Exhibit 10.1


PURCHASE AGREEMENT


 


PURCHASE AGREEMENT
(the “Agreement”), dated as of April 19, 2013, by and between ELITE PHARMACEUTICALS, INC., a Nevada corporation,
(the “Company”), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited liability company (the “Investor”).


 


WHEREAS: 


 


Subject to the terms and conditions set
forth in this Agreement, the Company wishes to sell to the Investor, and the Investor wishes to buy from the Company, up to Ten
Million Dollars ($10,000,000) of the Company's common stock, $.001 par value (the “Common Stock”). The shares
of Common Stock to be purchased hereunder are referred to herein as the “Purchase Shares.”


 


NOW THEREFORE, in consideration of the
mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Investor hereby agree as follows:


 


1.            CERTAIN
DEFINITIONS. 


 


For purposes of this
Agreement, the following terms shall have the following meanings:


 


(a)          “Available
Amount” means initially Ten Million Dollars ($10,000,000) in the aggregate which amount shall be reduced by the Purchase
Amount each time the Investor purchases shares of Common Stock pursuant to Section 2 hereof.


  


(b)          “Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.


 


(c)          “Business
Day” means any day on which the Principal Market is open for trading including any day on which the Principal Market
is open for trading for a period of time less than the customary time.


 


(d)          “Closing
Sale Price” means, for any security as of any date, the last closing sale price for such security on the Principal Market
as reported by the Principal Market, or, if the Principal Market is not the principal securities exchange or trading market for
such security, the last closing sale price of such security on the principal securities exchange or trading market where such security
is listed or traded as reported by the Principal Market.


 


(e)          “Confidential
Information” means any information disclosed by either party to the other party, either directly or indirectly, in writing,
orally or by inspection of tangible objects (including, without limitation, documents, prototypes, samples, plant and equipment),
which is designated as "Confidential," "Proprietary" or some similar designation. Information communicated
orally shall be considered Confidential Information if such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to
a disclosing party by third parties. Confidential Information shall not, however, include any information which (i) was publicly
known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly
known and made generally available after disclosure by the disclosing party to the receiving party through no action or inaction
of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party
as shown by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the
receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is independently
developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown
by documents and other competent evidence in the receiving party’s possession; or (vi) is required by law to be disclosed
by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement
prior to such disclosure and assistance in obtaining an order protecting the information from public disclosure.


 




    	 



    	 



    

 


(f)           “Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law.


 


(g)          “DTC”
means The Depository Trust Company, or any successor performing substantially the same function for the Company.


 


(h)          “DWAC
Shares” means shares of Common Stock that are (i) issued in electronic form, (ii) freely tradable and transferable and
without restriction on resale and (iii) timely credited by the Company to the Investor’s or its designee’s specified
Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated Securities Transfer (FAST) Program or any similar
program hereafter adopted by DTC performing substantially the same function.


 


(i)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


(j)           “Material
Adverse Effect” means any material adverse effect on (i) the enforceability of any Transaction Document, (ii) the
results of operations, assets, business or financial condition of the Company and its Subsidiaries, taken as a whole, other than
any material adverse effect that resulted exclusively from (A) any change in the United States or foreign economies or securities
or financial markets in general that does not have a disproportionate effect on the Company and its Subsidiaries, taken as a whole,
(B) any change that generally affects the industry in which the Company and its Subsidiaries operate that does not have a
disproportionate effect on the Company and its Subsidiaries, taken as a whole, (C) any change arising in connection with earthquakes,
hostilities, acts of war, sabotage or terrorism or military actions or any escalation or material worsening of any such hostilities,
acts of war, sabotage or terrorism or military actions existing as of the date hereof, (D) any action taken by the Investor,
its affiliates or its or their successors and assigns with respect to the transactions contemplated by this Agreement, (E) the
effect of any change in applicable laws or accounting rules that does not have a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, or (F) any change resulting from compliance with terms of this Agreement or the consummation
of the transactions contemplated by this Agreement, or (iii) the Company’s ability to perform in any material respect
on a timely basis its obligations under any Transaction Document to be performed as of the date of determination.


 


(k)          “Maturity
Date” means the first day of the month immediately following the thirty six (36) month anniversary of the Commencement
Date.


 


(l)           “PEA
Period” means the period commencing at 9:30 a.m., Eastern time, on the tenth (10th) Business Day immediately
prior to, and ending at 9:30 a.m., Eastern time, on the Business Day immediately following, the effective date of any post-effective
amendment to the Registration Statement or New Registration Statement (as such terms are defined in the Registration Rights Agreement).


 




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(m)          “Person”
means an individual or entity including but not limited to any limited liability company, a partnership, a joint venture, a corporation,
a trust, an unincorporated organization and a government or any department or agency thereof.


 


(n)          “Principal
Market” means the OTC Bulletin Board (it being understood that as used herein “OTC Bulletin Board” shall
also mean any successor or comparable market quotation system or exchange to the OTC Bulletin Board such as the OTCQB operated
by the OTC Markets Group, Inc.); provided however, that in the event the Company’s Common Stock is ever listed or traded
on The NASDAQ Global Market, The NASDAQ Capital Market, The NASDAQ Global Select Market, the New York Stock Exchange, the NYSE
MKT or the NYSE Arca, then the “Principal Market” shall mean such other market or exchange on which the Company’s
Common Stock is then listed or traded.


 


(o)          “Purchase
Amount” means, with respect to any particular Regular Purchase made hereunder, the portion of the Available Amount to
be purchased by the Investor pursuant to Section 2 hereof.


 


(p)          “Purchase
Date” means with respect to any particular Regular Purchase made hereunder, the Business Day on which the Investor receives
by 4:30 P.M., Eastern time, of such Business Day a valid Regular Purchase Notice that the Investor is to buy Purchase Shares pursuant
to Section 2(a) hereof.


 


(q)         
“Purchase Price” means the lower of (A) the lowest Sale Price of the Common Stock on the Purchase Date and (B)
the arithmetic average of the three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12) consecutive Business
Days ending on the Business Day immediately preceding such Purchase Date (in each case, to be appropriately adjusted for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction).


 


(r)           “Regular
Purchase Notice” means, with respect to any Regular Purchase pursuant to Section 2(a) hereof, an irrevocable written
notice from the Company to the Investor directing the Investor to buy such applicable amount of Purchase Shares at the applicable
Purchase Price as specified by the Company therein on the Purchase Date.


 


(s)          “Sale
Price” means any sale price for the shares of Common Stock on the Principal Market as reported by the Principal Market.


 


(t)           “SEC”
means the U.S. Securities and Exchange Commission.


 


(u)          “Securities”
means, collectively, the Purchase Shares and the Commitment Shares.


 


(v)          “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(w)          “Subsidiary”
means any Person the Company wholly-owns or controls, or in which the Company, directly or indirectly, owns a majority of the voting
stock or similar voting interest, in each case that would be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated
under the Securities Act.


 


(x)           “Transaction
Documents” means, collectively, this Agreement, the Registration Rights Agreement, the schedules and exhibits hereto
and thereto, and each of the other agreements, documents, certificates and instruments entered into or furnished by the parties
hereto in connection with the transactions contemplated hereby and thereby.


 




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(y)          “Transfer
Agent” means American Stock Transfer & Trust Company, or such other Person who is then serving as the transfer agent
for the Company in respect of the Common Stock.


 


2. PURCHASE OF COMMON STOCK. 


 


Subject to the terms
and conditions set forth in this Agreement, the Company has the right to sell to the Investor, and the Investor has the obligation
to purchase from the Company, Purchase Shares as follows:


 


(a)          Commencement
of Regular Sales of Common Stock. Upon the satisfaction of the conditions set forth in Sections 7 and 8 hereof (the “Commencement”
and the date of satisfaction of such conditions the “Commencement Date”), the Company shall have the right,
but not the obligation, to direct the Investor, by its delivery to the Investor of a Regular Purchase Notice from time to time,
to buy up to Eighty Thousand Dollars ($80,000.00) worth of Purchase Shares (each such purchase a “Regular Purchase”)
at the Purchase Price on the Purchase Date. The Regular Purchase Amount may be increased to up to One Hundred Fifty Thousand Dollars
($150,000.00) per Regular Purchase Notice if the Closing Sale Price of the Common Stock is not below $.125 (subject to equitable
adjustment for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the Purchase
Date. The Regular Purchase Amount may be increased to up to Two Hundred Fifty Thousand Dollars ($250,000.00) per Regular Purchase
Notice if the Closing Sale Price of the Common Stock is not below $.175 (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction) on the Purchase Date. The Regular Purchase Amount
may be increased to up to Three Hundred Fifty Thousand ($350,000) per Regular Purchase Notice if the Closing Sale Price of the
Common Stock is not below $.25 (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock
split or other similar transaction) on the Purchase Date. The Regular Purchase Amount may be increased to up to Five Hundred Thousand
($500,000) per Regular Purchase Notice if the Closing Sale Price of the Common Stock is not below $.40 (subject to equitable adjustment
for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction) on the Purchase Date. With
respect to each such Regular Purchase, the Company must deliver an instruction letter to the Company’s transfer agent requesting
delivery of the Purchase Shares on the Business Day following the Purchase Date. If on any Purchase Date the Closing Sale Price
of the Common Stock is below the Regular Purchase threshold price, such Regular Purchase shall automatically be reduced to the
next lowest applicable Regular Purchase Amount. If the Company delivers any Regular Purchase Notice for a Purchase Amount in excess
of the limitations contained in the immediately preceding sentence, such Regular Purchase Notice shall be void ab initio
to the extent of the amount by which the Regular Purchase Amount set forth in such Regular Purchase Notice exceeds the Regular
Purchase Amount which the Company is permitted to include in such Purchase Notice in accordance herewith, and the Investor shall
have no obligation to purchase such excess Regular Purchase Amount in respect of such Regular Purchase Notice; provided that the
Investor shall remain obligated to purchase a Regular Purchase Amount which the Company is permitted to include in such Regular
Purchase Notice. The Company may deliver multiple Regular Purchase Notices to the Investor so long as at least two (2) Business
Days have passed since the most recent Regular Purchase was completed. Notwithstanding the foregoing, the Company shall not deliver
any Regular Purchase Notices during the PEA Period.


