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                          EON LABS MANUFACTURING, INC.

                                STOCK OPTION PLAN

1.0      PURPOSE

         The purpose of the Plan is to encourage ownership in the Company by
         selected Employees, Nonemployee Directors and Consultants and Advisors,
         thus providing an incentive for such individuals to contribute to the
         future success and prosperity of the Company. In addition, the Plan is
         intended to provide incentives that will attract and retain highly
         qualified individuals as Employees and Nonemployee Directors and to
         assist in aligning the interests of such Employees and Nonemployee
         Directors with those of the Company's Stockholders.

2.0      DEFINITIONS

THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS UNLESS THE CONTEXT
INDICATES OTHERWISE:

2.1      "AWARD" shall mean Stock Options.

2.2      "AWARD AGREEMENT" shall mean a written agreement between the Company
         and a Participant that establishes and records an Award to the
         Participant and may include terms, conditions, restrictions and
         limitations applicable to the Award that are in addition to those under
         the Plan.

2.3      "BOARD" shall mean the Board of Directors of the Company.

2.4      "CAUSE" shall mean, subject to a Participant's Award Agreement, and for
         the purposes of this Plan only the:

         (i)      conviction for, or guilty plea to, a felony or crime of
                  similar gravity,

         (ii)     perpetration by the Participant of a material, dishonest act
                  or fraud against the Company, or

         (iii)    material breach by a Participant of any of the covenants or
                  provisions of the Participant's non-competition agreement, if
                  any, in effect on the date such Participants is terminated for
                  Cause pursuant to Section 8.2 of the Plan.

2.5      "CHANGE IN CONTROL OF THE COMPANY" shall mean the occurrence of any one
         of the following events:

         (i)      the acquisition of beneficial ownership (within the meaning of
                  Rule 13d-3 promulgated under the Securities Exchange Act of
                  1934) of 50% or more of the Company Voting Securities directly
                  or indirectly by a person (as such term is used in Sections
                  13d and 14d of the Securities Exchange Act of 1934) or by two

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                  or more persons acting as a partnership, limited partnership,
                  joint venture, syndicate or other such group, other than the
                  Company or the Parent or companies controlled by the Parent;
                  provided, however, that such acquisition shall not constitute
                  a Change in Control of the Company hereunder if a majority of
                  the holders of the Company Voting Securities immediately prior
                  to such acquisition retain directly or through ownership of
                  one or more holding companies, immediately following such
                  acquisition, a majority of the voting securities entitled to
                  vote generally in the election of directors of the successor
                  entity;

         (ii)     consummation of a merger, consolidation, sale, disposition or
                  other reorganization or business combination of the Company
                  (the "Transaction") (other than a reincorporation of the
                  Company), in each case, unless, following such Transaction,
                  all or substantially all of the individuals or entities who
                  were the beneficial owners, respectively, of the Company
                  Voting Securities immediately prior to such Transaction
                  beneficially own , directly or indirectly, more than 50% of,
                  respectively, the then outstanding voting securities entitled
                  to vote generally in the election of directors , as the case
                  may be, of the corporation resulting from such Transaction
                  (including, without limitation, a corporation which as a
                  result of such transaction owns the Company either directly or
                  through one or more subsidiaries);

         (iii)    the sale, liquidation or distribution of all or substantially
                  all of the assets of the Company to a third party who is not
                  an affiliate of the Company;

         (iv)     the Stockholders of the Company approve a plan for the
                  dissolution of the Company in accordance with applicable state
                  law; or

         (v)      during any period of 24 consecutive months, individuals who at
                  the beginning of such period constitute the Board of Directors
                  cease for any reason to constitute a majority thereof unless
                  the election, or the nomination for election, by the Company's
                  Stockholders of each director who was not a director at the
                  beginning of the period was approved by a vote of at least
                  two-thirds of the directors then still in office who were
                  directors at the beginning of such period.

2.6      "CODE" shall mean the Internal Revenue Code of 1986, as amended.

2.7      "COMMITTEE" shall mean the Board or a compensation committee or
         subcommittee of the Board appointed by the Board from among its
         members; provided, however, that following an Initial Public Offering,
         it shall mean a committee comprised solely of two or more "outside
         directors" within the meaning of Section 162(m) of the Code and the
         regulations thereunder and, if practicable, each member of the
         Committee shall be a "nonemployee director" within the meaning of the
         rules promulgated under Section 16(b) of the Exchange Act.

2.8      "COMMON STOCK" shall mean the Company's common stock, par value $0.01
         per share; provided, however, that immediately following the date upon
         which the Company amends its Certificate of Incorporation to create
         Class B convertible, non-voting common stock, par value $.01 per share,
         of the Company (the "Class B Stock"), all references to "Common Stock"
         in the Plan and in any outstanding option awarded prior

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         to such date, as well as options granted thereafter, shall be deemed to
         refer to Class B Stock.

2.9      "COMPANY" shall mean Eon Labs Manufacturing, Inc.

2.10     "COMPANY VOTING SECURITIES" means the outstanding voting securities of
         the Company entitled to vote generally in the election of directors,
         determined on a fully-diluted basis.

2.11     "CONSOLIDATED INCOME BEFORE INTEREST, TAXES, DEPRECIATION AND
         AMORTIZATION"shall mean, for the applicable twelve (12) month period,
         the consolidated income of the Company and its wholly-owned
         subsidiaries from the operations of the Company and its wholly-owned
         subsidiaries before the deduction of interest expense, depreciation and
         amortization expense and provision for taxes on income with respect to
         such period, determined in accordance with generally accepted
         accounting principles consistently applied; it being understood and
         agreed that (i) in no event shall the consolidated income of the
         Company and its wholly-owned subsidiaries include any extraordinary or
         non-operating items of income or expense or insurance proceeds received
         by the Company or any of its wholly-owned subsidiaries or income or
         expense not directly related to the operations of the Company and its
         wholly-owned subsidiaries, (ii) the Company shall not be precluded from
         changing the accounting principles applied by it, on advice from its
         independent accountants, and any such change shall not violate the
         requirement of consistent application of accounting principles and
         (iii) there shall be no deduction made for management fees (but not
         royalty fees) paid to Hexal Pharmaceuticals, Inc. or Eon Labs, Inc. or
         their affiliates (except for out-of-pocket expenses reasonably incurred
         by such entities directly in connection with the Company's business).

2.12     "CONSULTANTS AND ADVISORS" shall mean persons (other than persons who
         are Employees or Nonemployee Directors) or entities that render
         services to the Company, including independent contractors.

2.13     "DISABILITY" shall mean a permanent and total disability as defined in
         the Company's long term disability insurance program; provided,
         however, that in the event no such program is in effect, Disability
         shall mean a total and permanent disability or incapacity resulting
         from medically demonstrable bodily injury or disease (i) which prevents
         the Participant from engaging in any regular occupation for
         compensation or profit, (ii) which has continuously existed for a
         period of at least six months and (iii) for which the Participant would
         be eligible for or is in receipt of disability benefits under the
         Federal Social Security Act. Disability will be determined by the
         Committee who may reasonably require the Participant to undergo
         examination by a qualified physician selected by the Committee at any
         time or times for the purposes of determining whether the Participant
         incurred and continues to have a Disability.

2.14     "EFFECTIVE DATE" shall mean the date on which the Plan is adopted and
         approved by a majority of the Stockholders of the Company.

2.15     "EMPLOYEE" shall mean a full-time, salaried, exempt employee of the
         Company.

2.16     "EMPLOYMENT REPURCHASE NOTICE" shall mean the written notice provided
         by the Company to the Participant stating the Company's election to
         exercise its right to call

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         Common Stock held by the Participant pursuant to the exercise of a
         Stock Option, specifying the number of Shares to be repurchased, and
         specifying a closing date for such repurchase.

2.17     "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
         amended, including applicable regulations thereunder.

2.18     "FAIR MARKET VALUE" shall mean:

         (i)      if the Common Stock is readily tradeable on a national
                  securities exchange or other market system, (x) in the
                  over-the-counter market as reported by the NASDAQ Stock
                  Market, the closing price on the date of determination, if any
                  trades were made on such day and if such information is
                  available, otherwise the average of the last bid and asked
                  prices for the date of determination, or (y) if the Class A
                  Common Stock of the Company is then traded on a national
                  securities exchange, the average of the high and low prices
                  for date of determination or, if lower, the closing price on
                  the date of determination, on the principal national
                  securities exchange on which it is so traded; provided,
                  however, that if the Common Stock was not traded on the date
                  of determination, prices shall be determined as of the last
                  preceding trading date; or

         (ii)     if the Common Stock is not readily tradeable on a national
                  securities exchange or other market system, the value as
                  determined in good faith by the Committee.

2.19     "INITIAL PUBLIC OFFERING" shall mean the sale of any Common Stock of
         the Company pursuant to a registration statement that has been declared
         effective under the Securities Act of 1933, as amended, if as a result
         of such sale (i) the issuer becomes a reporting company under Section
         12(b) or 12(g) of the Exchange Act and (ii) such Common Stock is traded
         on the New York Stock Exchange or the American Stock Exchange, or
         quoted on the NASDAQ National Market System or traded or quoted on any
         other national stock exchange or national securities system.

2.20     "NONEMPLOYEE DIRECTOR" shall mean a member of the Board who is not an
         Employee.

2.21     "PARTICIPANT" shall mean any Employee, Nonemployee Director, Consultant
         or Advisor to whom an Award has been granted by the Committee under the
         Plan.

2.22     "PLAN" shall mean the Eon Labs Manufacturing, Inc. Stock Option Plan.

2.23     "PUT CAP" shall mean, as of the date of determination, the lesser of
         (i) the dollar amount of Common Stock that the Company is able to
         repurchase without violating applicable state law and/or the terms of
         any agreement with its banks or institutional lenders, or (ii) twenty
         percent (20%) of the Company's Consolidated Income before Interest,
         Taxes, Depreciation and Amortization for the twelve (12) month period
         ending on December 31st immediately preceding the date of determination
         less the aggregate dollar amount of shares of Common Stock repurchased
         during such twelve (12) month period ending on such December 31st from
         Participants, or former Employees other than payments to such
         Participants, or former Employees pursuant to Section 9.2 of the Plan.
         For purposes of this definition, the aggregate dollar amount of Common
         Stock repurchased during such 12 month period shall include the Fair
         Market Value of shares of Common Stock withheld by the Company upon a
         Participant's exercise of a Stock Option to satisfy the Participant's
         minimum statutory withholding tax obligation.

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2.24     "STOCK OPTION" shall mean the grant by the Committee to a Participant
         of a non-qualified stock option to purchase Common Stock in accordance
         with Section 6. Such option shall not be an "incentive stock option"
         within the meaning of Section 422 of the Code.

2.25     "STOCKHOLDERS" shall mean those persons holding securities of the
         Company having general voting power, under ordinary circumstances, to
         elect the Company's Board.

