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EXHIBIT 10.64
March 27, 1997
Xx. Xxxxx X. Xxxxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Xx. Xxx X. Xxxxxx
Xxxxxx & Company, Inc.
0000 Xxxxx Xxxxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Sun Pharmaceutical Industries Limited
Synergy House, Subhanpura
Xxxxx Xxxx, Xxxxxx, 000-000 Xxxxx
Attn: Xxxxx Xxxxxxxx
RE: XXXXXX PHARMACEUTICAL LABORATORIES, LTD. (THE "COMPANY")
Dear Messrs. Hagelstein, Joliat and Xxxxxxxx:
This letter, when countersigned by Hagelstein, Joliat and Sun Pharmaceutical
Industries Limited ("Sun"), will constitute a binding agreement between the
Company, Hagelstein, Joliat and Sun. Each of the parties is aware of the
Company's financial circumstances, the necessity for the Company to raise
additional financing for operating capital and Sun's proposal to make a capital
contribution of $7.5 million for 5.3 million shares of the Common Stock of the
Company (the "Capital Contribution") pursuant to a stock purchase agreement (the
"Stock Purchase Agreement"). Each of the parties is also aware that Sun has
included as a condition to consummation of the Stock Purchase Agreement that
Messrs. Hagelstein and Xxxxxx each agree to "contribute" $500,000 each (as
described below) to the Company.
Accordingly, Sun hereby agrees to make the Capital Contribution pursuant to the
terms and conditions of the Stock Purchase Agreement in reliance upon the
promises of Messrs. Hagelstein and Xxxxxx hereunder. In addition, in order to
accommodate Sun and assist the Company in raising needed financing, and
acknowledging (i) the personal benefit to Hagelstein and Xxxxxx in having Sun
provide the Company with the Capital Contribution, and (ii) Sun's reliance on
Hagelstein and Xxxxxx each satisfying all of the terms and conditions of this
agreement, Hagelstein
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and Xxxxxx each agree to contribute $500,000 to the Company (in the manner
described below) within the three (3) months following Sun's contribution of
$4.0 million (U.S.) of the $7.5 million Capital Contribution. If, however, any
part of Sun's $4.0 million contribution is in the form of an irrevocable letter
of credit, the $4.0 million contribution will not be deemed to have been
contributed for the purpose of this letter agreement, and Hagelstein's and
Xxxxxx'x obligation to provide $500,000 each to Caraco will not commence, until
the entire amount of the letter of credit(s) has been drawn down by Caraco and
Caraco has actually received a total of $4.0 million (U.S.) in cash from Sun's
$4.0 million contribution.
The Company will not be obligated to Hagelstein or Xxxxxx in connection with
their respective contributions and, accordingly, neither Hagelstein nor Xxxxxx
will receive any securities of or from the Company (including notes or stock)
for such contribution to the Company. Hagelstein's and Xxxxxx'x respective
contributions may be in the form of any combination of one or more of the
following: (i) cash and/or (ii) shares of the Company's Common Stock ("Shares")
valued at the higher of (a) the average of the bid and ask price or the closing
price of the securities on the applicable national securities exchange, Nasdaq
Small Cap Market, Nasdaq National Market, OTC Bulletin Board or comparable
exchange during the five (5) trading days prior to the contribution or (b) at
some other mutually agreed upon value. Notwithstanding the above, in the event
that Hagelstein and/or Xxxxxx elect to contribute Shares, neither Hagelstein nor
Xxxxxx will be obligated to contribute more than a maximum of 250,000 Shares
each.
Very truly yours,
CARACO PHARMACEUTICAL LABORATORIES, LTD.,
a Michigan corporation
/s/Xxxxxxx X. Xxxx
By: Xxxxxxx X. Xxxx
Its: President
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The terms and provisions of this
letter agreement, and each of them,
are hereby accepted and approved:
/s/Xxx X. Xxxxxx Dated: March 27, 1997
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Xxx X. Xxxxxx, individually and
as Trustee of the Xxx X. Xxxxxx
Qualified Terminable Interest
Marital Trust u/a/d 4/8/82
/s/Xxxxx X. Xxxxxxxxxx Dated: March 27, 1997
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Xxxxx X. Xxxxxxxxxx, individually and
as Trustee of the Xxxxx Xxxxxxxxxx
Trust u/a/d 10/27/93
Sun Pharmaceutical Industries Limited
By: /s/Xxxxx Xxxxxxxx Dated: April 1, 1997
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Xxxxx Xxxxxxxx
Its: Managing Partner
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