Document:

Exhibit 10.2

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"), OR APPLICABLE STATE
SECURITIES  LAWS  (THE  "STATE  ACTS"),  AND  SHALL  NOT BE  SOLD  OR  OTHERWISE
TRANSFERRED  BY THE HOLDER  EXCEPT BY  REGISTRATION  OR PURSUANT TO AN EXEMPTION
FROM  REGISTRATION  UPON THE ISSUANCE TO THE COMPANY OF AN OPINION OF COUNSEL OR
OTHER  EVIDENCE  REASONABLY  SATISFACTORY  TO THE COMPANY TO THE EFFECT THAT ANY
SUCH  TRANSFER  SHALL NOT BE IN  VIOLATION OF THE  SECURITIES  ACT AND THE STATE
ACTS.

                                                            Dated: July 20, 2004

                                     WARRANT

                                       TO

                              PURCHASE COMMON STOCK

                                       OF

                           ELITE PHARMACEUTICALS, INC.

       This  certifies  that,  for  good  and  valuable   consideration,   Elite
Pharmaceuticals,  Inc, a Delaware  corporation (the "COMPANY"),  grants to Jason
Lyons,  residing at 7239, San Salvador Drive, Boca Raton,  Florida 33433 or hiss
registered  assigns  (the  "WARRANTHOLDER"),  the  right  to  subscribe  for and
purchase from the Company Fifty Thousand  (50,000) shares (the "WARRANT SHARES")
of common stock,  par value $0.01 per share, of the Company  ("COMMON STOCK") at
the exercise price of $3.00 per share (subject to adjustment as provided herein,
the "EXERCISE  PRICE").  This Warrant shall be  exercisable  from and after 9:00
A.M.,  Eastern Standard Time on July 20, 2004 but no later than July 20, 2007 to
and including  5:00 P.M. (the  "EXPIRATION  DATE").  The Exercise  Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 6.

SECTION 1.    EXERCISE OF WARRANT;  LIMITATION  ON  EXERCISE;  TAXES;  TRANSFER;
              DIVISIBILITY.

       1.1.   EXERCISE OF WARRANT.  This Warrant is immediately  exercisable and
may be exercised, in whole or in part, at any time on or prior to the Expiration
Date.  The  rights   represented  by  this  Warrant  may  be  exercised  by  the
Warrantholder  of  record,  in  whole  or in part,  from  time to  time,  by (a)
surrender of this Warrant,  accompanied by the Exercise Form annexed hereto (the
"EXERCISE FORM") duly executed by the Warrantholder of record and specifying the
number of Warrant  Shares to be  purchased  to the Company at its offices at 165
Ludlow  Avenue,  Northvale,  New Jersey 07647 (or such other office or agency of
the Company as it may designate by notice to the Warrantholder at the address of
such

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Warrantholder  appearing on the books of the  Company)  during  normal  business
hours on any day (a  "BUSINESS  DAY") other than a Saturday,  Sunday or a day on
which the American Stock Exchange is authorized to close or on which the Company
is otherwise  closed for business but not later than 5:00 P.M. on the Expiration
Date; (b) payment of the Exercise Price by delivery to the Company in cash or by
certified or official bank check in New York Clearing House Funds,  of an amount
equal to the Exercise  Price for the number of Warrant  Shares  specified in the
Exercise  Form, and (c) such  documentation  as to the identity and authority of
the  Warrantholder  as the Company may reasonably  request.  Such Warrant Shares
shall be deemed by the Company to be issued to the  Warrantholder  as the record
holder of such  Warrant  Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the Warrant Shares
as aforesaid. Certificates for the Warrant Shares specified in the Exercise Form
shall be delivered to the  Warrantholder  as promptly as practicable.  The stock
certificates so delivered shall be in  denominations  as may be specified by the
Warrantholder  and  shall be  issued  in the name of the  Warrantholder  or,  if
permitted by subsection 1.4 and in accordance with the provisions thereof,  such
other name as shall be  designated  in the Exercise  Form. If this Warrant shall
have been exercised only in part, the Company shall,  at the time of delivery of
the  certificates  for the Warrant  Shares,  deliver to the  Warrantholder a new
Warrant  evidencing the rights to purchase the remaining  Warrant Shares,  which
new Warrant shall in all other respects be identical with this Warrant.

       1.2.   LIMITATION ON EXERCISE.  If this Warrant is not exercised prior to
5:00 P.M. on the  Expiration  Date,  this  Warrant,  or any new  Warrant  issued
pursuant to subsection 1.1, shall cease to be exercisable and shall become void,
and all rights of the Warrantholder hereunder shall cease.

       1.3.   PAYMENT OF TAXES.  The issuance of certificates for Warrant Shares
shall be made  without  charge to the  Warrantholder  for any stock  transfer or
other issuance tax in respect thereto; PROVIDED, HOWEVER, that the Warrantholder
shall be  required  to pay any and all taxes  which may be payable in respect to
any  transfer  involved in the issuance  and  delivery of any  certificates  for
Warrant Shares in a name other than that of the then  Warrantholder as reflected
upon the books of the Company.

       1.4.   RESTRICTIONS  ON  TRANSFER.  Neither  this  Warrant nor any of the
Warrant Shares may be transferred or sold except in compliance  with  applicable
United States federal and state securities laws. Subject to the foregoing,  this
Warrant and all rights hereunder are  transferable,  in whole or in part, by the
Warrantholder  and any such transfer is registrable at the office of the Company
by the  holder  hereof  in  person  or by its  duly  authorized  attorney,  upon
surrender of this Warrant in accordance with Section 3 hereof.

Section 2.    RESERVATION AND LISTING OF SHARES.