2.26     "VEST" shall mean with respect to Stock Options, when the Stock Option
         (or a portion of such Stock Option) first becomes exercisable and
         remains exercisable subject to the terms and conditions of such Stock
         Option.

2.27     "VESTING DATE" Shall mean the date or dates on which an Award Vests.

3.0      ELIGIBILITY AND PARTICIPATION

3.1      ELIGIBILITY. All Employees, Nonemployee Directors and Consultants and
         Advisors shall be eligible to participate in the Plan and to receive
         Awards.

3.2      PARTICIPATION. Participants shall consist of such Employees,
         Nonemployee Directors and Consultants and Advisors as the Committee in
         its sole discretion designates to receive Awards under the Plan.
         Designation of a Participant in any year shall not require the
         Committee to designate such person or entity to receive an Award in any
         other year or, once designated, to receive the same type or amount of
         Award as granted to the Participant in any other year. The Committee
         shall consider such factors as it deems pertinent in selecting
         Participants and in determining the type and amount of their respective
         Awards.

4.0      ADMINISTRATION

4.1      RESPONSIBILITY. The Committee shall have the responsibility, in its
         sole discretion, to control, operate, manage and administer the Plan in
         accordance with its terms.

4.2      AWARD AGREEMENT. Each Award granted under the Plan shall be evidenced
         by an Award Agreement which shall be signed by the Committee and the
         Participant; provided, however, that in the event of any conflict
         between a provision of the Plan and any provision of an Award
         Agreement, the Plan shall prevail.

4.3      AUTHORITY OF THE COMMITTEE. The Committee shall have all the
         discretionary authority that may be necessary or helpful to enable it
         to discharge its responsibilities with respect to the Plan, including
         but not limited to the following:

         (i)      to determine eligibility for participation in the Plan;

         (ii)     to determine the type and amount of any Award granted under
                  the Plan;

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         (iii)    to supply any omission, correct any defect or reconcile any
                  inconsistency in the Plan in such manner as it shall deem
                  appropriate in its sole discretion to carry the same into
                  effect;

         (iv)     to issue administrative guidelines as an aid to administer the
                  Plan and make changes in such guidelines as it deems proper;

         (v)      to make rules for carrying out and administering the Plan and
                  to make changes in such rules as it deems proper;

         (vi)     to determine the Fair Market Value of Common Stock underlying
                  an Award;

         (vii)    to accelerate the Vesting of any Award; and

         (viii)   to take any and all other actions it deems necessary or
                  advisable for the proper operation or administration of the
                  Plan.

4.4      ACTION BY THE COMMITTEE. The Committee may act only by a majority of
         its members, provided, however, that in the event the Committee is
         comprised of only two members, the Committee shall act only by
         unanimous consent. Any determination of the Committee may be made,
         without a meeting, by a writing or writings signed by all of the
         members of the Committee. In addition, the Committee may authorize any
         one or more of its members to execute and deliver documents on behalf
         of the Committee.

4.5      DELEGATION OF AUTHORITY. The Committee may delegate to one or more of
         its members, or to one or more agents, such administrative duties as it
         may deem advisable; provided, however, that any such delegation shall
         be in writing; provided, further, that if the Committee delegates the
         authority to grant Awards to any officer or employee who is not a
         member of the Committee, such delegation shall be pursuant to a written
         resolution adopted by the Committee and shall in all other respects
         comply with Section 157, Title 8, of the Delaware Code. In addition,
         the Committee, or any person to whom it has delegated duties under this
         Section 4.5, may employ one or more persons to render advice with
         respect to any responsibility the Committee or such person may have
         under the Plan. The Committee may employ such legal or other counsel,
         consultants and agents as it may deem desirable for the administration
         of the Plan and may rely upon any opinion or computation received from
         any such counsel, consultant or agent. Expenses incurred by the
         Committee in the engagement of such counsel, consultant or agent shall
         be paid by the Company.

4.6      DETERMINATIONS AND INTERPRETATIONS BY THE COMMITTEE. All determinations
         and interpretations made by the Committee shall be binding and
         conclusive on all Participants and their heirs, successors, and legal
         representatives.

4.7      LIABILITY. No member of the Board and no Employee shall be liable for
         any act or failure to act hereunder, except in circumstances involving
         his or her bad faith, gross negligence or willful misconduct, or for
         any act or failure to act hereunder by any other member or Employee or
         by any agent to whom duties in connection with the administration of
         the Plan have been delegated.

4.8      INDEMNIFICATION. The Company shall indemnify members of the Committee
         and any agent of the Committee who is an Employee, against any and all
         liabilities or expenses

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         to which they may be subjected by reason of any act or failure to act
         with respect to their duties on behalf of the Plan, except in
         circumstances involving such person's bad faith, gross negligence or
         willful misconduct.

5.0      COMMON STOCK SUBJECT TO PLAN

5.1      AVAILABLE SHARES OF COMMON STOCK. Subject to adjustment as provided in
         Section 5.3, the number of shares of Common Stock available for the
         grant of Awards under the Plan shall not exceed 79,000 shares of Common
         Stock. Common Stock subject to or underlying an Award that expires
         unexercised, or is forfeited, terminated or canceled, and Common Stock
         that is tendered to pay for the exercise of an Award shall thereafter
         again be available for grant under the Plan.

5.2      MAXIMUM AGGREGATE NUMBER OF SHARES OF COMMON STOCK UNDERLYING AWARDS
         GRANTED UNDER THE PLAN TO ANY SINGLE PARTICIPANT. Following an Initial
         Public Offering, but in no event prior to the latest date that 162(m)
         of the Code and the rules and regulations thereunder shall first apply
         to the Plan, the maximum aggregate number of shares of Common Stock
         underlying all Awards that may be granted to any single Participant
         during the life of the Plan shall be 25,000 shares of Common Stock,
         subject to adjustment as provided in Section 5.3. For purposes of this
         paragraph, any Awards that expire unexercised, or are forfeited,
         terminated or canceled, and shares of Common Stock that are tendered to
         pay for the exercise of an Award shall be counted in determining the
         maximum aggregate number of shares of Common Stock that may be granted
         to any single Participant during the life of the Plan.

5.3      ADJUSTMENT TO COMMON STOCK. If there is any change in the Common Stock
         of the Company, through merger, consolidation, reorganization,
         recapitalization, a Common Stock dividend, a Common Stock split,
         reverse Common Stock split, split-up, split-off, spin-off, combination
         of Common Stock, exchange of Common Stock, dividend in-kind or other
         like change in capital structure or distribution (other than normal
         cash distributions or cash dividends) to Stockholders of the Company,
         an adjustment shall be made to each outstanding Award so that each such
         Award shall thereafter be with respect to or exercisable for such
         securities, cash and/or other property as would have been received in
         respect of the Common Stock subject to such Award had such Award been
         paid, distributed or exercised in full immediately prior to such change
         or distribution. In addition, in the event of any such change or
         distribution, in order to prevent dilution or enlargement of
         Participants' rights under the Plan, the Committee shall have the
         authority to adjust, in an equitable manner, the number and kind of
         shares of Common Stock that may be issued under the Plan, the number
         and kind of shares of Common Stock subject to outstanding Awards, the
         exercise price applicable to outstanding Common Stock Options, and
         other value determinations applicable to outstanding Awards. Further,
         the Committee is authorized to make adjustments to the terms and
         conditions of, and the criteria included in, Awards in recognition of
         unusual or nonrecurring events affecting the Company or the financial
         statements thereof, or in response to changes in applicable laws,
         regulations, or accounting principles.

6.0      STOCK OPTIONS

6.1      IN GENERAL. The Committee may, in its sole discretion, grant Stock
         Options to Employees, Nonemployee Directors and Consultants and
         Advisors for any reason, including but not limited to the attainment of
         performance objectives as defined in the

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         Participant's Award Agreement. The Committee shall, in its sole
         discretion, determine the Employees, the Nonemployee Directors and
         Consultants and Advisors who will receive Stock Options and the number
         of shares of Common Stock underlying each Stock Option.

6.2      EXERCISE PRICE. The Committee shall specify the exercise price of each
         Stock Option in the Award Agreement; provided, however, that the
         exercise price of any Stock Option shall not be less than 100 percent
         of the Fair Market Value of the Common Stock underlying such Award on
         the date of grant unless the Committee in its sole discretion and due
         to special circumstances determines otherwise.

6.3      TERM OF AWARDS. Except as the Committee in its sole discretion may
         otherwise provide in the Award Agreement, the terms of the Stock
         Options shall be ten (10) years, and any Award shall expire and cease
         to be exercisable after the tenth anniversary of the date of grant.

6.4      EXERCISE OF STOCK OPTIONS. The Stock Options shall be exercised as set
         forth in the Participant's Award Agreement. The Stock Option exercise
         price may be paid in cash. After an Initial Public Offering, in the
         sole discretion of the Committee, payment may also be made (i) by the
         delivery or presentation of Common Stock then owned by the Participant
         for not less than six (6) months or (ii) by the delivery of a properly
         executed exercise notice to the Company together with a copy of
         irrevocable instructions to a broker to effect the immediate sale of
         some or all of the Shares purchased pursuant to exercising the Options
         and to remit promptly to the Company, out of the sale or loan proceeds
         available on the settlement date, the aggregate exercise price payable
         for the purchased Shares (a "Cashless Exercise"). To facilitate the
         foregoing Cashless Exercise, the Company may enter into agreements for
         coordinated procedures with one or more brokerage firms. The Committee
         may prescribe any other method of paying the exercise price that it
         determines to be consistent with applicable law and the purpose of the
         Plan, including without limitation, in lieu of the exercise of a Stock
         Option by delivery of Common Stock then owned by a Participant,
         providing the Company with a notarized statement attesting to the
         number of shares of Common Stock owned by the Participant for not less
         than six (6) months, where upon verification by the Company, the
         Company would issue to the Participant only the number of incremental
         shares of Common Stock to which the Participant is entitled upon
         exercise of the Stock Option.

7.0      VESTING AND NON-TRANSFERABILITY

7.1      VESTING. The Committee shall specify the Vesting Date with respect to
         each grant of an Award. The Committee may grant an Award that is
         Vested, either in whole or in part, on the date of grant. The Vesting
         of such Award may be subject to such other terms and conditions as
         shall be determined by the Committee, including, without limitation,
         accelerating the Vesting of such Award. If the Committee fails to
         specify a Vesting Date or Vesting Dates in the Award Agreement,
         one-fifth of an Award will Vest on each anniversary following the date
         of grant such that the Award will be fully (100%) vested upon the fifth
         calendar anniversary of the date of grant in accordance with the
         schedule set forth below.

