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

       

    ASSET PURCHASE
AGREEMENT

    


    THIS ASSET PURCHASE AGREEMENT (“Agreement”), dated
August 27, 2010 (the “Effective Date”), is
between Mikah Pharma
LLC, a limited liability
company organized under the laws of Delaware (“Seller”), and Elite Pharmaceuticals, Inc., a
publicly traded company organized under the laws of the State of Delaware (“Buyer”).

    


    Background

    


    Seller
purchased several ANDA’s from a site that is operating under a Consent Decree, a
copy of which was provided to Buyer, which may subject the ANDA (as defined
below) to be subject to additional scrutiny before FDA permits the Products (as
defined below) to be manufactured elsewhere. Nevertheless, on the terms and
conditions set forth in this Agreement and the Consent Decree, Buyer wishes to
purchase and Seller wishes to sell, the ANDA(s) listed in this
Agreement.

    


    ARTICLE
1

     

    DEFINITIONS

     

    Section
1.1      Definitions

     

    All terms not defined below are defined
elsewhere in this Agreement.

    


    “Affiliate” means any
Person that directly or indirectly Controls, is Controlled by or is under common
Control with another Person.  A Person will be deemed to “Control” another
Person if it has the power to direct or cause the direction of the other Person,
whether through ownership of securities, by contract or otherwise.

    


    “Agency” means any
governmental regulatory authority or authorities in the United States
responsible for granting approval(s), clearance(s), qualification(s), license(s)
or permit(s) for any aspect of the research, development, manufacture,
marketing, distribution or sale of a Product.  The term “Agency”
includes, but is not limited to, the FDA and the United States Drug Enforcement
Administration.

    


    “ANDA” means
Abbreviated New Drug Application number 75-274 (Naltrexone Hydrochloride Tablets
USP, 50 mg) and all amendments thereto, that have to date been filed with the
FDA seeking authorization and approval to manufacture, package, ship and sell,
as more fully defined in 21 C.F.R. Part 314, the Products.


     

    “ANDA Technology and
Scientific Materials” means any technological, scientific, chemical or
biological materials, trade secrets, know-how, intellectual property,
techniques, data, inventions, practices, methods and all other confidential and
proprietary technical, research, development and other applicable business
information (whether patented, patentable or otherwise) related to the
manufacture, validation, packaging, release testing, stability and shelf life of
the Product, including all Product formulations, in existence and in the
possession of Seller as of the Closing Date.

     

    
      
        
          	 	
                    
      

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


     

    “Assumed Liabilities”
has the meaning set forth in Section 2.3.

    


    “Bill of Sale” means a
bill of sale to be delivered by Seller to Buyer effective on the Closing Date,
substantially in the form of Exhibit
A.

    


    “Business Day” means
any day other than a Saturday, Sunday or other day on which banks in New York,
New York, USA are permitted or required to close by law or
regulation.


    


    “Encumbrance” means
any mortgage, charge, lien, security interest, easement, right of way, pledge or
encumbrance of any nature whatsoever.

     

    “Excluded Liabilities”
has the meaning set forth in Section 2.3.

     

    “FDA” means the United
States Food and Drug Administration.

     

    “Governmental Entity”
means any court, administrative agency, department or commission or other
governmental authority or instrumentality, whether U.S. or non-U.S.

     

    “Governmental Rule”
means any law, judgment, order, decree, statute, ordinance, rule or regulation
issued or promulgated by any Governmental Entity.

     

    “Liabilities” means
any and all debts, liabilities and obligations, whether accrued or fixed,
absolute or contingent, matured or unmatured, or determined or determinable,
including those arising under any law, action or governmental order and those
arising under any contract, agreement, arrangement, commitment or undertaking,
or otherwise.

     

    “Losses” means,
collectively, any and all damages, losses, taxes, Liabilities, claims judgments,
penalties, costs and expenses (including reasonable legal fees and
expenses).

     

    “Material Adverse
Effect” means an effect which is material and adverse to the Purchased
Assets taken as a whole, but does not include: (i) any adverse effect due to
changes in conditions generally affecting (A) the healthcare industry or (B) the
United States economy as whole, (ii) any change or adverse effect caused by, or
relating to, the announcement of this Agreement and the transactions
contemplated by this Agreement or (iii) any adverse effect due to legal or
regulatory changes.

     

    “Mutual Confidential
Disclosure Agreement” means the Mutual Confidential Disclosure Agreement
entered into by the parties.

     

    “Person” means any
individual, corporation, partnership, limited liability company, joint venture,
trust, business association, organization, Governmental Entity or other
entity.

     

    “Pre-Closing Period”
means the period beginning on the Effective Date and continuing until the
Closing Date.

