Exhibit 10.9
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EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of July 23,
2003, by and between Elite Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx Xxxx (the "Executive"), residing at
___________________________.
W I T N E S S E T H:
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WHEREAS, on June 3, 2003 (the "Effective Date"), the Company retained
the Executive as its Chief Executive Officer; and
WHEREAS, the Company and the Executive desire to memorialize the terms
and conditions under which the Executive is currently serving, and will continue
to serve, as the Company's Chief Executive Officer;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
Section 1. Term of Employment; Representations and Warranties of the
Executive. This Agreement shall be effective as of the Effective Date and,
subject to earlier termination as specified herein, shall continue until the
third anniversary of the Effective Date (the "Term"), provided, however, that
unless the Company or the Executive gives written notice to the other party at
least sixty (60) days prior to the expiration of the then-current Term that the
Company or the Executive, as the case may be, elects not to renew this
Agreement, the then-current Term shall be automatically extended for additional
one-year periods. The Executive hereby represents and warrants that (i) he has
the legal capacity to execute and perform this Agreement, (ii) this Agreement is
a valid and binding obligation of the Executive enforceable against him in
accordance with its terms, (iii) the Executive's service hereunder will not
conflict with, or result in a breach of, any agreement, understanding, order,
judgment or other obligation to which the Executive is presently a party or by
which he may be bound, and (iv) the Executive is not subject to, or bound by,
any covenant against competition, confidentiality obligation or any other
agreement, order, or judgment which would conflict with, restrict or limit the
performance of the services to be provided by him hereunder.
Section 2. Position and Duties. (a) During the Term, the Executive
shall serve as the Chief Executive Officer of the Company. The Executive shall
have such powers and duties as are commensurate with such position and as may be
conferred upon him by the Board of Directors of the Company (the "Board").
During the Term, the Executive shall devote all of his business time, attention,
skill and efforts exclusively to the business and affairs of the Company.
(b) Upon consummation of a Strategic Transaction (as defined below),
if the Executive is then serving as the Chief Executive Officer of the Company,
the size of the Board shall be increased by one (1) member and the Executive
shall be appointed as a director of the
Company to fill such vacancy. For purposes of this Agreement, "Strategic
Transaction" means, in any one or series of related transactions, (i) the sale
of all or substantially all of the assets of the Company where the fair value of
the consideration received by the Company (after all related fees and expenses),
as determined in good faith by the Board, is at least Ten Million Dollars
($10,000,000), (ii) a merger or other business combination with, or into,
another entity, where the fair value of the consideration received by the
stockholders of the Company (after all related fees and expenses) in connection
with such merger or other business combination, as determined in good faith by
the Board, is at least Ten Million Dollars ($10,000,000) or (iii) any public or
private sale by the Company of its debt or equity securities or securities
convertible into or exchangeable for its debt or equity securities which results
in net proceeds to the Company (after all related fees and expenses) of at least
Ten Million Dollars ($10,000,000).
Section 3. Compensation. For all services rendered by the Executive in
any capacity during the Term, including, without limitation, services as an
executive officer, director, or member of any committee of the Company or any of
its subsidiaries, affiliates or divisions thereof, the Executive shall be
compensated as follows:
(a) The Company shall pay the Executive a fixed salary at a rate per
annum equal to Two Hundred Thousand Dollars ($200,000) until such time as the
Company consummates a Strategic Transaction, at which time the fixed salary
payable to the Executive shall increase to Three Hundred Thirty Thousand One
Hundred Forty Dollars ($330,140) per annum (the "Base Salary"). The Base Salary
shall be subject to such periodic increases as the Board shall deem appropriate
in light of, among other factors, the then-existing financial condition of the
Company and the Executive's success in implementing the Company's business plan
and achieving its strategic objectives. The Base Salary shall be payable in
accordance with the customary payroll practices of the Company.
(b) The Executive shall be eligible to receive an annual bonus in an
amount to be determined by the Compensation Committee of the Board of Directors
in its sole and absolute discretion.
(c) The Executive shall be entitled to three (3) weeks of vacation in
each calendar year during the Term; provided, however, that the Executive shall
not be entitled to carryover vacation from one year to any other year or to any
payment in respect of any unused or accrued vacation.
