Document:

Exhibit 10.1

                                                                  EXECUTION COPY

        AMENDED AND RESTATED  EMPLOYMENT  AGREEMENT  (this  "AGREEMENT"),
        dated  February 9, 2007, by and between  Elite  Pharmaceuticals,
        Inc.,  a  Delaware  corporation  ("COMPANY"),   and  Charan  Behl
        ("EXECUTIVE").
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                                R E C I T A L S:

                  WHEREAS,  the Company and Executive entered into an Employment
Agreement,  dated November 13, 2006 (the "ORIGINAL AGREEMENT"),  and the Company
and  Executive  desire to amend and  restate  the  terms and  conditions  of the
Original Agreement; and

                  WHEREAS,  Executive desires to continue to provide  employment
services  to the  Company,  and the  Company  desires to  continue to retain the
employment services of Executive,  in each case, in accordance with the terms of
this Agreement.

                  In consideration of the mutual promises herein contained,  the
parties hereby agree as follows:

                               A G R E E M E N T:

                  1. EMPLOYMENT.

                           1.1. GENERAL. The Company hereby employs Executive in
the capacity of Head of Technical  Affairs at the compensation rate and benefits
set forth in Section 2 hereof for the Term (as defined in Section  3.1  hereof).
Executive hereby accepts such employment, subject to the terms herein contained.
In such capacity (a) Executive  shall report to, and follow the  directions  of,
the Board of Directors (the "BOARD"),  the Chief Executive  Officer (the "CEO"),
the Chief  Scientific  Officer ("CSO") and each other  executive  officer of the
Company  so  designated  by the Board  ("DESIGNATED  EXECUTIVE  OFFICERS"),  (b)
perform  and carry out such  duties  and  responsibilities  that are  reasonably
consistent with Executive's  position and  responsibilities  and this Agreement,
and (c) perform and discharge such additional duties and responsibilities as may
be determined from time to time by the CEO, the CSO or any Designated  Executive
Officer  of the  Company  or the  Board  that  are  reasonably  consistent  with
Executive's position.

                           1.2.  TIME  DEVOTED  TO  POSITION.  During  the Term,
Executive  shall devote  substantially  all of his business time,  attention and
skills to the  business  and affairs of  Company,  including  its  subsidiaries,
entities and organizations presently existing or hereafter formed,  organized or
acquired by Company (each, a "SUBSIDIARY" and collectively, the "SUBSIDIARIES").
Nothing in this Agreement shall prevent Executive from devoting  reasonable time
and  attention  to  personal,  public and  charitable  affairs,  as long as such
activities  do not  interfere  with  the  effective  performance  of his  duties
hereunder.

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                  2. COMPENSATION AND BENEFITS.

                           2.1.  SALARY.  During the Term, the Company shall pay
to Executive,  and Executive shall accept,  as full compensation for any and all
services rendered and to be rendered by him during such period to Company in all
capacities  the  following:  (i) a base salary at the annual rate of Two Hundred
Fifty Thousand Dollars ($250,000) during the Term (the "BASE SALARY");  and (ii)
any  additional  bonus and the benefits  set forth in Sections  2.2, 2.3 and 2.4
hereof.  The Base Salary shall be payable in accordance with the regular payroll
practices  of  the  Company  applicable  to its  senior  executives,  less  such
deductions as shall be required to be withheld by applicable law and regulations
or otherwise. The Board may increase the Base Salary in the sole discretion.

                           2.2. BONUS.

                           (a) GUARANTEED BONUS. The Executive shall be entitled
to Twenty Five Thousand  Dollars  ($25,000)  bonus payable in cash within thirty
(30) days of the end of each  fiscal  year of the Company  (the  "Fiscal  Year")
during the Term.

                           (b) DISCRETIONARY BONUSES.  Following the end of each
Fiscal Year during the Term commencing on January 1, 2007, wholly subject to the
discretion of the Board (or any committee of the Board delegated  authority over
employee compensation matters), the Company may award Executive a bonus of up to
fifty percent (50%) of the Executive's then Base Salary (initially,  One Hundred
and Twenty  Five  Thousand  Dollars  ($125,000)),  payable (at the option of the
Company) in cash or in shares of Common Stock (as defined  below)  valued at the
closing price of the Common Stock on the immediately  preceding trading day, for
the  relevant  Fiscal  Year  (pro-rated  for  periods of less than a full Fiscal
Year). For purposes of determining  whether such discretionary  bonuses shall be
payable,  the Board (or any  committee  of the Board  delegated  authority  over
employee compensation matters),  shall discuss with the Executive certain annual
goals to the achieved by the Company and/or the Executive  during the applicable
year.  Such goals will be  established  by the  Company and  discussed  with the
Executive in good faith and within a reasonable time of the commencement of each
Fiscal Year.  If such  discretionary  bonuses are to be paid in shares of Common
Stock,  the number of shares  issuable  shall be  determined by reference to the
average of the closing  price of a share of Common Stock during the five trading
days immediately preceding the date of issuance of such shares.

                           (c) LIMITATION ON BONUSES.  Notwithstanding  anything
to the  contrary  in this  Section  2.2 or Section 3, no annual  bonus  shall be
deemed to have accrued or  otherwise to have become  payable for the purposes of
this Agreement unless this Agreement shall not have been terminated prior to the
end of the Fiscal Year in respect of which such bonus was to be awarded.

                           2.3. STOCK OPTIONS.

                                2.3.1.   INITIAL   OPTIONS.   Effective  on  the
Commencement  Date (as defined below),  the Company granted to Executive options
(the "INITIAL  OPTIONS") to purchase

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two hundred fifty thousand (250,000) shares of common stock, par value $0.01 per
share (the "COMMON STOCK") of the Company,  pursuant to the Company's 2004 Stock
Option Plan, as amended (the "PLAN"). The Initial Options:

                  (i) shall, to the maximum extent  permitted  under  applicable
         law, qualify as "incentive stock options" within the meaning of Section
         422 of the Internal Revenue Code;

                  (ii) be fully vested and immediately exercisable in full as of
         the Commencement Date;

                  (iii) have a per share exercise price equal to $2.25; and

                  (iv) be subject to the terms and  conditions  set forth in the
         Plan and a stock option agreement to be entered into by the Company and
         Executive, simultaneously herewith (the "OPTION AGREEMENT"). Such grant
         of options  pursuant to this  Section  2.3.1 shall be fully  vested and
         exercisable,  subject to the terms of the Plan and the Option Agreement
         and  acceleration  pursuant  to Section 3 hereof.  The shares of Common
         Stock  issuable upon exercise of the Initial  Options are subject to an
         effective registration statement filed with the Securities and Exchange
         Commission (the "SEC").

                                2.3.2.  OPIOID PRODUCT  OPTIONS.  In addition to
the other grants set forth in this Section  2.3,  effective on the  Commencement
Date, the Company granted to Executive options (the "OPIOID PRODUCT OPTIONS") to
purchase up to three hundred thousand (300,000) shares of Common Stock, pursuant
to the Plan. The Opioid Product Options:

                  (i) shall, to the maximum extent  permitted  under  applicable
         law, qualify as "incentive stock options" within the meaning of Section
         422 of the Internal Revenue Code;

                  (ii) have a per share exercise price equal to $2.25;

                  (iii) have one hundred fifty thousand  (150,000)  options vest
         and become immediately  exercisable in full only upon the closing of an
         exclusive  product  license for the first of the United States national
         market, the entire European Union market or the Japan market or product
         sale transaction of all of the Company's ownership rights in the United
         States (only once for each individual  product) for the Company's first
         Non-Generic Opioid Drug;

                  (iv) have one hundred fifty  thousand  (150,000)  options vest
         and become immediately  exercisable in full only upon the closing of an
         exclusive  product license for the United States national  market,  the
         entire  European  Union  market or the Japan  market  or  product  sale
         transaction  of all of the  Company's  ownership  rights in the  United
         States (only once for each individual product) for the Company's second
         Non-Generic Opioid Drug; and

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                  (v) be  subject to the terms and  conditions  set forth in the
         Plan and Option Agreement.

All such options shall be subject to acceleration  pursuant to Section 3 hereof.
The shares of Common Stock issuable upon exercise of the Opioid Product  Options
are  subject to an  effective  registration  statement  filed with the SEC.  For
purposes of this Section 2.3.2, "Non-Generic Opioid Drug" means a drug developed
by the  Company for which FDA  approval  will be sought  under a NDA  (including
under  a  505(b)(2)  application)  for  oxycodone,  hydrocodone,  hydromorphone,
oyxmorphone or morphine.