       All Warrant Shares issued upon the exercise of the rights  represented by
this Warrant shall,  upon issuance and payment of the Exercise Price in cash, be
validly issued,  fully paid and  nonassessable  and free from all taxes,  liens,
security interests,  charges and other encumbrances with respect to the issuance
thereof other than taxes in respect of any transfer occurring  contemporaneously
with  such  issuance.  During  the  period  within  which  this  Warrant  may be

                                      -2-
<PAGE>

exercised, the Company shall at all times have authorized and reserved, and keep
available and free from  preemptive or similar  rights,  a sufficient  number of
shares of Common Stock to provide for the exercise of this Warrant.

SECTION 3.    EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.

       If permitted by  subsection  1.4,  upon  surrender of this Warrant to the
Company with a duly executed  instrument of assignment  and funds  sufficient to
pay any transfer tax, the Company shall,  without charge,  execute and deliver a
new Warrant of like tenor in the name of the assignee  named in such  instrument
of assignment and this Warrant shall  promptly be canceled.  Upon receipt by the
Company  of  evidence  reasonably   satisfactory  to  it  of  the  loss,  theft,
destruction  or mutilation of this Warrant and, if requested by the Company,  an
agreement to indemnify the Company for any loss resulting from the Warrant to be
replaced, the Company will execute and deliver a new Warrant of like tenor.

Section 4.    OWNERSHIP OF WARRANT.

       The  Company  may deem and treat the  person or entity in whose name this
Warrant  is  registered  as the  holder and owner  hereof  (notwithstanding  any
notations of ownership or writing  hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary,  until
presentation  of this  Warrant  for  registration  of  transfer  as  provided in
subsection 1.1 or in Section 3.

Section 5.    CERTAIN ADJUSTMENTS.

       The Exercise Price at which Warrant Shares may be purchased hereunder and
the number of Warrant Shares to be purchased upon exercise hereof are subject to
change or adjustment as follows:

       5.1.   NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or the
Exercise  Price of such Warrant  Shares is  adjusted,  as herein  provided,  the
Company  shall  promptly  send by first  class  mail,  postage  prepaid,  to the
Warrantholder, notice of such adjustment.

                                      -3-
<PAGE>

       5.2.   PRESERVATION  OF PURCHASE  RIGHTS UPON MERGER,  CONSOLIDATION.  In
case of any  consolidation  of the Company  with or merger of the  Company  into
another  entity or in case of any sale,  transfer or lease to another  entity of
all or  substantially  all the assets,  the  Warrantholder  shall have the right
thereafter  upon payment of the Exercise  Price in effect  immediately  prior to
such  action to receive  upon  exercise  of this  Warrant the kind and amount of
shares and other securities and property which a holder of a number of shares of
Common Stock equal to the number as to which this Warrant is exercised  would be
entitled to receive after the  happening of such  consolidation,  merger,  sale,
transfer or lease had this  Warrant  been  exercised  immediately  prior to such
action,  subject to future  adjustments,  which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The provisions of
this subsection 5.2 shall apply similarly to successive consolidations, mergers,
sales, transfers or leases.

       5.3.   ADJUSTMENTS.

              (a)    STOCK  DIVIDENDS,  DISTRIBUTIONS  OR  SUBDIVISIONS.  In the
                     event the Company shall issue  additional  shares of Common
                     Stock  pursuant to a stock  dividend,  stock  distribution,
                     subdivision, share split or reclassification,  concurrently
                     with the effectiveness of such event, the Exercise Price in
                     effect   immediately   prior   to  such   event   shall  be
                     proportionately decreased with the number of Warrant Shares
                     purchasable upon exercise of this Warrant immediately prior
                     to such  event  and the  number of  shares  underlying  the
                     Warrant shall be proportionately increased.

              (b)    COMBINATIONS   OR   CONSOLIDATIONS.   In  the   event   the
                     outstanding  shares of Common  Stock  shall be  combined or
                     consolidated,   by   reclassification,   reverse  split  or
                     otherwise,  into a lesser number of shares of Common Stock,
                     concurrently  with the  effectiveness  of such  event,  the
                     Exercise  Price in effect  immediately  prior to such event
                     shall  be  proportionately  increased  and  the  number  of
                     Warrant  Shares  purchasable  upon exercise of this Warrant
                     immediately  prior to such event  shall be  proportionately
                     decreased.

Section 6.    REGISTRATION RIGHTS.

       6.1.   PIGGYBACK  REGISTRATION.  If at any time or from time to time, the
Company shall  register the sale of any of its Common Stock under the Securities
Act of 1933 (the "SECURITIES  ACT") for its own account or the account of any of
its security  holders,  other than a registration on Form S-8 relating solely to
an employee  benefit plan or a  registration  on Form S-4  relating  solely to a
transaction under Rule 145 of the Securities Act, the Company will:

       (i)    give to the initial  Warrantholder and each other person or entity
              who holds all or any portion of this Warrant or the Warrant Shares
              (collectively  with  the  initial  Warrantholder,  the  "HOLDERS")
              written notice thereof as soon as practicable  prior to filing the
              registration statement or offering statement, but in any event not
              later than 10 days prior to such filing; and

                                      -4-
<PAGE>

       (ii)   on behalf of all entities  requesting  inclusion in such offering,
              include the Registrable  Securities (as defined in Section 6.2) in
              the offering and may condition  such offer on their  acceptance of
              any other reasonable conditions (including, without limitation, if
              such offering is underwritten,  that such requesting holders agree
              in writing to enter into an underwriting  agreement with customary
              terms).  If the  representative  of the  underwriter  advises  the
              Company in writing that marketing  factors require a limitation on
              the number of shares to be underwritten,  the numbers of shares to
              be included in the underwriting or registration shall be allocated
              first to the Company,  second,  to the Company's  security holders
              that triggered the instant registration (the "TRIGGERING HOLDERS")
              and  thereafter  shall be  allocated  among the  Holders and other
              security holders requesting  inclusion in the offering pro rata on
              the basis of the number of shares each requesting Holder and other
              security  holder requests to be included bears to the total number
              of shares of all requesting holders that have been requested to be
              included  in  such  offering  (to the  extent  not  included  as a
              Tiggering Holder). If a person who has requested inclusion in such
              offering as provided above does not agree to the terms of any such
              underwriting,  such person shall be excluded  therefrom by written
              notice  from the Company or the  underwriter.  The  securities  so
              excluded shall also be withdrawn from registration, if applicable.

