Document:

EXHIBIT 4.1
                                                                     -----------

                             ABLE LABORATORIES, INC.

                    CERTIFICATE OF DESIGNATIONS, PREFERENCES

               AND RIGHTS OF SERIES Q CONVERTIBLE PREFERRED STOCK

           The undersigned officer of Able Laboratories, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), does hereby certify that, pursuant to authority
conferred by the Certificate of Incorporation, as amended to date, and pursuant
to the provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of Able Laboratories, Inc., on August 8, 2001
adopted a resolution providing for certain powers, designations, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of certain shares of Series Q Convertible
Preferred Stock, $.01 par value, of the Corporation, which resolution is as
follows:

           RESOLVED: That, pursuant to the authority vested in the Board of
Directors of the Corporation and in accordance with the General Corporation Law
of the State of Delaware and the provisions of the Corporation's Certificate of
Incorporation, the Certificate of Designations, Preferences and Rights of Series
AA Convertible Preferred Stock filed with the Secretary of State of the State of
Delaware on August 15, 2001, providing for the creation of the Series AA
Convertible Preferred Stock, par value $.01 per share, of the Corporation, and
the voting powers, preferences and relative, participating, option and other
special rights and the qualifications, limitations and restrictions thereof, be
and hereby are amended and restated as set forth on Exhibit A attached hereto.

           EXECUTED as of this 15th day of August, 2001.

                                                     ABLE LABORATORIES, INC.

                                                     By:
                                                         --------------------
                                                         Dhananjay G. Wadekar
                                                         President
<PAGE>
                                    EXHIBIT A
                                    ---------

(a)        Description and Designation of Series Q Convertible Preferred Stock
           -------------------------------------------------------------------

           1.  Designation and Definitions.

               (a)  Designation. A total of 61,150 shares of the Corporation's
previously undesignated Preferred Stock, $.01 par value, shall be designated as
the "Series Q Convertible Preferred Stock" (the "Series Q Stock"). The original
issue price per share of the Series Q Stock shall be $100 (the "Original Issue
Price").

                   (i) Certain Definitions. As used herein, the following terms,
unless the context otherwise requires, have the following respective meanings:

                   (ii) "Asset Transfer" means the sale, lease, exchange, or
other transfer of all or 50% or more of the assets of the Corporation in one or
a series of related transactions.

                   (iii) "Business Day" means a day on which the Nasdaq Stock
Market is open for trading and that is neither a Saturday, Sunday nor any other
day on which banks in the City of New York are authorized by law to close.

                   (iv) "Change in Control Transaction" means the occurrence of
either (i) an acquisition after the date hereof by an individual or legal entity
or "group" (as described in Rule 13d-5(b)(1) promulgated under the Securities
Exchange Act of 1934, as amended) of effective control (whether through legal or
beneficial ownership of capital stock of the Corporation, by contract or
otherwise) of in excess of 50% of the voting securities of the Corporation that
it is not approved by the Board of Directors of the Corporation or (ii) a
replacement at one time or over time of more than one-half of the members of the
Corporation's Board of Directors that is not approved by a majority of those
individuals who are members of the Board of Directors on the date hereof (or by
those individuals who are serving as members of the Board of Directors on any
date whose nomination to the board of directors was approved by a majority of
the members of the board of directors who are members on the date hereof.
Notwithstanding the foregoing, a "Change in Control Transaction" shall not
include any increase in the number of directors in connection with the
occurrence of a "Voting Period" as defined in Section 4 below.

                   (v) "Common Stock" means the common stock, par value $.01 per
share, of the Corporation.

                   (vi) "Common Stock Issuable Per Share" on an applicable
Conversion Date or the Conversion Determination Date means the quotient of the
Total Common Stock Issuable divided by the total number of shares of Series Q
Stock issued and outstanding as of the Original Issue Date.

                   (vii) "Conversion Date" means (i) in the case of a conversion
upon the request of a holder of Series Q Stock, 3 days after the Conversion
Notice Date, and (ii) in the case of a conversion upon the request of the
Corporation, the Conversion Notice Date.

                                       -2-
<PAGE>
                   (viii) "Conversion Determination Date" means the date on
which no Floating Rate Convertibles are issued or outstanding.

                   (ix) "Conversion Notice Date" means (i) each date on which
the Corporation receives by telecopy written notice in accordance with Section
5(i) hereof from a holder of Series Q Stock that such holder elects to convert
shares of its Series Q Stock, or (ii) the date on which the Corporation gives by
telecopy written notice to holders of Series Q Stock to convert shares of Series
Q Stock.

                   (x) "Conversion Price" means the quotient of the Original
Issue Price divided by the Common Stock Issuable Per Share

                   (xi) "Conversion Ratio" means, at any time, a fraction the
numerator of which is the Original Issue Price and the denominator of which is
the Conversion Price at such time.

                   (xii) "Event of Default" means the occurrence of any one or
more of the following events:

                       (a) The Corporation shall default in the payment of any
                   amounts owed under the Series Q Stock and the same shall
                   continue for a period of ten days;

                       (b) Any of the representations or warranties made by the
                   Corporation in any Transaction Document (as defined in the
                   Purchase Agreement) shall be false or misleading in any
                   material respect at the time made;

                       (c) The Corporation fails to issue shares of Common Stock
                   to the holder of Series Q Stock or to cause its transfer
                   agent to issue shares of Common Stock upon conversion of the
                   Series Q Stock in accordance with the terms of the Series Q
                   Stock, fails to transfer any certificate for shares of Common
                   Stock issued to the holder upon conversion of the Series Q
                   Stock and when required by the terms of the Series Q Stock or
                   any Transaction Document, and such transfer is otherwise
                   lawful, or fails to remove any restrictive legend or to cause
                   its transfer agent to transfer any certificate or any shares
                   of Common Stock issued to the holder upon conversion of the
                   Series Q Stock as and when required by the terms of the
                   Series Q Stock or any Transaction Document, and such legend
                   removal is otherwise lawful, and any such failure continues
                   uncured for five Business Days;

                       (d) The Corporation fails to perform or observe, in any
                   material respect, any other covenant, term, provision,
                   condition, agreement, or obligation of the Series Q Stock for
                   a period of 30 days after written notice from a holder of
                   such failure;

                                       -3-
<PAGE>
                       (e) The Corporation fails to perform or observe, in any
                   material respect, any covenant, term, provision, condition,
                   agreement, or obligation of the Company under the Purchase
                   Agreement or any other Transaction Document and such failure
                   continues uncured for 30 days after written notice from a
                   holder of such failure;

                       (f) Any governmental agency or any court of competent
                   jurisdiction at the instance of any governmental agency shall
                   assume custody or control of the whole or any substantial
                   portion of the properties or assets of the Corporation and
                   shall not be dismissed within 60 days thereafter;

                       (g) Any money judgment, writ or warrant of attachment, or
                   similar process in excess of $500,000 in the aggregate shall
                   be entered or filed against the Corporation or any of its
                   properties or other assets and shall remain unpaid,
                   unvacated, unbonded, or unstayed for a period of 60 days or
                   in any event later than five days prior to the date of any
                   proposed sale thereunder;

                       (h) The Common Stock is suspended or delisted from
                   trading on the Nasdaq OTC Bulletin Board for in excess of
                   five consecutive Trading Days; or

                       (i) A Change in Control Transaction shall have occurred.

                   (xiii) "Excluded Stock" means (i) shares of Common Stock
issued upon conversion of the Series Q Stock; (ii) shares of Common Stock and/or
options, warrants or other Common Stock purchase rights, and the Common Stock
issued pursuant to such options, warrants or other rights issued after the
Original Issue Date to employees, officers, or directors of, or consultants or
advisors to the Corporation or any subsidiary pursuant to any incentive or bonus
plan or any similar plan or arrangement adopted by the Board of Directors
providing for the issuance of such securities or rights; (iii) shares of Common
Stock issued pursuant to the exercise of options, warrants, purchase rights, or
convertible securities (other than Floating Rate Convertibles) outstanding as of
the Original Issue Date; (iv) shares of Common Stock issued pursuant to a stock
split, combination, dividend or distribution pursuant to Section 5(c)(ii) or
(iii); (v) shares of Common Stock issued for consideration other than cash
pursuant to a merger, consolidation, acquisition, or similar business
combination approved by the Board of Directors; (vi) shares of Common Stock
issued in connection with any other transaction approved by holders of at least
a majority of the outstanding shares of Series Q Stock (voting on an as
converted basis as of the date of such vote); or (vii) any equity securities
issued to any bank, equipment lessor, or equipment vendor pursuant to a
financing agreement that is not for equity financing purposes and that is
approved by the Board of Directors.

                   (xiv) "Floating Rate Convertibles" means shares of Preferred
Stock of the Corporation that are convertible into shares of Common Stock on
terms other than a fixed price per share or a fixed number of shares. Floating
Rate Convertibles shall not include the Series Q Stock.

                                       -4-
<PAGE>
                   (xv) "Fundamental Change" means: (i) an Asset Transfer, or
(ii) any merger or consolidation to which the Corporation is a party.
Notwithstanding the foregoing, the following shall NOT be a Fundamental Change:
a merger or consolidation (a) to which the Corporation is a party; (b) in which
it is the surviving corporation and there is no resulting reclassification of
the outstanding Common Stock; and (c) after giving effect to which, persons who
were, immediately before the consummation or closing of such merger or
consolidation, holders of outstanding Common Stock will be the direct or
indirect owners of securities of the Corporation possessing, on a fully diluted
basis, at least 51% of the voting power of all voting securities of the
Corporation (excluding, for purposes of such computation, any such person who is
also a party to such merger or consolidation).

                   (xvi) "Operating Profit" means the net of (1) revenue less
(2) cost of goods sold plus selling, general and administrative expenses,
depreciation and research and development costs (certain research and
development costs shall be agreed to by the Corporation and the holders of at
least 50% of the then outstanding shares of Series Q Stock) determined in
accordance with generally accepted accounting principles applied in a manner
consistent with the manner in which the Corporation's annual audited financial
statements filed with the Securities and Exchange Commission are prepared.

                   (xvii) "Original Issue Date" means the date of the closing of
the "Purchase Agreement," as defined below.

