EXHIBIT 10(d)
EXECUTION VERSION
EMPLOYMENT AGREEMENT (the "AGREEMENT"), dated as of
December 6, 2006 (the "EFFECTIVE DATE"), by and between
Novel Laboratories, Inc., a Delaware corporation (the
"COMPANY") and Veerappan S. Subramanian (the
"EXECUTIVE").
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INTRODUCTION
The Company and the Executive each desires the Company to employ the
Executive as the Company's Chairman and Chief Executive Officer.
AGREEMENT
The parties hereby agree as follows:
1. EMPLOYMENT.
1.1. TITLE AND DUTIES. Commencing on the date of this
Agreement, the Company shall employ the Executive, and the Executive shall serve
the Company, as Chief Executive Officer of the Company. In such capacities (a)
the Executive shall report to, and follow the directions of, the Board of
Directors of the Company (the "BOARD"), (b) perform the duties and discharge the
responsibilities set forth on EXHIBIT A to this Agreement, and (c) perform and
discharge such additional duties and responsibilities that are reasonably
consistent with his titles as may be determined from time to time by the Board.
All of the Executive's duties and responsibilities shall be performed in a
diligent and professional manner, consistent with his fiduciary duties as an
executive officer of the Company.
1.2. WORKING TIME. The Executive shall devote substantially
all of his business time, attention and skills to the business and affairs of
the Company and the performance of his duties and responsibilities hereunder
during three (3) full business days per week. Nothing in this Agreement shall
prevent the Executive from devoting reasonable time and attention to personal,
public and charitable affairs, as long as such activities do not interfere with
the effective performance of his duties hereunder. The provisions of this
Agreement shall not be deemed to prohibit or restrict Executive from performing
services pursuant to the Advisory Agreement, of even date herewith, between
Executive and Elite Pharmaceutical, Inc. ("ELITE").
2. COMPENSATION; EXPENSES; BENEFITS.
2.1. SALARY. The Company shall pay a salary to the Executive
at a rate of US$220,000 per calendar year (pro-rated for periods of less than a
full calendar year). The Executive's salary shall be paid in approximately equal
installments in accordance with the Company's customary payroll practices. The
Executive's salary shall be subject to annual review for increase at the
discretion of the Board.
2.2. DISCRETIONARY ANNUAL BONUS. At the sole discretion of the
Board, the Executive may receive an annual bonus in an amount to be determined
by the unanimous written consent of the Board.
2.3 DISCRETIONARY STOCK OPTIONS. The Company, in its sole
discretion, may grant to Executive stock options (the "STOCK OPTIONS") to
purchase shares of the Company's common stock, par value $0.01 (the "COMMON
STOCK"), pursuant to the Company's 2006 Stock Option Plan (the "PLAN"). The
Stock Options shall (i) to the maximum extent permitted under applicable law,
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code, (ii) have a per share exercise price equal the then fair
market value of a share of Common Stock, (iii) vest, as determined by the Board,
in its sole discretion and (iv) be subject to the terms and conditions set forth
in the Company's customary stock option agreement and the Plan. All such options
shall vest and be exercisable, as determined by the Board, in its sole
discretion.
2.4 COMPANY PLANS. Executive shall be entitled to participate
in such employee benefit and welfare plans and programs as Company may from time
to time generally offer or provide to senior executive officers of Company, to
the extent that the Executive's participation is permitted under such plans,
including participation in life insurance, health and accident, medical plans
and programs, and profit sharing and retirement plans. Nothing in the foregoing
shall limit or restrict the Company's discretion to amend, revise or terminate
any benefit or plan without notice to or consent of the Executive.
2.5 VACATION. Executive shall be entitled to five (5) weeks of
paid vacation per Fiscal Year, pro rated for periods of less than a full Fiscal
Year; PROVIDED, that the timing and duration of any particular vacation shall
not interfere with the business of the Company or the effective performance of
Executive's duties hereunder, as reasonably determined in good faith by the
Board.
2.6 AUTOMOBILE ALLOWANCE. During the Term, the Company shall
pay the Executive a monthly automobile allowance in the amount of Seven Hundred
Dollars ($700).
