Document:

EX-10.2

                          REGISTRATION RIGHTS AGREEMENT

       This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of  March  15,  2006  among  Elite  Pharmaceuticals,  Inc.,  a  Delaware
corporation (the "COMPANY"),  and the several purchasers  signatory hereto (each
such purchaser is a "PURCHASER" and collectively, the "PURCHASERS").

       This  Agreement is made pursuant to the  Securities  Purchase  Agreement,
dated as of the  date  hereof  between  the  Company  and  each  Purchaser  (the
"PURCHASE AGREEMENT").

       The Company and each Purchaser hereby agrees as follows:

       1.     DEFINITIONS.  Capitalized  terms  used and not  otherwise  defined
herein that are defined in the Purchase  Agreement shall have the meanings given
such terms in the Purchase Agreement.  As used in this Agreement,  the following
terms shall have the following meanings:

              "ADVICE" shall have the meaning set forth in Section 6(d).

              "EFFECTIVENESS   DATE"   means,   with   respect  to  the  initial
       Registration Statement required to be filed hereunder, the 120th calendar
       day  following  the date hereof (the 150th  calendar day in the case of a
       "full review" by the  Commission of the initial  Registration  Statement)
       and, with respect to any additional  Registration Statements which may be
       required  pursuant to Section  3(c),  the 60th calendar day following the
       date on which the Company first knows,  or reasonably  should have known,
       that  such  additional  Registration  Statement  is  required  hereunder;
       PROVIDED, HOWEVER, in the event the Company is notified by the Commission
       that one of the above Registration  Statements will not be reviewed or is
       no longer subject to further review and comments,  the Effectiveness Date
       as to  such  Registration  Statement  shall  be  the  sixth  Trading  Day
       following  the date on which  the  Company  is so  notified  if such date
       precedes the dates required above.

              "EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
       2(a).

              "EVENT" shall have the meaning set forth in Section 2(b).

              "EVENT DATE" shall have the meaning set forth in Section 2(b).

              "FILING  DATE"  means,  with  respect to the initial  Registration
       Statement  required  hereunder,  the 30th calendar day following the date
       hereof and, with respect to any additional  Registration Statements which
       may be required pursuant to Section 3(c), the 30th day following the date
       on which the Company first knows,  or  reasonably  should have known that
       such additional Registration Statement is required hereunder.

              "HOLDER" or "HOLDERS" means the holder or holders, as the case may
       be, from time to time of Registrable Securities.

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              "INDEMNIFIED  PARTY"  shall have the  meaning set forth in Section
       5(c).

              "INDEMNIFYING  PARTY"  shall have the meaning set forth in Section
       5(c).

              "LOSSES" shall have the meaning set forth in Section 5(a).

              "PLAN OF DISTRIBUTION" shall have the meaning set forth in Section
       2(a).

              "PROSPECTUS"  means  the  prospectus  included  in a  Registration
       Statement (including,  without limitation, a prospectus that includes any
       information  previously  omitted  from a  prospectus  filed as part of an
       effective  registration  statement in reliance upon Rule 430A promulgated
       under the Securities  Act), as amended or  supplemented by any prospectus
       supplement,  with  respect to the terms of the offering of any portion of
       the Registrable Securities covered by a Registration  Statement,  and all
       other   amendments   and   supplements  to  the   Prospectus,   including
       post-effective  amendments, and all material incorporated by reference or
       deemed to be incorporated by reference in such Prospectus.

              "REGISTRABLE  SECURITIES"  means, as of the date in question,  (i)
       all of the shares of Common Stock issuable upon conversion in full of the
       shares of Preferred  Stock,  (ii) all shares of Common Stock  issuable as
       dividends on the Preferred Stock assuming all dividend  payments are made
       in shares of Common Stock and the Preferred  Stock is held for at least 5
       years, (iii) all shares of Common Stock issuable upon the occurrence of a
       Non-Cash  Redemption  Triggering Event, (iv) all Warrant Shares,  (v) any
       additional   shares  issuable  in  connection   with  any   anti-dilution
       provisions  associated  with the  Preferred  Stock and  Warrants (in each
       case, without giving effect to any limitations on conversion set forth in
       the  Certificate  of  Designation or limitations on exercise set forth in
       the Warrant) and (vi) any  securities  issued or issuable  upon any stock
       split, dividend or other distribution,  recapitalization or similar event
       with respect to the foregoing. Notwithstanding the foregoing, Registrable
       Securities  shall not include any securities (i) eligible to be sold into
       the public market under Rule 144(k)  promulgated under the Securities Act
       (or any successor rule),  (ii) sold by a person to the public pursuant to
       Rule 144 under the Securities Act (or any successor rule),  (iii) sold by
       a person to the public pursuant to a registration statement including the
       registration  statement filed pursuant to the Agreement or (iv) sold in a
       transaction  in which the  registration  rights of this Agreement are not
       transferred.

              "REGISTRATION   STATEMENT"  means  the   registration   statements
       required to be filed hereunder and any additional registration statements
       contemplated  by Section 3(c),  including (in each case) the  Prospectus,
       amendments and supplements to such registration  statement or Prospectus,
       including pre- and post-effective  amendments,  all exhibits thereto, and
       all material  incorporated  by reference or deemed to be  incorporated by
       reference in such registration statement.

              "RULE 415" means Rule 415  promulgated by the Commission  pursuant
       to the Securities  Act, as such Rule may be amended from time to time, or
       any similar rule or

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       regulation  hereafter adopted by the Commission having  substantially the
       same purpose and effect as such Rule.

              "RULE 424" means Rule 424  promulgated by the Commission  pursuant
       to the Securities  Act, as such Rule may be amended from time to time, or
       any similar rule or regulation hereafter adopted by the Commission having
       substantially the same purpose and effect as such Rule.

              "SELLING  SHAREHOLDER  QUESTIONNAIRE"  shall have the  meaning set
       forth in Section 3(a).

       2.     SHELF REGISTRATION

              (a)    On or prior to each Filing Date,  the Company shall prepare
       and file with the Commission a "Shelf"  Registration  Statement  covering
       the resale of 110% of the Registrable  Securities on such Filing Date for
       an offering to be made on a  continuous  basis  pursuant to Rule 415. The
       Registration Statement shall be on Form S-3 (except if the Company is not
       then eligible to register for resale the  Registrable  Securities on Form
       S-3, in which case such registration shall be on another appropriate form
       in accordance  herewith) and shall contain (unless otherwise  directed by
       at least a majority in interest of the Holders)  substantially  the "PLAN
       OF  DISTRIBUTION"  attached hereto as ANNEX A (as modified by the Company
       and  acceptable  to the Holders as necessary to respond to comments  from
       the  Commission).  Subject to the terms of this  Agreement,  the  Company
       shall  use its best  efforts  to  cause a  Registration  Statement  to be
       declared effective under the Securities Act as promptly as possible after
       the  filing   thereof,   but  in  any  event  prior  to  the   applicable
       Effectiveness  Date,  and  shall  use  its  best  efforts  to  keep  such
       Registration  Statement  continuously  effective under the Securities Act
       until all Registrable  Securities covered by such Registration  Statement
       have been sold, or may be sold without  volume  restrictions  pursuant to
       Rule 144(k),  as determined  by the counsel to the Company  pursuant to a
       written  opinion  letter to such effect,  addressed and acceptable to the
       Company's  transfer  agent and the affected  Holders (the  "EFFECTIVENESS
       PERIOD").  The Company  shall  request  effectiveness  of a  Registration
       Statement as of 5:00 pm Eastern Time on a Trading Day. The Company  shall
       notify the  Holders via  facsimile  or e-mail of the  effectiveness  of a
       Registration  Statement  within  24 hours of the  time  that the  Company
       confirms  effectiveness  with  the  Commission,  which  shall be the date
       requested for  effectiveness  of a  Registration  Statement.  The Company
       shall,  by 5:30 pm Eastern  Time on the Trading  Day after the  Effective
       Date (as defined in the Purchase Agreement), file a final Prospectus with
       the  Commission as required by Rule 424.  Failure to so notify the Holder
       within 1 Trading Day of such  notification of effectiveness or failure to
       file a final  Prospectus  as  aforesaid  shall be deemed  an Event  under
       Section 2(b).

              (b)    If: (i) a  Registration  Statement is not filed on or prior
       to its Filing Date (if the Company files a Registration Statement without
       affording the Holders the  opportunity  to review and comment on the same
       as required  by Section  3(a),  the  Company  shall not be deemed to have
       satisfied  this clause (i)),  or (ii) the Company  fails to file with the

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       Commission  a  request  for  acceleration  in  accordance  with  Rule 461
       promulgated under the Securities Act, within six Trading Days of the date
       that the Company is notified (orally or in writing, whichever is earlier)
       by the Commission  that a Registration  Statement will not be "reviewed,"
       or not subject to further review, or (iii) a Registration Statement filed
       or  required  to be filed  hereunder  is not  declared  effective  by the
       Commission by its  Effectiveness  Date,  or (iv) after the  Effectiveness
       Date,  a  Registration   Statement   ceases  for  any  reason  to  remain
       continuously  effective as to all Registrable  Securities for which it is
       required to be  effective,  or the Holders are otherwise not permitted to
       utilize the Prospectus therein to resell such Registrable  Securities for
       more than 30  consecutive  calendar  days or more than an aggregate of 45
       calendar days during any 12-month  period (which need not be  consecutive
       calendar  days)  (any such  failure  or breach  being  referred  to as an
       "EVENT",  and for  purposes of clause (i) or (iii) the date on which such
       Event  occurs,  or for purposes of clause (ii) the date on which such six
       Trading Day period is  exceeded,  or for purposes of clause (iv) the date
       on which such 30 or 45 calendar day period,  as  applicable,  is exceeded
       being referred to as "EVENT DATE"),  then in addition to any other rights
       the  Holders may have  hereunder  or under  applicable  law, on each such
       Event Date and on each  monthly  anniversary  of each such Event Date (if
       the  applicable  Event  shall not have been cured by such date) until the
       applicable Event is cured, the Company shall pay to each Holder an amount
       in cash, as partial liquidated damages and not as a penalty,  equal to 2%
       of the  aggregate  purchase  price paid by such  Holder  pursuant  to the
       Purchase  Agreement  for any  Registrable  Securities  then  held by such
       Holder and which may not then be sold by the  Registration  Statement  or
       under  Rule 144,  up to a  maximum  of 18% per  Holder  of the  aggregate
       purchase price paid by such Holder pursuant to the Purchase Agreement. If
       the Company fails to pay any partial  liquidated damages pursuant to this
       Section in full  within  seven days after the date  payable,  the Company
       will pay  interest  thereon  at a rate of 18% per annum  (or such  lesser
       maximum  amount that is  permitted to be paid by  applicable  law) to the
       Holder,  accruing daily from the date such partial liquidated damages are
       due until such amounts, including the interest thereon, are paid in full.
       The partial  liquidated  damages pursuant to the terms hereof shall apply
       on a daily pro-rata basis for any portion of a month prior to the cure of
       an Event.