                   (xviii) "Outstanding Shares" means the number of shares of
Common Stock issued and outstanding plus the total number of shares issuable
upon conversion or exercise of all outstanding convertible securities, excluding
shares of Excluded Stock. The term "Outstanding Shares" shall be deemed to
include shares of Common Stock issued or issuable upon conversion of convertible
securities issued for the purpose of redeeming Floating Rate Convertibles,
notwithstanding the definition of "Excluded Stock" above. If a holder of Series
Q Stock converts any shares of Series Q Stock prior to the Conversion
Determination Date then the number of Outstanding Shares shall be calculated by
the Company for the purpose of the conversion as provided above assuming that
all Floating Rate Convertibles had been converted on the Trading Day immediately
prior to the Conversion Notice Date, PROVIDED, that the Conversion Price
applicable to such holder shall be subject to later adjustment pursuant to the
following sentence. The Outstanding Shares shall be fixed at the number
calculated on the Conversion Determination Date pursuant to this section,
subject to adjustment as provided in Section 5, and such number shall be used as
the number of Outstanding Shares for all future determinations of the Conversion
Price; the Conversion Price of shares of Series Q Stock held by any holder that
has converted any shares of Series Q Stock prior to the Conversion Determination
Date shall be adjusted to yield the applicable aggregate number of shares of
Common Stock upon conversion of the remaining shares of Series Q Stock held by
the holder, as if all shares of Series Q Stock had been converted by the holder
after the Conversion Determination Date. If a holder has already converted all
shares of Series Q Stock before the Conversion Determination Date then the
Company shall after the Conversion Determination Date issue to the holder such
additional number of shares of Common Stock as may be necessary to produce the
aggregate number of shares of Common Stock as contemplated by the previous
sentence.
                                       -5-
<PAGE>
                   (xix) "Preferred Stock" means the preferred stock, par value
$0.01 per share, of the Corporation.

                   (xx) "Purchase Agreement" means the Stock Purchase Agreement
dated August ___, 2001, between the Corporation and the purchasers of the Series
Q Stock.

                   (xxi) "Total Common Stock Issuable" means the product of (i)
the quotient obtained by dividing (a) the number of Outstanding Shares as of the
earlier of an applicable Conversion Date or the Conversion Determination Date by
(b) 0.75 times (ii) 0.25. The calculation of Total Common Stock Issuable is
based upon 60,000 shares of Series Q Preferred Stock issued pursuant to the
Purchase Agreement and the equation contained in the foregoing sentence shall be
adjusted appropriately to account for a larger or smaller number of shares of
Series Q Preferred Stock actually being issued.

                   (xxii) "Trading Day" means a day on which the NASD OTC
Bulletin Board (or such other trading system then in use by the National
Association of Securities Dealers, Inc.), is open for the transaction of
business, or, if the Common Stock is not listed or admitted to a trading system
then in use by the National Association of Securities Dealers, Inc. but is
trading on any securities exchange, a day on which such securities exchange is
open for the transaction of business; or, if the foregoing does not apply, any
Business Day.

           2.  Dividends. Except as expressly provided herein the holders of
shares of Series Q Stock shall not be entitled to dividends.

               (a) The holders of Series Q Stock, in preference to the holders
of the Corporation's Common Stock and Series L and Series P Preferred Stock and
in parity with and in accordance with the terms of the Series N and Series O
Preferred Stock, shall be entitled to receive, when, as and if declared by the
Board of Directors, but only out of funds that are legally available therefor,
cash dividends on each outstanding share of Series Q Stock (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to such shares) at an annual rate per share equal to eight percent (8%)
of the original purchase price of $100 per share of the Series Q Stock (which
amount shall be subject to adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Series Q
Preferred Stock) (the "Series Q Dividends"). The Series Q Dividends shall be
payable before any dividends (whether in cash or property) on any shares of
Common Stock shall be declared or paid or set apart for payment. The Series Q
Stock shall rank senior as to dividends to all other series of preferred stock
outstanding as of the date of filing of this Certificate of Designations other
than Series N Preferred Stock and Series O Preferred Stock, and shall rank on a
parity as to dividends with the Series N Preferred Stock and Series O Preferred
Stock. The Series Q Dividends shall be paid semiannually within thirty (30) days
of the end of each of the second and fourth quarter, PROVIDED, that the
Corporation reports a positive Operating Profit for such period. If the
Corporation does not report a positive Operating Profit for such semiannual
period the Series Q Dividends shall accrue and shall become payable within
thirty (30) days of the end of the next semiannual period in which the
Corporation reports a positive Operating Profit. The Series Q Dividends shall be
deemed to accrue and be cumulative, whether or not earned or declared and
whether or not there are profits, surplus or other funds of the Corporation
legally available for the payment of dividends. If Series Q Dividends in respect
of any prior or
                                       -6-
<PAGE>
current semiannual dividend period shall not have been declared and paid or if
there shall not have been a sum sufficient for the payment thereof set apart,
the deficiency shall first be fully paid before (ii) any dividend or other
distribution in cash or other property shall be paid or declared and set apart
with respect to the Corporation's Common Stock or any class or series of the
Corporation's capital stock ranking junior to the Series Q Stock, now or
hereafter outstanding or (ii) purchase or redemption of any stock ranking junior
to or on a parity with the Series Q Preferred Stock as to dividends or on
liquidation, now or hereafter outstanding. Upon any conversion of the Series Q
Stock, all accumulated and unpaid Series Q Dividends, whether or not declared,
since the date of issue up to and including Conversion Date thereof, shall be
paid by the Corporation.

           The provisions of this Section 2(a) shall not, however, apply to (i)
a dividend payable in Common Stock, or (ii) any repurchase of any outstanding
securities of the Corporation that is unanimously approved by the Corporation's
Board of Directors.

               (b) Declared Dividends on Common Stock. If the Board of Directors
shall declare a cash dividend payable upon the then outstanding shares of Common
Stock, the holders of the Series Q Stock shall be entitled to the amount of cash
dividends on the Series Q Stock as would be declared payable on the number of
whole shares of Common Stock into which the shares of Series Q Stock held by
each holder thereof could be converted pursuant to the provisions of Section 5
hereof, such number determined as of the record date for the determination of
holders of Common Stock entitled to receive such dividend. Such determination of
"whole shares" shall be based upon the aggregate number of shares of Series Q
Stock held by each holder, and not upon each share of Series Q Stock so held by
the holder.

               (c) Dividends on Other Securities. The Board of Directors may
declare and the Corporation may pay or set apart for payment, or cause the
accrual of, stated or cumulative dividends and other distributions on any other
series of Preferred Stock ranking on a parity with or senior to the Series Q
Preferred Stock, and may purchase or otherwise redeem any of the same (or any
warrants, rights, options or other securities exercisable therefor or
convertible or exchangeable therein), and the holders of Series Q Stock shall
not be entitled to share therein.

           3.  Liquidation, Dissolution or Winding Up.

               (a) Treatment at Liquidation, Dissolution or Winding Up. In the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, or in the event of its insolvency, before any
distribution or payment is made to any holders of Common Stock or any other
class or series of capital stock of the Corporation designated to be junior to
the Series Q Stock, and subject to the liquidation rights and preferences of any
class or series of Preferred Stock designated by the Board of Directors to be
senior to or on a parity with the Series Q Stock with respect to liquidation
preferences, the holder of each share of Series Q Stock shall be entitled to be
paid first out of the assets of the Corporation available for distribution to
holders of the Corporation's capital stock of all classes, whether such assets
are capital, surplus or earnings, an amount equal to the Original Issue Price
per share of Series Q Stock held by any holder plus all accrued but unpaid
dividends (the "Liquidation Value"). For purposes hereof, the Series Q Stock
shall rank on liquidation on parity with the Series O Preferred Stock, and
senior to the Common Stock. Subject to the foregoing sentence, the Series Q

                                       -7-
<PAGE>
Stock shall rank on liquidation senior to all other classes of Preferred Stock
outstanding on the Original Issue Date.

           If, upon liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the holders of the Series Q Stock the full amount
to which they otherwise would be entitled, the holders of Series Q Stock shall
share ratably in any distribution of available assets pro rata in proportion to
the respective liquidation preference amounts that would otherwise be payable
upon liquidation with respect to the outstanding shares of the Series Q Stock if
all liquidation preference amounts with respect to such shares were paid in
full, based upon the aggregate Liquidation Value payable upon all shares of
Series Q Stock then outstanding.

           After such payment shall have been made in full to the holders of the
Series Q Stock, or funds necessary for such payment shall have been set aside by
the Corporation in trust for the account of holders of the Series Q Stock so as
to be available for such payment, the remaining assets available for
distribution shall be distributed ratably among the holders of the Common Stock
and any class or series of capital stock designated to be junior to the Series Q
Stock (if any) in right of payment upon any liquidation, dissolution or winding
up of the Corporation.

           The amounts set forth above shall be subject to equitable adjustment
by the Board of Directors whenever there shall occur a stock dividend, stock
split, combination, reorganization, recapitalization, reclassification or other
similar event involving a change in the capital structure of the Series Q Stock.

               (b) Distributions Other Than Cash. Whenever the distributions
provided for in this Section shall be payable in property other than cash, the
value of such distribution shall be the fair market value of such property as
determined in good faith by the Board of Directors. All distributions (including
distributions other than cash) made hereunder shall be made pro rata to the
holders of Series Q Stock.

               (c) Events Not Deemed A Liquidation. A Fundamental Change other
than an Asset Transfer will not be deemed to be a liquidation, dissolution or
winding up of the Corporation under this Section 3. For purposes of this Section
3, a liquidation, dissolution, or winding up of the Corporation shall be deemed
to be occasioned by, or to include, an Asset Transfer. The occurrence of an
Asset Transfer shall entitle the holders of Series Q Stock to receive at the
closing in cash, securities, or other property (valued as provided in paragraph
3(b) above) the respective amounts as specified in paragraph 3(a) in liquidation
of their Series Q Stock, unless the holders of a majority of the outstanding
shares of Series Q Stock, voting separately as a class, affirmatively vote that
such transaction shall not be deemed to be a liquidation, dissolution, or
winding up of the Corporation under this Section 3.

               (d) Notice. Written notice of any liquidation, dissolution, or
winding up of the Corporation, stating the payment date or dates when and the
place or places where the amounts distributable in such circumstances shall be
payable, shall be given by first class mail, postage prepaid, not less than 10
days prior to any payment date stated therein, to the holders of record of the
Series Q Stock at their respective addresses as the same shall appear on the
stock records of the Corporation.

                                       -8-
<PAGE>
           4.  Voting Power.

               (a) General. Except as expressly provided in this Section 4 or as
otherwise required by the General Corporation Law of the State of Delaware, each
holder of Series Q Stock shall be entitled to vote on all matters and shall be
entitled to that number of votes equal to the number of whole shares of Common
Stock into which such holder's shares of Series Q Stock could be converted,
pursuant to the provisions of Section 5 hereof, at the record date for the
determination of stockholders entitled to vote on any matter or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as otherwise required by law, the
holders of shares of Series Q Stock and Common Stock shall vote together (or
render written consent in lieu of a vote) as a single class on all matters
submitted to the stockholders of the Corporation. The determination as to the
number of "whole shares" shall be based upon the aggregate number of shares of
Series Q Stock held by each holder, not upon each share of Series Q Stock so
held by the holder. Fractional votes shall not be permitted and any fractional
voting rights resulting from the above formula shall be rounded to the nearest
whole number (with one-half being rounded upward).

