Document:

EXHIBIT 10.40
                           STOCK REDEMPTION AGREEMENT

         THIS STOCK  REDEMPTION  AGREEMENT (this  "Agreement"),  made as of this
31st  day of  May,  2006  (the  "Closing  Date"),  is by and  between  BigString
Corporation, a Delaware corporation (the "Corporation"), and June E. Handshy, an
individual residing in the State of Oklahoma (the "Redeeming Shareholder").

                              W I T N E S S E T H:
                              --------------------

         WHEREAS,  the  Redeeming  Shareholder  owns  4,000,000  shares  of  the
Corporation's common stock, par value $.0001 per share ("Common Stock");

         WHEREAS,  the  Redeeming  Shareholder  has  agreed  to  sell,  and  the
Corporation has agreed to purchase, 2,000,000 shares of Common Stock held by the
Redeeming Shareholder (the "Subject Shares"),  upon the terms and subject to the
conditions set forth in this Agreement (the "Redemption"); and

         WHEREAS, as an inducement for the Corporation to effect the Redemption,
the  Redeeming   Shareholder  has  agreed,   as  provided  herein,   to  certain
restrictions with regard to the sale, assignment, transfer, encumbrance or other
disposition of the shares of Common Stock held by the Redeeming Shareholder that
are not part of the Subject Shares (the "Remaining Shares").

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
covenants  and  undertakings  made by the parties  hereto,  and  intending to be
legally bound, it is hereby mutually agreed:

         1. Mutual Agreement to Redeem. The Redeeming  Shareholder hereby agrees
            --------------------------
to surrender  for  redemption to the  Corporation,  and the  Corporation  hereby
agrees to redeem from the  Redeeming  Shareholder,  the Subject  Shares upon the
terms and subject to the conditions set forth in this Agreement.

         2. Surrender of Subject Shares. Contemporaneously with the execution of
            ---------------------------
this Agreement by both parties, the Redeeming Shareholder shall surrender to the
Corporation Certificates 0000149, 0000150, 0000151 and 0000152 (each Certificate
represents 500,000 shares of Common Stock),  which, in the aggregate,  represent
the Subject  Shares,  endorsed in blank for  transfer,  and upon receipt of such
Stock  Certificates  the Corporation  shall tender to the Redeeming  Shareholder
payment of the Redemption Price (as defined below).

         3. Payment of Redemption  Price.  The redemption  price for the Subject
            ----------------------------
Shares shall be 5/100  Dollars  ($0.05) per share or an aggregate of One Hundred
Thousand Dollars ($100,000) (the "Redemption Price"). The Redemption Price shall
be immediately sent by the Corporation to the Redeeming Shareholder upon receipt
of this Stock Redemption Agreement,  executed by the Redeeming Shareholder,  and
the endorsed Stock Certificates.  Payment shall be made by wire transfer,  or by
corporate check via overnight shipment with concurrent  notification by email to
the Redeeming Shareholder of the tracking number.

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         4. Lockup of Securities.
            --------------------

            (a) Lockup of  Securities.  Except as set forth in Section 4(b), the
                ---------------------
Redeeming  Shareholder  shall not,  at any time prior to the  conclusion  of the
twenty-six  month period following the Closing Date (such period expires on July
31, 2008 and shall be referred to herein as the "Restricted  Period"),  directly
or indirectly,  (i) offer,  pledge,  sell,  contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase,  lend or  otherwise  transfer or dispose of any of
the  Remaining  Shares,  or (ii) enter into any swap or other  arrangement  that
transfers to another,  in whole or in part, any of the economic  consequences of
ownership of any of the Remaining Shares, whether any such transaction described
in clause  (i) or (ii)  above is to be  settled  by  delivery  of the  Remaining
Shares,  in  cash  or  otherwise  (any  such  transaction,  whether  or not  for
consideration, being referred to herein as a "Transfer," and each Person to whom
a Transfer is made,  regardless of the method of Transfer, is referred to herein
as a "Transferee").

            (b) Permitted Transfers.  The Redeeming Shareholder is permitted to,
                -------------------
at any time after the  conclusion  of the 14 month period  following the Closing
Date (i.e.,  after July 31,  2007),  sell 100,000  shares of Common Stock at the
prevailing  market  price  into  the  public  market.  In  addition,  after  the
conclusion of the 14 month period  following the Closing Date (i.e.,  after July
31, 2007),  the Redeeming  Shareholder  may sell,  every 3 months for a 12 month
period,  an additional  50,000 shares of Common Stock at the  prevailing  market
price into the public market.  Accordingly,  after the 14 month period following
the Closing Date (i.e., after July 31, 2007), the Redeeming Shareholder may sell
150,000  of  the  Remaining  Shares.  The  Redeeming  Shareholder  may  sell  an
additional 50,000 of the Remaining Shares after the conclusion of each of the 17
month period  following the Closing Date (i.e.,  after October 31, 2007), the 20
month period  following the Closing Date (i.e.,  after January 31, 2008) and the
23 month period following the Closing Date (i.e.,  after April 30, 2008). At the
conclusion of the 26 month period  following the Closing Date (i.e.,  after July
31, 2008),  the Redeeming  Shareholder may sell or transfer any of the Remaining
Shares  at her own  discretion  without  any  limitations  on the  number of the
Remaining  Shares she may sell;  provided,  that she comply with all  applicable
federal and state securities laws.

         5.  Representations  and Warranties of the Redeeming  Shareholder.  The
             -------------------------------------------------------------
Redeeming Shareholder represents and warrants to the Corporation that:

            (a)  Ownership.  The Redeeming  Shareholder is the sole owner of the
                 ---------
Subject Shares;  the Subject Shares are a portion of the shares of capital stock
in the Corporation  owned by the Redeeming  Shareholder;  and the Subject Shares
are  free  and  clear  of all  claims,  liens,  and  encumbrances  of  any  kind
whatsoever, whether legal or equitable.