<Table>
<Caption>
                  Calendar Anniversary                  Percent Vesting on                   Total Percent
                   After Grant Date                    the Anniversary Date                     Vested
<S>                      <C>                                            <C>                       <C>
                         1                                              20%                         20%

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                         2                                              20%                         40%
                         3                                              20%                         60%
                         4                                              20%                         80%
                         5                                              20%                        100%
</Table>

7.2      NON-TRANSFERABILITY. An Award shall not be transferable by the
         Participant other than by will or the laws of descent and distribution,
         and Stock Options shall be exercisable, during the Participant's
         lifetime, only by the Participant. Notwithstanding the foregoing, the
         Committee, in its sole discretion may permit the transferability of an
         Award by a Participant solely to members of the Participant's immediate
         family or trusts or family partnerships or other similar entities for
         the benefit of such persons and subject to such terms, conditions,
         restrictions and/or limitations, if any, as the Committee may include
         in the Award Agreement.

8.0      DEATH, DISABILITY, AND TERMINATION WITHOUT CAUSE

8.1      TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. Subject to a
         Participant's Award Agreement, if the employment or performance of
         services of a Participant (who is an individual) is terminated as a
         result of death or Disability, all Awards or portions thereof that have
         not yet Vested shall Vest only to the extent such unvested portion
         would have Vested had the Participant's employment terminated one day
         after the grant date Anniversary immediately following the date of such
         death or Disability. Such Vested Awards shall remain exercisable for
         the one year following the date of termination, but in no event later
         than the term of such Awards.

8.2      TERMINATION OF EMPLOYMENT FOR CAUSE. Subject to a Participant's Award
         Agreement, in the event a Participant is terminated by the Company for
         Cause, all unvested Awards and any Vested, but unexercised Awards shall
         be forfeited upon the date of such termination.

8.3      TERMINATION OF EMPLOYMENT WITHOUT CAUSE. Subject to a Participant's
         Award Agreement, if the employment or performance of services of a
         Participant (who is an individual) is terminated by the Participant or
         by the Company for any reason other than for Cause, death, or
         Disability, all Awards or portions thereof that have not yet Vested,
         shall be forfeited and any Vested Awards shall remain exercisable for
         90 days after the date of termination; provided, however, that a
         Consultant or Advisor who terminates services to become an Employee or
         a Nonemployee Director shall not be deemed to have terminated without
         Cause.

9.0       HOLDING PERIOD AND SALE TO COMPANY

9.1      HOLDING PERIOD. Except as provided in Section 9.4 or the Committee in
         its sole discretion determines otherwise, a Participant who acquires
         Common Stock pursuant to an Award shall hold such Common Stock for a
         period of not less than six (6) months from the date the Participant
         exercised a Stock Option. During the six (6) month period, the Common
         Stock may not be sold, assigned, transferred or otherwise disposed of,
         or pledged or hypothecated as collateral for a loan or as security for
         the performance of any obligation or for any other purpose as the
         Committee shall determine. Following such six-month period, in no event
         shall the Common Stock be assignable, transferable, sold, pledged,
         encumbered or otherwise subject to any legal process for the payment of
         any claim against the Participant, other than to the Company in
         accordance with

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         Sections 9.2 and 9.3 below, to members of the Participant's immediate
         family or trusts or family partnerships or other similar entities for
         the benefit of such persons, or to such parties pursuant to a will or
         the laws of descent and distribution, and subject to such terms,
         conditions, restrictions and/or limitations, if any, as the Committee
         may require.

9.2      CALL RIGHT OF THE COMPANY.

         (i)      EXERCISE OF THE CALL RIGHT. Subject to Section 9.1, in the
                  event of an Employee's termination from employment with the
                  Company, or a Nonemployee Director's, Consultant's or
                  Advisor's termination of the performance of services for the
                  Company, the Company shall have the right to call and the
                  Participant shall, upon such election of the Company, be
                  obligated to sell all or any part of the Common Stock acquired
                  by such Participant pursuant to the exercise of a Stock
                  Option. Such call right shall be exercisable during the period
                  that is not less than six months after the acquisition of the
                  Common Stock being repurchased nor more than one year after
                  the later of (a) the termination of the Participant's
                  employment with the Company or (b) such acquisition, unless
                  the Committee in its sole discretion determines otherwise.
                  Upon the exercise of such call right, the Company shall tender
                  to the Participant an amount of cash and/or a note, in
                  accordance with paragraph (ii) below, equal to the Fair Market
                  Value of the Common Stock held by the Participant on the date
                  the call right is exercised. The Company may exercise its
                  right to call with respect to all or any portion of the Common
                  Stock subject to such call, and if the Company calls only a
                  portion of such Common Stock, the remaining Common Stock shall
                  continue to be subject to the Company's right to call.

         (ii)     METHOD OF PAYMENT. The Company may, in its sole discretion,
                  pay the purchase price for any Common Stock repurchased by it
                  pursuant to this Section 9.2 either in cash and/or by delivery
                  on the date of purchase of a check in an amount equal to at
                  least fifty percent (50%) of such purchase price, together
                  with the Company's promissory note in a principal amount equal
                  to the remainder of such purchase price (the "COMPANY NOTE"),
                  provided that any indebtedness of the Participant to the
                  Company, whether or not otherwise then due and payable, shall
                  be deducted from the purchase price for any such Common Stock
                  repurchased by the Company hereunder, but only to the extent
                  that such indebtedness does not exceed such purchase price.
                  The Company Note shall be due and payable not later than two
                  (2) years from the date of issuance, with principal and
                  interest thereon (which interest shall be set at the prime
                  rate set by Citibank, N.A. on the date of a such repurchase)
                  payable on an unsecured basis in two (2) equal annual
                  installments, with the first installment to occur on the first
                  calendar anniversary of the date of issuance and the remaining
                  installment to occur on the second calendar anniversary
                  thereof.

         (iii)    ASSIGNMENT. For purposes of the Company's Call Right set forth
                  in this Section 9, the term "Company" shall include any party
                  to whom the Company has assigned its rights to purchase
                  Shares.

9.3      PUT RIGHT OF PARTICIPANTS. Subject to Section 9.1, the Committee, in
         its sole discretion, may grant a Participant the right to sell to the
         Company and the Company shall, upon such election by the Participant,
         be obligated to purchase all or any part of the Common

                                       10
<Page>

         Stock acquired pursuant to the Participant's exercise of a Stock
         Option at the Fair Market Value of the Common Stock on the date of
         sale to the Company (the "Put Right"); provided, that, in no event
         shall such Put Right be exercisable until after December 31, 2002;
         and provided, further, that the Participant has held such Common
         Stock at least 6 months from the date such Common Stock was acquired
         pursuant to the exercise of the Stock Options. Such Put Right shall
         be exercisable for all or a portion of the Common Stock subject to
         the Put Right. If a Participant puts only part of the Common Stock
         subject to the Put Right, the remaining Common Stock shall continue
         to be subject to the Put Right. The Put Right shall be exercisable
         only between December 1 and December 31 of any year (the "Put
         Window"), or such other period as the Committee, in its sole
         discretion may permit, by submitting written notice to the
         Committee; provided, however, that if the value of the Common Stock
         put by all Participants, and former Employees during a Put Window
         exceeds the Put Cap, the puts shall be limited as follows. The
         Company shall determine the number of shares of Common Stock that
         equal the Put Cap using the per share value as of the last day of
         the Put Window, and that number of shares shall hereinafter be
         referred to as "X." If the number of shares put during the Put
         Window exceeds X, the Company shall not be obligated to purchase a
         percentage of the Common Stock put by each Participant. Such
         percentage shall be equal to one (1) minus a fraction, the numerator
         of which is X and the denominator of which is the total Common Stock
         put by all Participants during such period.

9.4      PUBLIC OFFERING. In the event of an Initial Public Offering with
         aggregate gross proceeds to the Company of at least Twenty-Five Million
         Dollars ($25,000,000), or a merger, consolidation, sale, disposition or
         other reorganization or business combination of the Company in which
         the Company is not the surviving entity, the holding period and
         prohibitions of transfer of Common Stock described in Section 9.1, the
         call right of the Company described in Section 9.2, and the Put Right
         described in 9.3 shall terminate immediately and be without further
         force or effect, except to the extent an Award and its related Award
         Agreement are assumed, expressly rather than by operation of law, by
         the successor corporation (or its Parent) in connection with such a
         merger, consolidation, sale, disposition or other reorganization or
         business combination of the Company.

10.0     CHANGE IN CONTROL

10.1     ACCELERATED VESTING. The Committee, in its sole discretion, pursuant to
         a Participant's Award Agreement on the date the Award is granted, may
         provide that if a Participant's employment or performance of services
         is terminated by the Company without Cause within the one-year period
         following a Change in Control of the Company, the Vesting Date(s) for
         all or a portion of such Award may be accelerated.

10.2     CASHOUT. The Committee, in its sole discretion, may determine that,
         upon the occurrence of a Change in Control of the Company, all or a
         portion of certain outstanding Awards shall terminate within a
         specified number of days after notice to the holders, and each such
         holder shall receive with respect to each share of Common Stock subject
         to a Stock Option, an amount equal to the excess of the Fair Market
         Value of the Common Stock underlying the Stock Option on the date of
         the Change in Control of the Company over the exercise price of such
         Stock Option. Such amount shall be payable in cash, in one or more
         kinds of property (including the property, if any,

                                       11
<Page>

         payable in the transaction) or in a combination thereof, as the
         Committee, in its sole discretion, shall determine.

10.3     ASSUMPTION OR SUBSTITUTION OF AWARDS. Notwithstanding anything
         contained in the Plan to the contrary, the Committee may, in its sole
         discretion, provide that an Award may be assumed by any entity which
         acquires control of the Company or may be substituted by a similar
         award under such entity's compensation plans.

11.0     TAXES

11.1     WITHHOLDING TAXES. The Company may require a Participant who incurs
         taxable wage income pursuant to exercising a Stock Option to reimburse
         the Company which employs such Participant for any taxes required by
         any governmental regulatory authority to be withheld or otherwise
         deducted and paid by such entity in respect of the issuance or
         disposition of the Common Stock. In lieu thereof, the Company or shall
         have the right to withhold the amount of such taxes from any other sums
         due or to become due from the Company to the Participant upon such
         terms and conditions as the Committee shall prescribe. The Company may,
         in its discretion, hold the Common Stock certificate to which such
         Participant is entitled upon the exercise of a Stock Option as security
         for the payment of such withholding tax liability, until cash
         sufficient to pay that liability has been accumulated.

11.2     USE OF COMMON STOCK TO SATISFY WITHHOLDING OBLIGATION. With respect to
         withholding required upon the exercise of Stock Options, Employees and
         Nonemployee Directors may elect to satisfy the withholding requirement,
         in whole or in part, by having the Company withhold shares of Common
         Stock issuable upon the exercise of the Stock Option or other taxable
         event having a Fair Market Value on the date of tax that is determined
         to be equal to the Employee's or Nonemployee Director's minimum
         statutory tax obligation; provided, however, that the Committee may
         disapprove of any such election, suspend or terminate the right to make
         such elections or provide that the right to make such elections shall
         not apply to particular shares of Common Stock or exercises. The
         Committee may impose any additional conditions or restrictions on the
         right to make such an election as it shall deem appropriate, including
         conditions or restrictions with respect to Section 16 of the Exchange
         Act.

