EX-10.2

 

CONSULTING AGREEMENT (the “Agreement”), dated as of October 20, 2008 between
ELITE PHARMACEUTICALS, INC., a Delaware corporation having a principal place of
business at 165 Ludlow Avenue, Northvale, New Jersey 07467 (the “Company”), and
PARALLEX CLINICAL RESEARCH, a Consultant having an address at 218 Walker Place,
West Hempstead, NY 11552 (“Consultant”).

INTRODUCTION

           The Company desires to engage Consultant to provide consulting
services to Elite for Elite’s opioid abuse-resistant product, sustained release
opioid product and other such products that Elite may request assistance with
(the “Products”), all as more fully described in Exhibit A hereto. To accomplish
such purposes the Company and Consultant hereby agree as follows:

ARTICLE I
RETENTION: TERM: DUTIES

          1.1      Retention of Consultant; Term. The Company hereby retains the
services of Consultant, and Consultant hereby agrees to render services to the
Company, all in accordance with the terms and conditions hereof, for a term (the
“Term”) commencing on October 20, 2008 and terminating at such time as the
Company shall notify Consultant in writing pursuant to Section 3.1 below.

          1.2     Duties. During the Term, Consultant shall perform such
consulting services for the Company, its subsidiaries and affiliates as may be
required and assigned by the Company. These services shall include by way of
illustration and not limitation include assistance in development and execution
of Elite’s regulatory and clinical program to assist in development of the
Products and such other services as the Company shall request in writing from
time to time. The parties acknowledge and agree that the services shall be
performed by Stuart Apfel (“Apfel”) on behalf of Consultant. Consultant has, and
if necessary will engage its other employees with the proper skill, training and
experience to provide the services; provided, that before any of Consultant’s
other employees provides services the Company shall agree to such Consultant
employees. Consultant shall provide, and shall cause each such person to provide
the services hereunder in a diligent and professional manner in accordance with
generally accepted industry standards. The services of Consultant hereunder
shall be performed at the applicable rates set forth in Section 2.1 hereof.
Consultant shall provide the Company with progress reports with respect to the
services rendered hereunder in reasonable detail on a periodic basis and as
otherwise requested by the Company. Consultant shall be solely responsible for
the payment of all salaries and other compensation to its employees,
representatives or agents. The Company shall have the right at all times to
terminate the assignment of any employee of Consultant upon notice for any
reason, in Company’s sole discretion.

 

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          1.3     No Conflict. Consultant represents and warrants to the Company
that it and its employees and representatives are free to be engaged by the
Company upon the terms contained in this Agreement and that there are no
consulting agreements, employment contracts, restrictive covenants or other
agreements or fiduciary obligations preventing or interfering with in any manner
whatsoever the full performance of Consultant’s duties hereunder.

          1.4     Relationship of Parties. The Company and Consultant
acknowledge and agree that Consultant, its employees, representatives and agents
are independent contractors and not employees of, or joint venturers or partners
with, the Company. Consultant, its employees, and representatives will not be
entitled to any of the Company’s employee benefits (including without
limitation, pension, insurance, disability, overtime premium, vacation plans,
and the like) and will not have any right to make commitments to third parties
on behalf of the Company unless specifically authorized in writing by the
Company. Any employees or other representatives that Consultant may engage to
provide services on behalf of the Company with the Company’s prior written
consent shall remain the employees of Consultant and shall be paid directly by
Consultant for all services in this connection. Consultant shall be solely
responsible for all obligations and reports covering Social Security,
Unemployment Insurance, Workers’ Compensation, Income Tax and other reports and
deductions required by any applicable Federal, state or local law with respect
to the services provided hereunder by Consultant, its employees and
representatives.

          1.5     Legal Compliance. Consultant, its employees and
representatives will comply with all applicable governmental laws, ordinances,
rules and regulations applicable to the performance of the services hereunder.

          1.6     Appointment of Apfel. During the Term, Apfel shall serve as
the Company’s Chief Scientific Officer and Chief Medical Officer.

