Document:

EXHIBIT
      10.4

     

    EMPLOYMENT
      AGREEMENT

     

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

     

    RECITALS:

     

    A. WHEREAS,
      Executive is presently employed by Employer in the capacity of Executive Vice
      President and Chief Financial Officer.

     

    B. WHEREAS,
      Employer and Executive desire to cancel and replace Executive’s existing
      Employment Agreement dated June 2007, and enter into this Agreement for
      Executive to continue to perform the duties associated with her position on
      the
      terms and conditions set forth herein.

     

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

     

    1. Employment.

     

    1.1. General.
      Employer hereby employs Executive in the capacity of Executive Vice President
      and Chief Financial Officer of Par 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 her from time
      to time by the Board and by the Chief Executive Officer and/or Chief Operating
      Officer of Par reasonably consistent with Executive’s position and this
      Agreement, and shall report to the Board and the Chief Operating Officer of
      Par.

     

    1.2. Time
      Devoted to Position.
      Executive, during the Employment Term, shall devote substantially all of her
      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 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 her during such period to Employer in all capacities,
      including, but not limited to, all services that may be rendered by her 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 $340,000 (Three Hundred and Forty Thousand
      Dollars), or at such increased rate as the Board (through its Compensation
      and
      Equity Awards Committee), in its sole discretion, may hereafter from time to
      time grant to Executive (as so adjusted, the “Base Salary”) and (ii) any
      additional bonus and the benefits set forth in Sections 2.2, 2.3 and 2.4 hereof.
      The Base Salary shall be payable in accordance with the regular payroll
      practices of Employer applicable to senior executives, less such deductions
      as
      shall be required to be withheld by applicable law and regulations or otherwise.
      Executive shall be considered annually beginning in January 2008 for an increase
      to her base salary.

     

    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 her 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
      her 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 her 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.

     

    
      
         

      

      
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    2.4.4. Automobile.
      Employer shall provide Executive with an automobile cash allowance commensurate
      with her titles and positions.

     

    2.4.5. Life
      Insurance.
      Employer shall obtain (provided, that Executive 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.

     

    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 fifth
      (5th)
      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 fifth (5th)
      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 her
      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
      her 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 her duties hereunder as a result of a physical or mental
      illness, all as determined in good faith by the Board.

     

    
      
         

      

      
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    3.2.4. For
      Cause By Employer.
      Employer may terminate the Employment Term for “Cause” based on objective
      factors determined in good faith by a majority of
      the
      Board as set forth in a Notice of Termination to Executive specifying the
      reasons for termination and the failure of the Executive to cure the same within
      ten (10) days after Employer shall have given the Notice of Termination;
provided,
      however,
      that in
      the event the Board in good faith determines that the underlying reasons giving
      rise to such determination cannot be cured, then the ten (10) day period shall
      not apply and the Employment Term shall terminate on the date the Notice of
      Termination is given. For purposes of this Agreement, “Cause” shall mean (i)
      Executive’s conviction of, guilty or no contest plea to, or confession of guilt
      of, a felony, or other crime involving moral turpitude; (ii) an act or omission
      by Executive in connection with her employment that constitutes fraud, criminal
      misconduct, breach of fiduciary duty, dishonesty, gross negligence, malfeasance,
      willful misconduct, or other conduct that is materially harmful or detrimental
      to Employer; (iii) a material breach by Executive of this Agreement; (iv)
      continuing failure to perform such duties as are assigned to Executive by
      Employer in accordance with this Agreement, other than a failure resulting
      from
      a Disability; (v) Executive’s knowingly taking any action on behalf of Employer
      or any of its affiliates without appropriate authority to take such action;
      (vi)
      Executive’s knowingly taking any action in conflict of interest with Employer or
      any of its affiliates given Executive’s position with Employer; and/or (vii) the
      commission of an act of personal dishonesty by Executive that involves personal
      profit in connection with Employer.

     

    3.2.5. Without
      Cause By Employer.
      Employer may terminate the Employment Term for any reason or no reason
      whatsoever (other than for the reasons set forth elsewhere in this Section
      3.2)
      by giving a Notice of Termination to Executive. The Notice of Termination shall
      specify the Date of Termination, which date shall not be earlier than thirty
      (30) days after the Notice of Termination is given or such shorter period if
      Employer shall pay to Executive that amount of the Base Salary amount that
      would
      have been earned between the thirty (30) day period and such shorter period
      in
      accordance with the Employer’s regular payroll practices.

