CONFIDENTIAL TREATMENT REQUEST
                                            [ * ] INDICATES INFORMATION THAT HAS
                                                      BEEN OMITTED PURSUANT TO A
                                              CONFIDENTIAL TREATMENT REQUEST AND
                                           THIS INFORMATION HAS BEEN FILED UNDER
                                              SEPARATE COVER WITH THE COMMISSION

                                                                  EXECUTION COPY

PRODUCT DEVELOPMENT, MANUFACTURING, AND DISTRIBUTION AGREEMENT

[ * ] COATED PELLETS ORAL CAPSULE [ * ]

This PRODUCT DEVELOPMENT, MANUFACTURING AND DISTRIBUTION AGREEMENT ("Agreement")
entered  into as of this 30th day of March 2005,  among  Harris  Pharmaceutical,
Inc.  ("Harris") located at 12500 World Plaza Lane, Suite 3 Fort Myers,  Florida
33907, a corporation of the State of Florida, Tish Technologies LLC ("Tishtec"),
located at 27 Yale Court,  Livingston,  NJ], a  corporation  of the State of New
Jersey,  and Elite  Laboratories,  Inc.,  ("Elite") a wholly owned subsidiary of
Elite Pharmaceuticals,  Inc., located at 165 Ludlow Ave, Northvale,  NJ 07647, a
corporation of the State of New Jersey.

RECITALS

Whereas,  Harris,  Tishtec  and Elite  (each,  a "Party" and  collectively,  the
"Parties") represent and warrant to each other that the recitals, as pertains to
such Party herein are true and correct;

Whereas, Elite is in the business of research and development, and manufacturing
pharmaceutical drug products in a manner conforming with applicable  regulations
found at 21 CFR Parts 210 and 211 ("cGMPs");

Whereas,  Tishtec  is in the  business  of  pharmaceutical  product  formulation
development and  pharmaceutical  product  analytical test method development and
ANDA filing in a manner  conforming with applicable  regulations found at 21 CFR
Parts 210 and 211 ("cGMPs');

Whereas, Harris is in the business of marketing pharmaceutical drug products;

Whereas,  the Parties desire that Harris shall be the sponsor,  and the owner of
the ANDA asset; and

Whereas,  the  Parties  desire to  collaborate  to  develop,  obtain  regulatory
approval for, manufacture, and sell [ * ] Coated Pellets Oral Capsule [ * ] (the
"Product") in accordance with the terms and conditions  specified  herein and in
the Exhibits hereto.

Now,  therefore,  for the  consideration  and covenants  set forth  herein,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the Parties hereby
agree as follows:

ARTICLE I: DEFINITIONS

The following  terms as used in this  Agreement  have the  following  respective
meanings:

1.1.     FDA:   The  term  "FDA"   means  the  United   States   Food  and  Drug
         Administration.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

1.2.     MILESTONES:  The term  "Milestones"  means the project  activities  and
         performance descriptions set forth on Exhibit "A."

1.3.     ANDA: The term "ANDA" means  Abbreviated  New Drug  Application for the
         Product prepared and submitted to FDA under this Agreement.

1.4.     DEVELOPMENT  COSTS:  The  term  "Development  Costs"  means  the  fully
         absorbed direct and indirect cost of performing the Product development
         activities  provided  for  in  Article  II of  this  Agreement  and  as
         estimated in Exhibit "A" hereto.

1.5.     PROFIT SHARE:  The term "Profit Share" means a Party's share of Profits
         as determined in accordance with Exhibit "C" to this Agreement.

1.6      BIOEQUIVALENCE  STUDY OR STUDIES:  The term  "Bioequivalence  Study" or
         "Bioequivalence   Studies"  means  a  study  conducted  to  ensure  the
         Product's  compliance  with  the  FDA  Bioequivalence   requirement  in
         accordance with 21 CFR 320.1.

1.7      FDCA: The term "FDCA" means the Federal Food, Drug and Cosmetic Act set
         forth in 21 U.S.C ss.301 et. seq.

1.8.     TRANSFER PRICE: is defined in Section 4.4.

1.9      PROPRIETARY  RIGHTS: The term "Proprietary  Rights" means, with respect
         to the Product,  all know-how,  technical  and clinical data  generated
         during the Term related to the  development of the Product  (including,
         without limitation,  inventions,  whether or not patentable and whether
         or not  tested or reduced to  practice,  any and all data,  techniques,
         discoveries,   developments,   designs,  trade  secrets,   confidential
         business  information,   know-how  and  tangible  expressions,   tests,
         reports, processes, formulae,  specifications,  improvements,  results,
         experiments,  samples,  statistics  and test  analyses  relating to the
         Product),  except to the  extent  any of the  foregoing  is based on or
         incorporates Confidential Information of any Party to this Agreement or
         of any third party.

1.10     TERRITORY:  The term  "Territory"  means the United  States of America,
         Canada, Mexico, and Puerto Rico.

1.11     REFERENCED LISTED DRUG: The term "Reference Listed Drug" means [ * ].

ARTICLE II: DEVELOPMENT OF PRODUCT; PROPRIETARY RIGHTS

2.1.     PRODUCT DEVELOPMENT.

         A.     Elite shall be  responsible  for,  and shall exert  commercially
                reasonable best efforts in,  developing the Product according to
                the activity descriptions and the timelines set forth in Exhibit
                "A".   Without   limiting  the   foregoing,   Tishtec  shall  be
                responsible  for, and shall exert  commercially  reasonable best
                efforts in  providing to Elite the initial  Product  formulation
                composition and process,  and conducting,  through an acceptable
                third party,  pilot and pivotal  Bioequivalence  Studies for the
                Product to evidence  bioequivalence to the Reference Listed Drug
                in  accordance  with study  plan  protocols  agreed  upon by the
                Parties to this Agreement,  and compiling an approvable ANDA for
                submission to the FDA. Elite shall be responsible for overseeing
                packaging related activities for the Product, including, but not
                limited to subcontracting such packaging services to a qualified
                cGMP facility.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         B.     Elite  shall be  responsible  for [ * ] percent  ([ * ]%) of the
                Development  Costs,  including,  but not limited  to,  packaging
                costs, and  preparation,  submission and prosecution of the ANDA
                for the Product to the FDA, as set forth in Sections 4.1 and 5.1
                below.

         C.     Harris  shall be  responsible  for [ * ] percent ([ * ]%) of the
                Development Costs,  including but not limited to packaging,  and
                preparation,  submission  and  prosecution  of the  ANDA for the
                Product to the FDA, as set forth in Sections 4.1 and 5.1 below.

2.2.     INTELLECTUAL PROPERTY

         All  rights,  title and  interest in and to all  intellectual  property
         rights  relating  to  the  Product,   including   without   limitation,
         inventions,   discoveries,   creations,   information,  data,  reports,
         results, and/or improvements to any confidential information, know-how,
         study  inventions,   regulatory  filings,  patent  rights,   processes,
         techniques,  and any improvements,  modifications,  alterations thereto
         and patents  issuing  thereon  made  during the term of this  Agreement
         (collectively,  "Intellectual  Property") are and shall, in all events,
         be the sole and  exclusive  property  of the  Party who  develops  such
         Intellectual  Property.  The other Parties may not grant any sublicense
         to such Party's Intellectual Property Rights without such Party's prior
         written  consent,  which  consent  may be granted or  withheld  in such
         Party's sole discretion.  Such Intellectual Property may be used by the
         developing  Party on other unrelated  products,  however the developing
         Party or Parties hereby grant Harris the exclusive right and license to
         use  such  Intellectual   Property  in  a  commercial  manner  for  the
         production of the Product. Notwithstanding the above, in no event shall
         any of the Parties hereto use the  Intellectual  Property in connection
         with the development of any product containing the [ * ] molecule.

