Exhibit 10.1

Execution Copy

               EMPLOYMENT AGREEMENT, dated January 3, 2008 (this “Agreement”),
by and between Elite Pharmaceuticals, Inc., a Delaware corporation (“Company”),
and Dr. Stuart Apfel (“Executive”).

R E C I T A L S:

               WHEREAS, Executive desires to provide employment services to the
Company, and the Company desires to retain the employment services of Executive,
pursuant to the terms of this Agreement.

               In consideration of the mutual promises herein contained, the
parties hereby agree as follows:

A G R E E M E N T:

               1.      Employment.

                       1.1.      General. The Company hereby employs Executive
in the capacity of Chief Medical Officer at the compensation rate and benefits
set forth in Section 2 hereof for the Term (as defined in Section 3.1 hereof).
Executive hereby accepts such employment, subject to the terms herein contained.
In such capacity (a) Executive shall report to, and follow the directions of,
the Chief Executive Officer (the “CEO”), (b) perform and carry out such duties
and responsibilities that are reasonably consistent with Executive’s position
and responsibilities and this Agreement, and (c) perform and discharge such
additional duties and responsibilities as may be determined from time to time by
the CEO of the Company or the Board of Directors of the Company (the “Board”)
that are reasonably consistent with Executive’s position.

                       1.2.      Time Devoted to Position. During the Term,
Executive shall devote substantially all of his business time, attention and
skills to the business and affairs of Company, including its subsidiaries,
entities and organizations presently existing or hereafter formed, organized or
acquired by Company (each, a “Subsidiary” and collectively, the “Subsidiaries”),
during at least three (3) business days each calendar week. Nothing in this
Agreement shall prevent Executive from devoting reasonable time and attention to
personal, public and charitable affairs, as long as such activities do not
interfere with the effective performance of his duties hereunder.

               2.      Compensation and Benefits.

                       2.1.      Salary. During the Term, the Company shall pay
to Executive, and Executive shall accept, as full compensation for any and all
services rendered and to be rendered by him during such period to Company in all
capacities the following: (i) a base salary at the annual rate of Two Hundred
Twenty Thousand Dollars ($220,000) during the Term (the “Base Salary”); and (ii)
any additional bonus and the benefits set forth in Sections 2.2, 2.3 and 2.4
hereof. The Base Salary shall be payable in accordance with the regular payroll
practices of the Company applicable to its senior executives, less such
deductions as shall be required to be

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withheld by applicable law and regulations or otherwise. The Board may increase
the Base Salary in the sole discretion.

                      2.2.     Bonus.

                      (a)      Discretionary Bonuses. Following the end of each
calendar year during the Term, commencing with the calendar year beginning on
January 1 2008, wholly subject to the discretion of the Board (or any committee
of the Board delegated authority over employee compensation matters), the
Company may award Executive a bonus of up to fifty percent (50%) of the
Executive’s then Base Salary (initially, One Hundred Ten Thousand Dollars
($110,000)), payable (at the option of the Company) in cash or in shares of
Common Stock (as defined below) valued at the closing price of the Common Stock
on the immediately preceding trading day, for the relevant calendar year
(pro-rated for periods of less than a full calendar year). For purposes of
determining whether such discretionary bonuses shall be payable, the Board (or
any committee of the Board delegated authority over employee compensation
matters), shall discuss with the Executive certain annual goals to the achieved
by the Company and/or the Executive during the applicable year and upon
determination of the amount of such bonus, the Company shall pay such bonus in
accordance with its customary payroll practices. Such goals will be established
by the Board (or any committee of the Board delegated authority over employee
compensation matters) and discussed with the Executive in good faith and within
a reasonable time of the commencement of each calendar year.

                      (b)      Limitation on Bonuses. Notwithstanding anything
to the contrary in this Section 2.2 or Section 3, no annual bonus shall be
deemed to have accrued or otherwise to have become payable for the purposes of
this Agreement unless this Agreement shall remain in full force and effect up to
and through the end of the calendar year in respect of which such bonus was to
be awarded; provided that in the case of Executive’s termination by the Company
without Cause or termination by Executive for Good Reason, any accrued annual
bonus shall be payable to Executive, on a pro rated basis, for the portion of
the year up to, and including, the Date of Termination.

                      2.3.      Stock Options.

                                2.3.1.      Initial Options. Effective on the
date hereof, the Company shall grant to Executive options (the “Initial
Options”) to purchase One Hundred Twenty Thousand (120,000) shares of common
stock, par value $0.01 per share (the “Common Stock”) of the Company, pursuant
to the Company’s 2004 Stock Option Plan, as amended (the “Plan”). The Initial
Options:

     

     (i)        shall, to the maximum extent permitted under applicable law,
qualify as “incentive stock options” within the meaning of Section 422 of the
Internal Revenue Code;

     (ii)       be fully vested and immediately exercisable in full as of the
date hereof;

     (iii)      have a per share exercise price equal to $1.75; and

 

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     (iv)      be subject to the terms and conditions set forth in the Plan and
a stock option agreement to be entered into by the Company and Executive,
simultaneously herewith (the “Option Agreement”). Such grant of options pursuant
to this Section 2.3.1 shall be subject to the terms of the Plan and the Option
Agreement. The shares of Common Stock issuable upon exercise of the Initial
Options are subject to an effective registration statement filed with the
Securities and Exchange Commission (the “SEC”).

