Summary of ELITE PHARMACEUTICALS INC /DE/

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

On March 18, 2009, Elite Pharmaceuticals, Inc., a Delaware corporation (the "Registrant"), entered into a Strategic Alliance Agreement (the "Alliance Agreement") with Epic Pharma, LLC, a Delaware limited liability company ("Epic"), and Epic Investments, LLC, a Delaware limited liability company and wholly-owned subsidiary of Epic (the "Purchaser"), pursuant to which the Registrant will commence a strategic relationship with Epic, a pharmaceutical company that operates a business synergistic to that of the Registrant in the research and development, manufacturing, sales and marketing of oral immediate and controlled release drug products. Under the Alliance Agreement (i) at least eight additional generic drug products will be developed by Epic at the Registrant's facility with the intent of filing abbreviated new drug applications for obtaining United States Food and Drug Administration ("FDA") approval of such generic drugs, (ii) the Registrant will be entitled to 15% of the profits generated from the sales of such additional generic drug products upon approval by the FDA, and (iii) Epic and the Registrant will 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 current drug products. In order to provide the Registrant with the additional capital necessary for the product development and synergies presented by the strategic relationship with Epic, Epic will invest in the Registrant through the purchase by its wholly-owned subsidiary, the Purchaser, of $3.75 million of newly issued shares of the Registrant's Series E Convertible Preferred Stock, par value US$0.01 per share (the "Series E Preferred Stock"), at a price of US$1,000 per share, each share convertible, at US$0.05 per share (the "Conversion Price"), into approximately 20,000 shares of its Common Stock, par value US$0.01 per share (the "Common Stock"), subject to certain adjustments. A copy of the Alliance Agreement is attached to this Form 8-K as Exhibit 10.1 and this summary of the terms of the Alliance Agreement is qualified in its entirety by reference to such Exhibit. Pursuant to the Alliance Agreement, Epic has agreed to guarantee the performance by the Purchaser of its obligations under the Alliance Agreement.

The Registrant, Epic and Purchaser will conduct an initial closing (the "Initial Closing") on or before April 30, 2009 (the date of such Initial Closing, the "Initial Closing Date"), provided that all conditions precedent contained in the Alliance Agreement have been satisfied or waived by the appropriate party.

The consummation of the transactions contemplated in the Alliance Agreement will permit the Registrant to continue its current operation as a pharmaceutical company, thereby allowing the Registrant the opportunity to maximize its value for the benefit of its stockholders and avoiding a forced sale of substantially all of its assets. In the event the transactions contemplated in the Alliance Agreement are not consummated, it is likely that the Registrant would be required to promptly dispose of certain of its material assets, including all of its facilities and both its manufacturing and development equipment, regardless of whether the value of such assets is depressed due to the current economic conditions. If the Registrant were to liquidate after such disposition, the Registrant estimates that the amount of its current obligations and the liquidation preference maintained by the Registrant's Series D Preferred Stock (as defined below) would exceed the amount that the Registrant would likely receive as a result of such liquidation. Accordingly, if the Registrant does not complete the closing of the Alliance Agreement and, as a result, is compelled to sell its assets in today's market and subsequently liquidates, the Registrant believes that there would be no amounts distributable to the

holders of its Series C Preferred Stock (as defined below), its Series B Preferred Stock (as defined below) and its Common Stock (as defined below).

The Registrant believes that the completion of the transactions contemplated by the Alliance Agreement represents the Registrant's best opportunity to create and maximize value for all of its stockholders by (a) adding a new revenue source from which the Registrant will be able fund a portion of its operations following commercialization of certain of Epic's products to be developed at the Facility (as defined below), (b) engaging Epic, which has experience in the development, manufacture and licensing of pharmaceutical products, as a strategic partner, and (c) providing funding to the Registrant to participate in its strategic relationship with Epic and to continue its development of its pain products.

Use of Facility and Joint Development of Drug Products

On the Initial Closing Date, Epic and its employees and consultants will commence using a portion of the Registrant's facility located at 165 Ludlow Avenue, Northvale, New Jersey (the "Facility"), for the purpose of developing new generic drug products, all at Epic's sole cost and expense (other than Facility related expenses), for a period of at least three years (the "Initial Term"), unless sooner terminated or extended pursuant to the Alliance Agreement or by mutual agreement of the Registrant and Epic (the Initial Term, as shortened or extended, the "Term"). In addition to the use of the Facility, Epic will use the Registrant's machinery, equipment, systems, instruments and tools residing at the Facility (collectively the "Personal Property") in connection with its joint drug development project at the Facility. Epic will have the right, exercisable in its sole discretion, to extend the Initial Term for two periods of one year each by giving written notice to the Registrant of such extension within ninety days of the end of the Initial Term or any extension thereof. Any such extension will be on the same terms and conditions contained in the Alliance Agreement. The Registrant will be responsible for (and Epic will have no responsibility for) any maintenance, services, repairs and replacements in, to or of the Facility and the Personal Property, at the Registrant's sole cost and expense, unless any such maintenance, service, repair or replacement is required as a result of the negligence or misconduct of Epic's employees or representatives, in which case Epic will be responsible for the costs and expenses associated therewith.

During the Term, Epic will use and occupy a portion of the Facility and use the Personal Property for the purpose of developing (i) at least four control release products (the "Identified CR Products") and (ii) at least four immediate release products (the "Identified IR Products"), the identity of each will be subject to the prior agreement between Epic and the Registrant. If, during the Term, Epic determines, in its reasonable business judgment, that the further or continuing development of any Identified CR Product and/or Identified IR Product is no longer commercially feasible, Epic may, upon written notice to the Registrant, eliminate from development under the Alliance Agreement such Identified CR Product and/or Identified IR Product, and replace such eliminated product with another control release or immediate release product, as applicable.

Epic will also use a portion of the Facility and use the Personal Property for the purpose of developing (x) additional control release products of Epic (the "Additional CR Products"), subject to the mutual agreement of Epic and the Registrant, and/or (y) additional immediate release products of Epic (the "Additional IR Products"), subject to the mutual agreement of the Registrant and Epic (each Identified CR Product, Identified IR Product, Additional CR Product and Additional IR Product, individually, a "Product," and collectively, the "Products"). Under

the Alliance Agreement, Epic may not eliminate an Identified CR Product or an Identified IR Product unless it replaces such Product with an Additional CR product or Additional IR Product, as the case may be. Subject to the mutual agreement of the parties as to additional consideration and other terms, Epic may use and occupy the Facility for the development of other products of Epic (in addition to the Products).

As additional consideration for Epic's use and occupancy of a portion of the Facility and its use of the Personal Property during the Term and the issuance and delivery by the Registrant to the Purchaser of the Milestone Shares (as defined below) and Milestone Warrants (as defined below), for the period beginning on the First Commercial Sale (as defined in the Alliance Agreement) of each Product and continuing for a period of ten years thereafter (measured independently for each Product), Epic will pay the Registrant a cash fee (the "Product Fee") equal to fifteen percent of the Profit (as defined in the Alliance Agreement), if any, on each of the Products.

With respect to each Identified CR Product and Additional CR Product . . .