Document:

REPLACEMENT WARRANT HOLDERS

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION  RIGHTS AGREEMENT (the "Agreement"),  dated as of December
14, 2005, by and among Elite Pharmaceuticals,  Inc., a Delaware corporation (the
"Company")  and the holders of Warrants to purchase  Common  Stock issued by the
Company  pursuant to the  Exercise  Agreements  (as each term is defined  below)
listed on SCHEDULE 1 attached hereto (each, a "Warrant Holder");

         WHEREAS,  the Company and each of the Warrant Holders have entered into
a Warrant  Exercise  Agreement dated within thirty days of the date hereof (each
an "Exercise Agreement"); and

         WHEREAS,  to induce  each  Warrant  Holder to execute  and  deliver the
Exercise  Agreement,  the  Company  has agreed to provide  certain  registration
rights under the Securities Act of 1933, as amended (the "Securities  Act"), and
the rules and regulations thereunder,  or any similar successor statute, as well
as any applicable state securities laws.

         NOW,  THEREFORE,  in  consideration  of the premises,  representations,
warranties, and the mutual covenants and agreements contained herein, and in the
Exercise Agreement,  and for other good and valuable consideration,  the receipt
and  sufficiency of which are hereby  acknowledged,  the Company,  the Placement
Agent and the Warrant  Holders,  intending to be legally bound,  hereby agree as
follows:

1.       CERTAIN DEFINITIONS.

         Capitalized  terms  defined in the Exercise  Agreements  shall have the
same meanings  herein as are ascribed to them therein.  In addition,  as used in
this Agreement,  the following terms shall have the following  meanings ascribed
to them below:

         "Affiliate"  means any Person that has a relationship with a designated
Person  whereby  either of such Persons  directly or  indirectly  controls or is
controlled  by or is under  common  control  with the  other.  For this  purpose
"control" means the power, direct or indirect,  of one Person to direct or cause
direction of the management and policies of another,  or any act with respect to
the securities of the Company, whether by contract, through voting securities or
otherwise.

         "Closing Date" means December 14, 2005.

         "Common  Stock" shall be the  Company's  authorized  common  stock,  as
constituted  on the date of this  Agreement,  any stock into  which such  common
stock may thereafter be changed and any stock of the Company of any other class,
which is not  preferred  as to dividends or assets over any other class of stock
of the Company issued to the Warrant Holders of shares of such common stock upon
any re-classification thereof.

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         "Company  Registration  Expenses"  shall mean bills or invoices  (other
than Selling  Expenses)  incident to the Company's  performance of or compliance
with this Agreement including, without limitation, all registration,  filing and
NASDR fees,  fees and expenses of compliance  with  securities or blue sky laws,
word  processing,  duplicating  and printing  expenses,  messenger  and delivery
expenses,  fees and disbursements of counsel for the Company and all independent
public  accountants  including  the expenses of any audit and/or "cold  comfort"
letter, all fees and expenses in connection with the Company's obligations under
Section 3.1, if applicable, and other Persons retained by the Company.

         "Controlling  Person" shall have the meaning set forth under Section 15
of the Securities Act.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Excluded  Form"  means  a  Form  S-4  or  Form  S-8,  pursuant  to the
Securities Act or any similar or successor form then in effect.

         "NASDR" means the NASD Regulation, Inc.

         "Offering"  means the  solicitation  by the Placement  Agent of Warrant
Holders to enter into Exercise Agreements.

         "Person" means a corporation,  an association, a partnership, a limited
liability  company, a joint venture,  a trust, an organization,  a business,  an
entity,  an  individual,  a  government  or political  subdivision  thereof or a
governmental body.

         "Placement Agent" shall mean Indigo Securities, LLC.

         "Placement  Agent  Agreement" shall mean the placement agent agreement,
dated as of November 9, 2005, between the Placement Agent and the Company.

         "Placement  Agent  Warrants" shall mean the warrants to purchase shares
of Common Stock issued to the Placement  Agent  pursuant to the Placement  Agent
Agreement.

         "Register,  registered and registration" means a registration  effected
by preparing and filing a  Registration  Statement on a form approved by the SEC
other  than an  Excluded  Form in  compliance  with the  Securities  Act and the
declaration of effectiveness  ordering the  effectiveness  of such  Registration
Statement.

         "Registrable Securities" means Common Stock issued upon (i) exercise of
the  Warrants  and (ii)  exercise of the  Placement  Agent  Warrants.  As to any
Registrable  Securities,   once  issued,  such  securities  shall  cease  to  be
Registrable  Securities  when (i) a  Registration  Statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such Registration
Statement,  (ii)  they can be sold to the  public  pursuant  to Rule 144 (or any
successor  provision)  under the  Securities  Act,  (iii)  they  shall have been
otherwise  transferred  but new  certificates  for  them  not  bearing  a legend
restricting  further  transfer  shall have been  delivered  by the  Company  and
subsequent  disposition of them shall not require  registration or qualification
of them under the

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Securities  Act or any similar state law then in force,  or (iv) they shall have
ceased to be outstanding.

         "Registration  Statement" means one or more registration  statements of
the  Company  on Form  S-3  under  the  Securities  Act  registering  all of the
Registrable Securities, including any amendments or supplements thereto.

         "SEC"  means  the  Securities  and  Exchange  Commission  or any  other
governmental body at the time administering the Securities Act.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Selling  Expenses" shall mean all  underwriting  discounts,  brokerage
fees and selling commissions applicable to the Registrable Securities registered
and all fees and disbursements of counsel for the Warrant Holder.

         "Warrants"  means the  warrants to purchase  Common Stock issued by the
Company  pursuant to the Exercise  Agreements  and listed on SCHEDULE 1 attached
hereto.

         "Warrant  Holders"  means the Warrant  Holders and any  transferees  or
assignees  who agree to become  bound by the  provisions  of this  Agreement  in
accordance with Section 10 hereof.  Warrant Holders also refers to the Placement
Agent and its  assignees  when  referring  to the offer and sale of  Registrable
Securities and other rights arising under Sections 2 and 3.