 




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(b)          Payment
for Purchase Shares. For each Regular Purchase, the Investor shall pay to the Company an amount equal to the Purchase Amount
with respect to such Regular Purchase as full payment for such Purchase Shares via wire transfer of immediately available funds
on the same Business Day that the Investor receives such Purchase Shares if they are received by the Investor before 1:00 p.m.,
Eastern time, or if received by the Investor after 1:00 p.m., Eastern time, the next Business Day. The Company shall not issue
any fraction of a share of Common Stock upon any purchase. If the issuance would result in the issuance of a fraction of a share
of Common Stock, the Company shall round such fraction of a share of Common Stock up or down to the nearest whole share. All payments
made under this Agreement shall be made in lawful money of the United States of America or wire transfer of immediately available
funds to such account as the Company may from time to time designate by written notice in accordance with the provisions of this
Agreement. Whenever any amount expressed to be due by the terms of this Agreement is due on any day that is not a Business Day,
the same shall instead be due on the next succeeding day that is a Business Day.


 


(c)          Purchase
Price Floor. The Company and the Investor shall not effect any purchases under this Agreement on any Purchase Date that the
Closing Sale Price is less than the Floor Price. "Floor Price" means $.07, which shall be appropriately adjusted
for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction and, effective upon the consummation
of any such reorganization, recapitalization, non-cash dividend, stock split or other similar transaction, the Floor Price shall
mean the lower of (i) the adjusted price and (ii) $1.00.


 


(e)          Beneficial
Ownership Limitation. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not issue
or sell, and the Investor shall not purchase or acquire, any shares of Common Stock under this Agreement which, when
aggregated with all other shares of Common Stock then beneficially owned by the Investor and its affiliates (as calculated pursuant
to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) would result in the beneficial ownership by the Investor
and its affiliates of more than 9.99% of the then issued and outstanding shares of Common Stock (the “Beneficial
Ownership Limitation”). Upon the written or oral request of the Investor, the Company shall promptly (but not later than
one (1) Business Day) confirm orally or in writing to the Investor the number of shares of Common Stock then outstanding. The Investor
and the Company shall each cooperate in good faith in the determinations required hereby and the application hereof. The Investor’s
written certification to the Company of the applicability of the Beneficial Ownership Limitation, and the resulting effect thereof
hereunder at any time, shall be conclusive with respect to the applicability thereof and such result absent manifest error.


 


3.            INVESTOR'S
REPRESENTATIONS AND WARRANTIES.


 


The Investor represents
and warrants to the Company that as of the date hereof and as of the Commencement Date:


 


(a)          Investment
Purpose.  The Investor is acquiring the Securities as principal for its own account and not with a view to or for distributing
or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has
no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty
not limiting the Investor’s right to sell the Securities at any time pursuant to the registration statement described herein
or otherwise in compliance with applicable federal and state securities laws and with respect to the Commitment Shares (as defined
below in Section 5(e)), subject to Section 5(e) hereof).  The Investor is acquiring the Securities hereunder in the ordinary
course of its business.


 


(b)          Accredited
Investor Status. The Investor is an "accredited investor" as that term is defined in Rule 501(a)(3) of Regulation
D promulgated under the Securities Act.


 




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(c)          Reliance
on Exemptions. The Investor understands that the Securities may be offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon
the truth and accuracy of, and the Investor's compliance with, the representations, warranties, agreements, acknowledgments and
understandings of the Investor set forth herein in order to determine the availability of such exemptions and the eligibility of
the Investor to acquire the Securities.


 


(d)          Information.
The Investor understands that its investment in the Securities involves a high degree of risk. The Investor (i) is able to bear
the economic risk of an investment in the Securities including a total loss thereof, (ii) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and risks of the proposed investment in the Securities
and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial
condition and business of the Company and others matters related to an investment in the Securities. Neither such inquiries nor
any other due diligence investigations conducted by the Investor or its representatives shall modify, amend or affect the Investor's
right to rely on the Company's representations and warranties contained in Section 4 below. The Investor has sought such accounting,
legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities.


 


(e)          No
Governmental Review. The Investor understands that no U.S. federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of an investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(f)          Transfer
or Sale. The Investor understands that (i) the Securities may not be offered for sale, sold, assigned or transferred unless
(A) registered pursuant to the Securities Act or (B) an exemption exists permitting such Securities to be sold, assigned or transferred
without such registration; (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the
terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller
(or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act)
may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder.


 


(g)          Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a
valid and binding agreement of the Investor enforceable against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies.


 


(h)          Residency.
The Investor is a resident of the State of Illinois.


 


(i)           No
Short Selling. The Investor represents and warrants to the Company that at no time prior to the date of this Agreement has
any of the Investor, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly,
any (i) "short sale" (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock
or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock.


 




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4.            REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The Company represents
and warrants to the Investor that as of the date hereof and as of the Commencement Date:


 


(a)          Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither
the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of
formation or incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure
to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse
Effect, and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification. The Company has no Subsidiaries except as set forth on Schedule 4(a).


 


(b)          Authorization;
Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations
under this Agreement, the Registration Rights Agreement and each of the other Transaction Documents, and to issue the Securities
in accordance with the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby, including without limitation, the issuance of the Commitment
Shares and the reservation for issuance and the issuance of the Purchase Shares issuable under this Agreement, have been duly authorized
by the Company's Board of Directors and no further consent or authorization is required by the Company, its Board of Directors
or its shareholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly
executed and delivered by the Company and (iv) this Agreement constitutes, and each other Transaction Document upon its execution
on behalf of the Company, shall constitute, the valid and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies. The Board of Directors of the Company has approved the resolutions (the “Signing Resolutions”)
substantially in the form as set forth as Exhibit C attached hereto to authorize this Agreement and the transactions contemplated
hereby. The Signing Resolutions are valid, in full force and effect and have not been modified or supplemented in any respect.
The Company has delivered to the Investor a true and correct copy of such resolutions adopting the Signing Resolutions executed
by all of the members of the Board of Directors of the Company. Except as set forth in this Agreement, no other approvals or consents
of the Company’s Board of Directors and/or shareholders is necessary under applicable laws and the Company’s Articles
of Incorporation and/or By-laws to authorize the execution and delivery of this Agreement or any of the transactions contemplated
hereby, including, but not limited to, the issuance of the Commitment Shares and the issuance of the Purchase Shares.


 




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(c)          Capitalization.
As of the date hereof, the authorized capital stock of the Company is set forth on Schedule 4(c). Except as disclosed in
Schedule 4(c), (i) no shares of the Company's capital stock are subject to preemptive rights or any other similar rights
or any liens or encumbrances suffered or permitted by the Company, (ii) there are no outstanding debt securities, (iii) there are
no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, (iv) there are no agreements or arrangements under which the Company or any of its Subsidiaries
is obligated to register the sale of any of their securities under the Securities Act (except the Registration Rights Agreement),
(v) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries, (vi) there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described
in this Agreement and (vii) the Company does not have any stock appreciation rights or "phantom stock" plans or agreements
or any similar plan or agreement. The Company has furnished to the Investor true and correct copies of the Company's Articles of
Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company's
By-laws, as amended and as in effect on the date hereof (the "By-laws"), and summaries of the terms of all securities
convertible into or exercisable for Common Stock, if any, and copies of any documents containing the material rights of the holders
thereof in respect thereto.


 


(d)          Issuance
of Securities. Upon issuance and payment thereof in accordance with the terms and conditions of this Agreement, the Purchase
Shares shall be validly issued, fully paid and nonassessable and free from all taxes, liens, charges, restrictions, rights of first
refusal and preemptive rights with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder
of Common Stock. 75,000,000 shares of Common Stock have been duly authorized and reserved for issuance upon purchase under this
Agreement as Purchase Shares. 2,929,115 shares of Common Stock (subject to equitable adjustment for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction) have been duly authorized and reserved for issuance as Initial Commitment
Shares (as defined below in Section 5(e)) in accordance with this Agreement. The Initial Commitment Shares shall be validly issued,
fully paid and nonassessable and free from all taxes, liens, charges, restrictions, rights of first refusal and preemptive rights
with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. 2,929,115
shares of Common Stock (subject to equitable adjustment for any reorganization, recapitalization, non-cash dividend, stock split
or other similar transaction) have been duly authorized and reserved for issuance as Additional Commitment Shares (as defined below
in Section 5(e)) in accordance with this Agreement. When issued in accordance with this Agreement, the Additional Commitment Shares
shall be validly issued, fully paid and nonassessable and free from all taxes, liens, charges, restrictions, rights of first refusal
and preemptive rights with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of
Common Stock.