                                2.3.2.      Milestone Options. In addition to
the other grants set forth in this Section 2.3, effective on the date hereof,
the Company shall grant to Executive options (the “Milestone Options”) to
purchase up to Two Hundred Eighty Thousand (280,000) shares of Common Stock,
pursuant to the Plan. The Milestone Options:

     

     (i)        shall, to the maximum extent permitted under applicable law,
qualify as “incentive stock options” within the meaning of Section 422 of the
Internal Revenue Code;

     (ii)       have a per share exercise price equal to $1.75;

     (iii)      shall vest and become exercisable as follows:

           

        (A)      as to 80,000 shares upon the successful completion, as
determined by the Board, of a Company sponsored Phase III clinical trial of the
Company’s developmental drug product referred to as ELI-216;

        (B)      as to 80,000 shares upon the successful completion, as
determined by the Board, of a Company sponsored Phase III clinical trial of the
Company’s developmental drug product referred to as ELI-154;

        (C)      as to 80,000 shares upon the successful completion, as
determined by the Board, by the Company during the Term of a Company sponsored
long-term safety study for the Company’s developmental drug product referred to
as ELI-216; and

        (D)      as to 40,000 shares upon the closing of an exclusive product
license for the United States national market, or product sale transaction of
all of the Company’s ownership rights, for either ELI-216 or ELI-154.

             (iv)      be subject to the terms and conditions set forth in the
Plan and Option Agreement. All such options shall be subject to acceleration
pursuant to Section 3 hereof.

Upon the earlier to occur of the expiration of (x) the third anniversary of the
Commencement Date or (y) the termination of Executive’s employment hereunder,
all unvested Milestone Options granted shall automatically terminate and all
vested but unexercised Milestone Options shall terminate to the extent
unexercised within ninety (90) days of such date and in accordance with the
terms of the stock option agreement by and between the Executive and the Company
with respect to the Milestone Options and the Plan. The shares of Common Stock
issuable upon

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exercise of the Milestone Options are subject to an effective registration
statement filed with the SEC.

                                2.3.3.      Additional Options. In addition to
the other grants set forth in this Section 2.3, the Company, in its sole
discretion, may grant to Executive additional options (the “Additional Options”)
to purchase shares of Common Stock, pursuant to the Plan. The Additional Options
shall (i) to the maximum extent permitted under applicable law, qualify as
“incentive stock options” within the meaning of Section 422 of the Internal
Revenue Code, (ii) have a per share exercise price equal the then fair market
value of a share of Common Stock, (iii) vest, as determined by the Board, in its
sole discretion, and (iv) be subject to the terms and conditions set forth in
the Plan and Option Agreement. All such options shall vest and be exercisable,
as determined by the Board, in its sole discretion and shall be subject to
acceleration pursuant to Section 3 hereof.

                                2.3.4.      Pledge of Common Stock underlying
the Options. Executive may not, directly or indirectly, sell, assign, transfer,
offer, grant a participation in, mortgage, pledge, hypothecate, create a
security interest in or lien upon, encumber, donate, contribute, place in trust,
enter into any voting agreement with respect to, the shares of Common Stock
underlying the Initial Options, Milestone Options or Additional Options without
the prior written consent of the Company. During the Term, Executive shall not,
directly or indirectly, enter into any short sales or “derivative” or “hedging”
transactions or strategies, nor maintain any “short” positions, with respect to
the Common Stock.

                                2.3.5.      Conflict. In the event of any
conflict between the terms of the Plan or this Agreement, the terms of this
Agreement shall govern.

                      2.4.      Executive Benefits.

                                2.4.1.      Expenses. Company shall promptly
reimburse Executive for expenses he reasonably incurs in connection with the
performance of his duties (including business travel and entertainment expenses)
hereunder, against receipts or other appropriate written evidence of such
expenditures as required by the appropriate Internal Revenue Service regulations
or by the Company; provided, that, all expenses in excess of US$500.00 per
month, individually or in the aggregate, shall be approved by the Chief
Executive Officer as a condition to reimbursement thereof.

                                2.4.2.      Company Plans. Executive shall be
entitled to participate in such employee benefit and welfare plans and programs
as Company may from time to time generally offer or provide to senior executive
officers of Company or the Subsidiaries, including participation in life
insurance, health and accident, medical plans and programs, and profit sharing
and retirement plans. Nothing in the foregoing shall limit or restrict the
Company’s discretion to amend, revise or terminate any benefit or plan without
notice to or consent of the Executive.

                                2.4.3.      Vacation. Executive shall be
entitled to fifteen (15) business days of paid vacation per calendar year, pro
rated for periods of less than a full calendar year; provided, that the timing
and duration of any particular vacation shall not interfere with the

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business of the Company or the effective performance of Executive’s duties
hereunder, as reasonably determined in good faith by the Chief Executive
Officer. The Company acknowledges that the religious holidays set forth on
Exhibit A hereto shall be valid vacation days regardless of any potential
interference in the business of the Company or the performance of Executive’s
duties hereunder.

                                2.4.4.      Automobile Allowance. During the
Term, the Company shall pay the Executive a monthly automobile allowance in the
amount of Four Hundred Twenty Dollars ($420).

                                2.4.5.      Life Insurance. The Company will
obtain and maintain during the Term a term life insurance policy in the amount
of Five Hundred Thousand Dollars ($500,000) on the life of the Executive payable
to the estate of the Executive in the event of the Executive’s death during the
Term.

               3.      Employment Term; Termination.

                       3.1.      Employment Term. Executive’s employment
hereunder shall commence as January 3, 2008 (the “Commencement Date”) and,
subject to Section 1.2 hereof and except as otherwise provided in Section 3.2
hereof, shall continue for one (1) year following the Commencement Date and,
thereafter, shall automatically be renewed (upon the compensation terms provided
herein other than option grants which shall be negotiated with the Executive at
such time) for successive one (1) year terms (each, a “Term Year” and all such
Term Years collectively, the “Term”) commencing at the end of the initial Term
Year, unless Executive or Company shall have provided a Notice of Termination
(as defined in Section 3.4.1 hereof) electing not to renew the Term to the other
party at least sixty (60) days prior to such scheduled expiration. The Company
and Executive hereby agree to participate in good faith negotiations regarding
any requested modifications of the terms of the Agreement during the period
commencing no later than ninety (90) days prior to the end of the applicable
Term Year. Upon the expiration or non-renewal of the Term pursuant to this
Section 3.1 or its termination pursuant to Sections 3.2.1 through 3.2.5 hereof,
inclusive, Executive shall be released from all duties hereunder (except as set
forth in Sections 4 and 5 hereof) and the obligations of Company to Executive
shall be as set forth in Section 3.3 hereof only.

