Document:

ELITE PHARMACEUTICALS, INC

                     INCENTIVE STOCK OPTION LETTER AGREEMENT

TO: Bernard Berk

         We are  pleased to inform you that you have been  selected by the Board
of Directors, (the "Plan Administrator") of the Elite Pharmaceuticals, Inc. (the
"Company")  2004  Stock  Option  Plan,  as  amended  (the  "Plan") to receive an
incentive  option for the  purchase of 200,000  shares of the  Company's  common
stock,  par value $.01 per share (the  "Shares"),  at an exercise price of $2.69
per share (the "exercise  price").  Such option to the maximum extent  permitted
under applicable law, qualify as "incentive stock options" within the meaning of
Section 422 of the Internal  Revenue Code. A copy of the Plan and the provisions
thereof, including, without limitation, those relating to withholding taxes, are
incorporated into this Agreement by reference.

         The  terms  of the  option  are as set  forth  in the  Plan and in this
Agreement. The most important of the terms are summarized as follows:

         1. TERM. The term of the option is ten years from date of grant, unless
sooner terminated.

         2. EXERCISE. During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal  representative of
your estate or the  beneficiary  thereof  following your death.  You may use the
Notice of Exercise in the form attached to this  Agreement when you exercise the
option.

         3. PAYMENT FOR SHARES. The option may be exercised by the delivery of:

         (a) Cash,  personal  check  (unless  at the time of  exercise  the Plan
Administrator determines otherwise), or bank certified or cashier's checks;

         (b) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise,  shares of the capital stock of the Company held by you having a fair
market value at the time of exercise,  as  determined  in good faith by the Plan
Administrator, equal to the exercise price;

         (c) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise, a properly executed Notice of Exercise, together with instructions to
the Company to  withhold  from the shares  that would  otherwise  be issued upon
exercise  that number of shares  having a fair market  value equal to the option
exercise price; or

         (d) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise,  a properly  executed Notice of Exercise,  together with  irrevocable
instructions  to a broker to promptly  deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.

         4.  TERMINATION.  The  option  will  terminate  on the  earlier  of (i)
September  2, 2015 or (ii) 90 days  following  the date of  termination  of your
employment by the Company or a

<PAGE>

subsidiary  or after  cessation  of your  relationship  with the  Company  or an
Affiliate  thereof,  unless  cessation is due to death or total  disability,  in
which case 12 months after cessation of such relationship; provided, that in the
case of a termination of the Optionee by the Company without Cause (as such term
is defined in the  Employment  Agreement,  dated as of September 2, 2005, by and
between the Company and the Optionee) 180 days following the date of termination
of your  employment  by the Company or a subsidiary  or after  cessation of your
relationship with the Company or an Affiliate thereof.

         5.  TRANSFER  OF  OPTION.  Subject  to  the  Plan,  the  option  is not
transferable,  except  by  will  or  by  the  applicable  laws  of  descent  and
distribution or pursuant to a qualified domestic relations order.

         6. VESTING. The option shall vest as follows:

         (i)      during the period  commencing on the first  anniversary of the
                  date of the  granting  of the  option  and  ending  on the day
                  preceding  the  second  anniversary  of  such  date,  you  may
                  exercise  such option  with  respect to one-half of the shares
                  granted thereby; and

         (ii)     during the period commencing on such second  anniversary,  you
                  may  exercise  such option  with  respect to all of the shares
                  granted thereby.

         7. DATE OF GRANT. The date of grant of the option is September 2, 2005.

         YOUR  PARTICULAR  ATTENTION IS DIRECTED TO PROVISIONS OF THE PLAN WHICH
DESCRIBES CERTAIN IMPORTANT  CONDITIONS THAT MUST BE SATISFIED BEFORE THE OPTION
CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY
HAS NO OBLIGATION TO REGISTER  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED THE
SHARES THAT WOULD BE ISSUED UPON THE  EXERCISE OF YOUR  OPTION,  AND IF IT NEVER
REGISTERS  THE  SHARES,  YOU WILL NOT BE ABLE TO EXERCISE  THE OPTION  UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.  AT THE PRESENT TIME,  EXEMPTIONS FROM
REGISTRATION  UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY LIMITED AND MIGHT
BE UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THE OPTION.  CONSEQUENTLY,  YOU
MIGHT HAVE NO OPPORTUNITY TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH
EXERCISE.  IN ADDITION,  YOU SHOULD CONSULT WITH YOUR TAX ADVISOR CONCERNING THE
RAMIFICATIONS TO YOU OF HOLDING OR EXERCISING YOUR OPTIONS OR HOLDING OR SELLING
THE SHARES UNDERLYING SUCH OPTIONS.

