c55318_ex10-1.htm







EX-10.1

 



SEPARATION
  AGREEMENT AND GENERAL RELEASE OF CLAIMS (this “Agreement”), dated as of October 20, 2008, by and between ELITE PHARMACEUTICALS, INC., with offices at 165 Ludlow Avenue, Northvale, New Jersey 07647 (the “Company”), and STUART APFEL, an individual residing at 218 Walker Place, West Hempstead, NY 11552. 








BACKGROUND


          WHEREAS, Employee is presently employed by the Company; and


          WHEREAS,
Employee’s employment with the Company has been terminated as of the Separation
Date (as defined below), and, in connection therewith, the Company has agreed
to provide  certain benefits to Employee in consideration of Employee’s
execution and performance of this Agreement; 


           NOW, THEREFORE, in consideration of the mutual covenants and conditions contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows: 


TERMS


           1.      Termination of Employment. Employee
acknowledges that his employment with the Company shall terminate as of, and that his work-through date with the Company is the close of business on October 20, 2008 (the “Separation Date”). Employee acknowledges that all expenses to which he may be entitled to reimbursement have been reimbursed. 


       (a)     Employment
Agreement. Employee acknowledges
and hereby waives his entitlement to certain notice and payment provisions upon
termination under his Employment Agreement dated January 3, 2008, by and between
Employee and the Company (the “Employment Agreement”).
In particular, Employee hereby waives his right to notice under Section 3.2.4
and all obligations of the Company to the Employee  set forth in Sections 3.3,
3.2.4, 3.3.2 of the Employment Agreement, including without limitation the Severance
Amount (as such term is defined in the Employment Agreement). Employee further
acknowledges that there are no payment amounts outstanding  to Employee under
the Employment Agreement. 


          2.     Severance Benefits. The Company shall pay to Employee a severance payment of Four Thousand Two Hundred Nineteen Dollars (US$4,219) less any payroll or withholding taxes (the “Severance Payment”) Upon payment of the Severance Payment, the Company shall have no further obligation to Employee, including, without limitation, on
account of his service as an employee of the Company.


          3.     Covenants, Representations and Warranties of the Parties. The Company and Employee each represents and warrants to the other (as to itself) that (i) the party has full authority and capacity to enter into and perform the party’s obligations under
this Agreement

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(having obtained all requisite corporate, company and/or governmental approvals), (ii) this Agreement has been fully authorized, executed and delivered by the party and that the party has
full legal right, power and authority to enter into and perform this Agreement, which constitutes a valid and binding agreement between the parties, enforceable against the party in accordance with its terms, (iii) there are no agreements between
the party and any third party that conflict with this Agreement; and (iv) no consent or approval of any third party, court or governmental agency is required in connection with the party’s execution and performance of this Agreement.



          4.     General Release of Claims and Covenants Not to Sue. Employee for himself and his respective administrators, executors, agents, beneficiaries and assigns, does hereby waive, release and forever discharge the Company (as hereinafter defined for the
purposes of this Section 4) of and from any and all Claims (as defined below). Employee agrees not to file a lawsuit to assert any such Claim. This release covers all Claims arising from the beginning of time up to and including the date of this
Agreement, but does not cover Claims relating to the validity or enforcement of this Agreement. In addition, Employee irrevocably and unconditionally releases, forever discharges, and agrees to indemnify and hold harmless the Company from all Claims
Employee believes or, at a later date may believe, he has against the Company for any actions arising out of Employee’s employment with or separation from the Company from the beginning of time up to and including the date of this Agreement,
whether known or unknown as of the date of this Agreement.


     (a)     Definition
of “Claims”. (i) For purposes of this
Agreement, “Claims” includes
without limitation all  actions or demands of any kind that Employee now has,
or may have or claim to have in the future arising out of occurrences on or before
the date of this Agreement. More specifically, Claims include rights, causes
of action, damages, penalties,  losses, attorneys’ fees, costs, expenses,
obligations, agreements, judgments and all other liabilities of any kind or description
whatsoever, either in law or in equity, whether known or unknown, suspected or
unsuspected. 


                   (ii)
     The nature of Claims covered by this release and
covenant not to sue includes, without limitation, all actions or demands in any
way based on Employee’s
employment with Company,  the terms and conditions of such employment, or the
termination of such employment. More specifically, all of the following are included
in the types of Claims that will be barred by this release and covenant not to
sue: (i) contract claims (whether  express or implied), (ii) tort claims (such
as for defamation or emotional distress), (iii) claims under federal, state and
municipal laws, regulations, ordinances or court decisions of any kind, (iii)
claims of discrimination, harassment or  retaliation, whether based on race,
color, religion, gender, sex, age, sexual orientation, handicap or disability,
national origin, or any other legally protected class, (iv) claims under the
Age Discrimination in Employment Act of 1967 as amended  by the Older Workers
Benefit Protection Act, Title VII of the Civil Rights Act of 1964 as amended
by the Civil Rights Act of 1991, the Equal Pay Act of 1962, the Americans with
Disabilities Act of 1990, the Workers Adjustment and Retraining  Notification
Act, the New York State Human Rights Law (Article 15 of the New York State Employee
Law), the New York City Human Rights Law (Title I, Chapter B of the Administrative
Code of the City of New York), or any other federal, state or local  statute
or ordinance, (v) claims under Employee Retirement Income

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Security Act, the Fair Labor Standards Act, state wage payment laws and state wage and hour laws; and (vi) claims for wrongful discharge. 


