Document:

Exhibit 10.4

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT is made and entered into as of the
26th day of December 2007, by and between SCIELE PHARMA, INC., a Delaware
corporation (the “Company”), and LESLIE B.
ZACKS (“Executive”).

 

WITNESSETH:

 

WHEREAS,
the parties desire to amend and restate the terms and conditions of the
existing employment agreement between the Company and Executive, to be
effective as of the date hereof.

 

NOW,
THEREFORE, in consideration of Executive’s continued employment, the covenants
and mutual agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby agree as follows:

 

1.             Employment.  Throughout the Term (as
defined in Section 2 below), the Company shall employ Executive as
provided herein, and Executive hereby accepts such employment. In accepting
such employment, Executive states that, to the best of his knowledge, he is not
now, and by accepting such employment, will not be, under any restrictions in
the performance of the duties contemplated under this Agreement as a result of
the provisions of any prior employment agreement or non-compete or similar
agreement to which Executive is or was a party.

 

2.             Term of Employment.  The term of Executive’s employment by the
Company hereunder shall continue hereafter unless sooner terminated as a result
of Executive’s death or in accordance with the provisions of Section 6
below (the “Term”).

 

3.             Duties.  Throughout the Term, and except as otherwise
expressly provided herein, Executive shall be employed by the Company as the Executive
Vice President, Chief Legal and Compliance Officer and Assistant Secretary of
the Company.
Executive shall devote his full time to the performance of his duties in this
position in accordance with the Company’s By-laws, this Agreement and the
directions of the Company’s Board of Directors and any Compliance officer of
the Company who is senior to Executive. Without limiting the generality of the
foregoing, throughout the Term, Executive shall faithfully perform his duties
as Executive Vice President, Chief Legal and Compliance Officer and
Assistant Secretary
at all times so as to promote the best interests of the Company. In addition,
Executive shall serve as an officer of the Company.

 

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4.             Compensation.

 

(a)                                  Salary.  For any and
all services performed by Executive under this Agreement during the Term, in
whatever capacity, the Company shall pay to Executive an annual salary as shall
be determined by the Company’s Board of Directors and the Compensation
Committee (the “Salary”) less any and all applicable federal, state and local
payroll and withholding taxes. The Salary shall be paid in the same increments
as the Company’s normal payroll, but no less frequent than bi-monthly and
prorated, however, for any period of less than a full month. The Salary will be
reviewed annually by the Compensation Committee of the Board of Directors and a
determination shall be made at that time as to the appropriateness of an
increase, if any, thereto.

 

(b)                                 Bonus.  In addition to the Salary, Executive shall be
eligible to receive from the Company an annual incentive compensation bonus (the
“Bonus”) as shall be determined based on such criteria as shall be determined
from time to time by the Compensation
Committee of the Board of Directors. The nature of the criteria and the
determination as to whether the criteria have been satisfied, shall be
determined by the Compensation Committee of the Board of Directors in its sole
discretion. Accordingly, there is no assurance that a Bonus will be paid to
Executive with respect to all or any particular year during the Term.

 

5.             Benefits and Other Rights.  In consideration for Executive’s performance
under this Agreement, the Company shall provide to Executive the following
benefits:

 

(a)                                  The Company will provide Executive with cash advances
for or reimbursement of all reasonable out-of-pocket business expenses incurred
by Executive in connection with his employment hereunder. Such reimbursement,
which in all cases will be made no later than the end of the calendar year
after which Executive incurs the expense, is conditioned upon Executive
adhering to any and all reasonable policies established by Company from time to
time with respect to such reimbursements or advances, including, but not
limited to, a requirement that Executive submit supporting evidence of any such
expenses to the Company.

 

(b)                                 The Company will provide Executive and
his family with the opportunity to receive group medical coverage under the
terms of the Company’s health insurance plan during the Term, but subject to
completion of normal waiting periods. During any such waiting period, the
Company will pay, or reimburse Executive for, the cost of COBRA coverage for
Executive and his family under his prior health plan. The Company will provide
Executive, at Company’s expense, short-term disability and life insurance.

 

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(c)                                  During the Term the Executive shall be
entitled to twenty (20) days paid vacation per year, it being understood and
agreed that unused vacation shall not be carried over from one year to the
next. In addition, Executive shall be entitled to eight (8) paid holidays
and four (4) paid personal days off.

 

6.             Termination of the Term.

 

(a)                                  The Company shall have the right to
terminate the Term under the following circumstances:

 

(i)                                     Executive’s death; or

 

(ii)                                  Without Cause, effective upon sixty (60) days written
notice to Executive by the Company;

 

(iii)                               With Cause; or

 

(iv)                              Upon or within one (1) year
following a Change of Control.

 

(b)                                 Executive shall have the right to
terminate the Term under the following circumstances:

 

(i)                                     At any time upon sixty (60) days prior written notice
to the Company; or

 

(ii)                                  For Good Reason upon or within one (1) year following a Change
of Control.

 

(c)                                  For purposes of this Agreement, “Cause”
shall mean:

 

(i)                                     Executive is convicted of the commission
of a felony or a crime involving dishonesty, fraud or moral turpitude;

 

(ii)                                  Executive has engaged in acts of fraud,
embezzlement, theft or other dishonest acts against the Company as determined
by the Board of Directors in good faith;

 

(iii)                               Executive commits an act which negatively
impacts the Company or its employees including, but not limited to, engaging in
competition with the Company, disclosing confidential information, or engaging
in conduct that is in material violation of Company policies and standards,
including but not limited to its policies and standards on equal employment
opportunity, work environment, workplace conduct, or business ethics, violation
of which could place the Company’s interests at risk of harm;

 

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(iv)                              Executive’s gross neglect or willful
misconduct in the discharge of his duties and responsibilities; or

 

(v)                                 Executive’s repeated refusal to follow
the lawful direction of the Board of Directors or supervising officers.

 

(d)                                 For purposes of this Agreement, “Change
of Control” shall mean the occurrence of any of the following:

 

(i)                                     The acquisition (other than by direct purchase of
shares from the Company) by any “person”, including a “syndication” or “group”,
as those terms are used in Section 13(d)(3) or 14 (d)(2) of the
Securities Exchange Act of 1934, as amended (other than any such person
currently owning in excess of the following amount), of securities representing
20% or more of the combined voting power of the Company’s then outstanding
voting securities, which is any security that ordinarily possesses the power to
vote in the election of the Board of Directors of a corporation without the
happening of any precondition or contingency;

 

(ii)                                  The Company is merged or consolidated
with another corporation and immediately after giving effect to the merger or
consolidation less than 80% of the outstanding voting securities of the
surviving or resulting entity are then beneficially owned in the aggregate by (a) the
stockholders of the Company immediately prior to such merger or consolidation,
or (b) if a record date has been set to determine the stockholders of the
Company entitled to vote on such merger or consolidation, the stockholders of
the Company as of such record date;

 

(iii)                               If at any time during a calendar year a majority of
the directors of the Company are not persons who were directors at the
beginning of the calendar year; or

 

(iv)                              The Company transfers
substantially all of its assets to another corporation which is a less than 80%
owned subsidiary of the Company.

 

(e)                                  For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any one or more of the following events
which continues uncured for a period of not less than thirty (30) days
following written notice given by Executive to the Company within fifteen (15)
days following the occurrence of such event, unless the Executive specifically
agrees in writing that such event shall not be “Good Reason”:

 

(i)                                     Any material breach of this Agreement by
the Company;

 

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(ii)                                  Any failure to continue the Executive as
an Executive officer of the Company;

 

(iii)                               The requirement by the Company that Executive perform
his services hereunder primarily at a location outside of the metropolitan
Atlanta, Georgia area; or

 

(iv)                              The material reduction of
Executive’s Salary below the amount set forth in Section 4(a) above
without the written consent of Executive.

 

7.             Effect of Expiration or
Termination of the Term. Promptly following the termination of
the Term, and except as otherwise expressly agreed to by the Company in
writing, Executive shall:

 

(a)                                  Immediately resign from any and all other positions or
committees which Executive holds or is a member of with the Company or any
subsidiary of the Company including, but not limited to, as an officer and
director of the Company or any subsidiary of the Company.

 

(b)                                 Provide the Company with all reasonable
assistance necessary to permit the Company to continue its business operations
without interruption and in a manner consistent with reasonable business
practices; provided, however, that such transition period shall not exceed
thirty (30) days after termination nor require more than twenty (20) hours of
Executive’s time per week and Executive shall be promptly reimbursed for all
out-of-pocket expenses.

 

(c)                                  Deliver to the Company possession of any and all
property owned or leased by the Company which may then be in Executive’s
possession or under his control, including, without limitation, any and all
such keys, credit cards, automobiles, equipment, supplies, books, records,
files, computer equipment, computer software and other such tangible and
intangible property of any description whatsoever. If, following the expiration
or termination of the Term, Executive shall receive any mail addressed to the
Company, then Executive shall immediately deliver such mail, unopened and in
its original envelope or package, to the Company.

 

(d)                                 Other than as provided in this Section 7,
upon a termination of employment all other benefits and/or entitlements to
participate in programs or benefits, if any, will cease as of the effective
date except medical insurance coverage that may be continued at Executive’s own
expense as provided by applicable law or written Company policy.

 

(e)                                  Upon termination of Executive pursuant to Section 6(a)(i) or
Section 6(a)(ii) without Cause, subject to Section 7(l), the
Company shall provide Executive or Executive’s estate: (i) a lump sum
payment equal 

 

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to one year’s
worth of Salary at the rate in effect immediately prior to termination, plus (ii) a
lump sum payment equal to one hundred percent (100%) of the Bonus, if any, paid
to Executive for the calendar year immediately preceding termination, plus (iii) subject
to Section 7(h), twelve (12) months of COBRA coverage for Executive which
shall be substantially equivalent to that provided by the Company prior to
termination.  Further, all of Executive’s
then unvested options and stock awards previously issued pursuant to the
Company’s stock option and other equity incentive plans shall immediately vest
and be exercisable as herein provided.

 

(f)                                    Upon termination of Executive pursuant to
Section 6(a)(iii) or Section 6(b)(i), the Company shall pay
Executive all Salary accrued but unpaid as of the date of such termination.

 

(g)                                 Upon termination of Executive pursuant to Section 6(a)(iv) or
Section 6(b)(ii), subject to Section 7(l), the Company shall: (i) pay
to Executive a lump sum amount equal to two years’ worth of Salary at the rate
in effect immediately prior to termination, plus (ii) pay to Executive a
lump sum amount equal to two hundred percent (200%) of the Bonus, if any, paid
to Executive for the calendar year immediately preceding termination,  plus (iii) provide COBRA coverage for
Executive which shall be substantially equivalent to that provided by the
Company prior to termination until the earlier of (A) twenty-four (24)
months after the date of termination, (B) the availability of replacement
coverage to Executive from a third party employer after Executive has accepted
another full-time position and (C) the expiration of COBRA benefits by
reason of lapse of the statutory or regulatory benefit period established by governmental
authority. Further, upon a Change in Control, regardless of whether the
Executive is terminated, all of Executive’s then unvested options and stock
awards previously issued pursuant to the Company’s stock option and other
equity incentive plans shall immediately vest and be exercisable as herein
provided.

 

(h)                                 In the event that Executive shall be
entitled to receive a COBRA benefit pursuant to Section 7(e), such COBRA
benefit shall continue only until such time as Executive shall have accepted another
full time position.  Failure of Executive
to promptly report the acceptance of a new position shall entitle the Company
to terminate all remaining COBRA benefits and to seek restitution for any
payments made to Executive subsequent to such job acceptance.