2.       REGISTRATION.

         2.1      MANDATORY REGISTRATION.

                  2.1.1 The  Company  shall file with the SEC, on the date which
is on or  before  forty-five  (45)  days  after the  Closing  Date (the  "Filing
Deadline")  a  Registration  Statement  on Form  S-3  (or,  if  Form  S-3 is not
available, on such form of Registration Statement as is then available to effect
a registration of all of the Registrable Securities;  provided, that the Company
shall  convert such other form to Form S-3, or file a  replacement  registration
statement  on Form S-3  promptly  after  the first  date on which it meets  such
requirement)  pertaining to the resale of all of the Registrable Securities and,
to the  extent  allowable  under the  Securities  Act and the rules  promulgated
thereunder, to such indeterminate number of additional shares of Common Stock as
may become issuable  pursuant to provisions to prevent  dilution  resulting from
stock  splits,   stock  dividends  or  similar   transactions   (the  "Mandatory
Registration  Statement").  The Mandatory  Registration Statement shall contain,
unless   otherwise   required  by  applicable  law  or  the  SEC,  the  "Selling
Shareholders"  and "Plan of  Distribution"  section of the  Prospectus in a form
reasonably  satisfactory to the Warrant Holders based upon information  provided
by the selling shareholder. The Registrable Securities included in the Mandatory
Registration  Statement shall be registered on behalf of the Warrant Holders set
forth on  Schedule 1 hereof.  The  Mandatory  Registration  Statement  (and each
amendment  or  supplement   thereto,   and  each  request  for  acceleration  of
effectiveness  thereof)  shall be  provided  to the  Warrant  Holders  and their
counsel at least five (5) business days prior to its filing or other submission;
such notice to specify the securities to be registered, the proposed numbers and
amounts  thereof and the date  thereafter  by which the Company must receive the
Warrant  Holders'  written  indication  if any

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Warrant  Holder does not wish to include  their  Registrable  Securities in such
Registration  Statement  and advising the Warrant  Holders of their rights under
this Section 2. The Company shall file the Mandatory  Registration Statement and
use its best  efforts  to cause all of the  Registrable  Securities  (unless  an
Warrant  Holder has  indicated  otherwise  with respect to all or any portion of
such Warrant Holder's Registrable Securities pursuant to the preceding sentence)
to be registered  under the Securities Act, in connection with the sale or other
disposition by the Warrant Holders of the Registrable  Securities so registered.
The  Company  shall use its best  efforts  to cause the  Mandatory  Registration
Statement,  as amended,  to become  effective as soon as  practicable  after the
filing  thereof.  The  Mandatory  Registration  Statement  shall  only cover the
Registrable  Securities  and any  stockholder of the Company that is entitled to
participate under, and exercises any existing, piggy-back registration rights.

         2.1.2 If the Mandatory Registration Statement (i) has not been declared
or ordered effective within  one-hundred and twenty (120) days after the Closing
Date (the "Four Month Period") or (ii) has been declared effective, but prior to
the  second  anniversary  of the  Closing  Date  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 not  permitted  to utilize the  Prospectus
therein to resell such Registrable  Securities,  in each case for a period of 15
consecutive  Trading Days or more than an aggregate of any 25 Trading  Days,  in
each case during which a Warrant  Holder could exercise the Warrant and sell the
Warrant Shares at a profit, during a 12-month period (any such failure or breach
being  referred  to as an  "Event",  and for  purposes of clause (i) the date on
which such Event  occurs,  or for purposes of clause (ii) the date on which such
15 or 25 Trading Day period, as applicable, is exceeded, being referred to as an
"Event  Date"),  then in  addition  to any other  rights  the  Holders  may have
hereunder  or under  applicable  law, on each monthly  anniversary  of each such
Event  Date (if the  applicable  Event  shall not have been  cured by such date)
until the date on which the applicable  Event is cured, the Company shall pay to
each Holder an amount in cash,  as damages  and not as a penalty,  equal to 0.5%
per month of the  aggregate  exercise  price  applicable  under the terms of the
Warrants to the Registrable  Securities then held by such Holder. If the Company
fails to pay any  liquidated  damages  pursuant  to this  Section in full within
seven  business  days after the date  payable,  the  Company  will pay  interest
thereon  at a rate of 16% 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 liquidated damages are due until such amounts,  plus all such interest
thereon,  are paid in full. The damages pursuant to the terms hereof shall apply
on a daily  pro-rata basis for any portion of a month prior to the date on which
an Event is cured.  The Company shall have the option to pay any damages in cash
or Common Stock.

         2.2      DEMAND REGISTRATION

                  2.2.1 If the Mandatory  Registration  Statement shall not have
been  declared  or ordered  effective  and the Company  shall  receive a written
request no earlier than ninety (90) days following the Closing but no later than
22 months after the Closing from Warrant Holders holding more than $1,000,000 in
value of the Registrable  Securities then outstanding  (the "Initiating  Warrant
Holder") that the Company file a registration statement under the Securities Act
covering the registration of the Registrable Securities, then the Company shall,
within  thirty (30) days of the receipt  thereof,  give  written  notice of such
request to all Warrant Holders, and subject to the limitations set forth herein,
effect,  as expeditiously  as reasonably  possible,  the

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registration  under the Securities Act of all  Registrable  Securities  that the
Warrant Holders request to be registered.

                  2.2.2  The   Company   shall  not  be  required  to  effect  a
registration  pursuant  to this  Section 2.2 if (i) the  Mandatory  Registration
Statement  has been  declared or ordered  effective,  whether or not one or more
holders  of  Registrable  Securities  elected  not  to  register  all  of  their
respective shares in the Mandatory  Registration  Statement (ii) the Company has
previously  effected  two  registrations  pursuant to this  Section 2.2 and such
previous  registrations  has been  declared  or ordered  effective  or (iii) the
Registrable Securities covered by registrations pursuant to this Section 2.2 may
be sold  pursuant to Rule 144(k)  promulgated  under the  Securities  Act or any
successor  provision.  Subject  to  the  foregoing,  the  Company  shall  file a
registration  statement covering the Registrable Securities and other securities
so  requested  to be  registered  pursuant  to  this  Section  2.2  as  soon  as
practicable after receipt of the request or requests of the Warrant Holders.

