Exhibit 10.1


                       SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

        This   SECOND   AMENDED  AND   RESTATED   EMPLOYMENT   AGREEMENT   (this
"AGREEMENT"),  dated  November 13, 2006, by and between  Elite  Pharmaceuticals,
Inc.,  a  Delaware   corporation   (the   "COMPANY"),   and  Bernard  Berk  (the
"EXECUTIVE").

                                     W I T N E S S E T H:
                                     -------------------


        WHEREAS,  on July 23, 2003 the Company and the Executive entered into an
employment  agreement (the "ORIGINAL  EMPLOYMENT  AGREEMENT") which memorialized
the terms and conditions  under which the Executive would serve as the Company's
Chief Executive Officer;

        WHEREAS,  the Company and the  Executive  amended and restated the terms
and  conditions  under which the  Executive  continued to serve as the Company's
Chief Executive  Officer and served as Chairman of the Board of Directors of the
Company  pursuant to an Amended and Restated  Employment  Agreement  dated as of
September 2, 2005 (the "FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT");

        WHEREAS, the Company and the Executive wish to further amend and restate
the terms and conditions under which the Executive will continue to serve as the
Company's Chief Executive  Officer and Chairman of the Board of Directors of the
Company;

        NOW,  THEREFORE,  in  consideration  of the mutual  covenants  contained
herein, the parties hereto agree as follows:

        Section 1. TERM OF  EMPLOYMENT;  REPRESENTATIONS  AND  WARRANTIES OF THE
EXECUTIVE.  This  Agreement  shall be effective as of the date of this Agreement
(the "EFFECTIVE DATE") and, subject to earlier  termination as specified herein,
shall continue  until the third  anniversary of the Effective Date (the "INITIAL
TERM", and together with any extensions,  the "TERM"),  provided,  however, that
unless the Company or the Executive  gives written  notice to the other party at
least sixty (60) days prior to the expiration of the then-current  Term that the
Company  or the  Executive,  as the  case  may  be,  elects  not to  renew  this
Agreement,  the then-current Term shall be automatically extended for additional
one-year  periods.  The Executive hereby represents and warrants that (i) he has
the legal capacity to execute and perform this Agreement, (ii) this Agreement is
a valid and  binding  obligation  of the  Executive  enforceable  against him in
accordance  with its terms,  (iii) the  Executive's  service  hereunder will not
conflict  with, or result in a breach of, any agreement,  understanding,  order,
judgment or other  obligation  to which the Executive is presently a party or by
which he may be bound,  and (iv) the  Executive  is not subject to, or bound by,
any  covenant  against  competition,  confidentiality  obligation  or any  other
agreement,  order, or judgment which would conflict with,  restrict or limit the
performance of the services to be provided by him hereunder.

<PAGE>

        Section 2. POSITION AND DUTIES.  During the Term,  the  Executive  shall
serve as the Chief  Executive  Officer of the  Company  and the  Chairman of the
Board of  Directors  of the Company (the "BOARD OF  DIRECTORS").  The  Executive
shall have such powers and duties as are commensurate  with such position and as
may be  conferred  upon him by the Board of  Directors.  During  the  Term,  the
Executive  shall devote all of his business time,  attention,  skill and efforts
exclusively to the business and affairs of the Company.

        Section 3.  COMPENSATION.  For all services rendered by the Executive in
any capacity  during the Term,  including,  without  limitation,  services as an
executive officer, director, or member of any committee of the Company or any of
its  subsidiaries,  affiliates  or divisions  thereof,  the  Executive  shall be
compensated as follows:

        (a) Effective as of the Effective  Date,  the Company shall be obligated
to pay the  Executive a fixed salary at a rate per annum equal to Three  Hundred
Thirty Thousand One Hundred Forty Dollars  ($330,140)  (the "BASE SALARY").  The
Base  Salary  shall  be  subject  to such  periodic  increases  as the  Board of
Directors  shall  deem  appropriate  in  light  of,  among  other  factors,  the
then-existing  financial condition of the Company and the Executive's success in
implementing the Company's business plan and achieving its strategic objectives.
Except as  otherwise  provided in this  Section  3(a),  the Base Salary shall be
payable in accordance with the customary payroll practices of the Company.

        (b) The Executive  shall be eligible to receive an annual bonus of up to
fifty percent (50%) of the Executive's then Base Salary (initially,  One Hundred
and Sixty Five Thousand and Seventy Dollars ($165,070)),  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  Fiscal Year  (pro-rated  for periods of less than a full
Fiscal Year).  The  Compensation  Committee of the Board of Directors  will give
good faith  consideration,  in exercising its discretion to determine the annual
bonus  of the  Executive,  to  any  commercialization  of  products,  merger  or
acquisition,  business  combination  or  collaboration,  growth in  revenue  and
earnings,  additional  financings or other strategic or business  transaction or
combination that inures to the benefit of the stockholders of the Company.

        (c) The  Executive  shall be  entitled  to four (4) weeks of vacation in
each calendar year during the Term; provided,  however, that the Executive shall
not be entitled to carryover  vacation from one year to any other year or to any
payment in respect of any unused or accrued vacation.

        (d) PREVIOUSLY GRANTED OPTIONS.

               (i) The  Company  previously  granted  the  Executive  options to
purchase up to 800,000 shares of the Company's  Common Stock, par value $.01 per
share  (the  "COMMON  STOCK")  which  to  the  maximum  extent  permitted  under
applicable law, are intended to qualify as "incentive  stock options" within the
meaning  of  Section  422 of the  Internal  Revenue  Code  ("PREVIOUSLY  GRANTED
OPTIONS") and which except as set forth in Section  3(d)(ii)(3)  below, have all
previously vested.


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<PAGE>

               (ii) Of the Previously  Granted Options,  (1) options to purchase
up to 300,000  shares of Common  Stock,  granted  under the Original  Employment
Agreement and vested as of June 3, 2003,  have a per share  exercise price equal
to $2.01 and are  subject  to the terms and  conditions  of the  Company's  1997
Employee  Stock  Option  Plan  ("1997  Plan")  and the  stock  option  agreement
previously entered into by the Company and Executive; (2) options to purchase up
to 300,000 shares of Common Stock of which Executive waived and released any and
all rights to receive or  exercise  such  options as to 75,000  shares of Common
Stock and with respect to the remaining  options  exercisable  for up to 225,000
shares of  Common  Stock,  vested  as of  September  2,  2005,  have a per share
exercise price of $2.15 and are subject to the terms and conditions set forth in
the Stock Option Agreement dated as of July 23, 2003, by and between the Company
and the Executive, as amended by an amendment dated as of September 2, 2005; (3)
options to purchase up to 200,000  shares of Common Stock,  of which options for
100,000  vested on September 2, 2006 and options for the remaining  100,000 vest
on September  2, 2007,  have a per share  exercise  price equal to $2.69 and are
subject to the Company's  2004  Employee  Stock Option Plan (the "PLAN") and the
Incentive Stock Option Letter Agreement  between the Company and Executive dated
September 2, 2005.

