Exhibit 10.2

 

SEPARATION AGREEMENT AND RELEASE

 

SEPARATION AGREEMENT AND RELEASE (this "Agreement"), dated as of April 26, 2016,
by and between ANI Pharmaceuticals, Inc., a Delaware corporation (the "Company")
and Charlotte Arnold ("Executive"). The Company and the Executive are sometimes
individually referred to herein as a "Party" or collectively as the "Parties."

 

WHEREAS, Executive has been employed by the Company as its Vice President and
Chief Financial Officer pursuant to the terms of that certain Employment Offer
Letter with the Company dated May 6, 2009 (as amended, the “Employment Letter”);
and

 

WHEREAS, in consideration of Executive's employment with the Company, Executive
has been granted a series of options to purchase shares of the Company's common
stock and ("Options") and restricted shares of the Company's common stock
("Restricted Stock"), each in accordance with the terms of the Company's Fourth
Amended and Restated 2008 Stock Incentive Plan.

 

WHEREAS, the Parties hereto are entering into this Agreement in order to
terminate the Executive's employment with the Company and to set forth the terms
and conditions under which such employment is to be terminated.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound the parties
hereby agree as follows:

 

1. Effective Date. Executive’s employment with the Company is hereby terminated,
effective as of May 6, 2016 (the "Effective Date"). In order to receive payments
hereunder, Executive shall be required to execute and return to the Company, on
or prior to the Effective Date, a release in substantially the same form
provided in Section 7 below. Executive acknowledges and agrees that her failure
to execute and return such release shall obligate her to return any payments she
has received prior to the Effective Date pursuant to this Agreement.

 

2. Resignation; Payments.

 

(a) Effective as of the close of business on May 5, 2016, Executive shall resign
as Vice President and Chief Financial Officer of the Company, as well as any
other position she holds with the Company and its subsidiaries and affiliates,
provided, that if requested by the Company and in consideration of the
agreements set forth herein, Executive agrees to remain as a registered officer
of the affiliates of the Company organized in The Netherlands without additional
compensation for a period not to exceed thirty (30) days following the Effective
Date, promptly following which Executive shall execute and deliver to the
Company a written resignation from any such remaining positions. Executive will
be paid all accrued salary and vacation, to the extent provided in the Company's
policies, through the Effective Date, in each case less applicable withholding
taxes and pursuant to the Company's regular payroll practices.

 

 

 

 

(b) In addition to the foregoing, Executive shall be eligible to receive the
following additional incentive compensation:

 

(i) In the event that prior to July 31, 2016 the Company has entered into a
senior secured credit facility with Citizens Business Capital or another lender
acceptable to the Company (the "Secured Credit Facility"), the Company shall pay
to Executive an incentive bonus of $100,000, no later than the first regular
payroll date after the later of (A) the Effective Date and (B) thirty (30) days
following the execution thereof; and

 

(ii) In the event that prior to July 31, 2016 the Company has retained
EisnerAmpner LLC (“Eisner”) to provide tax services to the Company and Eisner
has completed its review of the Company's methodology for tax accruals and
estimates for the first quarter of 2016 (the “Review”), the Company shall pay to
Executive an incentive bonus of $48,000, no later than the first regular payroll
date after the later of (A) the Effective Date and (B) thirty (30) days
following the completion of the Review.

 

3. Transition of Responsibilities; Consultancy; Compensation.

 

(a) The Company and Executive hereby agree that for the period following the
Effective Date through March 15, 2017 (the "Transition Period"), Executive will
serve as a consultant to the Company and cooperate with and provide reasonable
assistance to the Company and its employees and consultants in order to effect a
smooth transition of knowledge with which Executive was familiar during her
employment, including providing assistance as requested with respect to
preparation and completion of the Company’s audited financial statements for the
year ending December 31, 2016 and the Company’s Report on Form 10-K for the year
ending December 31, 2016 to be filed with the Securities and Exchange
Commission. During the Transition Period, Employee shall use reasonable and good
faith efforts and shall be reasonably available (by telephone and/or e-mail) to
answer questions or provide information to such Company personnel, not to exceed
20 hours per calendar month plus, prior to July 31, 2016, a reasonable amount of
additional time needed to complete the Secured Credit Facility.