       3.     REGISTRATION PROCEDURES.

       In connection with the Company's registration  obligations hereunder, the
Company shall:

              (a)    Not less than 5 Trading  Days  prior to the  filing of each
       Registration  Statement  and not less than one 1 Trading Day prior to the
       filing of any related  Prospectus or any amendment or supplement  thereto
       (including  any  document  that  would be  incorporated  or  deemed to be
       incorporated  therein by reference),  the Company  shall,  (i) furnish to
       each Holder  copies of all such  documents  proposed  to be filed,  which
       documents (other than those  incorporated or deemed to be incorporated by
       reference) will be subject to the review of such Holders,  and (ii) cause
       its officers and  directors,  counsel and  independent  certified  public
       accountants  to respond to such  inquiries as shall be necessary,  in the
       reasonable  opinion of  respective  counsel  to each  Holder to conduct a

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       reasonable  investigation  within the meaning of the Securities  Act. The
       Company shall not file a Registration Statement or any such Prospectus or
       any amendments or supplements  thereto to which the Holders of a majority
       of the  Registrable  Securities  shall  reasonably  object in good faith,
       provided  that,  the Company is notified of such  objection in writing no
       later than 5 Trading Days after the Holders have been so furnished copies
       of a Registration  Statement or 1 Trading Day after the Holders have been
       so furnished copies of any related  Prospectus or amendment or supplement
       thereto.  Each  Holder  agrees to  furnish  to the  Company  a  completed
       Questionnaire  in the  form  attached  to this  Agreement  as  Annex B (a
       "SELLING  SHAREHOLDER  QUESTIONNAIRE")  not less than three  Trading Days
       prior  to the  Filing  Date  or by  the  end of  the  third  Trading  Day
       following  the date on which such  Holder  receives  draft  materials  in
       accordance with this Section.

              (b)    (i) Prepare and file with the Commission  such  amendments,
       including post-effective  amendments, to a Registration Statement and the
       Prospectus  used in  connection  therewith  as may be necessary to keep a
       Registration  Statement  continuously  effective  as  to  the  applicable
       Registrable  Securities for the Effectiveness Period and prepare and file
       with the Commission such additional  Registration  Statements in order to
       register  for  resale  under the  Securities  Act all of the  Registrable
       Securities  (subject  to the  permitted  blackout  periods  set  forth in
       Section  2(b));  (ii)  cause the  related  Prospectus  to be  amended  or
       supplemented by any required Prospectus  supplement (subject to the terms
       of  this  Agreement),  and as so  supplemented  or  amended  to be  filed
       pursuant to Rule 424; (iii) respond as promptly as reasonably possible to
       any comments  received from the Commission with respect to a Registration
       Statement or any amendment thereto and as promptly as reasonably possible
       provide true and complete  copies of all  correspondence  from and to the
       Commission  relating  to a  Registration  Statement  to all  Holders  who
       request such information in writing (provided that the Company may excise
       any  information   contained  therein  which  would  constitute  material
       non-public  information  as to  any  Holder  which  has  not  executed  a
       confidentiality  agreement  with the  Company);  and (iv)  comply  in all
       material  respects  with the  provisions  of the  Securities  Act and the
       Exchange  Act  with  respect  to  the   disposition  of  all  Registrable
       Securities  covered by a  Registration  Statement  during the  applicable
       period in accordance  (subject to the terms of this  Agreement)  with the
       intended  methods of disposition by the Holders thereof set forth in such
       Registration  Statement  as  so  amended  or  in  such  Prospectus  as so
       supplemented.

              (c)    If  during  the   Effectiveness   Period,   the  number  of
       Registrable Securities at any time exceeds 90% of the number of shares of
       Common  Stock  then  registered  in a  Registration  Statement,  then the
       Company  shall  file as soon as  reasonably  practicable  but in any case
       prior to the applicable Filing Date, an additional Registration Statement
       covering the resale by the Holders of not less than 110% of the number of
       such Registrable Securities.

              (d)    Notify the  Holders of  Registrable  Securities  to be sold
       (which  notice shall,  pursuant to clauses (iii) through (vi) hereof,  be
       accompanied by an instruction to suspend the use of the Prospectus  until
       the requisite changes have been made) as promptly as reasonably  possible
       (and, in the case of (i)(A)  below,  not less than 1 Trading Day prior to

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       such filing) and (if requested by any such Person) confirm such notice in
       writing no later than one  Trading  Day  following  the day (i)(A) when a
       Prospectus or any Prospectus supplement or post-effective  amendment to a
       Registration  Statement is proposed to be filed;  (B) when the Commission
       notifies  the  Company   whether   there  will  be  a  "review"  of  such
       Registration Statement and whenever the Commission comments in writing on
       such  Registration  Statement;  and (C) with  respect  to a  Registration
       Statement  or any  post-effective  amendment,  when the  same has  become
       effective;  (ii) of any request by the Commission or any other Federal or
       state   governmental   authority  for  amendments  or  supplements  to  a
       Registration Statement or Prospectus or for additional information; (iii)
       of the  issuance  by  the  Commission  or  any  other  federal  or  state
       governmental  authority of any stop order suspending the effectiveness of
       a  Registration   Statement  covering  any  or  all  of  the  Registrable
       Securities or the initiation of any Proceedings for that purpose; (iv) of
       the  receipt  by the  Company  of any  notification  with  respect to the
       suspension of the qualification or exemption from qualification of any of
       the  Registrable  Securities  for  sale  in  any  jurisdiction,   or  the
       initiation or threatening of any Proceeding for such purpose;  (v) of the
       occurrence  of any  event or  passage  of time that  makes the  financial
       statements included in a Registration  Statement ineligible for inclusion
       therein or any statement made in a  Registration  Statement or Prospectus
       or any  document  incorporated  or deemed to be  incorporated  therein by
       reference  untrue in any material  respect or that requires any revisions
       to a Registration  Statement,  Prospectus or other  documents so that, in
       the case of a Registration  Statement or the Prospectus,  as the case may
       be, it will not contain any untrue  statement of a material  fact or omit
       to state any material fact required to be stated  therein or necessary to
       make the statements  therein,  in light of the circumstances  under which
       they were made, not  misleading;  and (vi) the occurrence or existence of
       any pending  corporate  development  with respect to the Company that the
       Company  believes may be material and that, in the  determination  of the
       Company,  makes  it not in the  best  interest  of the  Company  to allow
       continued   availability  of  a  Registration  Statement  or  Prospectus;
       provided that any and all of such information  shall remain  confidential
       to each Holder until such information  otherwise  becomes public,  unless
       disclosure   by  a  Holder  is  required  by  law;   PROVIDED,   FURTHER,
       notwithstanding   each  Holder's   agreement  to  keep  such  information
       confidential,   the  Holders  make  no  acknowledgement   that  any  such
       information is material, non-public information.

              (e)    Use its best  efforts  to avoid  the  issuance  of,  or, if
       issued,   obtain  the   withdrawal  of  (i)  any  order   suspending  the
       effectiveness of a Registration  Statement, or (ii) any suspension of the
       qualification (or exemption from qualification) of any of the Registrable
       Securities  for sale in any  jurisdiction,  at the  earliest  practicable
       moment.

              (f)    Furnish to each Holder upon its request, without charge, at
       least one  conformed  copy of each such  Registration  Statement and each
       amendment  thereto,  including  financial  statements and schedules,  all
       documents  incorporated or deemed to be incorporated therein by reference
       to the extent  requested by such  Person,  and all exhibits to the extent
       requested  by  such  Person  (including  those  previously  furnished  or
       incorporated  by reference)  promptly  after the filing of such documents
       with the Commission.

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              (g)    Subject to the terms of this Agreement,  the Company hereby
       consents to the use of such  Prospectus  and each amendment or supplement
       thereto by each of the selling  Holders in  connection  with the offering
       and sale of the Registrable Securities covered by such Prospectus and any
       amendment or  supplement  thereto,  except after the giving of any notice
       pursuant to Section 3(d).

              (h)    If NASDR Rule 2710  requires  any  broker-dealer  to make a
       filing prior to executing a sale by a Holder,  the Company shall (i) make
       an Issuer  Filing with the NASDR,  Inc.  Corporate  Financing  Department
       pursuant to proposed  NASDR Rule  2710(b)(10)(A)(i),  (ii) respond within
       five  Trading  Days to any  comments  received  from NASDR in  connection
       therewith,  unless compliance would require a longer period, then the end
       of such  period,  and (iii) pay the filing  fee  required  in  connection
       therewith.

              (i)    Prior to any resale of Registrable  Securities by a Holder,
       use its  commercially  reasonable  efforts  to  register  or  qualify  or
       cooperate with the selling Holders in connection with the registration or
       qualification  (or exemption from the Registration or  qualification)  of
       such  Registrable  Securities  for the  resale  by the  Holder  under the
       securities  or Blue  Sky laws of such  jurisdictions  within  the  United
       States  as any  Holder  reasonably  requests  in  writing,  to keep  each
       registration or qualification (or exemption  therefrom)  effective during
       the  Effectiveness  Period  and to do any and all  other  acts or  things
       reasonably  necessary to enable the disposition in such  jurisdictions of
       the  Registrable  Securities  covered  by  each  Registration  Statement;
       provided,  that the Company shall not be required to qualify generally to
       do  business  in any  jurisdiction  where  it is not  then so  qualified,
       subject the Company to any material tax in any such jurisdiction where it
       is not then so subject or file a general consent to service of process in
       any such jurisdiction.

