ENDO PHARMACEUTICALS HOLDINGS INC. EXECUTIVE EMPLOYMENT AGREEMENT

1.

Term . The initial term of this Agreement shall be for the period commencing on the Effective Date and ending, subject to earlier termination as set forth in Section 6, on the third anniversary of the Effective Date (the “Employment Term”). The Employment Term shall automatically renew for an additional one (1) year unless notice of non-renewal is delivered by either party by no later than 120 days prior to the expiration of the Employment Term.

2.

Employment . During the Employment Term:

(a)

Executive will have such duties as are assigned or delegated to Executive by the Chief Executive Officer, and will serve as Executive Vice President, Research and Development of the Company.

(b)

Executive shall devote his full-time attention to the business and affairs of the Company. Executive may serve on corporate, civil or charitable boards or committees, subject in all cases to the approval of the Chief Executive Officer. Executive may manage personal and family investments, participate in industry organizations and deliver lectures at educational institutions, so long as such activities do not interfere with the performance of Executive’s responsibilities hereunder.

(c)

Executive shall be subject to and shall abide by each of the Company’s personnel policies applicable and communicated in writing to senior executives.

3.

Annual Compensation .

(a)

Base Salary . The Company agrees to pay or cause to be paid to Executive during the Employment Term a base salary at the rate of $575,000 per annum or such increased amount as the Board may from time to time determine (hereinafter referred to as the “Base Salary”). Such Base Salary shall be payable in accordance with the Company’s customary practices applicable to its executives. Such Base Salary, upon a recommendation by the Chief Executive Officer, shall be reviewed at least annually by the Board or by the Compensation Committee of the

Board (the “Committee”), and may be increased in the sole discretion of the Committee, but not decreased.

(b)

Incentive Compensation . For each fiscal year of the Company ending during the Employment Term, beginning with the 2008 fiscal year, Executive shall be eligible to receive a target annual cash bonus of 55% of the Base Salary (such target bonus, as may hereafter be increased, the “Target Bonus”) with the opportunity to receive a maximum annual cash bonus of 200% of the Base Salary, as recommended in good faith by the Chief Executive Officer of the Company and approved by the Committee in its sole discretion, if the Company and Executive achieve certain performance targets set by the Committee. Such annual cash bonus (“Incentive Compensation”) shall be paid in no event later than the 15th day of the third month following the end of the taxable year (of the Company or Executive, whichever is later) in which the performance targets have been achieved.

(c)

Equity Compensation Plans . To the extent the Company determines to award stock options, restricted stock units or other similar consideration to management personnel based upon duration of employment or achievement of performance targets, or both, Executive shall be permitted to participate in such programs. For each Fiscal Year or part thereof during the Employment Term, Executive shall be eligible to receive equity-based compensation in an amount equal up to two hundred percent (200%) of the Base Salary for such Fiscal Year (or such lesser (including zero) or greater percent of the Salary for such Fiscal Year as is recommended in good faith to the Committee by the Chief Executive Officer of the Company and approved by the Committee) All such equity-based awards shall be subject to the terms and conditions set forth in the applicable plan and agreements, and in all cases shall be as determined by the Committee. Executive’s 2008 long-term equity incentive to be granted in 2009 will not be prorated based on Executive’s partial year of employment.

4.

Sign-On Compensation and Benefits

(a)

Initial Stock Option Grant . Effective as of the Effective Date, the Company shall grant Executive stock options to purchase 50,000 shares of Company stock under the Company’s equity incentive plans, with an exercise price equal to the closing market price on the Effective Date. Such initial grant of stock options shall vest ratably over a four-year period, 25% on each anniversary of the date of grant, provided Executive is employed on such dates by the Company. All such stock options shall be subject to the terms and conditions set forth in the applicable plan and applicable award agreement attached as Exhibit A hereto.

(b)

Sign-On Bonus . On the first regular payroll period payment date following the Effective Date, the Company shall pay Executive a one-time sign-on cash bonus of $50,000. The Company will also provide a tax gross-up allowance to assist in payment of federal and state income tax liabilities. All such sums must be repaid

to the Company in the event Executive voluntarily terminates his employment within eighteen (18) months of the Effective Date.

(c)

Relocation Reimbursement . The Company will provide Executive with a relocation allowance of up to $300,000 to cover documented and reasonable moving expenses that are incurred within twelve (12) months of the Effective Date, in connection with his relocation to the Chadds Ford, PA area. Executive shall also be eligible for temporary living expense reimbursement, to be pre-approved by Company, for up to twelve (12) months after the Effective Date. The Company will also provide a tax gross-up allowance to assist in payment of federal and state income tax liabilities. All such sums must be repaid to the Company in the event Executive voluntarily terminates his employment within eighteen (18) months of the Effective Date.