2.3.     STATUS MEETINGS AND MONTHLY REPORTS

         The Parties  shall  conduct  meetings to review and discuss the Product
         development progress.  These meetings will be held monthly or quarterly
         depending upon the needs of Harris,  Tishtec,  and Elite.  The meetings
         shall be  attended by at least one (1) member or designee of each Party
         and may be held by  telephone  conference  call at the  request  of any
         Party. Five (5) days prior to the meeting, both Tishtec and Elite shall
         provide  the  other  Parties  with a  report  summarizing  its  Product
         development  activities for the preceding period. At the meetings,  the
         Parties shall discuss and review the  development  of the Product,  the
         budgeted Development Costs, the scheduling of Product development,  and
         such other information and topics relating to the Product as each Party
         may reasonably request.  The discussions and all information  discussed
         at these meetings  shall be briefly  summarized in the form of minutes.
         Tishtec and Elite will prepare those  portions of the minutes  relating
         to their  responsibilities.  Harris  shall  prepare  the balance of the
         minutes,  incorporating Tishtec's and Elite's portions and distributing
         the  complete  minutes  to  all  Parties.  Such  minutes  shall  not be
         considered   final  until  they  have  been   received,   reviewed  and
         acknowledged as accepted by an attending  representative of each Party.
         The time and location of such monthly meetings shall be mutually agreed
         upon by the Parties.

2.4      FDA/HARRIS INSPECTION

         A.     Tishtec  hereby  agrees,  and any  third  party  conducting  the
                Bioequivalence  Study shall agree, to permit  representatives of
                Harris  and/or  of the FDA to  examine  at any  reasonable  time
                during normal business hours, and where applicable,  make copies
                of relevant information and facilities necessary to confirm that
                the clinical  trials (or


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

                studies) being  conducted  pursuant to this  Agreement  (each, a
                "Study") are being  conducted in  compliance  with the protocol,
                this Agreement and applicable law.

         B.     Tishtec and any such third party  conducting the  Bioequivalence
                Study  shall   immediately   notify  Harris  and  Elite  if  FDA
                schedules,  or,  without  scheduling,  begins an inspection of a
                study site, or Tishtec.  In addition,  Tishtec will  immediately
                provide Harris and Elite copies of any correspondence form or to
                the FDA or other regulatory  authorities related to the clinical
                trials,  including  but not  limited  to any  FD-483s or warning
                letters, as well as any other correspondence with a governmental
                agency that is reasonably  likely to affect the  suitability  of
                Tishtec  or  such  third  party  to  continue   conducting   the
                Bioequivalence Study.

2.5.     MARKETING OUTSIDE OF THE TERRITORY

         This Agreement sets forth the obligations,  rights and responsibilities
         of  the  Parties  for   developing,   securing   regulatory   approval,
         manufacturing,  marketing,  distributing and selling the Product in the
         Territory.  The Parties will negotiate  separate  agreements  governing
         their respective obligations, rights and responsibilities for countries
         outside of the Territory.

ARTICLE III: CONFIDENTIALITY

3.1.     CONFIDENTIALITY OBLIGATION

         Harris,  Tishtec  and Elite  shall  keep in  strictest  confidence  all
         materials  and  information  provided by the other,  in  whatever  form
         provided,  that are confidential or proprietary in nature,  relating to
         the other Party's  business,  operations and technology  ("Confidential
         Information").  Such  Confidential  Information  includes,  but  is not
         limited  to,  information  and  technology  relating  to  each  Party's
         marketing plans, research and development activities, marketing trends,
         products,  designs,  technical specifications and data for the Product,
         Proprietary  Rights,  flowcharts,  logic  diagrams'  notes,  memoranda,
         know-how,  trade  secrets and  products,  as well as any  materials and
         information  that,  from  the  circumstances  in  which  they  are made
         available  to the other  Party,  in good  faith  ought to be treated as
         confidential  or  proprietary.  Except as necessary in carrying out its
         obligations under this Agreement,  no Party shall use or disclose,  nor
         permit  its  employees,  suppliers,  customers  or  agents  to  use  or
         disclose,  any such Confidential  Information without the prior written
         consent  of  the  disclosing  Party.  The  confidentiality   obligation
         contained in this  Section 3.1 shall remain  binding on all Parties for
         five (5) years after any termination of this  Agreement,  regardless of
         the cause of such termination.

3.2.     EXCEPTION TO CONFIDENTIALITY OBLIGATION

         The obligations of each Party under this Article III shall not apply to
         information  which is: (a)  presently  available  to the public  domain
         (except as disclosed by any Party in violation of this Agreement);  (b)
         lawfully received by any Party from a third party who is not or was not
         bound in a  confidential  relationship  to either  Harris,  Tishtec  or
         Elite;  or (c)  required  to be  disclosed  as a matter of law in legal
         proceedings, and regulation or government authority, in which event the
         Party so required to disclose  the  information  shall  forthwith  give
         notice to the originating Party and duly allow it to appeal or litigate
         the required disclosure.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

3.3.     RETURN OF CONFIDENTIAL INFORMATION

         Each Party shall, at the  termination of this Agreement,  return to the
         originating  Party  all  of its  Confidential  Information  and  copies
         thereof and any information  related to the development and manufacture
         of the  Product,  except to the extent the Party is  entitled to retain
         such   Confidential   Information   under  another  provision  of  this
         Agreement.

ARTICLE IV: OBLIGATIONS OF THE PARTIES

4.1.     PRODUCT DEVELOPMENT, BIOEQUIVALENCE STUDIES, AND REGULATORY APPROVAL TO
         MARKET PRODUCT

         A.     DEVELOPMENT.  Per Section  2.1,  each of Tishtec and Elite shall
                use  commercially  reasonable  efforts  to develop  the  Product
                according to the activity descriptions set forth in Exhibit "A,"
                and Harris  will pay [ * ] percent  ([ * ]%) of the  Development
                Costs in accordance with Section 5.1.

         B.     BIOEQUIVALENCE STUDY. Harris shall have the final decision as to
                the clinical  research  organization  used for the pilot and the
                pivotal  Bioequivalence  Studies.  Harris  and  Elite  shall  be
                responsible for funding the pilot and the pivotal Bioequivalence
                Studies in their proportionate  allocated share of [ * ] percent
                ([ * ]%) Harris and [ * ] percent ([ * ]%) Elite as set forth in
                Exhibit "A". It is expressly  understood  and agreed that Harris
                shall have all rights, title and interest in the Product.

         C.     ANDA.  Harris shall be the sponsor and owner of the ANDA for the
                Product Elite will provide copies of all correspondence with the
                FDA and  required  supporting  filing  (i.e.  copies  of  annual
                reports  etc.) to Harris  within  ten (10)  days of filing  such
                documents  with the FDA.  Harris,  Elite  and  Tishtec  shall be
                responsible for prosecuting and filing the ANDA. Harris shall be
                responsible for maintaining the ANDA after approval of the ANDA.

4.2.     ASSIGNMENTS, TRANSFER, SALE OR LICENSE OF PRODUCT

         A.     At any time  prior to filing  the ANDA  with the FDA,  if Harris
                wishes to  terminate  for any reason,  it shall  comply with the
                provisions of Sec. 9.1 of this Agreement.

         B.     Following  approval of the ANDA by the FDA, should Harris desire
                to assign,  transfer,  sell or license the Product or any of its
                Proprietary Rights:

                a.    Harris  shall notify  Tishtec and Elite in writing  within
                      ninety (90) days of the decision.

                b.    Tishtec  shall  have the  right of  first  negotiation  to
                      acquire such Product or  Proprietary  Rights as Harris may
                      transfer.

                c.    If Tishtec  declines  the  opportunity  to enter into such
                      negotiations,  or if the  Parties are not able to conclude
                      such negotiations and reach an agreement within sixty (60)
                      days  after   beginning   negotiations   (subject  to  the
                      negotiations commencing within ten (10) days of the end of
                      the ninety (90) day notice period, Harris then shall enter
                      into negotiations with Elite.

                d.    If Elite  thereafter,  declines the  opportunity  to enter
                      into such negotiations,  or if the Parties are not able to
                      conclude such  negotiations  and reach an agreement within
                      sixty (60) days after beginning  negotiations  (subject to
                      negotiations


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

                      commencing),  Harris is free to assign,  transfer, sell or
                      license  the  Product and its  Proprietary  Rights  within
                      thirty (30) days on terms no less favorable to Harris than
                      those offered to Tishtec and Elite.

                e.    If Harris fails to consummate such  assignment,  transfer,
                      sale or license of the Product and the Proprietary  Rights
                      to a third  party  within  such  30-day  period,  then the
                      license  rights  shall once again be subject to  Tishtec's
                      and Elite's right of first negotiation as set forth above.

                f.    Harris shall pay for all Product ordered by Harris through
                      the date of assignment,  transfer,  and sale or licensing.
                      Harris may not  transfer any of its rights to the Product,
                      whether to Tishtec,  Elite,  or a third party,  unless the
                      transferee  agrees  in  writing  to be  bound  by  Harris'
                      obligations   under  this  Agreement,   including  without
                      limitation  Harris'  obligations to market the Product and
                      pay Tishtec and Elite their Profit Shares.