 

(i)                                     Subject to Section 7(l), any dollar amounts which
are to be paid at the time of termination under this Section 7, other than
COBRA payments, shall be paid within thirty (30) days after the date of
termination.  Subject to Section 7(l),
any COBRA payments shall be made in accordance with the usual payroll practices
which were applicable prior 

 

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to
termination.  Except as otherwise
specifically set forth herein, any and all payments made pursuant to this
Agreement shall be net of any and all applicable federal, state and local
payroll and withholding taxes.

 

(j)                                     If the Company or the Company’s
accountants determine that the payments called for under Section 7(g) of
this Agreement either alone or in conjunction with any other payments or
benefits made available to the Employee by the Company will result in the
Employee being subject to an excise tax (“Excise Tax”) under Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), or if an Excise
Tax is assessed against Executive as a result of such payments or other
benefits, the Company shall make a Gross-Up Payment (as defined below) to or on
behalf of Executive as and when such determination(s) and assessment(s),
as appropriate, are made, subject to the conditions of this subsection (j). A “Gross-Up
Payment” shall mean a payment to or on behalf of Executive that shall be
sufficient to pay (i) any Excise Tax in full, (ii) any federal, state
and local income tax and Social Security or other employment tax on the payment
made to pay such Excise Tax as well as any additional Excise Tax on the
Gross-Up Payment, and (iii) any interest or penalties assessed by the
Internal Revenue Service on Executive if such interest or penalties are attributable
to the Company’s failure to comply with its obligations under this subsection (j) or
applicable law. Any determination under this subsection (j) by the Company
or the Company’s accountants shall be made in accordance with Section 280G
of the Code, any applicable related regulations (whether proposed, temporary or
final), any related Internal Revenue Service rulings and any related case law,
and shall assume that Executive shall pay Federal income taxes at the highest
marginal rate in effect for the year in which the Gross-Up Payment is made and
state and local income taxes at the highest marginal rate in effect in the
state of Executive’s residence for such year. Executive shall take such action
(other than waiving Employee’s right to any payments or benefits) as the
Company reasonably requests under the circumstances to mitigate or challenge
such tax. If the Company reasonably requests that Executive take action to
mitigate or challenge, or to mitigate and challenge, any such tax or assessment
and Executive complies with such request, the Company shall provide Executive
with such information and such expert advice and assistance from the Company’s
accountants, lawyers and other advisors as Executive may reasonably request and
shall pay for all expenses incurred in effecting such compliance and any
related fines, penalties, interest and other assessments. Subject to the
provisions of this subsection (j), all determinations required to be made under
this subsection (j), including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the public accounting firm
that is retained by the Company as of the date immediately prior to the Change of
Control (the “Accounting Firm”) 

 

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which shall
provide detailed supporting calculations both to the Company and Executive
within thirty (30) business days of the receipt of notice from the Company or
Executive that there has been a payment that could trigger a Gross-Up Payment,
or such earlier time as is requested by the Company (collectively, the “Determination”).
In the event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, Executive may
appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). All fees and expenses of the Accounting
Firm shall be borne solely by the Company and the Company shall enter into any
agreement requested by the Accounting Firm in connection with the performance
of the services hereunder. The Gross-Up Payment under this subsection (j) with
respect to any payments made under Section 7(g) shall be made no
later than sixty (60) days following such payments. If the Accounting Firm
determines that no Excise Tax is payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that failure
to report the Excise Tax, if any, on Executive’s applicable federal income tax
return will not result in the imposition of a negligence or similar penalty.
The Determination by the Accounting Firm shall be binding upon the Company and
Executive. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the Determination, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”)
or Gross-Up Payments are made by the Company which should not have been made (“Overpayment”),
consistent with the calculations required to be made hereunder. In the event
that Executive thereafter is required to make payment of any additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid
by the Company to or for the benefit of Executive. In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse Executive for
his Excise Tax as herein set forth, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such Overpayment (together
with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive to or for the benefit of the Company.
Executive shall cooperate, to the extent Executive’s expenses are reimbursed by
the Company, with any reasonable requests by the Company in connection with any
contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.

 

(k)                                  If Executive (i) is terminated
pursuant to Section 6(a)(iii) or Section 6(b)(ii), (ii) is
a specified employee (within the meaning of Section 409A and Treas. Reg.
§1.409A-3(i)(2)) and (iii) after giving effect to

 

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Section 7(l) of
the Agreement, the payments called for under Section 7(g) of the
Agreement constitute a deferral of compensation under Code Section 409A,
then the Company shall pay to Executive an amount (the “409A Gross Up Payment”)
such that, after payment by Executive of all taxes (including interest and
penalties) imposed upon Executive under Code Section 409A with respect to
the payments called for under Section 7(g) of the Agreement that
would not be imposed if Code Section 409A did not apply to such payments (“409A
Taxes”), including, without limitation, any income taxes, employment taxes and
409A Taxes imposed upon the 409A Gross-Up Payment (and any interest and
penalties imposed with respect thereto) but excluding any excise taxes imposed
under Code Section 4999, Executive retains an amount of the 409A
Gross-Up Payment equal to the 409A Taxes imposed upon the payments called for
under Section 7(g) of the Agreement.

 

(l)                                     Notwithstanding
any other provisions of this Agreement, any payment or benefit otherwise
required to be made after Executive’s termination of employment that the
Company reasonably determines is subject to Code Section 409A(a)(2)(B)(i),
shall not be paid or payment commenced until the later of (i) six months
after the date of Executive’s “separation from service” (within the meaning of
Code Section 409A and Treasury Regulation Section 1.409A-1(h) without
regard to optional alternative definitions available thereunder) and (ii) the
payment date or commencement date specified in this Agreement for such
payment(s).  On the earliest date on
which such payments can be made or commenced without violating the requirements
of Code Section 409A(a)(2)(B)(i), Executive shall be paid, in a single
cash lump sum, an amount equal to the aggregate amount of all payments delayed
pursuant to the preceding sentence, plus interest to the date of payment at a
rate equal to 120% of the applicable Federal rate, within the meaning of Code Section 1274(d),
in effect on the date of the relevant payment, compounded semi-annually.  In addition, Executive and the Company agree
to cooperate to make such amendments to the terms of the Agreement as may be
necessary to avoid the imposition of penalties and additional taxes under Code Section 409A
with respect to any payments or benefits under the Agreement.

 

8.             Executive’s Covenant Not to
Solicit.  Executive hereby covenants and agrees with
the Company that, for so long as Executive is employed by the Company and for a
period of twelve (12) months after the termination of such employment for any
reason (the “Restricted Period”), Executive shall not, without the prior
written consent of the Company, which consent shall be within the sole and
exclusive discretion of the Company, either directly or indirectly, on his own
account or on behalf of any other person or entity, solicit any current or
prospective Company supplier, customer, client, or other person or entity
through whom sales are facilitated with whom Executive had material contact on
behalf of the Company within the twelve (12) months preceding 

 

9

 

Executive’s
termination of employment, for the purpose of seeking any contract or
arrangement for the purchase, sale, promotion, marketing, or placement on
formulary or preferred listing of drug products (or ingredients of drug
products), including generic and nongeneric drug products, which are
competitive with Company products. For purposes of this provision, “material
contact” shall be defined as two or more written or oral communications for the
purpose of seeking any contract or arrangement for the purchase, sale,
promotion, marketing, or placement on formulary or preferred listing of drug
products (or ingredients of drug products). Executive may seek the Company’s
consent to solicit suppliers that have excess capacity or specific customers,
clients, or other persons or entities through whom sales are facilitated with
respect to specific products as reasonably determined by the Company.

 

9.             Confidentiality. Attached to this
Agreement as Exhibit A is the form of the Employee/Independent Contractor
Confidentiality and Non-Solicitation Agreement (the “Confidentiality Agreement”)
which the Company requires all employees, including, but not limited to, the
Executive, to execute and which is a part of each employee’s terms of
employment. By signing this Agreement, Executive acknowledges having received,
read, executed and delivered to the Company a copy of the Confidentiality
Agreement and agrees that the terms of the Confidentiality Agreement shall be
incorporated by reference into this Agreement and shall be considered as part
of the terms and conditions of Executive’s continued employment with the
Company.

 

10.           Remedies.

 

(a)                                  The covenants of Executive set forth in Section 8
and Section 9 are separate and independent covenants for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of
which are acknowledged by Executive, and have also been made by Executive to
induce the Company to enter into this Agreement and continue Executive’s
employment with the Company. Each of the aforesaid covenants may be availed of,
or relied upon, by the Company in any court of competent jurisdiction, and
shall form the basis of injunctive relief and damages including expenses of
litigation (including, but not limited to, reasonable attorney’s fees upon
trial and appeal) suffered by the Company arising out of any breach of the
aforesaid covenants by Executive. The covenants of Executive set forth in this Section 10
are cumulative to each other and to all other covenants of Executive in favor
of the Company contained in this Agreement and shall survive the termination of
this Agreement for the purposes intended.

 

(b)                                 Each of the covenants contained in Section 8 and Section 9
above shall be construed as agreements which are independent of any other
provision of this Agreement, and the existence of any claim or cause of action
by any party hereto against any other party hereto, of whatever nature, shall
not constitute a defense to the enforcement of such covenants. If any of such
covenants shall be deemed unenforceable by virtue of its scope in terms of
geographical area, length of time or 

 

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otherwise, but may
be made enforceable by the imposition of limitations thereon, Executive agrees
that the same shall be enforceable to the fullest extent permissible under the
laws and public policies of the jurisdiction in which enforcement is sought.
The parties hereto hereby authorize any court of competent jurisdiction to
modify or reduce the scope of such covenants to the extent necessary to make
such covenants enforceable.

 

(c)                                  In the event that Executive
believes that the Company is in violation of a material obligation owed to Executive
under this Agreement, and the Executive has given notice of such violation to
the Company requesting that the Company cure such violation, and within twenty
(20) business days the Company has not undertaken steps to cure such violation
or to provide information to Executive demonstrating that the Company is not in
violation of the Agreement, and as a result of such failure to cure or dispute
such violation, the Executive terminates the Agreement in accordance with Section 6(b),
Executive shall not be barred from seeking employment with a competitor
notwithstanding the restriction of Section 8; provided, however, that all
other restrictions contained in this Agreement, including, but not limited to,
the covenants in Section 8 and in Section 9, shall remain in full
force and effect.

 

11.           Enforcement Costs. If any legal action or other proceeding
is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney’s fees, court costs and all expenses
even if not taxable as court costs (including, without limitation, all such
fees, costs and expenses incident to appeal and other post judgment
proceedings), incurred in that action or proceeding, in addition to any other
relief to which such party or parties may be entitled. Attorneys’ fees shall
include, without limitation, paralegal fees, investigative fees, administrative
costs, sales and use taxes and all other reasonable charges billed by the
attorney to the prevailing party.

 

12.           Notices.  Any and all notices necessary or desirable to
be served hereunder shall be in writing and shall be:

 

(a)                                  Personally delivered, or

 

(b)                                 Sent by certified mail, postage prepaid, return
receipt requested, or guaranteed overnight delivery by a nationally recognized
express delivery company, in each case addressed to the intended recipient at
the address set forth below.

 

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For notices sent to the Company:

 

Sciele
Pharma, Inc.

Five
Concourse Parkway

Suite 1800

Atlanta,
Georgia 30328

Attn:
Darrell Borne

Telephone
No.: (770) 442-9707

Facsimile No.: (770) 442-9594

 

For
notices sent to Executive:

 

Leslie
B. Zacks

509
Princeton Way

Atlanta,
Georgia 30307

Telephone:
(404) 325-1910

 

Either
party hereto may amend the addresses for notices to such party hereunder by
delivery of a written notice thereof served upon the other party hereto as provided
herein. Any notice sent by certified mail as provided above shall be deemed
delivered on the third (3rd) business day next following the postmark date
which it bears.

