EXHIBIT 10.26


Execution Copy








CREDIT AGREEMENT


dated as of


November 17, 2005


among


CARACO PHARMACEUTICAL LABORATORIES, LTD.


and


JPMORGAN CHASE BANK, N.A.













	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TABLE
  OF CONTENTS

  
	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
  Definitions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
   

  	
  Defined Terms

  	
   

  	
  1

  
	
  SECTION 1.02.

  	
   

  	
  Classification of Loans
  and Borrowings

  	
   

  	
  17

  
	
  SECTION 1.03.

  	
   

  	
  Terms Generally

  	
   

  	
  17

  
	
  SECTION 1.04.

  	
   

  	
  Accounting Terms; GAAP

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  II

  
	
  The
  Credits

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
   

  	
  Commitment

  	
   

  	
  17

  
	
  SECTION 2.02.

  	
   

  	
  Loans and Borrowings

  	
   

  	
  18

  
	
  SECTION 2.03.

  	
   

  	
  Requests for Borrowings

  	
   

  	
  18

  
	
  SECTION 2.04.

  	
   

  	
  Evidence of Debt

  	
   

  	
  19

  
	
  SECTION 2.05.

  	
   

  	
  Letters of Credit

  	
   

  	
  20

  
	
  SECTION 2.06.

  	
   

  	
  Funding of Borrowings

  	
   

  	
  21

  
	
  SECTION 2.07.

  	
   

  	
  Interest Elections

  	
   

  	
  21

  
	
  SECTION 2.08.

  	
   

  	
  Termination and Reduction
  of Commitment

  	
   

  	
  22

  
	
  SECTION 2.09.

  	
   

  	
  Repayment of Loans

  	
   

  	
  23

  
	
  SECTION 2.10.

  	
   

  	
  Prepayment of Loans

  	
   

  	
  24

  
	
  SECTION 2.11.

  	
   

  	
  Fees

  	
   

  	
  25

  
	
  SECTION 2.12.

  	
   

  	
  Interest

  	
   

  	
  25

  
	
  SECTION 2.13.

  	
   

  	
  Alternate Rate of Interest

  	
   

  	
  25

  
	
  SECTION 2.14.

  	
   

  	
  Increased Costs

  	
   

  	
  26

  
	
  SECTION 2.15.

  	
   

  	
  Break Funding Payments

  	
   

  	
  27

  
	
  SECTION 2.16.

  	
   

  	
  Taxes

  	
   

  	
  27

  
	
  SECTION 2.17.

  	
   

  	
  Payments Generally

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  III

  
	
  Representations
  and Warranties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
   

  	
  Organization; Powers

  	
   

  	
  28

  
	
  SECTION 3.02.

  	
   

  	
  Authorization;
  Enforceability

  	
   

  	
  29

  
	
  SECTION 3.03.

  	
   

  	
  Governmental Approvals; No
  Conflicts

  	
   

  	
  29

  
	
  SECTION 3.04.

  	
   

  	
  Financial Condition; No
  Material Adverse Change

  	
   

  	
  29

  
	
  SECTION 3.05.

  	
   

  	
  Properties

  	
   

  	
  29

  
	
  SECTION 3.06.

  	
   

  	
  Litigation and
  Environmental Matters

  	
   

  	
  30

  
	
  SECTION 3.07.

  	
   

  	
  Compliance with Laws and
  Agreements

  	
   

  	
  30

  
	
  SECTION 3.08.

  	
   

  	
  Investment and Holding
  Company Status

  	
   

  	
  30

  
	
  SECTION 3.09.

  	
   

  	
  Taxes

  	
   

  	
  30

  
	
  SECTION 3.10.

  	
   

  	
  ERISA

  	
   

  	
  30

  
	
  SECTION 3.11.

  	
   

  	
  Disclosure

  	
   

  	
  31

  
	
  SECTION 3.12.

  	
   

  	
  Employee Matters

  	
   

  	
  31

  
	
  SECTION 3.13.

  	
   

  	
  Subsidiaries

  	
   

  	
  32

  
	
  SECTION 3.14.

  	
   

  	
  Collateral Documents

  	
   

  	
  32

  



i







	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.15.

  	
   

  	
  Solvency

  	
   

  	
  32

  
	
  ARTICLE
  IV

  
	
  Conditions

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
   

  	
  Effective Date

  	
   

  	
  34

  
	
  SECTION 4.02.

  	
   

  	
  Each Credit Event

  	
   

  	
  36

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
  Affirmative
  Covenants

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
   

  	
  Financial Statements;
  Ratings Change and Other Information

  	
   

  	
  37

  
	
  SECTION 5.02.

  	
   

  	
  Notices of Material Events

  	
   

  	
  38

  
	
  SECTION 5.03.

  	
   

  	
  Existence; Conduct of
  Business

  	
   

  	
  38

  
	
  SECTION 5.04

  	
   

  	
  Payment of Obligations

  	
   

  	
  38

  
	
  SECTION 5.05.

  	
   

  	
  Maintenance of Properties;
  Insurance

  	
   

  	
  38

  
	
  SECTION 5.06.

  	
   

  	
  Books and Records;
  Inspection Rights

  	
   

  	
  39

  
	
  SECTION 5.07.

  	
   

  	
  Compliance with Laws

  	
   

  	
  39

  
	
  SECTION 5.08.

  	
   

  	
  Use of Proceeds and
  Letters of Credit

  	
   

  	
  39

  
	
  SECTION 5.09

  	
   

  	
  Collateral Security;
  Further Assurances

  	
   

  	
  39

  
	
  SECTION 5.10

  	
   

  	
  Additional Covenants

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VI

  
	
  Negative
  Covenants

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
   

  	
  Liens

  	
   

  	
  40

  
	
  SECTION 6.02.

  	
   

  	
  Fundamental Changes

  	
   

  	
  42

  
	
  SECTION 6.03.

  	
   

  	
  Investments, Loans,
  Advances, Guarantees and Acquisitions

  	
   

  	
  42

  
	
  SECTION 6.04.

  	
   

  	
  Swap Agreements

  	
   

  	
  43

  
	
  SECTION 6.05.

  	
   

  	
  Restricted Payments

  	
   

  	
  43

  
	
  SECTION 6.06.

  	
   

  	
  Transactions with
  Affiliates

  	
   

  	
  43

  
	
  SECTION 6.07.

  	
   

  	
  Restrictive Agreements
  

  	
   

  	
  43

  
	
  SECTION 6.08

  	
   

  	
  Change of Name or
  Location; Change of Fiscal Year

  	
   

  	
  44

  
	
  SECTION 6.09

  	
   

  	
  Amendments to Agreements

  	
   

  	
  44

  
	
  SECTION 6.10

  	
   

  	
  Prepayment of
  Indebtedness; Subordinated Debt

  	
   

  	
  44

  
	
  SECTION 6.11

  	
   

  	
  Depository Banks

  	
   

  	
  44

  
	
  SECTION 6.12

  	
   

  	
  Minimum EBITDA

  	
   

  	
  44

  
	
  SECTION 6.13

  	
   

  	
  Fixed Charge Coverage
  Ratio

  	
   

  	
  44

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VII

  
	
  Events
  of Default

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Events of Default

  	
   

  	
  45

  



ii







	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII

  
	
  Miscellaneous

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01.

  	
   

  	
  Notices

  	
   

  	
  47

  
	
  SECTION 8.02.

  	
   

  	
  Waivers; Amendments

  	
   

  	
  47

  
	
  SECTION 8.03.

  	
   

  	
  Expenses; Indemnity;
  Damage Waiver

  	
   

  	
  48

  
	
  SECTION 8.04.

  	
   

  	
  Successors and Assigns

  	
   

  	
  49

  
	
  SECTION 8.05.

  	
   

  	
  Survival

  	
   

  	
  50

  
	
  SECTION 8.06.

  	
   

  	
  Counterparts;
  Integration;  Effectiveness

  	
   

  	
  50

  
	
  SECTION 8.07.

  	
   

  	
  Severability

  	
   

  	
  50

  
	
  SECTION 8.08.

  	
   

  	
  Right of Setoff

  	
   

  	
  50

  
	
  SECTION 8.09.

  	
   

  	
  Governing Law;
  Jurisdiction; Consent to Service of Process

  	
   

  	
  51

  
	
  SECTION 8.10.

  	
   

  	
  WAIVER OF JURY TRIAL

  	
   

  	
  51

  
	
  SECTION 8.11.

  	
   

  	
  Headings

  	
   

  	
  51

  
	
  SECTION 8.12.

  	
   

  	
  Interest Rate Limitation

  	
   

  	
  51

  
	
  SECTION 8.13.

  	
   

  	
  USA PATRIOT Act

  	
   

  	
  52

  



iii







               CREDIT
AGREEMENT dated as of November 17, 2005, among CARACO PHARMACEUTICAL
LABORATORIES, LTD. and JPMORGAN CHASE BANK, N.A.


               The
parties hereto agree as follows:


ARTICLE
I

DEFINITIONS

Definitions


               SECTION
1.01.  Defined Terms.  As used in this Agreement, the following
terms have the meanings specified below:


               “ABR”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.


               “Accounts”
shall have the meaning set forth in Article 9 of the UCC.


               “Acquisition”
means any transaction, or any series of related transactions, consummated on or
after the Effective Date, by which any Loan Party (a) acquires any going
business or all or substantially all of the assets of any Person, whether
through purchase of assets, merger or otherwise or (b) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the Equity Interests
of a Person which has ordinary voting power for the election of directors or
other similar management personnel of a Person (other than Equity Interests
having such power only by reason of the happening of a contingency) or a
majority of the outstanding Equity Interests of a Person.


               “Adjusted
LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied
by (b) the Statutory Reserve Rate.


               “Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.


               “Alternate
Base Rate” means, for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1%.  Any change in the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively. 


               “Availability
Period” means the period from and including the Effective Date to but
excluding the Termination Date.


               “Banking
Services” means each and any of the following bank services provided to the
Borrower or any Guarantor by the Lender or any of its Affiliates: (a)
commercial credit cards, (b) stored value cards and (c) treasury management
services (including, without limitation, controlled 


1







disbursement,
automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).


               “Banking
Services Obligations” means any and all obligations of the Borrower or any
Guarantor, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor) in connection with Banking Services.


               “Board”
means the Board of Governors of the Federal Reserve System of the United States
of America.