       6.2.   REGISTRABLE  SECURITIES.  For the  purposes of this Section 6, the
term  "REGISTRABLE  SECURITIES" shall mean any Warrant Shares issued or issuable
to a Holder upon exercise of its Warrant, any shares of Common Stock issued to a
Holder as a dividend on its Warrant Shares, and any other shares of Common Stock
distributable on, with respect to, or in replacement of or substitution for such
Registrable Securities,  including those that have been transferred as permitted
under this Warrant, except for those that have been sold or transferred pursuant
to an effective  registration statement or as may be resold pursuant to Rule 144
under the Securities Act.

       6.3.   OBLIGATIONS  OF A HOLDER  AND OTHERS IN A  REGISTRATION.  (a) Each
Holder agrees to timely furnish such  information  regarding such person and the
securities  sought to be registered and to take such other action as the Company
may  reasonably  request,  including  the entering  into of  agreements  and the
providing of documents,  in connection with the registration or qualification of
such securities  and/or the compliance of such  registration  statement with all
applicable  laws.  Such Holders  severally  agree that, in  connection  with any
offering undertaken pursuant to subsection 6.1, the Company shall have the right
to,  if it  deems an  underwriter  or  underwriters  necessary  or  appropriate,
designate such underwriter(s). If the registration involves an underwriter, each
participating  Holder agrees, upon the request of such underwriter,  not to sell
any  unregistered  securities of the Company for a period of 180 days  following
the effective date of the registration  statement for such offering and to enter
into an underwriting agreement with such underwriters containing customary terms
and provisions.

       (b)    If at any time after  giving  written  notice of its  intention to
register any  Registrable  Securities  and prior to the  effective  date of such
registration  statement,  the  Company  shall  determine  for any  reason not to
register or to delay  registration of such Registrable  Securities,  the

                                      -5-
<PAGE>

Company may, at its election,  give written notice of such determination to each
Holder and in the case of a determination not to register,  shall be relieved of
its obligation to register any  Registrable  Securities in connection  with such
registration,  without  prejudice  as to a Holder's  rights with  respect to any
future registration.

       6.4.   INDEMNIFICATION.

       (a)    Subject to applicable law, the Company will indemnify each Holder,
each underwriter and each person controlling such Holder or underwriter  against
all claims, losses, damages and liabilities,  including legal and other expenses
reasonably incurred,  arising out of any untrue or allegedly untrue statement of
a material  fact  contained in the  registration  statement,  or any omission or
alleged  omission  to  state  a  material  fact  required  to be  stated  in the
registration   statement  or  necessary  to  make  any  statements  therein  not
misleading,  or arising out of any  violation  by the Company of the  Securities
Act,  any  state  securities  or  "blue  sky"  laws  or any  applicable  rule or
regulation,  except with respect to an untrue statement or omission contained in
any information or affidavit furnished in writing by the Holder for inclusion in
such registration statement.

       (b)    Subject to applicable law, each Holder, severally and not jointly,
will indemnify the Company, and each person controlling the Company, against all
claims,  losses,  damages and  liabilities,  including  legal and other expenses
reasonably incurred,  arising out of any untrue or allegedly untrue statement of
a material  fact  contained  in the  registration  statement,  or required to be
stated  in the  registration  statement  or  necessary  to make  the  statements
contained therein not misleading,  to the extent,  but only to the extent,  that
such untrue  statement or omission is contained in any  information or affidavit
furnished in writing by such Holder to the Company specifically for inclusion in
such registration statement.

       6.5.   TRANSFER OF  REGISTRATION  RIGHTS.  The  registration  rights of a
Holder  under  Section  6  hereof  shall  automatically  be  transferred  to any
transferee  of this  Warrant,  or any  portion  thereof,  or of any  Registrable
Securities,  without any notice or other  action by the  transferring  Holder of
such transferee.  Any such transferee will be deemed to be a Holder for purposes
of this Section 6, and as a condition precedent to such transferee's exercise of
its rights  hereunder,  such  transferee  must agree to be bound by the terms of
this Section 6.

       6.6.   EXPENSES OF REGISTRATION. The expenses incurred in connection with
registrations  pursuant to this Section 6, namely all registration fees, federal
and  state  filing  and  qualification   fees,   printing  expenses,   fees  and
disbursements  of counsel for the Company and expenses of any special  audits of
the  Company's   financial   statements   incidental  to  or  required  by  such
registration,  shall be borne by the Company,  except that the Company shall not
be  required  to pay the fees and  disbursements  of  counsel  for the Holder or
Holders or  underwriters'  discounts  or  commissions  relating  to  Registrable
Securities being sold by any Holders.

Section 7.    MISCELLANEOUS.

       7.1.   ENTIRE  AGREEMENT.  This Warrant  constitutes the entire agreement
between the Company and the  Warrantholder  with respect to this Warrant and the
Warrant Shares.

                                      -6-
<PAGE>

       7.2.   BINDING EFFECTS; BENEFITS. This Warrant shall inure to the benefit
of and  shall be  binding  upon the  Company  and the  Warrantholder  and  their
respective heirs, legal representatives, successors and assigns. Nothing in this
Warrant,  expressed or implied,  is intended to or shall confer on any person or
entity other than the Company,  the  Warrantholder  and their respective  heirs,
legal representatives,  successors or assigns, any rights, remedies, obligations
or liabilities under or by reason of this Warrant.

