SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS (this “Agreement”), dated as
of November 3, 2008, by and between ELITE PHARMACEUTICALS, INC., with offices at
165 Ludlow Avenue, Northvale, New Jersey 07647 (the “Company”), and CHARAN BEHL.

BACKGROUND

          WHEREAS, Employee is presently employed by the Company; and

          WHEREAS, Employee’s employment with the Company has been terminated as
of the Separation Date (as defined below), and, in connection therewith, the
Company has agreed to provide certain benefits to Employee in consideration of
Employee’s execution and performance of this Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants and
conditions contained in this Agreement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties agree as follows:

TERMS

           1.      Termination of Employment. Employee acknowledges that his
employment with the Company shall terminate as of, and that his work-through
date with the Company is the close of business on November 3, 2008 (the
“Separation Date”).

           (a)      Employment Agreement. Employee acknowledges and hereby
waives his entitlement to certain notice and payment provisions upon termination
under his Amended and Restated Employment Agreement dated February 9, 2007, by
and between Employee and the Company (the “Employment Agreement”). In
particular, Employee hereby waives his right to notice under Section 3.2.4 and
all obligations of the Company to the Employee set forth in Sections 3.3, 3.2.4,
3.3.2 of the Employment Agreement, including without limitation the Severance
Amount (as such term is defined in the Employment Agreement).

           (b)      Payments. The Company shall pay to Employee (i) $25,000
(which amount represents the unpaid guaranteed bonus as of March 2008), (ii)
$12,019 (which amount represents 2 1/5 weeks of unpaid vacation for the 2008
fiscal year) and (iii) $14,263 in expense reimbursements. Employee acknowledges
that there are no payment amounts outstanding to Employee under the Employment
Agreement and that all expenses to which he may be entitled to reimbursement
under the Company’s reimbursement policy have been reimbursed.

           (c)      Option Agreements. Employee acknowledges the grant of
options to purchase up to 750,000 shares of common stock, par value $0.01 per
share (the “Common Stock”) of the Company at an exercise price of $2.25 per
share as set forth in the Incentive Stock Option Letter Agreements dated
November 13, 2006, the “Option Agreements”), which is each attached hereto as
Exhibit A. Employee acknowledges that pursuant to two of the Option Agreements,
options

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to purchase 500,000 shares of Common Stock are unvested and shall terminate as
of the Separation Date. Employee acknowledges that he has 90 days following the
Separation Date of which to exercise the remaining options to purchase up to
250,000 shares of Common Stock.

         2.      Severance Benefits. The Company shall pay to Employee a
severance payment of Twenty Thousand Five Hundred Forty Eight Dollars
(US$20,548) less any payroll or withholding taxes (the “Severance Payment”). The
Company shall grant to Employee an option to purchase 50,000 shares of Common
Stock (the “Severance Option”). The Severance Option shall be fully vested and
have an exercise price equal to $[___] (which amount represents the closing
price of Common Stock on the American Stock Exchange on the date prior to the
grant). Upon payment of the Severance Payment and grant of the Severance Option,
the Company shall have no further obligation to Employee, including, without
limitation, on account of his service as an employee of the Company.

          3.      Covenants, Representations and Warranties of the Parties. The
Company and Employee each represents and warrants to the other (as to itself)
that (i) the party has full authority and capacity to enter into and perform the
party’s obligations under this Agreement (having obtained all requisite
corporate, company and/or governmental approvals), (ii) this Agreement has been
fully authorized, executed and delivered by the party and that the party has
full legal right, power and authority to enter into and perform this Agreement,
which constitutes a valid and binding agreement between the parties, enforceable
against the party in accordance with its terms, (iii) there are no agreements
between the party and any third party that conflict with this Agreement; and
(iv) no consent or approval of any third party, court or governmental agency is
required in connection with the party’s execution and performance of this
Agreement.

