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NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY  AND THE  SECURITIES  ISSUABLE  UPON  EXERCISE  OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                To Purchase __________ Shares of Common Stock of

                           ELITE PHARMACEUTICALS, INC.

      THIS COMMON STOCK PURCHASE  WARRANT (the  "WARRANT")  certifies  that, for
value received,  _____________ (the "HOLDER"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the Initial  Exercise Date (as defined in Section 2) and
on or prior to the close of business on the five year anniversary of the Initial
Exercise Date (the "TERMINATION DATE") but not thereafter,  to subscribe for and
purchase  from  Elite   Pharmaceuticals,   Inc.,  a  Delaware  corporation  (the
"COMPANY"),  up to ______  shares (the "WARRANT  SHARES") of Common  Stock,  par
value $.01 per share, of the Company (the "COMMON STOCK"). The purchase price of
one share of Common  Stock  under this  Warrant  shall be equal to the  Exercise
Price, as defined in Section 2(b).

      SECTION 1.  DEFINITIONS.  Capitalized terms used and not otherwise defined
herein shall have the meanings  set forth in that  certain  Securities  Purchase
Agreement (the "PURCHASE  AGREEMENT"),  dated April 24, 2007,  among the Company
and the purchasers signatory thereto.

      SECTION 2. EXERCISE.

            (a) EXERCISE OF WARRANT. Exercise of the purchase rights represented
by this  Warrant  may be made,  in whole or in part,  at any time or times on or
after the date of issue of this Warrant (the "INITIAL  EXERCISE DATE") and on or
before the  Termination  Date by  delivery  to the  Company  of a duly  executed
facsimile  copy of the Notice of  Exercise  Form  annexed  hereto (or such other
office or agency of the Company as it may  designate by notice in writing to the
registered  Holder at the address of such Holder  appearing  on the books of the
Company); and,

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within  three (3) Trading  Days of the date said Notice of Exercise is delivered
to the Company,  the Holder shall have  surrendered  this Warrant to the Company
and the Company shall have received  payment of the aggregate  Exercise Price of
the shares  thereby  purchased by wire  transfer or  cashier's  check drawn on a
United States bank.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares  available  hereunder shall have
the effect of lowering  the  outstanding  number of Warrant  Shares  purchasable
hereunder  in an  amount  equal  to the  applicable  number  of  Warrant  Shares
purchased.  The Holder and the Company shall maintain records showing the number
of Warrant Shares  purchased and the date of such  purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within one (1) Business Day
of receipt of such  notice.  In the event of any  dispute  or  discrepancy,  the
records of the Holder shall be controlling and  determinative  in the absence of
manifest error.

            (b) EXERCISE PRICE. The exercise price per share of the Common Stock
under this  Warrant  shall be  US$3.00,  subject to  adjustment  hereunder  (the
"EXERCISE PRICE").

            (c) CASHLESS  EXERCISE.  If at any time after one year from the date
of  issuance  of this  Warrant  there  is no  effective  Registration  Statement
registering,  or no current prospectus  available for, the resale of the Warrant
Shares by the Holder,  then this  Warrant may also be  exercised at such time by
means of a "cashless  exercise" in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

                 A =  the VWAP on the Trading Day immediately preceding the date
                      of such election;

                 B =  the Exercise Price of this Warrant, as adjusted; and

                 X =  the number of Warrant  Shares  issuable  upon exercise of
                      this Warrant in accordance with the terms of this  Warrant
                      by means of a cash  exercise  rather than a cashless
                      exercise.

            (d) EXERCISE LIMITATIONS.

                  (i) HOLDER'S  RESTRICTIONS.  The Company  shall not effect any
exercise of this Warrant,  and a Holder shall not have the right to exercise any
portion of this Warrant,  pursuant to Section 2(c) or  otherwise,  to the extent
that after giving  effect to such  issuance  after  exercise as set forth on the
applicable  Notice  of  Exercise,  such  Holder  (together  with  such  Holder's
Affiliates,  and any other person or entity acting as a group together with such
Holder  or any of such  Holder's  Affiliates),  as set  forth on the  applicable
Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
Limitation  (as defined  below).  For purposes of the  foregoing  sentence,  the
number of  shares of Common  Stock  beneficially  owned by such  Holder  and its
Affiliates  shall  include the number of shares of Common  Stock  issuable  upon
exercise of this Warrant with respect to which such determination is being made,
but shall  exclude the number of shares of Common  Stock which would be issuable
upon  (A)  exercise  of the  remaining,  nonexercised  portion  of this  Warrant
beneficially owned by such Holder or any of

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<PAGE>

its Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company  (including,  without limitation,
any other Preferred Stock or Warrants)  subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by such
Holder or any of its affiliates.  Except as set forth in the preceding sentence,
for purposes of this Section 2(d)(i),  beneficial  ownership shall be calculated
in  accordance  with  Section  13(d)  of the  Exchange  Act  and the  rules  and
regulations promulgated  thereunder,  it being acknowledged by a Holder that the
Company  is  not  representing  to  such  Holder  that  such  calculation  is in
compliance  with  Section  13(d) of the  Exchange  Act and such Holder is solely
responsible for any schedules required to be filed in accordance  therewith.  To
the extent that the  limitation  contained  in this Section  2(d)  applies,  the
determination  of whether  this  Warrant is  exercisable  (in  relation to other
securities  owned by such Holder  together with any  Affiliates)  and of which a
portion of this  Warrant is  exercisable  shall be in the sole  discretion  of a
Holder,  and the  submission of a Notice of Exercise  shall be deemed to be each
Holder's  determination  of whether this Warrant is exercisable  (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is  exercisable,  in each case subject to such aggregate
percentage  limitation,  and the Company  shall have no  obligation to verify or
confirm the accuracy of such determination.  In addition,  a determination as to
any group status as  contemplated  above shall be determined in accordance  with
Section  13(d) of the  Exchange  Act and the rules and  regulations  promulgated
thereunder.  For purposes of this Section  2(d),  in  determining  the number of
outstanding  shares  of  Common  Stock,  a  Holder  may  rely on the  number  of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form  10-Q  or  Form  10-K,  as  the  case  may  be,  (y) a more  recent  public
announcement  by the  Company  or (z) any  other  notice by the  Company  or the
Company's  Transfer  Agent  setting  forth the number of shares of Common  Stock
outstanding.  Upon the written or oral  request of a Holder,  the Company  shall
within two Trading Days confirm  orally and in writing to such Holder the number
of  shares  of  Common  Stock  then  outstanding.  In any  case,  the  number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by such  Holder  or its  Affiliates  since the date as of which  such  number of
outstanding  shares of Common  Stock was  reported.  The  "BENEFICIAL  OWNERSHIP
LIMITATION"  shall  be  4.99%  of the  number  of  shares  of the  Common  Stock
outstanding  immediately after giving effect to the issuance of shares of Common
Stock  issuable  upon  exercise  of  this  Warrant.   The  Beneficial  Ownership
Limitation  provisions of this Section 2(d)(i) may be waived by such Holder,  at
the  election of such  Holder,  upon not less than 61 days' prior  notice to the
Company to change the Beneficial  Ownership Limitation to 9.99% of the number of
shares of the Common Stock  outstanding  immediately  after giving effect to the
issuance  of shares of Common  Stock  upon  exercise  of this  Warrant,  and the
provisions of this Section 2(d) shall continue to apply. Upon such a change by a
Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such
9.99% limitation,  the Beneficial Ownership Limitation may not be further waived
by such  Holder.  The  provisions  of this  paragraph  shall  be  construed  and
implemented in a manner  otherwise than in strict  conformity  with the terms of
this Section 2(d)(i) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial  Ownership  Limitation
herein  contained  or to make changes or  supplements  necessary or desirable to
properly  give effect to such  limitation.  The  limitations  contained  in this
paragraph shall apply to a successor holder of this Warrant.

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<PAGE>

                  (ii)  TRADING  MARKET  RESTRICTIONS.  If the  Company  has not
obtained Shareholder Approval (as defined below), then the Company may not issue
upon  exercise of this Warrant a number of shares of Common Stock,  which,  when
aggregated  with any shares of Common Stock issued (A) upon  conversion of or as
payment of dividends  on the  Preferred  Stock  issued  pursuant to the Purchase
Agreement,  (B) upon prior exercise of this or any other Warrant issued pursuant
to the  Purchase  Agreement  and (C)  pursuant  to any  warrants  issued  to any
registered  broker-dealer as a fee in connection with the Securities pursuant to
the Purchase  Agreement,  would exceed 19.999% of the number of shares of Common
Stock  outstanding  on the Trading Day  immediately  preceding  the Closing Date
(such number of shares, the "ISSUABLE MAXIMUM"). If on any attempted exercise of
this Warrant,  the issuance of Warrant Shares would exceed the Issuable  Maximum
and the Company shall not have  previously  obtained the vote of shareholders to
approve the issuance of shares of Common Stock in excess of the Issuable Maximum
pursuant to the terms  hereof  (the  "SHAREHOLDER  APPROVAL"),  then the Company
shall issue to the Holder  requesting a Warrant  exercise such number of Warrant
Shares as may be issued  below the  Issuable  Maximum  and,  with respect to the
remainder of the aggregate  number of Warrant Shares,  this Warrant shall not be
exercisable until and unless Shareholder Approval has been obtained.

            (e) MECHANICS OF EXERCISE.