(d) On the Effective Date, the Company granted the Executive options
("Initial Options") to purchase three hundred thousand (300,000) shares of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), pursuant
to the Company's 1997 Employee Stock Option Plan (the "Plan"). The Initial
Options (i) are, to the maximum extent permitted under applicable law, intended
to qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code, (ii) shall be fully vested as of the Effective Date,
(iii) shall have a per share exercise price equal to $2.01, the closing price of
a share of Common Stock, as listed on the American Stock Exchange, on the
Effective Date, and (iv) are subject to the terms and conditions set forth in
the Plan and the stock option agreement being entered into by the Company and
the Executive simultaneously herewith.
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(e) The Company hereby grants to the Executive options to purchase an
additional three hundred thousand (300,000) shares of Common Stock (the
"Additional Options"). The Additional Options (i) shall, to the maximum extent
permitted under applicable law, qualify as incentive stock options, (ii) shall
vest solely upon consummation of a Strategic Transaction, (iii) shall have a per
share exercise price equal to the closing price of a share of Common Stock, as
listed on the American Stock Exchange, on the date hereof, and (iv) shall be
evidenced by a stock option agreement being entered into by the Company and the
Executive simultaneously herewith.
(f) During the Term, the Company shall pay the Executive a monthly
automobile allowance in the amount of Six Hundred Dollars ($600).
(g) The Executive shall be entitled to participate in all compensation
and employee benefit plans or programs, and to receive all benefits, perquisites
and emoluments, for which any salaried employees of the Company are eligible
under any plan or program now or hereafter established and maintained for the
employees of the Company, to the fullest extent permissible under the general
terms and provisions of such plans or programs and in accordance with the
provisions thereof. Notwithstanding the foregoing, nothing in this Agreement
shall preclude the amendment or termination of any such plan or program;
provided, that, such amendment or termination is applicable generally to the
senior officers of the Company or any subsidiary or affiliate.
(h) During the Term, the Executive shall be covered under the
directors and officers' insurance policy maintained by the Company.
Section 4. Business Expenses. The Company shall pay or reimburse the
Executive for all reasonable travel or other expenses incurred by the Executive
in connection with the performance of his duties and obligations under this
Agreement, subject to the Executive's presentation of appropriate vouchers in
accordance with such procedures as are applicable to senior officers of the
Company and to preserve any deductions for Federal income taxation purposes to
which the Company may be entitled.
Section 5. Termination of Employment; Effects Thereof. (a) The Company
shall have the right, upon delivery of written notice to the Executive, to
terminate the Executive's employment hereunder prior to the expiration of the
Term (i) pursuant to a Termination for Cause (as defined in Section 5(g)), (ii)
upon the Executive's Permanent Disability (as defined in Section 5(g)), or (iii)
pursuant to a Without Cause Termination (as defined in Section 5(g)). The
Executive shall have the right, upon delivery of written notice to the Company,
to terminate the Executive's employment hereunder prior to the expiration of the
Term in the Executive's sole discretion; provided, however, that, without the
Company's written consent, no termination of the Executive's employment pursuant
to this sentence shall be effective until thirty (30) days after receipt by the
Company of written notice of termination from the Executive. Notwithstanding the
foregoing, the Executive shall have the right, upon delivery of written notice
to the Company, to immediately terminate the Executive's employment hereunder in
the event that the Company (w) breaches this Agreement by materially reducing
the
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nature or scope of the authorities, powers, functions, duties or
responsibilities of the Executive set forth in Section 2 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, (x) otherwise materially breaches its obligations pursuant to
this Agreement and the Company fails to remedy such other breach within thirty
(30) days of receipt of written notice of such breach from the Executive, (y)
relocates its principal executive offices outside of New Jersey or New York or
(z) consummates a Change of Control Event (as defined in Section 5(g)) with an
entity (other than Nostrum Pharmaceuticals, Inc.) and the Executive elects to
terminate his employment for any reason within thirty (30) days following the
consummation of such Change of Control Event (a "Termination for Good Reason").
The Executive's employment hereunder shall terminate automatically without
action by any party hereto upon the Executive's death.
