SECOND AMENDMENT, dated as of June 1, 2009 (this “
Second Amendment ”), by and between Elite
Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”), on the one hand, and Epic Pharma, LLC, a
Delaware limited liability company (the “ Parent
”), Epic Investments, LLC, a Delaware limited liability
company (including its successors and assigns, the “
Purchaser ”), Ashok G. Nigalaye (“
Nigalaye ”) and Jeenarine Narine (together with
Nigalaye, the “ Principals ”), on the other
hand, relating to a certain STRATEGIC ALLIANCE AGREEMENT, dated as
of March 18, 2009, as amended by that certain Amendment thereto
dated as of April 30, 2009 (as amended, the “ Alliance
Agreement ”; capitalized terms used herein and not
otherwise defined have the meaning assigned to such terms in the
Alliance Agreement).
WHEREAS, the parties hereto have
agreed to amend and waive certain provisions of the Alliance
Agreement on the terms and subject to the conditions contained
herein.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained herein, and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendments . The
Alliance Agreement is hereby amended as follows:
(a) Article I is amended by:
(1)
adding a definition for the term “Guarantors” which
shall read as follows:
““ Guarantors ” shall have the meaning
assigned to such term in Section 4.15. ”
(2)
amending the definition of Initial Closing Date to read as
follows:
“ Initial Closing Date ” means June 3, 2009
or such other date as the Parties may mutually agree upon in
writing.
(b) The definition of
“Milestone Shares” which appears in Article I, and
Section 2.10 (a) and Section 2.10(b) are each amended by deleting
each reference to “Purchaser” which appears therein and
inserting “Parent” in its stead.
(c) The first paragraph of Section
3.2 is amended and restated in its entirety to read as follows:
“Except as set forth in the disclosure schedules delivered
to the Company concurrently herewith (the “ Epic
Disclosure Schedules ”), which such Epic Disclosure
Schedules shall be deemed a part hereof and to qualify any
representation or warranty otherwise made herein to the extent of
such disclosure, the Parent and the Purchaser, severally, and not
jointly, each as to itself and not the other, hereby make the
representations and warranties
set forth below to the Company as of the date hereof and the
Initial Closing Date:”
(d) The heading and first
sentence of Section 3.2(a) is amended and restated in its entirety
to read as follows:
“ Control and Operations of the Purchaser . The
Parent, directly or indirectly, controls the operations of the
Purchaser, and all the issued and outstanding membership interests
of the Purchaser are validly issued and are fully paid,
non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities or any such rights have been
waived.”
(e) The second sentence of
Section 3.2(g) is amended and restated in its entirety to read as
follows:
“As of the Initial Closing Date, the Parent is a drug
development company and the Purchaser is, directly or indirectly,
controlled by Parent and that the businesses of each of the Parent
and the Purchaser is synergistic with the business of the
Company.”
(f) Section 4.1(a) is amended and
restated in its entirety to read as follows:
“(a) The Securities may only be disposed of in compliance
with state and federal securities laws. In connection with any
transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an
Affiliate of the Parent or the Purchaser, as the case may be, or in
connection with a pledge as contemplated in Section 4.1(b), the
Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and
reasonably acceptable to the Company, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to
the effect that such transfer does not require registration of such
transferred Securities under the Securities Act. As a condition of
transfer, any such transferee shall agree in writing to be bound by
the terms of this Agreement and shall have the rights of the Parent
or the Purchaser, as the case may be, under this
Agreement.”
(g) Section 4.1(b) is amended and
restated in its entirety to read as follows:
“(b) Each of the Parent and the Purchaser agrees to the
imprinting, so long as is required by this Section 4.1, of a legend
on any of the Securities in the following form:
[NEITHER] THESE SECURITIES [NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS
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AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON [EXERCISE] OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
(h) Section 4.1(d) is amended and
restated in its entirety to read as follows:
“(d) Each of the Parent and the Purchaser agrees that the
removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the
Company’s reliance that the Parent or the Purchaser, as the
case may be, will sell any Securities pursuant to either the
registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption
therefrom.”
(i) Section 4.2 is amended and
restated in its entirety to read as follows:
“4.2 Furnishing of Information . Until the earliest
of the time that (i) neither the Parent nor the Purchaser owns
Securities or (ii) the Warrants have expired, the Company covenants
to use its commercially reasonable efforts to maintain the
registration of the Common Stock under Section 12(b) or 12(g) of
the Exchange Act and to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date hereof
pursuant to the Exchange Act. As long as either the Parent or the
Purchaser owns Securities, if the Company is not required to file
reports pursuant to the Exchange Act, it will prepare and furnish
to the Parent and the Purchaser and make publicly available in
accordance with Rule 144(c) such information as is required for the
Parent and the Purchaser to sell the Securities under Rule 144. The
Company further covenants that it will use its commercially
reasonable efforts to take such further action as the Parent or the
Purchaser, as holders of Securities issued pursuant to this
Agreement or the other Transaction Documents, may reasonably
request, to the extent required from time to time to enable such
Person to sell such Securities without registration under the
Securities Act within the requirements of the exemption provided by
Rule 144.”
(j) Section 4.3 is amended and
restated in its entirety to read as follows:
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“4.3 Integration . The Company shall not sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the
Securities in a manner that would require the registration under
the Securities Act of the sale of the Securities to the Parent and
the Purchaser pursuant to this Agreement or the other Transaction
Documents or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading
Market.”
(k) The third sentence of Section
4.5 is amended and restated in its entirety to read as follows:
“Neither the Company, on the one hand, nor the Parent or
the Purchaser, on the other hand, shall issue any press release
regarding the transactions contemplated hereby or the other
Transaction Documents without the prior consent of the Company or
the Parent and the Purchaser, as the case may be, which consent
shall not unreasonably be withheld or delayed, except (i) as
required by federal securities law in connection with the filing of
final Transaction Documents (including signature pages thereto)
with the Commission and (ii) to the extent such disclosure is
required by law or Trading Market regulations, in which case the
Company shall provide the Parent and the Purchaser with prior
notice of such disclosure permitted under this subclause
(ii).”
(l) Section 4.6 is amended and
restated in its entirety to read as follows:
“4.6 Shareholder Rights Plan . No claim will be
made or enforced by the Company or, with the consent of the
Company, any other Person, that the Parent or the Purchaser
