AMENDED AND RESTATED
OPTION TO PURCHASE SHARES
THIS GRANT OF OPTION is made between Elite Pharmaceuticals, Inc., a
Delaware corporation ("Elite"), and Dr. Atul M. Mehta, Ph.D. (the "Optionee") on
the 18th day of October, 2004.
RECITALS
WHEREAS, Elite and the Optionee has entered into a Settlement Agreement
and Mutual Release, dated April 21, 2004 (the "Settlement Agreement"), pursuant
to which, inter alia, the parties thereto agreed that the Optionee held options
to purchase 770,000 shares of Common Stock, par value $0.01 per share (the
"Common Stock"), of Elite;
WHEREAS, Elite, through its designees, desires to purchase from the
Optionee, Mehta Partners, LP, Asha Mehta, Amar Mehta, Atul Mehta c/f Anand Mehta
(collectively, the "Mehta Holders") any or all shares of capital stock of Elite
owned by the Mehta Holders;
WHEREAS, pursuant to an agreement, dated as of October 7, 2004 (the
"Agreement"), by and among Elite and the Mehta Holders, the Mehta Holders agreed
to sell any or all shares of capital stock of Elite owned by the Mehta Holders
subject to certain conditions precedent, including the termination of options
held by the Optionee to purchase 100,000 shares of Common Stock and the
modification of the expiration date of all, and the exercise price of some, of
the remaining options held by the Optionee to purchase 670,000 shares of Common
Stock; and
WHEREAS, this Amended and Restated Grant of Option replaces any prior
grant of options and is intended by the parties to be the sole grant of option
by Elite to the Optionee.
AGREEMENT
In consideration of the Mehta Holders entering into the Agreement, and
other valuable consideration rendered, the receipt and sufficiency of which is
hereby acknowledged, it is agreed as follows:
1. OPTION. In full replacement of any options held by the Optionee at
any time prior to the date hereof, Elite hereby grants to the Optionee the right
to purchase six hundred and seventy thousand (670,000) shares of Common Stock,
par value $0.01 per share, of Elite (the "Shares") to be exercised as provided
herein (collectively, the "Options").
2. EXERCISE OF OPTIONS. All Options granted hereunder shall be fully
vested and shall have the exercise prices set forth below (which exercise price
shall be payable by check or wire transfer):
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Options to Purchase Common Exercise Price Per Share for such
Stock: Options:
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100,000 $1.00
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100,000 $1.50
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100,000 $2.00
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70,000 $2.34
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100,000 $2.34
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100,000 $2.50
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100,000 $3.00
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In the event that prior to the exercise in full of the Options, Elite shall have
effected one or more stock dividends, stock splits, reorganizations,
recapitalizations, combinations of shares, mergers, consolidations or other
changes in the corporate structure or stock of the corporation, the Board of
Directors shall equitably adjust the number, kind and exercise price of the per
share of the shares of Common Stock issuable upon exercise of the Options.
3. MANNER OF EXERCISE. The Options may be exercised by written notice
and tender of the exercise price being delivered to Elite at any time before the
time of the expiration of the Option. Options may be exercised only in
increments of one thousand (1,000) shares or multiples thereof.
4. EXPIRATION. All Options shall expire on December 31, 2007 (the
"Expiration Date"); provided, however, that if within one hundred and eighty
(180) days prior to the Expiration Date, the shares of Common Stock issuable
upon exercise of the Options (the "Registrable Securities") have not been
registered pursuant to a registration statement that has been declared effective
by the Securities and Exchange Commission, and pursuant to which the Optionee
can sell such shares (whether or not the Optionee in fact sells any Registrable
Securities), the Expiration Date shall be extended by additional one hundred and
eighty (180) day increments until such registration occurs. If, at the time of
the effectiveness of a registration statement pursuant to which the Optionee can
sell the Registrable Securities (whether or not the Optionee in fact sells any
Registrable Securities), the Options are to expire less than one hundred and
eighty (180) days after the effectiveness of such registration statement, the
Expiration Date shall be extended such that the extended Expiration Date shall
be at least one hundred and eighty (180) days after the effectiveness of such
registration statement. Notwithstanding the foregoing, the Expiration Date shall
not be extended with respect to any Options as to which (i) Elite shall have
offered to have included in a registration statement to be filed by Elite the
Registrable Securities for which such Options may be exercised and (ii) such
inclusion is refused or denied
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by the Optionee (or the then holder of such Options); provided that the Optionee
shall not be obligated to include any Registrable Securities if the registration
as to which inclusion is sought would require the Optionee to agree to be bound
by an underwriters agreement which would in any way affect the ability of the
Optionee to sell such Registrable Securities or incur any liabilities or
additional costs.
5. RESTRICTIONS. The Optionee may not assign, pledge or encumber these
Options at any time to any party. Upon the death of the Optionee, the
administrator or executor of the Optionee's estate may exercise the Options in
the Optionee's place until the date of termination. This Option may only be
exercised by the Optionee or the administrator or executor of Optionee's estate.
6. ENTIRE AGREEMENT. This Grant of Option, the Settlement Agreement
(other than as to the number and terms of options held by the Optionee which
shall be govern by this Grant of Option) and the Agreement contains the entire
agreement between the parties, and supercedes all other grants, agreements,
promises or representations concerning the subject matter of this instrument.
Elite and the Optionee agree that the Options evidenced by this Amended and
Restated Grant of Option constitute all options to purchase capital stock of
Elite held by the Optionee and the Optionee has no other options, warrants,
subscriptions or other rights to purchase any shares of Elite's capital stock.
7. BINDING EFFECT. This Grant of Option shall be binding on Elite and
any successor corporation.
8. NOTICES. Any notices to be made under this Agreement shall be made
by certified mail to the parties at the following addresses:
To Elite: Elite Pharmaceuticals, Inc.
165 Ludlow Avenue
Northvale, NJ 07647
Facsimile: 201-750-2755
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Attention: President
with a copy to: Reitler Brown & Rosenblatt LLC
800 Third Avenue, 21st Floor
New York, New York 10022
Facsimile: (212) 371-5500
Attention: Scott H. Rosenblatt, Esq.
To the Optionee: Atul M. Mehta, Ph.D.
76 Walsh Drive
Mahwah, NJ 07430
with a copy to: KMZ Rosenman
575 Madison Ave.
New York, New York 10022-2585
Facsimile: 212-894-5505
Attention: Howard S. Jacobs, Esq.
Either party may change such party's address by giving notice to the other party
in accordance with this provision.
9. CAPTIONS. The captions used in this document are included solely for
convenience, and under no circumstances shall be used in the construction or
interpretation of any provision in this Agreement.
10. GOVERNING LAW AND VENUE. This Grant of Option shall be governed by
the laws of the State of Delaware. The venue for any action or proceeding
relating to this Grant of Option shall be in a court of competent subject matter
jurisdiction in the State of New Jersey.
11. AMENDMENT. The terms of this Grant of Option shall not be amended
or modified except in a writing signed by Elite and the Optionee.
ELITE PHARMACEUTICALS, INC.
By: /s/ Bernard Berk
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Bernard Berk, President
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THE OPTIONEE
/s/ Dr. Atul M. Mehta
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Dr. Atul M. Mehta
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