                                2.3.3   INTENTIONALLY OMITTED

                                2.3.4.  MILESTONE  OPTIONS.  Subject  to Section
2.3.7.  hereof,  in addition to the other  grants set forth in this Section 2.3,
effective on the  Commencement  Date, the Company  granted to Executive  options
(the  "MILESTONE  OPTIONS")  to purchase up to two  hundred  thousand  (200,000)
shares of Common Stock, pursuant to the Plan. The Milestone Options:

                  (i) shall, to the maximum extent  permitted  under  applicable
         law, qualify as "incentive stock options" within the meaning of Section
         422 of the Internal Revenue Code;

                  (ii) have a per share exercise price equal to $2.25;

                  (iii)  shall  vest  and  become   exercisable  only  upon  the
         occurrence of the following  events which occur during the Initial Term
         (up to a maximum of 200,000 shares of Common Stock in the aggregate):

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

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

                           (c) Milestone Options  exercisable for fifty thousand
          (50,000)  shares of Common  Stock  shall vest and  become  immediately
          exercisable  in full only upon the  closing  of an  exclusive  product
          license  for  the  United  States  national  market  or  product  sale
          transaction of all of the Company's  ownership rights (on a product by
          product  basis and only  once for each  individual  product)  for each
          Company  drug  product,  other than the  Non-Generic  Opioid Drugs for
          which Opioid Product Options were granted under Section 2.3.2 above;

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

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

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

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

                  (iv) be subject to the terms and  conditions  set forth in the
         Plan and  Option  Agreement.  All such  options  shall  be  subject  to
         acceleration pursuant to Section 3 hereof.

Upon  the  earlier  to  occur  of the  expiration  of the  Initial  Term of this
Agreement or the termination of Executive's  employment hereunder,  all unvested
Milestone  Options  granted  shall  automatically  terminate  and all vested but
unexercised  Milestone  Options shall  terminate in accordance with the terms of
the stock  option  agreement by and between the  Executive  and the Company with
respect to the Milestone Options and the Plan; provided that, in the case of any
Milestone  Options  that may be vested  pursuant  to clause (e) or clause (g) of
Section  2.3.4(iii)  above, if (x) the applicable filing with the FDA or PTO, as
the case may be, was made by the Company  during the  Initial  Term but prior to
the termination of the Executive by the Company without Cause,  (y) the approval
relating to such  filing  (either  from the FDA or the PTO)  occurs  within five
hundred forty (540) days of such filing and (x) such approval  occurring  within
the three year Initial Term, the Milestone Options relating to such filing shall
vest in accordance with clause (e) or clause (g), as the case may be. The shares
of Common Stock  issuable upon exercise of the Milestone  Options are subject to
an effective registration statement filed with the SEC.

                                2.3.5 ADDITIONAL  MILESTONE OPTIONS.  Subject to
Section 2.3.7.  hereof,  if the maximum  number of Milestone  Options shall have
vested during the Initial Term of this Agreement, the Company shall grant to the
Executive additional options to purchase shares of Common Stock (the "ADDITIONAL
MILESTONE OPTIONS"),  pursuant to the Plan. The Additional Milestone Options (i)
shall,  to the  maximum  extent  permitted  under  applicable  law,  qualify  as
"incentive  stock  options"  within the meaning of Section  422 of the  Internal
Revenue Code,  (ii) shall have a per share  exercise  price equal to the closing
price of a share of Common

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Stock,  as listed on the American Stock  Exchange,  on the date of grant,  (iii)
shall be subject to the terms and conditions set forth in the Plan and the stock
option agreement to be entered into by the Company and the Executive on the date
of grant which shall be  substantially  the same as the Option  Agreement,  (iv)
shall be fully  vested  and  exercisable  in full upon  grant,  and (v) shall be
granted at the end of the then current Fiscal Year in which any of the following
triggering  events  shall  occur (and,  in the case of grants  related to events
occurring  after the end of the last fiscal year during the Initial  Term,  such
grants  shall be made at the end of the first  Fiscal  Year  after  the  Initial
Term):

                           (a)  Additional  Milestone  Options  for one  hundred
          twenty-five thousand (125,000) shares of Common Stock shall be granted
          at the end of the then  current  Fiscal Year (and  immediately  vested
          exercisable in full) upon the commencement of first Phase III clinical
          trial relating to the first  Non-Generic  Opioid Drug developed by the
          Company  only  to the  extent  that  such  Milestone  Options  did not
          previously  vest under  clause  (iii)(a)  of Section  2.3.4,  it being
          understood  that in no event  shall  the  total of  Milestone  Options
          vesting under  2.3.4(iii)(a) and Additional  Milestone Options granted
          under this Section  2.3.5(iii)(a) exceed options for 125,000 shares of
          Common Stock in the aggregate;

                           (b) Additional  Milestone Options for one hundred and
          twenty five thousand (125,000) shares of Common Stock shall be granted
          at the end of the then current  Fiscal Year upon the  commencement  of
          the first Phase III clinical trial relating to the second  Non-Generic
          Opioid  Drug  developed  by the Company  only to the extent  Milestone
          Options  did not  previously  vest under  clause  (clause  (iii)(b) of
          Section  2.3.4,  it being  understood  that (i) in no event  shall the
          total  of  Milestone  Options  vesting  under  2.3.4(iii)(b)  and  the
          Additional Milestone Options granted under this Section  2.3.5(iii)(b)
          exceed 125,000 shares of Common Stock in the aggregate, and (ii) in no
          event shall the options vested and/or granted under Sections 2.3.4(a),
          2.3.4(b),  2.3.5(a) and 2.3.5(b)  exceed options for 250,000 shares of
          Common Stock in the aggregate.

                           (c) Additional  Milestone  Options for fifty thousand
          (50,000)  shares of Common  Stock  shall be  granted at the end of the
          then  current  Fiscal  Year upon the closing of an  exclusive  product
          license  for  the  United  States  national  market  or  product  sale
          transaction of all ownership rights (on a product by product basis and
          only once for each individual  product) for each Company drug product,
          other than the  Non-Generic  Opioid Drugs for which any Opioid Product
          Options were granted under Section 2.3.2 above;

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

                           (e) Additional  Milestone  Options for forty thousand
          (40,000)  shares of Common  Stock  shall be  granted at the end of the
          then current Fiscal Year (and immediately  vested exercisable in full)
          upon the approval by the FDA of any ANDA,

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          NDA or 505(b)(2)  application  of the Company  (filed in the Company's
          name) for a product not previously approved by the FDA;

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

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

Upon  the  earlier  to  occur  of the  expiration  of the  Initial  Term of this
Agreement or the termination of Executive's employment hereunder, all Additional
Milestone  Options shall  automatically  terminate in accordance  the applicable
stock option  agreement to be entered into by and between the  Executive and the
Company with respect to such Additional Milestone Options (which agreement shall
be substantially similar to the other stock option agreements by and between the
Executive and the Company) and the Plan.  For the avoidance of doubt,  (i) under
no circumstances  shall Additional  Milestone  Options be granted as a result of
the occurrence of an event which had  previously  triggered,  or  simultaneously
therewith  will  trigger,  the vesting of any  Milestone  Options  granted under
Section 2.3.4 above and (ii) no Opioid  Product  Options,  Milestone  Options or
Additional  Milestone Options shall be granted or vest under this Agreement as a
result of any transaction  entered into, or any FDA or PTO application or filing
made,  by, or in the name of,  any  Person in which  the  Company  has an equity
interest but which is not a wholly-owned subsidiary of the Company.

                                2.3.6.  ADDITIONAL  OPTIONS.  In addition to the
other grants set forth in this Section 2.3, the Company, in its sole discretion,
may grant to Executive additional options (the "ADDITIONAL OPTIONS") to purchase
shares of Common Stock,  pursuant to the Plan. The Additional  Options shall (i)
to the maximum extent  permitted  under  applicable  law,  qualify as "incentive
stock options"  within the meaning of Section 422 of the Internal  Revenue Code,
(ii) have a per share exercise price equal the then fair market value of a share
of Common Stock,  (iii) vest, as determined by the Board, in its sole discretion
and (iv) be subject to the terms and conditions set forth in the Plan and Option
Agreement. All such options shall vest and be exercisable,  as determined by the
Board, in its sole  discretion and shall be subject to acceleration  pursuant to
Section 3 hereof.