     (b)      Definition
of “Company”. For purposes of this Section
4, “Company” includes,
without limitation, Elite  Pharmaceuticals, Inc., and its past, present and future
parents, Affiliates (as defined below), subsidiaries, divisions, predecessors,
successors, assigns, employee benefit plans and trusts and each of their respective
past, present and future  directors, officers, partners, shareholders, members,
managers, agents, employees, attorneys, representatives, consultants, associates,
fiduciaries, plan sponsors, administrators and trustees. 


     (c)      Definition
of “Affiliate”. For
purposes of this Agreement, “Affiliate” (and
its derivations) shall mean, with respect to any  person, any other person who
controls, is controlled by or is under common control with such person. For purposes
of the definition of Affiliate, “control” means
the power to direct the management and policies of such person or firm, directly
or indirectly, whether through the ownership of voting securities, by contract
or  otherwise.


     (d)      Employee’s Acknowledgment of Scope of Release. Employee declares and agrees that any Claims he may have incurred or sustained may not be fully known to him and may be more numerous and more serious than he now believes or expects. Further,
in entering into this Agreement, Employee relies wholly upon his own judgment of the future development, progress and result of said Claims, both known and unknown, and acknowledges that he has not been influenced to any extent whatsoever in the
making of this Agreement by any representations or statements regarding said Claims made by individuals or entities who are within the definition of Company above. Employee further acknowledges that he accepts the terms herein in full settlement and
satisfaction of all such Claims. 


          5.      Restrictive Covenants of Employee.


     (a)      Employment Agreement. Employee acknowledges that he has certain obligations under his Employment Agreement dated as of January 3, 2008.  In particular, Employee acknowledges his obligations under Sections 4 and 5: “Protection of Confidential
Information and Trade Secrets; Non-Competition; No Solicitation” and “Continued Cooperation; Return of Documents and Property; Injunctive Relief; Non-Exclusivity and Survival” of the Employment Agreement. Employee agrees that he will
continue to be bound by and shall abide by such provisions. 


     (b)      Confidentiality. 


     (i)      Employee acknowledges and agrees that, during his employment with the Company, he had access to Proprietary Information (as defined below) and that the
Proprietary Information is the exclusive property of the Company or the party that disclosed or delivered such information to the Company. Employee agrees not to use the Proprietary Information, directly or indirectly, and agrees that he will
promptly notify the Company of any unauthorized disclosure of Proprietary Information. Specifically, Employee agrees that all Proprietary Information or inventions developed as a direct result of his efforts on behalf of the Company 

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during his employment with the Company remain the exclusive property of the Company, and that Employee has no ownership interest therein. For purposes of this Agreement,
“Proprietary Information” means all of the following information and material, whether or not
reduced to writing and whether or not patentable, that Employee, during his employment with the Company, had access to or developed, in whole or in part, as a direct or indirect result of either his efforts on behalf of the Company or through the
use of any of the Company’s facilities or resources: (i) computer software, including without limitation all source and object code, flow charts, algorithms, coding sheets, routines, sub-routines, compilers, assemblers, design concepts and
related documentation and manuals; (ii) production processes, collection and receivable management processes, procedures and techniques, marketing techniques, licensing or sales policies, financial information, employee names and job descriptions,
customer and prospective customer names and requirements, data and other information or materials relating to the manner in which the customer, prospective customer or the Company do business; (iii) patents, patent applications, trademarks,
trademark applications and any other intellectual property rights and discoveries, concepts and ideas (including but not limited to the nature and results of research and development activities), processes, formulae, techniques,
“know-how”, designs, drawings and specifications, information relating to products, proposed products, agreements with or proprietary information of third parties,
and clinical data and analysis, clinical trials, applications and communications with the United States Food and Drug Administration; (iv) any other information or materials relating
to the business or activities of the Company which is not generally known to others engaged in similar business or activities; (v) all inventions and ideas which are derived from or relate to Employee’s access to, or knowledge of, any of the
information or materials describe herein; (vi) any of the information or material described herein which is the property of any other person or firm which has revealed or delivered such information or material to the Company pursuant to a
contractual relationship with the Company or otherwise in the course of the Company’s business. Proprietary Information shall not include any information or material of the type described herein to the extent that such information or material
is or becomes publicly known through no act on Employee’s part in violation of this confidentiality provision. 