            (b)  Authority.   The  Redeeming  Shareholder  has  full  power  and
                 ---------
authority to deliver the Subject Shares to the Corporation.

            (c) Binding Obligation.  This Agreement, when executed and delivered
                ------------------
by the Redeeming Shareholder,  will constitute a valid and binding obligation of
the Redeeming  Shareholder,  enforceable  against the Redeeming  Shareholder  in
accordance  with  its  terms,  except  as  may  be  limited  by  (i)  applicable
bankruptcy,  insolvency,  reorganization,  moratorium,

                                       2
<PAGE>

fraudulent  conveyance  or similar laws  relating to or affecting the rights and
remedies of creditors  and debtors,  and (ii)  equitable  principles  generally,
regardless of whether such  principles  are considered in a proceeding at equity
or at law.

            (d) No Breach or Termination.  The Redeeming Shareholder's execution
                ------------------------
and  performance  of this Agreement will not result in the breach or termination
of any term or provision  of, or  constitute  a default  under,  any  indenture,
mortgage,  deed of trust or other agreement or instrument to which the Redeeming
Shareholder is a party or by which the Redeeming  Shareholder's  property may be
bound.

            (e) Advice of Counsel. In connection with the execution and delivery
                -----------------
of  this  Agreement,   the  Redeeming  Shareholder  acknowledges  that  (i)  the
Corporation  has advised her to seek the advice of counsel and other advisors in
connection with the execution and delivery of this Agreement, (ii) the Redeeming
Shareholder  has carefully read and fully  understands  all of the provisions of
this  Agreement,  and (iii) the  Redeeming  Shareholder  is  entering  into this
Agreement  knowingly,  freely and  voluntarily in exchange for good and valuable
consideration.

            (f) Access to Information. As the spouse of Charles A. Handshy, Jr.,
                ---------------------
a  member  of  the  Corporation's  board  of  directors  and an  officer  of the
Corporation,  the Redeeming Shareholder has been provided access to all relevant
information  necessary to make a fully informed investment decision and is fully
aware  of  all  disclosed  and  undisclosed  developments  with  respect  to the
Corporation and its operations.  In addition, the Corporation has made available
to the Redeeming  Shareholder  the  opportunity to ask questions of, and receive
answers from, the other officers of the  Corporation  concerning the Corporation
and its business.

            (g)  Non-Disparagement.  The Redeeming  Shareholder  agrees that she
                 -----------------
shall  not  make  or  publish  statements  or   representations,   or  otherwise
communicate,  directly or indirectly,  in writing, orally, or otherwise, or take
any action  which may,  directly  or  indirectly,  disparage  or be  damaging or
critical of the Corporation or any entity affiliated with the Corporation, or in
any way adversely affecting or otherwise maligning the Corporation's  reputation
or that of any of the Corporation's entities. In the event of a violation of the
terms and conditions of this Section 5(g), the Redeeming Shareholder agrees that
the Corporation shall have the right to seek any injunctive, equitable and other
legal relief available to it.

         6.  Representations and Warranties of the Corporation.  The Corporation
             -------------------------------------------------
represents and warrants to the Redeeming Shareholder that:

            (a) Organization  and Authority.  The Corporation is duly organized,
                ---------------------------
validly  existing and in good standing  under the laws of the State of Delaware,
and has all  requisite  power and  authority  (corporate  and  other) to own its
properties,  to carry on its  business  as now being  conducted,  to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.

            (b) Authorization.  The execution and delivery by the Corporation of
                -------------
this  Agreement and the  consummation  by the  Corporation  of all  transactions
contemplated  hereby  have been duly  authorized  by all  proper  and  requisite
corporate action.

                                       3
<PAGE>

            (c) Binding Obligation.  This Agreement, when executed and delivered
                ------------------
by the Corporation, will constitute a valid and binding obligation,  enforceable
against the Corporation in accordance  with its terms,  except as may be limited
by (i) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance  or similar laws  relating to or affecting the rights and remedies of
creditors and debtors,  and (ii) equitable principles  generally,  regardless of
whether such principles are considered in a proceeding at equity or at law.

            (d) No Violations,  Conflicts,  Breaches or Defaults. The execution,
                ------------------------------------------------
delivery  and  performance  by  the  Corporation  of  this  Agreement,  and  the
consummation by the Corporation of the transactions  contemplated  hereby,  will
not,  with or without the giving of notice or the  passage of time or both,  (i)
violate  the  provisions  of any  law,  rule  or  regulation  applicable  to the
Corporation; (ii) violate the provisions of the Certificate of Incorporation, as
amended,  or the Amended and Restated By-laws of the Corporation;  (iii) violate
any  judgment,  decree,  order  or  award  of any  court,  governmental  body or
arbitrator;  or (iv) conflict with or result in the breach or termination of any
term or provision of, or constitute a default under,  or cause any  acceleration
under,  or cause the  creation  of any  lien,  charge  or  encumbrance  upon the
properties or assets of the  Corporation  pursuant to, any indenture,  mortgage,
deed of trust or other  instrument  or agreement to which the  Corporation  is a
party or by which the Corporation or its properties is or may be bound.

            (e) SEC Reports.  The  Corporation  has previously  delivered to the
                -----------
Redeeming  Shareholder  its  Annual  Report on Form  10-KSB  for the year  ended
December 31, 2005 and its  quarterly  report on Form 10-QSB for the three months
ended March 31, 2006 (the "Reports").  The financial statements contained in the
Reports fairly present,  as of their respective dates, the financial  condition,
retained earnings,  assets and liabilities of the Corporation and the results of
operations of the Corporation's business for the periods indicated.