 

(b) In exchange for such consulting services, the Company shall compensate
Executive as follows:

 

(i) Executive shall receive aggregate consulting fee for the Transition Period
of $136,850 (the "Consulting Fee"). The Consulting Fee shall be paid in equal
monthly installments through the Transition Period. Executive shall make payment
of all required taxes, whether Federal, state or local in nature, including but
not limited to income taxes, Social Security taxes, Federal Unemployment
Compensation taxes that are required to be paid by her pursuant to any
applicable law in respect of the Consulting Fee.

 

(ii) With respect to the Options and Restricted Stock granted to Executive prior
to January 1, 2016, the Company and Executive agree as follows:

 

(A) The Restricted Stock Grant Agreement(s) executed by the Parties with respect
to the Restricted Stock (the "RSGAs") are hereby amended mutatis mutandis to
reflect that any shares of Restricted Stock that are scheduled to vest and be
released from the Repurchase Option (as defined in the RSGAs) following the
Effective Date but on or prior to July 31, 2017, shall immediately vest and be
released from the Repurchase Option as of the end of the Transition Period, it
being acknowledged and agreed that the release therefrom shall then be subject
to taxation as provided in the Internal Revenue Code of 1986, as amended (the
"Code");

 

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(B) The Non-Statutory Stock Option Agreement(s) executed by the Parties with
respect to any Options other than those intended to qualify as "incentive stock
options" under Section 422 of the Code (the "Non-ISO Agreements") are hereby
amended mutatis mutandis to reflect that as of the end of the Transition Period,
the number of Option Shares (as defined in the Non-ISO Agreements) as to which
any such Options are exercisable shall be increased by the number of Option
Shares that are scheduled to become available for exercise on or prior to July
31, 2017 and that such Options shall remain exercisable until the first (1st)
anniversary of the end of the Transition Period;

 

(C) The Incentive Stock Option Agreement(s) executed by the Parties with respect
to any Options intended to qualify as "incentive stock options" under Section
422 of the Code (the "ISO Agreements") are hereby amended mutatis mutandis to
reflect that as of the Effective Date the number of Option Shares (as defined in
the ISO Agreements) as to which any such Options are exercisable shall be
increased by the number of Option Shares that are scheduled to become available
for exercise on or prior to July 31, 2017 and that such Options shall remain
exercisable until the first (1st) anniversary of the Effective Date, it being
acknowledged and agreed that in the event such Options are not exercised on or
prior to the three (3) month anniversary of the Effective Date, such Options
shall no longer be treated as incentive stock options" under Section 422 of the
Code and that the exercise thereof shall be subject to taxation as provided in
the Code; and

 

(D) Notwithstanding the foregoing, in the event the Executive materially
breaches the terms of this Agreement the terms of Section 3.2(c) of the Non-ISO
Agreements and the ISO Agreements shall apply, which may result in the
obligation that Executive surrender shares of the Company's common stock and
disgorge any profits realized, as provided therein.

 

(E) Executive acknowledges and agrees that the Company is obligated to withhold
from all payments made to her under the Employment Agreement all taxes payable
in connection with the foregoing agreements and arising out of the termination
of her employment and/or the exercise of her Options, as and to the extent
provided in the RGAs, the Non-ISO Agreements and the ISO Agreements.

 

(F) Nothing herein shall limit or adversely affect the acceleration of vesting
on a "change of control" provided for in Section 3.3 of the Non-ISO Agreements
and the ISO Agreements or in Section 3.3(b)(i) of the RSGA.

 

(iii) Legal Fees. Upon presentation of appropriate documentation, the Company
shall reimburse Executive for reasonable counsel fees, of up to an aggregate of
fifteen thousand dollars ($15,000), for the negotiation and documentation of
this Agreement which shall be paid within thirty (30) days following the
Effective Date.

