Exhibit 10.51

 

 

 

 

ASSET PURCHASE AGREEMENT

 

BY AND BETWEEN

 

Elite Pharmaceuticals, Inc.

 

AND

 

NOSTRUM LABORATORIES INC.

 

DATED AS OF

 

December 16, 2019

 

 

 

This document is not intended to create, nor will it be deemed to create, a
legally binding or enforceable offer or agreement of any type or nature, unless
and until the duly authorized and approved execution of this document by the
parties and the delivery of an executed copy hereof by each of the parties to
all other parties

 

 

 

 

TABLE OF CONTENTS

 

    Page       Article 1 PURCHASE AND SALE 1 Section 1.1 Sale and Purchase of
Assets 1 Section 1.2 Assumed Liabilities 1 Section 1.3 Excluded Liabilities. 2
Section 1.4 Purchase Price 2 Section 1.5 Purchase Price Allocation 2     Article
2 CLOSING 3 Section 2.1 Closing 3 Section 2.2 Actions to be Taken at the Closing
3 Section 2.3 License to Certain Product Technology 3     Article 3
REPRESENTATIONS OF SELLER 3 Section 3.1 Organization and Authority 3 Section 3.2
Consents and Approvals; No Violations 4 Section 3.3 Absence of Litigation 4
Section 3.4 Regulatory Matters 4 Section 3.5 Title 5 Section 3.6 Brokers 5
Section 3.7 Exclusivity of Representations and Warranties 5     Article 4
REPRESENTATIONS OF BUYER 5 Section 4.1 Organization and Authority 5 Section 4.2
Consents and Approvals; No Violations 6 Section 4.3 Litigation 6 Section 4.4
Brokers 6 Section 4.5 No Other Representations and Warranties 6     Article 5
COVENANTS 7 Section 5.1 Product Responsibility 7 Section 5.2 Transfer of
Regulatory Approvals 7 Section 5.3 Transfer Taxes 7 Section 5.4 Public
Announcements 7 Section 5.5 Confidentiality 7 Section 5.6 Further Assurances 7  
  Article 6 INDEMNIFICATION 7 Section 6.1 Survival of Representations,
Warranties and Covenants 7 Section 6.2 Indemnification by Seller for the Benefit
of Buyer 9 Section 6.3 Indemnification by Buyer for the Benefit of Seller 9
Section 6.4 Certain Further Limitations 9 Section 6.5 Indemnification Procedures
10 Section 6.6 Treatment of Indemnity Payments 12

 

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Section 6.7 Exclusive Remedy 13     Article 7 MISCELLANEOUS 13 Section 7.1 Fees
and Expenses 13 Section 7.2 Amendment 13 Section 7.3 Waiver 13 Section 7.4
Entire Agreement 13 Section 7.5 Assignment 14 Section 7.6 Notices 14 Section 7.7
Construction; Section Headings; Draftsmanship; Interpretation 15 Section 7.8
Annexes, Exhibits and Schedules 15 Section 7.9 No Third Party Beneficiaries 16
Section 7.10 Severability 16 Section 7.11 Limitation of Remedies 16 Section 7.12
No Recourse 16 Section 7.13 Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial 16 Section 7.14 Service of Process 17 Section 7.15 Specific
Enforcement 17 Section 7.16 Counterparts; Delivery 17     Annex A Definitions
A-1 Annex B Products / Allocation Schedule B-1

 

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ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”), dated as of December 16, 2019,
is entered into by and between Elite Pharmaceuticals, Inc., a Nevada corporation
(“Seller”), and Nostrum Laboratories Inc., a New Jersey, USA corporation
(“Buyer”). Seller and Buyer shall be referred to herein from time to time
collectively as the “Parties” and individually as a “Party”. Capitalized words
have the definitions set forth in Annex A.

 

BACKGROUND

 

WHEREAS, Buyer desires to acquire the Regulatory Approvals (as defined herein),
the Regulatory Documentation (as defined herein), certain rights to Product
Technology (as defined herein) and certain other assets relating to one or more
of these, and Seller has agreed to sell such assets on the terms and subject to
the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the respective covenants,
representations and warranties set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:

 

Article 1
PURCHASE AND SALE

 

Section 1.1 Sale and Purchase of Assets. Subject to the terms and conditions set
forth herein, at the Closing, Seller shall sell to Buyer and Buyer shall
purchase from Seller, free and clear of all Liens other than Permitted Liens,
for the Purchase Price, Seller’s right, title and interest in and to the
following (collectively, the “Transferred Assets”):

 

(a) the Regulatory Approvals; and

 

(b) the Regulatory Documentation.

 

Section 1.2 Assumed Liabilities. Upon the terms and subject to the conditions of
this Agreement, effective as of the Closing Date, Buyer shall assume and pay,
perform or otherwise discharge, in accordance with their respective terms and
subject to their respective conditions thereof, the following liabilities and
obligations (collectively, the “Assumed Liabilities”):

 

(a) all liabilities and obligations arising out of or relating to Products sold
by or on behalf of Buyer or its Affiliates on or after the Closing Date,
including any product liability, breach of warranty or similar claim for injury
or other harm to person or property, which result from the use or misuse of
Products or otherwise related to the Products (including all proceedings
relating to any such liabilities or obligations) sold by or on behalf of Buyer
on or after the Closing Date;

 

(b) all liabilities and obligations arising out of or relating to any Product
recall instituted on or after the Closing Date for Products sold by or on behalf
of Buyer on or after the Closing Date, subject to Seller’s reimbursement
obligations set forth in Section 5.1;

 

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(c) Taxes that are the responsibility of Buyer pursuant to Section 5.33; and

 

(d) all other liabilities and obligations arising out of, or relating to, the
marketing, sale or use of the Products or Transferred Assets by or on behalf of
Buyer or its Affiliates or their respective agents on or after the Closing Date.

 

Section 1.3 Excluded Liabilities. Buyer shall not assume, nor shall Buyer be
responsible to pay, perform or discharge any liabilities or obligations of
Seller other than the Assumed Liabilities (collectively, the “Excluded
Liabilities”). Without limiting the foregoing, Purchaser shall not assume:

 

(a) any action, suit or proceeding pending as of the Closing Date
notwithstanding the disclosure thereof by Buyer to Seller any subsequent claim,
action, suit or proceeding arising out of or relating to such pending matters,
any other similar event occurring on or prior to the Closing Date or, resulting
from the conduct of Seller’s business by Seller on or prior to the Closing Date;

 

(b) any liability of Seller for any taxes for any periods prior to or subsequent
to the Closing whether or not relating to the business and notwithstanding the
disclosure thereof by Seller to Buyer;

 

(c) any obligation or liability arising from claims, proceedings or causes of
action resulting from property damage or personal injury (including death)
caused by the Products sold by Seller prior to the Closing Date; or

 

(d) any trade payable or accrued expenses.

 

Section 1.4 Purchase Price.

 

(a) The “Purchase Price” shall be an amount equal to U.S. $300,000 (Three
Hundred Thousand U.S. Dollars).

 

(b) At the Closing, Buyer shall pay to Seller an amount in cash, without
interest, equal to the Purchase Price.

 

(c) All payments made by Buyer pursuant to Section 1.4(b) shall be made by wire
transfer of immediately available funds, which wire transfers shall be made to
an account specified in writing immediately upon Closing.