              (j)    If requested by the Holders,  cooperate with the Holders to
       facilitate   the  timely   preparation   and  delivery  of   certificates
       representing  Registrable  Securities  to be  delivered  to a  transferee
       pursuant to a Registration  Statement,  which certificates shall be free,
       to the extent  permitted by the Purchase  Agreement,  of all  restrictive
       legends,  and  to  enable  such  Registrable  Securities  to be  in  such
       denominations  and  registered  in such  names  as any such  Holders  may
       request.

              (k)    Upon  the  occurrence  of any  event  contemplated  by this
       Section 3, as promptly as  reasonably  possible  under the  circumstances
       taking into account the  Company's  good faith  assessment of any adverse
       consequences  to the  Company  and  its  stockholders  of  the  premature
       disclosure of such event, prepare a supplement or amendment,  including a
       post-effective  amendment, to a Registration Statement or a supplement to
       the  related  Prospectus  or any  document  incorporated  or deemed to be
       incorporated  therein by reference,  and file any other required document
       so that, as thereafter  delivered,  neither a Registration  Statement nor
       such  Prospectus  will contain an untrue  statement of a material fact or
       omit to state a material fact required to be stated  therein or necessary
       to make the statements therein, in light of the circumstances under which
       they were made, not misleading.  Upon the  Notification by the Company to
       the Holders in accordance with clauses (iii) through (vi) of Section 3(d)
       above to suspend the

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       use of any Prospectus until the requisite changes to such Prospectus have
       been made, the Holders shall suspend use of such Prospectus.  The Company
       will use its best efforts to ensure that the use of the Prospectus may be
       resumed as promptly as is  practicable.  The Company shall be entitled to
       exercise its right under this Section 3(k) to suspend the availability of
       a  Registration  Statement  and  Prospectus,  subject  to the  payment of
       partial  liquidated damages pursuant to Section 2(b), for a period not to
       exceed 60 calendar  days (which need not be  consecutive  days) in any 12
       month period.

              (l)    Comply with all  applicable  rules and  regulations  of the
       Commission.

              (m)    The Company may require each  selling  Holder to furnish to
       the  Company a certified  statement  as to the number of shares of Common
       Stock  beneficially  owned  by  such  Holder  and,  if  required  by  the
       Commission,  the natural persons thereof that have voting and dispositive
       control over the Shares. During any periods that the Company is unable to
       meet its  obligations  hereunder with respect to the  registration of the
       Registrable  Securities  solely  because any Holder fails to furnish such
       information  within three  Trading  Days of the  Company's  request,  any
       liquidated  damages that are accruing at such time as to such Holder only
       shall be tolled and any Event that may otherwise  occur solely because of
       such  delay  shall  be  suspended  as to such  Holder  only,  until  such
       information  is delivered to the Company.  The Company may file or refile
       any  Registration  Statement or amendment  thereto without  including the
       Registrable  Securities  of such  Holder  until  and  unless  the  Holder
       provides the required information.

       4.     REGISTRATION  EXPENSES.  All fees  and  expenses  incident  to the
performance  of or compliance  with this Agreement by the Company shall be borne
by the Company whether or not any Registrable  Securities are sold pursuant to a
Registration  Statement.  The fees and  expenses  referred  to in the  foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with any Trading  Market on which the Common  Stock is then
listed for trading,  (B) in compliance with applicable  state securities or Blue
Sky laws  reasonably  agreed to by the  Company in writing  (including,  without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable  Securities) and (C) if
not previously  paid by the Company in connection  with an Issuer  Filing,  with
respect  to any filing  that may be  required  to be made by any broker  through
which a  Holder  intends  to make  sales of  Registrable  Securities  with  NASD
Regulation,  Inc.  pursuant  to the NASD  Rule  2710,  so long as the  broker is
receiving no more than a customary brokerage  commission in connection with such
sale,  (ii)  printing  expenses  (including,  without  limitation,  expenses  of
printing certificates for Registrable Securities and of printing prospectuses if
the  printing  of  prospectuses  is  reasonably  requested  by the  holders of a
majority of the Registrable  Securities  included in a Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its

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officers and employees  performing legal or accounting  duties),  the expense of
any annual  audit and the fees and  expenses  incurred  in  connection  with the
listing of the  Registrable  Securities on any  securities  exchange as required
hereunder.  In no event  shall the  Company  be  responsible  for any  broker or
similar  commissions of any Holder or, except to the extent  provided for in the
Transaction Documents, any legal fees or other costs of the Holders.

       5.     INDEMNIFICATION

              (a)    INDEMNIFICATION   BY  THE  COMPANY.   The  Company   shall,
       notwithstanding  any  termination of this  Agreement,  indemnify and hold
       harmless each Holder, the officers, directors, members, partners, agents,
       brokers (including  brokers who offer and sell Registrable  Securities as
       principal  as a result  of a pledge or any  failure  to  perform  under a
       margin call of Common Stock),  investment advisors and employees (and any
       other Persons with a  functionally  equivalent  role of a Person  holding
       such titles,  notwithstanding a lack of such title or any other title) of
       each of them,  each  Person who  controls  any such  Holder  (within  the
       meaning of Section 15 of the Securities Act or Section 20 of the Exchange
       Act) and the officers, directors, members, shareholders, partners, agents
       and employees (and any other Persons with a functionally  equivalent role
       of a Person holding such titles,  notwithstanding a lack of such title or
       any other title) of each such controlling  Person,  to the fullest extent
       permitted by applicable law, from and against any and all losses, claims,
       damages, liabilities,  costs (including,  without limitation,  reasonable
       attorneys'  fees) and  expenses  (collectively,  "LOSSES"),  as incurred,
       arising out of or relating to (1) any untrue or alleged untrue  statement
       of a material fact contained in a Registration Statement,  any Prospectus
       or any form of prospectus or in any amendment or supplement thereto or in
       any preliminary prospectus, or arising out of or relating to any omission
       or alleged  omission of a material fact required to be stated  therein or
       necessary to make the  statements  therein (in the case of any Prospectus
       or  form  of  prospectus  or   supplement   thereto,   in  light  of  the
       circumstances  under  which  they were made) not  misleading,  or (2) any
       violation  or alleged  violation  by the Company of the  Securities  Act,
       Exchange  Act or any  state  securities  law,  or any rule or  regulation
       thereunder,  in connection with the performance of its obligations  under
       this Agreement,  except to the extent,  but only to the extent,  that (i)
       such untrue  statements  or omissions  are based solely upon  information
       regarding such Holder  furnished in writing to the Company by such Holder
       expressly for use therein, or to the extent that such information relates
       to such  Holder  or such  Holder's  proposed  method of  distribution  of
       Registrable Securities and was reviewed and expressly approved in writing
       by such  Holder  expressly  for  use in a  Registration  Statement,  such
       Prospectus  or such form of  Prospectus or in any amendment or supplement
       thereto (it being  understood that the Holder has approved Annex A hereto
       for this purpose) or (ii) in the case of an occurrence of an event of the
       type  specified in Section  3(d)(iii)-(vi),  the use by such Holder of an
       outdated or  defective  Prospectus  after the Company has  notified  such
       Holder in writing that the  Prospectus is outdated or defective and prior
       to the receipt by such Holder of the Advice contemplated in Section 6(d).
       The Company shall notify the Holders promptly of the institution,  threat
       or assertion of any  Proceeding  arising from or in  connection  with the
       transactions  contemplated  by this  Agreement  of which the  Company  is
       aware.

                                       9
<PAGE>

              (b)    INDEMNIFICATION  BY HOLDERS.  Each Holder shall,  severally
       and not jointly,  indemnify and hold harmless the Company, its directors,
       officers,  agents and  employees,  each Person who  controls  the Company
       (within the meaning of Section 15 of the Securities Act and Section 20 of
       the Exchange Act), and the  directors,  officers,  agents or employees of
       such controlling  Persons,  to the fullest extent permitted by applicable
       law, from and against all Losses, as incurred,  to the extent arising out
       of or based solely  upon:  (x) such  Holder's  failure to comply with the
       prospectus delivery  requirements of the Securities Act or (y) any untrue
       or  alleged  untrue  statement  of  a  material  fact  contained  in  any
       Registration Statement, any Prospectus,  or any form of prospectus, or in
       any amendment or supplement thereto or in any preliminary prospectus,  or
       arising  out of or  relating  to any  omission  or alleged  omission of a
       material  fact  required to be stated  therein or  necessary  to make the
       statements  therein not  misleading  (i) to the  extent,  but only to the
       extent,  that such  untrue  statement  or omission  is  contained  in any
       information  so  furnished  in  writing  by such  Holder  to the  Company
       specifically  for  inclusion  in  such  Registration  Statement  or  such
       Prospectus  or (ii) to the extent that such  information  relates to such
       Holder's  proposed method of  distribution of Registrable  Securities and
       was reviewed and expressly  approved in writing by such Holder  expressly
       for use in a Registration  Statement (it being understood that the Holder
       has approved  Annex A hereto for this purpose),  such  Prospectus or such
       form of Prospectus  or in any amendment or supplement  thereto or (ii) in
       the case of an  occurrence  of an event of the type  specified in Section
       3(d)(iii)-(vi),  the use by  such  Holder  of an  outdated  or  defective
       Prospectus after the Company has notified such Holder in writing that the
       Prospectus  is  outdated  or  defective  and prior to the receipt by such
       Holder of the Advice  contemplated in Section 6(d). In no event shall the
       liability of any selling  Holder  hereunder be greater in amount than the
       dollar  amount of the net proceeds  received by such Holder upon the sale
       of  the  Registrable  Securities  giving  rise  to  such  indemnification
       obligation.

              (c)    CONDUCT OF INDEMNIFICATION  PROCEEDINGS.  If any Proceeding
       shall be brought or  asserted  against any Person  entitled to  indemnity
       hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall promptly
       notify  the  Person  from whom  indemnity  is sought  (the  "INDEMNIFYING
       PARTY") in writing,  and the  Indemnifying  Party shall have the right to
       assume  the  defense   thereof,   including  the  employment  of  counsel
       reasonably  satisfactory to the Indemnified  Party and the payment of all
       fees and expenses incurred in connection with defense thereof;  provided,
       that the failure of any  Indemnified  Party to give such notice shall not
       relieve the Indemnifying Party of its obligations or liabilities pursuant
       to this  Agreement,  except  (and  only) to the  extent  that it shall be
       finally   determined  by  a  court  of  competent   jurisdiction   (which
       determination  is not  subject  to appeal or  further  review)  that such
       failure shall have prejudiced the Indemnifying Party.