5.

Other Benefits .

(a)

Employee Benefits . During the Employment Term, Executive shall be entitled to participate in all employee benefit plans, practices and programs maintained by the Company and made available to employees generally, including, without limitation, all pension, retirement, profit sharing, savings, medical, hospitalization, disability, dental, life or travel accident insurance benefit plans, to the extent Executive is eligible under the terms of such plans. Executive’s participation in such plans, practices and programs shall be on the same basis and terms as are applicable to employees of the Company generally.

(b)

Executive Benefits . During the Employment Term, Executive shall be entitled to participate in all executive benefit or incentive compensation plans now maintained or hereafter established by the Company for the purpose of providing compensation and/or benefits to comparable executive employees of the Company including, but not limited to, the Company’s deferred compensation plans and any supplemental retirement, deferred compensation, supplemental medical or life insurance or other bonus or incentive compensation plans. Unless otherwise provided herein, Executive’s participation in such plans shall be on the same basis and terms, as other senior executives of the Company. No additional compensation provided under any of such plans shall be deemed to modify or otherwise affect the terms of this Agreement or any of Executive’s entitlements hereunder.

(c)

Fringe Benefits and Perquisites . During the Employment Term, Executive shall be entitled to all fringe benefits and perquisites generally made available by the Company to its senior executives.

(d)

Business Expenses . Upon submission of proper invoices in accordance with the Company’s normal procedures, Executive shall be entitled to receive prompt reimbursement of all reasonable out-of-pocket business, entertainment and travel expenses incurred by Executive in connection with the performance of Executive’s duties hereunder and incurred in accordance with the Company’s

travel an entertainment policy in effect from time to time. Such reimbursement shall be made in no event later than the end of the calendar year following the calendar year in which the expenses were incurred.

(e)

Office and Facilities . During the Employment Term Executive shall be provided with an appropriate office at the Company’s headquarters, with such secretarial and other support facilities as are commensurate with Executive’s status with the Company, which facilities shall be adequate for the performance of Executive’s duties hereunder.

(f)

Motor Vehicle Allowance . As of the Effective Date, Executive will be entitled to use of an automobile, and a replacement thereof, mutually acceptable to Executive and the Company, at least every three (3) fiscal years after the Effective Date during the Employment Term. The Company will reimburse Executive for all operating expenses relating thereto upon Executive’s submission of appropriate documentation as set forth in Section 5(a). The Company will determine the actual value, if any, of Executive’s non-business use of such automobile and will furnish Executive with a W-2 Wage and Tax Statement, grossed up for taxes, to be included in Executive’s income tax returns, in accordance with prevailing Internal Revenue Service regulations.

(g)

Vacation and Sick Leave . Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of Executive’s employment under this Agreement, pursuant to the following:

(i)

Executive shall be entitled to annual vacation in accordance with the vacation policies of the Company as in effect from time to time, which shall in no event be less than four weeks per year; vacation must be taken at such time or times as approved by the Board; and

(ii)

Executive shall be entitled to sick leave (without loss of pay) in accordance with the Company’s policies as in effect from time to time.

6.

Termination . The Employment Term and Executive’s employment hereunder may be terminated under the circumstances set forth below; provided, however, that notwithstanding anything contained herein to the contrary, Executive shall not be considered to have terminated employment with the Company for purposes of this Agreement unless Executive would be considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

(a)

Disability . The Company may terminate Executive’s employment, on written notice to Executive after having reasonably established Executive’s Disability. For purposes of this Agreement, Executive will be deemed to have a “Disability” if, as a result of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, Executive is unable to perform the

core functions of Executive’s position (with or without reasonable accommodation) or is receiving income replacement benefits for a period of three months or more under an accident and health plan covering employees of the Company. Executive shall be entitled to the compensation and benefits provided for under this Agreement for any period prior to Executive’s termination by reason of Disability during which Executive is unable to work due to a physical or mental infirmity in accordance with the Company’s policies for similarly-situated executives.

(b)

Death . Executive’s employment shall be terminated as of the date of Executive’s death.

