Redacted Version

 

Exhibit 10.17

 

MANUFACTURING AND LICENSE AGREEMENT

 

Between

 

Elite Pharmaceuticals, Inc.

 

and

 

Epic Pharma LLC

 

 

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

 

 

 

MANUFACTURING AND LICENSE AGREEMENT

 

This License Agreement (“Agreement”) is entered into as of the 1st day of
October, 2013 by and between EPIC PHARMA LLC, a Delaware limited liability
company (“EPIC”), and ELITE PHARMACEUTICALS, INC., a Nevada corporation and
ELITE LABORATORIES, INC. (a subsidiary of Elite Pharmaceuticals, Inc.), a
Delaware corporation (collectively, “ELITE”).

 

WHEREAS, ELITE has ownership rights to products/ANDAs specified on Schedule A
(the “Exclusive Products”) and Schedule D (the “Non-Exclusive Products”),
together (the “Products”) as of October 1, 2013, and EPIC wishes to license from
ELITE the right to manufacture, market and sell the Products on the terms and
conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto agree as follows:

  

 

GRANT OF LICENSE

 

Article 1

 

1.1              Exclusive Product License. ELITE hereby grants to EPIC a
license (“License” or “Licensing Rights”) without the right to further
sublicense, to manufacture, market and sell the Exclusive Products as listed in
Schedule A in the United States, including the right to reference the ANDA
Number, where appropriate, for approval to market the Products in the United
States.

 

1.2              Non-Exclusive Products License. ELITE hereby grants to EPIC a
non-exclusive license (“Non-Exclusive License” or “Non-Exclusive Licensing
Rights”) without the right to further sublicense, to manufacture, market and
sell the Non-Exclusive Products as listed in Schedule D in the United States,
including the right to reference the ANDA Number, where appropriate, for
approval to market the Non-Exclusive Products in the United States. ELITE shall
be the only other company allowed to manufacture, market and sell the
Non-Exclusive Products and ELITE shall only sell to clinics. EPIC shall not
share in any profits from Non-Exclusive Products sold by ELITE.

 

1.3              Marketing Rights. ELITE hereby grants to EPIC exclusive
marketing rights (“Marketing Rights”) to market and sell the Products in the
United States, and Puerto Rico). ELITE agrees that it shall not (and it shall
not authorize, permit or suffer any of its affiliates to), directly or
indirectly, sell or distribute a Product in United States at any time during the
term of this agreement unless specifically authorized or excluded under the
terms of this Agreement

 

1.4              Trademarks. EPIC agrees and acknowledges that it shall not
acquire by virtue of this Agreement any interest in any trademarks or trade
names of ELITE.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

2

 

 

1.5              Manufacturing. ELITE hereby grants to EPIC rights to
manufacture the Products for marketing and sales of the Products by EPIC in the
United States and Puerto Rico.

 

1.6              Regulatory and Pharmacovigilance. EPIC shall be responsible for
all regulatory and pharmacovigilance matters related to these Products.

 

1.7              Licensed Trade Secrets. The information exchanged between ELITE
and EPIC pursuant to this Agreement is expressly subject to the Mutual
Confidentiality and Non-Disclosure Agreement entered into by the parties and
dated October 8, 2008 (the “Confidentiality Agreement”) and whose term is hereby
made coterminous with this Agreement.

 

1.8              Improvements. Any new information, developments, or
improvements relating to the Products subject to this Agreement, and any patent
or copyright rights arising from or related thereto (collectively,
“Improvements”) will be owned solely by ELITE but shall be automatically
included in the License, and if EPIC develops an Improvement that may be used
beyond the Products which are the subject of this Agreement, then ELITE does now
automatically grant a worldwide, non-exclusive, irrevocable, royalty-free right
for EPIC to use the Improvement.

 

1.9              Quality Agreement. In conjunction with the execution of this
Agreement, the parties shall execute a Quality Agreement.