       7.3.   AMENDMENTS.  This Warrant may not be modified or amended except by
a written instrument signed by the Company and the Warrantholder.

       7.4.   SECTION  AND  OTHER  HEADINGS.  The  section  and  other  headings
contained  in this  Warrant  are for  reference  purposes  only and shall not be
deemed to be a part of this  Warrant or to affect the meaning or  interpretation
of this Warrant.

       7.5.   FURTHER  ASSURANCES.  Each of the  Company  and the  Warrantholder
shall do and  perform all such  further  acts and things and execute and deliver
all such other  certificates,  instruments  and/or documents as any party hereto
may reasonably  request in connection  with the performance of the provisions of
this Warrant.

       7.6.   NOTICES. All demands,  requests,  notices and other communications
required or permitted to be given under this Warrant  shall be writing and shall
be deemed to have been duly given if  delivered  personally,  sent by  confirmed
facsimile or sent by United  States  certified or  registered  first class mail,
postage  prepaid,  to the parties  hereto at the following  addresses or at such
other address as any party hereto shall hereafter specify by notice to the other
party hereto:

       (a)    if to the Company, addressed to:

                      Elite Pharmaceuticals, Inc.
                      165 Ludlow Avenue
                      Northvale, New Jersey 07647
                      Attention:  Chief Executive Officer

       (b)    If to the  Warrantholder,  addressed to the address of such person
              appearing on the books of the Company.

       Except as otherwise provided herein, all such demands,  requests, notices
and other  communications  shall be deemed to have been  received on the date of
personal delivery thereof,  the sending of confirmed facsimile thereof or on the
third Business Day after the mailing thereof.

       7.7.   SEPARABILITY.  Any  term or  provision  of this  Warrant  which is
invalid  or  unenforceable  in any  jurisdiction  shall be  ineffective  in such
jurisdiction  to the  extent  of such  invalidity  or  unenforceability  without
rendering  invalid or unenforceable  any other term or provision of this Warrant
or affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.

                                      -7-
<PAGE>

       7.8.   FRACTIONAL  SHARES.  No  fractional  shares or scrip  representing
fractional  shares  shall be issued  upon the  exercise  of this  Warrant.  With
respect to any  fraction of a share  called for upon any  exercise  hereof,  the
Company shall pay to the  Warrantholder an amount in cash equal to such fraction
multiplied by the of a share of Common Stock as of the date of such exercise.

       7.9.   GOVERNING  LAW. This Warrant shall be  interpreted  and the rights
and liabilities of the parties hereto  determined in accordance with the laws of
the United States  applicable  thereto and the internal laws of the State of New
York (other than its choice of law rules). The Company and Warrantholder consent
that all  service of process  may be made by  registered  mail  directed to such
party at its address set forth in subsection 7.6 above.

       7.10.  COUNTERPARTS.   This  Warrant  may  be   separately   executed  in
counterparts and by the different parties hereto in separate counterparts,  each
of  which  when so  executed  shall be  deemed  to  constitute  one and the same
Warrant.

                                      -8-
<PAGE>

IN WITNESS WHEREOF,  the Company and the initial  Warrantholder have caused this
Warrant to be signed by their  duly  authorized  officers  as of the 20th day of
July, 2004.

                                       ELITE PHARMACEUTICALS, INC.

                                       By:
                                           -------------------------------------
                                           Bernard Berk, Chief Executive Officer

                                       -----------------------------
                                       Jason Lyons

                                      -9-
<PAGE>

                           ELITE PHARMACEUTICALS, INC.

                              WARRANT EXERCISE FORM

                     (To be executed upon exercise Warrant)

              The  undersigned,  the  record  holder  of  this  Warrant,  hereby
irrevocably  elects to  exercise  the right,  represented  by this  Warrant,  to
purchase _________ of the Warrant Shares and herewith pays the Exercise Price in
accordance with the terms of this Warrant by tendering  payment for such Warrant
Shares  to  the  order  of  ELITE   PHARMACEUTICALS,   INC.  in  the  amount  of
$______________.

       The undersigned  requests that a certificate for the Warrant Shares being
purchased  be  registered  in  the  name  of  ________________   and  that  such
certificate be delivered to _____________.

Date _____________                            Signature ________________________

<PAGE>

                               FORM OF ASSIGNMENT

       FOR VALUE RECEIVED,  the undersigned hereby sells,  assigns and transfers
all of the rights of the undersigned  under the within Warrant,  with respect to
the number of shares of Common Stock covered thereby set forth below, to:

           Name of Assignee           Address           No. of Shares
           ----------------------------------------------------------

and hereby irrevocable  constitutes and appoints  ________________  as agent and
attorney-in-fact to transfer said Warrant on the books of Elite Pharmaceuticals,
Inc., with full power of substitution in the premises.

Dated
      -------------------

In the presence of

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

                                     Name:
                                          ------------------------------------

                                     Signature:
                                              --------------------------------
                                     Title of Signing Offer or Agent (if any):

                                     Address:
                                              --------------------------------

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

                                     Note: The above signature should correspond
                                           with the name on the face of the
                                           within Warrant.Exhibit 10.3

THE SECURITIES  REPRESENTED BY THIS WARRANT HAVE NOT BEEN  REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE  "SECURITIES  ACT"), OR APPLICABLE STATE
SECURITIES  LAWS  (THE  "STATE  ACTS"),  AND  SHALL  NOT BE  SOLD  OR  OTHERWISE
TRANSFERRED  BY THE HOLDER  EXCEPT BY  REGISTRATION  OR PURSUANT TO AN EXEMPTION
FROM  REGISTRATION  UPON THE ISSUANCE TO THE COMPANY OF AN OPINION OF COUNSEL OR
OTHER  EVIDENCE  REASONABLY  SATISFACTORY  TO THE COMPANY TO THE EFFECT THAT ANY
SUCH  TRANSFER  SHALL NOT BE IN  VIOLATION OF THE  SECURITIES  ACT AND THE STATE
ACTS.