 

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4. Return of Company Property. Executive hereby covenants and agrees that on the
Effective Date, she will return to the Company (or, in the case of information
or documents maintained in electronic form, certify to the destruction of) all
Trade Secrets and Confidential Information, whether in the form of books,
memoranda, plans, records or written data of any kind (and in whatever form or
media), and other physical objects relating to the business and affairs of the
Company and/or her employment with the Company, including, without limitation,
all Company credit cards and access keys, and all materials relating to,
containing or derived from any Company, Trade Secrets or Confidential
Information, in each case, which are then in Executive's possession or control.
Executive agrees to participate in an exit interview if requested by the
Company. Notwithstanding the foregoing, to the extent consented to by the
Company, Executive may retain any such Company property or documents for the
duration of the Transition Period to the extent reasonably required to perform
the consulting services to be performed by her during the Transition Period. Any
such retained property or documents will be returned to the Company or destroyed
as provided in this Section 4 promptly following the end of the Transition
Period.

 

5. Non-Disparagement. The Executive shall not, directly or indirectly, publicly
or to any third party, criticize, demean, malign or otherwise comment
disparagingly or negatively about the Company, nor shall she, directly or
indirectly, publish or authorize the release of disclosure of any information or
statements that would criticize, demean, malign or disparage or otherwise
portray the Company or any other Releasee (defined below), in a negative light.
The Company shall not, directly or indirectly, publicly or to any third party,
criticize, demean, malign or otherwise comment disparagingly or negatively about
the Executive, nor shall it, directly or indirectly, publish or authorize the
release of disclosure of any information or statements that would criticize,
demean, malign or disparage or otherwise portray the Executive in a negative
light. This provision is not intended to nor shall it be construed as limiting
the Company's or the Executive’s ability to testify truthfully pursuant to
lawful subpoena or other legal process.

 

6. Non-Solicitation. For the period from and after the Effective Date through
the first anniversary of the Effective Date, Executive agrees not to, directly
or indirectly, (a) induce or attempt to induce any employee of the Company to
terminate his or her employment with the Company; (b) in any way interfere with
the relationship between the Company and any of its employees; or (c) employ or
otherwise engage as an employee, independent contractor or otherwise, any
employee of the Company.

 

7. Release of Claims.

 

(a) Executive agrees that the consideration paid, to be paid or otherwise
granted to her pursuant hereto represents settlement in full of all outstanding
obligations owed to her by the Company, as of the Effective Date, whether
pursuant to the Employment Letter or otherwise.

 

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(b) (i) Executive, on behalf of herself, and her heirs, family members and
executors, hereby does as of the Effective Date irrevocably and unconditionally
release, acquit, agree not to sue, and forever discharges the Company and its
subsidiaries and affiliates, their respective successors and assigns, and their
respective past and present officers, directors, managers, employees, investors,
shareholders, partners, members, administrators, affiliates, divisions,
subsidiaries, predecessor and successor entities, and assigns (the “Releasees”),
of and from any and all manner of claims, charges, demands, sums of money,
actions, rights, promises, agreements, causes of action, obligations and
liabilities of any kind or nature whatsoever, at law or in equity, whether known
or unknown, existing or contingent, suspected or unsuspected, apparent or
concealed (hereinafter collectively referred to as “Claims”) which Executive now
or in the future may have or claim to have against the Releasees based upon or
arising out of any facts, acts, conduct, omissions, transactions, occurrences,
contracts, events, causes, matters or things of any conceivable kind or
character existing or occurring or claimed to exist or to have occurred at any
time on or before the Effective Date, whether asserted as an individual claim or
action, or a class claim or action on behalf of a class which includes Executive
as an actual or putative class member. The Parties intend Executive’s release to
be general and comprehensive in nature and to release all Claims and potential
Claims against the Releasees to the maximum extent permitted by law. To the
fullest extent permitted by law, the Claims being released include, but are not
limited to, any and all Claims relating to or arising out of the Employment
Letter, Executive’s employment or the termination thereof, compensation and
benefits with the Company, including severance pay, sick leave, holiday pay,
vacation pay, life insurance, health and medical insurance, stock or stock
options, or any other fringe benefit; any and all defamation, personal injury,
property and tort claims, wrongful termination claims, discrimination,
harassment and retaliation claims, whistleblower claims, fraud claims, contract
claims, benefits claims, claims under any federal, state, municipal, foreign or
international whistle-blower, discrimination or fair employment practices law,
statute or regulation. Notwithstanding the foregoing, the above release by
Executive shall not release: (i) any rights to indemnification Executive may
have under that certain Indemnification Agreement, dated April 8, 2014, between
the Executive and the Company or under the Certificate of Incorporation or
by-laws of the Company or (ii) any rights Executive may have under any directors
and officers liability insurance policy maintained by the Company.