         If you are or have  been a  director  of  officer  of the  Company  you
understand  that during any period in which the Shares  acquired  pursuant to an
exercise  of your  option  are  subject to the  provisions  of Section 16 of the
Securities  Exchange  Act of 1934,  as  amended  (and you  yourself  are also so
subject),  and in order for your transactions  under the Plan to qualify for the
exemption  from Section 16(b) provided by Rule 16b-3, a total of six months must
elapse  between  the grant of the option and the sale of shares  underlying  the
option.

                                        2
<PAGE>

         Please execute the Acceptance  and  Acknowledgement  set forth below on
the enclosed copy of this Agreement and return it to the undersigned.

                                                  Very truly yours,

                                                  Elite Pharmaceuticals, Inc.

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

                         ACCEPTANCE AND ACKNOWLEDGEMENT

         I, a  resident  of the State of  __________,  accept  the stock  option
described above granted under the Elite Pharmaceuticals,  Inc. 2004 Stock Option
Plan, and acknowledge receipt of a copy. I have read and understand the Plan.

Dated: September 2, 2005

                                           /s/ Bernard Berk
---------------------------------------    ----------------
          Taxpayer I.D. Number                 Signature

                                        3
<PAGE>

                               NOTICE OF EXERCISE

         The undersigned, pursuant to an Incentive Stock Option Letter Agreement
(the "Agreement") between the undersigned and Elite  Pharmaceuticals,  Inc. (the
"Company"), hereby irrevocably elects to exercise purchase rights represented by
the Agreement,  and to purchase  thereunder _______ shares (the "Shares") of the
Company's  common stock, par value $.01 per share ("Common  Stock"),  covered by
the Agreement and herewith makes payment in full therefor.

         1. If the sale of the Shares and the resale  thereof has not,  prior to
the date hereof, been registered pursuant to a registration  statement filed and
declared effective under the Securities Act of 1933, as amended (the "Act"), the
undersigned hereby agrees, represents, and warrants that: (a) the undersigned is
acquiring  the Shares  for his or her own  account  (and not for the  account of
others),  for  investment  and not  with a view to the  distribution  or  resale
thereof; (b) by virtue of his or her position, the undersigned has access to the
same kind of information  which would be available in a  registration  statement
filed under the Act; (c) the  undersigned is a sophisticated  investor;  (d) the
undersigned  understands that he or she may not sell or otherwise dispose of the
Shares in the absence of either (i) a registration statement filed under the Act
or (ii) an  exemption  from the  registration  provisions  thereof;  and (e) The
certificates  representing  the  Shares  may  contain a legend to the  effect of
subsection (d) of this Section 1.

         2. If the sale of the Shares and the resale thereof has been registered
pursuant to a registration statement filed and declared effective under the Act,
the undersigned  hereby  represents and warrants that he or she has received the
applicable  prospectus  and a copy  of the  most  recent  annual  report  of the
Company,  as well as all other  material  sent to  stockholders  generally.  The
undersigned  acknowledges  that the number of shares of Common Stock  subject to
the  Agreement  is  hereafter  reduced by the  number of shares of Common  Stock
represented by the Shares.

         Very truly yours,

         ______________________________________
         (type name under signature line)

         Social Security No. __________________

         Address: _____________________________

         ______________________________________

                                        4ELITE PHARMACEUTICALS, INC

                     INCENTIVE STOCK OPTION LETTER AGREEMENT

TO: Bernard Berk

         We are  pleased to inform you that you have been  selected by the Board
of Directors, (the "Plan Administrator") of the Elite Pharmaceuticals, Inc. (the
"Company")  2004  Stock  Option  Plan,  as  amended  (the  "Plan") to receive an
incentive  option for the  purchase of 400,000  shares of the  Company's  common
stock,  par value $.01 per share (the  "Shares"),  at an exercise price of $2.69
per share (the "exercise  price").  Such option to the maximum extent  permitted
under  applicable  law, shall qualify as "incentive  stock  options"  within the
meaning of Section 422 of the Internal  Revenue Code. A copy of the Plan and the
provisions thereof, including, without limitation, those relating to withholding
taxes, are incorporated into this Agreement by reference.

