MASTER SECURITY AGREEMENT

dated as of 12/28/01 ("Agreement")

          THIS AGREEMENT is between General Electric Capital Corporation
(together with its successors and assigns, if any, "Secured Party") and
Pharmaceutical Formulations, Inc. ("Debtor"). Secured Party has an office at 44
Old Ridgebury Road, Danbury, CT 06810-5105. Debtor is a corporation organized
and existing under the laws of the state of Delaware. Debtor's mailing address
and chief place of business is 460 Plainfield Avenue, Edison, NJ 08818.

1. CREATION OF SECURITY INTEREST.

          Debtor grants to Secured Party, its successors and assigns, a security
interest in and against all property listed on any collateral schedule now or in
the future annexed to or made a part of this Agreement ("Collateral Schedule"),
and in and against all additions, attachments, accessories and accessions to
such property, all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof (all such property is individually and
collectively called the "Collateral"). This security interest is given to secure
the payment and performance of all debts, obligations and liabilities of any
kind whatsoever of Debtor to Secured Party, now existing or arising in the
future, including but not limited to the payment and performance of certain
Promissory Notes from time to time identified on any Collateral Schedule
(collectively "Notes" and each a "Note"), and any renewals, extensions and
modifications of such debts, obligations and liabilities (such Notes, debts,
obligations and liabilities are called the "Indebtedness"). Unless otherwise
provided by applicable law, notwithstanding anything to the contrary contained
in this Agreement, to the extent that Secured Party asserts a purchase money
security interest in any items of Collateral ("PMSI Collateral"): (i) the PMSI
Collateral shall secure only that portion of the Indebtedness which has been
advanced by Secured Party to enable Debtor to purchase, or acquire rights in or
the use of such PMSI Collateral (the "PMSI Indebtedness"), and (ii) no other
Collateral shall secure the PMSI Indebtedness.

2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.

          Debtor represents, warrants and covenants as of the date of this
Agreement and as of the date of each Collateral Schedule that:

           (a) Debtor's exact legal name is as set forth in the preamble of this
Agreement and Debtor is, and will remain, duly organized, existing and in good
standing under the laws of the State set forth in the preamble of this
Agreement, has its chief executive offices at the location specified in the
preamble, and is, and will remain, duly qualified and licensed in every
jurisdiction wherever necessary to carry on its business and operations;

           (b) Debtor has adequate power and capacity to enter into, and to
perform its obligations under this Agreement, each Note and any other documents
evidencing, or given in connection with, any of the Indebtedness (all of the
foregoing are called the "Debt Documents");

           (c) This Agreement and the other Debt Documents have been duly
authorized, executed and delivered by Debtor and constitute legal, valid and
binding agreements enforceable in accordance with their terms, except to the
extent that the enforcement of remedies may be limited under applicable
bankruptcy and insolvency laws;

           (d) No approval, consent or withholding of objections is required
from any governmental authority or instrumentality with respect to the entry
into, or performance by Debtor of any of the Debt Documents, except any already
obtained;

           (e) The entry into, and performance by, Debtor of the Debt Documents
will not (i) violate any of the organizational documents of Debtor or any
judgment, order, law or regulation applicable to Debtor, or (ii) result in any
breach of or constitute a default under any contract to which Debtor is a party,
or result in the creation of any lien, claim or encumbrance on any of Debtor's
property (except for liens in favor of Secured Party) pursuant to any indenture,
mortgage, deed of trust, bank loan, credit agreement, or other agreement or
instrument to which Debtor is a party;

           (f) There are no suits or proceedings ending in court or before any
commission, board or other administrative agency against or affecting Debtor
which could, in the aggregate, have a material adverse effect on Debtor, its
business or operations, or its ability to perform its obligations under the Debt
Documents, nor does Debtor have reason to believe that any such suits or
proceedings are threatened;

           (g) All financial statements delivered to Secured Party in connection
with the indebtedness have been prepared in accordance with generally accepted
accounting principles, and since the date of the most recent financial
statement, there has been no material adverse change in Debtors financial
condition;

           (h) The Collateral is not, and will not be, used by Debtor for
personal, family or household purposes;

           (i) The Collateral is, and will remain, in good condition and repair
and Debtor will not be negligent in its care and use;

           (j) Debtor is, and will remain, the sole and lawful owner, and in
possession of, the Collateral, and has the sole right and lawful authority to
grant the security interest described in this Agreement; and

           (k) The Collateral is, and will remain, free and clear of all liens,
claims and encumbrances of any kind whatsoever, except for (i) liens in favor of
Secured Party, (ii) liens for taxes not yet due or for taxes being contested in
good faith and which do not involve, in the judgment of Secured Party, any risk
of the sale, forfeiture or loss of any of the Collateral, and (iii) inchoate
materialmen's, mechanic's, repairmen's and similar liens arising by operation of
law in the normal course of business for amounts which are not delinquent (all
of such liens are called "Permitted Liens").

