Unassociated Document


     

    SEW-2

     

    THE
SECURITIES REPRESENTED BY THIS WARRANT (AND/OR THE SECURITIES ISSUABLE UPON
CONVERSION OR EXERCISE HEREOF) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR WITH ANY STATE SECURITIES
COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED OF BY THE HOLDER IN THE
ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE  UNDER THE
SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS, IMMEDIATELY
PRIOR TO THE TIME SET FOR TRANSFER, SUCH TRANSFER MAY BE EFFECTED WITHOUT
VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS AND RULES.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES (AND/OR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF) MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES (AND/OR
THE SECURITIES ISSUABLE UPON CONVERSION OR EXERCISE HEREOF).

     

    Date:
October 30, 2009

     

    WARRANT
TO PURCHASE 40,000,000 SHARES OF COMMON STOCK OF

    ELITE
PHARMACEUTICALS, INC.

     

         Exercise
Price: $0.0625 per share,

    subject
to adjustment as provided below (the “Exercise Price”)

     

         
THIS IS TO CERTIFY that, for value received, Epic Investments, LLC, a Delaware
limited liability company, and its successors and assigns (collectively, the
“Holder”), is entitled to purchase, subject to the terms and conditions
hereinafter set forth, up to 40,000,000 fully paid and nonassessable shares (the
“Warrant Shares”) of the common stock, par value $0.001 per share (as amended by
the Amendment) (“Common Stock”), of Elite Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and to receive certificates for the Common Stock so
purchased. This Warrant to Purchase Common Stock (including any Warrant(s) to
Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”) has been issued pursuant to the terms and conditions of the Strategic
Alliance Agreement, dated as of March 18, 2009 by and between the Company and
the initial holder hereof (the “Strategic Agreement”; capitalized terms used
herein and not otherwise defined shall have the meanings assigned to them in the
Strategic Agreement).

     

         
1. EXERCISE PERIOD. The Holder may purchase all or a portion of the
Warrant Shares pursuant to Section 2 at any time or times on or after the date
of issuance of this Warrant but not after 5:00 p.m., New York time on the
seventh (7th)
anniversary of the date of issuance of this Warrant (such period, the “Exercise
Period”).

     

         
2. EXERCISE OF WARRANT.

     

         (a)
MECHANICS OF EXERCISE. (i) This Warrant may be exercised, in whole or in part,
at any time and from time to time during the Exercise Period. Such exercise
shall be accomplished by:

     

    
      
        
        

      

      
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(x) payment to the Company of an amount equal to the then applicable Exercise
Price multiplied by the number of Warrant Shares as to which this Warrant is
being exercised (the “Aggregate Exercise Price”) in cash, by wire transfer to an
account designated by the Company or by certified check or bank cashier’s check,
payable to the order of the Company, and

     

         
(y) physical delivery of this Warrant with an original executed Exercise Notice
in substantially the form attached hereto as Exhibit A (the
“Exercise Notice”) to the Company (the requirements referred to  in
clauses (x) and (y) being referred to as the “Exercise Delivery
Requirements”).

     