                      3.2.      Events of Termination. The Executive’s
employment shall terminate upon the occurrence of any one or more of the
following events:

                                3.2.1.      Death. In the event of Executive’s
death, Executive’s employment shall terminate on the date of his death. Amounts
payable to Executive’s estate upon Executive’s death are set forth in Section
3.3.1 below.

                                3.2.2.      Disability. In the event of
Executive’s Disability (as hereinafter defined), Company may, at its option,
terminate Executive’s employment by giving a Notice of Termination to Executive.
The Notice of Termination shall specify the Date of Termination (as defined in
Section 3.4.2. hereof), which date shall not be earlier than thirty (30) days
after the Notice of Termination is given. For purposes of this Agreement,
“Disability”

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means a disability as defined in any long-term disability insurance policy
(reasonably satisfactory to the Executive) provided by Company and insuring
Executive or, in the absence of any such policy, the inability of Executive for
120 days in any twelve (12) month period to substantially perform his duties
hereunder as a result of a physical or mental illness, all as determined in good
faith by the Board, in its sole discretion, based upon consultation with an
independent physician. Amounts payable to Executive upon termination due to
Disability are set forth in Section 3.3.1 below.

                                3.2.3.      Cause. Company may, at its option,
terminate Executive’s employment for “Cause” as set forth in a Notice of
Termination to Executive specifying the reasons for termination. The Notice of
Termination shall specify the Date of Termination, which date may be the date of
such Notice of Termination. For purposes of this Agreement, “Cause” shall mean
(i) Executive’s conviction of, guilty or no contest plea to, or confession of
guilt of, any felony or any other crime involving moral turpitude; (ii) an act
or omission by Executive in connection with his employment that constitutes
fraud, criminal misconduct, breach of fiduciary duty, dishonesty, gross
negligence, malfeasance, willful misconduct or other conduct that is materially
harmful or detrimental to Company; (iii) excessive use of alcohol or illegal
drugs so as to interfere with the performance of Executive’s obligations under
this Agreement; (iv) a breach by Executive of this Agreement (including a breach
of any representation or warranty set forth in this Agreement); (v) a continuing
failure by Executive to perform such duties as are assigned to Executive by the
CEO or the Board in accordance with this Agreement, other than a failure
resulting from a Disability; (vi) Executive’s knowingly taking any action on
behalf of Company or any of its affiliates without appropriate authority to take
such action (the approval of the CEO shall be deemed to be appropriate
authority); (vii) Executive’s knowingly taking any action in conflict of
interest with Company or any of its affiliates given Executive’s position with
Company; and/or (viii) the commission of an act of personal dishonesty by
Executive in connection with Company that involves personal profit to him or his
family members; provided that, in the case of clauses (ii), (iv), (v), (vi) and
(vii) above, “Cause” shall be subject to delivery by the Company of written
notice to Executive setting forth such damage, detriment, breach or failure (as
the case may be) and, to the extent such damage, detriment, breach or failure is
curable by Executive within a thirty (30) calendar day period, the expiration of
a thirty (30) calendar day period for Executive to cure such damage, detriment,
breach or failure. Amounts payable to Executive upon termination for Cause are
set forth in Section 3.3.1 below.

                                3.2.4.      Without Cause By Company. Company
may, at its option, terminate Executive’s Employment for any reason or no reason
whatsoever (other than for the reasons set forth elsewhere in this Section 3.2)
by giving a Notice of Termination to Executive. The Notice of Termination shall
specify the Date of Termination, which date shall not be earlier than sixty (60)
days after the Notice of Termination is given. Amounts payable to Executive upon
termination without cause are set forth in Section 3.3.2 below.

                                3.2.5.      Executive Termination. Executive
may, at his option, terminate his employment by giving a Notice of Termination
to the Company. The Notice of Termination shall specify the Date of Termination,
which date shall not be earlier than sixty (60) days after the Notice of
Termination is given, and whether Executive alleges Good Reason for resignation
from the Company. Amounts payable to Executive upon Executive’s voluntary

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termination are set forth in Section 3.3.1 below. A resignation by the Executive
for “Good Reason” shall not constitute a voluntary termination by the Executive
pursuant to this Section 3.2.5, but shall constitute, for purposes of this
Agreement, a termination without Cause by the Company pursuant to Section 3.2.4.
Executive shall be deemed to have resigned for “Good Reason” if (i) the Company
modifies an existing Company policy, or implement a new Company policy, which
has the effect of prohibiting, or materially restricting, Executive’s ability to
perform services for Parallax Clinical Research, LLC (“Parallax”) or the clients
of Parallax (other than as may restricted under the express terms of this
Agreement) and the Company fails to amend such policy within thirty (30) days
written notice by Executive to the CEO and the Board of the perceived effect of
such policy, (ii) Executive is assigned, without Executive’s express written
consent, duties materially inconsistent with his positions with the Company, and
such assignment is not revoked by the CEO or the Board within thirty (30) days
written notice to the CEO and the Board by Executive of such assignment or (iii)
the Company breaches any material provision of this Agreement and such breach is
not cured, to the extent curable, by the Company within thirty (30) days receipt
of written notice of such breach from Executive.