3. COLLATERAL.

           (a) Until the declaration of any default, Debtor shall remain in
possession of the Collateral; except that Secured Party shall have the right to
possess (i) any chattel paper or instrument that constitutes a part of the
Collateral, and (ii) any other Collateral in which Secured Party's Security
interest may be perfected only by possession. Secured Party may inspect any of
the Collateral during normal business hours after giving Debtor reasonable prior
notice. If Secured Party asks, Debtor will promptly notify Secured Party in
writing of the location of any Collateral.

           (b) Debtor shall (i) use the Collateral only in its trade or
business, (ii) maintain all of the Collateral in good operating order and
repair, normal wear and tear excepted, (iii) use and maintain the Collateral
only in compliance with manufacturers recommendations and all applicable laws,
and (iv) keep all of the Collateral free and clear of all liens, claims and
encumbrances (except for Permitted Liens).

           (c) Secured Party does not authorize, and Debtor agrees it shall not
(i) part with possession of any of the Collateral (except to Secured Party or
for maintenance and repair), (ii) remove any of the Collateral from the
continental United States, or (iii) sell, rent, lease, mortgage, license, grant
a security interest in or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral,

           (d) Debtor shall pay promptly when due all taxes, license fees,
assessments and public and private charges levied or assessed on any of the
Collateral, on its use, or on this Agreement or any of the other Debt Documents.
At its option, Secured Party may discharge taxes, liens, security interests or
other encumbrances at any time levied or placed on the Collateral and may pay
for the maintenance, insurance and preservation of the Collateral and effect
compliance with the terms of this Agreement or any of the other Debt Documents.
Debtor agrees to reimburse Secured Party, on demand, all costs and expenses
incurred by Secured Party in connection with such payment or performance and
agrees that such reimbursement obligation shall constitute Indebtedness.

           (e) Debtor shall, at all times, keep accurate and complete records of
the Collateral, and Secured Party shall have the right to inspect and make
copies of all of Debtor's books and records relating to the Collateral during
normal business hours, after giving Debtor reasonable prior notice.

           (f) Debtor agrees and acknowledges that any third person who may at
any time possess all or any portion of the Collateral shall be deemed to hold,
and shall hold, the Collateral as the agent of, and as pledge holder for,
Secured Party. Secured Party may at any time give notice to any third person
described in the preceding sentence that such third person is holding the
Collateral as the agent of, and as pledge holder for, the Secured Party.

4. INSURANCE.

           (a) Debtor shall at all times bear the entire risk of any loss,
theft, damage to, or destruction of, any of the Collateral from any cause
whatsoever.

           (b) Debtor agrees to keep the Collateral insured against loss or
damage by fire and extended coverage perils, theft, burglary, and for any or all
Collateral which are vehicles, for risk of loss by collision, and if requested
by Secured Party, against such other risks as Secured Party may reasonably
require. The insurance coverage shall be in an amount not less than the full
replacement value of the Collateral, and deductible amounts, insurers and
policies shall be acceptable to Secured Party. Debtor shall deliver to Secured
Party policies or certificates of insurance evidencing such coverage. Each
policy shall name Secured Party as a loss payee, shall provide the coverage to
Secured Party regardless of the breach by Debtor of any warranty or
representation made therein, shall not be subject to co-insurance, and shall
provide that coverage may not be canceled or altered by the insurer except upon
thirty (30) days prior written notice to Secured Party. Debtor appoints Secured
Party as its attorney-in-fact to make proof of loss, claim for insurance and
adjustments with insurers, and to receive payment of and execute or endorse all
documents, checks or drafts in connection with insurance payments. Secured Party
shall not act as Debtor's attorney-in-fact unless Debtor is in default. Proceeds
of insurance shall be applied, at the option of Secured Party, to repair or
replace the Collateral or to reduce any of the Indebtedness.