                                                             Warrant to Purchase
                                                   25,000 shares of Common Stock
                                       (subject to reduction as provided herein)

                                                             Dated: July 7, 2004

                                     WARRANT

                                       TO

                              PURCHASE COMMON STOCK

                                       OF

                           ELITE PHARMACEUTICALS, INC.

       This  certifies  that,  for  good  and  valuable   consideration,   Elite
Pharmaceuticals,   Inc,  a  Delaware  corporation  (the  "COMPANY"),  grants  to
[_________]  or his  registered  assigns  (the  "WARRANTHOLDER"),  the  right to
subscribe for and purchase from the Company 50,000 shares  (subject to reduction
to 35,000 shares as provided herein) (the "WARRANT SHARES") of common stock, par
value $0.01 per share, of the Company  ("COMMON STOCK") at the exercise price of
$4.20 per share  (subject  to  adjustment  as  provided  herein,  the  "EXERCISE
PRICE").  This Warrant shall be  exercisable  from and after 9:00 A.M.,  Eastern
Standard  Time on July 7, 2004 but no later  than July 6, 2007 to and  including
5:00 P.M. (the "EXPIRATION  DATE"). The Exercise Price and the number of Warrant
Shares are subject to adjustment from time to time as provided in Section 6.

SECTION 1.    EXERCISE OF WARRANT;  LIMITATION  ON  EXERCISE;  TAXES;  TRANSFER;
              DIVISIBILITY.

       1.1.   EXERCISE OF WARRANT.  This Warrant is immediately  exercisable and
may be exercised, in whole or in part, at any time on or prior to the Expiration
Date.  The  rights   represented  by  this  Warrant  may  be  exercised  by  the
Warrantholder  of  record,  in  whole  or in part,  from  time to  time,  by (a)
surrender of this Warrant,  accompanied by the Exercise Form

<PAGE>

annexed  hereto (the  "EXERCISE  FORM") duly  executed by the  Warrantholder  of
record  and  specifying  the  number of Warrant  Shares to be  purchased  to the
Company at its offices at 165 Ludlow  Avenue,  Northvale,  New Jersey  07647 (or
such other office or agency of the Company as it may  designate by notice to the
Warrantholder at the address of such Warrantholder appearing on the books of the
Company) during normal business hours on any day (a "BUSINESS DAY") other than a
Saturday,  Sunday or a day on which the American Stock Exchange is authorized to
close or on which the Company is  otherwise  closed for  business  but not later
than 5:00 P.M. on the  Expiration  Date;  (b) payment of the  Exercise  Price by
delivery to the Company in cash or by  certified  or official  bank check in New
York  Clearing  House Funds,  of an amount  equal to the Exercise  Price for the
number  of  Warrant  Shares  specified  in  the  Exercise  Form,  and  (c)  such
documentation  as to the identity  and  authority  of the  Warrantholder  as the
Company may  reasonably  request.  Such  Warrant  Shares  shall be deemed by the
Company to be issued to the  Warrantholder  as the record holder of such Warrant
Shares as of the close of business on the date on which this Warrant  shall have
been  surrendered  and  payment  made  for  the  Warrant  Shares  as  aforesaid.
Certificates  for the Warrant  Shares  specified in the  Exercise  Form shall be
delivered  to  the   Warrantholder   as  promptly  as  practicable.   The  stock
certificates so delivered shall be in  denominations  as may be specified by the
Warrantholder  and  shall be  issued  in the name of the  Warrantholder  or,  if
permitted by subsection 1.4 and in accordance with the provisions thereof,  such
other name as shall be  designated  in the Exercise  Form. If this Warrant shall
have been exercised only in part, the Company shall,  at the time of delivery of
the  certificates  for the Warrant  Shares,  deliver to the  Warrantholder a new
Warrant  evidencing the rights to purchase the remaining  Warrant Shares,  which
new Warrant shall in all other respects be identical with this Warrant.

       1.2.   LIMITATION ON EXERCISE.  If this Warrant is not exercised prior to
5:00 P.M. on the  Expiration  Date,  this  Warrant,  or any new  Warrant  issued
pursuant to subsection 1.1, shall cease to be exercisable and shall become void,
and all rights of the Warrantholder hereunder shall cease.

       1.3.   PAYMENT OF TAXES.  The issuance of certificates for Warrant Shares
shall be made  without  charge to the  Warrantholder  for any stock  transfer or
other issuance tax in respect thereto; PROVIDED, HOWEVER, that the Warrantholder
shall be  required  to pay any and all taxes  which may be payable in respect to
any  transfer  involved in the issuance  and  delivery of any  certificates  for
Warrant Shares in a name other than that of the then  Warrantholder as reflected
upon the books of the Company.

       1.4.   RESTRICTIONS  ON  TRANSFER.  Neither  this  Warrant nor any of the
Warrant Shares may be transferred or sold except in compliance  with  applicable
United States federal and state securities laws. Subject to the foregoing,  this
Warrant and all rights hereunder are  transferable,  in whole or in part, by the
Warrantholder  and any such transfer is registrable at the office of the Company
by the  holder  hereof  in  person  or by its  duly  authorized  attorney,  upon
surrender of this Warrant in accordance with Section 3 hereof.

       1.5.   REDUCTION OF WARRANT.  If the loan from Warrantholder to Company's
wholly-owned subsidiary Elite Laboratories, Inc. is prepaid by the date which is
180 days from

                                      -2-
<PAGE>

the date of this  Warrant,  the number of shares for which this  Warrant  may be
exercised shall be reduced from 25,000 to 18,750.