     (ii)      Employee further agrees that he shall maintain the terms of this Agreement and the negotiations leading up to it in the STRICTEST CONFIDENCE. Employee
shall not disclose or discuss any of the terms of this Agreement or the negotiations leading up to it with anyone other than: Employee’s immediate family members, accountant, the Internal Revenue Service, legal representative, or pursuant to
subpoena issued as part of a legal proceeding; provided that, before disclosing the terms of this Agreement or the negotiations leading up to it to any of the foregoing, Employee shall advise the recipient regarding the existence of this
confidentiality provision and obtain the agreement of the recipient to maintain the information in accordance with this provision. 


     (c)      Return of Corporate Property and Associated Expenses. Employee represents that he has returned to the Company all corporate property and copies thereof in his possession or under his custody or control, including without limitation, corporate credit
cards, identification badge, calling cards, cellular or mobile telephone, and computer equipment and software. Employee’s access to such property and facilities shall cease effective as of the Separation Date. In addition, Employee represents
and warrants to the Company that he has returned to the Company, and has not retained copies of, all customer records, whether in print or electronic form, and Employee specifically represents and warrants to the Company that he has

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deleted all such information from any personal computer or other electronic storage media in his possession.  Employee’s access to such property and facilities, records, and information
shall cease effective as of the Separation Date. 


     (d)      Non-Disparagement. Employee agrees that he shall not, directly or indirectly, defame, disparage, make negative comments about, whether or not true, the name or reputation of the Company or any of its Affiliates, including but not limited to, any
officer, director, employee or shareholder of the Company or any of its Affiliates, or act in any other manner that is intended to or does damage the good will, business or personal reputations of the Company or any of its Affiliates, including but
not limited to, any officer, director, employee or shareholder of the Company or any of its Affiliates. The provisions of this Section 5(d) shall survive any termination of this Agreement and the termination of the Employee’s employment with
the Company.


          6.      Acknowledgements of Employee.


     (a)      Except as provided for in Section 2, the Company shall have no further obligation to Employee, including, without limitation, on account of his service as
an employee of the Company.


     (b)      Employee acknowledges that any payments or benefits provided to Employee under the terms of this Agreement do not constitute an admission by the Company
that it has violated any law or legal obligation with respect to any aspect of Employee’s employment or separation therefrom. 


     (c)      Employee agrees and acknowledges that Employee’s right to receive and keep the Severance Payment is conditioned upon Employee continuing to observe,
and not be in breach of, the provisions of any of the terms or conditions provided for in this Agreement. Upon any breach hereof, all severance compensation and other benefits due Employee pursuant to Section 2 of this Agreement shall immediately
cease, or if already paid, shall be recoverable in full by the Company.  


     (d)      Employee has not instituted, assisted, or otherwise participated in connection with, any complaint, claim, charge, lawsuit, or administrative agency
proceeding, or action at law or otherwise against the Company. To the extent permitted by law, Employee waives his right to institute in the future any complaint, claim, charge, lawsuit, or administrative proceeding, or action at law or otherwise
against the Company, and agree not to accept any relief or recovery from any such action or proceeding filed on his behalf, other than any complaint, claim, charge, lawsuit, or administrative proceeding, or action at law in connection with, or
resulting from, the Company’s breach of any term of this Agreement. 


     (e)      Employee hereby represents that from the Separation Date onward (i) Employee has not made and will not make any representations, warranties, or commitments
binding the Company and (ii) Employee has not executed and will not execute any agreement on behalf of the Company, nor did Employee or shall Employee hold himself out to have such authority.

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     (f)      Upon reasonable advance written notice, during mutually agreeable time periods, and provided the foregoing shall not interfere with Employee’s then
current employment, Employee agrees to make himself available to the Company in any pending or future governmental or regulatory investigation, civil or administrative proceeding, or arbitration, subject to any privileges that Employee may have and
to his other personal and business commitments. The Company will reimburse Employee for any loss of salary and all reasonable costs and expenses incurred by Employee in connection with any such proceeding or arbitration.


     (g)      Employee hereby represents that Employee has not assigned to any person or entity any claim, including, without limitation, Claims that arose or could have
arisen against the Company, or its past, present and future parents, Affiliates, subsidiaries, divisions, predecessors, successors, assigns, employee benefit plans and trusts and each of their respective past, present and future directors, officers,
partners, shareholders, members, managers, agents, employees, attorneys, representatives, consultants, associates, fiduciaries, plan sponsors, administrators and trustees. 


     (h)      Employee acknowledges that he has been advised to consult, and has consulted, with legal counsel of his choosing, at his own expense, regarding the meaning
and binding effect of this Agreement and each and every term hereof prior to executing it. 