               “Board
of Directors” means: (1) with respect to a corporation, the board of
directors of the corporation or such directors or committee serving a similar
function; (2) with respect to a limited liability company, the board of
managers of the company or such managers or committee serving a similar function;
(3) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and (4) with respect to any other Person, the
managers, directors, trustees, board or committee of such Person or its owners
serving a similar function. 


               “Borrower”
means Caraco Pharmaceutical Laboratories, Ltd., a Michigan corporation.


               “Borrowing”
means Loans of the same Type, made, converted or continued on the same date
and, in the case of Eurodollar Loans, as to which a single Interest Period is
in effect.


               “Borrowing
Request” means a request by the Borrower for a Borrowing in accordance with
Section 2.03.


               “Business
Day” means any day that is not a Saturday, Sunday or other day on which commercial
banks in Chicago or Detroit are authorized or required by law to remain closed;
provided that, when used in connection with a Eurodollar Loan, the term
“Business Day” shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.


               “Capital
Lease Obligations” of any Person means the obligations of such Person to
pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.


               “Change
in Control” means (a) the change in
occupation of a majority of the seats (other than vacant seats) on the Board of
Directors of the Borrower, excluding the persons nominated to be directors by
Sun Pharmaceutical or any Affiliate of Sun Pharmaceutical that is Controlled by
Sun Pharmaceutical, or (b) any person or group or persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended,
but excluding Sun Pharmaceutical and any Affiliate of Sun Pharmaceutical that
is Controlled by Sun Pharmaceutical) shall obtain ownership or control in one
or more series of transactions of more than 40% of the common Equity Interests
or 40% of the voting power of the Equity Interests of the Borrower entitled to
vote in the election of members of the Board of Directors of the Borrower.


               “Change
in Law” means (a) the adoption of any law, rule or regulation after the
date of 


2







this
Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by the Lender, by any lending office
of the Lender or by the Lender’s holding company with any request, guideline or
directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.


               “Code”
means the Internal Revenue Code of 1986, as amended from time to time.


               “Collateral”
means, collectively, the “Collateral” under and as defined in, and any other
assets upon which a Lien has been granted by, any of the Collateral Documents.


               “Collateral
Documents” means, collectively, the Security Agreements, the Subsidiary
Guaranties and all other agreements or documents granting or
perfecting a Lien in favor of the Lender or otherwise providing support for the
Secured Obligations at any time, as any of the foregoing may be amended or
modified from time to time.


               “Commitment”
means, with respect to the Lender, the commitment of the Lender to make Loans
and issue Letters of Credit hereunder, expressed as an amount representing the
maximum aggregate amount of the Lender’s Revolving Credit Exposure hereunder,
as such commitment may be (a) reduced from time to time pursuant to Section
2.08 and (b) reduced or increased from time to time pursuant to assignments by
or to the Lender pursuant to Section 8.04.
The initial amount of the Commitment is $10,000,000.


               “Consolidated
Capital Expenditures” means, with reference to any period, the Capital
Expenditures of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period.


               “Consolidated
EBITDA” means Consolidated Net Income plus, to the extent deducted from
revenues in determining Consolidated Net Income, (a) Consolidated Interest
Expense, (b) expense for taxes paid or accrued net of tax refunds, (c)
depreciation, (d) amortization, (e) non-cash research and development expense,
and (f) extraordinary non-cash losses (as determined in accordance with GAAP)
incurred other than in the ordinary course of business, minus, to the extent
included in Consolidated Net Income, extraordinary gains (as determined in
accordance with GAAP) realized other than in the ordinary course of business,
all calculated for the Borrower and its Subsidiaries on a consolidated
basis.  


               “Consolidated
Interest Expense” means, with reference to any period, the interest expense
of the Borrower and its Subsidiaries calculated on a consolidated basis for
such period.


               “Consolidated
Net Income” means, with reference to any period, the net income (or loss)
of the Borrower and its Subsidiaries calculated on a consolidated basis for
such period.


               “Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.


               “Default”
means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an
Event of Default.


3







               “Disclosed
Matters” means any actions, suits and proceedings and any environmental
matters disclosed in the SEC Reports.


               “Disqualified
Stock” means any Equity Interest that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part.  Any
Equity Interest solely convertible or redeemable for common Equity Interests
(including Preferred Stock convertible or redeemable into common stock under
the Products Agreement between Sun Pharma Global Inc. and Caraco Pharmaceutical
Laboratories Ltd dated November 20, 2002) shall not be considered Disqualified
Stock.


               “Dollars”
or “$” refers to lawful money of the United States of America.


               “Effective
Date” means the date on which the conditions specified in Section 4.01
are satisfied (or waived in accordance with Section 8.02).


               “Environmental
Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to
public health and safety matters.


               “Environmental
Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or
indemnities), of the Borrower or any Subsidiary directly or indirectly
resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.


               “Equity
Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, and any warrants, options or
other rights entitling the holder thereof to purchase or acquire any such
equity interest.


               “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.


               “ERISA
Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.


               “ERISA
Event” means (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an “accumulated funding 


4







deficiency”
(as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (c) the filing pursuant to Section 412(d) of
the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability under
Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to an intention to terminate any Plan
or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability with respect to
the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by the Borrower or any ERISA Affiliate of any notice, or
the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.


               “Eurodollar”,
when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Adjusted LIBO Rate.


               “Event
of Default” has the meaning assigned to such term in Article VII.


               “Excluded
Taxes” means, with respect to the Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower
hereunder, income or franchise taxes imposed on (or measured by) its net
income  by the United States of America,
or by the jurisdiction under the laws of which such recipient is organized or
in which its principal office is located or, in which its applicable lending
office is located.


               “Federal
Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day that is a Business Day, the average (rounded upwards, if necessary,
to the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Lender from three Federal funds brokers of recognized standing
selected by it.  


               “Financial
Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.


               “Fiscal
Quarter” means any of the quarterly accounting periods of the Borrower,
ending on December 31, March 31, June 30 and September 30 of each year.


               “Fiscal
Year” means any of the annual accounting periods of the Borrower first
ending on March 31 of each year.  As an
example, reference to the 2005 Fiscal Year shall mean the Fiscal Year ending
March 31, 2005.


               “Fixed
Charge Coverage Ratio” means, the ratio, determined as of the end of each
of Fiscal Quarter of the Borrower, of (a) Consolidated EBITDA, minus
Consolidated Capital Expenditures which are not financed with permitted long
term debt, minus taxes, and minus Restricted Payments, to (b) Fixed Charges,
all as calculated for the most-recently ended four Fiscal Quarters and for the
Borrower and its Subsidiaries on a consolidated basis.  


5







               “Fixed
Charges” means, for any period, cash Consolidated Interest Expense, plus
the scheduled and any other required principal payments paid or payable on
Indebtedness, all as calculated for such period and for the Borrower and its
Subsidiaries on a consolidated basis. 


               “GAAP”
means generally accepted accounting principles in the United States of America.


               “Governmental
Authority” means the government of the United States of America, any other
nation or any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government, including
without limitation the U.S. Food and Drug Administration and the U.S. Drug
Enforcement Administration.


               “Governmental
Authorization” means any permit, registration, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.


               “Guarantee”
of or by any Person (the “guarantor”) means any obligation, contingent
or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any
obligation of the guarantor, direct or indirect, (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
or other obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not
include endorsements for collection or deposit in the ordinary course of
business.


               “Guarantor”
means each present and future Subsidiary.


               “Hazardous
Materials”  means all explosive or
radioactive substances or wastes and all hazardous or toxic substances, wastes
or other pollutants, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls, radon gas, infectious
or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.


               “Indebtedness”
of any Person means, without duplication, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any kind,
(b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of 


6







others,
(h) all Capital Lease Obligations of such Person, (h) all Off-Balance
Sheet Liabilities of such Person, (i) all obligations under any Disqualified
Stock  of such Person, (j) all
obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (k) all obligations,
contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.


               “Indemnified
Taxes” means Taxes other than Excluded Taxes.


               “Interest
Election Request” means a request by the Borrower to convert or continue a
Borrowing in accordance with Section 2.07.


               “Interest
Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months’ duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months’ duration after the first day of such Interest Period.


               “Interest
Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless,
in the case of a Eurodollar Borrowing only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (ii) any Interest Period pertaining
to a Eurodollar Borrowing that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such Interest Period) shall end on the last Business Day
of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and, in the case of a Borrowing,
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing. 


               “Inventory”
shall have the meaning set forth in Article 9 of the UCC.


               “LC
Disbursement” means a payment made by the Lender pursuant to a Letter of
Credit.


               “LC
Exposure” means, at any time, the sum of (a) the aggregate undrawn amount
of all outstanding Letters of Credit at such time plus (b) the aggregate amount
of all LC Disbursements that have not yet been reimbursed by or on behalf of
the Borrower at such time.  


               “Lender”
means JPMorgan Chase Bank, N.A., a national banking association, and its
successors and assigns.  


               “Letter
of Credit” means any letter of credit issued pursuant to this Agreement.


7







               “LIBO
Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Dow Jones Market Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Lender
from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity comparable to
such Interest Period.  In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the Lender
in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.


               “Lien”
means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.


               “Loan”
means a Loan made pursuant to Section 2.01(a).


               “Loan
Documents” means this Agreement, any Note, the Collateral Documents and any
other agreement, instrument or other document executed in connection therewith.


               “Loan
Parties” means the Borrower and the Guarantors. 


               “Loans”
means the loans made by the Lender to the Borrower pursuant to this Agreement.


               “Material
Adverse Effect” means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of any
Loan Party to perform any of its obligations under any Loan Document or
(c) the rights of or benefits available to the Lender under any Loan
Document.


               “Material
Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one
or more of the Borrower and its Subsidiaries in an aggregate principal amount
exceeding $2,500,000.  For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
the Borrower or any Subsidiary in respect of any Swap Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Borrower or such Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.


               “Moody’s”
means Moody’s Investors Service, Inc.


               “Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of 


8







ERISA.


               “Obligations”
means all unpaid principal of and accrued and unpaid interest on the Loans, the
LC Exposure, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrower and of the Guarantors to the
Lender or any Related Party arising under the Loan Documents.