(b) In lieu of any severance that may otherwise be payable to the
Executive pursuant to any policies of the Company, whether existing on the date
hereof or in effect from time to time hereafter, in the event that the Company
terminates the Executive's employment pursuant to a Without Cause Termination or
the Executive terminates the Executive's employment pursuant to a Termination
for Good Reason (other than in connection with a Change of Control Event
specified in clause (z) of the definition of Termination for Good Reason which
shall be governed by Section 5(c)), the Company shall (i) pay the Executive any
earned but unpaid Base Salary plus any unpaid reimbursable expenses as of the
effective date of termination of his employment, (ii) continue to pay the
Executive's then-current Base Salary and reimburse the Executive for the cost to
replace the life and disability insurance coverages afforded to the Executive
under the Company's benefit plans with substantially similar coverages,
following the effective date of termination of his employment for a period equal
to the greater of (x) the remaining then current term of this Agreement, or (y)
two years following the effective date of termination and (iii) pay the premiums
for the Executive's Company provided health insurance for the period during
which the Executive is entitled to continued health insurance coverage as
specified in the Comprehensive Omnibus Budget Reconciliation Act. Other than
pursuant to the terms of any benefit plan then-maintained by the Company, no
other payments shall be made, or benefits provided, by the Company under this
Agreement except as otherwise required by law.
(c) In lieu of any severance that may otherwise be payable to the
Executive pursuant to any policies of the Company, whether existing on the date
hereof or in effect from time to time hereafter, in the event that the
consummates a Change of Control Event (as defined in Section 5(g)) with an
entity (other than Nostrum Pharmaceuticals, Inc.) and the Executive elects to
terminate his employment for any reason within thirty (30) days following the
consummation of such Change of Control Event, the Company shall (i) pay the
Executive any earned but unpaid Base Salary plus any unpaid reimbursable
expenses as of the effective date of termination of his employment, (ii) pay the
Executive, in twenty-four (24) equal monthly installments commencing on the
first date of the month following the effective date of termination of his
employment, the sum of (A) Five Hundred Thousand Dollars ($500,000) if the fair
value of the consideration received (after all related fees and expenses) by the
Company or its stockholders, as the case may be, in connection with such Change
of Control Event (as determined in good faith by the Board) is equal to or less
than Ten Million Dollars ($10,000,000), (B) two (2) times the Executive's
then-current Base Salary or Five Hundred
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Thousand Dollars ($500,000), whichever is greater, if the fair value of the
consideration received (after all related fees and expenses) by the Company or
its stockholders, as the case may be, in connection with such Change of Control
Event (as determined in good faith by the Board) is greater than Ten Million
Dollars but equal to or less than Twenty Million Dollars ($20,000,000), or (C)
One Million Dollars ($1,000,000) if the fair value of the consideration received
(after all related fees and expenses) by the Company or its stockholders, as the
case may be, in connection with such Change of Control Event (as determined in
good faith by the Board) is greater than Twenty Million Dollars ($20,000,000),
(iii) reimburse the Executive for the cost to replace the life and disability
insurance coverages afforded to the Executive under the Company's benefit plans
with substantially similar coverages, following the effective date of
termination of his employment for a period equal to the greater of (x) the
remaining then current term of this Agreement, or (y) two years following the
effective date of termination and (iv) pay the premiums for the Executive's
Company provided health insurance for the period during which the Executive is
entitled to continued health insurance coverage as specified in the
Comprehensive Omnibus Budget Reconciliation Act. Other than pursuant to the
terms of any benefit plan then-maintained by the Company, no other payments
shall be made, or benefits provided, by the Company under this Agreement except
as otherwise required by law.
(d) In the event that the Company terminates the Executive's
employment pursuant to a Permanent Disability, the Company shall pay the
Executive the same amounts that would be payable to the Executive in the case of
a termination under Section 5(b) less any amounts actually received by the
Executive under any Company provided and paid for disability insurance coverage.
Other than pursuant to the terms of any benefit plan then-maintained by the
Company, no other payments shall be made, or benefits provided, by the Company
under this Agreement except as otherwise required by law.
(e) In the event that the Company terminates the Executive's
employment hereunder due to a Termination for Cause or, except as provided in
Section 5(b) or Section 5(c) above, the Executive terminates his employment with
the Company (including, without limitation, pursuant to any retirement plan or
policy then maintained by the Company), the Company shall pay the Executive any
earned but unpaid Base Salary plus any unpaid reimbursable expenses as of the
effective date of termination of his employment. Other than pursuant to the
terms of any benefit plan then-maintained by the Company, no other payments
shall be made, or benefits provided, by the Company under this Agreement except
as otherwise required by law.