     

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


     

    “Product(s)” means the
pharmaceutical or products now or hereafter described in the ANDA.

     

    “Purchase Price” has
the meaning set forth in Section 2.1.

     

    “Specifications” means
the procedures, requirements, standards, quality control testing and other data
in the ANDA, to the extent they exist, which are hereby incorporated by
reference into this Agreement, along with any valid amendments, supplements or
modifications thereto.

     

    “Territory” means the
United States and its territories, possessions, and commonwealths, including
Puerto Rico.

     

    “United States” or
“U.S.” or
“U.S.A.” means
the United States of America.

     

    Section
1.2      Interpretation

     

    When used in this Agreement the words
“include”, “includes” and “including” will be deemed to be followed by the words
“without limitation.”  Any terms defined in the singular will have a
comparable meaning when used in the plural, and vice-versa.

     

    Section
1.3      Currency

     

    All currency amounts referred to in
this Agreement are in United States Dollars, unless otherwise
specified.

    


    ARTICLE
2

     

    SALE AND
PURCHASE OF ASSETS

     

    Section
2.1      Purchase and
Sale

     

    Upon the
terms and subject to the conditions of this Agreement, on the Closing Date,
Seller will sell, assign, transfer, convey and deliver to Buyer, and Buyer will
purchase, acquire and accept, all right, title and interest  of Seller
in, to and under the Purchased Assets, for aggregate consideration of
$200,000.00 (the “Purchase Price”),
comprised of a credit of $200,000 to be made to Seller upon execution of this
Agreement (the “Initial Payment”) and
the execution and completion of development work outlined in the “Master
Development and License Agreement for {***} Between Elite Pharmaceuticals, Inc.
and Mikah Pharma, LLC.

     

    Section
2.2      Purchased
Assets

     

    The term
“Purchased
Assets” means the following properties, assets and rights of whatever
kind and nature, tangible or intangible, of Seller existing on the Closing Date
that relate solely and exclusively to the ANDA and any testing, data, studies,
and formulations created in connection therewith including: (i) the ANDA,
(ii) any correspondence with the FDA in Seller’s possession with respect to the
ANDA, (iii) the right of reference to the Drug Master Files, as set forth in the
ANDA; (iv) the ANDA Technology and Scientific Materials; and (v) a fully-paid,
perpetual, royalty-free exclusive license to use any Product technology which is
associated with or incorporated in the Product and to include the same in any
other product of Seller, but only for Buyer’s use in connection with the
manufacture in the Territory of any Product.

     

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

     

    Section
2.3      Assumption of Certain
Liabilities and Obligations

     

    From and
after the Closing, Buyer will assume, be responsible for and pay, perform and
discharge when due only those Liabilities (including any Liabilities for taxes
owed by Buyer) in connection with the Purchased Assets, the use thereof and the
later sale of any Product by Buyer arising from and after the Effective Date and
only with respect to events, conditions, actions or circumstances first arising
after the Effective Date, including but not limited to (i) Liabilities arising
from any patent or trademark infringement claim or lawsuit brought by any Third
Party, (ii) any product liability claim, and (iii) Liabilities arising from FDA
or any other Governmental Entity action or notification after the Effective Date
(collectively, the “Assumed
Liabilities”).  Buyer will not assume or be liable for any
Liabilities arising in connection with the Product and the Purchased Assets
prior to the Closing Date, including Liabilities resulting from Third Party
agreements of Seller or its Affiliates and Third Party claims arising out of
acts or omissions of Seller prior to Closing Date (collectively, the “Excluded
Liabilities”).

     

    Section
2.4      Buyer’s Grant of License

     

    As
nothing in this Agreement is intended to relinquish or convey any rights Seller
may have to manufacture or sell the Products outside of the Territory, Buyer
hereby grants Seller and its Affiliates a fully-paid, perpetual, royalty-free
non-exclusive license to use the ANDA Technology and Scientific Materials, but
only for Seller’s use in connection with the manufacture, registration or sale
of the Products outside of the Territory.

     

    ARTICLE
3

     

    CLOSING

     

    Section
3.1      Closing
Date

     

    The
closing of the sale and transfer of the Purchased Assets (the “Closing”) will take
place at the offices of either Buyer or Seller or by fax or mail, or other place
as designated by Seller.  The Closing shall take place on the
Effective Date or first Business Day following the execution of this Agreement;
provided, however, all of the
conditions to each party’s obligations under this Article have been satisfied or
waived, or at such other time, date and place as will be mutually agreed to by
the parties hereto (such date of the Closing being hereinafter referred to as
the “Closing
Date”).