               “Off-Balance
Sheet Liability” of a Person means (i) any obligation under a sale and
leaseback transaction which is not a Capital Lease Obligation, (ii) any
so-called “synthetic lease” or “tax ownership operating lease” transaction
entered into by such Person, (iii) the amount of obligations outstanding under
the legal documents entered into as part of any asset securitization or similar
transaction on any date of determination that would be characterized as
principal if such asset securitization or similar transaction were structured
as a secured lending transaction rather than as a purchase or (iv) any other
transaction (excluding operating leases for purposes of this clause (iv)) which
is the functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the balance sheet of such Person; in all of the
foregoing cases, calculated based on the
aggregate outstanding amount of obligations outstanding under the legal
documents entered into as part of any such transaction on any date of
determination that would be characterized as principal if such transaction were
structured as a secured lending transaction,
whether or not shown as a liability on a consolidated balance sheet of such
Person, in a manner reasonably satisfactory to the Lender.


               “Other
Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.


               “PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.


               “Permitted
Encumbrances” means:


	
   

  	
   

  
	
   

  	
            (a) Liens
  imposed by law for taxes that are not yet due or are being contested in
  compliance with Section 5.04;

  
	
   

  	
   

  
	
   

  	
            (b) carriers’,
  warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
  imposed by law, arising in the ordinary course of business and securing
  obligations that are not overdue by more than 30 days or are being contested
  in compliance with Section 5.04;

  
	
   

  	
   

  
	
   

  	
            (c) pledges
  and deposits made in the ordinary course of business in compliance with
  workers’ compensation, unemployment insurance and other social security laws
  or regulations;

  
	
   

  	
   

  
	
   

  	
            (d) deposits
  to secure the performance of bids, trade contracts, leases, statutory
  obligations, surety and appeal bonds, performance bonds and other obligations
  of a like nature, in each case in the ordinary course of business; and

  
	
   

  	
   

  
	
   

  	
            (e) easements,
  zoning restrictions, rights-of-way and similar encumbrances on real property
  imposed by law or arising in the ordinary course of business that do not
  secure any monetary obligations and do not materially detract from the value
  of the affected property or 

  



9







	
   

  	
   

  
	
       interfere
  with the ordinary conduct of business of the Borrower or any Subsidiary;

  
	
   

  	
   

  
	
  provided
  that the term “Permitted Encumbrances” shall not include any Lien securing
  Indebtedness.

  



               “Permitted
Investments” means:


	
   

  	
   

  
	
   

  	
            (a) direct
  obligations of, or obligations the principal of and interest on which are
  unconditionally guaranteed by, the United States of America (or by any agency
  thereof to the extent such obligations are backed by the full faith and
  credit of the United States of America), in each case maturing within one
  year from the date of acquisition thereof;

  
	
   

  	
   

  
	
   

  	
            (b) investments
  in commercial paper maturing within 270 days from the date of acquisition
  thereof and having, at such date of acquisition, the highest credit rating
  obtainable from S&P or from Moody’s;

  
	
   

  	
   

  
	
   

  	

            (c) investments
  in certificates of deposit, banker’s acceptances and time deposits maturing
  within 180 days from the date of acquisition thereof issued or guaranteed by
  or placed with, and money market deposit accounts issued or offered by, any
  domestic office of any commercial bank organized under the laws of the United
  States of America or any State thereof which has a combined capital and
  surplus and undivided profits of not less than $500,000,000;

  
	
   

  	
   

  
	
   

  	
            (d) fully
  collateralized repurchase agreements with a term of not more than 30 days for
  securities described in clause (a) above and entered into with a
  financial institution satisfying the criteria described in clause (c)
  above; and

  
	
   

  	
   

  
	
   

  	
            (e) money
  market funds that (i) comply with the criteria set forth in Securities and
  Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii)
  are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets
  of at least $5,000,000,000.

  



               “Person”
means any natural person, corporation, limited liability company, trust, joint
venture, association, company, partnership, Governmental Authority or other
entity.


               “Plan”  means any
employee pension benefit plan
(other than a Multiemployer Plan) subject to the provisions of Title IV of
ERISA or Section 412 of the Code or Section 302 of ERISA, and in
respect of which the Borrower or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an
“employer” as defined in Section 3(5) of ERISA.


               “Prime
Rate” means the rate of interest per annum publicly announced from time to
time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective from
and including the date such change is publicly announced as being
effective.  


               “Related
Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.


10







               “Requirements
of Law” means, as to any Person, the operating agreement, certificate of
incorporation, by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an arbitrator
or a court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property to which such Person or any of
its property is subject.


               “Restricted
Payment” means (i) any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the
Borrower or any Subsidiary, or (ii) any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any option, warrant or other
right to acquire any such Equity Interests in the Borrower.  It is acknowledged that the conversion of
any Equity Interests of the Borrower into
common Equity Interests of the Borrower that are not Disqualified Stock
are not Restricted Payments.


               “Revolving
Credit Exposure” means, at any time, the sum of the outstanding principal
amount of the Loans and the LC Exposure at such time.


               “SEC”
means the Securities and Exchange Commission or any Govern­mental Authority
succeeding to any or all of the functions of said Commission.


               “SEC
Reports”  means the following
reports and financial statements of the Borrower:


               (i) the
Borrower’s annual report on Form 10-K for the year ended March 31, 2005, as
filed with the SEC as of the date hereof; and


               (ii) the
Borrower’s quarterly reports on Form 10-Q for the quarter ended June 30, 2005
as filed with the SEC as of the date hereof.


               “Secured
Obligations” means, collectively, (i) the Obligations, (ii) the Banking
Services Obligations and (iii) the Swap Agreement Obligations owing to the
Lender or its Affiliates.


               “Security
Agreement” means each security
agreement, pledge agreement, pledge and security agreement and similar
agreement and any other agreement from any Loan Party granting a Lien on
any of its personal property (including without limitation any Equity Interests
owned by such Loan Party), each in form and substance acceptable to the Lender,
entered into by any Loan Party at any time for the benefit of the Lender
pursuant to this Agreement, as amended or modified from time to time.


               “S&P”
means Standard & Poor’s.


               “Statutory
Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus
the aggregate of the maximum reserve percentages (including any marginal,
special, emergency or supplemental reserves) expressed as a decimal established
by the Board to which the Lender is subject for eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the
Board).  Such reserve percentages shall
include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements 


11








without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to the Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.


               “Subordinated
Debt” of a Person means any Indebtedness of such Person the payment of
which is subordinated to payment of the Secured Obligations to the written
satisfaction of the Lender. 


               “Subsidiary”
means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent’s consolidated financial statements if such financial statements
were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, owned, controlled or held, or (b) that is,
as of such date, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.


               
“Subsidiary” means any subsidiary of the Borrower.


               “Subsidiary
Guaranty” means each guaranty executed by a Guarantor, which shall be in
form and substance satisfactory to the Lender.


               “Sun
Pharmaceutical” means Sun Pharmaceutical Industries Limited, a corporation
organized under the laws of India.


               “Swap
Agreement” means any agreement with
respect to any swap, forward, future or derivative transaction or option or
similar agreement involving, or settled by reference to, one or more rates,
currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk
or value or any similar transaction or any combination of these transactions; provided
that no phantom stock or similar plan providing for payments only on account
of services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.


               “Swap
Agreement Obligations” means any
and all obligations of the Borrower or any of its Subsidiaries, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) owing to the Lender or any of its Affiliates under any
and all Swap Agreements.


               “Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions,
charges or withholdings imposed by any Governmental Authority.


               “Termination
Date” means the earlier of (a) November 17, 2006 and (b) the date the
Commitment is terminated.


               “Transactions”
means the execution, delivery and performance by the Borrower of this
Agreement, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of 


12







Credit
hereunder and the transactions relating thereto.


               “Type”,
when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined
by reference to the Adjusted LIBO Rate or the Alternate Base Rate.


               “UCC”
means the Uniform Commercial Code as in effect from time to time in the State
of Michigan.


               “Wholly-Owned
Subsidiary” of a Person means, any Subsidiary all of the outstanding Equity
Interests of which shall at the time be owned or controlled, directly or
indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such
Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person.


               “Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.


               SECTION
1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a
“Eurodollar Loan”).


               SECTION
1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding mascu­line,
feminine and neuter forms. The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”. The word
“will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be construed
as referring to such agreement, instrument or other document as from time to
time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights. 


               SECTION
1.04. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if
the Borrower notifies the Lender that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Lender request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn
or such provision amended in accordance herewith.


13







ARTICLE
II
THE CREDITS



               SECTION
2.01. Commitment. Subject to the terms and conditions set forth herein,
the Lender agrees to make Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in the Revolving
Credit Exposure exceeding the Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Loans. 


               SECTION
2.02. Loans and Borrowings. (a) Subject to Section 2.13, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. The Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of the
Lender to make such Loan; provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in accord­ance
with the terms of this Agreement. 


               (b) At the commencement of each
Interest
Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate
amount that is an integral multiple of $100,000 and not less than $500,000. At
the time that each ABR Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $50,000 and not less than
$100,000; provided that an ABR Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the applicable Commitment or that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e). Borrowings of more than one Type may be outstanding at the
same time; provided that there shall not at any time be more than a
total of four Eurodollar Borrowings outstanding. 


               (c) Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Termination Date.




               SECTION
2.03. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Lender of such request in writing (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., Detroit time, three Business
Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 2:00 p.m., Detroit time, on the Business Day of
the proposed Borrowing; provided that any such notice of an ABR
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e) may be given not later than noon, Detroit time, on the
date of the proposed Borrowing. Each such written Borrowing Request shall be
irrevocable and shall be by hand delivery, telecopy or electronic communication
to the Lender of a written Borrowing Request in a form approved by the Lender
and signed by the Borrower. Each such written Borrowing Request shall specify
the following information in compliance with Section 2.02: 


	
   

  	
   

  
	
   

  	
  (i) the
  aggregate amount of the requested Borrowing;

  
	
   

  	
   

  
	
   

  	
  (ii) the
  date of such Borrowing, which shall be a Business Day;

  
	
   

  	
   

  
	
   

  	
  (iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

  



14







	
   

  	
   

  
	
   

  	
  (iv) in the
  case of a Eurodollar Borrowing, the initial Interest Period to be applicable
  thereto, which shall be a period contemplated by the definition of the term
  “Interest Period”; and

  
	
   

  	
   

  
	
   

  	
  (v) the
  location and number of the Borrower’s account to which funds are to be
  disbursed, which shall comply with the requirements of Section 2.06.

  



If no election
as to the Type of Borrowing is specified, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. 


               SECTION
2.04. Evidence of Debt. (a) The Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Borrower to the Lender resulting from each Loan made by the Lender, including
the amounts of principal and interest payable and paid to the Lender from time
to time hereunder.