2.7 LIFE INSURANCE. The Company will obtain and maintain
during the Term a term life insurance policy in the amount of One Million
Dollars ($1,000,000) on the life of the Executive payable to the estate of the
Executive in the event of the Executive's death during the Term; PROVIDED,
HOWEVER, that the annual premium to be paid in order to maintain such term life
insurance policy shall not exceed Six Thousand Dollars ($6,000) per year.
2.4. EXPENSES. The Executive shall be entitled to
reimbursement by the Company for all reasonable travel, lodging, and other
expenses actually incurred by the Executive in connection with the performance
of his duties, against receipts or other appropriate written evidence of such
expenditures as required by the appropriate Internal Revenue Service regulations
or by the Company.
3. TERMINATION OF EMPLOYMENT.
3.1. TERMINATION FOR DEATH. The Executive's employment
pursuant to this Agreement shall terminate automatically, without requirement of
further action by the Company or the Executive, upon the death of the Executive.
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3.2. TERMINATION BY THE COMPANY FOR CAUSE OR DISABILITY. The
Company shall have the right to terminate the Executive's employment for Cause
(as defined below) or Disability (as defined below) and such termination of the
Executive's employment shall be made by, and effective upon, delivery of written
notice of such termination to the Executive.
For the purposes hereof:
An "AFFILIATE" of a party shall have the meaning ascribed to the term
"affiliate" in the Stockholders' Agreement (as defined below).
"CAUSE" means, as such term is determined in accordance with Section 2.4
of the Stockholders' Agreement, (i) the Executive's breach of or default
under the terms of this Agreement (including a failure to perform his
duties and responsibilities with respect to the Company), which breach or
default continues beyond thirty (30) days after a written demand for
performance or compliance is delivered to the Executive by the Company;
(ii) violation of any securities law by the Executive; (iii) gross
negligence or willful misconduct by the Executive, in each case that has a
material adverse effect upon the Company; (iv) the Executive's commission
of, or pleading guilty or NOLO CONTENDERE to, a felony or a crime
involving moral turpitude, fraud, or embezzlement; or (v) the Executive's
willful breach of any provision of Sections 4 or 5 of this Agreement.
"CHANGE OF CONTROL EVENT" means, in any one or series of related
transactions, (i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction; (ii) the sale, transfer or other disposition of all or
substantially all of the Company's assets; (iii) the sale of securities by
the Company to a third party which securities constitute more than fifty
percent (50%) of the total combined voting power of the Company's
outstanding securities immediately following such transaction or (iv) the
consummation of a strategic combination as a result of which new directors
to the Board of Directors are appointed by stockholders who are not
stockholders of the Company prior to the consummation of such Change of
Control Event, such that the directors immediately prior to the
consummation of such transaction and the directors appointed by them
constitute less than 50% of the members of the Board of Directors
immediately following such transaction.
"DISABILITY" means any physical or mental illness that renders the
Executive unable to perform his duties or responsibilities under this
Agreement for either (i) a period of 90 consecutive days, or (ii) 120 days
during any period of 12 consecutive months.
"GOOD REASON" shall mean, during (and only during) any VGS Minority
Period, (x)(i) a material reduction in the nature or scope of the
authorities, powers, functions, duties or responsibilities of the
Executive set forth in Section 1 of this Agreement or fails to pay the
Executive's Base Salary when due and such failure is not remedied within
five (5) days of receipt of written notice of such failure from the
Executive setting forth in
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reasonable detail the circumstances alleged to be the basis for Good
Reason termination, (ii) a material breach by the Company of its
obligations pursuant to this Agreement which breach the Company fails to
remedy within thirty (30) days of receipt of written notice thereof from
the Executive setting forth in reasonable detail the circumstances alleged
to be the basis for Good Reason termination, or (iii) relocates its
principal executive offices outside of New Jersey or New York, or (y) an
election by the Executive to terminate his Employment for any reason
within ninety (90) days following the occurrence of a Change of Control
Event in which the affirmative vote of the VGS Designee (as such term is
defined in the Stockholders' Agreement) was requested in connection with
the approval of such Change of Control Event and VGS (and its permitted
assignees) did not provide an affirmative vote to approve such Change of
Control Event.
"STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement, dated as of
the date hereof, among the Company, the Executive and VGS.
