate  apartment  for a period of up to 24
months;  PROVIDED,  HOWEVER,  the aggregate amount Employer reimburses Executive
for such apartment shall not exceed $36,000 per calendar year,  prorated for any
partial year.  Employer may, at its option,  extend the period of time for which
it provides the corporate apartment.

                2.4.6.  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.  SIGNING  BONUS.  On the Effective  Date,  Employer  shall pay to
Executive  a  one-time  signing  bonus  (the  "Signing  Bonus") in the amount of
$150,000, 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  shall  have  been  employed
hereunder.

     3.   Employment Term; Termination.
          ----------------------------

          3.1.  EMPLOYMENT TERM. Prior to May 28, 2004,  Executive shall provide
Employer written notice of the date on which  Executive's  employment  hereunder

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shall commence (the  "Effective  Date"),  which shall not be later than June 28,
2004. Executive's employment shall commence on the Effective Date 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 Notice of Termination (as defined in Section 3.4.1 hereof) in respect
of its or his  election not to renew the  Employment  Term to the other party at
least 45 days prior to such termination. 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 hereof,  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 Notice  of  Termination  to  Employer.  The  Notice  of
Termination  shall specify the Date of Termination  (as defined in Section 3.4.2
hereof),  which date shall not be earlier than thirty (30) days after the Notice
of  Termination  is given or such  shorter  period if  mutually  agreed  upon by
Executive and Employer.

                3.2.3.  DISABILITY.  In the event of Executive's  Disability (as
hereinafter  defined),  Employer may 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 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  that 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

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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) a  continuing  or other  material
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;  (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 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 full annual Base Salary amount that would have been
earned between the 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; (ii) the assignment to Executive,  without Executive's
express written consent,  of duties materially  inconsistent with his positions,
responsibilities   and  status  with  Employer,   or  a  significant  change  in
Executive's reporting responsibilities,  titles or offices, 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;
(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 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. Any lump-sum
payments  owed by Employer  shall be made to Executive  within ten (10) business
days of the Date of Termination.  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 any 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.

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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,  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;
ELECTION  NOT TO RENEW 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 Employer elects not to renew this Agreement  pursuant
to Section 3.1 hereof,  Employer shall pay to Executive,  subject to Executive's
continued  compliance with the terms of Section 4 hereof, an amount equal to the
Severance  Amount.  For purposes hereof,  "Severance  Amount" shall mean two (2)
times the full annual Base Salary amount in effect at such applicable  time. Any
payments made in accordance with this Section 3.3.2 shall be made in twelve (12)
equal monthly  installments  from the Date of  Termination  in  accordance  with
Employer's regular payroll practices.

                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,  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 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 and/or disability  insurance proceeds received by Executive or his
estate  pursuant  to  insurance  policies  provided  by  Employer,   payable  in
accordance with Section 3.3.2 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 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,  for a  period  equal  to  twenty-four  (24)  months  from  the Date of
Termination (the "Benefits Period"), subject to Executive's continued compliance
with the terms of  Section 4 hereof,  all life  insurance,  medical,  health and
accident,  and disability  plans and programs in which Executive was entitled to
participate  immediately  prior  to the  Date  of  Termination;  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.  In the event that
Executive's  participation in any such plan or program is barred,  Employer,  at
its cost and expense,  shall use its commercially  reasonable efforts to provide
Executive  with  benefits  substantially  similar  to those that  Executive  was
entitled  to receive  under such plans and  programs  for the  remainder  of the
Benefits Period.

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                3.3.6.  EQUITY COMPENSATION.

                (a)     Subject  to  Section  3.3.6(b)  hereof,  notwithstanding
anything to the contrary  contained in the applicable award agreements  relating
to the Protected  Restricted Stock and the Protected Stock Options,  if Employer
elects not to renew the  Employment  Term  pursuant to Section 3.1 or terminates
the Employment  Term without cause pursuant to Section 3.2.5 hereof,  all of the
(i) Protected Restricted Stock and (ii) Protected Stock Options (clauses (i) and
(ii) above collectively,  the "Protected  Awards"),  whether vested or unvested,
shall not be terminated  solely as a result of such  termination or election not
to renew and shall  continue to vest  otherwise in accordance  with the terms of
the 2004 Equity Plan and the applicable  award  agreements;  PROVIDED,  HOWEVER,
each stock option that is a Protected  Stock Option shall only be exercisable on
or before the second (2nd)  anniversary of the date such Protected  Stock Option
shall vest (an  "Option  Termination  Date"),  and each  vested and  unexercised
Protected  Stock Option shall terminate and be of no further force and effect as
of its Option Termination Date.

