Document:

Exhibit 10.2

 

EON
LABS, INC.

1999 Marcus Avenue

Lake Success, NY 11042

 

February 11, 2005

 

Novartis Corporation

608 Fifth Avenue

New York, NY 10020

 

Confidentiality Agreement

 

Ladies and Gentlemen:

 

In order to allow you to evaluate a possible
negotiated (except as permitted by this letter agreement) transaction (the “Proposed Transaction”)
with Eon Labs, Inc. (the “Company”),
you have requested, following your execution and delivery to us of this letter
agreement, certain information about the properties, employees, finances,
businesses and operations of the Company. 
All information about the Company and its
subsidiaries, whether oral, written or electronic, furnished by us or our
Representatives (as defined below), whether furnished before or after the date
hereof, is referred to in this letter agreement as “Evaluation Material”.  Evaluation Material also includes all notes,
analyses, compilations, studies, interpretations or other documents prepared by
or for you or your Representatives which contain, reflect or are based upon, in
whole or in part, the information furnished to you or your Representatives
pursuant hereto.  Evaluation Material
does not include, however, information which (a) is or becomes publicly available
other than as a result of a disclosure by you or your Representatives in
violation of this letter agreement, (b) was available to you on a
nonconfidential basis prior to its disclosure by us or our Representatives, (c)
becomes available to you on a nonconfidential basis from a person (other than
us or our Representatives) who to your knowledge after inquiry is not
prohibited from disclosing such information to you by a legal, contractual or
fiduciary obligation to us, or (d) was independently developed by you
without your reference to the Evaluation Material.  As used in this letter agreement, the term “Representative”
means, as to any person, such person’s affiliates and its and its affiliates’
directors, officers, employees, agents, advisors (including, without
limitation, financial advisors, counsel and accountants) and other
representatives and financing sources. 
As used in this letter agreement, the term “person” shall be
broadly interpreted to include, without limitation, any corporation, company,
partnership or other legal or business entity or any individual.  As used in this letter agreement, “Law” means any
applicable law, regulation (including, without limitation, any rule or
regulation of any organized securities exchange, market or automated quotation
system on which any of a person’s securities are listed or quoted) or valid
legal process.

 

Subject to the immediately succeeding paragraph,
unless otherwise agreed in writing by us, (a) you agree, except as required by
Law in connection with a tender offer permitted by this letter agreement, to
keep confidential and not to disclose or reveal, directly or 

 

 

indirectly, any
Evaluation Material to any person other than those of your Representatives (i)
who are actively and directly participating in your evaluation of the Proposed
Transaction or who otherwise need to know the Evaluation Material for the
purpose of evaluating the Proposed Transaction and (ii) whom you will cause to
observe the terms of this letter agreement, (b) you agree not to use Evaluation
Material for any purpose other than in connection with your evaluation of the
Proposed Transaction or the consummation of the Proposed Transaction and
(c) you and we mutually agree, except as required by Law, not to disclose
to the public or to any person (other than those of our respective
Representatives who are actively and directly participating in the evaluation
of the Proposed Transaction or who otherwise need to know for the purpose of
evaluating the Proposed Transaction and whom you and we, respectively, will
cause to observe the terms of this letter agreement) any information about the
Proposed Transaction, or the terms or conditions or any other facts relating
thereto, including, without limitation, the fact that discussions are taking
place with respect thereto or the status thereof, the existence of this letter
agreement, or the fact that Evaluation Material has been made available to you
or your Representatives; provided, however, that any disclosure
prohibited by this paragraph may be made under the circumstances described in
the following paragraph to the extent you comply with the covenants in such
paragraph.  Each party acknowledges that
it shall be responsible for any breach of the terms of this letter agreement by
it or its Representatives.

 

In the event that you or any of your Representatives
are requested or required in a judicial or regulatory proceeding or otherwise required
by Law as permitted above to disclose any Evaluation Material, you agree to
provide the Company with prompt notice of such request or requirement in order
to enable the Company to seek an appropriate protective order or other remedy,
to consult with you with respect to the Company taking steps to resist or
narrow the scope of such request or requirement or to waive compliance, in
whole or in part, with the terms of this letter agreement.  You also agree, to the extent legally
permissible, (i) to provide the Company with a list of any Evaluation Material
you or any of your Representatives intend to disclose in compliance with this
paragraph (and, if applicable, the text of the disclosure language itself) in
advance of any such disclosure, and (ii) to cooperate with the Company to the
extent it may seek to limit such disclosure. 
In the event that such protective order or other remedy is not obtained,
or the Company waives compliance, in whole or in part, with the terms of this
letter agreement, you or your Representative will use reasonable best efforts
to disclose only that portion of the Evaluation Material that is legally
required to be disclosed and to ensure that all Evaluation Material so
disclosed will be accorded confidential treatment.