                  (i)  AUTHORIZATION  OF WARRANT SHARES.  The Company  covenants
that all Warrant  Shares  which may be issued upon the  exercise of the purchase
rights  represented by this Warrant will,  upon exercise of the purchase  rights
represented by this Warrant, be duly authorized,  validly issued, fully paid and
nonassessable and free from all taxes,  liens and charges created by the Company
in respect of the issue  thereof  (other  than taxes in respect of any  transfer
occurring contemporaneously with such issue).

                  (ii) DELIVERY OF CERTIFICATES UPON EXERCISE.  Certificates for
shares  purchased  hereunder  shall be  transmitted by the transfer agent of the
Company to the Holder by crediting the account of the Holder's prime broker with
the Depository  Trust Company through its Deposit  Withdrawal  Agent  Commission
("DWAC") system if the Company is a participant in such system, and otherwise by
physical  delivery  to the  address  specified  by the  Holder in the  Notice of
Exercise  within  three (3) Trading Days from the delivery to the Company of the
Notice of Exercise Form,  surrender of this Warrant and payment of the aggregate
Exercise Price as set forth above ("WARRANT SHARE DELIVERY DATE").  This Warrant
shall be  deemed  to have  been  exercised  on the date  the  Exercise  Price is
received by the Company. The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed
to have  become a holder of record of such  shares for all  purposes,  as of the
date the Warrant has been  exercised  by payment to the Company of the  Exercise
Price (or by cashless exercise,  if permitted) and all taxes required to be paid
by the Holder,  if any,  pursuant to Section  2(e)(vii) prior to the issuance of
such shares, have been paid.

                  (iii) DELIVERY OF NEW WARRANTS UPON EXERCISE.  If this Warrant
shall have been  exercised in part,  the Company  shall,  upon surrender of this
Warrant certificate,  at the time of delivery of the certificate or certificates
representing  Warrant  Shares,  deliver to Holder a new Warrant  evidencing  the
rights of Holder to purchase the  unpurchased  Warrant Shares called for by this
Warrant,  which new Warrant shall in all other  respects be identical  with this
Warrant.

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<PAGE>

                  (iv)  RESCISSION  RIGHTS.  If the  Company  fails to cause its
transfer  agent  to  transmit  to  the  Holder  a  certificate  or  certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant
Share  Delivery  Date,  then the  Holder  will  have the right to  rescind  such
exercise.

                  (v)  COMPENSATION  FOR  BUY-IN ON  FAILURE  TO TIMELY  DELIVER
CERTIFICATES  UPON  EXERCISE.  In addition to any other rights  available to the
Holder,  if the  Company  fails to cause its  transfer  agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant to
an exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market  transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant  Shares which the Holder  anticipated  receiving upon such
exercise (a "BUY-IN"),  then the Company shall (1) pay in cash to the Holder the
amount by which (x) the  Holder's  total  purchase  price  (including  brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the Holder in  connection  with the exercise at issue
times  (B) the  price  at which  the sell  order  giving  rise to such  purchase
obligation was executed,  and (2) at the option of the Holder,  either reinstate
the  portion of the Warrant and  equivalent  number of Warrant  Shares for which
such  exercise  was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company  timely  complied  with
its exercise  and delivery  obligations  hereunder.  For example,  if the Holder
purchases  Common  Stock  having a total  purchase  price of  $11,000 to cover a
Buy-In with respect to an  attempted  exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase  obligation of $10,000,  under
clause (1) of the immediately  preceding  sentence the Company shall be required
to pay the Holder  $1,000.  The Holder shall provide the Company  written notice
indicating the amounts  payable to the Holder in respect of the Buy-In and, upon
request of the  Company,  evidence  of the amount of such loss.  Nothing  herein
shall  limit a  Holder's  right to pursue  any other  remedies  available  to it
hereunder,  at law or in  equity  including,  without  limitation,  a decree  of
specific  performance  and/or  injunctive  relief with respect to the  Company's
failure to timely deliver certificates  representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

                  (vi) NO FRACTIONAL  SHARES OR SCRIP.  No fractional  shares or
scrip  representing  fractional shares shall be issued upon the exercise of this
Warrant.  As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall at its election,  either pay a
cash  adjustment  in respect of such final  fraction in an amount  equal to such
fraction multiplied by the Exercise Price or round up to the next whole share.

                  (vii) CHARGES,  TAXES AND EXPENSES.  Issuance of  certificates
for Warrant  Shares shall be made without  charge to the Holder for any issue or
transfer  tax or other  incidental  expense in respect of the  issuance  of such
certificate,  all of which taxes and expenses shall be paid by the Company,  and
such  certificates  shall be issued in the name of the Holder or in such name or
names as may be  directed by the Holder;  PROVIDED,  HOWEVER,  that in the event
certificates  for Warrant  Shares are to be issued in a name other than the name
of the Holder,  this Warrant when  surrendered for exercise shall be accompanied
by the Assignment Form attached

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<PAGE>

hereto duly executed by the Holder; and the Company may require,  as a condition
thereto,  the payment of a sum  sufficient  to reimburse it for any transfer tax
incidental thereto.

                  (viii)  CLOSING  OF  BOOKS.  The  Company  will not  close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

      SECTION 3. CERTAIN ADJUSTMENTS.

            (a) STOCK  DIVIDENDS AND SPLITS.  If the Company,  at any time while
this  Warrant is  outstanding:  (A) pays a stock  dividend or  otherwise  make a
distribution or  distributions on shares of its Common Stock or any other equity
or equity equivalent  securities  payable in shares of Common Stock (which,  for
avoidance  of doubt,  shall not include any shares of Common Stock issued by the
Company upon exercise of this  Warrant),  (B) subdivides  outstanding  shares of
Common Stock into a larger number of shares,  (C) combines  (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares,  or (D) issues by  reclassification  of shares of the  Common  Stock any
shares of capital  stock of the Company,  then in each case the  Exercise  Price
shall be multiplied by a fraction of which the numerator  shall be the number of
shares  of  Common  Stock  (excluding   treasury  shares,  if  any)  outstanding
immediately  before such event and of which the denominator  shall be the number
of shares of Common  Stock  outstanding  immediately  after  such  event and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted.  Any  adjustment  made  pursuant  to this  Section  3(a) shall  become
effective   immediately   after  the  record  date  for  the   determination  of
stockholders  entitled to receive such dividend or distribution and shall become
effective  immediately  after the effective  date in the case of a  subdivision,
combination or re-classification.

            (b)  SUBSEQUENT  EQUITY  SALES.  If the  Company  or any  Subsidiary
thereof,  as applicable,  at any time while this Warrant is  outstanding,  shall
sell or grant any option to  purchase  or sell or grant any right to reprice its
securities, or otherwise dispose of or issue (or announce any offer, sale, grant
or any option to purchase or other disposition) any Common Stock or Common Stock
Equivalents  entitling  any  Person to  acquire  shares of Common  Stock,  at an
effective  price per share less than the then  applicable  Conversion  Price (as
such term is defined in the Certificate of  Designations) of the Preferred Stock
(such  issuances  collectively,  a  "DILUTIVE  ISSUANCE")  (if the holder of the
Common Stock or Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions,  floating conversion,
exercise or exchange prices or otherwise, or due to warrants,  options or rights
per share  which are issued in  connection  with such  issuance,  be entitled to
receive  shares of Common  Stock at an  effective  price per share which is less
than the then applicable Conversion Price, such issuance shall be deemed to have
occurred for less than the then applicable  Conversion Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced by
multiplying  the  Exercise  Price by a fraction,  the  numerator of which is the
number of shares of Common Stock issued and outstanding immediately prior to the
Dilutive  Issuance  plus the number of shares of Common Stock which the offering
price  for  such  Dilutive  Issuance  would  purchase  at  the  then  applicable
Conversion Price, and the denominator of which shall be the sum of the number of
shares of Common Stock issued and outstanding  immediately prior to the Dilutive
Issuance plus the number of shares of Common Stock so issued

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or issuable in connection  with the Dilutive  Issuance and the number of Warrant
Shares issuable  hereunder  shall be increased such that the aggregate  Exercise
Price payable hereunder,  after taking into account the decrease in the Exercise
Price,  shall be equal to the aggregate Exercise Price prior to such adjustment.
Such  adjustment  shall be made  whenever  such  Common  Stock or  Common  Stock
Equivalents are issued.  Notwithstanding the foregoing,  no adjustments shall be
made,  paid or issued under this Section 3(b) in respect of an Exempt  Issuance.
The Company  shall  notify the Holder in writing,  no later than the Trading Day
following the issuance of any Common Stock or Common Stock  Equivalents  subject
to this section, indicating therein the applicable issuance price, or applicable
reset price,  exchange  price,  conversion  price and other  pricing terms (such
notice the "DILUTIVE ISSUANCE NOTICE").  For purposes of clarification,  whether
or not the Company provides a Dilutive  Issuance Notice pursuant to this Section
3(b),  upon the  occurrence  of any  Dilutive  Issuance,  after the date of such
Dilutive  Issuance the Holder is entitled to receive a number of Warrant  Shares
based  upon the  adjusted  Exercise  Price  regardless  of  whether  the  Holder
accurately refers to the adjusted Exercise Price in the Notice of Exercise.