 

(ii) This Agreement includes, without limiting the generality of the foregoing,
any claims she may have for wages, bonuses, commissions, penalties, deferred
compensation, vacation pay, separation benefits, defamation, libel, slander,
negligence, breach of covenant of good faith and fair dealing, personal injury,
emotional distress, breach of contract, breach of confidentiality, invasion of
privacy, negligence, improper discharge (based on contract, common law, or
statute, including any federal, state or local statute or ordinance prohibiting
discrimination or retaliation in employment), alleged violation of the United
States Constitution, the Civil Rights Act of 1964, including Title VII, the
Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the
Executive Retirement Income Security Act of 1974, the Worker Adjustment and
Retraining Notification Act, the Older Workers Benefit Protection Act, the Equal
Pay Act of 1963, the Family Medical Leave Act, the Rehabilitation Act of 1973,
or any other federal, state (including, but not limited to Delaware) or local
statutes concerning employment, labor, and/or human rights or discrimination
laws, and any claim for discrimination or retaliation based on sex, race, color,
creed, religion, age, national origin, marital status, sexual orientation,
disability, or perceived disability, medical condition, status with regard to
public assistance, sexual harassment, or any other protected class status, but
excludes claims arising after the date hereof out of any breach of this
Agreement. Executive understands and agrees that, by signing this Agreement, she
waives and releases any past, present, or future claim to employment with the
Company.

 

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(c) By signing this Agreement, Executive acknowledges and agrees that the
Company has informed her by this Agreement that she is entitled to twenty one
(21) days from the receipt of this Agreement (the “21 Day Period”) to consider
whether the terms are acceptable to her. The Company encourages Executive to use
the full 21 Day Period to consider this Agreement but she has the right, if she
chooses, to sign this Agreement prior to the expiration of the 21 Day Period. If
Executive does sign before the expiration of the 21 Day Period, Executive
represents that she did so voluntarily and expressly waives such period.

 

(d) By signing this Agreement, Executive has been advised, and she acknowledges
and agrees, that for seven (7) days after signing this Agreement she can change
her mind and revoke this Agreement by delivering written notice thereof to the
Company and that this Agreement will not become effective or enforceable until
this seven-day revocation period has expired, except for the termination of her
employment, which is effective whether or not Executive executes this Agreement.
Therefore, it is further acknowledged and agreed that if Executive does not
revoke this Agreement in writing within this seven-day period, the Agreement
will become effective and enforceable on the day following the expiration of the
seven-day revocation period (the "8th Day"). In the event that Executive does
revoke this Agreement in writing prior to the 8th Day, this Agreement shall not
be effective or enforceable and, in such event, all rights, agreements and
obligations created by this Agreement shall be ineffective, null, void and
unenforceable, except for the termination of her employment, which is effective
as of the Effective Date even if Executive does revoke this Agreement. Executive
acknowledges and agrees that her revocation of this Agreement shall obligate her
to return any payments she has received prior to such revocation pursuant to
this Agreement.