                (b)     If the Board  determines,  in good faith, that Executive
breached  his  obligations  under  Section 4 hereof,  all  restricted  stock and
unexercised stock options (including,  without limitation, all Protected Awards)
granted  to  Executive,  whether  vested  or  unvested,  shall  terminate  or be
cancelled (as applicable) immediately and be of no further force or effect.

          3.4.  DEFINITIONS.

                3.4.1.  "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.

                3.4.2.  "DATE OF  TERMINATION"  DEFINED.  "Date of  Termination"
means such date as the Employment Term expires (if not renewed) or is terminated
in accordance with Sections 3.1 or 3.2 hereof.

     4.   Certain Covenants.
          -----------------

          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.  Without limiting the foregoing,  Confidential
Information shall also include all information  related to products targeted for
development by Employer, subjects of research and development,  projected launch

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dates,  the  United  States  Food and  Drug  Administration  ("FDA")  protocols,
projected  dates for regulatory  filings,  consumer  studies,  market  research,
clinical research, business plans, content of the New Product Planning Committee
meetings,  planned expenditures,  profit margins, strategic evaluation plans and
initiatives,  and those  commissioned  by Employer  through  outside  vendors or
consultants,  such as IBM,  Cap Gemini and LEK,  and the content of all business
and strategic planning  conducted with or through Third Party  Relationships (as
defined  in  Section  4.4  hereof).   Executive's  obligation  not  to  disclose
Confidential Information shall be as set forth in Section 4.2 of this Agreement,
and shall include but not be limited to his  obligation  not to place himself in
any business position in which use or disclosure of Employer's confidences would
be likely,  expected  or  inevitable,  for his own benefit or the benefit of any
other person or entity.

          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).  Executive acknowledges that the Confidential Information
is a protectible interest of Employer under applicable law.

          4.3.  Intellectual  Property.  Executive acknowledges that, as part of
Employer's  confidences and trust reposed in him, he will be afforded  unimpeded
access  to  Employer's  Intellectual  Property.  As used  herein,  "Intellectual
Property"  shall  mean  and  include  all  research  and   development,   patent
applications, patent research and development strategies and planning, protocols
for design and approval of products, development plans for manufacturing,  sites
and raw materials, and all other or related intellectual property of Employer or
generated  on  Employer's  behalf or for its  benefit  with or  through  others.
Executive further  acknowledges that all such Intellectual  Property is valuable
property of Employer, not of Executive, and constitutes Confidential Information
and trade secrets in which Employer has a protectible  interest under applicable
law.

          4.4.  BUSINESS    RELATIONSHIPS   WITH   THIRD   PARTIES.    Executive
acknowledges  that,  in  significant  part,  Employer  conducts its business and
intends to conduct future business  through  business  relationships  with third
parties such as agents,  contractors,  vendors, business partners or affiliates,
or joint-venturers  ("Third Parties") who, with Employer or on its behalf or for
its benefit, engage, inter alia, in research and development, patent strategy or
applications,  manufacturing,  distribution,  or  similar  business  enterprises
significant  to Employer's  business  ("Third Party  Relationships").  Executive
agrees  that  the  work  product  and  content  of  Employer's  business  plans,
relationships,   financial   arrangements,   product  development  and  business
confidences involved in the Third Party Relationships,  and those planned for or
engaged in the future,  are  Confidential  Information  in which  Employer has a
protectible interest under applicable law.

          4.5.  UNIQUE  CHARACTER OF  EXECUTIVE'S  POSITION.  Executive  further
acknowledges  that his duties for Employer in his executive  capacities are of a
special,  unique,  extraordinary and intellectual character which place him in a
position  of  trust  and  responsibility   with  Employer  in  relation  to  its
specialized business,  including,  without limitation,  trust and responsibility
relating to conceptualization and/or implementation of Employer's marketing  and

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sales strategies, business relationships developed by Executive with the clients
and potential clients of Employer, public and investor communications, strategic
plans,  business targets,  projects,  partners,  and product developments in the
unique  aspects  of  the  pharmaceutical  and  generic  pharmaceutical  business
conducted  by  Employer.  Therefore,  Executive  acknowledges  that  each of the
restrictions  set forth in Section 4.7 below are  reasonable  and  necessary  to
protect  Employer from unfair  competition  by any party using or seeking to use
the Employer's  Confidential  Information and trade secrets, or using or seeking
to use Executive's  unique skills and knowledge  acquired with and for Employer,
or his position of trust with Employer, to Employer's disadvantage.

