FIRST AMENDMENT TO LOAN AGREEMENT
EXHIBIT
10.31
FIRST AMENDMENT TO LOAN
AGREEMENT
THIS
FIRST AMENDMENT TO LOAN AGREEMENT, dated as of August 11, 2009 (“First
Amendment”), is made by and among CARACO PHARMACEUTICAL LABORATORIES,
LTD., a Michigan corporation, with an address at 0000 Xxxxxx XxXxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 (“Borrower”), and RBS CITIZENS, N.A., a national association,
d/b/a Charter One, with an address of 00000 Xxxxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxxxxx 00000 (together with its affiliates, successors and
assigns, “Bank”).
W I T N E
S S E T H :
WHEREAS,
Borrower and Bank are parties to that certain Loan Agreement dated February 27,
2009 (the “Loan Agreement”), together with other Loan Documents related thereto
as described in the Loan Agreement; and
WHEREAS,
Borrower and Bank desire to increase the minimum deposit account covenant to be
not less than the estimated amount of Indebtedness of Borrower to Bank, and
modify other provisions of the Loan Agreement as provided herein.
NOW,
THEREFORE, in consideration of the amended provisions herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Section
6.10 of the Loan Agreement is hereby amended to increase the minimum balance of
the deposit account to be not less than the outstanding balance of the
Indebtedness of Borrower to Bank from time to time, which is approximately
$17,400,000 as of the date hereof, which shall be reduced by the amount of
principal repaid toward the Equipment Term Loan. The required balance
shall increase by the amount of accrued and unpaid interest as of the date of
any required interest payment if such payment is not made on or before the date
the failure to make such payment would become an Event of Default.
2. The
continuance of regulatory enforcement efforts by the Food and Drug
Administration or other restrictions on Borrower’s operations, voluntarily
imposed by Borrower or otherwise, on or after October 26, 2009, shall constitute
a violation of the covenants described in Section 6.7 (b) of the Loan Agreement
and shall be deemed an “Event of Default” without further notice or an
opportunity to cure, notwithstanding any other provision of the Loan Agreement
or other document to the contrary.
3. Except
as hereby amended, the Loan Agreement shall remain in full force and
effect. If any conflict exists between the terms and provisions of
the Loan Agreement, and the terms and provisions of this First Amendment, the
terms and provisions of this First Amendment shall govern and
control.
4. Each
party covenants, warrants and represents that it has the authority to execute
and bind each respective party to this First Amendment. Borrower
further reconfirms all of its obligations under the Loan Documents, along with
all of its representations and warranties to Bank as set forth in the Loan
Documents as being true in all respect, and that there are no existing Events of
Default under any provision of the Loan Agreement or any of the related Loan
Documents or other Indebtedness to Bank other than as noted herein that have not
otherwise been suspended by Bank. The Loan Agreement and Loan
Documents executed in connection therewith, whether prior to, or simultaneously
herewith, are hereby ratified and certified as being in full force and
effect.
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5. Borrower
acknowledges and agrees that Bank has fully performed all of its obligations
under all documents executed in connection with the Loan Documents and all
actions taken by Bank have been reasonable and appropriate under the
circumstances and within their rights under the Loan Agreement and the Loan
Documents. Borrower represents and warrants that it is aware of no
claims or causes of action against Bank or its officers, directors, employees or
agents. Notwithstanding such representation and warranty, and as
further consideration for the agreements set forth in this First Amendment,
Borrower, for itself and its successors and assigns, releases Bank and it
officers, directors, employees, agents, attorneys, affiliates, subsidiaries, and
successors and assigns, from any liability, claim, right or cause of action
which now exists or hereafter arises, whether known or unknown, arising from or
in any way related to facts in existence as of the date
hereof. Borrower also acknowledges and agrees to pay or otherwise
reimburse Bank, upon the execution of this First Amendment, for all reasonable
out-of-pocket costs incurred by Bank in the enforcement of the Loan Agreement,
and the negotiations and drafting of this First Amendment and related Loan
Documents.
6. The
Loan Agreement shall not be further amended, altered, modified, or changed in
any way except in writing signed by all the parties to this First Amendment, or
their successors or assigns.
7. This
First Amendment constitutes the entire agreement between the parties and
supersedes all prior and contemporaneous agreements or understandings, whether
written or oral, between the parties with respect to the subject matter
hereof. This First Amendment shall be binding on the parties hereto,
and their respective successor and assigns.
8. The
submission of this First Amendment for examination or its negotiation of the
terms described herein does not constitute an offer to amend the Loan Agreement,
and this First Amendment does not constitute a binding agreement until such time
as the First Amendment has been fully and finally executed by all parties to
this First Amendment.
Signatures
on following page
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THE
UNDERSIGNED individuals have executed this First Amendment on behalf of the
respective parties hereto, effective as of the day and year first above
written.
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BANK:
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RBS
CITIZENS, N.A.
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(d/b/a
CHARTER ONE)
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By:
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/s/ Xxxx Xxxxxxx
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Name:
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Xxxx Xxxxxxx
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Its:
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Senior Vice President
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BORROWER:
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CARACO
PHARMACEUTICAL
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LABORATORIES,
LTD.
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By:
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/s/ Xxxxxxxx Xxxxx
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Name:
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Xxxxxxxx Xxxxx
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Its:
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Chief Executive Officer
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By:
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/s/ Xxxxx Xxxxx
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Name:
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Xxxxx Xxxxx
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Its:
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Interim Chief Financial
Officer
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