          4.      General Release of Claims and Covenants Not to Sue. Employee
for himself and his respective administrators, executors, agents, beneficiaries
and assigns, does hereby waive, release and forever discharge the Company (as
hereinafter defined for the purposes of this Section 4) of and from any and all
Claims (as defined below). Employee agrees not to file a lawsuit to assert any
such Claim. This release covers all Claims arising from the beginning of time up
to and including the date of this Agreement, but does not cover Claims relating
to the validity or enforcement of this Agreement. In addition, Employee
irrevocably and unconditionally releases, forever discharges, and agrees to
indemnify and hold harmless the Company from all Claims Employee believes or, at
a later date may believe, he has against the Company for any actions arising out
of Employee’s employment with or separation from the Company from the beginning
of time up to and including the date of this Agreement, whether known or unknown
as of the date of this Agreement.

               (a)      Definition of “Claims”. (i) For purposes of this
Agreement, “Claims” includes without limitation all actions or demands of any
kind that Employee now has, or may have or claim to have in the future arising
out of occurrences on or before the date of this Agreement. More specifically,
Claims include rights, causes of action, damages, penalties, losses, attorneys’
fees, costs, expenses, obligations, agreements, judgments and all other
liabilities of any kind or description whatsoever, either in law or in equity,
whether known or unknown, suspected or unsuspected.

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               (ii) The nature of Claims covered by this release and covenant
not to sue includes, without limitation, all actions or demands in any way based
on Employee’s employment with Company, the terms and conditions of such
employment, or the termination of such employment. More specifically, all of the
following are included in the types of Claims that will be barred by this
release and covenant not to sue: (i) contract claims (whether express or
implied), (ii) tort claims (such as for defamation or emotional distress), (iii)
claims under federal, state and municipal laws, regulations, ordinances or court
decisions of any kind, (iii) claims of discrimination, harassment or
retaliation, whether based on race, color, religion, gender, sex, age, sexual
orientation, handicap or disability, national origin, or any other legally
protected class, (iv) claims under the Age Discrimination in Employment Act of
1967 as amended by the Older Workers Benefit Protection Act, Title VII of the
Civil Rights Act of 1964 as amended by the Civil Rights Act of 1991, the Equal
Pay Act of 1962, the Americans with Disabilities Act of 1990, the Workers
Adjustment and Retraining Notification Act, the New York State Human Rights Law
(Article 15 of the New York State Employee Law), the New York City Human Rights
Law (Title I, Chapter B of the Administrative Code of the City of New York), or
any other federal, state or local statute or ordinance, (v) claims under
Employee Retirement Income Security Act, the Fair Labor Standards Act, state
wage payment laws and state wage and hour laws; and (vi) claims for wrongful
discharge.

                (b)      Definition of “Company”. For purposes of this Section
4, “Company” includes, without limitation, Elite Pharmaceuticals, Inc., and its
past, present and future parents, Affiliates (as defined below), subsidiaries,
divisions, predecessors, successors, assigns, employee benefit plans and trusts
and each of their respective past, present and future directors, officers,
partners, shareholders, members, managers, agents, employees, attorneys,
representatives, consultants, associates, fiduciaries, plan sponsors,
administrators and trustees.

               (c)      Definition of “Affiliate”. For purposes of this
Agreement, “Affiliate” (and its derivations) shall mean, with respect to any
person, any other person who controls, is controlled by or is under common
control with such person. For purposes of the definition of Affiliate, "control"
means the power to direct the management and policies of such person or firm,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

               (d)      Employee’s Acknowledgment of Scope of Release. Employee
declares and agrees that any Claims he may have incurred or sustained may not be
fully known to him and may be more numerous and more serious than he now
believes or expects. Further, in entering into this Agreement, Employee relies
wholly upon his own judgment of the future development, progress and result of
said Claims, both known and unknown, and acknowledges that he has not been
influenced to any extent whatsoever in the making of this Agreement by any
representations or statements regarding said Claims made by individuals or
entities who are within the definition of Company above. Employee further
acknowledges that he accepts the terms herein in full settlement and
satisfaction of all such Claims.