 

Section 1.5 Purchase Price Allocation. The Parties agree that the Purchase Price
shall be allocated among the Transferred Assets as set forth on Annex B,
attached hereto (the “Allocation Schedule”). Neither Buyer nor Seller shall take
any position (whether in audits, Tax Returns or otherwise) that is inconsistent
with such allocation unless required to do so by applicable Law.

 

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Article 2
CLOSING

 

Section 2.1 Closing.

 

(a) Subject to the conditions set forth in this Agreement, the consummation of
the transactions contemplated by this Agreement (the “Closing”) shall take place
within seven (7) business days after both parties sign the agreement (the
“Closing Date”).

 

Section 2.2 Actions to be Taken at the Closing.

 

(a) Deliveries by Seller. At the Closing, Seller shall deliver, or shall cause
to be delivered to Buyer:

 

(i) final form of template Seller FDA Letter, to be transmitted to the FDA in
accordance with Section 5.2; and

 

(ii) such other certificates and documents customary in transactions similar to
those contemplated hereby as are reasonably requested by Buyer.

 

(b) Deliveries by Buyer. At the Closing, Buyer shall deliver or cause to be
delivered to Seller:

 

(i) evidence of the wire transfers referred to in Section 1.4(b); and

 

(ii) final form of template Buyer FDA Letter, to be transmitted to the FDA in
accordance with Section 5.2 and proof of FDA receipt; and

 

(iii) such other certificates and documents customary in transactions similar to
those contemplated hereby as are reasonably requested by Seller.

 

Section 2.3 License to Certain Product Technology. Seller hereby irrevocably and
unconditionally grants to Buyer as of the Closing Date, a royalty-free,
non-exclusive, perpetual license to use the Product Technology to market and
sell the Products in the United States, and to manufacture the Product for
marketing and sale in the United States.

 

Article 3
REPRESENTATIONS OF SELLER

 

Seller represents and warrants to Buyer that the statements in this Article 3
are true and correct as of the date hereof, except as set forth in the
Disclosure Schedule.

 

Section 3.1 Organization and Authority.

 

(a)  Seller is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation.

 

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(b)  Seller has all necessary power, capacity and authority to execute and
deliver this Agreement and the Ancillary Documents to which it is a party, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Ancillary
Documents to which Seller is a party are duly and validly executed and delivered
by Seller and, assuming the due authorization, execution and delivery by Buyer
hereto and thereto, this Agreement and the Ancillary Documents constitute, the
legal, valid and binding obligations of Seller enforceable in accordance with
their terms, except (i) to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting the enforcement of creditors’ rights generally, and (ii) that the
availability of equitable remedies, including specific performance, is subject
to the discretion of the court before which any proceeding thereof may be
brought.

 

Section 3.2 Consents and Approvals; No Violations.

 

(a) Except for notice to the FDA of the transfer of the Regulatory Approvals
pursuant to Section 5.2, assuming the truth and accuracy of the representations
and warranties of Buyer set forth in Article 4, the execution and delivery by
Seller of this Agreement and of the Ancillary Documents (to which Seller is a
party) does not, and the performance by Seller of this Agreement and of the
Ancillary Documents (to which Seller is a party) do not, in each case require
any filing with or approval from any Governmental Authority, except for such
filings and approvals that, if not made or obtained, would not reasonably be
expected to have a Material Adverse Effect.

 

(b) The execution and delivery by Seller of this Agreement and of the Ancillary
Documents (to which Seller is a party) does not, and the performance by Seller
of this Agreement and such Ancillary Documents (to which Seller is a party) do
not, in each case (i) violate the Governing Documents of Seller, (ii) violate
any Law applicable to Seller or its respective assets, or (iii) require the
consent, notice or other action by any Person under, conflict with, result in a
breach of or constitute a default under any material Contract, except in any
such case under clauses (ii) or (iii) of this Section 3.2(b), such for any such
violations, breaches, defaults, terminations, accelerations, cancellations,
consents, notices or other occurrences that would not reasonably be expected to
have a Material Adverse Effect.

 

Section 3.3 Absence of Litigation. As of the date of this Agreement, there are
no Actions pending or, to the Knowledge of Seller, threatened in writing
against, relating to or affecting (i) this Agreement or any Ancillary Documents,
or (ii) the transactions contemplated hereby or any action taken or to be taken
by Seller in connection with this Agreement or any Ancillary Documents, which if
adversely determined would result in a Material Adverse Effect.

 

Section 3.4 Regulatory Matters.

 

(a) The Seller has made available or shall make available to Buyer on the
Closing Date complete and correct copies of the Regulatory Approvals and all
material written communications from the FDA or other Governmental Authority
relating to those Regulatory Approvals in Seller’s possession or custody and
control.

 

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(b) (i) Seller has filed with the FDA all required notices, supplemental
applications and annual or other reports or documents, including adverse event
reports, with respect to the Regulatory Approvals, (ii) Seller has paid all fees
required by any Governmental Authority with respect to the Regulatory Approvals,
including filing fees applicable to the Products, and (iii) with respect to each
of the Products, Seller has acted in material compliance with 21 U.S.C. Sections
351, 352 and 355; 21 C.F.R. Parts 210, 211, or 314 et seq, respectively, and all
material terms and conditions of such Regulatory Approvals, in each case, in
accordance with Seller’s normal business practices.

 

Section 3.5 Title. Except as set forth in Section 3.5 of the Disclosure
Schedule, (i) Seller has good and marketable title to the Transferred Assets,
free and clear of all Liens other than Permitted Liens, (ii) to the Knowledge of
Seller, there are no adverse claims of ownership to the Transferred Assets, and
(iii) Seller has not received written notice, nor does Seller have Knowledge,
that any Person has asserted a claim of ownership or right of possession or use
in and to any of the Transferred Assets.

 

Section 3.6 Brokers. Except as set forth in Section 3.6 of the Disclosure
Schedule, no broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Seller.

 

Section 3.7 Exclusivity of Representations and Warranties. Notwithstanding the
delivery or disclosure to Buyer or its officers, directors, employees, agents or
Representatives of any documentation or other information, except for the
representations and warranties made by Seller in this Article 3, Seller
expressly disclaims any representations or warranties of any kind or nature,
whether written or oral, express or implied, as to the Transferred Assets, and
Seller specifically disclaims any representation or warranty of merchantability,
usage, suitability or fitness for any particular purpose with respect to such
assets, any part thereof, the workmanship thereof, and the absence of any
defects therein, whether latent or patent. The representations and warranties of
Seller contained in this Article 3 are the only representations and warranties
made by Seller in connection with the transactions contemplated by this
Agreement and supersede any and all previous written and oral statements, if
any, made by Seller or any of its Representatives.

 

Article 4
REPRESENTATIONS OF BUYER

 

Buyer represents and warrants to Seller that the statements in this Article 4
are true and correct as of the date hereof.

 

Section 4.1 Organization and Authority.

 

(a) Buyer is an entity duly organized, validly existing and in good standing
under the laws of its jurisdiction of formation.

 

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(b) Buyer has all necessary power, capacity and authority to execute and deliver
this Agreement and the Ancillary Documents to which it is a party, to perform
its obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. This Agreement and the Ancillary Documents are
duly and validly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery by Seller hereto and thereto, this
Agreement and the Ancillary Documents constitute, the legal, valid and binding
obligations of Buyer enforceable in accordance with their terms, except (i) to
the extent that enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other Laws affecting the enforcement
of creditors’ rights generally, and (ii) that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding thereof may be brought.