 




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(e)          No
Conflicts. Except as disclosed in Schedule 4(e), the execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation,
the reservation for issuance and issuance of the Purchase Shares and the Commitment Shares) will not (i) result in a violation
of the Articles of Incorporation, any Certificate of Designations, Preferences and Rights of any outstanding series of preferred
stock of the Company or the By-laws or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules
and regulations of the Principal Market applicable to the Company or any of its Subsidiaries) or by which any property or asset
of the Company or any of its Subsidiaries is bound or affected, except in the case of conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations under clause (ii), which could not reasonably be expected to result in a Material Adverse
Effect. Except as disclosed in Schedule 4(e), neither the Company nor its Subsidiaries is in violation of any term of or
in default under its Articles of Incorporation, any Certificate of Designation, Preferences and Rights of any outstanding series
of preferred stock of the Company or By-laws or their organizational charter or by-laws, respectively. Except as disclosed in Schedule
4(e), neither the Company nor any of its Subsidiaries is in violation of any term of or is in default under any material contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable
to the Company or its Subsidiaries, except for possible conflicts, defaults, terminations or amendments which could not reasonably
be expected to have a Material Adverse Effect. The business of the Company and its Subsidiaries is not being conducted, and shall
not be conducted, in violation of any law, ordinance, regulation of any governmental entity, except for possible violations, the
sanctions for which either individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect.
Except as specifically contemplated by this Agreement and as required under the Securities Act or applicable state securities laws
and the rules and regulations of the Principal Market, the Company is not required to obtain any consent, authorization or order
of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order
for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with
the terms hereof or thereof. Except as disclosed in Schedule 4(e) and set forth elsewhere in this agreement, all consents,
authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall
be obtained or effected on or prior to the Commencement Date. Except as listed in Schedule 4(e), since one year prior to
the date hereof, the Company has not received nor delivered any notices or correspondence from or to the Principal Market. The
Principal Market has not commenced any delisting proceedings against the Company.


 


(f)          SEC
Documents; Financial Statements. Except as disclosed in Schedule 4(f) the
Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or
such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including
the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Documents”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Documents
prior to the expiration of any such extension.  As of their respective dates and to the best of the Company’s knowledge,
the SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable.
None of the SEC Documents, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the SEC Documents comply in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for
the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments. Except as listed in Schedule 4(f), the Company has received no notices
or correspondence from the SEC for the one year preceding the date hereof. The SEC has not commenced any enforcement proceedings
against the Company or any of its subsidiaries.


 




    	-9-



    	 



    

 


(g)          Absence
of Certain Changes. Except as disclosed in Schedule 4(g), since December 31, 2012, there has been no material adverse
change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries.
The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts
as they become due.


 


(h)          Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened
against or affecting the Company, the Common Stock or any of the Company's Subsidiaries or any of the Company's or the Company's
Subsidiaries' officers or directors in their capacities as such, which could reasonably be expected to have a Material Adverse
Effect. A description of each action, suit, proceeding, inquiry or investigation before or by any court, public board, government
agency, self-regulatory organization or body which, as of the date of this Agreement, is pending or threatened in writing against
or affecting the Company, the Common Stock or any of the Company's Subsidiaries or any of the Company's or the Company's Subsidiaries'
officers or directors in their capacities as such, is set forth in Schedule 4(h).


 


(i)          Acknowledgment
Regarding Investor's Status. The Company acknowledges and agrees that the Investor is acting solely in the capacity of arm's
length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Company further
acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Investor
or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and
thereby is merely incidental to the Investor's purchase of the Securities. The Company further represents to the Investor that
the Company's decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company
and its representatives and advisors.


 


(j)           No
General Solicitation; No Integrated Offering. Neither the Company, nor any of its affiliates, nor any person acting on its
or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Securities. Neither the Company, nor any of its affiliates, nor
any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings
by the Company in a manner that would require stockholder approval pursuant to the rules of the Principal Market on which any of
the securities of the Company are listed or designated. The issuance and sale of the Securities hereunder does not contravene the
rules and regulations of the Principal Market.


 


(k)          Intellectual
Property Rights. Except as set forth on Schedule 4(k), the Company and its Subsidiaries own or possess adequate rights
or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct
their respective businesses as now conducted. Except as set forth on Schedule 4(k), none of the Company's material trademarks,
trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses,
approvals, government authorizations, trade secrets or other intellectual property rights have expired or terminated, or, by the
terms and conditions thereof, could expire or terminate within two years from the date of this Agreement. Except as set forth on
Schedule 4(k), the Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries
of any material trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of others, or of any such development of similar or identical
trade secrets or technical information by others and, except as set forth on Schedule 4(k), there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being threatened against, the Company or its Subsidiaries
regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement, which could reasonably be expected to have a Material Adverse Effect.


 




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(l)           Environmental
Laws. The Company and its Subsidiaries, to the best of the Company’s knowledge, (i) are in compliance with any and all
applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval, except where, in each of the
three foregoing clauses, the failure to so comply could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.


 


(m)          Title.
The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case
free and clear of all liens, encumbrances and defects (“Liens”), except for Liens on the Company’s facility
pursuant to the NJ Economic Development Authority Bonds, Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for
the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties.  Any
real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in compliance with such exceptions as are not material and do
not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.


 


(n)          Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Except as set forth on Schedule 4(n), neither the Company nor any such Subsidiary has been refused
any insurance coverage sought or applied for and neither the Company nor any such Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company and its Subsidiaries, taken as a whole.


 


(o)          Regulatory
Permits. The Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor
any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.


 


(p)          Tax
Status. The Company and each of its Subsidiaries has made or filed all federal and state income and all other material tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company
and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported
taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to
be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.


 




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(q)          Transactions
With Affiliates.  Except as set forth in the SEC Documents,
none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.


 


(r)           Application
of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all
necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation or the
laws of the state of its incorporation which is or could become applicable to the Investor as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company's issuance of the Securities and the Investor's ownership of the
Securities.


 


(s)           Disclosure.  Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents that will be timely
publicly disclosed by the Company, the Company confirms that neither it nor any other Person acting on its behalf has provided
the Investor or its agents or counsel with any information that it believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Registration Statement or the SEC Documents.   The Company understands
and confirms that the Investor will rely on the foregoing representation in effecting purchases and sales of securities of the
Company.  All of the disclosure furnished by or on behalf of the Company to the Investor regarding the Company, its business
and the transactions contemplated hereby, including the disclosure schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that
the Investor neither makes nor has made any representations or warranties with respect to the transactions contemplated hereby
other than those specifically set forth in Section 3 hereof.


 


(t)           Foreign
Corrupt Practices.  Neither the Company, nor to the knowledge
of the Company, any agent or other Person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any Person acting on its
behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the
Foreign Corrupt Practices Act of 1977, as amended.


 




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(u)          DTC
Eligible. The Company, through the Transfer Agent, currently participates in the DTC Fast Automated Securities Transfer (FAST)
Program and the Common Stock can be transferred electronically to third parties via the DTC Fast Automated Securities Transfer
(FAST) Program.


 


(v)          Sarbanes-Oxley.
The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are applicable to
it as of the date hereof, except where the failure to be in compliance is not reasonably likely to result in a Material Adverse
Effect.


 


(w)          Certain
Fees. Except as disclosed on Schedule 4(w), no brokerage or finder’s fees or commissions are or will be payable
by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents. Except as disclosed on Schedule 4(w), the Investor
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees
of a type contemplated in this Section 4(w) that may be due in connection with the transactions contemplated by the Transaction
Documents.


 


(x)           Investment
Company. The Company is not, and immediately after receipt of payment for the Securities will not be, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.


 


(y)          Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and
the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock pursuant to the Exchange Act nor has the Company received any notification that the SEC is currently contemplating
terminating such registration. Except as set forth on Schedule 4(e): (i) the Company has not, in the twelve (12) months
preceding the date hereof, received any notice from any Person to the effect that the Company is not in compliance with the listing
or maintenance requirements of the Principal Market; and (ii) the Company is, and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


 


(z)          Accountants.
The Company’s accountants are set forth in the SEC Documents and, to the knowledge of the Company, such accountants are an
independent registered public accounting firm as required by the Securities Act.


 


(aa)        Regulation
M Compliance. The Company has not, and to its knowledge no Person acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.


 


(bb)        Shell
Company Status. The Company is not currently, and within the past three years has not been, an issuer identified in Rule 144(i)(1)
under the Securities Act.


 




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5.            COVENANTS.


 


(a)          Filing
of Form 8-K and Registration Statement. The Company agrees that it shall, within the time required under the Exchange Act file
a Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby. The Company shall also file within thirty
(30) days from the date hereof a new registration statement (the “Registration Statement”) covering only the
sale of the Purchase Shares and the Commitment Shares, in accordance with the terms of the Registration Rights Agreement between
the Company and the Investor, dated as of the date hereof (“Registration Rights Agreement”). The Company shall
permit the Investor to review and comment upon the Current Report at least two (2) Business Days prior to its filing with the SEC,
the Company shall give due consideration to all such comments, and the Company shall not file the Current Report with the SEC in
a form to which the Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Current
Report within one (1) Business Day from the date the Investor receives the final pre-filing draft version thereof from the Company.


 


(b)          Blue
Sky. The Company shall take such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify
(i) the issuance of the Commitment Shares and the sale of the Purchase Shares to the Investor under this Agreement and (ii) any
subsequent resale of the Commitment Shares and all Purchase Shares by the Investor, in each case, under applicable securities or
“Blue Sky” laws of the states of the United States in such states as is reasonably requested by the Investor from time
to time, and shall provide evidence of any such action so taken to the Investor.