         (e) OPIOID PRODUCT  OPTIONS.  In addition to the other grants set forth
in this  Section 3,  effective on the date  hereof,  the Company  shall grant to
Executive options (the "OPIOID PRODUCT OPTIONS") to purchase up to three hundred
thousand  (300,000)  shares of Common  Stock,  pursuant to the Plan.  The Opioid
Product 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 $3.00;
(iii)  have one  hundred  fifty  thousand  (150,000)  options  vest  and  become
immediately  exercisable  in full only upon the closing of an exclusive  product
license for the first of the United States national market,  the entire European
Union  market or the Japan  market or  product  sale  transaction  of all of the
Company's  ownership  rights in the United States (only once for each individual
product) for the Company's first Non-Generic  Opioid Drug; (iv) have one hundred
fifty thousand (150,000) options vest and become immediately exercisable in full
only upon the closing of an  exclusive  product  license  for the United  States
national market, the entire European Union market or the Japan market or product
sale  transaction of all of the Company's  ownership rights in the United States
(only once for each  individual  product) for the Company's  second  Non-Generic
Opioid  Drug;  and (v) be subject to the terms and  conditions  set forth in the
Plan and the Incentive  Stock Option Letter  Agreement to be entered into by the
Company and the Executive, simultaneously herewith.

        The shares of Common Stock  issuable upon exercise of the Opioid Product
Options are subject to an effective  registration  statement filed with the SEC.
For  purposes  of this  Section  3(e),  "Non-Generic  Opioid  Drug" means a drug
developed  by the  Company  for which FDA  approval  will be sought  under a NDA
(including   under  a  505(b)(2)   application)   for  oxycodone,   hydrocodone,
hydromorphone, oyxmorphone or morphine.

        (f) MILESTONE OPTIONS.  On September 2, 2005, the Company granted to the
Executive  options to purchase up to four hundred  thousand  (400,000) shares of
Common Stock (the  "MILESTONE  OPTIONS"),  pursuant to the Plan.  The  Milestone
Options  (ii) shall,  to the maximum  extent  permitted  under  applicable  law,
qualify as "incentive  stock  options"  within the meaning of


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<PAGE>

Section 422 of the Internal  Revenue Code,  (ii) shall have a per share exercise
price equal to $2.69, the closing price of a share of Common Stock, as listed on
the American  Stock  Exchange,  on  September 1, 2005,  (iii) are subject to the
terms and conditions set forth in the Plan and the Incentive Stock Option Letter
Agreement  entered into by the Company and Executive dated September 2, 2005, as
amended simultaneously  herewith and (iv) shall vest and become exercisable only
upon the occurrence of the following  events which occur during the Initial Term
(up to a maximum of 400,000 shares of Common Stock in the aggregate):

               (1) Milestone  Options  exercisable  for one hundred  twenty-five
        thousand  (125,000)  shares  of  Common  Stock  shall  vest  and  become
        immediately exercisable in full upon the commencement of the first Phase
        III  clinical  trial  relating  to the  first  Non-Generic  Opioid  Drug
        developed by the Company;

               (2)  Milestone  Options  exercisable  for  seventy-five  thousand
        (75,000)  shares of  Common  Stock  shall  vest and  become  immediately
        exercisable  in full  upon  the  commencement  of the  first  Phase  III
        clinical trial relating to the second  Non-Generic Opioid Drug developed
        by the Company;

               (3) Milestone  Options  exercisable  for fifty thousand  (50,000)
        shares of Common Stock shall vest and become immediately  exercisable in
        full only 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 (on a product by product basis and only once
        for each individual  product) for each Company drug product,  other than
        the  Non-Generic  Opioid  Drugs for which  Opioid  Product  Options were
        granted under Section 3(e) above;

               (4)  Milestone  Options  exercisable  for ten  thousand  (10,000)
        shares of Common Stock shall vest and become immediately  exercisable in
        full upon the filing by the  Company  (in the  Company's  name) with the
        United  States  Food and Drug  Administration  (the  "FDA") of either an
        abbreviated new drug  application (an "ANDA") or a new drug  application
        (including  a NDA filed  with the FDA  under  Section  505(b)(2)  of the
        Federal Food, Drug, and Cosmetic Act, 21 U.S.C.  Section 301 ET SEQ.) (a
        "NDA"), for a product not covered by a previous FDA application;

               (5) Milestone  Options  exercisable  for forty thousand  (40,000)
        shares of Common Stock shall vest and become immediately  exercisable in
        full  upon  the  approval  by the FDA of any ANDA or NDA  (filed  in the
        Company's name) for a product not previously approved by the FDA;

               (6) Milestone Options exercisable for twenty-five (25,000) shares
        of Common Stock shall vest and become  immediately  exercisable  in full
        upon filing of an application  for U.S.  patent by the Company (filed in
        the Company's name); and

               (7) Milestone Options exercisable for twenty-five (25,000) shares
        of Common stock shall vest and become  immediately  exercisable  in full
        upon the  granting  by U.S.  Patent and  Trademark  Office  ("PTO") of a
        patent to the Company (filed in the Company's name).

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<PAGE>

        Upon the earlier to occur of the  expiration of the Initial Term of this
Agreement or the termination of Executive's  employment hereunder,  all unvested
Milestone  Options  granted  shall  automatically  terminate  and all vested but
unexercised  Milestone  Options shall  terminate 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; provided that, in the case of any
Milestone  Options  that may be vested  pursuant  to clause (5) or clause (7) of
Section 3(f)(iv) above, if (x) the applicable filing with the FDA or PTO, as the
case may be,  was made by the  Company  during  the  Initial  Term but  prior to
Without Cause Termination (as defined below),  (y) the approval relating to such
filing  (either from the FDA or the PTO) occurs  within five hundred forty (540)
days of such  filing  and (x) such  approval  occurring  within  the three  year
Initial  Term,  the  Milestone  Options  relating to such  filing  shall vest in
accordance  with  clause  (5) or clause  (7),  as the case may be. The shares of
Common Stock  issuable upon exercise of the Milestone  Options are subject to an
effective registration statement filed with the SEC.