         7.  Survival  of  Covenants,   Representations   and  Warranties.   All
             ------------------------------------------------------------
covenants,  undertakings,  representations  and warranties  made hereunder shall
survive the sale of the Subject Shares.

         8. Miscellaneous.
            -------------

            (a) Governing Law. This Agreement shall be governed by and construed
                -------------
in accordance with the laws of the State of New Jersey, without giving effect to
conflicts of laws principles.

            (b) Counterparts.  This Agreement may be executed  simultaneously in
                ------------
two or more counterparts,  each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

            (c) Successors and Assigns. This Agreement shall be binding upon and
                ----------------------
inure  to  the  benefit  of  the  parties  and  their  respective  heirs,  legal
representatives, executors, successors and assigns.

            (d)  Headings.  The  headings  contained in this  Agreement  are for
                 --------
reference  purposes only and shall not affect the meaning or  interpretation  of
this Agreement.

                                       4
<PAGE>

            (e) Amendment. No change,  amendment,  modification or revocation of
                ---------
this  Agreement  or waiver of any of the terms or  conditions  contained  herein
shall be valid  unless the same shall be  adopted,  waived or  consented  to, in
writing, by all of the parties hereto.

            (f) Waiver. The failure of any party to require performance under or
                ------
compliance  with any provision of this  Agreement  shall not affect that party's
right to enforce the same or any provision at a later time.

            (g) Notices.  All  communications  to a party  required or permitted
                -------
under this Agreement shall be in writing and (i) delivered personally, (ii) sent
by Federal Express or another nationally-recognized  overnight courier, or (iii)
mailed by first class United States mail,  postage  pre-paid,  at the address of
the party set forth below:

                       If to the Corporation:
                       ----------------------

                       BigString Corporation
                       3 Harding Road, Suite F
                       Red Bank, New Jersey  07701
                       Attn:  Darin M. Myman, President
                              and Chief Executive Officer

                       If to the Redeeming Shareholder:
                       --------------------------------

                       June E. Handshy
                       P.O. Box 205
                       Leonard, Oklahoma  74043

         Any  communication  delivered in accordance with the provisions of this
Agreement  shall be deemed to have been  delivered  (i) on the date of  personal
delivery, (ii) on the business day following the date sent by overnight courier,
or (iii) on the fifth day following  the date on which it was so mailed,  as the
case may be.

            (h) Validity.  The invalidity or illegality of any provision of this
                --------
Agreement  at any time shall not affect the  validity or legality of the same at
any other time or of any other provision of this Agreement.

            (i)  Entire   Agreement.   This   Agreement   contains   the  entire
                 ------------------
understandings  between the parties  relating to the  Redemption  of the Subject
Shares,  and no  agreements  or  understandings,  oral or  written,  express  or
implied,  relating to the same have been made by the  parties  which are not set
forth in this Agreement.

            (j) Further  Action.  The parties  agree to execute and deliver such
                ---------------
further  instruments  and  documents  and to take such  further  actions  as are
necessary  or  desirable  to  further  the  transactions  contemplated  by  this
Agreement.

            (k) Third Party Rights.  Nothing in this Agreement is intended to or
                ------------------
shall be deemed  to  create,  any claim or right on the part of any third  party
other than the parties hereto and their respective heirs, legal representatives,
executors,  successors and assigns; and no such

                                       5
<PAGE>

third party shall be entitled to assert any claim or right under this Agreement;
provided, however, that, notwithstanding the foregoing, the directors, officers,
employees,   agents,  and  representatives  of  the  Corporation  shall  be  the
beneficiary   of  the  Redeeming   Shareholder's   covenants,   agreements   and
undertakings herein.

            (l) Legal Representation.  Each party to this Agreement acknowledges
                --------------------
that she or it is represented  by her or its own legal  counsel.  This Agreement
accordingly shall not be construed against either party by reason of drafting or
preparation  thereof.  Each of the  parties  will  bear her or its own legal and
other  expenses in  connection  with the  negotiation  and  performance  of this
Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                           BIGSTRING CORPORATION,
                                           A Delaware corporation

                                      By:  /s/ Darin M. Myman
                                           -------------------------------------
                                   Name:   Darin M. Myman
                                  Title:   President and Chief Executive Officer

                                           REDEEMING SHAREHOLDER

                                                    /s/ June E. Handshy
                                           -------------------------------------
                                                         (Signature)

                                                      June E. Handshy
                                           -------------------------------------
                                                           (Name)

                                       6THIS WARRANT AND THE SHARES OF COMMON STOCK  ISSUABLE UPON EXERCISE  HEREOF HAVE
NOT BEEN REGISTERED  UNDER THE FEDERAL OR APPLICABLE  STATE  SECURITIES LAWS AND
INSTEAD ARE BEING ISSUED  PURSUANT TO  EXEMPTIONS  CONTAINED IN SAID LAWS.  THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE  HEREOF MAY NOT BE
TRANSFERRED  UNLESS (1) A  REGISTRATION  STATEMENT WITH RESPECT TO SUCH WARRANTS
AND THE SHARES OF COMMON STOCK UNDERLYING SUCH WARRANTS SHALL BE EFFECTIVE UNDER
THE  SECURITIES  ACT OF 1933,  AS AMENDED  OR (2) THE  ISSUER OF THE  SECURITIES
REPRESENTED  HEREBY  SHALL  HAVE  RECEIVED  AN  OPINION  OF  COUNSEL  REASONABLY
SATISFACTORY  TO IT THAT NO VIOLATION OF SUCH ACT OR SIMILAR  STATE LAWS WILL BE
INVOLVED IN SUCH TRANSFER.