         2.3      PIGGYBACK RIGHTS.

                  2.3.1 If the Company shall  determine to prepare and file with
the SEC 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 an Excluded  Form),  then the Company  shall send to each Warrant
Holder  holding  Registrable   Securities  that  have  not  been  covered  by  a
registration  statement that has been declared or ordered  effective  (each,  an
"Eligible Warrant Holder"),  written notice of such determination and if, within
15 business days after receipt of such notice any such Eligible  Warrant  Holder
shall so request in writing,  the  Company  shall  include in such  registration
statement the Registrable  Securities  requested by the Eligible Warrant Holders
to be so  included.  Such  written  notice  shall state the  intended  method of
disposition of the Registrable Securities by such Eligible Warrant Holder. If an
Eligible Warrant Holder decides not to include all of its Registrable Securities
in any registration  statement  thereafter  filed by the Company,  such Eligible
Warrant  Holder  shall  nevertheless  continue  to have the right to include any
Registrable Securities in any subsequent  registration statement or registration
statements  as may be filed by the  Company  with  respect to  offerings  of its
securities,  all upon the terms and conditions  set forth herein,  to the extent
all Registrable  Securities held by such Warrant Holder have not been covered by
a registration statement that has been declared or ordered effective by the time
of such subsequent registration.

                  2.3.2 If the  registration  statement  under which the Company
gives notice under this Section 2.3 is for an underwritten offering, the Company
shall so advise the Eligible Warrant Holders of Registrable Securities.  In such
event,  the  right of any such  Eligible  Warrant  Holder  to be  included  in a
registration  pursuant  to this  Section  2.3  shall be  conditioned  upon  such
Eligible Warrant Holder's  participation in such  underwriting and the inclusion
of such Eligible Warrant Holder's Registrable  Securities in the underwriting to
the extent provided herein. All Eligible Warrant Holders proposing to distribute
their  Registrable  Securities  through  such  underwriting  shall enter into an
underwriting  agreement in customary form with the  underwriter or  underwriters
selected  for  such  underwriting  by the  Company.  Notwithstanding  any  other
provision of the  Agreement,  if the  underwriter  determines in good faith that
marketing   factors  require  a  limitation  of  the  number  of  shares  to  be
underwritten,  the number of shares  that may be  included  in the  underwriting
shall be allocated,  first, to the Company;  second, to any selling

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shareholders that shall have exercised a demand  registration right; third, on a
PRO RATA basis, to the Eligible  Warrant  Holders and any other  shareholders of
the Company exercising incidental  registration rights based on the total number
of Registrable  Securities  sought to be registered in such  registration by the
Eligible Warrant Holders and such other shareholder of the Company.

                  2.3.3 If any Eligible Warrant Holder  disapproves of the terms
of any such  underwriting,  such Eligible  Warrant  Holder may elect to withdraw
therefrom  by written  notice to the Company and the  underwriter,  delivered at
least ten (10)  business days prior to the  effective  date of the  registration
statement.   Any  Registrable   Securities   excluded  or  withdrawn  from  such
underwriting  shall be excluded and  withdrawn  from the  registration.  For any
Eligible Warrant Holder which is a partnership,  limited liability  company,  or
corporation,  the  partners,  retired  partners,  members,  retired  members and
shareholders of such Eligible Warrant Holder,  or the estates and family members
of any such partners and retired  partners and any trusts for the benefit of any
of the  foregoing  person  shall  be  deemed  to be a single  "Eligible  Warrant
Holder,"  and any PRO RATA  reduction  with  respect to such  "Eligible  Warrant
Holder" shall be based upon the aggregate amount of shares carrying registration
rights owned by all entities and individuals  included in such "Eligible Warrant
Holder," as defined in this sentence.

                  2.3.4  The  Company  shall  have  the  right to  terminate  or
withdraw  any  registration  initiated by it under this Section 2.3 prior to the
effectiveness  of such  registration  whether or not any Eligible Warrant Holder
has elected to include securities in such registration.

3. REGISTRATION PROCEDURES.

         3.1 If and whenever the Company is required by the provisions hereof to
effect  or cause  the  registration  of any  Registrable  Securities  under  the
Securities  Act as provided  herein,  the Company  shall,  as  expeditiously  as
possible:

                  3.1.1  prepare  and file with the SEC, on or before the Filing
Deadline  the  Mandatory  Registration  Statement  required  by Section 2.1 or a
demand  Registration  Statement  pursuant  to Section  2.2 with  respect to such
Registrable  Securities  and use its best  efforts  to cause  such  Registration
Statement to become and remain effective (pursuant to Rule 415 of the Securities
Act) as soon as practicable  after such filing  (provided that,  before filing a
Registration  Statement or prospectus or any amendments or supplements  thereto,
the Company shall furnish to the Warrant  Holders  copies of all such  documents
proposed to be filed);

                  3.1.2 prepare and file with the SEC such amendments (including
post-effective  amendments) and supplements to such  Registration  Statement and
the  prospectus  used in  connection  therewith as may be necessary to keep such
Registration  Statement  effective,  true and  correct  during the  Registration
Period. For purposes of this Agreement,  "Registration  Period" means the period
commencing  with the effective date and ending on the earlier of (i) the sale of
all Registrable Securities covered thereby, (ii) the date upon which the Warrant
Holders may sell the Registrable  Securities pursuant to Rule 144(k) promulgated
under the Securities Act, or (iii) the expiration of the 24 months after Closing
or such shorter period as shall be necessary to complete the distribution of the
securities covered thereby,  and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all Registrable  Securities

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covered by such Registration Statement during such period in accordance with the
intended  methods of  disposition  by the Warrant  Holders in such  Registration
Statement;