     

    3.2.6. Employer’s
      Material Breach.
      Executive may terminate the Employment Term upon Employer’s material breach of
      this Agreement and the continuation of such breach for more than ten (10) days
      after written demand for cure of such breach is given to Employer by Executive
      (which demand shall identify the manner in which Employer has materially
      breached this Agreement). Employer’s material breach of this Agreement shall
      mean (i) the failure of Employer to make any payment that it is required to
      make
      hereunder to Executive when such payment is due or within two (2) business
      days
      thereafter; (ii) the assignment to Executive, without Executive’s express
      written consent, of duties inconsistent with her 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 her 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. 

     

    
      
         

      

      
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    3.3. Certain
      Obligations of Employer Following Termination of the Employment
      Term.
      Following termination of the Employment Term under the circumstances described
      below, Employer shall pay to Executive or her estate, as the case may be, the
      following compensation and provide the following benefits. All lump sum amounts
      shall be paid within forty-five (45) days of the Date of Termination in
      accordance with 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 during the period in which she is receiving severance payments and
      the Severance Amount (as defined in Section 3.3.2 hereof) shall not be reduced
      solely as a result of Executive’s subsequent employment by an entity other than
      Employer. The Executive must execute within thirty (30) days after the Date
      of
      Termination Employer’s standard form of Release Agreement attached as Exhibit A
      hereto.

     

    3.3.1. For
      Cause.
      In the
      event that the Employment Term is terminated by Employer for Cause, Employer
      shall pay to Executive in a single lump-sum within forty-five (45) days of
      the
      Date of Termination 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 her Base Amount (the “Severance
      Amount”), and Executive shall retain all vested benefits granted pursuant to
      Section 2.4 hereof. 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 her duties hereunder, the amount of Executive’s last annual cash
      bonus pursuant to Section 2.2 hereof. 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 Termination (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. 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.

     

    3.3.4. 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 her estate pursuant to insurance
      policies provided by Employer (including pursuant to Section 2.4.5 hereof),
      and
      Executive shall retain all vested benefits granted pursuant to Section 2.3
      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 3.2.2 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 her insurance coverage. Except as provided
      immediately below, Executive will be responsible for all COBRA premiums.
      Specifically, if Executive is terminated pursuant to Sections 3.2.3, 3.2.5
      or
      3.2.6 hereof, or Employer elects not to renew this Agreement pursuant to Section
      3.1 hereof, Executive shall be entitled to participate, at Employer’s expense,
      in all medical and health plans and programs of Employer in accordance with
      COBRA for a period of up to eighteen (18) months (the “Benefits Period”),
      subject to Executive’s continued compliance with the terms of Section 4 hereof;
provided,
      that
      Executive’s continued participation is permissible under the general 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 obligation with
      respect thereto pursuant to 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 her estate) shall have twenty-four (24) months from
      the date of termination to exercise any vested equity awards; provided,
      that
      the relevant equity award plan remains in effect and such equity awards shall
      not have otherwise expired in accordance with the terms thereof. In connection
      therewith, Employer agrees to use commercially reasonable efforts to amend
      Executive’s Equity Award Agreements if necessary to effectuate the provisions of
      this Section 3.3.7(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 her duties with respect to Employer, or (ii) by
      Executive pursuant to Section 3.2.6 hereof, then all equity awards theretofore
      granted to Executive shall thereupon vest and Executive shall have twenty-four
      (24) months from such date to exercise such options; provided,
      that
      the relevant equity award plan remains in effect and such equity awards shall
      not have otherwise expired in accordance with the terms thereof. In connection
      therewith, Employer agrees to use commercially reasonable 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 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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    (d) To
      the
      extent not determined by this Agreement, the terms and conditions of all equity
      awards, including without limitation awards of performance contingent restricted
      stock under the 2008 Program, shall be determined by the Executive’s Equity
      Award Agreements, Grant Agreements, Certificates of Performance Shares, and
      the
      terms of the plans and award documents pursuant to which the equity awards
      were
      made.

     

    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.

     

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

     

    
      
         

      

      
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    3.4.2. “Notice
      of Termination” Defined.
“Notice
      of Termination” means a written notice that indicates the specific termination
      provision relied upon by Employer or Executive and, except in the case of
      termination pursuant to Sections 3.2.1, 3.2.2 or 3.2.5 hereof, that sets forth
      in reasonable detail the facts and circumstances claimed to provide a basis
      for
      termination of the Employment Term under the termination provision so
      indicated.

     

    3.4.3. “Date
      of Termination” Defined.
“Date
      of Termination” means such date as the Employment Term is expired if not renewed
      or terminated in accordance with Sections 3.1 or 3.2 hereof.

