{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





PURCHASE
AGREEMENT





between





ELITE
PHARMACEUTICALS, INC.


and





EPIC
PHARMA, LLC





Dated as
of September 10, 2010


1


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





PURCHASE
AGREEMENT





This
PURCHASE AGREEMENT (the
“Agreement”) is
entered into as of September 10, 2010, by and between ELITE PHARMACEUTICALS,
INC. and ELITE LABORATORIES, INC. (a subsidiary of Elite Pharmaceuticals, Inc.),
a Delaware corporations with offices at 165 Ludlow Avenue, Northvale, New Jersey
07430 (“Buyer”) and EPIC PHARMA, LLC, a Delaware limited liability corporation
with offices at 227-15 N. Conduit Ave., Laurelton, New York 11413 (“Seller”).
Seller and Buyer are sometimes hereafter referred to individually as a “Party”
and collectively as the “Parties”.





RECITALS





WHEREAS, Seller is engaged in
the business of developing, manufacturing, marketing and selling pharmaceutical
products and owns certain rights related to the product (the “Product”) and
Abbreviated New Drug Application (the “ANDA”) listed in Appendix 1 of this
Agreement.





And,





WHEREAS, the parties hereto
intend that Seller shall sell to Buyer, and Buyer shall purchase from Seller
certain assets related to the Product upon the terms and subject to the
conditions set forth in this Agreement.





NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises,
representations, warranties, covenants and agreements hereinafter set forth, and
intending to be legally bound, the parties do hereby agree as
follows:





ARTICLE
1





Purchase
and Sale of Assets





1.1           Sale of Product.


Pursuant
to the terms and conditions set forth in this Agreement, Seller agrees to sell,
convey, assign, grant, transfer and deliver to Buyer, and Buyer agrees to
purchase, acquire and receive from Seller on the Closing Date, Seller’s entire
interest in the Product for manufacture, sale and use in the United States
(including its territories and possessions, the (“Territory”),
including (i) all regulatory correspondence received from the FDA with respect
to the ANDA and (ii) all know-how and technical information embodied in the ANDA
and specifically relating to the development, manufacture, packaging, use or
sale of the Product in the Territory owned or possessed by Seller on the Closing
Date (the “Information”),
together with the Product, the “Assets”).    Seller
also hereby grants Buyer and its Affiliates the ANDA technology and scientific
materials for Buyer’s use in connection with the manufacture, registration or
sale of the Product outside of the Territory.


2


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.





1.2           Closing
Date.


The
Closing Date of this Agreement shall be sixty (60) days from the date of this
Agreement or FDA approval of the ANDA, whichever is later.





1.3           Delivery of
Assets.


Upon
receipt of the payment of that portion of the Purchase Price set forth in
Section 2.1(a) (i), Seller shall deliver to Buyer a full and complete copy of
the following:





(a)
            Copy
      of the ANDA, together with a transfer letter to the FDA reflecting the
      change in ownership and the accompanying form
  356h;


(b)
            Development
      reports and analytical methods;


(c)
            Pre-approval
      inspection reports and responses;


(d)
            FDA
      communication letters during the approval process and through the date
      thereof;


(e)
            Bioequivalency
      report submitted to the FDA; and


(f)
            A
      duly executed Assignment and Bill of Sale, in the form annexed
      hereto.





ARTICLE
2





Consideration
for Transfer of Assets





2.1           Purchase
Price.





(a)
            Subject
      to the terms and conditions of this Agreement, in consideration for the
      sale and transfer of the Assets, Buyer shall pay to Seller, and amount
      equal to {***} dollars (${***}) (the “Purchase
      Price”).  {***} dollars (${***}) will be paid at the
      closing of this Agreement and the remaining ${***} will be paid quarterly
      over the next three years with the first payment on the first full quarter
      after the closing.  The quarterly payments will be ${***} each
      quarter.





(b)
            All
      payments under this Section shall be made by check, wire transfer or other
      immediately available funds to an account indicated by
    Seller.


3


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.





ARTICLE
3





Representations
and Warranties





3.1           Legal Authority.


Each
party represents and warrants that it has the legal power, authority and right
to enter into this Agreement and to perform its respective obligations set forth
herein.





3.2           Title to Assets.


Seller
hereby represents and warrants that it or its Affiliates has good and marketable
title to the Assets, free and clear of all liens.





3.3           Due
Diligence


Buyer
hereby acknowledges that it has conducted its own due diligence on the subject
matter of this Agreement, and has not relied upon any of Seller’s
representations in entering this Agreement.