     

    Section
3.2      Conditions to
Closing

     

    The
obligation of Buyer to purchase the Purchased Assets from Seller and the
obligations of Seller to sell, assign, convey and deliver the Purchased Assets
to Buyer will be subject to the satisfaction prior to the Closing Date that no
temporary restraining order, preliminary or permanent injunction or other legal
restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement will be threatened or in effect.

     

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

     

    Section
3.3      Conditions to Obligations of
Buyer

     

    The
obligation of Buyer to purchase the Purchased Assets from Seller is subject to
the satisfaction on and as of the Closing of each of the following
conditions:

     

    (a)      Representations.  The
representations and warranties of Seller set forth in this Agreement will be
true and correct as of the Closing as though made on and as of the Closing,
except to the extent such representations and warranties relate to an earlier
date (in which case such representation and warranties will be true and correct
as of such earlier date).

     

    (b)     Performance of Obligations
of Seller.  Seller will have performed or complied in all
material respects with all obligations, conditions and covenants required to be
performed by it under this Agreement at or prior to the Closing.

     

    (c)      Closing
Deliveries.  Seller will have executed and delivered to Buyer
the (i) Bill of Sale, and (ii) a “Transfer of Ownership” letter to the FDA,
relating to the ANDA, as prescribed in 21 CFR 314.72 upon Buyer’s request. Buyer
shall request the “Transfer of Ownership” before the commercialization of the
ANDA.

     

    (d)     ANDA.  As
further described in Section 6.2, Seller will deliver the ANDA to
Buyer.

     

    Section
3.4      Conditions to the
Obligations of Seller

     

    The
obligations of Seller to sell, assign, convey, and deliver the Purchased Assets,
or to cause the Purchased Assets to be sold, assigned, conveyed or delivered, as
applicable, to Buyer are subject to the satisfaction on and as of the Closing of
each of the following conditions:

     

    (a)      Representations and
Warranties.  The representations and warranties of Buyer set
forth in this Agreement will be true and correct in all material respects as of
the Closing as though made on and as of the Closing, except: (i) to the extent
such representations and warranties expressly relate to an earlier date (in
which case such representations and warranties will be true and correct as of
such earlier date) and (ii) for breaches of representations and warranties as to
matters that individually or in the aggregate would not materially interfere
with Buyer’s performance of its obligations hereunder; and

     

    (b)     Closing
Deliveries.  Buyer will have made the Initial Payment to Seller
in immediately available funds.

    


    ARTICLE
4

     

    REPRESENTATIONS
AND WARRANTIES OF SELLER

     

    As of
each of the Effective Date and Closing Date, Seller hereby represents to Buyer
as follows:

     

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

     

    Section
4.1      Seller Organization; Good
Standing

     

    Seller is
a limited liability company, duly organized, validity existing and in good
standing under the laws of the State of Delaware.  Seller has the
requisite power and authority to own the Purchased Assets and to carry on its
business as currently conducted.  Seller is duly qualified to conduct
business as a foreign corporation and is in good standing in each jurisdiction
where the nature of the business conducted by it makes such qualification
necessary, except where the failure to so qualify or be in good standing would
not have a Material Adverse Effect.

     

    Section
4.2      Authority; Execution and
Delivery

     

    Seller
has the requisite corporate power and authority to enter into this Agreement and
to consummate the transaction contemplated.  The execution and
delivery of this Agreement by Seller and the consummation of the transactions
contemplated have been validly authorized.  This Agreement has been
executed and delivered by Seller and, assuming the due authorization, execution
and delivery of this Agreement by Buyer, will constitute the legal and binding
obligation of Seller, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other similar laws affecting creditors’ rights generally
from time to time in effect and to general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing) regardless
of whether considered in a proceeding in equity or at law.

     

    Section
4.3      Consents; No Violation,
Etc.

     

    The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and the compliance with the terms hereof will
not: (i) violate any Governmental Rule applicable to Seller, (ii) conflict with
any provision of the certificate of incorporation or by-laws (or similar
organizational document) of Seller, (iii) conflict with any contract of Seller
or (iv) to the knowledge of Seller, violate any rights of any non-party, or (v)
require any approval, authorization, consent, license, exemption, filing or
registration with any court, arbitrator or Governmental Entity, except, with
respect to the foregoing clauses (i) and (iii), for such violations or conflicts
which would not have a Material Adverse Effect or materially interfere with
Seller’s performance of its obligations hereunder or, with respect to the
foregoing clause (v), for such approvals, authorizations, consents, licenses,
exemptions, filings or registrations which have been obtained or made or which,
if not obtained or made, would not have a Material Adverse Effect or interfere
with Seller’s performance of its obligations hereunder.