5. REPORTS.

           (a) Debtor shall promptly notify Secured Party of (i) any change in
the name of Debtor, (ii) any change in the state of its incorporation or
registration, (iii) any relocation of its chief executive offices, (iv) any
relocation of any of the Collateral, (v) any of the Collateral being lost,
stolen, missing, destroyed, materially damaged or worn out, or (vi) any lien,
claim or encumbrance other than Permitted Liens attaching to or being made
against any of the Collateral.

           (b) Debtor will deliver to Secured Party Debtor's complete financial
statements, certified by a recognized firm of certified public accountants,
within ninety (90) days of the close of each fiscal year of Debtor. If Secured
Party requests, Debtor will deliver to Secured Party copies of Debtor's
quarterly financial reports certified by Debtor's chief financial officer,
within ninety (90) days after the close of each of Debtor's fiscal quarter.
Debtor will deliver to Secured Party copies of all Forms 10-K and 10-Q, if any,
within 30 days after the dates on which they are filed with the Securities and
Exchange Commission.

6. FURTHER ASSURANCES.

           (a) Debtor shall, upon request of Secured Party, furnish to Secured
Party such further information, execute and deliver to Secured Party such
documents and instruments (including, without limitation, Uniform Commercial
Code financing statements) and shall do such other acts and things as Secured
Party may at any time reasonably request relating to the perfection or
protection of the security interest created by this Agreement or for the purpose
of carrying out the intent of this Agreement. Without limiting the foregoing,
Debtor shall cooperate and do all acts deemed necessary or advisable by Secured
Party to continue in Secured Party a perfected first security interest in the
Collateral, and shall obtain and furnish to Secured Party any subordinations,
releases, landlord waivers, lessor waivers, mortgagee waiver's, or control
agreements, and similar documents as may be from time to time requested by, and
in form and substance satisfactory to, Secured Party.

           (b) Debtor authorizes Secured Party to file a financing statement and
amendments thereto describing the Collateral and containing any other
information required by the applicable Uniform Commercial Code. Debtor
irrevocably grants to Secured Party the power to sign Debtor's name and
generally to act on behalf of Debtor to execute and file applications for title,
transfers of title, financing statements, notices of lien and other documents
pertaining to any or all of the Collateral; this power is coupled with Secured
Party's interest in the Collateral. Debtor shall, if any certificate of title be
required or permitted by law for any of the Collateral, obtain and promptly
deliver to Secured Party such certificate showing the lien of this Agreement
with respect to the Collateral. Debtor ratifies its prior authorization for
Secured Party to file financing statements and amendments thereto describing the
Collateral and containing any other information required by the Uniform
Commercial Code filed prior to the date hereof.

           (c) Debtor shall indemnify and defend the Secured Party, its
successors and assigns, and their respective directors, officers and employees,
from and against all claims, actions and suits (including, without limitation,
related attorneys' fees) of any kind whatsoever arising, directly or indirectly,
in connection with any of the Collateral.

7. DEFAULT AND REMEDIES.

           (a) Debtor shall be in default under this Agreement and each of the
other Debt Documents if:

                     (i) Debtor breaches its obligation to pay when due any
installment or other amount due or coming due under any of the Debt Documents;

                      (ii) Debtor, without the prior written consent of Secured
Party, attempts to or does sell, rent, lease, license, mortgage, grant a
security interest in, or otherwise transfer or encumber (except for Permitted
Liens) any of the Collateral;

                      (iii) Debtor breaches any of its insurance obligations
under Section 4;

                      (iv) Debtor breaches any of its other obligations under
any of the Debt Documents and fails to cure that breach within thirty (30) days
after written notice from Secured Party;

                      (v) Any warranty, representation or, statement made by
Debtor in any of the Debt Documents or otherwise in connection with any of the
Indebtedness shall be false or misleading in any material respect;

                      (vi) Any of the Collateral is subjected to attachment,
execution, levy, seizure or confiscation in any legal proceeding or otherwise,
or if any legal or administrative proceeding is commenced against Debtor or any
of the Collateral, which in the good faith judgment of Secured Party subjects
any of the Collateral to a material risk of attachment, execution, levy, seizure
or confiscation and no bond is posted or protective order obtained to negate
such risk;

                      (vii) Debtor breaches or is in default under any other
agreement between Debtor and Secured Party;

                      (viii) Debtor or any guarantor or other obligor for any of
the Indebtedness (collectively "Guarantor") dissolves, terminates its existence,
becomes insolvent or ceases to do business as a going concern;