               (b)
The Lender shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to the Lender hereunder
and (iii) the amount of any sum received by the Lender hereunder for the
account of the Lender and the Lender’s share thereof.


               (c)
The entries made in the accounts maintained pursuant to paragraph (a)
or (b) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that
the failure of the Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.


               (d)
The Lender may request that Loans made by it be evidenced by a promissory note.
In such event, the Borrower shall prepare, execute and deliver to the Lender a
promissory note payable to the order of the Lender (or, if requested by the
Lender, to the Lender and its registered assigns) and in a form approved by the
Lender. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section 8.04)
be represented by one or more promissory notes in such form payable to the
order of the payee named therein (or, if such promissory note is a registered
note, to such payee and its registered assigns).


               SECTION
2.05. Letters of Credit. (a) General. Subject to the terms
and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account, in a form reasonably acceptable to the
Lender, at any time and from time to time during the Availability Period. In
the event of any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Lender relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.


               (b)
Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or telecopy (or transmit by electronic 


15







communication,
if arrangements for doing so have been approved by the Lender) to the Lender
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall
be a Business Day), the date on which such Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit. If requested by the Lender, the Borrower also shall submit a
letter of credit application on the Lender’s standard form in connection with
any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent
and warrant that), after giving effect to such issuance, amendment, renewal or
extension the total Revolving Credit Exposures shall not exceed the Commitment
and the LC Exposure shall not exceed $1,000,000.


               (c)
Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the
date that is one year after the Termination Date.


               (d)
Reimbursement. If the Lender shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Lender an amount equal to such LC Disbursement not later than
12:00 noon, Detroit time, on the date that such LC Disbursement is made, if the
Borrower shall have received notice of such LC Disbursement prior to 10:00
a.m., Detroit time, on such date, or, if such notice has not been received by
the Borrower prior to such time on such date, then not later than 12:00 noon,
Detroit time, on (i) the Business Day that the Borrower receives such notice,
if such notice is received prior to 10:00 a.m., Detroit time, on the day of
receipt, or (ii) the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section
2.03 or 2.05 that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing.


               (e)
Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of
any Letter of Credit or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Lender under a Letter
of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Lender nor any of their Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, 


16







interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of
the Lender; provided that the foregoing shall not be construed to excuse
the Lender from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) suffered by
the Borrower that are caused by the Lender’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Lender (as finally determined by a court of competent jurisdiction), the Lender
shall be deemed to have exercised care in each such determination. In
furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their
face to be in substantial compliance with the terms of a Letter of Credit, the
Lender may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit. 


               (f)
Disbursement Procedures. The Lender shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Lender shall promptly notify the Borrower
by telephone (confirmed by telecopy) of such demand for payment and whether the
Lender has made or will make an LC Disbursement thereunder; provided
that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Lender with respect to any such LC
Disbursement. 


               (g)
Interim Interest. If the Lender shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is made, the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but
excluding the date that the Borrower reimburses such LC Disbursement, at the
rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(d) shall apply.


               (h)
Cash Collateralization. If any Event of Default under clause (a) or (b)
of Article VII shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Lender demanding the deposit of cash
collateral pursuant to this paragraph or automatically without notice or demand
on the Termination Date, the Borrower shall deposit in an account with the
Lender, in the name of the Lender and for the benefit of the Lender, an amount
in cash equal to the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash
collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described
in clause (h) or (i) of Article VII. Such deposit shall be held by
the Lender as collateral for the payment and performance of the obligations of
the Borrower under this Agreement. The Lender shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which investments
shall be made at the option and sole discretion of the Lender and at the
Borrower’s risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys
in such account shall be applied by the 


17







Lender to
reimburse the Lender for LC Disbursements for which it has not been reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated, be applied to satisfy other
obligations of the Borrower under this Agreement. If the Borrower is required
to provide an amount of cash collateral hereunder as a result of the occurrence
of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived if such date is prior to the Termination
Date.


               SECTION
2.06. Funding of Borrowings. The Lender shall make each Loan available
to the Borrower by promptly crediting the amounts so received, in like funds,
to an account of the Borrower maintained with the Lender and designated by the
Borrower in the applicable Borrowing Request.


               SECTION
2.07. Interest Elections. (a) Each Borrowing initially shall be of the
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing Request. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such Loans
comprising each such portion shall be considered a separate Borrowing. 


               (b)
To make an election pursuant to this Section, the Borrower shall notify the
Lender of such election in writing by the time that a Borrowing Request would
be required under Section 2.03 if the Borrower were requesting a Borrowing of
the Type resulting from such election to be made on the effective date of such
election. Each such written Interest Election Request shall be irrevocable and
shall be by hand delivery or telecopy to the Lender of a written Interest
Election Request in a form approved by the Lender and signed by the Borrower.


               (c)
Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:


	
   

  	
   

  
	
   

  	
            (i)
  the Borrowing to which such Interest Election Request applies and, if
  different options are being elected with respect to different portions
  thereof, the portions thereof to be allocated to each resulting Borrowing (in
  which case the information to be specified pursuant to clauses (iii) and (iv)
  below shall be specified for each resulting Borrowing);

  
	
   

  	
   

  
	
   

  	
            (ii)
  the effective date of the election made pursuant to such Interest Election
  Request, which shall be a Business Day;

  
	
   

  	
   

  
	
   

  	
            (iii)
  whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
  Borrowing; and

  
	
   

  	
   

  
	
   

  	
            (iv)
  if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to
  be applicable thereto after giving effect to such election, which shall be a
  period contemplated by the definition of the term “Interest Period”.

  



If any such Interest Election
Request requests a Eurodollar Borrowing but does not specify an Interest 


18







Period, then the Borrower shall
be deemed to have selected an Interest Period of one month’s duration.


               (d)
If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein,
at the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.


               SECTION
2.08. Termination and Reduction of Commitment. (a) Unless previously
terminated, the Commitment shall termi­nate on the Termination Date. 


               (b)
The Borrower may at any time terminate, or from time to time reduce, the
Commitment; provided that (i) each reduction of the Commitment shall be
in an amount that is an integral multiple of $100,000 and not less than
$500,000 and (ii) the Borrower shall not terminate or reduce the Commitment if,
after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the Revolving Credit Exposures would exceed the Commitment.


               SECTION
2.09. Repayment of Loans. (a) The Borrower hereby
unconditionally promises to pay to the Lender the then unpaid principal amount
of each Loan on the Termination Date.


               (b) The Borrower
shall immediately repay the Revolving Credit Exposure if at any time the
aggregate Revolving Credit Exposure exceeds the Commitment, to the extent
required to eliminate such excess. If any such excess remains after repayment
in full of all outstanding Loans, the Borrower shall provide cash collateral
for the LC Exposure in the manner set forth herein to the extent required to
eliminate such excess. 


               SECTION
2.10. Prepayment of Loans. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with paragraph (b) of this Section.


               (b)
Each partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.


               SECTION
2.11. Fees. (a) The Borrower agrees to pay a fee to the Lender with
respect to Letters of Credit, which shall accrue at the rate of 0.75% per annum
on the average daily amount of the Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the date on which the Lender
ceases to have any LC Exposure, as well as the Lender’s standard fees with
respect to the issuance, amendment, renewal or extension of any Letter of
Credit or processing of drawings thereunder. Such fees accrued through and
including the last day of March, June, September and December of each year
shall be payable on the third Business Day following such last day,


19







commencing on
the first such date to occur after the Effective Date; provided that all
such fees shall be payable on the date on which the Termination Date and any
such fees accruing after the Termination Date shall be payable on demand. Any
other fees payable to the Lender pursuant to this paragraph shall be payable
within 5 days after demand. All such fees shall be computed on the basis of a
year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day).


               (b)
All fees payable hereunder shall be paid on the dates due, in immediately
available funds, to the Lender. Fees paid shall not be refundable under any
circumstances.


               SECTION
2.12. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate minus 1.0%.


               (b)
The Loans comprising each Eurodollar Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
0.75%.


               (c)
Notwithstanding the foregoing, upon and during the continuance of any Event of
Default, all Loans and other amounts due hereunder (other than interest) shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Loans as provided in paragraph (a) of this Section.


               (d)
Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Loans, upon termination of the
Commitment; provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any repayment
or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the
end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or prepayment and
(iii) in the event of any conversion of any Eurodollar Loan prior to the end of
the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.


               (e)
All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on
the basis of a year of 365 days (or 366 days in a leap year), and in each case
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO
Rate or LIBO Rate shall be determined by the Lender, and such determination
shall be conclusive absent manifest error.


               SECTION
2.13. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:


	
   

  	
   

  
	
   

  	
            (a)
  the Lender determines (which determination shall be conclusive absent
  manifest error) that adequate and reasonable means do not exist for
  ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
  Interest Period; or

  
	
   

  	
   

  
	
   

  	
            (b)
  the Lender determines that the Adjusted LIBO Rate or the LIBO Rate, as
  applicable, for such Interest Period will not adequately and fairly reflect
  the cost to the Lender of making 

  



20







	
   

  	
   

  
	
   

  	
  or
  maintaining their Loans (or its Loan) included in such Borrowing for such
  Interest Period;

  



then the
Lender shall give notice thereof to the Borrower by telephone or telecopy as
promptly as practicable thereafter and, until the Lender notifies the Borrower
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the
circumstances giving rise to such notice affect only one Type of Borrowings,
then the other Type of Borrowings shall be permitted.


               SECTION
2.14. Increased Costs. (a) If any Change in Law shall:


	
   

  	
   

  
	
   

  	
            (i)
  impose, modify or deem applicable any reserve, special deposit or similar
  requirement against assets of, deposits with or for the account of, or credit
  extended by, the Lender (except any such reserve requirement reflected in the
  Adjusted LIBO Rate); or

  
	
   

  	
   

  
	
   

  	
            (ii)
  impose on the Lender or the London interbank market any other condition
  affecting this Agreement or Eurodollar Loans made by the Lender or any Letter
  of Credit;

  



and the result
of any of the foregoing shall be to increase the cost to the Lender of making
or main­taining any Eurodollar Loan (or of maintaining its obligation to make
any such Loan) or to increase the cost to the Lender of issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable
by the Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to the Lender such additional amount or amounts as will
compensate the Lender for such additional costs incurred or reduction suffered.