                          COMMON STOCK PURCHASE WARRANT

     To Purchase Shares of $0.01 Par Value Common Stock ("Common Stock") of

                           ELITE PHARMACEUTICALS, INC

No. [W-1] 600,000 Shares

         THIS  CERTIFIES  that,  for  $150,000,   Indigo   Ventures,   LLC  (the
"Purchaser"  or  "Holder")  is  entitled,  upon the  terms  and  subject  to the
conditions hereinafter set forth, at any time on or after the date hereof and on
or prior to 8:00  p.m.  New York  City  Time on the date  that is five (5) years
after the date hereof (the "Termination Date"), but not thereafter, to subscribe
for and purchase from Elite  Pharmaceuticals,  Inc., a Delaware corporation (the
"Company"), 600,000 shares of Common Stock (the "Warrant Shares") at an Exercise
Price equal to $3.00 per share (as  adjusted  from time to time  pursuant to the
terms hereof, the "Exercise Price"). The Exercise Price and the number of shares
for which the Warrant is exercisable  shall be subject to adjustment as provided
herein.  This Warrant is being issued in connection with the Financial  Advisory
Agreement (the "Advisory Agreement") dated July __, 2006 (the "Effective Date"),
entered into between the Company and  Purchaser.  Capitalized  terms used herein
and not  otherwise  defined  shall  have the  meaning  ascribed  thereto  in the
Advisory Agreement.

1.       TITLE OF  WARRANT.  Prior  to the  expiration  hereof  and  subject  to
         compliance with applicable  laws, this Warrant and all rights hereunder
         are  transferable,  in whole or in part, at the office or agency of the
         Company by the Holder hereof in person or by duly authorized  attorney,
         upon surrender of this Warrant  together with (a) the  Assignment  Form
         annexed  hereto  properly  endorsed,  and (b) any  other  documentation
         reasonably  necessary to satisfy the Company  that such  transfer is in
         compliance with all applicable securities laws. The term "Holder" shall
         refer to the Purchaser or any subsequent transferee of this Warrant.

2.       AUTHORIZATION OF SHARES;  VESTING.  (a) The Company  covenants that all
         shares of Common  Stock which may be issued upon the exercise of rights
         represented  by  this  Warrant  will,   upon  exercise  of  the  rights
         represented  by this Warrant and payment of the  Exercise  Price as set
         forth herein will be duly  authorized,  validly issued,  fully paid and
         nonassessable  and free from all taxes,  liens and charges  (other than
         liens  created by the  Holder) in respect of the issue  thereof  (other
         than taxes in respect of any transfer occurring  contemporaneously with
         such issue or otherwise specified herein).

         (b)  Holder's  right to acquire  600,000  Warrant  Shares shall vest as
         follows:  50,000 Warrant  Shares shall vest quarterly  beginning on the
         three (3) month  anniversary  of the  Effective  Date and ending on the
         three (3) year  anniversary  of the Effective  Date;  provided that the
         unvested  Warrant  Shares  shall  terminate  upon  termination  of  the
         Advisory  Agreement;  provided,  further that this Warrant  shall fully
         vest upon a Change of Control  (as  defined in 2(c)  below) that occurs
         prior to the termination of the Advisory Agreement.

         (c) The term  "Change of Control"  shall mean the  earliest to occur of
         the following events: (i) securities of the Company representing 50% or
         more of the combined  voting power of the  Company's  then  outstanding

<PAGE>

         voting  securities  are  acquired  by a person or  entity,  or group of
         related  persons  or  entities  that  were not  shareholders  as of the
         Effective Date, in a single transaction, (ii) a merger or consolidation
         is consummated in which the Company is a constituent corporation, which
         results in less than 50% of the  outstanding  voting  securities of the
         surviving  or  resulting  entity  being  owned  by  the  then  existing
         stockholders  of the  Company  or (iii) the sale,  transfer,  exclusive
         license or other disposition by the Company of substantially all of its
         assets to a person or an entity which is not a wholly-owned  subsidiary
         of the Company and not a shareholder of the Company as of the Effective
         Date.

3. EXERCISE OF WARRANT.

(a)               (i) The Holder may exercise this Warrant, in whole or in part,
         at any time and from time to time,  by delivering to the offices of the
         Company  or any  transfer  agent for the  Common  Stock  this  Warrant,
         together  with  a  Notice  of  Exercise  in  the  form  annexed  hereto
         specifying  the number of  Warrant  Shares  with  respect to which this
         Warrant  is  being  exercised,  together  with  payment  in cash to the
         Company of the Exercise Price  therefore;  provided that the Holder may
         not exercise the Warrant,  in whole or in part, for a period of one (1)
         year from any  vesting  date;  provided,  that such  restriction  shall
         expire  immediately  upon a  Change  of  Control  and  Holder  shall be
         entitled to exercise this Warrant in whole or in part.

                  (ii) Additionally, the Holder may exercise this Warrant by the
         exchange  of this  Warrant  in  whole  or in part  (with  the  Cashless
         Exercise subscription form in the form annexed hereto duly executed) (a
         "Cashless  Exercise")  at the address of the Company set forth  herein.
         Such presentation and exchange shall be deemed a waiver of the Holder's
         obligation  to pay the  Exercise  Price  or,  in the case of a  partial
         exercise of this  Warrant,  of the portion of the  Exercise  Price that
         would  otherwise be payable in connection  with such partial  exercise.
         Upon  presentment  of  this  Warrant  in  connection  with  a  Cashless
         Exercise, the number of Warrant Shares subject to this Warrant shall be
         reduced by the  number of  Warrant  Shares  specified  on the  Cashless
         Exercise  subscription  form,  and in exchange for such  reduction  the
         Holder shall receive the number of Warrant Shares,  as the case may be,
         specified on the Cashless  Exercise  subscription form (up to the total
         number of Warrant Shares which are subject to this Warrant)  multiplied
         by a fraction,  the  numerator of which shall be the excess of the then
         current  market  price per share of the Common  Stock over the Exercise
         Price per share, and the denominator of which shall be the then current
         market price per share of Common Stock. For purposes of any computation
         under this Section  3(a),  the then  current  market price shall be the
         average of the closing  prices for the five  trading  days  immediately
         prior  to  the  execution   and  delivery  of  the  Cashless   Exercise
         subscription form by Holder.

