EMPLOYMENT AGREEMENT, effective as of August 1, 2002, by and between

HI-TECH PHARMACAL CO., INC., a Delaware corporation with offices at 369 Bayview

Avenue, Amityville, New York 11701 (the "Corporation"), and ARTHUR S. GOLDBERG,

an individual residing at 58 Peppermint Road, Commack, New York 11725 (the

"Executive").



                               W I T N E S S E T H



           WHEREAS, the Corporation desires to secure the services of Executive

upon the terms and conditions hereinafter set forth; and



           WHEREAS, Executive desires to render services to the Corporation upon

the terms and conditions hereinafter set forth.



           NOW, THEREFORE, the parties mutually agree as follows:



           Section 1.   Employment. The Corporation hereby employs Executive and

Executive hereby accepts such employment, as an executive of the Corporation,

subject to the terms and conditions set forth in this Agreement.



           Section 2.   Duties. Executive shall serve as Vice President-Finance

and Chief Financial Officer of the Corporation and shall properly perform such

duties as may be assigned to him from time to time by the Chief Executive

Officer and/or Board of Directors of the Corporation. If requested by the

Corporation, Executive shall serve on any committee of the Board of Directors

without additional compensation. There shall be no diminution or change in

Executive's status or title without his express written consent. During the term

of this Agreement, Executive shall devote substantially all of his available

business time to the performance of his duties hereunder unless otherwise

authorized by the Board of Directors. In addition to the regular duties of a

Vice President-Finance and Chief Financial Officer, Executive shall be

responsible for the implementation of a new computer system and improvement of

the Corporation's perpetual inventory systems.



           Section 3.   Term of Employment. The term of Executive's employment

shall commence as of the date hereof and shall continue until July 31, 2005,

unless earlier terminated pursuant to the provisions of Section 5 hereof.



{PAGE}



           Section 4.    Compensation of Executive.



                   4.1.  Compensation. The Corporation shall pay to Executive as

annual compensation for his services hereunder a salary ("Salary") in an amount

equal to $157,500 per annum. Such annual compensation shall be adjusted

annually, commencing August 1, 2003 by the greater of (i) 5% or (ii) the

percentage increase, if any, in the Consumer Price Index, as defined herein, for

the most recent calendar month for which the Consumer Price Index has been

published over the Consumer Price Index for the same calendar month in the

immediately preceding year. As used herein, the "Consumer Price Index" shall

mean the Consumer Price Index for All Urban Consumers, New York - Northeastern

New Jersey area (1982-84=100) issued by the Bureau of Labor Statistics of the

United States Department of Labor; provided that in the event the Consumer Price

Index shall hereafter be converted to a different standard reference base or

otherwise revised, the determination of the salary increase shall be made with

the use of such conversion factor, formula or table for converting the Consumer

Price Index as may be published by the Bureau of Labor Statistics. The Salary

shall be payable weekly less such deductions as shall be required to be withheld

by applicable law and regulations.



                   4.2.  Bonus. In addition to his annual Salary Executive may

receive a bonus ("Bonus") during each year of employment. Such Bonus shall be

determined by the Board of Directors, in its sole discretion.



                   4.3.  Expenses. The Corporation shall pay or reimburse

Executive for all reasonable and necessary business, travel or other expenses

incurred by him, upon proper documentation thereof, which may be incurred by him

in connection with the rendition of the services contemplated hereunder.



                   4.4.  Benefits. During the term of this Agreement Executive

shall be entitled to participate in such pension, profit sharing, group

insurance, option plans, hospitalization, and group health benefit plans and all

other benefits and plans as the Corporation provides to its senior executives.



                   4.5.  Discretionary Payments. Nothing herein shall preclude

the Corporation for paying Executive such bonus or bonuses or other

compensation, as the Board of Directors, in their discretion, may authorize from

time to time.



           Section 5.    Termination.



                   5.1.  Termination. This Agreement and Executive's employment

hereunder shall terminate upon the death, Total Disability, as hereinafter

defined, termination of employment of Executive For Cause, as hereinafter

defined, Early Termination, as hereinafter defined, or because Executive

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