                  3.1.3 permit the Warrant  Holders and their  counsel to review
and comment upon all  Registration  Statements  at least five (5) business  days
prior to its  filing  with the SEC and all  amendments  and  supplements  to all
Registration Statements (except for documents incorporated by reference therein)
within a reasonable number of days prior to their filing with the SEC;

                  3.1.4 submit to the SEC,  within two (2)  business  days after
the Company learns that no review of the Registration  Statement will be made by
the staff of the SEC (the "Staff") or that the Staff has no further  comments on
the  Registration  Statement,  as the case may be, a request for acceleration of
effectiveness of the Registration Statement to a time and date not later than 48
hours after the submission of such request;

                  3.1.5  furnish  to  each  Warrant  Holder  whose   Registrable
Securities  are included in the  Registration  Statement,  and to the  Placement
Agent's counsel and each underwriter of the securities being sold by the Warrant
Holders such number of copies of such  Registration  Statement  and of each such
amendment and supplement  thereto (in each case  including all  exhibits),  such
number of copies  of the  prospectus  included  in such  Registration  Statement
(including each preliminary prospectus),  in conformity with the requirements of
the Securities  Act, and such other  documents,  as such counsel and underwriter
may reasonably  request, in substantially the form in which they are proposed to
be  filed  with  the  SEC,  in order  to  facilitate  the  public  sale or other
disposition of the Registrable  Securities  owned by the  participating  Warrant
Holders.  In the case of all Registration  Statements  referred to in Section 2,
the Company  shall furnish to each Warrant  Holder which  requests (i) a copy of
any request to accelerate the  effectiveness  of any  Registration  Statement or
amendment  thereto,  (ii)  on the  date  of  effectiveness  of the  Registration
Statement or any  amendment  thereto,  a notice  stating  that the  Registration
Statement or amendment  has been  declared  effective,  and (iii) such number of
copies of a prospectus,  including a preliminary prospectus,  and all amendments
and  supplements  thereto and such other  documents as such  Warrant  Holder may
reasonably  request in order to facilitate the  disposition  of the  Registrable
Securities  owned by such Warrant  Holder.  In  responding  to comments from the
staff of the SEC,  the Company  shall  cooperate  with any  Warrant  Holder that
notifies  the  Company  that it desires  to be  consulted  with  respect to such
process. To the extent that issues raised by the staff of the SEC have an impact
primarily on any such Warrant Holder rather than the Company,  the Company shall
give reasonable  deference to such Warrant Holder's requests with respect to the
process and substance of responses with respect to such issues;

                  3.1.6 use its best  efforts to (i)  register  and  qualify the
Registrable  Securities  covered by the Registration  Statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as each
Warrant  Holder  who  holds  Registrable  Securities  being  offered  reasonably
requests,   (ii)  prepare  and  file  in  those  jurisdictions  such  amendments
(including post-effective  amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness  thereof during
the  Registration  Period,  (iii) take such other  actions as may be  reasonably
necessary to maintain such  registrations  and  qualifications  in effect at all
times during the Registration Period, and (iv) take all other actions

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reasonably necessary or advisable to qualify the Registrable Securities for sale
in such jurisdictions; PROVIDED, HOWEVER, that the Company shall not be required
in connection  therewith or as a condition  thereto to qualify to do business in
any  jurisdiction  where it would not  otherwise  be required to qualify but for
this Section 3.1.6;

                  3.17 subject to Section  3.1.6,  use its best efforts to cause
such  Registrable  Securities  covered  by  such  Registration  Statement  to be
registered with or approved by such other  governmental  agencies or authorities
as may be reasonably  necessary to enable the  participating  Warrant Holders to
consummate the disposition of its Registrable Securities;

                  3.1.8  notify the  participating  Warrant  Holders at any time
when a  prospectus  relating  to its  Registrable  Securities  is required to be
delivered  under the  Securities  Act, of the Company's  becoming aware that the
prospectus included in the related  Registration  Statement,  as then in effect,
includes an untrue  statement of a material  fact or omits to state any material
fact required to be stated therein or necessary to make the  statements  therein
not misleading in light of the circumstances then existing, and promptly prepare
and  furnish  to the  participating  Warrant  Holders  and  each  underwriter  a
reasonable number of copies of a prospectus  supplemented or amended so that, as
thereafter  delivered to the  purchasers of such  Registrable  Securities,  such
prospectus  shall not include 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  not  misleading  in the  light  of the  circumstances  then
existing;

                  3.1.9    otherwise use its  best  efforts  to comply  with all
applicable rules and regulations of the SEC;

                  3.1.10 if the  Common  Stock is listed on the  American  Stock
Exchange,  another national securities exchange,  or on the Nasdaq Stock Market,
as the case may be,  the  Company  shall use its best  efforts to cause all such
Registrable  Securities  covered by such Registration  Statement to be listed on
the American Stock  Exchange,  other  national  securities  exchange,  or on the
Nasdaq Stock Market, as the case may be (if such Registrable  Securities are not
already so  listed),  if the  listing  of such  Registrable  Securities  is then
permitted under the rules of such exchange or market;

                  3.1.11 provide a transfer agent and registrar,  which may be a
single entity, for the Registrable  Securities not later than the effective date
of the Registration Statement;

                  3.1.12 in the case of an  underwritten  offering,  enable  the
Registrable  Securities to be in such denominations and registered in such names
as the  underwriters may request at least two business days prior to the sale of
the Registrable Securities;

                  3.1.13 cooperate with the Warrant Holders who hold Registrable
Securities  being offered to facilitate the timely  preparation  and delivery of
certificates  (not bearing any  restrictive  legends)  representing  Registrable
Securities to be offered pursuant to the Registration  Statement and enable such
certificates to be in such denominations or amounts,  as the case may be, as the
Warrant  Holders  may  reasonably  request and  registered  in such names as the
Warrant Holders may request;

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                  3.1.14   notify  the   Warrant   Holders  of  any  stop  order
threatened,  to the  knowledge  of the  Company,  or  issued by the SEC (and the
Company  shall notify the Warrant  Holders of the  resolution of any issued stop
order) and take all actions  reasonably  necessary  to prevent the entry of such
stop order or to remove it if entered;