3.4           Disclaimer of
Warranties.


EXCEPT AS
EXPRESSLY PROVIDED HEREIN, SELLER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, WITH REGARD TO THE PRODUCT, THE ANDA, AND THE ASSETS, INCLUDING THE
WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.  WITHOUT LIMITING THE FOREGOING, BUYER ACKNOWLEDGES THAT
SELLER HAS MADE NO REPRESENTATION OR WARRANTY AS TO THE ABILITY TO OBTAIN
APPROVAL FROM THE FDA WITH RESPECT TO THE ANDA OR THE SITE TRANSFER OR THE
ABILITY TO MANUFACTURE OR SELL THE PRODUCT IN ACCORDANCE WITH APPLICABLE
LAW.  THE PARTIES ACKNOWLEDGE THAT THE SALE AND ASSUMPTION OF THE
ASSETS BY BUYER IS ON AN “AS IS” BASIS.  SELLER WILL NOT AND DOES NOT
WARRANT THAT OWNERS OF PRODUCT THAT ARE SUBSTANTIALLY SIMILAR TO OR IDENTICAL
WITH THE PRODUCT WILL NOT ATTEMPT TO REGISTER AND SELL SUCH PRODUCT IN THE
TERRITORY.  SELLER MAKES NO REPRESENTATION OR WARRANTY AS TO THE
PROSPECTS, FINANCIAL OR OTHERWISE, OF MARKETING THE PRODUCT IN THE
TERRITORY.





ARTICLE
4





Additional
Agreements





4.1           Use of Seller Name.


Buyer
shall not use the name of Seller or any Seller Affiliates or their respective
trademarks, logos or designs in any manner whatsoever in connection with the
manufacture, use, sale, promotion, advertising or distribution of the
Product.


4


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





4.2           FDA Contacts.


On and
after the Closing Date, Buyer shall be responsible for all contacts with the FDA
and any other applicable Governmental or Regulatory Authorities in the Territory
with respect to the Product, and all other responsibilities relating to its
registration.





4.3           Payment of Transaction
Expenses.


All sales
taxes, use taxes, transfer taxes, filing fees, and similar taxes, fees and
expenses (excluding any taxes arising from income or gains earned by Seller)
required to be paid in connection with the sale of the Assets to Buyer will be
borne and paid by Buyer.





4.4           Site Transfer.


Buyer
shall use its commercially reasonable efforts to obtain the approval from the
FDA for the site transfer of the Product to Buyer’s manufacturing facility as
expeditiously as is reasonably practicable.  Buyer is solely
responsible for preparing the necessary paperwork and conducting any testing
required to support the site transfer. Buyer is responsible for purchasing all
other materials and components necessary to manufacture the product for
testing.





4.5           Limitation of
Transfer.


Buyer
hereby agrees that until such time as Buyer has discharged its entire payment
obligation hereunder, it shall not convey, sell, assign, transfer, license or
otherwise dispose of any of the Assets without prior written consent of Seller,
which consent shall not be unreasonably withheld.





4.6           Further
Assurances.


Seller,
at any time after the Closing Date, at the reasonable request of Buyer and at
Buyer’s sole expense, shall execute, acknowledge and deliver further
assignments, and other assurances, documents and instruments of transfer that
may be reasonably necessary for the purpose of assigning and granting to Buyer
all Assets to be conveyed pursuant to this Agreement.





4.7           Indemnification.





(a)
              Buyer
      shall defend, indemnify and hold Seller and its employees, directors,
      officers, Affiliates and agents harmless from and against any and all
      claims, losses, damages, liabilities, judgments, awards and costs
      whatsoever, including reasonable attorneys’ fees and court costs, and
      including without limitation bodily injury, death or property damages
      arising out of or in connection with (i) any act or failure to act which
      is the responsibility of Buyer or its Affiliates under this Agreement,
      (ii) any and all liabilities arising from any Action relating to, directly
      or indirectly the Product or the Assets which are the responsibility of
      Buyer or its Affiliates at any time following the Closing Date, and (iii)
      any liabilities, obligations, commitments of whatever kind and nature,
      primary or secondary, direct or indirect, absolute or contingent, known or
      unknown, whether or not accrued, arising out of or relating to, directly
      or indirectly, the Product or the Assets which obligations relate to any
      conduct of Buyer or its Affiliates at any time following the Closing
      Date.  This provision shall survive the expiration or
      termination of this
Agreement.


5


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.





(b)
            Seller
      shall defend, indemnify and hold Buyer and its employees, directors,
      officers, Affiliates and agents harmless from and against any and all
      claims, losses, damages, liabilities, judgments, awards and costs
      whatsoever, including reasonable attorneys’ fees and court costs, and
      including without limitation bodily injury, death or property damages
      arising out of or in connection with (i) any act or omission to act which
      is the responsibility of Seller or its Affiliates under this Agreement,
      (ii) any and all liabilities arising from any Action relating to, directly
      or indirectly the Product or the Assets which are the responsibility of
      Seller at any time prior to the Closing Date, and (iii) any liabilities,
      obligations, commitments of whatever kind and nature, primary or
      secondary, direct or indirect, absolute or contingent, known or unknown,
      whether or not accrued, arising out of or relating to, directly or
      indirectly, the Product or the Assets which obligations relate to any
      conduct of Seller at any time prior to the Closing Date.  This
      provision shall survive the expiration or termination of this
      Agreement.





4.8           Confidentiality.


For a
period of five (5) years from the date hereof, Seller shall hold in confidence
and use its best efforts to have its Affiliates and representatives hold in
confidence all information pertaining to the Assets and, except as contemplated
by this Agreement, shall not disclose, publish, use or permit others to use the
same; provided, however,that the foregoing restriction shall not apply to any portion of the
foregoing which was or becomes available on a non-confidential basis to the
other party or when such disclosure is required by a Governmental or Regulatory
Authority or is otherwise required by law or is necessary in order to establish
rights under this Agreement or any other agreements related
hereto.  This provision shall survive the expiration or termination of
this Agreement.