          4.6.  NATIONAL  AND   INTERNATIONAL   SCOPE  OF  BUSINESS.   Executive
acknowledges  that Employer's  business  includes the manufacture,  distribution
and/or  sale  of  its  products  on its  own  behalf  and  through  Third  Party
Relationships,  is nationwide in scope among the fifty United  States,  and also
includes  Israel and other  locations  or markets  in which  Employer  has or is
developing a Market Presence (as defined in Section 4.7.1 hereof).  Accordingly,
Executive acknowledges that the restrictions set forth in Sections 4.7 and 4.7.1
below are  reasonable in their national and  international  scope and geographic
territory.

          4.7.  COVENANT NOT TO COMPETE.  Executive  agrees  that,  at all times
during his  employment  by  Employer,  and for a period of not less than one (1)
year following the Date of Termination, if the Employment Term is terminated for
any reason,  including  expiration of the Employment Term,  Executive shall not,
directly or indirectly,  on his own behalf or for his own benefit,  or on behalf
of or for the  benefit of  another  (other  than the  Employer),  own,  operate,
manage,  engage in,  participate in, be employed by,  affiliate with, or provide
material  assistance  to,  contract for services for or with,  render  advice or
services to or otherwise assist in any capacity, directly or indirectly (whether
as an officer,  director,  partner,  agent,  investor,  consultant,  contractor,
employee,  equityholder,   lender,  counselor,  or  otherwise)  any  Competitive
Enterprise,  as defined in Section 4.7.1 below.  Notwithstanding  the foregoing,
nothing herein shall prevent  Executive from owning up to 2% of publicly  traded
securities in a Competitive Enterprise.

                4.7.1.  DEFINITION  OF  COMPETITIVE  ENTERPRISE  AND  GEOGRAPHIC
TERRITORY COVERED.  As used herein, the term "Competitive  Enterprise" means and
includes any person,  association,  business,  or entity: (a) that manufactures,
markets, licenses,  distributes,  contracts for the sale of, or sells (or causes
to be  manufactured,  marketed,  licensed,  distributed,  contracted for or sold
through  others) any product that competes  with,  or is developing  any product
that is  intended  to  compete  with  (i) any  product  manufactured,  marketed,
distributed,  licensed,  contracted  for sale or sold by Employer or through its
Third Party Relationships, or (ii) any product which the Employer has developed,
targeted for development, or is developing for manufacture,  marketing, license,
distribution, contract, or sale and which is projected to reach the wholesale or
retail market  within the later of five (5) years of the date of this  Agreement
or one  (1)  year  following  the  date of  termination  (each,  a  "Competitive
Product"); or (b) that obtains finished goods, source materials, or research and
development  (i) from any source or supplier with whom Employer  regularly  does
business ("Employer Source"),  or (ii) to formulate any Competitive Product. The
geographic territory covered by the term "Competitive  Enterprises" includes any
such person,  association,  business or entity (a) doing  business in the United
States  or in Israel or any other  location  or market in which  Employer  has a
Market Presence (defined as more than DE MINIMUS gross revenue as to any product

                                       9
<PAGE>

line or  business of  Employer  as of the Date of  Termination),  whether or not
through a Third Party  Relationship,  or (b) obtaining  finished  goods,  source
materials,  or  resources  and  development  for a  Competitive  Product  in any
location  or market in which  Employer  does so,  or from any  Employer  Source,
wherever located; and includes any person, association,  business or entity, (c)
outside  the United  States or Israel  which  manufactures,  markets,  licenses,
contracts  for,  distributes or sells (or causes to be  manufactured,  marketed,
licensed,  contracted  for,  distributed or sold through others) any Competitive
Product, or engages in the development of any Competitive Product intended to be
manufactured,  distributed,  licensed,  contracted  for or  sold  in the  United
States,  Israel or any other  location or market in which  Employer has a Market
Presence.