              An  Indemnified  Party  shall  have the right to  employ  separate
       counsel in any such Proceeding and to participate in the defense thereof,
       but the fees and expenses of such counsel shall be at the expense of such
       Indemnified  Party or  Parties  unless:  (1) the  Indemnifying  Party has
       agreed in writing  to pay such fees and  expenses;  (2) the  Indemnifying
       Party shall have failed promptly to assume the defense of such Proceeding
       and to employ counsel  reasonably  satisfactory to such Indemnified Party
       in any such  Proceeding;  or (3) the named parties to any such Proceeding
       (including any impleaded

                                       10
<PAGE>

       parties) include both such Indemnified Party and the Indemnifying  Party,
       and the  opinion of counsel to the  Indemnified  Party is that a material
       conflict  of  interest  is  likely to exist if the same  counsel  were to
       represent such  Indemnified  Party and the  Indemnifying  Party (in which
       case,  if such  Indemnified  Party  notifies  the  Indemnifying  Party in
       writing that it elects to employ  separate  counsel at the expense of the
       Indemnifying  Party, the  Indemnifying  Party shall not have the right to
       assume the defense  thereof and the  reasonable  fees and  expenses of no
       more  than  one  separate   counsel  shall  be  at  the  expense  of  the
       Indemnifying  Party).  The Indemnifying Party shall not be liable for any
       settlement of any such Proceeding  effected  without its written consent,
       which  consent  shall  not  be  unreasonably   withheld  or  delayed.  No
       Indemnifying  Party  shall,  without  the prior  written  consent  of the
       Indemnified  Party,  effect any  settlement of any pending  Proceeding in
       respect of which any Indemnified Party is a party, unless such settlement
       includes  an  unconditional  release of such  Indemnified  Party from all
       liability on claims that are the subject matter of such Proceeding.

              Subject to the terms of this  Agreement,  all reasonable  fees and
       expenses of the Indemnified Party (including reasonable fees and expenses
       to the extent incurred in connection with  investigating  or preparing to
       defend such  Proceeding in a manner not  inconsistent  with this Section)
       shall be paid to the Indemnified  Party, as incurred,  within ten Trading
       Days of written notice thereof to the Indemnifying Party; provided,  that
       the Indemnified Party shall promptly reimburse the Indemnifying Party for
       that  portion of such fees and  expenses  applicable  to such actions for
       which such Indemnified Party is judicially  determined to be not entitled
       to indemnification hereunder.

              (d)    CONTRIBUTION.  If the indemnification under Section 5(a) or
       5(b) is unavailable to an Indemnified  Party or  insufficient  to hold an
       Indemnified Party harmless for any Losses,  then each Indemnifying  Party
       shall contribute to the amount paid or payable by such Indemnified Party,
       in such proportion as is appropriate to reflect the relative fault of the
       Indemnifying  Party and Indemnified Party in connection with the actions,
       statements or omissions that resulted in such Losses as well as any other
       relevant   equitable   considerations.   The   relative   fault  of  such
       Indemnifying Party and Indemnified Party shall be determined by reference
       to, among other  things,  whether any action in question,  including  any
       untrue or alleged  untrue  statement  of a material  fact or  omission or
       alleged  omission  of a  material  fact,  has been  taken or made by,  or
       relates  to  information   supplied  by,  such   Indemnifying   Party  or
       Indemnified Party, and the parties' relative intent, knowledge, access to
       information and opportunity to correct or prevent such action,  statement
       or  omission.  The  amount  paid or payable by a party as a result of any
       Losses shall be deemed to include,  subject to the  limitations set forth
       in this  Agreement,  any reasonable  attorneys' or other fees or expenses
       incurred by such party in  connection  with any  Proceeding to the extent
       such party would have been  indemnified  for such fees or expenses if the
       indemnification  provided for in this Section was available to such party
       in accordance with its terms.

              The parties  hereto agree that it would not be just and  equitable
       if contribution pursuant to this Section 5(d) were determined by pro rata
       allocation or by any other method of  allocation  that does not take into
       account  the  equitable  considerations  referred

                                       11
<PAGE>

       to in the immediately preceding paragraph. Notwithstanding the provisions
       of this Section 5(d), no Holder shall be required to  contribute,  in the
       aggregate,  any  amount  in excess  of the  amount by which the  proceeds
       actually  received  by such  Holder  from  the  sale  of the  Registrable
       Securities  subject to the  Proceeding  exceeds the amount of any damages
       that such  Holder has  otherwise  been  required to pay by reason of such
       untrue or alleged  untrue  statement  or  omission  or alleged  omission,
       except in the case of fraud by such Holder.

              The  indemnity  and  contribution  agreements  contained  in  this
       Section are in addition to any liability  that the  Indemnifying  Parties
       may have to the Indemnified Parties.

       6.     MISCELLANEOUS

              (a)    REMEDIES.  In the event of a breach by the  Company or by a
       Holder, of any of their respective obligations under this Agreement, each
       Holder or the Company,  as the case may be, in addition to being entitled
       to exercise all rights granted by law and under this Agreement, including
       recovery of damages,  will be  entitled  to specific  performance  of its
       rights  under this  Agreement.  The Company  and each  Holder  agree that
       monetary  damages may not provide  adequate  compensation  for any losses
       incurred  by reason of a breach  by it of any of the  provisions  of this
       Agreement and hereby  further agrees that, in the event of any action for
       specific  performance  in respect of such breach,  it shall not assert or
       shall waive the defense that a remedy at law would be adequate.

              (b)    NO  PIGGYBACK  ON  REGISTRATIONS.  Except  as set  forth on
       SCHEDULE  6(B)  attached  hereto,  neither  the  Company  nor  any of its
       security  holders  (other  than the  Holders  in such  capacity  pursuant
       hereto) may include securities of the Company in the initial Registration
       Statement other than the Registrable  Securities.  Except as set forth on
       SCHEDULE  6(B),  the  Company  shall  not  file  any  other  registration
       statements until the initial Registration Statement required hereunder is
       declared  effective by the  Commission,  provided  that this Section 6(b)
       shall not  prohibit the Company from filing  amendments  to  registration
       statements already filed.

              (c)    COMPLIANCE.  Each Holder  covenants and agrees that it will
       comply with the prospectus delivery requirements of the Securities Act as
       applicable  to it in  connection  with  sales of  Registrable  Securities
       pursuant to a Registration Statement.

              (d)    DISCONTINUED   DISPOSITION.   Each  Holder  agrees  by  its
       acquisition of Registrable Securities that, upon receipt of a notice from
       the  Company  of the  occurrence  of any event of the kind  described  in
       Section  3(d)(iii)  through (vi), such Holder will forthwith  discontinue
       disposition of such Registrable Securities under a Registration Statement
       until it is advised in writing (the "ADVICE") by the Company that the use
       of the  applicable  Prospectus  (as  it may  have  been  supplemented  or
       amended) may be resumed.  The Company will use its best efforts to ensure
       that  the  use of  the  Prospectus  may  be  resumed  as  promptly  as is
       practicable.  The Company agrees and acknowledges that any

                                       12
<PAGE>

       periods  during  which  the  Holder  is  required  to   discontinue   the
       disposition of the Registrable  Securities  hereunder shall be subject to
       the provisions of Section 2(b).

              (e)    PIGGY-BACK  REGISTRATIONS.   If  at  any  time  during  the
       Effectiveness  Period  there is not an effective  Registration  Statement
       covering  all  of  the  Registrable  Securities  and  the  Company  shall
       determine  to  prepare  and  file  with  the  Commission  a  registration
       statement  relating to an offering  for its own account or the account of
       others under the  Securities Act of any of its equity  securities,  other
       than on Form S-4 or Form S-8 (each as  promulgated  under the  Securities
       Act) or their then equivalents relating to equity securities to be issued
       solely in connection  with any  acquisition  of any entity or business or
       equity  securities  issuable in connection with the stock option or other
       employee  benefit  plans,  then the  Company  shall send to each Holder a
       written  notice of such  determination  and, if within fifteen days after
       the date of such notice, any such Holder shall so request in writing, the
       Company shall include in such  registration  statement all or any part of
       such  Registrable  Securities  such  Holder  requests  to be  registered;
       PROVIDED,  HOWEVER,  that,  the Company shall not be required to register
       any  Registrable  Securities  pursuant  to this  Section  6(e)  that  are
       eligible  for  resale  pursuant  to Rule  144(k)  promulgated  under  the
       Securities Act or that are the subject of a then  effective  Registration
       Statement.

              (f)    AMENDMENTS AND WAIVERS.  The provisions of this  Agreement,
       including the provisions of this sentence,  may not be amended,  modified
       or  supplemented,   and  waivers  or  consents  to  departures  from  the
       provisions  hereof may not be given,  unless the same shall be in writing
       and signed by the  Company and the Holders of 70% in interest of the then
       outstanding  Registrable  Securities.  Notwithstanding  the foregoing,  a
       waiver or consent to depart from the provisions  hereof with respect to a
       matter that  relates  exclusively  to the rights of Holders and that does
       not  directly  or  indirectly  affect the rights of other  Holders may be
       given by  Holders  of all of the  Registrable  Securities  to which  such
       waiver or consent relates; PROVIDED, HOWEVER, that the provisions of this
       sentence  may  not  be  amended,  modified,  or  supplemented  except  in
       accordance with the provisions of the immediately preceding sentence.

              (g)    NOTICES.  Any and all  notices or other  communications  or
       deliveries  required  or  permitted  to be  provided  hereunder  shall be
       delivered as set forth in the Purchase Agreement.

              (h)    SUCCESSORS AND ASSIGNS.  This Agreement  shall inure to the
       benefit of and be binding upon the  successors  and permitted  assigns of
       each of the parties and shall  inure to the benefit of each  Holder.  The
       Company  may not  assign  (except by  merger)  its rights or  obligations
       hereunder  without the prior written consent of all of the Holders of the
       then-outstanding  Registrable  Securities.  Each Holder may assign  their
       respective rights hereunder in the manner and to the Persons as permitted
       under the Purchase Agreement.

