Exhibit 10.12
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STOCK OPTION AGREEMENT
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This STOCK OPTION AGREEMENT made as of this 23rd day of July, 2003
(this "Agreement"), by and between Elite Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and Xxxx X. Xxxxx (the "Optionee").
WITNESSETH THAT:
WHEREAS, on June 3, 2003 (the "Grant Date"), the Board of Directors of
the Company granted to the Optionee an option (the "Option") to purchase 300,000
shares (the "Option Shares") of the Company's Common Stock, par value $.01 per
share (the "Common Stock"); and
WHEREAS, the Company and the Optionee desire to memorialize the terms
and conditions of the grant of the Option to the Optionee;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
1. Option Grant. The Company granted to the Optionee an Option to purchase
from the Company all or any portion of the Option Shares, on the terms and
conditions herein set forth. It is intended that the Option shall
constitute a non-qualified stock option.
2. Exercise Price; Time of Exercise.
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(a) The exercise price for the Option Shares shall be $2.01 per share (the
"Option Price"), the closing price of a share of Common Stock, as listed on
the American Stock Exchange, on the Grant Date. The exercise price shall be
paid by check of the Optionee.
(b) The Option shall be one hundred percent (100%) exercisable on the Grant
Date.
3. Term of Option. The Option, to the extent not previously exercised, shall
terminate ten (10) years from the Grant Date.
4. Non-Transferability. The Option shall not be transferable otherwise than by
will or the laws of descent and distribution, and the Option may be
exercised, during the lifetime of the Optionee, only by the Optionee.
5. Services as a Director. Nothing in this Agreement gives the Optionee any
right to continued service as a director or officer of the Company or
limits in any way the right of the Company and/or its directors or its
stockholders to terminate that service.
6. Reservation of Shares. The Company shall at all times during the term of
the Option reserve and keep available such number of shares of Common Stock
as will be sufficient to satisfy the requirements of this Agreement.
7. Investment Certificate. Prior to the receipt of stock certificates pursuant
to the exercise of the Option granted hereunder, the Optionee shall, if
required in the Company's discretion, demonstrate an intent to hold the
shares acquired by exercise of the Option for investment and not with a
view to resale or distribution thereof to the public by delivering to the
Company an investment certificate or letter in such form as the Company may
require.
8. Status. Neither the Optionee nor the Optionee 's executor, administrator,
heirs or legatees shall have any rights as a holder of shares of Common
Stock subject to this Option until exercise of the Option, payment of the
Option Price, and the issuance of a stock certificate evidencing the Option
Shares issuable upon exercise of the Option.
9. Certain Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, other change in corporate
structure affecting the Common Stock, or spin-off or other distribution of
assets to stockholders, an appropriate adjustment shall be made to the
number of Option Shares, the Option Price and the number of shares of
Common Stock reserved for issuance under this Agreement.
10. Tax Withholding. The exercise of any Option Shares is subject to the
condition that, if at any time the Company shall determine, in its
discretion, that the satisfaction of withholding tax or other withholding
liabilities under any state or Federal law is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery of
Option Shares pursuant thereto, then, in such event, the exercise of the
Option or any portion thereof shall not be effective unless and until such
withholding tax or other withholding liabilities shall have been satisfied
in a manner acceptable to the Company.
11. Miscellaneous.
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(a) All notices, demands, requests, or other communications that may be or
are required to be given, served, or sent by a party pursuant to this
Agreement shall be in writing and shall be (i) personally delivered, (ii)
mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or (iii) sent by overnight delivery carrier,
addressed as follows:
(A) If to the Company:
Elite Pharmaceuticals, Inc.
000 Xxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
(B) If to the Optionee:
Xxxx X. Xxxxx
[___________________]
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Each party may designate by notice in writing, in the manner described
above, a new address to which any notice, demand, request, or communication
required or permitted by this Agreement may be sent. Any notice, demand,
request, or communication that shall be delivered, mailed or transmitted in
the manner described above shall be deemed given, served, sent or received
for all purposes when it is delivered to the addressee. An affidavit of
personal delivery or the delivery receipt shall be deemed conclusive, but
not exclusive, evidence of such delivery.
(b) The invalidity of any one or more provisions hereof shall not affect
the remaining portions of this Agreement; and if one or more of the
provisions contained herein should be invalid, or should operate to render
this Agreement invalid, this Agreement shall be construed as if such
invalid provisions had not been inserted.
(c) It is the express intention and agreement of the parties hereof that
all covenants and agreements made in this Agreement shall survive the
execution and delivery of this Agreement and the exercise (if any) of the
Option.
(d) Neither the waiver by a party of a breach of or a default under any of
the provisions of this Agreement, nor the failure of a party, on one or
more occasions, to enforce any of the provisions of this Agreement or to
exercise any right, remedy, or privilege hereunder shall thereafter be
construed as a waiver of any subsequent breach or default of a similar
nature, or as a waiver of any such provisions, rights, remedies, or
privileges hereunder.
(e) Subject to any provisions hereof restricting transfer, encumbrance and
assignment, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors, and assigns.
(f) It is the explicit intention of the parties hereto that no person or
entity other than the parties hereof is or shall be entitled to bring any
action to enforce any provisions of this Agreement against any parties
hereto, and that the covenants, undertakings, and agreements set forth in
the Agreement shall be solely for the benefit of, and shall be enforceable
only by, the parties hereto and their respective heirs, personal
representatives, successors and assigns as permitted hereunder.
(g) This Agreement contains the entire agreement among the parties with
respect to subject matter hereof, and supersedes all prior oral or written
agreements, commitments, or understandings with respect to the matters
provided for herein.
(h) Article, section and subsection headings contained in this Agreement
are inserted for convenience of reference only, shall not be deemed to be
part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
(i) This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed
in accordance with the internal laws of the State of Delaware without
giving effect to the choice of law principles thereof.
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Each of the parties hereto irrevocably submits and consents to the
exclusive jurisdiction of and laying of venue in the courts of the State of
New Jersey and the United States District Court for the District of New
Jersey for the purpose of any suit, action, proceeding or judgment relating
to or arising, directly or indirectly, out of this Agreement and the
transactions contemplated hereby. Each party hereto irrevocably waives any
objection to the exclusive laying of venue of any suit, action or
proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought
in an inconvenient forum.
(j) THE OPTIONEE REPRESENTS THAT HE AND/OR HIS OTHER PROFESSIONAL ADVISORS
HAVE HAD THE OPPORTUNITY TO REVIEW THIS AGREEMENT.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by an officer hereunto duly authorized, and the Optionee has hereunto
set his hand, all as of the day and year first above written.
ELITE PHARMACEUTICALS, INC.
By:
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Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
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Xxxx X. Xxxxx
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