Revolving Credit Note

EXHIBIT 10.2
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CITIZENS BANK OF MASSACHUSETTS REVOLVING CREDIT NOTE --------------------------------------------------------------------------------


$4,000,000.00 February 21, 2003


For value received, Able Laboratories, Inc., a corporation duly organized and existing under the laws of The State of Delaware and having a principal place of business at 6 Hollywood Court, South Plainfield, NJ 07080 (the "Borrower") hereby promises to pay to the order of Citizens Bank of Massachusetts, a Massachusetts banking corporation (the "Bank"), at the office of the Bank located at 28 State Street, Boston, Massachusetts 02109 or at such other address as the holder hereof may designate, the principal sum of FOUR MILLION DOLLARS ($4,000,000.00 ), or the aggregate unpaid principal amount of all advances made by the Bank to the Borrower pursuant to the terms of the Credit Agreement defined below, whichever is less, in lawful money of the United States of America in immediately available funds. If any advances are made during the period from the date hereof until June 30, 2004, (as such date may be extended, in writing, from time to time, in the Bank's sole and absolute discretion, the "Revolving Credit Termination Date"), unless an Event of Default (as defined in the Credit Agreement) occurs, the Borrower may borrow, repay and reborrow as provided in the Credit Agreement, provided that all outstanding principal plus accrued and unpaid interest shall be paid in full on the Revolving Credit Termination Date.


This Note is issued pursuant to that certain Credit Agreement of even date by and between the Borrower and the Bank, as the same has been amended and modified by that certain First Amendment to Credit Agreement ("the "First Amendment") of even date by and between the Borrower and the Bank (collectively, as from time to time amended, restated, supplemented or otherwise modified, the "Credit Agreement") and constitutes the "Revolving Credit Note" as provided therein. Capitalized terms used herein that are not defined shall have the same meanings assigned to such terms in the Credit Agreement. The Bank is entitled to the benefit and security of the Credit Agreement and all of the Related Agreements referred to therein. Reference is hereby made to the Credit Agreement, the terms of which are incorporated herein by reference, for a statement of all of the terms and conditions under which Advances under the Revolving Credit Facility evidenced by, among other things, this Note, are made and are to be repaid. In the event of any inconsistency between the terms of the Credit Agreement and this Note, the terms of the Credit Agreement shall govern and control.


This Revolving Credit Note evidences the Maximum Revolving Credit Facility Limit as defined in Section 2A.1 of the Credit Agreement.


The outstanding principal of all Advances shall accrue interest at the variable rate selected by the Borrower from the interest rate options set forth in the Credit Agreement as either a Prime Rate Loan, a LIBOR Rate Loan or a LIBOR Advantage Rate Loan in accordance with the terms and conditions of the Credit Agreement. The Borrower shall make periodic payments of interest on the unpaid principal balance hereof in accordance with the Credit Agreement.


Interest shall be computed on the basis of a three hundred sixty (360) day year and actual days elapsed. Upon the occurrence of an Event of Default, or after maturity, or after judgment has been rendered on this Revolving Credit Note, at the option of the Bank, the Borrower's right to select pricing options shall cease and the unpaid balance of the Revolving Credit Note shall accrue interest at a rate equal to the Default Rate as set forth in the Credit Agreement. Time is of the essence hereof. If the entire amount of any required principal and/or interest is not paid in full within ten (10) days after the same is due, the Borrower shall pay to the Bank a late fee equal to five percent (5%) of the required payment, with a minimum late charge of $35.00. The date and amount of each Advance under the Non-Restoring


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Credit Facility made by the Bank to the Borrower, the rates of interest applicable thereto and each payment made on account of the principal thereof shall be recorded by the Bank on its books.


The Borrower may prepay this Note, or portions thereof, subject to the prepayment provisions as provided in the Credit Agreement. The Credit Agreement also sets forth terms and conditions governing the Borrower's right to elect to convert or to renew the principal of this Note into another type of Loan.


If, at any time, the aggregate principal amount of all Advances outstanding under this Note shall exceed the Maximum Revolving Credit Limit, the Borrower shall immediately prepay so much of the outstanding principal balance, together with accru ...