EXHIBIT 10.2
ELITE PHARMACEUTICALS, INC.
CONSULTING AGREEMENT
CONSULTING AGREEMENT, dated as of November 4th, 2003 (the "Effective
Date") between Elite Pharmaceuticals, Inc., a Delaware corporation ("Company"),
with offices at 165 Ludlow Avenue, Northvale, New Jersey 07647 and Bridge
Ventures, Inc., with offices at 1241 Gulf of Mexico Drive, Longboat Key, Florida
34228 ("Consultant").
WHEREAS, the Company anticipates the material expansion of its
operations as a result of (i) funding in the form of debt, equity or a
combination of debt and equity in the amount of at least $2,000,000 (the
"Funding") or (ii) the acquisition of Nostrum Pharmaceuticals Inc. a privately
held corporation engaged in the development and distribution of drug delivery
systems (the "Nostrum Acquisition").
WHEREAS the Company desires to secure the availability of the services
on a consulting basis of an advisor with the financial knowledge and
sophistication possessed by Consultant upon the completion of the Funding or the
Nostrum Acquisition and Consultant desires to make itself available to provide
such services.
NOW THEREFOR IT IS HEREBY AGREED THAT:
1. Upon consummation of the earlier of the Funding or the Nostrum
Acquisition (the "Effective Date"), Consultant agrees to make itself available
to provide and to provide at the prior request of the Company its consulting
services on a nonexclusive basis in connection with the financial affairs of the
Company. Consultant's services will include advice with respect to overall
strategic planning, financing opportunities, acquisition policy, commercial and
investment banking relationships and stockholder matters and such other related
services as may be mutually agreed upon by Consultant and the Company. In no
event, however, shall Consultant be required to provide services hereunder which
(i) exceed 40 hours in the aggregate during any fiscal quarter of the Company,
(ii) after a date one year from the Effective Date at which time the Agreement
will terminate except for Sections 4, 5 and 6 hereof, and (iii) which require
Consultant to travel beyond a 50 mile radius from New York City.
2. In consideration of Consultant's agreement to provide services
pursuant to this Agreement, Consultant shall be entitled to receive, and the
Company agrees to pay Consultant $75,000 payable in twelve monthly installments
of $6,250 each with the first installment to be paid at the end of the first
month following the Effective Date and to issue on the Effective Date to
Consultant a Warrant in the form of Exhibit A hereto to purchase 100,000 shares
of the common stock, par value $.01 per share, of the Company, which contains a
provision for a cashless exercise.
3. The Company will reimburse Consultant for reasonable and necessary
expenses incurred by Consultant in performing the services hereunder, at cost
and without any markup or profit to Consultant. In all events, the Company will
not reimburse any general, administrative or overhead costs of Consultant.
Consultant agrees, as a condition to receiving any such reimbursement, to
provide an itemized detail of Consultant's expenses incurred as a result of any
such request.
4. Except as provided in this Section 4, during the term of this
Agreement and for so long as secrecy is maintained, Consultant will not disclose
any Confidential Information of the Company to any person, firm, corporation or
other entity for any reason or purpose whatsoever (other than in the normal
course of business on a need-to-know basis after the Company has received
assurances that the Confidential Information will be kept confidential by the
recipient thereof), nor will Consultant make use
of any such Confidential Information for its own purposes or for the benefit of
any person, firm, corporation or other entity except the Company. "CONFIDENTIAL
INFORMATION" means all information which is or becomes known to Consultant,
including all such information which became known to Consultant during the
period prior to the date of the Agreement, and relates to such matters as
intellectual property, research and development activities, new or prospective
products or services, books and records, financial data, customer lists,
marketing techniques, suppliers, purchases, potential business combinations,
distribution channels, services, procedures, pricing information and private
processes as they may exist from time to time; PROVIDED that the term
"Confidential Information" will not include information that is or becomes
generally available to the public (other than as a result of a disclosure in
violation of this Agreement by Consultant or by a person who received such
information from Consultant in violation of this Agreement).
5. Consultant agrees to execute and deliver a Non-Disclosure Agreement
with the Company in the form of Exhibit B hereto.
6. The Company agrees to indemnify and hold harmless Consultant against
any and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses, and disbursements (and any and all actions, suits,
proceedings, and investigations in respect thereof and any and all legal and
other costs, expenses, and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), including, without limitation
the costs, expenses, and disbursements, as and when incurred, of investigating,
preparing, or defending any such action, suit, proceeding, or investigation
(whether or not in connection with litigation in which Consultant is a party),
directly or indirectly, caused by, relating to, based upon, arising out of, or
in connection with Consultant's acting for the Company, including, without
limitation, any act or omission by Consultant in connection with its acceptance
of or the performance or non-performance of its obligations under this Agreement
as it may be amended from time to time (the "AGREEMENT"); PROVIDED, HOWEVER,
such indemnity agreement shall not apply to any portion of any such loss, claim,
damage, obligation, penalty, judgment, award, liability, cost, expense, or
disbursement to the extent it is found in a final judgment by a court of
competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the gross negligence or willful misconduct of
Consultant. The Company also agrees that Consultant shall not have any liability
(whether direct or indirect, in contract or tort or otherwise) to the Company
for or in connection with the engagement of Consultant, except to the extent
that any such liability is found in a final judgment by a court of competent
jurisdiction (not subject to further appeal) to have resulted primarily and
directly from Consultant gross negligence or willful misconduct.
