Form Of Subscription Agreement

SUBSCRIPTION AGREEMENT


SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of June 5, 2002, by and among Able Laboratories, Inc., a corporation organized under the laws of the State of Delaware (the "Company"), with headquarters located at 200 Highland Avenue, Suite 301, Needham, Massachusetts 02494, and ________ (the "Purchaser").


WHEREAS:


A. The Company and the Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act").


B. The Company desires to sell and issue to the Purchaser, and the Purchaser desires to purchase, for the purchase price set forth at the end of this Agreement, one or more "Units," as hereinafter defined.


NOW, THEREFORE, the Company and the Purchaser hereby agree as follows:


1. PURCHASE AND SALE OF UNITS
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a. Purchase of Units. Subject to the terms and conditions hereof, the undersigned (the "Purchaser") agrees to purchase the number of Units set forth at the end of this Agreement, at a purchase price of $10,000 per unit. Each Unit shall consist of:


(i) One $10,000 unsecured 12% promissory note (the "Note") in the form attached hereto as Exhibit A; and


(ii) One three year warrant to purchase 740 shares of common stock of Able Laboratories, Inc. (the "Company") par value $0.01 per share ("Common Stock") of the Company, at an exercise price of $5.10 per share (the "Warrant," and together with the Note, the "Securities") in the form attached hereto as Exhibit B.


The Purchaser hereby tenders the amount set forth at the end of this Agreement in the form of a check payable to the order of the Company or a wire transfer, in full payment of the purchase price for such Units.


b. Closing. The closing of the sale of the Units shall occur as of June 14, 2002, or such other time as the Company and a majority in interest of the Purchasers may agree. The sum tendered herewith pursuant to paragraph (a) will promptly be remitted to the Company, or third parties for the account of the Company, for its use. Promptly after such sum is remitted to the Company, the Company will cause a certificate for each of the Note and the Warrant purchased hereunder by the undersigned to be issued in the name of and delivered to the undersigned.


c. Acceptance of Agreement. This agreement shall be accepted by the Company when it is signed on behalf of the Company and the subscription price tendered concurrently herewith is transferred to or for the account of the Company (the "Closing"). The Company may refuse to accept any subscription, in whole or in part, in its sole discretion. If the Company rejects a subscription, in whole or in part, it will refund the purchase price for the rejected portion of the subscription.


2. PURCHASER'S REPRESENTATIONS AND WARRANTIES
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The Purchaser represents and warrants to the Company that:


a. Investment Purpose. It is purchasing the Securities for its own account for investment only and not with a present view towards the public sale or distribution thereof, except pursuant to sales that are exempt from the registration requirements of the Securities Act and/or sales registered under the Securities Act. The Purchaser understands that the Purchaser must bear the economic risk of this investment indefinitely, unless the Securities are registered pursuant to the Securities Act and any applicable state securities or blue sky laws or an exemption from such registration is available, and that the Company has no present intention of registering any such Securities.


b. Accredited Investor Status. The Purchaser is an "accredited investor" as defined in Rule 501(a) promulgated under the Securities Act, by reason of meeting one of the qualifications set forth on the "Accredited Investor Questionnaire" attached to this Subscription Agreement as Schedule A.


c. Reliance on Exemptions. The Purchaser understands that the Securities are being offered and sold to the Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser's compliance with, the representations, Notes, agreements, acknowledgments and understandings of the Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.


d. Information. The Purchaser and its counsel or representative, if any, have been furnished all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Purchaser or its counsel or representative. The Purchaser and its counsel, if any, have been afforded the opportunity to ask questions of the Company and have received what such Purchaser believes to be complete and satisfactory answers to any such inquiries.


e. Speculative Investment. The Purchaser has been informed and understands that this investment involves a high degree of risk. In particular, the Purchaser has read and carefully considered the information set forth in all of the "SEC Documents," as hereinafter defined.


f. Governmental Review. The Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.


g. Transfer or Resale. The Purchaser understands that the Securities have not been and are not being registered under the Securities Act or any state securities laws, and may not be transferred unless (a) subsequently registered thereunder, or (b) the Purchaser shall have delivered to the Company an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration. Neither the Company nor any other


-2- person is under any obligation to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.


h. Legends. The Purchaser understands that the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):


The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be sold, transferred or assigned in
the absence of an effective registration statement for the securities
under said Act, or an opinion of counsel, in form, substance and scope
customary for opinions of counsel in comparable transactions, that
registration is not required under said Act or unless the Company is
provided with reasonable assurances that the securities were sold
pursuant to Rule 144 under said Act.