 

1.10            Site Transfer. EPIC shall be responsible for all costs related
to the site transfer for all Products.

 

 

COMPENSATION

 

2.1.             License Fee, Milestone, and Transfer Cost Payments. In return
for the Licensing Rights described in this Agreement, EPIC shall pay to ELITE
the milestone payments (“Milestone Payments”) and a license fee (“License Fee”)
compensation specified in Schedule B. If ELITE manufactures any product for sale
by EPIC, then the transfer cost for the Product shall be ${***} per 1000 units
in any configuration required by marketing plus the cost of the API at cost (as
documented by invoices for the API)

 

2.2.             Records. EPIC shall keep complete and accurate records of all
manufacture and sales of the Products and the calculation of product costs, net
sales and gross profit of the Products. EPIC shall also provide a detailed
summary of the Cost of Goods for each product on Schedule A. ELITE shall have
the right, at ELITE’s expense and after thirty (30) days’ prior written notice
to EPIC, through an independent certified public accountant, on a mutually
agreeable date, to examine such records at any time within one (1) year after
the due date of the License Fee payments to which such records relate, during
regular business hours, during the life of this Agreement and for twelve (12)
months after expiration of the last production lot of Product sold by EPIC, in
order to verify the accuracy of the reports to be made under this Agreement. If
the accountant determines that EPIC has under-compensated ELITE, the findings
shall be shared with EPIC. If EPIC agrees that EPIC has not paid ELITE all of
the compensation ELITE was entitled to receive, or it is later determined that
EPIC did not pay all of the compensation due to ELITE, then EPIC shall pay the
proper amount of compensation and all costs and expenses incurred by ELITE to
hire the accountant and all of the accountant’s expenses, and all legal
expenses, to obtain the appropriate compensation. If EPIC disputes in good faith
the accuracy of the results of such examination, the parties will retain a
second independent certified public accountant whose examination will be binding
upon both parties. The losing party will pay all of the expenses of both
independent certified public accountant examinations.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

3

 

 

2.3.             Reports. EPIC will provide Reports as stipulated in Schedule B.

 

2.4.             Payments by EPIC.

 

(a)All Milestone Payments will be made by check and mailed to ELITE within ten
(10) days after the payment becomes due.

 

(b)The License Fee shall be paid to ELITE in monthly payments based upon the
previous month’s Products that EPIC shipped to its customers. All License Fee
payments shall be made by check and mailed to ELITE within thirty (30) days
after the end of each calendar month. A copy of the Report for the prior month
will accompany the check.

 

(c)A late fee of 1% per month will be accrued for all payments which EPIC fails
to pay when due.

 

 

TERM AND TERMINATION

 

3.1.             Term. This Agreement shall become effective as of the date
hereof and shall continue until five (5) years from such date (the “Initial
Term”), unless terminated earlier by mutual agreement of the parties or by one
of the parties in accordance with this Article 3; provided further that the
parties shall have the option, by mutual agreement, to extend the Initial Term
of this Agreement for an additional five (5) years (a “Renewal Term” and
collectively with the Initial Term, the “Term”) by the parties exchanging
written notice of such election not less than six (6) months prior to the
expiration of the Initial Term.

 

3.2.             Modification for Lack of Licensing Fees and Minimum Unit
Volumes.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

4

 

 

(a)EPIC hereby agrees to exert commercially reasonable efforts and shall devote
the same efforts to marketing the Products that EPIC exerts for its other major
pharmaceutical products being marketed in the United States.

 

(b)If after twelve (12) months of a Product’s launch, the Gross Profit declines
for any Product to the point that the License Fee paid to ELITE is less than
${***} for a six (6) month period for that Product, then ELITE may terminate the
Marketing Rights granted hereunder to EPIC as it relates to that individual
Product. If ELITE desires to terminate the Marketing Rights granted hereunder,
then ELITE shall give EPIC ninety (90) days written notice that it will no
longer have the Marketing Rights to sell the particular Product.