                  3.1.15  instruct the  Company's  transfer  agent to remove the
restrictive  legend  on  the  stock  certificates  after  effectiveness  of  the
applicable  Registration  Statement  and provide.  with the  cooperation  of the
Warrant Holders, any required legal opinions at the Company's sole expense; and

                  3.1.16  the  Company  shall  use its  commercially  reasonable
efforts to (subject to applicable law), as soon as practicable,  (A) incorporate
in a prospectus supplement or post-effective  amendment the information provided
by an  Warrant  Holder  pursuant  to  Section  3.2  relating  to  the  sale  and
distribution  of  Registrable   Securities,   including,   without   limitation,
information  with respect to the number of Registrable  Securities being offered
or sold,  the  purchase  price  being paid  therefor  and any other terms of the
offering of the Registrable Securities to be sold in such offering, (B) make all
required filings of such prospectus supplement or post-effective amendment after
being notified of the matters to be incorporated  in such prospectus  supplement
or  post-effective  amendment  and  (C)  supplement  or make  amendments  to any
Registration  Statement if reasonably requested by an Warrant Holder holding any
Registrable  Securities as it relates to the information  provided by an Warrant
Holder  pursuant  to  Section  3.2  relating  to the  sale and  distribution  of
Registrable Securities.

         3.2 In connection with the registration of the Registrable  Securities,
the Warrant Holders shall have the following obligations:

                  3.2.1 each  participating  Warrant Holder shall furnish to the
Company  in  writing  such  information  and  documents  regarding  it  and  the
distribution  of its securities as may reasonably be required to be disclosed in
the  Registration  Statement in question by the rules and regulations  under the
Securities Act or under any other applicable  securities or blue sky laws of the
jurisdictions  referred  to in  Section  3.1.4  above,  or as may  otherwise  be
reasonably requested; and

                  3.2.2 if any such registration or comparable  statement refers
to any  participating  Warrant Holder by name or otherwise as the Warrant Holder
of any  securities  of the Company,  but such  reference  to such  participating
Warrant Holder by name or otherwise is not required by the Securities Act or any
similar federal statute then in force,  then such  participating  Warrant Holder
shall  have  the  right  to  require  the  deletion  of the  reference  to  such
participating Warrant Holder.

         3.3 From and after the date of this  Agreement,  the Company shall not,
and shall not agree to,  allow the holders of any  securities  of the Company to
include any of their  securities in the Mandatory  Registration  Statement under
Section 2.1 hereof or any  amendment or  supplement  thereto under Section 3.1.2
hereof  without  the  consent  of  the  Warrant  Holders  of a  majority  of the
Registrable Securities,  except pursuant to outstanding  registration rights set
forth on SCHEDULE 3.3 attached hereto.

                                       9
<PAGE>

4.       REGISTRATION EXPENSES.

         In connection with any registration of Registrable  Securities pursuant
to Section 2, the  Company  shall,  whether or not any such  registration  shall
become  effective,  from  time to time  promptly  pay all  Company  Registration
Expenses.  Such expenses shall not include any Selling Expenses other than up to
$10,000 of reasonable fees and expenses of one counsel selected by a majority of
the Warrant Holders solely with respect to the Mandatory Registration Statement.

5.       INDEMNIFICATION.

         5.1 The Company shall, and hereby does, indemnify and hold harmless, to
the fullest extent permitted by law, each Warrant Holder and the Placement Agent
(and  their  respective  officers,   directors,   managers,  members,  partners,
stockholders,  employees,  agents and advisors) and each Person who controls any
Warrant  Holder or the Placement  Agent within the meaning of the Securities Act
(each, an  "Indemnified  Party") from and against all losses,  claims,  damages,
liabilities and expenses,  joint or several, to which any such Indemnified Party
may become subject under the Securities  Act, the Exchange Act and all rules and
regulations  under each such act,  any other  federal or state  statute,  law or
regulation at common law or otherwise,  insofar as such losses, claims, damages,
liabilities  or  expenses  (or  actions or  proceedings,  whether  commenced  or
threatened,  in respect  thereof)  arise out of or are based upon (i) any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
Registration Statement or any amendment or supplement thereto or any omission or
alleged  omission to state therein a material fact required to be stated therein
or  necessary to make the  statements  therein not  misleading,  (ii) any untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary,   final  or  summary   prospectus,   together  with  the  documents
incorporated  by reference  therein (as amended or  supplemented  if the Company
shall have filed with the SEC, any amendment thereof or supplement thereto),  or
any omission or alleged omission to state therein a material fact required to be
stated  therein or necessary  in order to make the  statements  therein,  in the
light of the circumstances under which they were made, not misleading,  or (iii)
any  violation  by the  Company  of any  federal,  state or  common  law rule or
regulation  applicable  to the Company and  relating to action of or inaction by
the Company in connection  with any such  registration  including the failure to
deliver any document required herein to be delivered, to an Warrant Holder and a
Placement  Agent;  and in each such case, the Company shall  reimburse each such
Indemnified  Party for any reasonable legal or other expenses as such reasonable
expenses  are  incurred  by  any  of  them  in  connection  with  investigating,
defending,  settling,  compromising,  proving or defending any such loss, claim,
damage, liability,  expense, action or proceeding;  PROVIDED,  HOWEVER, that the
Company  shall not be  liable  to any such  Indemnified  Party  insofar  as such
losses,  claims,  damages,  liabilities,  expenses,  actions or proceedings  are
caused by any untrue statement or alleged untrue statement or material  omission
to provide  information  pursuant  to  Section  5.2 made in  reliance  on and in
conformity with any written information furnished to the Company by or on behalf
of any Indemnified Party to be furnished under the Section 5.2 or as a result of
the failure of the Indemnified Party to furnish a prospectus to a purchaser.