ARTICLE II
COMPENSATION

          2.1      Compensation. For all services rendered by Consultant
hereunder and all covenants and obligations undertaken by it pursuant to this
Agreement, Consultant shall be compensated at the rate of $250 per hour for the
services of Stuart Apfel and $175 per hour for clinical research scientists,
payable monthly and upon presentation of an invoice itemized by days worked;
provided, however, that, in no event shall Consultant be entitled to
compensation (together with its employees’, representatives’ or agents’ billable
hours) of more than $10,000.00 in any month, unless Consultant has obtained the
prior written authorization of the Company. Consultant shall keep and shall
cause to be kept detailed monthly time sheets and is responsible for submitting
such records to Company. All invoices hereunder shall be submitted by Consultant
to the Company at the address set forth at the head of this Agreement.
Consultant’s federal identification number is 203418259.

          2.2      Expenses. Upon presentation of a written itemized account
thereof with related receipts, the Company shall from time to time pay to or
reimburse Consultant for the

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reasonable and necessary travel expenses incurred by Consultant in connection
with the performance of its duties hereunder, which travel expenses have been
approved in writing in advance by the Company.

ARTICLE III
TERMINATION

          3.1     Term; Termination. The Company shall be entitled to terminate
this Agreement immediately upon written notice to Consultant for any reason.
Sections 1.3, 1.4, 1.5, Article 4 and Article 5 shall survive the termination or
expiration of this Agreement. Upon termination or expiration of this Agreement,
the Company shall not have any further obligations to the Consultant hereunder.

          3.2     Continued Cooperation. Consultant and/or Apfel, as applicable,
shall, during and after the expiration or termination of this Agreement for any
reason, at Company’s sole expense, provide such reasonable cooperation as is
requested by Company with respect to any internal or external agency or legal
investigation (whether conducted by the Food and Drug Administration (“FDA”),
the Securities Exchange Commission (the “SEC”) or otherwise), lawsuits,
financial reports, or with respect to other matters within its knowledge,
responsibilities or purview, upon reasonable notice. Consultant, its employees
and representatives, including Apfel, shall execute all lawful documents
reasonably necessary for Company to secure or maintain any Confidential
Information (as defined below).

          3.3     Return of Documents and Property. Upon the expiration or
termination of this Agreement, or upon the earlier request of the Company,
Consultant, Apfel and Consultant’s 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 Consultant’s and/or Apfel’s
possession, care or control, regardless of whether such materials were created
or prepared by Consultant and/or Apfel, and regardless of the form of, or medium
containing, such information, documents, including without limitation, all
Company computers and hard drives, all computer files (whether or not such files
are stored on Consultant’s and/or Apfel’s personal computers), keys and any
other physical property of Company. A breach of the foregoing obligations by any
of Consultant’s employees and/or representatives, including without limitation,
Apfel, is deemed to be a breach by Consultant.

ARTICLE IV
NON-DISCLOSURE, NON-COMPETITION AND NON-SOLICITATION

          4.1     Non-Disclosure. Consultant acknowledges that, in performing
its services hereunder, it will be exposed to certain confidential and
proprietary information of the Company. Consultant, its employees and
representatives shall not disclose or furnish to any other person, firm or
corporation, or utilize for it or their own benefit any Confidential
Information. For purposes of this Agreement “Confidential Information is defined
as (a) any information relating to

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any confidential process, technique or procedure used by the Company, its
subsidiaries and affiliates, including, but not limited to, any patents and
designs, projections, procedures, formulae, processes, techniques,
methodologies, business, financial or organizational or administrative
information, personnel material and product, marketing or sales data; (b) the
identity of any products or compounds that are the subject of research,
development, commercialization or manufacture by the Company, including the
progress or status of any such research or development efforts Company; or (c)
any information of a confidential nature obtained as a result of any prior,
present or future relationship with the Company, its subsidiaries or affiliates;
(d) any trade secrets of the Company, its subsidiaries or affiliates; or (e) the
name, address or other information relating to any customer or supplier of the
Company, its subsidiaries or affiliates. It is further provided that the
foregoing provisions shall not apply to any information that Consultant can
document by clear and convincing evidence:

                      (a)    

is now public knowledge or which hereafter becomes public knowledge through no
fault of Consultant;

    (b)

is properly provided to Consultant without violation of an obligation owed to
the Company by an independent third party; or

    (c)

was already in the Consultant’s possession at the time of receipt from the
Company.