 


(c)          Listing/DTC.
The Company shall promptly secure the listing of all of the Purchase Shares and Commitment Shares to be issued to the Investor
hereunder on the Principal Market (subject to official notice of issuance). The Company shall use reasonable best efforts to maintain,
so long as any shares of Common Stock shall be listed on the Principal Market, such listing of all such Securities from time to
time issuable hereunder. The Company shall use commercially reasonable efforts to maintain the listing of the Common Stock on the
Principal Market and shall comply in all respects with the Company’s reporting, filing and other obligations under the bylaws
or rules and regulations of the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action that would
reasonably be expected to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall
promptly, and in no event later than the following Business Day, provide to the Investor copies of any notices it receives from
the Principal Market regarding the continued eligibility of the Common Stock for listing on the Principal Market; provided, however,
that the Company shall not be required to provide the Investor copies of any such notice that the Company reasonably believes constitutes
material non-public information and the Company would not be required to publicly disclose such notice in any report or statement
filed with the SEC under the Exchange Act (including on Form 8-K) or the Securities Act. The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section. The Company shall take all action necessary to ensure that its
Common Stock can be transferred electronically as DWAC Shares.


 


(d)          Limitation
on Short Sales and Hedging Transactions. The Investor agrees that beginning on the date of this Agreement and ending on the
date of termination of this Agreement as provided in Section 11, the Investor and its agents, representatives and affiliates shall
not in any manner whatsoever enter into or effect, directly or indirectly, any (i) "short sale" (as such term is defined
in Rule 200 of Regulation SHO of the Exchange Act) of the Common Stock or (ii) hedging transaction, which establishes a net short
position with respect to the Common Stock.


 




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(e)          Issuance
of Commitment Shares. In consideration for the Investor’s execution and delivery of this Agreement, the Company shall
cause the Transfer Agent to issue, on the date of this Agreement, 2,929,115 shares of Common Stock (the “Initial Commitment
Shares”) directly to the Investor and shall deliver to the Transfer Agent the Irrevocable Transfer Agent Instructions
with respect to the issuance of the Initial Commitment Shares in the form as set forth in Exhibit E attached hereto. For the avoidance
of doubt, all of the Initial Commitment Shares shall be fully earned as of the date of this Agreement, whether or not the Commencement
shall occur or any Purchase Shares are purchased by the Investor under this Agreement and irrespective of any termination of this
Agreement. In connection with each Regular Purchase hereunder, the Company shall issue to the Investor a number of shares of Common
Stock (the “Additional Commitment Shares” and, together with the Initial Commitment Shares, the “Commitment
Shares”) equal to the product of (x) 2,929,115 and (y) the Purchase Amount Fraction. The “Purchase Amount Fraction”
shall mean a fraction, the numerator of which is the Purchase Amount purchased by the Investor with respect to such Regular Purchase
of Purchase Shares and the denominator of which is Ten Million Dollars ($10,000,000). The Additional Commitment Shares shall be
issued to the Investor on the same Business Day as Purchase Shares are issued to the Investor in connection with the applicable
Regular Purchase in accordance with Section 2(c). In no event shall the amount of the Additional Commitment Shares to be issued
under this Agreement exceed 2,929,115 shares of Common Stock, provided that such Additional Commitment Shares shall be equitably
adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction.


 


(f)          Due
Diligence; Non-Public Information. The Investor shall have the right, from time to time as the Investor may reasonably deem
appropriate, to perform reasonable due diligence on the Company during normal business hours. The Company and its officers and
employees shall provide information and reasonably cooperate with the Investor in connection with any reasonable request by the
Investor related to the Investor's due diligence of the Company. Each party hereto agrees not to disclose any Confidential Information
of the other party to any third party and shall not use the Confidential Information for any purpose other than in connection with,
or in furtherance of, the transactions contemplated hereby. Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all reasonable measures to protect the secrecy of any
Confidential Information disclosed by the other party. The Company confirms that neither it nor any other Person acting on its
behalf shall provide the Investor or its agents or counsel with any information that constitutes or might constitute material,
non-public information, unless a simultaneous public announcement thereof is made by the Company in the manner contemplated by
Regulation FD. In the event of a breach of the foregoing covenant by the Company or any Person acting on its behalf (as determined
in the reasonable good faith judgment of the Investor), in addition to any other remedy provided herein or in the other Transaction
Documents, the Investor shall have the right to make a public disclosure, in the form of a press release, public advertisement
or otherwise, of such material, non-public information without the prior approval by the Company; provided the Investor shall have
first provided notice to the Company that it believes it has received information that constitutes material, non-public information
and the Company shall have at least 24 hours to respond to such notice, and thereafter the Investor shall have provided a draft
final version of such press release, public advertisement or otherwise at least 24 hours prior to the Investor’s intended
public disclosure, and the Investor shall have incorporated any reasonable comments made by the Company on such draft press release,
and the Company shall have failed to publicly disclose such material, non-public information prior to such disclosure by the Investor.
The Investor shall not have any liability to the Company, any of its Subsidiaries, or any of their respective directors, officers,
employees, stockholders or agents, for any such disclosure. The Company understands and confirms that the Investor shall be relying
on the foregoing covenants in effecting transactions in securities of the Company.


 


(g)          Purchase
Records. The Investor and the Company shall each maintain records showing the remaining Available Amount at any given time
and the dates and Purchase Amounts for each purchase or shall use such other method, reasonably satisfactory to the Investor and
the Company.


 


(h)          Taxes.
 The Company shall pay any and all transfer, stamp or similar taxes
that may be payable with respect to the issuance and delivery of any shares of Common Stock to the Investor made under this Agreement.



 


(i)           Use
of Proceeds. The Company will use the net proceeds from the offering as described in the Registration Statement or the SEC
Documents.


 




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(j)           Other
Transactions. The Company shall not enter into, announce or recommend to its stockholders any agreement, plan, arrangement
or transaction in or of which the terms thereof would restrict, materially delay, conflict with or impair the ability or right
of the Company to perform its obligations under the Transaction Documents, including, without limitation, the obligation of the
Company to deliver the Purchase Shares and the Commitment Shares to the Investor in accordance with the terms of the Transaction
Documents.


 


(k)          
No Variable Rate Transactions. From the date hereof until 18 months from the date hereof, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of shares of Common
Stock or Common Stock Equivalents for cash consideration (or a combination of units thereof) involving a Variable Rate Transaction,
provided that the Company shall be permitted to effect an Exempt Issuance.  “Common Stock Equivalents”
means any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time shares of Common
Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, shares of Common Stock.
“Variable Rate Transaction” means a transaction in which the Company enters into, or issues securities under,
any “at-the-market” or similar agreement, including, but not limited to, an equity line of credit (other than any transaction
between the Company and the Investor), whereby the Company may sell securities at a future determined price. “Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers, directors or vendors of the Company pursuant
to any stock or option plan duly adopted for such purpose, by the Board of Directors or a majority of the members of a committee
of directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued
hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities and (c)
securities issued pursuant to acquisitions or strategic transactions approved by the directors of the Company, which acquisitions
or strategic transactions can have a Variable Rate Transaction component,  provided that any such issuance shall only
be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an
asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition
to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities.


 


(l)           Integration.
From and after the date of this Agreement, the Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect of any security (as defined in Section 2 of the Securities Act) of the Company that would be integrated with the
offer or sale of the Securities such that the rules or regulations of the Principal Market would require stockholder approval of
this transaction prior to the closing of such other transaction unless stockholder approval is obtained before the closing of such
subsequent transaction.


 


6.            TRANSFER
AGENT INSTRUCTIONS.


 


(a)          
On the date of this Agreement, the Company shall issue irrevocable instructions to the Transfer Agent substantially in the
form attached hereto as Exhibit E to issue the Initial Commitment Shares in accordance with the terms of this Agreement
(the “Initial Irrevocable Transfer Agent Instructions”). The certificate(s) representing the Initial Commitment
Shares, except as set forth below, shall bear the following restrictive legend (the “Restrictive Legend”):


 




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THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.


 


(b)          On
the earlier of (i) the Commencement Date and (ii) such time that the Investor shall request, provided all conditions of Rule 144
under the Securities Act are met, the Company shall, no later than one (1) Business Day following the delivery by the Investor
to the Company or the Transfer Agent of one or more legended certificates representing the Initial Commitment Shares (which certificates
the Investor shall promptly deliver on or prior to the first to occur of the events described in clauses (i) and (ii) of this sentence),
as directed by the Investor, issue and deliver (or cause to be issued and delivered) to the Investor, as requested by the Investor,
either: (A) a certificate representing such Initial Commitment Shares that is free from all restrictive and other legends or (B)
a number of shares of Common Stock equal to the number of Initial Commitment Shares represented by the certificate(s) so delivered
by the Investor as DWAC Shares. The Company shall take all actions to carry out the intent and accomplish the purposes of the immediately
preceding sentence, including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and
instructions to the Transfer Agent, and any successor transfer agent of the Company, as may be requested from time to time by the
Investor or necessary or desirable to carry out the intent and accomplish the purposes of the immediately preceding sentence. On
the Commencement Date, the Company shall issue to the Transfer Agent, and any subsequent transfer agent, (i) irrevocable instructions
in the form substantially similar to those used by the Investor in substantially similar transactions (the “Commencement
Irrevocable Transfer Agent Instructions”) and (ii) the notice of effectiveness of the Registration Statement in the form
attached as an exhibit to the Registration Rights Agreement (the “Notice of Effectiveness of Registration Statement”),
in each case to issue the Commitment Shares and the Purchase Shares in accordance with the terms of this Agreement and the Registration
Rights Agreement. All Purchase Shares and Commitment Shares to be issued from and after Commencement to or for the benefit of the
Investor pursuant to this Agreement shall be issued only as DWAC Shares. The Company represents and warrants to the Investor that,
while this Agreement is effective, no instruction other than the Commencement Irrevocable Transfer Agent Instructions and the Notice
of Effectiveness of Registration Statement referred to in this Section 6(b) will be given by the Company to the Transfer
Agent with respect to the Commitment Shares or the Purchase Shares from and after Commencement, and the Commitment Shares and the
Purchase Shares shall otherwise be freely transferable on the books and records of the Company. The Company agrees that if the
Company fails to fully comply with the provisions of this Section 6(b) within five (5) Business Days of the Investor providing
the deliveries referred to above, the Company shall, at the Investor’s written instruction, purchase such shares of Common
Stock containing the Restrictive Legend from the Investor at the greater of the (i) Purchase Price paid for such shares of Common
Stock (as applicable) and (ii) the Closing Sale Price of the Common Stock on the date of the Investor’s written instruction.