        (g)  ADDITIONAL  MILESTONE  OPTIONS.  If the maximum number of Milestone
Options shall have vested during the Initial Term of this Agreement, the Company
shall grant to the  Executive  additional  options to purchase  shares of Common
Stock (the "ADDITIONAL MILESTONE OPTIONS"), pursuant to the Plan. The Additional
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) shall have a per share exercise price equal to
the closing  price of a share of Common Stock,  as listed on the American  Stock
Exchange,  on the  date of  grant,  (iii)  shall be  subject  to the  terms  and
conditions  set forth in the Plan and the stock  option  agreement to be entered
into by the Company and the Executive on the date of grant,  (iv) shall be fully
vested and  exercisable in full upon grant,  and (v) shall be granted at the end
of the then current  Fiscal Year in which any of the follows  triggering  events
shall occur (and, in the case of grants  related to events  occurring  after the
end of the last fiscal year during the Initial  Term,  such grants shall be made
at the end of the first Fiscal Year after the Initial Term):

               (1)  Additional  Milestone  Options for one  hundred  twenty-five
        thousand (125,000) shares of Common Stock shall be granted at the end of
        the then current  Fiscal Year (and  immediately  vested  exercisable  in
        full) upon the  commencement  of first Phase III clinical trial relating
        to the first  Non-Generic  Opioid Drug  developed by the Company only to
        the extent that such  Milestone  Options did not  previously  vest under
        clause  (f)(iv)(1)  of Section 3, it being  understood  that in no event
        shall the total of  Milestone  Options  vesting  under  3(f)(iv)(1)  and
        Additional  Milestone  Options  granted  under this  Section  3(g)(v)(1)
        exceed options for 125,000 shares of Common Stock in the aggregate;

               (2) Additional  Milestone Options for one hundred and twenty five
        thousand (125,000) shares of Common Stock shall be granted at the end of
        the then current  Fiscal Year upon the  commencement  of the first Phase
        III  clinical  trial  relating  to the second  Non-Generic  Opioid  Drug
        developed  by the Company only to the extent  Milestone  Options did not
        previously vest under clause (f)(iv)(2) of Section 3 it being understood
        that (i) in no event shall the total of Milestone  Options vesting under
        3 (f)(iv)(2) and the  Additional  Milestone  Options  granted under this
        Section  3  (g)(v)(2)  exceed  125,000  shares  of  Common  Stock in the
        aggregate,  and (ii) in no event shall the options vested


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<PAGE>

        and/or granted under Sections 3(f)(iv)(1),  3(f)(iv)(2),  3(g)(v)(1) and
        3(g)(v)(2)  exceed  options  for 250,000  shares of Common  Stock in the
        aggregate.

               (3)  Additional  Milestone  Options for fifty  thousand  (50,000)
        shares of Common  Stock shall be granted at the end of the then  current
        Fiscal Year upon the  closing of an  exclusive  product  license for the
        United  States  national  market  or  product  sale  transaction  of all
        ownership  rights (on a product by product  basis and only once for each
        individual  product)  for each  Company  drug  product,  other  than the
        Non-Generic  Opioid  Drugs for which any  Opioid  Product  Options  were
        granted under Section 3(e) above;

               (4) Additional  Milestone  Options  exercisable  for ten thousand
        (10,000)  shares of Common Stock shall be granted at the end of the then
        current Fiscal Year (and  immediately  vested  exercisable in full) upon
        the filing by the Company (in the Company's name) with the FDA of either
        an ANDA or NDA for a product not covered by a previous FDA application;

                (5) Additional  Milestone Options exercisable for forty thousand
        (40,000)  shares of Common  Stock shall be granted  upon the approval by
        the FDA of any ANDA, NDA or 505(b)(2)  application of the Company (filed
        in the Company's name) for a product not previously approved by the FDA;

               (6) Additional  Milestone Options for twenty-five (25,000) shares
        of Common Stock shall be granted at the end of the then  current  Fiscal
        Year (and  immediately  vested  exercisable  in full) upon  filing of an
        application  for an additional  U.S. patent by the Company (filed in the
        Company's name); and

               (7) Additional  Milestone Options for twenty-five (25,000) shares
        of  Common  Stock  shall be  granted  as of the end of the then  current
        Fiscal  Year  (and  immediately  vested  exercisable  in full)  upon the
        granting by U.S. Patent and Trademark  Office of such additional  patent
        to the Company (filed in the Company's name).

        Upon the earlier to occur of the  expiration of the Initial Term of this
Agreement or the termination of Executive's employment hereunder, all Additional
Milestone  Options shall  automatically  terminate in accordance  the applicable
stock option  agreement to be entered into by and between the  Executive and the
Company with respect to such Additional Milestone Options (which agreement shall
be substantially similar to the other stock option agreements by and between the
Executive and the Company) and the Plan.  For the avoidance of doubt,  (i) under
no circumstances  shall Additional  Milestone  Options be granted as a result of
the occurrence of an event which had  previously  triggered,  or  simultaneously
therewith  will  trigger,  the vesting of any  Milestone  Options  granted under
Section  3(f) above and (ii) no Opioid  Product  Options,  Milestone  Options or
Additional  Milestone Options shall be granted or vest under this Agreement as a
result of any transaction  entered into, or any FDA or PTO application or filing
made,  by, or in the name of, any person or entity in which the  Company  has an
equity interest but which is not a wholly-owned subsidiary of the Company.

        (h)  ADDITIONAL  OPTIONS.  In addition to the other  grants set forth in
this Section 3, the


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<PAGE>

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 the  stock  option  agreement  to be
entered  into by the Company and the  Executive  on the date of grant.  All such
options shall vest and be  exercisable,  as determined by the Board, in its sole
discretion.

        (i)   LIMITATION   UPON   DUPLICATIVE   GRANTING/VESTING   OF   OPTIONS.
Notwithstanding  anything set forth in this Section 3 of this Agreement,  in the
event that Opioid Product Options are vested under Section 3(e) as result of the
sale transaction  involving  Non-Generic  Opioid Drug, (x) no Milestone  Options
shall  vest  under  clauses  (f)(iv)(1)  or  (f)(iv)(2)  of Section 3 and (y) no
Additional  Milestone  Options  shall  be  granted  and/or  vest  under  clauses
(g)(v)(1) or (g)(v)(2) of Section 3, in each case,  as a result of any Phase III
clinical trials relating to the same drug product.  The limitations set forth in
this  Section  3(i) shall not affect the  granting  and/or  vesting of Milestone
Options or  Additional  Milestone  Options as a result of any Phase III clinical
trials  relating  to a  Non-Generic  Opioid  Drug  which  is the  subject  of an
exclusive license.

        (j) 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  Previously  Granted
Options, Opioid Product Options, Milestone Options, Additional 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.

        (k) PIGGBACK  REGISTRATION  RIGHTS. (i) If at any time after the Initial
Term, (x) the Company shall propose to register shares of Common Stock under the
Securities  Act of 1933  (other  than in a  registration  statement  on Form S-3
relating  to  sales  of  securities  to  participants  in  a  Company   dividend
reinvestment  plan,  or Form S-4 or S-8 or any  successor  form or in connection
with an acquisition or exchange offer or an offering of securities solely to the
existing  shareholders  or employees  of the  Company),  and (y) any  Additional
Milestone  Options that may be granted under Section 3(g) hereof shall have been
granted to, and are  exercisable  by, the  Executive,  the Company (1) will give
prompt  written  notice to the  Executive  of its  intention  to  effect  such a
registration  and (2) subject to Section  3(k)(ii)  below,  will include in such
registration all shares of Common Stock issued or issuable upon exercise of such
granted and vested Additional  Milestone Options (the "REGISTRABLE  SECURITIES")
which are permitted under applicable  securities laws to be included in the form
of registration  statement selected by the Company and with respect to which the
Company has received written requests for inclusion therein within 30 days after
the receipt of the Company's  notice  (each,  a "PIGGYBACK  REGISTRATION").  The
Executive  will be  permitted  to  withdraw  all or any part of the  Registrable
Securities from a Piggyback Registration at any time prior to the effective date
of such Piggyback Registration.