         
(b) Upon satisfaction of the Exercise Delivery Requirements, the Company will
(x) transmit to the Company’s transfer agent (the “Transfer Agent”) instructions
to issue the Warrant Shares in the amount set forth in the Exercise Delivery
Requirements and (y) as promptly as possible, but in no event more than three
(3) business days after satisfaction of the Exercise Delivery Requirements, (A)
provided that the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities Transfer Program, upon the request of
the Holder, credit such aggregate number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise to the Holder’s or its designee’s
balance account with DTC through its Deposit Withdrawal Agent Commission system,
or (B) if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate or certificates
representing the shares of Common Stock so purchased, registered in the
Company’s share register in the name of the Holder or its transferee (as
permitted under Section 3 below), for the number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise. With respect to any
exercise of this Warrant, the Holder will for all purposes be deemed to have
become the holder of record of the number of shares of Common Stock purchased
hereunder on the date this Warrant is delivered to the Company with a properly
executed Exercise Notice and payment of the Exercise Price (the “Exercise
Date”), irrespective of the date of delivery of the certificate evidencing such
shares, except that, if the  date of such receipt is a date on which
the stock transfer books of the Company are closed, such Person will be deemed
to have become the holder of such shares at the close of business on the next
succeeding date on which the stock transfer books are open. Fractional shares of
Common Stock will not be issued upon the exercise of this Warrant. In lieu of
any fractional shares that would have been issued but for the immediately
preceding sentence, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. In the event this Warrant is
exercised in part, the Company shall issue a new Warrant to the Holder covering
the aggregate number of shares of Common Stock as to  which this
Warrant remains exercisable for as soon as practicable and in no event later
than five (5) business days after any exercise. The Company shall pay any and
all taxes (other than income or withholding taxes) which may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant.

     

           (d)
DISPUTES. In the case of a dispute as to the determination of the Exercise Price
or the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the Holder the number of   Warrant Shares that are not
disputed and resolve such dispute in accordance with Section 15.

     

    
      
        
        

      

      
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(e) FORCE MAJEURE. The Company shall not be liable for or incur penalties for
delays or nonperformance in compliance with the issuance or delivery of the
Warrant Shares upon the exercise of the Warrant, if such delay or nonperformance
was caused by: (i) act of God, act of war, strike, fire,  natural
disaster, terrorism, quarantine or accident; or (ii) lack of availability of
materials, fuel or utilities.

     

         
3. TRANSFERABILITY AND EXCHANGE.

     

         
(a) TRANSFERABILITY. The Warrant and the other rights of the Holder pursuant to
this Warrant certificate are not severable from this Warrant certificate, and
shall not be assignable or transferable except in connection with a transfer or
assignment of this Warrant certificate in accordance with the terms hereof. Any
instrument purporting to make a transfer or assignment in violation of this
Section 3(a) shall be void and of no effect. Subject to compliance with any
applicable securities laws and the conditions set forth in Section 3(e) hereof
and to the provisions of Section 4.1 of the Strategic Agreement, this Warrant
and all rights hereunder (including, without limitation, any registration
rights) are transferable, in whole  or in part, upon surrender of this
Warrant certificate at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon compliance with the foregoing and such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or
Warrants in the name  of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled.

     

         
(b) WARRANT REGISTER. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose, in the name of the record Holder
hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise
hereof or any distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

     

         
(c) LOST, STOLEN OR MUTILATED WARRANT. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant, and,   in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Warrant, the Company shall execute and deliver to the Holder a new
Warrant representing the right to purchase the Warrant Shares then underlying
this Warrant.

     

         
(d) ISSUANCE OF NEW WARRANTS. Whenever the Company is required to issue a new
Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of
like tenor with this Warrant, (ii) shall represent, as indicated on the face of
such new Warrant, the right to purchase the Warrant Shares then underlying this
Warrant (or in the case of a new Warrant(s) being issued pursuant to Section
3(a),   the Warrant Shares designated by the Holder which, when
added to
the number of shares of Common Stock underlying the other new Warrants issued in
connection with such issuance, does not exceed the number of Warrant Shares then
underlying this Warrant), (iii) shall have an issuance date, as indicated on the
face of such new Warrant, which is the same as the issuance date hereunder and
(iv) shall have the same rights and conditions as this Warrant.

     

    
      
        
        

      

      
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(e) SECURITIES LAWS. This Warrant and the Warrant Shares issuable upon the
exercise hereof  may not be sold, transferred, pledged or hypothecated
unless the Company shall have been provided with an opinion of counsel, or other
evidence reasonably satisfactory to it, that such transfer is not in violation
of the Securities Act, and any applicable state securities laws or, with respect
to the Warrant Shares, a registration statement has been filed pursuant to the
Securities Act and has been declared effective with respect to such
disposition.