 

13.           Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof, and
all prior negotiations, agreements and understandings are merged herein. This
Agreement may not be modified or revised except pursuant to a written
instrument signed by the party against whom enforcement is sought.

 

14.           Severability.  The invalidity or unenforceability of any
provision hereof shall not affect the enforceability of any other provision
hereof, and except as otherwise provided in Section 10 above, any such
invalid or unenforceable provision shall be severed from this Agreement.

 

15.           Waiver. 
Failure to insist upon strict compliance with any of the terms or
conditions hereof shall not be deemed a waiver of such term or condition, and
the waiver or relinquishment of any right or remedy hereunder at any one or
more times shall not be deemed a waiver or relinquishment of such right or
remedy at any other time or times.

 

16.           Arbitration.  Any claims, disputes or controversies arising
out of or relating to this Agreement between the parties (other than those
arising under Section 10) shall be submitted to arbitration by the
parties. The arbitration shall be conducted in Atlanta, Georgia in accordance
with the rules of the American Arbitration Association then in existence
and the following provisions: Either party may serve upon the other party by
guaranteed overnight delivery by a nationally recognized express delivery
service, written demand that the dispute, specifying in detail its nature, be
submitted to arbitration. Within seven business days after the service of such
demand, each of the parties shall appoint an arbitrator and serve written
notice by guaranteed overnight delivery by a nationally recognized express
delivery service, of such appointment upon 

 

12

 

the
other party. The two arbitrators appointed shall appoint a third arbitrator.
The decision of two arbitrators in writing under oath shall be final and
binding upon the parties. The arbitrators shall decide who is to pay the
expenses of the arbitration. If the two arbitrators appointed fail to agree
upon a third arbitrator within ten days after their appointment, then an
application may be made by either party, upon notice to the other party, to any
court of competent jurisdiction for the appointment of a third arbitrator, and
any such appointment shall be binding upon both parties.

 

17.           Governing Law. 
This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the law of the State of
Delaware, without regard to its conflicts of laws provisions. Subject to Section 16,
each party hereto hereby (a) agrees that the Georgia state or superior
courts for the county of Forsyth or federal courts of the Northern District of
Georgia, shall be acceptable form or venues for any litigation which may be
initiated with respect to this Agreement or to enforce rights granted hereunder
and (b) consents to the personal jurisdiction and venue of such courts for
such purposes.

 

18.           Benefit and Assignability.
This Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns. The rights and obligations of Executive
hereunder are personal to him, and are not subject to voluntary or involuntary
alienation, transfer, delegation or assignment.

 

19.           Continuing Legal Education
and Bar Dues.  The Company and
Executive acknowledge that continuing legal education is required for lawyers.
Company agrees to pay for reasonable continuing legal education seminars to be
attended by Executive. In addition, the Company agrees to pay Executive’s
annual bar dues to the Georgia Bar Association, the Florida Bar Association and
to the bar for the United States Patent and Trademark Office.

 

IN WITNESS WHEREOF, the parties hereto have executed
this Employment Agreement as of the day and year first above written.

 

	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  /s/ Leslie B. Zacks

  
	
   

  	
  Name: Leslie B. Zacks

  
	
   

  	
   

  
	
   

  	
  SCIELE PHARMA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barrell Borne

  
	
   

  	
   

  	
  Darrell Borne, CFO

  

 

13

 

Exhibit A

 

Sciele
Pharma, Inc.

Employee / Independent Contractor

Non-Disclosure and Non-Solicitation Agreement

 

Employee Name:  Leslie B. Zacks

 

The growth and success of Sciele Pharma, Inc. (“SCRX”)
is largely dependent on two key assets, our proprietary information and our
highly competent employees and independent contractors.  Our employees are obtained by recruiting the
best people available and giving them opportunities to advance and share in the
success of SCRX.

 

Our proprietary information (including our
confidential information, Trade Secrets and other information not generally
known outside of SCRX) is obtained by research and product development,
business development conducted by SCRX, product improvements, marketing and
sales methods, and service to customers. 
Many SCRX employees make major contributions, and independent
contractors may do so as well.  These
result in a pool of information and expertise, which enables SCRX to conduct
its business with unusual success, and thus with unusual potential for its
employees and independent contractors. 
However, this potential exists only as long as this information and
expertise are retained within SCRX.  Once
generally known, this information gives no advantages to SCRX, its employees,
its independent contractors, or its stockholders.

 

In
effect, all SCRX employees and independent contractors have a common interest
and responsibility in seeing that no one employee or independent contractor
accidentally or intentionally discloses or distributes this pool of information
and expertise in an unauthorized manner. 
To help protect you, other employees or independent contractors, and
SCRX against such disclosure, this Agreement has been prepared so that we have
a common understanding concerning your responsibilities in this
connection.  Please read this Agreement
carefully so that you may understand its importance.

 

IN
CONSIDERATION OF the premises above and my employment or continued employment
as an employee or independent contractor of SCRX, I hereby agree with SCRX as
follows:

 

1.                                       Defined
Terms:  The
following definitions will have the meanings indicated when used in this
document:

 

(a)                                  Proprietary
Information means both Trade Secret and confidential information.

 

1

 

(i)                                     “Trade Secrets”
are defined as information belonging to the Company, licensed by it, or
disclosed to it on a confidential basis by third parties which: (a) derives
economic value from not being generally known to, and not being readily
ascertainable through proper means by, other persons or entities who can obtain
economic value from their disclosure or use; and (b) is the subject of
efforts that are reasonable under the circumstance to maintain their secrecy.
During my employment with the Company and thereafter, I hereby promise not to
disclose or use, or induce or assist in the disclosure or use of, any Trade
Secrets except for the benefit of the Company.

 

(ii)                                  “Confidential
Information” is defined as any information belonging to the Company, licensed
by it, or disclosed to it on a confidential basis by third parties, other than
Trade Secrets, which is valuable to the Company and not generally known by the
public.  During my employment with the
Company and for two years after the termination of my employment with the
Company for any reason, I hereby promise not to disclose or use, or induce or
assist in the disclosure or use of, any Confidential Information except for the
benefit of the Company.

 

(b)                                 Invention means any
invention, original work of authorship, development, concept, Trade Secret,
discovery, innovation or improvement (whether or not patentable, or registrable
under copyright or similar laws) made, initiated, conceived, or first actually
or constructively reduced to practice by me, closely or jointly with others:

 

(i)                                     which results
from any work for SCRX, any use of SCRX’s premises or property, or any use of
SCRX’s Proprietary Information, confidential items or other resources;

 

(ii)                                 which relates
to any method, process, laboratory practice or know-how useful to or being
developed by SCRX in connection with any existing or planned business of SCRX
or any actual or anticipated research or development of SCRX; or

 

(iii)                              which relates
to any product, article or manufacture, or composition of matter being
developed, made, sold, or used in connection with SCRX’s business or SCRX’s
development.

 

However,
where and to the extent required by applicable state statute, this Agreement
shall not require assignment to SCRX of the rights in an invention if no
equipment, 

 

2

 

supplies,
facilities, Trade Secrets, confidential information or confidential items of
SCRX were used, and the invention was developed entirely on my own time unless:

 

(i)                                   the invention
relates directly to SCRX business or to SCRX’s actual or demonstrably
anticipated research or development; or

 

(ii)                                the invention
results from any work performed by me for SCRX.

 

This definition of invention includes each and every
invention and/or improvement that I may make or conceive, either solely or
jointly with others, during my employment or within two years after termination
of employment for any reason with SCRX if and to the extent the invention
and/or improvement results from any work for SCRX, any use of SCRX’s premises
or property or any use of SCRX’s confidential items or confidential
information.

 

2.             Protection of Proprietary
Information

 

(a)                                  I acknowledge
that during the term of employment with the Company, I will learn certain Trade
Secrets and/or Confidential Information regarding the Company and its
business.  Such information includes,
without limitation, the following materials and information (whether or not
reduced to writing and whether or not patentable or protected by copyright):
technology, software, programs, plans, procedures, strategies, technical
matters regarding Company products, formulations, business opportunities,
methods of operation and production, financial data, including costs, margins,
payment terms and credit records, pricing, lists of actual and potential
customers and suppliers and related data, customer preferences and plans for
satisfying customer needs and preferences, marketing strategies, models, plans
for development and expansion, and information about Company personnel and
their abilities and compensation.  I
acknowledge that the Company has developed and will develop Trade Secrets and
Confidential Information as an integral part of its business and with
considerable investment, and that the Company has a legitimate business
interest in protecting the confidentiality of this information, and that
disclosure of this information to, or the use of this information on behalf of
competitors of the Company could cause serious injury to the Company.

 

(b)                                 During my
employment and for two (2) years after the termination of my employment
for any reason, I will hold in strictest confidence and will not disclose,
communicate or divulge to, or use for my own benefit or the benefit of another,
any Confidential Information or Inventions.

 

(c)                                  Notwithstanding
section (b) above, for such Proprietary Information constituting Trade
Secrets under the Georgia Trade Secrets Act of 1990, as may be amended from
time to time (the “Act”), I will maintain the

 

3

 

 

 

confidentiality of such Trade Secrets for as long as is permitted under
the Act.

 

(d)                                 Section 2
will not apply to any information which:

 

(i)                                   is or becomes
publicly known under circumstances involving no breach by me of the terms of
this Section 2, however, Proprietary Information shall not be publicly
known by reason of such information’s or item’s being available in isolated
segments in two or more readily available public documents,

 

(ii)                                is generally
disclosed to third parties by SCRX without restriction on such third parties,
or

 

(iii)                             is approved for
release by written authorization of the Board of Directors of the Company,

 

except
that a breach by me of my obligations under this Section 2 shall not be
absolved by the subsequent occurrence of any of the exceptions above.

 

(e)                                  All Proprietary
Information remains the property of SCRX at all times, before, during and after
my employment.  I will, upon termination
of my employment at SCRX or at any other time upon request by SCRX, promptly deliver
to SCRX all Proprietary Information I may have in my possession, including but
not limited to all Confidential Information relating to the business of
SCRX.  I understand that I must obtain
SCRX’s express, written permission with regard to any Proprietary Information
if I wish to keep any copies of any Confidential Information after the
termination of my employment.  I agree
to, upon SCRX’s request, certify to SCRX under oath that I have complied with
the provisions of this Section 2.

 

(f)                                    I acknowledge
that my agreement to protect Proprietary Information among other things
prohibits me from communicating Proprietary Information to former employees of
SCRX, both while I am employed by SCRX and after termination of my employment
for the duration of my agreement which is set forth in Sections 2(a) and
(b).

 

(g)                                 I shall submit
to SCRX any proposed publication which contains any discussion relating to
SCRX, any Proprietary Information, or Invention of SCRX, or any work performed
by me during the course of my employment with SCRX.  Unless I am notified by SCRX that such
publication contains Proprietary Information within 90 days of SCRX’s written
acknowledgement of receipt of such publication, I may proceed with such
publication.  This provision extends to
publications that are written and/or published after the termination of my
employment.

 

4

 

(h)                                 My employment
with SCRX and performance of my duties and responsibilities as an employee do
not and will not breach any agreement, which obligated me to keep in confidence
any Trade Secrets or confidential information of any other party or to refrain
from competing, directly or indirectly, with the business of any other party,
and I shall not disclose to SCRX any Proprietary Information of any other
party.

 

(i)                                     I acknowledge and agree that
although I may disclose and discuss Proprietary Information with other current
employees of SCRX, I will do so only on a need-to-know basis and for the sole
purpose of advancing the best interests and the business objectives of SCRX.