11.3     NO GUARANTEE OF TAX CONSEQUENCES. No person connected with the Plan in
         any capacity, including, but not limited to, the Company and its
         directors, officers, agents and Employees makes any representation,
         commitment, or guarantee that any tax treatment, including, but not
         limited to, federal, state and local income, estate and gift tax
         treatment, will be applicable with respect to Awards granted or amounts
         paid for the benefit of a Participant under the Plan.

12.0     TERM OF THE PLAN

12.1     TERM. The Plan shall be effective as of the Effective Date and shall
         terminate on the tenth anniversary of the Effective Date (unless sooner
         terminated by the Board under Section 12.2).

12.2     TERMINATION OF PLAN. The Board may suspend or terminate the Plan at any
         time with or without prior notice; provided, however, that no action
         authorized by this Section 12.2

                                       12
<Page>

         shall reduce the amount of any outstanding Award or change the terms
         and conditions thereof without the Participant's consent.

12.3     AMENDMENT OF PLAN. The Board may amend the Plan at any time without
         prior notice; provided, however, that no action authorized by this
         Section 12.3 shall reduce the amount of any outstanding Award or change
         the terms and conditions thereof without the Participant's consent;
         provided, further, that no amendment of the Plan shall, without the
         approval of the Stockholders of the Company:

         (i)      increase the total number of shares of Common Stock which may
                  be issued under the Plan;

         (ii)     modify the requirements as to eligibility for Awards under the
                  Plan.

         Provided, further, that following an Initial Public Offering, no
         amendment of the Plan shall, without the approval of the Company's
         Stockholders, increase the maximum number of shares of Common Stock
         which may be granted to any individual under the Plan.

         In addition, the Plan shall not be amended without the approval of such
         amendment by the Company's Stockholders if such approval is required
         under the rules and regulations of the stock exchange or national
         market system on which the Common Stock is listed.

12.4     AMENDMENT OR CANCELLATION OF AWARD AGREEMENTS. The Committee may amend
         or modify any Award Agreement at any time by mutual agreement between
         the Committee and the Participant or such other persons as may then
         have an interest therein. In addition, by mutual agreement between the
         Committee and a Participant or such other persons, Awards may be
         granted in substitution and exchange for, or in cancellation of, any
         Awards previously granted under the Plan or any other present or future
         plan of the Company or of an entity which (i) is purchased by the
         Company, (ii) purchases the Company, or (iii) merges into or with the
         Company.

12.5     ADDITIONAL TERMS AND CONDITIONS. The Committee may, by way of the
         Participant's Award Agreement or otherwise, establish such other terms,
         conditions, restrictions and/or limitations, if any, of any Award,
         provided they are not inconsistent with the Plan, including, without
         limitation, the requirement that the Participant not engage in
         competition with the Company.

13.0     MISCELLANEOUS

13.1     ELECTION TO DEFER COMPENSATION ATTRIBUTABLE TO AWARD. The Committee
         may, in its sole discretion, allow a Participant to elect to defer the
         receipt of any compensation attributable to an Award under guidelines
         and procedures to be established by the Committee.

13.2     LISTING OF COMMON STOCKS AND RELATED MATTERS. If at any time the
         Committee shall determine that the listing, registration or
         qualification of Common Stock subject to any Award on any securities
         exchange or under any applicable law, or the consent or approval of any
         governmental regulatory authority, is necessary or desirable as a
         condition of, or in connection with, the granting of an Award or the
         issuance of Common

                                       13
<Page>

         Stock thereunder, such Award may not be exercised, distributed or
         paid out, as the case may be, in whole or in part, unless such
         listing, registration, qualification, consent or approval shall have
         been effected or obtained free of any conditions not acceptable to
         the Committee.

13.3     CONDITIONS UPON ISSUANCE OF COMMON STOCK:

         (i)      Common Stock shall not be issued pursuant to any Award unless
                  the exercise of any Award and the issuance and delivery of
                  Common Stock pursuant to an Award shall comply with all
                  applicable laws, and shall be further subject to the approval
                  of counsel for the Company with respect to such compliance.

         (ii)     as a condition to receiving Common Stock pursuant to an Award,
                  the Company may require the person receiving such Common Stock
                  (a) to represent and warrant at the time of receipt that the
                  Common Stock is being purchased only for investment and
                  without any present intention to sell or distribute such
                  Common Stock if, in the opinion of counsel for the Company,
                  such a representation is required by any applicable laws and
                  (b) to agree to comply with any restrictions on transfer or
                  disposition of any interest in the Common Stock for a period
                  of up to 180 days following the effective date of a
                  registration statement of the Company filed under the
                  Securities Act of 1933.

13.4     NO FIDUCIARY RELATIONSHIP CREATED. Nothing contained in the Plan, and
         no action taken pursuant to its provisions, shall create or be
         construed to create a trust of any kind, or a fiduciary relationship
         between the Company and any Participant, beneficiary, legal
         representative or any other person. The Plan is not intended to be
         subject to the Employee Retirement Income Security Act of 1974, as
         amended.

13.5     NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE OR TO GRANTS. The
         Participant's rights, if any, to continue to serve the Company as a
         Nonemployee Director, officer, Employee, Consultant or Advisor or
         otherwise, shall not be enlarged or otherwise affected by his or her
         designation as a Participant under the Plan, and the Company reserves
         the right to terminate the employment of any Employee, or the services
         of any Nonemployee Director, Consultant or Advisor at any time. The
         adoption of the Plan shall not be deemed to give any Employee,
         Nonemployee Director, Consultant or Advisor or any other individual any
         right to be selected as a Participant or to be granted an Award.

13.6     AWARDS SUBJECT TO FOREIGN LAWS. The Committee may grant Awards to
         individual Participants who are subject to the tax laws of nations
         other than the United States, and such Awards may have terms and
         conditions as determined by the Committee as necessary to comply with
         applicable foreign laws. The Committee may take any action which it
         deems advisable to obtain approval of such Awards by the appropriate
         foreign governmental entity; provided, however, that no such Awards may
         be granted pursuant to this Section 13.6 and no action may be taken
         which would result in a violation of the Exchange Act or any other
         applicable law.

13.7     GOVERNING LAW. The Plan, all Awards granted hereunder, and all actions
         taken in connection herewith shall be governed by and construed in
         accordance with the laws of the state of Delaware without reference to
         principles of conflict of laws, except as superseded by applicable
         federal law.

                                       14
<Page>

13.8     OTHER BENEFITS. No Award granted under the Plan shall be considered
         compensation for purposes of computing benefits under any retirement
         plan of the Company nor affect any benefits or compensation under any
         other benefit or compensation plan of the Company now or subsequently
         in effect.

13.9     NO FRACTIONAL SHARES OF COMMON STOCK. No fractional shares of Common
         Stock shall be issued or delivered pursuant to the Plan or any Award.
         The Committee shall determine whether cash, Common Stock, Stock
         Options, or other property shall be issued or paid in lieu of
         fractional shares of Common Stock or whether such fractional shares of
         Common Stock or any rights thereto shall be forfeited or otherwise
         eliminated.

                                       15<Page>

         AGREEMENT made this 10th day of December, 1999, retroactive
to and effective as of the 10th day of November, 1999, by and between EON LABS
MANUFACTURING, INC., whose principal office is located at 227-15 North Conduit
Avenue, Laurelton, New York 11413, hereinafter designated as the ("EMPLOYER");
and DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFILIATED INDUSTRIES WAREHOUSE
EMPLOYEES LOCAL 815, AFFILIATED WITH THE INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA; whose office is located at 467
Sylvan Avenue, Englewood Cliffs, New Jersey 07632; hereinafter designated as the
"UNION".

         IN CONSIDERATION of the premises and of the mutual and reciprocal
promises herein made and obligations herein assumed, as more fully hereinafter
set forth, the parties agree as follows:

         FIRST:      The Employer recognizes the Union as the sole and
exclusive collective bargaining agent for all employees, excluding executives,
non-producing supervisors, office and clerical employees, salesmen, graduate
chemists, and the employee listed on Schedule "A", which schedule is attached
hereto and made a part hereof. Whenever the word "employees" is used in this
Agreement, it shall refer to all such employees in the bargaining unit as
defined above.

<Page>

                                      - 2 -

                        All employees shall, as a condition of continued
employment, become and remain members of the Union in good standing after they
have completed thirty days of employment or thirty days after execution of this
Agreement, whichever is later; provided, however, that no employee shall be
removed from his employ under this Paragraph so long as he continues to tender
uniform dues and initiation fees to the Union after such thirty-day period. Any
employee who fails to maintain his membership to the extent of not paying
uniform dues and initiation fees after such thirty-day period, shall be
discharged by the Employer within forty-eight hours after receipt of notice from
the Union that such employee has not paid uniform dues and initiation fees.

                        There shall be a trial period of thirty days for all new
employees commencing with the first day of employment, and during such trial
period the Employer may discharge such employee, and such discharge shall be
final and shall not be subject to arbitration as provided herein. For skilled
employees only, upon request by the Employer and with the approval of the Union,
such period may be extended for an additional period not to exceed sixty (60)
days. The Union shall not unreasonably withhold its consent to such a request.

<Page>

                                      - 3 -

         SECOND:        The Employer may discharge any employee at any time
for just cause. In the event the employee is proven to have committed an act
amounting to dishonesty or criminal negligence or violates any section of the
Food, Drug and Cosmetic Act, or other similar Federal, State or Local Health
Laws, the Employer may summarily discharge such employee.

         THIRD:         (A) Seniority shall consist of length of continuous
service with the Employer from the date of employment as an employee within the
bargaining unit on a plant-wide basis, for the purpose of computing benefits of
employment accruing to employees under this Agreement. Plant-wide seniority will
be observed in layoffs, reduction of working forces and recall, providing and
depending upon the skill and ability of an employee to perform the necessary and
required duties of work to be performed.

                        (B) Seniority shall cease and be ended:

         1. If the employee shall voluntarily leave the service of the Employer;

         2. If the employee is discharged from employment for just cause;

<Page>

                                      - 4 -

         3. If the employee, after being laid off, shall fail to report to the
Employer's employment office within three working days after receipt of a notice
in writing by the Employer, which notice shall be sent by registered mail to the
employee's last post office address;

         4. If the employee has been laid off for a continuous period of one
year or more;

         5. If the employee is granted a leave of absence by the Company and
does not report back to work on the designated day.

                        (C) The Employer may reduce the number of employees
employed in the plant, or the number of employees in any particular operation,
whenever it may deem it necessary in accordance with Paragraph Third as stated
herein.

         FOURTH:        The Employer shall deduct uniform membership dues and
initiation fees from the employees' salaries, and make such deductions from
the first full week's payroll in each month and transmit all such funds
deducted no later than the fifteenth day of each month. All funds deducted
from the employees' salaries for the payment of such dues and initiation fees
shall be held in trust by the Employer and shall be considered at all times
the property of the Union, provided, however, that prior to making such
deductions the Employer has

<Page>

                                        -5-

received from each employee on whose account such deductions are made a written
assignment, which shall not be irrevocable for a period of more than one year or
beyond the termination date of this Agreement, whichever occurs sooner, and
which may contain a clause that such assignment shall be automatically renewed
for additional periods of one year, unless the employee shall terminate such
assignment in writing within thirty days prior to any expiration date thereof.