 

Section 4.2 Consents and Approvals; No Violations.

 

(a) Except for notice to the FDA of the transfer of the Regulatory Approvals
pursuant to Section 5.2, assuming the truth and accuracy of the representations
and warranties of Seller set forth in Article 3, the execution and delivery by
Buyer of this Agreement and of the Ancillary Documents (to which Buyer is a
party) does not, and the performance by Buyer of this Agreement and of the
Ancillary Documents (to which Buyer is a party) do not, in each case require any
filing with or approval from any Governmental Authority.

 

(b) The execution and delivery by Buyer of this Agreement and of the Ancillary
Documents (to which Buyer is a party) does not, and the performance by Buyer of
this Agreement and such Ancillary Documents (to which Buyer is a party) do not,
in each case (i) violate the Governing Documents of Buyer, (ii) violate any Law
applicable to Buyer or its respective assets or properties, or (iii) require the
consent, notice or other action by any Person under, conflict with, result in a
breach of or constitute a default under any Contract, except in any such case
under clauses (ii) or (iii) of this Section 4.2(b), such for any such
violations, breaches, defaults, terminations, accelerations, cancellations,
consents, notices or other occurrences that would not reasonably be expected to
have a Buyer Material Adverse Effect.

 

Section 4.3 Litigation. As of the date of this Agreement, there are no Actions
pending or, to the Knowledge of Buyer, threatened in writing against, relating
to or affecting (i) this Agreement or any Ancillary Documents, or (ii) the
transactions contemplated hereby or any action taken or to be taken by Buyer in
connection with this Agreement or any Ancillary Documents.

 

Section 4.4 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Buyer unless expressly noted. RoseChemical LLC shall be paid 2% of
ANDA sale price ($6000.00 per sale of ANDA.)

 

Section 4.5 No Other Representations and Warranties. Except for the
representations and warranties made by Buyer in this Article 4, Buyer expressly
disclaims any representations or warranties of any kind or nature, whether
written or oral, express or implied. Further, Buyer (a) has conducted its own
independent review and analysis of, and, based thereon, has formed an
independent judgment concerning the Transferred Assets, including the regulatory
and development status of each Product and Regulatory Approval, and (b) has been
furnished with or given full access to such key employees, documents, facilities
and other information about the Transferred Assets as it and its Representatives
have deemed necessary to enable it to make an informed decision with respect to
the execution, delivery and performance of this Agreement and the transactions
contemplated hereby. Except as expressly set forth herein, Buyer acknowledges
and agrees that Seller provides all Transferred Assets with all faults on an
“as-is, where-is” basis. Buyer has received all materials relating to the
Transferred Assets that it has requested and has been afforded the opportunity
to obtain any additional information necessary to verify the accuracy of any
such information or of any representation or warranty made by Seller herein or
to otherwise evaluate the merits of the transactions contemplated hereby. Seller
has answered, to Buyer’s satisfaction all inquiries that Buyer and its
Representatives have made concerning the Transferred Assets or otherwise
relating to the transactions contemplated hereby. Buyer acknowledges that the
only representations and warranties made by Seller are those in Article 3. Buyer
is not relying on any representations and warranties, whether express or
implied, other than those made by Seller in Article 3 and is not aware of any
facts and/or circumstances that would make any of the representations and
warranties of Seller contained in Article 3 untrue or misleading.

 

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Article 5
COVENANTS

 

Section 5.1 Product Responsibility. Without limiting each Party’s respective
obligations under the Assumed Liabilities and Excluded Liabilities as set forth
under Section 1.2 and Section 1.3:

 

(a) From and after the Closing, Buyer shall be solely responsible for (i) all
regulatory matters with respect to the Products and the other Transferred
Assets, including those relating to communicating and corresponding, preparing
and filing reports, making adverse event reports, and paying applicable fees,
with and to applicable Governmental Authority, under all applicable Law,
including the FD&C Act, (ii) taking all actions and conducting all communication
with third parties in respect of Products (whether sold before or after the
Closing), including responding to all complaints in respect thereof and all
medical information requests, including complaints related to tampering or
contamination, and (iii) investigating all complaints and adverse events in
respect of Products sold after the Closing).

 

(b) Buyer is responsible for tech transfer of the Products to its own or a third
party manufacturing site. Seller’s responsibility with respect to such tech
transfer is limited to providing to Buyer technical documentation in its
possession with respect to the Products, and shall not include consultation or
other support.

 

(c) From and after the Closing, Buyer shall be solely responsible for
conducting, handling or processing, all recalls of units of Products, including
recalls required by any Governmental Authority or voluntary recalls by Buyer
based on safety, efficacy or similar concerns, with respect to the Products,
regardless of whether the Products were sold before or after the Closing;
provided, however, that to the extent that such recalls relate to Products sold
before the Closing, Seller shall reimburse Buyer for all costs associated with
such recall within thirty (30) days after receipt of an invoice therefor and
appropriate supporting documentation.

 

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Section 5.2 Transfer of Regulatory Approvals. On or as promptly as practical
after the Closing, Seller shall deliver the Regulatory Documentation to Buyer
and Buyer shall confirm receipt thereof, Within seven (7) Business Days Seller
shall file the Seller FDA Letter with the FDA and shall provide notice to Buyer
of such filing. Within seven (7) Business Days after receiving notice from the
Seller of the filing of the Seller FDA Letter, Buyer shall file the Buyer FDA
Letter with the FDA. Seller and Buyer shall take all other actions reasonably
necessary to notify the FDA that the Regulatory Approvals have been transferred
from Seller to Buyer and to affect the transfer of such Regulatory Approvals
from Seller to Buyer.

 

Section 5.3 Transfer Taxes. All transfer Taxes, recording fees and other similar
Taxes that are imposed on any of the Parties by any Governmental Authority in
connection with the transactions contemplated by this Agreement shall be borne
by Buyer.

 

Section 5.4 Public Announcements. Seller and Buyer shall not make any press
release(s), public announcement(s) or other information publicly released
relating to this Agreement or the transactions contemplated hereby; provided,
however, that either Party may include information regarding this Agreement and
the transactions contemplated hereby in a publicly disclosed document where such
information is required by applicable Law and only to the extent required by
such Law.

 

Section 5.5 Confidentiality. Seller and Buyer agree that the terms of this
Agreement shall not be disclosed or otherwise made available to the public and
that copies of this Agreement shall not be publicly filed or otherwise made
available to the public, except where such disclosure, availability or filing is
required by applicable Law and only to the extent required by such Law. In the
event that such disclosure, availability or filing is required by applicable
Law, each of Buyer and Seller (as applicable) agrees to use its commercially
reasonable efforts to obtain “confidential treatment” of this Agreement with the
U.S. Securities and Exchange Commission (or the equivalent treatment by any
other Governmental Authority) and to redact such terms of this Agreement as the
other Party shall request.

 

Section 5.6 Further Assurances. Subject to the terms and conditions hereof, on
and after the Closing, each Party hereby agrees, from time-to-time as and when
requested by the other Party, to execute and deliver, or cause to be executed
and delivered, all such documents and other papers and to use its commercially
reasonable efforts to take, or cause to be taken, all such further or other
appropriate actions and to do, or cause to be done, all other things as such
other Party may reasonably deem necessary or desirable to carry out the
provisions of this Agreement and give effect to the transactions contemplated
hereby.