              (i)    NO INCONSISTENT AGREEMENTS.  Neither the Company nor any of
       its  Subsidiaries  has  entered,  as of the date  hereof,  nor  shall the
       Company  or any  of its  Subsidiaries,  on or  after  the  date  of  this
       Agreement, enter into any agreement with respect

                                       13
<PAGE>

       to its  securities,  that would have the effect of  impairing  the rights
       granted to the Holders in this Agreement or otherwise  conflicts with the
       provisions  hereof.  Except as set forth on  SCHEDULE  6(I),  neither the
       Company  nor any of its  subsidiaries  has  previously  entered  into any
       agreement  granting  any  registration  rights with respect to any of its
       securities to any Person that have not been satisfied in full.

              (j)    EXECUTION AND COUNTERPARTS.  This Agreement may be executed
       in two or more  counterparts,  all of which when taken  together shall be
       considered  one and the same  agreement and shall become  effective  when
       counterparts  have been signed by each party and  delivered  to the other
       party,  it being  understood  that  both  parties  need not sign the same
       counterpart.  In the event that any  signature  is delivered by facsimile
       transmission  or by e-mail  delivery of a ".pdf"  format data file,  such
       signature  shall  create a valid  and  binding  obligation  of the  party
       executing (or on whose behalf such  signature is executed)  with the same
       force and effect as if such  facsimile or ".pdf"  signature  page were an
       original thereof.

              (k)    GOVERNING LAW. All questions  concerning the  construction,
       validity,  enforcement  and  interpretation  of this  Agreement  shall be
       determined in accordance with the provisions of the Purchase Agreement.

              (l)    CUMULATIVE  REMEDIES.  The  remedies  provided  herein  are
       cumulative and not exclusive of any other remedies provided by law.

              (m)    SEVERABILITY.   If  any  term,   provision,   covenant   or
       restriction   of  this   Agreement  is  held  by  a  court  of  competent
       jurisdiction to be invalid, illegal, void or unenforceable, the remainder
       of the terms,  provisions,  covenants and  restrictions  set forth herein
       shall  remain in full force and  effect and shall in no way be  affected,
       impaired  or  invalidated,   and  the  parties  hereto  shall  use  their
       commercially  reasonable  efforts to find and employ an alternative means
       to achieve the same or substantially the same result as that contemplated
       by such term, provision, covenant or restriction. It is hereby stipulated
       and  declared to be the  intention  of the  parties  that they would have
       executed the remaining  terms,  provisions,  covenants  and  restrictions
       without  including  any of such that may be hereafter  declared  invalid,
       illegal, void or unenforceable.

              (n)    HEADINGS.   The   headings  in  this   Agreement   are  for
       convenience  only, do not  constitute a part of this  Agreement and shall
       not be deemed to limit or affect any of the provisions hereof.

              (o)    INDEPENDENT NATURE OF HOLDERS'  OBLIGATIONS AND RIGHTS. The
       obligations  of each Holder  hereunder are several and not joint with the
       obligations  of any  other  Holder  hereunder,  and no  Holder  shall  be
       responsible  in any way for the  performance  of the  obligations  of any
       other  Holder  hereunder.  Nothing  contained  herein  or  in  any  other
       agreement or document  delivered  at any closing,  and no action taken by
       any Holder pursuant hereto or thereto,  shall be deemed to constitute the
       Holders as a partnership,  an  association,  a joint venture or any other
       kind of entity,  or create a presumption  that the Holders are in any way
       acting in concert with respect to such  obligations  or the

                                       14
<PAGE>

       transactions  contemplated  by  this  Agreement.  Each  Holder  shall  be
       entitled to protect and enforce its rights,  including without limitation
       the rights arising out of this  Agreement,  and it shall not be necessary
       for  any  other  Holder  to be  joined  as an  additional  party  in  any
       proceeding for such purpose.

                              ********************

                                       15
<PAGE>

       IN WITNESS WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.

                                        ELITE PHARMACEUTICALS, INC.

                                        By:_____________________________________
                                             Name:
                                             Title:

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       16
<PAGE>

                     [SIGNATURE PAGE OF HOLDERS TO ELI RRA]

Name of Holder: __________________________
SIGNATURE OF AUTHORIZED SIGNATORY OF HOLDER: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________

                           [SIGNATURE PAGES CONTINUE]

                                       17
<PAGE>

                                     ANNEX A

                              PLAN OF DISTRIBUTION

       Each Selling Stockholder (the "SELLING STOCKHOLDERS") of the common stock
and any of their pledgees,  assignees and successors-in-interest  may, from time
to time,  sell any or all of their shares of common stock on the American  Stock
Exchange or any other stock  exchange,  market or trading  facility on which the
shares  are traded or in private  transactions.  These  sales may be at fixed or
negotiated  prices.  A  Selling  Stockholder  may  use  any  one or  more of the
following methods when selling shares:

           o  ordinary  brokerage  transactions  and  transactions  in which the
              broker-dealer solicits purchasers;

           o  block trades in which the  broker-dealer  will attempt to sell the
              shares as agent but may position and resell a portion of the block
              as principal to facilitate the transaction;

           o  purchases  by a  broker-dealer  as  principal  and  resale  by the
              broker-dealer for its account;

           o  an  exchange  distribution  in  accordance  with the  rules of the
              applicable exchange;

           o  privately negotiated transactions;

           o  settlement of short sales entered into after the effective date of
              the registration statement of which this prospectus is a part;

           o  broker-dealers  may agree with the Selling  Stockholders to sell a
              specified number of such shares at a stipulated price per share;

           o  through  the  writing or  settlement  of options or other  hedging
              transactions, whether through an options exchange or otherwise;

           o  a combination of any such methods of sale; or

           o  any other method permitted pursuant to applicable law.

       The Selling  Stockholders  may also sell shares  under Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), if available,  rather
than under this prospectus.

       Broker-dealers  engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated,  but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage  commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.

                                       18
<PAGE>

       In connection with the sale of the common stock or interests therein, the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
Common Stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of the common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

       The  Selling  Stockholders  and any  broker-dealers  or  agents  that are
involved  in selling  the shares may be deemed to be  "underwriters"  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act. Each Selling  Stockholder has
informed  the  Company  that it does not have any written or oral  agreement  or
understanding,  directly or indirectly, with any person to distribute the Common
Stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).

       The Company is required to pay certain fees and expenses  incurred by the
Company  incident to the  registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses,  claims,  damages and
liabilities, including liabilities under the Securities Act.

       Because Selling  Stockholders may be deemed to be  "underwriters"  within
the  meaning of the  Securities  Act,  they will be  subject  to the  prospectus
delivery  requirements of the Securities Act including Rule 172  thereunder.  In
addition,  any  securities  covered by this  prospectus  which  qualify for sale
pursuant to Rule 144 under the  Securities Act may be sold under Rule 144 rather
than under this  prospectus.  There is no  underwriter  or  coordinating  broker
acting in connection  with the proposed sale of the resale shares by the Selling
Stockholders.

       We agreed to keep this prospectus  effective until the earlier of (i) the
date on which  the  shares  may be resold by the  Selling  Stockholders  without
registration  and  without  regard to any volume  limitations  by reason of Rule
144(k) under the  Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold  pursuant to this  prospectus or Rule 144 under the
Securities  Act or any other rule of similar  effect.  The resale shares will be
sold only through  registered or licensed  brokers or dealers if required  under
applicable  state securities  laws. In addition,  in certain states,  the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable  state or an exemption  from the  registration  or  qualification
requirement is available and is complied with.

       Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not  simultaneously  engage
in market making  activities with respect to the common stock for the applicable
restricted  period, as defined in Regulation

                                       19
<PAGE>

M, prior to the  commencement  of the  distribution.  In  addition,  the Selling
Stockholders  will be subject to  applicable  provisions of the Exchange Act and
the rules and regulations  thereunder,  including  Regulation M, which may limit
the timing of  purchases  and sales of shares of the common stock by the Selling
Stockholders  or any  other  person.  We will  make  copies  of this  prospectus
available  to the Selling  Stockholders  and have  informed  them of the need to
deliver a copy of this  prospectus to each  purchaser at or prior to the time of
the sale (including by compliance with Rule 172 under the Securities Act).

                                       20
<PAGE>

                                                                         ANNEX B

                           ELITE PHARMACEUTICALS, INC.

                 SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

       The  undersigned  beneficial  owner of common  stock,  par value $.01 per
share  (the  "COMMON  STOCK"),  of  Elite  Pharmaceuticals,   Inc.,  a  Delaware
corporation (the "COMPANY"), (the "REGISTRABLE SECURITIES") understands that the
Company has filed or intends to file with the Securities and Exchange Commission
(the  "COMMISSION")  a  registration  statement  on Form S-3 (the  "REGISTRATION
STATEMENT") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "SECURITIES  ACT"), of the Registrable  Securities,  in
accordance  with the terms of the  Registration  Rights  Agreement,  dated as of
March ___, 2006 (the "REGISTRATION RIGHTS AGREEMENT"), among the Company and the
Purchasers  named  therein.  A copy  of the  Registration  Rights  Agreement  is
available  from the Company  upon  request at the address set forth  below.  All
capitalized  terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.

       Certain  legal   consequences   arise  from  being  named  as  a  selling
securityholder  in  the  Registration  Statement  and  the  related  prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named  or not  being  named  as a  selling  securityholder  in the  Registration
Statement and the related prospectus.

                                     NOTICE

       The  undersigned  beneficial  owner  (the  "SELLING  SECURITYHOLDER")  of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise  specified under such Item 3)
in the Registration Statement.

                                       21
<PAGE>

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1.     NAME.

       (a)    Full Legal Name of Selling Securityholder

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

       (b)    Full  Legal  Name of  Registered  Holder  (if not the  same as (a)
              above) through which Registrable Securities Listed in Item 3 below
              are held:

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

       (c)    Full Legal Name of Natural  Control  Person (which means a natural
              person who directly or  indirectly  alone or with others has power
              to  vote   or   dispose   of  the   securities   covered   by  the
              questionnaire):

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

2.     ADDRESS FOR NOTICES TO SELLING SECURITYHOLDER:

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

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

--------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------
Fax:
    ----------------------------------------------------------------------------
Contact Person:
               -----------------------------------------------------------------

3.     BENEFICIAL OWNERSHIP OF REGISTRABLE SECURITIES:

       (a)    Type and Number of Registrable Securities  beneficially owned (not
              including the Registrable Securities that are issuable pursuant to
              the Purchase Agreement):

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

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

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

                                       22
<PAGE>

4.     BROKER-DEALER STATUS:

       (a)    Are you a broker-dealer?

