Document:

Exhibit 10.7

 

EON LABS, INC.

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

AMENDED AND
RESTATED EMPLOYMENT AGREEMENT, dated as of this 11th day of February, 2005 (the
“Effective Date”), between Eon Labs, Inc. (the “Company”) and David H. Gransee (the “Executive”).

 

R E C I T A L S:

 

WHEREAS, the
Company and the Executive are both parties to an Employment Agreement dated as
of February 2002 (the “Prior Employment Agreement”); and

 

WHEREAS, the
Company and the Executive wish to amend and restate the Prior Employment
Agreement to provide for an extension of the Employment Term, as defined in the
Prior Employment Agreement; and

 

WHEREAS, the
Company recognizes that the future growth, profitability and success of the
Company’s business will be substantially and materially enhanced by the
continued employment of the Executive by the Company; and

 

WHEREAS, the
Company desires to continue to employ the Executive and the Executive has
indicated his willingness to provide his services, on the terms and conditions
set forth herein.

 

NOW, THEREFORE, on
the basis of the foregoing premises and in consideration of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

 

Section 1.                                            Employment.  The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth.  During the Employment Term (as hereinafter
defined), the Executive shall serve as Controller
and Assistant Secretary of the Company, and in such other positions with
the Company and its subsidiaries commensurate with the Executive’s title as Controller and Assistant Secretary as the Board
of Directors of the Company (the “Board”) or its designee shall from time to
time specify.  During the Employment
Term, the Executive shall have the duties, responsibilities and obligations
customarily assigned to individuals serving in the position or positions in
which Executive serves hereunder, together with other duties, responsibilities
and obligations commensurate with the Executive’s title as the Board or its
designee shall from time to time specify.

 

Section 2.                                            Term.  Unless sooner terminated pursuant to Section 6
hereof, the Executive’s employment hereunder shall be deemed to have commenced
on February 11th, 2005 (the “Effective Date) and shall continue
during the period ending on the third anniversary of the Effective Date (the “Employment
Term”).

 

 

Section 3.                                            Compensation.  During the Employment Term, the Executive
shall be entitled to the following compensation and benefits:

 

(a)                                  Salary.  As compensation for the performance of the
Executive’s services hereunder, the Company shall pay to the Executive a salary
of $118,000 per annum with increases, if
any, as may be approved in writing by the Board (the “Salary”).  The Salary shall be payable in accordance
with the payroll practices of the Company as the same shall exist from time to
time.  The Executive’s base annual salary
as February 2, 2004 was $132,351.

 

(b)                                 Annual Bonus.  In the sole discretion of the Board, the
Executive shall be eligible to receive an annual cash bonus (“Bonus”).

 

(c)                                  Benefits.  The Executive shall be entitled to
participate in health, insurance, pension and other benefits provided to other
similarly situated employees of the Company. 
The Executive shall also be entitled to the same number of vacation
days, holidays, sick days and other benefits as are generally allowed to other
similarly situated employees of the Company in accordance with the Company
policy in effect from time to time.

 

Section 4.                                            Exclusivity.  During the Employment Term, the Executive
shall devote his full working time to the business of the Company, shall
faithfully serve the Company, shall in all respects conform to and comply with
the lawful and reasonable directions and instructions given to him in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company, and shall not engage in any
other business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities and/or charitable activities
consistent with the Company’s policy regarding investments (which may change
from time to time) or (iii) with the consent of the Board, serve as a member of
the board of directors or advisory boards (or their equivalents in the case of
a non-corporate entity) of non-competing businesses and charitable
organizations, provided that activities set forth in these clauses (i), (ii),
or (iii) either singly or in the aggregate, do not interfere in any material
respect with the services to be provided by the Executive hereunder.

 

Section 5.                                            Reimbursement
for Expenses.  The Executive is
authorized to incur reasonable expenses in the discharge of the services to be
performed hereunder, including expenses for travel, entertainment, lodging and
similar items in accordance with the Company’s expense reimbursement policy, as
the same may be modified by the Board from time to time.  The Company shall reimburse the Executive for
all such proper expenses upon presentation by the Executive of itemized accounts
of such expenditures in accordance with the financial policy of the Company, as
in effect from time to time.

 

Section 6.                                            Termination
and Default.

 

(a)                                  Early Termination
of the Employment Term.  The
Employment Term shall earlier terminate upon the earliest to occur of (i) a
termination of Executive’s employment due to the Executive’s death, (ii) a
termination by reason of a Disability, where “Disability” shall mean any
physical or mental disability or infirmity that prevents the performance of
Executive’s

 

 

duties hereunder for a
period of 120 consecutive days or 180 days during any 12-month period, (iii) a
termination by the Company with or without Cause (as defined below), or
(iv) a termination voluntary resignation by the Executive.

 

(b)                                 Termination due to
Death or Disability.  The Executive’s
employment shall terminate upon his death, or in the event of a Disability,
upon delivery of written notice to the Executive of such termination by reason
of the Executive’s Disability.  Upon such
event, the Executive, or Executive’s estate, as applicable, shall be entitled
to receive the amounts specified in Section 6(e) below.  The Board’s reasoned and good faith judgment
of Disability shall be final, binding and conclusive and shall be based on such
competent medical evidence as shall be presented to it by Executive and/or by
any physician or group of physicians or other competent medical expert employed
by Executive or the Company to advise the Board.

 

(c)                                  Termination by the
Company with or without Cause.  The
Company may terminate the Executive’s employment at any time, with or without
Cause.  Termination of the Executive’s
employment hereunder shall be effective upon delivery of written notice of such
termination.  For purposes of this
Agreement, “Cause” shall mean: (i) the Executive’s failure (except where due to
sickness or other Disability), neglect or refusal to perform his duties
hereunder which failure, neglect or refusal shall not have been corrected by
the Executive within 10 days of receipt by the Executive of written notice from
the Company of such failure, neglect or refusal, which notice shall with
reasonable specificity set forth the nature of said failure, neglect or
refusal; (ii) any willful or intentional act of the Executive that has the
effect of injuring the reputation or business of the Company or its affiliates
in any material respect; (iii) public or consistent drunkenness by the
Executive or his illegal use of narcotics which is, or could reasonably be
expected to become, materially injurious to the reputation or business of the
Company or which impairs, or could reasonably be expected to impair, the
performance of the Executive’s duties hereunder; (iv) conviction of, or plea of
guilty or nolo contendere to, the commission of a felony by the
Executive; (v) the commission by the Executive of an act of fraud or
embezzlement against the Company; or (vi) the Executive’s breach of any of the
covenants provided in Section 7 hereof.

 

(d)                                 Resignation by the
Executive.  The Executive shall have
the right to terminate his employment at any time by giving thirty (30) days
written notice of his resignation.