"VGS MINORITY PERIOD" means any period of time during which (i) the VGS
Designee represents less than 50% of the membership of the board and (ii)
Board, as then constituted, may cause the Company, without the affirmative
vote of the VGS Designee, to take actions which results in the occurrence
of an event that constitutes Good Reason. For the avoidance of doubt, the
Board, as constituted on the Effective Date, may not take actions which
results in the occurrence of an event that constitutes Good Reason.
"VGS" means VGS Pharma, LLC, a Delaware limited liability company.
3.3. TERMINATION BY EXECUTIVE. The Executive may terminate his
employment pursuant to this Agreement upon not less than thirty (30) business
days' prior written notice of such termination to the Company.
3.4. CESSATION OF ACTIVITIES. Notwithstanding anything to the
contrary in this Agreement, upon delivery of written notice of termination of
the Executive's employment hereunder by either party, the Company may relieve
the Executive of the Executive's duties, responsibilities and authority on
behalf of the Company and require the Executive to immediately vacate the
Company's premises.
3.5. TERMINATION OF COMPENSATION. The Executive's right to
compensation pursuant to this Agreement shall terminate upon termination of his
employment pursuant to this Agreement, except as otherwise required by
non-waivable provisions of applicable law or with respect to amounts which have
accrued and are payable as of the termination of the Executive's employment
pursuant to this Agreement.
4. PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS;
ASSIGNMENT OF INTELLECTUAL PROPERTY; NON-SOLICITATION.
4.1. DEFINITIONS.
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4.1.1. "CONFIDENTIAL INFORMATION" DEFINED. "CONFIDENTIAL
INFORMATION" means any and all information (oral or written) relating to the
Company or any entity controlling, controlled by, or under common control with
the Company, including information relating to: technology, Inventions (as
defined in Section 4.1.2. below), intellectual property, research, test
procedures and results; machinery and equipment; manufacturing processes;
financial information; products; identity and description of materials and
services used; purchasing; costs; pricing; customers and prospects; advertising,
promotion and marketing; sales approaches; sales material; training material;
and selling, servicing and information pertaining to any governmental
investigation, except such information that becomes public, other than as a
result of a breach of the provisions of Section 4.2. hereof. Without limiting
the foregoing, Confidential Information shall also include all information
related to products targeted for development by the Company, subjects of
research and development, projected launch dates, the protocols of the United
States Food and Drug Administration (the "FDA"), projected dates for regulatory
filings, consumer studies, market research, clinical research, business plans,
planned expenditures, profit margins, strategic evaluation plans and
initiatives, and those commissioned by the Company through outside vendors or
consultants, and the content of all business and strategic planning conducted
with or through third parties. For purposes of this Agreement, "PERSON" means an
individual, corporation, partnership, trust, limited liability company,
unincorporated organization, joint stock corporation, joint venture, association
or other entity, or any government, or any agency or political subdivision
thereof or any branch of any legal entity.
4.1.2. "INVENTIONS" DEFINED. "INVENTIONS" means any and
all inventions, discoveries, improvements, patent, copyrights, sales approaches,
sales materials, training material, and/or other property rights, whether or not
patented or patentable made, conceived, created, developed or contributed to by
the Executive during the Term which are (i) directly or indirectly related to
the business, operations or activities of the Company or any of its subsidiaries
or affiliates, (ii) directly or indirectly related to the Executive's
performance of the Services hereunder, or performance of other services
(including as a director, manager, officer, advisor, agent, representative,
consultant or other independent contractor) for, the Company or any of its
subsidiaries or affiliates, or (ii) based upon Confidential Information. For the
avoidance of doubt, inventions, discoveries, improvements, patents, copyrights
and/or property rights not related to "Designated Drug Products" of the Company
(as defined below) shall not be considered to be Inventions for purposes of this
Agreement.
4.1.3. "TERM" means the period beginning on the
commencement of the Executive's employment by the Company (whether or not
pursuant to this Agreement) and ending on the latest date upon which the
Executive is employed by the Company pursuant to this Agreement.