         FTFTH:         It is hereby agreed by and between the respective
parties that, commencing with the week ending November 12, 1999 (being a
continuation of contributions previously made), the Employer shall pay to the
Allied Welfare Fund the sum of Sixty-Nine ($69.00) Dollars, and commencing with
the week ending November 17, 2000 the sum of Seventy-one ($71.00) Dollars, and
commencing with the week ending November 16, 2001 the sum of Seventy-three
($73.00) dollars each and every week for each employee who is employed within
the bargaining unit, commencing with the first day of employment of such
employee, regardless of whether such employee is a member of the Union and
regardless of the number of hours worked during the week. The Employer shall
submit to the Fund a list of the employees for whom such payments are made.
Vacations, holidays and sick leave with pay shall be deemed time worked. The
Employer's payroll records, social security records

<Page>

                                        -6-

or other pertinent data shall be open for inspection and audit by the Fund upon
demand. Such payments shall be made directly to the Allied Welfare Fund and
shall be held subject to the provisions of a trust indenture effective January
26, 1954 and any amendments, changes or additions thereto. The Fund shall be
managed and administered by a board of trustees equally representative of the
employers and the Union. In the event the Employer and the Union trustees
deadlock on the administration of the Fund, they shall agree on an impartial
umpire to decide such dispute; or in the event of their failure to agree within
a reasonable length of time, an impartial umpire shall, on petition of either
trustee, be appointed by the District Court of the United States for the
district where the Fund has its principal office. The trustees shall make
provisions for an annual audit of the Fund. A statement of the results shall be
available for inspection by interested persons at the principal office of the
Fund and at such other places as may be designated by the trustees.

                        Such contributions shall be used for the purpose of
providing insurance, welfare, major medical insurance and similar benefits for
employees employed by the Employer, employees employed by all other employers
similarly situated, their families, and the payment of reasonable administrative
expenses of the Fund; and shall, in

<Page>

                                       -7-

addition, be used and disbursed by the trustees pursuant to the terms,
conditions and provisions of the trust indenture or any amendments, changes or
additions thereto; and the rules, regulations and resolutions adopted
thereunder. Neither the Union, nor any member of the Union individually or
collectively; nor any International Union, nor any body with which the Union nay
be affiliated; nor any participating employer individually or collectively; nor
any combination thereof; nor any association, corporation, group, entity, person
or trust; nor any successor or assign thereof, either directly or indirectly,
shall have any right, title, interest or claim in or to the Fund or any part
thereof; nor to any accounting, supervision or control thereof, of whatsoever
kind or nature. All monies, contributions, property, assets of the Fund and
those hereafter acquired; and the ownership control and the administration of
the Fund shall irrevocably, inseparably and forever remain vested exclusively in
the trustees of the Fund. No employee of any participating employer; nor any
employee of the Union; nor any person claiming by, through or under such
employee, either directly or indirectly, shall have any right, title, interest
or claim in or to the Fund or to any part thereof; nor to any accounting,
supervision or control thereof of whatsoever kind or nature; nor any claim
against the Union, participating employers, or the trustees, or to the
contributions of his or her employer to the Fund or any assets or monies held by
the

<Page>

                                       -8-

Fund except such benefits as are provided for by the plan and/or by the rules
and regulations from time to time established and promulgated by the trustees in
accordance with the powers granted by the trust indenture, as the same may be
amended or modified from time to time. The discretion of the trustees as to the
administration, use and disbursement of the Fund shall be final and conclusive.

                        All payments shall be due and payable on the first day
of each month, for the preceding month. If the Employer fails to make a payment
or payments required hereunder, on or before the tenth day of the succeeding
month, then the Trustees may require, and the Employer agrees to pay, interest
on any unpaid balance at the applicable rate as permitted by law. In addition,
the Employer specifically agrees that it shall be liable for all auditing
expenses, collection costs and legal fees incurred by the Union or by the
Trustees of the Fund for the collection of such payments.

                        From and out of the contributions made to the Allied
Welfare Fund as specified above, Eight Dollars per employee per week shall be
unconditionally and irrevocably allocated and paid to the Union Mutual Medical
Fund subject to the provisions of a trust indenture effective September 6, 1978
and any amendments,

<Page>

                                    -9-

changes or additions thereto, for the benefit of retired employees of the
Employer and retired employees of all other employers similarly situated and
their families who are receiving pension benefits from the Union Mutual Fund,
and those employees of the Employer and of all other employers similarly
situated whose pension benefits from the Union Mutual Fund have been vested and
who, in either case, are and remain members in good standing of the Union Mutual
Benefit Association. All sums contributed to the Union Mutual Medical Fund and
the affairs of said Fund shall be managed and administered by a Board of
Trustees equally representative of the employers and the participants. All of
the foregoing conditions and provisions applicable to the Allied Welfare Fund
shall be equally applicable to the Union Mutual Medical Fund.

         SIXTH:         It is hereby agreed by and between the respective
parties that, commencing with the effective date of this Agreement (being a
continuation of contributions previously made), the Employer shall pay to the
Union Mutual Fund the sun of Twenty-Four Dollars each and every week for each
employee who is employed within the bargaining unit commencing with the first
day of employment of such employee, regardless of whether such employee is a
member of the Union and regardless of the number of hours worked during the
week; and the Employer shall submit to the Fund a list of the

<Page>

                                     -10-

employees for whom such payments are made. Vacations, holidays and sick leave
with pay shall be deemed time worked. The Employer's payroll records, social
security records and other pertinent data shall be open for inspection and audit
by the Fund upon demand. Such payments shall be made directly to the Union
Mutual Fund and held subject to the provisions of a trust indenture effective
November 1, 1955 and any amendments, changes, or additions thereto. The Fund
shall be managed and administered by a board of trustees equally representative
of the employers and the Union. In the event the Employer and the Union trustees
deadlock on the administration of the Fund, the two shall agree on an impartial
umpire to decide such dispute; or in the event of their failure to agree within
a reasonable length of time, an impartial umpire shall, on petition of either
trustee, be appointed by the District Court of the United States for the
district where the Fund has its principal office. The trustees shall make
provisions for an annual audit of the Fund, a statement of the result of which
shall be available for inspection by interested persons at the principal office
of the Fund and at such other places as may be designated by the trustees.

                        The Fund shall be used for the purpose of providing
pensions and/or annuities and similar benefits for employees employed by the
Employer, employees

<Page>

                                      -11-

employed by all other employers similarly situated, the payment of reasonable
administrative expenses of the Fund and shall, in addition, be used and
disbursed by the trustees pursuant to the terms, conditions and provisions of
the trust indenture, or any amendments, changes or additions thereto; and the
rules, regulations and resolutions adopted thereunder. Neither the Union, nor
any member of the Union individually or collectively; nor any International
Union; nor any body with which the Union may be affiliated; nor any
participating employer individually or collectively; nor any combination
thereof; nor any association, corporation, group, entity, person or trust; nor
any successor or assign thereof either directly or indirectly, shall have any
right, title, interest or claim in or to the Fund, or any part thereof; nor to
any accounting, supervision or control thereof of whatsoever kind or nature. It
is understood and agreed that the Employer and all other employers similarly
situated may have a continuing financial obligation pursuant to the provisions
of the Employee Retirement Income Security Act of 1974, in the event of
termination or partial termination of the Fund. All monies, contributions,
property, assets of the Fund and those hereafter acquired; and the ownership,
control and the administration of the Fund shall irrevocably, inseparably and
forever remain vested exclusively in the trustees of the Fund. No employee of
any participating employer; nor any employee of the Union; nor any person
claiming by, through or under such

<Page>

                                     -12-

employee, either directly or indirectly, shall have any right, title, interest
or claim in or to the Fund or any part thereof; nor to any accounting,
supervision or control thereof of whatsoever kind or nature; nor any claim
against the Union, participating employers or the trustees; nor to the
contributions of his or her employer to the Fund; nor to any assets or monies
held by the Fund except such benefits as are provided by the plan and/or by the
rules and regulations from time to time established and promulgated by the
trustees in accordance with the powers granted by the trust indenture, as the
same may be amended or modified from time to time. The discretion of the
trustees as to the administration, use and disbursement of the Trust Fund shall
be final and conclusive.

                        All payments shall be due and payable on the first day
of each month, for the preceding month. If the Employer fails to make a payment
or payments required hereunder, on or before the tenth day of the succeeding
month, then the Trustees may require, and the Employer agrees to pay, interest
on any unpaid balance at the applicable rate as permitted by law. In addition,
the Employer specifically agrees that it shall be liable for all auditing
expenses, collection costs and legal fees incurred by the Union or by the
Trustees of the Fund for the collection of such payments.

<Page>

                                    - 13 -

         SEVENTH:       (A) For full time employees, forty hours shall
constitute the normal work week, Monday through Friday inclusive, eight hours
per day. The number of hours to be worked shall be designated by the Employer
and may be varied from time to time as the Employer may find it necessary.

                        (B) Hours worked in excess of forty hours in any
workweek or eight hours in any one day shall be paid for at one and one-half
times the regular straight-time rate of pay; it being specifically understood
that there shall be no duplicate of pay for overtime work. Excused absences
shall be deemed time worked insofar as the provisions of this Paragraph are
concerned.

                        (C) All hours worked on Sunday shall be paid for at the
rate of double time.

                        (D) Each employee shall be allowed three minutes at the
start of his or her work shift for clocking-in, and said three minutes will not
be deducted from the employee's pay.
<Page>

                                    - 14 -

                        (E) Each employee arriving more than three minutes late
at the start of his or her work shift, shall clock-in at the next quarter hour
immediately after their arrival.

                        (F) Each employee shall receive a five minute wash-up
period each day, at the conclusion of his or her work shift.

         EIGHTH:        SHIFT DIFFERENTIAL

                        (A) Shift designations will be based on an employee's
regularly scheduled start time, as follows:

<Table>
<Caption>
                                        Regularly Scheduled
          Shift                             Start  Time
          -----                             -----------

<S>                                     <C>
          First                         6:00 a.m.  - 10:00 a.m.
          Swing                         10:01 a.m. -  2:00 p.m.
          Second                        2:01 p.m.  -  6:00 p.m.
          Third                         6:01 p.m.  -  5:59 a.m.
</Table>

                        (B) Shift differential will be paid for time actually
worked and paid time off (including holidays, vacations and sick days as
follows:

<Page>

                                    - 15 -

<Table>
<Caption>
Shift                                         Differential
-----                                         -----------

<S>                                           <C>
First                                            -----
Swing                                              5%
Second                                            10%
Third                                             15%
</Table>

                        (C) Work performed at the end of an employee's regularly
scheduled work shift will be deemed a continuation of the employee's shift and
overtime shall be paid based on the employee's base rate of pay (including shift
differential, if applicable) and will not be considered a new (later) shift. By
way of example, an employee regularly scheduled to work 8:00 a.m. to 4:30 p.m.
is first shift. If such employee continues and works from 4:30 p.m. until 6:30
p.m., such additional two hours will be paid at the rate of one and one-half
times the first shift, and not the second shift, rate.