 

3.             Inventions and Patents

 

(a)                                  I have attached
hereto as Exhibit A a list describing all inventions, original works of
authorship, developments, improvements and Trade Secrets which were made by me
prior to my employment with SCRX (collectively, “Prior Inventions”), which
belong to me, which relate to SCRX’s proposed business, products or research
and development, and which are not assigned to SCRX hereunder, or, if no such
list is attached, I represent that there are no such Prior Inventions.  If in the course of my Employment Term I
incorporate into a SCRX product, process or machine a Prior Invention owned by
me or in which I have an interest, SCRX is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make,
have made, modify, use and sell such Prior Invention as part of or in
connection with such product, process or machine.

 

(b)                                 Inventions
shall be the property of SCRX.  I hereby
assign to SCRX or its designee all right, title and interest in and to any and
all Inventions and any and all related patents, copyrights, trademarks, and
trade names, and applications therefore, in the United States and elsewhere.

 

(c)                                  I will disclose
promptly to SCRX all Inventions.

 

(d)                                 If I am
employed in a technical capacity, I will maintain a laboratory notebook or
equivalent record that is kept in accordance with standard scientific
practices.  This notebook will contain
daily records of all business protocols, procedures, studies, experiments,
data, etc.  and will document the
conception and/or reduction to practice of any Invention.  I will follow any guidelines and policies
that SCRX presently has or implements in the future regarding the content,
protection, counter-signing or notarizing of notebooks.  I understand that all notebooks and copies
thereof are SCRX’s property and I may not have a copy of any notebook 

 

5

 

upon the termination of my employment without the express written
permission of SCRX, regardless of the circumstances of termination.

 

(e)                                  I shall, at
SCRX’s expense, execute declarations, further assignments, documents and other
instruments as necessary or desirable to fully and completely assign all
Inventions to SCRX or its designee and to assist SCRX or its designee in
applying for, prosecuting and enforcing patents, copyrights or other
intellectual property rights in the United States and in any foreign country
with respect to any Invention.  I
understand that this obligation shall continue to exist after the termination
of my employment, regardless of the reasons for and circumstances of
termination.  If SCRX is unable because
of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions assigned to SCRX
as above, then I hereby irrevocably designate and appoint SCRX and its duly
authorized officers and agents as my agent and attorney-in-fact, to act for and
in my behalf and stead to execute and file any such applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by me.

 

4.             Copyrightable Material

 

Without limiting the above, I
specifically agree that all copyrightable materials generated or developed by
me in connection with my duties and responsibilities with SCRX and under this
Agreement, including but not limited to advertising materials, product name and
identities, product instructions, laboratory notebooks, protocols, scientific
publications, artistic and product designs, sketches, technical bulletins,
computer programs, computer files, computer software, and computer databases,
shall be considered works made for hire under the copyright laws of the United
States and that they shall, upon creation, be owned exclusively by SCRX.  To the extent that any such materials, under applicable
law, may not be considered works made for hire, I hereby assign to SCRX the
ownership of all copyrights in such materials, without the necessity of any
further consideration, and SCRX shall be entitled to register and hold in its
own name all copyrights in respect of such materials.

 

5.             Non-Solicitation.  I hereby covenant and agree that for so
long as I am employed by the Company and for a period  of  two
(2) years after termination of such employment (the “Restricted  Period”) for any reason, I shall not, without
the prior written consent of the Company, which consent shall be within the
sole and exclusive discretion of the CEO, either directly or indirectly on my
own account or on behalf of any other person or entity, solicit

 

(a)                                  Any employee with
whom I have dealt with on behalf of the Company within the year preceding my
termination of employment, for the purposes of performing the job duties that
the individual was performing on behalf 

 

6

 

of
the Company for the selling or marketing of drug products, including generic
and nongeneric drug products which are (1) competitive with those products
being marketed by the Company at the time of my termination or (2) those
products that are in the company’s pipeline that I am aware of and of which I
have substantial knowledge and which the Company expects to be marketed within
two (2) years of my termination or

 

(b)                                 Any current
supplier, customer or client of the Company with whom I dealt with on behalf of
the Company within the year preceding my termination of employment, with whom I
had direct contact within the execution of my job duties that I was performing
on behalf of the Company which are (1) competitive with those products
being marketed by the Company at the time of my termination or (2) those
products that are in the Company’s pipeline that I was aware of and had
substantial knowledge regarding and which the Company expects to be marketed
within two (2) years of my termination.

 

I agree that during my employment by SCRX and for
two (2) years from the termination of such employment for any reason, I
will not, either directly or indirectly, on my own behalf or in the service of
or on behalf of others, solicit, divert or recruit, or attempt to solicit,
divert or recruit, any non-clerical  employee of
SCRX during my employment with SCRX, to leave such employment, whether or not
such employment is pursuant to a written contract with the Company or at will.

 

6.             Duty to SCRX

 

While employed at SCRX, I will not provide services
to any other pharmaceutical or related company which are the same or similar to
the services I have provided to Sciele Pharma. 
I understand that the preceding sentence does not apply to me to the
extent I am an independent contractor of SCRX.

 

7.             Expenses

 

I agree to repay any advances that SCRX may make to
me for business expenses, charges by me on any company credit card, and loans
from SCRX to me unless such expenses, charges or loans are reimbursable
business expenses in accordance with SCRX policies as established from
time-to-time.  Subject to applicable law,
I hereby expressly authorize SCRX to offset any amounts that I owe to SCRX from
compensation payable to me.

 

8.                                       No
Assurance or Obligation of Employment

 

I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause or notice.

 

9.             Costs

 

Should SCRX successfully enforce its rights against
me under this Agreement, SCRX shall be entitled to its costs of such
enforcement, including reasonable attorneys’ fees.  

 

7

 

Should I prevail in said action, SCRX shall pay my
reasonable costs associated with such enforcement, including my reasonable
attorneys’ fees.

 

10.           Miscellaneous

 

(a)                                  Survival.  The terms of this agreement shall survive
termination of my employment.

 

(b)                                 Severability.  If any provision of the Agreement shall, for
any reason be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid or unenforceable provision
had not been included herein.

 

(c)                                  Arbitration.    Any claims, disputes or
controversies arising out of or relating to this Agreement between the parties
(other than those arising under Section 10) shall be submitted to
arbitration by the parties.  The
arbitration shall be conducted in Atlanta, Georgia in accordance with the rules of
the American Arbitration Association then in existence and the following
provisions: Either party may serve upon the other party by guaranteed overnight
delivery by a nationally recognized express delivery service, written demand
that the dispute, specifying in detail its nature, be submitted to
arbitration.  Within seven (7) business
days after the service of such demand, each of the parties shall appoint an
arbitrator and serve written notice by guaranteed overnight delivery by a
nationally recognized express delivery service, of such appointment upon the
other party.  The two arbitrators
appointed shall appoint a third arbitrator. 
The decision of two arbitrators in writing under oath shall be final and
binding upon the parties.  The
arbitrators shall decide who is to pay the expenses of the arbitration.  If the two arbitrators appointed fail to
agree upon a third arbitrator within ten days after their appointment, then an
application may be made by either party, upon notice to the other party, to any
court of competent jurisdiction for the appointment of a third arbitrator, and
any such appointment shall be binding upon both parties.

 

(d)                                 Choice of Law.  Subject to and in conformity with paragraph b
above, The validity, construction, enforcement and interpretation of this
Agreement shall be governed by the internal laws (and not the laws of
conflicts) of the State of Georgia.  I
agree that the state and federal courts of the Northern District of Georgia
shall have exclusive jurisdiction and venue of any litigation arising out of or
relating to this Agreement and my employment or the termination of my
employment with SCRX and I hereby expressly consent to the personal
jurisdiction and venue of the state and federal courts of the Northern District
of Georgia for any such litigation.

 

(d)                                 Entire
Agreement.  This
Agreement shall supersede any and all prior agreements, representations or
understandings (whether oral or written and 

 

8

 

whether
express or implied) between the parties with respect to the subject matter
hereof.  No modification of or amendment
to this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing and signed by both parties.

 

(e)                                  Successors.

 

(a)                                  Company’s
Successors.  This
Agreement shall inure to the benefit of the Company’s successors in interest,
including, without limitation, successors through merger, consolidation, or
sale of substantially all of the Company’s stock or assets, and shall be
binding upon Employee.

 

(b)                                 My
Successors.  The terms
of this Agreement and all my rights of hereunder shall inure to the benefit of,
and be enforceable by, my personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

(f)                                    Compliance
with Company Policies. 
During the Employment Term, I will comply with all Company policies
generally applicable to the Company’s employees and independent contractors.

 

(g)                                 Non-Disclosure.  Unless required by law or to enforce this
Agreement, the parties hereto shall not disclose the existence of this
Agreement or the underlying terms to any third party, other than their representatives
who have a need to know such matters.

 

(h)                                 Enforcement
Costs. 
  If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorney’s fees, court costs and all expenses even if not
taxable as court costs (including, without limitation, all such fees, costs and
expenses incident to appeal and other post judgment proceedings), incurred in
that action or proceeding, in addition to any other relief to which such party
or parties may be entitled.  Attorney’s
fees shall include, without limitation, paralegal fees, investigative fees,
administrative costs, sales and use taxes and all other charges billed by the
attorney to the prevailing party.

 

(i)                                     Notices.    Any and all notices necessary or
desirable to be served hereunder shall be in writing and shall be:

 

(a)                                  Personally delivered, or

 

(b)                                 Sent by certified mail,
postage prepaid, return receipt requested, or guaranteed overnight delivery by
a nationally recognized express delivery company, in each case addressed to the
intended recipient at the address set forth below.

 

(c)                                  For notices sent to the
Company:

 

9

 

Sciele
Pharma, Inc.

Five Concourse Parkway, Suite 1800

Atlanta, Georgia 30328

Telephone No.: (770) 442-9707

Facsimile No.: (770) 442-9594

 

 (d)                              For notices
sent to Employee:

 

Leslie B. Zacks

509 Princeton Way

Atlanta, Georgia 30307

Telephone: (404) 325-1910

 

Either
party hereto may amend the addresses for notices to such party hereunder by
delivery of a written notice thereof served upon the other party hereto as provided
herein.  Any notice sent by certified
mail as provided above shall be deemed delivered on the third (3rd) business
day next following the postmark date which it bears.

 

(j)                                     Entire
Agreement. 
  This Agreement sets forth the entire agreement of the parties
hereto with respect to the subject matter hereof, and specifically supersedes
any other agreement or understanding among the parties hereto related to the
subject matter hereof, including, without limitation, the Original Agreement.  This Agreement may not be modified or revised
except pursuant to a written instrument signed by the party against whom
enforcement is sought.  No modification
of or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing and signed by both parties.

 

(k)                                  Waiver.    Failure to insist upon strict
compliance with any of the terms or conditions hereof shall not be deemed a
waiver of such term or condition, and the waiver or relinquishment of any right
or remedy hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or remedy at any other time or times.

 

[signature page follows]

 

10

 

	
  Employee:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Leslie Zacks

  	
   

  	
  12/26/2207

  	
   

  
	
  Printed Name

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Leslie Zacks

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreed to and Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sciele Pharma, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Darrell Borne

  	
   

  	
  12/26/2007

  	
   

  
	
  By

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EVP, CFO, Secretary and
  Treasurer

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  

 

11Exhibit 10.5

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

This
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered
into as of the 26th day of December 2007, by and between SCIELE PHARMA,
INC., a Delaware corporation (the “Company”), and LARRY M.
DILLAHA (“Executive”).

 

WITNESSETH:

 

WHEREAS,
the parties desire to amend and restate the terms and conditions of the
existing employment agreement between the Company and Executive, to be
effective as of the date hereof.

 

NOW,
THEREFORE, in consideration of Executive’s continued employment, the covenants
and mutual agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto do hereby agree as follows:

 

1.                                       Employment. 
Throughout the Term (as defined in Section 2 below), the Company
shall employ Executive as provided herein, and Executive hereby accepts such
employment. In accepting such employment, Executive states that, to the best of
his knowledge, he is not now, and by accepting such employment, will not be,
under any restrictions in the performance of the duties contemplated under this
Agreement as a result of the provisions of any prior employment agreement or
non-compete or similar agreement to which Executive is or was a party.