 

(e)                                  Payments upon
Termination.  (i)  In the event that the Executive’s employment
terminates for any reason, the Company shall pay to the Executive all amounts accrued
but unpaid hereunder through the date of
termination in respect of Salary, any unpaid Bonus in respect to any completed
fiscal year which has ended prior to the date of termination, accrued but
unused vacation and any unreimbursed expenses. 
Amounts owed by the Company in respect of the payments under Section 6(e)(i)
hereof or reimbursement for expenses under the provisions of Section 5
hereof shall be paid within five (5) business days of any termination , except
amounts payable with respect to unpaid Bonus, which shall be paid at such time
bonus amounts are paid to other senior executives.

 

(ii)                                  In the event that
prior to a Change in Control, the Executive’s employment is terminated by the
Company without Cause (other than upon expiration of the Employment Term
pursuant to Section 2 hereof or a termination under Section 6(b)
above), in

 

 

addition to the amounts
specified in subsection (i) above, (A) the Executive shall be entitled to
an amount equal to twelve (12) months Salary (less any applicable withholding
or similar taxes) at the rate in effect hereunder on the date of such
termination, such amount to be payable in substantially equal monthly
installments from the date of such termination through the date two months from
end of the Company’s fiscal year following the year of such termination (the “Severance
Term”); (B) the Company shall pay the Executive an aggregate amount equal to
one times the Bonus payable or paid to the Executive in respect of the
completed fiscal year which has ended prior to the date of termination, payable
in substantially equal monthly installments during the Severance Term; (C) a
lump-sum payment equal to twelve (12)
times the monthly cost of health continuation coverage for the Executive and
his dependents, as provided under COBRA and as determined on the date of
termination, whether or not the Executive elects such COBRA coverage; and (D)
all outstanding options then held by the Executive shall immediately vest as to
the number of covered shares which would otherwise have vested during the
Severance Term, assuming no termination of employment had occurred.  Payment of any amounts pursuant to this Section 6(e)
shall be expressly conditioned upon the Executive’s execution of a general
waiver and release of claims against the Company and its officers, directors,
agents, and affiliates.

 

(iii)                               In the event that in
connection with or following a Change in Control, the Executive’s employment is
terminated by the Company without Cause (other than upon expiration of the
Employment Term pursuant to Section 2 hereof or a termination under Section 6(b)
above), in lieu of amounts payable and benefits provided to the Executive
pursuant to subsection (ii) above, the Executive shall be entitled to receive (A) a lump-sum cash payment equal to two
(2) times (x) the Executive’s then-current Salary and (y) the Bonus payable or
paid to the Executive in respect of the completed fiscal year which has ended
prior to the date of termination; (B) a lump-sum payment equal to twenty four
(24) times the monthly cost of health continuation coverage for the Executive
and his dependents, as provided under COBRA and as determined on the
date of termination, whether or not the Executive elects such COBRA coverage;
and (C) all outstanding options then held by the Executive shall immediately
vest and be fully exercisable as of the date of such termination.  For purposes of this Agreement, the term “Change
in Control” shall have the same meaning as “Change in Control of the Company”
as provided in the Company’s Stock Option Plan (the “Option Plan”).

 

(iv)                              Payment of any amounts
pursuant to this Section 6(e) shall be expressly conditioned upon the
Executive’s execution of a general waiver and release of claims against the
Company and its officers, directors, agents, and affiliates.

 

(f)                                    Payment In Lieu.  In the event of termination of the Executive’s
employment due to the voluntary resignation by the Executive, the Company may,
in its sole and absolute discretion, at any time after notice of termination
has been given by the Executive, terminate this Agreement, provided that the
Company shall pay to the Executive his then current Salary and continue
benefits provided pursuant to Section 3(c) for the duration of the
unexpired notice period.

 

(g)                                 Survival of Operative
Sections.  Upon any termination of
the Executive’s employment, the provisions of Section 6(e), Section 6(f),
and Section 7 through Section 19 of this Agreement shall survive to
the extent necessary to give effect to the provisions thereof.

 

 

Section 7.                                            Restrictive
Covenants.  The Executive
acknowledges and agrees that the agreements and covenants contained in this Section 7
are (i) reasonable and valid in geographical and temporal scope and in all
other respects, and (ii) essential to protect the value of the Company’s
business and assets and by his employment with the Company, the Executive will
obtain knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of the
Company and to the Company’s substantial detriment.  For purposes of this Section 7,
references to the Company shall be deemed to include its subsidiaries.

 

(a)                                  Confidential
Information.  At any time during and
after the end of the Employment Term, without the prior written consent of the
Board, except to the extent required by an order of a court having
jurisdiction or under subpoena from an appropriate government agency, in which
event, the Executive shall use his best efforts to consult with the Board prior
to responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, the Executive shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information, operating policies or
manuals, business plans, financial records, packaging design or other
financial, commercial, business or technical information (i) relating to
the Company, or (ii) that the Company or any of its affiliates may receive
belonging to suppliers, customers or others who do business with the Company (“Confidential
Information”).  Executive’s obligation
under this Section 7(a) shall not apply to any information which (i) is
known publicly; (ii) is in the public domain or hereafter enters the public
domain without the breach of the Executive of this Section 7(a); (iii) is
known to the Executive prior to the Executive’s receipt of such information
from the Company any of its subsidiaries, as evidenced by written records of
the Executive; or (iv) is disclosed after termination of the Executive’s
employment to the Executive by a third party not under an obligation of
confidence to the Company.

 

(b)                                 Non-Competition.  The Executive covenants and agrees that
during the Employment Term and for a period extending to the first anniversary
of the Executive’s termination of employment for any reason (the “Restricted
Period”), with respect to any State in which the Company is engaged in business
at the time of such termination, the Executive shall not, directly or
indirectly, individually or jointly, own any interest in, operate, join,
control or participate as a partner, director, principal, officer, or agent of,
enter into the employment of, act as a consultant to, or perform any services
for (i) any entity which competes to a material extent with the business
activities in which the Company is engaged at the time of such termination or
in which business activities the Company has documented plans to become engaged
in and as to which Executive has knowledge at the time of Executive’s
termination of employment, or (ii) any entity in which any such relationship
with the Executive would result in the inevitable use or disclosure of
Confidential Information. 
Notwithstanding anything herein to the contrary, this Section 7(b)
shall not prevent the Executive from acquiring as an investment securities
representing not more than three percent (3%) of the outstanding voting
securities of any publicly-held corporation.

