Exhibit 10.1

AMENDED AND RESTATED
TRANSITION AND SEVERANCE AGREEMENT

This Amended and Restated Transition and Severance Agreement (the “Agreement”) is entered into as of September 7, 2007 (the “Effective Date”), by and between Sepracor Inc. (“Sepracor” or the “Company”) and W. James O’Shea (“O’Shea”) (individually, a “Party,” and collectively, the “Parties”) and amends and restates the Transition and Severance Agreement between the Parties entered into as of March 1, 2007.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.              Transition Period Position and Responsibilities. Effective as of March 1, 2007 (the “Transition Date”), O’Shea shall resign from his positions as President and Chief Operating Officer of Sepracor. Beginning on the Transition Date and ending on August 31, 2007, or earlier if O’Shea voluntarily terminates his employment prior to August 31, 2007 (the “Transition Period”), O’Shea shall be employed by Sepracor as its Vice Chairman, reporting to Timothy Barberich, Sepracor’s Executive Chairman. During the Transition Period, O’Shea shall perform such duties consistent with his position as are reasonably assigned to him by Mr. Barberich. The Parties further agree that O’Shea shall perform all work and provide all assistance hereunder at such times and locations as are reasonably determined by Mr. Barberich.

2.              Transition Period Compensation . During the Transition Period, the Company shall compensate O’Shea at the annual rate of $548,625, less applicable taxes and withholdings, (the “Base Salary”) to be paid in accordance with the Company’s regular payroll practices. In addition, provided O’Shea has not voluntarily terminated his employment prior to August 31, 2007, he shall be entitled to an annual bonus for calendar year 2007 equal to $219,450, less applicable taxes and withholdings. The bonus shall be paid to O’Shea in a lump sum, on or prior to March 1, 2008. For the duration of the Transition Period, the Company shall also continue to provide O’Shea with the benefits which he currently enjoys under the Company’s plans and policies, under the same terms that applied to him immediately prior to the Effective Date, subject to the terms of those plans and policies.

3.              Severance Period and Compensation . Effective on August 31, 2007 (the “Separation Date”), O’Shea’s employment with the Company shall cease. Thereafter, provided O’Shea has not voluntarily terminated his employment prior to August 31, 2007 and executes, delivers and does not revoke a release of claims for the benefit of the Company in a form provided by the Company, the Company shall continue to pay O’Shea the Base Salary (the “Base Salary Severance”) for a period of 12 months (the “Severance Period”), in accordance with its regular payroll practices. However, the first payment will not be made until March 1, 2008 and such first payment will be equal to those amounts to which O’Shea would otherwise have been entitled if not for the six month delay described above. For the remaining six (6) months of the Severance Period, O’Shea will be paid the balance of his Base Salary Severance in equal bi-weekly installments.

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For the duration of the Severance Period, if allowed under the Company’s life insurance policy, the Company further agrees to provide O’Shea with life insurance in the same amount the Company currently provides him, the full premium of which shall be paid by the Company.

Following the Separation Date, any entitlement O’Shea has, might have, had, or might have had to compensation, bonuses, wages or participation in any benefit plan, policy, program, contract or practice of the Company, shall terminate, except as required by federal or state law, by applicable plan terms or stock option agreements, or by the express terms of this Agreement.

4.              Stock Options and Restricted Stock . The Parties acknowledge that O’Shea has been awarded options to purchase 700,000 shares of the Company’s common stock, all of which options are fully vested, as well as options to purchase an additional 25,700 shares of the Company’s stock which will vest prior to the Separation Date. The grant dates and exercise prices of such options are set forth in Exhibit A hereto. O’Shea shall have the right to exercise any or all of his options for a period of ninety (90) days after the Separation Date. The options shall terminate at the close of business on the ninetieth (90 ^th ) day following the Separation Date. In addition, the Parties acknowledge that O’Shea is the owner of certain shares of restricted stock of the Company. Of these shares, a total 6,850 shares will no longer be subject to any restriction as of March 16, 2007, and may be retained or sold by O’Shea after that date in his discretion, subject to the Company’s insider trading policy, the terms of the incentive stock plan and restricted stock agreement under which such shares were granted and the federal securities laws. Except where expressly modified by this Agreement, the options and shares of restricted stock set forth in Exhibit A shall continue to be governed by the terms of the applicable stock option agreements and restricted stock agreement executed by the Parties.

5.              Cooperation. From the Effective Date forward, O’Shea agrees reasonably to cooperate with the Company in the defense or prosecution of any threatened or actual claims or actions which may be brought by, against or on behalf of the Company, its prede