 

2.                                       Term of Employment. 
The term of Executive’s employment by the Company hereunder shall
continue hereafter unless sooner terminated as a result of Executive’s death or
in accordance with the provisions of Section 6 below (the “Term”).

 

3.                                       Duties. 
Throughout the Term, and except as otherwise expressly provided herein,
Executive shall be employed by the Company as the Executive Vice
President, Chief Medical Officer of the Company. 
Executive shall devote his full time to the performance of his duties as
Executive Vice President and Chief Medical Officer of the Company in accordance
with the Company’s By-laws, this Agreement and the directions of the Company’s
Board of Directors and any executive officer of the Company who is senior to
Executive. Without limiting the generality of the foregoing, throughout the
Term Executive shall faithfully perform his duties as Executive Vice President
and Chief Medical Officer at all times so as to promote the best interests of
the Company.

 

4.                                       Compensation.

 

(a)                                  Salary. 
For any and all services performed by Executive under this Agreement
during the Term, in whatever capacity, the Company shall pay to Executive an
annual salary as shall be determined by the Company’s 

 

1

 

Board of Directors
and its Compensation Committee (the “Salary”) less any and all applicable
federal, state and local payroll and withholding taxes.  The Salary shall be paid in the same
increments as the Company’s normal payroll, but no less frequent than
bi-monthly and prorated, however, for any period of less than a full month. The
Salary will be reviewed annually by the Compensation Committee of the Board of
Directors and a determination shall be made at that time as to the
appropriateness of an increase, if any, thereto.

 

(b)                                 Bonus. 
In addition to the Salary, Executive shall be eligible to receive from
the Company an incentive compensation bonus (the “Bonus”) as shall be
determined based on such criteria as shall be determined from time to time by
the Compensation Committee of the Board of Directors. The nature of the
criteria and the determination as to whether the criteria have been satisfied
shall be determined by the Compensation Committee of the Board of Directors in
its sole discretion. Accordingly, there is no assurance that a Bonus will be
paid to Executive with respect to all or any particular year during the Term.

 

5.                                       Benefits and Other Rights. 
In consideration for Executive’s performance under this Agreement, the
Company shall provide to Executive the following benefits:

 

(a)                                  The Company will provide Executive with
cash advances for or reimbursement of all reasonable out-of-pocket business
expenses incurred by Executive in connection with his employment hereunder.
Such reimbursement, which in all cases will be made no later than the end of
the calendar year after which Executive incurs the expense, is conditioned upon
Executive adhering to any and all reasonable policies established by Company
from time to time with respect to such reimbursements or advances including,
but not limited to, a requirement that Executive submit supporting evidence of
any such expenses to the Company.

 

(b)                                 The Company will provide Executive and
his family with the opportunity to receive group medical coverage under the
terms of the Company’s health insurance plan, but subject to completion of
normal waiting periods. During any such waiting period, the Company will pay,
or reimburse Executive for, the cost of COBRA coverage for Executive and his
family under his prior health plan.

 

(c)                                  During the Term the Executive shall be
entitled to twenty (20) days paid vacation, it being understood and agreed that
unused vacation shall not be carried over from one year to the next. In
addition, Executive shall be entitled to eight (8) paid holidays and four (4) paid
personal days off.

 

2

 

6.                                       Termination of the Term.

 

(a)                                  The Company shall have the right to
terminate the Term under the following circumstances:

 

(i)                                   Executive shall die;

 

(ii)                                With or without Cause, effective upon
written notice to Executive by the Company; or

 

(iii)                             Upon or within one (1) year
following a Change of Control.

 

(b)                                 Executive shall have the right to
terminate the Term under the following circumstances:

 

(i)                                   At any time upon sixty (60) days prior
written notice to the Company; or

 

(ii)                                For Good Reason upon or within one (1) year
following a Change of Control.

 

(c)                                  For purposes of this Agreement, “Cause”
shall mean:

 

(i)                                   Executive shall be convicted of the
commission of a felony or a crime involving dishonesty, fraud or moral
turpitude;

 

(ii)                                Executive has engaged in acts of fraud,
embezzlement, theft or other dishonest acts against the Company;

 

(iii)                             Executive commits an act which negatively
impacts the Company or its employees including, but not limited to, engaging in
competition with the Company, disclosing confidential information or engaging
in sexual harassment, discrimination or other human rights-type violations;

 

(iv)                            Executive’s gross neglect or willful
misconduct in the discharge of his duties and responsibilities; or

 

(v)                               Executive’s repeated refusal to follow
the lawful direction of the Board of Directors or supervising officers.

 

(d)                                 For purposes of this Agreement, “Change
of Control” shall mean the occurrence of any of the following:

 

(i)                                   The acquisition (other than by a direct
purchase of shares from the Company) by any “person,” including a “syndication”
or “group”, as those terms are used in Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (other than any such 

 

3

 

person currently
owning in excess of the following amount), of securities representing 20% or
more of the combined voting power of the Company’s then outstanding voting
securities, which is any security that ordinarily possesses the power to vote
in the election of the Board of Directors of a corporation without the
happening of any precondition or contingency;

 

(ii)                                The Company is merged or consolidated
with another corporation and immediately after giving effect to the merger or
consolidation less than 80% of the outstanding voting securities of the
surviving or resulting entity are then beneficially owned in the aggregate by (x) the
stockholders of the Company immediately prior to such merger or consolidation,
or (y) if a record date has been set to determine the stockholders of the
Company entitled to vote on such merger or consolidation, the stockholders of
the Company as of such record date;

 

(iii)                             If at any time during a calendar year a
majority of the directors of the Company are not persons who were directors at
the beginning of the calendar year;

 

(iv)                            The Company transfers substantially all
of its assets to another corporation which is a less than 80% owned subsidiary
of the Company; or

 

(v)                               The Company approves a plan or proposal
for dissolution on liquidation of the Company.

 

(e)                                  For purposes of this Agreement, “Good
Reason” shall mean the occurrence of any one or more of the following events
which continues uncured for a period of not less than thirty (30) days
following written notice given by Executive to the Company within fifteen (15)
days following the occurrence of such event, unless the Executive specifically
agrees in writing that such event shall not be Good Reason:

 

(i)                                   Any material breach of this Agreement by
the Company;

 

(ii)                                Any failure to continue the Executive as
an executive officer of the Company;

 

(iii)                             The requirement by the Company that
Executive perform his services hereunder primarily at a location outside of the
metropolitan Atlanta, Georgia area; or

 

(iv)                            The material reduction of Executive’s
Salary below the amount set forth in Section 4(a) above without the
written consent of Executive.

 

4

 

7.                                       Effect of Expiration or
Termination of the Term.  Promptly
following the termination of the Term, and except as otherwise expressly agreed
to by the Company in writing, Executive shall:

 

(a)                                  Immediately resign from any and all other
positions or committees which Executive holds or is a member of with the
Company or any subsidiary of the Company including, but not limited to, as an
officer and director of the Company or any subsidiary of the Company.

 

(b)                                 Provide the Company with all reasonable
assistance necessary to permit the Company to continue its business operations
without interruption and in a manner consistent with reasonable business
practices; provided, however, that such transition period shall not exceed
thirty (30) days after termination nor require more than twenty (20) hours of
Executive’s time per week and Executive shall be promptly reimbursed for all
out-of-pocket expenses.

 

(c)                                  Deliver to the Company possession of any
and all property owned or leased by the Company which may then be in Executive’s
possession or under his control, including, without limitation, any and all
such keys, credit cards, automobiles, equipment, supplies, books, records,
files, computer equipment, computer software and other such tangible and
intangible property of any description whatsoever. If, following the expiration
or termination of the Term, Executive shall receive any mail addressed to the
Company, then Executive shall immediately deliver such mail, unopened and in
its original envelope or package, to the Company.

 

(d)                                 Other than as provided in this Section 7,
upon a termination of employment all other benefits and/or entitlements to
participate in programs or benefits, if any, will cease as of the effective
date except medical insurance coverage that may be continued at Executive’s own
expense as provided by applicable law or written Company policy.

 

(e)                                  Upon termination of Executive pursuant to
Section 6(a)(i) or Section 6(a)(ii) without Cause, subject
to Section 7(l), the Company shall: (i) pay to Executive a lump sum
amount equal to one year’s worth of Salary at the rate in effect immediately
prior to termination, plus (ii) pay to Executive a lump sum amount equal
to one hundred percent (100%) of the Bonus, if any, paid to Executive for the
calendar year immediately preceding termination, plus (iii) subject to Section 7(h),
provide twelve (12) months  of COBRA
coverage for Executive which shall be substantially equivalent to that provided
by the Company prior to termination. 
Further, all of Executive’s then unvested options and stock awards
previously issued pursuant to the Company’s stock option and other equity
incentive plans shall immediately vest and be exercisable as provided for in
the Sciele Pharma, Inc. Accelerated Vesting Plan, dated January 24,
2006.

 

5

 

(f)                                    Upon termination of Executive pursuant to
Section 6(a)(ii) with Cause or Section 6(b)(i), the Company
shall pay Executive or Executive’s estate all Salary accrued but unpaid as of
the date of such termination.

 

(g)                                 Upon termination of Executive pursuant to
Section 6(a)(iii) or Section 6(b)(ii), subject to Section 7(l),
the Company shall: (i) pay to Executive a lump sum amount equal to two
years’ worth of Salary at the rate in effect immediately prior to termination,
plus (ii) pay to Executive a lump sum amount equal to two hundred percent
(200%) of the Bonus, if any, paid to Executive for the calendar year
immediately preceding termination,  plus (iii) provide
COBRA coverage for Executive which shall be substantially equivalent to that
provided by the Company prior to termination until the earlier of (A) twenty-four
(24) months after the date of termination, (B) the availability of
replacement coverage to Executive from a third party employer after Executive
has accepted another full-time position and (C) the expiration of COBRA
benefits by reason of lapse of the statutory or regulatory benefit period
established by governmental authority. Further, upon a Change in Control,
regardless of whether the Executive is terminated, all of Executive’s then
unvested options and stock awards previously issued pursuant to the Company’s
stock option and other equity incentive plans shall immediately vest and be
exercisable as herein provided.

 

(h)                                 In the event that Executive shall be
entitled to receive a COBRA benefit pursuant to Section 7(e), such COBRA
benefit shall continue only until such time as Executive shall have accepted
another full time position.  Failure of Executive
to promptly report the acceptance of a new position shall entitle the Company
to terminate all remaining COBRA benefits and to seek restitution for any
payments made to Executive subsequent to such job acceptance.

 

(i)                                     Subject to Section 7(l), any dollar
amounts which are to be paid at the time of termination under this Section 7,
other than COBRA payments, shall be paid within thirty (30) days after the date
of termination.  Subject to Section 7(l),
any COBRA payments shall be made in accordance with the usual payroll practices
which were applicable prior to termination. 
Except as otherwise specifically set forth herein, any and all payments
made pursuant to this Agreement shall be net of any and all applicable federal,
state and local payroll and withholding taxes.