       1.6.   REPRESENTATION  BY HOLDER.  The Holder (i) represents and warrants
to the Company  that it is an  "accredited  investor" as that term is defined in
Rule 501(a) of Regulation D  promulgated  under the  Securities  Act of 1933, as
amended (the  "Securities  Act"),  and (ii) agrees not to exercise  this Warrant
unless it is an "accredited investor" at the time of such exercise.

Section 2.    RESERVATION AND LISTING OF SHARES.

       All Warrant Shares issued upon the exercise of the rights  represented by
this Warrant shall,  upon issuance and payment of the Exercise Price in cash, be
validly issued,  fully paid and  nonassessable  and free from all taxes,  liens,
security interests,  charges and other encumbrances with respect to the issuance
thereof other than taxes in respect of any transfer occurring  contemporaneously
with  such  issuance.  During  the  period  within  which  this  Warrant  may be
exercised, the Company shall at all times have authorized and reserved, and keep
available and free from  preemptive or similar  rights,  a sufficient  number of
shares of Common Stock to provide for the exercise of this Warrant.

SECTION 3.    EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.

       If permitted by  subsection  1.4,  upon  surrender of this Warrant to the
Company with a duly executed  instrument of assignment  and funds  sufficient to
pay any transfer tax, the Company shall,  without charge,  execute and deliver a
new Warrant of like tenor in the name of the assignee  named in such  instrument
of assignment and this Warrant shall  promptly be canceled.  Upon receipt by the
Company  of  evidence  reasonably   satisfactory  to  it  of  the  loss,  theft,
destruction  or mutilation of this Warrant and, if requested by the Company,  an
agreement to indemnify the Company for any loss resulting from the Warrant to be
replaced, the Company will execute and deliver a new Warrant of like tenor.

Section 4.    OWNERSHIP OF WARRANT.

       The  Company  may deem and treat the  person or entity in whose name this
Warrant  is  registered  as the  holder and owner  hereof  (notwithstanding  any
notations of ownership or writing  hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary,  until
presentation  of this  Warrant  for  registration  of  transfer  as  provided in
subsection 1.1 or in Section 3.

Section 5.    CERTAIN ADJUSTMENTS.

       The Exercise Price at which Warrant Shares may be purchased hereunder and
the number of Warrant Shares to be purchased upon exercise hereof are subject to
change or adjustment as follows:

       5.1.   NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or the

                                      -3-
<PAGE>

Exercise  Price of such Warrant  Shares is  adjusted,  as herein  provided,  the
Company  shall  promptly  send by first  class  mail,  postage  prepaid,  to the
Warrantholder, notice of such adjustment.

       5.2.   PRESERVATION  OF PURCHASE  RIGHTS UPON MERGER,  CONSOLIDATION.  In
case of any  consolidation  of the Company  with or merger of the  Company  into
another  entity or in case of any sale,  transfer or lease to another  entity of
all or  substantially  all the assets,  the  Warrantholder  shall have the right
thereafter  upon payment of the Exercise  Price in effect  immediately  prior to
such  action to receive  upon  exercise  of this  Warrant the kind and amount of
shares and other securities and property which a holder of a number of shares of
Common Stock equal to the number as to which this Warrant is exercised  would be
entitled to receive after the  happening of such  consolidation,  merger,  sale,
transfer or lease had this  Warrant  been  exercised  immediately  prior to such
action,  subject to future  adjustments,  which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 5. The provisions of
this subsection 5.2 shall apply similarly to successive consolidations, mergers,
sales, transfers or leases.

       5.3.   ADJUSTMENTS.

              (a)    STOCK  DIVIDENDS,  DISTRIBUTIONS  OR  SUBDIVISIONS.  In the
                     event the Company shall issue  additional  shares of Common
                     Stock  pursuant to a stock  dividend,  stock  distribution,
                     subdivision, share split or reclassification,  concurrently
                     with the effectiveness of such event, the Exercise Price in
                     effect   immediately   prior   to  such   event   shall  be
                     proportionately decreased with the number of Warrant Shares
                     purchasable upon exercise of this Warrant immediately prior
                     to such  event  and the  number of  shares  underlying  the
                     Warrant shall be proportionately increased.

              (b)    COMBINATIONS   OR   CONSOLIDATIONS.   In  the   event   the
                     outstanding  shares of Common  Stock  shall be  combined or
                     consolidated,   by   reclassification,   reverse  split  or
                     otherwise,  into a lesser number of shares of Common Stock,
                     concurrently  with the  effectiveness  of such  event,  the
                     Exercise  Price in effect  immediately  prior to such event
                     shall  be  proportionately  increased  and  the  number  of
                     Warrant  Shares  purchasable  upon exercise of this Warrant
                     immediately  prior to such event  shall be  proportionately
                     decreased.

Section 6.    REGISTRATION RIGHTS.

       6.1.   PIGGYBACK  REGISTRATION.  If at any time or from time to time, the
Company shall  register the sale of any of its Common Stock under the Securities
Act of 1933 (the "SECURITIES  ACT") for its own account or the account of any of
its security  holders,  other than a registration on Form S-8 relating solely to
an employee  benefit plan or a  registration  on Form S-4  relating  solely to a
transaction under Rule 145 of the Securities Act, the Company will:

       (i)    give to the initial  Warrantholder and each other person or entity
              who holds all or any portion of this Warrant or the Warrant Shares
              (collectively with the initial

                                      -4-
<PAGE>

              Warrantholder,  the  "HOLDERS")  written notice thereof as soon as
              practicable prior to filing the registration statement or offering
              statement,  but in any event not later  than 10 days prior to such
              filing; and