 

Article 6
INDEMNIFICATION

 

Section 6.1 Survival of Representations, Warranties and Covenants. Except to the
extent a different period is expressly set forth herein with respect to a
covenant to be performed after the Closing, the representations, warranties,
covenants and agreements in this Agreement shall survive the Closing and shall
terminate on the date that is twelve (12) months after the Closing Date;
provided, however, that the representations and warranties in Section 3.1,
Section 3.5, Section 3.6, Section 4.1 and Section 4.4 shall survive the Closing
and continue in full force and effect for the full period of all applicable
statutes of limitation (giving effect to any waiver, mitigation or extension
thereof). Notwithstanding the foregoing, any claims asserted in good faith (to
the extent known at such time) and in writing by notice from the non-breaching
Party to the breaching Party prior to the expiration date of the applicable
survival period and with respect to which the non-breaching party has actually
incurred Losses, shall not thereafter be barred by the expiration of the
relevant representation or warranty and such claims shall survive until finally
resolved.

 

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Section 6.2 Indemnification by Seller for the Benefit of Buyer. Subject to the
other provisions of this Article 6, from and after the Closing, Seller shall
indemnify, defend and hold Buyer and its Affiliates, officers, directors,
employees, and/or agents (each a “Buyer Indemnitee”) harmless from any damages,
losses, liabilities, obligations, or reasonable and documented out-of-pocket
expenses (including reasonable attorneys’ fees and expenses) (each, a “Loss”)
actually incurred by any Buyer Indemnitee as a result of:

 

(a) any material inaccuracy of any representation or warranty made by Seller
contained in Article 3;

 

(b) any material breach by Seller of any of the covenants or agreements
contained herein which are to be performed or complied with by Seller; or

 

(c) any Excluded Liability.

 

Section 6.3 Indemnification by Buyer for the Benefit of Seller. Subject to the
other provisions of this Article 6, from and after the Closing, Buyer shall
indemnify, defend and hold Seller and its Affiliates, officers, directors,
employees, and/or agents (each a “Seller Indemnitee”) harmless from any Loss
actually incurred by any Seller Indemnitee as a result of:

 

(a) Any material inaccuracy of any representation or warranty made by Buyer
contained in Article 4;

 

(b) any material breach by Buyer of any of the covenants or agreements contained
herein which are to be performed or complied with by Buyer; or

 

(c) any Assumed Liability.

 

Section 6.4 Certain Further Limitations.

 

(a) Seller shall not be liable to the Buyer Indemnitees under Section 6.2 unless
and until the aggregate amount of Losses that would otherwise be payable
hereunder exceeds on a cumulative basis an amount equal to $5,000.00 (the
“Deductible”), in which event Seller shall be required to pay or be liable for
all such Losses in excess of the Deductible.

 

(b) Seller’s maximum aggregate liability to the Buyer Indemnitees for all
defense and indemnification obligations owing by them pursuant to Section 6.2
shall not exceed an amount equal to $50,000.00 (the “Cap”). Neither the
Deductible nor the Cap shall apply to the indemnification obligations under
Section 6.2 or to any indemnification obligations that arise out of the Seller’s
breach of the representations or warranties set forth in Section 3.4 and Section
3.5 (the “Fundamental Representations”); provided, however, that Seller’s
maximum aggregate liability for indemnification obligations under Section 6.2
that arise out of the Seller’s breach of the Fundamental Representations shall
in no event exceed one-third the Purchase Price.

 

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(c) The amount of any Loss shall be calculated net of (i) any Tax Benefit
realized or realizable by the Indemnified Party or any of its Affiliates on
account of such Loss and (ii) any insurance proceeds (net of direct collection
expenses) or any indemnity, contribution or other similar payment received by
the Indemnified Party from any third party with respect thereto. If the
Indemnified Party receives or realizes a Tax Benefit on account of any Loss
after indemnification payment is made to it with respect to such Loss, the
Indemnified Party shall promptly pay to the Indemnifying Party the amount of
such Tax Benefit at such time or times as and to the extent that such Tax
Benefit is received or realized by the Indemnified Party. For purposes hereof,
“Tax Benefit” shall mean any Tax reduction or credit actually recognized or
realized, or that should have been recognized or realized, for the taxable year
in which or within which such Loss occurred or any Tax reduction attributable to
any increase in Tax loss carry back or carry forward arising in connection with
the accrual, incurrence or payment of any such Loss, provided that any such tax
reduction shall be deemed to be recognized and realized in the taxable year in
which and within which such Loss occurred. The Indemnified Party shall seek full
recovery under all insurance policies and Contracts covering any Loss, and with
respect to all Tax Benefits realized or realizable with respect to any Loss, to
the same extent as they would if such Loss were not subject to indemnification
hereunder. In the event that an insurance or other recovery is made by any
Indemnified Party with respect to any Loss for which any such Person has been
indemnified hereunder, then a refund equal to the aggregate amount of the
recovery shall be made promptly to the Indemnifying Party.

 

(d) The Buyer Indemnitees shall not be entitled to indemnification pursuant to
Section 6.2 for any Loss underlying any such indemnification claim to the extent
that:

 

(i) the Buyer Indemnitees could have, with commercially reasonable efforts,
mitigated or prevented such Loss (or any part thereof); or

 

(ii) such Loss (or any part thereof) results from or is magnified by the action
or inaction of any Buyer Indemnitee or any Affiliate of such Buyer Indemnitee
(including the Company) after the Closing.

 

(e)  To the extent that any Buyer Indemnitee may claim Losses under more than
one provision of Section 6.2, such Buyer Indemnitee may only recover for the
same Losses once.

 

Section 6.5 Indemnification Procedures. The Party making a claim under this
Article 6 is referred to as the “Indemnified Party” and the Party against whom
such claims are asserted under this Article 6 is referred to as the
“Indemnifying Party”.

 

10

 

 

(a) Third Party Claims. If any Indemnified Party receives notice of the
assertion or commencement of any Action made or brought by any Person who is not
a party to this Agreement or an Affiliate of a party to this Agreement or a
Representative of the foregoing (a “Third Party Claim”) against such Indemnified
Party with respect to which the Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnified Party shall give the
Indemnifying Party prompt written notice thereof, but in any event not later
than thirty (30) calendar days after receipt of such notice of such Third Party
Claim. The failure to give such prompt written notice shall not, however,
relieve the Indemnifying Party of its indemnification obligations, except and
only to the extent that the Indemnifying Party forfeits rights or defenses by
reason of such failure. Such notice by the Indemnified Party shall describe the
Third Party Claim in reasonable detail, shall include copies of all material
written evidence thereof and shall indicate the estimated amount, if reasonably
practicable, of the Loss that has been or may be sustained by the Indemnified
Party. The Indemnifying Party shall have the right to participate in, or by
giving written notice to the Indemnified Party, to assume the defense of any
Third Party Claim at the Indemnifying Party’s expense and by the Indemnifying
Party’s own counsel, and the Indemnified Party shall cooperate in good faith in
such defense; provided, that if the Indemnifying Party is Seller, such
Indemnifying Party shall not have the right to defend or direct the defense of
any such Third Party Claim that seeks an injunction or other equitable relief
against the Indemnified Party. In the event that the Indemnifying Party assumes
the defense of any Third Party Claim, subject to 6.5, it shall have the right to
take such action as it deems necessary to avoid, dispute, defend, appeal or make
counterclaims pertaining to any such Third Party Claim in the name and on behalf
of the Indemnified Party. The Indemnified Party shall have the right to
participate in the defense of any Third Party Claim with counsel selected by it
subject to the Indemnifying Party’s right to control the defense thereof. The
fees and disbursements of such counsel shall be at the expense of the
Indemnified Party, provided , that if in the reasonable opinion of counsel to
the Indemnified Party, (A) there are legal defenses available to an Indemnified
Party that are different from or additional to those available to the
Indemnifying Party; or (B) there exists a conflict of interest between the
Indemnifying Party and the Indemnified Party that cannot be waived, the
Indemnifying Party shall be liable for the reasonable fees and expenses of
counsel to the Indemnified Party in each jurisdiction for which the Indemnified
Party determines counsel is required. If the Indemnifying Party elects not to
compromise or defend such Third Party Claim, fails to promptly notify the
Indemnified Party in writing of its election to defend as provided in this
Agreement, or fails to diligently prosecute the defense of such Third Party
Claim, the Indemnified Party may, subject to 6.5, pay, compromise, defend such
Third Party Claim and seek indemnification for any and all Losses based upon,
arising from or relating to such Third Party Claim. Seller and Buyer shall
cooperate with each other in all reasonable respects in connection with the
defense of any Third Party Claim, including making available records relating to
such Third Party Claim and furnishing, without expense (other than reimbursement
of actual out-of-pocket expenses) to the defending party, management employees
of the non-defending party as may be reasonably necessary for the preparation of
the defense of such Third Party Claim.