                      3.3.      Obligations of Company Following Termination of
the Term. Following termination of Executive’s employment under the respective
circumstances described below, Company shall pay to Executive or his estate, as
the case may be, the following compensation and provide the following benefits
in full satisfaction and final settlement of any and all claims and demands that
Executive now has or hereafter may have hereunder against Company. In connection
with Executive’s receipt of any or all monies and benefits to be received
pursuant to this Section 3.3, Executive shall have no duty to seek subsequent
employment during the period in which he is receiving severance payments and any
Severance Amount (as defined in Section 3.3.2 hereof) shall not be reduced
solely as a result of Executive’s subsequent employment by an entity other than
Company (other than as a result of any violation of Sections 4 or 5 of this
Agreement). Executive acknowledges that any non-renewal or expiration of this
Agreement shall not be deemed an event of termination that would trigger any
obligations of Company pursuant to this Section 3.3.

                                3.3.1.      Termination For Cause by the Company
or Termination Due to Executive’s Death or Disability or Termination by
Executive. In the event that Executive’s employment is terminated by Company for
Cause pursuant to Section 3.2.3 hereof or by reason of Executive’s Disability
pursuant to Section 3.2.2 hereof or by reason of Executive’s death pursuant to
Section 3.2.1 hereof or Executive terminates his employment with the Company
pursuant to Section 3.2.5 hereof, (i) all unvested stock options under this
Agreement terminate as of the Date of Termination, (ii) all vested and
unexercised stock options under this Agreement as of the Date of Termination
granted by Company to Executive shall be exercisable for a period of ninety (90)
days from the Date of Termination in accordance with the terms of the Plan and
the applicable stock option agreements, (iii) the Company shall pay to
Executive, payable in accordance with the Company’s regular payroll practices,
an amount equal to any unpaid but earned Base Salary through the Date of
Termination and (iv) the Company shall reimburse Executive for any unpaid
expenses pursuant to Section 2.4.1 hereof.

                                3.3.2.      Termination Without Cause by the
Company. In the event that Executive’s employment is terminated by Company
pursuant to Section 3.2.4 hereof, (i) all

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unvested stock options under this Agreement shall terminate as of the Date of
Termination, (ii) all vested and unexercised stock options shall be exercisable
for a period of ninety (90) days from the Date of Termination, (iii) the Company
shall pay to Executive, subject to Executive’s continued compliance with the
terms of Sections 4 and 5 hereof, the Severance Amount, and (iv) the Company
shall reimburse Executive for any unpaid expenses pursuant to Section 2.4.1
hereof. For purposes hereof, “Severance Amount” shall mean the sum of (i) the
Base Salary in effect for the remainder of the applicable Term Year, (ii) a per
diem amount based upon the Base Salary for each unused vacation day remaining in
the applicable Term Year and (iii) the continuation of the benefits provided to
Executive under Section 2.4.4 and 2.4.5 of this Agreement for the remainder of
the applicable Term Year. Any payments made in accordance with this Section
3.3.2 shall be made in accordance with Company’s regular payroll practices and
shall be subject to Executive’s compliance with Sections 4 and 5 of this
Agreement and the delivery by Executive to the Company of an unconditional
release of all claim Executive may have against the Company and its affiliates.
The breach by Executive of any provision of Sections 4 or 5 shall result in a
forfeiture of any unpaid portion of the Severance Amount.

                                3.3.3.      Other Remedies. Nothing in this
Section 3.3 shall limit or restrict Company from pursuing or obtaining any other
remedies that may be available to it in law, contract or otherwise, in addition
to the remedies set forth herein, in response to any improper conduct of
Executive, or conduct in violation of the parties’ agreements.

                                3.3.5.      Termination of Employment. This
Agreement shall terminate simultaneously with the termination of Executive’s
employment by the Company for any reason; provided, however, that the covenants
set forth in Section 4 and 5 of this Agreement shall survive the termination of
this Agreement to the extent provided in such Sections.

                      3.4.      Definitions.

                                3.4.1.      “Notice of Termination” Defined.
“Notice of Termination” means a written notice that indicates the specific
termination provision relied upon by Company or Executive and, in the case of a
termination pursuant to Sections 3.2.2 or 3.2.3 hereof, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
Executive’s employment under the termination provision so indicated.

                                3.4.2.      “Date of Termination” Defined. “Date
of Termination” means such date as Executive’s employment expires in accordance
with Section 3.1 hereof or is terminated in accordance with Section 3.2 hereof.

              4.      Protection of Confidential Information and Trade Secrets;
Non-Competition; No Solicitation.

                      4.1.      Definitions.

                                4.1.1.      “Confidential Information” Defined.
“Confidential Information” means any and all information (oral or written)
relating to Elite or any entity controlling, controlled by, or under common
control with Elite, including information relating to:

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technology, Inventions, intellectual property, research, test procedures and
results; machinery and equipment; manufacturing processes; financial
information; products; identity and description of materials and services used;
purchasing; costs; pricing; customers and prospects; advertising, promotion and
marketing; and selling, servicing and information pertaining to any governmental
investigation, except such information that becomes public, other than as a
result of a breach of the provisions of Section 4.2 hereof, or was lawfully
known by Executive prior to his employment by the Company. Without limiting the
foregoing, Confidential Information shall also include all information related
to products targeted for development by Elite, subjects of research and
development, projected launch dates, the FDA protocols, projected dates for
regulatory filings, consumer studies, market research, clinical research,
business plans, planned expenditures, profit margins, strategic evaluation plans
and initiatives, and those commissioned by Elite through outside vendors or
consultants, and the content of all business and strategic planning conducted
with or through third parties. Executive’s obligation not to disclose
Confidential Information shall be as set forth in Section 4.2 of this Agreement.