         5.2 In connection with any Registration  Statement in which any Warrant
Holder and the Placement  Agent is  participating,  such  participating  parties
shall furnish to the Company in writing such  information as shall be reasonably
requested  by the  Company  for  use  in  any  such

                                       10
<PAGE>

Registration  Statement or prospectus  and shall  indemnify  and hold  harmless,
severally  and not jointly,  to the extent  permitted  by law, the Company,  its
officers,  directors,  employees,  agents, advisors and each Person, if any, who
controls  the Company  within the meaning of Section 15 of the  Securities  Act,
against  any  losses,  claims,  damages,   liabilities,   expenses,  actions  or
proceedings resulting from any untrue statement or alleged untrue statement of a
material  fact or any  omission  or alleged  omission  of a  material  fact with
respect to  information  furnished  by the  Warrant  Holder to the  Company  and
required to be stated in the Registration Statement or prospectus or preliminary
prospectus or any amendment thereof or supplement  thereto, or necessary to make
the statements  therein in the light of the  circumstance  under which they were
made (in the case of a prospectus) not  misleading,  in each case to the extent,
but only to the extent,  that such untrue  statement or omission with respect to
information  expressly  requested  by the  Company is made in reliance on and in
conformity with any information so furnished in writing or to be furnished under
this Section 5.2 by such participating Warrant Holder expressly for use therein.
Notwithstanding  the  provisions of this Section 5.2, each Investor shall not be
liable for any indemnification  obligation under this Agreement in excess of the
aggregate amount of net proceeds  received by such Investor from the sale of the
Registrable Securities pursuant to the applicable  Registration Statement. In no
case  shall the  Placement  Agent be liable for any  indemnification  obligation
under this  Agreement in excess of the  compensation  received by it pursuant to
the Placement Agent Agreement.

         5.3 Any Person entitled to indemnification under the provisions of this
Section 5 shall (i) give prompt  notice to the  indemnifying  party of any claim
with respect to which it seeks indemnification but the omission to so notify the
indemnifying  party will not relieve the  indemnifying  party from any liability
which it may have pursuant to this Section 5 to the extent it is not  materially
prejudiced  as a result  of such  failure,  and (ii)  unless  in the  reasonable
judgment of counsel for such  indemnified  party a conflict of interest  between
such  indemnified and  indemnifying  parties may exist in respect of such claim,
permit such indemnifying party to assume the defense of such claim, with counsel
reasonably  satisfactory  to the  indemnified  party;  and if such defense is so
assumed, such indemnifying party shall not enter into any settlement without the
consent of the indemnified party if such settlement  attributes liability to the
indemnified  party  and such  indemnifying  party  shall not be  subject  to any
liability  for  any  settlement  made  without  its  consent.  In the  event  an
indemnifying  party shall not be entitled,  or elects not, to assume the defense
of a claim, such  indemnifying  party shall not be obligated to pay the fees and
expenses  of  more  than  one  law  firm  for all  parties  indemnified  by such
indemnifying  party  hereunder in respect of such claim.  Such  indemnity  shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf  of any  indemnified  party  and  shall  survive  the  transfer  of  such
securities by such indemnified party.

         5.4 If for any reason the foregoing indemnity is unavailable,  then the
indemnifying  party  shall  contribute  to the  amount  paid or  payable  by the
indemnified party as a result of such losses,  claims,  damages,  liabilities or
expenses in such  proportion as is  appropriate to reflect the relative fault of
the indemnifying  party and the indemnified  party as well as any other relevant
equitable considerations in accordance with Section 6 below. No Person guilty of
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.

                                       11
<PAGE>

         5.5 An indemnifying  party shall make payments of all amounts  required
to be made pursuant to the foregoing  provisions of this Section 5 to or for the
account of the  indemnified  party from time to time  promptly  upon  receipt of
bills or invoices relating thereto or when otherwise due and payable.

6.       CONTRIBUTION.

         To provide for just and equitable contribution, if an Indemnified Party
makes a claim for  indemnification  pursuant  to  Section 5 but it is found in a
final  judicial  determination,   not  subject  to  further  appeal,  that  such
indemnification  may not be  enforced in such case,  even though this  Agreement
expressly provides indemnification in such case, then the Company (including for
this purpose any  contribution  made by or on behalf of any  officer,  director,
employee or agent for the Company, or any Controlling Person of the Company), on
the one hand, and the indemnified  party, on the other hand, shall contribute to
the losses,  liabilities,  claims, damages, and expenses whatsoever to which any
of them may be subject,  in such  proportions as are  appropriate to reflect the
relative benefits received by the Company,  on the one hand, and the indemnified
party,  on the other hand;  PROVIDED,  HOWEVER,  that if applicable law does not
permit such allocation, then other relevant equitable considerations such as the
relative fault of the Company and the  indemnified  party in connection with the
facts which resulted in such losses, liabilities,  claims, damages, and expenses
shall also be  considered.  No Person liable for a fraudulent  misrepresentation
shall be  entitled  to  contribution  from any person who is not liable for such
fraudulent  misrepresentation.  Anything  in  this  Section  6 to  the  contrary
notwithstanding,  no party shall be liable for contribution  with respect to the
settlement  of any claim or action  effected  without its written  consent.  The
Company,  the Warrant Holders and the Placement Agent agree that it would not be
just and equitable if  contribution  pursuant to this Section 6 were  determined
solely by pro rata  allocation or by any other method of  allocation  which does
not take account of the equitable  considerations referred to in this Section 6.
The  Warrant  Holders'  and the  Placement  Agent's  obligations  to  contribute
pursuant to this Section 6 are several and not joint.

7. RULE 144.

         The Company  covenants  that it shall file the  reports  required to be
filed  under  the  Securities  Act  and the  Exchange  Act  and  the  rules  and
regulations  adopted by the SEC thereunder (or, in the event that the Company is
not required to file such reports, it shall make publicly available  information
as set forth in Rule 144(c)(2)  promulgated under the Securities Act), or to the
extent  required  from  time to time  to  enable  the  Warrant  Holders  and the
Placement Agent to sell their Registrable  Securities without registration under
the Securities  Act within the limitation of the exemption  provided by (i) Rule
144 under the Securities  Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation  hereafter adopted by the SEC (collectively,
"Rule 144").