         C.     If Elite desires to sell its manufacturing facility:

                a.    Elite  shall  inform  Harris of its intent to sell  within
                      ninety (90) days of the decision.

                b.    Harris  would  prefer  the right to  continue  to have the
                      product  manufactured at the Elite facility under the same
                      terms and conditions granted under this Agreement.  If the
                      successor  to  Elite's  facility  elects  not to  continue
                      manufacturing   and   supplying  the  Product  under  this
                      Agreement,  Elite  must  give  nine (9)  months  notice to
                      Harris prior to terminating Elite's obligations under this
                      Agreement.  Elite and Tishtec shall in good faith and with
                      due  diligence,  use its best  efforts  to  assist  in the
                      transfer  of  the  manufacturing  process  (including  the
                      transfer  of any  and  all  documentation  related  to the
                      Product and/or the ANDA) to another facility.

                c.    If Harris  elects to transfer the Product  manufacture  to
                      another  facility,  Elite shall  provide all  information,
                      including  but  not  limited  to  the   documentation  and
                      technical   support  necessary  to  transfer  the  Product
                      manufacture  to a  manufacturing  facility  designated  by
                      Harris within sixty (60) days of such election.

         D.     Upon the sale of all or substantially all of Harris' assets to a
                third party entity,  Harris shall inform Elite of their intended
                change of control within ninety (90) days of the decision. Elite
                shall have the option of continuing to  manufacture  the Product
                under the same terms and conditions granted under this Agreement
                (and the  acquiring  entity of Harris  then shall  assume all of
                Harris'  obligations  under this  Agreement),  or of terminating
                this  Agreement.  If the  successor  to  Harris  does  not  wish
                manufacturing  of this  Product  to be  continued  at the  Elite
                facility, Harris must give nine (9) months notice to Elite.

4.3.     MANUFACTURING, PACKAGING & DELIVERY

         Following  ANDA  approval,  Elite  shall  manufacture  the  Product  in
         accordance  with  the  terms  and  conditions  of  this  Agreement.  In
         connection  with its  manufacturing  obligations  under this Agreement,
         Elite shall be responsible  for overseeing the packaging of the Product
         at a cGMP facility in its retail  package,  preparing the Master Label,
         including final printed labeling, text and printing the required labels
         and inserts for the Product  under a designated  Harris label or Harris
         designated  private  label,  all in  accordance  with the  ANDA  review
         process  and  the  ANDA  and  all  applicable  laws  and   regulations,
         including,


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         but not  limited  to the  laws  and  regulations  enforced  by the FDA.
         Tishtec,  Elite and Harris  shall  review and  approve  the form of the
         label and insert before final printing. Notwithstanding any such review
         and approval by them,  Elite shall be  responsible  for  manufacturing,
         storing and  overseeing  the  labeling,  packaging  and shipping of the
         Product  in  a  manner  that   complies  with  all   applicable   legal
         requirements,  including,  but not limited to the laws and  regulations
         enforced  by the FDA.  It is  expressly  understood  and  agreed by the
         Parties that Elite shall not assign or transfer its  responsibility  to
         manufacture the Product under this Agreement  without the prior written
         consent of Harris,  which  consent  may be  withheld  by Harris for any
         reason in its sole discretion.

4.4.     PURCHASE AND DISTRIBUTION

         A.     Harris shall purchase  finished  (ready to market)  Product from
                Elite at the  Transfer  Price  established  in Exhibit  "B" (the
                "Transfer Price"), subject to Elite's (including any third party
                supplier's)  compliance  with the terms and  conditions  of this
                Agreement.

         B.     Harris shall distribute Product in a commercially prudent manner
                and in a manner consistent with its status as a generic drug and
                in compliance with all applicable laws and  regulations.  Harris
                shall diligently market and promote the Product in the Territory
                using commercially  reasonable efforts to maximize Product sales
                and Profit Share.  Harris shall devote such marketing efforts to
                the  Product  as its  competitors  customarily  would  exert for
                generic   products  with  comparable   market  size  and  profit
                potential under  comparable  competitive  conditions.  Following
                approval of the ANDA by the FDA, Harris shall, at least once per
                calendar quarter,  provide to Elite and Tishtec,  in writing, an
                outline  of  Harris'   commercial   plans,   planned   marketing
                activities,  and  sales  expectations  for the  Product  for the
                upcoming three (3) calendar quarters.

         C.     Harris  shall  file all  labeling,  marketing,  advertising  and
                promotional  materials to the  regulatory  agency.  Harris shall
                store,  transport,  sell,  market and  distribute the Product in
                compliance  with  all  applicable  laws  and   regulations.   If
                requested  by  Harris,   Tishtec   shall  make  any   additional
                regulatory  filings as Harris'  agent  under the ANDA filing for
                advertising as well as any additional scientific questions.

4.5.     EXCLUSIVITY

         During the term of this Agreement, except as otherwise provided in this
         Agreement,  each of Tishtec and Elite agrees that,  unless  directed by
         Harris,  it will not develop or  manufacture  the Product for itself or
         any other  party  other than  Harris and Harris  agrees not to have the
         Product  developed  or  manufactured  for sale by any party  other than
         Tishtec  and  Elite,  subject to and in  accordance  with the terms and
         conditions of this Agreement.  It is the intent of this Agreement that,
         except as  otherwise  provided in this  Agreement,  Harris shall be the
         exclusive  distributor  of the  Product,  Elite  will be the  exclusive
         manufacturer  of the  Product,  Elite will  supply  Harris  with all of
         Harris'  requirements  of the  Product  for  distribution  and  sale by
         Harris,   in  the  Territory  and  Harris  will  purchase  all  of  its
         requirements of the Product in the Territory from Elite, subject to and
         in accordance  with the terms and  conditions of this  Agreement and in
         all events following regulatory  authorization to market the Product in
         that  country.  Notwithstanding  the above,  if FDA  regulatory  action
         limits or precludes Elite's ability to produce the Product, Tishtec and
         Harris  shall have the option to have the  Product  manufactured  at an
         alternate manufacturing site and by an alternate manufacturer,  subject
         to Harris' ongoing  obligation to pay Elite's Profit Share for all such
         Product  (regardless  of


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         the site of manufacture),  and subject to the alternate  manufacturer's
         entering into confidentiality obligations running to Elite safeguarding
         Elite's Confidential Information.

ARTICLE V: DEVELOPMENT COSTS, MANUFACTURING COSTS AND SALES

5.1.     DEVELOPMENT COSTS.

         A.     The Parties have  developed an agreed upon budget  setting forth
                the projected Development Costs, by Activity,  which is attached
                hereto as Exhibit "A." Harris will be responsible for payment of
                [ * ]% of the Development Costs. Elite, shall be responsible for
                [ * ]% of the  Development  Costs. No Party shall be responsible
                for Development Costs in excess of [ * ] percent ([ * ]%) of the
                estimated  costs of the  development  as per  Exhibit "A" hereto
                incurred without such Party's prior written  consent.  It is the
                belief of the Parties  that only one (1) pivotal  Bioequivalence
                Study will be  required to obtain the  approval of both  Product
                strengths because they will be dose-proportional.