                                4.1.2.      “Inventions” Defined. “Inventions”
means any and all inventions, discoveries, improvements, patent, copyrights
and/or other property rights, whether or not patented or patentable made,
conceived, created, developed or contributed to by Executive during the Term
which are (i) directly or indirectly related to the business, operations or
activities of the Company or any of its subsidiaries or affiliates, (ii)
directly or indirectly related to Executive’s employment by, or performance of
other services (including as a director, manager, officer, advisor, agent,
representative, consultant or other independent contractor) for, the Company or
any of its subsidiaries or affiliates, or (iii) based upon Confidential
Information.

                                4.1.3.      “Remaining Rights” Defined.
“Remaining Rights” means all of Executive’s rights, titles and interests in and
to the following intellectual property as of the date of this Agreement: any and
all inventions, discoveries, improvements, sales approaches, sales material,
training material, computer software, documentation, and other copyrightable
works or any other intellectual property (including, but not limited to,
materials or services subject to trademark or service mark registration), made,
conceived, created, developed or contributed to by Executive during the Term or
the term of any prior employment or consulting relationship between Executive
and the Company which are (i) directly or indirectly related to the business,
operations or activities of the Company or any of its subsidiaries or
affiliates, (ii) directly or indirectly related to Executive employment by, or
performance of other services (including as a director, manager, officer,
advisor, agent, representative, consultant or other independent contractor) for,
the Company or any of its subsidiaries or affiliates, or (iii) based upon
confidential or proprietary information which is or was owned by the Company or
any of its subsidiaries or affiliates at the time that such intellectual
property was made, conceived, created, developed or contributed to by Executive.

                                4.1.4. “Work for Hire” Defined. “Work for Hire”
means any and all sales approaches, sales material, training material, computer
software, documentation, other copyrightable works or any other intellectual
property (including, but not limited to, materials or services subject to
trademark or service mark registration, but excluding Inventions) made,
conceived, created, developed or contributed to by Executive during the Term and
which are (i) directly or indirectly related to the business, operations or
activities of the Company or any of its

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subsidiaries or affiliates, (ii) directly or indirectly related to Executive’s
employment by, or performance of other services (including as a director,
manager, officer, advisor, agent, representative, consultant or other
independent contractor) for, the Company or any of its subsidiaries or
affiliates, or (iii) based upon Confidential Information.

                                4.1.5. “Term” Defined for purposes of Sections 4
and 5. “Term”, as used solely in Sections 4 and 5 of this Agreement, means the
entire duration of the Executive’s relationship with the Company, including,
without limitation, any prior or subsequent employment periods as well as the
term of any prior or subsequent consulting or independent contracting
arrangements with the Company; provided that the manner in which such term is
used in the remaining portions of this Agreement shall not be altered or
expanded by the definition of such term for purposes of Sections 4 and 5 hereof.

                     4.2.      Non-disclosure of Confidential Information.
Executive agrees that he shall not use or disclose, either during the Term or at
any time thereafter for a period of five (5) years from termination of
Executive’s employment with the Company (except to the extent necessary during
the Term in connection with the necessary and proper performance of Executive’s
duties on behalf of Elite and in good faith, or as required by law or
governmental authority) any Confidential Information.

                     4.3.      Covenant Not To Compete and Non-Solicitation. In
consideration of Elite’s payment of compensation pursuant to Section 2 hereof,
the right to receive the Severance Amount (if applicable), and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:

                                4.3.1.      Executive shall not directly or
indirectly, during the Term or prior to the second anniversary of the end of the
Term, by ownership of securities or otherwise (except as a holder of less than
five (5%) percent of any class of equity securities of any other Person (as
defined below), which class of securities shall have been registered under
Section 12 of the Securities and Exchange Act of 1934, as amended (the “Exchange
Act”)), manage, control, finance, consult with, engage or participate in, or
assist, in any manner with or in respect of any drug products as to which the
Company (or any of its affiliates), or any co-development partner of the Company
(or any of its affiliates), shall have (x) developed, or be in the process of
developing, during the Term, or (y) have filed (irrespective of whether accepted
for filing by the FDA) in good faith either an abbreviated new drug application
or a new drug application (including 505(b)(2) Applications) with the FDA, in
each case, with respect to any drug technology developed, co-developed,
supplied, distributed, sold, marketed or manufactured by the Company (or any of
its affiliates), either by itself or together with any other individual,
corporation, partnership, trust, limited liability company, unincorporated
organization, joint stock corporation, joint venture, association or other
entity, or any government, or any agency or political subdivision thereof or any
branch of any legal entity (each, a “Person”) (including any product marketed
through any authorized generic product agreement), during the Term.

                                4.3.2.      During Term and prior to the second
anniversary of the end of the Term, Executive shall not directly or indirectly
solicit, recruit, hire, induce or engage, or attempt to solicit, recruit, hire,
induce or engage any (i) Persons employed or retained as

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consultants or other independent contractors by Elite, (ii) exclusive customers,
strategic partners, exclusive vendors or exclusive suppliers of Elite, or (iii)
other Persons with whom or which Elite maintains an exclusive commercial
relationship, or encourage any such Persons described in clauses (i), (ii) or
(iii) above to terminate or adversely alter their relationship with Elite
(including, without limitation, soliciting or endeavoring to cause any such
Person to use any products or services offered or provided by a Person other
than Elite which compete with the business, products or services of Elite).

                                4.3.3.      During the Term and prior to the
fifth anniversary of the end of the Term, Executive shall not directly or
indirectly make or cause to be made any oral or written statement which is, or
is reasonably likely to be, defamatory in any material respect to the business,
operations, activities or reputation of Elite, or their respective directors,
managers or officers.