     

    4. Confidentiality/
      Non-Solicitation/Non-Compete.

     

    4.1. “Confidential
      Information” Defined.
      “Confidential Information” means any and all information (oral or written)
      relating to Employer or any Subsidiary or any person or entity controlling,
      controlled by, or under common control with Employer or any Subsidiary or any
      of
      their respective activities, including, but not limited to, information relating
      to: technology, research, test procedures and results, machinery and equipment;
      manufacturing processes; financial information; products; identity and
      description of materials and services used; purchasing; costs; pricing;
      customers and prospects; advertising, promotion and marketing; and selling,
      servicing and information pertaining to any governmental investigation, except
      such information which becomes public, other than as a result of a breach of
      the
      provisions of Section 4.2 hereof. 

     

    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 her of her duties hereunder), directly or
      indirectly, use, communicate, disclose or disseminate any Confidential
      Information in any manner whatsoever for the benefit of any person or entity
      other than Employer (except as may be required under legal process by subpoena
      or other court order).

     

    4.3. Non-Solicitation.
      Executive shall not, while employed by Employer and for a period of one (1)
      year
      following the Date of Termination, directly or indirectly, hire, offer to hire,
      entice away or in any other manner persuade or attempt to persuade any officer,
      employee, agent, lessor, lessee, licensor, licensee, customer, prospective
      customer, or supplier of Employer or any of its Subsidiaries to discontinue
      or
      alter her or its relationship with Employer or any of its Subsidiaries.

     

    4.4. Non-Competition.
      Executive shall not, while employed by Employer and for a period of one (1)
      year
      following the Date of Termination, directly or indirectly provide any services
      (whether in the management, sales, marketing, public relations, finance,
      research, development, general office, administrative, or other areas) as an
      employee, agent, stockholder, officer, director, consultant, advisor, investor,
      or other representative of Employer's competitors in the branded or generic
      pharmaceutical industry in any state or country in which Employer does or seeks
      to do business. Employer's competitors include any entity, individual, or
      affiliate of such company or individual that develops, sells, markets, or
      distributes any products that compete with or are the same or similar to those
      of Employer. However, the restrictions of this Section 4.4 shall not apply
      if
      the Employment Term is terminated by Employer
      pursuant to Section 3.2.5 hereof or by Executive properly pursuant to Section
      3.2.6 hereof; nor shall this Section 4.4 prohibit Executive from being a passive
      owner of not more than one (1%) percent of any publicly-traded class of capital
      stock of any entity engaged in a competing business. 

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    4.5. Injunctive
      Relief.
      The
      parties hereby acknowledge and agree that (a) the type, scope and periods of
      restrictions imposed in Section 4 are necessary, fair and reasonable to protect
      Employer’s legitimate business interests and to prevent the inevitable
      disclosure of Employer’s Confidential Information; (b) Employer will be
      irreparably injured in the event of a breach by Executive of any of her
      obligations under this Section 4; (c) monetary damages will not be an adequate
      remedy for any such breach; (d) Employer will be entitled to injunctive relief,
      in addition to any other remedy which it may have, in the event of any such
      breach; and (e) the existence of any claims that Executive may have against
      Employer, whether under this Agreement or otherwise, will not be a defense
      to
      the enforcement by Employer of any of its rights under this Section
      4.

     

    4.6. Non-exclusivity
      and Survival.
      The
      covenants of Executive contained in this Section 4 are in addition to, and
      not
      in lieu of, any obligations that Executive may have with respect to the subject
      matter hereof, whether by contract, as a matter of law or otherwise, and such
      covenants and their enforceability shall survive any termination of the
      Employment Term by either party and any investigation made with respect to
      the
      breach thereof by Employer at any time.

     

    5. Miscellaneous
      Provisions.

     

    5.1. Severability.
      If, in
      any jurisdiction, any term or provision hereof is determined to be invalid
      or
      unenforceable, (a) the remaining terms and provisions hereof shall be
      unimpaired; (b) any such invalidity or unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction; and (c) the invalid or unenforceable term or provision shall,
      for
      purposes of such jurisdiction, be deemed replaced by a term or provision that
      is
      valid and enforceable and that comes closest to expressing the intention of
      the
      invalid or unenforceable term or provision.

     

    5.2. Execution
      in Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which shall be deemed to be
      an
      original but all of which taken together shall constitute one and the same
      agreement (and all signatures need not appear on any one counterpart), and
      this
      Agreement shall become effective when one or more counterparts has been signed
      by each of the parties hereto and delivered to each of the other parties
      hereto.

     

    5.3. Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed duly given upon receipt when delivered by hand,
      overnight delivery or telecopy (with confirmed delivery), or three (3) business
      days after posting, when delivered by registered or certified mail or private
      courier service, postage prepaid, return receipt requested, as
      follows:

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    If
      to
      Employer, to:

     

    Par
      Pharmaceutical, Inc.