               (b) Special Right to Elect Directors. For as long as at least 50%
of the shares of Series Q Stock originally issued remain outstanding, during any
period in which any one or more of the conditions described below shall exist
(such period being referred to herein as a "Voting Period"), the number of
directors constituting the Board of Directors of the Corporation shall be
automatically increased by the smallest number that would constitute a majority
of the Board of Directors as so increased by such smallest number; and the
holders of shares of Series Q Stock shall be entitled, voting separately as a
class (to the exclusion of the holders of all other securities and classes of
capital stock of the Corporation), to elect such smallest number of additional
directors (the "Series Q Directors"). A Voting Period shall commence:

                   (i) if at any time the Corporation has received a notice of
default on the payment of principal or interest on any material amount of any of
its indebtedness, which default has not been not cured within any applicable
cure period set forth in the instrument evidencing such indebtedness or if there
is no such period, within sixty (60) days of receipt by the Corporation of
notice of the same;

                   (ii) if the Corporation has failed to convert the Series Q
Stock when required pursuant to the terms of this Certificate of Designations,
and such failure remains uncured ten (10) days after receipt by the Corporation
of notice of the same;

                   (iii) if the Corporation has failed to report positive
Operating Profits for any two fiscal quarters during the fiscal year beginning
January 1, 2002; or

                   (iv) if the Corporation has defaulted in any material respect
in one or more provisions of this Certificate of Designations or the Purchase
Agreement, which default has not been cured within sixty (60) days of receipt by
the Corporation of notice of the same.

           Upon termination of a Voting Period, the voting rights described in
this Section 4(b) shall automatically terminate, subject always, however, to the
revesting of such voting rights in the holders of Series Q Stock upon the
commencement of another Voting Period upon a new occurrence of any of the events
described in this Section 4(b).

                                       -9-
<PAGE>
               (c) Voting Procedures. As soon as practicable after the
commencement of a Voting Period as described in Section 4(b), the Corporation
shall call a special meeting of holders of Series Q Stock and mail a notice of
such special meeting to such holders, such meeting to be held not less than 10
nor more than 20 days after the date of mailing of such notice. If the
Corporation fails to send such notice or does not call such a special meeting,
the meeting may be called by any such holder on like notice. The record date for
determining the holders entitled to notice of and to vote at such special
meeting shall be the close of business on the fifth Business Day preceding the
day on which such notice is mailed. At any such special meeting and at each
meeting of stockholder held for the purpose of electing directors during a
Voting Period, the holders of Series Q Stock, voting together as a class (to the
exclusion of the holders of all other securities and classes of capital stock of
the Corporation), shall be entitled to elect the Series Q Directors by a
plurality of the votes cast.

           The terms of office of all persons who are directors of the
Corporation at the time of a special meeting of holders of Series Q Stock to
elect directors shall continue, notwithstanding the election at such meeting by
such holders of the number of directors that they are entitled to elect, and the
persons so elected by such holders and the remaining incumbent directors elected
by the holders of the Common Stock and other series of Preferred Stock, if any,
shall constitute the duly elected directors of the Corporation.

           Simultaneously with the expiration of a Voting Period, the term of
office of the Series Q Directors shall automatically terminate, the number of
directors constituting the Board of Directors of the Corporation shall
automatically be reduced by the number that is has been increased pursuant to
Section 4(b), the remaining directors shall constitute the directors of the
Corporation and the voting rights of such holders of Series Q Stock pursuant to
Section 4(b) above shall automatically terminate, subject to the provisions of
the last sentence of Section 4(b).

           Any Series Q Director may be removed by, and shall not be removed
except by, the vote of the holders of record of a majority of the outstanding
shares of Series Q Stock voting as a class at a meeting of stockholders or of
the holders of Series Q Stock called for the purpose. So long as a Voting Period
shall exist (i) any vacancy in the office of a Series Q Director may be filled
(except as provided in the following clause (ii)) by an instrument in writing
signed by the remaining Series Q Directors and filed with the Corporation and
(ii) in the case of the removal of any Series Q Director, the vacancy may be
filled by the holders of record of the shares of Series Q Stock, voting as a
class, by a plurality of the votes cast, at the same meeting at which such
removal shall be voted.

           On the first date on which less than 50% of the shares of Series Q
Stock originally issued is outstanding, the term of office of the Series Q
Directors shall automatically terminate, the number of directors constituting
the Board of Directors of the Corporation shall automatically be reduced by the
number that is has been increased pursuant to Section 4(b), the remaining
directors shall constitute the directors of the Corporation and the voting
rights of such holders of Series Q Stock pursuant to Section 4(b) above shall
automatically terminate.

                                      -10-
<PAGE>
               (d) Separate Vote of Series Q Stock. For so long as at least 25%
of the shares of Series Q Stock originally issued remain outstanding, in
addition to any other vote or consent required herein or by law, and unless the
vote of holders of a greater number of shares of Series Q Stock shall then be
required by law, the vote or written consent of the holders of a majority of the
outstanding Series Q Stock, voting as a single class, shall be necessary for
effecting or validating the following actions:

                   (i) Any voluntary liquidation, dissolution, or winding up of
the Corporation;

                   (ii) Any Fundamental Change;

                   (iii) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation of the Corporation (including any filing of
a Certificate of Designation, increase in authorized capital stock of the
Corporation, or increase in the authorized shares of any class of Preferred
Stock authorized as of the date hereof), that affects adversely the voting
powers, preferences, or other special rights or privileges, qualifications,
limitations or restrictions of the Series Q Stock;

                   (iv) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the Corporation ranking on a
parity with, or senior to, the Series Q Stock in right of redemption,
liquidation preference, voting, or dividends or any increase in the authorized
or designated number of any such new class or series;

                   (v) Any authorization or any designation, whether by
reclassification or otherwise, of any new Floating Rate Convertibles;

                   (vi) Any payment of dividends or other distributions with
respect to any capital stock of the Corporation that ranks junior to the Series
Q Stock as to dividends or on liquidation while accrued dividends on the Series
Q Stock remain unpaid;

                   (vii) Any creation, incurrence or assumption of any liability
with respect to Indebtedness (as defined below) for money borrowed which exceeds
$500,000 in the aggregate at any time outstanding (excluding working capital
lines, revolving loans, letters of credit or indemnities for letters of credit
issued by others). For purposes hereof, "Indebtedness" shall mean all
obligations, contingent and otherwise, which should, in accordance with
generally accepted accounting principles, be classified upon the obligor's
balance sheet (or the notes thereto) as liabilities, but in any event including
liabilities secured by any mortgage on property owned or acquired subject to
such mortgage, whether or not the liability secured thereby shall have been
assumed, and also including all guaranties, endorsements and other contingent
obligations, in respect of Indebtedness of others, whether or not the same are
or should be so reflected in said balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;

                   (viii) Any grant of an exclusive license to any of the
Corporation's products;

                                      -11-
<PAGE>
                   (ix) Any change in the rights, preferences, or privileges of
the Series Q Stock that would be detrimental to the rights of holders of Series
Q Stock;

                   (x) Any issuance of shares of any class of Preferred Stock
authorized as of the date hereof other than Series Q Stock.

               (e) Class Voting. In addition to any rights granted to a holder
of shares of Series Q Stock pursuant to this Designation, shares of Series Q
Stock shall be entitled to vote as a class or series, separate and apart from
any other series of Preferred Stock or any holders of shares of Common Stock, on
any matter as to which class voting is required under applicable law.

           5.  Conversion Rights.

               (a) Mandatory Conversion. On or after the fifth anniversary of
the date hereof, PROVIDED, THAT no Floating Rate Convertibles are outstanding,
the Corporation may, at its option, by giving written notice to the holders of
shares of Series Q Stock to be converted, convert all outstanding shares of
Series Q Stock into such number of fully paid and non-assessable shares of
Common Stock as shall be determined by multiplying the number of shares of
Series Q Stock being converted by the Conversion Ratio. If the Corporation
elects to convert the outstanding shares of Series Q Stock as provided in this
Section 5(a), the Corporation must also pay at the time of conversion all
accrued but unpaid dividends on the shares of Series Q Stock being converted.

               (b) Optional Conversion. Subject to the provisions of this
Section 5, each holder of Series Q Stock shall have the right, at such holder's
option, to convert at any time any of the shares of Series Q Stock held by such
holder into such number of fully paid and nonassessable shares of Common Stock
as shall be determined by multiplying the number of shares of Series Q Stock
being converted by the Conversion Ratio.

               (c) Intentionally Left Blank.

               (d) Dividends Other Than Common Stock Dividends. In the event the
Corporation shall make or issue, or shall fix a record date for the
determination of holders of Common Stock entitled to receive a dividend or other
distribution (other than a distribution in liquidation or other distribution
otherwise provided for herein) with respect to the Common Stock payable in (i)
securities of the Corporation other than shares of Common Stock or (ii) other
assets (including notes or other indebtedness of the Corporation but excluding
cash dividends or distributions), then and in each such event provision shall be
made so that the holders of the Series Q Stock shall receive upon conversion
thereof in addition to the number of shares of Common Stock receivable
thereupon, the number of securities or such other assets of the Corporation that
they would have received had their Series Q Stock been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the Conversion Date, retained such
securities or such other assets receivable by them during such period, giving
application to all other adjustments called for during such period under this
Section 5 with respect to the rights of the holders of the Series Q Stock.

                                      -12-
<PAGE>
               (e) Subdivision or Combination of Common Stock. In case the
Corporation shall at any time subdivide (by any stock split, stock dividend, or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, or declares a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly additional shares
of Common Stock ("Common Stock Equivalents"), without payment of any
consideration by such holder for the additional shares of Common Stock or the
Common Stock Equivalents (including the additional shares of Common Stock)
issuable upon conversion or exercise thereof), then the number of Outstanding
Shares calculated immediately prior to such subdivision or distribution shall be
proportionately increased to include such Common Stock Equivalents. Conversely,
in case the outstanding shares of Common Stock shall be combined into a smaller
number of shares, by a reverse stock split or otherwise, the number of
Outstanding Shares as calculated immediately prior to such combination shall be
proportionately reduced.

               (f) Capital Reorganization or Reclassification. If the Common
Stock issuable upon the conversion of the Series Q Stock shall be changed into
the same or a different number of shares of any class or classes of capital
stock, whether by capital reorganization, recapitalization, reclassification, or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for elsewhere in this Section 5, or a Fundamental Change), then and in
each such event the holders of Series Q Stock shall have the right thereafter to
convert such shares into the kind and amount of shares of capital stock and
other securities and property receivable upon such reorganization,
recapitalization, reclassification or other change by the holders of the number
of shares of Common Stock into which such shares of Series Q Stock might have
been converted, all subject to further adjustment as provided herein.

               (g) Fundamental Change. If any Fundamental Change shall occur,
then each share of Series Q Stock outstanding as of the date of the consummation
or closing thereof shall be (and be deemed to have been) converted
automatically, without any further action by the holders thereof, into such
number of fully paid and nonassessable shares of Common Stock as shall be
determined by multiplying the number of shares of Series Q Stock then
outstanding by the Conversion Price; provided, however, that in the event of an
Asset Transfer, Section 3(c) hereof shall apply unless holders of a majority of
shares of Series Q Stock elect otherwise pursuant to the provisions of Section
3(c).