 

If EPIC’s unit volume sales of an API specific group of Products (“ Product
Group”), (initially defined as Isradipine, Dantrolene, or Loxapine Product
Groups), does not meet its minimum annual unit volume forecast for that Product
Group in the initial launch year, or does not meet its subsequent minimum annual
unit volume forecast (as defined in Schedule C) for a Product Group, then EPIC
shall have the following six (6) months to achieve one-half of the prior year’s
minimum annual unit volume forecast and if EPIC still fails to meet such volume
minimum during the six months described, then EPIC shall lose its Marketing
Rights of such Product Group.

 

3.3.             Termination by Mutual Agreement. The parties may terminate this
Agreement any time by mutual written agreement.

 

3.4.             Termination by Breach. Upon the breach or default in the
performance or observance of any of the material provisions of this Agreement by
either Party, when such breach or default is not cured by the responsible Party
within sixty (60) days after written notice by the other Party, the other Party
may terminate this Agreement upon an additional thirty (30) days written notice
to the other Party. Termination will be without prejudice to either Party to
recover any and all damages to which it may be entitled, or to exercise any
other remedies.

 

3.5.             Termination by ELITE Upon Bankruptcy or Reorganization of EPIC.
If EPIC enters into any proceeding (whether voluntary or otherwise) in
bankruptcy, reorganization or arrangement for the appointment of a receiver or
trustee to take possession of its assets, or any other proceeding under any law
for the relief of creditors or makes an arrangement for the benefit of its
creditors, and remains in such proceeding for 30 days, then ELITE shall retain
its rights to the Products and may terminate this Agreement without further
payment to EPIC.

 

3.6.             Licensing Rights upon Termination. Except as otherwise provided
in this Agreement, upon termination of this Agreement: all rights, privileges,
and licenses will terminate and revert to ELITE, and EPIC must not thereafter
make any use whatsoever of any trade secrets, except that it is agreed that upon
termination notwithstanding any other terms of this Agreement, EPIC may retain
one archival copy to have sufficient information solely to respond to state and
federal regulatory inquiries regarding the Products.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

5

 

 

3.7.             Accrued Rights. Expiration or termination of this Agreement
shall be without prejudice to the right of either Party to receive all payments
accrued and unpaid at the effective date of such expiration or termination,
without prejudice to the remedy of either Party in respect to any previous
breach of the representations, warranties or covenants herein contained, without
prejudice to any rights to indemnification set forth herein and without
prejudice to any other provision hereof which expressly or necessarily calls for
performance after such expiration or termination. EPIC expressly retains the
right to sell Product on-hand after termination of this Agreement and shall
remain bound to pay ELITE the Licensing Fee as provided in this Agreement.

 

3.8.             Transition. If this Agreement is terminated for any reason or
if EPIC loses its Marketing Rights for any or all Products, or if EPIC stops
selling for any reasons, EPIC then shall be required to contract manufacture at
cost plus {***}% for a three (3) year period from the date the termination
occurs or the date the selling ends whichever comes first.

  

                       
REPRESENTATIONS, WARRANTIES AND COMPETITION, COOPERATION UPON BANKRUPTCY OF
ELITE

 

4.1.           EPIC Representations. EPIC hereby represents and warrants to
ELITE that (a) it has obtained all necessary licenses, authorizations and
approvals required by applicable Law, including those required by the FDA, DEA
or any other applicable regulatory agency to enter into this Agreement and
perform its obligations hereunder; (b) the execution, delivery and performance
of this Agreement by EPIC does not conflict with or constitute a breach of any
order, judgment, agreement, or instrument to which it is a party; (c) the
execution, delivery and performance of this Agreement by EPIC does not require
the consent of any person; and (d) none of its officers or directors has ever
been convicted of a felony under the laws of the United States for conduct
relating to the development or approval of a drug product or relating to the
marketing or sale of a drug product

 

4.2.           ELITE Representations. ELITE hereby represents and warrants to
EPIC that (a) it has obtained all necessary licenses, authorizations and
approvals required by applicable Law, including those required by the FDA, DEA
or any other applicable regulatory agency to enter into this Agreement and
perform its obligations hereunder; (b) the execution, delivery and performance
of this Agreement by ELITE does not conflict with or constitute a breach of any
order, judgment, agreement, or instrument to which it is a party; (c) the
execution, delivery and performance of this Agreement by ELITE does not require
the consent of any person; and (d) none of its officers or directors has ever
been convicted of a felony under the laws of the United States for conduct
relating to the development or approval of a drug product or relating to the
marketing or sale of a drug product.

