<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
CARACO PHARMACEUTICAL LABORATORIES, LTD.
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, without par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
14075T 10 7
--------------------
(CUSIP Number)
Jay F. Joliat
1411 N. Woodward, Ste 300
Birmingham, MI 42009
With a copy to:
Fred B. Green, Esq.
Seyburn, Kahn, Ginn,
Bess, Deitch and
Serlin, P.C.
2000 Town Center
Suite 1500
Southfield, Michigan 48075
248-353-7620
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 20, 1997
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
Schedule because of Rule 13d-1 (b)(3) or (4), check the following box / /.
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 2 OF 15 PAGES
----------- ----- -----
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jay F. Joliat
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) or 2(e)
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
1,855,391 (See Item 5)
NUMBER OF ---------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY -0- (See Item 5)
EACH ---------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON
WITH 1,855,391 (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- (See Item 5)
- -------------------------------------------------------------------------------
10 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,855,391 (See Item 5)
- -------------------------------------------------------------------------------
11 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES*
- -------------------------------------------------------------------------------
12 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 3 OF 15 PAGES
------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jay F. Joliat Qualified Terminable Interest Marital Trust u/a/d 4-8-82
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,855,391 (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0- (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,855,391 (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,855,391 (See Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (Trust)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
3
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 4 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David A. Hagelstein
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF and BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,484,152 (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0- (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,484,152 (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,484,152 (See Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 5
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 5 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
David A. Hagelstein - Trust u/a/d 10-27-93
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
PF and BK
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Michigan
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 1,484,152 (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH -0- (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
1,484,152 (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0- (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,484,152 (See Item 5)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
11.1%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (Trust)
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 6
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 6 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Shantilal N. Shanghvi
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0- (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 5,300,000 (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0- (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,300,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 7
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 7 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Dilip S. Shanghvi
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0- (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 5,300,000 (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0- (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,300,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 8
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 8 OF 15 PAGES
------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sudhir V. Valia
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00 (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0- (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 5,300,000 (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0- (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,300,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
8
<PAGE> 9
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 9 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Narendra N. Borkar
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0- (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 5,300,000 (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0- (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,300,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 10
SCHEDULE 13D
CUSIP NO. 14075T 10 7 PAGE 10 OF 15 PAGES
---------------- --- ------
================================================================================
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sun Pharmaceutical Industries Limited
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC (See Item 3)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED / /
PURSUANT TO ITEMS 2(d) OR 2(e)
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
India
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0- (See Item 5)
OWNED BY ---------------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 5,300,000 (See Item 5)
---------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0- (See Item 5)
---------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,300,000 (See Item 5)
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,300,000
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) / /
EXCLUDES CERTAIN SHARES*
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.3%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 11
PAGE 11 OF 15
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, without par value (the
"Shares"), of Caraco Pharmaceutical Laboratories, Ltd., a Michigan corporation
(the "Company"). The principal executive offices of the Company are located at
1150 Elijah McCoy Drive, Detroit, Michigan 48202.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is being filed jointly by each of the following
persons pursuant to Rule 13d-(1)(f) promulgated by the Securities and Exchange
Commission (the "SEC") under Section 13 of the Securities Exchange Act of 1934,
as amended (the "Act"): (i) Jay F. Joliat Qualified Terminable Interest Marital
Trust u/a/d 4-8-82 (the "Joliat Trust"), (ii) Jay F. Joliat, individually and as
trustee of the Joliat Trust ("Joliat"), (iii) David A. Hagelstein Trust u/a/d
10-27-93 (the "Hagelstein Trust"), (iv) David A. Hagelstein, individually and as
trustee of the Hagelstein Trust ("Hagelstein"), (v) Sun Pharmaceutical
Industries Limited, a corporation organized under the laws of India ("Sun"),
(vi) Shantilal N. Shanghvi, the Chairman of Sun ("S. Shanghvi"), (vii) Dilip S.
Shanghvi, the major shareholder and a director of Sun ("D. Shanghvi"), (viii)
Sudhir V. Valia, a director of Sun ("Valia"), and (ix) Narendra N. Borkar, a
director of Sun ("Borkar"). The Joliat Trust, Joliat, the Hagelstein Trust,
Hagelstein, Sun, D. Shanghvi, S. Shanghvi, Valia and Borkar are sometimes
referred to herein individually as a "Reporting Person" and collectively as the
"Reporting Persons."
Information with respect to each of the Reporting Persons is given
solely by such Reporting Person, and no Reporting Person assumes responsibility
for the accuracy or completeness of information by another Reporting Person. By
their signature on this statement, each of the Reporting Persons agrees that
this statement is filed on behalf of such Reporting Person.
The Reporting Persons are parties to a Voting Agreement (as defined in
Item 6) and, accordingly, may be deemed to constitute a "group" for purposes of
Section 13(d)(3) of the Act. The Reporting Persons expell disclaim that they
have agreed to act as a group other than as described in this statement.