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<PAGE>

        (ii) If a Piggyback  Registration is to be an underwritten offering, and
the managing  underwriters  advise the Company in writing that in their  opinion
the number of securities  requested to be included in such registration  exceeds
the number which can be sold in such offering  without  adversely  affecting the
marketability of the offering, the Company will include in such registration:

                      (1) first, the securities the Company proposes to sell;

                      (2)  second,   securities   held  by  holders  other  than
               Executive, directors, officers or employees of the Company;

                      (3) third,  the  Registrable  Securities  requested  to be
               included in such registration by the Executive and any securities
               requested to be included in such registration by any other person
               or entity other than persons or entities  having a lower priority
               of registration than the Executive,  PRO RATA among Executive and
               such  other  persons or  entities,  on the basis of the number of
               securities  requested to be included in such registration by each
               of such holders and such other persons or entities; and

                      (4) thereafter,  other securities requested to be included
               in such registration, as determined by the Company.

        As a condition to the  inclusion of his  Registrable  Securities in such
registration,  the Executive will execute an underwriting agreement in customary
form and in form and substance satisfactory to the managing underwriters.

        (iii) If at any time after  giving  written  notice of its  intention to
register any of its securities as set forth in Section  3(k)(i) and prior to the
effective  date of the  registration  statement  filed in  connection  with such
registration,  the Company  shall  determine for any reason not to register such
securities,  the  Company  may, at its  election,  give  written  notice of such
determination  to the Executive  and thereupon be relieved of its  obligation to
register any Registrable Securities in connection with such registration.

         (l) During the Term,  the  Company  shall pay the  Executive  a monthly
automobile allowance in the amount of Eight Hundred Dollars ($800).

        (m) The Executive  shall be entitled to participate in all  compensation
and employee benefit plans or programs, and to receive all benefits, perquisites
and  emoluments,  for which any  salaried  employees of the Company are eligible
under any plan or program now or hereafter  established  and  maintained for the
employees of the Company,  to the fullest extent  permissible  under the general
terms and  provisions  of such  plans or  programs  and in  accordance  with the
provisions  thereof.  The  Executive  will be  entitled  to  participate  in the
Company's  qualified  401(k) plan and the Company  will make the maximum  annual
matching  contributions  to the  Executive's  account  thereunder  as  shall  be
permitted  by law for an  employee,  of the  Executive's  position  and  salary.
Notwithstanding  the  foregoing,  nothing in this  Agreement  shall preclude the
amendment  or  termination  of any such plan or program;  provided,  that,  such
amendment or


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<PAGE>

termination is applicable generally to the senior officers of the Company or any
subsidiary or affiliate.

        (n) During the Term, the Executive shall be covered under the directors'
and officers' insurance policy maintained by the Company.

        Section 4.  BUSINESS  EXPENSES.  The Company  shall pay or reimburse the
Executive for all reasonable  travel or other expenses incurred by the Executive
in connection  with the  performance  of his duties and  obligations  under this
Agreement,  subject to the Executive's  presentation of appropriate  vouchers in
accordance  with such  procedures as are  applicable  to senior  officers of the
Company and to preserve any deductions for Federal income  taxation  purposes to
which the Company may be entitled.

        Section 5. TERMINATION OF EMPLOYMENT;  EFFECTS THEREOF.  (a) The Company
shall have the right,  upon  delivery  of written  notice to the  Executive,  to
terminate the  Executive's  employment  hereunder prior to the expiration of the
Term (i) pursuant to a Termination for Cause (as defined in Section 5(h)),  (ii)
upon the Executive's Permanent Disability (as defined in Section 5(h)), or (iii)
pursuant  to a Without  Cause  Termination  (as  defined in Section  5(h)).  The
Executive shall have the right,  upon delivery of written notice to the Company,
to terminate the Executive's employment hereunder prior to the expiration of the
Term in the Executive's sole discretion;  provided,  however,  that, without the
Company's written consent, no termination of the Executive's employment pursuant
to this sentence shall be effective  until thirty (30) days after receipt by the
Company of written notice of termination from the Executive. Notwithstanding the
foregoing,  the Executive shall have the right,  upon delivery of written notice
to the Company, to immediately terminate the Executive's employment hereunder in
the event that the Company (w) breaches this  Agreement by  materially  reducing
the  nature  or  scope  of  the  authorities,   powers,  functions,   duties  or
responsibilities  of the Executive  set forth in Section 2 of this  Agreement or
fails to pay the  Executive's  Base  Salary  when due and  such  failure  is not
remedied  within five (5) days of receipt of written notice of such failure from
the Executive,  (x) otherwise  materially  breaches its obligations  pursuant to
this  Agreement  and the Company fails to remedy such other breach within thirty
(30) days of receipt of written  notice of such breach from the  Executive,  (y)
relocates its principal  executive  offices outside of New Jersey or New York or
(z)  consummates  a Change of Control Event (as defined in Section 5(h)) with an
entity and the  Executive  elects to  terminate  his  employment  for any reason
within  ninety (90) days  following the  consummation  of such Change of Control
Event (a "TERMINATION FOR GOOD REASON").  The Executive's  employment  hereunder
shall  terminate  automatically  without  action  by any party  hereto  upon the
Executive's death.

        (b) In lieu of any  severance  that  may  otherwise  be  payable  to the
Executive pursuant to this Section 5 or any other provision of this Agreement or
any  policies of the Company,  whether  existing on the date hereof or in effect
from  time to time  hereafter,  in the event  that the  Company  terminates  the
Executive's  employment pursuant to a Without Cause Termination or the Executive
terminates the Executive's  employment pursuant to a Termination for Good Reason
(other than in connection with a Change of Control Event specified in clause (z)
of the  definition of  Termination  for Good Reason,  which shall be governed by
Sections 5(c) and 5(d)),  the Company shall (i) pay the Executive any earned but
unpaid Base Salary plus any unpaid


                                       9
<PAGE>

reimbursable expenses as of the effective date of termination of his employment,
(ii) continue to pay the  Executive's  then-current  Base Salary (in  accordance
with the Company's  standard payroll  practices) and reimburse the Executive for
the cost to replace the life and disability  insurance coverages afforded to the
Executive  under  the  Company's  benefit  plans  with   substantially   similar
coverages,  following the effective date of termination of his employment, for a
period equal to the greater of (x) the  remainder of the  then-current  Term, or
(y) two years  following the  effective  date of  termination  and (iii) pay the
premiums for the Executive's  Company  provided health  insurance for the period
during which the Executive is entitled to continued health insurance coverage as
specified in the Comprehensive  Omnibus Budget Reconciliation Act. Other than as
required by law, no other payments shall be made, or benefits  provided,  by the
Company under this Agreement.