         B.     Tishtec or Elite,  as the designated  Party  responsible for the
                Activity,  shall issue invoices for the actual Development Costs
                of the Product,  including costs of the validation batches on an
                Activity basis, and on a monthly basis. With each invoice,  they
                shall provide an accounting  detail  supporting  the actual time
                and costs  associated  with  each  Activity  (including  but not
                all-inclusive of experiments and lab records).  Harris shall pay
                its  respective  share of such  Development  Costs within thirty
                (30) days after receipt of such invoice. Harris has the right to
                terminate   this   Agreement   in  its   entirety   if  a  pilot
                Bioequivalence Study has not been successfully  completed within
                nine (9) months of the date of this Agreement as per Exhibit A.

5.2.     MANUFACTURING COSTS AND SALES; PROFIT SHARE.

         A.     All parties shall agree as to the timing to make the  validation
                batches, giving Elite ninety (90) days advance notice.

         B.     Upon  FDA  approval  of the  ANDA  for the  Product  under  this
                Agreement,  if any  validation  batch of Product is not saleable
                due to short  dating,  Elite shall be  entitled to payment  from
                Harris, for the costs of such validation batches,  including but
                not  limited  to  all  raw  materials  costs,  as  part  of  its
                Development Costs.

         C.     Upon  FDA  approval  of the  ANDA  for the  Product  under  this
                Agreement,  if any  validation  batch of Product is not saleable
                due to failure of such batch to meet Product  specifications  of
                the ANDA (other  than  relating  to expiry  dating),  then Elite
                shall be responsible for the costs of such  validation  batches,
                including but not limited to all raw materials costs.

         D.     Harris  shall pay Elite [ * ] percent  ([ * ]%) of the  Transfer
                Price for a given shipment of Product within thirty (30) days of
                the date of the invoice.

         E.     During the term of this  Agreement,  on a quarterly basis within
                thirty days of the calendar quarter then ended, Harris shall pay
                each of Elite and Tishtec its  respective  Profit Share for such
                calendar quarter,  along with a detailed statement setting forth
                the calculation of Profit Share.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

5.3.     AUDIT; INSPECTION

         Within  one  hundred  eighty  (180)  days  following  the close of each
         calendar  year  during the term of this  Agreement  and for a period of
         twelve (12) months following  expiration or earlier termination of this
         Agreement,  upon the request of a Party ("Requesting  Party") the other
         Party shall provide the Requesting Party's  accountants,  at Requesting
         Party's sole cost and expense,  with access,  during  regular  business
         hours and upon  reasonable  prior  written  notice,  and subject to the
         confidentiality  obligations  set forth  herein,  to the other  Party's
         books and records  relating to the Product in the Territory  solely for
         purposes of verifying costs and expenses and Profit Share in connection
         with this Agreement, and for verifying the accuracy of the calculations
         hereunder for the calendar year then ended and for the two (2) calendar
         years prior thereto. If any such verification shows any underpayment or
         overpayment,  a  correcting  payment or a refund  shall be made  within
         thirty (30) days of completion of such  verification  and submission of
         the results thereof, with details of the calculations included therein.

ARTICLE VI: PRODUCT DEVELOPMENT FEES AND INTELLECTUAL PROPERTY

6.1.     It is agreed  between  Harris and Tishtec,  that upon the  execution of
         this  Agreement,  Harris  shall pay Tishtec a fee of  $150,000  for the
         identification  and  development  of the  Product  opportunity  and the
         oversight of the formulation  development work to be completed at Elite
         and/or Tishtec. Tishtec agrees that documentation of this process shall
         be provided to Harris on a monthly basis.

6.2.     It is agreed  between  Harris,  Tishtec,  and Elite that if, during any
         process of Product  development  (including  but not all  inclusive  to
         packaging   and   marketing),   if  any  Parties   develop   patentable
         manufacturing not currently available in the market place:

         A.     The developing Party shall be the sole owner of the intellectual
                property and may seek to protect this process as either a "trade
                secret" or patent the process.

         B.     If Elite and/or  Tishtec  develops such  intellectual  property,
                they shall be required to license the use of such "trade secret"
                or patentable technology to Harris or Elite (as applicable),  on
                an exclusive basis for the manufacture of the Product, for a fee
                of  $25,000  per  year of each  year in which  there  are a full
                twelve (12) months sales of the Product, for use by Elite in the
                manufacture  and Harris in the sales of the  Product  under this
                Agreement.

         C.     Such "trade secret" or patentable  technology may be used by the
                developing  Party on other  unrelated  products,  however Harris
                shall have the right of first  refusal to use such  process in a
                commercial manner for the production of the Product.

ARTICLE VII: DELIVERY, GUARANTEE,  INSURANCE,  INDEMNITY AND RELATIONSHIP OF THE
PARTIES

7.1.     ORDERING AND DELIVERY

         A.     Elite will deliver to Harris or shall cause the finished Product
                to be delivered to Harris in bottles packed in cases and stacked
                on pallets as specified by Harris under  Section  7.1(c)  below.
                Harris shall order  Product in  multiples of Elite's  batch size
                for the Product.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         B.     Harris  will  provide to Elite on a monthly  basis a forecast of
                its expected supply needs for the Product for the then following
                six (6)  months,  along with  requested  shipment  dates for the
                Product.  Each  monthly  forecast  shall be  deemed to be a firm
                purchase  order  as to the  Product,  binding  upon  Harris  and
                subject to Elite's acceptance or rejection, in whole or in part,
                scheduled  for the first three (3) months of the  forecast,  and
                non-binding as to the last three (3) months of the forecast.  If
                a monthly forecast  increases the monthly quantity of Product by
                more than 25% over the  quantity  scheduled  in the  immediately
                preceding  month  forecast,  Elite  shall  not  be  required  to
                manufacture  and ship the quantity of Product that exceeds a 25%
                increase.  At the time of each quarterly  forecast,  the Parties
                will agree on shipment  dates for the Product  scheduled for the
                first three (3) months of the forecast,  to the extent they have
                not already agreed, and Elite will make shipments,  or cause all
                shipments to occur,  in accordance  with the agreed dates.  If a
                monthly forecast  increases the quantity of any Product over the
                quantity   scheduled  in  the  immediately   preceding   monthly
                forecast,  the Parties will agree on an equitable  adjustment in
                the shipment dates.

         C.     In  addition  to monthly  forecasts,  at least  thirty (30) days
                before the  shipment  date agreed upon for any  Product,  Harris
                shall   provide  Elite  with   specific   written   instructions
                concerning the packaging, labeling (unless under a private label
                other than  Harris,  which will  require 60 days prior notice to
                Elite  and  Harris  shall  ensure  that  Elite  has   sufficient
                inventory of such private labels at least thirty days before the
                desired shipment date of Product), and shipping of such Product.

         D.     Elite  will  ship,   or  shall   ensure  that  any  third  party
                labeler/packager  ships,  the Product in accordance  with Harris
                shipping and delivery instructions.  Elite shall pay the cost to
                ship the bulk packaged Product to a third party labeler/packager
                and Harris shall pay the shipping  cost of the finished  Product
                shipped from a pre-approved  cGMP facility under Section 4.3, to
                Harris' desired location.  Each shipment shall be made to arrive
                within five (5) days of the shipping date. Upon shipment,  Elite
                shall invoice Harris in writing for the Transfer  Price.  Harris
                shall pay Elite the Transfer  Price  within  thirty (30) days of
                the date of the invoice as in  accordance  with Section  5.2(c).
                Elite  shall be deemed to have  delivered  the Product to Harris
                when the Product has been tendered to the shipper, and title and
                risk of loss of the  Product  shall be  deemed to pass to Harris
                upon such tender.