Joliat Trust and Joliat
(b)-(c) Mr. Joliat's business address is 1411 North Woodward Avenue,
Suite 300, Birmingham, Michigan 48009. His present principal occupation or
employment is Chairman of the Board, Chief Executive Officer and Treasurer of
the Beefcarver Restaurants, Inc., a restaurant corporation and Chairman of the
Board, President and Chief Executive Officer of Joliat & Company, a private
investment company.
Hagelstein Trust and Hagelstein
(b)-(c) Mr. Hagelstein's business address is 1411 North Woodward
Avenue, Suite 313, Birmingham, Michigan 48009. His present principal occupation
or employment is as a private investor.
Sun
(b)-(c) Sun is a corporation organized under the laws of India. Sun is
a specialty pharmaceutical company. Sun's business address is Synergy House
Subhanpura Gorwa Road, Baroda, 390-007 India.
Pursuant to Instruction C to Schedule 13D under the Act, the directors
and executive officers of Sun and their respective business addresses and
present principal occupations are set forth below:
<TABLE>
<CAPTION>
Name Address Occupation
- ---- ------- ----------
<S> <C> <C>
S. Shanghvi Synergy House Subhanpura Chairman of
Gorwa Road, Baroda the Board
390-007 India
D. Shanghvi Synergy House Subhanpura Managing Director
Gorwa Road, Baroda and Director
390-007 India
Valia Synergy House Subhanpura Director and
Gorwa Road, Baroda Director of Finance
390-007 India
Borkar Synergy House Subhanpura Director
Gorwa Road, Baroda
390-007 India
Shreenivas Lanka Synergy House Subhanpura Vice President
Gorwa Road, Baroda of Marketing
390-007 India
</TABLE>
<PAGE> 12
PAGE 12 OF 15
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgement, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
(f) Joliat Trust is a Michigan trust and Joliat is a citizen of the
United States. Hagelstein Trust is a Michigan trust and Hagelstein is a citizen
of the United States. Sun is a corporation organized under the laws of India
and each of its executive officers and directors named in this Item 2 are
citizens of India.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The source and amount of funds or other consideration used or to be
used by Sun to purchase Shares consists of working capital of Sun. The
5,300,000 Shares acquired by Sun have been purchased with an initial payment of
$2,000,000 with the balance of $5,500,000 to be paid thereafter. Payment of the
balance may be effectuated through delivery of irrevocable letters of credit.
Sun has also entered into a products agreement with the Company pursuant to
which Sun is to provide the Company with the technology with respect to generic
pharmaceutical products in return for Shares if certain conditions are
satisfied.
In October 1995, the Joliat Trust purchased 100,000 Shares at a price
of $2.50 per Share in a private purchase. In March 1996, the Joliat Trust
converted a $250,000 loan to the Company into 111,111 Shares ($2.25 per Share)
and, in connection therewith, Joliat received warrants for 486,666 Shares at an
exercise price of $2.62 per Share. In March 1996, the Joliat Trust purchased
100,000 Shares at a price of $2.25 per Share in a private purchase. In May
1996, the Joliat Trust purchased 250,000 Shares at a price of $2.00 per Share
in a private purchase. In May 1996, Joliat was awarded 1,100 Shares as a
director of the Company. In July 1996, the Joliat Trust purchased 800 Shares
at a price of $2.28 per Share on the open market. In August 1996, the Joliat
Trust purchased 800 Shares at a price of $2.60 per share on the open market.
In December 1996, the Joliat Trust purchased 1,200 Shares at a price of $2.46
per Share on the open market. In June 1997, Joliat was awarded 1,900 Shares as
a director of the Company. The source and amount of funds or other
consideration used or to be used by Joliat to purchase Shares are the funds of
the Joliat Trust.
In June 1995, the Hagelstein Trust purchased 616,000 Shares at a price
of $1.25 per Share in a private purchase. 584,000 of such Shares were
purchased through the conversion of $730,000 in loans to the Company. Such
loans were made by the Hagelstein Trust through borrowings from Comerica Bank.
In October 1995, the Hagelstein Trust purchased 40,000 Shares at a price of
$2.50 per Share in a private purchase. In March 1996, the Hagelstein Trust
purchased 130,000 Shares at a price of $2.25 per Share in a private purchase.
In May 1996, Hagelstein was awarded 900 Shares as a director of the Company.
In September 1996, the Hagelstein Trust purchased 7,000 Shares at prices
ranging between $1.12 - $1.25. In June 1997, Hagelstein was awarded 1,700
Shares as a director of the Company. The source and amount of funds or other
consideration used or to be used by Hagelstein to purchase Shares are personal
funds or other consideration and/or the funds of the Hagelstein Trust, and, as
disclosed, through loans made in the ordinary course of business from Comerica
Bank. See Item 5 with respect to certain options and warrants issued to Joliat
and Hagelstein.
ITEM 4. PURPOSE OF TRANSACTION.
The Joliat Trust, Joliat, the Hagelstein Trust and Hagelstein have
acquired their Shares for investment purposes. Sun has acquired its Shares in
order to gain entry into the United States generic pharmaceutical marketplace.