        (c) In lieu of any  severance  that  may  otherwise  be  payable  to the
Executive pursuant to this Section 5 or any other provision of this Agreement or
any  policies of the Company,  whether  existing on the date hereof or in effect
from time to time hereafter,  in the event that the Company consummates a Change
of Control  Event (as defined in Section  5(h)) with an entity and the Executive
elects to  terminate  his  employment  for any reason  within  ninety  (90) days
following the  consummation  of such Change of Control Event,  the Company shall
(i) pay the  Executive  any  earned  but  unpaid  Base  Salary  plus any  unpaid
reimbursable expenses as of the effective date of termination of his employment,
(ii)  pay  the  Executive,   in  twenty-four  (24)  equal  monthly  installments
commencing  on the  first  day of the  month  following  the  effective  date of
termination  of his  employment,  the sum of One Million  Dollars  ($1,000,000),
(iii) pay the  Executive's  then-current  Base  Salary (in  accordance  with the
Company's  standard  payroll  practices)  for a period  of  twelve  (12)  months
following the effective date of  termination,  (iv) following the effective date
of  termination of his  employment,  reimburse the Executive for the cost, for a
period  equal  to the  twelve  (12)  months  following  the  effective  date  of
termination,  of replacing the life and disability  insurance coverages afforded
to the Executive under the Company's  benefit plans with  substantially  similar
coverages and (v) pay the premiums for the Executive's  Company  provided health
insurance  for the period  during  which the  Executive is entitled to continued
health  insurance  coverage as specified  in the  Comprehensive  Omnibus  Budget
Reconciliation  Act.  Other than as required by law, no other  payments shall be
made, or benefits provided, by the Company under this Agreement.

        (d) In lieu of any  severance  that  may  otherwise  be  payable  to the
Executive pursuant to this Section 5 or any other provision of this Agreement or
any  policies of the Company,  whether  existing on the date hereof or in effect
from time to time hereafter,  in the event that the Company consummates a Change
of Control  Event (as defined in Section  5(h)) and the Company  terminates  the
Executive's  employment as Chief Executive  Officer of the Company in connection
with, or within one hundred eighty (180) days  following,  the  consummation  of
such Change of Control Event and other than a Termination for Cause, the Company
shall (i) pay the  Executive  any earned but unpaid  Base Salary plus any unpaid
reimbursable expenses as of the effective date of termination of his employment,
(ii)  pay  the  Executive,   in  twenty-four  (24)  equal  monthly  installments
commencing  on the  first  day of the  month  following  the  effective  date of
termination  of his  employment,  the sum of One Million  Dollars  ($1,000,000),
(iii) pay the  Executive's  then-current  Base  Salary (in  accordance  with the
Company's  standard  payroll  practices)  for a period  of  twelve  (12)  months
following the effective date of  termination, (iv)


                                       10
<PAGE>

following the effective  date of termination  of his  employment,  reimburse the
Executive for the cost,  for a period equal to the twelve (12) months  following
the  effective  date of  termination,  of  replacing  the  life  and  disability
insurance  coverages afforded to the Executive under the Company's benefit plans
with  substantially   similar  coverages  and  (v)  pay  the  premiums  for  the
Executive's  Company  provided health  insurance for the period during which the
Executive is entitled to continued health insurance coverage as specified in the
Comprehensive  Omnibus Budget Reconciliation Act. Other than as required by law,
no other payments shall be made, or benefits provided, by the Company under this
Agreement.

        (e) In the event that the Company terminates the Executive's  employment
pursuant to a Permanent Disability, the Company shall pay the Executive the same
amounts  that  would be payable to the  Executive  in the case of a  termination
under Section 5(b) less any amounts actually received by the Executive under any
Company provided and paid for disability insurance coverage. Other than pursuant
to the  terms of any  benefit  plan  then-maintained  by the  Company,  no other
payments  shall be  made,  or  benefits  provided,  by the  Company  under  this
Agreement except as otherwise required by law.

        (f) In the event that the Company terminates the Executive's  employment
hereunder due to a Termination  for Cause or, except as provided in Section 5(b)
or Section 5(c) above, the Executive  terminates his employment with the Company
(including,  without limitation,  pursuant to any retirement plan or policy then
maintained by the  Company),  the Company shall pay the Executive any earned but
unpaid  Base Salary plus any unpaid  reimbursable  expenses as of the  effective
date of termination of his  employment.  Other than as required by law, no other
payments  shall be  made,  or  benefits  provided,  by the  Company  under  this
Agreement.

        (g) The Company will obtain and maintain a life insurance  policy in the
amount of $1,000,000  on the life of the Executive  payable to the estate of the
Executive in the event of the Executive's death.

        (h) For  purposes  of this  Agreement,  the  following  terms  have  the
following meanings:

               (i)  "CHANGE OF  CONTROL  EVENT"  means,  in any one or series of
related  transactions,  (i)  a  merger  or  consolidation  in  which  securities
possessing  more than fifty percent (50%) of the total combined  voting power of
the Company's  outstanding  securities  are  transferred  to a person or persons
different from the persons holding those  securities  immediately  prior to such
transaction;   (ii)  the  sale,   transfer  or  other   disposition  of  all  or
substantially all of the Company's  assets;  (iii) the sale of securities by the
Company to a third party which  securities  constitute  more than fifty  percent
(50%) of the total combined voting power of the Company's outstanding securities
immediately  following such  transaction or (iv) the consummation of a strategic
combination  as a result of which new  directors to the Board of  Directors  are
appointed by stockholders  who are not  stockholders of the Company prior to the
consummation  of  such  Change  of  Control  Event,   such  that  the  directors
immediately  prior to the  consummation  of such  transaction  and the directors
appointed  by them  constitute  less  than 50% of the  members  of the  Board of
Directors immediately following such transaction.


                                       11
<PAGE>

               (ii) "PERMANENT  DISABILITY" means permanently  disabled so as to
qualify for full benefits under the Company's then-existing disability insurance
policy; provided, however, that if the Company does not maintain any such policy
on the date of determination, "Permanent Disability" shall mean the inability of
the  Executive to work for a period of six (6) full  calendar  months during any
eight (8) consecutive  calendar months due to illness or injury of a physical or
mental  nature,  supported  by  the  completion  by  the  Executive's  attending
physician  of  a  medical   certification  form  outlining  the  disability  and
treatment.