 

4.3.           Non-competition by EPIC. EPIC hereby covenants and agrees that
without the prior written consent of ELITE during the Term of this Agreement,
and for 1 year after the last shipment of Product by EPIC if the agreement is
terminated due to breach of the Agreement by EPIC, EPIC will not directly or
indirectly market any of the Products Licensed to EPIC by ELITE pursuant to this
Agreement. This section is not intended to prohibit EPIC from marketing and
selling a product which addresses the same therapeutic indication as a Product,
as long as that other product does not contain the same API as the Product(s) in
this Agreement.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

6

 

 

4.4.           Cooperation Upon Bankruptcy Event of ELITE. ELITE shall use, and
cause its representatives and affiliates to use, best efforts to make all
necessary arrangements and take all required actions to permit EPIC to retain
all rights licensed hereunder with respect to the Products in the event that
ELITE (i) is dissolved or liquidated, (ii) commences a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law, (iii)
is subject to an involuntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to ELITE and an order for relief
entered or such proceeding has not be dismissed or discharged within sixty (60)
days of commencement, (v) has made an assignment for the benefit of creditors,
or (vi) otherwise ceases to conduct business during the Term (each, an
“Extraordinary Event”).

  

 

INDEMNIFICATION AND INSURANCE

 

5.1.             ELITE Indemnity. Subject to Sections 5.2 and 5.4, ELITE shall
indemnify and hold harmless EPIC and its Affiliates against all third party
claims, actions, costs, expenses, including court costs and legal fees or other
third party liabilities ("Third Party Liabilities") whatsoever in respect of:

 

(a)any breach of any representation, warranty, covenant or similar promise made
under this Agreement or arising out of this Agreement;

 

(b)any negligence or willful misconduct by ELITE and/or any of its employees;
and

 

(c)any product liability in connection with the Products caused by ELITE or any
third party acting on behalf of ELITE or its Affiliates;

 

5.2.              EPIC Indemnity. Subject to Sections 5.1 and 5.4, EPIC shall
indemnify and hold harmless ELITE and its Affiliates against all Third Party
Liabilities whatsoever in respect of:

 

(a)EPIC’s and/or it Affiliates’, subcontractors’ or suppliers’ failure to comply
with the Product Specifications, cGMP or applicable Laws;

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

7

 

 

(b)the use, marketing, storage, distribution, handling or sale of the Product
after the Effective Date by EPIC or any third party, other than a third party
acting on behalf of ELITE or its Affiliates;

 

(c)any product liability in connection with the Products caused by EPIC or any
third party acting on behalf of EPIC or its Affiliates;

 

(d)for any Product that is recalled or withdrawn from the market by reason of
EPIC’s breach of any warranty or other covenant under this Agreement or any
other agreement with ELITE, ELITE will be entitled to reimbursement of all costs
associated with a recall or withdrawal, including reasonable costs associated
with compliance with the recall or withdrawal (including penalties).

 

(e)any liabilities arising out of the presence or actions of a EPIC employee at
EPIC’s manufacturing and packaging facilities pursuant to this Agreement; and

 

(f)any negligent or wrongful act by EPIC and any breach by EPIC of any
representation or warranty, covenant or similar promise made under this
Agreement or arising out of this Agreement.