            (c) SUBSEQUENT RIGHTS OFFERINGS.  If the Company,  at any time while
the  Warrant is  outstanding,  shall  issue  rights,  options or warrants to all
holders of Common Stock (and not to Holders)  entitling them to subscribe for or
purchase  shares of Common  Stock at a price per share less than the VWAP at the
record date  mentioned  below,  then the Exercise Price shall be multiplied by a
fraction,  of which the denominator  shall be the number of shares of the Common
Stock  outstanding  on the date of issuance of such rights or warrants  plus the
number  of  additional  shares of  Common  Stock  offered  for  subscription  or
purchase, and of which the numerator shall be the number of shares of the Common
Stock  outstanding  on the date of issuance of such rights or warrants  plus the
number  of shares  which the  aggregate  offering  price of the total  number of
shares so offered  (assuming receipt by the Company in full of all consideration
payable upon  exercise of such rights,  options or warrants)  would  purchase at
such VWAP.  Such  adjustment  shall be made whenever such rights or warrants are
issued,  and shall become  effective  immediately  after the record date for the
determination  of  stockholders  entitled  to receive  such  rights,  options or
warrants.  If any such rights,  options or warrants  expire  without having been
exercised,  the  Exercise  Price as adjusted  upon the  issuance of such rights,
options or warrants  shall be readjusted to the Exercise  Price which would have
been in effect had an  adjustment  been made on the basis  that only  additional
shares of Common Stock so issued were the additional  shares of Common Stock, if
any, actually issued or sold on the exercise of such rights, options or warrants
and such additional  shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise,  plus the
consideration,  if any, actually received by the Corporation for the granting of
all such rights,  options or warrants,  whether or not exercised,  provided that
such readjustment shall not apply to prior exercises of the Warrant.

            (d) PRO RATA DISTRIBUTIONS. If the Company, at any time prior to the
Termination  Date,  shall  distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash  dividends)  or rights or warrants  to  subscribe  for or purchase  any
security  other than the Common Stock (which shall be subject to Section  3(b)),
then in each such case the Exercise Price shall be adjusted by  multiplying  the
Exercise  Price  in  effect  immediately  prior to the  record  date  fixed  for
determination  of  stockholders  entitled  to  receive  such  distribution  by a
fraction of which the

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denominator  shall be the VWAP determined as of the record date mentioned above,
and of which the numerator  shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed  applicable to one outstanding  share of
the Common  Stock as  determined  by the Board of  Directors  in good faith.  In
either case the  adjustments  shall be described in a statement  provided to the
Holder of the portion of assets or evidences of  indebtedness  so distributed or
such  subscription  rights  applicable  to  one  share  of  Common  Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

            (e) FUNDAMENTAL  TRANSACTION.  If, at any time while this Warrant is
outstanding,  (A) the Company effects any merger or consolidation of the Company
with  or into  another  Person,  (B)  the  Company  effects  any  sale of all or
substantially all of its assets in one or a series of related transactions,  (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged  for  other  securities,  cash  or  property  (in  any  such  case,  a
"FUNDAMENTAL TRANSACTION"), then,

                  (i) subject to clause (ii) below, upon any subsequent exercise
of this  Warrant,  the Holder shall have the right to receive,  for each Warrant
Share that would have been issuable upon such exercise  immediately prior to the
occurrence of such  Fundamental  Transaction,  at the option of the Holder,  (a)
upon exercise of this Warrant and payment of the Exercise  Price,  the number of
shares of Common  Stock of the  successor  or  acquiring  corporation  or of the
Company, if it is the surviving  corporation,  and any additional  consideration
(the  "ALTERNATE  CONSIDERATION")  receivable  upon  or  as  a  result  of  such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable immediately prior to such event or (b) if the Company is acquired in
an all cash  transaction,  cash equal to the value of this Warrant as determined
in accordance with the Black-Scholes option pricing formula; or

                  (ii) if the Company is acquired in an all cash transaction, in
the option of the Company or its acquiror,  the Holder may be paid cash equal to
the value of this Warrant as  determined in  accordance  with the  Black-Scholes
option  pricing  formula  and upon  payment  of such  cash,  the  Warrant  shall
terminate.

For  purposes  of any such  exercise  by the Holder,  the  determination  of the
Exercise  Price  shall be  appropriately  adjusted  to  apply to such  Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such  Fundamental  Transaction,  and the Company
shall  apportion  the  Exercise  Price among the  Alternate  Consideration  in a
reasonable manner  reflecting the relative value of any different  components of
the Alternate Consideration.  If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it  receives  upon any  exercise  of this  Warrant  following  such  Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental

                                       8
<PAGE>

Transaction  shall  issue  to the  Holder  a new  warrant  consistent  with  the
foregoing  provisions and evidencing the Holder's right to exercise such warrant
into  Alternate  Consideration.  The terms of any agreement  pursuant to which a
Fundamental  Transaction  is effected  shall  include  terms  requiring any such
successor or surviving entity to comply with the provisions of this Section 3(d)
and  insuring  that this  Warrant  (or any such  replacement  security)  will be
similarly  adjusted upon any subsequent  transaction  analogous to a Fundamental
Transaction.

            (f)  CALCULATIONS.  All  calculations  under this Section 3 shall be
made to the nearest cent or the nearest  1/100th of a share, as the case may be.
For  purposes of this  Section 3, the number of shares of Common Stock deemed to
be issued and  outstanding  as of a given date shall be the sum of the number of
shares  of  Common  Stock  (excluding   treasury  shares,  if  any)  issued  and
outstanding.

            (g)  VOLUNTARY  ADJUSTMENT  BY COMPANY.  The Company may at any time
during the term of this Warrant  reduce the then current  Exercise  Price to any
amount and for any period of time deemed  appropriate  by the Board of Directors
of the Company.

            (h) NOTICE TO HOLDERS.

                  (i) ADJUSTMENT TO EXERCISE PRICE.  Whenever the Exercise Price
is  adjusted  pursuant to any  provision  of this  Section 3, the Company  shall
promptly  mail to each Holder a notice  setting  forth the Exercise  Price after
such  adjustment and setting forth a brief statement of the facts requiring such
adjustment.  If the  Company  issues  a  variable  rate  security,  despite  the
prohibition  thereon in the Purchase  Agreement,  the Company shall be deemed to
have issued  Common Stock or Common  Stock  Equivalents  at the lowest  possible
conversion  or  exercise  price at which such  securities  may be  converted  or
exercised in the case of a Variable Rate Transaction (as defined in the Purchase
Agreement).

                  (ii) NOTICE TO ALLOW  EXERCISE  BY HOLDER.  If (A) the Company
shall  declare a dividend (or any other  distribution  in whatever  form) on the
Common Stock; (B) the Company shall declare a special nonrecurring cash dividend
on or a redemption  of the Common  Stock;  (C) the Company  shall  authorize the
granting to all holders of the Common Stock rights or warrants to subscribe  for
or purchase any shares of capital  stock of any class or of any rights;  (D) the
approval of any stockholders of the Company shall be required in connection with
any  reclassification  of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of all or substantially  all of the
assets of the Company, of any compulsory share exchange whereby the Common Stock
is converted  into other  securities,  cash or property;  (E) the Company  shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Company;  then,  in each case,  the Company shall cause to be
mailed to the Holder at its last  address as it shall  appear  upon the  Warrant
Register  of the  Company,  at least 20  calendar  days prior to the  applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the  purpose of such  dividend,  distribution,
redemption,  rights or warrants,  or if a record is not to be taken, the date as
of which the  holders  of the  Common  Stock of record  to be  entitled  to such
dividend, distributions,  redemption, rights or warrants are to be determined or
(y) the  date on  which  such  reclassification,  consolidation,  merger,  sale,
transfer or share  exchange is expected to become  effective  or close,  and the
date as of which it is expected that holders of the Common Stock of

                                       9
<PAGE>

record  shall be  entitled  to  exchange  their  shares of the Common  Stock for
securities,  cash or other  property  deliverable  upon  such  reclassification,
consolidation,  merger,  sale,  transfer or share  exchange;  provided  that the
failure to mail such  notice or any defect  therein  or in the  mailing  thereof
shall not affect the validity of the corporate  action  required to be specified
in such  notice.  The Holder is  entitled to exercise  this  Warrant  during the
20-day period commencing on the date of such notice to the effective date of the
event triggering such notice.

      SECTION 4. TRANSFER OF WARRANT.

            (a) TRANSFERABILITY.  The Warrant and the other rights of the Holder
pursuant  to this  Warrant  certificate  are not  severable  from  this  Warrant
certificate,  and shall not be assignable or  transferable  except in connection
with a transfer or assignment of this Warrant certificate in accordance with the
terms  hereof.  Any  instrument  purporting  to make a transfer or assignment in
violation  of this  Section  4(a)  shall be void and of no  effect.  Subject  to
compliance  with any applicable  securities laws and the conditions set forth in
Section  4(d)  hereof  and to the  provisions  of  Section  4.1 of the  Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration  rights) are transferable,  in whole or in part, upon surrender
of this  Warrant  certificate  at the  principal  office of the  Company  or its
designated   agent,   together  with  a  written   assignment  of  this  Warrant
substantially  in the form  attached  hereto duly  executed by the Holder or its
agent or attorney and funds  sufficient  to pay any transfer  taxes payable upon
the  making  of such  transfer.  Upon  compliance  with the  foregoing  and such
surrender and, if required,  such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the  assignee or  assignees  and in the
denomination or  denominations  specified in such instrument of assignment,  and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned,  and this Warrant shall  promptly be cancelled.  A Warrant,  if
properly assigned,  may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

            (b) NEW WARRANTS. This Warrant may be divided or combined with other
Warrants  upon  presentation  hereof at the  aforesaid  office  of the  Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be issued,  signed by the Holder or its agent or attorney.
Subject  to  compliance  with  Section  4(a),  as to any  transfer  which may be
involved in such division or combination,  the Company shall execute and deliver
a new Warrant or Warrants in exchange  for the Warrant or Warrants to be divided
or combined in accordance with such notice.