                      4.4.      Assignment of Intellectual Property.

                                4.4.1.      Executive shall promptly disclose to
Elite any and all Inventions. Executive shall promptly communicate to Elite all
information, details and data pertaining to any Inventions in such form as Elite
requests. Executive agrees that Inventions, patents and patent applications are
the property of Elite, and any and all rights, titles or interests in and to
Inventions, patents or patent applications which Executive may have in any and
every jurisdiction are hereby assigned in full. Whenever Executive is requested
to do so by Elite, during or after the Term, Executive shall, at the Company’s
sole cost and expense, promptly execute and deliver any and all applications,
assignments or other documents or instruments reasonably deemed necessary or
advisable by Elite to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect, confirm or establish Elite’s
full and exclusive interests in any Inventions. The obligations set forth in
this Section 4.4.1 shall be binding upon the successors, assigns, executors,
administrators and other legal representatives of Executive.

                                4.4.2.      Any and all Works for Hire shall be
considered “works made for hire” under the copyright laws of the United States
or property of Elite under applicable federal, state, local and foreign
trademark laws (as appropriate). Executive shall promptly communicate to Elite
any and all Works for Hire, and any and all information, details and data
pertaining to any Works for Hire, in such form as Elite requests. To the extent
that Works for Hire fail to qualify as (A) “works made for hire” under the
copyright laws of the United States or any other jurisdiction or (B) property of
Elite under applicable federal, state, local or foreign trademark laws,
Executive hereby assigns each Work for Hire and all right, title and interest
therein in any and every jurisdiction to Elite. Whenever Executive is requested
to do so by Elite, during or after the Term, Executive shall, at the Company’s
sole cost and expense, promptly execute and deliver any and all applications,
assignments or other documents or instruments reasonably deemed necessary or
advisable by Elite to apply for and confirm and effectuate full and exclusive
ownership of Works for Hire in Elite, including, but not limited to, ownership
of any moral rights under the copyright law of any nation, or any other rights
under the intellectual property laws of any nation. The obligations set forth in
this Section 4.4.2 shall be binding upon the successors, assigns, executors,
administrators and other legal representatives of Executive.

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                      4.5.      If a court declares that any term or provision
of this Section 4 is invalid or unenforceable, the parties to this Agreement
agree that the court making the determination of invalidity or unenforceability
shall have the power to reduce the scope, duration or area of the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

                      4.6.      Executive hereby transfers, assigns, conveys,
grants and sets over to Elite and its successors and assigns forever, and Elite
hereby accepts, assumes and acquires from Executive for itself and its
successors and assigns forever, all of Executive’s right, title and interest in
and to the Remaining Rights in any and every jurisdiction. Executive hereby
covenants and agrees that, at any time and from time to time after the date
hereof, at the request of Elite or its successors or assigns, he will (i)
promptly and duly execute and deliver, or cause to be executed and delivered to
Elite, all such further documents and instruments, and (ii) promptly take all
such other and further action, as may be requested by Elite to more effectively
transfer, assign, convey, grant, set over, vest, protect, confirm and establish
full and exclusive right, title and interest in and to all of the Remaining
Rights in and to Elite and its successors and assigns forever in any and every
jurisdiction, including, without limitation, any and all applications,
assignments or other documents or instruments deemed necessary or advisable by
Elite to apply for and obtain Letters Patent of the United States or any foreign
jurisdiction. The obligations set forth in this Section 4.6 shall be binding
upon the successors, assigns, executors, administrators and other legal
representatives of Executive. Executive hereby represents and warrants to Elite
that Executive has not transferred any right, title or interest in or to the
Remaining Rights to any other Person as of the date of the execution of this
Agreement and, as of the date of the execution of this Agreement, has not
entered into any agreement to do so.

                      4.7.      Executive acknowledges and admits that a breach
of any of the covenants contained in this Section 4 will cause Elite irreparable
harm. Executive further acknowledges and admits that the damages resulting from
such a breach will be difficult or impossible to ascertain, and will be of the
sort that cannot be compensated by money or other damages, and that Elite in
addition to all other remedies available at law or equity, shall be entitled to
equitable relief, including specific performance and injunctive relief as
remedies for any such breach and that Executive further agree to waive any
requirement for securing or posting of any bond in connection with such remedy.
Executive therefore waives (and is estopped from asserting in a court of law or
equity) any argument that the breach, or threatened breach, of any of the
covenants contained in this Section 4 does not constitute irreparable harm for
which an adequate remedy at law is unavailable. Nothing contained in this
Section 4 or elsewhere in this Agreement shall be construed as prohibiting Elite
from pursuing any other remedies available at law or in equity for a breach, or
threatened breach, by the Employee of any of the covenants contained in this
Section 4.

                      4.8.      Elite Defined. For purposes of Section 4 hereof,
“Elite” shall mean and include the Company, the Subsidiaries and any affiliates
and joint ventures.

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              5.      Continued Cooperation; Return of Documents and Property;
Injunctive Relief; Non-exclusivity and Survival; Representations, Warranties and
Covenants of Executive.

                      5.1.      Continued Cooperation. Executive shall, during
and after the expiration or termination of this Agreement for any reason, at
Company’s sole expense, provide such reasonable cooperation as is requested by
Company with respect to any internal or external agency or legal investigation
(whether conducted by the FDA, the SEC or otherwise), lawsuits, financial
reports, or with respect to other matters within his knowledge, responsibilities
or purview, upon reasonable notice. Executive shall execute all lawful documents
reasonably necessary for Company to secure or maintain any Confidential
Information.

                      5.2.      Return of Documents and Property. Upon the end
of the Term, or upon the earlier request of the Company, Executive and his legal
or personal representatives will promptly return to the Company any and all
information, documents or other materials relating to or containing Confidential
Information which are, and any and all other property of the Company which is,
in Executive’s possession, care or control, regardless of whether such materials
were created or prepared by Executive and regardless of the form of, or medium
containing, such information, documents, including without limitation, all
Company computers and hard drives, all computer files (whether or not such files
are stored on the Executive’s personal computer), employee identification cards,
Company credit cards, keys and any other physical property of Company.