(f) In the event that the Executive's employment hereunder is
terminated due to the Executive's death, the Company shall (i) pay the
Executive's executor or other legal representative any earned but unpaid Base
Salary plus any unpaid reimbursable expenses as of the date of the Executive's
death and (ii) continue to pay the Executive's then-current Base Salary
following his death for a period equal to two (2) years following the date of
death of the Executive. Other than pursuant to the terms of any benefit plan
then-maintained by the Company, no other payments shall be made, or benefits
provided, by the Company under this Agreement except as otherwise required by
law.
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(g) For purposes of this Agreement, the following terms have the
following meanings:
(i) "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; or (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.
(ii) "Permanent Disability" means permanently disabled so as to
qualify for full benefits under the Company's then-existing disability insurance
policy; provided, however, that if the Company does not maintain any such policy
on the date of determination, "Permanent Disability" shall mean the inability of
the Executive to work for a period of six (6) full calendar months during any
eight (8) consecutive calendar months due to illness or injury of a physical or
mental nature, supported by the completion by the Executive's attending
physician of a medical certification form outlining the disability and
treatment.
(iii) "Termination for Cause" means, to the maximum extent
permitted by applicable law, a termination of the Executive's employment by the
Company because the Executive has (a) breached or failed to perform his duties
under applicable law and such breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness, (b) committed an act of
dishonesty in the performance of his duties hereunder, (c) willfully engaged in
conduct that is detrimental to the business of the Company, (d) been convicted
of a felony or a misdemeanor involving moral turpitude, (e) excessively used
alcohol or illegal drugs so as to interfere with the performance of the
Executive's obligations under this Agreement, (f) breached or failed to perform
his obligations and duties hereunder, which breach or failure the Executive
shall fail to remedy within ten (10) days after written demand from the Company
specifying in reasonable detail such breach or failure, (g) failed to follow
lawful, written directives of the Board that are consistent with the duties and
obligations of the Executive under this Agreement, and the Executive shall fail
to remedy such failure within ten (10) days after written demand from the Board,
or (h) violated in any material respect the representations made in Section 1 of
this Agreement or the provisions of Section 6 of this Agreement.
(iv) "Without Cause Termination" means a termination of the
Executive's employment by the Company other than due to Permanent Disability,
retirement or expiration of the Term and other than a Termination for Cause.
(g) Any payments to be made or benefits to be provided by the Company
pursuant to this Section 5 (other than in the event of the Executive's death or
Permanent Disability) are subject to the receipt by the Company of an effective
general release and agreement not to xxx, in a form reasonably satisfactory to
the Company (the "Release"), pursuant to which the Executive agrees (i) to
release all claims against the Company and certain related parties (excluding
claims for (x) indemnification under the Company's Certificate of
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Incorporation, by-laws or any Company provided insurance policy or (y) any
severance benefits payable hereunder), (ii) not to maintain any action, suit,
claim or proceeding against the Company, its subsidiaries and affiliates and
certain related parties relating to this Agreement, and (iii) to be bound by
certain confidentiality and non-disparagement covenants specified therein. The
Company shall deliver a general release and agreement not to xxx to the
Executive, in a form substantially similar to the Release, upon the Executive's
delivery of the Release to the Company; provided, that, the general release and
agreement not to xxx the Executive shall not be effective until following the
expiration of any revocation period applicable to the Release. Notwithstanding
the due date of any post-employment payment, the Company shall not be obligated
to make any payments under this Section 5 until after the expiration of any
revocation period applicable to the Release under applicable law, as may be
amended from time to time (which revocation period is presently seven (7) days
under the Age Discrimination Act).