    300
      Tice
      Boulevard

    Woodcliff
      Lake, New Jersey 07677

    Attention: Chief
      Executive Officer

    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:

     

    Veronica
      Lubatkin

    c/o
      Par
      Pharmaceutical, Inc.

    300
      Tice
      Boulevard

    Woodcliff
      Lake, New Jersey 07677

     

    or
      to
      such other address(es) as a party hereto shall have designated by like notice
      to
      the other parties hereto.

     

    5.4. Amendment.
      No
      provision of this Agreement may be modified, amended, waived or discharged
      in
      any manner except by a written instrument executed by both Par and
      Executive.

     

    5.5. Entire
      Agreement.
      This
      Agreement and, with respect to Section 3.3.7 hereof, Executive’s Equity Award
      Agreements and governing equity award plans, constitute the entire agreement
      of
      the parties hereto with respect to the subject matter hereof, and supersede
      all
      prior agreements and understandings of the parties hereto, oral or written,
      including, but not limited to, the parties’ Employment
      Agreement dated June 2007.
      Executive and Employer hereby agree that the Employment Agreement dated June
      2007 is hereby superseded and of no further force and effect, and that this
      Agreement shall be effective as of the date hereof. In the event of any conflict
      between Section 3.3.7 hereof and Executive’s Equity Award Agreements and the
      governing equity award plans, Section 3.3.7 shall govern.

     

    5.6. Applicable
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey applicable to contracts made and to be wholly performed
      therein.

     

    5.7. Headings.
      The
      headings contained herein are for the sole purpose of convenience of reference,
      and shall not in any way limit or affect the meaning or interpretation of any
      of
      the terms or provisions of this Agreement.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    5.8. Binding
      Effect; Successors and Assigns.
      Executive may not delegate any of her duties or assign her rights hereunder.
      This Agreement shall inure to the benefit of, and be binding upon, the parties
      hereto and their respective heirs, legal representatives, successors and
      permitted assigns. Employer shall require any successor (whether direct or
      indirect and whether by purchase, merger, consolidation or otherwise) to all
      or
      substantially all of the business and/or assets of Employer, by an agreement
      in
      form and substance reasonably satisfactory to Executive, to expressly assume
      and
      agree to perform this Agreement in the same manner and to the same extent that
      Employer would be required to perform if no such succession had taken
      place.

     

    5.9. Waiver.
      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 her 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 she or it is a party or she or it
      is
      otherwise bound; and (c) this Agreement is her 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). 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.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    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 months following the Date of
      Termination shall be accumulated and paid on the first day of the seventh month
      following the Date of Termination, or if earlier on Executive’s death in
      accordance with Section 3.3.4. This provision shall not apply to all payments
      on
      separation from service that satisfy the short-term deferral rule of Treas.
      Reg.
§1.409A-1(b)(4),
      or to the portion of the payments on separation from service that satisfy the
      requirements for separation pay due to an involuntary separation from service
      under Treas. Reg. §1.409A-1(b)(9)(iii),
      or to any payments that are otherwise exempt from the six month delay
      requirement of the Treasury Regulations under Section 409A of the Internal
      Revenue Code.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    

    

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

     

    

    

      
        	
                PAR
                  PHARMACEUTICAL, INC.

              
	 
	 
	
                By:
                  /s/ Stephen
                  Montalto                       
                  

              
	
                Name:
                  Stephen Montalto

              
	
                Title:  
                  Senior Vice President, 

              
	
                Human
                  Resources

              
	 
	 
	 
	
                /s/
                  Veronica
                  Lubatkin                               
                  

              
	
                Veronica
                  Lubatkin

              

      

    

     

     

    
      
         

      

      
        14EXHIBIT
      10.5

     

    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT
      (this
“Agreement”), dated as of March 5, 2008, by and between Par Pharmaceutical,
      Inc., a Delaware corporation (“Par” or “Employer”), and Paul Campanelli
      (“Executive”).

     

    RECITALS:

     

    A. WHEREAS,
      Executive is presently employed by Employer in the capacity of President,
      Generics Division.

     

    B. WHEREAS,
      Employer and Executive desire to cancel and replace Executive’s existing
      Employment Agreement dated March 2007, and enter into this Agreement for
      Executive to continue to perform the duties associated with his position on
      the
      terms and conditions set forth herein.

     

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

     

    1. Employment.

     

    1.1. General.
      Employer hereby employs Executive in the capacity of President, Generics
      Division at the compensation rate and benefits set forth in Section 2 hereof
      for
      the Employment Term (as defined in Section 3.1 hereof). Executive hereby accepts
      such employment, subject to the terms and conditions herein contained. In all
      such 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
      position and this Agreement, and shall report to the Board and the Chief
      Executive Officer of Par. 