                        (D) Work performed prior to an employee's regularly
scheduled work shift will be paid at the rate applicable to the employee's
regularly scheduled work shift. By way of example, an employee regularly
scheduled to work 3:00 p.m. to 11:30 p.m. is second shift. If such employee

<Page>

                                    - 16 -

reports early and works from 1:00 p.m. to 11:30 p.m., such additional two
hours (1:00 p.m. to 3:00 p.m.) will be paid at the rate of one and
one-half times the second shift rate.

         NINTH:         SHIFT ASSIGNMENTS AND STARTING TIMES

                        (A) The Company has the absolute right to determine the
number of employees and the work to be performed on any shift.

                        (B) (1) In the event the Company seeks to fill positions
on a particular shift, it will first seek volunteers from among those employees
qualified to perform the work. Selections from an excess of qualified volunteers
will be on the basis of greatest seniority. In the event of insufficient
qualified volunteers, qualified employees will be re-assigned involuntarily on
the basis of least seniority. No employee will be so involuntarily reassigned on
less than five (5) working days' notice.

                        (B) (2) The provisions of Sub-Section B(1)
notwithstanding, the Company may involuntarily reassign qualified employees
between shifts, out of seniority order, each for periods of up to two (2)
months when, in the Company's good faith business judgment, such action

<Page>

                                     -17-

is necessary to allow the shifts in question to operate efficiently. No employee
will be so involuntarily reassigned on less than five (5) working days' notice.

                        (C) Within each shift, the Company may set and assign
staggered or common scheduled starting times, the number of employees to be
scheduled to start at any particular time, and each individual employee's
starting time, regardless of seniority, provided, however, that the Company
seeks first to fill particular start times with volunteers from among
qualified employees before it assigns or re-assigns an employee a start time
involuntarily. No employee will be so involuntarily reassigned on less than
five (5) working days' notice.

         TENTH:         (A) The Employer shall have the right to hire and
utilize part-time employees to be assigned to the Employer's second or third
shifts, as elsewhere defined. For purposes of this provision, "part-time" shall
mean an employee generally assigned, on average, to one or more work days per
week generally consisting, on average, of six (6) hours or fewer.

<Page>

                                     -18-

                        (B) Part-time employees shall accrue seniority on the
same basis as, but be maintained on a separate seniority list from regular
employees. The trial period shall be measured in terms of workdays for part-time
employees. The Employer shall contribute to the Welfare, Pension and Vacation
funds on behalf of part-time employees as for regular employees. Part-time
employees shall earn vacation pay and receive holiday pay and other benefits on
a pro rata basis based on their regularly assigned hours. Part-time employees
shall receive premium, as opposed to straight time pay for overtime in excess of
8 hours per day.

                        (C) Part time employees shall be laid off in reverse
order of their part-time seniority. However, no full-time employee may be laid
off if any part-time employee is then employed in the same department as then
constituted by the Company. A full-time employee whose position is eliminated in
a layoff may bump into a part-time position, providing and depending upon the
skill and ability of the full-time employee to perform the necessary and
required duties of work to be performed, and shall, for bumping purposes, be
deemed to have greater part-time seniority than any part-time employee. A laid
off full-time employee who bumps into a part-time position does not as a result
forfeit his or her recall rights with respect to full-time employment pursuant
to Article Third.

<Page>

                                     -19-

         ELEVENTH:      (A) Each full-time employee covered by this
Agreement shall receive eight hours of straight-time pay at his or her regular
hourly rate of pay (including shift differential, where applicable), for the
following holidays:

<Table>
<Caption>
                                 2000
                                 -----
<S>                             <C>                               <C>
New Year's Day                   Monday                           January 3

Martin Luther King               Monday                           January 17

Presidents' Day                  Monday                           February 21

Good Friday                      Friday                           April 21

Memorial Day
(Observed)                       Monday                           May 29

Floating Holiday
in lieu of Birthday              Monday                           July 3

July 4th                         Tuesday                          July 4

Labor Day                        Monday                           September 4

Columbus Day
(Observed)                       Monday                           October 9

Thanksgiving                     Thursday                         November 23
                                 Friday                           November 24

Christmas                        Monday                           December 25
                                 Tuesday                          December 26

<Page>

                                     -20-

<Caption>
                                 2001
                                 ----
<S>                              <C>                             <C>
New Year's Day                   Monday                           January 1

Martin Luther King               Monday                           January 15

Presidents' Day                  Monday                           February 19

Good Friday                      Friday                           April 13

Memorial Day
(Observed)                       Monday                           May 28

July 4th                         Wednesday                        July 4

Labor Day                        Monday                           September 3

Columbus Day
(Observed)                       Monday                           October 8

Thanksgiving                     Thursday                         November 22
                                 Friday                           November 23

Christmas                        Monday                           December 24
                                 Tuesday                          December 25
Floating Holiday
in lieu of Birthday              Monday                           December 31
</Table>

                                       20

<Page>

                                        - 21 -

<Table>
<Caption>
                                 2002
                                 -----
<S>                              <C>                             <C>
New Year's Day                   Tuesday                          January 1

Martin Luther King               Monday                           January 21

Presidents' Day                  Monday                           February 18

Good Friday                      Friday                           March 29

Memorial Day
(observed)                       Monday                           May 27

July 4th                         Thursday                         July 4

Floating holiday
in lieu of Birthday              Friday                           July 5

Labor Day                        Monday                           September 2

Columbus Day
(observed)                       Monday                           October 14

Thanksgiving                     Thursday                         November 28
                                 Friday                           November 29

Christmas                        Tuesday                          December 24
                                 Wednesday                        December 25
</Table>

provided, however, that the employee is not absent from work his or her regular
working day preceding or his or her regular working day following the said
holiday. It is to be understood that Friday is the regular working day preceding
Monday and Monday is the regular working day following Friday.

                        (B) The Employer may keep its plant closed on any Monday
if any one of the above-listed

<Page>

                                      - 22 -

holidays falls on a Tuesday, or may keep its plant closed on any Friday if any
one of the above listed holidays falls on a Thursday. Such action shall not
deprive an employee of absolute pay for holidays listed herein.

         TWELFTH:       (A) It is hereby agreed by and between the respective
parties that effective as of November 10, 1999, (being a continuation of
contributions previously made) the Employer shall contribute to the Vacation
Fringe Benefit Fund the sum of Nine and Four-Tenths Per Cent (9.4%) and
commencing with the week ending December 3, 1999, the sum of Ten and
Four-Tenths Per Cent (10.4%) of the Employer's total, gross, straight-time
payroll expense for each employee covered by the Agreement regardless of
whether or not any such employee is a member of the Union and regardless of
the number of hours worked during the week. Such payments shall be made
weekly for the last preceding payroll week. A list containing the names and
straight-time, weekly earnings of each employee in the bargaining unit shall
accompany each such payment. The Employer's payroll records, social security
records and other pertinent data shall be open for inspection and audit by
the Fund upon demand. Such payments shall be made directly to the Vacation
Fringe Benefit Fund and shall be held subject to the provisions of a trust
indenture dated February 17, 1971 and any amendments, changes or additions
thereto.

<Page>

                                      - 23 -

                        The Fund shall be managed and administered by a board of
trustees equally representative of the employers and the Union. In the event
the Employer and the Union trustees deadlock on the administration of the Fund,
they shall agree on an impartial umpire to decide such dispute; or in the event
of their failure to agree within a reasonable length of time, an impartial
umpire shall, on petition of either trustee, be appointed by the District Court
of the United States for the district where the Fund has its principal office.
The trustees shall make provisions for an annual audit of the Fund. A statement
of the results shall be available for inspection by interested persons at the
principal office of the Fund and at such other places as may be designated by
the trustees.

                        The Fund shall be used for the purpose of providing
annual and supplementary vacation benefits, jury duty reimbursement and for such
approved similar and related purposes and benefits, and for the payment of the
reasonable administrative expenses of the Fund, as the trustees may determine.
By executing this Agreement, the Employer hereby authorizes the Trustees of the
Vacation Fringe Benefit Fund, on its behalf, as its express agent, and in its
name and stead, to remit to the appropriate Federal taxing authorities, the
Employer's share of any FICA taxes owed by the Employer as a result of vacation
and/or fringe benefit payments made by the

<Page>

                                    - 24 -

Fund to employees of the Employer, together with the employee's share of any
such taxes, and, where applicable to remit to the appropriate State taxing
authorities the disability taxes owed as a result of such payments. Similarly,
by executing this Agreement, the Employer hereby authorizes the Trustees of the
Fund on its behalf, as its express agent and in its name and stead, to issue to
the appropriate governmental agencies and to its employees receiving vacation
and/or fringe benefit payments through the Fund, Federal, State and City
earnings statements showing gross wages, FICA tax withheld, FICA wages, State
income tax withheld and local tax withheld as a result of such vacation and/or
fringe benefit payments by the Fund. The Trustees of the Fund shall have no
obligation to report wages earned by the Employer's employees, except such wages
as are transmitted to the Employer's employees by the Fund.

                        All monies paid to the Fund shall be used and disbursed
by the trustees pursuant to the terms, conditions and provisions of the trust
indenture or any amendments, changes or additions thereto; and the rules,
regulations and resolutions adopted thereunder. Neither the Union, nor any
member of the Union individually or collectively; nor any International Union;
nor any body with which the Union may be affiliated; nor any participating
Employer individually or collectively, nor any combination thereof; nor any

<Page>

                                    - 25 -

association, corporation, group, entity, person or trust; nor any successor or
assign thereof either directly or indirectly, shall have any right, title,
interest or claim in or to the Fund or any part thereof, nor to any accounting,
supervision or control thereof, of whatsoever kind or nature.

                        All monies, contributions, property, assets of the Fund
and those hereafter acquired and the ownership, control and the administration
of the Fund shall irrevocably, inseparably and forever remain vested exclusively
in the trustees of the Fund. No employee of any participating employer; nor any
employee of the Union; nor any person claiming by, through or under such
employee, either directly or indirectly, shall have any right, title, interest
or claim in or to the Fund or to any part thereof; nor to any accounting,
supervision or control thereof, of whatsoever kind or nature; nor any claim
against the Union, participating employers or the trustees, or to the
contributions of his or her Employer to the Fund or any assets or monies held by
the Fund except such benefits as are provided for by the Fund and/or by the
rules and regulations from time to time established and promulgated by the
trustees in accordance with the powers granted by the trust indenture as the
same may be amended or modified from time to time. The discretion of the
trustees as to the administration, use and disbursement of the Fund shall be
final and conclusive.