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

            (d) TRANSFER RESTRICTIONS.  If, at the time of the surrender of this
Warrant in connection  with any transfer of this  Warrant,  the transfer of this
Warrant shall not be registered pursuant to an effective  registration statement
under the Securities Act and under applicable state securities or blue sky laws,
the Company may require,  as a condition of allowing  such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a

                                       10
<PAGE>

written opinion of counsel (which opinion shall be in form,  substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such  transfer may be made without  registration  under the  Securities  Act and
under  applicable  state  securities  or blue sky laws,  (ii) that the holder or
transferee  execute and deliver to the Company an investment  letter in form and
substance  acceptable  to the  Company  and  (iii)  that  the  transferee  be an
"accredited investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a "qualified institutional buyer"
as defined in Rule 144A(a) under the Securities Act.

      SECTION 5. MISCELLANEOUS.

            (a) NO RIGHTS AS SHAREHOLDER  UNTIL EXERCISE.  This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder  of the
Company prior to the exercise hereof as set forth in Section 2(e)(ii).

            (b) LOSS, THEFT,  DESTRUCTION OR MUTILATION OF WARRANT.  The Company
covenants that upon receipt by the Company of evidence  reasonably  satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate  relating  to the  Warrant  Shares,  and in case of  loss,  theft or
destruction,  of indemnity or security reasonably  satisfactory to it (which, in
the case of the  Warrant,  shall not include the posting of any bond),  and upon
surrender and cancellation of such Warrant or stock  certificate,  if mutilated,
the Company  will make and deliver a new  Warrant or stock  certificate  of like
tenor  and  dated  as of such  cancellation,  in lieu of such  Warrant  or stock
certificate.

            (c) SATURDAYS,  SUNDAYS, HOLIDAYS, ETC. If the last or appointed day
for the taking of any action or the  expiration of any right required or granted
herein shall not be a Business  Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.

            (d) AUTHORIZED SHARES.

                  (i) The Company  covenants  that during the period the Warrant
is outstanding,  it will reserve from its authorized and unissued Common Stock a
sufficient  number of shares to provide for the  issuance of the Warrant  Shares
upon the exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall  constitute  full authority to
its officers who are charged with the duty of executing  stock  certificates  to
execute and issue the  necessary  certificates  for the Warrant  Shares upon the
exercise of the purchase  rights under this  Warrant.  The Company will take all
such  reasonable  action as may be necessary to assure that such Warrant  Shares
may be issued as provided  herein  without  violation of any  applicable  law or
regulation,  or of any  requirements of the Trading Market upon which the Common
Stock may be listed.

                  (ii) Except and to the extent as waived or consented to by the
Holder,  the Company  shall not by any action,  including,  without  limitation,
amending  its  certificate  of  incorporation  or  through  any  reorganization,
transfer  of  assets,  consolidation,  merger,  dissolution,  issue  or  sale of
securities or any other voluntary action,  avoid or seek to avoid the observance
or  performance  of any of the terms of this  Warrant,  but will at all times in
good faith

                                       11
<PAGE>

assist  in the  carrying  out of all such  terms  and in the  taking of all such
actions as may be  necessary or  appropriate  to protect the rights of Holder as
set forth in this Warrant against impairment. Without limiting the generality of
the  foregoing,  the Company  will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such  increase  in par value,  (b) take all such action as may be  necessary  or
appropriate  in order that the Company may validly and legally  issue fully paid
and nonassessable  Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

                  (iii)  Before  taking  any  action  which  would  result in an
adjustment in the number of Warrant Shares for which this Warrant is exercisable
or in the Exercise Price,  the Company shall obtain all such  authorizations  or
exemptions  thereof,  or consents  thereto,  as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

            (e)  JURISDICTION.   All  questions   concerning  the  construction,
validity,  enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

            (f)  RESTRICTIONS.  The Holder  acknowledges that the Warrant Shares
acquired  upon the  exercise  of this  Warrant,  if not  registered,  will  have
restrictions upon resale imposed by state and federal securities laws.

            (g)  NONWAIVER  AND  EXPENSES.  No course of dealing or any delay or
failure to exercise any right hereunder on the part of Holder shall operate as a
waiver of such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding  the fact that all rights hereunder terminate on the Termination
Date. If the Company  willfully and knowingly fails to comply with any provision
of this  Warrant,  which  results in any  material  damages to the  Holder,  the
Company  shall pay to Holder such  amounts as shall be  sufficient  to cover any
costs and expenses  including,  but not limited to, reasonable  attorneys' fees,
including those of appellate  proceedings,  incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights,  powers
or remedies hereunder.

            (h)  NOTICES.  Any  notice,  request or other  document  required or
permitted  to be  given or  delivered  to the  Holder  by the  Company  shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

            (i) LIMITATION OF LIABILITY.  No provision hereof, in the absence of
any  affirmative  action by Holder to exercise this Warrant to purchase  Warrant
Shares, and no enumeration  herein of the rights or privileges of Holder,  shall
give rise to any liability of Holder for the purchase  price of any Common Stock
or as a stockholder  of the Company,  whether such  liability is asserted by the
Company or by creditors of the Company.

            (j) REMEDIES.  Holder, in addition to being entitled to exercise all
rights  granted by law,  including  recovery  of  damages,  will be  entitled to
specific  performance of its rights under this Warrant.  The Company agrees that
monetary damages would not be adequate

                                       12
<PAGE>

compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby  agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.

            (k) SUCCESSORS AND ASSIGNS.  Subject to applicable  securities laws,
this Warrant and the rights and obligations  evidenced hereby shall inure to the
benefit of and be binding upon the  successors of the Company and the successors
and permitted assigns of Holder.  The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

            (l)  AMENDMENT.  This  Warrant  may be  modified  or  amended or the
provisions hereof waived with the written consent of the Company and the Holder.

            (m) SEVERABILITY.  Wherever possible, each provision of this Warrant
shall  be  interpreted  in  such  manner  as to be  effective  and  valid  under
applicable  law, but if any  provision of this Warrant shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

            (n)  HEADINGS.  The  headings  used  in  this  Warrant  are  for the
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.

                              ********************

                                       13
<PAGE>

            IN  WITNESS  WHEREOF,  the  Company  has caused  this  Warrant to be
executed by its officer thereunto duly authorized.

Dated: April 24, 2007

                                               ELITE PHARMACEUTICALS, INC.

                                               By:______________________________
                                                  Name: Bernard J. Berk
                                                  Title: Chief Executive Officer

                                       14
<PAGE>

                               NOTICE OF EXERCISE

TO: ELITE PHARMACEUTICALS, INC.

            (1) The  undersigned  hereby  elects to  purchase  ________  Warrant
Shares of the Company  pursuant to the terms of the  attached  Warrant  (only if
exercised in full),  and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

            (2) Payment shall take the form of (check applicable box):

                  |_| in lawful money of the United States; or

                  |_| [if permitted] the  cancellation of such number of Warrant
                  Shares as is  necessary,  in  accordance  with the formula set
                  forth in  subsection  2(c),  to  exercise  this  Warrant  with
                  respect to the maximum  number of Warrant  Shares  purchasable
                  pursuant  to the  cashless  exercise  procedure  set  forth in
                  subsection 2(c).

            (3) Please issue a certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                  __________________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

                  __________________________________

                  __________________________________

                  __________________________________

            (4) ACCREDITED INVESTOR. The undersigned is an "accredited investor"
as defined in  Regulation D  promulgated  under the  Securities  Act of 1933, as
amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________

SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________

Name of Authorized Signatory:  _________________________________________________

Title of Authorized Signatory: _________________________________________________

Date: __________________________________________________________________________

<PAGE>

                                 ASSIGNMENT FORM

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

            FOR  VALUE  RECEIVED,  [____]  all  of or  [_______]  shares  of the
foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________________________ whose address is

_______________________________________________________________________________.

________________________________________________________________________________

                                                  Dated: ______________, _______

                               Holder's Signature: _____________________________

                               Holder's Address:   _____________________________

                                                   _____________________________

Signature Guaranteed:  _________________________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY  AND THE  SECURITIES  ISSUABLE  UPON  EXERCISE  OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase ______ Shares of Common Stock of

                           ELITE PHARMACEUTICALS, INC.

         THIS COMMON STOCK PURCHASE WARRANT (the "WARRANT")  certifies that, for
value  received,  ___________  (the "HOLDER"),  is entitled,  upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after the Initial  Exercise Date (as defined in Section 2) and
on or prior to the close of business on the five year anniversary of the Initial
Exercise Date (the "TERMINATION DATE") but not thereafter,  to subscribe for and
purchase  from  Elite   Pharmaceuticals,   Inc.,  a  Delaware  corporation  (the
"COMPANY"),  up to _______  shares (the "WARRANT  SHARES") of Common Stock,  par
value $.01 per share, of the Company (the "COMMON STOCK"). The purchase price of
one share of Common  Stock  under this  Warrant  shall be equal to the  Exercise
Price, as defined in Section 2(b).