ARTICLE
5





General





5.1           Assignment.


Until
such time as Buyer has discharged all its payment obligations hereunder, this
Agreement may not be assigned by Buyer without the prior written consent of
Seller as set for in Section 4.4.  This Agreement will be binding upon
and will inure to the benefit of permitted assigns and
successors.


6


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.





5.2           Notices.


All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received on the date when delivered by hand delivery with receipt
acknowledged, or upon the next Business Day following receipt of telex or
telecopy transmission, or upon the third day after deposit in the United States
mail, registered or certified with postage prepaid, return receipt requested,
addressed as set forth below:





(a)
              If
      to Seller:Epic
      Pharma, LLC227-15
      N, Conduit AvenueLaurelton,
      NY 11413Attn:
              Ashok
      G. Nigalaye, President/CEORam
      Potti, Vice PresidentFax:
              718-276-1735(b)
              If
      to Buyer:Elite
      Pharmaceuticals, Inc.165
      Ludlow AvenueNorthvale,
      NJ 07647Attn:  Chris
      C. Dick, President/COOFax:
              201-367-7880





Any party
may alter the addresses to which communications or copies are to be sent by
giving notice of such change of address in conformity with the provision of this
Section 5.2 for giving notice.





5.3           Severability.


If any
provision of this Agreement is held to be invalid or unenforceable for any
reason, the remaining provisions will continue in full force without being
impaired or invalidated in any way, and the parties agree to replace any invalid
provision with a valid provision that most closely approximates the intent and
economic effect of the invalid provision.





5.4           Headings.


Headings
used in this Agreement are for reference purposes only and in no way define,
limit, construe or describe the scope or extent of such paragraph, or in any way
affect this Agreement.





5.5           No Waiver.


No term
or provisions hereof shall be deemed waived, and no breach excused, unless such
waiver or consent is in writing and signed by the party claimed to have waived
or consented.  The waiver by any party of any breach of any provision
of this Agreement will not operate or be interpreted as a waiver of any other
subsequent breach.


7


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





5.6           Relationship of the
Parties.


Nothing
in this Agreement should be construed to create a partnership, agency, joint
venture or employer-employee relationship.  None of the parties has
the authority to assume or create any obligation, express or implied, on behalf
of any other party.





5.7           Governing Law.


This
Agreement shall be governed and construed in accordance with the laws of the
State of New York (other than the provisions relating to conflicts of
law).  Each party hereby consents to the exclusive personal
jurisdiction of the state and federal courts located in the Borough of
Manhattan, City of New York, State of New York.





5.8           Entire Agreement;
Amendment.


This
Agreement and any additional documents required to be delivered on the Closing
Date, constitute the final, complete and exclusive agreement among the parties
with respect to the subject matter hereof and supersede any previous proposals,
negotiations, agreements, arrangements or warranties, whether verbal or written,
made among the parties with respect to such subject matter.  This
Agreement may be amended or modified only by mutual agreement in writing of the
authorized representatives of the parties.





5.9           Counterparts.


This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which shall together constitute one and the same
instrument.  This Agreement shall become binding when one or more
counterparts hereof shall bear the signatures of all parties indicated as
signatories hereto.





5.10           No Third Party
Beneficiary.


The terms
and provisions of this Agreement are intended solely for the benefit of each
party hereto and their respective successors or permitted assigns, and it is not
the intention of the parties to confer third-party beneficiary rights upon any
other person or entity.





5.11           Definitions.


As used
in this Agreement, the following defined terms shall have the meanings set forth
below:





“Action” means any
action, suit, proceeding, arbitration or Governmental or Regulatory Authority
investigation or audit.





“Affiliate” means any
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with the Person
specified.  As used herein the term “control” means possession of the
power to direct, or cause the direction of, the management and policies of a
corporation or other entity whether through the ownership of voting securities,
by contract or otherwise.





“Business Day” means a
day during which banks are generally open for business in New York.




8


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





“FDA” means the
federal Food and Drug Administration.





“Governmental or Regulatory
Authority” means any court, tribunal, arbitrator, agency, commission,
official or other instrumentality of any federal, state, county, city or other
political subdivision, domestic or foreign.





“Person” means any
natural person, corporation, general partnership, limited partnership,
proprietorship, other business organization, trust, union, association or
Governmental or Regulatory Authority.





IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.





EPIC
      PHARMA, LLCBy:Name:Title:ELITE
      PHARMACEUTICALS, INC.By:Name:Title:


9


{***}Confidential
portions of this exhibit have been redacted and filed separately with the
Commission pursuant to a confidential treatment request in accordance with
Rule 24b-2 of the Securities Exchange Act of 1934, as amended.





APPENDIX  1





Listing
of Product and ANDA





Product
      Description
              ANDA
      #{***}
      Tablets , {***} mg
              {***}-{***}




10