 

8. No Pending or Future Lawsuits. Executive represents that she has no lawsuits,
claims, or actions pending in her name or on behalf of any other person or
entity, against the Company, or any other Releasee. Executive also represents
that she does not intend to bring any claims on her own behalf or on behalf of
any other person or entity against any of the foregoing with respect to the
subject matter of this Agreement and claims released pursuant to this Agreement.
Executive agrees that she will not voluntarily participate in any judicial
proceeding of any nature or description against the Company or any other
Releasee that in any way involves the allegations and facts that Executive could
have raised against as of the Effective Date. Nothing in this Agreement shall
limit or impede Executive’s right to file a claim for unemployment benefits,
and/or any causes of action which by law Executive may not legally waive.
Executive agrees, however, that if Executive or anyone on Executive’s behalf,
brings any action concerning or related to any cause of action or liability
released in this agreement, Executive waives her right to, and will not accept,
any payments, monies, damages, or other relief, awarded in connection therewith.

 

9. No Knowledge of Claims. The Company represents and warrants that none of the
directors or executive officers of the Company has any actual knowledge that the
Company has any claims nor any actual knowledge of any facts or circumstances
that would reasonably be expected to result in any claim against Executive in
respect of her employment with the Company.

 

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10. Confidentiality. The Parties agree to keep strictly confidential all the
terms and conditions of this Agreement, including amounts in this Agreement, and
shall not disclose them to any person other than members of her immediate family
(solely with respect to Executive), legal or financial advisers, insurers,
lenders, or government officials who seek such information in the course of
their official duties, unless compelled or allowed by law to do so, or with the
prior written consent of the other Party hereto. In addition, Executive
acknowledges and agrees that all Confidential Information, Trade Secrets and
other property delivered to or compiled by Executive by or on behalf of the
Company or its subsidiaries or affiliates or any predecessor of any thereof (the
"Company Group") or their representatives, vendors or customers which pertain to
the business of the Company Group shall be and remain the property of the
Company or the other entity in the Company Group, as applicable. Executive
agrees that she shall (1) maintain strictly the confidentiality of and shall not
disclose any such Confidential Information or Trade Secrets and (2) not use the
Confidential Information or Trade Secrets for any purposes other than in
connection with the performance of her duties under this Agreement, unless
disclosure is required by law, subpoena, court order or in connection with any
legal proceeding. For purposes hereof, the parties agree that “Confidential
Information” means and includes without limitation: (1) all business or
financial information, plans, processes and strategies, market research and
analyses, projections, financing arrangements, consulting and sales methods and
techniques, expansion plans, forecasts and forecast assumptions, business
practices, operations and procedures, marketing and merchandising information,
distribution techniques, customer information and other business information,
including records, designs, patents, technology, business plans, financial
statements, manuals, memoranda, lists and other documentation respecting the
Company Group that the Company Group considers confidential and proprietary and
takes reasonable action to protect from disclosure; (2) all information and
materials which are proprietary and confidential to a third party and which have
been provided to the Company Group by such third party for the Company Group’s
use; and (3) all information derived from the foregoing. Confidential
Information shall not include information and materials that are already, or
otherwise become, known by or generally available to the public, other than as a
result of an act or omission by Executive in breach of the provisions of this
Agreement or any other applicable agreement between Executive and the Company.
Confidential Information shall not include any data or information that has been
disclosed to the public by the Company Group or has become generally known to
the public (except where such public disclosure has been made by or through
Executive's breach of this Agreement). For purposes hereof, the term “Trade
Secret” shall have the meaning given in the Delaware enactment of the Uniform
Trade Secrets Act, and shall include, without limitation, the whole or any
portion or phase of any scientific or technical information, design, process,
formula, concept, data organization, manual, other system documentation, or any
improvement of any thereof, in any case that is valuable and secret (in the
sense that it is not generally known to the Company’s competitors).