         SECTION  1.  DEFINITIONS.  Capitalized  terms  used  and not  otherwise
defined  herein shall have the  meanings  set forth in that  certain  Securities
Purchase Agreement (the "PURCHASE  AGREEMENT"),  dated April 24, 2007, among the
Company and the purchasers signatory thereto.

         SECTION 2.   EXERCISE.

                (a)   EXERCISE  OF  WARRANT.  Exercise  of the  purchase  rights
represented  by this  Warrant may be made,  in whole or in part,  at any time or
times on or after  the date of issue  of this  Warrant  (the  "INITIAL  EXERCISE
DATE") and on or before the  Termination  Date by  delivery  to the Company of a
duly executed  facsimile  copy of the Notice of Exercise Form annexed hereto (or
such  other  office or agency of the  Company as it may  designate  by notice in
writing to the registered  Holder at the address of such Holder appearing on the
books of the  Company);  and,

<PAGE>

within  three (3) Trading  Days of the date said Notice of Exercise is delivered
to the Company,  the Holder shall have  surrendered  this Warrant to the Company
and the Company shall have received  payment of the aggregate  Exercise Price of
the shares  thereby  purchased by wire  transfer or  cashier's  check drawn on a
United States bank.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares  available  hereunder shall have
the effect of lowering  the  outstanding  number of Warrant  Shares  purchasable
hereunder  in an  amount  equal  to the  applicable  number  of  Warrant  Shares
purchased.  The Holder and the Company shall maintain records showing the number
of Warrant Shares  purchased and the date of such  purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within one (1) Business Day
of receipt of such  notice.  In the event of any  dispute  or  discrepancy,  the
records of the Holder shall be controlling and  determinative  in the absence of
manifest error.

                (b)   EXERCISE PRICE. The exercise price per share of the Common
Stock under this Warrant shall be US$3.00,  subject to adjustment hereunder (the
"EXERCISE PRICE").

                (c)   CASHLESS EXERCISE.  If at any time after one year from the
date of issuance of this Warrant  there is no effective  Registration  Statement
registering,  or no current prospectus  available for, the resale of the Warrant
Shares by the Holder,  then this  Warrant may also be  exercised at such time by
means of a "cashless  exercise" in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

                A =   the VWAP on the Trading Day immediately preceding the date
                      of such election;

                B =   the Exercise Price of this Warrant, as adjusted; and

                X =   the number of Warrant Shares  issuable  upon  exercise  of
                      this Warrant in accordance  with the terms of this Warrant
                      by  means  of a  cash  exercise  rather  than  a  cashless
                      exercise.

                (d)   EXERCISE LIMITATIONS.

                      (i)     HOLDER'S  RESTRICTIONS.   The  Company  shall  not
effect any  exercise of this  Warrant,  and a Holder shall not have the right to
exercise any portion of this Warrant,  pursuant to Section 2(c) or otherwise, to
the extent that after giving effect to such issuance after exercise as set forth
on the applicable  Notice of Exercise,  such Holder (together with such Holder's
Affiliates,  and any other person or entity acting as a group together with such
Holder  or any of such  Holder's  Affiliates),  as set  forth on the  applicable
Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
Limitation  (as defined  below).  For purposes of the  foregoing  sentence,  the
number of  shares of Common  Stock  beneficially  owned by such  Holder  and its
Affiliates  shall  include the number of shares of Common  Stock  issuable  upon
exercise of this Warrant with respect to which such determination is being made,
but shall  exclude the number of shares of Common  Stock which would be issuable
upon  (A)  exercise  of the  remaining,  nonexercised  portion  of this  Warrant
beneficially  owned by such Holder or any of

                                       2
<PAGE>

its Affiliates and (B) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company  (including,  without limitation,
any other Preferred Stock or Warrants)  subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially owned by such
Holder or any of its affiliates.  Except as set forth in the preceding sentence,
for purposes of this Section 2(d)(i),  beneficial  ownership shall be calculated
in  accordance  with  Section  13(d)  of the  Exchange  Act  and the  rules  and
regulations promulgated  thereunder,  it being acknowledged by a Holder that the
Company  is  not  representing  to  such  Holder  that  such  calculation  is in
compliance  with  Section  13(d) of the  Exchange  Act and such Holder is solely
responsible for any schedules required to be filed in accordance  therewith.  To
the extent that the  limitation  contained  in this Section  2(d)  applies,  the
determination  of whether  this  Warrant is  exercisable  (in  relation to other
securities  owned by such Holder  together with any  Affiliates)  and of which a
portion of this  Warrant is  exercisable  shall be in the sole  discretion  of a
Holder,  and the  submission of a Notice of Exercise  shall be deemed to be each
Holder's  determination  of whether this Warrant is exercisable  (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is  exercisable,  in each case subject to such aggregate
percentage  limitation,  and the Company  shall have no  obligation to verify or
confirm the accuracy of such determination.  In addition,  a determination as to
any group status as  contemplated  above shall be determined in accordance  with
Section  13(d) of the  Exchange  Act and the rules and  regulations  promulgated
thereunder.  For purposes of this Section  2(d),  in  determining  the number of
outstanding  shares  of  Common  Stock,  a  Holder  may  rely on the  number  of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form  10-Q  or  Form  10-K,  as  the  case  may  be,  (y) a more  recent  public
announcement  by the  Company  or (z) any  other  notice by the  Company  or the
Company's  Transfer  Agent  setting  forth the number of shares of Common  Stock
outstanding.  Upon the written or oral  request of a Holder,  the Company  shall
within two Trading Days confirm  orally and in writing to such Holder the number
of  shares  of  Common  Stock  then  outstanding.  In any  case,  the  number of
outstanding  shares of Common Stock shall be  determined  after giving effect to
the conversion or exercise of securities of the Company, including this Warrant,
by such  Holder  or its  Affiliates  since the date as of which  such  number of
outstanding  shares of Common  Stock was  reported.  The  "BENEFICIAL  OWNERSHIP
LIMITATION"  shall  be  4.99%  of the  number  of  shares  of the  Common  Stock
outstanding  immediately after giving effect to the issuance of shares of Common
Stock  issuable  upon  exercise  of  this  Warrant.   The  Beneficial  Ownership
Limitation  provisions of this Section 2(d)(i) may be waived by such Holder,  at
the  election of such  Holder,  upon not less than 61 days' prior  notice to the
Company to change the Beneficial  Ownership Limitation to 9.99% of the number of
shares of the Common Stock  outstanding  immediately  after giving effect to the
issuance  of shares of Common  Stock  upon  exercise  of this  Warrant,  and the
provisions of this Section 2(d) shall continue to apply. Upon such a change by a
Holder of the Beneficial Ownership Limitation from such 4.99% limitation to such
9.99% limitation,  the Beneficial Ownership Limitation may not be further waived
by such  Holder.  The  provisions  of this  paragraph  shall  be  construed  and
implemented in a manner  otherwise than in strict  conformity  with the terms of
this Section 2(d)(i) to correct this paragraph (or any portion hereof) which may
be defective or inconsistent with the intended Beneficial  Ownership  Limitation
herein  contained  or to make changes or  supplements  necessary or desirable to
properly  give effect to such  limitation.  The  limitations  contained  in this
paragraph shall apply to a successor holder of this Warrant.

                                       3
<PAGE>

                      (ii)    TRADING  MARKET  RESTRICTIONS.  If the Company has
not obtained  Shareholder  Approval (as defined below), then the Company may not
issue upon exercise of this Warrant a number of shares of Common  Stock,  which,
when aggregated with any shares of Common Stock issued (A) upon conversion of or
as payment of dividends on the Preferred  Stock issued  pursuant to the Purchase
Agreement,  (B) upon prior exercise of this or any other Warrant issued pursuant
to the  Purchase  Agreement  and (C)  pursuant  to any  warrants  issued  to any
registered  broker-dealer as a fee in connection with the Securities pursuant to
the Purchase  Agreement,  would exceed 19.999% of the number of shares of Common
Stock  outstanding  on the Trading Day  immediately  preceding  the Closing Date
(such number of shares, the "ISSUABLE MAXIMUM"). If on any attempted exercise of
this Warrant,  the issuance of Warrant Shares would exceed the Issuable  Maximum
and the Company shall not have  previously  obtained the vote of shareholders to
approve the issuance of shares of Common Stock in excess of the Issuable Maximum
pursuant to the terms  hereof  (the  "SHAREHOLDER  APPROVAL"),  then the Company
shall issue to the Holder  requesting a Warrant  exercise such number of Warrant
Shares as may be issued  below the  Issuable  Maximum  and,  with respect to the
remainder of the aggregate  number of Warrant Shares,  this Warrant shall not be
exercisable until and unless Shareholder Approval has been obtained.

                (e)   MECHANICS OF EXERCISE.

                      (i)     AUTHORIZATION  OF  WARRANT  SHARES.   The  Company
covenants  that all Warrant  Shares which may be issued upon the exercise of the
purchase rights  represented by this Warrant will, upon exercise of the purchase
rights represented by this Warrant,  be duly authorized,  validly issued,  fully
paid and nonassessable and free from all taxes, liens and charges created by the
Company  in  respect of the issue  thereof  (other  than taxes in respect of any
transfer occurring contemporaneously with such issue).