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     5.      Restrictive Covenants of Employee.

          (a)      Employment Agreement. Employee acknowledges that he has
certain obligations under his Employment Agreement dated as of February 9, 2007.
In particular, Employee acknowledges his obligations under Sections 4 and 5:
“Protection of Confidential Information and Trade Secrets; Non-Competition; No
Solicitation” and “Continued Cooperation; Return of Documents and Property;
Injunctive Relief; Non-Exclusivity and Survival” of the Employment Agreement.
Employee agrees that he will continue to be bound by and shall abide by such
provisions.

         (b)      Confidentiality.

               (i)      Employee acknowledges and agrees that, during his
employment with the Company, he had access to Proprietary Information (as
defined below) and that the Proprietary Information is the exclusive property of
the Company or the party that disclosed or delivered such information to the
Company. Employee agrees not to use the Proprietary Information, directly or
indirectly, and agrees that he will promptly notify the Company of any
unauthorized disclosure of Proprietary Information. Specifically, Employee
agrees that all Proprietary Information or inventions developed as a direct
result of his efforts on behalf of the Company during his employment with the
Company remain the exclusive property of the Company, and that Employee has no
ownership interest therein. For purposes of this Agreement, “Proprietary
Information” means all of the following information and material, whether or not
reduced to writing and whether or not patentable, that Employee, during his
employment with the Company, had access to or developed, in whole or in part, as
a direct or indirect result of either his efforts on behalf of the Company or
through the use of any of the Company’s facilities or resources: (i) computer
software, including without limitation all source and object code, flow charts,
algorithms, coding sheets, routines, sub-routines, compilers, assemblers, design
concepts and related documentation and manuals; (ii) production processes,
collection and receivable management processes, procedures and techniques,
marketing techniques, licensing or sales policies, financial information,
employee names and job descriptions, customer and prospective customer names and
requirements, data and other information or materials relating to the manner in
which the customer, prospective customer or the Company do business; (iii)
patents, patent applications, trademarks, trademark applications and any other
intellectual property rights and discoveries, concepts and ideas (including but
not limited to the nature and results of research and development activities),
processes, formulae, techniques, “know-how”, designs, drawings and
specifications, information relating to products, proposed products, agreements
with or proprietary information of third parties, and clinical data and
analysis, clinical trials, applications and communications with the United
States Food and Drug Administration; (iv) any other information or materials
relating to the business or activities of the Company which is not generally
known to others engaged in similar business or activities; (v) all inventions
and ideas which are derived from or relate to Employee’s access to, or knowledge
of, any of the information or materials describe herein; (vi) any of the
information or material described herein which is the property of any other
person or firm which has revealed or delivered such information or material to
the Company pursuant to a contractual relationship with the Company or otherwise
in the course of the Company’s business. Proprietary Information shall not
include any information or material of the type described herein to the extent
that such information or material is or becomes publicly known through no act on
Employee’s part in violation of this confidentiality provision.

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               (ii)      Employee further agrees that he shall maintain the
terms of this Agreement and the negotiations leading up to it in the STRICTEST
CONFIDENCE. Employee shall not disclose or discuss any of the terms of this
Agreement or the negotiations leading up to it with anyone other than:
Employee’s immediate family members, accountant, the Internal Revenue Service,
legal representative, or pursuant to subpoena issued as part of a legal
proceeding; provided that, before disclosing the terms of this Agreement or the
negotiations leading up to it to any of the foregoing, Employee shall advise the
recipient regarding the existence of this confidentiality provision and obtain
the agreement of the recipient to maintain the information in accordance with
this provision.

          (c)      Return of Corporate Property and Associated Expenses.
Employee represents that he has returned to the Company all corporate property
and copies thereof in his possession or under his custody or control, including
without limitation, corporate credit cards, identification badge, calling cards,
cellular or mobile telephone, and computer equipment and software. Employee’s
access to such property and facilities shall cease effective as of the
Separation Date. In addition, Employee represents and warrants to the Company
that he has returned to the Company, and has not retained copies of, all
customer records, whether in print or electronic form, and Employee specifically
represents and warrants to the Company that he has deleted all such information
from any personal computer or other electronic storage media in his possession.
Employee’s access to such property and facilities, records, and information
shall cease effective as of the Separation Date.