           The Corporation shall give notice of a proposed or anticipated
Fundamental Change to all holders of the Series Q Stock not later than ten (10)
days before the expected closing or consummation of such Fundamental Change. The
Corporation also shall give prompt notice of the closing or consummation of such
Fundamental Change to all holders of record of the Series Q Stock as of the date
of such closing or consummation. Each holder of Series Q Stock shall thereupon
promptly surrender for conversion, to the Corporation at its principal office or
to any transfer agent for the Series Q Stock or the Common Stock, all
certificates representing all shares of Series Q Stock held by such holder,
accompanied by a written notice specifying the name or names in which such
holder wishes the certificate(s) for shares of Common Stock to be issued.

               (h) Certificate as to Adjustments; Notice by Corporation. In each
case of an adjustment or readjustment of the Conversion Price, the Corporation
at its expense will furnish each holder of Series Q Stock so affected with a
certificate prepared by an officer of the

                                      -13-
<PAGE>
Corporation, showing such adjustment or readjustment, and stating in detail the
facts upon which such adjustment or readjustment is based.

               (i) Exercise of Conversion Privilege. To exercise its conversion
privilege, a holder of Series Q Stock shall give written notice by telecopy to
the Corporation at its principal office that such holder elects to convert
shares of its Series Q Stock and shall thereafter surrender the original
certificate(s) representing the shares being converted to the Corporation at its
principal office together with an originally executed copy of such notice. Such
notice shall also state the name or names (with its address or addresses, as
well as the address(es) for delivery) in which the certificate(s) for shares of
Common Stock issuable upon such conversion shall be issued. The certificate(s)
for the shares of Series Q Stock surrendered for conversion shall be accompanied
by proper assignment thereof to the Corporation or in blank. As promptly as
practicable after the Corporation receives the original certificate(s) for the
shares of Series Q Stock surrendered for conversion, the proper assignment
thereof to the Corporation or in blank and the original notice of conversion
(collectively, the "Original Documentation"), but in no event more than three
(3) Trading Days after the later of the Corporation's receipt of the Original
Documentation and the Conversion Date (the "Delivery Date"), the Corporation
shall issue and shall deliver to the holder of the shares of Series Q Stock
being converted, at the addresses set forth therefor by the holder, such
certificate(s) as it may request for the number of whole shares of Common Stock
issuable upon the conversion of such shares of Series Q Stock in accordance with
the provisions of this Section 5, and cash, as provided in Section 5(j), in
respect of any fraction of a share of Common Stock issuable upon such
conversion. Such conversion or any conversion upon the request of the
Corporation shall be deemed to have been effected immediately prior to the close
of business on the applicable Conversion Date, and at such time the rights of
the holder as holder of the converted shares of Series Q Stock shall cease and
the person(s) in whose name(s) any certificate(s) for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the
holder(s) of record of the shares of Common Stock represented thereby.

               (j) Cash in Lieu of Fractional Shares. No fractional shares of
Common Stock or scrip representing fractional shares shall be issued upon the
conversion of shares of Series Q Stock. Instead of any fractional shares of
Common Stock that would otherwise be issuable upon conversion of Series Q Stock,
the Corporation shall pay to the holder of the share of Series Q Stock being
converted a cash adjustment in respect of such fractional shares in an amount
equal to the same fraction of the market price per share of the Common Stock (as
determined in a reasonable manner prescribed by the Board of Directors) at the
close of business on the Conversion Date. The determination as to whether or not
any fractional shares are issuable shall be based upon the aggregate number of
shares of Series Q Stock being converted at any one time by any holder thereof,
not upon each share of Series Q Stock being converted.

               (k) Partial Conversion. In the event some but not all of the
shares of Series Q Stock represented by a certificate(s) surrendered by a holder
are converted, the Corporation shall execute and deliver to or on the order of
the holder, at the expense of the Corporation, a new certificate representing
the number of shares of Series Q Stock which were not converted. Such new
certificate shall be so delivered on or prior to the date set forth in Section
5(i) for the delivery of certificates for shares of Common Stock.

                                      -14-
<PAGE>
               (l) Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series Q Stock, such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding shares of
the Series Q Stock (including any shares of Series Q Stock represented by any
warrants, options, subscription or purchase rights for the Series Q Stock), and
if at any time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then outstanding shares
of the Series Q Stock (including any shares of Series Q Stock represented by any
warrants, options, subscriptions or purchase rights for the Series Q Stock),
then the Corporation shall use all means reasonably available to it, and
promptly take any and all actions as may be necessary, to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.

           6.  Notices of Record Date. In the event of any:

               (a) taking by the Corporation of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of capital stock of any
class or any other securities or property, or to receive any other right, or

               (b) capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, or any Asset Transfer, or

               (c) voluntary or involuntary dissolution, liquidation or winding
up of the Corporation,

then and in each such event the Corporation shall telecopy and thereafter mail
or cause to be mailed to each holder of Series Q Stock a notice specifying (i)
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right and a description of such dividend, distribution
or right, (ii) the date on which any such reorganization, reclassification,
recapitalization, Asset Transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective, and (iii) the time,
if any, that is to be fixed, as to when the holders of record of Common Stock
(or other securities) shall be entitled to exchange their shares of Common Stock
(or other securities) for securities or other property deliverable upon such
reorganization, reclassification, recapitalization, Asset Transfer,
consolidation, merger, dissolution, liquidation or winding up. Such notice shall
be telecopied and thereafter mailed by first class mail, postage prepaid, or by
express overnight courier service, at least ten (10) days prior to the date
specified in such notice on which such action is to be taken.

           7.  General.

               (a) Replacement of Certificates. Upon the Corporation's receipt,
from the holder of any certificate evidencing shares of Series Q Stock, of
evidence reasonably satisfactory to the Corporation (an affidavit of such holder
will be satisfactory) of the ownership and the loss, theft, destruction or
mutilation of such certificate, and in the case of any such loss, theft or

                                      -15-
<PAGE>
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation, and in the case of any such mutilation, upon surrender of such
certificate, the Corporation (at its expense) shall execute and deliver to such
holder, in lieu of such certificate, a new certificate that represents the
number of shares represented by, is dated the date of, is issued in the name of
the holder of, and is substantially identical in form of, such lost, stolen,
destroyed or mutilated certificate.

               (b) Payment of Taxes. The Corporation shall pay all taxes (other
than taxes based upon income) and other governmental charges that may be imposed
in connection with the issuance or delivery of any shares of Common Stock (or
other of the Corporation's securities) that results from the conversion of
shares of Series Q Stock pursuant to this Certificate of Designations. If the
Corporation, pursuant to a notice from a holder of any shares of Series Q Stock,
effects the issuance or delivery of any shares of Common Stock (or other of the
Corporation's securities) in any name(s) other than such holder's name, then
such holder shall deliver to the Corporation with the aforesaid notice (A) all
transfer taxes and other governmental charges payable upon the issuance or
delivery of securities in such other name(s) or (B) evidence satisfactory to the
Corporation that such taxes and charges have been or shall be paid in full.

               (c) Status of Redeemed or Converted Shares. Shares of Series Q
Stock that are redeemed, converted or otherwise acquired by the Corporation in
any manner (including by purchase or exchange) shall be canceled and upon
cancellation (i) shall no longer be deemed to be outstanding, (ii) shall become
authorized but unissued shares of preferred stock undesignated as to series, and
(iii) may be reissued as part of another series of preferred stock.

                                      -16-EXHIBIT 4.2
                                                                     -----------

                            STOCK PURCHASE AGREEMENT

           THIS STOCK PURCHASE AGREEMENT is made as of the ___ day of August,
2001, by and between Able Laboratories, Inc. (the "Company"), a corporation
organized under the laws of Delaware with its principal offices at 200 Highland
Avenue, Suite 301, Needham, MA 02494, and each of the persons and entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as EXHIBIT B (which persons and entities are
hereinafter collectively referred to as "Purchasers" and each individually as a
"Purchaser").

           IN CONSIDERATION of the mutual covenants contained in this Agreement,
the parties agree as follows:

           SECTION 1. Authorization of Sale of the Shares. Subject to the terms
and conditions of this Agreement, the Company has authorized the sale and
issuance to the Purchasers of the number of shares (the "Shares") of Series Q
Convertible Preferred Stock $.01 par value per share (the "Series Q Stock"), of
the Company set forth on the signature page hereof. The Series Q Stock shall
have the rights, preferences, privileges, and restrictions set forth in the
Certificate of Designation, Preferences, and Rights of Series Q Stock in the
form attached hereto as EXHIBIT A (the "Designation").

           SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing
(as defined in Section 3), the Company will issue and sell the Shares to each
Purchaser, severally and not jointly, and each Purchaser will buy the number of
Shares from the Company set forth opposite such Purchasers name on EXHIBIT B,
upon the terms and conditions hereinafter set forth, at the purchase price set
forth on EXHIBIT B.

           SECTION 3. Delivery of the Shares at the Closing. The completion of
the purchase and sale of the Shares (the "Closing") shall occur simultaneously
with the execution hereof (the "Closing Date"). At the Closing, the Company will
issue to each Purchaser one or more stock certificates registered in the name of
the Purchaser, or in such nominee name(s) as designated by each Purchaser in
writing, representing the Shares. The name(s) in which the stock certificates
are to be registered are set forth in the Stock Certificate Questionnaire
attached hereto as APPENDIX I. The Company's obligation to complete the purchase
and sale of the Shares being purchased hereunder and deliver such stock
certificates to the Purchasers at the Closing shall be subject to the following
conditions, any one or more of which may be waived by the Company: (a) receipt
by the Company of (i) same-day funds in the full amount of the purchase price
for the Shares being purchased hereunder, (ii) promissory notes previously
issued by the Company in the amounts set forth on Schedule 3, for cancellation
as payment of the purchase price for the shares being purchased hereunder, (iii)
a cash advance or accruals for services rendered to the Company as set forth on
Schedule 3, or (iv) any combination of such methods of payment; and (b) the
accuracy in all material respects of the representations and warranties made by
the Purchasers and the fulfillment of those undertakings of the Purchasers to be
fulfilled prior to or at the Closing. The Purchasers' obligation to accept
delivery of such stock certificate(s) and to pay for the Shares evidenced
thereby shall be subject to the accuracy in all material respects of the
<PAGE>
representations and warranties made by the Company herein and the fulfillment of
those undertakings of the Company to be fulfilled prior to or at the Closing.

           SECTION 4. Representations, Warranties and Covenants of the Company.
The Company hereby represents and warrants to, and covenants with, the
Purchasers as follows:

           4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; and the Company is duly qualified to do business as a foreign
corporation and is good standing in each other jurisdiction in which
qualification is required, except where the failure to be so qualified will not
have a Material Adverse Effect, as defined in Section 4.4.

           4.2 Authorized Capital Stock.  Immediately prior to the Closing, the
authorized capital stock of the Company consists of:

                      (i) 225,000,000 shares of Common Stock, $.01 par value per
           share, (the "Common Stock") of which 127,977,653 shares are issued
           and outstanding at the close of business on August 7, 2001; and

                      (ii) 10,000,000 shares of Preferred Stock, $.01 par value
           per share. Each series of Preferred Stock designated by the Board of
           Directors is listed on Schedule 4.2 hereto.