                      (ii)    DELIVERY   OF    CERTIFICATES    UPON    EXERCISE.
Certificates for shares purchased hereunder shall be transmitted by the transfer
agent of the  Company to the Holder by  crediting  the  account of the  Holder's
prime broker with the Depository  Trust Company  through its Deposit  Withdrawal
Agent Commission ("DWAC") system if the Company is a participant in such system,
and otherwise by physical delivery to the address specified by the Holder in the
Notice of  Exercise  within  three (3)  Trading  Days from the  delivery  to the
Company of the Notice of Exercise Form, surrender of this Warrant and payment of
the aggregate Exercise Price as set forth above ("WARRANT SHARE DELIVERY DATE").
This  Warrant  shall be deemed to have been  exercised  on the date the Exercise
Price is received by the  Company.  The Warrant  Shares  shall be deemed to have
been issued,  and Holder or any other person so  designated  to be named therein
shall be  deemed  to have  become a holder  of  record  of such  shares  for all
purposes,  as of the date the  Warrant  has been  exercised  by  payment  to the
Company of the Exercise  Price (or by cashless  exercise,  if permitted) and all
taxes required to be paid by the Holder,  if any,  pursuant to Section 2(e)(vii)
prior to the issuance of such shares, have been paid.

                      (iii)   DELIVERY OF NEW WARRANTS  UPON  EXERCISE.  If this
Warrant shall have been exercised in part, the Company shall,  upon surrender of
this  Warrant  certificate,  at the  time  of  delivery  of the  certificate  or
certificates  representing  Warrant  Shares,  deliver  to  Holder a new  Warrant
evidencing  the rights of Holder to  purchase  the  unpurchased  Warrant  Shares
called for by this  Warrant,  which new Warrant  shall in all other  respects be
identical with this Warrant.

                                       4
<PAGE>

                      (iv)    RESCISSION  RIGHTS.  If the Company fails to cause
its  transfer  agent to transmit  to the Holder a  certificate  or  certificates
representing the Warrant Shares pursuant to this Section 2(e)(iv) by the Warrant
Share  Delivery  Date,  then the  Holder  will  have the right to  rescind  such
exercise.

                      (v)     COMPENSATION  FOR  BUY-IN  ON  FAILURE  TO  TIMELY
DELIVER CERTIFICATES UPON EXERCISE. In addition to any other rights available to
the Holder,  if the Company fails to cause its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant to
an exercise on or before the Warrant Share Delivery Date, and if after such date
the Holder is required by its broker to purchase (in an open market  transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant  Shares which the Holder  anticipated  receiving upon such
exercise (a "BUY-IN"),  then the Company shall (1) pay in cash to the Holder the
amount by which (x) the  Holder's  total  purchase  price  (including  brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the Holder in  connection  with the exercise at issue
times  (B) the  price  at which  the sell  order  giving  rise to such  purchase
obligation was executed,  and (2) at the option of the Holder,  either reinstate
the  portion of the Warrant and  equivalent  number of Warrant  Shares for which
such  exercise  was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company  timely  complied  with
its exercise  and delivery  obligations  hereunder.  For example,  if the Holder
purchases  Common  Stock  having a total  purchase  price of  $11,000 to cover a
Buy-In with respect to an  attempted  exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase  obligation of $10,000,  under
clause (1) of the immediately  preceding  sentence the Company shall be required
to pay the Holder  $1,000.  The Holder shall provide the Company  written notice
indicating the amounts  payable to the Holder in respect of the Buy-In and, upon
request of the  Company,  evidence  of the amount of such loss.  Nothing  herein
shall  limit a  Holder's  right to pursue  any other  remedies  available  to it
hereunder,  at law or in  equity  including,  without  limitation,  a decree  of
specific  performance  and/or  injunctive  relief with respect to the  Company's
failure to timely deliver certificates  representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

                      (vi)    NO  FRACTIONAL  SHARES  OR  SCRIP.  No  fractional
shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant.  As to any fraction of a share which Holder would  otherwise be
entitled to purchase  upon such  exercise,  the Company  shall at its  election,
either pay a cash  adjustment  in respect  of such final  fraction  in an amount
equal to such fraction  multiplied by the Exercise Price or round up to the next
whole share.

                      (vii)   CHARGES,   TAXES   AND   EXPENSES.   Issuance   of
certificates  for Warrant  Shares shall be made without charge to the Holder for
any issue or transfer tax or other incidental expense in respect of the issuance
of such  certificate,  all of  which  taxes  and  expenses  shall be paid by the
Company,  and such certificates  shall be issued in the name of the Holder or in
such name or names as may be directed by the Holder; PROVIDED,  HOWEVER, that in
the event  certificates for Warrant Shares are to be issued in a name other than
the name of the Holder,  this Warrant  when  surrendered  for exercise  shall be
accompanied by the Assignment  Form attached

                                       5
<PAGE>

hereto duly executed by the Holder; and the Company may require,  as a condition
thereto,  the payment of a sum  sufficient  to reimburse it for any transfer tax
incidental thereto.

                      (viii)  CLOSING OF BOOKS.  The Company  will not close its
stockholder books or records in any manner which prevents the timely exercise of
this Warrant, pursuant to the terms hereof.

         SECTION 3.   CERTAIN ADJUSTMENTS.

                (a)   STOCK  DIVIDENDS AND SPLITS.  If the Company,  at any time
while this Warrant is outstanding: (A) pays a stock dividend or otherwise make a
distribution or  distributions on shares of its Common Stock or any other equity
or equity equivalent  securities  payable in shares of Common Stock (which,  for
avoidance  of doubt,  shall not include any shares of Common Stock issued by the
Company upon exercise of this  Warrant),  (B) subdivides  outstanding  shares of
Common Stock into a larger number of shares,  (C) combines  (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares,  or (D) issues by  reclassification  of shares of the  Common  Stock any
shares of capital  stock of the Company,  then in each case the  Exercise  Price
shall be multiplied by a fraction of which the numerator  shall be the number of
shares  of  Common  Stock  (excluding   treasury  shares,  if  any)  outstanding
immediately  before such event and of which the denominator  shall be the number
of shares of Common  Stock  outstanding  immediately  after  such  event and the
number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted.  Any  adjustment  made  pursuant  to this  Section  3(a) shall  become
effective   immediately   after  the  record  date  for  the   determination  of
stockholders  entitled to receive such dividend or distribution and shall become
effective  immediately  after the effective  date in the case of a  subdivision,
combination or re-classification.

                (b)   SUBSEQUENT  EQUITY SALES. If the Company or any Subsidiary
thereof,  as applicable,  at any time while this Warrant is  outstanding,  shall
sell or grant any option to  purchase  or sell or grant any right to reprice its
securities, or otherwise dispose of or issue (or announce any offer, sale, grant
or any option to purchase or other disposition) any Common Stock or Common Stock
Equivalents  entitling  any  Person to  acquire  shares of Common  Stock,  at an
effective  price per share less than the then  applicable  Conversion  Price (as
such term is defined in the Certificate of  Designations) of the Preferred Stock
(such  issuances  collectively,  a  "DILUTIVE  ISSUANCE")  (if the holder of the
Common Stock or Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions,  floating conversion,
exercise or exchange prices or otherwise, or due to warrants,  options or rights
per share  which are issued in  connection  with such  issuance,  be entitled to
receive  shares of Common  Stock at an  effective  price per share which is less
than the then applicable Conversion Price, such issuance shall be deemed to have
occurred for less than the then applicable  Conversion Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced by
multiplying  the  Exercise  Price by a fraction,  the  numerator of which is the
number of shares of Common Stock issued and outstanding immediately prior to the
Dilutive  Issuance  plus the number of shares of Common Stock which the offering
price  for  such  Dilutive  Issuance  would  purchase  at  the  then  applicable
Conversion Price, and the denominator of which shall be the sum of the number of
shares of Common Stock issued and outstanding  immediately prior to the Dilutive
Issuance  plus the  number of shares of Common  Stock so issued

                                       6
<PAGE>

or issuable in connection  with the Dilutive  Issuance and the number of Warrant
Shares issuable  hereunder  shall be increased such that the aggregate  Exercise
Price payable hereunder,  after taking into account the decrease in the Exercise
Price,  shall be equal to the aggregate Exercise Price prior to such adjustment.
Such  adjustment  shall be made  whenever  such  Common  Stock or  Common  Stock
Equivalents are issued.  Notwithstanding the foregoing,  no adjustments shall be
made,  paid or issued under this Section 3(b) in respect of an Exempt  Issuance.
The Company  shall  notify the Holder in writing,  no later than the Trading Day
following the issuance of any Common Stock or Common Stock  Equivalents  subject
to this section, indicating therein the applicable issuance price, or applicable
reset price,  exchange  price,  conversion  price and other  pricing terms (such
notice the "DILUTIVE ISSUANCE NOTICE").  For purposes of clarification,  whether
or not the Company provides a Dilutive  Issuance Notice pursuant to this Section
3(b),  upon the  occurrence  of any  Dilutive  Issuance,  after the date of such
Dilutive  Issuance the Holder is entitled to receive a number of Warrant  Shares
based  upon the  adjusted  Exercise  Price  regardless  of  whether  the  Holder
accurately refers to the adjusted Exercise Price in the Notice of Exercise.

