NOTE
(Series B)
$495,000.00 August 31, 2005
Newark, New Jersey
Elite Pharmaceuticals, Inc. (the "Borrower") acknowledges itself
indebted to, and for value received hereby promises to pay to the order of, the
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") and its successors
and assigns, the principal sum of FOUR HUNDRED NINETY FIVE THOUSAND and 00/100
dollars ($495,000.00) and to pay interest on the unpaid principal amount hereof
from the date of this Note calculated on the same basis as interest is
calculated on the Bonds (as hereinafter defined). The unpaid principal amount
hereof shall be equal to the outstanding aggregate principal amount of the
Bonds. Principal and interest hereunder shall be payable in the amounts and on
the dates set forth in the Bonds.
This Note is issued to evidence the obligation of the Borrower and
pursuant to, and shall be governed by and construed in accordance with, the
terms and conditions of the Loan Agreement (as hereinafter defined) for the
repayment of the Loan in the amount of $495,000 made by the Authority to the
Borrower thereunder from the proceeds of the Authority's $495,000 Economic
Development Bonds (Elite Pharmaceuticals, Inc. - 2005 Project), Federally
Taxable Series B (the "Bonds") and the payment of interest thereon, including
provision for repayment of the Loan in certain cases. All capitalized words and
terms not defined herein shall have the respective meanings and be construed
herein as provided in the Loan Agreement.
The Authority has assigned the Loan Agreement (together with this Note)
to the Trustee pursuant to the Indenture, reserving certain of its rights
thereunder. Such assignment is made as security for the payment of the Bonds
issued by the Authority pursuant to the Resolution adopted by it on July 12,
2005 and the Indenture.
This Note is entitled to all of the benefits and is subject to all of
the provisions of the Loan Agreement, which provisions are hereby incorporated
herein by reference thereto. Subject to the provisions hereof, the obligations
of the Borrower to make or cause the payments required hereunder shall be
absolute and unconditional without defense or setoff as more fully set forth in
the Loan Agreement.
This Note is subject to prepayment in whole or in part as provided in
the Loan Agreement.
If an "Event of Default" occurs under the Loan Agreement, the principal
of this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement.
Whenever payment or provision thereof has been made in respect of the
principal of, premium, if any, and interest on all Bonds in accordance with the
Loan Agreement, this Note shall be deemed paid in full and shall be canceled and
returned to the Borrower.
All payments of principal, premium, if any, and interest shall be made
to the Trustee at its Principal Office in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts. All payments shall be in the full amount
required hereunder unless and to the extent the Borrower is entitled to a credit
under the Loan Agreement or the Indenture.
Payment of the redemption price of any of the Bonds pursuant to the
provisions for redemption in the Indenture shall constitute payment of
principal, or any portion thereof, any premium thereon and accrued interest
thereon due on this Note. Any payment of interest on or principal or redemption
price of the Bonds pursuant to the Loan Agreement shall constitute a
corresponding interest or principal payment on this Note.
In case the Trustee or the Authority shall have proceeded to enforce
its rights under this Note, the Loan Agreement and/or the Indenture and such
proceedings shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Trustee or the Authority, then and in
every case the Borrower and the Trustee or the Authority shall be restored
respectively to their respective positions and rights hereunder, and all rights,
remedies and powers of the Borrower and the Trustee or the Authority shall
continue as though no such proceedings had been taken.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Borrower under the Federal bankruptcy laws or any
other applicable law, or in case a receiver or trustee shall have been appointed
for the property of the Borrower or in the case of any other similar judicial
proceedings relating to the Borrower, or to the creditors or property of the
Borrower, the Trustee and the Authority shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and provide a claim or
claims for the amounts owing and unpaid in respect of this Note and, in case of
any judicial proceedings relative to the Borrower, its creditors, or its
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized to make such payments to the Trustee and
the Authority, as the case may be, and to pay to the Trustee and the Authority
any amount due it for compensation and expenses, including counsel fees incurred
by it up to the date of such distribution.
This Note shall be governed by the laws of the State of New Jersey.