Document:

Exhibit 10.2

        EMPLOYMENT  AGREEMENT  (this  "AGREEMENT"),  dated  November 13,
        2006,  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, Executive desires to provide employment services to the
Company, and the Company desires to retain the employment services of Executive.

                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 Executive  Vice  President and Chief  Scientific  Officer 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")
and the Chief  Executive  Officer  (the  "CEO"),  (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 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.

                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

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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 date
hereof,  the Company shall grant to Executive options (the "INITIAL OPTIONS") to
purchase 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 date hereof;

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

                (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 date hereof,
the Company shall grant to Executive  options (the "OPIOID PRODUCT  OPTIONS") to
purchase up to three hundred thousand (300,000) shares of Common Stock, pursuant
to the Plan. The Opioid Product Options:

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

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

                (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

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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 date hereof,  the Company shall grant 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;

                        (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)

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        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 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

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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, 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

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        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;

                        (iii)   third, the Registrable  Securities  requested to
                be  included  in  such  registration  by the  Executive  and any
                securities requested to be included in such

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                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.

                                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).

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<PAGE>

                                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 commence as of the date hereof (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 date  hereof  (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.

                                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,

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<PAGE>

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; (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  which breach or failure the Executive shall fail
to remedy  within  thirty  (30)  days  after  written  demand  from the  Company
specifying in reasonable detail such breach or failure; (v) a continuing failure
by  Executive  to perform such duties as are assigned to Executive by the CEO 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;  and/or  (viii) the  commission  of an act of  personal
dishonesty by Executive in connection with Company that involves personal profit
to him or his family members.  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 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

                                       11
<PAGE>

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.

                                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  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,  all unvested  Opioid
Product  Options  and  Milestone  Options  shall  immediately  vest  and  become
exercisable. Executive shall then have ninety (90)

                                       12
<PAGE>

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.

                                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. 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 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

                                       13
<PAGE>

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 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 date of this Agreement:  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

                                       14
<PAGE>

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.

                        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

                                       15
<PAGE>

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.

                        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

                                       16
<PAGE>

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 date
hereof,  at 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 date of the  execution  of this
Agreement  and,  as of the  date of the  execution  of this  Agreement,  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

                                       17
<PAGE>

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 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

                                       18
<PAGE>

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.      MISCELLANEOUS PROVISIONS.

                        6.1.    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.

                        6.2.    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.

                        6.3.    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.

                                       19
<PAGE>

                      6.4. 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

        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.

                        6.5.    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.

                        6.6.    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.  Company
and  Executive  shall  execute and deliver all such further  documents as may be
necessary to carry out the intent of the preceding sentence.

                                       20
<PAGE>

                        6.7.    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.

                        6.8.    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.

                        6.9.    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 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.

                        6.10.   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.

                        6.11.   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.

                        6.12.   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

                                       21
<PAGE>

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.

                        6.13.   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.

                        6.14.   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 10.3

        EMPLOYMENT  AGREEMENT  (this  "AGREEMENT"),  dated  November 13,
        2006,  by and between  Elite  Pharmaceuticals,  Inc., a Delaware
        corporation ("COMPANY"), and Chris Dick ("EXECUTIVE").
        ----------------------------------------------------------------

                                R E C I T A L S:

                WHEREAS, Executive desires to provide employment services to the
Company, and the Company desires to retain the employment services of Executive.

                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  Executive  Vice  President  of  Corporate  Development  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")
and the Chief  Executive  Officer  (the  "CEO"),  (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 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.

                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
Thousand Dollars  ($200,000)  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.
<PAGE>

                        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
Thousand Dollars ($100,000)),  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 date
hereof,  the Company shall grant to Executive options (the "INITIAL OPTIONS") to
purchase 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 date hereof;

                                       2
<PAGE>

                (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 date hereof,
the Company shall grant to Executive  options (the "OPIOID PRODUCT  OPTIONS") to
purchase up to three hundred thousand (300,000) shares of Common Stock, pursuant
to the Plan. The Opioid Product Options:

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

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

                (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

                                       3
<PAGE>

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 date hereof,  the Company shall grant 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;

                        (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)

                                       4
<PAGE>

        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 (ii)
shall,  to the  maximum  extent  permitted  under  applicable  law,  qualify  as
"incentive  stock  options"  within the meaning of Section  422 of the  Internal
Revenue Code,  (ii) shall have a per share  exercise  price equal to the closing
price of a share of Common Stock, as listed on the American Stock  Exchange,  on
the date of grant,  (iii) shall be subject to the terms and conditions set forth
in the Plan and the stock option agreement to be entered into by the Company and
the Executive on the date of grant 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

                                       5
<PAGE>

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, 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

                                       6
<PAGE>

        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.

                                       7
<PAGE>

                                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;

                                (iii)   third,   the   Registrable    Securities
                requested to be included in such  registration  by the Executive
                and any securities requested to be included in such

                                       8
<PAGE>

        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.

                                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).

                                       9
<PAGE>

                                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 commence as of the date hereof (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 date  hereof  (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.

                                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,

                                       10
<PAGE>

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; (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  which breach or failure the Executive shall fail
to remedy  within  thirty  (30)  days  after  written  demand  from the  Company
specifying in reasonable detail such breach or failure; (v) a continuing failure
by  Executive  to perform such duties as are assigned to Executive by the CEO 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;  and/or  (viii) the  commission  of an act of  personal
dishonesty by Executive in connection with Company that involves personal profit
to him or his family members.  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 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

                                       11
<PAGE>

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.

                                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  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,  all unvested  Opioid
Product  Options  and  Milestone  Options  shall  immediately  vest  and  become
exercisable. Executive shall then have ninety (90)

                                       12
<PAGE>

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.

                                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. 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 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

                                       13
<PAGE>

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 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 date of this Agreement:  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

                                       14
<PAGE>

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.

                        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

                                       15
<PAGE>

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.

                        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

                                       16
<PAGE>

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 date
hereof,  at 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 date of the  execution  of this
Agreement  and,  as of the  date of the  execution  of this  Agreement,  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

                                       17
<PAGE>

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 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

                                       18
<PAGE>

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.      MISCELLANEOUS PROVISIONS.

                        6.1.    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.

                        6.2.    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.

                        6.3.    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.

                                       19
<PAGE>

                        6.4.    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

        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:

               Chris Dick
               3043 Comfort Road
               New Hope, PA 18938

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

                        6.5.    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.

                        6.6.    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.  Company
and  Executive  shall  execute and deliver all such further  documents as may be
necessary to carry out the intent of the preceding sentence.

                                       20
<PAGE>

                        6.7.    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.

                        6.8.    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.

                        6.9.    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 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.

                        6.10.   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.

                        6.11.   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.

                        6.12.   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

                                       21
<PAGE>

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.

                        6.13.   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.

                        6.14.   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/ Chris Dick
                                    ----------------------------------------
                                    Chris Dick

                                       23

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