 

(j)                                     If the Company or the Company’s
accountants determine that the payments called for under Section 7(g) of
this Agreement either alone or in conjunction with any other payments or
benefits made available to the Employee by the Company will result in the
Employee being subject to an excise tax (“Excise Tax”) under Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”), or if an Excise
Tax is assessed against Executive as a result of such payments or other
benefits, the 

 

6

 

Company shall make
a Gross-Up Payment (as defined below) to or on behalf of Executive as and when
such determination(s) and assessment(s), as appropriate, are made, subject
to the conditions of this subsection (j). A “Gross-Up Payment” shall mean a
payment to or on behalf of Executive that shall be sufficient to pay (i) any
Excise Tax in full, (ii) any federal, state and local income tax and
Social Security or other employment tax on the payment made to pay such Excise
Tax as well as any additional Excise Tax on the Gross-Up Payment, and (iii) any
interest or penalties assessed by the Internal Revenue Service on Executive if
such interest or penalties are attributable to the Company’s failure to comply
with its obligations under this subsection (j) or applicable law. Any
determination under this subsection (j) by the Company or the Company’s
accountants shall be made in accordance with Section 280G of the Code, any
applicable related regulations (whether proposed, temporary or final), any
related Internal Revenue Service rulings and any related case law, and shall
assume that Executive shall pay Federal income taxes at the highest marginal
rate in effect for the year in which the Gross-Up Payment is made and state and
local income taxes at the highest marginal rate in effect in the state of
Executive’s residence for such year. Executive shall take such action (other
than waiving Employee’s right to any payments or benefits) as the Company
reasonably requests under the circumstances to mitigate or challenge such tax.
If the Company reasonably requests that Executive take action to mitigate or
challenge, or to mitigate and challenge, any such tax or assessment and
Executive complies with such request, the Company shall provide Executive with
such information and such expert advice and assistance from the Company’s
accountants, lawyers and other advisors as Executive may reasonably request and
shall pay for all expenses incurred in effecting such compliance and any
related fines, penalties, interest and other assessments. Subject to the
provisions of this subsection (j), all determinations required to be made under
this subsection (j), including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by the public accounting firm
that is retained by the Company as of the date immediately prior to the Change
of Control (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and Executive within thirty (30) business days
of the receipt of notice from the Company or Executive that there has been a
payment that could trigger a Gross-Up Payment, or such earlier time as is
requested by the Company (collectively, the “Determination”). In the event that
the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change of Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company and the Company shall enter into any agreement 

 

7

 

requested by the
Accounting Firm in connection with the performance of the services hereunder.
The Gross-Up Payment under this subsection (j) with respect to any payments
made under Section 7(g) shall be made no later than sixty (60) days
following such payments. If the Accounting Firm determines that no Excise Tax
is payable by Executive, it shall furnish Executive with a written opinion to
such effect, and to the effect that failure to report the Excise Tax, if any,
on Executive’s applicable federal income tax return will not result in the
imposition of a negligence or similar penalty. The Determination by the
Accounting Firm shall be binding upon the Company and Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time
of the Determination, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made (“Underpayment”) or Gross-Up Payments
are made by the Company which should not have been made (“Overpayment”),
consistent with the calculations required to be made hereunder. In the event
that Executive thereafter is required to make payment of any additional Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid
by the Company to or for the benefit of Executive. In the event the amount of
the Gross-Up Payment exceeds the amount necessary to reimburse Executive for
his Excise Tax as herein set forth, the Accounting Firm shall determine the
amount of the Overpayment that has been made and any such Overpayment (together
with interest at the rate provided in Section 1274(b)(2) of the Code)
shall be promptly paid by Executive to or for the benefit of the Company.
Executive shall cooperate to the extent Executive’s expenses are reimbursed by
the Company, with any reasonable requests by the Company in connection with any
contests or disputes with the Internal Revenue Service in connection with the
Excise Tax.

 

(k)                                  If Executive (i) is terminated
pursuant to Section 6(a)(iii) or Section 6(b)(ii), (ii) is
a specified employee (within the meaning of Section 409A and Treas. Reg.
§1.409A-3(i)(2)) and (iii) after giving effect to Section 7(l) of
the Agreement, the payments called for under Section 7(g) of the
Agreement constitute a deferral of compensation under Code Section 409A,
then the Company shall pay to Executive an amount (the “409A Gross Up Payment”)
such that, after payment by Executive of all taxes (including interest and
penalties) imposed upon Executive under Code Section 409A with respect to
the payments called for under Section 7(g) of the Agreement that
would not be imposed if Code Section 409A did not apply to such payments (“409A
Taxes”), including, without limitation, any income taxes, employment taxes and
409A Taxes imposed upon the 409A Gross-Up Payment (and any interest and
penalties imposed with respect thereto) but excluding any excise taxes imposed
under Code Section 4999, Executive retains an amount of the 409A
Gross-Up Payment equal to the

 

8

 

 

 

409A Taxes imposed upon the payments called for under Section 7(g) of
the Agreement.

 

(l)                                     Notwithstanding
any other provisions of this Agreement, any payment or benefit otherwise
required to be made after Executive’s termination of employment that the Company
reasonably determines is subject to Code Section 409A(a)(2)(B)(i), shall
not be paid or payment commenced until the later of (i) six months after
the date of Executive’s “separation from service” (within the meaning of Code Section 409A
and Treasury Regulation Section 1.409A-1(h) without regard to
optional alternative definitions available thereunder) and (ii) the
payment date or commencement date specified in this Agreement for such
payment(s).  On the earliest date on
which such payments can be made or commenced without violating the requirements
of Code Section 409A(a)(2)(B)(i), Executive shall be paid, in a single
cash lump sum, an amount equal to the aggregate amount of all payments delayed
pursuant to the preceding sentence, plus interest to the date of payment at a
rate equal to 120% of the applicable Federal rate, within the meaning of Code Section 1274(d),
in effect on the date of the relevant payment, compounded semi-annually.  In addition, Executive and the Company agree
to cooperate to make such amendments to the terms of the Agreement as may be
necessary to avoid the imposition of penalties and additional taxes under Code Section 409A
with respect to any payments or benefits under the Agreement.

 

8.                                       Restrictive Covenants for
Executive.  Executive hereby covenants and agrees with
the Company that for so long as Executive is employed by the Company and for a
period (the “Restricted Period”) of twelve (12) months after termination of
such employment for any reason, Executive shall not, without the prior written
consent of the Company, which consent shall be within the sole and exclusive
discretion of the Company, either directly or indirectly on his own account or
on behalf of any other person or entity:

 

(a)                                  Perform services for a Competing Business
that are substantially similar in whole or in part to those that he performed
for the Company in his role as Executive Vice President and Chief Medical
Officer, including specifically, but not limited to, the sale or marketing of
drug products or the management of individuals involved in the sale or
marketing of drug products. For purposes of this covenant, the term “Competing
Business” shall mean any company engaged in the development, marketing or sale
of prescription drug products, including generic and nongeneric drug products,
which are competitive with: (1) those products being marketed by the
Company at the time of Executive’s termination; or (2) those products that
Executive was aware were under development by the Company and expected to be
marketed within two (2) years of Executive’s termination. This covenant
shall apply only within the “Territory” which is defined as the fifty states of
the United States. Executive recognizes and agrees that in capacity of
Executive Vice President and Chief Medical 

 

 

9

 

Officer, his
duties extend throughout the entire service area of the Company which includes,
at a minimum, the fifty states of the United States and that, because of the
executive nature of Executive’s position with the Company, in order to afford
the Company protection from unfair competition by the Executive following his
termination of employment, this covenant must extend throughout the stated
Territory. Executive further acknowledges that this covenant does not prohibit
him from engaging in his entire trade or business but only a very limited
segment of the pharmaceuticals industry

 

(b)                                 Solicit any current supplier, customer or
client of the Company with whom Executive dealt, or with whom anyone in
Executive’s direct chain of command dealt, on behalf of the Company within the
year preceding Executive’s termination of employment, for the purpose of
purchasing drug products (or ingredients of drug products) or selling or
marketing drug products, including generic and nongeneric drug products, which
are competitive with: (1) those products being marketed by the Company at
the time of Executive’s termination; or (2) those products that Executive
was aware were under development by the Company and expected to be marketed
within two (2) years of Executive’s termination. Notwithstanding this
subsection (b), Executive may solicit suppliers that have excess capacity as
reasonably determined by the Company.

 

9.                                       Confidentiality. 
Attached to this Agreement as Exhibit A is the form of the
Employee/Independent Contractor Confidentiality and Non-Solicitation Agreement
(the “Confidentiality Agreement”) which the Company requires all employees,
including, but not limited to, the Executive, to execute and which is a part of
each employee’s terms of employment. By signing this Agreement, Executive
acknowledges having received, read, executed and delivered to the Company a
copy of the Confidentiality Agreement and agrees that the terms of the
Confidentiality Agreement shall be incorporated by reference into this
Agreement and shall be considered as part of the terms and conditions of
Executive’s continued employment with the Company.

 

10.                                 Remedies.

 

(a)                                  The covenants of Executive set forth in Section 8
and Section 9 are separate and independent covenants for which valuable
consideration has been paid, the receipt, adequacy and sufficiency of which are
acknowledged by Executive, and have also been made by Executive to induce the
Company to enter into this Agreement and continue Executive’s employment with
the Company.  Each of the aforesaid
covenants may be availed of, or relied upon, by the Company in any court of
competent jurisdiction, and shall form the basis of injunctive relief and
damages including expenses of litigation (including, but not limited to,
reasonable attorney’s fees upon trial and appeal) suffered by the Company
arising out of any breach of the aforesaid covenants by Executive.  The 

 

 

10

 

covenants of Executive
set forth in this Section 10 are cumulative to each other and to all other
covenants of Executive in favor of the Company contained in this Agreement and
shall survive the termination of this Agreement for the purposes intended.

 

(b)                                 Each of the covenants contained in Section 8
and Section 9 above shall be construed as agreements which are independent
of any other provision of this Agreement, and the existence of any claim or
cause of action by any party hereto against any other party hereto, of whatever
nature, shall not constitute a defense to the enforcement of such covenants. If
any of such covenants shall be deemed unenforceable by virtue of its scope in
terms of geographical area, length of time or otherwise, but may be made
enforceable by the imposition of limitations thereon, Executive agrees that the
same shall be enforceable to the fullest extent permissible under the laws and
public policies of the jurisdiction in which enforcement is sought. The parties
hereto hereby authorize any court of competent jurisdiction to modify or reduce
the scope of such covenants to the extent necessary to make such covenants
enforceable.

 

(c)                                  In the event that Executive believes that
the Company is in violation of a material obligation owed to Executive under
this Agreement, and the Executive has given notice of such violation to the
Company requesting that the Company cure such violation, and within twenty (20)
business days the Company has not undertaken steps to cure such violation or to
provide information to Executive demonstrating that the Company is not in
violation of the Agreement, and as a result of such failure to cure or dispute
such violation, the Executive terminates the Agreement in accordance with Section 6(b),
Executive shall not be barred from seeking employment with a competitor
notwithstanding the restriction of Section 8(a); provided, however, that
all other restrictions contained in this Agreement, including, but not limited
to the covenants in Section 8(b) and in Section 9, shall remain
in full force and effect.

 

11.                                 Enforcement Costs. 
If any legal action or other proceeding is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorney’s fees, court costs and all expenses even if not taxable as
court costs (including, without limitation, all such fees, costs and expenses
incident to appeal and other post judgment proceedings), incurred in that
action or proceeding, in addition to any other relief to which such party or
parties may be entitled. Attorneys’ fees shall include, without limitation,
paralegal fees, investigative fees, administrative costs, sales and use taxes
and all other charges billed by the attorney to the prevailing party.

 

12.                                 Notices. 
Any and all notices necessary or desirable to be served hereunder shall
be in writing and shall be:

 

 

11

 

(a)                                  Personally delivered, or

 

(b)                                 Sent by certified mail, postage prepaid,
return receipt requested, or guaranteed overnight delivery by a nationally
recognized express delivery company, in each case addressed to the intended
recipient at the address set forth below.

 

For
notices sent to the Company:

 

Sciele
Pharma, Inc.