 

(b) Settlement of Third Party Claims. Notwithstanding any other provision of
this Agreement, the Indemnifying Party shall not enter into settlement of any
Third Party Claim without the prior written consent of the Indemnified Party,
except as provided in this 6.5. If a firm offer is made to settle a Third Party
Claim without leading to liability or the creation of a financial or other
obligation on the part of the Indemnified Party and provides, in customary form,
for the unconditional release of each Indemnified Party from all liabilities and
obligations in connection with such Third Party Claim and the Indemnifying Party
desires to accept and agree to such offer, the Indemnifying Party shall give
written notice to that effect to the Indemnified Party. If the Indemnified Party
fails to consent to such firm offer within ten (10) days after its receipt of
such notice, the Indemnified Party may continue to contest or defend such Third
Party Claim and in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim shall not exceed the amount of such settlement
offer. If the Indemnified Party fails to consent to such firm offer and also
fails to assume defense of such Third Party Claim, the Indemnifying Party may
settle the Third Party Claim upon the terms set forth in such firm offer to
settle such Third Party Claim. If the Indemnified Party has assumed the defense
pursuant to Section 6.5, it shall not agree to any settlement without the
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed).

 

11

 

 

(c) Direct Claims. Any Action by an Indemnified Party on account of a Loss which
does not result from a Third Party Claim (a “Direct Claim”) shall be asserted by
the Indemnified Party giving (i) Seller, if the Indemnified Party is a Buyer
Indemnitee, or (ii) Buyer, if the Indemnified Party is a Seller Indemnitee,
reasonably prompt written notice thereof, but in any event not later than thirty
(30) days after the Indemnified Party becomes aware of such Direct Claim. The
failure to give such prompt written notice shall not, however, relieve the
Indemnifying Party of its indemnification obligations, except to the extent that
the Indemnifying Party forfeits rights or defenses or is otherwise materially
prejudiced by reason of such failure. Such notice by the Indemnified Party shall
describe the Direct Claim in reasonable detail, shall include copies of all
material written evidence thereof and shall indicate the estimated amount, if
reasonably practicable, of the Loss that has been or would be reasonably
expected to be sustained by the Indemnified Party. Buyer, if the Indemnifying
Party is a Buyer Indemnitee, or Seller, if the Indemnifying Party is a Seller
Indemnitee, shall have thirty (30) days after its receipt of such notice to
respond in writing to such Direct Claim. If the Indemnifying Party does not so
respond within such thirty (30) day period after receiving notice, the
Indemnifying Party shall be deemed to have rejected such claim, in which case
the Indemnified Party shall be free to pursue such remedies as may be available
to the Indemnified Party on the terms and subject to the provisions of this
Agreement.

 

(d) Cooperation. Upon a reasonable request by the Indemnifying Party, each
Indemnified Party seeking indemnification hereunder in respect of any Direct
Claim, hereby agrees to consult with the Indemnifying Party and act reasonably
to take actions reasonably requested by the Indemnifying Party in order to
attempt to minimize or otherwise reduce the amount of Loss in respect of such
Direct Claim. Any costs or expenses associated with taking such actions shall be
included as Losses hereunder.

 

Section 6.6 Treatment of Indemnity Payments. The Parties agree that any
indemnification payments made pursuant to this Article 6 shall be treated as
adjustments to the purchase price for Tax purposes, unless otherwise required by
Law, and such agreed treatment shall govern for purposes of this Agreement.

 

12

 

 

Section 6.7 Exclusive Remedy. Except in the case where a Party seeks to obtain
specific performance pursuant to Section 7.15, from and after the Closing, the
rights of the Parties to indemnification pursuant to the provisions of this
Article 6 shall be the sole and exclusive remedy for the Parties with respect to
any matter in any way arising from or relating to (a) this Agreement or its
subject matter or (b) any other matter relating to the Transferred Assets,
regardless of the legal theory under which such liability or obligation may be
sought to be imposed, whether sounding in contract or tort, or whether at law or
in equity, or otherwise, and the Parties hereby agree that the Indemnitees shall
have no remedy or recourse with respect to any of the foregoing other than
pursuant to, and subject to the terms and conditions of, this Article 6. The
Parties acknowledge and agree that the Indemnitees may not avoid such limitation
on liability by (i) seeking damages for breach of contract, tort or pursuant to
any other theory of liability, all of which are hereby waived, or (ii) asserting
or threatening any claim against any Person that is not a Party hereto (or a
successor to a Party hereto) for breaches of the representations, warranties and
covenants contained in this Agreement. The Parties agree that the provisions in
this Agreement relating to indemnification, and the limits imposed on Buyer’s
and the Buyer Indemnitees’ and Seller’s and the Seller Indemnitees’ remedies
with respect to this Agreement and the transactions contemplated hereby were
specifically bargained for between sophisticated parties and were specifically
taken into account in the determination of the amounts to be paid to Seller
hereunder. Subject to the foregoing and the additional procedures for bringing
or resolving disputes as specifically provided in Article 7, to the maximum
extent permitted by Law, the Parties hereby waive all other rights and remedies
with respect to any matter in any way relating to this Agreement or arising in
connection herewith, whether under any Laws at common law, in equity or
otherwise.

 

Article 7
MISCELLANEOUS

 

Section 7.1 Fees and Expenses. Except as otherwise set forth in this Agreement,
all costs, fees and expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement, including the fees and
disbursements of Representatives, shall be paid by the Party incurring such fees
or expenses.

 

Section 7.2 Amendment. This Agreement may be amended, modified or supplemented
only by a written agreement duly executed and delivered by Seller and Buyer, and
any purported amendment by any Party or Parties effected in a manner which does
not comply with this Section 7.2 shall be void and of no force or effect.

 

Section 7.3 Waiver. Except as otherwise expressly provided herein, no waiver
with respect to this Agreement shall be enforceable unless in writing and signed
by the Party against whom enforcement is sought. Except as otherwise expressly
provided herein, no failure to exercise, delay in exercising, or single or
partial exercise of any right, power or remedy by a Party, and no course of
dealing between the Parties, shall constitute a waiver of, or shall preclude any
other or further exercise of, any right, power or remedy.