          (d)      Non-Disparagement. Employee agrees that he shall not,
directly or indirectly, defame, disparage, make negative comments about, whether
or not true, the name or reputation of the Company or any of its Affiliates,
including but not limited to, any officer, director, employee or shareholder of
the Company or any of its Affiliates, or act in any other manner that is
intended to or does damage the good will, business or personal reputations of
the Company or any of its Affiliates, including but not limited to, any officer,
director, employee or shareholder of the Company or any of its Affiliates. The
provisions of this Section 5(d) shall survive any termination of this Agreement
and the termination of the Employee’s employment with the Company.

     6.      Acknowledgements of Employee.

          (a)      Except as provided for in Section 2, the Company shall have
no further obligation to Employee, including, without limitation, on account of
his service as an employee of the Company.

          (b)      Employee acknowledges that any payments or benefits provided
to Employee under the terms of this Agreement do not constitute an admission by
the Company that it has violated any law or legal obligation with respect to any
aspect of Employee’s employment or separation therefrom.

          (c)      Employee agrees and acknowledges that Employee's right to
receive and keep the Severance Payment and Severance Option is conditioned upon
Employee continuing to

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observe, and not be in breach of, the provisions of any of the terms or
conditions provided for in this Agreement. Upon any breach hereof, all severance
compensation and other benefits due Employee pursuant to Section 2 of this
Agreement shall immediately cease, or if already paid, shall be recoverable in
full by the Company.

          (d)      Employee has not instituted, assisted, or otherwise
participated in connection with, any complaint, claim, charge, lawsuit, or
administrative agency proceeding, or action at law or otherwise against the
Company. To the extent permitted by law, Employee waives his right to institute
in the future any complaint, claim, charge, lawsuit, or administrative
proceeding, or action at law or otherwise against the Company, and agree not to
accept any relief or recovery from any such action or proceeding filed on his
behalf, other than any complaint, claim, charge, lawsuit, or administrative
proceeding, or action at law in connection with, or resulting from, the
Company’s breach of any term of this Agreement.

          (e)      Employee hereby represents that from the Separation Date
onward (i) Employee has not made and will not make any representations,
warranties, or commitments binding the Company and (ii) Employee has not
executed and will not execute any agreement on behalf of the Company, nor did
Employee or shall Employee hold himself out to have such authority.

          (f)      Upon reasonable advance written notice, during mutually
agreeable time periods, and provided the foregoing shall not interfere with
Employee’s then current employment, Employee agrees to make himself available to
the Company in any pending or future governmental or regulatory investigation,
civil or administrative proceeding, or arbitration, subject to any privileges
that Employee may have and to his other personal and business commitments. The
Company will reimburse Employee for any loss of salary and all reasonable costs
and expenses incurred by Employee in connection with any such proceeding or
arbitration.

          (g)      Employee hereby represents that Employee has not assigned to
any person or entity any claim, including, without limitation, Claims that arose
or could have arisen against the Company, or its past, present and future
parents, Affiliates, subsidiaries, divisions, predecessors, successors, assigns,
employee benefit plans and trusts and each of their respective past, present and
future directors, officers, partners, shareholders, members, managers, agents,
employees, attorneys, representatives, consultants, associates, fiduciaries,
plan sponsors, administrators and trustees.

          (h)      Employee acknowledges that he has been advised to consult,
and has consulted, with legal counsel of his choosing, at his own expense,
regarding the meaning and binding effect of this Agreement and each and every
term hereof prior to executing it.

         (i)      Employee, intending to be legally bound hereby, certifies and
warrants that he has read carefully this Agreement and has executed it
voluntarily and with full knowledge and understanding of its significance,
meaning and binding effect. Employee further declares that he is competent to
understand the content and effect of this Agreement.