 

(c)                                  Non-Solicitation;
Non-Interference.  During the
Restricted Period, the Executive shall not, directly or indirectly, for his own
account or for the account of any other

 

 

individual or entity (i) solicit or induce, or in any manner attempt to
solicit or induce, any person employed by, an agent of, or a service provider
to, the Company to terminate such person’s employment, agency or service, as
the case may be, with the Company; or (ii) divert, or attempt to divert, any
person, concern, or entity from doing business with the Company or any of its
subsidiaries, or attempt to induce any such person, concern or entity to cease
being a customer or supplier of the Company.

 

(d)                                 Non-Disparagement.  The Executive agrees that, except as required
by applicable law, or compelled by process of law, at any time following the
date hereof, neither he, nor anyone acting on his behalf, shall hereafter
(i) make any derogatory, disparaging or critical statement about the
Company, or any of the Company’s current officers, directors, employees,
shareholders or lenders or any persons who were officers, directors, employees,
shareholders or lenders of the Company; or (ii) without the Company’s
prior written consent, communicate, directly or indirectly, with the press or
other media, concerning the past or present employees or business of the
Company.

 

(e)                                  Return of
Documents; Company Property.  In the
event of the termination of Executive’s employment for any reason, the
Executive shall deliver to the Company all of (i) the property of the
Company and (ii) the documents and data of any nature and in whatever
medium of the Company in his possession, and he shall not take with him any
such property, documents or data or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information.

 

(f)                                    Works for Hire.  The Executive agrees that the Company shall
own all right, title and interest (including patent rights, copyrights, trade
secret rights, mask work rights and other rights throughout the world) in any
inventions, works of authorship, mask works, ideas or information made or
conceived or reduced to practice, in whole or in part, by the Executive (either
alone or with others) during the Employment Term (“Developments”); provided,
however, that the Company shall not own Developments for which no equipment,
supplies, facility, trade secret information or Confidential Information of the
Company was used and which were developed entirely on Executive’s time, and
(i) which do not relate (A) to the business of the Company or its affiliates or
(B) to the Company’s or its affiliates actual or demonstrably anticipated
research or development, and (ii) which do not result from any work performed
by the Executive for the Company. 
Subject to the foregoing, Executive will promptly and fully disclose to
the Company, or any persons designated by it, any and all Developments made or
conceived or reduced to practice or learned by the Executive, either alone or
jointly with others during the Employment Term. 
The Executive hereby assigns all right, title and interest in and to any
and all of these Developments to the Company. 
The Executive agrees to assist the Company, at the Company’s expense, to
further evidence, record and perfect such assignments, and to perfect, obtain,
maintain, enforce, and defend any rights specified to be so owned or
assigned.  The Executive hereby
irrevocably designates and appoints the Company and its agents as
attorneys-in-fact to act for and on the Executive’s behalf to execute and file
any document and to do all other lawfully permitted acts to further the
purposes of the foregoing with the same legal force and effect as if executed
by the Executive.  In addition, and not
in contravention of any of the foregoing, the Executive acknowledges that all
original works of authorship which are made by him (solely or jointly with others)
within the scope of employment and which are protectable by copyright are “works
made for hire,” as that term is defined in the United States

 

 

Copyright Act (17 USC ‘
101).  To the extent allowed by law, this
Section 7(f) includes all rights of paternity, integrity, disclosure and
withdrawal and any other rights that may be known as or referred to as “moral
rights” (“Moral Rights”).  To the extent
Executive retains any such Moral Rights under applicable law, the Executive
hereby waives such Moral Rights and consents to any action consistent with the
terms of this Agreement with respect to such Moral Rights, in each case, to the
full extent of such applicable law.  The
Executive will confirm any such waivers and consents from time to time as
requested by the Company.

 

(g)                                 Blue Pencil.  If any court of competent jurisdiction shall
at any time deem the duration or the geographic scope of any of the provisions
of this Section 7 unenforceable, the other provisions of this Section 7
shall nevertheless stand and the duration and/or geographic scope set forth
herein shall be deemed to be the longest period and/or greatest size
permissible by law under the circumstances, and the parties hereto agree that
such court shall reduce the time period and/or geographic scope to permissible
duration or size.

 

Section 8.                                            Injunctive
Relief.  Without intending to limit
the remedies available to the Company, the Executive acknowledges that a breach
of any of the covenants contained in Section 7 hereof may result in
material irreparable injury to the Company or its subsidiaries or affiliates
for which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order and/or a preliminary or permanent injunction, without the
necessity of proving irreparable harm or injury as a result of such breach or
threatened breach of Section 7 hereof, restraining the Executive from
engaging in activities prohibited by Section 7 hereof or such other relief
as may be required specifically to enforce any of the covenants in Section 7
hereof.  Notwithstanding any other
provision to the contrary, the Restricted Period shall be tolled during any
period of violation of any of the covenants in Section 7(b) or Section 7(c)
hereof and during any other period required for litigation during which the
Company seeks to enforce this covenant against the Executive if it is
ultimately determined that such person was in breach of such covenants.

 

Section 9.                                            Representations
and Warranties of the Executive.  The
Executive represents that:

 

(a)                                  the Executive is
entering into this Agreement voluntarily and that his employment hereunder and
compliance with the terms and conditions hereof will not conflict with or
result in the breach by him of any agreement to which he is a party or by
which he may be bound,

 

(b)                                 he has not, and in
connection with his employment with the Company will not, violate any
non-solicitation or other similar covenant or agreement by which he is or may
be bound, and

 

(c)                                  in connection with
his employment with the Company he will not use any confidential or proprietary
information he may have obtained in connection with employment with any prior
employer.

 

 

Section 10.                                      Taxes.  The Company may withhold from any payments
made under this Agreement all applicable taxes, including but not limited to
income, employment and social insurance taxes, as shall be required by law.

 

Section 11.                                      Indemnification.  The Company shall indemnify the Executive
(and his legal representatives or other successors) to the fullest extent
permitted (including payment of expenses in advance of final disposition of the
proceeding) by the laws of the State of New York, as in effect at the time of
the subject act or omission, or the Certificate of Incorporation and By-Laws of
the Company as in effect at such time or on the date of this Agreement,
whichever affords or afforded greater protection to the Executive, and the
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers, against all costs, charges and expenses whatsoever incurred or
sustained by him or his legal representatives in connection with any action,
suit or proceeding to which he (or his legal representatives or other
successors) may be made a party by reason of his being or having been a
director, officer or employee of the Company or any of its subsidiaries.  If any action, suit or proceeding is brought
or threatened against the Executive in respect of which indemnity may be sought
against the Company pursuant to the foregoing, the Executive shall notify the
Company promptly in writing of the institution of such action, suit or
proceeding and the Company shall assume the defense hereof and the employment
of counsel and payment of all fees and expenses.