                (c)   SUBSEQUENT RIGHTS OFFERINGS.  If the Company,  at any time
while the Warrant is outstanding, shall issue rights, options or warrants to all
holders of Common Stock (and not to Holders)  entitling them to subscribe for or
purchase  shares of Common  Stock at a price per share less than the VWAP at the
record date  mentioned  below,  then the Exercise Price shall be multiplied by a
fraction,  of which the denominator  shall be the number of shares of the Common
Stock  outstanding  on the date of issuance of such rights or warrants  plus the
number  of  additional  shares of  Common  Stock  offered  for  subscription  or
purchase, and of which the numerator shall be the number of shares of the Common
Stock  outstanding  on the date of issuance of such rights or warrants  plus the
number  of shares  which the  aggregate  offering  price of the total  number of
shares so offered  (assuming receipt by the Company in full of all consideration
payable upon  exercise of such rights,  options or warrants)  would  purchase at
such VWAP.  Such  adjustment  shall be made whenever such rights or warrants are
issued,  and shall become  effective  immediately  after the record date for the
determination  of  stockholders  entitled  to receive  such  rights,  options or
warrants.  If any such rights,  options or warrants  expire  without having been
exercised,  the  Exercise  Price as adjusted  upon the  issuance of such rights,
options or warrants  shall be readjusted to the Exercise  Price which would have
been in effect had an  adjustment  been made on the basis  that only  additional
shares of Common Stock so issued were the additional  shares of Common Stock, if
any, actually issued or sold on the exercise of such rights, options or warrants
and such additional  shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise,  plus the
consideration,  if any, actually received by the Corporation for the granting of
all such rights,  options or warrants,  whether or not exercised,  provided that
such readjustment shall not apply to prior exercises of the Warrant.

                (d)   PRO RATA DISTRIBUTIONS.  If the Company, at any time prior
to the Termination  Date,  shall  distribute to all holders of Common Stock (and
not to  Holders  of  the  Warrants)  evidences  of its  indebtedness  or  assets
(including  cash and cash  dividends)  or rights or warrants to subscribe for or
purchase  any  security  other than the Common  Stock (which shall be subject to
Section  3(b)),  then in each such case the Exercise  Price shall be adjusted by
multiplying  the Exercise Price in effect  immediately  prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a  fraction  of which the

                                       7
<PAGE>

denominator  shall be the VWAP determined as of the record date mentioned above,
and of which the numerator  shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed  applicable to one outstanding  share of
the Common  Stock as  determined  by the Board of  Directors  in good faith.  In
either case the  adjustments  shall be described in a statement  provided to the
Holder of the portion of assets or evidences of  indebtedness  so distributed or
such  subscription  rights  applicable  to  one  share  of  Common  Stock.  Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

                (e)   FUNDAMENTAL  TRANSACTION.  If,  at  any  time  while  this
Warrant is outstanding,  (A) the Company effects any merger or  consolidation of
the Company with or into another Person, (B) the Company effects any sale of all
or substantially  all of its assets in one or a series of related  transactions,
(C) any  tender  offer or  exchange  offer  (whether  by the  Company or another
Person) is completed  pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities,  cash or property,  or (D)
the Company effects any  reclassification  of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively  converted into
or  exchanged  for other  securities,  cash or  property  (in any such  case,  a
"FUNDAMENTAL TRANSACTION"), then,

                      (i)     subject to clause (ii) below,  upon any subsequent
exercise of this Warrant,  the Holder shall have the right to receive,  for each
Warrant Share that would have been issuable upon such exercise immediately prior
to the occurrence of such Fundamental Transaction,  at the option of the Holder,
(a) upon exercise of this Warrant and payment of the Exercise Price,  the number
of shares of Common Stock of the  successor or acquiring  corporation  or of the
Company, if it is the surviving  corporation,  and any additional  consideration
(the  "ALTERNATE  CONSIDERATION")  receivable  upon  or  as  a  result  of  such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common  Stock for which  this  Warrant is
exercisable immediately prior to such event or (b) if the Company is acquired in
an all cash  transaction,  cash equal to the value of this Warrant as determined
in accordance with the Black-Scholes option pricing formula; or

                      (ii)    if  the   Company  is  acquired  in  an  all  cash
transaction,  in the option of the  Company or its  acquiror,  the Holder may be
paid cash equal to the value of this Warrant as determined  in  accordance  with
the  Black-Scholes  option  pricing  formula and upon payment of such cash,  the
Warrant shall terminate.

For  purposes  of any such  exercise  by the Holder,  the  determination  of the
Exercise  Price  shall be  appropriately  adjusted  to  apply to such  Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such  Fundamental  Transaction,  and the Company
shall  apportion  the  Exercise  Price among the  Alternate  Consideration  in a
reasonable manner  reflecting the relative value of any different  components of
the Alternate Consideration.  If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it  receives  upon any  exercise  of this  Warrant  following  such  Fundamental
Transaction. To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or  surviving  entity in such  Fundamental

                                       8
<PAGE>

Transaction  shall  issue  to the  Holder  a new  warrant  consistent  with  the
foregoing  provisions and evidencing the Holder's right to exercise such warrant
into  Alternate  Consideration.  The terms of any agreement  pursuant to which a
Fundamental  Transaction  is effected  shall  include  terms  requiring any such
successor or surviving entity to comply with the provisions of this Section 3(d)
and  insuring  that this  Warrant  (or any such  replacement  security)  will be
similarly  adjusted upon any subsequent  transaction  analogous to a Fundamental
Transaction.

                (f)   CALCULATIONS.  All calculations under this Section 3 shall
be made to the nearest cent or the nearest  1/100th of a share,  as the case may
be. For  purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and  outstanding  as of a given date shall be the sum of the number
of shares  of Common  Stock  (excluding  treasury  shares,  if any)  issued  and
outstanding.

                (g)   VOLUNTARY  ADJUSTMENT  BY COMPANY.  The Company may at any
time during the term of this Warrant  reduce the then current  Exercise Price to
any  amount  and for any  period  of time  deemed  appropriate  by the  Board of
Directors of the Company.

                (h)   NOTICE TO HOLDERS.

                      (i)     ADJUSTMENT   TO  EXERCISE   PRICE.   Whenever  the
Exercise  Price is adjusted  pursuant to any  provision  of this  Section 3, the
Company shall  promptly mail to each Holder a notice  setting forth the Exercise
Price after such  adjustment  and setting  forth a brief  statement of the facts
requiring  such  adjustment.  If the Company  issues a variable  rate  security,
despite the prohibition thereon in the Purchase Agreement,  the Company shall be
deemed to have issued  Common  Stock or Common Stock  Equivalents  at the lowest
possible  conversion or exercise price at which such securities may be converted
or  exercised  in the case of a Variable  Rate  Transaction  (as  defined in the
Purchase Agreement).

                      (ii)    NOTICE TO ALLOW  EXERCISE  BY  HOLDER.  If (A) the
Company shall declare a dividend (or any other distribution in whatever form) on
the Common  Stock;  (B) the Company shall  declare a special  nonrecurring  cash
dividend on or a redemption of the Common Stock; (C) the Company shall authorize
the  granting to all holders of the Common Stock rights or warrants to subscribe
for or purchase any shares of capital  stock of any class or of any rights;  (D)
the approval of any  stockholders of the Company shall be required in connection
with any  reclassification  of the Common Stock, any  consolidation or merger to
which the Company is a party, any sale or transfer of all or  substantially  all
of the assets of the  Company,  of any  compulsory  share  exchange  whereby the
Common  Stock is converted  into other  securities,  cash or  property;  (E) the
Company shall authorize the voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Company;  then, in each case, the Company shall
cause to be mailed to the Holder at its last address as it shall appear upon the
Warrant  Register  of the  Company,  at  least  20  calendar  days  prior to the
applicable record or effective date hereinafter  specified, a notice stating (x)
the date on which a record  is to be taken  for the  purpose  of such  dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such  dividend,  distributions,   redemption,  rights  or  warrants  are  to  be
determined  or (y)  the  date on  which  such  reclassification,  consolidation,
merger,  sale,  transfer or share  exchange is expected to become  effective  or
close,  and the date as of which it is expected that holders of the Common Stock
of

                                       9
<PAGE>

record  shall be  entitled  to  exchange  their  shares of the Common  Stock for
securities,  cash or other  property  deliverable  upon  such  reclassification,
consolidation,  merger,  sale,  transfer or share  exchange;  provided  that the
failure to mail such  notice or any defect  therein  or in the  mailing  thereof
shall not affect the validity of the corporate  action  required to be specified
in such  notice.  The Holder is  entitled to exercise  this  Warrant  during the
20-day period commencing on the date of such notice to the effective date of the
event triggering such notice.

         SECTION 4.   TRANSFER OF WARRANT.

                (a)   TRANSFERABILITY.  The Warrant and the other  rights of the
Holder pursuant to this Warrant  certificate are not severable from this Warrant
certificate,  and shall not be assignable or  transferable  except in connection
with a transfer or assignment of this Warrant certificate in accordance with the
terms  hereof.  Any  instrument  purporting  to make a transfer or assignment in
violation  of this  Section  4(a)  shall be void and of no  effect.  Subject  to
compliance  with any applicable  securities laws and the conditions set forth in
Section  4(d)  hereof  and to the  provisions  of  Section  4.1 of the  Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration  rights) are transferable,  in whole or in part, upon surrender
of this  Warrant  certificate  at the  principal  office of the  Company  or its
designated   agent,   together  with  a  written   assignment  of  this  Warrant
substantially  in the form  attached  hereto duly  executed by the Holder or its
agent or attorney and funds  sufficient  to pay any transfer  taxes payable upon
the  making  of such  transfer.  Upon  compliance  with the  foregoing  and such
surrender and, if required,  such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the  assignee or  assignees  and in the
denomination or  denominations  specified in such instrument of assignment,  and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned,  and this Warrant shall  promptly be cancelled.  A Warrant,  if
properly assigned,  may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

                (b)   NEW WARRANTS. This Warrant may be divided or combined with
other Warrants upon presentation  hereof at the aforesaid office of the Company,
together with a written notice  specifying the names and  denominations in which
new  Warrants  are to be issued,  signed by the Holder or its agent or attorney.
Subject  to  compliance  with  Section  4(a),  as to any  transfer  which may be
involved in such division or combination,  the Company shall execute and deliver
a new Warrant or Warrants in exchange  for the Warrant or Warrants to be divided
or combined in accordance with such notice.

