AMENDMENT, dated as September 3, 2003, to the Settlement Agreement,
dated October 23, 2002 (the "Settlement Agreement"), by and among Elite
Pharmaceuticals, Inc., a Delaware corporation ("ELITE" or the
"COMPANY"), Xxxxxx Xxxxxxxx, Xxxxxx Will, Xxxxxxx X. Xxxxxxxx, Bridge
Ventures, Inc., a Florida corporation, Bridge Ventures, Inc., Employee
Pension Plan, SMACS Holding Corp., a Florida corporation, Saggi Capital
Corp., a New York corporation, Saggi Capital Corp. Money Purchase Plan
and Saggi Capital Corp. Profit Sharing Plan (collectively the "XXXXXXXX
GROUP").
Recitals:
Pursuant to the Settlement Agreement the Company offered to issue New
Warrants for Old Warrants upon payment by the holder of Old Warrants of $.10 per
share subject to issuance upon exercise of the Old Warrants.
The Company has agreed subject to the terms and conditions of this
Amendment to issue the New Warrants solely in exchange for the Old Warrants
without the holder of the Old Warrants required to make any cash payment
therefore.
Each capitalized term used herein and not otherwise defined shall have
the meaning assigned to such term in the Settlement Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED:
1. ARTICLE THREE of the Settlement Agreement is hereby revised
and amended to read as follows:
"Article III
Exchange Offer
Section 3.1 Exchange Offer.
(a) Promptly following the Effective Date, Elite shall
offer to all holders of its outstanding Class A Warrants which expired November
30, 2002 (the "OLD WARRANTS") to issue in exchange for their Old Warrants
pursuant to the conditions summarized below NEW WARRANTS in the form of Exhibit
A hereto upon delivery of the registered holder's certificate evidencing the Old
Warrants.
(b) The New Warrants will (i) be exercisable for the same
number of shares of Common Stock as the Old Warrants, (ii) have an exercise
price of $5.00 per share (subject to appropriate adjustment in the event of any
stock split, reverse stock split, stock dividend, recapitalization or
reclassification occurring after the date hereof in respect of the Common
Stock), (iii) expire on November 30, 2005 the "EXPIRATION DATE"), and (iv)
except as set forth herein will have substantially all of the same other terms
and conditions as the Old Warrants.
(c) The New Warrants shall provide that (i) if the
Warrant Shares Registration Statement (as defined below) is not effective on any
date during the thirty (30) day period immediately prior to and including the
Expiration Date (the "THIRTY DAY PERIOD"), and (ii) Elite's Common Stock trades
at a price greater than $5.00 (subject to appropriate adjustment in the event of
any stock split, reverse stock split, stock dividend, recapitalization or
reclassification occurring after the date hereof in respect of the Common Stock)
on any trading day on which the Warrant Shares Registration Statement is not
effective during the Thirty Day Period, then the Expiration Date shall be
extended to the 30th day after the date on which the Warrant Shares Registration
Statement is again effective and available for the exercise of the New Warrants.
Such provisions shall apply to any subsequent suspension of the Warrant Shares
Registration Statement occurring prior to the then-current Expiration Date.
(d) Upon the occurrence of Elite becoming eligible to use
Form S-3 (or any successor "short-form" registration statement) to register the
Warrant Shares (the "S-3 ELIGIBILITY DATE") (the "REGISTRATION EVENT") (but in
no event later than 15 days thereafter), Elite shall prepare and file with the
Commission a Registration Statement on Form S-3, or such successor form, the
"WARRANT SHARES REGISTRATION STATEMENT") registering the shares of Common Stock
issuable upon exercise of the New Warrants and shall use commercially reasonable
efforts to cause the Warrant Shares Registration Statement to become effective,
including to respond to all comments from the Commission and to file all
amendments to the Warrant Shares Registration Statement so required to respond
to such comments. Elite shall use commercially reasonable efforts to maintain
the effectiveness of the Warrant Shares Registration Statement until such time
as the New Warrants are no longer outstanding.
(e) Prior to the S-3 Eligibility Date, Elite shall
deliver or cause to be delivered to all holders of New Warrants, (i) the
information required by Rule 14a-3(b) promulgated pursuant to the Exchange Act
and (ii) the information required by Items 401, 402 and 403 of Regulation S-K
promulgated pursuant to the Securities Act.
(f) Notwithstanding the other provisions of this Section
3.1, Elite may suspend the use of the prospectus contained in the Warrant Shares
Registration Statement for a period not to exceed 45 days in any 180-day period
or an aggregate of 90 days in any 365 day period if the Board of Directors of
the Company shall have determined in good faith that because of valid business
reasons (not including avoidance of the Company's obligations hereunder),
including the acquisition or divestiture of assets, pending corporate
developments and similar events, it is in the best interests of the Company to
suspend such use, and prior to suspending such use the Company provides
warrantholders with written notice of such suspension, which notice need not
specify the nature of the event giving rise to such suspension.
(g) The New Warrants will not be transferable except by
operation of law.
Section 3.2 Expenses. Elite will pay all expenses associated
with the Warrant Share Registration Statement excluding discounts, commissions,
fees of underwriters, selling brokers, dealer managers or similar securities
industry professionals."
2. Section 9.1 of the Settlement Agreement is hereby amended to
provide that the notices to Elite shall be sent to the attention of Xxxxxxx
2
Xxxx, Chief Executive Officer, copy to Reitler Xxxxx LLC, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Facsimile: (000) 000-0000, Attention: Xxxxx Xxxxxxxxxx,
Esq.
3. Except as provided above, this Amendment does not amend any
other provision of the Settlement Agreement.
[Remainder of this Page is Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment or caused this Amendment to be duly executed by their authorized
representative, as of the day and year first above written.
ELITE PHARMACEUTICALS, INC.
By: /s/ XXXXXXX XXXX
------------------------------
Name: Xxxxxxx Xxxx
Title: Chief Executive Officer
/s/ XXXXXX XXXXXXXX
------------------------------
Xxxxxx Xxxxxxxx
Address:
Telephone:
Facsimile:
/s/ XXXXXX WILL
------------------------------
Xxxxxx Will
Address:
Telephone:
Facsimile:
/s/ XXXXXXX X. XXXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxxx
Address:
Telephone:
Facsimile:
BRIDGE VENTURES, INC.
By: /s/ XXXXXX XXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Secretary
Address:
Telephone:
Facsimile:
4
BRIDGE VENTURES, INC. EMPLOYEE
PENSION PLAN
By: /s/ XXXXXX XXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Trustee
Address:
Telephone:
Facsimile:
SMACS HOLDING CORP.
By: /s/ XXXXXX XXXXXXXX
------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Trustee
Address:
Telephone:
Facsimile:
SAGGI CAPITAL CORP.
By: /s/ XXXXXX WILL
------------------------------
Name: Xxxxxx Will
Title: President
Address:
Telephone:
Facsimile:
SAGGI CAPITAL CORP. MONEY
PURCHASE PLAN
By: /s/ XXXXXX WILL
------------------------------
Name: Xxxxxx Will
Title: Trustee
Address:
Telephone:
Facsimile:
5
SAGGI CAPITAL CORP. PROFIT
SHARING PLAN
By: /s/ XXXXXX WILL
------------------------------
Name: Xxxxxx Will
Title: Trustee
Address:
Telephone:
Facsimile:
6
