Negative Pledge Agreement - Citibank

EXHIBIT 10.30


_________, 2004


NEGATIVE PLEDGE AGREEMENT


In consideration of one or more loans, advances, or other financial accommodations or transactions, at any time before, at or after the date hereof made or extended by Citibank, F.S.B. (the "Bank"), to Caraco Pharmaceutical Laboratories Ltd. (the "Borrower"), the Borrower hereby agrees as follows:


1. As used herein, the following terms shall have the following meanings:


"Loan" shall mean the revolving line of credit in the amount of $10,000,000 made available by the Bank to the Borrower, and such other loans, advances or financial accommodations that the Bank may provide in the future to the Borrower.


"Loan Documents" shall mean the master note and all other documents evidencing or securing the Loan or executed in connection therewith.


"Obligations" shall mean the obligations of the Borrower to the Bank pursuant to the Loan Documents.


"Assets" shall mean all of Debtor's now existing and hereafter acquired inventory, of every kind and nature, wherever located, including, without limitation, all raw materials, finished goods, work-in-process, packing and advertising materials and all documents, whether negotiable or nonnegotiable representing any of the foregoing, all embedded software, and all supporting obligations an all products and proceeds thereof; all now existing and hereafter acquired or created accounts (including without limitation health-care insurance receivables, credit card receivables, licensing fees an royalties and rights to payment for realty sold or leased), together with the Debtor's interest in all inventory described in invoices with respect to such accounts; all returned and repossessed inventory; and all now existing and hereafter acquired or created instruments (including promissory notes), chattel paper (whether tangible or electronic) wherever located, including, without limitation, all of the foregoing which arise in connection with the sale of inventory and/or the rendition of services, and all supporting obligations and all products and proceeds of the foregoing and all of Debtor's books and records.


"Transfer" shall mean any bulk sale, transfer, assignment, gift, hypothecation, pledge, mortgage or creation of any lien, encumbrance or security interest in the Assets. Transfer shall include involuntary transfers, liens and encumbra ...