4.1.4. "WORK FOR HIRE" DEFINED. "WORK FOR HIRE" means
any and all sales approaches, sales material, training material, computer
software, documentation, other copyrightable works or any other intellectual
property (including, but not limited to, materials or services subject to
trademark or service mark registration, but excluding Inventions) made,
conceived, created, developed or contributed to by the Executive during the Term
and which are
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(i) directly or indirectly related to the business, operations or activities of
the Company or any of its subsidiaries or affiliates, (ii) directly or
indirectly related to the Executive's performance of the Services hereunder by,
or performance of other services (including as a director, manager, officer,
Executive, agent, representative, consultant or other independent contractor)
for, the Company or any of its subsidiaries or affiliates, or (iii) based upon
Confidential Information. For the avoidance of doubt, sales approaches, sales
material, training material, computer software, documentation, other
copyrightable works or any other intellectual property not related to the
business of the Company shall not be considered to be Works for Hire for
purposes of this Agreement.
4.2. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive
agrees that he shall not use or disclose, either during the Term or at any time
thereafter, (except to the extent necessary during the Term in connection with
the necessary and proper performance of the Executive's duties on behalf of the
Company and in good faith, or as required by law or governmental authority) any
Confidential Information.
4.3. COVENANT NOT TO COMPETE AND NON-SOLICITATION.
4.3.1. During the Term and continuing for a period
ending on the first anniversary of the termination of this Agreement by the
Company or the resignation from employment by the Executive, unless this
Agreement is terminated without Cause by the Company or by the resignation from
employment by the Executive for Good Reason:
(x) The Executive shall not, directly or indirectly,
manage, control, consult with, or engage (as either an employee or consultant)
in any business or activity anywhere in the world involving a drug product that
is Competitive (as defined below) with any Designated Drug Products of the
Company or any of its respective subsidiaries or affiliates, or any related
inventions or other intellectual property of the Company or any of its
respective subsidiaries or affiliates (collectively, a "COMPETITIVE ACTIVITY");
and
(y) Any investment (whether equity or debt) by the
Executive, any affiliate of the Executive or VGS, in any Person engaging, or
providing services or financing for, a Competitive Activity (a "COMPETITIVE
COMPANY") shall be wholly conditioned on and subject to the prior written
unanimous approval of the Board, including any follow-on investments in any
entity that, subsequent to the time of the initial investment, has become a
Competitive Company. The foregoing restriction shall not apply to investments
for equity interests not exceeding five percent (5%) of a Competitive Company or
financing provided to a subsidiary or affiliate of a Competitive Company which
is not itself engaged in a Competitive Activity.
For the purposes hereof:
"COMPETITIVE" shall mean a drug product that is based upon the same chemical
molecule, utilizes the same route of administration, and treats the same
indications as a Designated Drug Product, regardless of dosage strength.
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"DESIGNATED DRUG PRODUCTS" shall mean (i) all drug products currently in
development, marketed or commercialized by the Company or any of its
subsidiaries or affiliates, (ii) all drug products in-licensed by the Company or
any of its subsidiaries or affiliates, and (iii) all prospective drug products
included in the Initial Business Plan (as such term is defined in that certain
Strategic Alliance Agreement, dated as of the date hereof, among the Company,
the Executive, Elite and VGS Pharma, LLC, a Delaware limited liability company
(the "STRATEGIC ALLIANCE AGREEMENT")) or any Annual Business Plan (as such term
is defined in the Strategic Alliance Agreement) of the Company.
Notwithstanding anything to the contrary in this Section 4.3, following the
termination of this Agreement, the Executive shall not be prohibited from
engaging in Competitive Activities with respect to drug products included in the
Initial Business Plan or any Annual Business Plan that either (a) are included
on the Inactive Products List (as defined below) or (b) have not yet completed
successful stability testing on exhibit batches of such drug products.
"INACTIVE PRODUCT LIST" means a list of drug products included in the Initial
Business Plan or any Annual Business Plan of the Company that the Elite Designee
(as such term is defined in the Stockholders' Agreement) and the VGS Designee
(as such term is defined in the Stockholders' Agreement) reasonably agree by
mutual written consent will not be developed (or prior development efforts shall
be terminated) by or on behalf of the Company and should be placed on the
Inactive Products List. The Inactive Product List shall be reviewed and updated
at least quarterly pursuant to Section 3.4(b) of the Strategic Alliance
Agreement and shall agree, in good faith, on the final version of the Inactive
Products List promptly after the term of this Agreement.