         The  terms  of the  option  are as set  forth  in the  Plan and in this
Agreement. The most important of the terms are summarized as follows:

         1. TERM. The term of the option is ten years from date of grant, unless
sooner terminated.

         2. EXERCISE. During your lifetime only you can exercise the option. The
Plan also provides for exercise of the option by the personal  representative of
your estate or the  beneficiary  thereof  following your death.  You may use the
Notice of Exercise in the form attached to this  Agreement when you exercise the
option.

         3. PAYMENT FOR SHARES. The option may be exercised by the delivery of:

         (a) Cash,  personal  check  (unless  at the time of  exercise  the Plan
Administrator determines otherwise), or bank certified or cashier's checks;

         (b) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise,  shares of the capital stock of the Company held by you having a fair
market value at the time of exercise,  as  determined  in good faith by the Plan
Administrator, equal to the exercise price;

         (c) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise, a properly executed Notice of Exercise, together with instructions to
the Company to  withhold  from the shares  that would  otherwise  be issued upon
exercise  that number of shares  having a fair market  value equal to the option
exercise price; or

         (d) Unless the Plan  Administrator  in its sole  discretion  determines
otherwise,  a properly  executed Notice of Exercise,  together with  irrevocable
instructions  to a broker to promptly  deliver to the Company the amount of sale
or loan proceeds to pay the exercise price.

         4.  TERMINATION.  The  option  will  terminate  on the  earlier  of (i)
September  2, 2015 or (ii) 90 days  following  the date of  termination  of your
employment  by  the  Company  or  a

<PAGE>

subsidiary  or after  cessation  of your  relationship  with the  Company  or an
Affiliate  thereof,  unless  cessation is due to death or total  disability,  in
which case 12 months after cessation of such relationship; provided, that in the
case of a termination of the Optionee by the Company without Cause (as such term
is defined in the  Employment  Agreement,  dated as of September 2, 2005, by and
between the Company and the Optionee) 180 days following the date of termination
of your  employment  by the Company or a subsidiary  or after  cessation of your
relationship with the Company or an Affiliate thereof.

         5.  TRANSFER  OF  OPTION.  Subject  to  the  Plan,  the  option  is not
transferable,  except  by  will  or  by  the  applicable  laws  of  descent  and
distribution or pursuant to a qualified domestic relations order.

         6. VESTING. The option shall vest as follows:

                  (i) 50,000 shares upon the closing of each product  license or
         product sale  transaction  (on a product by product basis and only once
         for each  product) in which the Company  receives  an  aggregate  of at
         least $5,000,000 in net cash proceeds (including royalties and signing,
         license  and  milestone  payments)  in  connection  with  such  product
         transaction;

                  (ii)  10,000  shares  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; and

                  (iii)  40,000  shares 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;

         provided however,  that on September 2, 2009 all unvested options shall
terminate.

         7. DATE OF GRANT. The date of grant of the option is September 2, 2005.

         YOUR  PARTICULAR  ATTENTION IS DIRECTED TO PROVISIONS OF THE PLAN WHICH
DESCRIBES CERTAIN IMPORTANT  CONDITIONS THAT MUST BE SATISFIED BEFORE THE OPTION
CAN BE EXERCISED AND BEFORE THE COMPANY CAN ISSUE ANY SHARES TO YOU. THE COMPANY
HAS NO OBLIGATION TO REGISTER  UNDER THE  SECURITIES ACT OF 1933, AS AMENDED THE
SHARES THAT WOULD BE ISSUED UPON THE  EXERCISE OF YOUR  OPTION,  AND IF IT NEVER
REGISTERS  THE  SHARES,  YOU WILL NOT BE ABLE TO EXERCISE  THE OPTION  UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.  AT THE PRESENT TIME,  EXEMPTIONS FROM
REGISTRATION  UNDER FEDERAL AND STATE SECURITIES LAWS ARE VERY LIMITED AND MIGHT
BE UNAVAILABLE TO YOU PRIOR TO THE EXPIRATION OF THE OPTION.  CONSEQUENTLY,  YOU
MIGHT HAVE NO OPPORTUNITY TO EXERCISE THE OPTION AND TO RECEIVE SHARES UPON SUCH
EXERCISE.  IN ADDITION,  YOU SHOULD CONSULT WITH YOUR TAX ADVISOR