         In the event that the Warrant is not  exercised in full,  the number of
         Warrant  Shares shall be reduced by the number of such  Warrant  Shares
         for which this Warrant is exercised,  and the Company,  if requested by
         Holder and at the Company's expense, shall within five (5) Trading Days
         (as  defined  below)  issue and  deliver to the Holder a new Warrant of
         like tenor in the name of the Holder or as the Holder (upon  payment by
         Holder of any applicable  transfer taxes) may request,  reflecting such
         adjusted Warrant Shares.

         Certificates  for shares of Common Stock  purchased  hereunder shall be
         delivered to the Holder  hereof  within five (5) Trading Days after the
         date on which this Warrant shall have been exercised as aforesaid.  The
         Holder may  withdraw  its Notice of Exercise at any time if the Company
         fails to timely  deliver  the  relevant  certificates  to the Holder as
         provided in this  Agreement.  A Notice of Exercise shall be deemed sent
         on the date  received by the Company if received  before 5:00 p.m.  New
         York Time on such  date,  or the day  following  such date if  received
         after  5:00 p.m.  New York  Time;  provided  that the  Company  is only
         obligated to deliver  Warrant Shares  against  delivery of the Exercise
         Price  from  the  holder  hereof  and  surrender  of this  Warrant  (or
         appropriate affidavit and/or indemnity in lieu thereof).

         In lieu of delivering  physical  certificates  representing the Warrant
         Shares issuable upon conversion of this Warrant, provided the Company's
         transfer agent is participating in the Depository Trust Company ("DTC")
         Fast Automated  Securities  Transfer ("FAST") program,  upon request of
         the Holder,  the Company shall use commercially  reasonable  efforts to
         cause its transfer agent to electronically  transmit the Warrant Shares
         issuable upon  exercise to the Holder,  by crediting the account of the
         Holder's  prime  broker with DTC through its Deposit  Withdrawal  Agent
         Commission  ("DWAC")  system.  The time periods for delivery

                                       2
<PAGE>

         described above shall apply to the electronic  transmittals through the
         DWAC system. The Company agrees to use commercially  reasonable efforts
         to coordinate with DTC to accomplish this objective.

(b)      The term  "Trading  Day" means (x) if the Common Stock is not listed on
         the New York or American  Stock  Exchange but sale prices of the Common
         Stock are  reported  on Nasdaq  National  Market or  another  automated
         quotation  system,  a day on which trading is reported on the principal
         automated  quotation  system  on which  sales of the  Common  Stock are
         reported,  (y) if the  Common  Stock is  listed  on the New York  Stock
         Exchange  or the  American  Stock  Exchange,  a day on  which  there is
         trading on such stock exchange,  or (z) if the foregoing provisions are
         inapplicable,  a day on  which  quotations  are  reported  by  National
         Quotation Bureau Incorporated.

4.       NO  FRACTIONAL   SHARES  OR  SCRIP.  No  fractional   shares  or  scrip
         representing  fractional  shares  shall be issued upon the  exercise of
         this  Warrant.  In lieu of  issuance  of a  fractional  share  upon any
         exercise hereunder,  the Company,  in its sole discretion,  will either
         round up to  nearest  whole  number of shares or pay the cash  value of
         that  fractional  share,  which cash value shall be  calculated  on the
         basis of the average  closing price of the Common Stock during the five
         (5) Trading Days immediately preceding the date of exercise.

5.       CHARGES,  TAXES AND EXPENSES.  Issuance of  certificates  for shares of
         Common Stock upon the  exercise of this  Warrant  shall be made without
         charge to the  Holder  hereof  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 of this Warrant
         or in such  name or  names as may be  directed  by the  Holder  of this
         Warrant;  PROVIDED,  HOWEVER, that in the event certificates for shares
         of Common  Stock are to be issued in a name  other than the name of the
         Holder of this  Warrant,  this  Warrant when  surrendered  for exercise
         shall be  accompanied  by the  Assignment  Form  attached  hereto  duly
         executed by the Holder hereof;  and PROVIDED FURTHER,  that the Company
         shall not be  required  to pay any tax or taxes which may be payable in
         respect  of any  transfer  involved  in  the  issuance  of any  Warrant
         certificates or any  certificates for the Warrant Shares other than the
         issuance of a Warrant  Certificate to the Holder in connection with the
         Holder's surrender of a Warrant Certificate upon the exercise of all or
         less than all of the Warrants evidenced thereby.

6.       CLOSING  OF  BOOKS.  Subject  to  applicable  law and the  rules of the
         principal market on which the Common Stock may from time to time trade,
         the Company will at no time close its  shareholder  books or records in
         any manner which interferes with the timely exercise of this Warrant.

7.       NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE.

(a)      Prior  to  exercise  of all or any  portion  of this  Warrant  and as a
         condition  to the  issuance by the Company of any Warrant  Shares,  the
         Holder  agrees to  provide  an  irrevocable  proxy in favor of the then
         current chief executive  officer of the Company to vote all such shares
         to be  issued  upon  exercise  of this  Warrant  in any vote put to the
         shareholders of the Company in the form attached hereto as ANNEX I.