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

                (d)   TRANSFER RESTRICTIONS. If, at the time of the surrender of
this Warrant in connection  with any transfer of this  Warrant,  the transfer of
this  Warrant  shall not be  registered  pursuant to an  effective  registration
statement under the Securities Act and under applicable state securities or blue
sky laws, the Company may require,  as a condition of allowing such transfer (i)
that the Holder or transferee of this  Warrant,  as the case may be,  furnish to
the  Company a

                                       10
<PAGE>

written opinion of counsel (which opinion shall be in form,  substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such  transfer may be made without  registration  under the  Securities  Act and
under  applicable  state  securities  or blue sky laws,  (ii) that the holder or
transferee  execute and deliver to the Company an investment  letter in form and
substance  acceptable  to the  Company  and  (iii)  that  the  transferee  be an
"accredited investor" as defined in Rule 501(a)(1),  (a)(2),  (a)(3), (a)(7), or
(a)(8) promulgated under the Securities Act or a "qualified institutional buyer"
as defined in Rule 144A(a) under the Securities Act.

         SECTION 5.   MISCELLANEOUS.

                (a)   NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does
not entitle the Holder to any voting rights or other rights as a shareholder  of
the Company prior to the exercise hereof as set forth in Section 2(e)(ii).

                (b)   LOSS,  THEFT,  DESTRUCTION  OR MUTILATION OF WARRANT.  The
Company  covenants  that upon  receipt  by the  Company of  evidence  reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock  certificate  relating to the Warrant Shares,  and in case of loss,
theft or  destruction,  of indemnity or security  reasonably  satisfactory to it
(which, in the case of the Warrant,  shall not include the posting of any bond),
and upon surrender and  cancellation  of such Warrant or stock  certificate,  if
mutilated,  the Company will make and deliver a new Warrant or stock certificate
of like  tenor and dated as of such  cancellation,  in lieu of such  Warrant  or
stock certificate.

                (c)   SATURDAYS,   SUNDAYS,   HOLIDAYS,  ETC.  If  the  last  or
appointed  day for the  taking  of any  action  or the  expiration  of any right
required or granted  herein shall not be a Business Day, then such action may be
taken or such right may be exercised on the next succeeding Business Day.

                (d)   AUTHORIZED SHARES.

                      (i)     The Company  covenants  that during the period the
Warrant is outstanding,  it will reserve from its authorized and unissued Common
Stock a  sufficient  number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant.  The Company
further  covenants  that its  issuance of this  Warrant  shall  constitute  full
authority  to its  officers  who are charged  with the duty of  executing  stock
certificates  to execute and issue the  necessary  certificates  for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.  The Company
will take all such  reasonable  action as may be  necessary  to assure that such
Warrant  Shares  may be issued  as  provided  herein  without  violation  of any
applicable law or regulation,  or of any requirements of the Trading Market upon
which the Common Stock may be listed.

                      (ii)    Except and to the extent as waived or consented to
by  the  Holder,  the  Company  shall  not  by any  action,  including,  without
limitation,   amending  its   certificate  of   incorporation   or  through  any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities  or any other  voluntary  action,  avoid or seek to avoid the
observance or performance  of any of the terms of this Warrant,  but will at all
times in good  faith

                                       11
<PAGE>

assist  in the  carrying  out of all such  terms  and in the  taking of all such
actions as may be  necessary or  appropriate  to protect the rights of Holder as
set forth in this Warrant against impairment. Without limiting the generality of
the  foregoing,  the Company  will (a) not increase the par value of any Warrant
Shares above the amount payable therefor upon such exercise immediately prior to
such  increase  in par value,  (b) take all such action as may be  necessary  or
appropriate  in order that the Company may validly and legally  issue fully paid
and nonassessable  Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having  jurisdiction  thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.

                      (iii)   Before  taking any action which would result in an
adjustment in the number of Warrant Shares for which this Warrant is exercisable
or in the Exercise Price,  the Company shall obtain all such  authorizations  or
exemptions  thereof,  or consents  thereto,  as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

                (e)   JURISDICTION.  All questions  concerning the construction,
validity,  enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.

                (f)   RESTRICTIONS.  The Holder  acknowledges  that the  Warrant
Shares acquired upon the exercise of this Warrant, if not registered,  will have
restrictions upon resale imposed by state and federal securities laws.

                (g)   NONWAIVER AND EXPENSES.  No course of dealing or any delay
or failure to exercise any right  hereunder on the part of Holder shall  operate
as a waiver of such right or  otherwise  prejudice  Holder's  rights,  powers or
remedies,  notwithstanding  the fact that all rights hereunder  terminate on the
Termination  Date. If the Company  willfully and knowingly  fails to comply with
any  provision of this  Warrant,  which  results in any material  damages to the
Holder,  the Company  shall pay to Holder such amounts as shall be sufficient to
cover  any  costs  and  expenses  including,  but  not  limited  to,  reasonable
attorneys' fees, including those of appellate proceedings, incurred by Holder in
collecting any amounts due pursuant hereto or in otherwise  enforcing any of its
rights, powers or remedies hereunder.

                (h)   NOTICES. Any notice, request or other document required or
permitted  to be  given or  delivered  to the  Holder  by the  Company  shall be
delivered in accordance with the notice provisions of the Purchase Agreement.

                (i)   LIMITATION  OF  LIABILITY.  No  provision  hereof,  in the
absence of any affirmative action by Holder to exercise this Warrant to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase  price of any Common
Stock or as a stockholder of the Company,  whether such liability is asserted by
the Company or by creditors of the Company.

                (j)   REMEDIES.   Holder,  in  addition  to  being  entitled  to
exercise  all rights  granted by law,  including  recovery of  damages,  will be
entitled to specific  performance of its rights under this Warrant.  The Company
agrees that  monetary  damages would not be adequate

                                       12
<PAGE>

compensation for any loss incurred by reason of a breach by it of the provisions
of this Warrant and hereby  agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.

                (k)   SUCCESSORS AND ASSIGNS.  Subject to applicable  securities
laws, this Warrant and the rights and obligations  evidenced  hereby shall inure
to the  benefit of and be binding  upon the  successors  of the  Company and the
successors and permitted  assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders  from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant Shares.

                (l)   AMENDMENT.  This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

                (m)   SEVERABILITY.  Wherever  possible,  each provision of this
Warrant shall be  interpreted  in such manner as to be effective and valid under
applicable  law, but if any  provision of this Warrant shall be prohibited by or
invalid under  applicable law, such provision shall be ineffective to the extent
of such  prohibition or invalidity,  without  invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

                (n)   HEADINGS.  The  headings  used in this Warrant are for the
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.

                              ********************

                                       13
<PAGE>

                  IN WITNESS WHEREOF,  the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: April 24, 2007

                                        ELITE PHARMACEUTICALS, INC.

                                        By:
                                           -------------------------------------
                                           Name:  Bernard J. Berk
                                           Title: Chief Executive Officer

                                       14
<PAGE>

                               NOTICE OF EXERCISE

TO:  ELITE PHARMACEUTICALS, INC.

         (1) The undersigned  hereby elects to purchase  ________ Warrant Shares
of the Company  pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders  herewith payment of the exercise price in full,  together
with all applicable transfer taxes, if any.

         (2) Payment shall take the form of (check applicable box):

                [ ] in lawful money of the United States; or

                [ ] [if  permitted] the  cancellation  of such number of Warrant
                Shares as is necessary, in accordance with the formula set forth
                in subsection 2(c), to exercise this Warrant with respect to the
                maximum  number of Warrant  Shares  purchasable  pursuant to the
                cashless exercise procedure set forth in subsection 2(c).

         (3)  Please  issue a  certificate  or  certificates  representing  said
Warrant  Shares  in the  name of the  undersigned  or in such  other  name as is
specified below:

                ----------------------------------------

The Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

                ----------------------------------------

                ----------------------------------------

                ----------------------------------------

         (4) ACCREDITED INVESTOR. The undersigned is an "accredited investor" as
defined  in  Regulation  D  promulgated  under the  Securities  Act of 1933,  as
amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________

SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________

Name of Authorized Signatory:  _________________________________________________

Title of Authorized Signatory: _________________________________________________

Date: __________________________________________________________________________

<PAGE>

                                 ASSIGNMENT FORM

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

         FOR VALUE RECEIVED,  [____] all of or [_______] shares of the foregoing
Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

____________________________________________________________________.

____________________________________________________________________

                                                 Dated:  ______________, _______

                             Holder's Signature:  ______________________________

                             Holder's Address:    ______________________________

                                                  ______________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.

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