Five
Concourse Parkway

Suite 1800

Atlanta,
Georgia 30328

Telephone
No.: (770) 442-9707

Facsimile
No.: (770) 442-9594

 

For
notices sent to Executive:

 

Mr. Larry
M. Dillaha

2046
Breckenridge Dr.

Mt.
Juliet, TN 37122

 

Either
party hereto may amend the addresses for notices to such party hereunder by
delivery of a written notice thereof served upon the other party hereto as
provided herein. Any notice sent by certified mail as provided above shall be
deemed delivered on the third (3rd) business day next following the postmark
date which it bears.

 

13.                                 Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto with respect to the subject matter hereof, and
specifically supersedes any other agreement or understanding among the parties
hereto related to the subject matter hereof, including, without limitation, the
Original Agreement. This Agreement may not be modified or revised except
pursuant to a written instrument signed by the party against whom enforcement
is sought.

 

14.                                 Severability. 
The invalidity or unenforceability of any provision hereof shall not
affect the enforceability of any other provision hereof, and except as
otherwise provided in Section 10 above, any such invalid or unenforceable
provision shall be severed from this Agreement.

 

15.                                 Waiver. 
Failure to insist upon strict compliance with any of the terms or
conditions hereof shall not be deemed a waiver of such term or condition, and
the waiver or relinquishment of any right or remedy hereunder at any one or
more times shall not be deemed a waiver or relinquishment of such right or
remedy at any other time or times.

 

16.                                 Arbitration. 
Any claims, disputes or controversies arising out of or relating to this
Agreement between the parties (other than those arising under Section 10)
shall 

 

 

12

 

be submitted to
arbitration by the parties. The arbitration shall be conducted in Atlanta,
Georgia in accordance with the rules of the American Arbitration
Association then in existence and the following provisions: Either party may
serve upon the other party by guaranteed overnight delivery by a nationally
recognized express delivery service, written demand that the dispute,
specifying in detail its nature, be submitted to arbitration. Within seven (7) business
days after the service of such demand, each of the parties shall appoint an
arbitrator and serve written notice by guaranteed overnight delivery by a
nationally recognized express delivery service, of such appointment upon the
other party. The two arbitrators appointed shall appoint a third arbitrator.
The decision of two arbitrators in writing under oath shall be final and
binding upon the parties. The arbitrators shall decide who is to pay the
expenses of the arbitration. If the two arbitrators appointed fail to agree
upon a third arbitrator within ten days after their appointment, then an
application may be made by either party, upon notice to the other party, to any
court of competent jurisdiction for the appointment of a third arbitrator, and
any such appointment shall be binding upon both parties.

 

17.                                 Governing Law. 
This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the law of the State of
Georgia, without regard to its conflicts of laws provisions. Subject to Section 16,
each party hereto hereby (a) agrees that the state and federal courts of
the Northern District of Georgia shall have exclusive jurisdiction and venue of
any litigation which may be initiated with respect to this Agreement or to
enforce rights granted hereunder and (b) consents to the personal
jurisdiction and venue of such courts for such purposes.

 

18.                                 Benefit
and Assignability.  This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns. The rights and obligations of Executive hereunder are
personal to him, and are not subject to voluntary or involuntary alienation,
transfer, delegation or assignment.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as
of the day and year first above written.

	
  EXECUTIVE:

  
	
   

  
	
  /s/
  Larry M. Dillaha

  
	
  Name:
  

  	
  Larry
  M. Dillaha

  
	
   

  
	
  SCIELE
  PHARMA, INC.

  
	
   

  
	
  By:

  	
  /s/
  Patrick Fourteau

  
	
  Name:

  	
  Patrick
  Fourteau, Chief Executive Officer

  

 

 

13

 

Exhibit A

 

Sciele
Pharma, Inc.

Employee / Independent Contractor

Non-Disclosure and Non-Solicitation Agreement

 

Employee Name:  Larry M. Dillaha

 

The growth and success of Sciele Pharma, Inc. (“SCRX”)
is largely dependent on two key assets, our proprietary information and our
highly competent employees and independent contractors.  Our employees are obtained by recruiting the
best people available and giving them opportunities to advance and share in the
success of SCRX.

 

Our proprietary information (including our
confidential information, Trade Secrets and other information not generally
known outside of SCRX) is obtained by research and product development,
business development conducted by SCRX, product improvements, marketing and
sales methods, and service to customers. 
Many SCRX employees make major contributions, and independent
contractors may do so as well.  These
result in a pool of information and expertise, which enables SCRX to conduct
its business with unusual success, and thus with unusual potential for its
employees and independent contractors. 
However, this potential exists only as long as this information and
expertise are retained within SCRX.  Once
generally known, this information gives no advantages to SCRX, its employees,
its independent contractors, or its stockholders.

 

In
effect, all SCRX employees and independent contractors have a common interest
and responsibility in seeing that no one employee or independent contractor
accidentally or intentionally discloses or distributes this pool of information
and expertise in an unauthorized manner. 
To help protect you, other employees or independent contractors, and SCRX
against such disclosure, this Agreement has been prepared so that we have a
common understanding concerning your responsibilities in this connection.  Please read this Agreement carefully so that
you may understand its importance.

 

IN
CONSIDERATION OF the premises above and my employment or continued employment
as an employee or independent contractor of SCRX, I hereby agree with SCRX as
follows:

 

1.                                       Defined
Terms:  The
following definitions will have the meanings indicated when used in this
document:

 

(a)                                  Proprietary
Information means both Trade Secret and confidential information.

 

 

1

 

                                                                                                (i)            “Trade Secrets” are defined as
information belonging to the Company, licensed by it, or disclosed to it on a
confidential basis by third parties which: (a) derives economic value from
not being generally known to, and not being readily ascertainable through
proper means by, other persons or entities who can obtain economic value from
their disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstance to maintain their secrecy. During my
employment with the Company and thereafter, I hereby promise not to disclose or
use, or induce or assist in the disclosure or use of, any Trade Secrets except
for the benefit of the Company.

 

                                                                                                (ii)           “Confidential Information” is defined
as any information belonging to the Company, licensed by it, or disclosed to it
on a confidential basis by third parties, other than Trade Secrets, which is
valuable to the Company and not generally known by the public.  During my employment with the Company and for
two years after the termination of my employment with the Company for any
reason, I hereby promise not to disclose or use, or induce or assist in the
disclosure or use of, any Confidential Information except for the benefit of
the Company.

 

(b)                                 Invention means any
invention, original work of authorship, development, concept, Trade Secret,
discovery, innovation or improvement (whether or not patentable, or registrable
under copyright or similar laws) made, initiated, conceived, or first actually
or constructively reduced to practice by me, closely or jointly with others:

 

(i)                                     which results
from any work for SCRX, any use of SCRX’s premises or property, or any use of
SCRX’s Proprietary Information, confidential items or other resources;

 

(ii)                                  which relates
to any method, process, laboratory practice or know-how useful to or being
developed by SCRX in connection with any existing or planned business of SCRX
or any actual or anticipated research or development of SCRX; or

 

(iii)                               which relates
to any product, article or manufacture, or composition of matter being
developed, made, sold, or used in connection with SCRX’s business or SCRX’s
development.

 

However,
where and to the extent required by applicable state statute, this Agreement
shall not require assignment to SCRX of the rights in an invention if no
equipment, 

 

2

 

supplies,
facilities, Trade Secrets, confidential information or confidential items of
SCRX were used, and the invention was developed entirely on my own time unless:

 

(i)                                     the invention
relates directly to SCRX business or to SCRX’s actual or demonstrably
anticipated research or development; or

 

(ii)                                  the invention
results from any work performed by me for SCRX.

 

This definition of invention includes each and every
invention and/or improvement that I may make or conceive, either solely or
jointly with others, during my employment or within two years after termination
of employment for any reason with SCRX if and to the extent the invention
and/or improvement results from any work for SCRX, any use of SCRX’s premises
or property or any use of SCRX’s confidential items or confidential
information.

 

2.             Protection of Proprietary
Information

 

(a)                                  I acknowledge
that during the term of employment with the Company, I will learn certain Trade
Secrets and/or Confidential Information regarding the Company and its
business.  Such information includes,
without limitation, the following materials and information (whether or not
reduced to writing and whether or not patentable or protected by copyright):
technology, software, programs, plans, procedures, strategies, technical
matters regarding Company products, formulations, business opportunities,
methods of operation and production, financial data, including costs, margins,
payment terms and credit records, pricing, lists of actual and potential
customers and suppliers and related data, customer preferences and plans for satisfying
customer needs and preferences, marketing strategies, models, plans for
development and expansion, and information about Company personnel and their
abilities and compensation.  I
acknowledge that the Company has developed and will develop Trade Secrets and
Confidential Information as an integral part of its business and with
considerable investment, and that the Company has a legitimate business
interest in protecting the confidentiality of this information, and that
disclosure of this information to, or the use of this information on behalf of
competitors of the Company could cause serious injury to the Company.

 

(b)                                 During my
employment and for two (2) years after the termination of my employment
for any reason, I will hold in strictest confidence and will not disclose,
communicate or divulge to, or use for my own benefit or the benefit of another,
any Confidential Information or Inventions.

 

(c)                                  Notwithstanding
section (b) above, for such Proprietary Information constituting Trade
Secrets under the Georgia Trade Secrets Act of 1990, as may be amended from
time to time (the “Act”), I will maintain the

 

 

 

3

 

 

confidentiality of such Trade Secrets for as long as is permitted under
the Act.

 

(d)                                 Section 2
will not apply to any information which:

 

(i)                                     is or becomes
publicly known under circumstances involving no breach by me of the terms of
this Section 2, however, Proprietary Information shall not be publicly
known by reason of such information’s or item’s being available in isolated
segments in two or more readily available public documents,

 

(ii)                                  is generally
disclosed to third parties by SCRX without restriction on such third parties,
or

 

(iii)                               is approved for
release by written authorization of the Board of Directors of the Company,

 

except
that a breach by me of my obligations under this Section 2 shall not be
absolved by the subsequent occurrence of any of the exceptions above.

 

(e)                                  All Proprietary
Information remains the property of SCRX at all times, before, during and after
my employment.  I will, upon termination
of my employment at SCRX or at any other time upon request by SCRX, promptly deliver
to SCRX all Proprietary Information I may have in my possession, including but
not limited to all Confidential Information relating to the business of
SCRX.  I understand that I must obtain
SCRX’s express, written permission with regard to any Proprietary Information
if I wish to keep any copies of any Confidential Information after the
termination of my employment.  I agree
to, upon SCRX’s request, certify to SCRX under oath that I have complied with
the provisions of this Section 2.

 

(f)                                    I acknowledge
that my agreement to protect Proprietary Information among other things
prohibits me from communicating Proprietary Information to former employees of
SCRX, both while I am employed by SCRX and after termination of my employment
for the duration of my agreement which is set forth in Sections 2(a) and
(b).

 

(g)                                 I shall submit
to SCRX any proposed publication which contains any discussion relating to
SCRX, any Proprietary Information, or Invention of SCRX, or any work performed
by me during the course of my employment with SCRX.  Unless I am notified by SCRX that such
publication contains Proprietary Information within 90 days of SCRX’s written
acknowledgement of receipt of such publication, I may proceed with such
publication.  This provision extends to
publications that are written and/or published after the termination of my
employment.

 

 

4

 

(h)                                 My employment
with SCRX and performance of my duties and responsibilities as an employee do
not and will not breach any agreement, which obligated me to keep in confidence
any Trade Secrets or confidential information of any other party or to refrain
from competing, directly or indirectly, with the business of any other party,
and I shall not disclose to SCRX any Proprietary Information of any other
party.

 

(i)                                     I acknowledge and agree that
although I may disclose and discuss Proprietary Information with other current
employees of SCRX, I will do so only on a need-to-know basis and for the sole
purpose of advancing the best interests and the business objectives of SCRX.

