Stock Option Issued To Robert J. Mauro

Grant Date: April 26, 2004


STOCK OPTION


GRANTED BY


ABLE LABORATORIES, INC.


TO


ROBERT MAURO


For valuable consideration, the receipt of which is hereby acknowledged, Able Laboratories, Inc., a Delaware corporation (hereinafter together with its subsidiaries, where the context permits, referred to as the "Company"), hereby grants to the Holder named in Schedule A attached hereto the following Stock Option:


SECTION 1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set forth, the Holder is hereby given the right and option to purchase from the Company shares of the Company's Common Stock, $.01 par value per share (the "Common Stock"). Schedule A attached hereto and hereby incorporated herein sets forth with respect to this option (i) its expiration date, (ii) its exercise price per share, (iii) the maximum number of shares that the Holder may purchase upon exercise hereof, (iv) the vesting schedule, and (v) certain other terms and conditions applicable to this option and incorporated herein. This option shall terminate in all respects, and all rights and options to purchase shares hereunder shall terminate, ten years from the Grant Date set forth above. The right to purchase shares hereunder shall be cumulative.


This Option is not issued under the Company's 2003 Stock Incentive Plan (the "Plan"). However, this Option shall be subject in every respect to the provisions of the Plan, as the same may be amended from time to time, as fully if this Option were issued under the Plan. A copy of the Plan is being delivered herewith, and the Plan is hereby incorporated herein by reference and made a part hereof. In the event of any conflict or inconsistency between the terms of this Option and those of the Plan, the terms of the Plan shall govern.


SECTION 2. EXERCISE OF OPTION. This option shall be exercised by the delivery of written notice to the Company (the "Notice") setting forth the number of shares with respect to which the option is to be exercised and the address to which the certificates for such shares are to be mailed, together with (i) delivery of a personal, certified or bank check or postal money order payable to the order of the Company for an amount equal to the option price for the number of shares specified in the Notice, or (ii) with the consent of the Committee, shares of Common Stock of the Company which (a) either have been owned by the Holder for more than six (6) months and are not subject to restrictions under any Plan on the date of surrender or were not acquired, directly or indirectly, from the Company, and (b) have a fair market value on the date of surrender not greater than the option price for the shares as to which such option is being exercised, or (iii) with the consent of the Committee, delivering to the Company a properly


-1-


executed Notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the purchase price; provided that in the event the Holder chooses to pay the purchase price as so provided, the Holder and the broker shall comply with such procedures and enter into such agreement of indemnity and other agreements as the Committee shall prescribe as a condition of such payment procedure; provided that the Company need not act upon such Notice until the Company receives full payment of the exercise price, or (iv) with the consent of the Committee, any combination of such methods of payment. For the purpose of the preceding sentence, the fair market value per share of the Common Stock so delivered to the Company shall be the closing price per share on the date of delivery as reported by the Nasdaq Stock Market, Inc. ("Nasdaq") or another automated quotation system of the National Association of Securities Dealers, Inc. (the "NASD"), including the OTC Bulletin Board or any successor thereto or, if the Common Stock is not then quoted on Nasdaq or any such automated quotation system, on such registered national securities exchange on which the Common Stock is listed; provided, that, if there is no trading on such date, the fair market value shall be deemed to be the closing price per share on the last preceding date on which the Common Stock was traded. If the Common Stock is not listed on any national registered securities exchange or quoted on Nasdaq or any sich automated quotation system, the fair market value of the Common Stock shall be determined in good faith by the Committee.


SECTION 3. CONDITIONS AND LIMITATIONS. The Company, in its discretion, may file a registration statement on Form S-8 under the Securities Act of 1933, as amended (the "Securities Act") to register shares of Common Stock reserved for issuance under this Option. At any time at which such a registration statement is not in effect, it shall be an additional condition precedent to any exercise of this option that the Holder shall deliver to the Company a customary "investment letter" satisfactory to the Company and its counsel in which, among other things, the Holder shall state that the Holder is purchasing the shares for investment and acknowledges that they are not freely transferable except in compliance with state and federal securities laws.


SECTION 4. DELIVERY OF SHARES. Within a reasonable time after receipt by the Company of the Notice and payment for any shares to be purchased hereunder and, if required as a condition to exercise, the investment letter described in Section 3, the Company will deliver or cause to be delivered to the Holder (or if any other individual or individuals are exercising this option, to such individual or individuals) at the address specified in the Notice a certificate or certificates for the number of shares with respect to which the option is then being exercised, registered in the name or names of the individual or individuals exercising the option, either alone or jointly with another person or persons with rights of survivorship, as the individual or individuals exercising the option shall prescribe in writing to the Company at or prior to such purchase; provided, however, that if any law or regulation or order of the Securities and Exchange Commission or other body having jurisdiction in the premises shall require the Company or the Holder (or the individual or individuals exercising this option) to take any action in connection with the shares then being purchased, the date for the delivery of the certificates for such shares shall be extended for the period necessary to take and complete such action, it being understood that the Company shall have no obligation to take and complete any such action. The Company may imprint upon such certificate the legend set forth in the Plan or such other legends referencing stock transfer restrictions which counsel for the Company considers appropriate. Delivery by the Company of the certif ...