     

         
4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES SUBJECT TO WARRANT. The
Exercise Price and the number of shares of Common Stock purchasable upon the
exercise of this Warrant are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.

     

         
(a) DIVIDENDS, ETC. In case the Company shall, with respect to the holders of
its Common Stock, (i) pay a Common Stock dividend or make a distribution to its
stockholders in shares of Common Stock  or other securities, (ii)
split or subdivide its outstanding shares of Common Stock into a greater
number   of shares, or (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, then the Exercise Price in effect
at the time of the record date for such dividend or on the effective date of
such split, subdivision or combination, and/or the number and kind of securities
issuable on such date, shall be proportionately adjusted so that the Holder of
any Warrant thereafter exercised shall be entitled to receive the aggregate
number and kind of shares of Common Stock (or such other securities other than
Common Stock, as the case may be) of the Company, at the same aggregate Exercise
Price, that, if such Warrant had been exercised immediately prior to such date,
the Holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, distribution, split, subdivision or combination. Such
adjustment shall be made successively whenever any event listed above shall
occur.

     

         
(b) MERGER, ETC. If at any time after the date hereof there shall be a merger or
consolidation of the Company with or into or a transfer of all or substantially
all of the assets of the Company to another  entity, then the Holder
shall be entitled to receive upon or after such transfer, merger or
consolidation becoming effective, and upon payment of the Exercise Price then in
effect, the number of shares or other securities or property of the Company or
of the successor corporation resulting from such merger or consolidation, which
would have been received by the Holder for the shares of stock subject to this
Warrant had this Warrant been exercised just prior to such transfer, merger or
consolidation becoming effective or to the applicable record date thereof, as
the case may be. The Company will not merge or consolidate with or into any
other corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless the
corporation resulting from such merger or consolidation (if not the Company), or
such transferee corporation, as the case may be, shall expressly assume in
writing the due and punctual performance and observance of each and every
covenant and condition of this Warrant to be performed and observed by the
Company.

     

    
      
        
        

      

      
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(c) RECLASSIFICATION, ETC. If at any time after the date hereof there
shall be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different number of
securities of any other class or classes, then the Holder shall thereafter be
entitled to receive upon exercise of this Warrant, during the period specified
herein and upon payment of the Exercise Price then in effect, the number of
shares or other securities or property resulting from such reorganization or
reclassification, which would have been received by the Holder for the shares of
stock subject to this Warrant had this Warrant at such time been
exercised.

     

       
  (d) WEIGHTED AVERAGE ADJUSTMENT. If the Company or any Subsidiary
thereof, at any time while this Warrant is outstanding, sells or grants any
option to purchase or sells or grants any right to reprice its securities (other
than a reduction in the Exercise Price), or otherwise disposes of or issues (or
announces any sale, grant or any option to purchase or other disposition) any
Common Stock or Common Stock Equivalents in connection with an Exempt Issuance,
for which the Holder’s consent was not required under Section 4(b) of the
Certificate of Designation or Section 4.14 of the Strategic Agreement, entitling any Person to
acquire shares of Common Stock at an effective price per share that is lower
than the then applicable Exercise Price (any such issuance, a “Dilutive Issuance”)
(if the holder of the  Common Stock or Common Stock Equivalents so
issued shall at any time, whether by operation of purchase price adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is lower than the then applicable Exercise Price,
such issuance shall be deemed to have occurred for less than the then applicable
Exercise Price on such date of the Dilutive Issuance), then the then applicable
Exercise Price shall be reduced to a price determined by multiplying the then
applicable Exercise Price by a fraction, the numerator of which is the sum of
(i) the number of shares of Common Stock issued and outstanding immediately
prior to the Dilutive Issuance plus (ii) the number of
shares of Common Stock issuable upon conversion or exercise of Common Stock
Equivalents issued and outstanding immediately prior to the Dilutive Issuance
plus (iii) the number
of shares of Common Stock which the offering price for such Dilutive Issuance
would purchase at the then applicable Exercise Price, and the denominator of
which shall be the sum of (1) the number of shares of Common Stock issued and
outstanding immediately prior to the Dilutive Issuance plus (2) the number of shares
of Common Stock issuable upon conversion or exercise of Common Stock Equivalents
issued and outstanding immediately prior to the Dilutive Issuance plus (3) the number of shares
of Common Stock so issued or issuable in connection with the Dilutive Issuance.
Notwithstanding the foregoing, no adjustment will be made under this Section
3(d) in respect of any issuance as to which the Holder has provided its written
approval under Section 4(b) of the  Certificate of Designation or
Section 4.14 of the Strategic Agreement. The Company shall notify the Holder in
writing, no later than five (5) Business Days following a Dilutive Issuance,
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance
Notice”). Such Dilutive Issuance Notice shall be given by the Company to
the Holder in accordance with Section 10 hereof.