 

Section 7.4 Entire Agreement. This Agreement (together with the annexes and
exhibits hereto and the Disclosure Schedule) and the Ancillary Documents
together constitute the entire agreement among the Parties with respect to the
subject matter of such documents and supersede all other prior agreements and
understandings, both written and oral, among the Parties with respect to the
subject matter of such documents. In the event of any inconsistency between the
provisions of this Agreement and the provisions of any Ancillary Document, the
provisions of this Agreement shall prevail.

 

13

 

 

Section 7.5 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any Party (whether by operation of
Law or otherwise), other than for collateral purposes, without the prior written
consent of the other Party(ies). Any attempted assignment of this Agreement not
in accordance with the terms of this Section 7.5 shall be void and of no force
or effect.

 

Section 7.6 Notices. notices, requests, consents, claims, demands, waivers and
other communications under this Agreement shall be in writing and shall be
deemed to have been duly given (i) on the date of service if served personally
on the Party to whom notice is to be given, (ii) on the day of transmission if
sent via facsimile transmission or by e-mail during regular business hours of
the recipient to the facsimile number or e-mail address given below, and the
following Business Day if sent after the regular business hours of the
recipient, (iii) on the Business Day after delivery to Federal Express or
similar overnight courier or the Express Mail service maintained by the United
States Postal Service, or (iv) on the third day after mailing, if mailed to the
Party to whom notice is to be given, by first class mail, registered or
certified, postage prepaid and properly addressed, to the Party as follows:

 

If to Buyer:

 

Nostrum Laboratories Inc. 

1370 Hamilton Street 

Somerset, NJ 08873 

Attention: Anil Anand 

Facsimile: 816-308-4994 

E-mail: anil@nostrumpharma.com

 

with a copy (which shall not constitute notice to Buyer) to:

 

Tanzina Chowdhury

1370 Hamilton Street

Somerset, NJ 08873

E-mail: Tchowdhury@nostrumlabs.com

 

If to Seller:

 

Elite Pharmaceuticals, Inc. 

165 Ludlow Avenue 

Northvale, NJ 07647 

Attention: Nasrat Hakim 

Facsimile: 201-750-2755 

E-mail: nhakim@elitepharma.com

 

with a copy (which shall not constitute notice to Seller) to:

 

Attention: Carter Ward 

Facsimile: 201-750-2755 

E-mail: cward@elitepharma.com

 

14

 

 

Section 7.7 Construction; Section Headings; Draftsmanship; Interpretation.

 

(a) The term “this Agreement” means this Asset Purchase Agreement together with
the Disclosure Schedule, annexes and exhibits hereto, as the same may from time
to time be amended, modified, supplemented or restated in accordance with the
terms hereof and thereof. The headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

 

(b) No Party, nor its respective counsel, shall be deemed the drafter of this
Agreement for purposes of construing the provisions hereof, and all provisions
of this Agreement shall be construed according to their fair meaning and not
strictly for or against any Party.

 

(c) Unless otherwise indicated to the contrary herein by the context or use
thereof (i) the words, “herein,” “hereto,” “hereof” and words of similar import
refer to this Agreement as a whole, including the Disclosure Schedule and
exhibits hereto, and not to any particular section, subsection, paragraph,
subparagraph or clause contained in this Agreement, (ii) masculine gender shall
also include the feminine and neutral genders, and vice versa, (iii) words
importing the singular shall also include the plural, and vice versa, (iv) the
words “include,” “includes” or “including” shall be deemed to be followed by the
words “without limitation”, (v) a term has the meaning assigned to it, (vi) “or”
is not exclusive, (vii) all references in this Agreement to designated
“Articles,” “Sections,” “paragraphs,” “clauses” and other subdivisions are to
the designated Articles, Sections, paragraphs, clauses and other subdivisions of
this Agreement unless otherwise specified, and (viii) any definition of or
reference to any agreement, instrument, document, statute or regulation herein
shall be construed as referring to such agreement, instrument, document, statute
or regulation in effect as of the date hereof.

 

Section 7.8 Annexes, Exhibits and Schedules. The Disclosure Schedule and all
annexes, exhibits and documents expressly incorporated into this Agreement are
hereby incorporated into this Agreement and made a part hereof as if set out in
full in this Agreement. The specification of any dollar amount in the
representations or warranties contained in this Agreement is not intended to
imply that such amounts, or higher or lower amounts or other items, are or are
not material, and no Party shall use the fact of the setting of such amounts in
any dispute or controversy as to whether any obligation, item or matter not
described herein or included in a Schedule is or is not material for purposes of
this Agreement. Any item of information, matter or document disclosed or
referenced in, or attached to, the Disclosure Schedule shall not (a) be used as
a basis for interpreting the terms “material” or other similar terms in this
Agreement or to establish a standard of materiality, (b) represent a
determination that such item or matter did not arise in the ordinary course of
business, (c) be deemed or interpreted to expand the scope of any Party’s
representations and warranties, obligations, covenants, conditions or agreements
contained herein, (d) constitute, or be deemed to constitute, an admission of
liability or obligation regarding such matter, (e) represent a determination
that the consummation of the transactions contemplated by this Agreement
requires the consent of any third party, (f) constitute, or be deemed to
constitute, an admission to any third party concerning such item or matter or
(g) constitute, or be deemed to constitute, an admission or indication by Seller
that such item meets any or all of the criteria set forth in this Agreement for
inclusion in the Disclosure Schedule. No disclosure in the Disclosure Schedule
relating to any possible breach or violation of any agreement or Law shall be
construed as an admission or indication that any such breach or violation exists
or has actually occurred.

 

15

 

 

Section 7.9 No Third Party Beneficiaries. This Agreement shall be binding upon
and inure solely to the benefit of each Party and its successors and permitted
assigns and, except as provided in the following sentence of this Section 7.9,
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other Person any legal or equitable rights, benefits or remedies of any
nature whatsoever under or by reason of this Agreement. Notwithstanding anything
to the contrary contained in this Agreement, if the transactions contemplated by
this Agreement are consummated, the Indemnitees shall be third party
beneficiaries of the provisions set forth in Article 6.

 

Section 7.10 Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not invalidate or render unenforceable such term or
provision in any other jurisdiction, and all other provisions of this Agreement
shall remain in full force and effect so long as the economic or legal substance
of the transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or unenforceable, the Parties shall negotiate in good faith
to modify this Agreement so as to effect the original intent of the Parties as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest extent possible.

 

Section 7.11 Limitation of Remedies. No breach of any representation, warranty
or covenant contained herein or in any certificate delivered pursuant to this
Agreement shall give rise to any right on the part of Buyer or Seller, after the
consummation of the transactions contemplated hereby, to rescind this Agreement
or any of the transactions contemplated hereby.

 

Section 7.12 No Recourse. Notwithstanding anything that may be expressed or
implied in this Agreement, Buyer agrees and acknowledges that no recourse under
this Agreement, any Ancillary Document, or any documents or instruments
delivered in connection with this Agreement or any Ancillary Document shall be
had against any current or future equity holder, partner, member, controlling
person, director, officer, employee, incorporator, manager, Representative or
Affiliate of Seller (or any Affiliate of any of the foregoing) (each, a
“Nonparty Affiliate”), whether by the enforcement of any assessment or by any
legal or equitable proceeding, or by virtue of any Law, it being expressly
agreed and acknowledged that no personal liability whatsoever shall attach to,
be imposed on or otherwise be incurred by any Nonparty Affiliate for any
obligation of Seller or Buyer, as applicable, under this Agreement, any
Ancillary Document, any documents or instruments delivered in connection with
this Agreement or any Ancillary Document, or any transaction contemplated by the
foregoing, for any claim based on, in respect of or by reason of such
obligations or their creation.