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          (j)      Employee acknowledges that he was given a period of 21 days
within which to consider this Agreement and to the extent he executes this
Agreement before the expiration of the 21-day period, he does so knowingly and
voluntarily and only after consulting his attorney. Employee shall have the
right to cancel and revoke this Agreement during a period of 7 days following
executing this Agreement, and this Agreement shall not become effective, and no
payments or benefits shall be made or provided pursuant to this Agreement, until
the day after the expiration of such 7-day period. The 7-day period of
revocation shall commence upon Employee executing this Agreement. In order to
revoke this Agreement, the Executive shall deliver to the Company, prior to the
expiration of such 7-day period, a written notice of revocation. Upon such
revocation, this Agreement shall be null and void and of no further force or
effect.

     7.      Headings. The headings contained in this Agreement are not part of
this Agreement and are included solely for ease of reference.

     8.      Integration and Modification. Employee declares and represents that
no promise or agreement has been made to him other than those expressed herein.
Except as stated herein, this Agreement and the Option Agreements, constitute
the entire agreement of the parties and supersedes all prior understandings,
whether oral or written, between them. Any modification of this Agreement must
be made in writing and signed by all parties.

     9.      Severability. If any provision of this Agreement is or shall be
declared invalid or unenforceable by a court of competent jurisdiction, the
remaining provisions shall not be affected thereby and shall remain in full
force and effect.

     10.      Notices. All notices and other communications set forth in this
Agreement are to be deemed delivered the day they are sent if sent by same day
or overnight commercial service to the applicable party at the following address
(or such other address for a party as may be specified by like notice):

     If to Employee:

Charan Behl
PO Box 376
Commack, NY 11725

     If to the Company:

Elite Pharmaceuticals, Inc.
165 Ludlow Avenue
Northvale, NJ 07647
Attention: Chief Executive Officer or Chief Financial Officer
Facsimile: (201) 750-2755

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     With a copy to:

Reitler Brown & Rosenblatt LLC
800 Third Avenue, 21st floor
New York, NY 10022
Attention: Lauren K. Kluger, Esq.
Facsimile: (212) 371-5500

     11.      Governing Law; Consent to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
(without giving effect to its choice or conflict of laws provisions). Each of
the parties hereby irrevocably and unconditionally submits to the jurisdiction
of the courts of the State of New York and of the federal courts sitting in the
State of New York in all actions or proceedings arising out of or relating to
this Agreement. Each of the parties agrees that all actions or proceedings
arising out of or relating to this Agreement must be litigated exclusively in
any such state or federal court that sits in the City of New York, Borough of
Manhattan, and accordingly, each party irrevocably waives any objection which it
may now or hereafter have to the laying of the venue of any such litigation in
any such court.

     12.      Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument.

     13.      Equitable Remedies. Employee acknowledges and agrees that it would
be impossible or inadequate to measure and calculate the Company's damages from
any breach of the covenants set forth in Sections 3, 4, 5 and 6 of this
Agreement. Accordingly, Employee agrees that if he breaches any of such
covenants, the Company will have available, in addition to any other right or
remedy available, the right to obtain an injunction from a court of competent
jurisdiction restraining such breach or threatened breach and to specific
performance of any such provision of this Agreement. Employee further agrees
that no bond or other security shall be required in obtaining such equitable
relief and hereby consents to the issuance of such injunction and to the
ordering of specific performance.

[Remainder of page intentionally left blank. Signature page follows.]

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     IN WITNESS WHEREOF, and with the intention of being legally bound hereby,
the parties have executed this Separation Agreement and General Release of
Claims as of the date first written above.

                CHARAN BEHL             ELITE PHARMACEUTICALS, INC.            
        By:         Name: Chris Dick             Title: Chief Operating Officer
         

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EXHIBIT A

Incentive Stock Option Letter Agreements Dated November 13, 2006

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