     

    
      
        
        

      

      
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          (e)
ADJUSTMENTS LESS THAN ONE PERCENT. Notwithstanding any provision herein to the
contrary, no adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Exercise Price; provided, however, that any adjustments which by reason of
this Section 4(d) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 4
shall be made to  the nearest cent or the nearest one-hundredth of a
share, as the case may be.

     

          (f)
OTHER CAPITAL STOCK. In the event that at any time, as a result of an adjustment
made pursuant to Section 4(a) or (b) above, the Holder of this Warrant, when
thereafter exercised, shall become entitled to receive any shares of capital
stock of the Company other than shares of Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in this Section 4, and the other provisions of this Warrant shall
apply on like terms to any such other shares.

     

         
5. RESERVATION OF SHARES. The Company covenants that it will at all times take
all steps necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock for  the sole purpose of issuance upon
exercise of this Warrant, as provided herein, free from
preemptive  rights or any other actual contingent purchase rights of
Persons other than the Holder, not less than such aggregate number of Warrant
Shares as shall be issuable (taking into account the adjustments and
restrictions contained herein) upon the exercise in full of this Warrant. To the
extent that the Amendment does not result in an increase of the Company’s
authorized and unissued shares of Common Stock adequate for the exercise in full
of this Warrant, the Company shall undertake to promptly seek stockholder
approval to increase such number of authorized and unissued shares of Common
Stock. The Company covenants that all Warrant Shares that shall be issuable upon
the exercise of this Warrant shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.

     

         
6. NOTICES TO HOLDER. Upon any adjustment of the Exercise Price (or number of
shares of Common Stock purchasable upon the exercise of this Warrant) pursuant
to Section 4, the Company shall promptly thereafter, but in no event later than
ten (10) days after the event causing the adjustment has occurred, cause to be
given to the Holder written notice of such adjustment. Such notice shall include
the Exercise Price (and/or the number of shares of Common Stock purchasable upon
the exercise of this Warrant) after such adjustment, and shall set forth in
reasonable detail the Company’s method of calculation and the facts upon which
such calculations were based. Where appropriate, such notice shall be given in
advance and included as a part of any notice required to be given under the
other provisions   of this Section 6.  

     

        In
the event of (a) any fixing by the Company of a record date with respect to the
holders of any class  of securities of the Company for the purpose of
determining which of such holders are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares  of capital stock of any class or any other securities or
property, or to receive any other right or to give effect to any split, (b) any
capital reorganization of the Company, or reclassification or recapitalization
of the capital stock of the Company or any transfer
of all or substantially all of the assets or business of the Company to, or
consolidation or merger of the Company with or into, any other Person, or (c)
any voluntary or involuntary dissolution or winding up of the Company, then and
in each such event the Company will give the Holder a written notice specifying,
as the case may be (i) the record date for such split, dividend, distribution,
or right, and stating the amount and character of such split, dividend,
distribution, or right; or (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger, conveyance,
dissolution, liquidation, or winding up is to take place and the time, if any is
to be fixed, as of which the holders of record of Common Stock (or such capital
stock or securities receivable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock
securities) for securities or other property deliverable upon such event. Any
such notice shall be given at least 10 days prior to the earliest date therein
specified.

