INDEMNITY AGREEMENT
INDEMNITY AGREEMENT dated as of July 25, 2001 (the "Agreement") by and
between Minrad Inc., a Delaware corporation (the "Company"), and Xxxxx Xxxxxxxxx
Partners LP, a Delaware limited partnership ("Guarantor").
RECITALS:
A. Guarantor has agreed to guarantee (the "Guaranty") the Company's
obligations under (a) a series of loans by and between the
Company and Wachovia Bank, N.A. (the "Lender") and (b) a Letter
of Credit established by Wachovia in favor of the Company, for
the Company's working capital needs not to exceed $400,000 in the
aggregate (collectively the "Loans").
B. Lender would not have entered into the Loans with the Company
without the Guaranty.
C. The Company and Guarantor have entered into that certain Pledge
and Security Agreement, dated as of the date hereof (the
"Security Agreement"), whereby the Company has granted Guarantor
a continuing security interest in the Collateral (as defined in
the Security Agreement).
AGREEMENT
The Company and Guarantor agree as follows:
1. The Company agrees to irrevocably, unconditionally, and
absolutely guarantee to Guarantor the full, faithful, timely and
proper compliance and observance of the following covenants so
long as Guarantor is required to guarantee the Company's
performance under the Loans:
(a) The Company shall provide Guarantor with a copy of all
financial information reports, and all material documents,
instruments, notices, correspondence and other information
required to be provided or otherwise given by the Company to
Lender or to any other party relating to the Loans;
(b) The Company shall provide Guarantor with a copy of all
material documents, instruments, notices, correspondence and
other information received by the Company from Lender or any
other party relating to the Loans;
(c) The Company shall not commit fraud or material
misrepresentation which may cause a default under any of the
Loans;
(d) The Company will not amend any of the Loans without the prior
written consent of Guarantor, unless the effect of such
amendment(s) is to terminate the liability of the Guarantor
under the Guaranty;
(e) The Company shall comply with, satisfy and fulfill each of
its obligations under the Loans in accordance with their
respective provisions; and
(f) The Company shall cure any default, if curable, declared by
Lender under any Loan, or satisfy any obligation incurred by
the Guarantor pursuant to the Guaranty.
2. In order to induce the Guarantor to issue the Guaranty, and in
consideration thereof, the Company agrees to issue to Guarantor
or its designees warrants to purchase up to One Million
(1,000,000) shares of the Company's Series B Convertible
Preferred Stock, par value $1.15 per share (the "Series B
Preferred Stock"), upon the terms and conditions set forth in the
Warrant Agreement by and between the Company and the Guarantor,
dated July 25, 2001, exercisable until the seventh anniversary of
this Agreement in accordance with, and subject to, the
aforementioned Warrant Agreement.
3. The Company agrees to protect, defend, indemnify and save
harmless Guarantor from, and pay or reimburse it for, any and all
liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses imposed upon or incurred by or
asserted against Guarantor under the Guaranty.
4. The Company agrees that Guarantor has the right, but not the
obligation, to cure any and all defaults by the Company under any
of the Loans as they may occur. If such a default or any breach
of any covenants under any of the Loans by the Company shall
occur, Guarantor shall have the right to take such actions as
Guarantor deems reasonably necessary or appropriate to minimize
or eliminate Guarantor's potential liability under the Guaranty.
Guarantor shall not have any liability to the Company for any
actions so taken.
5. This Agreement shall not be affected, modified or impaired by the
voluntary or involuntary liquidation, dissolution, sale or other
disposition of all or substantially all of the assets, marshaling
of assets and liabilities, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization,
arrangements, composition with creditors or readjustment of, or
other similar proceedings affecting, the Company.
6. Presentment, protest, demand, and notice of protest and demand,
and notice or receipt of any and all collateral, and of the
exercise of possessory remedies or foreclosure on any and all
collateral received by Guarantor from the Company, or any other
person, are hereby waived. All settlements, compromises,
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compositions, accounts stated, and agreed balances in good faith
between any primary or secondary obligors on any accounts
received as collateral shall be binding upon the Company.