 

Consultant will restrict access to Confidential Information to the minimum
number of its employees and representatives as is necessary for the purpose of
the performance of the services hereunder and shall use best efforts to preserve
and safeguard the Confidential Information. Consultant shall advise its
employees of the confidential nature of the Confidential Information and shall
ensure that its employees and representatives keep such information confidential
and utilize such information only in accordance with the terms of this
Agreement.

          4.2      Non-Solicitation; Non-Competition. Consultant agrees that
during the Term of this Agreement and for a period of one year thereafter, it
will not, in any manner, directly or indirectly (a) be employed by, engaged in
or participate in the ownership, management, operation or control of, or act in
any advisory, expert or other capacity for, any entity or consultant that
competes with the Company, its subsidiaries or affiliates with the Products
being developed by the Company, its subsidiaries or affiliates and relating
directly or indirectly to the Consultant’s work hereunder; (b) solicit or divert
any business or any customer from the Company, its subsidiaries or affiliates or
assist any person, firm or corporation in doing so or attempting to do so; or
(c) cause or seek to cause any person, firm or corporation to refrain from
dealing or doing business with the Company, its subsidiaries or affiliates or
assist any person, firm or corporation in doing so; or (d) solicit or divert any
employee from the Company, its subsidiaries or affiliates or assist any person,
firm or corporation in doing so.

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          4.3      Securities Laws. Consultant acknowledges that he is aware
(and that its employees have been advised) that the United States securities
laws (“Securities Laws”) prohibit Consultant, its employees and any person or
entity who has received material non-public information about the Company from
purchasing or selling securities of the Company or from communicating such
information to any other person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities in
reliance on such information. Consultant shall not do or perform any act in
violation of any Securities Laws or other applicable securities law.

          4.4      No Granting of License. Nothing herein contained is intended
or shall be interpreted as (i) granting or creating any right or license in or
to Consultant with respect to any patent rights, copyrights, trademarks, trade
secretes, or other intellectual property or proprietary rights owned or
controlled by the Company, or (ii) waiving or relinquishing any rights of
enforcement that the Company may have with respect to patent, copyright,
trademark, trade secrets, or other intellectual or other proprietary
infringement or misappropriation.

          4.5      Inventions. All data, results, ideas, discoveries,
inventions, reports, or other works of authorship (including, without
limitation, any derivative works) that are or may be patentable or subject to
copyright and that may be made, authored, discovered or otherwise conceived or
invented by Consultant, including, without limitation, its employees,
representatives, or agents, as a result of performing the services hereunder,
whether alone or in conjunction with others (collectively, the “Inventions”),
and all right, title and interest in and to such Inventions throughout the
world, shall be deemed a “work made for hire” (as such term is defined in Title
17 United States Code Section 101) and shall the sole and exclusive property of
the Company. To the extent any right, title or interest in or to such Inventions
by operation of law or otherwise belong to Consultant, its employees,
representatives, or agents, such Inventions shall be deemed assigned upon
discovery, conception or creation to the Company and shall become the sole and
exclusive property of the Company, without any further act of Consultant, its
employees, representatives, or agents. Consultant agrees to treat, and shall
cause its employees, representatives, or agents to treat, all such Inventions as
Company’s Confidential Information hereunder. Consultant shall promptly
communicate to Company, without publishing same, any Inventions and all
available information relating to any Inventions (with all necessary plans and
models).

          Consultant shall assist, and shall cause its employees,
representatives, or agents to assist, the Company in perfecting its ownership
rights in Inventions and obtaining, maintaining and defending any such
Inventions. Consultant will, at the request of Company, execute and perform, and
cause its employees, representatives and/or agents, as the case may be, to
execute and perform, all such deeds, documents, acts and things as Company and
its duly authorized agents may deem necessary or desirable to, among other
things: (a) apply for, obtain and vest solely in the name of Company, letters
patent, copyrights, trademark registrations or other analogous protection in any
country throughout the world and when so obtained or vested to renew, extend and
restore the same; and (b) defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation or cancellation of such letters patent, copyright, trademark
registration or other analogous

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protection. In the event that Company is unable, after reasonable effort, to
secure Consultant’s signature on any application, assignment, or other document
or instrument relating to letters patent, copyright, trademark or other
analogous protection relating to a Invention, whether because of the physical or
mental incapacity of Consultant or for any other reason whatsoever, Consultant
hereby irrevocably designates and appoints Company and each of its duly
authorized officers and agents as Consultant’s agent and attorney-in-fact, to
act for and in Consultant’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright, trademark or other
analogous protection thereon with the same legal force and effect as if executed
by Consultant.