     

    Section
4.4      Litigation

     

    To the knowledge of Seller, there are
no claims, suits, actions or other proceedings pending or threatened in writing
against Seller at law or in equity before or by any federal, state, municipal or
other governmental department, commission, board bureau, agency or
instrumentality, domestic or foreign, which may in any way materially adversely
affect the performance of Seller’s obligations under this Agreement or the
transactions contemplated hereby.  There are no outstanding claims,
suits, actions, judgments, orders, injunctions, decrees or awards against Seller
in connection with the Purchased Assets, this Agreement or the transactions
contemplated hereby that have not been satisfied in all material
respects.

     

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

     

    Section
4.5      Title to Purchased Assets;
AS IS

     

    Seller
has good and valid title to all of the Purchased Assets, as the case may be,
free and clear of all Encumbrances.  Buyer agrees that it is
purchasing and will take possession of the Purchased Assets in their AS IS condition and that Buyer
has been given the opportunity to conduct such investigations and inspections of
the Purchased Assets as it deems necessary or appropriate.

     

    Section
4.6      Purchased Assets AS
IS

     

    SELLER DOES NOT MAKE ANY
REPRESENTAIONS AND WARRANTIES THAT THE FDA WILL APPROVE ANY FILINGS FOR OR
RELATED TO THE AND AS TRANSFERRED HEREUNDER OR THAT BUYER WILL EVER BE ABLE TO
PRODUCE A COMMERICALLY SALEABLE PRODUCT AS TO THE ANDAS.  SELLER
FURTHER MAKES NO REPRESENTATIONS AS TO THE ADEQUACY OR COMPLETENESS OF THE
FORMULATION OR OTHER DATA UNDERLYING THE ANDAS AND FURTHER MAKES NO
REPRESENTAION AS TO THE REGULATORY SUFFICIENCY OF THE ANDAS.

     

    Section
4.7      Exclusive Representations
and Warranties

     

    Other
than the representations and warranties set forth in this Article 4, Seller is
not making any other representations or warranties, express or implied, with
respect to the Purchased Assets.

     

    ARTICLE
5

     

    REPRESENTATIONS
OF BUYER

     

    As of
each of the Effective Date and Closing Date, Buyer hereby represents and
warrants to Seller as follows:

     

    Section
5.1      Buyer’s Organization; Good
Standing

     

    Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  Buyer is not in arrears of any taxes
and is not under investigation by any Governmental Entity.  Buyer has
requisite corporate power and authority to carry on its business as it is
currently being conducted.  Buyer is qualified to conduct business as
a foreign corporation and is in good standing in every jurisdiction where the
nature of the business conducted by it makes such qualification necessary,
except where the failure to so qualify or be in good standing would not prevent
or materially delay the consummation of the transactions contemplated
hereby.

     

    Section
5.2      Authority; Execution and
Delivery

     

    Buyer has
the corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Buyer and the consummation of the transactions contemplated hereby
have been authorized.  This Agreement has been executed and delivered
by Buyer and, assuming the due authorization, execution and delivery of this
Agreement by Seller, constitutes the legal and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors’ rights generally from time to time in
effect and to general principles of equity (including concepts of materiality,
reasonableness, good faith and fair dealing regardless) of whether considered in
a proceeding in equity or at law.

     

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

     

    Section
5.3      Consents; Notices; No
Violations, Etc.

     

    The
execution and delivery of this Agreement do not, and the consummation of the
transactions contemplated hereby and the compliance with the terms hereof will
not: (i) violate any Governmental Rule, (ii) conflict with any provision of the
certificate of incorporation or by-laws of Buyer, (iii) conflict with any
material contract to which Buyer is a party or by which it is otherwise bound or
(iv) require any approval, authorization, consent, license, exemption, filing or
registration with any court, arbitrator or Governmental Entity, except with
respect to the foregoing clauses (i) and (iii), for such violations or conflicts
which would not materially interfere with Buyer’s performance of its obligations
hereunder or, with respect to the foregoing clause (iv), for such approvals,
authorizations, consents, licenses, exemptions, filings or registrations which
have been obtained or made or which, if not obtained or made, would not
materially interfere with Buyer’s performance of its obligations
hereunder.

     

    Section
5.4      Litigation

     

    As of the
date hereof, there is no suit, claim, action, investigation or proceeding
pending or, to the knowledge of Buyer, threatened against Buyer or any of its
Affiliates which if adversely determined would delay the ability of Buyer to
perform any of its obligations hereunder.

     

    Section
5.5      Status of
ANDA

     

    Buyer has
reviewed each of the ANDA, recognizes that they may be subject to additional
scrutiny by the FDA as a result of the Consent Decree, and recognizes and
assumes all risks and costs directly or indirectly associated with obtaining FDA
approval to manufacture, packaging, and marketing of any of the
Products.