               (iii)  "TERMINATION  FOR  CAUSE"  means,  to the  maximum  extent
permitted by applicable law, a termination of the Executive's  employment by the
Company  because the  Executive has (a) breached or failed to perform his duties
under  applicable  law  and  such  breach  or  failure  to  perform  constitutes
self-dealing,  willful  misconduct  or  recklessness,  (b)  committed  an act of
dishonesty in the performance of his duties hereunder,  (c) willfully engaged in
conduct that is detrimental  to the business of the Company,  (d) been convicted
of a felony or a misdemeanor  involving moral  turpitude,  (e) excessively  used
alcohol  or  illegal  drugs  so as to  interfere  with  the  performance  of the
Executive's obligations under this Agreement,  (f) breached or failed to perform
his  obligations  and duties  hereunder,  which breach or failure the  Executive
shall fail to remedy  within  thirty  (30) days after  written  demand  from the
Company  specifying in reasonable  detail such breach or failure,  (g) failed to
follow lawful,  written directives of the Board of Directors that are consistent
with the duties and obligations of the Executive  under this Agreement,  and the
Executive  shall  fail to remedy  such  failure  within  thirty  (30) days after
written  demand from the Board of  Directors,  or (h)  violated in any  material
respect  the  representations  made  in  Section  1 of  this  Agreement  or  the
provisions of Section 6 of this Agreement.

               (iv)  "WITHOUT  CAUSE  TERMINATION"  means a  termination  of the
Executive's  employment by the Company  other than due to Permanent  Disability,
death,  retirement or expiration (or  non-renewal)  of the Term and other than a
Termination for Cause.

        (e) Any  payments  to be made or  benefits to be provided by the Company
pursuant to this Section 5 (other than in the event of the Executive's  death or
Permanent  Disability) are subject to the receipt by the Company of an effective
general release and agreement not to sue, in a form  reasonably  satisfactory to
the  Company  (the  "RELEASE"),  pursuant to which the  Executive  agrees (i) to
release all claims against the Company and certain  related  parties  (excluding
claims for (x) indemnification under the Company's Certificate of Incorporation,
by-laws or any Company provided  insurance policy or (y) any severance  benefits
payable hereunder),  (ii) not to maintain any action,  suit, claim or proceeding
against the Company, its subsidiaries and affiliates and certain related parties
relating to this Agreement, and (iii) to be bound by certain confidentiality and
non-disparagement  covenants  specified  therein.  The Company  shall  deliver a
general  release  and  agreement  not  to  sue  to  the  Executive,  in  a  form
substantially  similar to the  Release,  upon the  Executive's  delivery  of the
Release to the Company; provided, that, the general release and agreement not to
sue the Executive  shall not be effective  until following the expiration of any
revocation period applicable to the Release. Notwithstanding the due date of any
post-employment payment, the Company shall not be obligated to make any payments
under  this  Section  5 until  after the  expiration  of any  revocation  period
applicable to the Release under  applicable  law, as may be amended from time to
time (which revocation period is presently


                                       12
<PAGE>

seven (7) days under the Age Discrimination Act).

        Section 6. OTHER  DUTIES OF  EXECUTIVE  DURING AND AFTER  TERM.  (a) The
Executive  recognizes and  acknowledges  that all information  pertaining to the
affairs,  business,  clients,  or  customers  of  the  Company  or  any  of  its
subsidiaries  or  affiliates  (any or all of  such  entities  being  hereinafter
referred to as the "BUSINESS"), as such information may exist from time to time,
other than information that the Company has previously made publicly  available,
is confidential  information and is a unique and valuable asset of the Business,
access  to and  knowledge  of which  are  essential  to the  performance  of the
Executive's  duties under this Agreement.  In consideration of the payments made
to him  hereunder,  the  Executive  shall not,  except to the extent  reasonably
necessary in the performance of his duties under this Agreement,  divulge to any
person, firm, association,  corporation, or governmental agency, any information
concerning  the  affairs,  businesses,  clients,  or  customers  of the Business
(except  such  information  as is required by law to be divulged to a government
agency or pursuant to lawful  process),  or make use of any such information for
his  own  purposes  or for the  benefit  of any  person,  firm,  association  or
corporation  (except the Business) and shall use his reasonable  best efforts to
prevent  the  disclosure  of  any  such  information  by  others.  All  records,
memoranda,  letters,  books, papers, reports,  accountings,  experience or other
data, and other records and documents relating to the Business,  whether made by
the  Executive  or  otherwise  coming  into  his  possession,  are  confidential
information and are, shall be, and shall remain the property of the Business. No
copies  thereof  shall be made which are not retained by the  Business,  and the
Executive  agrees, on termination of his employment or on demand of the Company,
to deliver the same to the Company.

        (b) The Executive recognizes and acknowledges that the Company shall own
all Work Product created or contributed to by the Executive  during the Term and
all Work Product  created or  contributed  to by the Executive as an employee or
consultant  of the  Company (or its  subsidiaries  or  affiliates)  prior to the
Effective Date (including,  without limitation,  during the term of the Original
Employment  Agreement and the First Amended and Restated Employment  Agreement).
As used herein, "Work Product" includes, but is not limited to, all intellectual
property  rights,  US  and  international  copyrights,   patentable  inventions,
creations,  discoveries and improvements, works of authorship and ideas, whether
or not  patentable  or  copyrightable  and  regardless of their form or state of
development.  All Work Product or contributed to by the Executive as an employee
or  consultant  of the  Company (or its  subsidiaries  or  affiliates)  shall be
considered  work  made  for  hire by the  Executive  and  shall  be owned by the
Company.

               (i) If any of the Work Product  created or  contributed to by the
Executive as an employee or  consultant of the Company (or its  subsidiaries  or
affiliates)  may not, by operation of law, be considered a work made for hire by
the Executive for the Company,  or if ownership of all right, title and interest
of the intellectual property rights therein shall not otherwise vest exclusively
in the  Company,  the  Executive  shall  assign,  and upon  creation  thereof or
contribution  thereto shall be deemed to have  automatically  assigned,  without
further consideration, the ownership of all such Work Product to the Company and
its successors and assigns.  The Company,  its successors and assigns shall have
the  right to  obtain  and hold in its or their  own name  copyrights,  patents,
registrations and other protections available to the Work Product. The Executive
shall  assist  the  Company,  during  and  after  the  Term,  in  obtaining  and

                                       13
<PAGE>

maintaining patent,  copyright,  trademark and other appropriate  protection for
all Work Product in all countries and  jurisdictions,  at the Company's expense.
The Executive  hereby  irrevocably  relinquishes for the benefit of the Company,
its successors and assigns any moral rights in the Work Product recognized under
applicable law.

               (ii) The  Executive  shall  disclose all Work Product  created or
contributed  to by the  Executive as an employee or consultant of the Company or
its subsidiaries or affiliates  (before,  during and after the Term) promptly to
the  Company  and shall not  disclose  the Work  Product  to anyone  other  than
authorized  Company personnel  without the Company's prior written consent.  The
Executive  shall not  disclose  to the  Company or induce the Company to use any
secret or confidential information or material belonging to others.

