Exhibit 10.54

 

EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

 

FIRST AMENDMENT TO

 

THE LICENSE, SUPPLY AND DISTRIBUTION AGREEMENT BETWEEN ELITE

PHARMACEUTICALS, INC./ELITE LABORATORIES, INC. AND LANNETT COMPANY, INC.

 

This Amendment, dated as of July 29, 2019 (the “Amendment”), by and between
Elite Pharmaceuticals, Inc., a Nevada corporation and Elite Laboratories, Inc.,
a Delaware corporation with offices at 165 Ludlow Avenue, Northvale, New Jersey
07647 (collectively “Elite”) and Lannett Company, Inc., a Delaware corporation
located at 9000 State Road, Philadelphia, PA 19136 and/or its Affiliates
(“Lannett”) (and together the “Parties”) relating to that License, Supply and
Distribution Agreement between the Parties dated March 6, 2019 (the
“Agreement”);

 

WHEREAS Lannett and Elite desire to amend the Agreement on the terms and subject
to the conditions contained herein, and

 

WHEREAS, capitalized terms used herein and not otherwise defined shall have the
meaning assigned to such terms in the Agreement.

 

NOW, THEREFORE in consideration of the mutual covenants and agreements contained
herein, the sufficiency, adequacy and satisfaction of which are hereby
acknowledged, Lannett and Elite hereby agree as follows:

 

1.Section 1.1 (v) shall be replaced in its entirety with the new Section 1.1 (v)
below:

 

v. “Net Profits” is calculated as listed in Schedule C and means the Net Sales
of a Product minus the sum of (i) the Distribution Fee, (ii) Transfer Price of
Product and (iii) shipping costs from the Facility:

 

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EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

 

2.Section 3.3 shall be replaced in its entirety with new Section 3.3 below:

 

a.License Fees. Throughout the Initial Term and Renewal Term, LANNETT shall pay
to ELITE *** percent (***%) of the Net Profits received from sales of each
Product within forty-five (45) days of the end of each calendar quarter
(“License Fees”). Such payment shall additionally include a sales summary for
each Product, generally in the format as provided in Schedule C. In no case
shall the License Fees for any calendar quarter be negative; provided, however,
in the event of a loss in any calendar quarter, subject to ELITE’s written
approval of any Product pricing by LANNETT that leads to quarterly losses and
subject to the loss carryover clause that follows, the amount of that loss shall
be carried forward to subsequent calendar quarters until the amount of such loss
has been fully absorbed. In the event that Net Profits for calendar quarter are
negative, LANNETT shall carry over *** percent (***%) of the value by which the
Net Profits are negative in such calendar quarter and deduct this amount from
the calculation of Net Sales for the following calendar quarter. If Net Profits
are negative in two (2) or more consecutive calendar quarters, LANNETT shall
invoice ELITE for *** percent (***%) of the value by which the Net Profits are
negative for the previous calendar quarter and carry over *** percent (***%) of
the value by which Net Profits are negative for the current calendar quarter and
deduct this amount from the calculation of Net Sales for the following calendar
quarter. For the avoidance of doubt, if Net Profits are negative in subsequent
calendar quarters, the amounts will be similarly carried over or reimbursed as
per the terms set forth in this Section 3.3 until Net Profits are positive.
Reimbursement of negative Net Profits owed by ELITE in this Section 3.3 shall be
payable to LANNETT within forty-five (45) days after receipt of an invoice from
LANNETT.

 

3.The Title Page for the Schedules that follows the signatures and precedes the
schedules shall be replaced in its entirety with the new titles listed below:

 

Schedule A: Products

 

Schedule B: Product Specifications

 

Schedule C: Quarterly Report for Calculation of Net Profit

 

Schedule D: Shipping Instructions

 

4.Schedule C of the Agreement shall be replaced in its entirety with new
Schedule C below:

 

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EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

 

Schedule C

 

Quarterly Report for Calculation of NET Profit

 

Product Name:________________________________________________________

 

Quantity sold by SKU XXXX units Gross Sales $ Deductions:   Chargebacks  
Rebates   ADministrative Fees   Billbacks   Returns   Shelf Stock Adjustments  
Other deductions   Cash Discounts   Medicaid   NET SALES $ Transfer Price  
DIstribution FEES   Shipping COsts   NET PROFIT   Profit share Payment to ELITe
at THE APPLICABLE LICENSE FEE PERCENTAGE SET FORTH IN SECTION 3.3  

 

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EXPLANATORY NOTE: [***] INDICATES THE PORTION OF THIS EXHIBIT

THAT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND

(II) WOULD BE COMPETITIVELY HARMFUL IN PUBLICLY DISCLOSED.

 

Except as expressly provided in this Amendment, the Agreement and all provisions
therein are and shall continue to be in full force and effect in accordance with
its terms.

 

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by
their duly authorized representatives as of the day and year first above
written.

 

Elite Pharmaceuticals, Inc.   Lannett Company, Inc.           By: s/ Nasrat
Hakim   By: s/ John Kozlowski Name: Nasrat Hakim   Name: John Kozlowski Title:
President and CEO   Title: COSSO Date: 7-29-2019   Date: 7-31-2019

  

Elite Laboratories, Inc.         By: s/ Nasrat Hakim   Name: Nasrat Hakim  
Title: President and CEO   Date: 7-29-2019  

 

 

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