 




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7.           CONDITIONS
TO THE COMPANY'S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK.


 


The right of the Company
hereunder to commence sales of the Purchase Shares on the Commencement Date is subject to the satisfaction of each of the following
conditions:


 


(a)          The
Investor shall have executed each of the Transaction Documents and delivered the same to the Company;


 


(b)          A
registration statement covering the sale of a portion of the Commitment Shares and Purchase Shares shall have been declared
effective under the Securities Act by the SEC and no stop order with respect to the Registration Statement shall be pending or
threatened by the SEC; and


 


(c)          The
representations and warranties of the Investor shall be true and correct in all material respects as of the date hereof and as
of the Commencement Date as though made at that time.


 


8.           CONDITIONS
TO THE INVESTOR'S OBLIGATION TO PURCHASE SHARES OF COMMON STOCK.


 


The obligation of the
Investor to buy Purchase Shares under this Agreement is subject to the satisfaction of each of the following conditions on or prior
to the Commencement Date and, once such conditions have been initially satisfied, there shall not be any ongoing obligation to
satisfy such conditions after the Commencement has occurred:


 


(a)          The
Company shall have executed each of the Transaction Documents and delivered the same to the Investor;


 


(b)          The
Company shall have issued or caused to be issued to the Investor (i) one or more certificates representing the Initial Commitment
Shares free from all restrictive and other legends or (ii) a number of shares of common stock equal to the number of Initial Commitment
Shares as DWAC Shares, in each case in accordance with Section 6(b);


 


(c)          The
Common Stock shall be listed on the Principal Market, trading in the Common Stock shall not have been within the last 365 days
suspended by the SEC or the Principal Market and all Securities to be issued by the Company to the Investor pursuant to this Agreement
shall have been approved for listing on the Principal Market in accordance with the applicable rules and regulations of the Principal
Market, subject only to official notice of issuance;


 


(d)          The
Investor shall have received the opinion of the Company's legal counsel dated as of the Commencement Date substantially in the
form agreed to prior to the date of this Agreement by the Company’s legal counsel and the Investor’s legal counsel
generally in the form attached hereto as Exhibit A;


 


(e)          The
representations and warranties of the Company shall be true and correct in all material respects (except to the extent that any
of such representations and warranties is already qualified as to materiality in Section 4 above, in which case, such representations
and warranties shall be true and correct without further qualification) as of the date when made and as of the Commencement Date
as though made at that time (except for representations and warranties that speak as of a specific date) and the Company shall
have performed, satisfied and complied with the covenants, agreements and conditions required by the Transaction Documents to be
performed, satisfied or complied with by the Company at or prior to the Commencement Date. The Investor shall have received a certificate,
executed by the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing effect in the form attached
hereto as Exhibit B;


 




    	-18-



    	 



    

 


(f)          The
Board of Directors of the Company shall have adopted resolutions in the form attached hereto as Exhibit C which shall
be in full force and effect without any amendment or supplement thereto as of the Commencement Date;


 


(g)          As
of the Commencement Date, the Company shall have reserved out of its authorized and unissued Common Stock, (A) solely for
the purpose of effecting purchases of Purchase Shares hereunder, 75,000,000 shares of Common Stock and (B) as Commitment Shares
in accordance with Section 5(e) hereof, 2,929,115 shares of Common Stock;


 


(h)          The
Irrevocable Transfer Agent Instructions shall have been delivered to and acknowledged in writing by the Company and the Company's
Transfer Agent;


 


(i)           The
Company shall have delivered to the Investor a certificate evidencing the incorporation and good standing of the Company in the
State of Nevada issued by the Secretary of State of the State of Nevada as of a date within ten (10) Business Days of the Commencement
Date;


 


(j)           The
Company shall have delivered to the Investor a certified copy of the Articles of Incorporation as certified by the Secretary of
State of the State of Nevada within ten (10) Business Days of the Commencement Date;


 


(k)          The
Company shall have delivered to the Investor a secretary's certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit C;


 


(l)           The
Registration Statement covering the sale of a portion of the Purchase Shares and Commitment Shares shall have been declared effective
under the Securities Act by the SEC and no stop order with respect to the Registration Statement shall be pending or threatened
by the SEC. The Company shall have prepared and delivered to the Investor a final and complete form of prospectus, dated and current
as of the Commencement Date, to be used by the Investor in connection with any sales of any Purchase Shares or Commitment Shares,
and to be filed by the Company one Business Day after the Commencement Date. The Current Report shall have been filed with the
SEC, as required pursuant to Section 5(a). The Company shall have made all filings under all applicable federal and state securities
laws necessary to consummate the issuance of the Commitment Shares and Purchase Shares pursuant to this Agreement in compliance
with such laws;


 


(m)          No
Event of Default has occurred, or any event which, after notice and/or lapse of time, would become an Event of Default has occurred;


 


(n)          All
federal, state and local governmental laws, rules and regulations applicable to the transactions contemplated by the Transaction
Documents and necessary for the execution, delivery and performance of the Transaction Documents and the consummation of the transactions
contemplated thereby in accordance with the terms thereof shall have been complied with, and all consents, authorizations and orders
of, and all filings and registrations with, all federal, state and local courts or governmental agencies and all federal, state
and local regulatory or self-regulatory agencies necessary for the execution, delivery and performance of the Transaction Documents
and the consummation of the transactions contemplated thereby in accordance with the terms thereof shall have been obtained or
made, including, without limitation, in each case those required under the Securities Act, the Exchange Act, applicable state securities
or “Blue Sky” laws or applicable rules and regulations of the Principal Market, or otherwise required by the SEC, the
Principal Market or any state securities regulators;


 




    	-19-



    	 



    

 


(o)          No
statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated, threatened or endorsed
by any federal, state, local or foreign court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay any of the transactions contemplated by the Transaction Documents;


 


(p)          No
action, suit or proceeding before any federal, state, local or foreign arbitrator or any court or governmental authority of competent
jurisdiction shall have been commenced or threatened, and no inquiry or investigation by any federal, state, local or foreign governmental
authority of competent jurisdiction shall have been commenced or threatened, against the Company, or any of the officers, directors
or affiliates of the Company, seeking to restrain, prevent or change the transactions contemplated by the Transaction Documents,
or seeking material damages in connection with such transactions; and


 


(q)          The
Company shall have provided the Investor with the information requested by the Investor in connection with its due diligence requests
in accordance with the terms of Section 5(f) hereof.


 


9.            INDEMNIFICATION.



 


In consideration of
the Investor's execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in addition to all
of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless
the Investor and all of its affiliates, shareholders, officers, directors, employees and direct or indirect investors and any of
the foregoing Person's agents or other representatives (including, without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of,
or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in
the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Indemnitee and
arising out of or resulting from the execution, delivery, performance or enforcement of the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, other than with respect to Indemnified Liabilities which directly
and primarily result from the gross negligence or willful misconduct of any Indemnitee. To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law. Payment under this indemnification shall be made
within thirty (30) days from the date Investor makes written request for it. A certificate containing reasonable detail as to the
amount of such indemnification submitted to the Company by Investor shall be conclusive evidence, absent manifest error, of the
amount due from the Company to Investor. If any action shall be brought against any Indemnitee in respect of which indemnity may
be sought pursuant to this Agreement, such Indemnitee shall promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Indemnitee. Any Indemnitee
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnitee, except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Company and the position of such Indemnitee, in which case
the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.


 




    	-20-



    	 



    

 


10.          EVENTS
OF DEFAULT. 


 


An “Event
of Default” shall be deemed to have occurred at any time as any of the following events occurs:


 


(a)          the
effectiveness of a registration statement registering the Purchase Shares and Commitment Shares lapses for any reason (including,
without limitation, the issuance of a stop order) or such registration statement or the prospectus forming a part thereof is unavailable
to the Investor for resale of any or all of the Purchase Shares and Commitment Shares, and such lapse or unavailability continues
for a period of ten (10) consecutive Business Days or for more than an aggregate of thirty (30) Business Days in any 365-day period,
but excluding a lapse or unavailability where (i) the Company terminates a registration statement after the Investor has confirmed
in writing that all of the Purchase Shares and Commitment Shares covered thereby have been resold or (ii) the Company supersedes
one registration statement with another registration statement, including (without limitation) by terminating a prior registration
statement when it is effectively replaced with a new registration statement covering Purchase Shares and Commitment Shares (provided
in the case of this clause (ii) that all of the Purchase Shares and Commitment Shares covered by the superseded (or terminated)
registration statement that have not theretofore been resold are included in the superseding (or new) registration statement);


 


(b)          the
suspension of the Common Stock from trading or the failure of the Common Stock to be listed on the Principal Market for a period
of three (3) consecutive Business Days;


 


(c)          the
delisting of the Common Stock from the Principal Market, provided, however, that the Common Stock is not immediately thereafter
trading on the New York Stock Exchange, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the
NYSE MKT, the NYSE Arca or the OTC Bulletin Board (or nationally recognized successor thereto);


 


(d)          the
failure for any reason by the Transfer Agent to issue Purchase Shares or Commitment Shares to the Investor within five (5) Business
Days after the applicable Purchase Date which the Investor is entitled to receive such Securities;


 


(e)          the
Company breaches any representation, warranty, covenant or other term or condition under any Transaction Document if such breach
could have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably curable, only if such
breach continues for a period of at least five (5) Business Days;


 


(f)           if
any Person commences a proceeding against the Company pursuant to or within the meaning of any Bankruptcy Law which is not discharged
within 90 days;


 


(g)          if
the Company pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry
of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (iv) makes a general assignment for the benefit of its creditors or is generally unable to
pay its debts as the same become due;


 




    	-21-



    	 



    

 


(h)          a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against the Company in
an involuntary case, (ii) appoints a Custodian of the Company or for all or substantially all of its property, or (iii) orders
the liquidation of the Company or any Subsidiary;


 


(i)           if
at any time the Company is not eligible to transfer its Common Stock electronically as DWAC Shares.