               (b)
If the Lender determines that any Change in Law regarding capital requirements
has or would have the effect of reducing the rate of return on the Lender’s
capital or on the capital of the Lender’s holding company, if any, as a
consequence of this Agreement or the Loans made by the Lender, or the Letters
of Credit issued by the Lender, to a level below that which the Lender or the
Lender’s holding company could have achieved but for such Change in Law (taking
into consideration the Lender’s policies and the policies of the Lender’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to the Lender such additional amount or amounts as will compensate the
Lender or the Lender’s holding company for any such reduction suffered.


               (c)
A certificate of the Lender setting forth the amount or amounts necessary to
compensate the Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay the
Lender the amount shown as due on any such certificate within 10 days
after receipt thereof. 


               (d)
Failure or delay on the part of the Lender to demand compensation pursuant to
this Section shall not constitute a waiver of the Lender’s right to demand such
compensation; provided that the Borrower shall not be required to
compensate the Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that the Lender
notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of the Lender’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased


21







 costs
or reductions is retroactive, then the 180-day period referred to above shall
be extended to include the period of retroactive effect thereof.


               SECTION
2.15. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(b) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate the
Lender for the loss, cost and expense attributable to such event. In the case
of a Eurodollar Loan, such loss, cost or expense to the Lender shall be deemed
to include an amount determined by the Lender to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have
been applicable to such Loan, for the period from the date of such event to the
last day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which the
Lender would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
market. A certifi­cate of the Lender setting forth any amount or amounts that
the Lender is entitled to receive pursuant to this Section shall be delivered
to the Borrower and shall be conclusive absent manifest error. The Borrower
shall pay the Lender the amount shown as due on any such certificate within 10
days after receipt thereof.


               SECTION 2.16.
Taxes. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if the Borrower
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Lender receives an amount equal
to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law. 


               (b)
In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.


               (c)
The Borrower shall indemnify the Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Lender on or with respect to any payment by or on account of any obligation
of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed
or asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Borrower by the Lender shall be conclusive absent manifest error. 


               (d)
As soon as practicable after any payment of Indemnified Taxes or Other Taxes by
the Borrower to a Governmental Authority, the Borrower shall deliver to the
Lender the original or a 


22







certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Lender.


               (e)
If the Lender or the Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.16, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.16 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Lender or the Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the Lender or
the Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Lender or the Lender in the event the Lender or the Lender is
required to repay such refund to such Governmental Authority. This Section
shall not be construed to require the Lender or the Lender to make available
its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person. 


               SECTION
2.17. Payments Generally; (a) The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 3:00 p.m., Detroit time, on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Lender, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to
the Lender at its offices designated to the Borrower from time to time. If any
payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments hereunder shall be made in dollars.


               (b)
If at any time insufficient funds are received by and available to the Lender
to pay fully all amounts of principal, unreimbursed LC Disbursements, interest
and fees then due hereunder, such funds shall be applied (i) first, towards
payment of interest and fees then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due
to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto
in accordance with the amounts of principal and unreimbursed LC Disbursements
then due to such parties.


ARTICLE
III

REPRESENTATIONS AND WARRANTIES


               In
order to induce the Lender to enter into this Agreement, the Borrower
represents and warrants to the Lender, that the following statements are true,
correct and complete (it being understood and agreed that the representations
and warranties made on the Effective Date are deemed to be made concurrently
with, and giving effect to, the consummation of the Transactions):


               SECTION
3.01. Organization; Powers. Each of the Borrower and its Subsidiaries is



23







duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every juris­diction where such qualification is required. As of
the Effective Date, the Borrower has no Subsidiaries.


               SECTION
3.02. Authorization; Enforceability. The Transactions are within the
Borrower’s and each Guarantor’s corporate or company, as the case may be,
powers and have been duly authorized by all necessary corporate or company and,
if required, stockholder or member action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.


               SECTION
3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or
made and are in full force and effect, (b) will not violate any applicable law
or regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, agreement or
other instrument binding upon the Borrower or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries, except as created under the Collateral Documents in favor of the
Lender.


               SECTION
3.04. Financial Condition; No Material Adverse Change. (a) The audited
balance sheets and statements of income, stockholders equity and cash flows as
of and for the 2004 Fiscal Year for the Borrower and its subsidiary heretofore
furnished to the Lender present fairly, in all material respects, the financial
position and results of operations and cash flows of such Person as of such
dates and for such periods in accordance with GAAP.


               (b)
Since March 31, 2005, there has been no material adverse change in the
business, assets, operations, prospects or condition, financial or otherwise,
of the Borrower and its Subsidiaries, taken as a whole.


               SECTION
3.05. Properties. (a) Each of the Borrower and its Subsidiar­ies has
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do
not interfere with its ability to conduct its business as currently conducted
or to utilize such properties for their intended purposes. 


               (b)
Each of the Borrower and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.


24







               SECTION
3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to
which there is a reasonable possi­bility of an adverse determination and that,
if adversely deter­mined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.


               (b)
Except for the Disclosed Matters and except with respect to any other matters
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under
any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.


               (c)
Since the date of this Agreement, there has been no change in the status of the
Disclosed Matters that, individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse Effect.


               SECTION
3.07. Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all Requirements of Law of any Governmental
Authority applicable to it or its property and all indentures, agreements and
other instruments binding upon it or its property and has all Governmental
Authorizations required by any Requirement of Law, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect. 


               SECTION
3.08. Investment and Holding Company Status. Neither the Borrower nor
any of its Subsidiaries is (a) an “investment company” as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
“holding company” as defined in, or subject to regula­tion under, the Public
Utility Holding Company Act of 1935.


               SECTION
3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed
or caused to be filed all tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves in accordance with GAAP or (b) to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect. 


               SECTION
3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed by
more than $250,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent
financial statements reflecting such amounts, exceed by more than $250,000 the
fair market value of the assets of all such underfunded 


25







Plans.


               SECTION
3.11. Disclosure. The Borrower has disclosed to the Lender all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to
the Lender or the Lender in connection with the negotiation of this Agreement
or delivered hereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time.


               SECTION
3.12 Employee Matters.
Neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (a) no unfair labor practice complaint pending against the Borrower or
any of its Subsidiaries, or to the knowledge of the Borrower, threatened
against any of them and no grievance or arbitration proceeding arising out of
or under any collective bargaining agreement that is so pending against the
Borrower or any of its Subsidiaries or to the knowledge of the Borrower,
threatened against any of them, (b) no strike, work stoppage or other labor
controversy in existence or threatened involving the Borrower or any of its
Subsidiaries, and (c) no violation of any laws or regulations, foreign or
domestic, with respect to any employee, union or related matters by the
Borrower or any of its Subsidiaries, except (with respect to any matter
specified in clause (a), (b) or (c) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
The Borrower and its Subsidiaries are in
substantial compliance in all material respects with the Fair Labor Standards
Act, as amended, and have paid all minimum and overtime wages required by law
to be paid to their employees.


               SECTION
3.13 Subsidiaries. As of the Effective Date, the Borrower has no
Subsidiaries. 


               SECTION
3.14 Collateral Documents. The Security Agreement is
effective to create in favor of the Lender a legal, valid and enforceable
security interest in the Collateral and when financing statements in
appropriate form are filed in the appropriate office in the State of Michigan,
the Security Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the
Collateral and the proceeds thereof, as security for the Secured Obligations,
in each case prior and superior in right to any other Person except Liens
permitted by Section 6.01.


               SECTION
3.15 Solvency. (a) the fair value of the assets of each Loan Party, at a
fair valuation, will exceed the debts and liabilities, subordinated, contingent
or otherwise, of each Loan Party; (b) the present fair saleable value of the
assets of each Loan Party will be greater than the amount that will be required
to pay the probable liability of each Loan Party on its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) each Loan Party will
not have unreasonably small capital with which to conduct the businesses in
which it is engaged as such businesses are now conducted and are proposed to be
conducted after the date hereof. The 


26







Borrower does
not intend to, or to permit any of its Subsidiaries to, and does not believe
that it or any of its Subsidiaries will, incur debts beyond its ability to pay
such debts as they mature, taking into account the timing of and amounts of
cash to be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the Indebtedness
of any such Subsidiary. 


ARTICLE
IV

CONDITIONS


Conditions


               SECTION
4.01. Effective Date. The obligations of the Lender to make Loans and to
issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance
with Section 8.02):


	
   

  	
   

  
	
   

  	
            (a)
  The Lender (or its counsel) shall have received from each party thereto
  either (i) a counterpart of each Loan Document signed on behalf of each
  party thereto or (ii) written evidence satisfactory to the Lender (which may
  include telecopy transmission of a signed signature page of this Agreement)
  that each party thereto has signed a counterpart of this Agreement.

  
	
   

  	
   

  
	
   

  	
            (b)
  The Lender shall have received a favorable written opinion of counsel for the
  Borrower and the Guarantors, in form and substance acceptable to the Lender,
  and covering such other matters relating to the Borrower and the Guarantors,
  this Agreement or the Transactions as the Lender shall reasonably request.
  The Borrower hereby requests such counsel to deliver such opinion.

  
	
   

  	
   

  
	
   

  	
            (c)
  The Lender shall have received such documents and certificates as the Lender
  or its counsel may reasonably request relating to the organization, existence
  and good standing of the Borrower and the Guarantors, the authorization of
  the Transactions and any other legal matters relating to the Borrower, the
  Guarantors this Agreement or the Transactions, all in form and substance
  satisfactory to the Lender and its counsel.

  
	
   

  	
   

  
	
   

  	
            (d)
  The Lender shall have received a certificate, dated the Effective Date and
  signed by the President, a Vice President or a Financial Officer of the
  Borrower, confirming compliance with the conditions set forth in
  paragraphs (a) and (b) of Section 4.02.

  
	
   

  	
   

  
	
   

  	
            (e)
  The Lender shall have received all fees and other amounts due and payable on
  or prior to the Effective Date, including, to the extent invoiced,
  reimbursement or payment of all out-of-pocket expenses required to be
  reimbursed or paid by the Borrower hereunder.

  
	
   

  	
   

  
	
   

  	
            (f)
  The Lender shall have received all Lien and other searches that the Lender
  deems necessary, the Loan Parties shall have delivered UCC termination
  statements or amendments to existing UCC financing statements with respect to
  any filings against the Collateral as may be requested by the Lender and
  shall have authorized the filing of such termination statements or
  amendments, the Lender shall have been authorized to file any UCC financing
  statements that the Lender deems necessary to perfect its Liens in the
  Collateral and 

  



27







	
   

  	
   

  
	
   

  	
  Liens
  creating a first priority security interest in the Collateral in favor of the
  Lender shall have been perfected.