All subscriptions, warrants, options, convertible securities, and other rights
(contingent or other) to purchase or otherwise acquire equity securities of the
Company issued and outstanding immediately prior to the Closing, or contracts,
commitments, understandings, or arrangements by which the Company or any of its
subsidiaries is or may be obligated to issue shares of Common Stock, or
securities or rights convertible or exchangeable for shares of Common Stock, are
as set forth on Schedule 4.2 hereto. Except as set forth on Schedule 4.2, no
Common Stock nor any subscription, warrant, option, convertible security, or
other right (contingent or other) to purchase or otherwise acquire equity
securities of the Company is outstanding on the Closing Date. The issued and
outstanding shares of the Company's capital stock have been duly authorized and
validly issued, are fully paid and nonassessable, have been issued in compliance
with all applicable federal and state securities laws, and were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities. No holder of Common Stock is entitled to preemptive
or similar rights.

           4.3. Issuance, Sale and Delivery of the Shares. The Shares being
purchased hereunder have been duly authorized and, when issued, delivered and
paid for in the manner set forth in this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances other than liens or encumbrances created or imposed upon the
Purchasers. The shares of Common Stock issuable upon conversion of the Shares
(the "Conversion Shares") have been duly and validly reserved for issuance upon
conversion of the Shares and, when so issued, will be duly authorized, validly
issued, fully paid and nonassessable shares of Common Stock, and will be free of
any liens or encumbrances or rights of first refusal other than liens or
encumbrances created by or imposed upon the Purchasers. Except as listed on
Schedule 4.3, no preemptive rights or similar rights of any stockholder of the

                                       -2-
<PAGE>
Company or any of its subsidiaries to subscribe for or purchase exist with
respect to the issuance and sale of the Shares or the issuance and delivery of
the Conversion Shares by the Company pursuant to this Agreement. Except as
contemplated by Section 7.5 of this Agreement, no further approval or authority
of the stockholders or the Board of Directors of the Company will be required
for the issuance and sale of the Shares to be sold by the Company as
contemplated herein or for the issuance and delivery of the Conversion Shares.
The Company's issuance of the Shares and the Conversion Shares shall be in
compliance with all applicable federal and state securities laws.

           4.4. Due Execution, Delivery and Performance of the Agreements. The
Company has full corporate power and authority to own and operate its properties
and assets, to enter into this Agreement and the Registration Rights Agreement
in the form attached hereto as EXHIBIT C (the "Registration Rights Agreement"
and, together with this Agreement and the Designation, the "Transaction
Documents"), to issue and sell the Shares and the Conversion Shares, and perform
the transactions contemplated by this Agreement and the Registration Rights
Agreement. The Transaction Documents have been duly authorized, and at the
Closing the Transaction Documents will have been duly executed and delivered by
the Company. The execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions
therein contemplated will not violate any provision of the Certificate of
Incorporation or by-laws of the Company.

           The execution, delivery and performance of the Transaction Documents
by the Company and the consummation by the Company of the transactions therein
contemplated will not result in the creation of any lien, charge, security
interest or encumbrance upon any assets of the Company pursuant to the terms or
provisions of, or conflict with, result in the breach or violation of, or
constitute, either by itself or upon notice or the passage of time or both, a
default under any material agreement, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Company is a party
or by which the Company or any of its properties may be bound or affected and in
each case which individually or in the aggregate would have a material adverse
effect on the condition (financial or otherwise), properties, business,
prospects, or results of operations of the Company and its subsidiaries, taken
as a whole (a "Material Adverse Effect"), or any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company or
any of its respective properties. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other governmental
body is required for the execution and delivery of the Transaction Documents or
the consummation of the transactions contemplated by the Transaction Documents,
except for compliance with all federal and state securities laws applicable to
the offering and sale of the Shares.

           Upon its execution and delivery, and assuming the valid execution
thereof by the Purchaser, the Transaction Documents will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

                                       -3-
<PAGE>
           4.5 Good Standing of Subsidiaries. Each of the Company's subsidiaries
(i) is listed on Schedule 4.5, (ii) has been duly organized and is validly
existing in good standing under the laws of the jurisdiction of its
incorporation, (iii) has corporate power and authority to own, lease and operate
its properties and to conduct its business as conducted and as proposed to be
conducted, and (iv) is duly qualified and is in good standing as a foreign
corporation in each jurisdiction in which such qualification is required, except
where the failure to be so qualified will not have a Material Adverse Effect.
All of the issued and outstanding capital stock of each such subsidiary has been
duly authorized and validly issued, is duly paid and nonassessable and is owned
by the Company free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; and none of the outstanding shares of capital
stock of each such subsidiary was issued in violation of any preemptive or
similar rights of any third party.

           4.6 No Defaults. The Company is not in violation of or default under
any provision of its Certificate of Incorporation or bylaws, or other
organizational documents. Except as disclosed in the Information Documents (as
that term is defined in Section 4.17 below), neither the Company nor any of its
subsidiaries, and to the best of the Company's knowledge, no other party
thereto, is in breach of or default with respect to any provision of any
agreement, judgment, decree, order, mortgage, deed of trust, lease, franchise,
license, indenture, permit or other instrument to which the Company or any of
its subsidiaries is a party or by which the Company, any of its subsidiaries, or
any of their properties are bound; and there does not exist any state of facts
which, with notice or lapse of time or both, would constitute an event of
default as defined in such documents on the part of the Company or any of its
subsidiaries, except for such breaches and defaults that individually or in the
aggregate would not have a Material Adverse Effect. Neither the Company nor any
of its subsidiaries is in violation of any judgment, order, or decree by which
the Company, any of its subsidiaries, or their properties is bound. Neither the
Company nor any of its subsidiaries is in violation of any statute, rule, or
regulation of any governmental authority, except for such violations that
individually or in the aggregate would not have a Material Adverse Effect.

           4.7 No Actions. Except as disclosed in the Information Documents,
there are no legal or governmental actions, suits or proceedings, or
investigation pending or, to the best of the Company's knowledge, threatened to
which the Company or any of its subsidiaries is or may be a party or of which
property owned or leased by the Company or any of its subsidiaries is or may be
subject (except for litigation that individually or in the aggregate would not
have a Material Adverse Effect); and no material labor problem or labor
disturbance by the employees of the Company or any of its subsidiaries exists,
or, to the best of the Company's knowledge, is imminent. Except for the
"Stipulated Order Amending Agreed Order Of Permanent Injunction" entered in the
matter captioned United States v. Able Laboratories, Inc., Civ. Action No.
91-4916 (D.N.J.), neither the Company nor any of its subsidiaries is a party to
or subject to the provisions of any injunction, judgment, decree or order of any
court, regulatory body, administrative agency or other governmental body.

           4.8 Properties. The Company and each of its subsidiaries has, as of
the applicable dates referred to therein, good and marketable title to all the
properties and assets reflected as owned by it in the financial statements
included in the Information Documents, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except (i) those, if any, reflected in such
financial statements or listed in Schedule 4.8, or (ii) those that are not

                                       -4-
<PAGE>
material in amount and do not adversely affect the use made and currently
proposed to be made of such property by the Company or such subsidiary. The
Company and its subsidiaries hold their leased properties under valid and
binding leases. The Company and its subsidiaries own or lease all such
properties as are necessary to their operations as now conducted. Neither the
Company nor any of its subsidiaries own any real property. Any real property and
facilities held under lease by the Company and its subsidiaries are held by them
under valid, subsisting, and enforceable leases of which the Company and its
subsidiaries are in compliance.

           4.9 No Material Change. Since December 31, 2000, except as disclosed
in the Information Documents: (i) the Company and its subsidiaries have not
incurred any material liabilities or obligations, indirect or contingent, or
entered into any material verbal or written agreement or other transaction that
is not in the ordinary course of business; (ii) the Company and its subsidiaries
have not sustained any material loss or interference with their businesses or
properties from fire, flood, windstorm, accident or other calamity, whether or
not covered by insurance; (iii) the Company has not paid or declared any
dividends or other distributions with respect to its Common Stock, and the
Company and each of its subsidiaries is not in default in the payment of
principal or interest on any outstanding debt obligations, if any; (iv) there
has not been any material change in the indebtedness material to the Company or
any of its subsidiaries, other than the promissory notes issued by the Company
that are being cancelled pursuant to this Agreement or other than in the
ordinary course of business; and (v) there has not been a Material Adverse
Effect in the condition (financial or otherwise), properties, business or
results of operations of the Company or any of its subsidiaries.

           4.10    Intellectual Property.

                   (a) The Company and its subsidiaries own or have the right to
use all Intellectual Property Rights (as defined below) used by the Company and
its subsidiaries for the conduct of their respective businesses, which
Intellectual Property Rights are the only Intellectual Property Rights necessary
or required for the conduct of their respective businesses as they are currently
being conducted.

                   (b) Neither the Company nor any of its subsidiaries is in
default of its obligations to pay royalties or other amounts to other persons by
reason of the ownership or use of any Intellectual Property Rights used by the
Company and its subsidiaries for the conduct of their respective businesses.

                   (c) No Intellectual Property Right owned by the Company or
any of its subsidiaries violates or will violate any license or infringes or
will infringe any Intellectual Property Rights of another. To the best of the
Company's knowledge, no Intellectual Property Right, product or service
marketed, sold or licensed (as licensor or as licensee) by the Company or any of
its subsidiaries, violates or will violate any license or infringes or will
infringe any Intellectual Property Rights of another, nor has the Company or any
of its subsidiaries received any notice that any of the Intellectual Property
Rights used by the Company or any of its subsidiaries for the conduct of their
respective businesses, conflicts or will conflict with the rights of others.

                                       -5-
<PAGE>
                   (d) There are no claims pending or, to the best of the
Company's knowledge, threatened with respect to any Intellectual Property Rights
necessary or required for the conduct of the business of the Company or any of
its subsidiaries as currently conducted, nor, to the best of the Company's
knowledge, does there exist any basis therefor.

As used herein, the term "Intellectual Property Rights" means all patents,
trademarks, service marks, trade names, copyrights, inventions, trade secrets,
know-how, licenses, proprietary processes and formulae and applications for
patents, trademarks, service marks and copyrights.

           4.11    Compliance. The Company and each of its subsidiaries is in
possession of all permits, licenses, and other authorizations material to the
conduct of its business as currently conducted or as proposed to be conducted.
The Company has not been advised, and has no reason to believe, that the Company
or any of its subsidiaries is not conducting business in compliance with all
licenses, permits, and other authorizations material to the conduct of their
business and with all applicable laws, rules, and regulations of the
jurisdictions in which it is conducting business, except where failure to be in
compliance would not have a Material Adverse Effect.