                      5.3.      Injunctive Relief. The parties hereby
acknowledge and agree that (a) Company will be irreparably injured in the event
of a breach by Executive of any of his obligations under Sections 4 and 5
hereof; (b) monetary damages will not be an adequate remedy for any such breach;
(c) Company will be entitled to injunctive relief, in addition to any other
remedies that it may have, in the event of any such breach and Executives
further agree to waive any requirement for securing or posting of any bond in
connection with such remedy, and waives (and is estopped from asserting in a
court of law or equity) any argument that the breach, or threatened breach, of
any of the covenants contained in Sections 4 or 5 does not constitute
irreparable harm for which an adequate remedy at law is unavailable. Nothing
contained in this Section 5 or elsewhere in this Agreement shall be construed as
prohibiting the Company from pursuing any other remedies available at law or in
equity for a breach, or threatened breach, by the Employee of any of the
covenants contained in this Section 5; and (d) the existence of any claims that
Executive may have against Company, whether under this Agreement or otherwise,
will not be a defense to the enforcement by Company of any of its rights under
Sections 4 and 5 hereof. All of the parties’ covenants and Company’s rights to
specific enforcement, injunctive relief and other remedies as set forth herein
shall apply in the event of any breach or threatened breach by Executive of any
of the provisions of Sections 4 and/or 5 hereof. The parties further agree that
any action concerning any alleged breach(es) of Sections 4 and/or 5 hereof shall
not be brought or addressed in arbitration, and the existence of any demand for
arbitration or pendency of any dispute in arbitration under this Agreement shall
not be a basis to delay or defer adjudication by a court of any demand for
specific performance, injunctive relief or other remedies in relation to any
alleged breach(es) of Sections 4 and/or 5 hereof.

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                      5.4.      Non-exclusivity and Survival. The covenants of
Executive contained in Sections 4 and 5 hereof are in addition to, and not in
lieu of, any obligations that Executive may have with respect to the subject
matter hereof, whether by contract, as a matter of law or otherwise, and such
covenants and their enforceability shall survive any expiration or termination
of the Term by either party and any investigation made with respect to the
breach thereof by Company at any time.

                      5.5.       Representations and Warranties of the
Executive. The Executive hereby represents and warrants to the Company as
follows:

                                5.5.1.      The Executive has the full power,
authority and capacity to execute and deliver this Agreement and to perform his
obligations hereunder.

                                5.5.2.      The execution, delivery and
performance of this Agreement shall not (and with the giving of notice or lapse
of time or both would not) result in the breach of any agreements, including the
Purdue Agreement (as defined below), or other obligations to which the Executive
is a party or the Executive is otherwise bound or violate any law.

                                5.5.3.     This Agreement is the Executive’s
valid and binding obligation enforceable in accordance with its terms.

                                5.5.4.      There is not currently, nor has
there been in the last five (5) years, any action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Executive, threatened against or affecting the Executive before any court,
arbitrator, or governmental (federal, state, county, local or foreign) agency or
authority, including, without limitation, the United States Securities and
Exchange Commission (collectively, an “Action”). The Executive is not currently,
nor has he been in the last five (5) years, the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.

                                5.5.5.      The Executive has terminated the
Master Consultant Services Agreement, entered into as of August 14, 2006,
between Purdue Pharma L.P. and the Executive d/b/a Parallax Clinical Research,
LLC (the “Purdue Agreement”), prior to executing this Agreement. There are no
agreements which contain any negative covenants with respect to, or otherwise
restrict, the Executive’s performance of his duties under this Agreement at any
time in the future other than the confidentiality provisions set forth in the
Purdue Agreement.

                      5.6.       Parallax Clinical Research, LLC.

                                5.6.1.      Notwithstanding anything else to the
contrary in this Agreement, the parties agree that (i) Executive holds an
ownership interest in Parallax, a New York-based consulting firm that provides
strategic and practical assistance with clinical trial protocol design,
planning, initiating and management and (ii) Executive shall continue to devote
a portion of his time to Parallax and provides services, on behalf of Parallax,
to its clients, subject to the terms of this Agreement.

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                                5.6.2      Executive agrees that, during the
Term, the services to be provided by Executive to Parallax and clients of
Parallax shall not interfere with the effective performance of his duties
hereunder and such services shall not violate any provision of this Agreement
(including, without limitation, Section 4 hereof) or any Company policy.
Specifically, Executive agrees that, during the Term, he shall not perform
consulting services for any client of Parallax (or for Parallax for the benefit
of a client), to the extent that the client receiving the benefit of such
service is in competition with, or is marketing, developing, formulating,
testing or researching a product that would compete with any products of, the
Company; provided that Parallax may continue to provide services to such client
without the assistance of Executive.

                                5.6.3.      Executive agrees that, during the
Term, Executive shall not perform consulting services in the pharmaceutical
industry other than through his relationship with Parallax and in accordance
with the provisions of this Agreement.

              6.      Miscellaneous Provisions.

                      6.1.      Section 409A. Notwithstanding any provision of
this Agreement to the contrary, if Executive is a “specified employee” as
defined in Section 409A of the Internal Revenue Code of 1986, as amended, and
the regulations issued or to be issued by the Department of the Treasury
thereunder (“Section 409A”), Executive shall not be entitled to any payments
upon a termination of employment until the earlier of (i) the date which is six
months after the termination of employment for any reason other than death or
(ii) the date of the Executive’s death and the first such payment shall equal
the sum of all payments that would have been made from the date of termination
to the date of such first payment were it not for the delay in payment for
Section 409A purposes.

                      6.2.      Severability. If, in any jurisdiction, any term
or provision hereof is determined to be invalid or unenforceable, (a) the
remaining terms and provisions hereof shall be unimpaired; (b) any such
invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such term or provision in any other jurisdiction; and (c)
the invalid or unenforceable term or provision shall, for purposes of such
jurisdiction, be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.