The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped, if (a) the resale of such Security is registered under the Securities Act, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the Securities Act.


i. Authorization; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Purchaser and constitutes the valid and binding agreements of the Purchaser enforceable in accordance with its terms.


j. Location of Purchaser. The Purchaser has advised the Company in writing with respect to the jurisdiction wherein the investment decision regarding the Purchaser's acquisition of the Securities has been made.


3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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The Company represents and warrants to the Purchaser that:


a. Organization and Qualification. The Company is a corporation duly organized and existing in good standing under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction where the failure so to qualify would have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on the operations, properties, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole on a consolidated basis or on the ability of the Company to perform its obligations in connection with the transactions contemplated hereby on a timely basis.


b. Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and perform this Agreement, to issue and sell the Securities in accordance with the terms hereof, and to issue the Warrant Shares upon exercise of the Warrant in accordance with their terms. The execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby (including, without limitation,


-3- the issuance of the Note and the Warrant and the issuance and reservation for issuance of the Warrant Shares) have been duly authorized by the Company's Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its stockholders is required; this Agreement has been duly executed and delivered by the Company; and this Agreement constitutes the valid and binding obligations of the Company enforceable against the Company in accordance with its respective terms. The Warrant Shares have been reserved for issuance and, when issued upon conversion of the Note and payment of the exercise price therefor in accordance with the terms thereof, will be validly issued, fully paid and non-assessable.


c. SEC Documents, Financial Statements. Since December 31, 2000, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (all of the foregoing, filed prior to the date hereof and after December 31, 2000, and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits) incorporated by reference therein, together with any registration statements or other documents filed by the Company pursuant to the Securities Act during such time, being hereinafter referred to herein as the "SEC Documents"). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto.


d. No General Solicitation. Neither the Company nor any person acting for the Company has conducted any "general solicitation," as such term is defined in Regulation D, with respect to any of the Securities being offered hereby.


e. Blue Sky Laws. The Company shall take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Purchaser pursuant to this Agreement under applicable securities or "blue sky" laws of the states of the United States or obtain exemption therefrom, and shall provide evidence of any such action so taken to the Purchaser.


f. Additional Information. Upon the written request of the Purchaser while holding the Note, the Company shall send the following reports to the Purchaser: a copy of its Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, any proxy statements, any Current Reports on Form 8-K and any press releases issued by the Company or any of its subsidiaries.


4. GOVERNING LAW; MISCELLANEOUS
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a. Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts applicable to contracts made and to be performed therein, without regard of its conflict of laws principles. The parties consent to the jurisdiction of the United States District Courts for the District of Massachusetts in any suit or proceeding based on or arising under this Agreement and agree that all claims in respect of such suit or proceeding may be


-4- determined in such court. The parties irrevocably waive the defense of an inconvenient forum to the maintenance of such suit or proceeding. The parties further agree that service of process mailed by first class mail shall be deemed in every respect effective service of process in any suit or proceeding arising hereunder. Nothing herein shall affect a party's right to serve process in any other manner permitted by law. The parties agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner.


b. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties.


c. Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.


d. Severability. 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.


e. Entire Agreement; Amendments. This Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Purchaser make any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Purchaser.


f. Notices. Any notices required or permitted to be given under the terms of this Agreement shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier, overnight delivery service or by confirmed telecopy, and shall be effective five days after being placed in the mail, if mailed, or upon receipt or refusal of receipt, if delivered personally or by courier, overnight delivery service or confirmed telecopy, in each case addressed to a party. The addresses for such communications shall be:


If to the Company:


Able Laboratories, Inc.
200 Highland Street, Suite 301
Needham, Massachusetts 02494
Telecopy: (781) 449-5190
Attention: Dhananjay G. Wadekar


with a copy to:


Foley, Hoag & Eliot LLP
155 Seaport Boulevard
Boston, Massachusetts 02210
Telecopy: (617) 832-7000
Attention: David A. Broadwin, Esq.


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If to Purchaser, to the address set forth on the signature page hereof.


Each party shall provide notice to the other parties of any change in address.


g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other.


h. Publicity. The Purchaser shall not make any press release or other public statement concerning the transactions contemplated hereby without the prior written consent of the Company.


i. Further Assurances. 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.


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IN WITNESS WHEREOF, the undersigned Purchaser and the Company have c ...