 

In addition, if you determine that you do not wish to
proceed with the Proposed Transaction, you will promptly advise us of that
decision.  In that case or upon the
written request of the Company, you will (and will cause your Representatives
to), at your election, promptly deliver to the Company or destroy (provided
that any such destruction shall be certified by a duly authorized
Representative of yours) all Evaluation Material (including all copies
thereof), including, without limitation, expunging to the extent practicable
all Evaluation Material from any computer, word processor or other device in
your possession, except that one copy of all such Evaluation Material may be
kept in your legal department for compliance purposes.

 

You agree that until the date that is twelve (12)
months from the date hereof (the “Restricted
Period”), without the prior approval of a majority of the members of
the

 

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Company’s Board of
Directors and a majority of the members of the special committee of the Company’s
Board of Directors formed in connection herewith (“Special
Committee”), you and your affiliates will not, and you will cause
your Representatives (in their capacity as such) not to (and you and they will
not join or form a group within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (a “13D Group”), act in concert or participate with any other
persons to), directly or indirectly: (a) acquire or offer to acquire, seek,
propose or agree to acquire, by means of a purchase, tender or exchange offer,
business combination, merger or in any other manner, beneficial ownership
(whether direct or indirect) of the Company or any of its subsidiaries, any of
the assets of the Company or any of its subsidiaries, or any securities of the
Company or any of its subsidiaries (including, without limitation, rights or
options to acquire such ownership), other than, (i) shares of common stock of
the Company (the “Common Stock”)
owned by Santo Holding (Deutschland) GmbH as of the date hereof (the “Santo Shares”) constituting at least a
majority of the outstanding Common Stock or an option with respect to such
majority, (ii) as permitted by this letter agreement upon the occurrence of a
Significant Event (as defined below), or (iii) as required pursuant to the
immediately following paragraph; (b) unless you or your affiliates shall have previously
purchased a sufficient amount of Santo Shares to constitute a majority of the
outstanding Common Stock (a “Control Block”)
(in which event the restrictions in this clause (b) shall cease to be
applicable) and subject to your continuing obligations pursuant to the immediately
following paragraph, seek to influence, advise or direct the vote of any holder
of securities of the Company (including by making or participating in any “solicitation”
of “proxies” as such terms are used in the rules of the Securities and Exchange
Commission) or seek to change or control the Board of Directors of the Company
or change the governing instruments of the Company or, seek or propose to
influence, advise, change or control the management or policies or affairs of
the Company, or (c) except (i) in connection with the transactions
required pursuant to the immediately following paragraph following your or your
affiliates’ purchase of a Control Block, (ii) in connection with a transaction to
be approved by a majority of the Company’s Board of Directors and a majority of
the Special Committee following your or your affiliates’ entering into any
agreement with respect to the acquisition of a Control Block (including, for
the avoidance of doubt, an option agreement with respect thereto) or (iii) as
permitted by this letter agreement upon the occurrence of a Significant Event (which
in any such event shall cause the restrictions in this clause (c) to cease to be
applicable), make any publicly announced proposals, or take any action which
could require the Company to make any public disclosure regarding a proposal,
with respect to an extraordinary transaction involving the Company or a
substantial portion of its securities or assets.

 

You agree that if you or
your affiliates acquire a Control Block during the Restricted Period, you or
your affiliates will, prior to the expiration of the Restricted Period, propose
and use reasonable best efforts to take all legally permissible actions to
consummate a tender offer (with no conditions other than legal and regulatory
requirements) to acquire all of the Common Stock owned by the public
stockholders of the Company (the “Public
Shares”), at a price per share of Common Stock equal to the dollar equivalent
value of the amount of Euro paid per Santo Share calculated as of the date of
the agreement to acquire the Santo Shares; provided, that, if a majority
of the Public Shares are tendered into the tender offer, you or your affiliates
will propose and use reasonable best efforts to take all legally permissible actions
to consummate a merger in which all remaining Common Stock outstanding would be
acquired at the tender offer price.