 

Section 12.                                      Binding
Arbitration.  Without limiting the
remedies available to the Company pursuant to Section 8, any controversy
arising out of or relating to this Agreement or the breach hereof shall be
settled by binding arbitration in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association (with the exception
that there will be a panel of three arbitrators rather than a single
arbitrator) and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.  The costs of any such arbitration proceedings
shall be borne equally by the Company and Executive, and neither party shall be
entitled to recover attorney’s fee or costs expended in the course of such
arbitration or enforcement of the awarded rendered thereunder. The location for
the arbitration shall be New York City, New York.  Any award made by such arbitrator
shall be final, binding and conclusive on the parties for all purposes, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.

 

Section 13.                                      Successors
and Assigns; No Third-Party Beneficiaries.

 

(a)                                  The Company.
This Agreement shall inure to the benefit of and be enforceable by, and may be
assigned by the Company to, any purchaser of all or substantially all of the
Company’s business or assets, any successor to the Company or any assignee
thereof (whether direct or indirect, by purchase, merger, consolidation or
otherwise).  The Company will require any
such purchaser, successor or assignee to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such purchase, succession or assignment had
taken place.

 

(b)                                 The Executive.  The Executive’s rights and obligations under
this Agreement shall not be transferable by the Executive by assignment or
otherwise, without the prior written consent of the Company; provided, however,
that if the Executive shall die, all

 

 

amounts then payable to
the Executive hereunder shall be paid in accordance with the terms of this
Agreement to the Executive’s devisee, legatee or other designee or, if there be
no such designee, to the Executive’s estate.

 

Section 14.                                      Waiver
and Amendments.  Any waiver,
alteration, amendment or modification of any of the terms of this Agreement
shall be valid only if made in writing and signed by the parties hereto; provided,
however, that any such waiver, alteration, amendment or modification is
consented to on the Company’s behalf by the Board.  No waiver by either of the parties hereto of
their rights hereunder shall be deemed to constitute a waiver with respect to
any subsequent occurrences or transactions hereunder unless such waiver
specifically states that it is to be construed as a continuing waiver.

 

Section 15.                                      Severability
and Governing Law.  If any covenants
or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction (a)
the remaining terms and provisions hereof shall be unimpaired and (b) the
invalid or unenforceable term or provision hereof shall be deemed replaced by a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision
hereof.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

 

Section 16.                                      Notices.

 

(a)                                  Every notice or other
communication relating to this Agreement shall be in writing, and shall be
mailed to or delivered to the party for whom it is intended at such address as
may from time to time be designated by it in a notice mailed or delivered to
the other party as herein provided, provided that, unless and until some other
address be so designated, all notices or communications by the Executive to the
Company shall be mailed or delivered to the Company at its principal executive
office, and all notices or communications by the Company to the Executive may
be given to the Executive personally or may be mailed to Executive at the
Executive’s last known address, as reflected in the Company’s records.

 

(b)                                 Any notice so
addressed shall be deemed to be given: 
(i) if delivered by hand, on the date of such delivery; (ii) if mailed
by courier, on the first business day following the date of such mailing; and
(iii) if mailed by registered or certified mail, on the third business day
after the date of such mailing.

 

Section 17.                                      Section Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, affect the meaning or interpretation of this
Agreement or of any term or provision hereof.

 

Section 18.                                      Entire
Agreement.  This Agreement
constitutes the entire understanding and agreement of the parties hereto
regarding the employment of the Executive. 
This Agreement supersedes all prior negotiations, discussions,
correspondence, communications,

 

 

understandings and
agreements between the parties, including, without limitation, the Prior
Employment Agreement, relating to the subject matter of this Agreement.

 

Section 19.                                      Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.

 

*     *     *     *     *

 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement as of the date first
above written.

 

 

	
   

  	
  EON LABS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William F. Holt

  	
   

  
	
   

  	
   

  	
  Name: William F. Holt

  
	
   

  	
   

  	
  Title:  Vice
  President, Finance & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David H. Gransee

  	
   

  
	
   

  	
  David H. GranseeExhibit
10.8

 

EON LABS, INC.

 

AMENDED AND
RESTATED EMPLOYMENT AGREEMENT

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT,
dated as of this 11th day of February 2005, between Eon Labs, Inc. (the “Company”),
and William F. Holt (the “Executive”).

 

R E C I T A L S:

 

WHEREAS, the Company and the Executive are
both parties to an Employment Agreement dated as of February 2002 (the “Prior
Employment Agreement”); and

 

WHEREAS, the Company and the Executive wish
to amend and restate the Prior Employment Agreement to provide for an extension
of the Employment Term, as defined in the Prior Employment Agreement; and

 

WHEREAS, the Company recognizes that the
future growth, profitability and success of the Company’s business will be
substantially and materially enhanced by the continued employment of the
Executive by the Company; and

 

WHEREAS, the Company desires to continue to
employ the Executive and the Executive has indicated his willingness to provide
his services, on the terms and conditions set forth herein.

 

NOW, THEREFORE, on the basis of the foregoing
premises and in consideration of the mutual covenants and agreements contained
herein, the parties hereto agree as follows:

 

Section 1.                                            Employment.  The Company hereby agrees to employ the
Executive and the Executive hereby accepts employment with the Company, on the
terms and subject to the conditions hereinafter set forth.  During the Employment Term (as hereinafter
defined), the Executive shall serve as Vice
President Finance, Secretary, Treasurer and Chief Financial Officer of
the Company, and in such other senior executive position or positions with the
Company and its subsidiaries commensurate with the Executive’s title as Vice President Finance, Secretary, Treasurer and Chief
Financial Officer as the Board of Directors of the Company (the “Board”)
shall from time to time specify.  During
the Employment Term, the Executive shall have the duties, responsibilities and
obligations customarily assigned to individuals serving in the position or
positions in which Executive serves hereunder, together with other senior
executive duties, responsibilities and obligations commensurate with the
Executive’s title as the Board shall from time to time specify.

 

Section 2.                                            Term.  Unless sooner terminated pursuant to Section 6
hereof, the Executive’s employment hereunder shall be deemed to have commenced
on the 11th day of February 2005 (the “Effective Date”) and
shall continue during the period ending on the third anniversary of the
Effective Date (the “Employment Term”).

 

 

Section 3.                                            Compensation.  During the Employment Term, the Executive
shall be entitled to the following compensation and benefits:

 

(a)                                  Salary.  As compensation for the performance of the
Executive’s services hereunder, the Company shall pay to the Executive a salary
of $178,000 per annum with increases, if
any, as may be approved in writing by the Board (the “Salary”).  The Salary shall be payable in accordance
with the payroll practices of the Company as the same shall exist from time to
time. The Executive’s base annual salary as of February 2, 2004 was
$211,996.