     

    Section
5.6      Assumption of Regulatory
Commitments

     

    From and
after the Closing Date, Buyer will assume control of and responsibility for all
costs, obligations and Liabilities arising from or related to, any commitments
or obligations to any Governmental Entity involving the ANDA and any of the
other Purchased Assets.

     

    ARTICLE
6

     

    OTHER
AGREEMENTS

     

    Section
6.1      Confidentiality

     

    The
parties agree that the exchange of confidential information and materials
relating to the Purchased Assets and the terms and conditions contained in this
Agreement shall be governed by the Mutual Confidential Disclosure Agreement,
which is hereby incorporated herein by reference in its entirety.  The term
of the Mutual Confidential Disclosure Agreement is hereby extended by the
parties for five (5) years beyond the term of the Agreement. 

     

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

     

    Section
6.2      Transfer of
ANDA

     

    For a
period of 30 days from and after the Closing Date, Seller will cooperate with
Buyer in disclosing and copying any relevant records and reports which are
required to be made, maintained and reported pursuant to Governmental Rules in
the Territory with respect to the ANDA that is a part of the Purchased
Assets.  The parties hereby agree to use reasonable efforts to take
any other actions required by the FDA to effect the transactions contemplated
herein.  All costs related thereto will be borne by
Buyer.

     

    Section
6.3      Further Action; Consents;
Filings

     

    Upon the
terms and subject to the conditions hereof, Seller and Buyer will use their
respective reasonable efforts to:  (i) take, or cause to be taken, all
actions necessary and proper under applicable Governmental Rules or otherwise to
satisfy the conditions to Closing and consummate and make effective the
transactions contemplated by this Agreement, (ii) obtain from the requisite
Governmental Entities any consents, licenses, permits, waivers, approvals,
authorizations or orders required to be obtained or made in connection with the
authorization, execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement, and (iii) make all necessary
filings, and thereafter make any other advisable submissions, with respect to
this Agreement and the transactions contemplated by this Agreement required
under any applicable Governmental Rules.  The parties hereto will
cooperate with each other in connection with the making of all filings,
including by providing all such non-confidential documents to the other party
hereto and its advisors prior to filing and, if requested, by accepting all
reasonable additions, deletions or changes suggested in connection
therewith.  Seller and Buyer will furnish all information required for
any application or other filing to be made pursuant to the rules and regulations
of any applicable Governmental Rules in connection with the transactions
contemplated by this Agreement.

     

    ARTICLE
7

     

    TERMINATION
AMENDMENT AND WAIVER

     

    Section
7.1      Termination

     

    (a)         This
Agreement may be terminated and the transactions contemplated hereby abandoned
at any time prior to the Closing:

     

    
      	
               
      

            	
              (i)

            	
              by
      mutual written consent of Seller and Buyer;
or

            


    

     

    
      	
               
      

            	
              (ii)

            	
              by
      Buyer if any of the conditions set forth in Section 3.3 will have become
      incapable of fulfillment and will not have been waived by Buyer;
      or

            


    

     

    
      	
               
      

            	
              (iii)

            	
              by
      Seller if any of the conditions set forth in Section 3.4 will have become
      incapable of fulfillment and will not have been waived by
      Seller,

            


    

     

    provided,
the party seeking termination pursuant to clause (ii) or (iii) is not in breach
of any of its representations, warranties, covenants or agreements contained in
this Agreement.

     

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

     

    (b)         In
the event of termination of this Agreement by either party pursuant to this
Section, written notice thereof will be given to the other party and the
transactions contemplated by this Agreement will be terminated, without further
action by either party.  If the transactions contemplated by this
Agreement are terminated as provided herein:

     

    
      	
               
      

            	
              (i)

            	
              Buyer
      will return the Purchased Assets and all documents and other material
      received from Seller relating to the Purchased Assets and to the
      transactions contemplated hereby, whether so obtained before or after the
      execution hereof, to Seller; and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              All
      confidential information received by Buyer with respect to Seller, the
      Purchased Assets will be continued to be treated confidential in
      accordance with the Mutual Confidential Disclosure
    Agreement.

            


    

     

    Section
7.2      Amendments and
Waivers

     

    This
Agreement may not be amended except by an instrument in writing signed by both
parties hereto.  By an instrument in writing, Buyer, on the one hand,
or Seller, on the other hand, may waive compliance by the other party with any
term or provision of this Agreement that such other party was or is obligated to
comply with or perform.