4.3.2. Prior to the second anniversary of the end of the
Term, the Executive shall not directly or indirectly solicit, recruit, or
induce, or attempt to solicit, recruit, or induce any Persons (i) employed by
the Company or (ii) retained as consultants or other independent contractors by
the Company and dedicating at least 80% of such consultant's or independent
contractor's work time to the Company, or encourage any such Persons described
in clauses (i), or (ii) above to terminate or adversely alter their relationship
with the Company.
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4.4. ASSIGNMENT OF INTELLECTUAL PROPERTY.
4.4.1. The Executive shall promptly disclose to the
Company any and all Inventions. The Executive shall promptly communicate to the
Company all information, details and data pertaining to any Inventions in such
form as the Company requests. The Executive agrees that Inventions are the
property of the Company, and any and all rights, titles or interests in and to
Inventions, and any patents or patent applications related thereto which the
Executive may have in any and every jurisdiction are hereby assigned in full.
Whenever the Executive is requested to do so by the Company, during or after the
Term, the Executive shall, at the Company's sole cost and expense, promptly
execute and deliver any and all applications, assignments or other documents or
instruments reasonably deemed necessary or advisable by the Company to apply for
and obtain Letters Patent of the United States or any foreign country or to
otherwise protect, confirm or establish the Company's full and exclusive
interests in any Inventions. The obligations set forth in this Section 4.4.1
shall be binding upon the successors, assigns, executors, administrators and
other legal representatives of the Executive.
4.4.2. Any and all Works for Hire shall be considered
"works made for hire" under the copyright laws of the United States or property
of the Company under applicable federal, state, local and foreign trademark laws
(as appropriate). The Executive shall promptly communicate to the Company any
and all Works for Hire, and any and all information, details and data pertaining
to any Works for Hire, in such form as the Company requests. To the extent that
Works for Hire fail to qualify as (A) "works made for hire" under the copyright
laws of the United States or any other jurisdiction or (B) property of the
Company under applicable federal, state, local or foreign trademark laws, the
Executive hereby assigns each Work for Hire and all right, title and interest
therein in any and every jurisdiction to the Company. Whenever the Executive is
requested to do so by the Company, during or after the Term, the Executive shall
promptly execute and deliver any and all applications, assignments or other
documents or instruments deemed necessary or advisable by the Company to apply
for and confirm and effectuate full and exclusive ownership of Works for Hire in
the Company, including, but not limited to, ownership of any moral rights under
the copyright law of any nation, or any other rights under the intellectual
property laws of any nation. The obligations set forth in this Section 4.4.2
shall be binding upon the successors, assigns, executors, administrators and
other legal representatives of the Executive.
4.5. If a court declares that any term or provision of this
Section 4 is invalid or unenforceable, the parties to this Agreement agree that
the court making the determination of invalidity or unenforceability shall have
the power to reduce the scope, duration or area of the term or provision, to
delete specific words or phrases, or to replace any invalid or unenforceable
term or provision with 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, and this Agreement shall be enforceable as so modified.
4.6. The Executive hereby transfers, assigns, conveys, grants
and sets over to the Company and its successors and assigns forever, and the
Company hereby accepts, assumes and acquires from the Executive for itself and
its successors and assigns forever, all of
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the Executive's right, title and interest in and to the Inventions in any and
every jurisdiction. The Executive hereby covenants and agrees that, at any time
and from time to time after the date hereof, at the request of the Company or
its successors or assigns, he will (i) promptly and duly execute and deliver, or
cause to be executed and delivered to the Company, all such further documents
and instruments, and (ii) promptly take all such other and further action, as
may be requested by the Company to more effectively transfer, assign, convey,
grant, set over, vest, protect, confirm and establish full and exclusive right,
title and interest in and to all of the Inventions in and to the Company and its
successors and assigns forever in any and every jurisdiction, including, without
limitation, any and all applications, assignments or other documents or
instruments deemed necessary or advisable by the Company to apply for and obtain
Letters Patent of the United States or any foreign jurisdiction. The obligations
set forth in this Section 4.6 shall be binding upon the successors, assigns,
executors, administrators and other legal representatives of the Executive. The
Executive hereby represents and warrants to the Company that the Executive has
not transferred any right, title or interest in or to the Inventions to any
other Person as of the date of the execution of this Agreement and, as of the
date of the execution of this Agreement, has not entered into any agreement to
do so.