 

3

 

If the Company enters into, or resolves or otherwise
determines to enter, into any merger, sale or other business combination
transaction, or makes a recommendation in favor of a tender offer for a
competing transaction, pursuant to which the outstanding Common Stock would be
converted into cash or securities of another person or 13D Group (other than
you and your affiliates) or 50% or more of the then outstanding Common Stock (other
than you and your affiliates) would be owned by persons other than current
holders of Common Stock, or which would result in all or a substantial portion
of the Company’s assets being sold to any person or 13D Group (a “Significant Event”), nothing herein shall
prevent you or any of your affiliates from making, and if you or any of your
affiliates shall have acquired a Control Block, consummating, a competing
proposal for the Company.

 

For a period of two years from the date hereof, you
agree that you and your affiliates will not, directly or indirectly, employ or
solicit to employ any management-level employees of the Company; provided that
nothing herein shall prohibit you or your affiliates from (i) hiring or seeking
to hire any individual who has received notice of termination from the Company
prior to the first time such individual had any communication with you or your
Representatives relating to employment or (ii) hiring any individual who
contacts you on his or her own initiative and without any direct or indirect
solicitation by you.  The foregoing
prohibitions on solicitations of employees shall not be deemed violated by
virtue of general mass solicitations of employment by you not specifically
directed toward employees of the Company.

 

Subject to the terms and conditions that may be
contained in any final definitive agreement regarding the Proposed Transaction
and without prejudice thereto, you acknowledge that none of the Company or its
Representatives and none of the respective officers, directors, employees,
agents or controlling persons of our Representatives makes any express or
implied representation or warranty as to the completeness of the Evaluation
Material, and you agree that none of such persons shall have any liability to
you or any of your Representatives relating to or arising from your or their
use of any Evaluation Material or for any errors therein or omissions
therefrom. You also agree that you are not entitled to rely on the completeness
of any Evaluation Material and that you shall be entitled to rely solely on
such representations and warranties as may be made to you in any definitive
agreement relating to the Proposed Transaction, subject to the terms and
conditions of such agreement.

 

You further acknowledge that you are aware and that
your Representatives have been advised that the United States securities laws
prohibit any person having non-public material information about a company from
purchasing or selling securities of that company or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person may purchase or sell such securities.

 

Each party hereto agrees that no contract or agreement
providing for any transaction involving the Proposed Transaction and no
transaction or business combination related thereto shall be deemed to exist between
the parties hereto or to be approved by any of the parties hereto or any of
their respective Boards of Directors for any purpose unless and until a final
definitive agreement regarding the Proposed Transaction has been executed and
delivered by the parties hereto, and that neither party hereto, nor any of its
Representatives, is under any legal obligation or has any liability to the
other party of any nature whatsoever with respect to the Proposed Transaction
by virtue of this letter agreement or otherwise (other than with respect

 

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to
the confidentiality and other matters set forth herein, including your
obligation with respect to the tender offer and subsequent merger described in
the fifth and sixth paragraphs of this letter agreement, on the terms and
subject to the conditions set forth therein).

 

It is understood and agreed that money damages would
be an insufficient remedy for any breach of this letter agreement by either
party or its Representatives and that without prejudice to the rights and
remedies otherwise available to it, a party shall be entitled to equitable
relief by way of injunction, specific performance or otherwise if the other
party or any of its Representatives breaches or threatens to breach any of the
provisions of this letter agreement.

 

The parties hereby irrevocably and unconditionally
consent to submit to the exclusive jurisdiction of the courts of the State of
Delaware and of the United States of America located in the State of Delaware
for any actions, suits or proceedings arising out of or relating to this letter
agreement and the transactions contemplated hereby (and the parties agree not
to commence any action, suit or proceeding relating thereto except in such
courts), and further agree that service of any process, summons, notice or
document by U.S. registered mail to the respective addresses set forth above
shall be effective service of process for any action, suit or proceeding
brought against the parties in any such court. 
The parties hereby irrevocably and unconditionally waive any objection
to the laying of venue of any action, suit or proceeding arising out of this
agreement or the transactions contemplated hereby, in the courts of the State
of Delaware or the United States of America located in the State of Delaware,
and hereby further irrevocably and unconditionally waive and agree not to plead
or claim in any such court that any such action, suit or proceeding brought in
any such court has been brought in an inconvenient forum.