<Page>

                                    - 26 -

                        All payments shall be due and payable on the first day
of each week, for the preceding week. The foregoing notwithstanding, however, if
the Employer fails to make all payments required hereunder, on or before the
tenth day of the month for the preceding month, then the Trustees may require,
and the Employer agrees to pay, interest on any unpaid balance at the
applicable rate as permitted by law. In addition, the Employer specifically
agrees that it shall be liable for all auditing expenses, collection costs and
legal fees incurred by the Union or by the Trustees of the Fund for the
collection of such payments.

                        Conditioned upon the Employer's timely payment in full
to the Fund of all of its obligations as specified herein, no further liability
whatsoever shall attach hereunder to the Employer; and no claim can, shall or
may be made by any employee against the Employer based upon the terns hereof for
any reason whatsoever.

                        (B) For employees employed prior to November 10, 1987,
the amount of vacation shall be determined as of July 1st of each year in
accordance with the following schedule:

<Page>

                                    - 27 -

<Table>
<S>                                                      <C>
Less than six months of employment                       None

Six months but less than one year of employment          One week (40 hours)

One year but less than five years of employment          Three weeks (120 hours)

Five years but less than twenty years of employment      Four weeks (160 hours)

Twenty or more years of employment                       Five weeks (200 hours)
</Table>

                        For employees employed on and after November 10, 1987,
vacations shall be determined as of July 1st of each year in accordance with the
following schedule:

<Table>
<S>                                                      <C>
Less than six months of employment                       None

Six months but less than one year of employment          One week (40 hours)

One year but less than five years of employment          Two weeks (80 hours)

Five years but less than eight years of employment       Three weeks (120 hours)

Eight years but less than twenty years of employment     Four weeks (160 hours)

Twenty or more years of employment                       Five weeks (200 hours)
</Table>

<Page>

                                    - 28 -

                        In determining eligibility for vacation leaves, all
computations shall be based upon each employee's total length of employment with
the Employer. No deductions shall be made from an employee's accumulated service
except for periods of nonemployment by the Employer. Such deductions shall be
made in accordance with the provisions of the trust indenture, and/or
resolutions adopted by the trustees.

                        Full power and authority will be lodged in the trustees
of the Vacation Fringe Benefit Fund to determine the extent of service credits
to be allocated to each employee as well as the rules and regulations pursuant
to which employees will be paid for any earned vacation pay.

                        In accordance with the rules and regulations of the Fund
and at such intervals as they determine appropriate, the trustees of the Fund
shall transmit to each employee on whose behalf contributions have been made to
such Fund, an amount equal to the sum of such employee's vacation leave
entitlement multiplied by such employee's regular straight-time, hourly rate of
pay as of the date of such employee's vacation leave. This sum will be
diminished by the amount of any vacation payments made by the Fund to such

<Page>

                                    - 29 -

employee during the preceding vacation year (i.e. the period from July 1
of the preceding year through June 30 of the current year).

                        Part-time employees shall receive vacation leave and
vacation pay on a pro rata basis.

                        Vacations shall be taken during the months of July
through September of each and every year. Vacation schedules shall be designed
by the Employer at least thirty days prior to July 1. Vacations shall be taken
during the designated time only, except where permission is given in writing by
the Company to be taken at some other time. The Employer shall have the right to
designate a two or three week period during which the plant shall close in order
that all employees may take a common vacation.

                        Vacation time in excess of two weeks need not be
consecutive, unless permission is so granted by the Employer. The Company agrees
to schedule the excess of vacation time before the anniversary date of the
contract, giving due consideration to production schedules and employees'
wishes. The Employer shall have the right to direct the Vacation Fringe Benefit
Fund to, and the Fund shall, upon

<Page>

                                    - 30 -

such direction, pay for the third, fourth and fifth week's vacation, in lieu of
vacation time off, providing it is agreeable to the employee.

                        Employees whose employment terminates prior to July 1 of
any year, other than by virtue of a discharge for just cause, shall receive
vacation pay on a pro-rata basis dating from the prior vacation cutoff.

         THIRTEENTH:    Each full-time employee shall receive two ten minute
paid rest periods during each work shift, approximately at the mid-point of the
first half of each shift and approximately at the mid-point of the second half
of each shift at times to be designated by the Employer.

                        Part-time employees who work in excess of four hours on
any shift shall receive one ten minute paid rest period during each such shift.

         FOURTEENTH:    (A) The Union recognizes that management of the
business of the Employer rests solely and exclusively with the Employer; and the
Employer shall have the exclusive control and supervision of its operations; and
the Union agrees not to interfere with any of the Employer's rights and
prerogatives.

<Page>

                                    - 31 -

                        (B) The Union recognizes that it is to the interest of
both the Union and the Employer that the Employer shall receive the Union's full
cooperation in maintaining operating efficiency and agrees to cooperate with the
Employer to obtain the greatest amount of production in the Employer's
operations consistent with sound working conditions and other provisions of this
Agreement.

                        (C) The Employer shall be the sole judge of the ability
of any employee to perform the work covered by the contract or the agreed wage
rate or wage scale, and reclassification in accordance therewith shall be in the
sole discretion of the Employer in the first instance, subject, however, to the
grievance procedure where an employee claims he has the ability to perform the
work.

                        (D) The Employer shall in all instances be the sole and
exclusive judge of the fitness and competency of any new employee during their
trial period for the work to be performed, and the Employer shall have the sole
discretion in the selection and choice of new employees.

                        (E) The Employer and the Union agree to cooperate in
continuing to maintain policies and practices which prevent discrimination
against any employee or

<Page>

                                    - 32 -

applicant for employment because of race, color, religion, sex, age or national
origin, or any other basis prohibited by applicable law, and further to
affirmatively cooperate in the implementation of Presidential Executive Order
#11246, its regulations, and other lawful requirements intended to prevent any
such discrimination.

         FIFTEENTH:     After reporting his presence at the office, any
authorized representative of the Union shall be permitted to enter the
Employer's place of business at any time for the adjustment of disputes,
grievances or any other matters that may require a representative's presence.

         SIXTEENTH:     Should any dispute arise concerning the application,
interpretation, effect, purpose or breach of any term or condition of this
Agreement, or in the event that there shall exist any claim, demand, dispute, or
controversy between the parties hereto, including but not limited to a demand or
dispute arising out of a proposed addition, deletion or modification of this
Agreement, the parties hereto shall first attempt to settle and adjust such
dispute, claim, demand or controversy by negotiation. In the event that said
dispute shall not be completely settled and

<Page>

                                    - 33 -

adjusted, the parties agree to submit the question, including any damages that
have been suffered, to arbitration in the following manner:

                        The Employer shall designate one arbitrator and the
Union shall designate one arbitrator who shall attempt to settle the issues
involved and if they do not agree then the two arbitrators shall designate a
third arbitrator who shall act as Chairman. Should the arbitrators designated by
the Employer and the Union fail to agree upon a Chairman as herein described,
then the Executive Secretary of the American Arbitration Association shall
designate a Chairman. The Arbitration Board shall conduct such hearings in such
manner as shall be designated by the Chairman of the Board. A two-thirds
decision shall be final and binding upon the parties hereto and may be entered
as a final decree or judgment in the Supreme Court of the State of New York.

                        In the event that either of the parties hereto shall
fail to designate an arbitrator after notice of the demand for arbitration has
been sent by registered mail within three days as hereinabove provided, then the
Executive Secretary of the American Arbitration Association shall, upon request
of either party hereto, designate an arbitrator who shall conduct such hearing
in such manner as he

<Page>

                                    - 34 -

shall consider proper. In the event of the failure of either party to be present
at the time and place designated for the arbitration, then the arbitrator shall
have the right to listen to the party appearing at the time and place for
arbitration and shall have the power to render a decision based on the testimony
before him. The decision of the arbitrator shall be final and binding upon both
parties hereto and may be entered as a final decree or judgment in the Supreme
Court of the State of New York. The cost of arbitration shall be borne equally
by the Employer and the Union. Nothing contained herein shall act as a bar to an
arbitration proceeding at any time.

         SEVENTEENTH:   All good conditions, customs and privileges enjoyed by
the employees prior to the execution of this Agreement, except as limited,
changed or abolished by the terms of this Agreement, shall continue in full
force and effect without interruption or suspension as though they were actually
enumerated herein.

         EIGHTEENTH:    (A) Since it is the intent of the parties of this
Agreement that the procedures herein provided shall serve as a means for
peaceful settlement of all differences, disputes, complaints and grievances that
may arise between them, it is agreed that the Union shall not

<Page>

                                    - 35 -

authorize nor encourage nor participate in any strike or workstoppage or
slowdown, and the Employer agrees that there shall be no lockouts.

                        (B) In the event of any unauthorized strike or stoppage
during the life of this Agreement, there shall be no liability on the part of
the Union or any of its officers, agents or members not participating in the
strike or stoppage. The Union agrees and undertakes to discipline any of its
members who engage in any unauthorized strike or stoppage, and agrees that the
Employer may discharge any employee who participates in such unauthorized strike
or stoppage.

         NINETEENTH:    At the expiration of the third annual period and every
year thereafter, the Union shall have the right to renegotiate wages and other
benefits for all the employees then employed. Should the parties fail to agree,
then the matter shall be submitted to arbitration as provided herein.

         TWENTIETH:     Except as specified in Paragraph Twenty-Fourth, the
payment by the Employer of Christmas or other bonuses is entirely voluntary and
solely in

<Page>

                                    - 36 -

the discretion of the Employer, any such payment is not deemed part of the pay
structure, and any such payment is not deemed a precedent.

         TWENTY-FIRST:  In the event the Employer decides to conduct its
inventory on a regularly scheduled work day, no employee shall lose any pay as a
result of the taking of such inventory.

         TWENTY-SECOND: Where work shoes or other special footwear are required,
such footwear shall be supplied by the employee, who shall be reimbursed an
amount up to the average retail sale price for a standard pair of such footwear.
In the event such footwear wears out or is damaged, such shall be replaced by
the employee who shall be reimbursed by the Employer in accordance with the
formula referred to above, provided that the wear or damage has been shown to
the Company prior to replacement, and provided further that such damage is not
due to the employee's negligence.

         TWENTY-THIRD:  The Shop Steward, the Union and each initially affected
employee will be notified five days in advance of any layoff due to lack of
work, except in the case of emergency which is beyond the control of the
Employer.

<Page>

                                    - 37 -

         TWENTY-FOURTH: (A) Effective as of and retroactive to November 10,
1999, each employee on the Employer's payroll as of such date shall receive a
general wage increase of Twenty-Six (26.00) Dollars per week ($.65 per hour).

                        (B) on or before December 27, 1999, each employee who is
on the payroll as of November 10, 1999, shall receive a bonus of $300.

                        (C) Effective November 10, 2000, each employee on the
Employer's payroll as of such date shall receive a general wage increase of
Twenty-Two ($22.00) Dollars per week ($.55 per hour).

                        (D) Effective November 10, 2001, each employee on the
Employer's payroll as of such date shall receive a general wage increase of
Twenty-Two ($22.00) Dollars per week (.55 per hour).