7.2.     GUARANTEE

         Elite  guarantees that the Product  delivered to Harris will not be, on
         the date of delivery,  adulterated or misbranded  within the meaning of
         the FDCA or an article which may not,  under the provisions of Sections
         404, 505 or 512 of the FDCA, be introduced  into  interstate  commerce.
         Elite further  guarantees  that the Product will be manufactured in all
         respects in  accordance  with the ANDA and will conform in all respects
         with cGMPs.  Elite agrees to comply with and be bound by all reasonable
         Harris  quality  standards  that may be  agreed  to by the  Parties  in
         writing and appended to this Agreement. If any Product is found to fail
         to conform to the  specifications of the ANDA or is not manufactured in
         accordance with current good manufacturing  practices, and such failure
         is due to acts or omissions of Elite,  then Harris shall have the right
         to reject such  nonconforming  shipment of Product or the nonconforming
         portion  thereof,  as the case may be. Harris shall give written notice
         to Elite of its rejection  within fifteen (15) days of Harris'  receipt
         of  the  Product,  specifying  the  grounds  for  such  rejection.  The
         nonconforming  Product shall be held for Elite's disposition,  or shall
         be  returned to Elite,  as directed by Elite in writing.  Nonconforming
         packaged


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         Product  shall be returned to Elite  within ten (10)  business  days of
         Elite's so  directing.  Elite will  replace  the  Product at no cost to
         Harris.  Elite will bear the cost of any Recall (as  defined  below) of
         any Product  due to acts or  omissions  of Elite.  Harris will bear the
         cost of any Recall of any Product due to acts or  omissions  of Harris.
         In all other events, the costs of any Product Recall shall be allocated
         [ * ] percent ([ * ]%) to Harris, [ * ] percent ([ * ]%) to Elite.

7.3.     OTHER REPRESENTATIONS AND WARRANTIES

         A.     Elite  represents  and  warrants  that it will use  commercially
                reasonable  efforts to ensure that any third  party  supplier of
                the Active  Pharmaceutical  Ingredient  ("API")  for the Product
                shall have an active Drug  Master File with the FDA,  shall have
                been  qualified by FDA to supply the API under the ANDA,  and is
                in compliance with the obligations imposed by the FDCA.

         B.     Elite  represents  and  warrants  that it will use  commercially
                reasonable    efforts   to   ensure   that   any   third   party
                packager/labeler  it  subcontracts  with pursuant to Section 4.4
                shall  perform its  packaging,  storing,  labeling  and shipping
                services  in  a  manner  which  comports  with  all  obligations
                hereunder,  and is in compliance with the obligations imposed by
                the FDCA.

         C.     Each of Tishtec and Elite  represents  that  performance  of its
                obligations  set  forth  in this  Agreement  (whether  performed
                directly by Elite or through a supplier,  such as  provision  of
                API from a third  party  supplier)  shall  not  infringe  on the
                intellectual  property rights,  including but not limited to any
                patent rights,  of any third party.  Tishtec further  represents
                and  warrants  that  none  of  Tishtec  or any of its  officers,
                directors,   employees   or   shareholders   is   bound  by  any
                restrictions or obligations (of  confidentiality,  nondisclosure
                or  otherwise)  owing to any third  party  with  respect  to the
                formulations, technology, know-how or information to be provided
                by Tishtec under this Agreement.

         D.     Harris represents and warrants that its sale and distribution of
                the Product will not violate any  agreement or order to which it
                is a party or by which it is bound. The Parties will immediately
                notify  each  other  of,  and  assist  each  other in  answering
                customer or regulatory  inquiries and complaints  concerning the
                Product.

         E.     DISCLAIMER  OF  WARRANTIES:   EXCEPT  AS  SPECIFICALLY  PROVIDED
                HEREIN,  ELITE EXPRESSLY  DISCLAIMS ANY AND ALL OTHER WARRANTIES
                OF ANY KIND,  EXPRESS OR IMPLIED,  INCLUDING WITHOUT  LIMITATION
                THE WARRANTIES OF  MERCHANTABILITY  AND FITNESS FOR A PARTICULAR
                PURPOSE.

         F.     Elite  and  Harris  each  agrees  to  notify  the  other  within
                twenty-four  (24) hours of any  serious and  unexpected  adverse
                reactions  reported to either of them  resulting from the use of
                the Product (whether inside or outside of the Territory).  Elite
                and Harris  shall each  notify the other  promptly  of any other
                complaints or adverse  reactions from third parties  reported to
                either of them  resulting  from use of the  Product  sold  under
                Harris' label.

         G.     In the  event  either  party  believes  it may be  necessary  to
                conduct a recall,  field correction,  market  withdrawal,  stock
                recovery,  or other  similar  action with respect to any Product
                sold by Elite to Harris under this Agreement (a "Recall"), Elite
                and  Harris


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

                shall  consult  with each  other as to how best to  proceed,  it
                being  understood  and agreed that the final  decision as to any
                Recall of any Product shall be made by Elite; provided, however,
                that Harris shall not be  prohibited  hereunder  from taking any
                action that it is required to take by applicable law.

7.4.     COMPLIANCE WITH LAW

         The Parties  herein  represent and warrant that they will perform their
         respective obligations hereunder in accordance with all applicable law.

7.5      LIMITATION OF LIABILITY

         EXCEPT  WITH  RESPECT  TO (x)  CONSEQUENTIAL  DAMAGES  AWARDED TO THIRD
         PARTIES FOR PRODUCT  LIABILITY  CLAIMS  COVERED BY THE  INDEMNIFICATION
         OBLIGATIONS  SET  FORTH IN  SECTION  7.7(A)  OF THIS  AGREEMENT,  ELITE
         INFRINGEMENT CLAIMS AND Tishtec INFRINGEMENT CLAIMS COVERED BY SECTIONS
         7.7(B)  and  7.7(C)  OF  THIS  AGREEMENT,  AND (y)  ANY  BREACH  OF THE
         CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE III OF THIS AGREEMENT,
         NO PARTY  TO THIS  AGREEMENT  SHALL BE  LIABLE  FOR ANY  OTHER  PARTY'S
         CONSEQUENTIAL,  INCIDENTAL,  SPECIAL OR  PUNITIVE  DAMAGES,  OR LOSS OF
         PROFITS.

7.6.     INSURANCE

         A.     Elite  represents  and  warrants  that it has product  liability
                insurance  in the  amount of at least  $1,000,000  per claim and
                $5,000,000  in the  aggregate  covering  the Product  developed,
                manufactured,  packaged and labeled  hereunder  and shall ensure
                that any third party supplier hired by Elite in connection  with
                its  obligations   hereunder   shall  carry  product   liability
                insurance in the same  amounts.  Elite will provide  evidence of
                his coverage to Harris on an annual basis or whenever any change
                is made by Elite or any  third-party  supplier in such policy of
                insurance.

         B.     Harris  represents  and warrants  that it has product  liability
                insurance  in the  amount of at least  $1,000,000  per claim and
                $5,000,000 in the aggregate  including products covering Product
                distributed  from its facility.  Harris will provide evidence of
                this coverage to Elite on an annual basis or whenever any change
                is made by Harris in such policy of insurance.

7.7.     INDEMNIFICATION

         A.     Elite and Tishtec agree to indemnify  and hold harmless  Harris,
                its  directors,  officers,  employees  and  agents(collectively,
                "Harris  Indemnified  Parties"),  from any liability or expense,
                including  reasonable  fees and  costs of  defense,  they  incur
                arising out of or in connection with third party claims relating
                to: (i) Elite's, or any third party supplier engaged by Elite's,
                negligence   with   respect  to  the   manufacturing,   storage,
                packaging,  labeling or shipment of the Product;  (ii)  personal
                injury  or  death   resulting  from  use  of  Product  that  was
                manufactured,  stored,  or shipped by Elite,  or any third party
                supplier engaged by Elite, in a manner that does not comply with
                the terms and conditions of this Agreement (a "Product Liability
                Claim");   or  (iii)  any  breach  of   Elite's   or   Tishtec's
                representations  or  warranties  set  forth  in this  Agreement,
                including  but not limited to those set forth in  Sections  7.2,
                7.3 (but specifically  excluding  Section 7.3(C)),  and 7.4; all
                provided  that the  liability or expense which is the subject of
                the third party  claim is


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

                not related in any way to Harris',  or any third party  supplier
                engaged by Harris', negligence, fault, or other act or omission.
                Harris  agrees to  indemnify,  defend and hold  harmless  Elite,
                Tishtec, and their respective directors, officers, employees and
                agents  (individually,  "Elite Indemnified Parties" and "Tishtec
                Indemnified Parties"), from any liability or expense,  including
                reasonable fees and costs of defense,  they incur arising out of
                or in  connection  with third party  claims  relating  to: (i) a
                breach of Harris'  representations  or  warranties  set forth in
                this  Agreement;  (ii)  Harris',  or any  third  party  supplier
                engaged by Harris', negligence with respect to the transporting,
                storing,  sale, marketing,  promotion or distribution of Product
                hereunder;  or (iii) any third party supplier engaged by Harris'
                packaging,  labeling or shipment of Product in  accordance  with
                the terms and  conditions of this  Agreement;  all provided that
                the  liability  or expense  which is the subject of the claim is
                not  related in any way to Elite's  or  Tishtec's  (or any third
                party supplier engaged by Elite or Tishtec's) negligence, fault,
                or other act or omission.