As disclosed in Item 6, the Joliat Trust, the Hagelstein Trust and Sun have
entered into a Voting Agreement pursuant to which, among other things, Sun may
designate a majority of the directors of the Board of Directors of the Company
and the Joliat Trust and the Hagelstein Trust may each designate one director.
In addition, as disclosed in Item 6, the Joliat Trust and the Hagelstein Trust
have agreed to vote in accordance with Sun's directors with respect to certain
shareholder matters. The Voting Agreement also provides that the Executive
Committee shall consist of three directors, two selected by Sun and one selected
by the Joliat Trust and the Hagelstein Trust. In connection with the foregoing,
the Board of Directors has appointed a Chief Executive Officer proposed by Sun
and Sun intends to designate up to a majority of the members of the Board of
Directors and to select a Chairman of the Board therefrom. In connection with
Sun's acquisition of Shares, the Bylaws of Caraco were amended and restated to
accommodate the foregoing. In addition, the Bylaws were amended and restated to
require a two-thirds (2/3rds) vote of the entire Board of Directors to approve:
(i) the sale or disposition of all or substantially all of the assets of the
Company; (ii) the liquidation, winding up or dissolution of the Company; (iii)
the issuance of or receipt of subscription for any capital stock of the Company
to Sun and/or its affiliates; and (iv) the amendment of the Company's Articles
and Bylaws.
As disclosed in Item 3, Sun has entered into a products agreement with
the Company pursuant to which Sun is to provide the Company with the technology
with respect to generic pharmaceutical products in return for shares if certain
conditions are satisfied. If all or a portion of the balance of the $5,500,000
owed to the Company by Sun for the Shares disclosed in Item 3, payable in three
payments of $2,000,000, $2,000,000 and $1,500,000 is not timely made, the
Company may cancel the 1,413,333 Shares, 1,413,333 Shares and 1,060,001 Shares,
respectively, relating to such payments, pursuant to a pledge agreement between
the Company and Sun. In connection with Sun's acquisition of the Shares, the
Joliat Trust and the Hagelstein Trust have agreed that following the receipt of
the next $2,000,000 payment by Sun to the Company, that each will return to the
Company up to 250,000 Shares each without any consideration from the Company
therefor. In connection therewith, the Joliat Trust has agreed to deem a loan
from the Joliat Trust to the Company of $150,000 in April 1997, paid in full,
and as a result thereof, the Joliat Trust will be deemed to have "returned" to
the Company 150,000 Shares of the 250,000 Shares to be returned. In addition,
with respect to loans to the Company of (i) $100,000 in August 1996, $300,000
in October 1996, $100,000 in November 1996, $100,000 in January 1997, and
$300,000 in February 1997 from the Joliat Trust and (ii) $100,000 in August
1996, $90,000 in November 1996 and $200,000 in February 1997 from the
Hagelstein Trust, the Company and the Joliat Trust and the Hagelstein Trust,
respectively, have agreed to (A) extend the maturity date of the loans to
August 1, 1999, (B) to pre-pay in Shares the interest due on the loans through
August 1, 1999 at $1.50 per Share, and (C) to provide the Joliat Trust and the
Hagelstein Trust with an option to convert the principal into Shares at $1.50
per Share. Based on the foregoing, the prepayment of interest in Shares
(which, is anticipated, will occur in the very near future) will result in the
Joliat Trust and the Hagelstein Trust receiving 159,543 Shares and 68,007
Shares, respectively. The Joliat Trust and the Hagelstein Trust have also
agreed not to dispose of their Shares for a period of four years without the
consent of Sun, and thereafter for a period of three years to give Sun a right
of first refusal or the sale of their Shares. The restriction on disposition of
their shares for the four year period terminates in the event of (i) any sale
of Shares by Sun to anyone other than an affiliate; (ii) approval by the Board
of the Company of a merger, consolidation, or sale of substantially all of the
assets of the Company to another entity; or (iii) a tender offer for the
Shares.
At this time, except as disclosed above, the Reporting Persons have
no plans or proposals which relate to or would result in:
(1) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Company;
(2) a sale or transfer of a material amount of assets of the Company;
(3) any material change in the present capitalization or dividend policy
of the Company;
(4) any other material change in the Company's business or corporate
structure;
(5) changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
(6) the Shares becoming eligible for termination pursuant to Section
12(g)(4) of the Act; or
(7) any action similar to those enumerated above.
<PAGE> 13
PAGE 13 OF 15
ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER
The following information is provided in response to Item 5 of Schedule
13D and is based on a total of 13,151,506 Shares outstanding (based on the
acquisition by Sun of 5,300,000 Shares on August 20, 1997, on information from
the Company as to the number of Shares outstanding as of August 20, 1997.
(a)-(b) Sun acquired beneficial ownership of 5,300,000 Shares on August
20, 1997 at a price of approximately $1.415 per share. This constitutes
approximately 40.3% of the Company's outstanding Shares. By virtue of the
relationship between S. Shanghvi, D. Shanghvi, Valia, and Borkar and Sun, such
individuals may be deemed to possess indirect beneficial ownership of and share
the power to vote or direct the vote of the Shares of Sun. Also, by virtue of
the above disclosed relationships, Sun, D. Shanghvi, S. Shanghvi, Valia and
Borkar may be deemed to share the power to vote or direct the vote and the power
to dispose or to direct the disposition of the Shares. However, such
individuals disclaim beneficial ownership of (and the power to vote or direct
the vote of) the Shares beneficially owned by Sun.