           4.12    Taxes. The Company and each of its subsidiaries has filed all
federal, state, county and local tax returns, required to be filed by it, and
the Company and each of its subsidiaries has paid all taxes shown to be due by
such returns as well as all other taxes, assessments and governmental charges
that have become due or payable, including, without limitation, all taxes that
the Company or such subsidiary is obligated to withhold from amounts owing to
employees, creditors and third parties. The Company and its subsidiaries have
established adequate reserves for all taxes accrued but not yet payable. No
audit, action, suit, proceeding, claim, examination, deficiency, or assessment
is currently pending or, to the best of the Company's knowledge, threatened
against the Company or any of its subsidiaries. There is no tax lien (other than
for current taxes not yet due and payable), whether imposed by a Federal, state,
county, or local taxing authority, outstanding against the assets, properties or
business of the Company or any of its subsidiaries.

           4.13    Investment Company.  The Company is not regulated or required
to be registered as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.

           4.14    Integration, etc. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Company that would bring the offer, issuance or sale of the
Shares, as contemplated by this Agreement, within the provisions of Section 5 of
the Securities Act of 1933, as amended (the "Securities Act"). Neither the
Company nor any of its Affiliates (as defined in Rule 501(b) of Regulation D
under the Securities Act) has directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of, any
"security" (as defined in the Securities Act) which is or could be integrated
with the sale of the Shares in a manner that would require the registration
under the Securities Act of the Shares or (ii) engaged in any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) in connection with the offering of the Shares or in
any manner involving a public offering within the meaning of Section 4(2) of the
Act.
                                       -6-
<PAGE>
           4.15    Insurance.  The Company maintains the insurance policies
summarized on Schedule 4.15.  To the knowledge of the Company, all such
insurance policies are in full force and effect.

           4.16  Reporting Company; Listed Securities. The Company has filed all
reports and statements required to be filed by Sections 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the two
years preceding the Closing Date on a timely basis and has been subject to such
filing requirements for such two year period. The Company's Common Stock is
quoted on the OTC Bulletin Board Market and is listed for trading on the Boston
Stock Exchange. As of the Closing Date, the Company meets all the requirements
for continued listing on the OTC Bulletin Board Market and the Boston Stock
Exchange, and to the best of the Company's knowledge, there is no stop order
suspending the trading of the Common Stock on the OTC Bulletin Board Market or
the Boston Stock Exchange or any information that would result in the Common
Shares being delisted from the OTC Bulletin Board Market or the Boston Stock
Exchange. All material agreements to which the Company is a party or to which
the property or assets of the Company are subject have been filed as exhibits to
the Information Documents as required under the Exchange Act.

           4.17 Additional Information. A true and complete copy of each report,
schedule, registration statement and definitive proxy statement filed by the
Company with the Commission under the Securities Act and the Exchange Act during
the twelve (12) months preceding the Closing Date (as such documents have since
the time of their filing been amended together with all documents incorporated
by reference therein or attached as exhibits thereto, the "Information
Documents"), which include all the documents (other than preliminary material)
that the Company was required to file with the Commission under the Exchange Act
since such date, has been made available to the Purchasers. As of their
respective dates, each Information Document and any forms, reports and other
documents filed by the Company during the period commencing on the date of this
Agreement and ending on the last date on which the Company is required to
maintain the effectiveness of the registration statement referred to in the
Registration Rights Agreement (the "Registration Statement"), complied or will
comply in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the
Commission thereunder applicable to the Information Documents or such other
forms, reports or other documents, and no Information Document contained, or
will contain at the time it was or is filed, any untrue statement of a material
fact or omitted, or will omit at the time they are filed, to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. The
financial statements, together with the related notes, of the Company included
in the Information Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Commission with respect thereto, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by the rules and regulations of
the Commission) and fairly present (subject, in the case of the unaudited
statements, to normal, recurring audit adjustments, which were not individually
or in the aggregate material) in all material respects the financial position of
the Company and its consolidated subsidiaries as at the dates thereof and their
consolidated results of operations and cash flows for the periods then ended.
There were no material liabilities, direct or indirect, fixed or contingent, of

                                       -7-
<PAGE>
the Company and its consolidated subsidiaries as of the respective dates of such
financial statements that generally accepted accounting principles would require
to be reflected therein that are not reflected therein or in the notes thereto.
Since March 31, 2001, except as disclosed in the Information Documents (i) there
has been no material change in the consolidated condition, financial or
otherwise, or operations of the Company and its consolidated subsidiaries, (ii)
except as set forth in Schedule 4.17 neither the Company nor any of its
consolidated subsidiaries has incurred any indebtedness for money borrowed or
any material liability, contingent or otherwise, except in the ordinary course
of business or entered into any material commitment or other transaction not in
the ordinary course of business, (iii) there has been no event, occurrence, or
development that has resulted or that could result in a Material Adverse Effect,
(iv) the Company has not declared or made any payment or distribution of cash or
other property to its stockholders, officers, or directors (other than in
compliance with existing compensation agreements or stock option plans) with
respect to its capital stock, or purchased, redeemed (or made any agreements to
purchase or redeem) any shares of its capital stock, and (v) the Company has not
altered its method of accounting.

           4.18    Legal Opinion.  At the Closing, the Company will cause Foley,
Hoag & Eliot LLP, counsel to the Company, to deliver a legal opinion to the
Purchasers as to the matters set forth in EXHIBIT D hereto.

           4.19 Outstanding Registration Rights. Except as described in Schedule
4.19, the Company is not a party to any contract or agreement pursuant to which
any other party or parties thereto have the right to require the Company (on a
best efforts basis or otherwise) (i) to register securities of the Company under
the Securities Act for sale by or on behalf of such party or parties or (ii) to
notify such party or parties of the Company's intention to file a registration
statement under the Securities Act and at the request of such party or parties
to include therein securities of the Company for sale by or on behalf of such
party or parties.

           4.20    Environmental and Safety Laws. To the Company's knowledge,
neither the Company nor any of its subsidiaries is in violation of any
applicable statute, law, or regulation relating to the environment or
occupational health and safety, and to its knowledge, no material expenditures
are or will be required in order to comply with any such existing statute, law,
or regulation.

           4.21    Other Adverse Facts, etc. To the best of the Company's
knowledge, there are no existing facts or circumstances that materially and
adversely affect, or (insofar as the Company can now reasonably foresee) in the
future may materially and adversely affect, the business, results of operations,
or condition, financial or otherwise, of the Company and its consolidated
subsidiaries that are not disclosed in the Information Documents or in this
Agreement or any exhibit or schedule hereto, or which are required to be
disclosed by the Company in an Information Document.

           SECTION 5.  Representations, Warranties and Covenants of the
Purchaser.

           5.1     Each Purchaser, individually and not jointly, represents and
warrants to, and covenants with, the Company that: (i) it is knowledgeable,
sophisticated and experienced in making, and is qualified to make, decisions
with respect to investments in securities representing an investment decision

                                       -8-
<PAGE>
like that involved in the purchase of the Shares, including investments in
securities issued by the Company, and has requested, received, reviewed and
understood all information it deems relevant in making an informed decision to
purchase the Shares, including, without limitation, the information contained in
the Information Documents; (ii) it acknowledges that the offering of the Shares
pursuant to this Agreement has not been reviewed by the Commission or any state
regulatory authority; (iii) it is acquiring the number of Shares set forth in
the signature page hereto, for its own account for investment only and with no
present intention of distributing any of such Shares or any arrangement or
understanding with any other persons regarding the distribution of such Shares;
(iv) it will not, directly or indirectly, offer, sell, pledge, transfer or
otherwise dispose of (or solicit any offers to buy, purchase or otherwise
acquire or take a pledge of) any of the Shares except in compliance with the
Securities Act, rules and regulations promulgated under the Securities Act and
any applicable state securities or blue sky laws; (v) it has completed or caused
to be completed the Stock Certificate Questionnaire, attached hereto as APPENDIX
I and will at the Company's request the Registration Statement Questionnaire
complete or cause to be completed the Registration Statement Questionnaire
attached hereto as APPENDIX II, for use in preparation of the Registration
Statement, and the answers thereto are true and correct as of the date hereof
and will be true and correct as of the effective date of the Registration
Statement; (vi) it has, in connection with its decision to purchase the number
of Shares set forth on the signature page hereof, not relied upon any
representations or other information (whether oral or written) other than as set
forth in the Information Documents and the representations and warranties of the
Company contained herein; (vii) it has had an opportunity to discuss this
investment with representatives of the Company and ask questions of them and
such questions have been answered to the full satisfaction of the Purchaser; and
(viii) it is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act.

           5.2    Each Purchaser, individually and not jointly, hereby covenants
with the Company not to make any sale of the Shares without satisfying the
prospectus delivery requirements under the Securities Act, if any.

           5.3  Each Purchaser, individually and not jointly, further represents
and warrants to, and covenants with, the Company that (i) the Purchaser has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
(ii) the Purchaser is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, (iii) no consent, approval,
authorization, or other order of any court, regulatory body, administrative
agency or other governmental body that has not been obtained is required on the
part of the Purchaser for the execution and delivery of this Agreement or the
consummation of the transactions contemplated by this Agreement, and (iv) upon
the execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (v) there
is not in effect any order enjoining or restraining the Purchaser from entering
into or engaging in any of the transactions contemplated by this Agreement.

                                       -9-
<PAGE>
           5.4 Each Purchaser, individually and not jointly, recognizes that an
investment in the Shares is speculative and involves a high degree of risk,
including a risk of total loss of the Purchaser's investment.

           5.5 Each Purchaser, individually and not jointly, represents and
warrants that all of the information provided to the Company or its agents or
representatives concerning such Purchaser's suitability to invest in the Company
and the representations and warranties contained herein, are complete, true, and
correct as of the date hereof, and understands that the Company is relying on
the statements contained herein to establish an exemption from registration
under U.S. federal and state securities laws.

           5.6 Each Purchaser, individually and not jointly, represents and
warrants that the address set forth in the signature page hereto is such
Purchaser's true and correct domicile.

           5.7 Each Purchaser, individually and not jointly, covenants to
provide the Company an updated, accurate and complete plan of distribution at
all times during which the Company is required to keep the Registration
Statement in effect.

           5.8 Each Purchaser, individually and not jointly, understands and
agrees that each certificate or other document evidencing any of the Shares
shall be endorsed with a legend in substantially the form set forth below as
well as any other legends required by applicable law, and the Purchaser
covenants that the Purchaser shall not transfer the Shares represented by any
such certificate without complying with the restrictions on transfer described
in the legends endorsed on such certificate:

           THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
           BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
           AMENDED ("SECURITIES ACT"), OR REGISTERED OR QUALIFIED
           UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE
           SECURITIES MAY NOT BE TRANSFERRED UNLESS (A) COVERED BY AN
           EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
           AND REGISTERED OR QUALIFIED UNDER APPLICABLE STATE
           SECURITIES LAWS OR (B) EXEMPTIONS FROM SUCH REGISTRATION OR
           QUALIFICATION REQUIREMENTS ARE AVAILABLE. AS A CONDITION TO
           PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY
           MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL
           ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT NO
           REGISTRATION OR QUALIFICATION IS LEGALLY REQUIRED FOR SUCH
           TRANSFER.