Section 6. Other Duties of Executive During and After Term. (a) The
Executive recognizes and acknowledges that all information pertaining to the
affairs, business, clients, or customers of the Company or any of its
subsidiaries or affiliates (any or all of such entities being hereinafter
referred to as the "Business"), as such information may exist from time to time,
other than information that the Company has previously made publicly available,
is confidential information and is a unique and valuable asset of the Business,
access to and knowledge of which are essential to the performance of the
Executive's duties under this Agreement. In consideration of the payments made
to him hereunder, the Executive shall not, except to the extent reasonably
necessary in the performance of his duties under this Agreement, divulge to any
person, firm, association, corporation, or governmental agency, any information
concerning the affairs, businesses, clients, or customers of the Business
(except such information as is required by law to be divulged to a government
agency or pursuant to lawful process), or make use of any such information for
his own purposes or for the benefit of any person, firm, association or
corporation (except the Business) and shall use his reasonable best efforts to
prevent the disclosure of any such information by others. All records,
memoranda, letters, books, papers, reports, accountings, experience or other
data, and other records and documents relating to the Business, whether made by
the Executive or otherwise coming into his possession, are confidential
information and are, shall be, and shall remain the property of the Business. No
copies thereof shall be made which are not retained by the Business, and the
Executive agrees, on termination of his employment or on demand of the Company,
to deliver the same to the Company.
(b) The Executive recognizes and acknowledges that the Company shall
own all Work Product created by the Executive during the Term and all Work
Product created by the Executive as a consultant of the Company prior to the
Effective Date. As used herein, "Work Product" includes, but is not limited to,
all intellectual property rights, US and international copyrights, patentable
inventions, creations, discoveries and improvements, works of authorship and
ideas, whether or not patentable or copyrightable and regardless of their form
or state of development. All Work Product shall be considered work made for hire
by the Executive and shall be owned by the Company.
(i) If any of the Work Product may not, by operation of law, be
considered a work made for hire by the Executive for the Company, or if
ownership of all right,
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title and interest of the intellectual property rights therein shall not
otherwise vest exclusively in the Company, the Executive shall assign, and upon
creation thereof shall be deemed to have automatically assigned, without further
consideration, the ownership of all such Work Product to the Company and its
successors and assigns. The Company, its successors and assigns shall have the
right to obtain and hold in its or their own name copyrights, patents,
registrations and other protections available to the Work Product. The Executive
shall assist the Company in obtaining and maintaining patent, copyright,
trademark and other appropriate protection for all Work Product in all
countries, at the Company's expense. The Executive hereby irrevocably
relinquishes for the benefit of the Company, its successors and assigns any
moral rights in the Work Product recognized under applicable law.
(ii) The Executive shall disclose all Work Product promptly to
the Company and shall not disclose the Work Product to anyone other than
authorized Company personnel without the Company's prior written consent. The
Executive shall not disclose to the Company or induce the Company to use any
secret or confidential information or material belonging to others.
(iii) The provisions of this Section 6(b) cover Work Product of
any kind that is conceived or made by the Executive during the term of this
Agreement (and during the period prior to the Effective Date that the Executive
provided consulting services to the Company) that (i) relates specifically to
the business of the Company or its subsidiaries and affiliates, (ii) results
from tasks assigned to the Executive by the Company or its subsidiaries and
affiliates, or (iii) are conceived or made with the use of facilities or
materials provided by the Company or its subsidiaries and affiliates.
(c) In consideration of the payments to be made to him hereunder,
during the period (the "Restrictive Period") commencing on the effective date of
the termination of his employment for any reason and ending one (1) year
thereafter, the Executive shall not, without express prior written approval of
the Company, directly or indirectly, (i) solicit or assist any third party in
soliciting for employment any person then currently employed by the Company or
any of its subsidiaries and affiliates or who was employed by the Company or any
of its subsidiaries and affiliates during the three-month period immediately
preceding the termination of the Executive's employment (collectively,
"Employees"), (ii) employ, attempt to employ or materially assist any third
party in employing or attempting to employ any Employee, or (iii) otherwise act
on behalf of any Competitor to interfere with the relationship between the
Company or any of its subsidiaries and affiliates and their respective
Employees.
(d) The Executive acknowledges that the restrictions contained in this
Section 6 are reasonable and necessary to protect the legitimate interests of
the Company and that any breach by the Executive of any provision contained in
this Section 6 will result in irreparable injury to the Company for which a
remedy at law would be inadequate. Accordingly, the Executive acknowledges that
the Company shall be entitled to temporary, preliminary and permanent injunctive
relief against the Executive in the event of any breach or threatened breach by
the Executive of the provisions of this Section 6, in addition to any other
remedy that may be available to the Company whether at law or in equity. With
respect to any provision
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of this Section 6 finally determined by a court of competent jurisdiction to be
unenforceable, such court shall be authorized to reform this Agreement or any
provision hereof so that it is enforceable to the maximum extent permitted by
law. The parties hereto shall abide by such court's determination. If the
covenants of Section 6(c) are determined to be wholly or partially unenforceable
in any jurisdiction, such determination shall not be a bar to or in any way
diminish the Company's right to enforce such covenants in any other
jurisdiction.