                             Yes [_]          No [_]

       (b)    If  "yes"  to  Section  4(a),  did you  receive  your  Registrable
              Securities as compensation for investment  banking services to the
              Company.

                             Yes [_]          No [_]

       Note:  If no, the  Commission's  staff has  indicated  that you should be
              identified as an underwriter in the Registration Statement.

       (c)    Are you an affiliate of a broker-dealer?

                             Yes [_]          No [_]

       (d)    If you are an  affiliate of a  broker-dealer,  do you certify that
              you bought the  Registrable  Securities in the ordinary  course of
              business,  and at the  time  of the  purchase  of the  Registrable
              Securities to be resold,  you had no agreements or understandings,
              directly  or  indirectly,   with  any  person  to  distribute  the
              Registrable Securities?

                             Yes [_]          No [_]

       Note:  If no, the  Commission's  staff has  indicated  that you should be
              identified as an underwriter in the Registration Statement.

5.     BENEFICIAL  OWNERSHIP  OF OTHER  SECURITIES  OF THE COMPANY  OWNED BY THE
       SELLING SECURITYHOLDER.

       EXCEPT AS SET  FORTH  BELOW IN THIS  ITEM 5, THE  UNDERSIGNED  IS NOT THE
       BENEFICIAL  OR  REGISTERED  OWNER OF ANY  SECURITIES OF THE COMPANY OTHER
       THAN THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM 3.

       (a)    Type and  Amount  of Other  Securities  beneficially  owned by the
              Selling Securityholder:

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

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

                                       23
<PAGE>

6.     RELATIONSHIPS WITH THE COMPANY:

       EXCEPT  AS SET  FORTH  BELOW,  NEITHER  THE  UNDERSIGNED  NOR  ANY OF ITS
       AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (OWNERS OF 5%
       OF MORE  OF THE  EQUITY  SECURITIES  OF THE  UNDERSIGNED)  HAS  HELD  ANY
       POSITION OR OFFICE OR HAS HAD ANY OTHER  MATERIAL  RELATIONSHIP  WITH THE
       COMPANY (OR ITS PREDECESSORS OR AFFILIATES) DURING THE PAST THREE YEARS.

       State any exceptions here:

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

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

       The undersigned agrees to promptly notify the Company of any inaccuracies
or changes in the information  provided herein that may occur  subsequent to the
date hereof at any time while the Registration Statement remains effective.

       By signing  below,  the  undersigned  consents to the  disclosure  of the
information  contained  herein  in its  answers  to  Items 1  through  6 and the
inclusion of such  information  in the  Registration  Statement  and the related
prospectus  and  any  amendments  or  supplements   thereto.   The   undersigned
understands  that  such  information  will  be  relied  upon by the  Company  in
connection with the preparation or amendment of the  Registration  Statement and
the related prospectus.

       IN WITNESS WHEREOF the  undersigned,  by authority duly given, has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

Dated:                         Beneficial Owner:
       -------------------                      --------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                  Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                       24EX-10.3

INDIGO SECURITIES, LLC

                                             March 6, 2006

Mr. Bernard Berk
Chief Executive Officer
Elite Pharmaceuticals, Inc.
150 Northvale Avenue
Ludlow, New Jersey 07647

                  Re: SECOND AMENDED PLACEMENT AGENT AGREEMENT

Ladies and Gentlemen:

       Pursuant to our ongoing relationship,  we are writing to confirm with you
the  arrangements  under which Indigo  Securities,  LLC  ("INDIGO") has acted as
financial advisor to Elite Pharmaceuticals, Inc. (the "COMPANY") with respect to
the  Transactions  (as defined  below)(the  "ENGAGEMENT").  This Second  Amended
Placement Agent Agreement shall be referred to herein as the "AGREEMENT" and the
"EFFECTIVE  DATE" shall mean November 9, 2005.  This Agreement  amends the first
amended  engagement  letter by and between  Indigo and the  Company  dated as of
December 16, 2005 which  amended the original  engagement  letter by and between
Indigo and the  Company  dated as of  November  9, 2005.  Each of Indigo and the
Company may be referred to herein  individually as a "PARTY" and collectively as
the "PARTIES".

1.     THE ENGAGEMENTS; WARRANT TRANSACTION AND EQUITY OFFERING.

       A.     In  connection  with the  Engagement,  the Company  has  requested
Indigo's  assistance  in  facilitating  (i) the  exercise of warrants  (the "OLD
WARRANTS") by investors ("EXCHANGING HOLDERS") who received warrants to purchase
shares of the Company's  common stock  ("COMMON  STOCK") in connection  with the
Company's private placement transaction dated as of October, 2004 (such exercise
shall be referred to as the "WARRANT TRANSACTION"); and (ii) the issuance of new
warrants by the  Company  (as  described  in the term sheet  attached  hereto as
EXHIBIT A) to Exchanging Holders  participating in the Warrant  Transaction (the
"NEW  WARRANTS");  and (iii) the issuance of Preferred (as defined  below) in an
Equity  Offering  (as defined  below)  described in Section  1.B.  below.  It is
contemplated that the New Warrants and Preferred issued in the Transactions will
be issued  by the  Company  in a private  placement  transaction  (the  "PRIVATE
PLACEMENT";  together with the Equity Offering, the issuance of New Warrants and
the Warrant Transaction,  the "PRIVATE PLACEMENTS" or the "TRANSACTIONS") exempt
from registration under the U.S.  Securities Act of 1933 (the "SECURITIES ACT"),
and otherwise in compliance  with the  applicable  laws and  regulations  of any
jurisdiction in which the Securities are offered. Indigo shall only be obligated
to  assist  the  Company  with the  Transactions  on a "best  efforts"  basis as
described above.

       B.     The  Company  hereby  engages  the  Placement  Agent to act as its
exclusive agent in connection  with the offering (the "EQUITY  OFFERING") by the
Company  of up to  $8,250,000,  including  a 10%  over-allotment  (the  "MAXIMUM
AMOUNT"),   of  the  Company's  perpetual   Convertible   Preferred  Stock  (the
"PREFERRED")  convertible  into shares of Common Stock at a conversion  price of
$2.25 per

<PAGE>

Elite Pharmaceuticals, Inc.
Page 2

share (the  "CONVERSION  PRICE" and such stock, the "PREFERRED") and warrants to
acquire  Common Stock (the  "WARRANTS"  and,  together with the  Preferred,  the
"SECURITIES"  and  the  purchasers  of  the  Securities,  each  a  "HOLDER"  and
collectively,  the  "HOLDERS")  pursuant  to the terms set forth on Exhibit B or
such other  terms as may be agreed  upon by the  Holders  and the  Company.  The
Equity Offering shall be conducted as a private placement to be made pursuant to
the  exemption  afforded by Section 4(2) of the  Securities  Act and Rule 506 of
Regulation D promulgated thereunder, as well as applicable state laws.

       C.     The Offering is being made upon the terms and conditions set forth
on the term sheet  attached as EXHIBIT B hereto (the "TERM SHEET") or upon other
terms and conditions  mutually agreed on by the Company and the Placement Agent,
by means of written documentation,  inclusive of a Securities Purchase Agreement
(which  shall  include  an  investor   questionnaire),   a  Registration  Rights
Agreement,  a Certificate of Designations,  Investor  Warrants,  Placement Agent
Warrants  and any  other  necessary  documents,  agreements  and/or  instruments
necessary  to  appropriately  document  the  transaction,   (collectively,   the
"OFFERING  DOCUMENTS"),  which written  documentation shall be delivered to each
Holder.

2.     THE PRIVATE PLACEMENTS.

       The Company and Indigo  will each  reasonably  believe at the time of the
Private Placements that each Exchanging Holder and Holder will be an "accredited
investor" as defined in Rule 501 of Regulation D of the  Securities Act and will
satisfy  any  private   placement   requirements   applicable  in  any  non-U.S.
jurisdiction  where the New Warrants or Securities  may be offered.  The Company
will file in a timely manner with the U.S.  Securities  and Exchange  Commission
(the "SEC") any notices with respect to the New Warrants or Securities  required
by Rule 503 of  Regulation  D and will furnish to Indigo  promptly  thereafter a
signed copy of each such notice.

3.     INFORMATION SUPPLIED; REPRESENTATIONS.

       The Company will furnish to Indigo such  information  as Indigo  believes
appropriate to its engagement  hereunder.  In addition,  the representations and
warranties  of the Company made in the Exchange  Agreement  and Equity  Offering
Documents,  as applicable,  are hereby incorporated herein by reference in their
entirety with the same legal effect as if such  representations  and  warranties
were set forth herein.  This  Agreement has been duly and validly  authorized by
the  Company  and Indigo is a valid and  binding  agreement  of the  Company and
Indigo, enforceable in accordance with its terms.

4.     FEES AND EXPENSES.

       A.     Warrant Exchange Fees.

       (i)    Simultaneous  with  payment of the  exercise  price  under the Old
Warrants and the delivery of the New Warrants, at the Closing, the Company shall
pay the  Placement  Agent a commission  equal to (1) seven and one-half  percent
(7.5%) of the gross cash  proceeds  received by the Company from the exercise of
the Old Warrants (the "CASH FEE"), and (2) New Warrants exercisable for a number
of shares of the  Company's  common  stock  equal  the Cash Fee  divided  by the
exercise  price  of the  New  Warrants  (the  "PLACEMENT  AGENT  WARRANT").  The
Placement Agent Warrant shall include a "cashless exercise" provision. Placement
Agent shall be reimbursed  at

<PAGE>

Elite Pharmaceuticals, Inc.
Page 3

Closing for its  reasonable  expenses  incurred in connection  with the Offering
including,  without limitation,  legal fees of the Placement Agent's counsel and
disbursements  of Placement  Agent's counsel in connection with the Offering and
Equity  Offering,  in an amount not to exceed $50,000 assuming that the terms of
the Equity Offering conform, in all material respects,  with the terms described
on the Term Sheet;  provided,  that Placement Agent's counsel presents a copy of
the bill at Closing documenting such fees and disbursements.