     (i)      Employee, intending to be legally bound hereby, certifies and warrants that he has read carefully this Agreement and has executed it voluntarily and with
full knowledge and understanding of its significance, meaning and binding effect. Employee further declares that he is competent to understand the content and effect of this Agreement. 


     (j)      Employee acknowledges that he was given a period of 21 days within which to consider this Agreement and to the extent he executes this Agreement before the
expiration of the 21-day period, he does so knowingly and voluntarily and only after consulting his attorney.  Employee shall have the right to cancel and revoke this Agreement during a period of 7 days following executing this Agreement, and this
Agreement shall not become effective, and no payments or benefits shall be made or provided pursuant to this Agreement, until the day after the expiration of such 7-day period. The 7-day period of revocation shall commence upon Employee executing
this Agreement. In order to revoke this Agreement, the Executive shall deliver to the Company, prior to the expiration of such 7-day period, a written notice of revocation. Upon such revocation, this Agreement shall be null and void and of no
further force or effect. 


          7.      Headings. The
headings contained in this Agreement are not part of this Agreement and are included solely for ease of reference. 


          8.      Integration and Modification. Employee declares and represents that no promise or agreement has been made to him other than those expressed herein and the grant of options to purchase up to 400,000 shares of common stock of the Company at an exercise price of
$1.75

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per share as set forth in the Incentive Stock Option Letter Agreements dated January 3, 2008, the “Option
Agreements”), which is each attached hereto as Exhibit A. Except as stated herein, this Agreement and the Option Agreements, constitute the entire agreement of the parties
and supersedes all prior understandings, whether oral or written, between them. Any modification of this Agreement must be made in writing and signed by all parties. 


          9.      Severability. If
any provision of this Agreement is or shall be declared invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall not be affected thereby and shall remain in full force and effect. 


          10.     Notices.
All  notices and other communications set forth in this Agreement are to be deemed
delivered the day they are sent if sent by same day or overnight commercial service
to the applicable party at the following address (or such other address for a
party as  may be specified by like notice): 

	           	
If to Employee:	
	 	 	
	 	
         Dr. Stuart C. Apfel	
	 	
         218
 Walker Place	
	 	
         West Hempstead, NY 11552	
	 	 	
	 	
If to the Company:	
	 	 	
	 	         Elite Pharmaceuticals, Inc.	
	 	
         165 Ludlow Avenue	
	 	
         Northvale, NJ 07647	
	 	
         Attention: Chief Executive Officer or Chief Financial Officer	
	 	
         Facsimile: (201) 750-2755	
	 	 	
	 	
With a copy to:	
	 	 	
	 	
         Reitler Brown & Rosenblatt LLC	
	 	
         800 Third Avenue, 21st floor	
	 	
         New York, NY 10022	
	 	
         Attention: Lauren K. Kluger, Esq.	
	 	
         Facsimile: (212) 371-5500	





          11.     Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York (without giving effect to its choice or conflict of laws provisions). Each of the parties hereby irrevocably and
unconditionally submits to the jurisdiction of the courts of the State of New York and of the federal courts sitting in the State of New York in all actions or proceedings arising out of or relating to this Agreement. Each of the parties agrees that
all actions or proceedings arising out of or relating to this Agreement must be litigated exclusively in any such state or federal court that sits in the City of New York, Borough of Manhattan, and accordingly, each party irrevocably waives
any

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objection which it may now or hereafter have to the laying of the venue of any such litigation in any such court.  


          12.     Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same instrument. 


          13.     Equitable Remedies. Employee acknowledges and agrees that it would be impossible or inadequate to measure and calculate the Company’s damages from any breach of the covenants set forth in Sections 3, 4, 5 and 6 of this Agreement. Accordingly,
Employee agrees that if he breaches any of such covenants, the Company will have available, in addition to any other right or remedy available, the right to obtain an injunction from a court of competent jurisdiction restraining such breach or
threatened breach and to specific performance of any such provision of this Agreement. Employee further agrees that no bond or other security shall be required in obtaining such equitable relief and hereby consents to the issuance of such injunction
and to the ordering of specific performance. 


[Remainder of page intentionally left blank. Signature page follows.]

 

 

 

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          IN WITNESS WHEREOF, and with the intention of being legally bound hereby, the parties have executed this Separation Agreement and General Release of Claims as
of the date first written above. 

	 	/s/
    Stuart Apfel	 
	 	
      DR. STUART C. APFEL	
	 	 	 	
	 	 	 	
	 	 	 	
	 	
      ELITE PHARMACEUTICALS, INC.	
	 	 	 	
	 	 	 	
	 	By:  	/s/
    Chris Dick	 
	 	 	 Name: Chris Dick	
	 	 	
Title: Executive Vice President of	
	 	 	
         Corporate
Development	


 

 

 





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