                      (ix) If Debtor or any Guarantor is a natural person,
Debtor or any such Guarantor dies or becomes incompetent;

                      (x) A receiver is appointed for all or of any part of the
property of Debtor or any Guarantor, or Debtor or any Guarantor makes any
assignment for the benefit of creditors;

                      (xi) Debtor or any Guarantor files a petition under any
bankruptcy, insolvency or similar law, or any such petition is filed against
Debtor or any Guarantor and is not dismissed within forty-five (45) days; or

                      (xii) Debtor's improper filing of an amendment or
termination statement relating to a filed financing statement describing the
Collateral;

                      (xiii) Debtor is in default of the Master Lease Purchase
Agreement dated November 2, 2000 between General Electric Capital Business Asset
Funding Corporation as Lessor and Pharmaceutical Formulations, Inc. as Lessee;

                      (xiv) Debtor is in default of the Loan and Security
Agreement ("LSA") dated August 2, 1995 between General Electric Capital Business
Asset Funding Corporation (formerly known as Metlife Capital Corporation) and
ICC Industries, Inc., which LSA was subsequently assigned to Pharmaceutical
Formulations, Inc. through the Assignment and Assumption Agreement dated May 13,
1998 between ICC Industries, Inc. and Pharmaceutical Formulations, Inc.;

                      (xv) Debtor is in default of the Term Promissory Note
dated December 4, 1998 between General Electric Capital Business Asset Funding
Corporation as Payee and Pharmaceutical Formulations, Inc. as Maker.

           (b) If Debtor is in default, the Secured Party, at its option, may
declare any or all of the Indebtedness to be immediately due and payable,
without demand or notice to Debtor or any Guarantor. The accelerated obligations
and liabilities shall bear interest (both before and after any judgment) until
paid in full at the lower of eighteen percent (18%) per annum or the maximum
rate not prohibited by applicable law.

           (c) After default, Secured Party shall have all of the rights and
remedies of a Secured Party under the Uniform Commercial Code, and under any
other applicable law. Without limiting the foregoing, Secured Party shall have
the right to (i) notify any account debtor of Debtor or any obligor on any
instrument which constitutes part of the Collateral to make payment to the
Secured Party, (ii) with or without legal process, enter any premises where the
Collateral may be and take possession of and remove the Collateral from the
premises or store it on the premises, (iii) sell the Collateral at public or
private sale, in whole or in part, and have the right to bid and purchase at
said sale, or (iv) lease or otherwise dispose of all or part of the Collateral,
applying proceeds from such disposition to the obligations then in default. If
requested by Secured Party, Debtor shall promptly assemble the Collateral and
make it available to Secured Party at a place to be designated by Secured Party
which is reasonably convenient to both parties. Secured Party may also render
any or all of the Collateral unusable at the Debtor's premises and may dispose
of such Collateral on such premises without liability for rent or costs. Any
notice that Secured Party is required to give to Debtor under the Uniform
Commercial Code of the time and place of any public sale or the time after which
any private sale or other intended disposition of the Collateral is to be made
shall be deemed to constitute reasonable notice if such notice is given to the
last known address of Debtor at least five (5) days prior to such action.o

           (d) Proceeds from any sale or lease or other disposition shall be
applied; first, to all costs of repossession, storage, and disposition including
without limitation attorneys', appraisers', and auctioneers' fees; second, to
discharge the obligations then in default; third, to discharge any other
Indebtedness of Debtor to Secured Party, whether as obligor, endorser,
guarantor, surety or indemnitor; fourth, to expenses incurred in paying or
settling liens and claims against the Collateral; and lastly, to Debtor, if
there exists any surplus. Debtor shall remain fully liable far any deficiency.

           (e) Debtor agrees to pay all reasonable attorneys' fees and other
costs incurred by Secured Party in connection with the enforcement, assertion,
defense or preservation of Secured Party's rights and remedies under this
Agreement, or if prohibited by law, such lesser sum as may be permitted. Debtor
further agrees that such fees and costs shall constitute Indebtedness.