       (ii)   If the Company conducts a separate private placement of securities
to any  investor(s)  introduced  to the  company  by the  Placement  Agent  ("PA
INVESTORS")  at any time during the  eighteen  (18) month period  following  the
Termination  Date, then the Company will pay to the Placement Agent a commission
equal to seven and one-half  percent (7.5%) of the gross cash proceeds  received
by the company from the PA Investors in such new private placement  ("SUBSEQUENT
CASH FEE"), and, in addition  thereto,  issue to the Placement Agent warrants to
purchase a number of shares common stock of the Company equal to the  Subsequent
Cash Fee divided by the per share purchase  price of the Company's  common stock
in such private placement, or such other fee as mutually agreed to the Parties.

       B.     Equity Offering Fees.

       (i)    At each closing in the Equity  Offering,  the Placement Agent will
receive a cash fee (the "CASH FEE") for Securities  sold in the Equity  Offering
to Holders, which Cash Fee shall be equal to eight percent (8%) of the aggregate
purchase price of the Securities sold in the Equity Offering.

       (ii)   At the final  Closing the Company  shall  deliver to the Placement
Agent a placement agent warrant (the "PLACEMENT AGENT WARRANT")  exercisable for
a number  of  shares  of  Common  Stock  equal to the  Section  4.B(i)  Cash Fee
attributable  to the sale of  Securities  divided by the per share price paid by
Holders on the Closing Date  ("CLOSING  PRICE").  The Placement  Agent  Warrants
shall initially be exercisable at an amount equal to the Closing Price per share
of Common Stock, subject to adjustment, commencing upon the date of issuance and
continuing for five (5) years after issuance. The Placement Agent Warrants shall
be  transferable  by  the  Placement  Agent  only  to its  officers,  directors,
shareholders and employees, as well as by such persons to their immediate family
affiliates in connection with estate planning, provided that no such transfer or
disposition may be made other than in compliance with applicable securities laws
and  furnishing  satisfactory  evidence of such  compliance to the Company.  The
Placement Agent Warrant shall contain the same terms as the Warrants except that
the Placement Agent Warrant shall also include a "cashless exercise" provision.

       (iii)  At  each   Closing,   the   Placement   Agent   will   receive   a
non-accountable  expense  allowance  equal  to 2% of the  total  gross  proceeds
received by the Company at that Closing from the sale of Preferred to Holders at
that Closing (other than investors introduced by management or affiliates of the
Company or management),  such 2% amount being sometimes hereafter referred to as
the "NON-ACCOUNTABLE  EXPENSE ALLOWANCE".  In addition, the Placement Agent will
be reimbursed for its (a) legal fees and expenses in connection  with the Equity
Offering,  and (b) post-closing  documented fees and expenses (including without
limitation legal fees and expenses) in connection with the Securities.
<PAGE>

Elite Pharmaceuticals, Inc.
Page 4

5.     NOTICES.

       All  communications  hereunder shall be in writing and shall be mailed or
delivered (a) to the Company,  at its offices at 150 Northvale  Avenue,  Ludlow,
New Jersey 07647, and (b) to Indigo,  at its offices at 780 Third Avenue,  Suite
2302, New York, NY 10017, Attention: Eric Brachfeld.

6.     INDEMNIFICATION.

       (a)    The Company  agrees to indemnify  and hold  harmless  Indigo,  its
employees  and  representatives  and each person who controls  Indigo within the
meaning of Section 15 of the Securities Act against any and all losses,  claims,
damages  or  liabilities,  joint or  several,  to which  they or any of them may
become subject under the Securities Act or any other statute or at common law in
connection with the performance of its duties  described herein and to reimburse
persons  indemnified as above for any legal or other expense (including the cost
of any  investigation  and preparation)  incurred by them in connection with any
litigation whether or not resulting in any liability,  provided,  however,  that
the  indemnity  agreement  contained  in this  Section  6(a)  shall not apply to
amounts paid in settlement of any such litigation if such settlement is effected
without the consent of the  Company,  nor shall it apply to Indigo or any person
controlling  Indigo  in  respect  of  any  such  losses,  claims,   damages,  or
liabilities  arising out of, or based upon, any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, if such statement or
omission  was made in  reliance  upon  information  furnished  in writing to the
Company  by Indigo.  Indigo  agrees  within ten days after the  receipt by it of
written  notice of the  commencement  of any action  against  it or against  any
person controlling it as aforesaid,  in respect of which indemnity may be sought
from the Company on account of the indemnity agreement contained in this Section
6(a), to notify the Company in writing of the commencement thereof. The omission
of Indigo so to notify the  Company of any such  action  shall not  relieve  the
Company from any liability which it may have to Indigo or any person controlling
it as  aforesaid  on  account  of the  indemnity  agreement  contained  in  this
subsection  except to the extent that any such failure in giving  notice  causes
the amounts paid by the Company to be greater than it otherwise would have been.
In case any such action shall be brought against Indigo or any such  controlling
person and Indigo  shall  notify the Company of the  commencement  thereof,  the
Company  shall be entitled to  participate  in (and, to the extent that it shall
wish,  to direct) the defense  thereof at its own expense but such defense shall
be conducted by counsel of recognized  standing and reasonably  satisfactory  to
Indigo or such  controlling  person or persons,  defendant or  defendants in the
litigation;  provided,  that the  Company  shall not be required to pay for more
than one firm of  counsel  for all  indemnified  parties,  which  firm  shall be
designated  by Indigo.  The  Company  agrees to notify  Indigo  promptly  of the
commencement  of any litigation or proceeding  against it or in connection  with
the issue and sale of any of its  securities  and to furnish  to Indigo,  at its
request,  copies of all  pleadings  therein and permit  Indigo to be an observer
therein and apprise  Indigo of all  developments  therein,  all at the Company's
expense.

       (b)    Indigo  agrees,  in the same  manner and to the same extent as set
forth in Section  6(a) of this  Agreement,  to indemnify  and hold  harmless the
Company and each person,  if any, who controls the Company within the meaning of
Section 15 of the  Securities  Act, with respect to any statement in or omission
from the  information  provided to investors  any  amendments  thereto,  if such
statement or omission was made in reliance upon information furnished in writing
to the Company by Indigo, on its behalf, specifically for use in connection with
the  preparation  of  documents to be provided to  prospective  investors or any
amendment  thereof  or  supplement  thereto  or by  reason of  improper  selling
practices  (including  failure to comply  with,  or a  violation  of, any law or
regulation by Indigo, its officers,  directors and registered placement agents).
Indigo shall not be liable for amounts paid in

<PAGE>

Elite Pharmaceuticals, Inc.
Page 5

settlement of any such  litigation if such  settlement was effected  without its
consent.  In case of commencement  of any action,  in respect of which indemnity
may be sought from Indigo on account of the  indemnity  agreement  contained  in
this Section 6(b), each person agreed to be indemnified by Indigo shall have the
same  obligation  to notify  Indigo as Indigo has toward the  Company in Section
6(a) of this  Agreement,  subject to the same potential loss of indemnity in the
event  such  notice  is not  given,  and  Indigo  shall  have the same  right to
participate  in (and to the extent that it shall wish, to direct) the defense of
such action at its own expense,  but such defense shall be conducted by one firm
of counsel of recognized standing and satisfactory to the Company. Indigo agrees
to  notify  the  Company  promptly  of the  commencement  of any  litigation  or
proceeding against it or against any such controlling person, of which it may be
advised,  in connection  with the issue and sale of any of the securities of the
Company,  and to furnish  the  Company at its  request  copies of all  pleadings
therein and permit the  Company to be an observer  therein and apprise it of all
developments therein, all at Indigo's expense.

       (c)    The respective indemnity agreements between Indigo and the Company
contained in Sections 6(a) and 6(b) of this Agreement,  and the  representations
and  warranties  of the Company set forth  elsewhere  in this  Agreement,  shall
remain operative and in full force and effect,  regardless of any  investigation
made by or on behalf of Indigo or by or on behalf of any  controlling  person of
Indigo or the Company any controlling  person of the Company,  shall survive the
delivery  of the  Units.  Any  successor  of the  Company  and  Indigo or of any
controlling  person of  Indigo,  as the case may be,  shall be  entitled  to the
benefits of the respective indemnity agreements.

       (d)    In order to provide for just and equitable  contribution under the
Securities Act in any case in which (i) any person  entitled to  indemnification
under this Section 6 makes claim for  indemnification  pursuant hereto but it is
judicially  determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding  the fact that this  Section 6 provides for  indemnification  in
such case, or (ii) contribution  under the Securities Act may be required on the
part of any such person in circumstances for which  indemnification  is provided
under this Section 6, then,  and in each such case, the Company and Indigo shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after any contribution  from others) in such proportions so that
Indigo is responsible  for the proportion that the fees provided for herein bear
to the purchase price of the Securities,  and the Company is responsible for the
remaining  portion;  provided,  that,  in any such case,  no person  guilty of a
fraudulent  misrepresentation  (within  the  meaning  of  Section  11(f)  of the
Securities  Act) shall be entitled to  contribution  from any person who was not
guilty of such fraudulent misrepresentation.

       Within ten days after receipt by any party to this Agreement of notice of
the commencement of any action, suit or proceeding,  such party will, if a claim
for  contribution  in respect  thereof is to be made against  another party (the
"CONTRIBUTING  PARTY"),  notify  the  contributing  party,  in  writing,  of the
commencement  thereof, but the omission so to notify the contributing party will
not  relieve it from any  liability  which it may have to any other  party other
than for  contribution  hereunder  except to the extent that any such failure in
giving  notice causes the amounts paid by the  contributing  party to be greater
than it otherwise  would have been. In case any such action,  suit or proceeding
is brought against any party, and such party so notifies a contributing party or
his or its Placement Agent of the commencement  thereof within the aforesaid ten
days, the  contributing  party will be entitled to participate  therein with the
notifying party and any other  contributing party similarly

<PAGE>

Elite Pharmaceuticals, Inc.
Page 6

notified.  Any such contributing  party shall not be liable to any party seeking
contribution  on account of any  settlement  of any claim,  action or proceeding
effected by such party seeking  contribution without the written consent of such
contributing  party. The contribution  provisions  contained in Section 6 are in
addition to any other rights or remedies which either party hereto may have with
respect to the other or hereunder.