 


In addition to any other rights and remedies
under applicable law and this Agreement, including the Investor termination rights set forth in Section 11 hereof, so long as an
Event of Default has occurred and is continuing, or if any event which, after notice and/or lapse of time, would become an Event
of Default, has occurred and is continuing, or so long as the Closing Sale Price is below the Floor Price, the Company shall not
deliver to the Investor any Regular Purchase Notice, and the Investor shall not purchase any shares of Common Stock under this
Agreement.


 


11.          TERMINATION


 


This Agreement may
be terminated only as follows:


 


(a)          If
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding
against the Company which is not discharged within 90 days, a Custodian is appointed for the Company or for all or substantially
all of its property, or the Company makes a general assignment for the benefit of its creditors (any of which would be an Event
of Default as described in Sections 10(f), 10(g) and 10(h) hereof), this Agreement shall automatically terminate without any liability
or payment to the Company (except as set forth below) without further action or notice by any Person.


 


(b)          In
the event that the Commencement shall not have occurred, the Company shall have the option to terminate this Agreement for any
reason or for no reason without any liability whatsoever of any party to any other party under this Agreement.


 


(c)          In
the event that the Commencement shall not have occurred on or before July 31, 2013, due to the failure to satisfy the conditions
set forth in Sections 7 and 8 above with respect to the Commencement, the non-breaching party shall have the option to terminate
this Agreement at the close of business on such date or thereafter without liability of any party to any other party (except as
set forth below).


 


(d)         
At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or for no
reason by delivering notice (a “Company Termination Notice”) to the Investor electing to terminate this Agreement without
any liability whatsoever of any party to any other party under this Agreement (except as set forth below). The Company Termination
Notice shall not be effective until one (1) Business Day after it has been received by the Investor.


 


(e)          This
Agreement shall automatically terminate on the date that the Company sells and the Investor purchases the full Available Amount
as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to
any other party under this Agreement (except as set forth below).


 




    	-22-



    	 



    

 


(f)           If
for any reason or for no reason the full Available Amount has not been purchased in accordance with Section 2 of this Agreement
by the Maturity Date, this Agreement shall automatically terminate on the Maturity Date, without any action or notice on the part
of any party and without any liability whatsoever of any party to any other party under this Agreement (except as set forth below).


 


Except as set forth in Sections 11(a) (in
respect of an Event of Default under Sections 10(f), 10(g) and 10(h)) 11(e) and 11(f), any termination of this Agreement pursuant
to this Section 11 shall be effected by written notice from the Company to the Investor, or the Investor to the Company, as the
case may be, setting forth the basis for the termination hereof. The representations and warranties and covenants of the Company
and the Investor contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set forth in Section 9 hereof and
the agreements and covenants set forth in Sections 10, 11 and 12, shall survive the Commencement and any termination of
this Agreement. No termination of this Agreement shall (i) affect the Company's or the Investor's rights or obligations (A) under
this Agreement with respect to pending Regular Purchases, and the Company and the Investor shall complete their respective obligations
with respect to any pending Regular Purchases under this Agreement, and (B) under the Registration Rights Agreement, which shall
survive any such termination, or (ii) be deemed to release the Company or the Investor from any liability for intentional misrepresentation
or willful breach of any of the Transaction Documents.


 


12.          MISCELLANEOUS.


 


(a)          Governing
Law; Jurisdiction; Jury Trial. The corporate laws of the State of Nevada shall govern all issues concerning the relative rights
of the Company and its shareholders. All other questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the other Transaction Documents shall be governed by the internal laws of the State of Illinois, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Chicago, for the adjudication of any
dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 


(b)          Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature or signature delivered by e-mail in a “.pdf” format data file shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.


 


(c)          Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.


 




    	-23-



    	 



    

 


(d)          Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.


 


(e)          Entire
Agreement. The Transaction Documents supersede all other prior oral or written agreements between the Investor, the Company,
their affiliates and Persons acting on their behalf with respect to the subject matter thereof, and this Agreement, the other Transaction
Documents and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Investor makes any representation,
warranty, covenant or undertaking with respect to such matters. The Company acknowledges and agrees that is has not relied on,
in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in the Transaction
Documents.


 


(f)          Notices.
Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii)
one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such communications shall be:


 


If to the Company:


Elite Pharmaceuticals, Inc.


165 Ludlow Avenue


Northvale, New Jersey 07647


Telephone:        201-750-2646


Facsimile:         201-750-2755


Attention:         Carter
Ward, CFO


 


With a copy to:


Richard Feiner, Esq.


381 Park Avenue South


16th Floor


New York, NY 10016


Telephone:        212-779-8600


Facsimile:         917-720-0863


 


If to the Investor:


Lincoln Park Capital Fund, LLC


440 North Wells, Suite 410


Chicago, IL 60654


Telephone:        312-822-9300


Facsimile:         312-822-9301


Attention:          Josh
Scheinfeld/Jonathan Cope


 


If to the Transfer
Agent:


American Stock Transfer & Trust
Company


6201 15th Avenue


Brooklyn, NY 11219


Telephone:         718-921-8208


Facsimile:          718-331-1852


Attention:          Alexandra
M. Albrecht


 




    	-24-



    	 



    

 


or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent or other communication, (B) mechanically or electronically generated by the sender's facsimile machine
containing the time, date, and recipient facsimile number or (C) provided by a nationally recognized overnight delivery service,
shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively.


 


(g)          Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of
the Investor, including by merger or consolidation. The Investor may not assign its rights or obligations under this Agreement.


 


(h)          No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.


 


(i)           Publicity.
The Investor shall have the right to approve before issuance any press release, SEC filing or any other public disclosure made
by or on behalf of the Company whatsoever with respect to, in any manner, the Investor, its purchases hereunder or any aspect of
this Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior
approval of the Investor, to make any press release or other public disclosure (including any filings with the SEC) with respect
to such transactions as is required by applicable law and regulations or the rules of the Principal Market so long as the Company
and its counsel consult with the Investor in connection with any such press release or other public disclosure prior to its release.
The Investor must be provided with a copy thereof prior to any release or use by the Company thereof. The Company agrees and acknowledges
that its failure to fully comply with this provision constitutes a material adverse effect on its ability to perform its obligations
under this Agreement.


 


(j)           Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.


 


(k)          No
Financial Advisor, Placement Agent, Broker or Finder. The Company represents and warrants to the Investor that, except as disclosed
in Schedule 4(w), it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions
contemplated hereby. The Investor represents and warrants to the Company that it has not engaged any financial advisor, placement
agent, broker or finder in connection with the transactions contemplated hereby. The Company shall be responsible for the payment
of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by the Company relating
to or arising out of the transactions contemplated hereby. The Company shall pay, and hold the Investor harmless against, any liability,
loss or expense (including, without limitation, attorneys' fees and out of pocket expenses) arising in connection with any such
claim.


 




    	-25-



    	 



    

 


(l)            No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.


 


(m)          Remedies,
Other Obligations, Breaches and Injunctive Relief. The Investor’s remedies provided in this Agreement, including, without
limitation, the Investor’s remedies provided in Section 9, shall be cumulative and in addition to all other remedies available
to the Investor under this Agreement, at law or in equity (including a decree of specific performance and/or other injunctive relief),
no remedy of the Investor contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy
and nothing herein shall limit the Investor's right to pursue actual damages for any failure by the Company to comply with the
terms of this Agreement. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Investor 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 Investor 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.


 


(n)          Enforcement
Costs. If: (i) this Agreement is placed by the Investor in the hands of an attorney for enforcement or is enforced by the Investor
through any legal proceeding; (ii) an attorney is retained to represent the Investor in any bankruptcy, reorganization, receivership
or other proceedings affecting creditors' rights and involving a claim under this Agreement, or (iii) an attorney is retained to
represent the Investor in any other proceedings whatsoever in connection with this Agreement, then the Company shall pay to the
Investor, as incurred by the Investor, all reasonable costs and expenses including attorneys' fees incurred in connection therewith,
in addition to all other amounts due hereunder. If this Agreement is placed by the Company in the hands of an attorney for enforcement
or is enforced by the Company through any legal proceeding, then the Investor shall pay to the Company, as incurred by the Company,
all reasonable costs and expenses including attorneys' fees incurred in connection therewith, in addition to all other amounts
due hereunder.