(a)-(b) Joliat, individually and as trustee of the Joliat Trust,
beneficially owns 1,855,391 Shares (constituting approximately 13.0% of the
Company's outstanding Shares) with sole power to vote or direct the vote and
sole power to dispose or direct the disposition of the Shares. See Item 6,
however, with respect to the agreement by Joliat to vote on certain matters in
accordance with Sun's directions. The 1,855,391 Shares beneficially owned by
Joliat include: (i) 285,714 shares of Series A Preferred Stock convertible on
a one-for-one basis into Shares; (ii) warrants to purchase 65,000 Shares which
are exercisable through December 31, 2004 at an exercise price of $3.50 per
Share; (iii) warrants granted to Joliat in connection with a loan to the Company
(subsequently converted into Shares) to purchase 486,666 shares exercisable
through March 31, 2000 at an exercise price of $2.62 per Share; (iv) an option
granted to Joliat in connection with a loan to the Company to purchase 225,000
Shares which are exercisable through October 18, 2006 at an exercise price of
$1.31 per Share; and (v) options received in his capacity as a Director of the
Company for 6,000 Shares at an exercise price of $5.00 per Share.
(a)-(b) Hagelstein, individually as trustee of the Hagelstein Trust,
beneficially owns 1,484,152 Shares (constituting approximately 11.1% of the
Company's outstanding Shares) with sole power to vote or direct the vote and
sole power to dispose or direct the disposition of the Shares. See Item 6,
however, with respect to the agreement by Hagelstein to vote on certain matters
in accordance with Sun's directions. The 1,484,152 Shares beneficially owned by
Hagelstein include: (i) an option for 224,158 Shares at an exercise price of
$1.50 per share expiring February 20, 2002 in exchange for cancellation of more
expensive options totalling 224,158 Shares in connection with Hagelstein's
agreement to return up to 250,000 Shares to the Company (disclosed in Item 4);
(ii) options received in his capacity as a Director of the Company for 6,000
Shares at an exercise price of $5.00 per Share; and (iii) a warrant to
purchase 5,000 Shares exercisable until February 11, 1999 at $6.75 per Share.
<PAGE> 14
PAGE 14 OF 15
(c) Except with respect to Sun's acquisition of 5,300,000 Shares described
above, none of the Reporting Persons has effected any transactions in Shares
during the preceding 60 days.
(d) Except as described above, no other person is known to have the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such securities.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
As disclosed in this Schedule 13D, Sun, the Joliat Trust and the
Hagelstein Trust have entered into a Voting Agreement dated August 20, 1997.
The general terms of the Voting Agreement have been disclosed above, which
disclosure is incorporated herein, with respect to Sun's right to select a
majority of the Company's directors, Sun's right to appoint a majority of the
directors to the Executive Committee, Joliat's and Hagelstein's agreement not
to sell their Shares for a period of four years without Sun's consent, and
Sun's right of first refusal of the sale of Joliat's and Hagelstein's Shares.
In addition, the Voting Agreement provides that neither Hagelstein nor Joliat
shall sell their Shares to any competitor or distributor or business associate
of the Company without Sun's consent. Joliat and Hagelstein have also agreed
that they will vote in accordance with Sun's directors with respect to any
matter relating to the investment, merger, alliance, share dilution,
appointment of key employees, major restructuring or reorganizing, bank
borrowing, funding or giving credit.
In the event that Sun sells more than 30% of the outstanding Shares of
the Company within four years from the date of the Voting Agreement or if Sun
defaults in its pledge agreement with the Company (see Item 4) subject to
certain conditions, the Board of Directors shall be reconstituted in accordance
with the Share ownership of Sun, the Joliat Trust and the Hagelstein Trust. In
addition, the Executive Committee shall be reconstituted so that it consists of
one director designated by Sun and two directors designated by the Joliat Trust
and the Hagelstein Trust. In the event that Sun owns less than 10% of the
outstanding Shares of the Company, the Voting Agreement shall terminate.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following exhibits are filed with this statement:
Exhibit 1: Joint Statement Agreement
Exhibit 2: Voting Agreement dated August 20, 1997.