 

11. Inventions. Executive represents that she has disclosed to the Company any
and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of her employment
with the Company and which directly related to the business or activities of the
Company and which Executive conceived as a result of her employment by the
Company. Executive agrees that she has assigned all of Executive’s interests
therein to the Company or its nominee. Executive agrees that all materials that
Executive developed or conceived and/or documents related thereto during her
employment with the Company were works made-for-hire for the Company within the
meaning of the copyright laws of the United States or any similar or analogous
law or statute of any other jurisdiction, and accordingly, the Company shall be
the sole and exclusive owner for all purposes for the distribution, exhibition,
advertising and exploitation of such materials or any part of them in all media
and by all means now known or that may hereafter be devised, throughout the
universe in perpetuity. Should any arbitrator or court of competent jurisdiction
ever hold that such materials do not constitute works made-for-hire, Executive
hereby irrevocably assigns to the Company, and agrees that the Company shall be
the sole and exclusive owner of, all right, title and interest in and to all
such materials, including the patents, trademarks, copyrights and any other
proprietary rights arising therefrom. Executive reserves no rights with respect
to any such materials, and hereby acknowledges the adequacy and sufficiency of
the compensation paid and to be paid by the Company to Executive for the
materials and the contributions Executive made to the development of any such
information or materials. Executive agrees to cooperate with all lawful efforts
of the Company to protect the Company's rights in and to any or all of such
information and materials and will, at the request of the Company, execute any
and all instruments or documents reasonably necessary or desirable in order to
register, establish, acquire, prosecute, maintain, perfect or defend the
Company's rights in and to such information and materials.

 

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12. Entire Agreement. The Employment Letter is hereby terminated, effective as
of the Effective Date, and shall thereafter be of no further force and effect.
This Agreement, the RGAs, the Non-ISO Agreement and the ISO Agreements
constitute the full and entire understanding and agreement of the Parties with
regard to the subjects hereof and supersede in their entirety all other or prior
agreements, whether oral or written, with respect thereto.

 

13. Successor and Assigns.  Executive may not assign this Agreement to any other
Person without the prior, written consent of the Company. This Agreement shall
inure to the benefit of and shall be binding upon the Executive and her heirs,
administrators, representatives, executors, successors and permitted assigns,
and upon the successors and assigns of the Company.

 

14. Notices. All notices made pursuant to this Agreement shall be delivered by
both electronic mail (e-mail) and Federal Express or other equivalent overnight
delivery service, and shall be delivered to the following recipients:

 

If to the Executive, to her at:

 

[personal information]

 

If to the Company, to it at:

 

210 Main Street West

Baudette, MN 56623

Attention: Arthur Przybyl

[personal information]

 

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15. Governing Law; Jurisdiction.

 

(a) This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware (without giving effect to any
conflicts or choice of laws provisions thereof that would cause the application
of the domestic substantive laws of any other jurisdiction).

 

(b) Any judicial proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement or any agreement identified herein may be
brought only in state or federal courts located in New Castle County, Delaware,
and by the execution and delivery of this Agreement, each of the parties hereto
accepts for themselves the exclusive jurisdiction of the aforesaid courts and
irrevocably consents to the jurisdiction of such courts (and the appropriate
appellate courts) in any such proceedings, waives any objection to venue laid
therein and agrees to be bound by the judgment rendered thereby in connection
with this Agreement or any agreement identified herein. THE CHOICE OF FORUM SET
FORTH IN THIS SECTION 15 SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY
JUDGMENT OBTAINED IN THE AFORESAID COURTS IN ANY OTHER JURISDICTION.

 

16. Representations and Warranties. Executive represents and warrants to the
Company that:

 

(a) This Agreement constitutes the legal, valid and binding obligations of the
Executive enforceable against her in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws of general application affecting enforcement of
creditors’ rights and by general principles of equity that restrict the
availability of equitable remedies.

 

(b) The execution, delivery and performance of this by Executive and the
consummation of the transactions contemplated herein do not and will not
conflict with or result in any breach of any of the provisions of, constitute a
default under, or result in a violation of the provisions of any material
agreement or material instrument to which she or her properties is subject.

 

17. Voluntary Execution of Agreement. This Agreement is executed voluntarily and
without any duress or undue influence on the part or behalf of the Parties
hereto. The Parties acknowledge that they: (a) have read this Agreement, (b)
have been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel, (c) have not relied upon any representations or
statements made by the other Party hereto which are not specifically set forth
in this Agreement, (d) understand the terms and consequences of this Agreement
and of the releases it contains, and (e) are fully aware of the legal and
binding effect of this Agreement.