 


(o)          Amendment
and Waiver; Failure or Indulgence Not Waiver. No provision of this Agreement may be amended or waived by the parties from and
after the date that is one (1) Business Day immediately preceding the initial filing of the Registration Statement with the SEC.
Subject to the immediately preceding sentence, (i) no provision of this Agreement may be amended other than by a written instrument
signed by both parties hereto and (ii) no provision of this Agreement may be waived other than in a written instrument signed by
the party against whom enforcement of such waiver is sought. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.


 


* * * * *


 




    	-26-



    	 



    

 


IN WITNESS WHEREOF, the Investor
and the Company have caused this Agreement to be duly executed as of the date first written above.


 


	 	THE COMPANY:
	 	 
	 	ELITE PHARMACEUTICALS, INC.
	 	 
	 	By:  	s/ Jerry Treppel
	 	Name: Jerry Treppel
	 	Title: CEO
	 	 
	 	INVESTOR:
	 	 
	 	LINCOLN PARK CAPITAL FUND, LLC
	 	BY: LINCOLN PARK CAPITAL, LLC
	 	BY: ROCKLEDGE CAPITAL CORPORATION
	 	 
	 	By:  	s/Josh Scheinfeld
	 	Name: Josh Scheinfeld
	 	Title: President


 




    	-27-



    	 



    

 


SCHEDULES


 


	Schedule 4(a)	Subsidiaries
	Schedule 4(c)	Capitalization
	Schedule 4(e)	Conflicts
	Schedule 4(f)	Exchange Act Filings
	Schedule 4(g)	Material Changes
	Schedule 4(h)	Litigation
	Schedule 4(k)	Intellectual Property
	Schedule 4(n)	Insurance


 


EXHIBITS


 


	Exhibit A	Form of Company Counsel Opinion
	Exhibit B	Form of Officer’s Certificate
	Exhibit C	Form of Resolutions of Board of Directors of the Company
	Exhibit D	Form of Secretary’s Certificate
	Exhibit E	Form of Letter to Transfer Agent


 




    	 



    	 



    

 


DISCLOSURE SCHEDULES


 


Schedule 4(a) – Subsidiaries


 


Schedule 4(c) - Capitalization


 


Schedule 4(e) - No Conflicts


 


Schedule 4(f) - Exchange Act Filings


 


Schedule 4(g) - Absence of Certain Changes


 


Schedule 4(h) - Litigation


 


Schedule 4(k) - Intellectual Property Rights


 


Schedule 4(n) - Insurance


 




    	 



    	 



    

 


EXHIBIT A


 


FORM OF COMPANY COUNSEL OPINION


 


Capitalized terms used
herein but not defined herein, have the meaning set forth in the Purchase Agreement. Based on the foregoing, and subject to the
assumptions and qualifications set forth herein, we are of the opinion that:


 


1.    The
Company is a corporation existing and in good standing under the laws of the State of Nevada. The Company is qualified to do business
as a foreign corporation and is in good standing in the State of New Jersey.


 


2.    The
Company has the corporate power to execute and deliver, and perform its obligations under, each Transaction Document to which it
is a party. The Company has the corporate power to conduct its business as, to the best of our knowledge, it is now conducted,
and to own and use the properties owned and used by it.


 


3.    The
execution, delivery and performance by the Company of the Transaction Documents to which it is a party have been duly authorized
by all necessary corporate action on the part of the Company. The execution and delivery of the Transaction Documents by the Company,
the performance of the obligations of the Company thereunder and the consummation by it of the transactions contemplated therein
have been duly authorized and approved by the Company's Board of Directors and no further consent, approval or authorization of
the Company, its Board of Directors or its stockholders is required. The Transaction Documents to which the Company is a party
have been duly executed and delivered by the Company and are the valid and binding obligations of the Company, enforceable against
the Company in accordance with their terms except as such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting creditor’s rights
and remedies.


 


4.    The
execution, delivery and performance by the Company of the Transaction Documents, the consummation by the Company of the transactions
contemplated thereby including the offering, sale and issuance of the Commitment Shares and the Purchase Shares in accordance with
the terms and conditions of the Purchase Agreement, and fulfillment and compliance with terms of the Transaction Documents, does
not and shall not: (i) conflict with, constitute a breach of or default (or an event which, with the giving of notice or lapse
of time or both, constitutes or could constitute a breach or a default), under (a) the Certificate of Incorporation or the Bylaws
of the Company, (b) any material agreement, note, lease, mortgage, deed or other material instrument to which to our knowledge
the Company is a party or by which the Company or any of its assets are bound, (ii) result in any violation of any statute,
law, rule or regulation applicable to the Company, or (iii) to our knowledge, violate any order, writ, injunction or decree applicable
to the Company or any of its subsidiaries.


 


5.    The
issuance of the Purchase Shares and Commitment Shares pursuant to the terms and conditions of the Transaction Documents has been
duly authorized and the Commitment Shares and Initial Purchase Shares are validly issued, fully paid and non-assessable, to our
knowledge, free of all taxes, liens, charges, restrictions, rights of first refusal and preemptive rights. 75,000,000 shares of
Common Stock have been properly reserved for issuance under the Purchase Agreement. When issued and paid for in accordance with
the Purchase Agreement, the Purchase Shares shall be validly issued, fully paid and non-assessable, to our knowledge, free of all
taxes, liens, charges, restrictions, rights of first refusal and preemptive rights. To our knowledge, the execution and delivery
of the Registration Rights Agreement do not, and the performance by the Company of its obligations thereunder shall not, give rise
to any rights of any other person for the registration under the Securities Act of any shares of Common Stock or other securities
of the Company which have not been waived.


 




    	 



    	 



    

 


6.    As
of the date hereof, the authorized capital stock of the Company consists of __,___,___ shares of common stock, par value $0.001
per share, of which to our knowledge __________ shares are issued and outstanding. Except as set forth on Schedule 4(c) of the
Purchase Agreement, to our knowledge, there are no outstanding shares of capital stock or other securities convertible into or
exchangeable or exercisable for shares of the capital stock of the Company.


 


7.    Assuming
the accuracy of the representations and your compliance with the covenants made by you in the Transaction Documents, the offering,
sale and issuance of the Initial Commitment Shares to you pursuant to the Transaction Documents is exempt from registration under
the Securities Act and the securities laws and regulations of the State of Illinois.


 


8.    Other
than that which has been obtained and completed prior to the date hereof, no authorization, approval, consent, filing or other
order of any federal or state governmental body, regulatory agency, or stock exchange or market, or any court, or, to our knowledge,
any third party is required to be obtained by the Company to enter into and perform its obligations under the Transaction Documents
or for the Company to issue and sell the Purchase Shares as contemplated by the Transaction Documents.


 


9.    The Common Stock
is registered pursuant to Section 12(g) of the Exchange Act. To our knowledge, since one year preceding the date of the Purchase
Agreement, the Company has been in compliance with the reporting requirements of the Exchange Act applicable to it. To our knowledge,
since one year preceding the date of the Purchase Agreement, the Company has not received any written notice from the Principal
Market stating that the Company has not been in compliance with any of the rules and regulations (including the requirements for
continued listing) of the Principal Market.


 


We further advise you
that to our knowledge, except as disclosed on Schedule 4(h) in the Purchase Agreement, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body, any governmental agency, any stock exchange or market, or self-regulatory
organization, which has been threatened in writing or which is currently pending against the Company, any of its subsidiaries,
any officers or directors of the Company or any of its subsidiaries or any of the properties of the Company or any of its subsidiaries.


 


In addition, we have
participated in the preparation of the Registration Statement (SEC File #________) covering the sale of the Purchase Shares and
the Commitment Shares including the prospectus dated ____________, contained therein and in conferences with officers and other
representatives of the Company (including the Company’s independent auditors) during which the contents of the Registration
Statement and related matters were discussed and reviewed and, although we are not passing upon and do not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the Registration Statement, on the basis of the information
that was developed in the course of the performance of the services referred to above, considered in the light of our understanding
of the applicable law, nothing came to our attention that caused us to believe that the Registration Statement (other than the
financial statements and schedules and the other financial and statistical data included therein, as to which we express no belief),
as of their dates, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not misleading.


 




    	 



    	 



    

 


EXHIBIT B


 


FORM OF OFFICER’S CERTIFICATE


 


This Officer’s
Certificate (“Certificate”) is being delivered pursuant to Section 8(e) of that certain Purchase Agreement dated
as of ______ __, 2013, (“Purchase Agreement”), by and between ELITE PHARMACEUTICALS, INC., a Nevada corporation
(the “Company”), and LINCOLN PARK CAPITAL FUND, LLC (the “Investor”). Terms used herein
and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement.


 


The undersigned, ___________,
______________ of the Company, hereby certifies as follows:


 


1.          I
am the _____________ of the Company and make the statements contained in this Certificate;


 


2.          The
representations and warranties of the Company are true and correct in all material respects (except to the extent that any of such
representations and warranties is already qualified as to materiality in Section 4 of the Purchase Agreement, in which case, such
representations and warranties are true and correct without further qualification) as of the date when made and as of the Commencement
Date as though made at that time (except for representations and warranties that speak as of a specific date);


 


3.          The
Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date.


 


4.          The
Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy
Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate
involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as
they become due.


 


IN WITNESS WHEREOF,
I have hereunder signed my name on this ___ day of ___________.


 


	 	 	 
	 	  Name:	 
	 	  Title:	 


 


The undersigned as
Secretary of ELITE PHARMACEUTICALS, INC., a Nevada corporation, hereby certifies that ___________ is the duly elected, appointed,
qualified and acting ________ of _________ and that the signature appearing above is his genuine signature.