  
	
   

  	
   

  
	
   

  	
            (g)
  All legal (including tax implications) and regulatory matters, including, but
  not limited to compliance with applicable requirements of Regulations U, T
  and X of the Board shall be satisfactory to the Lender.

  
	
   

  	
   

  
	
   

  	
            (h)
  The Borrower shall have delivered evidence of insurance coverage in form,
  scope, and substance reasonably satisfactory to the Lender.

  
	
   

  	
   

  
	
   

  	
            (i)
  The Lender shall have received a certificate from a Financial Officer
  concerning the solvency and other appropriate factual information with
  respect to the Borrower and its Subsidiaries in form and substance
  satisfactory to the Lender with respect to solvency.

  
	
   

  	
   

  
	
   

  	
            (j)
  The Lender shall have received satisfactory results of due diligence
  investigations of the Borrower and its subsidiaries (including without
  limitation liabilities and contingent liabilities (e.g., environmental,
  retiree medical benefits, ERISA, etc.) and contractual obligations and a
  review of financial statements on the Borrower and its subsidiaries satisfactory
  to the Lender). 

  
	
   

  	
   

  
	
   

  	
            (k)
  The Loan Parties shall have delivered such other documents as the Lender or
  its counsel may have reasonably requested.

  



Notwithstanding
the foregoing, the obligations of the Lender to make Loans and to issue Letters
of Credit hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 8.02) at or prior to
3:00 p.m., Detroit time, on November 17, 2005 (and, in the event such
conditions are not so satisfied or waived, the Commitment shall terminate at
such time). 


               SECTION
4.02. Each Credit Event. The obligation of the Lender to make a Loan on
the occasion of any Borrowing and to issue, amend, renew or extend any Letter
of Credit, is subject to the satisfaction of the following conditions:


	
   

  	
   

  
	
   

  	
            (a)
  The representations and warranties of each Loan Party set forth in this
  Agreement or in any other Loan Document shall be true and correct on and as
  of the date of such Borrowing or the date of issuance, amendment, renewal or
  extension of such Letter of Credit, as applicable.

  
	
   

  	
   

  
	
   

  	
            (b)
  At the time of and immediately after giving effect to such Borrowing or the
  issuance, amendment, renewal or extension of such Letter of Credit, as applicable,
  no Default shall have occurred and be continuing.

  



Each Borrowing
and each issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrower on the
date thereof as to the matters specified in paragraphs (a) and (b) of this
Section.


28







ARTICLE
V

AFFIRMATIVE COVENANTS

Affirmative Covenants


               Until
the Commitment have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Lender that:


               SECTION
5.01. Financial Statements; Ratings Change and Other Information. The
Borrower will furnish to the Lender:


	
   

  	
   

  
	
   

  	
            (a)
  promptly after the Borrower’s annual report on Form 10-K is publicly filed
  for each Fiscal Year of the Borrower, written notice of the filing or
  delivery thereof to the SEC, provided that if such Form 10-K is not filed
  within 90 days after the end of each Fiscal Year of the Borrower, then
  the Borrower shall deliver to the Lender within 90 days after the end of
  each Fiscal Year its audited consolidated balance sheet and related
  statements of operations, stockholders’ equity and cash flows as of the end
  of and for such year, setting forth in each case in comparative form the
  figures for the previous Fiscal Year, all reported on by Rehmann Robson or
  other independent public accountants of recognized national standing (without
  a “going concern” or like qualification or exception and without any
  qualification or exception as to the scope of such audit) to the effect that
  such consolidated financial statements present fairly in all material
  respects the financial condition and results of operations of the Borrower
  and its consolidated Subsidiaries on a consolidated basis in accordance with
  GAAP consistently applied;

  
	
   

  	
   

  
	
   

  	
            (b)
  promptly after the Borrower’s quarterly report on Form 10-Q is publicly filed
  for each fiscal quarter of the Borrower, written notice of the filing or
  delivery thereof to the SEC, provided that if such Form 10-Q is not filed
  within 60 days after the end of each Fiscal Quarter of the Borrower,
  then the Borrower shall deliver to the Lender within 60 days after the
  end of each Fiscal Quarter its consolidated balance sheet and related
  statements of operations, stockholders’ equity and cash flows as of the end
  of and for such Fiscal Quarter and the then elapsed portion of the Fiscal
  Year, setting forth in each case in comparative form the figures for the
  corresponding period or periods of (or, in the case of the balance sheet, as
  of the end of) the previous Fiscal Year, all certified by one of its Finan­cial
  Officers as presenting fairly in all material respects the financial
  condition and results of operations of the Borrower and its consolidated
  Subsidiaries on a consolidated basis in accordance with GAAP consis­tently
  applied, subject to normal year-end audit adjustments and the absence of
  footnotes;

  
	
   

  	
   

  
	
   

  	
            (c)
  concurrently with any delivery of financial statements under clause
  (a) or clause (b) above, a certificate of a Financial Officer of
  the Borrower (i) certifying as to whether a Default has occurred and, if
  a Default has occurred, specifying the details thereof and any action taken
  or proposed to be taken with respect thereto, (ii) setting forth
  reasonably detailed calculations demonstrating compliance with
  Sections 6.12 and 6.13 and (iii) stating whether any change in GAAP
  or in the application thereof has occurred since the date of the audited
  financial statements referred to in Section 3.04 and, if any such change
  has occurred, specifying 

  



29







	
   

  	
   

  
	
   

  	
  the effect
  of such change on the financial statements accompanying such certificate,
  and, additionally, concurrently with any delivery of any Form 10-Q under
  clause (b) above, a certificate of a Financial Officer of the Borrower
  certifying to the Lender such financial statements as presenting fairly in
  all material respects the financial condition and results of operations of
  the Borrower and its consolidated Subsidiaries on a consolidated basis in
  accordance with GAAP consis­tently applied, subject to normal year-end audit
  adjustments and the absence of footnotes;

  
	
   

  	
   

  
	
   

  	
            (d) within
  30 days after the end of each month in which any Loans or Letters of
  Credit are outstanding and in any event no less than once in each consecutive
  twelve month period, and at such other times as may be requested by the
  Lender, as of the period then ended, a listing of Accounts in detail
  satisfactory to the Lender and other supporting information requested by the
  Lender in connection therewith;

  
	
   

  	
   

  
	
   

  	
            (e) promptly after the same are publicly filed, written notice of the filing or
  delivery of all periodic and other reports, proxy statements and other
  materials filed by the Borrower or any Subsidiary with the SEC, or with any
  national securities exchange, or distributed by the Borrower to its share­holders
  generally, as the case may be;

  
	
   

  	
   

  
	
   

  	
            (f) promptly following any request therefor, such other information regarding the
  operations, business affairs and financial condition of the Borrower or any
  Subsidi­ary or Affiliate, or compliance with the terms of this Agreement, as
  the Lender or the Lender may reasonably request.

  



               SECTION
5.02. Notices of Material Events. The Borrower will furnish to the
Lender prompt written notice of the following:


	
   

  	
   

  
	
   

  	
            (a)
  the occurrence of any Default;

  
	
   

  	
   

  
	
   

  	
            (b)
  the filing or commencement of any action, suit or proceeding by or before any
  arbitrator or Governmental Authority against or affecting the Borrower or any
  Affiliate thereof that, if adversely determined, could reasonably be expected
  to result in a Material Adverse Effect; 

  
	
   

  	
   

  
	
   

  	
            (c)
  the occurrence of any ERISA Event that, alone or together with any other
  ERISA Events that have occurred, could reasonably be expected to result in
  liability of the Borrower and its Subsidiaries in an aggregate amount
  exceeding $250,000; and

  
	
   

  	
   

  
	
   

  	
            (d)
  any other development that results in, or could reasonably be expected to
  result in, a Material Adverse Effect.

  



Each notice
delivered under this Section shall be accompanied by a statement of a Financial
Officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.


               SECTION
5.03. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises 


30







material to the
conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under
Section 6.02.


               SECTION
5.04. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its obliga­tions, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall
become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropri­ate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.


               SECTION 5.05.
Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.


               SECTION
5.06. Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Lender or the Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.
The Borrower shall take such action as may be reasonably requested by the Lender to
allow the Lender to rely on the annual audit of the Borrower and its
Subsidiaries.


               SECTION 5.07.
Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.


               SECTION
5.08. Use of Proceeds and Letters of Credit. The proceeds of the Loans
and Letters of Credit will be used only for working capital needs and general
corporate purposes of the Borrower and its Subsidiaries. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations T, U and X.


               SECTION
5.09. Collateral Security; Further Assurances. (a) To guarantee or
secure the payment when due of the Secured Obligations, the Borrower shall
execute and deliver, or cause to be executed and delivered, to the Lender
Collateral Documents granting or providing for the following:


               (i)
Subsidiary Guaranties of all
present and future Subsidiaries of the Borrower.


               (ii)
Security Agreements granting a first priority, enforceable Lien and security
interest, subject only to Liens permitted by Section 6.01, on all
present and future Accounts, Inventory and all proceeds thereof of
the Borrower and each Guarantor.


31







               (iii)
All other security and
collateral described in the Collateral Documents. 


          (b) The
Borrower agrees that it will promptly notify the Lender of the formation or
acquisition of any Subsidiary or other Subsidiary or the acquisition of any
assets on which a Lien is required to be granted and that is not covered by
existing Collateral Documents. The Borrower agrees that it will promptly execute
and deliver, and cause each Subsidiary to execute and deliver, promptly upon the request of the Lender, such
additional Collateral Documents and other agreements, documents and
instruments, each in form and substance satisfactory to the Lender, sufficient
to grant to the Lender the Subsidiary Guaranties and Liens contemplated by this
Agreement and the Collateral Documents. Additionally, the Borrower shall
execute and deliver, and cause each Subsidiary to execute and deliver, promptly upon the request of the Lender, such
certificates, legal opinions, lien searches, organizational and other charter
documents, resolutions and other documents and agreements as the Lender may
request in connection therewith. The Borrower shall use its best efforts to cause
each lessor of real property to the Borrower or any Guarantor where any material Collateral is located to
execute and deliver to the Lender an agreement in form and substance reasonably
acceptable to the Lender duly executed on behalf of such lessor waiving any
distraint, lien and similar rights with respect to any property subject to the
Collateral Documents and agreeing to permit the Lender to enter such premises
in connection therewith. 


