On June 3, 2009 (the “Initial Closing Date”), Elite Pharmaceuticals, Inc., a Delaware corporation (the “Registrant”), conducted the initial closing (the “Initial Closing”) under that certain Strategic Alliance Agreement, dated as of March 18, 2009 (the “Alliance Agreement”), by and among the Registrant, on the one hand, and Epic Pharma, LLC, a Delaware limited liability company (the “Parent”), and Epic Investments, LLC, a Delaware limited liability company (including its successors and assigns, the “Purchaser”), on the other hand, as the same has been amended by the First Amendment (as defined below), and the Second Amendment (as defined below). The Registrant’s entry into the Alliance Agreement was previously disclosed by the Registrant in Current Report on Form 8-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 23, 2009 (the “March 23, 2009 Form 8-K”) and any disclosure contained herein relating to the Alliance Agreement is qualified in its entirety by reference to such exhibit.

Effective as of the Initial Closing Date, the Parent has commenced the development of 8 of its generic drug products at the Registrant’s facility pursuant to the Alliance Agreement with the intent of filing abbreviated new drug applications for obtaining United States Food and Drug Administration approval of such generic drug products.  In addition, the Registrant and the Parent have begun to share with each other certain resources, technology and know-how in the development of drug products, which the Registrant believes will benefit the continued development of its pain products, ELI-154 and ELI-216.

At the Initial Closing, the Registrant issued and sold to the Purchaser, in a private placement, pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended, 1,000 shares of its Series E Convertible Preferred Stock, par value $0.01 per share (the “Series E Preferred Stock”), at a price of $1,000 per share, each share convertible, at $0.05 per share (the “Conversion Price”), into 20,000 shares of Common Stock, par value $0.01 per share (the “Common Stock”). The Conversion Price is subject to adjustment for certain events, including, without limitation, dividends, stock splits, combinations and the like. The Conversion Price is also subject to adjustment for (a) the sale of Common Stock or securities convertible into or exercisable for Common Stock, for which the Purchaser’s consent was not required under the Series E Certificate (as defined below), at a price less than the then applicable Conversion Price, (b) the issuance of Common Stock in lieu of cash in satisfaction of the Registrant’s dividend obligations on shares of outstanding shares of its Series B 8% Convertible Preferred Stock, par value $0.01 per share, Series C 8% Convertible Preferred Stock, par value $0.01 per share, and/or Series D 8% Convertible Preferred Stock, par value $0.01 per share (the “Series D Preferred Stock”), and (c) the issuance of Common Stock as a result of any holder of Series D Preferred Stock exercising its right to require the Registrant to redeem all of such holder’s shares of Series D Preferred Stock pursuant to the terms thereof. The Purchaser also acquired a warrant to purchase 20,000,000 shares of Common Stock (the "Warrant"), exercisable on or prior to June 3, 2016, at a per share exercise price of $0.0625 (the “Exercise Price”), subject to adjustments for certain events, including, but not limited to, dividends, stock splits, combinations and the like. The Exercise Price of the Warrant will also be subject to adjustment for the sale of Common Stock or securities convertible into Common Stock, for which the Purchaser’s consent was not required under the Alliance Agreement, at a price less than the then