 

Section 7.13 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

 

(a) This Agreement shall be governed by and construed in accordance with the
State of New York and the laws of the United States, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdiction) that would cause the application of the Law
of any jurisdiction other than the State of New York.

 

16

 

 

(b) Any Action arising out of or based upon this Agreement, the Ancillary
Documents or the transactions contemplated hereby or thereby may be instituted
in any provincial or federal court in the State of New York, and each Party
irrevocably submits to the exclusive jurisdiction of such courts in any such
Action. Service of process, summons, notice or other document by mail to such
Party’s address set forth herein shall be effective service of process for any
Action brought in any such court. The Parties irrevocably and unconditionally
waive any objection to the laying of venue of any Action in such courts and
irrevocably waive and agree not to plead or claim in any such court that any
such Action brought in any such court has been brought in an inconvenient forum.

 

(c) Each Party acknowledges and agrees that any controversy which may arise
under this Agreement or the Ancillary Documents is likely to involve complicated
and difficult issues and, therefore, each such Party irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any Action arising out of or relating to this Agreement, the Ancillary Documents
or the transactions contemplated hereby or thereby. Each Party certifies and
acknowledges that (i) no Representative of any other Party has represented,
expressly or otherwise, that such other Party would not seek to enforce the
foregoing waiver in the event of a legal action, (ii) such Party has considered
the implications of this waiver, (iii) such Party makes this waiver voluntarily,
and (iv) such Party has been induced to enter into this Agreement by, among
other things, the mutual waivers and certifications in this Section 7.13(c).

 

Section 7.14 Service of Process. Each Party irrevocably consents to the service
of summons and complaint and any other process outside the territorial
jurisdiction of the courts referred to in Section 7.13 in any proceeding by
sending or delivering a copy of the process to the Party to be served at the
address of the Party and in the manner provided for the giving of notices in
Section 7.6 (except that email or facsimile shall not be permitted delivery
means pursuant to this Section 7.14). Nothing herein shall affect the right of
any Party to serve process in any other manner permitted by applicable Law.

 

Section 7.15 Specific Enforcement. Except as otherwise expressly provided
herein, any and all remedies provided herein will be deemed cumulative with and
not exclusive of any other remedy conferred hereby, or conferred by Law or
equity, upon such Party, and the exercise by a Party of any one remedy will not
preclude the exercise of any other remedy. The Parties agree that irreparable
damage for which monetary damages, even if available, would not be an adequate
remedy, would occur in the event that the Parties do not perform their
respective obligations under the provisions of this Agreement in accordance with
their specific terms or otherwise breach such provisions. Each of the Parties
agrees that it will not oppose the granting of an injunction, specific
performance and other equitable relief when expressly available pursuant to the
terms of this Agreement, and hereby waives (a) any defenses in any action for an
injunction, specific performance or other equitable relief, including the
defense that the other Parties have an adequate remedy at law or an award of
specific performance is not an appropriate remedy for any reason at law or
equity, and (b) any requirement under Law to post a bond, undertaking or other
security as a prerequisite to obtaining equitable relief.

 

Section 7.16 Counterparts; Delivery. This Agreement may be executed in multiple
original, PDF or facsimile counterparts, each of which shall be deemed an
original, and all of which taken together shall be considered one and the same
agreement. Each executed signature page to this Agreement and to each agreement
and certificate delivered by a Party pursuant to this Agreement may be delivered
by any of the methods described in Section 7.6, including via facsimile or
e-mail, provided that such delivery is effected in accordance with the notice
information provided for in Section 7.6. In the event that any signature to this
Agreement or any agreement or certificate delivered pursuant hereto, or any
amendment thereof, is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding
obligation of the Party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof. No Party shall raise the use of a
facsimile machine or e-mail delivery of a “.pdf” format data file to deliver any
such signature page or the fact that such signature was transmitted or
communicated through the use of a facsimile machine or e-mail delivery of a
“.pdf” format data file as a defense to the formation or enforceability of a
contract and each Party forever waives any such defense.

 

*           *           *

 

17

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Agreement
to be duly executed on its behalf as of the day and year first above written.

 

  SELLER       ELITE PHARMACEUTICALS, INC.         By: s/Nasrat Hakim   Name:
Nasrat Hakim   Title: CEO         BUYER       NOSTRUM LABORATORIES INC.        
By:   s/Ruben Valdez Jr January 16, 2020   Name: Ruben Valdez Jr   Title: Vice
President Business Development

 

 

[Signature page to Asset Purchase Agreement]

 

 

 

 

ANNEX A

 

DEFINITIONS

 

As used in this Agreement, the following terms, whether used in the singular or
plural, shall have the following meanings:

 

“Action” means any claim, action, cause of action, demand, lawsuit, arbitration,
inquiry, audit, notice of violation, proceeding, litigation, citation, summons,
subpoena or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, whether present or future, fixed or unascertained,
actual or contingent whether at law or in equity.

 

“Affiliate” means, with respect to any Person, any other Person who, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term “control” means (i) the
ownership of more than 50% of the voting securities or other voting interest of
any Person (including attribution from related parties) or (ii) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlled by” and “under
common control with” have meanings correlative thereto.

 

“Allocation Schedule” has the meaning set forth in Section 1.5.

 

“Agreement” has the meaning set forth in the preamble to this Agreement.

 

“Ancillary Documents” means the Confidentiality Agreement and each other
agreement, document, instrument and/or certificate contemplated by this
Agreement to be executed in connection with the transactions contemplated
hereby.

 

“ANDA” means an “abbreviated new drug application” as such term is used under
Section 505(j) of the FD&C Act, including all subsequent submissions,
supplements and amendments thereto.

 

“Assumed Liabilities” has the meaning set forth in Section 1.2.

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York are authorized or required by Law to close.

 

“Buyer” has the meaning set forth in the preamble to this Agreement.

 

“Buyer FDA Letter” means the transfer of ownership letter from Buyer to the FDA
as required by 21 CFR § 314.72, in a form mutually agreed between Seller and
Buyer, to effectuate the transfer of the Regulatory Approvals from Seller to
Buyer.

 

“Buyer Material Adverse Effect” means any change, development, circumstance,
effect, event or fact that is or would reasonably be expected to prevent,
materially delay or materially impair Buyer’s consummation of the transactions
contemplated by this Agreement.

 

“Buyer Indemnitee” has the meaning set forth in Section 6.2.

 

Annex A-1

 

 

“Closing” has the meaning set forth in Section 2.1(a).

 

“Closing Date” has the meaning set forth in Section 2.1(a).

 

“Confidentiality Agreement” means that certain Confidentiality Agreement, dated
as of February 20, 2019 by and between Seller and Buyer.

 

“Contract” means any agreement, contract, lease, instrument and other executory
commitment to which any Person is a party or to which any of the assets of such
Person are subject.

 

“Deductible” has the meaning set forth in Section 6.4(a).

 

“Direct Claim” has the meaning set forth in Section 6.5(c).

 

“Disclosure Schedule” means the disclosure schedule delivered by Seller
concurrently with the execution and delivery of this Agreement.

