EXHIBIT 10.30
_________, 2004
NEGATIVE PLEDGE AGREEMENT
In consideration of one or more loans, advances, or other financial
accommodations or transactions, at any time before, at or after the date hereof
made or extended by Citibank, F.S.B. (the "Bank"), to Caraco Pharmaceutical
Laboratories Ltd. (the "Borrower"), the Borrower hereby agrees as follows:
1. As used herein, the following terms shall have the following meanings:
"Loan" shall mean the revolving line of credit in the amount of
$10,000,000 made available by the Bank to the Borrower, and such other loans,
advances or financial accommodations that the Bank may provide in the future to
the Borrower.
"Loan Documents" shall mean the master note and all other documents
evidencing or securing the Loan or executed in connection therewith.
"Obligations" shall mean the obligations of the Borrower to the Bank
pursuant to the Loan Documents.
"Assets" shall mean all of Debtor's now existing and hereafter acquired
inventory, of every kind and nature, wherever located, including, without
limitation, all raw materials, finished goods, work-in-process, packing and
advertising materials and all documents, whether negotiable or nonnegotiable
representing any of the foregoing, all embedded software, and all supporting
obligations an all products and proceeds thereof; all now existing and hereafter
acquired or created accounts (including without limitation health-care insurance
receivables, credit card receivables, licensing fees an royalties and rights to
payment for realty sold or leased), together with the Debtor's interest in all
inventory described in invoices with respect to such accounts; all returned and
repossessed inventory; and all now existing and hereafter acquired or created
instruments (including promissory notes), chattel paper (whether tangible or
electronic) wherever located, including, without limitation, all of the
foregoing which arise in connection with the sale of inventory and/or the
rendition of services, and all supporting obligations and all products and
proceeds of the foregoing and all of Debtor's books and records.
"Transfer" shall mean any bulk sale, transfer, assignment, gift,
hypothecation, pledge, mortgage or creation of any lien, encumbrance or security
interest in the Assets. Transfer shall include involuntary transfers, liens and
encumbrances arising by operation of law, judicial proceedings, contract or
otherwise, as well as transfers arising by voluntary act, but shall not include
replacement of equipment for obsolescence or upgrade, nor in the case of
inventory, use or consumption in the ordinary course of business.
"Proceeds" shall mean the consideration of the Transfer of the Assets.
2. As long as the Obligations shall remain unpaid or unsatisfied, the
undersigned shall not, without the written consent of the Bank in each instance
first had and obtained, make any Transfer of the Asset or suffer or permit any
Transfer to be made by anyone in respect to the Asset.
3. For notice purposes and not for the purpose of perfecting any security
interest, the Borrower authorizes the Bank to (i) file any Uniform Commercial
Code financing statements or amendments thereto without the signature of the
Borrower or by signing of the Borrower's name to any such financing statements
as its attorney-in-fact, in jurisdictions in which the Bank is unable to file
financing statements or amendments without the Borrower's signature or (ii) file
a photographic or other reproduction of this Negative Pledge Agreement (the
"Agreement") as a financing statement.
4. a. Unless otherwise provided in any written consent given by
the Bank in accordance with Paragraph 2, or if the Borrower shall hereafter make
any Transfer of the Assets in violation of Paragraph 2, the Proceeds derived,
received by or inuring to the benefit of the Borrower in connection therewith
are hereby transferred, set over and assigned to the Bank, and shall be received
and held by the Borrower as the trustee of an express trust solely for the
benefit of the Bank (and the Bank is hereby granted a security interest
therein), and shall be delivered to the Bank forthwith upon receipt in these
forms as received, except for the endorsement or assignment necessary to
transfer title thereto to the Bank, and such Proceeds shall be applied by the
Bank in payment or reduction of the Obligations in such order or manner and at
such time or times as the Bank, in its sole discretion, shall determine.
b. Further, in the event that the Borrower shall hereafter make
any Transfer of the Assets in violation of Paragraph 2, or should there occur
any violation of any of the terms hereof, same shall be considered to be an
Event of Default under the provisions of the Loan Documents, and the Bank shall
have each of its remedies under the Loan Documents.
5. The Borrower hereby irrevocably designates and appoints the Bank, its
agents and designees, as attorney-in-fact for, and in the name of, the Borrower
with full power and authority (but under no duty), to enforce and protect all of
the rights herein granted to the Bank. Said power of attorney is coupled with an
interest. The Borrower hereby authorizes the making and delivery by such
attorney-in-fact, for and in the name of the Borrower, of any and all additional
documents, instruments, assignments or endorsements deemed necessary or
desirable to assure the fulfillment of the purposes hereof, hereby ratifying and
confirming, in all respects, the action by such attorney-in-fact.
6. Nothing herein contained shall, in any manner, be deemed to amend,
supersede or modify any term or provision of any note, guarantee, security
agreement, collateral loan agreement or other instrument evidencing any loan or
obligation of the Borrower to the Bank, it being understood that the terms of
this Agreement shall be deemed merely supplemental thereto.
7. The provision hereof shall be binding upon the Borrower and upon the
Borrower's successors, and assigns, as the case may be, and shall inure to the
benefit of the Bank, its successors, transferees and assigns. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
Connecticut, and cannot be changed or terminated orally.
CARACO PHARMACEUTICAL
LABORATORIES LTD.
By: /s/ Xxxxxxxx X. Xxxxx
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Name: Xxxxxxxx X. Xxxxx
Title: Chief Executive Officer
State of Michigan
County of Oakland, Acting in Xxxxx County
On this 19th day of March 2004, Xxxxxxxx Xxxxx personally appeared before me,
who is personally known to me to be the signer of the above instrument, and he
acknowledged signing of his own free will.
By: /s/ Xxxxx Xxxxx-Xxxxxxxx, Ph.D.
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Xxxxx Xxxxx-Xxxxxxxx, Ph.D
Notary Public, State of Michigan
My Commission Expires September 1, 2007