               (iii) The  provisions  of this Section 6(b) cover Work Product of
any kind that is  conceived,  created,  contributed  to or made by the Executive
during the term of this  Agreement (and during the period prior to the Effective
Date that the  Executive  provided  employment  or  consulting  services  to the
Company or its subsidiaries or affiliates) that (i) relates  specifically to the
business of the Company or its  subsidiaries  and affiliates,  (ii) results from
tasks  assigned  to  the  Executive  by the  Company  or  its  subsidiaries  and
affiliates,  or  (iii)  are  conceived  or made  with the use of  facilities  or
materials, or confidential or proprietary information or trade secrets, provided
by the Company or its subsidiaries and affiliates.

        (c) In consideration of the payments to be made to him hereunder, during
the period (the  "RESTRICTIVE  PERIOD")  commencing on the effective date of the
termination of his employment for any reason and ending one (1) year thereafter,
the Executive shall not,  without express prior written approval of the Company,
directly or indirectly,  (i) solicit or assist any third party in soliciting for
employment  any person  then  currently  employed  by the  Company or any of its
subsidiaries  and  affiliates  or who was  employed by the Company or any of its
subsidiaries and affiliates during the three-month period immediately  preceding
the termination of the Executive's employment (collectively,  "EMPLOYEES"), (ii)
employ,  attempt to employ or materially  assist any third party in employing or
attempting  to employ  any  Employee,  or (iii)  otherwise  act on behalf of any
competitor to interfere with the relationship  between the Company or any of its
subsidiaries and affiliates and their respective Employees.

        (d) The Executive  acknowledges that the restrictions  contained in this
Section 6 are reasonable  and necessary to protect the  legitimate  interests of
the Company and that any breach by the Executive of any  provision  contained in
this  Section 6 will  result in  irreparable  injury to the  Company for which a
remedy at law would be inadequate.  Accordingly, the Executive acknowledges that
the Company shall be entitled to temporary, preliminary and permanent injunctive
relief against the Executive in the event of any breach or threatened  breach by
the  Executive  of the  provisions  of this  Section 6, in addition to any other
remedy that may be  available to the Company  whether at law or in equity.  With
respect to any  provision  of this  Section 6 finally  determined  by a court of
competent  jurisdiction to be  unenforceable,  such court shall be authorized to
reform this  Agreement or any provision  hereof so that it is enforceable to the
maximum extent  permitted by law. The parties hereto shall abide by such court's
determination.  If the covenants of Section 6(c) are  determined to be wholly or
partially  unenforceable in any jurisdiction,  such determination shall not be a
bar to or in any way diminish


                                       14
<PAGE>

the Company's right to enforce such covenants in any other jurisdiction.

        (e) The  Company's  obligation  to make  payments,  or  provide  for any
benefits  under this  Agreement  (except to the extent  vested or  exercisable),
shall cease upon a violation by the Executive of the  provisions of this Section
6. The  provisions  of this  Section  6 shall  survive  any  termination  of the
Executive's  employment  with the Company.  The Company shall not be required to
post any bond or other security in connection with any proceeding to enforce the
provisions of this Section 6.

        Section 7.  INDEMNIFICATION.  Prior to the Effective Date, the Executive
rendered  consulting  services to the Company pursuant to the terms of a certain
Consulting Agreement,  dated as of April 15, 2003 (the "CONSULTING  AGREEMENT"),
by and between the Company and Michael Andrews  Corporation (the  "CONSULTANT").
For  purposes  of the  Delaware  General  Corporation  Law (the  "DGCL") and the
provisions  of the  Company's  Certificate  of  Incorporation  and By-laws,  the
Executive,  the  Consultant  and  the  Consultant's   shareholders,   employees,
permitted agents and representatives shall each have the status of an "agent" of
the  Company  and,   accordingly,   (i)  the  Executive  shall  be  entitled  to
indemnification  and advancement of expenses from the Company in connection with
the performance of the Executive's  duties hereunder and (ii) the Consultant and
its  shareholders,  employees,  permitted  agents and  representatives  shall be
entitled to  indemnification  and  advancement  of expenses  from the Company in
connection  with the  performance of the Consulting  Services (as defined in the
Consulting  Agreement)  previously  rendered  to  the  Company  pursuant  to the
Consulting  Agreement,  in the case of clause (i) or (ii), to the fullest extent
permitted  by the  DGCL  and the  provisions  of the  Company's  Certificate  of
Incorporation  and By-laws.  In  addition,  to the maximum  extent  permitted by
applicable  law  (including  the DGCL),  the Company  shall  indemnify  and hold
harmless (i) the Executive against and in respect of any and all claims,  costs,
expenses,  damages,  liabilities,  losses or  deficiencies  (including,  without
limitation,  counsel's  fees and other costs and expenses  incident to any suit,
action or proceeding)  (collectively,  "DAMAGES") arising out of, resulting from
or  incurred  in  connection  with the  Executive's  performance  of his  duties
hereunder,  except to the extent that any such  Damages  result from a breach of
this Agreement by the Executive and (ii) the  Consultant  and its  shareholders,
employees,  agents or  representatives  against  and in  respect  of any and all
Damages  arising  out of,  resulting  from or incurred  in  connection  with the
provision of the  Consulting  Services by the  Consultant,  except to the extent
that any such Damages result from (A) the gross negligence or willful misconduct
of the Consultant and/or its shareholders,  employees agents or representatives;
provided,  however,  any such gross  negligence or willful  misconduct shall not
limit  the   Consultant   and/or   its   shareholders,   employees,   agents  or
representatives  right to indemnification  arising out of any claims by Dr. Atul
M. Mehta,  the former chief  executive  officer of the Company,  surrounding his
resignation as the chief executive officer of the Company or (B) a breach of the
Consulting Agreement by the Consultant.

        Section 8. WITHHOLDINGS. The Company may directly or indirectly withhold
from any payments made under this  Agreement all Federal,  state,  city or other
taxes and all  other  deductions  as shall be  required  pursuant  to any law or
governmental  regulation or ruling or pursuant to any contributory  benefit plan
maintained by or on behalf of the Company.


                                       15
<PAGE>

        Section 9.  CONSOLIDATION,  MERGER,  OR SALE OF ASSETS.  Nothing in this
Agreement shall preclude the Company from consolidating or merging into or with,
or transferring  all or  substantially  all of its assets to, or engaging in any
other business  combination  with, any other person or entity which assumes this
Agreement and all obligations and  undertakings of the Company  hereunder.  Upon
such a consolidation,  merger,  transfer of assets or other business combination
and  assumption,  the term "Company" as used herein shall mean such other person
or entity and this Agreement shall continue in full force and effect.

