AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Exhibit 10.36

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made as of December 20, 2005 by Endo Pharmaceuticals Holdings Inc., a Delaware corporation (the “Employer”), and Peter A. Lankau (the “Employee”).

     WHEREAS, the Employer and the Employee entered into an employment agreement, dated as August 11, 2000 (the “Original Employment Agreement”);

     WHEREAS, the Employer and the Employee amended and restated the Original Employment Agreement as of September 1, 2001 (the “2001 Employment Agreement”);

     WHEREAS, the Employee and the Board of Directors of the Employer have each determined that amending and restating the 2001 Employment Agreement is advisable and desirable; and

     WHEREAS, the Board of Directors of the Employer has approved this Agreement upon the terms set forth herein;

     NOW THEREFORE, in consideration of the premises and mutual agreements contained herein, the parties, intending to be legally bound, agree as follows:

ARTICLE 1. DEFINITIONS .

          For the purposes of this Agreement, the following terms have the meanings specified or referred to in this Article 1.

           “Agreement” means this Employment Agreement, including the Exhibits hereto, as amended from time to time.

           “Basic Compensation” means Salary and Benefits.

           “Benefits” shall have the meaning set forth in Section 3.1(b).

           “Board of Directors” means the board of directors of the Employer.

           “Confidential Information” means any and all:

          (a) trade secrets concerning the business and affairs of the Employer, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current, and planned research

and development, current and planned manufacturing or distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), computer software and database technologies, systems, structures, and architectures (and related formulae, compositions, processes, improvements, devices, know-how, inventions, discoveries, concepts, ideas, designs, methods and information);

          (b) information concerning the business and affairs of the Employer (which includes historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, personnel training and techniques and materials) however documented; and

          (c) notes, analysis, compilations, studies, summaries, and other material prepared by or for the Employer containing or based, in whole or in part, on any information included in the foregoing.

      “CPI” means the Consumer Price Index-All Urban Consumers, Philadelphia Region (1982-1984 = 100), as published by the United States Department of Labor.

      “disability” shall have the meaning set forth in Section 6.2.

      “Effective Date” means January 1, 2006.

      “Employment Period” shall have the meaning set forth in Section 2.2.

      “Fiscal Year” means the Employer’s fiscal year, as it exists on the Effective Date or as changed from time to time.

      “for cause” shall have the meaning set forth in Section 6.3.

      “for good reason” shall have the meaning set forth in Section 6.4.

      “Incentive Compensation” shall have the meaning set forth in Section 3.2.

      “person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, or governmental body.

      “Post-Employment Period” shall have the meaning set forth in Article 8.

      “Renewal Term” shall have the meaning set forth in Section 2.2.

      “Salary” shall have the meaning set forth in Section 3.1(a).

ARTICLE 2. EMPLOYMENT TERMS AND DUTIES.

           Section 2.1 Employment . The Employer hereby employs the Employee, and the Employee hereby accepts employment by the Employer, upon the terms and conditions set forth in this Agreement.

           Section 2.2 Term . Subject to the provisions of Article 6, the initial term of the Employee’s employment under this Agreement will be one (1) year, beginning on the Effective Date and ending on the first anniversary of the Effective Date (the “Initial Term”). The term of this Agreement may be renewed by the Employee and the Employer for additional periods of one year (each, a “Renewal Term”; the Initial Term together with all Renewal Terms, if any, are hereinafter referred to as the “Employment Period”).

           Section 2.3 Duties . The Employee will have such duties as are assigned or delegated to the Employee by the Board of Directors, and will initially serve as President and Chief Executive Officer of the Employer and the Employee shall have the status, authority, duties and responsibilities typically recognized as attributes of such position. The Employee will devote the Employee’s business, time, attention, skill, and energy to the business of the Employer, will promote the success of the Employer’s business, and will cooperate with the Board of Directors in the advancement of the best interests of the Employer. Nothing in this Section 2.3, however, will prevent the Employee from engaging in additional activities in connection with personal investments and community affairs that are not inconsistent with the Employee’s duties under this Agreement. It is expressly understood and agreed that to the extent any such activities have been conducted by the Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to be inconsistent with the Employee’s duties under this Agreement. The Employee shall, from time to time, inform the Board of Directors of those additional activities in which the Employee is engaged. If the Employee is elected as a director of the Employer or as a director or officer of any of Employer’s subsidiaries, the Employee will fulfill the Employee’s duties as such director or officer without additional compensation.

           Section 2.4 Director’s and Officer’s Liability Coverage. The Employer shall cause the Employee to be (a) indemnified as an officer and director of the Employer or any of its affiliates, to the extent applicable, to the maximum extent permitted by applicable law, and (b) covered by director’s and officer’s liability insurance as may be in effect from time to time in connection with the Employee serving as an officer and director of Employer or any of its affiliates. The provisions of this Section 2.4 shall survive termination of this Agreement for any reason.