           SECTION 6.Survival of Representatives and Warranties. Notwithstanding
any investigation made by any party to this Agreement, all representations and
warranties made by the Company and the Purchasers herein and in any certificates

                                      -10-
<PAGE>
or documents delivered pursuant hereto or in connection therewith shall survive
following the delivery to the Purchasers of the Shares being purchased and the
payment therefor.

           SECTION 7.  Covenants.

           7.1.   Corporate Existence. The Company will take all steps necessary
to preserve and continue the corporate existence of the Company. The Company
will comply with all applicable laws and regulations, decrees, orders,
judgements, licenses, and permits ("Applicable Laws"), except where
non-compliance with such Applicable Laws would not have a Material Adverse
Effect.

           7.2.  Reservation of Common Stock. As of the date hereof, the Company
has authorized and reserved and the Company shall continue to reserve and keep
available, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to issue the Conversion Shares. The number of shares so
reserved shall be increased or decreased to reflect adjustments in the number of
Conversion Shares issuable upon conversion of the Shares.

           7.3.   Exchange Act Registration. The Company will maintain the
registration of its Common Stock under Section 12 of the Exchange Act, will
comply in all respects with its reporting and filing obligations under the
Exchange Act, and will not take any action or file any document (whether or not
permitted by the Exchange Act or the rules thereunder) to terminate or suspend
such registration or to terminate or suspend its reporting and filing
obligations under said Act, until the date which is two years from the Closing
Date.

           7.4. Listing of Common Stock. The Company shall prepare and file with
the Boston Stock Exchange an additional shares listing application covering a
reasonable estimate of the Conversion Shares issuable upon conversion of the
Shares and take all steps necessary to cause such shares to be approved for
listing as soon as practicable thereafter. In addition, if at any time the
number of Conversion Shares issuable upon conversion of the Shares is greater
than the number of shares of Common Stock theretofore listed on the Boston Stock
Exchange, the Company shall promptly take such action to file an additional
shares listing application covering such additional number of shares of Common
Stock.

           7.5. Increase in Authorized Shares. As such time as the Company would
be, if all outstanding Shares were immediately converted, precluded from
honoring the conversion of the Shares in full due to the unavailability of a
sufficient number of shares of authorized but unissued Common Stock, the Board
of Directors of the Company shall promptly (an in any case within 90 days from
such date) hold a stockholders meeting at which the stockholders would vote to
amend the Company's Certificate of Incorporation to increase the number of
authorized shares of Common Stock to at least a number of shares equal to the
sum of (i) all shares of Common Stock then outstanding, (ii) the number of
shares of Common Stock issuable on account of all outstanding warrants, options,
and convertible securities (other than the Shares) and on account of all shares
reserved under any stock option, stock purchase, or similar plan, and (iii) such
number of Conversion Shares as would then be issuable upon conversion of all
outstanding Shares. The Board of Directors of the Company shall recommend, and
shall otherwise use its best efforts to promptly obtain, stockholder approval of
such amendment, and the Company shall use its best efforts to cause Company

                                      -11-
<PAGE>
management to vote shares of Common Stock held by management in favor of such
amendment. During any period in which the Company does not have a sufficient
number of shares of authorized but unissued Common Stock available to convert
all outstanding Shares, the Directors of the Company agree not to convert any
Shares or exercise any stock options to purchase shares of Common Stock.

           7.6. Distribution Operations. Unless the holders of a majority of the
Shares agree to the contrary, within 90 days from the date of this Agreement the
Company will relocate its distribution operations to its facility in South
Plainfield, New Jersey, or such other location mutually agreed to by the Company
and a majority of the holders of the outstanding shares of Series Q Stock.

           7.7. Stock Option Pool. Without the prior consent of the holders of a
majority of the Shares, for as long as at least 25% of the shares of Series Q
Stock issue pursuant to this Agreement are outstanding the Company will not
increase the stock option pool for employees by more than 5,000,000 shares (as
adjusted for any stock dividends, combinations, splits, recapitalization, and
similar events).

           7.8.  Observer Rights. So long as Corporate Opportunities Funds, L.P.
and the Corporate Opportunities Fund (Institutional), L.P. ("Corporate
Opportunities Funds") own 50% or more of the number of Shares originally
purchased by them at the Closing, the Company shall allow one representative of
Corporate Opportunities Funds to attend all meetings of the Company's Board of
Directors in a nonvoting capacity, and in connection therewith, the Company
shall give such representative copies of all notices, minutes consents and other
materials, financial or otherwise, that the Company provides to its Board of
Directors, PROVIDED, THAT any such representative agrees to leave all or any
portion of a meeting of the Board of Directors in the event that, in the
reasonable good faith believe of the Board of Directors, allowing such
representative to remain in the meeting would result in a waiver of the
attorney-client privilege. The failure to provide the observer rights in this
Section 7 shall not affect the validity of any action taken by the Board.

           7.9. Use of Proceeds. The Company will apply all of the proceeds (net
of costs directly related to the preparation and negotiation of this Agreement
and the offering and sale of the Shares) derived from the sale of the Shares to
redeem indebtedness and for general working capital purposes.

           7.10. Taxes. The Company will promptly pay and discharge all lawful
taxes, assessments, and governmental charges or levies imposed on it or upon its
income or profits, or upon any of its properties, real or personal, before the
same shall become in default, as well as all lawful claims for labor, materials,
and supplies or otherwise which, if unpaid, might become a lien or charge upon
its properties or any part thereof, except where the failure to do so would not
have a Material Adverse Effect; provided, however, that the Company shall not be
required to pay or cause to be paid any such tax, assessment, charge, levy or
claim prior to institution of foreclosure proceedings if the validity thereof
shall be contested in good faith by appropriate proceedings and if the Company
shall have established reserves deemed by the Company to be adequate with
respect to such tax, assessment, charge, levy, or claim.

                                      -12-
<PAGE>
           7.11. Insurance. The Company will maintain liability, property
damage, and insurance on its insurable property against fire and other hazards
with responsible insurance carriers in the relative proportionate amounts
consistent with the Company's past practice and usually carried by reasonable
and prudent companies conducting businesses similar to that of the Company
except where the failure to do so would not have a Material Adverse Effect.

           7.12. Financial Statements and Compliance Certificates. The Company
will keep true books of record and account in which full, true, and correct
entries in accordance with generally accepted accounting principles will be made
of all dealings or transactions in relation to its business and activities. For
a period of three years after the Closing Date, or until such earlier date on
which no Shares issued and outstanding as of the Closing remain issued and
outstanding, the Company immediately upon public filing shall furnish, by email,
facsimile or overnight mail, to each holder of Shares:

                     (i) commencing with the fiscal quarter ending September 30,
           2001, a consolidated balance sheet of the Company as of the end of
           such quarter and consolidated statements of operations and cash flows
           of the Company for such quarter and for the expired portion of the
           then current fiscal year, setting forth comparable figures for the
           same quarter and expired portion of the previous fiscal year, and
           prepared and certified by the chief financial or accounting officer
           of the Company, subject to year-end audit adjustment;

                     (ii) a balance sheet of the Company as of the end of such
           fiscal year and consolidated statements of operations, stockholders'
           equity, and cash flows of the Company for such fiscal year, setting
           forth comparable figures for the previous fiscal year, all reported
           upon, and certified, by independent certified public accountants of
           nationally recognized standing;

                     (iii) with each financial statement required to be
           delivered pursuant to the provisions of paragraph (ii) above, a
           certificate of the chief financial or accounting officer of the
           Company stating that to the best of his knowledge there does not
           exist any Event of Default or any condition or event which after
           notice or lapse of time, or both, would constitute an Event of
           Default, or specifying the nature and period of existence of each
           such Event of Default, condition or event and the action the Company
           is taking or proposes to take with respect thereto; and

                     (iv) copies of all financial statements and reports sent by
           the Company to its shareholders and of all regular and periodic
           reports, if any, filed by it with the Commission pursuant to any
           statute, rule, or regulation administered by the Commission.

           7.13. Rule 144. As long as the Purchasers own Shares or Conversion
Shares, (i) the Company agrees to timely file all reports required to be filed
by the Company after the date hereof under the Securities Act and the Exchange
Act (including the reports pursuant to Section 13(a) or 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144) and the rules and
regulations adopted by the SEC thereunder), (ii) if the Company is not required
to file reports pursuant to such sections, it will prepare and furnish to the
Purchasers and make publicly available in accordance with Rule 144(c) such
information as is required for the Purchasers to sell the Shares and the
Conversion Shares under Rule 144, and (iii) the Company will take such further

                                      -13-
<PAGE>
action as any holder of Shares or Conversion Shares may reasonably request, all
to the extent required from time to time to enable such Purchaser to sell
Conversion Shares without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144, including causing its
attorneys to issue and deliver any appropriate legal opinion required to permit
a Purchaser to sell Conversion Shares under Rule 144 upon receipt of appropriate
documentation relating to such sale. Upon the request of any Purchaser, the
Company shall deliver to such person a written certification of a duly
authorized officer as to whether it has complied with the foregoing
requirements.

           SECTION 8.  Registration and Transfer of Shares. The Company agrees
to maintain an office (or to appoint an agent having an office) in Needham,
Massachusetts, or such other city as the Company may designate by notice in
writing to holders of Shares, at which Shares may be surrendered for transfer
and reissuance, for exchange, replacement, conversion, or cancellation. The
Company shall keep or cause to be kept, at the office or agency so maintained, a
register or registers in which the Company or its agent shall register the names
and addresses of the holders of the Shares and shall transfer registered Shares
in accordance with this Agreement. Upon surrender for transfer of any registered
Shares duly assigned by the registered holder (or its duly authorized attorney)
to the transferee(s) thereof, and subject to satisfaction of the requirements
set forth in Section 5.8 hereof if the sale of such Shares is not registered
under the Securities Act, the Company shall execute and deliver a new registered
certificate for the Shares. No service charge shall be assessed for any
transfer, registration, reissuance, exchange, or conversion hereunder.

           SECTION 9.  Substitution of Share Certificates. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction, or
mutilation of any certificate for Shares, and of indemnity satisfactory to it
(which, in the case of any original purchaser of the Shares, shall be a
contractual obligation of such purchaser) and upon surrender, at the office or
agency maintained in accordance with Section 8 hereof, and cancellation of any
certificate, if mutilated, the Company will execute and deliver a new
certificate of like tenor, in lieu of such certificate.

           SECTION 10. Event of Default. The occurrence and continuation of any
one or more of the following events shall constitute an "Event of Default"
hereunder: default shall be made in the due performance or observance of any
material covenant, agreement, or provision herein to be performed or observed by
the Company or a breach shall exist in any material representation or warranty
herein contained, and such default or breach is material and shall have
continued unabated for a period of 90 days after written notice thereof to the
Company from any holder or holders of Shares aggregating not less than 25% of
the aggregate number of the Shares then outstanding.