    


    ARTICLE
8

     

    INDEMNIFICATION

     

    Section
8.1      Survival

     

    All
representations and warranties of Seller and Buyer contained herein or made
pursuant hereto will survive the Closing Date for an indefinite period or until
such time as Buyer and Seller shall mutually agree in writing.  The
covenants and agreements of the parties hereto contained in this Agreement will
survive and remain in full force for the applicable periods described therein
or, is no such period is specified, indefinitely.  Any right of
indemnification pursuant to this Article with respect to a claimed breach of a
representation, warranty, covenant, agreement or obligation shall expire only
upon written release by the party whom such representation, warranty, covenant,
agreement or obligation is owed.  The provisions of this Section 8.1
will survive for so long as any other Section of this Agreement will
survive.

     

    Section
8.2      Indemnification by
Seller

     

    Seller
hereby agrees to indemnify and defend Buyer and its Affiliates, and their
respective officers, directors and employees (the “Buyer Indemnified
Parties”) against, and agrees to hold them harmless from, any claims for
Losses by a non-party to the extent such Losses arise from or in connection with
the following:

     

    (a)      breach
or alleged breach by Seller and/or any of its Affiliates or successors in
interest thereto of any representation or warranty made by it contained in this
Agreement;

     

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

     

    (b)     any
breach or alleged breach by Seller and/or any of its Affiliates or successors in
interest thereto of any of its covenants, agreements or obligations contained in
this Agreement;

     

    (c)      events,
conditions actions or circumstances arising prior to the Closing;
or

     

    (d)     Indemnification
of Buyer

     

    Buyer hereby agrees to indemnify and
defend Seller and its Affiliates and related companies, and their respective
officers, directors and employees (the “Seller Indemnified
Parties”) against, and agrees to hold them harmless from, any Losses by a
non-party to the extent such Losses arise from or in connection with the
following:

     

    (e)      any
breach or alleged breach by Buyer and/or any of its Affiliates or successors in
interest of any representation or warranty made by it contained in this
Agreement;

     

    (f)      any
breach or alleged breach by Buyer and/or any of its Affiliates or successors in
interest of any of its covenants, agreements or obligations contained in this
Agreement;  or

     

    (g)     any
and all liability in connection with the use and sale by Buyer of the Product or
the ANDA after the Closing.

     

    Section
8.3      Procedure

     

    (a)         In
order for an Indemnified Party under this Article 8 (an “Indemnified Party”)
to be entitled to any indemnification provided for under this Agreement, the
Indemnified Party will, within a reasonable period of time following the
discovery of the matters giving rise to any Losses, notify its applicable
insurer and the indemnifying party under this Article 8 (the “Indemnifying Party”)
in writing of its claim for indemnification for such Losses, specifying in
reasonable detail the nature of the Losses and the amount of the liability
estimated to accrue therefrom; provided, however, that failure
to give notification will not affect the indemnification provided hereunder,
except to the extent the Indemnifying Party will have been actually prejudiced
as a result of the failure.  Thereafter, the Indemnified Party will
deliver to the Indemnifying Party, within a reasonable period of time after the
Indemnified Party’s receipt of such request, all information, records and
documentation reasonably requested by the Indemnifying Party with respect to
such Losses.  The Indemnifying Party shall control all litigation
reflecting to the indemnification.  Without limiting the foregoing,
the Indemnified Party shall control choice of counsel, staffing, and all
decisions to be made with the litigation.

     

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

     

    (b)         If
the indemnification sought pursuant hereto involves a claim made by a non-party
against the Indemnified Party (a “Non-Party Claim”),
the Indemnifying Party will be entitled to participate in the defense of such
Non-Party Claim and, if it so chooses, to assume the defense of such Non-Party
Claim with counsel selected by the Indemnifying Party.  Should the
Indemnifying Party so elect to assume the defense of a Non-Party Claim, the
Indemnifying Party will not be liable to the Indemnified Party for any legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof.  If the Indemnifying Party assumes such defense, the
Indemnifying Party will control such defense.  The Indemnifying Party
will be liable for the reasonable fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party has not
assumed the defense thereof (other than during any period in which the
Indemnified Party will have failed to give notice of the Non-Party Claim as
provided above).  If the Indemnifying Party chooses to defend or
prosecute a Non-Party Claim, all of the parties hereto will cooperate in the
defense or prosecution thereof.  Such cooperation will include the
retention and (upon the Indemnifying Party’s request) the provision to the
Indemnifying Party of records and information, which are reasonably relevant to
such Non-Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder.  If the Indemnifying Party chooses to defend or prosecute
any Non-Party Claim, the Indemnifying Party will seek the approval of the
Indemnified Party (not to be unreasonably withheld) to any settlement,
compromise or discharge of such Non-Party Claim the Indemnifying Party may
recommend and which by its terms obligates the Indemnifying Party to pay the
full amount of the liability in connection with such Non-Party
Claim.  Whether or not the Indemnifying Party will have assumed the
defense of a Non-Party Claim, the Indemnified Party will not admit any liability
with respect to, or settle, compromise or discharge, such Non-Party Claim
without the Indemnifying Party’s prior written consent).  The
Indemnifying Party shall reimburse upon demand, all reasonable costs and
expenses incurred by the Indemnified Party in cooperation with the defense or
prosecution of the Non-Party Claim.