ARTICLE 3. COMPENSATION.

           Section 3.1 Basic Compensation.

           (a) Salary . As of the Effective Date, the Employee will be paid an annual salary of $500,000, subject to adjustment as provided below (the “Salary”), which will be payable in equal periodic installments according to the Employer’s customary payroll practices, but no less frequently than monthly. The Salary will be reviewed by the Board of Directors not less frequently than annually, and be adjusted in the sole discretion of the Board of Directors, but in no event will the Salary be less than $500,000 per year. In determining the amount of any adjustment to Salary, the Board of Directors shall take into account inflation, merit, changes in responsibilities and industry salary practices for executives. Any increase in Salary shall not serve to limit or reduce any other obligation to the Employee under this Agreement. Salary shall not be reduced after such increase unless such reduction is part of a reduction in salaries of specified management personnel of the Employer undertaken in a program approved by the Employer’s Board of Directors.

           (b) Benefits . The Employee will, during the Employment Period, be permitted to participate in such incentive, savings, pension, profit sharing, bonus, life insurance, hospitalization and major medical, and other employee benefit plans, practices, policies and programs, of the Employer that may be in effect from time to time, to the extent the Employee is eligible under the terms of those plans (collectively, the “Benefits”).

           (c) Stock Options . To the extent the Employer determines to award stock options or other similar consideration to management personnel based upon duration of employment or achieving performance targets, or both, Employee shall be permitted to participate in such programs, and the Employer and the Employee shall enter into an addendum to this Agreement outlining the terms of such participation.

           Section 3.2 Incentive Compensation . For each Fiscal Year or part thereof during the Employment Period the Employee shall be paid in cash as additional compensation (the “Incentive Compensation”) for the services to be rendered by the Employee pursuant to this Agreement, an amount equal to fifty percent (50%) of the Salary for such Fiscal Year (or such lesser (including zero) or greater (not to exceed two hundred) percent of the Salary for such Fiscal Year as is recommended in good faith to the Board of Directors by the Chief Financial Officer of the Employer and approved by the Board of Directors) if the Employer meets the performance targets set by the Board of Directors (the “Performance Targets”) for such Fiscal Year. Incentive Compensation for each Fiscal Year or part thereof shall be paid as soon as practicable following receipt by the Employer of its audited financial statements for the Fiscal Year for which the Incentive Compensation is being paid, unless the Employee shall elect to defer the receipt of such Incentive Compensation. The Employee shall be permitted to submit a proposal for additional incentive compensation with respect to the period commencing on the date hereof and ending at the end of the Employer’s current Fiscal Year, and the Employer shall consider such proposal in good faith.

ARTICLE 4. FACILITIES AND EXPENSES.

     The Employer will furnish the Employee office space, equipment, supplies, and such other facilities and personnel as the Employer deems necessary or appropriate for the performance of the Employee’s duties under this Agreement. The Employer will pay the Employee’s dues in such professional societies and organizations as are appropriate, and will pay on behalf of the Employee (or reimburse the Employee for) reasonable expenses incurred by the Employee at the request of, or on behalf of, the Employer in the performance of the Employee’s duties pursuant to this Agreement, and in accordance with the Employer’s employment policies, including reasonable expenses incurred by the Employee in attending conventions, seminars, and other business meetings, in appropriate business entertainment activities, and for promotional expenses. The Employee must file expense reports with respect to such expenses in accordance with the Employer’s policies.

ARTICLE 5. VACATIONS AND HOLIDAYS .

     The Employee will be entitled to paid vacation each Fiscal Year in accordance with the vacation policies of the Employer in effect for its executive officers from time to time, provided that in no event shall such number of paid vacation days be fewer than twenty. Vacation must be taken by the Employee at such time or times as approved by the Chairman of the Board. The Employee will also be entitled to the paid holidays and other paid leave set forth in the Employer’s policies. Vacation days and holidays during any Fiscal Year that are not used by the Employee during such Fiscal Year may be used in any subsequent Fiscal Year.

ARTICLE 6. TERMINATION AND ELECTION NOT TO RENEW .

      Section 6.1 Events of Termination . The Employment Period, the Employee’s Basic Compensation and Incentive Compensation, and any and all other rights of the Employee under this Agreement or otherwise as an employee of the Employer will terminate (except as otherwise provided in this Article 6):

      (a)  upon the death of the Employee;

      (b)  upon the disability of the Employee (as defined in Section 6.2);

      (c)  for cause (as defined in Section 6.3), immediately upon notice from the Employer to the Employee, or at such later time as such notice may specify, unless otherwise provided in Section 6.3; or

      (d)  for good reason (as defined in Section 6.4) upon not less than thirty days’ prior notice from the Employee to the Employer; or

      (e)  by the Company other than for cause upon not less than thirty days’ prior notice from the Employer to the Employee