(b)      Subject to Section 12 of this Warrant and the  provisions  of any other
         written agreement between the Company and the Purchaser,  the Purchaser
         shall not be  entitled  to vote or receive  dividends  or be deemed the
         holder of Warrant  Shares or any other  securities  of the Company that
         may at any time be issuable on the exercise hereof for any purpose, nor
         shall  anything  contained  herein  be  construed  to  confer  upon the
         Purchaser,  as such,  any of the rights of a stockholder of the Company
         or any right to vote for the  election of  directors or upon any matter
         submitted  to  stockholders  at any  meeting  thereof,  or to  give  or
         withhold   consent  to  any   corporate   action   (whether   upon  any
         recapitalization,  issuance of stock, reclassification of stock, change
         of par  value,  or  change  of  stock to no par  value,  consolidation,
         merger,  conveyance or otherwise) or to receive notice of meetings,  or
         to receive  dividends or  subscription  rights or  otherwise  until the
         Warrant shall have been exercised as provided herein.  However,  at the
         time of the exercise of this Warrant pursuant to Section 3 hereof,  the
         Warrant Shares so purchased  hereunder  shall be deemed to be issued to
         such  Holder  as the  record  owner of such  shares  as of the close of
         business on the date on which this Warrant shall have been exercised.

                                       3
<PAGE>

8.       SECURITY.  This  Warrant  and  the  Warrant  Shares  secure  all of the
         obligations  of the Holder  under the  promissory  note for One Hundred
         Fifty Thousand Dollars  ($150,000.00) in the form attached as EXHIBIT B
         to the Advisory Agreement (the "Note"), including (i) all principal of,
         and interest (including, without limitation, any interest which accrues
         after  the  commencement  of any  case,  proceeding  or  other  actions
         relating to the bankruptcy,  insolvency or reorganization of the Holder
         and any  other  amounts  owing) on the  Note,  (ii) all  other  amounts
         payable  by the Holder  under  Note  (including  expenses  incurred  in
         connection  with the enforcement of the Note) and (iii) any renewals or
         extensions of any of the foregoing.

9.       ASSIGNMENT AND TRANSFER OF WARRANT.

(a)      This  Warrant may be assigned by the  surrender of this Warrant and the
         Assignment  Form  annexed  hereto  duly  executed  at the office of the
         Company (or such other  office or agency of the Company or its transfer
         agent  as the  Company  may  designate  by  notice  in  writing  to the
         registered Holder hereof at the address of such Holder appearing on the
         books of the Company);  provided, further, that this Warrant may not be
         resold or  otherwise  transferred  except  (i) with the  prior  written
         consent of the  Company,  (ii) in a  transaction  registered  under the
         Securities  Act  of  1933,  as  amended  (the  "Act"),  or  (ii)  in  a
         transaction pursuant to an exemption,  if available,  from registration
         under the Act and whereby,  if reasonably  requested by the Company, an
         opinion of counsel  reasonably  satisfactory to the Company is obtained
         by the Holder of this Warrant to the effect that the  transaction is so
         exempt.  Subject to Section 9(b) below,  the Warrant  Shares may not be
         resold or otherwise transferred except (i) in a transaction  registered
         under  the Act,  or (ii) in a  transaction  pursuant  to the  exemption
         afforded  by  Rule  144 of the  Act,  if  available,  and  whereby,  if
         reasonably  requested by the Company,  an opinion of counsel reasonably
         satisfactory  to the Company is obtained by the Holder of this  Warrant
         to the effect that the transaction is so exempt.

(b)      Neither this Warrant nor the Warrant  Shares may be transferred so long
         as any principal and/or interest of the Note remains outstanding.

10.      LOSS,  THEFT,  DESTRUCTION  OR  MUTILATION  OF WARRANT;  EXCHANGE.  The
         Company represents  warrants and covenants that (a) upon receipt by the
         Company of evidence and/or indemnity  reasonably  satisfactory to it of
         the loss,  theft,  destruction  or  mutilation  of any Warrant or stock
         certificate representing the Warrant Shares, and in case of loss, theft
         or  destruction,  of indemnity  reasonably  satisfactory to it, and (b)
         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
         this Warrant or stock  certificate,  without any charge therefor.  This
         Warrant is exchangeable  at any time for an equal  aggregate  number of
         Warrants  of  different  denominations,  as  requested  by  the  holder
         surrendering the same, or in such  denominations as may be requested by
         the Holder  following  determination  of the Exercise Price. No service
         charge  will be made for such  registration  or  transfer,  exchange or
         reissuance.

11.      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 be a Saturday, Sunday or a legal holiday, then such action
         may be taken or such right may be exercised on the next  succeeding day
         not a legal holiday.

12.      EFFECT OF CERTAIN  EVENTS.  If at any time  while  this  Warrant or any
         portion   thereof  is  outstanding  and  unexpired  there  shall  be  a
         transaction  (by  merger or  otherwise)  in which  more than 50% of the
         voting  power of the Company is disposed of  (collectively,  a "Sale or
         Merger  Transaction"),  the Holder of this Warrant shall have the right
         thereafter to purchase,  by exercise of this Warrant and payment of the
         aggregate  Exercise Price in effect  immediately  prior to such action,
         the kind and amount of shares and other  securities  and property which
         it  would  have  owned or have  been  entitled  to  receive  after  the
         happening  of  such   transaction   had  this  Warrant  been  exercised
         immediately prior thereto, subject to further adjustment as provided in
         Section 12.

13.      ADJUSTMENTS  OF  EXERCISE  PRICE AND NUMBER OF WARRANT  SHARES.  In the
         event the  Company  shall  issue  additional  shares  of  Common  Stock
         pursuant to a 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

                                       4
<PAGE>

         increased. 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.

