Non-restoring Credit Facility Note

CITIZENS BANK OF MASSACHUSETTS NON-RESTORING CREDIT FACILITY NOTE ================================================================================


$1,700,000.00 October 24, 2002


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 200 Highland Avenue, Suite 301, Needham, Massachusetts 02494 (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 ONE MILLION SEVEN HUNDRED THOUSAND DOLLARS ($1,700,000.00), plus interest accrued thereon, in lawful money of the United States of America in immediately available funds pursuant to the terms of the Credit Agreement defined below.


This Note is issued pursuant to that certain Credit Agreement of even date by and between the Borrower and the Bank (as from time to time amended, restated, supplemented or otherwise modified, the "Credit Agreement") and constitutes a `Non-Restoring Credit Facility 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 the Advance under the Non-Restoring Credit Facility evidenced by, among other things, this Note, is made and is 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.


Interest on the unpaid principal balance of the Advance evidenced by this Note shall accrue at the rate selected by the Borrower in accordance with the terms and conditions of the Credit Agreement. Interest shall accrue at a variable rate as a Prime Rate Loan, a LIBOR Advantage Rate Loan, or a LIBOR Rate Loan, as may be selected by the Borrower in accordance with the terms and conditions of the Credit Agreement.


This Note shall be payable in the total number of fifty-nine (59) payments, with the first fifty-eight (58) of such payments to consist of principal in the amount of $28,333.34, plus accrued interest on the unpaid principal balance of this Note calculated and payable as set forth in the Credit Agreement with a final payment to consist of the entire unpaid principal balance, plus accrued interest thereon. The first of said payments is to be made on December 5, 2002, and the remainder of said payments are payable on like day of each succeeding month (with interest being payable in accordance with the provisions of the Credit Agreement), with the final payment, unless sooner paid, to be made on October 24, 2007.


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 Note, at the option of the Bank, the Borrower's right to select pricing options shall cease and the unpaid principal of this Note shall accrue interest at a rate which is 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 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.


Page 1 of 5
The Borrower may prepay this Note, or portions thereof, as provided in the Credit Agreement. The Credit Agreement also sets forth the terms and conditions governing Borrower's right to elect to convert or to renew the principal balance of this Note into another type of Loan.


All payments, including any prepayments as set forth above, shall, at the option of the Bank, be applied first to the payment of all costs and expenses incurred by the Bank arising out of the loan transaction evidenced by this Note for which the Borrower is responsible pursuant to the Credit Agreement and Related Agreements referred to therein a ...