If any action, suit, proceeding, or investigation is commenced, as to
which Consultant proposes to demand indemnification, it shall notify the Company
with reasonable promptness; PROVIDED, HOWEVER, that any failure by Consultant to
notify the Company shall not relieve the Company from its obligations hereunder,
except to the extent that its defenses have been materially prejudiced thereby.
The Company shall designate counsel to represent Consultant and such counsel
shall, to extent consistent with its professional responsibilities, cooperate
with the Company and its counsel. The Company shall pay the fees, expenses, and
disbursements of such counsel. The Company shall be liable for any settlement of
any claim against Consultant made with the Company's written consent, which
consent shall not be unreasonably withheld. The Company shall not, without the
prior written consent of Consultant, settle or compromise any claim, or permit a
default or consent to the entry of any judgment in respect thereof, unless such
settlement, compromise, or consent includes, as an unconditional term thereof,
the giving by the claimant to Consultant of an unconditional release from all
liability in respect of such claim.
In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these Indemnification Provisions is made, but it is
found in a final judgment by a court of competent
2
jurisdiction (not subject to further appeal) that such indemnification may not
be enforced in such case, even though the express provisions hereof provide for
indemnification in such case, then the Company, on the one hand, and Consultant,
on the other hand, shall contribute to the losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses, and disbursements to
which the indemnified persons may be subject in accordance with the relative
benefits received by the Company, on the one hand, and Consultant, on the other
hand, and also the relative fault of the Company, on the one hand, and
Consultant on the other hand, in connection with the statements, acts, or
omissions which resulted in such losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses, or disbursements and
the relevant equitable considerations shall also be considered. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from
any person who is no also found liable for such fraudulent misrepresentation.
Notwithstanding the foregoing, Consultant shall not be obligated to contribute
any amount hereunder that exceeds the amount of fees previously received by
Consultant pursuant to the Agreement.
Neither termination nor completion of the engagement of Consultant
referred to above shall affect these Indemnification Provisions which shall then
remain operative and in full force and effect.
7. The obligations, terms and conditions set forth in Sections 4, 5 and
6 shall survive the terms of this Agreement.
8. (a) Upon termination of this Agreement, Consultant will immediately
(i) return or destroy (and provide evidence of such destruction), as the Company
may direct, all documentation in any medium that contains, refers to, or relates
to the Confidential Information (as defined in Section 4), and will retain no
copies thereof.
(b) This Agreement shall governed by the laws of the State of Delaware
(other than its choice of laws provisions). It is the desire and intent of the
parties hereto that the provisions of this Agreement will be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, although the Company
and Consultant consider the restrictions contained in this Agreement to be
reasonable for the purpose of preserving the Company's goodwill and proprietary
rights, if any particular provision of this Agreement is adjudicated to be
invalid or unenforceable, such provision will be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of such provision in the
particular jurisdiction in which such adjudication is made.
(c) The parties acknowledge that the Company's damages at law would be
an inadequate remedy for the breach by Consultant of any provision of Sections 4
or 5, and agree in the event of such breach that the Company may obtain
temporary and permanent injunctive relief restraining Consultant from such
breach, and, to the extent permissible under the applicable statutes and rules
of procedure, a temporary injunction may be granted immediately upon the
commencement of any such suit. Nothing contained herein will be construed as
prohibiting the Company from pursuing any other remedies available at law or
equity for such breach or threatened breach of Sections 4 or 5 of this
Agreement.
(d) The relationship of Consultant to the Company shall be that of an
independent contractor. Nothing herein shall be construed to constitute the
parties as partners or joint venturers, or as employees or agents of the other.
Except as expressly set forth herein, neither party has any express or implied
right or authority to assume or create any obligations on behalf or in the name
of the other.
Personnel and subcontractors supplied by Consultant are not the Company 's
personnel or agents, and Consultant assumes full responsibility for their acts.
3
(e) This Agreement is personal in its nature and the parties hereto
will not, without the written consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder; PROVIDED that the provisions
hereof will inure to the benefit of, and be binding upon, each successor of the
Company, whether by merger, consolidation, transfer of all or substantially all
of its assets, or otherwise.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.
ELITE PHARMACEUTICALS, INC.
By: /s/ Bernard Berk
---------------------------------
Name: Bernard Berk
Title: Chief Executive Officer
CONSULTANT:
BRIDGE VENTURES, INC.
By: /s/ Harris Freedman
----------------------------------
Name: Harris Freedman
Title:
----------------------------
4