         B.     Elite  shall   indemnify,   defend  and  hold  harmless   Harris
                Indemnified  Parties and Tishtec  Indemnified  Parties  from the
                costs and expenses of settling,  paying or defending any and all
                claims,  actions  or  proceedings  resulting  from an  assertion
                against  Tishtec   Indemnified  Parties  or  Harris  Indemnified
                Parties  that Elite's  Intellectual  Property  infringes  upon a
                third party's intellectual  property rights ("Elite Infringement
                Claims");  provided  however that Elite shall not be responsible
                for any  Infringement  Claim relating to  Intellectual  Property
                provided by Tishtec, Harris, or any third party.

         C.     Tishtec  shall  indemnify,   defend  and  hold  harmless  Harris
                Indemnified  Parties and Elite  Indemnified  Parties and pay all
                costs and expenses of settling,  paying or defending any and all
                claims,  actions  or  proceedings  resulting  from an  assertion
                against Elite Indemnified  Parties or Harris Indemnified Parties
                that  Tishtec's  Intellectual  Property  infringes  upon a third
                party's  intellectual  property  rights  ("Tishtec  Infringement
                Claims"); provided however that Tishtec shall not be responsible
                for any  Infringement  Claim relating to  Intellectual  Property
                provided by Elite, Harris, or any third party.

         D.     Except with  respect to Product  Liability  Claims,  breaches of
                confidentiality  obligations,  and Elite Infringement Claims and
                Tishtec  Infringement  Claims,  in  no  event  shall  a  Party's
                liability  to  indemnify  under this  Section  7.7 or  otherwise
                exceed the  aggregate  Profit  Share  payments  received by such
                Party as of the date of the claim for indemnity hereunder.

7.8      RELATIONSHIP OF THE PARTIES

         It is expressly  understood  and agreed that Tishtec,  Elite and Harris
         are independent  contractors and that the relationship  between them by
         virtue of this  Agreement  shall not constitute a partnership or agency
         of any kind.  No Party to this  Agreement  shall have the  authority to
         make any statements,  representations or commitments of any kind, or to
         take any action,  which shall be binding on the other Party without the
         prior  written  authorization  of  that  other  Party.  It  is  further
         understood  that  Harris  is not a tenant  of Elite  or its  Lessee  or
         Lessor,  and shall  not be  responsible  for any rent or lease  expense
         incurred by Elite.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

ARTICLE VIII: DISPUTE RESOLUTION/ARBITRATION

8.1.     In the  event  that  a  dispute  arising  out of or  relating  to  this
         Agreement cannot be resolved through  negotiation  between the Parties,
         the Parties  hereto agree to submit the dispute to  mediation  and will
         jointly appoint a mutually acceptable  mediator,  seeking assistance in
         such regard from the CPR Institute of Dispute  Resolution  (366 Madison
         Avenue, New York, NY 10017,  telephone number 212-949-6490) if they are
         unable to promptly agree upon such appointment. Mediation must commence
         within  fifteen (15) days after  either  Party hereto  serves a written
         notice of  mediation  upon the other and the Parties  hereto shall bear
         equally the cost of the mediation.  The Parties agree to participate in
         good faith in the  mediation and related  negotiations  for a period of
         five [5] days.  If the  Parties are not  successful  in  resolving  the
         dispute  through  mediation,  the  parties  may  then  arbitrate.  This
         Agreement  shall be governed by and  construed in  accordance  with the
         laws of the  State of  Florida  without  regard  to  conflicts  of laws
         provisions.

8.2.     ARBITRATION:  In the event a dispute  cannot be resolved in  accordance
         with  Section  8.1,  all  controversies  or  claims  arising  out of or
         relating to this Agreement, or of a breach of it, shall be submitted to
         binding  arbitration  pursuant to Section 682.01 et seq, of the Florida
         Statutes  (Florida  Arbitration  Code) as amended from time to time and
         not under the rules of the American Arbitration Association.

         A.     The  arbitration  shall be  before  one (1)  arbitrator.  If the
                Parties fail to agree on the sole arbitrator within fifteen (15)
                days of  written  notice  from  either  Party of a dispute to be
                submitted  to  arbitration,  either  Party may apply to have the
                arbitrator  appointed  by  a  court  of  competent  jurisdiction
                pursuant to Section 682.04,  Florida  Statutes.  All arbitration
                proceedings shall be held in Lee County, Florida.

         B.     The  arbitration  hearing shall be held within  forty-five  (45)
                days from the date of the arbitrator's  acceptance of his or her
                duties,  unless otherwise agreed by all Parties,  or extended by
                the arbitrator on good cause shown.

         C.     The fees and costs of the  arbitration  shall be equally divided
                so that each Party shall pay one third.  If a Party fails to pay
                the fees of the  arbitrator as requested  from time to time, the
                other Party may  advance any such fees,  which shall be due with
                interest at the  maximum  legal rate  permitted  by law from the
                date  of  advancement,  and  shall  be  part  of  the  award  in
                arbitration.

         D.     The Parties agree that the Arbitrator shall be granted the power
                to award reasonable attorneys' to the prevailing Party.

         E.     Any award  rendered  in the  arbitration  shall be  binding  and
                conclusive upon the Parties and shall not be subject to retrying
                or appeal before any court.  The arbitrator shall have the right
                to decree specific performance. Judgment upon the award rendered
                in  the   arbitration   may  be  entered  in  any  court  having
                jurisdiction.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

ARTICLE IX: TERM AND TERMINATION OF AGREEMENT

This Agreement shall continue in effect as of the Effective Date for a period of
ten (10) years from the first  shipment of commercial  production  quantities of
the Product under this Agreement (the "Initial  Term").  After the Initial Term,
this Agreement  shall continue for successive  terms of five (5) years each (the
"Additional  Terms"),  unless either Harris or Elite provides  written notice to
the other Party at least forty-five (45) days before the end of the then-current
Term that such Party desires to terminate this Agreement (the  Additional  Terms
and  Initial  Terms  being  referred  to  herein  collectively  as the  "Term").
Notwithstanding  the  foregoing,  this Agreement may be terminated in accordance
with the following provisions:

9.1.     TERMINATION WITHOUT CAUSE DURING DEVELOPMENT

         Before the FDA approves the ANDA with respect to the Product, if Harris
         wishes to terminate for any reason:

         A.     Harris  shall give thirty (30) days notice in writing to Tishtec
                and Elite.

         B.     All of Harris'  rights to the Product and the ANDA shall  revert
                back to Tishtec  upon  repayment to Harris by Tishtec of the one
                time Product  development  fee of $150,000.  If Tishtec does not
                pay the  $150,000 to Harris  within  thirty (30) days of Harris'
                notice, Elite shall have the right to all of Harris' rights upon
                payment of$150,000 to Harris.

         C.     Harris  shall  pay  Tishtec  and  Elite  its  prorated  share of
                Development Costs through the date of notice and as set forth on
                Exhibit "A".