4.7. The Executive acknowledges and admits that a breach of
any of the covenants contained in this Section 4 will cause the Company
irreparable harm. The Executive further acknowledges and admits that the damages
resulting from such a breach will be difficult or impossible to ascertain, and
will be of the sort that cannot be compensated by money or other damages, and
that the Company in addition to all other remedies available at law or equity,
shall be entitled to equitable relief, including specific performance and
injunctive relief as remedies for any such breach and that the Executive further
agree to waive any requirement for securing or posting of any bond in connection
with such remedy. The Executive therefore waives (and is estopped from asserting
in a court of law or equity) any argument that the breach, or threatened breach,
of any of the covenants contained in this Section 4 does not constitute
irreparable harm for which an adequate remedy at law is unavailable. Nothing
contained in this Section 4 or elsewhere in this Agreement shall be construed as
prohibiting the Company from pursuing any other remedies available at law or in
equity for a breach, or threatened breach, by the Executive of any of the
covenants contained in this Section 4.
4.8 The parties hereby acknowledge that the provisions
contained in this Section 4 are essential terms of this Agreement.
5. CONTINUED COOPERATION; RETURN OF DOCUMENTS AND PROPERTY;
INJUNCTIVE RELIEF; NON-EXCLUSIVITY AND SURVIVAL.
5.1. CONTINUED COOPERATION. The Executive shall, during and
after the Executive's employment pursuant to this Agreement for any reason, at
the Company's sole expense (including, after the Term, compensation of Executive
at a daily rate of Two Thousand Dollars ($2,000)), cooperate fully with the
Company's reasonable request with respect to any internal or external agency or
legal investigation (whether conducted by the FDA, the United States Securities
and Exchange Commission or otherwise), lawsuits, financial reports, or with
respect to other matters within his knowledge, responsibilities or purview;
PROVIDED, HOWEVER, that such requests do not unreasonably interfere with the
Executive's business activities. The
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Executive shall execute all lawful documents reasonably necessary for the
Company to secure or maintain any Confidential Information.
5.2. RETURN OF DOCUMENTS AND PROPERTY. Upon the end of the
Term, or upon the earlier request of the Company, the Executive and his legal or
personal representatives will promptly return to the Company any and all
information, documents or other materials relating to or containing Confidential
Information which are, and any and all other property of the Company which is,
in the Executive's possession, care or control, regardless of whether such
materials were created or prepared by the Executive and regardless of the form
of, or medium containing, such information, documents, including without
limitation, all computers and hard drives, Executive identification cards,
Company credit cards, keys and any other physical property of the Company.
5.3. INJUNCTIVE RELIEF. The parties hereby acknowledge and
agree that (a) the Company will be irreparably injured in the event of a breach
by the Executive of any of his obligations under Sections 4 and 5 hereof; (b)
monetary damages will not be an adequate remedy for any such breach; (c) the
Company will be entitled to injunctive relief, in addition to any other remedies
that it may have, in the event of any such breach; and (d) the existence of any
claims that the Executive may have against the Company, whether under this
Agreement or otherwise, will not be a defense to the enforcement by the Company
of any of its rights under Sections 4 and 5 hereof. All of the parties'
covenants and the Company's rights to specific enforcement, injunctive relief
and other remedies as set forth herein shall apply in the event of any breach or
threatened breach by the Executive of any of the provisions of Sections 4 and/or
5 hereof. The parties further agree that any action concerning any alleged
breach(es) of Sections 4 and/or 5 hereof shall not be brought or addressed in
arbitration, and the existence of any demand for arbitration or pendency of any
dispute in arbitration under this Agreement shall not be a basis to delay or
defer adjudication by a court of any demand for specific performance, injunctive
relief or other remedies in relation to any alleged breach(es) of Sections 4
and/or 5 hereof.
5.4. NON-EXCLUSIVITY AND SURVIVAL. The covenants of the
Executive contained in Sections 4 and 5 hereof are in addition to, and not in
lieu of, any obligations that the Executive may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise, and such
covenants and their enforceability shall survive any expiration or termination
of the Term by either party and any investigation made with respect to the
breach thereof by the Company at any time.