 

5.3.             Procedures for Indemnification. In the event that a party (the
"Indemnified Party") is seeking indemnification under Sections 5.1 or 5.2, the
Indemnified Party shall inform the other party (the "Indemnifying Party") of a
claim as soon as reasonably practicable after the Indemnified Party receives
notice of the claim, shall permit the Indemnifying Party to assume direction and
control of the defense of the claim, and shall cooperate as requested by the
Indemnifying Party (at the expense of the Indemnifying Party) in the defense of
the claim; provided, however, if the defendants in any such action include both
the Indemnified Party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that a conflict may arise between the positions of the
Indemnifying Party and the Indemnified Party in conducting the defense of any
such action or that there may be legal defenses available to it that are
different from or additional to those available to the Indemnifying Party, the
Indemnified Party shall have the right to select separate counsel to assume such
legal defenses and to otherwise participate in the defense of such action or on
behalf of the Indemnified Party. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, settle or compromise or consent to the
entry of judgment with respect to any pending or threatened action or claim
whatsoever, in respect of which indemnification could be sought under Sections
6.1 or 6.2 (whether or not the Indemnified Party is an actual or potential party
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of the Indemnified Party in form and substance reasonably
satisfactory to the Indemnified Party from all liability arising out of such
action or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of the Indemnified Party.
The Indemnifying Party shall not be liable for settlement of any pending or
threatened action or any claim whatsoever that is effected without its written
consent (which consent shall not be unreasonably withheld or delayed).

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

8

 

 

5.4.             Mitigation. In the event of any occurrence which may result in
either party becoming liable under Section 5.1 or Section 5.2, each party shall
use its best efforts to take such actions as may be reasonably necessary to
mitigate the damages payable by the other party under Section 5.1 or Section
5.2, as the case may be.

 

5.5.             Limitation of Liability. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL ANY PARTY, ITS DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTIES FOR ANY CLAIMS
RELATED TO LOST PROFITS AND GOODWILL, WHETHER BASED UPON A CLAIM OR ACTION OF
CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE,
ARISING OUT OF THIS AGREEMENT.

 

5.6.             Insurance. Each party shall maintain commercial general
liability insurance through the term of this Agreement upon launch of the first
Product, which insurance shall afford limits of not less than $5,000,000 for
each occurrence for personal injury or property damage liability. Furthermore,
each party shall maintain product liability insurance, through the term of this
Agreement upon launch of the first Product and for a period of three (3) years
thereafter, which insurance shall afford limits of not less than $5,000,000 in
the aggregate per annum with respect to product and completed operations
liability. This insurance shall be written to cover claims incurred, discovered,
manifested, or made during or after the expiration of this Agreement. Each party
shall provide the other with a certificate of insurance evidencing the above and
showing the name of the issuing company, the policy number, the effective date,
the expiration date and the limits of liability. The insurance certificate shall
further provide for a minimum of thirty (30) days' written notice to the insured
of a cancellation of, or material change in, the insurance. If a party is unable
to maintain the insurance policies required under this Agreement through no
fault on the part of such party, then such party shall forthwith notify the
other party in writing and the parties shall in good faith negotiate appropriate
amendments to the insurance provision of this Agreement in order to provide
adequate assurances. In the event that either a customer or an insurer of either
party requires such party to increase its insurance limits above the $5,000,000
described above for any policy, then the other party to this Agreement must also
match the required insurance increase, so that the parties to this Agreement are
carrying the same insurance policy limits. It is the express intention of the
parties that the parties shall endeavor to avoid insurance policy limits above
$10,000,000.

 

  

MISCELLANEOUS

 

6.1.             Waiver; Remedies and Amendment. Any waiver by any party hereto
of a breach of any provisions of this Agreement will not be implied and will not
be valid unless such waiver is recited in writing and signed by such party.
Failure of any party to require, in one or more instances, performance by the
other party or parties in strict accordance with the terms and conditions of
this Agreement will not be deemed a waiver or relinquishment of the future
performance of any such terms or conditions or of any other terms and conditions
of this Agreement. A waiver by any party of any term or condition of this
Agreement, including this Section 5.1, shall be valid only if in writing and
will not be deemed or construed to be a waiver of such term or condition for any
other term. All rights, remedies, undertakings, obligations and agreements
contained in this Agreement will be cumulative and none of them will be a
limitation of any other remedy, right, undertaking, obligation or agreement of
any party. This Agreement may not be amended except in a writing signed by all
parties.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

9

 

 

6.2.             Affiliates, Assignment, No Inconsistent Agreements. EPIC may
not assign its rights and obligations hereunder without the prior written
consent of ELITE. Neither EPIC nor ELITE will enter into any agreement that is
inconsistent with its obligations hereunder.