                                2.3.7.      LIMITATION     UPON      DUPLICATIVE
GRANTING/VESTING OF OPTIONS.  Notwithstanding anything set forth in this Section
2.3 of this Agreement, in the event that Opioid Product Options are vested under
Section 2.3.2 as result of the sale  transaction  involving  Non-Generic  Opioid
Drug, (x) no Milestone  Options shall vest under clauses (iii)(a) or (iii)(b) of
Section 2.3.4 and (y) no Additional  Milestone  Options shall be granted  and/or
vest under clauses (v)(a) or (v)(b) of Section 2.3.5,  in each case, as a result
of any  Phase  III  clinical  trials  relating  to the same  drug  product.  The
limitations set forth in this Section 2.3.7 shall not affect the granting and/or
vesting of Milestone Options or Additional  Milestone Options as a result of any
Phase III clinical  trials  relating to a  Non-Generic  Opioid Drug which is the
subject of an exclusive license.

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                                2.3.8.  PLEDGE OF COMMON  STOCK  UNDERLYING  THE
OPTIONS.  Executive may not,  directly or indirectly,  sell,  assign,  transfer,
offer,  grant a  participation  in,  mortgage,  pledge,  hypothecate,  create  a
security interest in or lien upon, encumber, donate, contribute, place in trust,
enter into any voting  agreement  with  respect  to, the shares of Common  Stock
underlying the Initial  Options,  Opioid  Product  Options,  Milestone  Options,
Additional  Milestone  Options or Additional  Options  without the prior written
consent of the  Company.  During the Term,  Executive  shall  not,  directly  or
indirectly, enter into any short sales or "derivative" or "hedging" transactions
or strategies,  nor maintain any "short"  positions,  with respect to the Common
Stock.

                                2.3.9.  CONFLICT.  In the event of any  conflict
between  the terms of the Plan or this  Agreement,  the terms of this  Agreement
shall govern.

                                2.3.10 PIGGY-BACK REGISTRATION RIGHTS.

                  (a) If at any time after the  Initial  Term,  (x) the  Company
         shall propose to register  shares of Common Stock under the  Securities
         Act of  1933  (other  than in a  registration  statement  on  Form  S-3
         relating to sales of securities to participants  in a Company  dividend
         reinvestment  plan,  or  Form  S-4 or S-8 or any  successor  form or in
         connection  with an  acquisition  or  exchange  offer or an offering of
         securities  solely to the  existing  shareholders  or  employees of the
         Company),  and (y) any Additional Milestone Options that may be granted
         under  Section  2.3.5  hereof  shall  have  been  granted  to,  and are
         exercisable by, the Executive, the Company (i) will give prompt written
         notice to the Executive of its intention to effect such a  registration
         and (ii)  subject  to Section  2.3.10(b)  below,  will  include in such
         registration  all  shares  of Common  Stock  issued  or  issuable  upon
         exercise of such granted and vested  Additional  Milestone Options (the
         "Registrable   Securities")   which  are  permitted  under   applicable
         securities  laws to be included in the form of  registration  statement
         selected  by the  Company  and with  respect to which the  Company  has
         received  written  requests for inclusion  therein within 30 days after
         the receipt of the Company's notice (each, a "PIGGYBACK REGISTRATION").
         The  Executive  will be  permitted  to withdraw  all or any part of the
         Registrable  Securities from a Piggyback Registration at any time prior
         to the effective date of such Piggyback Registration.

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

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

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

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                           (iii) third, the Registrable  Securities requested to
                  be  included in such  registration  by the  Executive  and any
                  securities  requested to be included in such  registration  by
                  any other Person other than Persons having a lower priority of
                  registration than the Executive,  PRO RATA among Executive and
                  such other  Persons,  on the basis of the number of securities
                  requested to be included in such  registration by each of such
                  Holders and such other Persons; and

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

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

                  (c)  RIGHT TO  TERMINATE  REGISTRATION.  If at any time  after
         giving  written  notice  of  its  intention  to  register  any  of  its
         securities as set forth in Section 2.3.10(a) and prior to the effective
         date of the  registration  statement  filed  in  connection  with  such
         registration,  the  Company  shall  determine  for  any  reason  not to
         register  such  securities,  the  Company  may, at its  election,  give
         written notice of such  determination to the Executive and thereupon be
         relieved of its  obligation to register any  Registrable  Securities in
         connection with such registration.

                           2.4. EXECUTIVE BENEFITS.

                                2.4.1.   EXPENSES.    Company   shall   promptly
reimburse  Executive  for expenses he reasonably  incurs in connection  with the
performance of his duties (including business travel and entertainment expenses)
hereunder,  against  receipts  or other  appropriate  written  evidence  of such
expenditures as required by the appropriate Internal Revenue Service regulations
or by the Company; PROVIDED, that, all expenses in excess of US$2,000 per month,
individually  or in the  aggregate,  shall be  approved  by the Chief  Executive
Officer as a condition to reimbursement thereof.

                                2.4.2.   COMPANY  PLANS.   Executive   shall  be
entitled to participate in such employee  benefit and welfare plans and programs
as Company may from time to time generally offer or provide to senior  executive
officers  of  Company  or the  Subsidiaries,  including  participation  in  life
insurance,  health and accident,  medical plans and programs, and profit sharing
and  retirement  plans.  Nothing in the  foregoing  shall limit or restrict  the
Company's  discretion to amend,  revise or terminate any benefit or plan without
notice to or consent of the Executive.

                                2.4.3. VACATION.  Executive shall be entitled to
five (5) weeks of paid  vacation per Fiscal Year,  pro rated for periods of less
than a  full  Fiscal  Year;  PROVIDED,  that  the  timing  and  duration  of any
particular  vacation shall not interfere with the business of the Company or the
effective performance of Executive's duties hereunder,  as reasonably determined
in good faith by the Chief Executive Officer.

                                       9

<PAGE>

                                2.4.4.  AUTOMOBILE  ALLOWANCE.  During the Term,
the Company shall pay the Executive a monthly automobile allowance in the amount
of Seven Hundred Dollars ($700).

                                2.4.5.  LIFE INSURANCE.  The Company will obtain
and maintain during the Term a term life insurance  policy in the amount of Five
Hundred Thousand Dollars  ($500,000) on the life of the Executive payable to the
estate of the Executive in the event of the Executive's death during the Term.

                  3. EMPLOYMENT TERM; TERMINATION.

                           3.1.   EMPLOYMENT   TERM.    Executive's   employment
hereunder  shall commenced on November 13, 2006 (the  "COMMENCEMENT  DATE") and,
subject to Section  1.2 hereof and except as  otherwise  provided in Section 3.2
hereof,  shall continue for three (3) years following the Commencement Date (the
"INITIAL TERM"). Thereafter, this Agreement shall automatically be renewed (upon
the  compensation  terms provided herein other than option grants which shall be
negotiated  with the Executive at such time) for  successive  one (1) year terms
commencing at the end of the Initial Term (the Initial  Term,  together with any
prior or subsequent  employment or  consulting  term(s),  being also referred to
herein as the "TERM"),  unless Executive or Company shall have provided a Notice
of  Termination  (as defined in Section 3.4.2 hereof)  electing not to renew the
Term to the  other  party at  least  sixty  (60)  days  prior to such  scheduled
expiration.  Upon the  expiration  or  non-renewal  of the Term pursuant to this
Section 3.1 or its termination  pursuant to Sections 3.2.1 through 3.2.5 hereof,
inclusive,  Executive shall be released from all duties hereunder (except as set
forth in Sections 4 and 5 hereof) and the  obligations  of Company to  Executive
shall be as set forth in Section 3.3 hereof only.

                           3.2.   EVENTS   OF   TERMINATION.   The   Executive's
employment  shall  terminate  upon  the  occurrence  of any  one or  more of the
following events:

                                3.2.1. DEATH. In the event of Executive's death,
Executive's employment shall terminate on the date of his death. Amounts payable
to  Executive's  estate upon  Executive's  death are set forth in Section  3.3.2
below.