8. REGISTRATION RIGHTS OF OTHERS.

         If the  Company  shall at any time  hereafter  provide  any  Person any
rights with respect to the  registration  of any securities of the Company under
the Securities  Act, such rights shall not permit any such  securities to become
registered during the period between Closing and the date that is 180 days after
the Mandatory  Registration Statement becomes effective or, in any other

                                       12
<PAGE>

manner, be superior to the rights provided herein to the Warrant Holders and the
Placement  Agent.  For the  avoidance  of doubt,  this  Section 8  excludes  any
registration rights that exist on the date hereof.

9.       REPORTING STATUS AND LISTING.

         (a) Until the date on which the Warrant  Holders shall have sold all of
their Registrable Securities,  the Company shall file all reports required to be
filed with the SEC  pursuant to the  Exchange  Act,  and the  Company  shall not
terminate  its status as an issuer  required to file reports  under the Exchange
Act even if the  Exchange  Act or the rules  and  regulations  thereunder  would
otherwise permit such termination.

         (b) The Company shall use its best efforts to maintain the  eligibility
for  quotation of the Common Stock on the American  Stock  Exchange.  Subject to
applicable law, neither the Company nor any of its  Subsidiaries  shall take any
action  which  would be  reasonably  expected  to  result  in the  delisting  or
suspension of the Common Stock on the American Stock Exchange. The Company shall
pay all fees and expenses in connection with  satisfying its  obligations  under
this section.

10. TRANSFER OF REGISTRATION RIGHTS.

         If and to the extent that any  Warrant  Holder or the  Placement  Agent
sells or otherwise  disposes of Registrable  Securities or warrants  exercisable
for Registrable Securities in any transaction that does not require registration
under the Securities  Act (other than a transaction  exempt under Rule 144), the
rights of the Warrant  Holder or the Placement  Agent  hereunder with respect to
such  Registrable  Securities  shall be  assignable  to any  transferee  of such
Registrable  Securities;  PROVIDED,  HOWEVER,  that  such  transferee  agrees in
writing to be bound by all the terms and conditions of this Agreement.

11.      MISCELLANEOUS.

         11.1  The  registration  rights  provided  to the  Warrant  Holders  of
Registrable  Securities  hereunder  shall  terminate  on the date there shall no
longer be any outstanding  Registrable  Securities;  PROVIDED,  HOWEVER that the
provisions of Section 5 hereof shall survive any termination of this Agreement.

         11.2  A  Person  is  deemed  to be an  Warrant  Holder  of  Registrable
Securities whenever such Person owns of record such Registrable  Securities.  If
the Company receives conflicting instructions,  notices or elections from two or
more Persons with respect to the same Registrable Securities,  the Company shall
act upon  the  basis of  instructions,  notice  or  election  received  from the
registered owner of such Registrable Securities.

         11.3 All  notices,  offers,  acceptance  and any other  acts under this
Agreement shall be in writing,  and shall be sufficiently  given if delivered to
the  addressees in person,  by Federal  Express or similar  receipted  overnight
delivery,  or by facsimile or e-mail delivery followed by a copy sent by Federal
Express or similar receipted overnight delivery, as follows:

                                       13
<PAGE>

                  If to the Company:      Elite Pharmaceuticals, Inc.
                                          165 Ludlow Avenue
                                          Northvale, NJ 07647
                                          Facsimile No.:  (201) 750-2755
                                          Attention:  Mr. Bernard Berk
                                                      Chief Executive Officer

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

If to an Warrant  Holder,  at such  address as such  Warrant  Holder  shall have
provided in writing to the Company or such other address as such Warrant  Holder
furnishes by notice given in accordance with this Section 11.3, with a copy to:

                                          Indigo Securities, LLC
                                          780 Third Avenue, 23rd Floor
                                          New York, NY 10017
                                          Facsimile No.: (212) 298-9933
                                          Attention:  Eric Brachfeld

                  With a Copy to:         Wollmuth Maher & Deutsch LLP
                                          500 Fifth Avenue
                                          New York, New York 10110
                                          Facsimile No.:  (212) 382-0050
                                          Attention:  Rory M. Deutsch, Esq.

         11.4  Failure of any party to exercise  any right or remedy  under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

         11.5 This  Agreement  shall be governed by and  construed in accordance
with the laws of the State of New York  applicable  to contracts  made and to be
performed in the State of New York.

         11.6 Each  party  agrees  that all  legal  proceedings  concerning  the
interpretations,  enforcement  and defense of the  transactions  contemplated by
this  Agreement  (whether  brought  against  a party  hereto  or its  respective
affiliates,  directors,  officers,  shareholders,  employees or agents) shall be
commenced exclusively in the state and federal courts sitting in Manhattan,  New
York. Each party hereto hereby irrevocably submits to the exclusive jurisdiction
of the  state  and  federal  courts  sitting  in  Manhattan,  New  York  for the
adjudication  of any dispute  hereunder  or in

                                       14
<PAGE>

connection  herewith or with any  transaction  contemplated  hereby or discussed
herein (including with respect to the enforcement hereof). Each party agrees not
to commence a claim or proceeding  hereunder in a court other than a state court
or federal  court sitting in  Manhattan,  New York,  except (i) if required as a
mandatory counterclaim or cross-claim in a proceeding commenced by a Person in a
different  jurisdiction  or (ii) if such party has first  brought  such claim or
proceeding  in such  court  sitting  in  Manhattan,  New York and both the state
courts  and the  federal  courts  sitting  in  Manhattan,  New York have  denied
jurisdiction over such claim or proceeding. Each party hereto hereby irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding  by mailing a copy thereof via  registered  or
certified  mail or overnight  delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this  Agreement and agrees that
such service shall constitute good and sufficient  service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner  permitted by law.  Each party hereto  (including
its affiliates,  agents,  officers,  directors and employees) hereby irrevocably
waives,  to the fullest extent permitted by applicable law, any and all right to
trial  by  jury in any  legal  proceeding  arising  out of or  relating  to this
Agreement or the transactions contemplated hereby.