          4.8.  COVENANT NOT TO SOLICIT  SUPPLIERS AND OTHERS.  Executive  shall
not,  while  employed by Employer and for a period of one (1) year following the
Date of  Termination,  directly  or  indirectly  solicit  or divert  (or seek to
divert) or entice  away,  for the benefit of  Executive  or any other  person or
entity,  or cause (or attempt to cause) or persuade in any manner to cease doing
business with Employer or reduce its level of business with Employer,  any Third
Party Relationship,  client,  supplier,  vendor,  contractor,  business partner,
licensee,  licensor,  agent or  investor,  or  supplier of source  materials  or
finished goods, product lines or research,  who was doing business with Employer
at any time within twelve (12) months prior to the Date of  Termination,  or who
was  actively  engaged in  discussions  in  contemplation  of any such  business
relationship  during  such  period.  During the  above-referenced  one- (1) year
period,  Executive  may not  accept  business  from any of the  above-referenced
entities where doing so would have the effect of diverting  Employer's  existing
business,  or would have the effect of reducing its  existing  level of business
with such entities.

          4.9.  COVENANT  NOT TO HIRE OR  SOLICIT  EMPLOYEES.  Except  with  the
express written  permission of Employer,  Executive shall not, while employed by
Employer and for a period of two (2) years  following  the Date of  Termination,
directly  or  indirectly  hire,  retain or engage,  or offer to hire,  retain or
engage,  or solicit for employment or other retention or engagement of services,
or otherwise induce to leave Employer, for the benefit of Executive or any other
person or entity, any employee, consultant or contractor who is then employed by
or  engaged  by  Employer  or was so  employed  or  engaged  as of the  Date  of
Termination.

          4.10. TOLLING DURING PERIODS OF VIOLATION.  The parties agree that, in
the event  Executive  violates any of the provisions of Sections 4.7, 4.8 or 4.9
hereof during the time periods of restriction  set forth  respectively  therein,
any  such  period  of  restriction  shall be  tolled  for the  duration  of such
violation,  and the applicable period of restriction shall not expire, and shall
be  extended  for a  period  of  time  commensurate  with  the  duration  of the
violation.

          4.11. GOODWILL.  Executive  acknowledges that, through and solely as a
result of his  employment  by Employer,  he shall acquire an equity stake in the
Employer's  business.  Accordingly,  solely for purposes of  enforcement  of the
covenants  contained  in this  Section  4,  Executive  agrees to be  deemed  and
regarded under  applicable legal precedent as if he were in the same position as
a seller of a business interest and goodwill appurtenant thereto.

          4.12. APPLICATION   IRRESPECTIVE   OF  REASON   FOR   TERMINATION   OF
EMPLOYMENT.  In light of the  acknowledgements  set forth in this Section 4, the
parties agree that the provisions of this Section 4 shall apply in the  event of

                                       10
<PAGE>

Executive's  termination  from  employment,  whether by Employer  or  Executive,
whether for Cause or without Cause, or for any other reason or asserted reasons.

          4.13. EMPLOYER DEFINED.  For purposes of Section 4 hereof,  "Employer"
shall mean and include Resources,  Employer, FineTech Laboratories Ltd., and any
parent corporations, affiliates, subsidiaries and joint ventures.

          4.14. PROPERTY  RIGHTS;  ASSIGNMENT  OF  INVENTIONS.  With  respect to
information,  inventions and discoveries or any interest in any copyright and/or
other property right developed, made or conceived of by Executive,  either alone
or with others, at any time during his employment by Employer and whether or not
within working hours,  arising out of such  employment or pertinent to any field
of business or research in which, during such employment, Employer is engaged or
(if such is known to or  ascertainable  by Executive) is  considering  engaging,
Executive hereby agrees:

          (a)   that all such  information,  inventions  and  discoveries or any
interest in any copyright  and/or other property right,  whether or not patented
or patentable, shall be and remain the exclusive property of Employer;

          (b)   to disclose promptly to an authorized representative of Employer
all such  information,  inventions and discoveries or any copyright and/or other
property  right and all  information  in  Executive's  possession as to possible
applications and uses thereof;

          (c)   not  to  file  any  patent  application  relating  to  any  such
invention or discovery  except with the prior  written  consent of an authorized
officer of Employer (other than Executive);

          (d)   that  Executive  hereby  waives and  releases any and all rights
Executive may have in and to such information,  inventions and discoveries,  and
hereby assigns to Employer and/or its nominees all of Executive's  right,  title
and  interest in them,  and all  Executive's  right,  title and  interest in any
patent,  patent  application,  copyright or other  property right based thereon.
Executive hereby  irrevocably  designates and appoints  Employer and each of its
duly authorized officers and agents as his agent and attorney-in-fact to act for
him and on his behalf and in his stead to execute and file any  document  and to
do all other lawfully  permitted acts to further the  prosecution,  issuance and
enforcement of any such patent, patent application,  copyright or other property
right with the same force and effect as if executed and  delivered by Executive;
and

          (e)   at the request of Employer, and without expense to Executive, to
execute such documents and perform such other acts as Employer  deems  necessary
or  appropriate,  for  Employer  to  obtain  patents  on  such  inventions  in a
jurisdiction or jurisdictions  designated by Employer, and to assign to Employer
or its designee such inventions and any and all patent  applications and patents
relating thereto.