          4.6      Indemnity Obligations of Consultant. Consultant shall
indemnify, defend and hold Company and its affiliates harmless from and against
any and all claims, proceedings, losses, damages, liabilities, costs and
expenses (including reasonable attorneys’ fees) in connection with a breach of
this Agreement by or for any of Consultant’s, its employees’, representatives’,
or other agents’ acts and omissions hereunder.

          4.7      Breach of Provisions. If Consultant and/or any of its
employees, agents or representatives breaches any of the provisions of this
Article 4 in addition to and without limiting any other remedies available to
the Company at law or in equity, the Company shall be entitled to immediate
equitable relief in the form of an injunction in any court to restrain any such
breach or threatened breach and to enforce the provisions of this Article 4 and
such other relief as the court may determine to be necessary, reasonable or
proper. Consultant acknowledges and agrees that there is no adequate remedy at
law for any such breach or threatened breach and, in the event that any
proceeding is brought seeking injunctive relief, Consultant shall not use as a
defense thereto that there is an adequate remedy at law.

ARTICLE V
MISCELLANEOUS

          5.1      Assignment. The rights and obligations of Consultant under
this Agreement may not be assigned or delegated by Consultant without the prior
written consent of the Company.

          5.2      Binding Effect. This Agreement shall extend to and be binding
upon Consultant, Apfel and their respective successors, permitted assigns, heirs
and legal representatives, and shall inure to the benefit of the Company, its
successors and assigns.

          5.3     Notices. Any notice required or permitted to be given under
this Agreement to either party shall be sufficient if in writing and if sent by
Federal Express or other similar express courier service, to the address of such
party set forth above, or to such other address as such party may hereafter
designate by a notice given to the other party in the manner provided in this
Section.

          5.4      Waiver. A waiver by a party hereto of a breach of any term,
covenant or condition of this Agreement by the other party hereto shall not
operate or be construed as a waiver

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of any other or subsequent breach by such party of the same or any other term,
covenant or condition hereof.

          5.5      Entire Agreement. This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof and no
waiver, modification, change or amendment of any of its provisions shall be
valid unless in writing and signed by the party against whom such claimed
waiver, modification, change or amendment is sought to be enforced. This
Agreement supersedes all prior understandings, whether oral or written, between
the Consultant and the Company.

          5.6      Authority. The parties each represent and warrant that they
have the power, authority and right to enter into this Agreement and to carry
out and perform the terms, covenants and conditions hereof.

          5.7      Applicable Law; Choice of Forum. This Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of New Jersey without giving effect to principles relating to conflicts of law.
Any legal action or proceeding filed in connection with this Agreement shall be
filed in a forum in the State of New Jersey. The parties hereby consent to the
sole and exclusive jurisdiction of the courts in the State of New Jersey and
agree not to raise any defense or make any argument that the pendency of any
legal action or proceeding in such courts is inconvenient.

          5.8      Severability. In the event that any of the provisions of this
Agreement, or any portion thereof, shall be held to be invalid or unenforceable,
the validity and enforceability of the remaining provisions hereof shall not be
affected or impaired but shall remain in full force and effect.

* * *

 

 

 

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

  ELITE PHARMACEUTICALS, INC.               By:    /s/ Chris Dick       Chris
Dick     Executive Vice President of Corporate     Development                  
  PARALLAX CLINICAL RESEARCH               By: /s/ Stuart Apfel       Dr. Stuart
C. Apfel, M.D.     President

Agreed and Acknowledged that
Stuart Apfel shall be bound by the
Terms of this Agreement as if he were
a party hereto in place of Parallax
Clinical Research

    Stuart Apfel

 

 

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SCHEDULE A

 * Assistance in development and execution of Elite’s regulatory and clinical
   program for its once-daily opioid product.

 * Assistance in development and execution of Elite’s regulatory and clinical
   program for its abuse-resistant opioid product.

 

 

 

 

 

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