14.      NOTICE OF  ADJUSTMENT.  Whenever the number of Warrant Shares or number
         or kind of securities or other property  purchasable  upon the exercise
         of this Warrant or the Exercise  Price is adjusted,  the Company  shall
         promptly mail to the Holder of this Warrant a notice  setting forth the
         number of Warrant Shares (and other securities or property) purchasable
         upon  the  exercise  of this  Warrant  and the  Exercise  Price of such
         Warrant Shares after such  adjustment and setting forth the computation
         of such  adjustment and a brief  statement of the facts  requiring such
         adjustment.

15.      AUTHORIZED  SHARES.  The Company  covenants  that during the period the
         Warrant  is  outstanding  and  exercisable,  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
         and all  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, regulation,  or rule of
         any applicable market or exchange.

16.      COMPLIANCE  WITH  SECURITIES  LAWS. (a) The Holder hereof  acknowledges
         that the Warrant Shares acquired upon the exercise of this Warrant,  if
         not registered (or if no exemption from registration exists), will have
         restrictions upon resale imposed by state and federal  securities laws.
         Each  certificate  representing the Warrant Shares issued to the Holder
         upon exercise (if not  registered,  for resale or  otherwise,  or if no
         exemption  from  registration   exists)  will  bear  substantially  the
         following legend:

          THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
         REGISTERED  UNDER THE FEDERAL OR APPLICABLE  STATE  SECURITIES LAWS AND
         INSTEAD ARE BEING ISSUED PURSUANT TO EXEMPTIONS CONTAINED IN SAID LAWS.
         THIS  WARRANT AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON  EXERCISE
         HEREOF MAY NOT BE TRANSFERRED UNLESS (1) A REGISTRATION  STATEMENT WITH
         RESPECT TO SUCH SECURITIES  SHALL BE EFFECTIVE UNDER THE SECURITIES ACT
         OF 1933,  AS AMENDED OR (2) THE  ISSUER OF THE  SECURITIES  REPRESENTED
         HEREBY   SHALL  HAVE   RECEIVED   AN  OPINION  OF  COUNSEL   REASONABLY
         SATISFACTORY  TO IT THAT NO VIOLATION OF SUCH ACT OR SIMILAR STATE LAWS
         WILL BE INVOLVED IN SUCH TRANSFER.

(b)      Without limiting the Purchaser's right to transfer, assign or otherwise
         convey the Warrant or Warrant Shares in compliance  with all applicable
         securities  laws,  the Holder of this Warrant,  by  acceptance  hereof,
         acknowledges that this Warrant and the Warrant Shares to be issued upon
         exercise  hereof  are being  acquired  solely for the  Purchaser's  own
         account  and not as a  nominee  for  any  other  party,  and  that  the
         Purchaser will not offer,  sell or otherwise dispose of this Warrant or
         any  Warrant  Shares to be issued upon  exercise  hereof  except  under
         circumstances that will not result in a violation of applicable federal
         and state securities laws.

17.      MISCELLANEOUS.

(a)      ISSUE DATE; CHOICE OF LAW; VENUE; JURISDICTION.  The provisions of this
         Warrant shall be construed and shall be given effect in all respects as
         if it had been issued and  delivered by the Company on the date hereof.
         This  Warrant  shall be binding upon any  successors  or assigns of the
         Company. This Warrant will be construed and enforced in accordance with
         and  governed by the laws of the State of New York,  except for matters
         arising under the Act, without  reference to principles of conflicts of
         law. Each of the parties consents to the exclusive  jurisdiction of the
         Federal and State Courts sitting in the County of New York in

                                       5
<PAGE>

         the State of New York in connection with any dispute arising under this
         Warrant and hereby waives,  to the maximum extent permitted by law, any
         objection,  including  any objection  based on FORUM NON  CONVENIENS or
         venue,  to the bringing of any such  proceeding  in such  jurisdiction.
         EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY.

(b)      MODIFICATION AND WAIVER.  This Warrant and any provisions hereof may be
         changed,  waived,  discharged  or  terminated  only by an instrument in
         writing  signed by the party against which  enforcement  of the same is
         sought.  Any amendment effected in accordance with this paragraph shall
         be binding upon the  Purchaser,  each future holder of this Warrant and
         the Company.  No waivers of, or exceptions  to, any term,  condition or
         provision  of this  Warrant,  in any one or more  instances,  shall  be
         deemed to be, or construed  as, a further or  continuing  waiver of any
         such term, condition or provision.

(c)      NOTICES. Any notice or other communication  required or permitted to be
         given  hereunder  shall be in writing by  facsimile,  mail or  personal
         delivery and shall be effective upon actual receipt of such notice. The
         addresses for such communications shall be to the addresses as shown on
         the books of the  Company or to the Company at the address set forth in
         the  Advisory  Agreement.  A party  may from  time to time  change  the
         address to which notices to it are to be delivered or mailed  hereunder
         by notice in accordance with the provisions of this Section 17(c).

(d)      SEVERABILITY.  Whenever 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 is held to be
         invalid,  illegal or  unenforceable in any respect under any applicable
         law or  rule  in  any  jurisdiction,  such  invalidity,  illegality  or
         unenforceability   shall  not  affect   the   validity,   legality   or
         enforceability   of  any  other  provision  of  this  Warrant  in  such
         jurisdiction or affect the validity,  legality or enforceability of any
         provision  in  any  other  jurisdiction,  but  this  Warrant  shall  be
         reformed,  construed  and  enforced  in  such  jurisdiction  as if such
         invalid,  illegal or  unenforceable  provision had never been contained
         herein.

(e)      SPECIFIC ENFORCEMENT.  The Company and the Holder acknowledge and agree
         that  irreparable  damage  would  occur  in the  event  that any of the
         provisions of this Warrant were not performed in accordance  with their
         specific terms or were  otherwise  breached.  It is accordingly  agreed
         that the parties shall be entitled to an injunction or  injunctions  to
         prevent or cure  breaches  of the  provisions  of this  Warrant  and to
         enforce  specifically  the terms and provisions  hereof,  this being in
         addition to any other remedy to which either of them may be entitled by
         law or equity.