 

“Excluded Liabilities” has the meaning set forth in Section 1.3.

 

“FDA” means the United States Food and Drug Administration, or any successor
entity thereto.

 

“FD&C Act” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et
seq. as amended, and includes the rules and regulations promulgated thereunder.

 

“GAAP” means United States generally accepted accounting principles.

 

“Governing Documents” means the legal document(s) by which any Person (other
than an individual) establishes its legal existence or which govern its internal
affairs. For example, the “Governing Documents” of a corporation are its
certificate of incorporation and bylaws, the “Governing Documents” of a limited
partnership are its limited partnership agreement and certificate of limited
partnership and the “Governing Documents” of a limited liability company are its
operating agreement and certificate of formation.

 

“Governmental Authority” means any (i) nation, region, state, province, county,
city or other jurisdiction, (ii) federal, state, local, municipal, foreign or
other government or political subdivision thereof, (iii) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal),
whether foreign or domestic, or (iv) body exercising or entitled to exercise any
executive, judicial, legislative, regulatory, self-regulatory or taxing
authority or power of any nature, whether foreign or domestic, including any
arbitral tribunal.

 

“Indemnified Party” has the meaning set forth in Section 6.5.

 

“Indemnifying Party” has the meaning set forth in Section 6.5.

 

“Indemnitees” means both the Buyer Indemnitees and the Seller Indemnitees.

 

Annex A-2

 

 

“Knowledge of Buyer” and any derivations thereof means, as of the applicable
date, the actual knowledge (and shall in no event encompass constructive,
imputed or similar concepts of knowledge) of Nostrum Laboratories Inc. none of
whom shall have any personal liability or obligations regarding such knowledge.

 

“Knowledge of Seller” and any derivations thereof means, as of the applicable
date, the actual knowledge (and shall in no event encompass constructive,
imputed or similar concepts of knowledge).

 

“Law” means any code, law (including without limitation any principle of common
law), order, writ, ordinance, rule, regulation, statute or treaty of any
Governmental Authority having jurisdiction over the applicable Person(s), or
over any of their respective properties or businesses.

 

“Lien” means, with respect to any asset, any mortgage, pledge, security
interest, encumbrance, lien or charge in respect of such asset. For the
avoidance of doubt, the term “Lien” shall not be deemed to include any license
of Intellectual Property Rights.

 

“Loss” has the meaning set forth in Section 6.2.

 

“Manufacture” or “Manufacturing” means the planning, purchasing, manufacture,
processing, compounding, storage, filing, testing, sample retention, stability
testing, release and shipment of the Products.

 

“Material Adverse Effect” means an event, change, or effect which is materially
adverse to the Transferred Assets, taken as a whole; provided that for purposes
of the foregoing, none of the following shall be deemed in itself, either alone
or in combination, to constitute a “Material Adverse Effect”, and shall not be
taken into account in determining whether a “Material Adverse Effect” has
occurred or would be expected to occur (i) conditions affecting the U.S. economy
generally, (ii) any adverse change, development, circumstance, effect, event or
fact (including any change in general legal, regulatory, political, economic or
business conditions) that is generally applicable to the industries or markets
in which the Seller operates, (iii) changes in any Law or other binding
directives issued by any Governmental Authority, (iv) any action taken by Seller
with the written consent of Buyer, (v) the negotiation, execution, announcement
or pendency of this Agreement and the transactions contemplated hereby,
including any impact thereof on relationships, contractual or otherwise, with
any customers, suppliers, distributors, partners or employees, or (vi) the
taking of any action contemplated by this Agreement, the Ancillary Documents or
the other agreements contemplated hereby, including compliance with the terms
hereof and thereof and the completion of the transactions contemplated hereby
and thereby.

 

“Nonparty Affiliate” has the meaning set forth in Section 7.12.

 

“Parties” and “Party” have the meaning set forth in the preamble to this
Agreement.

 

“Permitted Liens” means Liens for utilities, assessments, Taxes or other
governmental charges that are not yet delinquent or are being contested in good
faith.

 

Annex A-3

 

 

“Person” means an individual, partnership, corporation, limited liability
company, joint stock company, unincorporated organization or association, trust,
joint venture, association or other similar entity, whether or not a legal
entity, and any Governmental Authority.

 

“Product Technology” means the following information owned by or licensed to
Seller, as in existence and in the possession or control of Seller as of the
Closing Date: the manufacturing technology, proprietary or confidential
information, processes, techniques, protocols, methods, know-how and
improvements that are necessary or used to manufacture the Products in
accordance with the ANDAs, including the manufacturing process approved in the
ANDA (if any), specifications and test methods, raw material, packaging,
stability and other applicable specifications, manufacturing and packaging
instructions, master formula, validation reports to the extent available,
stability data, analytical methods, records of complaints, annual product
reviews to the extent available, and other master documents necessary or used
for the manufacture, control and release of the Product as conducted by, or on
behalf of Seller or any of its Affiliates. The Product Technology includes the
rights owned or controlled by Seller, including any sublicenseable license,
under any patent issued in or subject to a pending application, including any
continuing applications filed or that could be filed with similar priority
claims as of the Closing Date.

 

“Products” means the generic pharmaceutical products listed in Annex B.

 

“Purchase Price” has the meaning set forth in Section 1.4.

 

“Regulatory Approvals” means the ANDAs for each of the Products as set forth on
Annex B.

 

“Regulatory Documentation” means the following to the extent exclusively related
to the Products, owned and maintained by or on behalf of Seller or otherwise in
the possession of Seller as of the Closing Date (i) the ANDAs (including all
amendments, supplements, and FDA correspondence related to such ANDAs), batch
records and annual product reviews relevant to the Products, (ii) all
correspondence reported to, or received from, the FDA related to a recall of any
Product, and (iii) all adverse drug experience reports submitted to the FDA for
any Product.

 

“Representatives” means, with respect to a Person, such Person’s directors,
officers, employees, accountants, consultants, legal counsel, investment
bankers, advisors, financing sources, and agents and other representatives.

 

“Seller” has the meaning set forth in the preamble to this Agreement.

 

“Seller FDA Letter” means the transfer of ownership letter from Seller to the
FDA as required by 21 CFR § 314.72, in a form mutually agreed between Seller and
Buyer, to effectuate the transfer of the Regulatory Approvals from Seller to
Buyer.

 

“Seller Indemnitee” has the meaning set forth in Section 6.3.

 

“Tax” means any federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add on minimum, sales, use, transfer,
real property gains, registration, value added, excise, natural resources,
severance, stamp, occupation, windfall profits, environmental, customs, duties,
real property, personal property, capital stock, social security (or similar),
unemployment, disability, payroll, license, employee or other withholding, or
other tax, of any kind whatsoever and any interest, penalties or additions
attributable to any of the foregoing (whether disputed or not).

 

“Tax Benefit” has the meaning set forth in Section 6.4(c).

 

“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including schedules and
attachments thereto, and including any amendment thereof.

 

“Third Party Claim” has the meaning set forth in Section 6.5(a).

 

“Transferred Assets” has the meaning set forth in Section 1.1.

 

Annex A-4

 

 

ANNEX B

 

PRODUCTS / ALLOCATION SCHEDULE

 

Product Name   Dosage Form; Strength(s)   ANDA No.           Hydromorphone HCL
Oral Tablet   8 mg   ANDA # 076723

 

 

Annex B-1