     

    1.2. Time
      Devoted to Position.
      Executive, during the Employment Term, shall devote substantially all of his
      business time, attention and skills to the business and affairs of
      Employer.

     

    1.3. Certifications.
      Whenever the Chief Executive Officer of Par is required by law, rule or
      regulation or requested by any governmental authority or by Par’s auditors to
      provide certifications with respect to Par’s financial statements or filings
      with the Securities and Exchange Commission or any other governmental authority,
      Executive shall sign such certifications as may be reasonably requested by
      the
      Chief Executive Officer of Par and/or Employer, with such exceptions as
      Executive deems necessary to make such certifications accurate and not
      misleading.

     

    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 grant to Executive (as so adjusted, the “Base Salary”); and (ii) any
      additional bonus and the benefits set forth in Sections 2.2, 2.3 and 2.4 hereof.
      The Base Salary shall be payable in accordance with the regular payroll
      practices of Employer applicable to senior executives, less such deductions
      as
      shall be required to be withheld by applicable law and regulations or
      otherwise.

     

    2.2. Bonus.
      Subject
      to Section 3.3 hereof, Executive shall be entitled to an annual bonus during
      the
      Employment Term in such amount (if any) as determined by the Board based on
      such
      performance criteria as it deems appropriate, including, without limitation,
      Executive’s performance and Employer’s earnings, financial condition, rate of
      return on equity and compliance with regulatory requirements. The target amount
      of Executive’s Bonus shall be equal to fifty (50%) percent of his Base Salary.
      At the time the Board determines the Executive is eligible 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. Life
      Insurance.
      Employer shall obtain (provided, that Executive 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

        
          

        

      

      
         

      

    

    2.4.5. Automobile.
      Employer shall provide Executive with an automobile cash allowance of One
      Thousand and Fifty Dollars ($1,050) (gross) per month.

     

    3. Employment
      Term; Termination.

     

    3.1. Employment
      Term.
      Executive’s employment hereunder shall commence on the date hereof and, except
      as otherwise provided in Section 3.2 hereof, shall continue until December
      31,
      2010 (the “Initial Term”). Thereafter, this Agreement shall automatically be
      renewed for successive one-year periods commencing on January 1, 2011 (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. For
      Cause By Employer.
      Employer may terminate the Employment Term for “Cause” based on objective
      factors determined in good faith by a majority of the Board as set forth in
      a
      Notice of Termination to Executive specifying the reasons for termination and
      the failure of the Executive to cure the same within ten (10) days after
      Employer shall have given the Notice of Termination; provided,
      however,
      that in
      the event the Board in good faith determines that the underlying reasons giving
      rise to such determination cannot be cured,
      then the ten (10) day period shall not apply and the Employment Term shall
      terminate on the date the Notice of Termination is given. For purposes of this
      Agreement, “Cause” shall mean (i) Executive’s conviction of, guilty or no
      contest plea to, or confession of guilt of, a felony, or other crime involving
      moral turpitude; (ii) an act or omission by Executive in connection with his
      employment that constitutes fraud, criminal misconduct, breach of fiduciary
      duty, dishonesty, gross negligence, malfeasance, willful misconduct, or other
      conduct that is materially harmful or detrimental to Employer; (iii) a material
      breach by Executive of this Agreement; (iv) continuing failure to perform such
      duties as are assigned to Executive by Employer in accordance with this
      Agreement, other than a failure resulting from a Disability; (v) Executive’s
      knowingly taking any action on behalf of Employer or any of its affiliates
      without appropriate authority to take such action; (vi) Executive’s knowingly
      taking any action in conflict of interest with Employer or any of its affiliates
      given Executive’s position with Employer; and/or (vii) the commission of an act
      of personal dishonesty by Executive that involves personal profit in connection
      with Employer.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    3.2.5. Without
      Cause By Employer.
      Employer may terminate the Employment Term for any reason or no reason
      whatsoever (other than for the reasons set forth elsewhere in this Section
      3.2)
      by giving a Notice of Termination to Executive. The Notice of Termination shall
      specify the Date of Termination, which date shall not be earlier than thirty
      (30) days after the Notice of Termination is given or such shorter period if
      Employer shall pay to Executive that amount of the Base Salary amount that
      would
      have been earned between the thirty (30) day period and such shorter period
      in
      accordance with the Employer’s regular payroll practices.