                                3.2.2.  DISABILITY.  In the event of Executive's
Disability  (as  hereinafter  defined),  Company  may, at its option,  terminate
Executive's  employment  by giving a Notice of  Termination  to  Executive.  The
Notice of  Termination  shall  specify  the Date of  Termination  (as defined in
Section  3.4.3.  hereof),  which date shall not be earlier than thirty (30) days
after the  Notice of  Termination  is given.  For  purposes  of this  Agreement,
"DISABILITY" means a disability as defined in any long-term disability insurance
policy  (reasonably  satisfactory  to the  Executive)  provided  by Company  and
insuring  Executive  or, in the absence of any such  policy,  the  inability  of
Executive for 120 days in any twelve (12) month period to substantially  perform
his  duties  hereunder  as a result  of a  physical  or mental  illness,  all as
determined in good faith by the Board, in its sole  discretion.  Amounts payable
to Executive upon  termination  due to Disability are set forth in Section 3.3.2
below.

                                       10

<PAGE>

                                3.2.3.  CAUSE.   Company  may,  at  its  option,
terminate  Executive's  employment  for  "CAUSE"  as set  forth in a  Notice  of
Termination to Executive  specifying the reasons for termination.  The Notice of
Termination shall specify the Date of Termination, which date may be the date of
such Notice of Termination.  For purposes of this Agreement,  "Cause" shall mean
(i)  Executive's  conviction  of, guilty or no contest plea to, or confession of
guilt of, any felony or any other crime involving moral  turpitude;  (ii) an act
or omission by Executive in  connection  with his  employment  that  constitutes
fraud,  criminal  misconduct,   breach  of  fiduciary  duty,  dishonesty,  gross
negligence,  malfeasance, willful misconduct or other conduct that is materially
harmful or detrimental to Company  (whether or not such act or omission  relates
to the  Company);  (iii)  excessive  use of alcohol  or  illegal  drugs so as to
interfere with the performance of Executive's  obligations under this Agreement;
(iv) a breach by  Executive of this  Agreement  (other than a failure to perform
addressed  by cause (v) below) or of any of the  representations  or  warranties
contained in this  Agreement;  (v) a continuing  failure by Executive to perform
such duties as are assigned to Executive  by the CEO, any  Designated  Executive
Officer or the Board in  accordance  with this  Agreement,  other than a failure
resulting from a Disability, after receipt from the Company of written notice of
such  continuing  failure and, to the extent such  failure is curable,  a thirty
(30) day period to cure such  failure;  (vi)  Executive's  knowingly  taking any
action  on  behalf  of  Company  or any of its  affiliates  without  appropriate
authority  to take such  action  (the  approval of the CEO shall be deemed to be
appropriate authority), after receipt from the Company of written notice of such
action and, to the extent the damage  resulting  from such action is curable,  a
thirty (30) day period to cure such damage;  (vii) Executive's  knowingly taking
any action in conflict of interest with Company or any of its  affiliates  given
Executive's  position with Company;  (viii) the commission of an act of personal
dishonesty  by  Executive  that  involves  personal  profit to him or his family
members; or (ix) a determination by the Board, in its sole discretion,  that the
employment of Executive  under this  Agreement  should  terminate (a termination
pursuant to this clause (ix), a  "DISCRETIONARY  CAUSE  TERMINATION");  PROVIDED
that Discretionary  Cause Termination shall be effective on the thirtieth (30th)
day after the  provision by the Company to  Executive  of written  notice of the
Board's  determination.  Amounts payable to Executive upon termination for Cause
are set forth in Section 3.3.1 below.

                                3.2.4. WITHOUT CAUSE BY COMPANY. Company may, at
its  option,  terminate  Executive's  Employment  for any  reason  or no  reason
whatsoever  (other than for the reasons set forth elsewhere in this Section 3.2)
by giving a Notice of Termination to Executive.  The Notice of Termination shall
specify  the Date of  Termination,  which date shall not be earlier  than thirty
(30) days after the Notice of Termination is given. Amounts payable to Executive
upon termination without cause are set forth in Section 3.3.2 below.

                                3.2.5. EXECUTIVE TERMINATION.  Executive may, at
his option,  terminate his  employment by giving a Notice of  Termination to the
Company. The Notice of Termination shall specify the Date of Termination,  which
date shall not be earlier  than sixty (60) days after the Notice of  Termination
is given.  Amounts payable to Executive upon Executive's  voluntary  termination
are set forth in Section 3.3.1 below.  A termination  by the Executive for "Good
Reason" shall not constitute a voluntary  termination by the Executive  pursuant
to this Section 3.2.5, but shall  constitute a termination  without Cause by the
Company  pursuant to Section 3.2.4.  Executive  shall be deemed to have resigned
for "Good Reason" if (1) the Company fails to comply with the material  terms of
this Agreement or any stock option or

                                       11

<PAGE>

similar  agreement  with the  Employee  then in effect,  after  receipt from the
Executive  of written  notice of such failure and, to the extent such failure is
curable,  a thirty (30) day period to cure such failure;  or (2) the Executive's
principal  business  location  is moved to a location  outside the States of New
York or New Jersey.

                           3.3. OBLIGATIONS OF COMPANY FOLLOWING  TERMINATION OF
THE TERM. Following  termination of Executive's  employment under the respective
circumstances  described below, Company shall pay to Executive or his estate, as
the case may be, the following  compensation and provide the following  benefits
in full satisfaction and final settlement of any and all claims and demands that
Executive now has or hereafter may have hereunder against Company. In connection
with  Executive's  receipt  of any or all  monies and  benefits  to be  received
pursuant to this Section 3.3,  Executive  shall have no duty to seek  subsequent
employment during the period in which he is receiving severance payments and any
Severance  Amount  (as  defined in Section  3.3.2  hereof)  shall not be reduced
solely as a result of Executive's  subsequent employment by an entity other than
Company  (other  than as a result of any  violation  of  Sections 4 or 5 of this
Agreement).  Executive  acknowledges  that any non-renewal or expiration of this
Agreement  shall not be deemed an event of  termination  that would  trigger any
obligations of Company pursuant to this Section 3.3.

                                3.3.1.  TERMINATION  FOR CAUSE BY THE COMPANY OR
TERMINATION  BY EXECUTIVE  WITHOUT GOOD  REASON.  In the event that  Executive's
employment  is  terminated  by Company for Cause  pursuant  to Section  3.2.3 or
Executive  terminates his employment with the Company  pursuant to Section 3.2.5
for other than Good Reason,  (i) all unvested stock options under this Agreement
terminate as of the Date of Termination,  (ii) all vested and unexercised  stock
options under this Agreement as of the Date of Termination granted by Company to
Executive  shall be exercisable in accordance with the terms of the Plan and the
applicable  stock option  agreements,  (iii) the Company shall pay to Executive,
payable in accordance with the Company's  regular payroll  practices,  an amount
equal to any unpaid but earned Base Salary through the Date of  Termination  and
(iv) the Company shall reimburse  Executive for any unpaid expenses  pursuant to
Section  2.4.1  hereof;  PROVIDED  that the  termination  of all unvested  stock
options  pursuant to clause (i) above shall be subject to Section  3.3.2  below,
solely with respect to a Discretionary Cause Termination and a public disclosure
of a Change of Control  occurring  within ninety (90) days of the date Executive
is terminated.

