NON-DISPOSAL UNDERTAKING

 

Date : February 2, 2012       To : ICICI Bank Limited, New York Branch 

 

Dear Sirs,

 

We at Cadista Holdings Inc. (the Parent Company), a Delaware corporation with a
principal office at 207 Kiley Drive, Salisbury, Maryland 21801, refer to the
Credit Facility Agreement dated as of the date hereof (Facility Agreement)
entered into between Jubilant Cadista Pharmaceuticals Inc. (Borrower) a Delaware
corporation and wholly-owned subsidiary of the Parent Company having its
principal office at 207 Kiley Drive, Salisbury, Maryland 21801, and ICICI Bank,
New York Branch (hereinafter referred to as either the “Lender”, “Bank” or
“you”), under the terms of which you have agreed to provide a revolving credit
facility and certain other facilities in an amount not exceeding $ 8,500,000 in
the aggregate (Facility) to the Borrower.

 

At the request of the Borrower, the Parent Company has agreed to not dispose of
its shareholdings in the Borrower on the terms and conditions set out below. The
shares of common stock of the Borrower held by the Parent as of date are more
particularly described under Schedule I attached hereto (Parent Company Shares).

 

1.           DEFINITIONS

 

Capitalized terms used herein and not separately defined have the meanings
ascribed to such terms in the Facility Agreement. In this Undertaking, the
capitalized terms below shall have the following meanings:

 

Lender means ICICI Bank Limited, New York Branch.

 

Management Control means the power to direct the management and policies of an
entity, whether through the ownership of voting capital, by contract or
otherwise.

 

Party means a party to this Undertaking.

 

Undertaking means this Non-Disposal Undertaking dated February 2, 2012.

 

2.           THE FACILITY AGREEMENT

 

The Parent Company hereby acknowledges receipt of a copy of the Facility
Agreement and confirms that it is familiar with and has approved of the terms
and conditions of the Facility Agreement.

 

3.           NON-DISPOSAL UNDERTAKING

 

In consideration of the Facility being made available to the Borrower under the
terms of the Facility Agreement and the other Credit Documents, the Parent
Company hereby agrees, confirms and undertakes that:

 

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(a)As on the date of this Undertaking, the Parent Company is holding the Parent
Company Shares, which constitute all of the issued and outstanding shares of the
Borrower on a fully-diluted basis, as is more particularly described under
Schedule I attached hereto. The share certificates (the Certificates) pertaining
to the aforesaid shares are presently in custody of State Bank of India, New
York Branch.

 

(b)Notwithstanding anything contained herein or any other Credit Document, as
long as any amounts remain due from the Borrower to Lender under the Facility
Agreement or any Credit Document:

 

(i)the Parent Company will ensure that its shareholding in the Borrower shall
remain at 100% of the issued and outstanding equity share capital on a
fully-diluted basis of the Borrower.

 

(ii)the Parent Company affirms that the custody of the said certificates are
with the State Bank of India, N.Y. and as and when it receives the share
certificates from State Bank of India (which shall in no event be later than
after the indebtedness to State Bank of India is paid in full), it will not part
with the custody of the Certificates without your prior written approval of the
Lender and will at all times maintain Management Control of the Borrower;

 

(iii)the Parent Company has not and will not transfer, assign, dispose of,
pledge, charge or create any lien or in any way encumber its shareholdings in
the Borrower in favor of any other Person;

 

4.             REPRESENTATIONS AND WARRANTIES AND UNDERTAKINGS

 

4.1          The Parent Company hereby represents and warrants that:

 

(a)The obligations expressed to be assumed by it in this Undertaking are legal,
valid, binding and enforceable obligations of the Parent Company.

 

(b)It has the power to enter into, perform and deliver, and has taken all
necessary corporate and other action to authorize its entry into, performance
and delivery of, this Undertaking and the transactions contemplated by it,
including without limitation, the consent of the Board of the Parent Company
that is attached hereto as Exhibit A.