     

    3.2.6. Employer’s
      Material Breach.
      Executive may terminate the Employment Term upon Employer’s material breach of
      this Agreement and the continuation of such breach for more than ten (10) days
      after written demand for cure of such breach is given to Employer by Executive
      (which demand shall identify the manner in which Employer has materially
      breached this Agreement). Employer’s material breach of this Agreement shall
      mean (i) the failure of Employer to make any payment that it is required to
      make
      hereunder to Executive when such payment is due 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 amounts
      shall be paid within forty-five (45) days of the Date of Termination in
      accordance with 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 during the period in which he is receiving severance payments and
      the
      Severance Amount (as defined in Section 3.3.2 hereof) shall not be reduced
      solely as a result of Executive’s subsequent employment by an entity other than
      Employer. The Executive must execute within thirty (30) days after the Date
      of
      Termination Employer’s standard form of Release Agreement attached 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 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 term 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 (the “Severance
      Amount”), and Executive shall retain all vested benefits granted pursuant to
      Section 2.4 hereof. 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 2.2 hereof. 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 Termination (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
      the
      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 of 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 pursuant to Section 2.4.4 hereof),
      and
      Executive shall retain all vested benefits granted pursuant to Section 2.3
      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 employer 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. Specifically, if Executive is terminated pursuant to Sections
      3.2.3, 3.2.5 or 3.2.6 hereof, or Employer elects not to renew this Agreement
      pursuant to Section 3.1 hereof, Executive shall be entitled to participate,
      at
      Employer’s expense, in all medical and health plans and programs of Employer in
      accordance with
      COBRA for a period of up to eighteen (18) months (the “Benefits Period”),
      subject Executive’s continued compliance with the terms of Section 4 hereof;
provided,
      that
      Executive’s continued participation is permissible under the general 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 obligation with
      respect thereto pursuant to 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,
      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(a).

     

    (b) In
      the
      event the Employment Term is terminated (i) by Employer pursuant to Section
      3.2.5 hereof and the reason for such termination is not related to the
      performance of Executive in his duties with respect to Employer, or (ii) by
      Executive pursuant to Section 3.2.6 hereof, then all equity awards theretofore
      granted to Executive shall thereupon vest and Executive shall have twenty-four
      (24) months from such date to exercise such options; provided,
      that
      the relevant equity award plan remains in effect and such equity awards shall
      not have otherwise expired in accordance with the terms thereof. In connection
      therewith, Employer agrees to use commercially reasonable 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 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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    (d) To
      the
      extent not determined by this Agreement, the terms and conditions of all equity
      awards, including without limitation awards of performance contingent restricted
      stock under the 2008 Program, shall be determined by the Executive’s Equity
      Award Agreements, Grant Agreements, Certificates of Performance Shares, and
      the
      terms of the plans and award documents pursuant to which the equity awards
      were
      made.

     

    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.

     

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

     

    3.4.2. “Notice
      of Termination” Defined.
“Notice
      of Termination” means a written notice that indicates the specific termination
      provision relied upon by Employer or Executive and, except in the case of
      termination pursuant to Sections 3.2.1, 3.2.2 or 3.2.5 hereof, that sets forth
      in reasonable detail the facts and circumstances claimed to provide a basis
      for
      termination of the Employment Term under the termination provision so
      indicated.

     

    
      
         

      

      
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    3.4.3. “Date
      of Termination” Defined.
“Date
      of Termination” means such date as the Employment Term is expired if not renewed
      or terminated in accordance with Sections 3.1 or 3.2 hereof.

     

    4. Confidentiality/
      Non-Solicitation/Non-Compete.

     

    4.1. “Confidential
      Information” Defined.
      “Confidential Information” means any and all information (oral or written)
      relating to Employer or any Subsidiary or any person or entity controlling,
      controlled by, or under common control with Employer or any Subsidiary or any
      of
      their respective activities, including, but not limited to, information relating
      to: technology, research, test procedures and results, machinery and equipment;
      manufacturing processes; financial information; products; identity and
      description of materials and services used; purchasing; costs; pricing;
      customers and prospects; advertising, promotion and marketing; and selling,
      servicing and information pertaining to any governmental investigation, except
      such information which becomes public, other than as a result of a breach of
      the
      provisions of Section 4.2 hereof.

     

    4.2. Non-disclosure
      of Confidential Information.
      Executive shall not at any time (other than as may be required or appropriate
      in
      connection with the performance by him of his duties hereunder), directly or
      indirectly, use, communicate, disclose or disseminate any Confidential
      Information in any manner whatsoever for the benefit of any person or entity
      other than Employer (except as may be required under legal process by subpoena
      or other court order).

     

    4.3. Non-Solicitation.
      Executive shall not, while employed by Employer and for a period of one (1)
      year
      following the Date of Termination, directly or indirectly, hire, offer to hire,
      entice away or in any other manner persuade or attempt to persuade any officer,
      employee, agent, lessor, lessee, licensor, licensee, customer, prospective
      customer, or supplier of Employer or any of its Subsidiaries to discontinue
      or
      alter his or its relationship with Employer or any of its
      Subsidiaries.