                                3.3.2. TERMINATION WITHOUT CAUSE BY THE COMPANY,
TERMINATION  BY EXECUTIVE  FOR GOOD REASON OR  TERMINATION  DUE TO DISABILITY OR
DEATH.  In the event  that  Executive's  employment  is  terminated  by  Company
pursuant to Section 3.2.4 hereof or by reason of Executive's Disability pursuant
to Section 3.2.2 hereof or by reason of  Executive's  death  pursuant to Section
3.2.1 hereof,  or by Executive for Good Reason,  (i) all unvested  stock options
under this Agreement shall remain  outstanding but shall be unexercisable  for a
period  of  ninety  (90) days and  shall  thereafter  at the end of such  90-day
period,  subject to the last sentence of this Section 3.3.2  terminate,  and all
vested and unexercised stock options shall be exercisable for a period of ninety
(90) days from the Date of Termination, (ii) the Company shall pay to Executive,
subject to Executive's  continued  compliance with the terms of Sections 4 and 5
hereof,  the Severance Amount,  (iii) the Company shall reimburse  Executive for
any unpaid expenses  pursuant to Section 2.4.1 hereof and (iv) the Company shall
pay the premiums for the

                                       12

<PAGE>

Executive's  Company  provided health  insurance for twelve (12) months from the
Date of Termination For purposes hereof,  "SEVERANCE AMOUNT" shall mean the Base
Salary in effect for the greater of (a) the  remainder  of the Initial  Term and
(b) the first  anniversary  of the Date of  Termination.  Any  payments  made in
accordance  with this Section 3.3.2 shall be made in accordance  with  Company's
regular  payroll  practices and shall be subject to Executive's  compliance with
Sections 4 and 5 of this Agreement.  The breach by Executive of any provision of
Sections  4 or 5 shall  result in a  forfeiture  of any  unpaid  portion  of the
Severance  Amount.  Notwithstanding  this  Section  3.3.2,  if the first  public
disclosure  of a Change of Control (as defined in Section  3.4.1  hereof) of the
Company (or of an  agreement  to which the Company is a party to effect a Change
of Control of the  Company)  shall  occur  within  ninety  (90) days of the date
Executive is terminated  without Cause or as a result of a  Discretionary  Cause
Termination,  all unvested  Opioid Product  Options and Milestone  Options shall
immediately vest and become  exercisable.  Executive shall then have ninety (90)
days  from the  Date of  Termination  to  exercise  all  vested  stock  options;
PROVIDED,  that the relevant  stock option plan remains in effect and such stock
options shall not have otherwise  expired in accordance  with the terms thereof.
No Severance Amount shall be due or payable as a result of a Discretionary Cause
Termination.

                                3.3.3.  TERMINATION  UPON CHANGE OF CONTROL.  In
the event that  Executive's  employment is  terminated by Company  without Cause
within  ninety  (90) days after a Change of  Control,  (i) all  unvested  Opioid
Product  Options and Milestone  Options under this Agreement  shall  immediately
vest  and  along  with  all  vested  and  unexercised  stock  options  shall  be
exercisable  in for a period of ninety  (90) days from the Date of  Termination,
(ii) the  Company  shall pay to  Executive,  subject  to  Executive's  continued
compliance  with the terms of  Sections 4 and 5 hereof,  the  Severance  Amount,
(iii) the Company shall reimburse  Executive for any unpaid expenses pursuant to
Section  2.4.1  hereof,  (iv)  the  Company  shall  pay  the  premiums  for  the
Executive's  Company  provided health  insurance for twelve (12) months from the
Date of  Termination  and (v) an amount equal to Five Hundred  Thousand  Dollars
($500,000)  payable  in a single  lump  sum.  In  addition,  in the  event  that
Executive's  employment is terminated by Company as a result of a  Discretionary
Cause  Termination  within  ninety  (90)  days  after a Change of  Control,  all
unvested Opioid Product Options and Milestone Options under this Agreement shall
immediately  vest and along with all vested and unexercised  stock options shall
be exercisable in for a period of ninety (90) days from the Date of Termination.
Any payments made in  accordance  with this Section 3.3.3 shall be made in place
of any other  payments  under this  Agreement  and shall be in  accordance  with
Company's  regular  payroll  practices  and  shall  be  subject  to  Executive's
compliance with Sections 4 and 5 of this  Agreement.  The breach by Executive of
any  provision  of Sections 4 or 5 shall  result in a  forfeiture  of any unpaid
portion of the Severance Amount.

                                3.3.4.  OTHER REMEDIES.  Nothing in this Section
3.3 shall  limit or  restrict  Company  from  pursuing  or  obtaining  any other
remedies that may be available to it in law, contract or otherwise,  in addition
to the  remedies  set forth  herein,  in  response  to any  improper  conduct of
Executive, or conduct in violation of the parties' agreements.

                                3.3.5. TERMINATION OF EMPLOYMENT. This Agreement
shall terminate simultaneously with the termination of Executive's employment by
the Company for

                                       13

<PAGE>

any reason;  provided,  however, that the covenants set forth in Section 4 and 5
of this Agreement  shall survive the termination of this Agreement to the extent
provided in such Sections.

                           3.4. DEFINITIONS.

                                3.4.1.  "CHANGE OF  CONTROL"  DEFINED.  The term
"CHANGE OF  CONTROL"  shall mean (a) the  acquisition  of Company  pursuant to a
consolidation  of Company  with,  or merger of Company  with or into,  any other
Person  with the  result of which the  holders  of the  Company's  voting  stock
immediately  prior to such transaction hold less than fifty (50%) percent of the
combined voting power after giving effect to such  transaction;  (b) the sale of
all or substantially  all of the assets or capital stock of Company to any other
Person;  or (c)  securities  of Company  representing  greater  than fifty (50%)
percent of the  combined  voting  power of  Company's  then  outstanding  voting
securities are acquired by a Person,  or group of related  Persons,  in a single
transaction or series of related transactions.

                                3.4.2. "NOTICE OF TERMINATION" DEFINED.  "NOTICE
OF TERMINATION"  means a written notice that indicates the specific  termination
provision  relied upon by Company or Executive and, in the case of a termination
pursuant to Sections 3.2.2 or 3.2.3 hereof,  sets forth in reasonable detail the
facts  and  circumstances   claimed  to  provide  a  basis  for  termination  of
Executive's employment under the termination provision so indicated.

                                3.4.3. "DATE OF TERMINATION"  DEFINED.  "DATE OF
TERMINATION"  means such date as  Executive's  employment  expires in accordance
with Section 3.1 hereof or is terminated in accordance with Section 3.2 hereof.

                  4. PROTECTION OF  CONFIDENTIAL  INFORMATION AND TRADE SECRETS;
NON-COMPETITION; NO SOLICITATION.

                           4.1. DEFINITIONS.

                                4.1.1.   "CONFIDENTIAL   INFORMATION"   DEFINED.
"CONFIDENTIAL  INFORMATION"  means  any and all  information  (oral or  written)
relating  to Elite or any entity  controlling,  controlled  by, or under  common
control with Elite,  including information relating to: technology,  Inventions,
intellectual  property,  research,  test  procedures and results;  machinery and
equipment;  manufacturing processes;  financial information;  products; identity
and  description of materials and services  used;  purchasing;  costs;  pricing;
customers and  prospects;  advertising,  promotion and  marketing;  and selling,
servicing and information pertaining to any governmental  investigation,  except
such information that becomes public,  other than as a result of a breach of the
provisions of Section 4.2 hereof,  or was lawfully  known by Executive  prior to
his  employment by the Company.  Without  limiting the  foregoing,  Confidential
Information shall also include all information  related to products targeted for
development by Elite,  subjects of research and  development,  projected  launch
dates,  the FDA  protocols,  projected  dates for regulatory  filings,  consumer
studies,   market  research,   clinical   research,   business  plans,   planned
expenditures,  profit margins,  strategic evaluation plans and initiatives,  and
those  commissioned by Elite through  outside  vendors or  consultants,  and the
content of all business and strategic  planning  conducted with or through third
parties. Executive's obligation not to disclose

                                       14

<PAGE>

Confidential Information shall be as set forth in Section 4.2 of this Agreement.

                                4.1.2. "INVENTIONS" DEFINED.  "INVENTIONS" means
any and all inventions,  discoveries,  improvements,  patent,  copyrights and/or
other property rights,  whether or not patented or patentable  made,  conceived,
created,  developed or contributed to by Executive during the Term which are (i)
directly or indirectly related to the business,  operations or activities of the
Company or any of its  subsidiaries  or affiliates,  (ii) directly or indirectly
related  to  Executive's   employment  by,  or  performance  of  other  services
(including as a director,  manager,  officer,  advisor,  agent,  representative,
consultant  or other  independent  contractor)  for,  the  Company or any of its
subsidiaries or affiliates, or (iii) based upon Confidential Information.

                                4.1.3.  "REMAINING  RIGHTS" DEFINED.  "REMAINING
RIGHTS"  means all of  Executive's  rights,  titles and  interests in and to the
following  intellectual  property  as of the  Commencement  Date:  any  and  all
inventions,   discoveries,   improvements,  sales  approaches,  sales  material,
training material,  computer software,  documentation,  and other  copyrightable
works  or any  other  intellectual  property  (including,  but not  limited  to,
materials or services subject to trademark or service mark registration),  made,
conceived,  created, developed or contributed to by Executive during the Term or
the term of any prior employment or consulting  relationship  between  Executive
and the Company  which are (i) directly or  indirectly  related to the business,
operations  or  activities  of  the  Company  or  any  of  its  subsidiaries  or
affiliates,  (ii) directly or indirectly related to Executive  employment by, or
performance  of other  services  (including  as a  director,  manager,  officer,
advisor, agent, representative, consultant or other independent contractor) for,
the  Company  or any of its  subsidiaries  or  affiliates,  or (iii)  based upon
confidential or proprietary  information which is or was owned by the Company or
any of its  subsidiaries  or  affiliates  at the  time  that  such  intellectual
property was made, conceived, created, developed or contributed to by Executive.