     

    ARTICLE
9

     

    GENERAL
PROVISIONS

     

    Section
9.1      Expenses

     

    Except as
otherwise specified in this Agreement, all costs and expenses, including fees
and disbursements of counsel, financial advisors and accountants, incurred in
connection with this Agreement and the transactions contemplated hereby will be
paid by the party incurring such costs and expenses, whether or not the Closing
will have occurred.

     

    Section
9.2      Further Assurances and
Actions

     

    Each of
the parties hereto, upon the request of the other party hereto, whether before
or after the Closing and without further consideration, will do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged or delivered
all such further acts, deeds, documents, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonably necessary to effect
complete consummation of the transactions contemplated by this
Agreement.  Seller and Buyer agree to execute and deliver such other
documents, certificates, agreements and other writings and to take such other
actions as may be reasonably necessary in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.

     

    Section
9.3      Notices

     

    All
notices and other communications required or permitted to be given or made
pursuant to this Agreement shall be in writing signed by the sender and shall be
deemed duly given:  (a) on the date delivered, if personally
delivered, (b) on the date sent by facsimile with automatic confirmation by the
transmitting machine showing the proper number of pages were transmitted without
error, (c) on the Business Day after being sent by Federal Express or another
recognized overnight mail service which utilizes a written form of receipt for
next day or next business day delivery, or (d) upon receipt after mailing, if
mailed by United States postage-prepaid certified or registered mail, return
receipt requested, in each case addressed to the applicable party at the address
set forth below: provided that a party may
change its address for receiving notice by the proper giving of notice
hereunder:

     

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

     

    
      	
               
      

            	
              (a)

            	
              if to Buyer,
      to:

            


    

    


    Elite
pharmaceuticals

    165
Ludlow Avenue

    Northvale,
New Jersey 07647

    


    
      Attn:
Jerry Treppel, President and CEO

    

    


    
      	
               
      

            	
              (b)

            	
              if Seller,
      to:

            


    

    


    Mikah
Pharma LLC

    20 Kilmer
Drive

    Hillsborough,
New Jersey  08844

    


    Attention:
Nasrat Hakim, President and CEO

     

    Section
9.4      Headings

     

    The table
of contents and headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation of this
Agreement.

     

    Section
9.5      Severability

     

    If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced under any law or public policy, all other terms and provisions of
this Agreement will nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties hereto as
closely as possible in an acceptable manner in order that the transactions
contemplated hereby are consummated as originally contemplated to the greatest
extent possible.

     

    Section
9.6      Counterparts

     

    This
Agreement may be executed in one (1) or more counterparts, all of which will be
considered one and the same agreement and will become effective when one more
counterparts have been signed by each of the parties hereto and delivered to the
other parties hereto.

     

    Section
9.7      Entire Agreement: No
Non-Party Beneficiaries

     

    This
Agreement and the Exhibits hereto constitute the entire agreement and supersede
all prior agreements and understandings both written and oral (including any
letter or intent, memorandum of understanding electronic communicators, e-mail
or term sheet), between or among the parties hereto with respect to the subject
matter hereof.  Except as specifically provided herein or therein,
such agreements are not intended to confer upon any non-party other than the
parties hereto any rights or remedies hereunder or thereunder.

     

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

     

    Section
9.8      Governing
Law

     

    This
Agreement and any and all matters arising directly or indirectly herefrom shall
be governed by and construed and enforced in accordance with the laws of the
State of New Jersey, U.S.A. applicable to agreements made and to be performed
entirely in such state, without giving effect to the conflict of law principles
thereof.

     

    Section
9.9      Jurisdiction, Venue, Service
of Process

     

    Buyer and
Seller agree to irrevocably submit to the sole and exclusive jurisdiction of the
state or federal courts in the state of New Jersey for any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each party agrees that service of any process, summons, notice or document by
U.S. registered mail or recognized international courier service to such party’s
address set forth in this Agreement shall be effective service of
process.

     

    Section
9.10    Specific
Performance

     

    The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement were not performed in accordance with the terms
hereof and that the parties will be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity, without the
necessity of demonstrating the inadequacy of monetary damages and without the
posting of a bond.