9.2.     TERMINATION WITHOUT CAUSE AFTER DEVELOPMENT.

         After  eighteen  (18) months of launch of the Product  into the market,
         either Harris or Elite may terminate  this Agreement on six (6) months'
         written  notice to the  other if the  Profit  Share to the  terminating
         party for the twelve (12) month period  preceding the date of notice of
         termination is less than three hundred thousand dollars ($300,000).  If
         the Agreement is terminated under this section by Harris, Harris agrees
         to pay for all Product ordered by it.

         If the  Agreement is  terminated  under this section by Harris,  Harris
         shall have the option to  transfer  and sell the ANDA and its rights to
         the Product to Tishtec and Harris shall take such actions,  and execute
         and deliver such documents, as Tishtec may from time to time reasonably
         request to effectuate the transfer of the ANDA to Tishtec hereunder. If
         Tishtec  does not accept  rights and does not  request  transfer of the
         ANDA in writing within thirty (30) days of the notice,  Elite may elect
         to accept the transfer of the ANDA its rights to the Product and Harris
         shall take such  actions,  and execute and deliver such  documents,  as
         Elite  may from  time to time  reasonably  request  to  effectuate  the
         transfer of the ANDA to Elite hereunder. The accepting party shall have
         all of Harris' rights and obligations for the Product.

         If the  Agreement  is  terminated  under this  section by Elite,  Elite
         agrees, at the request of Harris, to transfer the Product manufacturing
         to another  facility  and shall  provide all  information  necessary to
         transfer  the  Product   manufacturing  to  a  manufacturing   facility
         designated by Harris within sixty (60) days of such termination notice.
         Any such  termination  by Elite shall be effective upon FDA approval of
         the new manufacturing facility, or if earlier, on nine months' from the
         date of Elite's notice of termination.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

9.3.     TERMINATION FOR CAUSE

         This Agreement may be terminated by either Elite or Harris in the event
         of a material  breach or default by a Party  which is not cured  within
         thirty (30) days after receipt of written  notice  detailing the breach
         or default.

9.4.     RIGHTS UPON TERMINATION

         Subject  to  Sections  9.1(B)  and  9.2,  or  upon  termination  of the
         Agreement due to a material  breach by Harris,  upon the termination or
         expiration  of this  Agreement,  Harris  shall  continue  to  have  the
         ownership rights to the ANDA,  including the right to license,  sell or
         transfer the ANDA.

9.5      ACTS OF INSOLVENCY

         Either  Elite or Harris may  terminate  this  Agreement  for default by
         written  notice if the other Party becomes  insolvent,  makes a general
         assignment for the benefit of creditors,  files a voluntary petition of
         bankruptcy,  suffers or permits the  appointment  of a receiver for its
         business  assets,  or  becomes  subject  to any  proceeding  under  any
         bankruptcy or insolvency law, whether domestic or foreign, or has wound
         up or  liquidated,  voluntarily  or  otherwise.  A Party  hereto  shall
         immediately  notify  the other  Party  upon an  occurrence  of any such
         event.

9.6      FORCE MAJEURE

         Either Party, Elite or Harris or Tishtec, shall be excused from failure
         to perform any of its obligations  hereunder to the extent such failure
         is caused by acts of God, fires, floods, war, sabotage,  unavailability
         of raw materials,  governmental  laws or  regulations,  labor disputes,
         strikes or similar  occurrences,  where such Party is without  fault or
         negligence  (a  "Force  Majeure  Event"),  provided  such  Party  gives
         immediate  notice of such Force Majeure  Event to the other Party,  and
         exercises due diligence to remove the cause as soon as practicable.  As
         applicable due to natural disaster,  Elite will make reasonable efforts
         to assist Harris to find/establish  another approved cGMP manufacturing
         site.

ARTICLE X: MISCELLANEOUS

10.1     ASSIGNMENT

         Neither this  Agreement  nor any interest  therein may be assigned,  in
         whole or in part, by either Party, Elite or Harris or Tishtec,  without
         the prior  written  consent of the other,  except that either Party may
         assign  its  rights  and   obligations   to  an  affiliate,   division,
         subsidiary, or parent company, or to a successor approved by (i) Elite,
         if Harris is the assignor,  (ii) Harris,  if Elite is the assignor,  or
         (iii) Elite and Harris,  if Tishtec is the assignor  (such approval not
         to be unreasonably withheld), in which event such assignee or successor
         shall assume the respective  Party's rights and obligations  hereunder.
         Subject to the  foregoing,  this  Agreement  shall be binding  upon and
         inure to the  benefit  of the  Parties  hereto,  and  their  respective
         successors and assigns.

10.2.    NO WAIVER

         No delay or omission by any Party hereto to exercise any right of power
         occurring  upon any  noncompliance  or  default  by the other  Party or
         Parties with respect to any of the terms of this Agreement shall impair
         any  such  right or power or be  construed  to be a waiver  thereof.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         A  waiver  by any  of  the  Parties  hereto  of  any of the  covenants,
         conditions,  or  agreements  to be  performed by the other shall not be
         construed  to be a  waiver  of any  succeeding  breach  thereof  of any
         covenant,  condition,  or agreement  herein  contained.  Unless  stated
         otherwise,  all  remedies  provided  for in  this  Agreement  shall  be
         cumulative  and in  addition  to and not in lieu of any other  remedies
         available to any Party at law, in equity, or otherwise.

10.3.    ENTIRE AGREEMENT; MODIFICATIONS TO THE AGREEMENT

         This Agreement, including all Exhibits attached hereto, constitutes the
         entire  agreement  between  the  Parties.  All  prior   contemporaneous
         agreements,  proposals,   understandings,   whether  oral  or  written,
         relating to the subject  matter  hereto are hereby  superceded  by this
         Agreement,  except of the  Confidentiality  Agreement dated December 1,
         2004, among Harris,  Tishtec,  and Elite,  which shall continue in full
         force and effect. No modification or waiver of any of the provisions of
         this  Agreement  shall be valid  unless it is  provided  in writing and
         signed by Harris and Elite and, if and to the extent such  modification
         or waiver modifies Tishtec's rights or obligations, by Tishtec, too.

10.4.    GOVERNING LAW

         This  Agreement  shall be governed by the laws of the State of Florida,
         United States of America.

10.5.    NOTICES

         All  communications  required  or  permitted  hereunder,  shall  be  in
         writing,  and shall be effective  upon  delivery to the above  provided
         addresses.

10.6.    AUTHORITY

         Each person signing on behalf of a Party to this Agreement below herein
         represents  and warrants  that it has the legal right and  authority to
         enter  into  this  Agreement,  and to  fully  perform  its  obligations
         hereunder,  and that  none has made nor will  make any  commitments  in
         conflict with its respective obligations hereunder.

10.7.    HEADINGS

         The headings  and  subheadings  utilized  herein are not a part of this
         Agreement,  but are merely  guides or labels to assist in locating  and
         reading the provisions hereof.

10.8.    SURVIVAL

         The following provisions in this Agreement shall survive termination or
         expiration  of this  Agreement  for any reason:  Article I,  Article II
         Section 2.2, Article III,  Sections 7.2, 7.3(A),  (B) (C) (D), (E), (F)
         and (G), 7.5, and 7.7, Article VIII, Article IX, and Article X

10.9     SEVERABILITY

         It is not the  intention  of any Party  hereto to  violate  any  public
         policy  statutory  or  common  laws,  rules,  regulations,  treaty,  or
         decisions of any  government  agency or  executive  body thereof of any
         country or community or  association  of countries.  Should one or more
         provisions of this Agreement be or become invalid or  unenforceable  by
         reason of such a violation,  then the Parties hereto shall  substitute,
         by mutual consent, valid provisions for


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

         such  invalid  provisions,  which valid  provisions  in their  economic
         effect  come  so  close  to  the  invalid  provisions  that  it  can be
         reasonably   assumed  that  the  Parties  would  have  contracted  this
         Agreement with those new provisions.  In case such provisions cannot be
         found,  the invalidity of one or more provisions of the Agreement shall
         not  affect  the  validity  for the  Agreement  as a whole,  unless the
         invalid provisions are of such essential  importance for this Agreement
         that it is to be  reasonably  assumed  that the Parties  would not have
         contracted this Agreement without the invalid provisions.