(e) The Company's obligation to make payments, or provide for any
benefits under this Agreement (except to the extent vested or exercisable),
shall cease upon a violation by the Executive of the provisions of this Section
6. The provisions of this Section 6 shall survive any termination of the
Executive's employment with the Company. The Company shall not be required to
post any bond or other security in connection with any proceeding to enforce the
provisions of this Section 6.
Section 7. Indemnification. Prior to the Effective Date, the Executive
rendered consulting services to the Company pursuant to the terms of a certain
Consulting Agreement, dated as of April 15, 2003 (the "Consulting Agreement"),
by and between the Company and Xxxxxxx Xxxxxxx Corporation (the "Consultant").
For purposes of the Delaware General Corporation Law (the "DGCL") and the
provisions of the Company's Certificate of Incorporation and By-laws, the
Executive, the Consultant and the Consultant's shareholders, employees,
permitted agents and representatives shall each have the status of an "agent" of
the Company and, accordingly, (i) the Executive shall be entitled to
indemnification and advancement of expenses from the Company in connection with
the performance of the Executive's duties hereunder and (ii) the Consultant and
its shareholders, employees, permitted agents and representatives shall be
entitled to indemnification and advancement of expenses from the Company in
connection with the performance of the Consulting Services (as defined in the
Consulting Agreement) previously rendered to the Company pursuant to the
Consulting Agreement, in the case of clause (i) or (ii), to the fullest extent
permitted by the DGCL and the provisions of the Company's Certificate of
Incorporation and By-laws. In addition, to the maximum extent permitted by
applicable law (including the DGCL), the Company shall indemnify and hold
harmless (i) the Executive against and in respect of any and all claims, costs,
expenses, damages, liabilities, losses or deficiencies (including, without
limitation, counsel's fees and other costs and expenses incident to any suit,
action or proceeding) (collectively, "Damages") arising out of, resulting from
or incurred in connection with the Executive's performance of his duties
hereunder, except to the extent that any such Damages result from a breach of
this Agreement by the Executive and (ii) the Consultant and its shareholders,
employees, agents or representatives against and in respect of any and all
Damages arising out of, resulting from or incurred in connection with the
provision of the Consulting Services by the Consultant, except to the extent
that any such Damages result from (A) the gross negligence or willful misconduct
of the Consultant and/or its shareholders, employees agents or representatives;
provided, however, any such gross negligence or willful misconduct shall not
limit the Consultant and/or its shareholders, employees, agents or
representatives right to indemnification arising out of any claims by Xx. Xxxx
X. Xxxxx, the former chief executive officer of the Company, surrounding his
resignation as the chief executive officer of the Company or (B) a breach of the
Consulting Agreement by the Consultant.
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Section 8. Withholdings. The Company may directly or indirectly
withhold from any payments made under this Agreement all Federal, state, city or
other taxes and all other deductions as shall be required pursuant to any law or
governmental regulation or ruling or pursuant to any contributory benefit plan
maintained by or on behalf of the Company.
Section 9. Consolidation, Merger, or Sale of Assets. Nothing in this
Agreement shall preclude the Company from consolidating or merging into or with,
or transferring all or substantially all of its assets to, or engaging in any
other business combination with, any other person or entity which assumes this
Agreement and all obligations and undertakings of the Company hereunder. Upon
such a consolidation, merger, transfer of assets or other business combination
and assumption, the term "Company" as used herein shall mean such other person
or entity and this Agreement shall continue in full force and effect.
Section 10. Notices. All notices and other communications under this
Agreement shall be in writing and, unless otherwise provided herein, shall be
deemed duly given if delivered personally, by facsimile transmission (receipt of
which is confirmed) or upon receipt by the receiving party of any notice sent by
registered or certified mail (first-class mail, postage pre-paid, return receipt
requested) or by overnight courier or similar courier service, addressed, in the
case of the Executive, at the address first set forth above, or, in the case of
the Company, at the address set forth below:
Elite Pharmaceuticals, Inc.
000 Xxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Board of Directors
Facsimile No.:
or to such other address as either party shall have previously specified in
writing to the other.