                                       2
<PAGE>

CONCERNING  THE  RAMIFICATIONS  TO YOU OF HOLDING OR EXERCISING  YOUR OPTIONS OR
HOLDING OR SELLING THE SHARES UNDERLYING SUCH OPTIONS.

         If you are or have  been a  director  of  officer  of the  Company  you
understand  that during any period in which the Shares  acquired  pursuant to an
exercise  of your  option  are  subject to the  provisions  of Section 16 of the
Securities  Exchange  Act of 1934,  as  amended  (and you  yourself  are also so
subject),  and in order for your transactions  under the Plan to qualify for the
exemption  from Section 16(b) provided by Rule 16b-3, a total of six months must
elapse  between  the grant of the option and the sale of shares  underlying  the
option.

         Please execute the Acceptance  and  Acknowledgement  set forth below on
the enclosed copy of this Agreement and return it to the undersigned.

                                                  Very truly yours,

                                                  Elite Pharmaceuticals, Inc.

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

                         ACCEPTANCE AND ACKNOWLEDGEMENT

         I, a  resident  of the State of  __________,  accept  the stock  option
described above granted under the Elite Pharmaceuticals,  Inc. 2004 Stock Option
Plan, and acknowledge receipt of a copy. I have read and understand the Plan.

Dated: September 2, 2005

                                           /s/ Bernard Berk
---------------------------------------    ----------------
          Taxpayer I.D. Number                 Signature

                                       3
<PAGE>

                               NOTICE OF EXERCISE

         The undersigned, pursuant to an Incentive Stock Option Letter Agreement
(the "Agreement") between the undersigned and Elite  Pharmaceuticals,  Inc. (the
"Company"), hereby irrevocably elects to exercise purchase rights represented by
the Agreement,  and to purchase  thereunder _______ shares (the "Shares") of the
Company's  common stock, par value $.01 per share ("Common  Stock"),  covered by
the Agreement and herewith makes payment in full therefor.

         1. If the sale of the Shares and the resale  thereof has not,  prior to
the date hereof, been registered pursuant to a registration  statement filed and
declared effective under the Securities Act of 1933, as amended (the "Act"), the
undersigned hereby agrees, represents, and warrants that: (a) the undersigned is
acquiring  the Shares  for his or her own  account  (and not for the  account of
others),  for  investment  and not  with a view to the  distribution  or  resale
thereof; (b) by virtue of his or her position, the undersigned has access to the
same kind of information  which would be available in a  registration  statement
filed under the Act; (c) the  undersigned is a sophisticated  investor;  (d) the
undersigned  understands that he or she may not sell or otherwise dispose of the
Shares in the absence of either (i) a registration statement filed under the Act
or (ii) an  exemption  from the  registration  provisions  thereof;  and (e) The
certificates  representing  the  Shares  may  contain a legend to the  effect of
subsection (d) of this Section 1.

         2. If the sale of the Shares and the resale thereof has been registered
pursuant to a registration statement filed and declared effective under the Act,
the undersigned  hereby  represents and warrants that he or she has received the
applicable  prospectus  and a copy  of the  most  recent  annual  report  of the
Company,  as well as all other  material  sent to  stockholders  generally.  The
undersigned  acknowledges  that the number of shares of Common Stock  subject to
the  Agreement  is  hereafter  reduced by the  number of shares of Common  Stock
represented by the Shares.

         Very truly yours,

         ______________________________________
         (type name under signature line)

         Social Security No. __________________

         Address: _____________________________

         ______________________________________

                                       4

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