     

    Section
9.11    Force
Majeure

     

    Neither
party will be in default of this Agreement to the extent that performance of its
obligations (other than obligations to pay amounts owed under this Agreement) is
delayed or prevented by reason of events or circumstances beyond its reasonable
control, including without limitation, earthquake, flood or other acts of God,
fire, explosion, terrorism, war, compliance with laws, regulations or
governmental or judicial orders, labor disputes, unavailability of
transportation (“Force
Majeure”).  Should either party be delayed in or prevented from
performing any of its obligations under this Agreement by reason of Force
Majeure, such party shall give prompt notice thereof to the other party and
shall be obligated to perform the affected obligations within sixty (60) days
after the Force Majeure ceases to delay or prevent performance
thereof.

     

    Section
9.12    Publicity

     

    Neither
party will make any public announcement concerning, or otherwise publicly
disclose, any information with respect to the transactions contemplated by this
Agreement or any of the terms and conditions hereof without the prior written
consent of the other parties hereto. Notwithstanding the foregoing, either party
may make any public disclosure concerning the transactions contemplated hereby
that in the opinion of such party’s counsel may be required by law or the rules
of any stock exchange on which such party’s or its Affiliates’ securities trade;
provided, however, the party
making such disclosure will provide the non-disclosing party with a copy of the
intended disclosure reasonably, and to the extent practicable, prior to public
dissemination, and the parties hereto will coordinate with one another regarding
the timing, form and content of such disclosure.  Notwithstanding the
foregoing, after the Closing, Buyer may publicize its ability to market and sell
the Product without approval from Seller.

     

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

     

    Section
9.13    Assignment

     

    Neither
party may assign its rights or obligations under this Agreement without the
prior written consent of the other party; provided, however, that either
party may assign its rights and obligations under this Agreement, without the
prior written consent of the other party, to an Affiliate or to a successor of
the assignment party by reason of merger, sale of all or substantially all of
its assets or any similar transaction.  Any permitted assignee or
successor-in-interest will assume all obligations of its assignor under this
Agreement.  No assignment will relieve either party of its
responsibility for the performance of any obligation.  This Agreement
will be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

     

    [SIGNATURE
PAGE FOLLOWS]

     

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

     

    IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed by their respective
representatives thereunto duly authorized, all as of the date first written
above.

     

    
      
        
          
            	
                    MIKAH
      PHARMA LLC

                  	 
      	
                    ELITE
      PHARMACEUTICALS, INC.

                  	 
	 
      	 
      	 
      	 
	
                    By:

                  	 
      	 
      	
                    By:

                  	 
      	 
	
                    Name:
      Nasrat Hakim

                  	 
      	
                    Name:
      Chris Dick

                  	 
	
                    Title:  
      President and CEO

                  	 
      	
                    Title:
      President

                  	 


          

        

      

    

     

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

     

    EXHIBIT
A

    


    BILL OF
SALE

    


    THIS BILL OF SALE, dated May 18, 2010,
is executed by Mikah Pharma LLC (“Seller”), a limited liability company
organized under the laws of Delaware in favor of Elite Pharmaceuticals, Inc.
(“Buyer”), a publically traded company organized under the laws of Delaware,
pursuant to the Asset Purchase Agreement, dated May 18, 2010 (the “Agreement”),
by and between Seller and Buyer.  Capitalized terms used but not
defined herein have the meanings given to them in the Agreement.

    


    i.           The
Agreement provides for, among other things, the sale of the Purchased Assets by
Seller to Buyer.

    


    ii.          In
consideration of the payment of the Purchase Price, Seller by this Bill of Sale
does hereby immediately sell, transfer, assign and deliver to Buyer, all of
Seller’s rights, title and interest in and to the Purchased Assets,
notwithstanding that the Final Payment is to be made following the
Closing.

    


    iii.         Seller
hereby agrees that from time to time after the delivery of this instrument, at
Buyer’s request and without further consideration, Seller will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, conveyances,  transfers,
assignments, powers of attorney and assurances as reasonably may be required
more effectively to convey, transfer to and vest in Buyer, and to put Buyer in
possession of, the Purchased Assets.

    


    iv.         This
instrument is executed by, and will be binding upon, Seller and its successors
and assigns for the uses and purposes set forth herein.

    


    v.          This
Bill of Sale shall be construed and enforced in accordance with the laws of the
State of New Jersey.

    


    IN WITNESS WHEREOF, this Bill
of Sale has been duly executed and delivered by Seller as of the date and year
first written above.

    


    
      
        
          	
                  MIKAH
      PHARMA  LLC

                
	 
      
	
                  By:

                	 
      
	 
      	
                  Nasrat
      Hakim

                
	 
      	
                  President
      and CEO

                


        

      

    

     

    
      
        
          	 	
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