                            [Signature Page Follows]

                                       6
<PAGE>

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

Dated:  July  __, 2006

                                                ELITE PHARMACEUTICALS, INC.

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

                                       7
<PAGE>

                                  PURCHASE FORM

SUBSCRIPTION (CASH)

The undersigned,  ___________________ (the "Holder"), pursuant to the provisions
of the Warrant of ELITE  PHARMACEUTICALS,  INC. ("the  Company")  granted to the
Holder (or its assignor) dated _____ (the "Warrant"), hereby agrees to subscribe
for and  purchase  ____________________  shares of the Common  Stock,  par value
$0.01 per share,  of the  Company  covered  by the  Warrant,  and makes  payment
therefor in full at the price per share provided by the Warrant.

Dated:                                      Signature:
      ----------------                                --------------------------

SUBSCRIPTION (CASHLESS EXERCISE)

The undersigned  Holder  ___________________,  pursuant to the provisions of the
Warrant,  hereby  elects  to  exchange  its  Warrant,  in whole  or in part,  as
appropriate,  for ______ shares of Common Stock, stated value $___ per share, of
the Company,  pursuant to the cashless  exercise  provisions of Section 3 of the
Warrant.

Dated:                                      Signature:
      ----------------                                --------------------------

INSTRUCTIONS FOR REGISTRATION OF STOCK:

                  Name
                      -------------------------------------------------
                            (please type or print in block letters)

                  Address
                         ----------------------------------------------

                  Address
                         ----------------------------------------------

<PAGE>

                    FORM OF ASSIGNMENT OR PARTIAL ASSIGNMENT

FOR VALUE RECEIVED _________________________ (the "Holder) hereby sells, assigns
and transfers unto

Name
    ------------------------------------------------------------------------
                    (please typewrite or print in block letters)

Address
       ---------------------------------------------------------------------

the right to purchase Common Stock,  as appropriate,  to the extent of _________
shares as to which such right is  exercisable  pursuant to this Warrant of ELITE
PHARMACEUTICALS,  INC. ("the Company") dated _____ granted to the Holder (or its
assignor),    and   does    hereby    irrevocably    constitute    and   appoint
_____________________,  attorney,  to transfer  same on the books of the Company
with full power of substitution in the premises.

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.

<PAGE>

                                     ANNEX I

                                IRREVOCABLE PROXY

                           ELITE PHARMACEUTICALS, INC.

From and after the date hereof, the undersigned, as record holder of the _______
shares of common  stock,  par  value  $0.01 per share of Elite  Pharmaceuticals,
Inc., a Delaware corporation (the "COMPANY"), hereby irrevocably (to the fullest
extent  permitted  by  law)  authorizes,   empowers,  appoints  and  constitutes
________,  the Company's current chief executive  officer,  as the undersigned's
proxy to (1) attend the any meeting of the  stockholders of the Company (and any
adjournments  thereof)  (each a  "STOCKHOLDER  MEETING"),  and  (2) to vote  (or
abstain from voting) the Shares (as defined below) of the Company, on any matter
submitted at any time at any  Stockholder  Meeting or via written consent to the
stockholders of the Company in their capacity as such and not pursuant to rights
granted by  contract,  in each case with the same  effect as if the  undersigned
were personally present at the Stockholder  Meeting or voting such securities or
personally  acting on any matters  submitted to the  stockholders of the Company
for approval or consent at any Stockholder  Meeting.  Upon the execution hereof,
all prior proxies given by the undersigned with respect to any of the Shares are
hereby  revoked,  and the  undersigned  agrees  that  during the term  hereof no
subsequent proxies will be given with respect to any of the Shares.

This proxy is irrevocable, is coupled with an interest, and in all of the Shares
held of record or by the undersigned.

For the purposes of this proxy,  "SHARES" means ________  shares of Common Stock
held of record by the  undersigned,  and all  voting  equity  securities  of the
Company  issued upon  conversion or exchange of, or in respect of, the foregoing
securities held of record by the  undersigned  and all voting  securities of the
Company issued to the undersigned in the future.

This proxy shall exist for so long as the undersigned owns any Shares.

If any  provision of this proxy or any part of any such  provision is held under
any circumstances to be invalid or unenforceable in any  jurisdiction,  then (a)
such provision or part thereof shall, with respect to such  circumstances and in
such  jurisdiction,  be deemed amended to conform to applicable laws so as to be
valid and  enforceable  to the fullest  possible  extent,  (b) the invalidity or
unenforceability  of such provision or part thereof under such circumstances and
in such  jurisdiction  shall not affect the validity or  enforceability  of such
provision  or  part  thereof  under  any  other  circumstances  or in any  other
jurisdiction, and (c) the invalidity or enforceability of such provision or part
thereof shall not affect the validity or  enforceability  of any other provision
of this  proxy.  Each  provision  of this proxy is  separable  from every  other
provision  of this  proxy,  and each  part of each  provision  of this  proxy is
separable from every other part of such provision.

This  proxy  shall be  governed  by the laws of the State of  Delaware,  without
giving effect to its choice or conflicts of laws provisions.

This proxy shall be filed with the Secretary of the Company.

THIS PROXY SHALL BE SIGNED EXACTLY AS THE STOCKHOLDER'S NAME APPEARS ON HIS, HER
OR ITS STOCK  CERTIFICATE(S).  JOINT  STOCKHOLDERS MUST EACH SIGN THIS PROXY. IF
SIGNED BY AN ATTORNEY IN FACT, THE POWER OF ATTORNEY MUST BE ATTACHED.

Dated as of                             INDIVIDUAL:
            ---------

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

                                        ADDRESS:

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

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

                                       2

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