 

(c)The entry into and performance by it of, and the transactions contemplated
by, this Undertaking does not and will not conflict with:

 

(i)any law or regulation applicable to it or binding on its property or assets;

 

(ii)its constitutional documents; and/ or

 

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(iii)any agreement or instrument binding on it or any of its property or assets.

 

(d)It has obtained as of the date hereof, all authorizations, consents, permits
and licenses required:

 

(i)to enable it lawfully to enter into, exercise its rights and comply with its
obligations in this Undertaking;

 

(ii)to make this Undertaking enforceable against Parent Company; and

 

(iii)to enable it to carry on its business, trade and ordinary activities, have
been obtained or effected and are in full force and effect.

 

(e)There are and shall be no legal, administrative or other actions, claims or
other proceedings current, pending or, threatened against it which if decided
adversely would adversely affect the financial condition, business, operations
or prospects of the Parent Company or would adversely affect the Parent
Company’s ability to perform its obligations under this Undertaking or which
question the legality, validity or binding effect of any provision of this
Undertaking.

 

(g)It will immediately inform Lender of (i) the imposition of, or change in any
law, decree or regulation affecting its obligations under this Undertaking; (ii)
any amendment to its constituent documents; (iii) any material change in its
business activities; (iv) of the occurrence of any other matter which affects
the corporate or business activities or existence of the Parent Company; and (v)
the occurrence of any other matter which affects the corporate or business
existence of the Parent Company.

 

5.           OBLIGATIONS

 

5.1         Mergers, Etc.

 

As long as the Facility is outstanding, the Parent Company will not allow the
Borrower to exercise any rights in respect of Parent Company Shares, or take or
support any actions, which results in (i) any transaction of merger or
consolidation or amalgamation of Borrower, or (ii) liquidation, winding-up or
dissolution of the Borrower (or suffer any liquidation or dissolution), or (iii)
the conveyance, sale, lease, transfer or other disposition of, in one
transaction or a series of transactions, any shares of Borrower’s capital stock
or all or any substantial part of its business or assets, whether now owned or
hereafter acquired, or (iv) any change in the nature of Borrower’s business or
in the methods by which it conducts business, or (v) the amendment of Borrower’s
certificate of incorporation, bylaws (or equivalent charter documents) to create
or authorize the creation of any class or series of stock other than the class
or classes or series of stock now authorized in Borrower’s certificate of
incorporation heretofore delivered to Lender and all of which are held by the
Parent Company.

 

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5.2         Support Resolutions

 

As long as the Facility is outstanding, the Parent Company will,

   

(a)support all necessary corporate resolutions, including any resolutions at the
meetings of shareholders of the Borrower to ensure that the Borrower complies
with the terms of the Credit Documents; and

 

(b)oppose all corporate resolutions, including at the meetings of the
shareholders of the Borrower that may result in the Borrower being in breach of
any Credit Document.

 

6.           TERMINATION

 

The obligations of the Parent Company pursuant to this Undertaking will continue
as long as any amounts remain due and payable to the Lender under the Facility
or the Facility remains outstanding, save in respect of any obligations which
remain unperformed on that date.

 

7.           NOTICES

 

All notices and other communications, provided for under this Undertaking shall
be in writing and mailed or telecopied or delivered, if to the Borrower, at its
address noted herein above, if to the Parent Company, at its address noted
herein above, and if to the Bank, at its address at 500 Fifth Avenue, 28th
Floor, New York, New York 10110 in the United States America; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other party complying as to delivery with the terms of this
Section. All such notices and communications shall when mailed, hand delivered,
sent by overnight courier or telegraphed, be effective when deposited in the
mails or delivered to the telegraph company or received when delivered by hand
or through courier, respectively, addressed as aforesaid, except that notices to
the Bank pursuant to the provisions of this Undertaking shall not be effective
until received by the Bank.

 

8.           MISCELLANEOUS

 

8.1Any term or condition of this Undertaking can be waived at any time only by
Lender and in writing.

 

8.2This Undertaking may be modified or amended only by a written instrument duly
executed by Lender.