     

    4.4. Non-Competition.
      Executive shall not, while employed by Employer and for a period of one (1)
      year
      following the Date of Termination, directly or indirectly provide any services
      (whether in the management, sales, marketing, public relations, finance,
      research, development, general office, administrative, or other areas) as an
      employee, agent, stockholder, officer, director, consultant, advisor, investor,
      or other representative of Employer's competitors in the branded or generic
      pharmaceutical industry in any state or country in which Employer does or seeks
      to do business. Employer's competitors include any entity, individual, or
      affiliate of such company or individual that develops, sells, markets, or
      distributes any products that compete with or are the same or similar to those
      of Employer. However, the restrictions of this Section 4.4 shall not apply
      if
      the Employment Term is terminated by Employer pursuant to Section 3.2.5 hereof
      or by Executive properly pursuant to Section 3.2.6 hereof; nor shall this
      Section 4.4 prohibit Executive from being a passive owner of not more than
      one
      (1%) percent of any publicly-traded class of capital stock of any entity engaged
      in a competing business.

     

    
      
         

      

      
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    4.5. Injunctive
      Relief.
      The
      parties hereby acknowledge and agree that (a) the type, scope and periods of
      restrictions imposed in Section 4 are necessary, fair and reasonable to protect
      Employer’s legitimate business interests and to prevent the inevitable
      disclosure of Employer’s Confidential Information; (b) Employer will be
      irreparably injured in the event of a breach by Executive of any of his
      obligations under this Section 4; (c) monetary damages will not be an adequate
      remedy for any such breach; (d) Employer will be entitled to injunctive relief,
      in addition to any other remedy which it may have, in the event of any such
      breach; and (e) the existence of any claims that Executive may have against
      Employer, whether under this Agreement or otherwise, will not be a defense
      to
      the enforcement by Employer of any of its rights under this Section
      4.

     

    4.6. Non-exclusivity
      and Survival.
      The
      covenants of Executive contained in this Section 4 are in addition to, and
      not
      in lieu of, any obligations that Executive may have with respect to the subject
      matter hereof, whether by contract, as a matter of law or otherwise, and such
      covenants and their enforceability shall survive any termination of the
      Employment Term by either party and any investigation made with respect to
      the
      breach thereof by Employer at any time.

     

    5. Miscellaneous
      Provisions.

     

    5.1. Severability.
      If, in
      any jurisdiction, any term or provision hereof is determined to be invalid
      or
      unenforceable, (a) the remaining terms and provisions hereof shall be
      unimpaired; (b) any such invalidity or unenforceability in any jurisdiction
      shall not invalidate or render unenforceable such provision in any other
      jurisdiction; and (c) the invalid or unenforceable term or provision shall,
      for
      purposes of such jurisdiction, be deemed replaced by a term or provision that
      is
      valid and enforceable and that comes closest to expressing the intention of
      the
      invalid or unenforceable term or provision.

     

    5.2. Execution
      in Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the different
      parties hereto in separate counterparts, each of which shall be deemed to be
      an
      original but all of which taken together shall constitute one and the same
      agreement (and all signatures need not appear on any one counterpart), and
      this
      Agreement shall become effective when one or more counterparts has been signed
      by each of the parties hereto and delivered to each of the other parties
      hereto.

     

    5.3. Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed duly given upon receipt when delivered by hand,
      overnight delivery or telecopy (with confirmed delivery), or three (3) business
      days after posting, when delivered by registered or certified mail or private
      courier service, postage prepaid, return receipt requested, as
      follows:

     

    If
      to
      Employer, to:

     

    Par
      Pharmaceutical, Inc.

    300
      Tice
      Boulevard

    Woodcliff
      Lake, New Jersey 07677

    Attention: Chairman

    Telecopy
      No.: (201) 802-4620

     

    
      
         

      

      
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    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:

     

    Paul
      Campanelli

    c/o
      Par
      Pharmaceutical, Inc.

    300
      Tice
      Boulevard

    Woodcliff
      Lake, New Jersey 07677

     

    or
      to
      such other address(es) as a party hereto shall have designated by like notice
      to
      the other parties hereto.

     

    5.4. Amendment.
      No
      provision of this Agreement may be modified, amended, waived or discharged
      in
      any manner except by a written instrument executed by both Par and
      Executive.

