REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT (this "Agreement") dated as of November 1,
1999, is made by and among NORTH AMERICAN VACCINE, INC., a Canadian corporation
("Borrower"), and [*], a Delaware corporation ("[*]".)
R E C I T A L S
A. Borrower and Bank of America, N.A. ("Bank") are party to that
certain loan agreement dated as of November 1, 1999 (as amended, modified or
restated from time to time the "Loan Agreement"), pursuant to which Bank has
agreed to make a revolving credit facility available to Borrower. Borrower's
obligations under the Loan Agreement are secured, in part, by liens on the
collateral described in that certain Security Agreement dated as of November 1,
1999, and that certain Patent and Trademark Assignment and Security Agreement
dated as of November 1, 1999 (collectively, the "Bank Security Agreements"). The
Loan Agreement, Bank Security Agreements, notes, financing statements and other
collateral documents related thereto are referred to herein as the "Loan
Documents."
C. Borrower has requested in connection with such financing that [*]
guaranty certain obligations of Borrower under the Loan Agreement. [*] has
entered into that certain Guaranty dated as of November 1, 1999, in favor of
Bank (the "Guaranty") to guarantee such obligations of Borrower.
D. Borrower and [*] have a substantial business relationship
independent of the Guaranty and [*] anticipates obtaining continued benefits
from that relationship as a result of Borrower's access to financing under the
Loan Documents.
E. In consideration of [*] entering into the Guaranty, Borrower has
agreed to indemnify and reimburse [*] if [*] is required to pay any
amounts under or in connection with the Guaranty. The obligations of the
Borrower pursuant to this Agreement shall be secured by certain collateral
described in that certain Security Agreement dated as of November 1, 1999, and
that certain Patent and Trademark Assignment and Security Agreement dated as of
November 1, 1999 (collectively, the "[*] Security Agreements").
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. INDEMNIFICATION BY BORROWER.
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1.
1.1 Borrower undertakes (to the fullest extent permitted by
applicable law) to indemnify [*] and its affiliates and their respective
directors, officers, employees and agents (collectively, the "Indemnified
Parties") from, and hold said Indemnified Parties harmless against, any and all
losses, liabilities, claims, actions, proceedings, suits, damages, costs and
expenses of any nature whatsoever in connection with or arising out of the
Guaranty (collectively, "Losses"), including, without limitation, the reasonable
attorneys' fees and disbursements (other than attorneys' fees and disbursements
incurred in connection with the preparation of the Guaranty and related
documents) (the "Indemnified Matters").
1.2 If any Indemnified Party is presented with any claim in
writing or any action or proceeding is formally commenced against an Indemnified
Party which may give rise to a right of indemnification hereunder, such
Indemnified Party shall promptly give written notice thereof to Borrower.
Borrower may, by delivery of written notice to such Indemnified Party within
thirty (30) days following receipt of such notice, elect to contest such claim,
action or proceeding in such manner as it deems necessary or advisable, and each
Indemnified Party shall cooperate with Borrower in connection therewith.
Notwithstanding Borrower's election to contest any such claim, action or
proceeding, if the Indemnified Party reasonably determines that it needs its own
counsel (separate from Borrower's counsel), the Indemnified Party shall have the
right to participate in its own defense and to have legal counsel of its choice
and participate in such defense, at the Indemnified Party's cost and expense
(unless such legal counsel is retained as a result of a representation conflict
with Borrower's counsel), without in any way impairing Borrower's obligations
under this Section 1 to indemnify and hold harmless such Indemnified Party from
all Indemnified Matters. In the event of any payment by an Indemnified Party
under the Guaranty, Borrower shall immediately upon demand by the relevant
Indemnified Party reimburse the Indemnified Party for such payment, plus
interest from the date of payment by Indemnified Party to the date of
reimbursement at an annual rate equal to _____________ percent or, if lower, the
highest rate permitted by law. Nothing in this Agreement shall restrict any
Indemnified Party from making any payment under the Guaranty without contesting
the necessity of such payment if the Indemnified Party in good faith believes
that such payment is due, and any such payment by an Indemnified Party shall be
subject to reimbursement by Borrower as provided above.
2. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants as follows:
2.1 ORGANIZATIONAL STATUS. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Canada.
2.2 POWER AND AUTHORITY. Borrower has full power and authority to
enter into this Agreement and perform all of its obligations hereunder. The
execution, delivery and performance by Borrower of this Agreement do not
contravene Borrower's charter or bylaws or violate any provision of any statute,
law, rule, regulation, judgment, order or decree and will not conflict with, or
constitute a breach or default under, any indenture, loan agreement, contract or
other agreement or instrument to which Borrower is a party or by which Borrower
or any of its property is bound.
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2.
2.3 GOVERNMENTAL AUTHORIZATION. No authorization, consent or
approval or other action by, and no notice to or other filing with, any
governmental authority or regulatory body is required for the due execution and
delivery by Borrower of this Agreement or the performance by Borrower of any of
its obligations hereunder.
3. COVENANTS. Borrower covenants that until [*] is fully released from
the Guaranty and all indemnity obligations of Borrower under Section 1 above
have been met with respect to then existing Losses, Borrower will comply with
Sections 3 and 4 of the Loan Agreement and, if for any reason the Loan Agreement
is terminated or otherwise ceases to be in effect, to comply with the provisions
of Sections 3 and 4 thereof as last in effect.
4. EXPENSES. Borrower will on demand pay to [*] the amount of any and
all reasonable costs and expenses, including but not limited to the reasonable
fees and disbursements of its counsel and of any experts or agents, which [*]
may incur in connection with (i) the exercise or enforcement by [*] of any of
its rights or remedies hereunder, or (ii) any failure by Borrower to perform any
of its obligations hereunder.
5. ASSIGNMENT. Without the other party's prior written consent, no
party may assign or delegate any of its rights or obligations hereunder, except
that [*] may assign its rights (including indemnity rights under Section 1) as
part of any merger, consolidation or restructuring of [*] or as part of a
transfer of a substantial portion of [*]'s assets. If at any time or times by
sale, assignment, negotiation, pledge or otherwise, [*] transfers any of the
Obligations (as defined in the Loan Agreement), such transfer shall carry with
it [*]'s rights and remedies under this Agreement with respect to the
Obligations transferred, and the transferee shall become vested with such rights
and remedies whether or not they are specifically referred to in the transfer.
If and to the extent [*] retains any other Obligations, [*] shall continue to
have the rights and remedies herein set forth with respect thereto.
6. NOTICES. Any notice or other communication required or desired to
be served, given or delivered hereunder shall be in writing to the parties at
the addresses set forth below and shall be deemed to have been validly served,
given or delivered if given in accordance with the notice provisions of the Loan
Agreement as then in effect or, if the Loan Agreement is not then in effect, in
accordance with the notice provisions of the Loan Agreement last in effect.
7. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York applicable to contracts made and to be
performed in the State of New York. This Agreement shall be given a fair and
reasonable construction in accordance with the intention of the parties and
without regard to, or aid of, any provision of law which provides that an
agreement shall be construed against the drafter thereof.
8. SECURITY. Borrower's obligations under this Agreement shall be
secured by each of the [*] Security Agreements.
9. MISCELLANEOUS. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. This Agreement shall be binding upon
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3.
Borrower and its successors and assigns, and all persons claiming under or
through Borrower or any of its successors or assigns, and shall inure to the
benefit of and be enforceable by [*] and its successors and assigns.
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4.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
NORTH AMERICAN VACCINE, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
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Title: Chief Executive Officer & President
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[*]
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[Signature Page to Reimbursement Agreement]