         IN WITNESS  WHEREOF,  each of Harris,  Tishtec and Elite have  executed
         this Product Development,  Manufacturing, and Distribution Agreement by
         their duly authorized officers as of the Effective Date.

ELITE LABORATORIES, INC.


--------------------------
Bernard J. Berk, President


TISH TECHNOLOGIES, LLC


--------------------------------------
Satish Patel, Ph.D., M.B.A., President


HARRIS PHARMACEUTICAL, INC.


--------------------------------
Brian A. Harris, M.D., President


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

ATTACHMENTS

EXHIBIT A:  Product development activity schedule

EXHIBIT B:  Transfer price for [ * ] Capsule Coated Pellets [ * ]

EXHIBIT C:  Profit Sharing Calculation

EXHIBIT D:  Example of Profit Sharing Calculation

ELITE LABORATORIES, INC.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>


EXHIBIT A: Product Development Activity Schedule [ * ] BASE STRENGTHS (03-06-05)
FOR THE UNITED STATES MARKET

<TABLE>
<CAPTION>
------ ----------------------------------------- --------------------- ----------------------- -----------------------
                                                    RESPONSIBILITY           TIME LINES              COSTS, $*
  #                   ACTIVITIES                 --------------------- ----------------------- -----------------------
                                                   ELITE     HARRIS       ELITE      HARRIS        *           *
------ ----------------------------------------- ---------- ---------- ------------ ---------- ----------- -----------
  <S>  <C>                                         <C>        <C>         <C>         <C>         <C>         <C>
       [ * ]
       ---------------------------------------------------------------------------------------------------------------
       [ * ]                                       [ * ]
       ----------------------------------------- ----------
  1    [ * ]                                       [ * ]
       ----------------------------------------- ----------   [ * ]       [ * ]       [ * ]      [ * ]       [ * ]
       [ * ]                                       [ * ]
       ----------------------------------------- ----------
       [ * ]                                       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ---------- ----------- -----------
       [ * ]
       ---------------------------------------------------------------------------------------------------------------
  2    [ * ]                                       [ * ]      [ * ]       [ * ]        [ * ]      [ * ]       [ * ]
       ----------------------------------------- ---------- ---------- ------------- ---------- ----------- ----------
       [ * ]                                       [ * ]      [ * ]       [ * ]        [ * ]      [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------- ---------- ----------- ----------
       [ * ]
       ---------------------------------------------------------------------------------------------------------------
  3    [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]
       ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
       [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
  4    [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
  5    [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
  6    [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
  7    [ * ]                                       [ * ]      [ * ]       [ * ]       [ * ]       [ * ]       [ * ]
------ ----------------------------------------- ---------- ---------- ------------ ----------- ----------- ----------
                               TOTALS                                                             [ * ]       [ * ]
---------------------------------------------------------------------- ------------ ----------- ----------- ----------
</TABLE>

The cost of $[ * ] includes the cost of the active pharmaceutical ingredient

*ALL DEVELOPMENT COSTS ARE TO SHARED [ * ]% HARRIS, [ * ]% ELITE.

**PRODUCT  FORMULATION,  COMPOSITION AND MANUFACTURING PROCESS SHALL BE PROVIDED
BY TISHTEC.

EXHIBIT B

ESTIMATED TRANSFER PRICE (MANUFACTURING COSTS) FOR [ * ]

<TABLE>
<CAPTION>
----------------------------------------------------------------------------- --------------------- ------------------------
                                                                                     100 MG                 75 MG.
                                 ACTIVITIES                                      PER BOTTLE OF           PER BOTTLE OF
                                                                                 50 CAPSULES, $         50 CAPSULES, $
----------------------------------------------------------------------------- --------------------- ------------------------
<S>                                                                                  <C>                     <C>
Active pharmaceutical ingredient                                                     [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Inactive pharmaceutical ingredients, capsules, and any other materials               [ * ]                   [ * ]
included in the product
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Packaging from a third party: Packaging components, container closure                [ * ]                   [ * ]
system, labels, insert, and shipping
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Manufacturing labor                                                                  [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Manufacturing facilities, equipment, utilities                                       [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Analytical labor                                                                     [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------
</TABLE>


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------- --------------------- ------------------------
                                                                                     100 MG                 75 MG.
                                 ACTIVITIES                                      PER BOTTLE OF           PER BOTTLE OF
                                                                                 50 CAPSULES, $         50 CAPSULES, $
----------------------------------------------------------------------------- --------------------- ------------------------
<S>                                                                                  <C>                     <C>
Analytical facilities, equip, utilities, materials                                   [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
Indirect costs (regulatory, accounting, etc.)                                        [ * ]                   [ * ]

----------------------------------------------------------------------------- --------------------- ------------------------

----------------------------------------------------------------------------- --------------------- ------------------------
COST PER BOTTLE OF [ * ]CAPSULES, $                                                  [ * ]                   [ * ]
----------------------------------------------------------------------------- --------------------- ------------------------

YEARLY OBLIGATION OF STABILITY - ONE BATCH OF EACH STRENGTH (TOTAL OF 2 BATCHES) = $[ * ]
</TABLE>

Assumptions:

   1. [ * ]

   2. [ * ]


   3. [ * ]

   4. [ * ]

[ * ]


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

EXHIBIT C

PROFIT SHARING CALCULATION



Gross Sales                =    Aggregate invoice price

Net Sales                  =    Gross sales - Trade Deductions (capped at [ * ]%
                                of Gross Sales) (see below)

Gross Margins              =    Net Sales- Transfer Price

Net Gross Margins          =    Gross Margins less  a  one  time  charge,  up to
                                $150,000,  to be agreed  upon by all Parties for
                                the  advertisement  and  promotional   marketing
                                activities,  less  Royalties,  less the  Product
                                Development Fee

--------------------------------------------------------------------------------

Royalties                  =    Amount paid on  potential  Intellectual Property
                                as provided in Section 6.2(B)._

Product Development Fee    =    One time fee of $150,000 paid to Tishtec


The Profit  Share for each Party shall  equal the  following  percentage  of NET
GROSS MARGINS:

[ * ]% Harris
[ * ]% Elite
[ * ]% Tishtec

Trade Deductions include:

o     Customs and excise duties or other sales taxes (but,  for the avoidance of
      doubt not income or corporation tax),  directly related to the sale of the
      Product

o     Costs  incurred by Harris in respect of transport,  shipping and insurance
      costs; and industry standard or mandatory  discounts or rebates related to
      the sale of the  Product,  including,  without  limitation,  any credit in
      respect of any Federal or state Medicaid, Medicare or similar program; and

o     Amounts  repaid or credited  by Harris,  consistent  with its  ordinary or
      customary  business  practices  for  similar  products,  by  reason of the
      rejection or return of goods and allowances, including trade, quantity and
      cash  discounts  and any other  adjustments,  including  those  granted on
      account of price or shelf  stock  adjustments,  billing  errors,  rejected
      goods,   damaged  goods,   recalls,   returns,   rebates,   charge  backs,
      reimbursements,  similar payments granted or given to wholesalers or other
      distributors,  buying  groups,  health  care  insurance  carriers or other
      institutions.


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

<PAGE>

EXHIBIT D

EXAMPLE OF PROFIT SHARING CALCULATION

SAMPLE  - [ * ]

Gross Sales                          =    [ * ]

Net Sales                            =    [ * ]

Gross Margins                        =    [ * ]

Royalties                            =    [ * ]

Product Development Fee              =    [ * ]

One time charge  agreed upon by      =    [ * ]
All  parties for the  advertisement
And Promotional marketing
activities

NET GROSS MARGINS                    =    [ * ]

---------------------------------------------------------------------


The NET GROSS MARGINS will be shared by the three parties as follows:

[ * ]% Harris
[ * ]% Elite
[ * ]% Tishtec

* Trade deductions

** Transfer price


* Portions of this exhibit have been omitted and filed separately pursuant to an
application  for  confidential  treatment filed with the Securities and Exchange
Commission  pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.