        Section 10.  NOTICES.  All notices and other  communications  under this
Agreement shall be in writing and, unless otherwise  provided  herein,  shall be
deemed duly given if delivered personally, by facsimile transmission (receipt of
which is confirmed) or upon receipt by the receiving party of any notice sent by
registered or certified mail (first-class mail, postage pre-paid, return receipt
requested) or by overnight courier or similar courier service, addressed, in the
case of the Executive,  at the address for the Executive  first set forth above,
or, in the case of the Company, at the address set forth below:

                             Elite Pharmaceuticals, Inc.
                             165 Ludlow Ave
                             Northvale, New Jersey  07647
                             Attention:  Board of Directors
                             Facsimile No.:  (201) 750-2401

or to such other  address as either  party shall have  previously  specified  in
writing to the other.

        Section  11. NO  ATTACHMENT.  Except  as  required  by law,  no right to
receive  payments  under  this  Agreement  shall  be  subject  to  anticipation,
commutation,  alienation,  sale,  assignment,  encumbrance,  charge,  pledge, or
hypothecation  or  to  execution,   attachment,  levy,  or  similar  process  or
assignment by operation of law, and any attempt,  voluntary or  involuntary,  to
effect any such action shall be null, void and of no effect; provided,  however,
that nothing in this Section 11 shall  preclude the assumption of such rights by
executors, administrators or other legal representatives of the Executive or his
estate  and their  assigning  any  rights  hereunder  to the  person or  persons
entitled thereto.

        Section 12.  SOURCE OF PAYMENT.  All  payments  provided  for under this
Agreement  shall be paid in cash  from the  general  funds of the  Company.  The
Company  shall not be required to establish a special or separate  fund or other
segregation  of assets to assure such  payments,  and, if the Company shall make
any  investments to aid it in meeting its obligations  hereunder,  the Executive
shall have no right,  title or interest  whatever in or to any such  investments
except as may otherwise be expressly  provided in a separate written  instrument
relating to such investments. Nothing contained in this Agreement, and no action
taken pursuant to its provisions, shall create or be construed to create a trust
of any kind, or a fiduciary relationship,  between the Company and the Executive
or any other person.  To the extent that any person  acquires a right to receive
payments from the Company  hereunder,  such right,  without  prejudice to rights
which  employees  may have,  shall be no greater  than the right of an unsecured
creditor of the Company.

                                       16
<PAGE>

        Section 13. BINDING  AGREEMENT;  NO ASSIGNMENT.  This Agreement shall be
binding  upon,  and shall inure to the benefit of, the Executive and the Company
and their respective permitted  successors,  assigns,  heirs,  beneficiaries and
representatives.  This  Agreement  is personal to the  Executive  and may not be
assigned by him without the prior written consent of the Company.  Any attempted
assignment in violation of this Section 13 shall be null and void.

        Section 14.  EXPENSES.  Except as set forth  herein,  each party  hereto
shall  pay  its  own  expenses   incident  to  the   preparation,   negotiation,
administration   and   enforcement  of  this  Agreement  and  the   transactions
contemplated herein.

        Section 15.  GOVERNING  LAW.  This  Agreement  shall be governed by, and
construed in  accordance  with,  the  internal  laws of the State of New Jersey,
without reference to the choice of law principles thereof.

        Section 16. DISPUTE  RESOLUTION.  At the option of either the Company or
the Executive,  any dispute,  controversy or question  arising under,  out of or
relating to this Agreement or the breach thereof, other than pursuant to Section
6 hereof,  shall be referred  for  decision by  arbitration  in the State of New
Jersey by a neutral  arbitrator  mutually  selected by the parties  hereto.  Any
arbitration   proceeding  shall  be  governed  by  the  Rules  of  the  American
Arbitration  Association  then in effect or such  rules  last in effect  (in the
event such Association is no longer in existence).  If the parties are unable to
agree upon such a neutral  arbitrator  within  twenty one (21) days after either
party has given the other  written  notice of the desire to submit the  dispute,
controversy  or question for decision as aforesaid,  then either party may apply
to the American Arbitration Association for a final and binding appointment of a
neutral  arbitrator,  however,  if such  Association is not then in existence or
does not act in the matter within forty five (45) days of any such  application,
either  party  may apply to the  presiding  judge of the  Superior  Court of any
county in New Jersey for the  appointment  of a neutral  arbitrator  to hear the
parties and such judge is hereby  authorized  to make such  appointment.  In the
event that either party exercises the right to submit a dispute,  controversy or
question  arising  hereunder  to  arbitration,   the  decision  of  the  neutral
arbitrator shall be final,  conclusive and binding on all interested persons and
no action at law or in equity shall be  instituted  or, if  instituted,  further
prosecuted  by either  party  other  than to  enforce  the award of the  neutral
arbitrator. The award of the neutral arbitrator may be entered in any court that
has  jurisdiction.  The  Executive and the Company shall each bear all their own
costs (including the fees and  disbursements of counsel)  incurred in connection
with any such  arbitration  and  shall  each pay  one-half  of the  costs of any
arbitrator appointed hereunder.

        Section 17. ENTIRE AGREEMENT. This Agreement shall constitute the entire
agreement among the parties with respect to the matters covered hereby and shall
supersede  all  previous  written,  oral or  implied  understandings  among them
(including  the  Consulting  Agreement,  the  Original  Agreement  and the First
Amended and Restated Employment Agreement) with respect to such matters.

        Section 18.  SEVERABILITY.  The invalidity of any provision hereof shall
not affect the validity,  force or effect of the remaining provisions hereof. In
the event that an arbitrator designated pursuant to the provisions of Section 16
or a court of competent  jurisdiction  determines  that any provision  contained
herein is not  enforceable as written because of the


                                       17
<PAGE>

breadth or duration of such  provision,  such arbitrator or court shall have the
authority to modify the terms of such  provision so that,  as so modified,  such
provision  shall be enforceable  to the maximum  extent  permitted by applicable
law.

        Section 19. AMENDMENTS.  This Agreement may only be amended or otherwise
modified,  and  compliance  with any provision  hereof may only be waived,  by a
writing executed by all of the parties hereto. The provisions of this Section 19
may only be amended or otherwise modified by such a writing.

        Section 20.  COUNTERPARTS.  This Agreement may be executed in any number
of  counterparts,  each of which shall be deemed to be an  original,  and all of
which shall together be deemed to constitute one and the same instrument.

                            (Signature Page Follows)










                                       18
<PAGE>





        IN WITNESS  WHEREOF,  the Company has caused this  Amended and  Restated
Employment  Agreement to be duly  executed by the  undersigned,  thereunto  duly
authorized,  and the Executive  has signed this Amended and Restated  Employment
Agreement, all as of the date first written above.

                                           ELITE PHARMACEUTICALS, INC.


                                           By: /s/ Edward Neugeboren
                                              ----------------------------------
                                              Name:  Edward Neugeboren
                                              Title: Director



                                           /s/ Bernard Berk
                                           -----------------------
                                           Bernard Berk