 

(b)                                 Annual
Bonus.  In the sole discretion of the
Board, the Executive shall be eligible to receive an annual cash bonus;
provided, however, that in the event the Company adopts an annual bonus plan
for its senior executives, the Executive shall participate in such plan on the
same basis as other senior executives of the Company (with appropriate
adjustment due to differences in title and salary).

 

(c)                                  Benefits.
The Executive shall be entitled to an amount of paid vacation per year as
provided in the Company’s vacation policy, which shall in no event be less than
four (4) weeks per year.  In addition, the Executive shall be entitled
to participate in health, insurance, pension and other benefits provided to other
senior executives of the Company.  The
Executive shall also be entitled to the same number of holidays, sick days and
other benefits as are generally allowed to other senior executives of the
Company in accordance with the Company policy in effect from time to time.

 

Section 4.                                            Exclusivity.  During the Employment Term, the Executive
shall devote his full working time to the business of the Company, shall
faithfully serve the Company, shall in all respects conform to and comply with
the lawful and reasonable directions and instructions given to him in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company, and shall not engage in any
other business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities and/or charitable
activities consistent with the Company’s policy regarding investments (which
may change from time to time) or (iii) with the consent of the Board, serve as
a member of the board of directors or advisory boards (or their equivalents in
the case of a non-corporate entity) of non-competing businesses and charitable
organizations, provided that activities set forth in these clauses (i), (ii),
or (iii) either singly or in the aggregate, do not interfere in any material
respect with the services to be provided by the Executive hereunder.

 

Section 5.                                            Reimbursement
for Expenses.  The Executive is
authorized to incur reasonable expenses in the discharge of the services to be
performed hereunder, including expenses for travel, entertainment, lodging and
similar items in accordance with the Company’s expense reimbursement policy, as
the same may be modified by the Board from time to time.  The Company shall reimburse the Executive for
all such proper expenses upon presentation by the Executive of itemized accounts
of such expenditures in accordance with the financial policy of the Company, as
in effect from time to time.

 

2

 

Section 6.                                            Termination
and Default.

 

(a)                                  Early
Termination of the Employment Term. 
The Employment Term shall earlier terminate upon the earliest to occur
of (i) a termination of Executive’s employment due to the Executive’s death,
(ii) a termination by reason of a Disability, where “Disability” shall mean any
physical or mental disability or infirmity that prevents the performance of
Executive’s duties hereunder for a period of 120 consecutive days or 180 days
during any 12-month period, (iii) a termination by the Company with or without
Cause (as defined below), or (iv) a termination by Executive with or without
Good Reason (as defined below).

 

(b)                                 Termination
due to Death or Disability.  The
Executive’s employment shall terminate upon his death, or in the event of a
Disability, upon delivery of written notice to the Executive of such
termination by reason of the Executive’s Disability.  Upon such event, the Executive, or Executive’s
estate, as applicable, shall be entitled to receive the amounts specified in Section 6(f)
below.  The Board’s reasoned and good
faith judgment of Disability shall be final, binding and conclusive and shall
be based on such competent medical evidence as shall be presented to it by
Executive and/or by any physician or group of physicians or other competent
medical expert employed by Executive or the Company to advise the Board.

 

(c)                                  Termination
by the Company with or without Cause. 
The Company may terminate the Executive’s employment at any time, with
or without Cause.  Termination of the
Executive’s employment hereunder shall be effective upon delivery of written
notice of such termination.  For purposes
of this Agreement, “Cause” shall mean: (i) the Executive’s failure (except
where due to sickness or other Disability), neglect or refusal to perform his
duties hereunder which failure, neglect or refusal shall not have been
corrected by the Executive within 10 days of receipt by the Executive of
written notice from the Company of such failure, neglect or refusal, which
notice shall with reasonable specificity set forth the nature of said failure,
neglect or refusal; (ii) any willful or intentional act of the Executive that
has the effect of injuring the reputation or business of the Company or its
affiliates in any material respect; (iii) public or consistent drunkenness by
the Executive or his illegal use of narcotics which is, or could reasonably be
expected to become, materially injurious to the reputation or business of the
Company or which impairs, or could reasonably be expected to impair, the
performance of the Executive’s duties hereunder; (iv) conviction of, or plea of
guilty or nolo contendere to, the commission of a felony by the
Executive; (v) the commission by the Executive of an act of fraud or
embezzlement against the Company; or (vi) the Executive’s breach of any of the
covenants provided in Section 7 hereof.

 

(d)                                 Termination
by the Executive for Good Reason. 
The Executive may terminate his employment with the Company for Good
Reason upon thirty (30) days written notice, which notice shall specifically
set forth the nature of such Good Reason. 
The term “Good Reason” shall mean (i) any material diminution in the
nature or scope of Executive’s functions, duties, position, responsibilities,
or reporting relationships that are inconsistent with the Executive’s titles or
this Agreement, (ii) at any time following a Change in Control (as defined
below), without the Executive’s consent, the relocation of the Executive’s
principal office location more than fifty (50) miles from its current location,
(iii) delivery written notice of resignation at any time and for any reason
during the period commencing on the nine-month anniversary of a Change in
Control and ending on the eleven-month anniversary of a Change in

 

3

 

Control, or (iv) the
failure of the Company to obtain the assumption in writing of its obligation to
perform this Agreement by any successor to all or substantially all of the
assets of the Company; provided, however, that the term “Good Reason” shall not
include a termination pursuant to Section 2 or Section 6(b)
hereof.  Notwithstanding the occurrence
of any such event or circumstance above (other than clause (iii) above), such
occurrence shall not be deemed to constitute Good Reason hereunder if, within
the thirty-day notice period, the event or circumstance giving rise to Good
Reason has been fully corrected by the Company. 
For purposes of this Agreement, the term “Change in Control” shall have
the same meaning as “Change in Control of the Company” as provided in the
Company’s Stock Option Plan (the “Option Plan”).

 

(e)                                  Resignation
by the Executive.  The Executive
shall have the right to terminate his employment at any time by giving thirty
(30) days written notice of his resignation.

 

(f)                                    Payments
upon Termination.  (i)  In the event that the Executive’s employment
terminates for any reason, the Company shall pay to the Executive all amounts
accrued but unpaid hereunder through the date of termination in respect of
Salary, any unpaid Bonus in respect to any completed fiscal year which has
ended prior to the date of termination, accrued but unused vacation and any
unreimbursed expenses.  Amounts owed by
the Company in respect of the payments under Section 6(f)(i) hereof or
reimbursement for expenses under the provisions of Section 5 hereof shall
be paid within five (5) business days of any termination, except amounts
payable with respect to unpaid Bonus, which shall be paid at such time bonus
amounts are paid to other senior executives.