     

    
      
        
        

      

      
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7. NO RIGHTS AS A STOCKHOLDER. This Warrant does not entitle the Holder to any
voting rights, distribution rights, dividend rights or other rights as a
stockholder of the Company, nor to any  other rights whatsoever except
the rights herein set forth.

     

         
8. ADDITIONAL COVENANTS OF THE COMPANY. The Company shall, upon issuance of any
shares for which this Warrant is exercisable, at its expense, promptly obtain
and maintain the listing of such shares.

     

         
The Company shall comply with the reporting requirements of Sections 13 and
15(d) of the Exchange Act for so long as and to the extent that such
requirements apply to the Company.

     

         
The Company shall not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this
Warrant. Without limiting the generality of the foregoing, the Company (a) will
not increase the par value of any shares of capital stock receivable upon
exercise of this Warrant above the amount payable therefor upon such exercise,
(b) will take all such actions as may be necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable stock,
and (c) the Company shall  not, by amendment of its Certificate of
Incorporation or Bylaws or through a reorganization, transfer of assets,
consolidation, merger, dissolution, issuance, or sale of securities or any other
voluntary action, avoid, circumvent, or seek to avoid the observance or
performance of any of the terms to be observed or performed under this Warrant
by the Company, but shall at all times in good faith assist in carrying out of
all the provisions of this Warrant and in taking all such action as may be
necessary or appropriate to protect Holder’s rights under this Warrant against
impairment.

     

         
9. SUCCESSORS AND ASSIGNS. During the Lock-up Period, this Warrant may not be
assigned by the Holder without the prior written consent of the Company. This
Warrant shall be binding upon and inure to the benefit of the Company, the
Holder and their respective successors and permitted assigns.

     

         
10. NOTICES. The Company agrees to maintain a ledger of the ownership of this
Warrant (the “Ledger”). Any notice hereunder shall be given by registered or
certified mail if to the
Company, at its principal executive office and, if to the Holder, to its address
shown in the Ledger of the Company; provided, however, that the Holder may at
any time on three (3) business days written notice to the Company designate or
substitute one other address where notice is to be given. Notice shall be deemed
given and received when a certified or registered letter, properly addressed
with postage prepaid, is deposited in the U.S. mail.

     

    
      
        
        

      

      
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11. SEVERABILITY. Every provision of this Warrant is intended to be severable.
If any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not  affect the remainder of this
Warrant.

     

         
12. GOVERNING LAW. This Warrant shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to the principles
of choice of laws thereof.

     

         
13. ATTORNEYS’ FEES. In any action or proceeding brought to enforce any
provision of this Warrant, the prevailing party shall be entitled to recover
reasonable attorneys’ fees in addition to its costs and expenses and any other
available remedy.

     

         
14. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the
Exercise Price or the arithmetic calculation of the Warrant Shares, the Company
shall submit the disputed determinations  or arithmetic calculations
via facsimile within one (1) business day of receipt of the Exercise Notice
giving rise to such dispute, as the case may be, to the Holder. If the Holder
and the Company are unable  to agree upon such determination or
calculation of the Exercise Price or the Warrant Shares within
two  (2) business days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
(2) business days thereafter submit via facsimile (a) the disputed determination
of the Exercise Price to an independent, reputable investment bank selected by
the Company and approved by the Holder (such approval not to be unreasonably
withheld, delayed or conditioned) or (b) the disputed arithmetic calculation of
the Warrant Shares to the Company’s independent, outside accountant. The Company
shall cause the investment bank or the accountant, as the case may be, to
perform the determinations or calculations and notify the Company and the Holder
of the results no later than ten (10) business days from the time it receives
the disputed determinations or calculations. Such investment bank’s or
accountant’s determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error. The fees of such investment bank or
independent accountant shall be borne one half by the Company and one half by
the Holder.