         11.7 This  Agreement  (including  all schedules  and exhibits  thereto)
constitutes  the entire  agreement  among the parties hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein.  This  Agreement  supersedes all prior  agreements  and  understandings
(whether oral or written)  among the parties  hereto and thereto with respect to
the subject matter hereof and thereof.

         11.8 Subject to the  requirements of Section 10 hereof,  this Agreement
shall inure to the benefit of and be binding upon the  successors and assigns of
each of the parties hereto.

         11.9 The headings in this  Agreement are for  convenience  of reference
only and shall not form part of or effect the interpretation of this Agreement.

         11.10 This Agreement may be executed in one or more counterparts,  each
of which shall be deemed an original but all of which together shall  constitute
one and the same instrument. The execution of this Agreement may be by actual or
facsimile signature.

         11.11  Each  party  shall  do and  perform,  or  cause  to be done  and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

         11.12 Except as otherwise set forth herein, all consents, approvals and
other  determinations  to be  made  by the  Warrant  Holders  pursuant  to  this
Agreement  shall be made by the Warrant Holders holding more than 66 2/3% of the
Registrable Securities then held by all Warrant Holders.

                                       15
<PAGE>

         11.13  If  any  provision  of  this  Agreement   shall  be  invalid  or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or  enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

         11.14 This  Agreement is intended for the benefit of the parties hereto
and  their  respective  permitted  successors  and  assigns,  and is not for the
benefit of, nor may any provision hereof be enforced by any other Person.

                [REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK.]

                                       16
<PAGE>

         IN WITNESS WHEREOF, the parties have set their hands and seals the date
and year first above written.

                              ELITE PHARMACEUTICALS, INC.

                              By:
                                  ----------------------------------------------
                                    Bernard Berk, Chief Executive Officer

                              INVESTORS:

                              INDIGO SECURITIES, LLC

                              By:
                                  ----------------------------------------------
                                    Eric Brachfeld, Managing Partner

                      [ADDITIONAL SIGNATURE PAGES ATTACHED]

                                       17
<PAGE>

                                              INDIVIDUAL:
                                              ----------

Dated:
       -------------------                         -----------------------------
                                                   Name of Individual:

                                                   Address:

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

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

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

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

                                                   Facsimile:
                                                              ------------------

Dated:                                          NON-INDIVIDUAL:
       ------------------                       --------------

                                                   -----------------------------
                                                   Name of Entity

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

                                                   Address:

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

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

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

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

                                                   Facsimile:
                                                              ------------------

                                       18
<PAGE>

                                   SCHEDULE 1

                                       TO

                           REPLACEMENT WARRANT HOLDERS

                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                           ELITE PHARMACEUTICALS, INC.

                          AND THE FOLLOWING INVESTORS:

                                                                    REPLACEMENT
                NAME                           ADDRESS                WARRANTS
                ----                           -------              ------------

     Marlin Fund II, LP
     Marlin Fund Offshore, LDC

     Marlin Fund Offshore, Ltd.
     Marlin Fund LP
     Jerry Treppel
     Wheaten HealthCare Partners, LP
     Valor Capital Management LP
     S.A.C. Capital Associates, LLC
     Bushido Capital
     Myron Neugeboren
     Charon Behl
     Chris Dick
     Shirley Rae Sullivan
     Lewis Asset Management
     Abbey E. Blatt                         24 Saber Dr., Kings Park
     Bill Mitsinikos                        1645 Lands End Road, Manalapan
     Norman RothsteinINDIGO SECURITIES, LLC

                                          November 9, 2005

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

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).  This letter agreement shall be referred to
herein as the "AGREEMENT" and the "EFFECTIVE  DATE" shall mean 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 ENGAGEMENT; WARRANT TRANSACTION.

         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 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 such issuance,
together with the Warrant Transaction,  the "TRANSACTIONS").  It is contemplated
that the New Warrants issued in the  Transactions  will be issued by the Company
in a  private  placement  transaction  (the  "PRIVATE  PLACEMENT")  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.

2.       THE PRIVATE PLACEMENT.

         The Company and Indigo will each reasonably  believe at the time of the
Private Placement that each Exchanging  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 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  Securities  required  by Rule 503 of  Regulation  D and will  furnish to
Indigo promptly thereafter a signed copy of each such notice.

<PAGE>

Elite Pharmaceuticals, Inc.
November 9, 2005
Page 2

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 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)  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 (i) 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 (ii) New  Warrants  exercisable  for a
number of shares of the Company's  common stock equal to 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 Closing for its  reasonable  expenses  incurred in
connection with the Engagement including,  without limitation, legal fees of the
Placement Agent's counsel and disbursements of Placement Agent's counsel,  in an
amount not to exceed $20,000;  provided, that Placement Agent's counsel presents
a copy of the bill at Closing documenting such fees and disbursements.

         (b) 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 on-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 by the
Parties.

5.       NOTICES.

         All communications hereunder shall be in writing and shall be mailed or
delivered (a) to the Company,  at its offices at 165 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

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Elite Pharmaceuticals, Inc.
November 9, 2005
Page 3

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.  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 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 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.

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Elite Pharmaceuticals, Inc.
November 9, 2005
Page 4

         (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. 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  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 letter  agreement  shall be invalid,
illegal or  unenforceable,  the  validity,  legality and  enforceability  of the
remaining  provisions of this letter  agreement shall not in any way be affected
or impaired thereby.

<PAGE>

Elite Pharmaceuticals, Inc.
November 9, 2005
Page 5

         (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 letter  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  letter
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:  /s/ Eric Brachfeld
                                            Print Name:  Eric Brachfeld
                                            Title:  Managing Partner

ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE:

ELITE PHARMACEUTICALS, INC.

By:  /s/ Bernard Berk
Print Name: Bernard Berk
Title:  CEO

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