 

(ii)                                  In
the event that prior to a Change in Control, the Executive’s employment is
terminated by the Company without Cause (other than upon expiration of the
Employment Term pursuant to Section 2 hereof or a termination under Section 6(b)
above) or by the Executive for Good Reason, in addition to the amounts
specified in subsection (i) above, (A) the Executive shall be entitled to
an amount equal to twelve (12) months Salary (less any applicable withholding
or similar taxes) at the rate in effect hereunder on the date of such
termination, such amount to be payable in substantially equal monthly installments
from the date of such termination through the date two months from end of the
Company’s fiscal year following the year of such termination (the “Severance
Term”); (B) the Company shall pay the Executive an aggregate amount equal to
one times the Bonus payable or paid to the Executive in respect of the
completed fiscal year which has ended prior to the date of termination, payable
in substantially equal monthly installments during the Severance Term; (C) a
lump-sum payment equal to twelve (12)
times the monthly cost of health continuation coverage for the Executive and
his dependents, as provided under COBRA and as determined on the date of
termination, whether or not the Executive elects such COBRA coverage; and (D)
all outstanding options then held by the Executive shall immediately vest as to
the number of covered shares which would otherwise have vested during the
Severance Term, assuming no termination of employment had occurred.  Payment of any amounts pursuant to this Section 6(f)
shall be expressly conditioned upon the Executive’s execution of a general
waiver and release of claims against the Company and its officers, directors,
agents, and affiliates.

 

(iii)                               In
the event that in connection with or following a Change in Control, the
Executive’s employment is terminated by the Company without Cause (other than

 

4

 

upon expiration of the
Employment Term pursuant to Section 2 hereof or a termination under Section 6(b)
above) or by the Executive for Good Reason, in lieu of amounts payable and
benefits provided to the Executive pursuant to subsection (ii) above, the
Executive shall be entitled to receive (A) a lump-sum cash payment equal to two (2) times the sum of (x) the Executive’s
then-current Salary and (y) the Bonus payable or paid to the Executive in
respect of the completed fiscal year which has ended prior to the date of
termination; (B) a lump-sum payment equal to twenty
four (24) times the monthly cost of health continuation coverage for the
Executive and his dependents, as provided under COBRA and as determined on the
date of termination, whether or not the Executive elects such COBRA coverage;
and (C) all outstanding options then held by the Executive shall immediately
vest and be fully exercisable as of the date of such termination.

 

(iv)                              Payment
of any amounts pursuant to this Section 6(f) shall be expressly
conditioned upon the Executive’s execution of a general waiver and release of
claims against the Company and its officers, directors, agents, and affiliates.

 

(g)                                 Payment
In Lieu.  In the event of termination
of the Executive’s employment due to the voluntary resignation by the
Executive, the Company may, in its sole and absolute discretion, at any time
after notice of termination has been given by the Executive, terminate this
Agreement, provided that the Company shall pay to the Executive his then
current Salary and continue benefits provided pursuant to Section 3(c) for
the duration of the unexpired notice period.

 

(h)                                 Additional
Payments.

 

(i)                                     In
the event that payments or benefits made or provided to the Executive under
this Agreement and under any other plan, program or agreement of the Company,
or any of their respective affiliates (the “Aggregate Payment”) are or become
subject to the tax imposed under Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”) or any similar tax that may hereafter be
imposed (the “Excise Tax”), the Company shall pay to the Executive an
additional amount (the “Additional Payment”) such that the net amount retained
by the Executive with respect to the Aggregate Payment, after deduction of any
Excise Tax on the Aggregate Payment and any Federal, state and local income tax
and Excise Tax on the Additional Payment (and any interest and penalties
thereon), but before deduction for any Federal, state or local income or
employment tax withholding on such Aggregate Payment, shall be equal to the
amount of the Aggregate Payment.

 

(ii)                                  The
determination of whether the Aggregate Payment will be subject to the Excise
Tax and, if so, the amount to be paid to the Executive and the time of payment
pursuant to this Section 6(h) shall be made by an independent auditor (the
“Auditor”) jointly selected by the Company and the Executive and paid by the
Company.  The Auditor shall be a
nationally recognized United States public accounting firm which has not,
during the two years preceding the date of its selection, acted in any way on
behalf of the Company.  If the Executive
and the Company cannot agree on the firm to serve as the Auditor, then the
Executive and the Company shall each select one accounting firm and those two
firms shall jointly select the accounting firm to serve as the Auditor.  All fees and expenses of the Auditor shall be
borne solely by the Company.

 

5

 

(iii)                               For
purposes of determining the amount of the Additional Payment, the Executive
shall be deemed to pay:

 

(A)                              Federal income taxes at
the highest applicable marginal rate of Federal income taxation for the
calendar year in which the Additional Payment is to be made, and

 

(B)                                Any applicable state
and local income taxes at the highest applicable marginal rate of taxation for
the calendar year in which the Additional Payment is to be made, net of the
maximum reduction in Federal incomes taxes which could be obtained from the
deduction of such state or local taxes if paid in such year.

 

(iv)                              In
the event that the Excise Tax is subsequently determined by the Auditor or
pursuant to any proceeding or negotiations with the Internal Revenue Service to
be less than the amount taken into account hereunder in calculating the
Additional Payment made, the Executive shall repay to the Company, at the time
that the amount of such reduction in the Excise Tax is finally determined, the
portion of such prior Additional Payment that would not have been paid if such
Excise Tax had been applied in initially calculating such Additional Payment,
plus interest on the amount or such repayment at the rate provided in Section 1274(b)(2)(B)
of the Code.  Notwithstanding the
foregoing, in the event any portion of the Additional Payment to be refunded to
the Company has been paid to any Federal, state or local tax authority,
repayment thereof shall not be required until actual refund or credit of such
portion has been made to the Executive, and interest payable to the Company
shall not exceed interest received or credited to the Executive by such tax
authority for the period it held such portion. 
The Executive and the Company shall mutually agree upon the course of
action to be pursued if the Executive’s good faith claim for refund or credit
is denied.

 

(v)                                 In
the event that the Excise Tax is later determined by the Auditor or pursuant to
any proceeding or negotiations with the Internal Revenue Service to exceed the
amount taken into account hereunder at the time the Tax Reimbursement Payment
is made (including, but not limited to, by reason of any payment the existence
or amount of which cannot be determined at the time of the Additional Payment),
the Company shall make an additional payment in respect of such excess (plus
any interest or penalty payable with respect to such excess) at the time that
the amount of such excess is finally determined.

 

(i)                                     Survival
of Operative Sections.  Upon any
termination of the Executive’s employment, the provisions of Section 6(f),
Section 6(g), Section 6(h) and Section 7 through Section 19
of this Agreement shall survive to the extent necessary to give effect to the
provisions thereof.