<PAGE> 15
PAGE 15 OF 15
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: September 2, 1997
Jay F. Joliat Qualified Terminable Interest
Marital Trust u/a/d 4-8-82
By: /s/ Jay F. Joliat
----------------------------------
Jay F. Joliat, Trustee
David A. Hagelstein Trust u/a/d 10-27-93
By: /s/ David A. Hagelstein
----------------------------------
David A. Hagelstein, Trustee
Sun Pharmaceutical Industries Limited
By: /s/ Dilip S. Shanghvi
----------------------------------
Dilip S. Shanghvi,
Managing, Director
/s/ Jay F. Joliat
----------------------------------
Jay F. Joliat
/s/ David A. Hagelstein
----------------------------------
David A. Hagelstein
/s/ Shantilal N. Shanghvi
----------------------------------
Shantilal N. Shanghvi
/s/ Dilip S. Shanghvi
----------------------------------
Dilip S. Shanghvi
/s/ Sudhir V. Valia
----------------------------------
Sudhir V. Valia
/s/ Narendra N. Borkar
----------------------------------
Narendra N. Borkar
<PAGE> 16
EXHIBIT INDEX
Exhibit Description
- ------- -----------
1 Joint Statement Agreement
2 Voting Agreement dated
August 20, 1997
<PAGE> 1
EXHIBIT 1
SCHEDULE 13D JOINT FILING AGREEMENT
The undersigned and each other person executing this joint filing
agreement (this "Agreement") agree as follows:
(i) The undersigned and each other person executing this Agreement
are individually eligible to use the Schedule 13D to which this Exhibit is
attached and such Schedule 13D is filed on behalf of the undersigned and each
other person executing this Agreement; and
(ii) The undersigned and each other person executing this Agreement
are responsible for the timely filing of such Schedule 13D and any amendments
thereto, and for the completeness and accuracy of the information concerning
such person contained therein; but none of the undersigned or any other person
executing this Agreement is responsible for the completeness or accuracy of the
information statement concerning any other persons making the filing, unless
such person knows or has reason to believe that such information is inaccurate.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all of which, taken together,
shall constitute one and the same instrument.
DATED: September 2, 1997
Jay F. Joliat Qualified Terminable Interest
Marital Trust u/a/d 4-8-82
By: /s/ Jay F. Joliat
----------------------------------
Jay F. Joliat, Trustee
David A. Hagelstein Trust u/a/d 10-27-93
By: /s/ David A. Hagelstein
----------------------------------
David A. Hagelstein, Trustee
Sun Pharmaceutical Industries Limited
By: /s/ Dilip S. Shanghvi
----------------------------------
Dilip S. Shanghvi,
Managing Director
/s/ Jay F. Joliat
----------------------------------
Jay F. Joliat
/s/ David A. Hagelstein
----------------------------------
David A. Hagelstein
/s/ Shantilal N. Shanghvi
----------------------------------
Shantilal N. Shanghvi
/s/ Dilip S. Shanghvi
----------------------------------
Dilip S. Shanghvi
/s/ Sudhir V. Valia
----------------------------------
Sudhir V. Valia
/s/ Narendra N. Borkar
----------------------------------
Narendra N. Borkar
<PAGE> 1
EXHIBIT 2
VOTING AGREEMENT
THIS AGREEMENT is made and entered into as of this 2th day of August,
1997 , by and among Caraco Pharmaceutical Laboratories, Ltd., a Michigan
corporation (the "Company"), Sun Pharmaceutical Industries Limited, a
publicly-traded Indian company ("Sun"), David A. Hagelstein as Trustee of the
TTEE David A. Hagelstein Trust, u/a/d 10/27/93 ("Hagelstein") and Jay F. Joliat
as Trustee of the Jay F. Joliat Qualified Terminable Interest Marital Trust,
u/a/d 4/8/82 ("Joliat"). Hagelstein and Joliat are sometimes hereinafter
collectively referred to as the "Group." Sun, Hagelstein and Joliat are
sometimes hereinafter collectively referred to as the "Stockholders" and
individually as a "Stockholder." Certain capitalized terms used herein are
defined in Paragraph 13 hereof.
WHEREAS, the Company and Sun intend to enter into a stock purchase
agreement pursuant to which Sun will acquire 5.3 Million Shares of Common Stock
of the Company (the "Stock Purchase Agreement").
WHEREAS, it is intended that the Stock Purchase Agreement will require
that the parties enter into a Voting Agreement with regard to the selection and
election of directors of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties to this Agreement agree as
follows:
1. EFFECTIVE DATE. This Agreement shall automatically become
effective upon sending First remittance by Sun as per the Stock
Purchase Agreement.
2. BOARD OF DIRECTORS, COMMITTEES AND BYLAWS.
(a) From and after the consummation of the Stock Purchase
Agreement and until the provisions of this Paragraph cease
to be effective, each Stockholder shall vote all of his or its
Shares and any other voting securities of the Company over
which such Stockholder has voting control and shall take all
other necessary or desirable actions within his or its
control (whether in the capacity as a stockholder, director,
member of a board committee, or officer of the Company or
otherwise, and including, without limitation, attendance at
meetings in person or by proxy for purposes of obtaining a
quorum and execution of written consents in lieu of meetings)
and the Company shall take
<PAGE> 2
all necessary and desirable actions within its control
(including, without limitation, calling special board and
stockholders meetings) so that:
(i) The authorized number of directors on the Board of
Directors of the Company (the "Board") shall be
established at not less than five (5) and no more than
eleven (11) directors.