                                4.1.4. "WORK FOR HIRE" DEFINED.  "WORK FOR HIRE"
means any and all sales approaches,  sales material, training material, computer
software,  documentation,  other  copyrightable  works or any other intellectual
property  (including,  but not limited  to,  materials  or  services  subject to
trademark  or  service  mark  registration,   but  excluding  Inventions)  made,
conceived, created, developed or contributed to by Executive during the Term and
which are (i) directly or  indirectly  related to the  business,  operations  or
activities  of  the  Company  or any of its  subsidiaries  or  affiliates,  (ii)
directly or indirectly  related to Executive's  employment by, or performance of
other  services  (including as a director,  manager,  officer,  advisor,  agent,
representative,  consultant or other independent contractor) for, the Company or
any  of its  subsidiaries  or  affiliates,  or  (iii)  based  upon  Confidential
Information.

                                4.1.5. "TERM" DEFINED FOR PURPOSES OF SECTIONS 4
AND 5. "Term",  as used solely in Sections 4 and 5 of this Agreement,  means the
entire duration of the  Executive's  relationship  with the Company,  including,
without  limitation,  any prior or subsequent  employment periods as well as the
term  of  any  prior  or  subsequent   consulting  or  independent   contracting
arrangements  with the Company;  PROVIDED  that the manner in which such term is
used in the  remaining  portions  of this  Agreement  shall  not be  altered  or
expanded by the definition of such term for purposes of Sections 4 and 5 hereof.

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<PAGE>

                           4.2.  NON-DISCLOSURE  OF  CONFIDENTIAL   INFORMATION.
Executive agrees that he shall not use or disclose, either during the Term or at
any  time  thereafter  for a  period  of five  (5)  years  from  termination  of
Executive's  employment with the Company (except to the extent  necessary during
the Term in connection with the necessary and proper  performance of Executive's
duties  on  behalf  of  Elite  and  in  good  faith,  or as  required  by law or
governmental authority) any Confidential Information.

                           4.3. COVENANT NOT TO COMPETE AND NON-SOLICITATION. In
consideration  of Elite's payment of compensation  pursuant to Section 2 hereof,
the right to receive the Severance  Amount (if  applicable),  and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged:

                                4.3.1.   Executive   shall   not   directly   or
indirectly,  prior to the first anniversary of the end of the Term, by ownership
of securities or otherwise (except as a holder of less than five (5%) percent of
any class of equity  securities  of any other Person (as defined  below),  which
class  of  securities  shall  have  been  registered  under  Section  12 of  the
Securities and Exchange Act of 1934, as amended (the "EXCHANGE  ACT")),  manage,
control,  finance,  consult with,  engage or participate  in, or assist,  in any
manner  with or in respect of any drug  products as to which the Company (or any
of its affiliates),  or any co-development partner of the Company (or any of its
affiliates), shall have (x) substantially developed during the Term, or (y) have
filed  (irrespective  of whether  accepted  for filing by the FDA) in good faith
either an abbreviated new drug application or a new drug application  (including
505(b)(2)  Applications)  with the FDA, in each case,  with  respect to any drug
technology developed,  co-developed,  supplied,  distributed,  sold, marketed or
manufactured  by the  Company  (or any of its  affiliates),  either by itself or
together with any other individual,  corporation,  partnership,  trust,  limited
liability company,  unincorporated organization,  joint stock corporation, joint
venture,  association  or other  entity,  or any  government,  or any  agency or
political  subdivision  thereof  or any  branch of any  legal  entity  (each,  a
"Person") (including any product marketed through any authorized generic product
agreement), during the Term.

                                4.3.2.  Prior to the second  anniversary  of the
end of the Term,  Executive shall not directly or indirectly  solicit,  recruit,
hire, induce or engage, or attempt to solicit,  recruit,  hire, induce or engage
any (i)  Persons  employed  or  retained  as  consultants  or other  independent
contractors by Elite, (ii) exclusive  customers,  strategic partners,  exclusive
vendors or  exclusive  suppliers of Elite,  or (iii) other  Persons with whom or
which Elite  maintains an exclusive  commercial  relationship,  or encourage any
such  Persons  described  in clauses  (i),  (ii) or (iii) above to  terminate or
adversely alter their  relationship with Elite (including,  without  limitation,
soliciting  or  endeavoring  to cause  any such  Person to use any  products  or
services offered or provided by a Person other than Elite which compete with the
business, products or services of Elite).

                                4.3.3. Prior to the fifth anniversary of the end
of the Term, Executive shall not directly or indirectly make or cause to be made
any  oral  or  written  statement  which  is,  or is  reasonably  likely  to be,
defamatory in any material  respect to the business,  operations,  activities or
reputation of Elite, or their respective directors, managers or officers.

                                       16

<PAGE>

                           4.4. ASSIGNMENT OF INTELLECTUAL PROPERTY.

                                4.4.1.  Executive  shall  promptly  disclose  to
Elite any and all Inventions.  Executive shall promptly communicate to Elite all
information, details and data pertaining to any Inventions in such form as Elite
requests. Executive agrees that Inventions,  patents and patent applications are
the  property of Elite,  and any and all rights,  titles or  interests in and to
Inventions,  patents or patent  applications which Executive may have in any and
every jurisdiction are hereby assigned in full.  Whenever Executive is requested
to do so by Elite,  during or after the Term,  Executive shall, at the Company's
sole cost and expense,  promptly  execute and deliver any and all  applications,
assignments or other  documents or instruments  reasonably  deemed  necessary or
advisable by Elite to apply for and obtain  Letters  Patent of the United States
or any foreign  country or to otherwise  protect,  confirm or establish  Elite's
full and exclusive  interests in any  Inventions.  The  obligations set forth in
this Section  4.4.1 shall be binding upon the  successors,  assigns,  executors,
administrators and other legal representatives of Executive.

                                4.4.2.  Any and all  Works  for  Hire  shall  be
considered  "works made for hire" under the copyright  laws of the United States
or  property  of Elite  under  applicable  federal,  state,  local  and  foreign
trademark laws (as appropriate).  Executive shall promptly  communicate to Elite
any and all  Works  for  Hire,  and any and all  information,  details  and data
pertaining to any Works for Hire, in such form as Elite requests.  To the extent
that  Works for Hire fail to  qualify  as (A)  "works  made for hire"  under the
copyright laws of the United States or any other jurisdiction or (B) property of
Elite  under  applicable  federal,  state,  local  or  foreign  trademark  laws,
Executive  hereby  assigns each Work for Hire and all right,  title and interest
therein in any and every jurisdiction to Elite.  Whenever Executive is requested
to do so by Elite,  during or after the Term,  Executive shall, at the Company's
sole cost and expense,  promptly  execute and deliver any and all  applications,
assignments or other  documents or instruments  reasonably  deemed  necessary or
advisable by Elite to apply for and confirm and  effectuate  full and  exclusive
ownership of Works for Hire in Elite,  including,  but not limited to, ownership
of any moral rights under the copyright  law of any nation,  or any other rights
under the intellectual property laws of any nation. The obligations set forth in
this Section  4.4.2 shall be binding upon the  successors,  assigns,  executors,
administrators and other legal representatives of Executive.

                           4.5. If a court  declares  that any term or provision
of this  Section 4 is invalid or  unenforceable,  the parties to this  Agreement
agree that the court making the determination of invalidity or  unenforceability
shall  have the  power to  reduce  the  scope,  duration  or area of the term or
provision,  to delete  specific  words or phrases,  or to replace any invalid or
unenforceable  term or  provision  with a term or  provision  that is valid  and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable  term or provision,  and this Agreement shall be enforceable as so
modified.