       (ii)   on behalf of all entities  requesting  inclusion in such offering,
              include the Registrable  Securities (as defined in Section 6.2) in
              the offering and may condition  such offer on their  acceptance of
              any other reasonable conditions (including, without limitation, if
              such offering is underwritten,  that such requesting holders agree
              in writing to enter into an underwriting  agreement with customary
              terms).  If the  representative  of the  underwriter  advises  the
              Company in writing that marketing  factors require a limitation on
              the number of shares to be underwritten,  the numbers of shares to
              be included in the underwriting or registration shall be allocated
              first to the Company,  second,  to the Company's  security holders
              that triggered the instant registration (the "TRIGGERING HOLDERS")
              and  thereafter  shall be  allocated  among the  Holders and other
              security holders requesting  inclusion in the offering pro rata on
              the basis of the number of shares each requesting Holder and other
              security  holder requests to be included bears to the total number
              of shares of all requesting holders that have been requested to be
              included  in  such  offering  (to the  extent  not  included  as a
              Tiggering Holder). If a person who has requested inclusion in such
              offering as provided above does not agree to the terms of any such
              underwriting,  such person shall be excluded  therefrom by written
              notice  from the Company or the  underwriter.  The  securities  so
              excluded shall also be withdrawn from registration, if applicable.

       6.2.   REGISTRABLE  SECURITIES.  For the  purposes of this Section 6, the
term  "REGISTRABLE  SECURITIES" shall mean any Warrant Shares issued or issuable
to a Holder upon exercise of its Warrant, any shares of Common Stock issued to a
Holder as a dividend on its Warrant Shares, and any other shares of Common Stock
distributable on, with respect to, or in replacement of or substitution for such
Registrable Securities,  including those that have been transferred as permitted
under this Warrant, except for those that have been sold or transferred pursuant
to an effective  registration statement or as may be resold pursuant to Rule 144
under the Securities Act.

       6.3.   OBLIGATIONS  OF A HOLDER  AND OTHERS IN A  REGISTRATION.  (a) Each
Holder agrees to timely furnish such  information  regarding such person and the
securities  sought to be registered and to take such other action as the Company
may  reasonably  request,  including  the entering  into of  agreements  and the
providing of documents,  in connection with the registration or qualification of
such securities  and/or the compliance of such  registration  statement with all
applicable  laws.  Such Holders  severally  agree that, in  connection  with any
offering undertaken pursuant to subsection 6.1, the Company shall have the right
to,  if it  deems an  underwriter  or  underwriters  necessary  or  appropriate,
designate such underwriter(s). If the registration involves an underwriter, each
participating  Holder agrees, upon the request of such underwriter,  not to sell
any  unregistered  securities of the Company for a period of 180 days  following
the effective date of the registration  statement for such offering and to enter
into an underwriting agreement with such underwriters containing customary terms
and provisions.

                                      -5-
<PAGE>

       (b)    If at any time after  giving  written  notice of its  intention to
              register any  Registrable  Securities  and prior to the  effective
              date of such registration  statement,  the Company shall determine
              for any reason not to  register or to delay  registration  of such
              Registrable  Securities,  the Company may, at its  election,  give
              written  notice of such  determination  to each  Holder and in the
              case of a determination not to register,  shall be relieved of its
              obligation  to register any  Registrable  Securities in connection
              with such registration,  without prejudice as to a Holder's rights
              with respect to any future registration.

       6.4.   INDEMNIFICATION.

       (a)    Subject to applicable law, the Company will indemnify each Holder,
each underwriter and each person controlling such Holder or underwriter  against
all claims, losses, damages and liabilities,  including legal and other expenses
reasonably incurred,  arising out of any untrue or allegedly untrue statement of
a material  fact  contained in the  registration  statement,  or any omission or
alleged  omission  to  state  a  material  fact  required  to be  stated  in the
registration   statement  or  necessary  to  make  any  statements  therein  not
misleading,  or arising out of any  violation  by the Company of the  Securities
Act,  any  state  securities  or  "blue  sky"  laws  or any  applicable  rule or
regulation,  except with respect to an untrue statement or omission contained in
any information or affidavit furnished in writing by the Holder for inclusion in
such registration statement.

       (b)    Subject to applicable law, each Holder, severally and not jointly,
will indemnify the Company, and each person controlling the Company, against all
claims,  losses,  damages and  liabilities,  including  legal and other expenses
reasonably incurred,  arising out of any untrue or allegedly untrue statement of
a material  fact  contained  in the  registration  statement,  or required to be
stated  in the  registration  statement  or  necessary  to make  the  statements
contained therein not misleading,  to the extent,  but only to the extent,  that
such untrue  statement or omission is contained in any  information or affidavit
furnished in writing by such Holder to the Company specifically for inclusion in
such registration statement.

       6.5.   TRANSFER OF  REGISTRATION  RIGHTS.  The  registration  rights of a
Holder  under  Section  6  hereof  shall  automatically  be  transferred  to any
transferee  of this  Warrant,  or any  portion  thereof,  or of any  Registrable
Securities,  without any notice or other  action by the  transferring  Holder of
such transferee.  Any such transferee will be deemed to be a Holder for purposes
of this Section 6, and as a condition precedent to such transferee's exercise of
its rights  hereunder,  such  transferee  must agree to be bound by the terms of
this Section 6.

       6.6.   EXPENSES OF REGISTRATION. The expenses incurred in connection with
registrations  pursuant to this Section 6, namely all registration fees, federal
and  state  filing  and  qualification   fees,   printing  expenses,   fees  and
disbursements  of counsel for the Company and expenses of any special  audits of
the  Company's   financial   statements   incidental  to  or  required  by  such
registration,  shall be borne by the Company,  except that the Company shall not
be  required  to pay the fees and  disbursements  of  counsel  for the Holder or
Holders or  underwriters'  discounts  or  commissions  relating  to  Registrable
Securities being sold by any Holders.

                                      -6-
<PAGE>

Section 7.    MISCELLANEOUS.