(ii) The following persons shall be elected to the Board:
A. Six (6) individuals (the "Sun Directors")
designated by Sun;
B. One (1) individual (the "J Director") designated
by Joliat;
C. One (1) individual (the "H Director") designated
by Hagelstein; and
D. Three (3) individuals ("Independent Directors")
to be appointed with the mutual consent of J & H
and Sun (Joliat and Hagelstein are hereinafter
collectively referred to as the "Non-Sun
Directors").
(iii) Each of the three classes of directors (whose
current terms expire in 1997, 1998 and 1999) shall
have as close to one-third (1/3) Sun Directors and one-
third (1/3) Non-Sun Directors and one-third (1/3)
Independent Directors as feasible.
(iv) Special meetings of the Board may be called only
by the Chairman of the Board, the Chief Executive
Officer, the Executive Committee or by a majority of
the Board.
(v) The Board shall elect a Chief Executive Officer
selected by Sun who shall report to the Board.
Conditions of his employment and his removal and
replacement will be as per the Board's directions.
(vi) The Board shall elect a Chairman of the Board selected
by Sun from time to time from one of the Sun Directors.
(vii) With respect to shareholder votes to remove a
director, the Group will vote in accordance with Sun's
directions with respect to Sun Directors, and Sun will
vote in accordance with the directions of Joliat with
respect to J Director and in accordance with directions
of Hagelstein with respect to H Director.
<PAGE> 3
(viii) With respect to other shareholders votes, the Group
will vote in accordance with Sun's directions with
respect to any matter relating to the investment,
merger, alliance, share dilution, appointment of key
employees, major restructuring or reorganizing, bank
borrowing, funding or giving credit. However, any matter
related to capitalization needing shareholders approval
will be such that it will not affect the relative voting
and ownership position of the Group in relation to Sun's
voting and ownership position. Any such change must
have the same proportionate effect on Sun as it has on
the Group.
(ix) In the event that any representative designated
hereunder by Sun under clause (ii)(A) above ceases to
serve as a member of the Board, the resulting vacancy
on the Board shall be filled by a representative
designated by Sun.
(x) In the event that any representative designated
by Joliat and Hagelstein, respectively, under clause
(ii)(B) or (ii)(C) above ceases to serve as a member of
the Board, the resulting vacancy on the Board shall be
filled by a representative designated by a majority of
the Shares held by Hagelstein or Joliat, respectively.
(xi) The composition of the Board of Directors of any
Subsidiary of the Company shall be the same as that of
the Board.
(xii) The Executive Committee of the Board shall be
established at three (3) directors. The Executive
Committee will exercise all powers and authority of the
Board in management of the business and affairs of the
Company, subject to statutory restrictions.
(xiii) The following persons shall be elected by the Board to
the Executive Committee:
A. Two (2) Sun Directors designated by Sun; and
B. One (1) Non-Sun Director designated by a
majority of the Shares of the Group.
(xiv) Removal from the Executive Committee (with or without
cause) of any Sun Director designated by Sun under
clause (xiii)(A) above shall be at Sun's sole
determination.
3
<PAGE> 4
(xv) Removal from the Executive Committee (with or
without cause) of any Non-Sun Director designated
by the Group under clause (xiii)(B) above shall be at
the Group's sole determination by a majority vote of the
Shares held by the Group.
(xvi) In the event that any Sun Director designated to
be on the Executive Committee by Sun under
clause (xiii)(A) above ceases to serve as a member of
the Executive Committee, the resulting vacancy on the
Executive Committee shall be filled by a Sun Director
designated by Sun.
(xvii) In the event that any Non-Sun Director
designated to be on the Executive Committee by
the Group under clause (xiii)(B) above ceases to serve
as a member of the Executive Committee, the resulting
vacancy on the Executive Committee shall be filled by a
Non-Sun Director designated by a majority of the Shares
held by the Group.
(xviii)The composition of the executive committee of
any Subsidiary of the Company shall be the same as
that of the Executive Committee of the Company.