                           4.6.  Executive hereby transfers,  assigns,  conveys,
grants and sets over to Elite and its successors and assigns forever,  and Elite
hereby  accepts,  assumes  and  acquires  from  Executive  for  itself  and  its
successors and assigns forever,  all of Executive's right, title and interest in
and to the  Remaining  Rights in any and every  jurisdiction.  Executive  hereby
covenants  and  agrees  that,  at any  time  and  from  time to time  after  the
Commencement Date, at

                                       17

<PAGE>

the request of Elite or its successors or assigns, he will (i) promptly and duly
execute and deliver,  or cause to be executed and  delivered to Elite,  all such
further  documents  and  instruments,  and (ii) promptly take all such other and
further  action,  as may be  requested  by Elite to more  effectively  transfer,
assign,  convey, grant, set over, vest, protect,  confirm and establish full and
exclusive right, title and interest in and to all of the Remaining Rights in and
to Elite and its successors and assigns  forever in any and every  jurisdiction,
including,  without limitation,  any and all applications,  assignments or other
documents or instruments deemed necessary or advisable by Elite to apply for and
obtain  Letters  Patent of the United  States or any foreign  jurisdiction.  The
obligations  set forth in this Section 4.6 shall be binding upon the successors,
assigns, executors, administrators and other legal representatives of Executive.
Executive  hereby  represents  and  warrants  to Elite  that  Executive  has not
transferred  any right,  title or interest in or to the Remaining  Rights to any
other Person as of the Commencement  Date and, as of the Commencement  Date, has
not entered into any agreement to do so.

                           4.7. Executive  acknowledges and admits that a breach
of any of the covenants contained in this Section 4 will cause Elite irreparable
harm.  Executive further acknowledges and admits that the damages resulting from
such a breach will be difficult or impossible  to ascertain,  and will be of the
sort that cannot be  compensated  by money or other  damages,  and that Elite in
addition to all other remedies available at law or equity,  shall be entitled to
equitable  relief,  including  specific  performance  and  injunctive  relief as
remedies  for any such  breach  and that  Executive  further  agree to waive any
requirement  for securing or posting of any bond in connection with such remedy.
Executive  therefore waives (and is estopped from asserting in a court of law or
equity)  any  argument  that the breach,  or  threatened  breach,  of any of the
covenants  contained in this Section 4 does not constitute  irreparable harm for
which an  adequate  remedy  at law is  unavailable.  Nothing  contained  in this
Section 4 or elsewhere in this Agreement shall be construed as prohibiting Elite
from pursuing any other remedies  available at law or in equity for a breach, or
threatened  breach,  by the Employee of any of the  covenants  contained in this
Section 4.

                           4.8. ELITE DEFINED. For purposes of Section 4 hereof,
"Elite" shall mean and include the Company,  the Subsidiaries and any affiliates
and joint ventures.

                  5.  CONTINUED  COOPERATION;  RETURN OF DOCUMENTS AND PROPERTY;
INJUNCTIVE RELIEF; NON-EXCLUSIVITY AND SURVIVAL.

                           5.1. CONTINUED  COOPERATION.  Executive shall, during
and after the expiration or  termination  of this  Agreement for any reason,  at
Company's sole expense,  provide such reasonable  cooperation as is requested by
Company with respect to any internal or external  agency or legal  investigation
(whether  conducted  by the  FDA,  the SEC or  otherwise),  lawsuits,  financial
reports, or with respect to other matters within his knowledge, responsibilities
or purview, upon reasonable notice. Executive shall execute all lawful documents
reasonably  necessary  for  Company  to  secure  or  maintain  any  Confidential
Information.

                           5.2.  RETURN OF DOCUMENTS AND PROPERTY.  Upon the end
of the Term, or upon the earlier request of the Company, Executive and his legal
or  personal  representatives  will  promptly  return to the Company any and all
information, documents or other materials relating

                                       18

<PAGE>

to or  containing  Confidential  Information  which  are,  and any and all other
property of the Company which is, in  Executive's  possession,  care or control,
regardless of whether such  materials  were created or prepared by Executive and
regardless of the form of, or medium  containing,  such information,  documents,
including  without  limitation,  all  Company  computers  and hard  drives,  all
computer files (whether or not such files are stored on the Executive's personal
computer),  employee  identification  cards,  Company credit cards, keys and any
other physical property of Company.

                           5.3.    INJUNCTIVE   RELIEF.   The   parties   hereby
acknowledge and agree that (a) Company will be irreparably  injured in the event
of a breach  by  Executive  of any of his  obligations  under  Sections  4 and 5
hereof; (b) monetary damages will not be an adequate remedy for any such breach;
(c)  Company  will be entitled to  injunctive  relief,  in addition to any other
remedies  that it may  have,  in the  event of any such  breach  and  Executives
further  agree to waive any  requirement  for securing or posting of any bond in
connection  with such remedy,  and waives (and is estopped  from  asserting in a
court of law or equity) any argument that the breach,  or threatened  breach, of
any  of  the  covenants  contained  in  Sections  4 or  5  does  not  constitute
irreparable  harm for which an adequate  remedy at law is  unavailable.  Nothing
contained in this Section 5 or elsewhere in this Agreement shall be construed as
prohibiting the Company from pursuing any other remedies  available at law or in
equity  for a  breach,  or  threatened  breach,  by the  Employee  of any of the
covenants  contained in this Section 5; and (d) the existence of any claims that
Executive may have against  Company,  whether under this Agreement or otherwise,
will not be a defense to the  enforcement  by Company of any of its rights under
Sections 4 and 5 hereof.  All of the parties'  covenants and Company's rights to
specific  enforcement,  injunctive relief and other remedies as set forth herein
shall apply in the event of any breach or threatened  breach by Executive of any
of the provisions of Sections 4 and/or 5 hereof.  The parties further agree that
any action concerning any alleged breach(es) of Sections 4 and/or 5 hereof shall
not be brought or addressed in arbitration,  and the existence of any demand for
arbitration or pendency of any dispute in arbitration under this Agreement shall
not be a basis  to  delay or defer  adjudication  by a court of any  demand  for
specific  performance,  injunctive  relief or other  remedies in relation to any
alleged breach(es) of Sections 4 and/or 5 hereof.

                           5.4.  NON-EXCLUSIVITY AND SURVIVAL.  The covenants of
Executive  contained  in Sections 4 and 5 hereof are in addition  to, and not in
lieu of, any  obligations  that  Executive  may have with respect to the subject
matter hereof,  whether by contract,  as a matter of law or otherwise,  and such
covenants and their  enforceability  shall survive any expiration or termination
of the Term by either  party and any  investigation  made  with  respect  to the
breach thereof by Company at any time.

                  6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF EXECUTIVE.

                           6.1. In the event that Executive  receives any notice
(written or otherwise), or otherwise becomes aware of, any claim,  investigation
or action against,  naming or in anyway  involving  Executive or relating in any
way to his past or current  activities  (whether or not related to the  Company)
from any governmental or regulatory body or agency, including but not limited to
the SEC,  the FDA or the United  States  Justice  Department,  he will  promptly
notify the  Company in writing of such claim and a copy of any  written  notice,
complaint or other

                                       19

<PAGE>

material  provided to Executive by such agency or regulator,  in any case within
two (2) business days of receipt thereof. There is no other action filed against
him or claim  pending or  threatening  by any entity or person  relating  to any
violations  of the  applicable  securities  laws of the United  States or of any
state thereof.

                  7. MISCELLANEOUS PROVISIONS.

                           7.1. SECTION 409A.  Notwithstanding  any provision of
this  Agreement to the  contrary,  if  Executive  is a  "specified  employee" as
defined in Section 409A of the Internal  Revenue Code of 1986,  as amended,  and
the  regulations  issued  or to be  issued  by the  Department  of the  Treasury
thereunder  ("SECTION  409A"),  Executive  shall not be entitled to any payments
upon a termination of employment  until the earlier of (i) the date which is six
months after the  termination  of employment  for any reason other than death or
(ii) the date of the  Executive's  death and the first such payment  shall equal
the sum of all payments  that would have been made from the date of  termination
to the date of such  first  payment  were it not for the  delay in  payment  for
Section 409A purposes.

                           7.2. SEVERABILITY.  If, in any jurisdiction, any term
or  provision  hereof is  determined  to be  invalid or  unenforceable,  (a) the
remaining  terms  and  provisions  hereof  shall  be  unimpaired;  (b) any  such
invalidity  or  unenforceability  in any  jurisdiction  shall not  invalidate or
render  unenforceable such term or provision in any other jurisdiction;  and (c)
the invalid or  unenforceable  term or  provision  shall,  for  purposes of such
jurisdiction,  be  deemed  replaced  by a term or  provision  that is valid  and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.