           (f) Secured Party's rights and remedies under this Agreement or
otherwise arising are cumulative and may be exercised singularly or
concurrently. Neither the failure nor any delay on the part of the Secured Party
to exercise any right, power or privilege under this Agreement shall operate as
a waiver, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise of that or any other right,
power or privilege. SECURED PARTY SHALL NOT BE DEEMED TO HAVE WAIVED ANY OF ITS
RIGHTS UNDER THIS AGREEMENT OR UNDER ANY OTHER AGREEMENT, INSTRUMENT OR PAPER
SIGNED BY DEBTOR UNLESS SUCH WAIVER IS EXPRESSED IN WRITING AND SIGNED BY
SECURED PARTY. A waiver an any one occasion shall not be construed as a bar to
or waiver of any right or remedy on any future occasion.

           (g) DEBTOR AND SECURED PARTY UNCONDITIONALLY WAIVE THEIR RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, ANY OF THE OTHER DEBT DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED
HEREBY, ANY DEALINGS BETWEEN DEBTOR AND SECURED PARTY RELATING TO THE SUBJECT
MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP
THAT IS BEING ESTABLISHED BETWEEN DEBTOR AND SECURED PARTY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER
DEBT DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

8. MISCELLANEOUS.

           (a) This Agreement, any Note and/or any of the other Debt Documents
may be assigned, in whole or in part, by Secured Party without notice to Debtor,
and Debtor agrees not to assert against any such assignee, or assignee's
assigns, any defense, set-off, recoupment claim or counterclaim which Debtor has
or may at any time have against Secured Party for any reason whatsoever. Debtor
agrees that if Debtor receives written notice of an assignment from Secured
Party, Debtor will pay all amounts payable under any assigned Debt Documents to
such assignee or as instructed by Secured Party. Debtor also agrees to confirm
in writing receipt of the notice of assignment as may be reasonably requested by
Secured Party or assignee.

           (b) All notices to be given in connection with this Agreement shall
be in writing, shall be addressed to the parties at their respective addresses
set forth in this Agreement (unless and until a different address may be
specified in a written notice to the other party), and shall be deemed given (i)
on the date of receipt if delivered in hand or by facsimile transmission, (ii)
on the next business day after being sent by express mail, and (iii) on the
fourth business day after being sent by regular, registered or certified mail.
As used herein, the term "business day" shall mean and include any day other
than Saturdays, Sundays, or other days on which commercial banks in New York,
New York are required or authorized to be closed.

           (c) Secured Party may correct patent errors and fill in all blanks in
this Agreement or in any Collateral Schedule consistent with the agreement of
the parties.

           (d) Time is of the essence of this Agreement. This Agreement shall be
binding, jointly and severally, upon all parties described as the "Debtor" and
their respective heirs, executors, representatives, successors and assigns, and
shall inure to the benefit of Secured Party, its successors and assigns.

           (e) This Agreement and its Collateral Schedules constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede all prior understandings (whether written, verbal or
implied) with respect to such subject matter. THIS AGREEMENT AND ITS COLLATERAL
SCHEDULES SHALL NOT BE CHANGED OR TERMINATED ORALLY OR BY COURSE OF CONDUCT, BUT
ONLY BY A WRITING SIGNED BY BOTH PARTIES. Section headings contained in this
Agreement have been included for convenience only, and shall not affect the
construction or interpretation of this Agreement.

           (f) This Agreement shall continue in full force and effect until all
of the Indebtedness has been indefeasibly paid in full to Secured Party or its
assignee. The surrender, upon payment or otherwise, of any Note or any of the
other documents evidencing any of the Indebtedness shall not affect the right of
Secured Party to retain the Collateral for such other indebtedness as may then
exist or as it may be reasonably contemplated will exist in the future. This
Agreement shall automatically be reinstated if Secured Party is ever required to
return or restore the payment of all or any portion of the Indebtedness (all as
though such payment had never been made).

           (g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CONNECTICUT (WITHOUT REGARD TO THE CONFLICT OF
LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, REGARDLESS OF THE LOCATION OF THE EQUIPMENT.

IN WITNESS WHEREOF, Debtor and Secured Party, intending to be legally bound
hereby, have duly executed this Agreement in one or more counterparts, each of
which shall be deemed to be an original, as of the day and year first aforesaid.

SECURED PARTY:

General Electric Capital Corporation

By:       /s/ Cheryle L. Supranovich                              

Name:  Cheryle L. Supranovich                                   

Title:   Risk Analyst                                                       
DEBTOR:

Pharmaceutical Formulations, Inc.

By:      /s/ Walter Kreil                                  

Name:  Walter Kreil                                      

Title:   VP & CFO