(xix) The rights of the parties hereto shall
be modified as set forth below in the that Sun sells
within a period of four (4) years from the date of this
Agreement, its shares which exceed in the aggregate, 30%
of the outstanding shares of Caraco at the time of such
sale to any person other than an affiliate of Sun, or in
other words, if at any time, as a result of a sale of
shares to any person other than an affiliate of Sun,
Sun's ownership falls below 30% of the then outstanding
shares of Caraco ("a 30% threshold event"); or if Sun
defaults as defined in Paragraph 5 of the Stock Pledge
Agreement. If, however, Pledgor cannot make any timely
payment due to reasons beyond its control, such as
Reserve Bank of India's balance of payment situation or
any other similar reasons or force majeure, for a period
of six (6) months from the due date of a payment, the
company will not exercise any of its rights or remedies
for this period of six (6) months. Payments within
these six (6) months will be treated as a timely
payment. Upon the occurrence of a 30% threshold event,
or a default as cited above, the Board of Directors
shall be reconstituted in accordance with the
proportionate share holdings of each of the Stockholders
in relation to the total shares outstanding (but Board
representation may not, in any case, be less favorable
to the Non-Sun Director Group immediately prior to such
occurrence as a result of such reconstitution). This
reconstitution of the Board will not effect the
4
<PAGE> 5
number of Independent Directors. The Chief
Executive Officer and the Chairman of the Board shall be
elected from one of the Non-Sun Directors selected by
the majority of the shares held by the Group. Upon the
occurrence of a 30% threshold event or a default as
defined, the Executive Committee shall be reconstituted
so that it consists of one (1) Sun Director selected by
Sun and two (2) Non-Sun Directors selected by a majority
of the Shares held by the Group. Also, upon the
occurrence of a 30% threshold event, or a default as
defined, the transfer restriction cited in Section 4(a)
below shall be modified to permit each of the individual
members of the Group to sell a like cumulative
percentage proportion of the shares beneficially owned
or controlled by each respective member as that which
Sun cumulatively anticipates selling the relation to
that amount which Sun holds immediately prior to such an
occurrence. Sun and the Group shall participate
concurrently on a pro-rata basis in like percentage
proportions to their respective total holding in any
such sale (for example: if Sun anticipates cumulatively
selling 40% of their holders (which would trigger this
30% threshold event), Sun would notify the Group of such
intent and allow the members of the Group to
simultaneously sell their shares up to 40% of their
respective holdings). Notwithstanding the above, or any
language that may be to the contrary elsewhere in this
Agreement, in the event that Sun owns 10% or less of the
outstanding Shares of Caraco, all of the provisions of
this Agreement shall terminate and be of no further
force or effect. Sun may, however, make bonafide pledge
of any number of its shares, without attracting
provisions of this Clause.
(xx) The Company shall pay the reasonable out-of-pocket
expenses incurred by each Director in connection
with attending the meetings of the Board, the board
of directors of any Subsidiary and any committee of
the Board of Directors.
(xxi) The Bylaws shall be amended, as applicable, in
accordance with the provisions of this Paragraph 2.
3. TERM. Unless terminated earlier pursuant to the
provisions of Paragraph 2(xix), this Agreement shall terminate and be of no
further force or effect from and after the fourth anniversary hereof.
4. TRANSFER.
(a) Each of the members of the Group agrees, except with the
consent of Sun, for a period of four (4) years from the date
of this Agreement, not to sell or otherwise dispose of his
Shares except to an Affiliate which specifically agrees in
writing to be bound by the terms of this Agreement. Members
of the Group may, however, make a bona fide pledge of their
Shares if Pledgor agrees to be bound by the terms of this
5
<PAGE> 6
Agreement and also agrees to bind any subsequent person(s)
claiming through him. Notwithstanding the foregoing, the
above restrictions shall terminate in the event of (i) any
sale of Shares by Sun to anyone other than an Affiliate, (ii)
approval by the Board of the Company of a merger,
consolidation, or sale of substantially all of the assets of
the Company to another entity, or (iii) a tender offer for
Shares.
(b) Each of the members of the Group agrees that for a subsequent
three-year period after the expiration of the first four years
of this Agreement, that if an when he (or any person claiming
through or under him) decides to sell any of their Shares
anywhere and to any person or entity other than through the
open public market on the established Stock Exchange where the
Company's stock is regularly traded, he will first offer the
same exact transaction with the same exact terms and
conditions to Sun or its nominee(s). The price of shares for
such transaction shall not exceed 25% higher than the
prevailing market price, that is the average price of at least
10 days closing prices on the Stock Exchange where the shares
are listed. If Sun or its nominee(s) does not purchase the
same within 60 days of the receipt of such offer from a member
of the Group, then such member shall be free to sell the said
shares to anyone.
(c) Each of the members of the Group agrees, that for a subsequent
three-year period after the expiration of the first four years
of this Agreement, that if and when he (or any person claiming
through or under him) decides to sell any of their Shares, he
will first offer such shares to Sun or its nominee(s) at the
then prevailing market price. If Sun or its nominee(s) does
not purchase same within 60 days of the receipt of such offer
from a member of the Group, then such member shall be free to
sell the said shares to any person or entity he wishes.
"Prevailing market price" shall mean the average price of the
last 10 days closing prices on the established Stock Exchange
where the Company's stock is regularly traded. If there is no
public market for the shares at the time a member of the Group
wishes to sell his shares as a result of the Company being
delisted and/or otherwise not quoted on any recognized
exchange, the price that will be used shall be determined by:
(i) the average of two independent appraisals. One appraisal
to be performed by a certified appraiser selected by Sun, and
one appraisal to be performed by a certified appraiser
selected by the selling member(s) of the Group with the two
appraisals not to differ by more than 25% in relation to the
higher of the two appraisals. If the two appraisers cannot
agree on a valuation with this allowable deviation, then a
third appraisal shall be performed by an independent appraiser
from any one of the "Big Six" accounting firms that is
mutually satisfactory to both parties. The average of the
three appraisals shall then be the valuation used. To
encourage a good faith attempt at arriving at a fair market
value for the Shares to be sold, both parties will share
equally in the cost of this valuation process; or (ii) a
mutually agreed upon price satisfactorily negotiated between
the two parties.