 

6.3.             Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed will be deemed to be an original
and all of which when taken together will constitute this Agreement.

 

6.4.             Governing Law; Dispute Resolution; Venue. This Agreement will
be governed by and construed in accordance with the laws of the state of New
York without regard to conflict of law or choice of law rules. Any controversy
or claim pursuant to this Agreement or the breach thereof shall be referred for
decision forthwith to a senior executive of each Party not directly involved in
the dispute. If no agreement is reached within thirty (30) days of the request
by one Party to the other to refer the same to such senior executive, then such
controversy or claim shall be settled by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association; such
arbitration to be held in Rockford, Illinois on an expedited basis. Judgment
upon the award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.

 

6.5.             Headings. The headings set forth at the beginning of the
various sections of this Agreement are for convenience and form no part of the
Agreement between the parties.

 

6.6.             Notices. All notices, requests, instructions, consents and
other communications to be given pursuant to this Agreement shall be in writing
and shall be deemed received (a) on the same day if delivered in person, by
same-day courier or by facsimile, electronic mail or other electronic
transmission, (b) on the next day if delivered by overnight mail or courier, or
(c) on the date indicated on the return receipt, or if there is no such receipt,
on the third calendar day (excluding Sundays) if delivered by certified or
registered mail, postage prepaid, to the party for whom intended to the
following addresses:

 

If to EPIC:  

EPIC

22715 North Conduit Avenue

Laurelton, NY 11413

Attn: President

 

      If to ELITE:  

ELITE PHARMACEUTICALS, Inc.

165 Ludlow Avenue

Northvale, New Jersey 07647

Attention: President and CEO

 

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

10

 

 

6.7 Notice. Each party may by written notice given to the other in accordance
with this Agreement change the address to which notices to such party are to be
delivered.

 

6.8 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid or unenforceable, it will be modified, if
possible, to the minimum extent necessary to make it valid and enforceable or,
if such modification is not possible, it will be stricken and the remaining
provisions will remain in full force and effect.

 

6.9 Survival. The rights and obligations which accrue to a party during the term
of this agreement shall survive the termination of this Agreement.

 

6.10 Force Majeure. No party to this Agreement will be liable for failure or
delay in the performance of any of its obligations hereunder, if such failure or
delay is due to causes beyond its reasonable control including, without
limitation, acts of God, earthquakes, fires, strikes, acts of war, or
intervention of any governmental authority, but any such delay or failure will
be remedied by such party as soon as possible after the removal of the cause of
such failure or delay.

 

6.11 Entire Understanding. This Agreement, including the schedules attached
hereto, contains the entire understanding relative to the matters addressed
herein, and supersedes all prior and collateral communications, reports, and
understandings, if any, between the parties regarding the matters addressed
herein.

 

6.12 Drafting. The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

 

6.13 Not a Joint Venture. This Agreement does not constitute or create (and the
Parties do not intend to create hereby) a joint venture, pooling arrangement,
Partnership, or formal business organization of any kind between and among any
of the Parties, and the rights and obligations of the Parties shall be only
those expressly set forth herein. The relationship hereby established between
EPIC and ELITE is solely that of licensee and licensor, each is an independent
contractor engaged in the operation of its own respective business. Neither
Party shall be considered to be an agent of the other for any purpose
whatsoever. Each Party shall be responsible for providing its own personnel and
workers compensation, medical coverage or similar benefits and shall be solely
responsible for the payment of social security benefits, unemployment insurance,
pension benefits, withholding any required amounts for income and other
employment-related taxes and benefits of its own employees, and shall make its
own arrangements for injury, illness or other insurance coverage to protect
itself, its Affiliates, its subcontractors and personnel from any damages, loss
and/or liability arising out of the performance of this Agreement. Neither Party
has the power or authority to act for, represent or bind the other (or its
Affiliates) in any manner.