       7.1.   ENTIRE  AGREEMENT.  This Warrant  constitutes the entire agreement
between the Company and the  Warrantholder  with respect to this Warrant and the
Warrant Shares.

       7.2.   BINDING EFFECTS; BENEFITS. This Warrant shall inure to the benefit
of and  shall be  binding  upon the  Company  and the  Warrantholder  and  their
respective heirs, legal representatives, successors and assigns. Nothing in this
Warrant,  expressed or implied,  is intended to or shall confer on any person or
entity other than the Company,  the  Warrantholder  and their respective  heirs,
legal representatives,  successors or assigns, any rights, remedies, obligations
or liabilities under or by reason of this Warrant.

       7.3.   AMENDMENTS.  This Warrant may not be modified or amended except by
a written instrument signed by the Company and the Warrantholder.

       7.4.   SECTION  AND  OTHER  HEADINGS.  The  section  and  other  headings
contained  in this  Warrant  are for  reference  purposes  only and shall not be
deemed to be a part of this  Warrant or to affect the meaning or  interpretation
of this Warrant.

       7.5.   FURTHER  ASSURANCES.  Each of the  Company  and the  Warrantholder
shall do and  perform all such  further  acts and things and execute and deliver
all such other  certificates,  instruments  and/or documents as any party hereto
may reasonably  request in connection  with the performance of the provisions of
this Warrant.

       7.6.   NOTICES. All demands,  requests,  notices and other communications
required or permitted to be given under this Warrant  shall be writing and shall
be deemed to have been duly given if  delivered  personally,  sent by  confirmed
facsimile or sent by United  States  certified or  registered  first class mail,
postage  prepaid,  to the parties  hereto at the following  addresses or at such
other address as any party hereto shall hereafter specify by notice to the other
party hereto:

       (a)    if to the Company, addressed to:

                      Elite Pharmaceuticals, Inc.
                      165 Ludlow Avenue
                      Northvale, New Jersey 07647
                      Attention:  Chief Executive Officer

       (b)    If to the  Warrantholder,  addressed to the address of such person
              appearing on the books of the Company.

       Except as otherwise provided herein, all such demands,  requests, notices
and other  communications  shall be deemed to have been  received on the date of
personal delivery thereof,  the sending of confirmed facsimile thereof or on the
third Business Day after the mailing thereof.

       7.7.   SEPARABILITY.  Any  term or  provision  of this  Warrant  which is
invalid  or  unenforceable  in any  jurisdiction  shall be  ineffective  in such
jurisdiction to the extent of such

                                      -7-
<PAGE>

invalidity or  unenforceability  without  rendering invalid or unenforceable any
other  term  or  provision  of  this  Warrant  or  affecting   the  validity  or
enforceability  of any of the terms or  provisions  of this Warrant in any other
jurisdiction.

       7.8.   FRACTIONAL  SHARES.  No  fractional  shares or scrip  representing
fractional  shares  shall be issued  upon the  exercise  of this  Warrant.  With
respect to any  fraction of a share  called for upon any  exercise  hereof,  the
Company shall pay to the  Warrantholder an amount in cash equal to such fraction
multiplied by the Fair Market Value of a share of Common Stock as of the date of
such exercise.

       7.9.   GOVERNING  LAW. This Warrant shall be  interpreted  and the rights
and liabilities of the parties hereto  determined in accordance with the laws of
the United  States  applicable  thereto  and the  internal  laws of the State of
Delaware  (other  than its choice of law rules).  The Company and  Warrantholder
consent that all service of process may be made by  registered  mail directed to
such party at its address set forth in subsection 7.6 above.

       7.10.  COUNTERPARTS.   This  Warrant  may  be   separately   executed  in
counterparts and by the different parties hereto in separate counterparts,  each
of  which  when so  executed  shall be  deemed  to  constitute  one and the same
Warrant.

                                      -8-
<PAGE>

IN WITNESS WHEREOF,  the Company and the initial  Warrantholder have caused this
Warrant  to be signed by their  duly  authorized  officers  as of the 7th day of
June, 2004.

                                       ELITE PHARMACEUTICALS, INC.

                                       By:
                                           -------------------------------------
                                           Bernard Berk, Chief Executive Officer

                                       -------------------------------------
                                       Name:

                                      -9-
<PAGE>

                           ELITE PHARMACEUTICALS, INC.

                              WARRANT EXERCISE FORM

                     (To be executed upon exercise Warrant)

              The  undersigned,  the  record  holder  of  this  Warrant,  hereby
irrevocably  elects to  exercise  the right,  represented  by this  Warrant,  to
purchase _________ of the Warrant Shares and herewith pays the Exercise Price in
accordance with the terms of this Warrant by tendering  payment for such Warrant
Shares  to  the  order  of  ELITE   PHARMACEUTICALS,   INC.  in  the  amount  of
$______________.

       The undersigned  requests that a certificate for the Warrant Shares being
purchased  be  registered  in  the  name  of  ________________   and  that  such
certificate be delivered to _____________.

Date _____________                            Signature ________________________

<PAGE>

                               FORM OF ASSIGNMENT

       FOR VALUE RECEIVED,  the undersigned hereby sells,  assigns and transfers
all of the rights of the undersigned  under the within Warrant,  with respect to
the number of shares of Common Stock covered thereby set forth below, to:

           Name of Assignee           Address           No. of Shares
           ----------------------------------------------------------

and hereby irrevocable  constitutes and appoints  ________________  as agent and
attorney-in-fact to transfer said Warrant on the books of Elite Pharmaceuticals,
Inc., with full power of substitution in the premises.

Dated
      -------------------

In the presence of

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

                                     Name:
                                          ------------------------------------

                                     Signature:
                                              --------------------------------
                                     Title of Signing Offer or Agent (if any):

                                     Address:
                                              --------------------------------

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

                                     Note: The above signature should correspond
                                           with the name on the face of the
                                           within Warrant.

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