(d) For a period of seven years from the date of this
Agreement no member of the Group shall sell or otherwise
transfer its Shares to any competitor or distributor or buyer
or seller or business associate of the Company without the
consent of Sun.
6
<PAGE> 7
5. AMENDMENT AND WAIVER. Except as otherwise provided herein, no
modification, amendment or waiver of any provisions of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved by each of (i) the Company, (ii) Sun, and the
holder of a majority of shares held by the Group. The failure of any party to
enforce any of the provisions of this Agreement shall in no way be construed as
a waiver of such provision and shall not affect the right of such party
thereafter to enforce each and every provision of the Agreement in accordance
with its terms.
6. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision, but this Agreement shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
7. ENTIRE AGREEMENT. Except as otherwise expressly set forth
herein, this document embodies the complete Agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral which may be related to the subject matter hereof
in any way.
8. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same Agreement.
9. REMEDIES. The Stockholders shall be entitled to enforce their
rights under this Agreement specifically to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in their favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that a Stockholder may in his or its sole discretion apply for
specific performance in order to enforce or prevent any violation of the
provisions of this Agreement.
10. NOTICES. Any notice provided for in this Agreement shall be
in writing and shall be either personally delivered, sent via facsimile
(receipt confirmed), mailed first class mail (postage pre-paid and receipt
confirmed) or sent by reputable over-night courier service (charges pre-paid
and receipt confirmed) to the Company, to Sun and to the Group at their
respective addresses set forth below or the attention of such other person as
the recipient party has specified by prior written notice to the sending
parties. Notices will be deemed to have been given hereunder when delivered
personally, upon transmitting a facsimile, three days after deposit in the U.S.
Mail and one day after deposit with a reputable overnight courier service.
Notices shall be sent to the following addresses:
If to Caraco: Caraco Pharmaceutical Laboratories, Ltd.
1150 Elijah McCoy Drive
Detroit, Michigan 48202 Attn: William R. Hurd,
President
7
<PAGE> 8
With a copy to: Fred B. Green, Esq.
Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, P.C.
2000 Town Center - Suite 1500
Southfield, Michigan 48075
If to Sun: Sun Pharmaceutical Industries Limited
Synergy House, Subhanpura
Gorwa Road, Baroda 390-007 India
Attn: Dilip Shanghvi, Managing Director
and
Sun Pharmaceutical Industries Limited
3, Narayan Building, 23, L.N. Road
Dadar (E), Mumbai - 400 014 India
Attn: Sudhir Valia
With a copy to: Michael D. Rosenthal, Esq.
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
If to the of the Group:
David A. Hagelstein, as Trustee of the
TTEE David A. Hagelstein Trust, u/a/d 10/27/93
1411 North Woodward Avenue - Suite 313
Birmingham, Michigan 48009
Jay F. Joliat, as Trustee of the
Jay F. Joliat Qualified Terminable Interest
Marital Trust, u/a/d 4/8/82
1411 North Woodward Suite 300
Birmingham, Michigan 48009
11. GOVERNING LAW. The corporate law of Michigan shall govern all
issues concerning the relative rights of the Company and Stockholders. All of
the questions concerning the construction, validity, and interpretation of this
Agreement shall be governed by the internal law, and not the law of conflicts
of Michigan.
12. DESCRIPTIVE HEADINGS. Descriptive headings of this Agreement
are inserted for convenience only and do not constitute part of this Agreement.
13. DEFINITIONS.
"Affiliate" of a Person means any other Person, entity or investment
fund controlling, controlled by or under common control with such Person and
any partner of such Person which is a partnership or, in the case of a trust,
the trustee or any beneficiary of such trust.
"Person" means an individual, partnership, corporation, association,
joint stock company, trust, joint venture, unincorporated organization or
governmental entity or any department, agency or political subdivision thereof.
"Shares" means (i) any of the Company's capital stock purchased or
otherwise acquired by any Stockholder and (ii) any securities issued or
issuable directly or indirectly with respect to the
8
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securities referred to in clause (i) above by way of stock dividend or stock
split or in connection with a combination of Shares, recapitalization, merger,
consolidation or other reorganization.
"Subsidiary" means any corporation of which the securities having a
majority of the ordinary voting power in electing the board of directors are,
at the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
"Arbitration" Any dispute between the parties regarding any provision
of this Agreement shall be resolved by binding arbitration before the London
Court of International Arbitration according to its rules of commercial
arbitration. Judgment upon the award of the arbitrators may be entered by any
court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
INDIVIDUALS:
/s/ David A. Hagelstein
-----------------------------
David A. Hagelstein, as
Trustee of the TTEE David Hagelstein
Trust, u/a/d 10/27/93
/s/ Jay F. Joliat
-----------------------------
Jay F. Joliat, as Trustee of the
Jay F. Joliat Qualified Terminable
Interest Marital Trust, u/a/d 4/8/82
SUN PHARMACEUTICAL INDUSTRIES LIMITED
By:/s/ Narendra Borkar
--------------------------
Narendra Borkar
Its: Director
9