(c)

Cause . The Company may terminate Executive’s employment for “Cause,” effective as of the date of the Notice of Termination (as defined in Section 7 below). “Cause” shall mean, for purposes of this Agreement: (a) the continued failure by Executive substantially to perform Executive’s duties under this Agreement (other than any such failure resulting from Disability), (b) the criminal felony indictment of Executive by a court of competent jurisdiction, (c) the engagement by Executive in misconduct that has caused, or in the good faith judgment of the Chief Executive Officer may cause if not discontinued, harm (financial or otherwise) to the Company or any of its subsidiaries, if any, such harm to include, without limitation, (i) the disclosure of material secret or Confidential Information (as defined in Section 11(d)) of the Company or any of its subsidiaries, if any, (ii) the debarment of the Company or any of its subsidiaries, if any, by the U.S. Food and Drug Administration or any successor agency (the “FDA”), or (iii) the registration of the Company or any of its subsidiaries, if any, with the U.S. Drug Enforcement Administration of any successor agency (the “DEA”) to be revoked, (d) the debarment of Executive by the FDA, or (e) the continued material breach by Executive of this Agreement after written demand is delivered to Executive which specifically identifies the breach and Executive’s failure to cure within five (5) days of such demand. Reference in this paragraph to the Company shall also include direct and indirect subsidiaries of the Company.

(d)

Without Cause . The Company may terminate Executive’s employment without Cause. The Company shall deliver to Executive a Notice of Termination (as defined in Section 7 below) not less than thirty (30) days prior to the termination of Executive’s employment without Cause and the Company shall have the option of terminating Executive’s duties and responsibilities prior to the expiration of such thirty-day notice period.

(e)

Good Reason . Executive may terminate employment with the Company for Good Reason (as defined below) by delivering to the Company a Notice of Termination (as defined in Section 7 below) not less than thirty (30) days prior to the termination of Executive’s employment for Good Reason. The Company shall have the option of terminating Executive’s duties and responsibilities prior to the expiration of such thirty-day notice period. For purposes of this Agreement,

“Good Reason” means any of the following: (a) a material diminution in Executive’s salary or benefits; (b) the assignment of Executive without Executive’s consent to a position, responsibilities, or duties of a materially lesser status or degree of responsibility than Executive’s position, responsibilities, or duties immediately following the Effective Date; or (c) the Company requiring Executive to be based at any office or location more than fifty (50) miles from Executive’s current principal business location (except for any such change in location which is not materially adverse to Executive). Executive shall provide notice of the existence of the Good Reason condition within ninety (90) days of the date Executive learns of the condition, and the Company shall have a period of thirty (30) days during which it may remedy the condition, and in case of full remedy such condition shall not be deemed to constitute Good Reason hereunder.

(f)

Without Good Reason. Executive may voluntarily terminate Executive’s employment without Good Reason by delivering to the Company a Notice of Termination not less than thirty (30) days prior to the termination of Executive’s employment and the Company shall have the option of terminating Executive’s duties and responsibilities prior to the expiration of such thirty-day notice period.

7.

Notice of Termination . Any purported termination by the Company or by Executive shall be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice that indicates a termination date, the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated. For purposes of this Agreement, no such purported termination of Executive’s employment hereunder shall be effective without such Notice of Termination (unless waived by the party entitled to receive such notice).

8.

Compensation Upon Termination . Upon termination of Executive’s employment during the Employment Term, Executive shall be entitled to the following benefits:

(a)

Termination by the Company for Cause or by Executive Without Good Reason . If Executive’s employment is terminated by the Company for Cause or by Executive without Good Reason, the Company shall pay Executive all amounts earned or accrued hereunder through the termination date, including:

(i)

any accrued and unpaid Base Salary;

(ii)

any Incentive Compensation earned but unpaid in respect of any completed fiscal year preceding the termination date;

(iii)

reimbursement for any and all monies advanced or expenses incurred in connection with Executive’s employment for reasonable and necessary expenses incurred by Executive on behalf of the Company for the period ending on the termination date;

(iv)

any accrued and unpaid vacation pay;

(v)

any previous compensation that Executive has previously deferred (including any interest earned or credited thereon), in accordance with the terms and conditions of the applicable deferred compensation plans or arrangements then in effect, to the extent vested as of Executive’s termination date; and

(vi)

any amount or benefit as provided under any benefit plan or program in accordance with the terms thereof;

(b)

Termination by the Company for Disability . If Executive’s employment is terminated by the Company for Disability, the Company shall pay Executive:

(i)

the Accrued Compensation; and

(ii)

an amount equal to the Incentive Compensation that Executive would have been entitled to receive in respect of the fiscal year in which Executive’s termination date occurs, had Executive continued in employment until the end of such fiscal year, which amount, determined based on the Company’s actual performance for such year relative to the performance goals applicable to Executive, shall be multiplied by a fraction (A) the numerator of which is the number of days in such fiscal year through termination date and (B) the denominator of which is 365 (the “Pro-Rata Bonus”) and shall be payable in a lump sum payment at the time such bonus or incentive awards are payable to other participants.