 

Section 7.                                            Restrictive
Covenants.  The Executive
acknowledges and agrees that the agreements and covenants contained in this Section 7
are (i) reasonable and valid in geographical and temporal scope and in all
other respects, and (ii) essential to protect the value of the Company’s
business and assets and by his employment with the Company, the Executive will
obtain knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and experience
could be used to the substantial advantage of a competitor of the Company and
to the Company’s substantial

 

6

 

detriment.  For purposes of this Section 7,
references to the Company shall be deemed to include its subsidiaries.

 

(a)                                  Confidential
Information.  At any time during and
after the end of the Employment Term, without the prior written consent of the
Board, except to the extent required by an order of a court having
jurisdiction or under subpoena from an appropriate government agency, in which
event, the Executive shall use his best efforts to consult with the Board prior
to responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, the Executive shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information, operating policies or
manuals, business plans, financial records, packaging design or other
financial, commercial, business or technical information (i) relating to
the Company, or (ii) that the Company or any of its affiliates may receive
belonging to suppliers, customers or others who do business with the Company (“Confidential
Information”).  Executive’s obligation
under this Section 7(a) shall not apply to any information which (i) is
known publicly; (ii) is in the public domain or hereafter enters the public
domain without the breach of the Executive of this Section 7(a); (iii) is
known to the Executive prior to the Executive’s receipt of such information
from the Company any of its subsidiaries, as evidenced by written records of
the Executive; or (iv) is disclosed after termination of the Executive’s
employment to the Executive by a third party not under an obligation of
confidence to the Company.

 

(b)                                 Non-Competition.  The Executive covenants and agrees that
during the Employment Term and for a period extending to the first anniversary of the Executive’s
termination of employment for any reason (the “Restricted Period”), with
respect to any State in which the Company is engaged in business at the time of
such termination, the Executive shall not, directly or indirectly, individually
or jointly, own any interest in, operate, join, control or participate as a
partner, director, principal, officer, or agent of, enter into the employment
of, act as a consultant to, or perform any services for (i) any entity which
competes to a material extent with the business activities in which the Company
is engaged at the time of such termination or in which business activities the
Company has documented plans to become engaged in and as to which Executive has
knowledge at the time of Executive’s termination of employment, or (ii) any
entity in which any such relationship with the Executive would result in the
inevitable use or disclosure of Confidential Information.  Notwithstanding anything herein to the contrary,
this Section 7(b) shall not prevent the Executive from acquiring as an
investment securities representing not more than three percent (3%) of the
outstanding voting securities of any publicly-held corporation.

 

(c)                                  Non-Solicitation;
Non-Interference.  During the
Restricted Period, the Executive shall not, directly or indirectly, for his own
account or for the account of any other individual or entity (i) solicit or
induce, or in any manner attempt to solicit or induce, any person employed by,
an agent of, or a service provider to, the Company to terminate such person’s
employment, agency or service, as the case may be, with the Company; or (ii)
divert, or attempt to divert, any person, concern, or entity from doing
business with the Company or any of its subsidiaries, or attempt to induce any
such person, concern or entity to cease being a customer or supplier of the
Company.

 

7

 

(d)                                 Non-Disparagement.  The Executive agrees that, except as required
by applicable law, or compelled by process of law, at any time following the
date hereof, neither he, nor anyone acting on his behalf, shall hereafter
(i) make any derogatory, disparaging or critical statement about the
Company, or any of the Company’s current officers, directors, employees, shareholders
or lenders or any persons who were officers, directors, employees, shareholders
or lenders of the Company; or (ii) without the Company’s prior written
consent, communicate, directly or indirectly, with the press or other media,
concerning the past or present employees or business of the Company.

 

(e)                                  Return
of Documents; Company Property.  In
the event of the termination of Executive’s employment for any reason, the
Executive shall deliver to the Company all of (i) the property of the
Company and (ii) the documents and data of any nature and in whatever
medium of the Company in his possession, and he shall not take with him any
such property, documents or data or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information.

 

(f)                                    Works
for Hire.  The Executive agrees that
the Company shall own all right, title and interest (including patent rights,
copyrights, trade secret rights, mask work rights and other rights throughout
the world) in any inventions, works of authorship, mask works, ideas or
information made or conceived or reduced to practice, in whole or in part, by
the Executive (either alone or with others) during the Employment Term (“Developments”);
provided, however, that the Company shall not own Developments for which no
equipment, supplies, facility, trade secret information or Confidential
Information of the Company was used and which were developed entirely on
Executive’s time, and (i) which do not relate (A) to the business of the
Company or its affiliates or (B) to the Company’s or its affiliates actual or
demonstrably anticipated research or development, and (ii) which do not result
from any work performed by the Executive for the Company.  Subject to the foregoing, Executive will
promptly and fully disclose to the Company, or any persons designated by it,
any and all Developments made or conceived or reduced to practice or learned by
the Executive, either alone or jointly with others during the Employment
Term.  The Executive hereby assigns all right,
title and interest in and to any and all of these Developments to the
Company.  The Executive agrees to assist
the Company, at the Company’s expense, to further evidence, record and perfect
such assignments, and to perfect, obtain, maintain, enforce, and defend any
rights specified to be so owned or assigned. 
The Executive hereby irrevocably designates and appoints the Company and
its agents as attorneys-in-fact to act for and on the Executive’s behalf to
execute and file any document and to do all other lawfully permitted acts to
further the purposes of the foregoing with the same legal force and effect as
if executed by the Executive.  In
addition, and not in contravention of any of the foregoing, the Executive
acknowledges that all original works of authorship which are made by him
(solely or jointly with others) within the scope of employment and which are
protectable by copyright are “works made for hire,” as that term is defined in
the United States Copyright Act (17 USC ‘ 101). 
To the extent allowed by law, this Section 7(f) includes all rights
of paternity, integrity, disclosure and withdrawal and any other rights that
may be known as or referred to as “moral rights” (“Moral Rights”).  To the extent Executive retains any such
Moral Rights under applicable law, the Executive hereby waives such Moral
Rights and consents to any action consistent with the terms of this Agreement
with respect to such Moral Rights, in each case, to the full extent of such
applicable law.  The Executive will
confirm any such waivers and consents from time to time as requested by the
Company.

 

8

 

(g)                                 Blue
Pencil.  If any court of competent
jurisdiction shall at any time deem the duration or the geographic scope of any
of the provisions of this Section 7 unenforceable, the other provisions of
this Section 7 shall nevertheless stand and the duration and/or geographic
scope set forth herein shall be deemed to be the longest period and/or greatest
size permissible by law under the circumstances, and the parties hereto agree
that such court shall reduce the time period and/or geographic scope to
permissible duration or size.