6. LIMITATION ON CERTAIN DEVELOPMENT PROJECTS. The Company
acknowledges that it has been informed of the restrictions on the activities of
the Executive pursuant to the Separation and Release Agreement, between Par
Pharmaceuticals, Inc. and the Executive, and the Employment Agreement, between
Par Pharmaceuticals, Inc. and the Executive (collectively, the "PAR
AGREEMENTS"), and agrees that the Executive shall not be required by the Company
to engage in the development of any drug product that the Executive has
covenanted not to develop pursuant to the Par Agreements in connection with his
performance of the Services hereunder. The Executive agrees that in the course
of performing his obligations hereunder, the Executive shall not engage in any
activity that would violate the Par Agreements.
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7. MISCELLANEOUS PROVISIONS.
7.1. CAPACITY, ETC. Each of the Executive and the Company
hereby represents and warrants to the other that, as the case may be: (a) he or
it has full power, authority and capacity to execute and deliver this Agreement
and to perform his or its obligations hereunder; (b) such execution, delivery
and performance shall not (and with the giving of notice or lapse of time or
both would not) result in the breach of any agreements or other obligations to
which he or it is a party or he or it is otherwise bound or violate any law; and
(c) this Agreement is his or its valid and binding obligation enforceable in
accordance with its terms.
7.2. ADVICE OF COUNSEL. The Executive represents and warrants
that he has had full opportunity to seek advice and representation by
independent counsel of his own choosing in connection with the interpretation,
negotiation and execution of this Agreement.
7.3. FURTHER ASSURANCES. Each of the parties hereto shall, at
any time and from time to time after the date hereof, at the request and expense
of the other party, (i) promptly and duly execute and deliver, or cause to be
duly executed and delivered to the requested Person, all such further documents
and instruments, and (ii) take or cause to be taken all such other and further
actions, in each case as may be reasonably requested by the other party to
implement and effect the terms of this Agreement.
7.4. BENEFITS OF AGREEMENT. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, be binding
upon, and be enforceable by, the parties hereto and their respective successors
and assigns. Elite shall be a third party beneficiary under this Agreement,
entitled to enforce the provisions of this Agreement and also explore the
Company's rights pursuant hereto.
7.5. ASSIGNMENT. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by either party without the
prior written consent of the other party. Any instrument purporting to make an
assignment in violation of this Section 7.5 shall be void.
7.6. SEVERABILITY. Except as otherwise provided in Section
4.5, if, in any jurisdiction, any term or provision hereof is determined to be
invalid or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired; (b) any such invalidity or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such term or provision in any other
jurisdiction; and (c) the invalid or unenforceable term or provision shall, for
purposes of such jurisdiction, 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.
7.7. ENTIRE AGREEMENT. This Agreement, together with the other
Strategic Alliance Documents (as such term is defined the Strategic Alliance
Agreement), constitute the full and entire understanding and agreement between
the parties with regard to the subject matters hereof and thereof and, except as
otherwise specifically provided therein, no
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party shall be liable or bound to any other in any manner by any other
representations, warranties, covenants or agreements with respect to such
subject matters.
7.8. AMENDMENT AND WAIVER. This Agreement and any provision
hereof or right or obligation hereunder may be amended, modified or waived only
with the prior written consent of the Company and the Executive which
amendments, modifications, and waivers shall be binding upon all other parties
hereto).
7.9. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given upon
receipt when delivered by hand, overnight delivery or facsimile (with confirmed
delivery), or three (3) business days after posting, when delivered by
registered or certified mail or private courier service, postage prepaid, return
receipt requested, as follows:
If to the Company, to:
Novel Laboratories, Inc.
165 Ludlow Avenue
Northvale, New Jersey
Facsimile No.: (201) 391-7693
Attn: Chief Executive Officer
With a copy (which shall not constitute notice) to:
Reitler Brown & Rosenblatt LLC
800 Third Avenue
21st Floor
New York, NY 10022
Facsimile No.: (212) 371-5500
Attn: Scott H. Rosenblatt, Esq.
If to the Executive, to:
Veerappan S. Subramanian
475 Bernardsville Road
Mendham, NJ 07945
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With a copy (which shall not constitute notice) to:
Cohen Tauber Spievack & Wagner LLP
420 Lexington Avenue
New York, NY 10070
Facsimile No.: (212) 586-5095
Attn: Larry Tauber, Esq.
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto in accordance with this Section 7.9.