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

11

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
set forth above.

 

 

 

ELITE PHARMACEUTICALS, INC. EPIC PHARMA LLC             By:          s/ Nasrat
Hakim                                     By:            s/ Jeenarine
Narine                           

 

Name: Nasrat Hakim

 

Name: Jeenarine Narine

 

Title: CEO and President

 

Title: President

    Date: __October 2, 2013_________________ Date: ___October 2,
2013________________

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

12

 

 

Redacted Version

 

SCHEDULE A

 

Exclusive Product List

 

 

 

 

 

Name ANDA # {***} {***} {***} {***} {***} {***} {***} {***} {***} {***} {***}
{***}

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

  

13

 

 

Redacted Version

 

SCHEDULE B

 

Compensation for Licensing Rights

 

Milestone Payments

 

EPIC shall pay to ELITE Milestone Payments totaling ${***}, according to the
following schedule:

 

·${***} shall be due to ELITE upon signing of this License Agreement and shall
be paid no later than November 15th, 2013.

·${***} shall be paid to ELITE upon filing for each Product’s supplement with
FDA as listed below:

 

·{***}

·{***}

·{***}

 

·${***} shall be paid to ELITE five business days after FDA’s approval of the
site transfer or first product launch and/or shipment whichever comes first:

 

§{***}

§{***}

§{***}

 

License Fee

 

EPIC will pay to ELITE a License Fee that is a percentage of the product gross
profit (“Product Gross Profit”) of EPIC, as defined below, generated on Products
sold and shipped to its customers by EPIC according to the following schedule:

 

·{***}% of Product Gross Profit

 

Product Gross Profit is defined as:

 

Net Sales – Cost of Sale - Cost of Goods = Product Gross Profit.

 

§Net Sales is defined as: Net Invoice Price less the following: Charge backs,
Buying Groups/Wholesaler Administrative Fees/Rebates, Allowances, Medicaid and
Returns.

 

§Cost of Sales is defined as 3% of Net Sales

 

§Cost of Goods is defined as ${***} per 1000 units in any configuration required
by marketing plus the cost of the API at cost (as documented by invoices for the
API).

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

14

 

 

EPIC shall also provide a detailed summary of the Cost of Goods for each product
on Schedule B that shall be calculated based on GAAP.

 

The calculation of Product Gross Profit and the Licensing Fee shall be performed
by Epic and presented to Elite as a report (“Report”) which shall include the
following information:

 

 

 

 

 

REPORT ITEMS

 

 

 

 

 

      Gross Invoice Sales   Total Sales for Month Cash Discount   Cash Discount
      Net Invoice Sales   Total Sales - Cash Discount       Deductions  
Allowances (including; Medicaid rebate; state program rebates)  price
adjustments; returns; charge backs. Net Sales   Net Invoice Sales – Deductions

 

Cost of Sales

 

 

3% of Net Sales

 

 

Cost of Goods

  Total Units x Unit Cost             Gross Profit   Net Sales less Cost of
Goods Margin %   Margin Percentage (Gross Profit divided by Gross Invoice Sales)
      Amount Due   Gross Profit $ x {***}%                  

 

Whenever possible, the Report will be made using actual sales, charge backs,
administrative fees/rebates, price adjustments, and returns; however, in some
cases estimated numbers may be required because of timing of CBs, fees, returns,
etc. A true up Report will be completed and presented to ELITE within 60 days
after the end of each calendar year.

  

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

15

 

 

SCHEDULE C

 

Minimum Annual Unit Forecast for Each Product Group

 

 

      Year 1        Year 2         Year 3        Year 4         Year 5 (Percent
of Market)           {***}           {***}           {***}          

 

16

 

 

SCHEDULE D

 

Non-Exclusive Product List

 

 

Name ANDA # {***} {***} {***} {***} {***} {***} {***} {***} {***} {***} {***}
{***}

 

{***} Confidential portions of this exhibit have been redacted and filed
separately with the Commission pursuant to a confidential treatment request in
accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Confidential

 

17