 

8.3The Parent Company will not assign or transfer all or any of its rights,
benefits or obligations under this Undertaking. Lender may, at any time, assign
or transfer all or any of your rights, benefits and obligations under this
Undertaking to any other person.

 

8.4In case any provision in or obligation under this Undertaking is held to be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.    

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8.5         This Undertaking will be governed by and construed and enforced in
accordance with the internal law, excluding any laws regarding the conflict of
laws, of the State of New York.

 

8.6          The Parent Company:

 

(a)         agrees that the courts in New York County, State of New York will
have exclusive jurisdiction to settle any disputes which may arise out of or in
connection with this Undertaking and that accordingly any suit, action or
proceedings (together referred to as Proceedings) arising out of or in
connection with this Undertaking shall be brought in such courts and irrevocably
submits to and accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts or tribunals;

 

(b)          irrevocably waives any objection now or in future, to the laying of
the venue of any Proceedings in any court in New York County, State of New York
and any claim that any such Proceedings have been brought in an inconvenient
forum and further irrevocably agrees that a judgment in any Proceedings brought
in any court in New York County, State of New York will be conclusive and
binding upon it and may be enforced in the courts of any other jurisdiction
(subject to the laws of such jurisdiction) by a suit upon such judgment, a copy
of which shall be conclusive evidence of such judgment, or in any other manner
provided by law;

 

(c)agrees that nothing contained in this Clause 8.6 will limit any of Lender’s
rights to take any Proceedings in any other court of competent jurisdiction, nor
will the taking of any Proceedings in one or more jurisdictions preclude the
taking of any Proceedings in any other jurisdiction whether concurrently or not,
and Parent Company submits to and accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such court, and
irrevocably waives any objection that it may have now or in the future to the
laying of the venue of any Proceedings and any claim that any such Proceedings
have been brought in an inconvenient forum; and

 

(d)hereby consents generally in respect of any Proceedings arising out of or in
connection with this Undertaking to the giving of any relief or the issue of any
process in connection with such Proceedings including, without limitation, the
making, enforcement or execution against any property whatsoever (irrespective
of its use or intended use) of any order or judgement which may be made or given
in such Proceedings.

 

8.8Any default or failure by the Parent Company to fulfill its obligations under
this Undertaking will constitute an Event of Default under the Facility
Agreement.

 

8.9This Undertaking is a Credit Document.

  

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9.           BORROWER'S CONFIRMATION

 

The Borrower confirms that it has read and understood the terms and conditions
of this Undertaking. The Borrower understands and acknowledges that it has been
notified about the existence, and the provisions, of this Undertaking, and
recognizes the rights of the Lender, and the obligations of the Parent Company,
under this Undertaking. The Borrower agrees and undertakes that it will not, and
it will not permit the Parent Company, to take any action, which by itself or
which considered in aggregate with other actions, would lead to non-compliance
with the provisions of this Undertaking.

 

[Intentionally left blank; signature page follows]

 

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IN WITNESS WHEREOF, the Parties to this undertaking have signed and affirmed
this Undertaking on the day and date appearing first appearing above.

 

Cadista Holdings Inc.       /s/ Kamal Mandan       Name: KAMAL MANDAN   Title:
CHIEF FINANCIAL OFFICER  

 

Jubilant Cadista Pharmaceuticals Inc.       /s/ Kamal Mandan       Name: KAMAL
MANDAN   Title: CHIEF FINANCIAL OFFICER  

 

ACKNOWLEDGED AND ACCEPTED

 

ICICI Bank Limited, New York Branch

 

/s/ Ashish Bafna

Name: ASHISH BAFNA

Title: ASSISTANT GENERAL MANAGER

 

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Schedule I

Details of Shareholding in the Borrower

 

Name of Holder  No. of
Shares  Share Certificate
Nos. Cadista Holdings Inc.   100    3 

  

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Exhibit A

 

Consent of the Board of Cadista Holdings Inc.

 

[Attached]

 

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