7.10. DESCRIPTIVE HEADINGS; CERTAIN INTERPRETATIONS. (a)
Descriptive headings are for convenience only and shall not control or affect
the meaning or construction of any term or provision of this Agreement.
(b) The following rules of interpretation apply to this Agreement:
(i) wherever it appears appropriate from the context, each term stated in either
the singular or plural shall include the singular and the plural, and pronouns
stated in either the masculine, feminine or neuter shall include the masculine,
feminine and neuter; (ii) "or" and "any" are not exclusive and "include" and
"including" are not limiting; and (iii) a reference to any agreement or other
contract includes permitted supplements and amendments.
7.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, and by the two parties hereto in separate
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
7.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY (WITHOUT GIVING
EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS).
7.13. CONSENT TO JURISDICTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF ANY
FEDERAL OR STATE COURT OF NEW JERSEY SITTING IN NEW JERSEY AND IRREVOCABLY
AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE LITIGATED EXCLUSIVELY
IN SUCH COURTS. EACH OF THE PARTIES HERETO AGREES NOT TO COMMENCE ANY LEGAL
PROCEEDING RELATED HERETO EXCEPT IN SUCH COURT. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING IN ANY SUCH COURT AND HEREBY FURTHER
IRREVOCABLY AND
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UNCONDITIONALLY WAIVES AND AGREES 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.
7.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE PARTIES HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT BOTH PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.14.
7.15. GENERAL. All exhibits to this Agreement are hereby
incorporated by reference and made part of this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Employment Agreement has been executed and
delivered by the parties hereto as of the date first above written.
COMPANY:
Novel Laboratories, Inc.
By: /s/ Bernard Berk
--------------------------------
Name: Bernard Berk
Title: Director
EXECUTIVE:
/s/ Veerappan S. Subramanian
------------------------------------
Veerappan S. Subramanian
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EXHIBIT A
DUTIES
The Executive's duties and responsibilities shall include:
o Managing the day-to-day operations of the Company;
o Initiating, managing and implementing the efforts of the Company to
develop drug products subject to FDA approval pursuant to ANDA's and
NDA's (including 505(b)(2) applications;
o Within 45 days following the date of this Agreement, the Executive
shall prepare and deliver to the Board and Elite a draft of a
comprehensive business plan and strategy for the Company (the
"INITIAL BUSINESS PLAN"), which Initial Business Plan shall include
(i) a selection of branded drug products currently on the market to
serve as initial targets of the Company for development and
commercialization of generic alternatives (collectively, the
"PROSPECTIVE PRODUCTS"), which Prospective Products shall not
include products currently under development by, or, to knowledge of
the Executive, under active consideration for development by, Elite,
(ii) estimated market shares of such Prospective Products, (iii)
estimated time to market of such Prospective Products, (iv)
estimated sales projections for such Prospective Products, (v) known
and anticipated competitors with respect to such Prospective
Products, (vi) future performance milestones and requisite financing
requirements with respect to the development and commercialization
of each Prospective Products and with respect to the business plan
of the Company generally and (vii) related funding, facilities and
personnel requirements. The inclusion of the foregoing information
in any Business Plan shall be a reasonable good faith determination
based upon the Executive's knowledge and understanding of the
pharmaceutical industry and reasonable assumptions and shall not be
deemed to be a guarantee of outcome. The Initial Business Plan shall
be subject to revision and/or approval by the Board;
o Within 30 days prior to the commencement of each successive calendar
year, the Executive shall prepare and deliver to the Board and Elite
a draft of a comprehensive business plan and strategy with detailed
budget (which shall include such information substantially similar
in nature to the information provided for in the Initial Business
Plan) for the Company for such upcoming calendar year, which plan
shall be subject to revision and/or approval by the Board (each, an
"ANNUAL BUSINESS PLAN");
o The Executive shall cause the Company to operate in accordance with
the Initial Business Plan and each Annual Business Plan (and all
budgets set forth in each), each of which shall be prepared by the
Executive and approved by the Board; and
o The Executive shall cause the Company to utilize available time of
Elite's employees, rather than engage new employees, to the extent
Elite employees shall have adequate available time for service to
the Company as required by the Company in order to meet its
objectives on a timely basis and such employees have the skills and
abilities required by the Company at competitive rates.
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