          4.15. 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

                                       11
<PAGE>

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.

          4.16. CONTINUED  COOPERATION.  Executive  shall,  during and after the
conclusion of his employment  relationship for any reason,  cooperate fully with
Employer with respect to any internal or external agency or legal  investigation
(whether  conducted  by the FDA, the  Securities  and  Exchange  Commission,  or
otherwise), lawsuits, financial reports, or with respect to other matters within
his knowledge,  responsibilities or purview.  Employer will pay a reasonable per
diem for post-termination services rendered by Executive in compliance herewith,
based on Executive's  Base Salary (in effect at such  applicable  time) and time
reasonably  expended  by him.  Executive  shall  execute  all  lawful  documents
reasonably  necessary  for  Employer  to secure  or  maintain  its  Intellectual
Property, Confidential Information, or other business requirements.

          4.17. RETURN OF DOCUMENTS  AND  PROPERTY.  Executive  shall,  upon the
conclusion of the employment relationship for any reason, participate in an exit
interview, and shall deliver promptly to Employer all documents, records, files,
customer  or  client  materials,  computer  files  or  discs,  and  Confidential
Information  fixed in any  tangible  medium  of  expression,  together  with all
computers and hard drives, employee identification cards, Employer credit cards,
keys, and any other physical property of Employer.

          4.18. 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 Section 4 hereof;  (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  Section 4
hereof.  All of  the  parties'  covenants  and  Employer's  rights  to  specific
enforcement,  injunctive  relief,  and other  remedies as set forth herein shall
apply in the event of any breach or threatened breach by Executive of any of the
provisions  of Section 4 hereof,  without the  requirement  of posting a bond or
other security in connection with any such application for specific  performance
or injunctive relief, which is hereby waived. The parties further agree that any
action  concerning  alleged  breach of Section 4 hereof  shall not be brought or
addressed in  arbitration,  and the existence of any demand for  arbitration  or
pendency of any dispute in arbitration under this Agreement shall not be a basis
to  delay  or  defer  adjudication  by  a  court  of  any  demand  for  specific
performance,  injunctive  relief,  or other  remedies in relation to any alleged
breach of Section 4 hereof.

          4.19. NON-EXCLUSIVITY   AND  SURVIVAL.   The  covenants  of  Executive
contained  in  Section 4 hereof  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.

                                       12
<PAGE>

     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 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:

          Pharmaceutical Resources, Inc.
          300 Tice Boulevard
          Woodcliff Lake, New Jersey 07677
          Attention:  Chairman
          Telecopy No.:  (201) 802-4620

     Copy to (which shall not constitute notice):

          Stephen A. Ollendorff, Esq.
          Whitney John Smith, Esq.
          Kirkpatrick & Lockhart LLP
          599 Lexington Avenue
          New York, New York  10022
          Telecopy No.:  (212) 536-3901

     If to Executive, to:

          Shankar Hariharan
          c/o Pharmaceutical Resources, Inc.
          300 Tice Boulevard
          Woodcliff Lake, New Jersey 07677

                                       13
<PAGE>

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 Employer and Executive.

          5.5.  ENTIRE   AGREEMENT.   This  Agreement   constitutes  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, 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 York  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  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 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 such breach  shall be construed or deemed to be a waiver of any
other or subsequent breach.

          5.10. CAPACITY,  ETC. 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  (including  any  covenants  not to  compete or
similar  covenants)  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 this  Agreement,  the
prevailing  party shall  be awarded reasonable attorneys' fees at  all trial and

                                       14
<PAGE>

appellate  levels,  and the expenses and costs incurred by such prevailing party
in connection therewith.  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 located in the
Borough of Manhattan,  City of New York 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 the Borough of Manhattan, City of New York. 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 Supreme Court of the
State of New York, New York 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

                                       15
<PAGE>

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 of competent jurisdiction.



                            [SIGNATURE PAGE FOLLOWS]

                                       16
<PAGE>

     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:  Vice President Human Resources



                              /s/ Shankar Hariharan
                              --------------------------------------------------
                              Shankar Hariharan

                                       17