     

         
15. REMEDIES, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The  remedies provided in this Warrant shall be cumulative and in
addition to all other remedies available under this Warrant and the Strategic
Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of the
Holder right to pursue actual damages for any failure by the Company to comply
with the terms of this Warrant. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available remedies,
to an injunction restraining any breach, without the necessity of showing
economic loss and without any bond or other security being
required.

     

    
      
        
        

      

      
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16. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein
prohibited, or omit to perform  any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Holder.

     

         
17. ENTIRE AGREEMENT. This Warrant (including the Exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject
matter.

     

         
18. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall
have the following meanings:

     

         (a)
“Bloomberg” means Bloomberg Financial Markets.

     

         (b)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any
date, the
last  closing bid price and last closing trade price, respectively,
for such security on the Trading Market, as reported by Bloomberg, prior to
4:00:00 p.m., New York Time, or, if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the bid
prices, or the ask prices, respectively, of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National
Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price
cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Bid Price or the Closing Sale Price, as the case may be, of
such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved
pursuant  to Section 15.

     

         
(c) “Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

     

     

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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
duly authorized officer as of the date first set forth above.

     

     

    
      
        	ELITE
      PHARMACEUTICALS, INC.	 	 	 	 
	 	 	 	 	 	 
	By:	  	 	 	
              	 
	Name: 
      	
              	 	 	
              	 
	Title:	
              	 	 	
              	 


      

    

     

    
      
        
        

      

      
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    EXHIBIT
A

     

    EXERCISE
NOTICE TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT TO
PURCHASE COMMON STOCK OF ELITE PHARMACEUTICALS, INC.

     

         
The undersigned holder hereby exercises the right to purchase _________________
of the shares of Common Stock (“WARRANT SHARES”) of Elite Pharmaceuticals, a
Delaware corporation (the “COMPANY”), evidenced by the attached Warrant to
Purchase Common Stock (the “WARRANT”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in  the
Warrant.

     

         
1. FORM OF EXERCISE PRICE. The Registered Holder intends that payment of the
Exercise Price shall be made as:

     

    
      
        	 
          	
                 a
      “CASH EXERCISE” with respect to    

              	 
      	
                 Warrant
      Shares

              


      

    

     

         
2. PAYMENT OF EXERCISE PRICE. In the event that the Registered Holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the
sum of $___________________ to the Company in accordance with the terms of the
Warrant.

     

         
3. DELIVERY OF WARRANT SHARES. The Company shall deliver to the Registered
Holder __________ Warrant Shares in accordance with the terms of the
Warrant.

     

    
      
        	Date:  
      	                             
      ,	 	 	 	 
	 	 	 	 	 	 
	 
       	 	 	 	 
	Name
      of Registered Holder	 	 	 	 
	 	 	 	 	 	 
	By:	 	 	 	
              	 
	
                Title
      (if applicable):

              	 	 	
              	 


      

    

     

    
      
        
        

      

      
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    ASSIGNMENT
FORM

     

    (To
assign the foregoing warrant, execute this form and supply required information.
Do not use this form to exercise the warrant.)

     

    For Value
Received the foregoing Warrant and all rights evidenced thereby are hereby
assigned to                                              whose address is

    
      
        
          	         
       	,	 	 
	 	 	 	 	 	 
	Dated: 
      	                 
                 
    ,	 	 	 	 


        

         

        
          	Holder’s
      Signature:	 	 	 	 	 
	 	 	 	 	 	 
	Holder’s
      Address:	  	 	 	
                	 
	 	 	 	
                	 


        

      

    

     

     

     

    CONSENTED
TO:

     

    
      
        
          	Elite
      Pharmaceuticals, Inc.	 	 	 	 
	 	 	 	 	 	 
	By:	  	 	 	
                	 
	Name: 
      	
                	 	 	
                	 
	Title:	
                	 	 	
                	 


        

      

       

    

    
      
        
        

      

      
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