 

3.             Inventions and Patents

 

(a)                                  I have attached
hereto as Exhibit A a list describing all inventions, original works of
authorship, developments, improvements and Trade Secrets which were made by me
prior to my employment with SCRX (collectively, “Prior Inventions”), which
belong to me, which relate to SCRX’s proposed business, products or research
and development, and which are not assigned to SCRX hereunder, or, if no such
list is attached, I represent that there are no such Prior Inventions.  If in the course of my Employment Term I
incorporate into a SCRX product, process or machine a Prior Invention owned by
me or in which I have an interest, SCRX is hereby granted and shall have a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license to make,
have made, modify, use and sell such Prior Invention as part of or in
connection with such product, process or machine.

 

(b)                                 Inventions
shall be the property of SCRX.  I hereby
assign to SCRX or its designee all right, title and interest in and to any and
all Inventions and any and all related patents, copyrights, trademarks, and
trade names, and applications therefore, in the United States and elsewhere.

 

(c)                                  I will disclose
promptly to SCRX all Inventions.

 

(d)                                 If I am
employed in a technical capacity, I will maintain a laboratory notebook or
equivalent record that is kept in accordance with standard scientific
practices.  This notebook will contain
daily records of all business protocols, procedures, studies, experiments,
data, etc.  and will document the
conception and/or reduction to practice of any Invention.  I will follow any guidelines and policies
that SCRX presently has or implements in the future regarding the content,
protection, counter-signing or notarizing of notebooks.  I understand that all notebooks and copies
thereof are SCRX’s property and I may not have a copy of any notebook 

 

 

5

 

upon the termination of my employment without the express written
permission of SCRX, regardless of the circumstances of termination.

 

(e)                                  I shall, at
SCRX’s expense, execute declarations, further assignments, documents and other
instruments as necessary or desirable to fully and completely assign all
Inventions to SCRX or its designee and to assist SCRX or its designee in
applying for, prosecuting and enforcing patents, copyrights or other
intellectual property rights in the United States and in any foreign country
with respect to any Invention.  I
understand that this obligation shall continue to exist after the termination
of my employment, regardless of the reasons for and circumstances of
termination.  If SCRX is unable because
of my mental or physical incapacity or for any other reason to secure my
signature to apply for or to pursue any application for any United States or
foreign patents or copyright registrations covering Inventions assigned to SCRX
as above, then I hereby irrevocably designate and appoint SCRX and its duly
authorized officers and agents as my agent and attorney-in-fact, to act for and
in my behalf and stead to execute and file any such applications and to do all
other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by me.

 

4.             Copyrightable Material

 

Without limiting the above, I
specifically agree that all copyrightable materials generated or developed by
me in connection with my duties and responsibilities with SCRX and under this
Agreement, including but not limited to advertising materials, product name and
identities, product instructions, laboratory notebooks, protocols, scientific
publications, artistic and product designs, sketches, technical bulletins,
computer programs, computer files, computer software, and computer databases,
shall be considered works made for hire under the copyright laws of the United
States and that they shall, upon creation, be owned exclusively by SCRX.  To the extent that any such materials, under
applicable law, may not be considered works made for hire, I hereby assign to
SCRX the ownership of all copyrights in such materials, without the necessity
of any further consideration, and SCRX shall be entitled to register and hold
in its own name all copyrights in respect of such materials.

 

5.             Non-Solicitation.  I hereby covenant and agree that for so
long as I am employed by the Company and for a period  of  two
(2) years after termination of such employment (the “Restricted  Period”) for any reason, I shall not, without
the prior written consent of the Company, which consent shall be within the
sole and exclusive discretion of the CEO, either directly or indirectly on my
own account or on behalf of any other person or entity, solicit

 

(a)                                  Any employee
with whom I have dealt with on behalf of the Company within the year preceding
my termination of employment, for the purposes of performing the job duties
that the individual was performing on behalf 

 

 

6

 

of
the Company for the selling or marketing of drug products, including generic
and nongeneric drug products which are (1) competitive with those products
being marketed by the Company at the time of my termination or (2) those
products that are in the company’s pipeline that I am aware of and of which I
have substantial knowledge and which the Company expects to be marketed within
two (2) years of my termination or

 

(b)                                 Any current
supplier, customer or client of the Company with whom I dealt with on behalf of
the Company within the year preceding my termination of employment, with whom I
had direct contact within the execution of my job duties that I was performing
on behalf of the Company which are (1) competitive with those products
being marketed by the Company at the time of my termination or (2) those
products that are in the Company’s pipeline that I was aware of and had
substantial knowledge regarding and which the Company expects to be marketed
within two (2) years of my termination.

 

I agree that during my employment by SCRX and for
two (2) years from the termination of such employment for any reason, I
will not, either directly or indirectly, on my own behalf or in the service of
or on behalf of others, solicit, divert or recruit, or attempt to solicit,
divert or recruit, any non-clerical  employee of
SCRX during my employment with SCRX, to leave such employment, whether or not
such employment is pursuant to a written contract with the Company or at will.

 

6.             Duty to SCRX

 

While employed at SCRX, I will not provide services
to any other pharmaceutical or related company which are the same or similar to
the services I have provided to Sciele Pharma. 
I understand that the preceding sentence does not apply to me to the
extent I am an independent contractor of SCRX.

 

7.             Expenses

 

I agree to repay any advances that SCRX may make to
me for business expenses, charges by me on any company credit card, and loans
from SCRX to me unless such expenses, charges or loans are reimbursable
business expenses in accordance with SCRX policies as established from
time-to-time.  Subject to applicable law,
I hereby expressly authorize SCRX to offset any amounts that I owe to SCRX from
compensation payable to me.

 

8.                                       No
Assurance or Obligation of Employment

 

I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause or notice.

 

9.             Costs

 

Should SCRX successfully enforce its rights against
me under this Agreement, SCRX shall be entitled to its costs of such
enforcement, including reasonable attorneys’ fees.  

 

 

7

 

Should I prevail in said action, SCRX shall pay my
reasonable costs associated with such enforcement, including my reasonable
attorneys’ fees.

 

10.           Miscellaneous

 

(a)                                  Survival.  The terms of this agreement shall survive
termination of my employment.

 

(b)                                 Severability.  If any provision of the Agreement shall, for
any reason be held to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid or unenforceable provision
had not been included herein.

 

(c)                                  Arbitration.    Any claims, disputes or
controversies arising out of or relating to this Agreement between the parties
(other than those arising under Section 10) shall be submitted to
arbitration by the parties.  The
arbitration shall be conducted in Atlanta, Georgia in accordance with the rules of
the American Arbitration Association then in existence and the following
provisions: Either party may serve upon the other party by guaranteed overnight
delivery by a nationally recognized express delivery service, written demand
that the dispute, specifying in detail its nature, be submitted to
arbitration.  Within seven (7) business
days after the service of such demand, each of the parties shall appoint an
arbitrator and serve written notice by guaranteed overnight delivery by a
nationally recognized express delivery service, of such appointment upon the
other party.  The two arbitrators
appointed shall appoint a third arbitrator. 
The decision of two arbitrators in writing under oath shall be final and
binding upon the parties.  The
arbitrators shall decide who is to pay the expenses of the arbitration.  If the two arbitrators appointed fail to
agree upon a third arbitrator within ten days after their appointment, then an
application may be made by either party, upon notice to the other party, to any
court of competent jurisdiction for the appointment of a third arbitrator, and
any such appointment shall be binding upon both parties.

 

(d)                                 Choice of Law.  Subject to and in conformity with paragraph b
above, The validity, construction, enforcement and interpretation of this
Agreement shall be governed by the internal laws (and not the laws of
conflicts) of the State of Georgia.  I
agree that the state and federal courts of the Northern District of Georgia
shall have exclusive jurisdiction and venue of any litigation arising out of or
relating to this Agreement and my employment or the termination of my
employment with SCRX and I hereby expressly consent to the personal
jurisdiction and venue of the state and federal courts of the Northern District
of Georgia for any such litigation.

 

(d)                                 Entire
Agreement.  This
Agreement shall supersede any and all prior agreements, representations or
understandings (whether oral or written and 

 

 

8

 

whether
express or implied) between the parties with respect to the subject matter
hereof.  No modification of or amendment
to this Agreement, nor any waiver of any rights under this Agreement, will be
effective unless in writing and signed by both parties.

 

(e)                                  Successors.

 

(a)                                  Company’s
Successors.  This
Agreement shall inure to the benefit of the Company’s successors in interest,
including, without limitation, successors through merger, consolidation, or
sale of substantially all of the Company’s stock or assets, and shall be
binding upon Employee.

 

(b)                                 My
Successors.  The terms
of this Agreement and all my rights of hereunder shall inure to the benefit of,
and be enforceable by, my personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

 

(f)                                    Compliance
with Company Policies. 
During the Employment Term, I will comply with all Company policies
generally applicable to the Company’s employees and independent contractors.

 

(g)                                 Non-Disclosure.  Unless required by law or to enforce this
Agreement, the parties hereto shall not disclose the existence of this
Agreement or the underlying terms to any third party, other than their representatives
who have a need to know such matters.

 

(h)                                 Enforcement
Costs. 
  If any legal action or other proceeding is brought for the
enforcement of this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any provisions of this
Agreement, the successful or prevailing party or parties shall be entitled to
recover reasonable attorney’s fees, court costs and all expenses even if not
taxable as court costs (including, without limitation, all such fees, costs and
expenses incident to appeal and other post judgment proceedings), incurred in
that action or proceeding, in addition to any other relief to which such party
or parties may be entitled.  Attorney’s
fees shall include, without limitation, paralegal fees, investigative fees,
administrative costs, sales and use taxes and all other charges billed by the
attorney to the prevailing party.

 

(i)                                     Notices.    Any and all notices necessary or
desirable to be served hereunder shall be in writing and shall be:

 

(a)                                  Personally delivered, or

 

(b)                                 Sent by certified mail,
postage prepaid, return receipt requested, or guaranteed overnight delivery by
a nationally recognized express delivery company, in each case addressed to the
intended recipient at the address set forth below.

 

(c)                                  For notices sent to the
Company:

 

9

 

                                                Sciele Pharma, Inc.

Five Concourse Parkway, Suite 1800

Atlanta, Georgia 30328

Telephone No.: (770) 442-9707

Facsimile No.: (770) 442-9594

 

(d)                                 For notices sent to
Employee:

 

Mr. Larry M. Dillaha

2046
Breckenridge Drive

Mt.
Juliet, TN. 37122

 

                                                Either party
hereto may amend the addresses for notices to such party hereunder by delivery
of a written notice thereof served upon the other party hereto as provided herein.  Any notice sent by certified mail as provided
above shall be deemed delivered on the third (3rd) business day next following
the postmark date which it bears.

 

(j)                                     Entire
Agreement. 
  This Agreement sets forth the entire agreement of the
parties hereto with respect to the subject matter hereof, and specifically
supersedes any other agreement or understanding among the parties hereto
related to the subject matter hereof, including, without limitation, the
Original Agreement.  This Agreement may
not be modified or revised except pursuant to a written instrument signed by
the party against whom enforcement is sought. 
No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing and signed by
both parties.

 

(k)                                  Waiver.    Failure to insist upon strict
compliance with any of the terms or conditions hereof shall not be deemed a
waiver of such term or condition, and the waiver or relinquishment of any right
or remedy hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or remedy at any other time or times.

 

[signature page follows]

 

10

 

Employee:

 

	
  Larry M. Dillaha

  	
   

  	
  12/26/2007

  	
   

  
	
  Printed Name

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Larry M. Dillaha

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreed to and Accepted:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sciele Pharma, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Patrick Fourteau

  	
   

  	
  12/26/2007

  	
   

  
	
  By

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CEO

  	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
   

  	
   

  

 

 

11

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