 


	 	 
	 	Secretary 


 




    	 



    	 



    

 


EXHIBIT C


 


FORM OF COMPANY RESOLUTIONS 


FOR SIGNING PURCHASE AGREEMENT


 


UNANIMOUS WRITTEN CONSENT OF 


ELITE PHARMACEUTICALS, INC.


 


In accordance with the corporate laws of
the state of Nevada, the undersigned, being all of the directors of ELITE PHARMACEUTICALS, INC., a Nevada corporation (the
“Corporation”) do hereby consent to and adopt the following resolutions as the action of the Board of Directors for
and on behalf of the Corporation and hereby direct that this Consent be filed with the minutes of the proceedings of the Board
of Directors:


 


WHEREAS, there has been presented to the
Board of Directors of the Corporation a draft of the Purchase Agreement (the “Purchase Agreement”) by and between the
Corporation and Lincoln Park Capital Fund, LLC (“Lincoln Park”), providing for the purchase by Lincoln Park of up to
Ten Million Dollars ($10,000,000) of the Corporation’s common stock, $0.001 par value per share (the “Common Stock”);
and


 


WHEREAS, after careful
consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board of Directors,
the Board of Directors has determined that it is advisable and in the best interests of the Corporation to engage in the transactions
contemplated by the Purchase Agreement, including, but not limited to, the issuance of 2,929,115 shares of Common Stock to Lincoln
Park as an initial commitment fee (the “Initial Commitment Shares”) and the sale of shares of Common Stock to Lincoln
Park up to the available amount under the Purchase Agreement (the "Purchase Shares").


 


Transaction Documents


 


NOW, THEREFORE, BE
IT RESOLVED, that the transactions described in the Purchase Agreement are hereby approved and ________________________________________
(the “Authorized Officers”) are severally authorized to execute and deliver the Purchase Agreement, and any other agreements
or documents contemplated thereby including, without limitation, a registration rights agreement (the “Registration Rights
Agreement”) providing for the registration of the shares of the Company’s Common Stock issuable in respect of the Purchase
Agreement on behalf of the Corporation, with such amendments, changes, additions and deletions as the Authorized Officers may deem
to be appropriate and approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an
Authorized Officer thereon; and


 


FURTHER RESOLVED, that
the terms and provisions of the Registration Rights Agreement by and among the Corporation and Lincoln Park are hereby approved
and the Authorized Officers are authorized to execute and deliver the Registration Rights Agreement (pursuant to the terms of the
Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officer may deem appropriate and
approve on behalf of, the Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon;
and


 


FURTHER RESOLVED, that
the terms and provisions of the Form of Transfer Agent Instructions (the “Instructions”) are hereby approved and the
Authorized Officers are authorized to execute and deliver the Instructions (pursuant to the terms of the Purchase Agreement), with
such amendments, changes, additions and deletions as the Authorized Officers may deem appropriate and approve on behalf of, the
Corporation, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and


 




    	 



    	 



    

 


Execution of Purchase
Agreement


 


FURTHER RESOLVED, that
the Corporation be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of up to Ten Million
Dollars ($10,000,000) of the Corporation’s common stock; and


 


Issuance of Common
Stock


 


FURTHER RESOLVED, that the Corporation is
hereby authorized to issue to Lincoln Park Capital Fund, LLC, 2,929,115 shares of Common Stock as Initial Commitment Shares and
that upon issuance of the Initial Commitment Shares pursuant to the Purchase Agreement the Commitment Shares shall be duly authorized,
validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof; and


 


FURTHER RESOLVED, that the Corporation is
hereby authorized to issue shares of Common Stock upon the purchase of Purchase Shares up to the Available Amount under the Purchase
Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of the Purchase Shares pursuant to the
Purchase Agreement, the Purchase Shares will be duly authorized, validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof; and


 


FURTHER RESOLVED, that
the Corporation shall initially reserve 75,000,000 shares of Common Stock for issuance as Purchase Shares under the Purchase Agreement;
and


 


FURTHER RESOLVED, that
the Corporation is hereby authorized to issue 2,929,115 shares of Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction) in connection with the purchase of Purchase Shares
(the “Additional Commitment Shares”) in accordance with the terms of the Purchase Agreement and that, upon issuance
of the Additional Commitment Shares pursuant to the Purchase Agreement, the Additional Commitment Shares will be duly authorized,
validly issued, fully paid and nonassessable with no personal liability attaching to the ownership thereof; and


 


FURTHER RESOLVED, that
the Corporation shall initially reserve 2,929,115 shares of Common Stock (subject to equitable adjustment for any reorganization,
recapitalization, non-cash dividend, stock split or other similar transaction) for issuance as Additional Commitment Shares under
the Purchase Agreement.


 


Approval of Actions


 


FURTHER RESOLVED, that,
without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to proceed on
behalf of the Corporation and to take all such steps as deemed necessary or appropriate, with the advice and assistance of counsel,
to cause the Corporation to consummate the agreements referred to herein and to perform its obligations under such agreements;
and


 




    	 



    	 



    

 


FURTHER RESOLVED, that the Authorized Officers
be, and each of them hereby is, authorized, empowered and directed on behalf of and in the name of the Corporation, to take or
cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered all such further agreements,
amendments, documents, certificates, reports, schedules, applications, notices, letters and undertakings and to incur and pay all
such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect the purpose and intent
of any and all of the foregoing resolutions, and that all actions heretofore taken by any officer or director of the Corporation
in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified and confirmed
in all respects.


 


IN WITNESS WHEREOF, the Board of Directors
has executed and delivered this Consent effective as of __________, 2013.


 


______________________


 


______________________


 


______________________


 


being all of the directors of ELITE PHARMACEUTICALS, INC.


 




    	 



    	 



    

 


EXHIBIT D


 


FORM OF SECRETARY’S CERTIFICATE


 


This Secretary’s Certificate (“Certificate”)
is being delivered pursuant to Section 7(k) of that certain Purchase Agreement dated as of _____ __, 2013(“Purchase Agreement”),
by and between ELITE PHARMACEUTICALS, INC., a Nevada corporation (the “Company”) and LINCOLN PARK CAPITAL
FUND, LLC (the “Investor”), pursuant to which the Company may sell to the Investor up to Ten Million Dollars ($10,000,000)
of the Company's Common Stock, $0.001 par value per share (the "Common Stock"). Terms used herein and not otherwise defined
shall have the meanings ascribed to them in the Purchase Agreement.


 


The undersigned, ____________, Secretary
of the Company, hereby certifies as follows:


 


1.          I
am the Secretary of the Company and make the statements contained in this Secretary’s Certificate.


 


2.          Attached
hereto as Exhibit A and Exhibit B are true, correct and complete copies of the Company’s bylaws (“Bylaws”)
and Certificate of Incorporation (“Articles”), in each case, as amended through the date hereof, and no action has
been taken by the Company, its directors, officers or shareholders, in contemplation of the filing of any further amendment relating
to or affecting the Bylaws or Articles.


 


3.          Attached
hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors of the
Company on _____________, at which a quorum was present and acting throughout. Such resolutions have not been amended, modified
or rescinded and remain in full force and effect and such resolutions are the only resolutions adopted by the Company’s Board
of Directors, or any committee thereof, or the shareholders of the Company relating to or affecting (i) the entering into and performance
of the Purchase Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment Shares and (ii) and the
performance of the Company of its obligation under the Transaction Documents as contemplated therein.


 


4.          As
of the date hereof, the authorized, issued and reserved capital stock of the Company is as set forth on Exhibit D hereto.


 


IN WITNESS WHEREOF,
I have hereunder signed my name on this ___ day of ____________.


 


	 	 	 
	 	Secretary	 


 


The undersigned as ___________ of ELITE
PHARMACEUTICALS, INC., a Nevada corporation, hereby certifies that ____________ is the duly elected, appointed, qualified and acting
Secretary of _________, and that the signature appearing above is his genuine signature.


 


	 	 


 




    	 



    	 



    

 


EXHIBIT E


 


FORM OF LETTER TO THE TRANSFER AGENT
FOR THE ISSUANCE OF THE COMMITMENTS SHARES AT SIGNING OF THE PURCHASE AGREEMENT


 


[COMPANY LETTERHEAD]


 


[DATE]


 


[TRANSFER AGENT]


__________________


__________________


__________________


 


Re: Issuance of Common Shares to Lincoln Park Capital Fund,
LLC


 


Dear ________,


 


On behalf of ELITE PHARMACEUTICALS, INC., (the “Company”),
you are hereby instructed to issue as soon as possible 2,929,115 shares of our common stock in the name of Lincoln
Park Capital Fund, LLC. The share certificate should be dated [DATE OF THE PURCHASE AGREEMENT]. I have included a true
and correct copy of a unanimous written consent executed by all of the members of the Board of Directors of the Company adopting
resolutions approving the issuance of these shares. The shares should be issued subject to the following restrictive legend:


 


THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, UNLESS SOLD PURSUANT TO: (1) RULE 144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (2) AN OPINION OF HOLDER’S COUNSEL,
IN A CUSTOMARY FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.


 




    	 



    	 



    

 


The share certificate should be sent as soon as possible
via overnight mail to the following address:


 


Lincoln Park Capital Fund, LLC


440 North Wells, Suite 410


Chicago, IL 60654


Attention: Josh Scheinfeld/Jonathan
Cope


 


Thank you very much for your help. Please call me at ______________
if you have any questions or need anything further.


 


ELITE PHARMACEUTICALS,
INC.


 


	BY:	 	 
	 	[name]	 
	 	[title]