 

It is further understood and agreed that no failure or
delay by either party in exercising any right, power or privilege under this
letter agreement shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege under this letter agreement.

 

If any provision of this letter agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed to
affect any other provision hereof or the validity of the remainder of this
letter agreement, and such invalid provision shall be deemed deleted herefrom
to the minimum extent necessary to cure such violation.

 

The obligations of the parties under this letter agreement
shall terminate on the third anniversary of the date hereof.

 

This letter agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

 

This letter agreement contains the entire agreement
between you and us with respect to the matters set forth herein, and no
modification of this letter agreement or waiver of the terms and conditions
hereof shall be binding upon you or us, unless approved in writing by each of
you and us (with any such action by us requiring the approval of the Special
Committee).

 

5

 

Please confirm your agreement with the foregoing by
signing and returning to the undersigned the duplicate copy of this letter
agreement enclosed herewith.

 

	
   

  	
  EON LABS, INC.

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Bernhard Hampl,
  Ph.D.

  	
   

  
	
   

  	
   

  	
  Name: Bernhard Hampl,
  Ph.D.

  
	
   

  	
   

  	
  Title: President and
  Chief Executive Officer

  
	
   

  	
   

  
	
  Accepted and agreed as of

  the date first written above:

  	
   

  
	
   

  	
   

  
	
  NOVARTIS CORPORATION

  	
   

  
	
   

  	
   

  
	
  By

  	
  /s/ Martin Henrich

  	
   

  	
   

  
	
   

  	
  Name: Martin Henrich

  	
   

  
	
   

  	
  Title: Executive Vice PresidentExhibit 10.1

 

 

	
   

  	
   

  	
  February 2,
  2005

  

 

 

Robert J. Koska

1764 Frost Lane

Naperville, IL  60564

 

Re:                               Offer of
Employment by Cepheid

 

Dear Rob:

 

I am very
pleased to confirm our offer to you of employment with Cepheid (the “Company”).  You will report to me in the position of Senior
Vice President, Worldwide Sales and Marketing. 
This offer is contingent on the successful completion of an employment
application and background and credit checks. 
The terms of our offer and the benefits currently provided by the Company
are as follows:

 

1.                                       Starting Salary.  Your starting salary will be $225,000.00 per
year and will be subject to annual review.

 

2.                                       Annual
Incentive Bonus.  You will be eligible to receive a cash bonus of up to 25% of your base
salary on an annual basis.  Achievement
of goals and objectives as mutually determined by you and me shall be the
determining feature in the percentage bonus payout you will receive.  Your first year’s bonus will be prorated
based on base salary earned in calendar year 2005.

 

3.                                       Benefits. 
In addition, you will be eligible to participate in regular health
insurance, bonus and other employee benefit plans established by the Company
for its employees from time to time.

 

4.                                       Change of
Control. 
The Company will offer you the change of control benefits detailed in
Exhibit A effective with your date of hire.

 

5.                                       Local Living Expenses.  As you will be commuting from the Naperville,
Illinois area to your job in Sunnyvale, California, the Company will provide
you with a furnished one-bedroom apartment in the Sunnyvale area (rent plus
utilities not to exceed $3,000.00 per month) for approximately three years or
until you elect to move to the Sunnyvale, California area per Section 6
below, so long as you remain employed by Cepheid in good standing.  In addition, the Company will pay for weekly
air transportation for you to return to your home in Illinois on the weekends
for the same period.

 

6.                                       Moving Expenses.  The Company will reimburse your
reasonable moving expenses and transportation costs associated with your move
to the Sunnyvale, California area, according to the schedule provided in
Exhibit B.  Should you voluntarily resign
your position

 

 

with the Company within twelve (12) months of your
actual move date, you will be required to repay these monies on a pro-rata
basis within one month of the date your employment terminates.  The Company shall have the right to offset
such amounts against other payments due to you that are not wages (e.g., expense
reimbursements).