Section 11. No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; provided, however,
that nothing in this Section 11 shall preclude the assumption of such rights by
executors, administrators or other legal representatives of the Executive or his
estate and their assigning any rights hereunder to the person or persons
entitled thereto.
Section 12. Source of Payment. All payments provided for under this
Agreement shall be paid in cash from the general funds of the Company. The
Company shall not be required to establish a special or separate fund or other
segregation of assets to assure such payments, and, if the Company shall make
any investments to aid it in meeting its obligations hereunder, the Executive
shall have no right, title or interest whatever in or to any such investments
except as may otherwise be expressly provided in a separate written instrument
relating to such investments. Nothing contained in this Agreement, and no action
taken pursuant
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to its provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between the Company and the Executive or any other
person. To the extent that any person acquires a right to receive payments from
the Company hereunder, such right, without prejudice to rights which employees
may have, shall be no greater than the right of an unsecured creditor of the
Company.
Section 13. Binding Agreement; No Assignment. This Agreement shall be
binding upon, and shall inure to the benefit of, the Executive and the Company
and their respective permitted successors, assigns, heirs, beneficiaries and
representatives. This Agreement is personal to the Executive and may not be
assigned by him without the prior written consent of the Company. Any attempted
assignment in violation of this Section 13 shall be null and void.
Section 14. Expenses. Except as set forth herein, each party hereto
shall pay its own expenses incident to the preparation, negotiation,
administration and enforcement of this Agreement and the transactions
contemplated herein.
Section 15. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New Jersey,
without reference to the choice of law principles thereof.
Section 16. Dispute Resolution. At the option of either the Company or
the Executive, any dispute, controversy or question arising under, out of or
relating to this Agreement or the breach thereof, other than pursuant to Section
6 hereof, shall be referred for decision by arbitration in the State of New
Jersey by a neutral arbitrator mutually selected by the parties hereto. Any
arbitration proceeding shall be governed by the Rules of the American
Arbitration Association then in effect or such rules last in effect (in the
event such Association is no longer in existence). If the parties are unable to
agree upon such a neutral arbitrator within twenty one (21) days after either
party has given the other written notice of the desire to submit the dispute,
controversy or question for decision as aforesaid, then either party may apply
to the American Arbitration Association for a final and binding appointment of a
neutral arbitrator, however, if such Association is not then in existence or
does not act in the matter within forty five (45) days of any such application,
either party may apply to the presiding judge of the Superior Court of any
county in New Jersey for the appointment of a neutral arbitrator to hear the
parties and such judge is hereby authorized to make such appointment. In the
event that either party exercises the right to submit a dispute, controversy or
question arising hereunder to arbitration, the decision of the neutral
arbitrator shall be final, conclusive and binding on all interested persons and
no action at law or in equity shall be instituted or, if instituted, further
prosecuted by either party other than to enforce the award of the neutral
arbitrator. The award of the neutral arbitrator may be entered in any court that
has jurisdiction. The Executive and the Company shall each bear all their own
costs (including the fees and disbursements of counsel) incurred in connection
with any such arbitration and shall each pay one-half of the costs of any
arbitrator appointed hereunder.
Section 17. Entire Agreement. This Agreement shall constitute the
entire agreement among the parties with respect to the matters covered hereby
and shall supersede all
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previous written, oral or implied understandings among them (including the
Consulting Agreement) with respect to such matters.
Section 18. Severability. The invalidity of any provision hereof shall
not affect the validity, force or effect of the remaining provisions hereof. In
the event that an arbitrator designated pursuant to the provisions of Section 16
or a court of competent jurisdiction determines that any provision contained
herein is not enforceable as written because of the breadth or duration of such
provision, such arbitrator or court shall have the authority to modify the terms
of such provision so that, as so modified, such provision shall be enforceable
to the maximum extent permitted by applicable law.
Section 19. Amendments. This Agreement may only be amended or otherwise
modified, and compliance with any provision hereof may only be waived, by a
writing executed by all of the parties hereto. The provisions of this Section 19
may only be amended or otherwise modified by such a writing.
Section 20. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which shall together be deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by the undersigned, thereunto duly authorized, and the Executive has
signed this Agreement, all as of the date first written above.
ELITE PHARMACEUTICALS, INC.
By:
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Name:
Title:
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Xxxxxxx Xxxx
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