 

Section 8.                                            Injunctive
Relief.  Without intending to limit
the remedies available to the Company, the Executive acknowledges that a breach
of any of the covenants contained in Section 7 hereof may result in
material irreparable injury to the Company or its subsidiaries or affiliates
for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, the Company shall be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction, without the necessity of
proving irreparable harm or injury as a result of such breach or threatened
breach of Section 7 hereof, restraining the Executive from engaging in
activities prohibited by Section 7 hereof or such other relief as may be
required specifically to enforce any of the covenants in Section 7
hereof.  Notwithstanding any other
provision to the contrary, the Restricted Period shall be tolled during any
period of violation of any of the covenants in Section 7(b) or Section 7(c)
hereof and during any other period required for litigation during which the
Company seeks to enforce this covenant against the Executive if it is
ultimately determined that such person was in breach of such covenants.

 

Section 9.                                            Representations
and Warranties of the Executive.  The
Executive represents that:

 

(a)                                  the
Executive is entering into this Agreement voluntarily and that his employment
hereunder and compliance with the terms and conditions hereof will not conflict
with or result in the breach by him of any agreement to which he is
a party or by which he may be bound,

 

(b)                                 he
has not, and in connection with his employment with the Company will not,
violate any non-solicitation or other similar covenant or agreement by which he
is or may be bound, and

 

(c)                                  in
connection with his employment with the Company he will not use any
confidential or proprietary information he may have obtained in connection with
employment with any prior employer.

 

Section 10.                                      Taxes.  The Company may withhold from any payments
made under this Agreement all applicable taxes, including but not limited to
income, employment and social insurance taxes, as shall be required by law.

 

Section 11.                                      Indemnification.  The Company shall indemnify the Executive
(and his legal representatives or other successors) to the fullest extent permitted
(including payment of expenses in advance of final disposition of the
proceeding) by the laws of the State of New York, as in effect at the time of
the subject act or omission, or the Certificate of Incorporation and By-Laws of
the Company as in effect at such time or on the date of this

 

9

 

Agreement, whichever
affords or afforded greater protection to the Executive, and the Executive
shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its directors and officers,
against all costs, charges and expenses whatsoever incurred or sustained by him
or his legal representatives in connection with any action, suit or proceeding
to which he (or his legal representatives or other successors) may be made a
party by reason of his being or having been a director, officer or employee of
the Company or any of its subsidiaries. 
If any action, suit or proceeding is brought or threatened against the
Executive in respect of which indemnity may be sought against the Company
pursuant to the foregoing, the Executive shall notify the Company promptly in
writing of the institution of such action, suit or proceeding and the Company
shall assume the defense hereof and the employment of counsel and payment of
all fees and expenses.

 

Section 12.                                      Binding
Arbitration.  Without limiting the
remedies available to the Company pursuant to Section 8, any controversy
arising out of or relating to this Agreement or the breach hereof shall be
settled by binding arbitration in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association (with the exception
that there will be a panel of three arbitrators rather than a single
arbitrator) and judgment upon the award rendered may be entered in any court
having jurisdiction thereof.  The costs of any such arbitration proceedings
shall be borne equally by the Company and Executive, and neither party shall be
entitled to recover attorney’s fee or costs expended in the course of such
arbitration or enforcement of the awarded rendered thereunder. The location for
the arbitration shall be New York City, New York.  Any award made by such arbitrator
shall be final, binding and conclusive on the parties for all purposes, and
judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof.

 

Section 13.                                      Successors
and Assigns; No Third-Party Beneficiaries.

 

(a)                                  The
Company. This Agreement shall inure to the benefit of and be enforceable
by, and may be assigned by the Company to, any purchaser of all or
substantially all of the Company’s business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise).  The
Company will require any such purchaser, successor or assignee to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such purchase, succession
or assignment had taken place.

 

(b)                                 The
Executive.  The Executive’s rights
and obligations under this Agreement shall not be transferable by the Executive
by assignment or otherwise, without the prior written consent of the Company; provided,
however, that if the Executive shall die, all amounts then payable to
the Executive hereunder shall be paid in accordance with the terms of this
Agreement to the Executive’s devisee, legatee or other designee or, if there be
no such designee, to the Executive’s estate.

 

Section 14.                                      Waiver
and Amendments.  Any waiver,
alteration, amendment or modification of any of the terms of this Agreement
shall be valid only if made in writing and signed by the parties hereto; provided,
however, that any such waiver, alteration, amendment or modification is
consented to on the Company’s behalf by the Board.  No waiver by either of the parties hereto of
their rights hereunder shall be deemed to constitute a waiver with respect to
any

 

10

 

subsequent occurrences or
transactions hereunder unless such waiver specifically states that it is to be
construed as a continuing waiver.

 

Section 15.                                      Severability
and Governing Law.  If any covenants
or such other provisions of this Agreement are found to be invalid or
unenforceable by a final determination of a court of competent jurisdiction (a)
the remaining terms and provisions hereof shall be unimpaired and (b) the
invalid or unenforceable term or provision hereof shall be deemed replaced by a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision
hereof.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES THEREOF) APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

 

Section 16.                                      Notices.

 

(a)                                  Every
notice or other communication relating to this Agreement shall be in writing,
and shall be mailed to or delivered to the party for whom it is intended at
such address as may from time to time be designated by it in a notice mailed or
delivered to the other party as herein provided, provided that, unless and
until some other address be so designated, all notices or communications by the
Executive to the Company shall be mailed or delivered to the Company at its
principal executive office, and all notices or communications by the Company to
the Executive may be given to the Executive personally or may be mailed to
Executive at the Executive’s last known address, as reflected in the Company’s
records.

 

(b)                                 Any
notice so addressed shall be deemed to be given:  (i) if delivered by hand, on the date of such
delivery; (ii) if mailed by courier, on the first business day following the
date of such mailing; and (iii) if mailed by registered or certified mail, on
the third business day after the date of such mailing.

 

Section 17.                                      Section Headings.  The headings of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, affect the meaning or interpretation of this
Agreement or of any term or provision hereof.

 

Section 18.                                      Entire
Agreement.  This Agreement constitutes
the entire understanding and agreement of the parties hereto regarding the
employment of the Executive.  This
Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties, including,
without limitation, the Prior Employment Agreement, relating to the subject
matter of this Agreement.

 

Section 19.                                      Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.

 

*                                         *                                         *                                         *                                         *

 

11

 

IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.

 

 

	
   

  	
  EON LABS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bernhard Hampl

  	
   

  
	
   

  	
   

  	
  Name: Bernhard Hampl

  
	
   

  	
   

  	
  Title: President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ William F. Holt

  	
   

  
	
   

  	
  William F. Holt

  
						

 

12

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