                        (E) On or before December 15, 2000 and again on or
before December 15, 2001, each employee on the Employer's payroll as of November
10, 2000 and November 10, 2001, respectively shall receive a bonus in accordance
with the bonus schedule set forth below:

<Page>

                                    - 38 -

                                 BONUS SCHEDULE

<Table>
<S>                                                           <C>
Less than six months of employment                             $50.00

Six months but less than one year of employment               $100.00

One year or more of employment                                $150.00
</Table>

          FICA payments on these bonuses shall be the Employer's responsibility.

                        (F) Effective November 10, 1999, the following starting
and progression rates of pay shall prevail:

<Table>
<Caption>
                                     After         After
        Start                       30 Days       6 Months
        -----                       -------       --------

<S>                                 <C>           <C>
        $250.00                     $260.00       $270.00
</Table>

                        (G) Employees hired at the thirty day rate or higher
shall receive a wage increase of Four Dollars ($4.00) per week ($.10 per hour)
after thirty days of employment and all general wage increases thereafter.

<Page>

                                    - 39 -

                        The minimum starting rate shall be at least one dollar
($1.00) per hour ($40.00 per week) in excess of the Federal or New York State
minimum wage (whichever shall be higher). The thirty day shall always be Ten
Dollars ($10.00) per week in excess of the starting rate. The six month rate
shall always be Twenty Dollars ($20.00) per week in excess of the starting rate.

                        (H) Employees on the payroll as of the date of any
general wage increases shall receive either the general wage increase or their
appropriate progression rate, whichever shall be greater.

         TWENTY-FIFTH:  In the event the Employer terminates its operations in
whole or part or moves them in whole or part to another location, more than
thirty miles straight-line distance from its present location in Laurelton, New
York, all employees who lose their jobs as a direct result of the termination
and, in the case of a relocation as above described, employees who cannot
accompany their jobs to the new location, shall be entitled to supplemental
vacation payments in the amount of one week's pay or proportionate part thereof
for each year of employment or proportionate part thereof. The Employer agrees
to be solely responsible for all supplemental

<Page>

                                    - 40 -

vacation payments to the extent that such cannot be met out of the Employer's
fringe benefit component contributions to the Vacation Fringe Benefit Fund,
which contributions initially commenced effective November 10, 1973.

         TWENTY-SIXTH:  All employees who have been employed for twelve months
or longer as of the start of any contract year, shall be entitled to five (5)
days of paid sick leave during such contract year.

                        Newly hired employees, and employees employed for less
than twelve months as of the start of any contract year shall not be entitled to
any paid sick leave during the first six months of their employment. After six
months, but less than eight months of employment, such employees shall be
entitled to one (1) day of paid sick leave. After eight months but less than ten
months of employment, such employees shall be entitled to one additional day of
paid sick leave. After ten months, but less than twelve months of employment,
such employees shall be entitled to one additional day of paid sick leave. After
twelve months of employment, such employees shall be entitled to five (5) days
of sick leave minus any days of sick leave utilized during the current contract
year. Thereafter, all such employees shall receive five days of paid sick leave
during each succeeding contract year.

<Page>

                                    - 41 -

                        All employees shall be reimbursed on the anniversary
of this Agreement for all unused sick leave. Such employees shall receive one
day's wages for each day of unused sick leave to be paid at the rate of pay
effective at the time said sick leave was unused.

                        Employees shall not be required to provide a doctor's
note or other substantiating evidence in order to be eligible to receive sick
leave pay, provided however, that employees shall telephone the Company as
early as practicable, but in no event later than one-half hour prior to the
start of the employee's scheduled shift on the first day of any illness to
advise the Company concerning the absence and its anticipated length. Failure
to so notify the Company may result in a disallowance of sick pay.

                        The foregoing notwithstanding, the Employer may
require a doctor's note in the event an employee claims more than three (3)
consecutive days of paid sick leave. The Employer may also require employees
absent for three (3) consecutive days or more as a result of illness to
provide a certificate of fitness to return to work.

<Page>

                                    - 42 -

         TWENTY-SEVENTH: On November 10, 2002, and at the expiration of each
annual period thereafter, the Union shall have the right to reopen the
contract in order to renegotiate wages and other benefits for all employees.
Should the parties fail to agree, the Union shall have the right to submit
any unresolved issues to arbitration in accordance with the provisions of
Paragraph Sixteenth hereof. Alternatively, the Union shall have the right to
terminate this Agreement and may thereafter engage in a strike or similar
concerted work stoppage.

                        The right to reopen shall not be waived by failure to
give notice under this clause and any agreement reached following such
reopening, no matter when had, shall be retroactive to November 10, 2002.

         TWENTY-EIGHTH: This Agreement shall become effective as of November
10, 1999 and shall remain operative and binding upon the parties thereto,
their heirs, successors, assignees, administrators, and trustees in
bankruptcy up to and including November 9, 2002, and shall automatically
continue thereafter for annual periods, and may terminate by one party giving
the other at least sixty days' notice by registered mail prior to any
expiration period of its intention to terminate this Agreement.

<Page>

                                    - 43 -

         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
this 10th day of December, 1999.

DRUG, CHEMICAL, COSMETIC, PLASTICS
AND AFFILIATED INDUSTRIES WAREHOUSE
EMPLOYEES LOCAL 815, AFFILIATED WITH
THE INTERNATIONAL BROTHERHOOD OF
TEAMSTERS

By: /s/ Ben Camadeco
   -------------------------------------
   Ben Camadeco, Secretary-Treasurer/CEO

By: /s/ Larry Plotnick
   -------------------------------------
    Larry Plotnick, President

EON LABS MANUFACTURING, INC.

By: /s/ William F. Holt    VP Finance
   ----------------------------------
   Employer                     Title

<Page>

                          EON LABS MANUFACTURING, INC.

                                  SCHEDULE "A"

Excluded Employee:

Frank S. Mellone

<Page>

If the foregoing conforms with your understanding, please sign below where
indicated.

ACCEPTED AND APPROVED:
Drug, Chemical, Cosmetic, Plastics
and Affiliated Industries Warehouse
Employees Local 815, Affiliated with
the International Brotherhood of
Teamsters

By: /s/ Ben Camadeco
   -------------------------------------
   Ben Camadeco, Secretary-Treasurer/CEO

By: /s/ Larry Plotnick
   -------------------------------------
    Larry Plotnick, President

ACCEPTED AND APPROVED:
Eon Labs Manufacturing, Inc.

By: /s/ William F. Holt    VP Finance
   ----------------------------------
   Employer                     Title

<Page>

[TEAMSTERS UNION LOGO]

                               LOCAL UNION NO. 815
 DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFLIATED INDUSTRIES WAREHOUSE EMPLOYEES

                               AFFILIATED WITH THE
                   INTERNATIONAL BROTHERHOOD OF TEAMSTERS

GENERAL OFFICE: 467 SYLVAN AVENUE       ENGLEWOOD CLIFFS, NEW JERSEY 07632
                                        PHONE: (201) 567-5552
                                               (212) 695-3985

                                                      November 10, 1999

Eon Labs Manufacturing, Inc.
227-15 North Conduit Avenue
Laurelton, Now York 11413

Gentlemen:

This is to confirm our understanding that, except as required by applicable
law, the Employer will not be required to make a contribution to the Union
Mutual Fund or to the Allied Welfare Fund on behalf of any employee for any
week for which such employee receives no pay.

ACCEPTED AND APPROVED:
Drug, Chemical, Cosmetic, Plastics
and Affiliated Industries Warehouse
Employees Local 815, Affiliated with
the International Brotherhood of
Teamsters

By: /s/ Ben Camadeco
   -------------------------------------
   Ben Camadeco, Secretary-Treasurer/CEO

By: /s/ Larry Plotnick
   -------------------------------------
    Larry Plotnick, President

ACCEPTED AND APPROVED:
Eon Labs Manufacturing, Inc.

By: /s/ William F. Holt    VP Finance
   ----------------------------------
   Employer                     Title

<Page>

[TEAMSTERS UNION LOGO]

                               LOCAL UNION NO. 815
 DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFLIATED INDUSTRIES WAREHOUSE EMPLOYEES

                               AFFILIATED WITH THE
                   INTERNATIONAL BROTHERHOOD OF TEAMSTERS

GENERAL OFFICE: 467 SYLVAN AVENUE       ENGLEWOOD CLIFFS, NEW JERSEY 07632
                                        PHONE: (201) 567-5552
                                               (212) 695-3985

                                                      November 10, 1999

Eon Labs Manufacturing, Inc.
227-15 North Conduit Avenue
Laurelton, New York 11413

Gentlemen:

You are hereby notified that the Union has no interest in inspecting or
utilizing your books, records or other data for any purpose other than the
computation of welfare and pension payments, and will not seek to inspect any
records other than those immediately necessary for computation.

If the following conforms with your understanding, please sign below where
indicated.

ACCEPTED AND APPROVED:
Drug, Chemical, Cosmetic, Plastics
and Affiliated Industries Warehouse
Employees Local 815, Affiliated with
the International Brotherhood of
Teamsters

By: /s/ Ben Camadeco
   -------------------------------------
   Ben Camadeco, Secretary-Treasurer/CEO

By: /s/ Larry Plotnick
   -------------------------------------
    Larry Plotnick, President

ACCEPTED AND APPROVED:
Eon Labs Manufacturing, Inc.

By: /s/ William F. Holt    VP Finance
   ----------------------------------
   Employer                     Title

<Page>

[TEAMSTERS UNION LOGO]

                               LOCAL UNION NO. 815
 DRUG, CHEMICAL, COSMETIC, PLASTICS AND AFFLIATED INDUSTRIES WAREHOUSE EMPLOYEES

                               AFFILIATED WITH THE
                   INTERNATIONAL BROTHERHOOD OF TEAMSTERS

GENERAL OFFICE: 467 SYLVAN AVENUE       ENGLEWOOD CLIFFS, NEW JERSEY 07632
                                        PHONE: (201) 567-5552
                                               (212) 695-3985

                                                      November 10, 1999

Eon Labs Manufacturing, Inc.
227-15 North Conduit Avenue
Laurelton, New York 11413

Gentlemen:

This is to confirm our understanding that the Employer agrees that insofar as
is practicable except as provided in Collective Bargaining Agreement Articles
EIGHTH and NINTH, the least-senior employee will be utilized first in the
event that it is necessary to transfer employees temporarily from one job to
another.

ACCEPTED AND APPROVED:
Drug, Chemical, Cosmetics, Plastics
and Affiliated Warehouse Employees
Local 815, Affiliated with the
International Brotherhood of Teamsters

By: /s/ Ben Camadeco
   -------------------------------------
   Ben Camadeco, Secretary-Treasurer/CEO

By: /s/ Larry Plotnick
   -------------------------------------
    Larry Plotnick, President

ACCEPTED AND APPROVED:
Eon Labs Manufacturing, Inc.

By: /s/ William F. Holt    VP Finance
   ----------------------------------
   Employer                     Title

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