 

In the event the protections afforded to you in your
Change of Control Retention and Severance Agreement are triggered during any
period of time in which you may have liability with respect to the Moving
Expenses, you shall not be required to repay the Company for any Moving
Expenses paid by the Company to you.

 

Except as
provided below, the Company reserves the right to change or otherwise modify,
in its sole discretion, the preceding terms of employment, as well as any of
the terms set forth herein at any time in the future.

 

7.                                       Confidentiality.  As an employee of the Company, you will have
access to certain confidential information of the Company and you may, during
the course of your employment, develop certain information or inventions that
will be the property of the Company.  To
protect the interests of the Company, you will need to sign the Company’s
standard “Employee Invention Assignment and Confidentiality Agreement” as a
condition of your employment.  We wish to
impress upon you that we do not want you to, and we hereby direct you not to,
bring with you any confidential or proprietary material of any former employer
or to violate any other obligations you may have to any former employer.  During the period that you render services to
the Company, you agree to not engage in any employment, business or activity
that is in any way competitive with the business or proposed business of the
Company.  You will disclose to the
Company in writing any other gainful employment, business or activity that you
are currently associated with or participate in that competes with the
Company.  You will not assist any other
person or organization in competing with the Company or in preparing to engage
in competition with the business or proposed business of the Company.  You represent that your signing of this offer
letter, agreement(s) concerning stock options granted to you, if any, under the
Plan (as defined below) and the Company’s Employee Invention Assignment and
Confidentiality Agreement and your commencement of employment with the Company
will not violate any agreement currently in place between yourself and current
or past employers.

 

8.                                       Options. 
The Compensation Committee of the Board of Directors of the Company has
approved a grant to you of the opportunity to purchase up to 200,000 shares of
Common Stock of the Company under our 1997 Stock Option Plan (the “Plan”) at
the closing fair market value of the Company’s Common Stock at the end of
business on your first day of employment. 
The shares you will be given the opportunity to purchase will vest at
the rate of twenty-five percent (25%) at the end of your first anniversary with
the Company, and an additional 1/48 of the total number of shares per month
thereafter, so long as you remain employed by the Company.  The grant of such options by the Company is
not a promise of compensation and is not intended to create any obligation on
the part of the Company.  Further

 

2

 

details on the
Plan and any specific opotion grant to you will be provided shortly after you
commence employment.

 

9.                                       At-Will Employment.  While we look forward to a long and
profitable relationship, should you decide to accept our offer, you will be an
at-will employee of the Company, which means the employment relationship can be
terminated by either of us for any reason, at any time, with or without prior
notice and with or without cause.  Any
statements or representations to the contrary (and, indeed, any statements
contradicting any provision in this letter) should be regarded by you as
ineffective.  Further, your participation
in any stock option or benefit program is not to be regarded as assuring you of
continuing employment for any particular period of time.  Any modification or change in your at will
employment status may only occur by way of a written employment agreement
signed by you and the Chief Executive Officer of the Company.

 

10.                                 Authorization to
Work. 
Please note that because of employer regulations adopted in the
Immigration Reform and Control Act of 1986, within three (3) business days of
starting your new position you will need to present documentation demonstrating
that you have authorization to work in the United States.  If you have questions about this requirement,
which applies to U.S. citizens and non-U.S. citizens alike, you may contact our
personnel office.

 

11.                                 Insider Trading Policy.  Your continued employment is also contingent
upon reading and signing the enclosed Insider Trading Policy.

 

12.                                 Acceptance.  This offer will remain open until
February 21, 2005.  If you decide to
accept our offer, and I hope you will, please sign the enclosed copy of this
letter in the space indicated and return it to me.  Your signature will acknowledge that you have
read and understood and agreed to the terms and conditions of this offer letter
and the attached documents, if any. 
Should you have anything else that you wish to discuss, please do not
hesitate to call me.

 

We look
forward to the opportunity to welcome you to the Company.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  John L. Bishop

  Chief Executive Officer

  

 

3

 

I have read
and understood this offer letter and hereby acknowledge, accept and agree to
the terms as set forth above and further acknowledge that no other commitments
were made to me as part of my employment offer except as specifically set forth
herein.

 

 

	
   

  	
   

  	
  Date
  signed:

  	
   

  
	
  Robert J. Koska

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Start Date

  

 

4

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