          (c)
The Borrower represents and warrants to the Lender that the execution, delivery and performance by the
Borrower of each Loan Document to which it is a party are not in contravention
of any applicable law, treaty, rule or regulation of any Governmental Authority
(including without limitation the Federal Food, Drug and Cosmetic Act,
the Public Health Services Act and the Controlled Substances Act and other laws, treaties, rules and regulations of any
Governmental Authority applicable to corporations engaged in the
business of developing, manufacturing and developing generic pharmaceuticals) and no consent, approval or authorization of or
declara­tion, registration or filing with any Governmental Authority is
required on the part of the Borrower in connection with the execution, delivery
and performance of the Loan Documents or as a condition to the legality,
validity or enforceability of the Loan Documents. The Borrower agrees to
deliver a legal opinion with respect to the matters described in the foregoing
sentence reasonably acceptable to the Lender within ninety days after the
Effective Date. 


               SECTION
5.10 Additional Covenants. If at any time the Borrower or
any of its Subsidiaries shall enter into or
be a party to any instrument or agreement, including all such instruments or
agreements in existence as of the date hereof and all such instruments or
agreements entered into after the date hereof, relating to or amending any
provisions applicable to any of its Indebtedness, which includes any covenants, defaults or similar
terms not substantially provided for in this Agreement or more favorable to the
lender or lenders thereunder than those provided for in this Agreement, then the
Borrower shall promptly so advise the
Lender. Thereupon, if the Lender shall request, upon notice to the Borrower, the Lender and the Borrower shall enter into an
amendment to this Agreement or an additional agreement (as the Lender may
request), providing for substantially the same material covenants, defaults and
similar terms as those provided for in such instrument or agreement to the
extent required and as may be selected by the Lender.


32







ARTICLE
VI

NEGATIVE COVENANTS

Negative Covenants


               Until
the Commitment have expired or terminated and the principal of and interest on
each Loan and all fees payable hereunder have been paid in full and all Letters
of Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower covenants and agrees with the Lender that:


               SECTION
6.01. Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any Collateral except
Permitted Encumbrances and Liens created under the Collateral Documents
securing the Secured Obligations.


               SECTION
6.02. Fundamental Changes. (a) The Borrower will not, and will not
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) any of its assets (in each case, whether now owned or here­after
acquired, but excluding the sale of inventory in the ordinary course of its
business and the sale of obsolete inventory), or liquidate or dissolve, except that,
if at the time thereof and immediately after giving effect thereto no Default
shall have occurred and be continuing (i) the Borrower and its Subsidiaries may
sell assets in which the sales price is at least the fair market value of the
assets sold and the aggregate amount of such asset sales is less than
$2,500,000 in any Fiscal Year and the consideration received is cash or cash
equivalents, (ii) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (iii) any
Subsidiary may merge into any Subsidiary in a transaction in which the
surviving entity is a Subsidiary, (iv) any Subsidiary may sell, transfer, lease
or otherwise dispose of its assets to the Borrower or to another Subsidiary,
and (v) any Subsidiary may liquidate or dissolve if the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lender; provided
that any such merger involving a Person that is not a Wholly-Owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.03.


               (b) The
Borrower will not, and will not permit any of its Subsidiaries to, engage to
any material extent in any business other than businesses of the type conducted
by the Borrower and its Subsidiaries on the date of execution of this Agreement
and businesses reasonably related thereto.


               SECTION
6.03. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not
a Wholly-Owned Subsidiary prior to such merger) any Equity Interests, evidences
of indebtedness or other securities (including any option, warrant or other
right to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or make any Acquisition,
except:


	
   

  	
   

  
	
   

  	
            (a)
  Permitted Investments; and

  
	
   

  	
   

  
	
   

  	
            (b)
  other investments not to exceed $2,500,000 in the aggregate during the term
  of this Agreement.

  



33







               SECTION
6.04. Swap Agreements. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements
entered into to hedge or mitigate risks to which the Borrower or any Subsidiary
has actual exposure (other than those in respect of Equity Interests of the
Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in
order to effectively cap, collar or exchange interest rates (from fixed to
floating rates, from one floating rate to another floating rate or otherwise)
with respect to any interest-bearing liability or investment of the Borrower or
any Subsidiary. 


               SECTION
6.05. Restricted Payments. The Borrower will not, and will not permit
any of its Subsidiaries to, declare or make, or agree to pay or make, directly
or indirectly, any Restricted Payment, except (a) the Borrower may declare and
pay dividends with respect to its Equity Interests payable solely in additional
shares of its common Equity Interests, (b) Subsidiaries may declare and pay
dividends ratably with respect to their Equity Interests and (c) the Borrower
may make Restricted Payments with respect to its Equity Interests so long as no Default exists or would be caused
thereby.


               SECTION
6.06. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions
between or among the Borrower and its Wholly-Owned Subsidiaries not involving
any other Affiliate and (c) any transaction involving issuance of Preferred
Stock that is not Disqualified Stock or redemption or conversion thereof into
common stock of the Borrower that is not Disqualified Stock issuable under the
Products Agreement between Sun Pharma Global Inc. and Caraco Pharmaceutical
Laboratories Ltd dated November 20, 2002.


               SECTION
6.07. Change of Name or Location; Change of Fiscal Year. No Loan Party
shall (a) change its name as it appears in official filings in the state of its
incorporation or organization, (b) change its chief executive office, principal
place of business, mailing address, corporate offices or warehouses or locations
at which Collateral is held or stored, or the location of its records
concerning the Collateral as set forth in the Security Agreements, (c) change
the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization, or
(e) change its state of incorporation or organization, in each case, unless the
Lender shall have received at least fifteen days prior written notice of such
change and the Lender shall have acknowledged in writing that either (1) such
change will not adversely affect the validity, perfection or priority of the
Lender’s security interest in the Collateral, or (2) any reasonable action
requested by the Lender in connection therewith has been completed or taken
(including any action to continue the perfection of any Liens in favor of the
Lender in any Collateral), provided that, any new location shall be
in the continental U.S. No Loan Party shall change its Fiscal Year.


               SECTION
6.08. Amendments to Agreements. No Loan Party will, nor will any Loan
Party permit its Subsidiaries to, amend, supplement or otherwise modify (a) its
articles of incorporation, charter, certificate of formation, operating
agreement, by-laws or other organizational document in any manner materially
adverse to the Lender, or (b) any instrument or agreement evidencing or
relating to any Subordinated Debt. 


34







               SECTION
6.09. Prepayment of Indebtedness; Subordinated Debt. No Loan Party
shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay
any principal of, premium, if any, interest or other amount payable in respect
of any Indebtedness prior to its scheduled maturity, other than (i) the
Obligations; (ii) Indebtedness secured by a Lien permitted by Section 6.01 if
the asset securing such Indebtedness has been sold or otherwise disposed of in
accordance herewith; and (iii) Indebtedness permitted hereunder upon any
permitted refinancing thereof in accordance therewith. Notwithstanding anything
herein to the contrary, no Loan Party shall directly or indirectly voluntarily
prepay, defease or in substance defease, purchase, redeem, retire or otherwise
acquire, any Subordinated Debt.


               SECTION
6.10. Depository Banks.
Each Loan Party shall maintain the Lender as such Loan Party’s principal
depository bank, including for the maintenance of operating, administrative,
cash management, collection activity, and other deposit accounts for the
conduct of its business. 


               SECTION
6.11 Minimum EBITDA.
The Borrower will not permit the net income (or loss) of the Borrower and its
Subsidiaries plus, to the extent deducted from revenues in
determining such net income, (a) the interest expense of the Borrower and its
Subsidiaries, (b) expense for taxes paid or accrued net of tax refunds, (c)
depreciation, (d) amortization, (e) non-cash research and development expense,
and (f) extraordinary non-cash losses (as determined in accordance with GAAP)
incurred other than in the ordinary course of business, minus, (i) to the
extent included in such net income, extraordinary gains (as determined in
accordance with GAAP) realized other than in the ordinary course of business,
(ii) the Capital Expenditures of the Borrower and its Subsidiaries which are
not financed with permitted long term debt, and (iii) Restricted Payments, all
calculated for the Borrower and its Subsidiaries on a consolidated basis,
determined as of the end of each of its Fiscal Quarters for the then
most-recently ended four Fiscal Quarters, to be less than $16,000,000 as of the
end of any Fiscal Quarter.


               SECTION
6.12. Fixed Charge Coverage Ratio. The Borrower will not
permit the ratio, determined as of the end of each of Fiscal Quarter of the
Borrower, of: 


                    (a)
the net income (or loss) of the Borrower and its Subsidiaries plus,
to the extent deducted from revenues in determining such net income, (i) the
interest expense of the Borrower and its Subsidiaries, (ii) expense for taxes
paid or accrued net of tax refunds, (iii) depreciation, (iv) amortization, (v)
non-cash research and development expense, and (vi) extraordinary non-cash
losses (as determined in accordance with GAAP) incurred other than in the
ordinary course of business, minus, (A) to the extent included in
such net income, extraordinary gains (as determined in accordance with GAAP)
realized other than in the ordinary course of business, (B) Capital
Expenditures of the Borrower and its Subsidiaries which are not financed with
permitted long term debt, (C) taxes, and (D) Restricted Payments, to 


                    (b)
the cash interest expense of the Borrower and its Subsidiaries plus
the scheduled and any other required principal payments paid or payable on
Indebtedness, all as
calculated for the most-recently ended four Fiscal Quarters and for the
Borrower and its Subsidiaries on a consolidated basis, determined as of the end
of each of its Fiscal Quarters for the then most-recently ended Fiscal Quarter,
to be less 1.20 to 1.0 as of the end of any Fiscal Quarter.