(c)

Termination By Reason of Death . If Executive’s employment is terminated by reason of Executive’s death, the Company shall pay Executive’s beneficiaries

(i)

the Accrued Compensation, and

(ii)

the Pro-Rata Bonus.

(d)

Termination by the Company Without Cause or by Executive for Good Reason Other Than in Connection with a Change of Control . If Executive’s employment by the Company shall be terminated by the Company without Cause or by Executive for Good Reason, either prior to a Change of Control or more than twenty-four (24) months following a Change of Control, then, subject to Section 15(f) of the Agreement, Executive shall be entitled to the benefits provided in this Section 8(d):

(i)

the Company shall pay to Executive the Accrued Compensation;

(ii)

the Company shall pay to Executive the Pro-Rata Bonus;

(iii)

the Company shall pay to Executive as severance pay and in lieu of any further Base Salary or other compensation and benefits for periods subsequent to the termination date, an amount in cash, which amount shall be payable in a lump sum payment within sixty (60) days following such termination (subject to Section 10), equal to two (2) times the sum of (A) Executive’s Base Salary and (B) the Target Bonus; and

(iv)

the Company shall provide Executive with continued coverage under any health, medical, dental, vision or life insurance program or policy in which Executive was eligible to participate as of the time of Executive’s employment termination for two (2) years following such termination on terms no less favorable to Executive and Executive’s dependents (including with respect to payment for the costs thereof) than those in effect immediately prior to such termination, which coverage shall become secondary to any coverage provided to Executive by a subsequent employer and to any Medicare coverage for which Executive becomes eligible.

(e)

Termination by the Company Without Cause or by Executive for Good Reason Following a Change of Control . If Executive’s employment by the Company shall be terminated by the Company without Cause or by Executive for Good Reason within twenty-four (24) months following a Change of Control, then in lieu of the amounts due under Section 8(d) above and subject to the requirements of Section 15(f) of the Agreement, Executive shall be entitled to the benefits provided in this Section 8(e):

(i)

the Company shall pay Executive any Accrued Compensation;

(ii)

the Company shall pay Executive any Pro-Rata Bonus;

(iii)

the Company shall pay Executive as severance pay and in lieu of any further Base Salary or other compensation and benefits for periods subsequent to the termination date, an amount in cash, which amount shall be payable in a lump sum payment within sixty (60) days following such termination (subject to Section 10), equal to two (2) times the sum of (A) Executive’s Base Salary and (B) the Target Bonus; and

(iv)

the Company shall provide Executive with continued coverage under any health, medical, dental, vision or life insurance program or policy in which Executive was eligible to participate as of the time of Executive’s employment termination for two (2) years following such termination on terms no less favorable to Executive and Executive’s dependents (including with respect to payment for the costs thereof) than those in effect immediately prior to such termination, which coverage shall become

secondary to any coverage provided to Executive by a subsequent employer.

(f)

No Mitigation . Executive shall not be required to mitigate the amount of any payment provided for under this Section 8 by seeking other employment or otherwise and, except as provided in Section 8(d)(iv) above, no such payment shall be offset or reduced by the amount of any compensation or benefits provided to Executive in any subsequent employment.

(g)

Excise Tax Gross-up . Whether or not Executive becomes entitled to the severance payments, if any of the payments or benefits received or to be received by Executive (including any payment or benefits received in connection with a Change of Control or Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, excluding the Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be subject to the Excise Tax, the Company shall pay to Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by Executive, after deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment, and after taking into account the phase out of itemized deductions and personal exemptions attributable to the Gross-Up Payment, shall be equal to the Total Payments. Any Gross-Up Payments shall be made as soon as practicable but in no event later than the end of calendar year following the calendar year in which the Excise Tax is paid.

9.

Change of Control .

(a)

“Change of Control” means and shall be deemed to have occurred upon the first of the following events to occur:

(i)

Any “Person” (as defined in Section 9(b) below) is or becomes the “beneficial owner” (“Beneficial Owner”) within the meaning set forth in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its “Affiliates” (as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act)) representing 30% or more of the combined voting power of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; or

(ii)

The following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation,

relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds (  ² / 3 ) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

(iii)

There is consummated a merger or consolidation of the Company or any dire