                      6.3.      Execution in Counterparts. This Agreement may be
executed in one or more counterparts, and by the two parties hereto in separate
counterparts, each of which shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

                      6.4.      Notices. All notices, requests, demands and
other communications hereunder shall be in writing and shall be deemed duly
given upon receipt when delivered by hand, overnight delivery or facsimile (with
confirmed delivery), or five (5) business days after

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posting, when delivered by registered or certified mail or national courier
service, postage prepaid, return receipt requested, as follows:

      If to Company, to:

          Elite Pharmaceuticals, Inc.
             165 Ludlow Avenue
             Northvale, New Jersey
             Facsimile No.: (201) 391-7693
             Attn: Chief Executive Officer

     With a copy (which shall not constitute notice) to:

             Reitler Brown & Rosenblatt LLC
             800 Third Avenue
             21st Floor
             New York, NY 10022
             Facsimile No.: (212) 371-5500
             Attn: Scott H. Rosenblatt, Esq.

      If to Executive, to:

             Dr. Stuart Apfel
             218 Walker Place
             West Hempstead, NY 11552
             Facsimile No.: (516) [_________ ]

      With a copy (which shall not constitute notice) to:

             Syma Levine, Esq., P.C.
             491 Bell Street                
             West Hempstead, New York 11552
             Facsimile No.: (516) 565 6243

or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.

               6.5.      Amendment. No provision of this Agreement may be
modified, amended, waived or discharged in any manner except by a written
instrument executed by both Company and Executive.

               6.6.      Entire Agreement. Except as specifically provided
herein, this Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements
and understandings of the parties hereto, oral or written. Company and Executive
shall execute and deliver all such further documents as may

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be necessary to carry out the intent of the preceding sentence. For the
avoidance of doubt, the parties hereto agree that, effective as of the
Commencement Date, the consulting agreement, dated as of ________, between the
Company and Executive, together with all consulting arrangements pursuant
thereto, shall immediately terminate, other than any obligation of the Company
relating to accrued but unpaid consulting fees arising from the performance by
Executive of consulting services under such agreement prior to the Commencement
Date.

               6.7.      Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be wholly performed therein.

               6.8.      Headings. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.

               6.9.      Binding Effect; Successors and Assigns. Executive may
not delegate any of his duties or assign any of his rights hereunder. This
Agreement shall inure to the benefit of, and be binding upon, the parties hereto
and their respective heirs, legal representatives and beneficiaries, successors
and permitted assigns. Company shall require any successor (whether direct or
indirect and whether by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Company, by an agreement in
form and substance reasonably satisfactory to Executive, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Company would be required to perform if no such succession had taken place.

               6.10.      Waiver. The failure of either of the parties hereto to
at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto thereafter to enforce each and every provision of this Agreement.
No waiver of any breach of any of the provisions of this Agreement shall be
construed or deemed to be a waiver of any other or subsequent breach.

               6.11.      Capacity, etc. Each of Executive and Company hereby
represents and warrants to the other that, as the case may be: (a) he or it has
full power, authority and capacity to execute and deliver this Agreement and to
perform his or its obligations hereunder; (b) such execution, delivery and
performance shall not (and with the giving of notice or lapse of time or both
would not) result in the breach of any agreements or other obligations to which
he or it is a party or he or it is otherwise bound or violate any law; and (c)
this Agreement is his or its valid and binding obligation enforceable in
accordance with its terms.

               6.12.      Enforcement; Jurisdiction. If any party institutes
legal action to enforce or interpret the terms and conditions of this Agreement,
the prevailing party shall be awarded reasonable attorneys’ fees of the
proceedings (including, without limitation, at all trial and appellate levels)
and the expenses and costs incurred by such prevailing party in connection
therewith. Any legal action, suit or proceeding, in equity or at law, arising
out of or relating to

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this Agreement shall be instituted exclusively in the State or Federal courts
located in the State and County of New York and each party agrees not to assert,
by way of motion, as a defense or otherwise, in any such action, suit or
proceeding, any claim that such party is not subject personally to the
jurisdiction of any such court, that the action, suit or proceeding is brought
in an inconvenient forum, that the venue of the action, suit or proceeding is
improper or should be transferred, or that this Agreement or the subject matter
hereof may not be enforced in or by any such court. Each party further
irrevocably submits to the jurisdiction of any such court in any such action,
suit or proceeding. Any and all service of process and any other notice in any
such action, suit or proceeding shall be effective against any party if given
personally or by registered or certified mail, return receipt requested or by
any other means of mail that requires a signed receipt, postage prepaid, mailed
to such party as herein provided. Nothing herein contained shall be deemed to
affect or limit the right of any party to serve process in any other manner
permitted by applicable law.

               6.13.      Withholding. The payment of any amount pursuant to
this Agreement, including, without limitation, pursuant to Sections 2 and 3,
shall be subject to any applicable withholding and payroll taxes, which may be
deducted by the Company in its sole discretion.

               6.14.      Advice of Counsel. Executive represents and warrants
that he has had full opportunity to seek advice and representation by
independent counsel of his or her own choosing in connection with the
interpretation, negotiation and execution of this Agreement.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.

   Elite Pharmaceuticals, Inc.
                    By: /s/ Bernard Berk

Name: Bernard Berk
Title:   Chief Executive Officer
                    /s/ Stuart Apfel

Dr. Stuart Apfel            

 

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Exhibit A

Jewish Holidays to be taken as Vacation Days

Rosh Hashanah (two days)
Yom Kippur (one day)
Succoth (two days)
Shemini Atzeret and Simchat Torah (two days)
Passover (two days at beginning and two days at end)
Shavuot (two days)

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