35







ARTICLE
VII

EVENTS OF DEFAULT


               If
any of the following events (“Events of Default”) shall occur:


	
   

  	
   

  
	
   

  	
            (a)
  the Borrower shall fail to pay any principal of any Loan or any reimbursement
  obligation in respect of any LC Disbursement when and as the same shall
  become due and payable, whether at the due date thereof or at a date fixed
  for prepayment thereof or otherwise; 

  
	
   

  	
   

  
	
   

  	
            (b)
  the Borrower shall fail to pay any interest on any Loan or any fee or any
  other amount (other than an amount referred to in clause (a) of this
  Article) payable under this Agreement, when and as the same shall become due
  and payable, and such failure shall continue unremedied for a period of five
  Business Days;

  
	
   

  	
   

  
	
   

  	
            (c)
  any representation or warranty made or deemed made by or on behalf of the
  Borrower or any Subsidiary in or in connection with this Agreement, or any
  amendment or modification hereof or waiver hereunder, or in any other Loan
  Document, report, certificate, financial statement or other document
  furnished pursuant to or in connection with this Agreement or any amendment or
  modification hereof or waiver hereunder, shall prove to have been incorrect
  when made or deemed made in any material respect;

  
	
   

  	
   

  
	
   

  	
            (d)
  the Borrower shall fail to observe or perform any covenant, condition or
  agreement contained in Section 5.02, 5.03 (with respect to the
  Borrower’s existence) or 5.08 or in Article VI;

  
	
   

  	
   

  
	
   

  	
            (e)
  the Borrower or any Guarantor shall fail to observe or perform any covenant,
  condition or agree­ment contained in this Agreement (other than those
  specified in clause (a), (b) or (d) of this Article) or any other Loan
  Document and such failure shall continue unremedied for a period of
  10 days after notice thereof from the Lender to the Borrower;

  
	
   

  	
   

  
	
   

  	
            (f)
  the Borrower or any Subsidiary shall fail to make any payment (whether
  of principal or interest and regardless of amount) in respect of any Material
  Indebtedness, when and as the same shall become due and payable;

  
	
   

  	
   

  
	
   

  	
            (g)
  any event or condition occurs that results in any Material Indebtedness becoming
  due prior to its scheduled maturity or that enables or permits (with or
  without the giving of notice, the lapse of time or both) the holder or
  holders of any Material Indebtedness or any trustee or agent on its or their
  behalf to cause any Material Indebtedness to become due, or to require the
  prepayment, repurchase, redemption or defeasance thereof, prior to its
  scheduled maturity; provided that this clause (g) shall not apply
  to secured Indebtedness that becomes due as a result of the voluntary sale or
  transfer of the property or assets securing such Indebtedness;

  
	
   

  	
   

  
	
   

  	
            (h)
  an involuntary proceeding shall be commenced or an involuntary petition shall
  be filed seeking (i) liquidation, reorganization or other relief in
  respect of the Borrower or any Subsidiary or its debts, or of a substantial
  part of its assets, under any Federal, state or foreign bankruptcy,
  insolvency, receivership or similar law now or hereafter in effect or
  (ii) the appointment of a receiver, trustee, custodian, sequestrator,
  conservator or similar official for the 

  



36







	
   

  	
   

  
	
   

  	
  Borrower or
  any Subsidiary or for a substantial part of its assets, and, in any such
  case, such proceeding or petition shall continue undismissed for 60 days
  or an order or decree approving or ordering any of the foregoing shall be
  entered;

  
	
   

  	
   

  
	
   

  	
            (i)
  the Borrower or any Subsidiary shall (i) voluntarily commence any
  proceeding or file any petition seeking liquidation, reorganization or other
  relief under any Federal, state or foreign bankruptcy, insolvency,
  receivership or similar law now or hereafter in effect, (ii) consent to
  the institution of, or fail to contest in a timely and appropriate manner,
  any proceeding or petition described in clause (h) of this Article,
  (iii) apply for or consent to the appointment of a receiver, trustee,
  custodian, sequestrator, conservator or similar offi­cial for the Borrower or
  any Subsidiary or for a substan­tial part of its assets, (iv) file an
  answer admit­ting the material allegations of a petition filed against it in
  any such proceeding, (v) make a general assignment for the benefit of
  creditors or (vi) take any action for the purpose of effecting any of
  the foregoing;

  
	
   

  	
   

  
	
   

  	
            (j)
  the Borrower or any Subsidiary shall become unable, admit in writing its
  inability or fail generally to pay its debts as they become due;

  
	
   

  	
   

  
	
   

  	
            (k)
  one or more judgments for the payment of money in an aggregate amount in
  excess of $1,000,000 shall be rendered against the Borrower, any Subsidiary
  or any combination thereof and the same shall remain undischarged for a
  period of 30 consecutive days during which execution shall not be
  effectively stayed, or any action shall be legally taken by a judgment
  creditor to attach or levy upon any assets of the Borrower or any Subsidiary
  to enforce any such judgment;

  
	
   

  	
   

  
	
   

  	
            (l)
  an ERISA Event shall have occurred that, in the opinion of the Lender, when
  taken together with all other ERISA Events that have occurred, could
  reasonably be expected to result in liability of the Borrower and its
  Subsidiaries in an aggregate amount exceeding $1,000,000 for all periods; 

  
	
   

  	
   

  
	
   

  	
            (m)
  Any Collateral Document shall fail to remain in full force or effect or any
  action shall be taken to discontinue or to assert the invalidity or unenforceability
  of any Collateral Document, or any Loan Party shall fail to comply with any
  of the terms or provisions of any Collateral Document if the failure
  continues beyond any period of grace provided for in the applicable
  Collateral Document, or any Collateral Document granting a Lien shall for any
  reason fail to create a valid and perfected first priority security interest
  in any Collateral purported to be covered thereby or subordination to be
  created thereunder, except as permitted by the terms of this Agreement or any
  Collateral Document; 

  
	
   

  	
   

  
	
   

  	
            (n)
  a Change in Control shall occur; or

  
	
   

  	
   

  
	
   

  	
            (o)
  the termination, amendment or other modification of any product agreement or
  other agreement or arrangement between any Loan Party and Sun Pharmaceutical
  or any of its Affiliates, any product recall by any Loan Party or any
  enforcement action by any Governmental Authorities against any Loan Party, in
  each case which could have a Material Adverse Effect.

  



37







then, and in
every such event (other than an event with respect to the Borrower described in
clause (h) or (i) of this Article), and at any time thereafter during the
continuance of such event, the Lender may, and at the request of the Lender
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate the Commitment, and
thereupon the Commitment shall terminate immediately, and (ii) declare the
Loans then out­standing to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall become due and
payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in clause (h) or (i) of this
Article, the Commitment shall automatically terminate and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.


ARTICLE
VIII

MISCELLANEOUS


               SECTION
8.01. Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:


	
   

  	
   

  
	
   

  	
            (i)
  if to the Borrower, to it at 1150 Elijah McCoy Drive, Detroit, Michigan 48202
  Attention of Mr. Jitendra Doshi (Telecopy No. 313-871-8039);

  
	
   

  	
   

  
	
   

  	
            (ii)
  if to the Lender, to JPMorgan Chase Bank, N.A. at such address and other
  contact information as from time to time supplied to the parties hereto by
  the Lender; and

  



               (b)
Notices and other communications to the Lender hereunder may be delivered or
furnished by electronic communications pursuant to procedures approved by the
Lender; provided that the foregoing shall not apply to notices pursuant to
Article II unless otherwise agreed by the Lender. The Lender or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications. 


               (c)
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.


               SECTION
8.02. Waivers; Amendments. (a) No failure or delay by the Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Lender hereunder are cumulative
and are not exclusive of any 


38







rights or
remedies that they would otherwise have. No waiver of any provision of this
Agree­ment or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effec­tive only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Lender may have had notice or knowledge of such Default at the time.


               (b)
Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Lender.


               SECTION
8.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Lender and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Lender, in connection with the preparation and administration of this
Agreement or any amendments, modifications or waivers of the provi­sions hereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), provided that the amount of legal fees of counsel for the Lender
for which the Borrower shall be liable shall not exceed the lesser of 50% of
such legal fees or $3,750, (ii) all reasonable out-of-pocket expenses incurred
by the Lender in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Lender, including the fees, charges and disbursements
of any counsel for the Lender, in connection with the enforcement or protection
of its rights in connection with this Agreement, including its rights under
this Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit. 


               (b)
The Borrower shall indemnify the Lender and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement or any agreement or
instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Lender to
honor a demand for payment under a Letter of Credit if the documents presented
in connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower
or any of its Subsidiaries, or any Environmental Liability related in any way
to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall
not, as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are deter­mined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee.


               (c)
To the extent permitted by applicable law, the Borrower shall not assert, and


39







hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.


               (d)
All amounts due under this Section shall be payable promptly after written
demand therefor.


               SECTION
8.04. Successors and Assigns. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Lender that issues any Letter of Credit), except that the Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Lender (and any attempted assignment or
transfer by the Borrower without such consent shall be null and void). Nothing
in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby, including any Affiliate of the Lender that issues any Letter
of Credit and, to the extent expressly contemplated hereby, the Related Parties
of the Lender) any legal or equitable right, remedy or claim under or by reason
of this Agreement.


               SECTION
8.05. Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other instru­ments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any fee or any other amount payable under this Agreement is outstand­ing and
unpaid or any Letter of Credit is outstanding and so long as the Commitment
have not expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and
8.03 and Article VIII shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitment or the termination of this Agreement or any provision
hereof.


               SECTION
8.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Lender and
amendments or supplements thereof constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the
subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Lender and the
Borrower. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.


               SECTION
8.07. Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability 


40







of the
remaining provisions hereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.


               SECTION
8.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations at any time owing by the
Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by the Lender, irrespective of whether or not the Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of the Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which the
Lender may have.


               SECTION
8.09. Governing Law; Jurisdiction; Consent to Service of Process. (a)
This Agreement shall be construed in accordance with and governed by the law of
the State of Michigan.


               (b)
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the courts of the State of
Michigan and of the United States District Court of the Eastern District of
Michigan, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Michigan or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right that
the Lender may otherwise have to bring any action or proceeding relating to
this Agreement against the Borrower or its proper­ties in the courts of any
jurisdiction.


               (c)
Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 8.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.


               SECTION
8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREE­MENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.


               SECTION
8.11. Headings. Article and Section headings and the Table of Contents
used herein are for convenience of reference only, are not part of this Agreement
and shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.


41







               SECTION
8.12. Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under appli­cable law (collectively the “Charges”), shall exceed
the maximum lawful rate (the “Maximum Rate”) which may be contracted
for, charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to the Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by the Lender.


               SECTION
8.13. USA PATRIOT Act. The Lender, per the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), hereby notifies the Borrower that pursuant to the requirements of
the Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow the Lender to identify the
Borrower in accordance with the Act.


               IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.


	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CARACO
  PHARMACEUTICAL LABORATORIES, LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  


  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  


  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  


  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK, N.A.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  


  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
   

  	
   

  
	
   

  	
  


  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  


  	
   

  



42