 

18. Injunctive Relief; Attorneys’ Fees. The Company shall be entitled to have
the provisions of Sections 5, 6, 8, 10 and 11 of this Agreement specifically
enforced through injunctive relief, but without having to prove the adequacy of
the available remedies at law, and without being required to post bond or
security, it being acknowledged and agreed that such breach will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company. In the event of any proceeding or action between
the Company and the Executive alleging a breach of this Agreement, in addition
to any other legal or equitable remedy the Company or the Executive may have,
the prevailing party in such action or proceeding shall be entitled to be
reimbursed for all its reasonable attorneys’ fees and costs incurred by it
arising out of any such breach. Executive agrees that this provision is
reasonable under the circumstances that exist at the time this Agreement is
executed. Any such action permitted to the Company by this Section, however,
shall not affect or impair any of Executive’s obligations under this Agreement,
including without limitation, the release of claims in Section 7 hereof.

 

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19. Section 409A. This Agreement, and any amounts payable to you hereunder, are
intended to be exempt from Section 409A of the Code, and the regulations and
guidance promulgated thereunder (“Section 409A”), pursuant to the “short-term
deferral” exception set out in Treasury Regulation Section 1.409A-1(b)(4) and/or
the separation pay exception set out in Treasury Regulation Section
1.409A-1(b)(9). Notwithstanding the foregoing or any provision of this Agreement
to the contrary, if any payment or benefit permitted or required under this
Agreement is reasonably determined by either Party to be subject for any reason
to a material risk of additional tax under Section 409A(a)(1)(B) of the Internal
Revenue Code of 1986, as amended, then the Parties shall promptly agree in good
faith on provisions to avoid such risk without materially changing the economic
value of this Agreement to either Party. However, any such tax under Section
409A is ultimately the Executive's responsibility. Each amount to be paid or
benefit to be provided pursuant to this Agreement shall be construed as a
separate identified payment for purposes of Section 409A.

 

20. Severability. This Agreement is intended to be severable. In the event that
any one or more of the provisions of this Agreement is held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Moreover, if any one or more of the provisions contained in this Agreement is
held to be excessively broad as to duration, scope, activity or subject, such
provisions will be construed by limiting and reducing them so as to be
enforceable to the maximum extent compatible with applicable law.

 

21. Waivers; Amendments. The Parties agree that the failure of a Party at any
time to require performance of any provision of this Agreement shall not affect,
diminish, obviate or void in any way the Party’s full right or ability to
require performance of the same or any other provision of this Agreement at any
time thereafter. This Agreement may only be amended in writing signed by all
Parties hereto.

 

22. Counterparts. This Agreement may be executed in any number of counterparts,
each of which, when so executed, shall be deemed an original. All counterparts
shall be construed together and shall constitute one instrument.

 

23. Construction.  The headings of the sections of this Agreement are for
convenience only and are not binding on any interpretation of this Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Separation Agreement
and Release effective as of the date first above specified.

 

 

/s/ Charlotte Arnold   CHARLOTTE ARNOLD  

STATE OF DELAWARE}

COUNTY OF NEW CASTLE}ss:

 

 

On the 26th day of April 2016, before me, the undersigned, personally appeared
Charlotte Arnold, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that she executed the same in her
capacity, and that by her signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.

 

/s/ Rebeca Chiappetta     Notary Public  

 

 

[Signatures continued on following page]

 

  11 

 

 

  ANI PHARMACEUTICALS, INC.                         By: /s/ Arthur S. Przybyl  
    Name: Arthur S. Przybyl       Title: Chief Executive Officer  

  

STATE OF GEORGIA }

COUNTY OF GWINNETT }ss:

 

On the 26th day of April, 2016, before me, the undersigned, personally appeared
Arthur S. Przybyl personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

  /s/ illegible     Notary Public  

 

  12