     

    5.5. Entire
      Agreement.
      This
      Agreement and, with respect to Section 3.3.7 hereof, Executive’s Equity Award
      Agreements and governing equity award plans constitute the entire agreement
      of
      the parties hereto with respect to the subject matter hereof, and supersede
      all
      prior agreements and understandings of the parties hereto, oral or written,
      including, but not limited to, the parties’ Employment
      Agreement dated March 2007.
      Executive and Employer hereby agree that the Employment Agreement dated March
      2007 is hereby superseded and of no further force and effect, and that this
      Agreement shall be effective as of the date hereof. In the event of any conflict
      between Section 3.3.7 hereof and Executive’s Equity Award Agreements and the
      governing equity award plans, Section 3.3.7 shall govern.

     

    5.6. Applicable
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New Jersey applicable to contracts made and to be wholly performed
      therein.

     

    5.7. Headings.
      The
      headings contained herein are for the sole purpose of convenience of reference,
      and shall not in any way limit or affect the meaning or interpretation of any
      of
      the terms or provisions of this Agreement.

     

    5.8. Binding
      Effect; Successors and Assigns.
      Executive may not delegate any of his duties or assign his rights hereunder.
      This Agreement shall inure to the benefit of, and be binding upon, the parties
      hereto and their respective heirs, legal representatives, successors and
      permitted assigns. Employer shall require any successor (whether direct or
      indirect and whether by purchase, merger, consolidation or otherwise) to all
      or
      substantially all of the business and/or assets of Employer, by an agreement
      in
      form and substance reasonably satisfactory to Executive, to expressly assume
      and
      agree to perform this Agreement
      in the same manner and to the same extent that Employer would be required to
      perform if no such succession had taken place.

     

    
      
         

      

      
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    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). Any legal action, suit or
      proceeding, in equity or at law, arising out of or relating to this Agreement
      shall be instituted exclusively in the State or Federal courts located in the
      State of New Jersey, and each party agrees not to assert, by way of motion,
      as a
      defense or otherwise, in any such action, suit or proceeding, any claim that
      such party is not subject personally to the jurisdiction of any such court,
      that
      the action, suit or proceeding is brought in an inconvenient forum, that the
      venue of the action, suit or proceeding is improper or should be transferred,
      or
      that this Agreement or the subject matter hereof may not be enforced in or
      by
      any such court. Each party further irrevocably submits to the jurisdiction
      of
      any such court in any such action, suit or proceeding. Any and all service
      of
      process and any other notice in any such action, suit or proceeding shall be
      effective against any party if given personally or by registered or certified
      mail, return receipt requested or by any other means of mail that requires
      a
      signed receipt, postage prepaid, mailed to such party as herein provided.
      Nothing herein contained shall be deemed to affect or limit the right of any
      party to serve process in any other manner permitted by applicable
      law.

     

    5.12. Arbitration.

     

    (a) Any
      dispute under Section 3 hereof, including, but not limited to, the determination
      by the Board of a termination for Cause pursuant to Section 3.2.4 hereof, or
      in
      respect of the breach thereof shall be settled by arbitration in New Jersey.
      The
      arbitration shall be accomplished in the following manner. Either party may
      serve upon the other party written demand that the dispute, specifying the
      nature thereof, shall be submitted to arbitration. Within ten (10) days after
      such demand is given in accordance with Section 5.3 hereof,
      each of the parties shall designate an arbitrator and provide written notice
      of
      such appointment upon the other party. If either party fails within the
      specified time to appoint such arbitrator, the other party shall be entitled
      to
      appoint both arbitrators. The two (2) arbitrators so appointed shall appoint
      a
      third arbitrator. If the two arbitrators appointed fail to agree upon a third
      arbitrator within ten (10) days after their appointment, then an application
      may
      be made by either party hereto, upon written notice to the other party, to
      the
      American Arbitration Association (the “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.

     

    
      
         

      

      
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    (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 months following the Date of
      Termination shall be accumulated and paid on the first day of the seventh month
      following the Date of Termination, or if earlier on Executive’s death in
      accordance with Section 3.3.4. This provision shall not apply to all payments
      on
      separation from service that satisfy the short-term deferral rule of Treas.
      Reg.
§1.409A-1(b)(4),
      or to the portion of the payments on separation from service that satisfy the
      requirements for separation pay due to an involuntary separation from service
      under Treas. Reg. §1.409A-1(b)(9)(iii),
      or to any payments that are otherwise exempt from the six month delay
      requirement of the Treasury Regulations under Section 409A of the Internal
      Revenue Code.

     

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

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

     

    

     

    
      	
              PAR
                PHARMACEUTICAL, INC.

            
	 
	 
	
              By:
                /s/ Stephen
                Montalto                         

            
	
              Name:
                Stephen Montalto

            
	
              Title:  
                Senior Vice President, 

            
	
              Human
                Resources

            
	 
	 
	 
	
              /s/
                Paul
                Campanelli                                    
                

            
	
              Paul
                Campanelli

            

    

    
 

    
      
         

      

      
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