7.     MISCELLANEOUS.

       (a)    No waiver, amendment or other modification of this Agreement shall
be  effective  unless in  writing  and  signed by each  party to be bound.  This
Agreement  shall inure to the benefit of and be binding on the  Company,  Indigo
and their respective successors.

       (b)    In case any provision of this Agreement shall be invalid,  illegal
or  unenforceable,  the validity,  legality and  enforceability of the remaining
provisions  of this  Agreement  shall  not in any way be  affected  or  impaired
thereby.

       (c)    The  Company  has  retained   Indigo  to  act  as  an  independent
contractor, and any duties of Indigo arising out of its engagement shall be owed
solely to the Company and to no other party.

       (d)    This Agreement shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York.

       (e)    Each of Indigo  and the  Company  (on its own behalf  and,  to the
extent  permitted by applicable law, on behalf of its  shareholders)  waives all
right to trial by jury in any action,  proceeding or counterclaim (whether based
upon contract, tort or otherwise) related to or arising out of this Agreement.

         Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to Indigo the enclosed  duplicate copy of this  Agreement.
We are delighted to participate in this engagement and have enjoyed working with
you on the assignment.

                                        Very truly yours,

                                        INDIGO SECURITIES LLC

                                        By:
                                             -----------------------------------
                                        Print Name:
                                                   -----------------------------
                                        Title:
                                              ----------------------------------

ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE:

ELITE PHARMACEUTICALS, INC.

By:
   --------------------------------------------------
Print Name:
           ------------------------------------------
Title:
      -----------------------------------------------

<PAGE>

                                                                       EXHIBIT A

                           WARRANT EXCHANGE TERM SHEET

<PAGE>

Elite Pharmaceuticals, Inc.
Page 8

                                                                       EXHIBIT B

                         BUSHIDO CAPITAL PARTNERS, LTD.

THIS TERM SHEET HAS BEEN PREPARED BY BUSHIDO  CAPITAL  PARTNERS FOR THE SOLE USE
OF ELITE  PHARMACEUTICALS  AND INDIGO SECURITIES AND IS NOT TO BE DISTRIBUTED TO
OTHER PARTIES WITHOUT THE CONSENT OF BUSHIDO CAPITAL PARTNERS.

                                   TERM SHEET

THIS TERM SHEET  SUMMARIZES THE PRINCIPAL  TERMS OF A PROPOSED  FINANCING OF THE
COMPANY.  THIS  TERM  SHEET IS FOR  DISCUSSION  PURPOSES  ONLY.  THE  TERMS  AND
CONDITIONS ARE SUBJECT TO CHANGE AND THIS TERM SHEET DOES NOT CONSTITUTE  EITHER
AN OFFER TO SELL OR AN OFFER TO PURCHASE  SECURITIES.  THE  ISSUANCE AND SALE OF
ANY  SECURITIES  IS SUBJECT TO  COMPLETION  OF DUE  DILIGENCE TO THE  INVESTORS'
SATISFACTION,  THE PREPARATION AND NEGOTIATION OF DEFINITIVE  DOCUMENTATION AND,
SUBSEQUENT  TO THE DATE  HEREOF,  NO MATERIAL  ADVERSE  DEVELOPMENTS  SHALL HAVE
OCCURRED RELATING TO THE BUSINESS,  ASSETS,  OPERATIONS,  PROPERTIES,  CONDITION
(FINANCIAL OR OTHERWISE) OR PROSPECTS OF THE COMPANY AND ITS SUBSIDIARIES, TAKEN
AS A WHOLE.

February 21, 2006

ISSUER:                  Elite Pharmaceuticals Inc. (AMEX: ELI) or the "Company"

ISSUE:                   Minimum of $5 million and maximum of $7.5  million (10%
                         maximum  over   allotment)  of  perpetual   Convertible
                         Preferred Stock (the "Preferred Stock").

INVESTORS:               Bushido   Capital   Partners  and  a  small  number  of
                         Qualified  Institutional   Buyers/Accredited  Investors
                         approved by the Company.

CLOSING DATE:            Expected  within 7 days  after  the  signing  of a term
                         sheet by the Company and the Investor. Only one Closing
                         permitted.

ISSUE PRICE:             The  Issue  Price  for each  Preferred  Share  shall be
                         $1000.  The  Investor  may elect to convert  the stated
                         value of Preferred  Stock into Common Stock at any time
                         following the Closing Date.

CONVERSION PRICE:        The  Conversion   Price  to  convert  the   Convertible
                         Preferred Shares to Common Stock will be equal to $2.50
                         per Common share.

PREFERRED DIVIDEND:      8% annual  rate,  payable  quarterly in arrears in cash
                         or, subject to standard Equity  Conditions (see below),
                         in  Common  Stock,  at  the  Company's  option.  If the
                         Company elects to pay the Preferred  Dividend in stock,
                         it must deliver a written  notice to that effect to the
                         Investors at least 5 trading days prior to the date set
                         for payment of the Dividend.  Common Stock delivered in
                         payment  of  Dividends  will  be  valued  at 95% of the
                         average  of each of the  VWAPs for the 20  trading  day
                         period ending on the trading day  immediately  prior to
                         the date set for payment of the Dividend.

FORCED CONVERSION:       The Company shall have the right but not the obligation
                         to force  the  Investors  to  convert  any  outstanding
                         Preferred Stock into the Company's  Common Stock at the
                         Conversion  Price if the  daily  VWAP of the  Company's
                         Common  Stock  exceeds  250% of the  Closing  Price and
                         trade  volume  averages at least 75k shares per day for
                         each of 20 consecutive trading days.
<PAGE>

Elite Pharmaceuticals, Inc.
Page 9

WARRANTS:                Total Warrants  coverage of 50% of the number of shares
                         of Common  Stock  that the  stated  value of  Preferred
                         Stock would buy at the Conversion  Price will be issued
                         to the  Investors.  All  Warrants  shall  have a 5 year
                         term.

                            o  Half of the  total  Warrants  will be  considered
                               Series A  Warrants  and  shall  have an  exercise
                               price of $3.00.

                            o  Half of the  total  Warrants  will be  considered
                               Series B  Warrants  and  shall  have an  exercise
                               price of $3.50.

                         The Company shall have the right but not the obligation
                         to force the  Investors  to  exercise  any  outstanding
                         Warrants  into  the  Company's   Common  Stock  at  the
                         Conversion  Price if the  daily  VWAP of the  Company's
                         Common  Stock  exceeds  250% of the  Closing  Price and
                         trading  volume average at least 75k shares per day for
                         each of 10 consecutive trading days.

REGISTRATION:            The  Company  shall  file to  register  the  underlying
                         common  shares  within 30 days of the Closing  Date and
                         make its best efforts to have the Registration declared
                         effective at the  earliest  date.  If the  registration
                         statement is not filed as  indicated  above or declared
                         effective  within 90 days  following  the date by which
                         the  Company  is  required  to  file  the  registration
                         statement in accordance with the preceding sentence (or
                         120 days in the event of a regulatory review), then the
                         Company  will have to pay to the  Investors  liquidated
                         damages  equal to 2% per month of the face value of the
                         Preferred  Stock  issued.  A maximum of 18%  liquidated
                         damages.

ANTI-DILUTION:           In the  event  the  Company  issues  at any time  while
                         Preferred Stock are still  outstanding  Common Stock or
                         any type of securities  giving right to Common Stock at
                         a price below the Issue Price,  the  Investor  shall be
                         extended  weighted  anti-dilution   protection  on  the
                         Preferred Stock and the Warrants.

RIGHT OF PARTICIPATION:  For as long as any Preferred Stock are outstanding, the
                         Investors  shall have a right of  participation  in any
                         new  fund  raising  undertaken  by  the  Company  in  a
                         percentage equal to the ratio of the principal value of
                         the outstanding Preferred Stock to the amount raised in
                         the new financing at the time of the new financing.

ADDITIONAL COVENANTS:

                         o  The Company is  prohibited  from  issuing  equity or
                            equity  linked  securities  for 180  days  post  the
                            Effective  Date  (subject  to  customary  carve  out
                            exceptions).

                         o  The  Company is  prohibited  from  issuing  variable
                            priced  equity and  variable  priced  equity  linked
                            securities.

                         o  The  Company is  prohibited  from  executing a stock
                            split or reverse  split for a period of one (1) year
                            from receiving an Effective registration.

                         o  The  Investors  agree  NOT to enter  into any  short
                            sales of the Common Stock prior to the Effectiveness
                            Date.

DOCUMENTATION
COUNSEL:                 Feldman Weinstein, LLP

GOVERNING LAW:           New York
<PAGE>

Elite Pharmaceuticals, Inc.
Page 10

LEGAL/DUE
DILIGENCE FEES:          On  the  Closing  Date,  the  Company  shall  reimburse
                         Bushido Capital Partners for legal,  transactional  and
                         due diligence costs  associated with this  transaction.
                         The amount  will be not more than  $50,000  and will be
                         non-accountable.

DILIGENCE FEES:          On  the  Closing  Date,  the  Company  shall  reimburse
                         Bushido Capital Partners for legal,  transactional  and
                         due diligence costs  associated with this  transaction.
                         The amount  will be not more than  $50,000  and will be
                         non-accountable.

PLACEMENT AGENT FEES:    8% cash  and  warrants  with  the  same  terms as those
                         issued to Purchasers  exercisable  for 8% of the Common
                         Stock   for   which   the   Purchaser's   warrant   are
                         exercisable,  provided that the Placement Agent warrant
                         shall have a cashless exercise provision.

EXPIRATION DATE:         The present  term sheet will expire,  unless  signed by
                         both  parties or extended  in writing,  at the close of
                         business on Wednesday, February 22nd, 2006.

ELITE PHARMACEUTICALS, INC.

______________________  Date ___________
BERNARD BERK
Chairman & CEO &

BUSHIDO CAPITAL PARTNERS, LTD.

______________________  Date ___________
Ronald S. Dagar
Partner

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