           SECTION 11. Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated, provided, however, that the Company shall pay
the reasonable out-of-pocket expenses (including fees of counsel) of Corporate
Opportunities Funds in connection with such transactions up to a maximum of
$20,000.

                                      -14-
<PAGE>
           SECTION 12. Broker's Fee. The Purchasers acknowledge that the Company
intends to pay to Phoenix Capital a fee in respect of the sale of the Shares to
the Purchasers. Each of the parties hereto hereby represents that, on the basis
of any actions and agreements by it, there are no other brokers or finders
entitled to compensation from the other party in connection with the sale of
Shares to the Purchasers.

           SECTION 13. Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent via overnight courier, sent by facsimile, or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:

                       if to the Company, to:

                       Able Laboratories, Inc.
                       200 Highland Avenue, Suite 301
                       Needham, MA  02494
                       Attn:  President

                       with a copy to:

                       Foley, Hoag & Eliot LLP
                       One Post Office Square
                       Boston, MA  02109
                       Attn:  David A. Broadwin, Esq.

or to such other person at such other place as the Company shall designate to
the Purchasers in writing; and

if to the Purchasers, at the address as set forth on EXHIBIT B, or at such other
address or addresses as may have been furnished to the Company in writing.

Notices provided in accordance with this Section 13 shall be deemed delivered
(i) upon personal delivery with signature required, (ii) one Business Day after
they have been sent to the recipient by reputable overnight courier service
(charges prepaid and signature required) (iii) upon confirmation, answer back
received, of successful transmission of a facsimile message containing such
notice if sent between 9 a.m. and 5 p.m., local time of the recipient, on any
Business Day, and as of 9 a.m. local time of the recipient on the next Business
Day if sent at any other time, or (iv) three Business Days after deposit in the
mail. The term "Business Day" as used in this Section 13 shall mean any day
other than Saturday, Sunday or a day on which banking institutions are not
required to be open in The Commonwealth of Massachusetts.

           SECTION 14. Amendment and Waiver. This Agreement may be amended or
modified only upon the written consent of the Company and the holders of a
majority of the Shares then outstanding (treated as if converted and including
any Conversion Shares into which the Shares have been converted that have not
been sold to the public). The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under this Agreement may be
waived only with the written consent of the holders of a majority of the Shares

                                      -15-
<PAGE>
(treated as if converted and including any Conversion Shares into which the
Shares have been converted that have not been sold to the public).

           SECTION 15. Changes. This Agreement may not be modified or amended
except pursuant to an instrument in writing, signed by the Company and the
Purchasers. Any provision in this Agreement to the contrary notwithstanding,
changes in or additions to this Agreement may be made, and compliance with any
covenant or condition herein set forth may be omitted, if the Company (a) shall
obtain from the holders of record of Shares aggregating not less than a majority
of the number of the Shares at the time outstanding their consent thereto in
writing and (b) shall deliver copies of such consent in writing to any such
holders of record who did not execute the same; provided, however, that without
the consent in writing of all holders of the Shares purchased pursuant to this
Agreement, no such consent shall reduce the percentage of the number of the
Shares the consent of the holders of which shall be required under this Section
15.

           SECTION 16. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

           SECTION 17. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

           SECTION 18. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to any choice of law provisions thereof.

           SECTION 19. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but both of
which, when taken together, shall constitute but one instrument, and shall
become effective when one or more counterparts have been signed by each party
hereto and delivered to the other party.

           SECTION 20. Remedies. In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, each of
the Purchasers will be entitled to specific performance of the obligations of
the Company under the Transaction Documents. The Company and each of the
Purchasers agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of the obligations under the Transaction
Documents and hereby agree to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.

           SECTION 21. Confidentiality. Each Purchaser covenants and agrees to
use, and to use its best efforts to ensure that its authorized representatives
shall use, the same degree of care with the Company's "confidential information"
as such Purchaser uses to protect its own financial, confidential and
proprietary information. For purposes hereof, "confidential information"
includes all financial, confidential and proprietary information which is
provided to such Purchaser under this agreement or is otherwise provided to such
Purchaser and identified by the Company in writing to such Purchaser as being of
a confidential nature, but shall not include any information which (i) was
available to or in possession of such Purchaser or any employees thereof or any

                                      -16-
<PAGE>
beneficial owner of a partnership interest in such Purchaser (collectively
referred to herein as "Permitted Recipients") prior to the time of disclosure to
such Purchaser by the Company or its representatives, (ii) is or becomes
generally available to the public other than as a result of a disclosure by any
of such Permitted Recipients, or (iii) is or becomes available to such Permitted
Recipients on a nonconfidential basis by a third party which is not bound by a
confidentiality agreement with the Company. Notwithstanding the preceding
sentence, a Purchaser may (a) disclose such confidential information when
required by law or governmental order or regulation or when required by a
subpoena or other process, provided that such Purchaser shall use reasonable
efforts to give the Company prior written notice thereof with sufficient time to
seek a protective order or confidential treatment; (b) disclose such
confidential information to the extent necessary to enforce this Agreement; and
(c) disclose such confidential information to its attorneys, accountants,
consultants and other professionals, partners, members and affiliates to the
extent necessary to obtain their services in connection with its investment in
the Company, provided that the requirements of this Section 10.14 shall in turn
be binding on any such attorney, accountant consultant, other professional,
partner, member or affiliate.

           SECTION 22. Entire Agreement. This Agreement (including the
attachments hereto) contains the entire agreement of the parties with respect to
the subject matter hereof and supersedes and is in full substitution for any and
all prior oral or written agreements and understandings between them related to
such subject matter, and neither party hereto shall be liable or bound to the
other party hereto in any manner with respect to such subject matter by any
representations, indemnities, covenants or agreements except as specifically set
forth herein.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

                                      -17-
<PAGE>

           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written by their duly authorized
representatives shown below:

                                               ABLE LABORATORIES, INC.

                                               By:_____________________________
                                               Name: __________________________
                                               Title:  ________________________

                                      -18-
<PAGE>
                                    EXHIBIT A
      CERTIFICATE OF DESIGNATION, PREFERENCES, AND RIGHTS OF SERIES Q STOCK

                                      -19-
<PAGE>

                                    EXHIBIT B

                             SCHEDULE OF PURCHASERS

                                      -20-
<PAGE>

                                    EXHIBIT C

                     [insert Registration Rights Agreement]

                                      -21-
<PAGE>

                                    EXHIBIT D

The Company's legal counsel (as indicated) shall deliver to the Purchasers a
legal opinion as of the closing date to the effect that:

(i)      The Company is a corporation validly existing and in good standing
         under the laws of the State of Delaware; the Company has all requisite
         corporate power and authority to own, lease, license and operate its
         assets and properties and conduct its business as now being conducted
         and as described in the Information Documents.

(ii)     The Company has the requisite corporate power and authority to enter
         into and perform its obligations under the Transaction Documents, and
         to issue the Shares and upon conversion of the Shares, to issue the
         Conversion Shares. The execution and delivery of the Transaction
         Documents, and the execution, issuance and delivery of the Shares and
         the Conversion Shares by the Company and the consummation by it of the
         transactions contemplated thereby have been duly authorized by all
         necessary corporate action and no further consent or authorization of
         the Company or its Board of Directors or stockholders is required. Each
         of the Transaction Documents has been duly executed and delivered and
         constitutes a valid and binding obligation of the Company enforceable
         against the Company in accordance with it respective terms, except as
         such enforceability may be limited by applicable bankruptcy,
         insolvency, or similar laws relating to, or affecting generally the
         enforcement of, creditors' rights and remedies or by other equitable
         principles of general application.

(iii)    The execution, delivery and performance of the Transaction Documents by
         the Company and the consummation by the Company of the transactions
         contemplated thereby, including, without limitation, the issuance of
         the Shares and the Conversion Shares, do not and will not (i) result in
         a violation of the Company's Certificate of Incorporation or By-Laws or
         (ii) result in a violation of any U.S. federal or state law, rule or
         regulation applicable to the Company or by which any property or asset
         of the Company is bound or affected, except for such violations as
         would not, individually or in the aggregate, have a Material Adverse
         Effect.

(iv)     The issuance of the Shares and the Conversion Shares in accordance with
         the Agreement will be exempt from registration under the Securities Act
         of 1933. When so issued, subject to sufficient reserved authorized
         shares of Common Stock, the Shares and the Conversion Shares will be
         duly and validly issued, fully paid and nonassessable, and free of any
         liens, encumbrances and preemptive or similar rights contained in the
         Company's Certificate of Incorporation or Bylaws or, to our knowledge,
         in any agreement to which the Company is party.

(v)      The authorized capital stock of the Company consists of 225,000,000
         shares of Common Stock, $0.01 par value per share, and 10,000,000
         shares of Preferred Stock, par value $0.01 per share.

(vi)     No consent, approval, authorization, or order of any court or
         governmental authority or agency is required for the consummation by
         the Company of the transactions contemplated by the Agreement, except
         such as may be required by Regulation D promulgated by the Securities
         and Exchange Commission or state securities or "blue sky" laws.

                                      -22-
<PAGE>

                                   APPENDIX I

                             ABLE LABORATORIES, INC.
                         STOCK CERTIFICATE QUESTIONNAIRE

Pursuant to Section 3 of the Agreement, please provide us with the following
information:

1.       The exact name that your Shares are to be registered in (this is the
         name that will appear on your stock certificate(s)). You may use a
         nominee name if appropriate:

         -----------------------------------

2.       The relationship between the Purchaser of the Shares and the Registered
         Holder listed in response to item 1 above:

         -----------------------------------

3.       The mailing address of the Registered Holder listed in response to item
         1 above:

         -----------------------------------
         -----------------------------------
         -----------------------------------

4.       The Social Security Number or Tax Identification Number of the
         Registered Holder listed in response to item 1 above:

         -----------------------------------

                                      -23-
<PAGE>

                                   APPENDIX II

                                                       ABLE LABORATORIES, INC.

                      REGISTRATION STATEMENT QUESTIONNAIRE

           In connection with the preparation of the Registration Statement,
please provide us with the following information:

           1. Pursuant to the "Selling Shareholder" section of the Registration
Statement, please state your or your organization's address and name exactly as
it should appear in the Registration Statement:

                     -----------------------------------
                     -----------------------------------
                     -----------------------------------

           2. Please provide the number of Shares of Common Stock that you or
your organization will own immediately after Closing, including those Shares
purchased by you or your organization pursuant to this Purchase Agreement and
those Shares of Common Stock purchased by you or your organization through other
transactions:

                     -----------------------------------
                     -----------------------------------
                     -----------------------------------

           3. Have you or your organization had any position, office or other
material relationship within the past three (3) years with the Company or its
affiliates? Please circle the correct answer.

                     Yes                  No

           If yes, please indicate the nature of any such relationships below:

                     -----------------------------------
                     -----------------------------------
                     -----------------------------------

           4. Does the plan of distribution in the draft form of Registration
Statement provided to you reflect your current plan of distribution?

                     Yes                  No

           If no, please attach a copy of your current plan of distribution.

                                      -24-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00029-of-00352.parquet"}]]