                           7.3. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts,  and by the two parties hereto in separate
counterparts,  each of which shall be deemed to be an original  and all of which
taken together  shall  constitute one and the same agreement (and all signatures
need not  appear  on any one  counterpart),  and  this  Agreement  shall  become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

                           7.4.  NOTICES.  All  notices,  requests,  demands and
other  communications  hereunder  shall be in writing  and shall be deemed  duly
given upon receipt when delivered by hand, overnight delivery or facsimile (with
confirmed delivery), or three (3) business days after posting, when delivered by
registered or certified mail or private courier service, postage prepaid, return
receipt requested, as follows:

         If to Company, to:

                  Elite Pharmaceuticals, Inc.
                  165 Ludlow Avenue
                  Northvale, New Jersey
                  Facsimile No.:  (201) 391-7693
                  Attn:    Chief Executive Officer

                                       20

<PAGE>

          With a copy (which shall not constitute notice) to:

                  Reitler Brown & Rosenblatt LLC
                  800 Third Avenue
                  21st Floor
                  New York, NY  10022
                  Facsimile No.:  (212) 371-5500
                  Attn:    Scott H. Rosenblatt, Esq.

         If to Executive, to:

                  Charan Behl
                  PO Box 376
                  Commack, NY 11725

or to such other  address(es)  as a party hereto shall have  designated  by like
notice to the other parties hereto.

                           7.5. AMENDMENT. No provision of this Agreement may be
modified,  amended,  waived  or  discharged  in any  manner  except by a written
instrument executed by both Company and Executive.

                           7.6.   ENTIRE   AGREEMENT.   Except  as  specifically
provided herein, this Agreement  constitutes the entire agreement of the parties
hereto with  respect to the subject  matter  hereof,  and  supersedes  all prior
agreements and understandings of the parties hereto,  oral or written (including
the Original  Agreement).  Company and  Executive  shall execute and deliver all
such  further  documents  as may be  necessary  to carry  out the  intent of the
preceding sentence.

                           7.7. APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be wholly performed therein.

                           7.8. HEADINGS.  The headings contained herein are for
the sole purpose of convenience of reference,  and shall not in any way limit or
affect the meaning or  interpretation  of any of the terms or provisions of this
Agreement.

                           7.9.   BINDING   EFFECT;   SUCCESSORS   AND  ASSIGNS.
Executive  may not  delegate  any of his  duties  or  assign  any of his  rights
hereunder.  This  Agreement  shall inure to the benefit of, and be binding upon,
the  parties  hereto  and their  respective  heirs,  legal  representatives  and
beneficiaries,  successors  and  permitted  assigns.  Company  shall require any
successor  (whether  direct  or  indirect  and  whether  by  purchase,   merger,
consolidation or otherwise) to all or  substantially  all of the business and/or
assets of Company, by an agreement in form and substance reasonably satisfactory
to  Executive,  to expressly  assume and agree to

                                       21

<PAGE>

perform  this  Agreement  in the same manner and to the same extent that Company
would be required to perform if no such succession had taken place.

                           7.10.  WAIVER.  The  failure of either of the parties
hereto to at any time enforce any of the provisions of this Agreement  shall not
be deemed or construed to be a waiver of any such  provision,  nor to in any way
affect the validity of this  Agreement or any  provision  hereof or the right of
either of the parties hereto  thereafter to enforce each and every  provision of
this  Agreement.  No  waiver  of any  breach  of any of the  provisions  of this
Agreement shall be construed or deemed to be a waiver of any other or subsequent
breach.

                           7.11.  CAPACITY,  ETC.  Each of Executive and Company
hereby  represents and warrants to the other that, as the case may be: (a) he or
it has full power,  authority and capacity to execute and deliver this Agreement
and to perform his or its obligations  hereunder;  (b) such execution,  delivery
and  performance  shall not (and  with the  giving of notice or lapse of time or
both would not) result in the breach of any  agreements or other  obligations to
which he or it is a party or he or it is otherwise bound or violate any law; and
(c) this  Agreement is his or its valid and binding  obligation  enforceable  in
accordance with its terms.

                           7.12.   ENFORCEMENT;   JURISDICTION.   If  any  party
institutes legal action to enforce or interpret the terms and conditions of this
Agreement,  the prevailing party shall be awarded reasonable  attorneys' fees at
all trial and  appellate  levels and the  expenses  and costs  incurred  by such
prevailing party in connection therewith.  Any legal action, suit or proceeding,
in equity or at law,  arising  out of or  relating  to this  Agreement  shall be
instituted  exclusively  in the State or Federal courts located in the State and
County of New York and each party agrees not to assert,  by way of motion,  as a
defense or otherwise,  in any such action,  suit or  proceeding,  any claim that
such party is not subject personally to the jurisdiction of any such court, that
the action,  suit or proceeding is brought in an  inconvenient  forum,  that the
venue of the action, suit or proceeding is improper or should be transferred, or
that this  Agreement or the subject  matter  hereof may not be enforced in or by
any such court.  Each party further  irrevocably  submits to the jurisdiction of
any such court in any such action,  suit or  proceeding.  Any and all service of
process and any other notice in any such  action,  suit or  proceeding  shall be
effective  against any party if given  personally  or by registered or certified
mail,  return  receipt  requested or by any other means of mail that  requires a
signed  receipt,  postage  prepaid,  mailed to such  party as  herein  provided.
Nothing  herein  contained  shall be  deemed to affect or limit the right of any
party to serve process in any other manner permitted by applicable law.

                           7.13. WITHHOLDING. The payment of any amount pursuant
to this Agreement,  including, without limitation, pursuant to Sections 2 and 3,
shall be subject to any applicable  withholding and payroll taxes,  which may be
deducted by the Company in its sole discretion.

                           7.14.  ADVICE OF COUNSEL.  Executive  represents  and
warrants that he has had full opportunity to seek advice and  representation  by
independent  counsel  of  his  or  her  own  choosing  in  connection  with  the
interpretation, negotiation and execution of this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                                       22

<PAGE>

          IN WITNESS WHEREOF,  this Agreement has been executed and delivered by
the parties hereto as of the date first above written.

                                     Elite Pharmaceuticals, Inc.

                                     By: /s/ Bernard Berk
                                        --------------------------------------
                                         Name:    Bernard Berk
                                         Title:   Chief Executive Officer

                                      /s/ Charan Behl
                                     -----------------------------------------
                                     Charan Behl

                                       23EXHIBIT 4.1
-----------

                                  AMENDMENT TO
                                WARRANT AGREEMENT

         THIS AMENDMENT TO WARRANT  AGREEMENT (this  "Amendment") to the Warrant
Agreement dated December 21, 2001 (the "Agreement") by and between Arkona, Inc.,
a Delaware  corporation (the "Company"),  and Paul Henriod,  an individual ("Mr.
Henriod")  is made as of  December  20,  2006.  Capitalized  terms  used but not
defined herein have the meaning set forth in the Agreement.  In consideration of
the mutual  promises and  covenants  set forth herein and in the  Agreement  and
other  good  and  valuable  consideration,   the  receipt  of  which  is  hereby
acknowledged by the parties, the parties hereto agree as follows:

1. Amendment to Term. The Termination  Date calculable  pursuant to Section 1 of
the  Agreement  (as being 60 months after the  Effective  Date,  or December 21,
2006)  is  hereby  amended  to be the  earlier  to occur of (a) the date 60 days
following the date Mr. Henroid  ceases to be a director of the Company,  and (b)
December 21, 2007.

2. Full Force and Effect.  Except as amended hereby,  the Agreement shall remain
in full force and effect.

3. Entire  Agreement.  This Amendment and the Agreement  constitute the full and
entire  understanding  and  agreement  between  the  parties  with regard to the
subjects hereof and thereof.

4.  Counterparts.  This Amendment may be executed in any number of counterparts,
each of which shall be an original,  but all of which together shall  constitute
one instrument.

         IN WITNESS  WHEREOF,  this Amendment is hereby  executed as of the date
first above written.

                                ARKONA, INC.
                                a Delaware corporation

                                By: /s/
                                    --------------------------------------------

                                Name:
                                      ------------------------------------------

                                Title:
                                       -----------------------------------------

/s/ PAUL HENRIOD
---------------------------
Paul Henriod, an individual

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