7. The failure by Guarantor at any time or times hereafter to
require strict performance by the Company of any of the
provisions, warranties, terms, and conditions contained herein or
in any other agreement, document, or instrument now or hereafter
executed by the Company and delivered to Guarantor shall not
waive, affect, or diminish any right of Guarantor hereafter to
demand strict compliance or performance therewith and with
respect to any other provisions, warranties, terms and conditions
contained in such agreements, documents, and instruments, and any
waiver of a default hereunder shall not waive or affect any other
default hereunder, whether prior or subsequent thereto and
whether of the same or a different type. None of the warranties,
conditions, provisions, and terms contained in this Agreement or
in any agreement, document, or instrument now or hereafter
executed by the Company and delivered to Guarantor shall be
deemed to have been waived by any act or knowledge of Guarantor,
its agents, officers or employees, but only by an instrument in
writing, signed by an officer of Guarantor and directed to the
Company specifying such waiver.
8. To induce Guarantor to enter into this Agreement, the Company
represents and warrants to Guarantor as follows:
(a) POWER TO INCUR OBLIGATIONS. The Company has the full power
and unrestricted right to enter into this Agreement and to
incur the obligations provided for herein. This Agreement has
been authorized by all necessary corporate action;
(b) CONFLICTS. This Agreement does not violate, conflict with, or
constitute any default under any decree, judgment, or any
agreement or instrument binding upon the Company. This
Agreement does not violate any of the organizational
documents of the Company;
(c) PENDING MATTERS. No action or investigation is pending, or to
the best of the Company's knowledge, threatened before or by
any state or federal court or administrative agency that
might result in any material adverse change in the financial
condition or operations of the Company. The Company is not in
violation of any agreement, the violation of which might
reasonably be expected to have a material adverse effect on
its businesses or assets, and the Company is not in violation
of any order, judgment, or decree of any state or federal
court;
(d) FINANCIAL STATEMENTS ACCURATE. All financial statements of
the Company hereafter provided by the Company are or will be
true and complete in all material respects as of their
respective dates and will fairly present the financial
condition of the Company, and there are no material
liabilities, direct or indirect, fixed or contingent, as of
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the respective dates of such statements which are not
reflected therein or in a written certificate delivered with
such statements. The financial statements of the Company are
prepared in accordance with GAAP applied on a consistent
basis from year to year. There has been no material adverse
change in the financial condition, operations, or prospects
of the Company since the dates of such statements except as
fully disclosed to Guarantor in writing with the delivery of
such statements;
(e) DISCLOSURE. Neither this Agreement nor any other document,
financial statement, credit information, certificate or
statement required herein to be furnished to Guarantor by the
Company in connection with this Agreement contains any
incorrect or misleading statement of a material fact nor
omits to state a material fact required to make the
statements herein not misleading;
(f) ORGANIZATION OF THE COMPANY. The Company is a Delaware
corporation, duly formed, validly existing and in good
standing under the laws of its state of organization and is
duly qualified to conduct its business in each jurisdiction
where the nature of its activities or properties or the
conduct of its business requires the Company to be so
qualified;
(g) CONSENT. No consent of any other party and no consent,
license, approval or authorization with any governmental
authority or agency is required in connection with the
execution and delivery of this Agreement by the Company; and
(h) DUE EXECUTION AND ENFORCEMENT. This Agreement constitutes a
valid and legally binding obligation of the Company,
enforceable in accordance with its respective terms.
9. The covenants, agreements, and conditions contained herein or
granted hereby shall be binding upon and shall inure to the
benefit of the Company and Guarantor, and each of their
respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to confer on any
person other than the parties hereto, or their respective
successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement. The Company may
assign and transfer its interest in this Agreement only with
Guarantor's prior written consent.
10. All notices, requests, demands, elections and other
communications which either party to this Agreement may be
required to give hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally, by a
reputable courier service which requires a signature upon
delivery, by mailing the same by registered or certified first
class mail, postage prepaid, return receipt requested, to the
party to whom the same is so given or made, or via facsimile.
Such notice, request, demand, waiver, election or other
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communication will be deemed to have been given as of the date so
delivered or two days after mailing thereof.
(a) Notice to Guarantor:
Xxxxx Xxxxxxxxx Partners LP
c/o Xxxxxxx Xxxxx Ventures, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile Number: 000-000-0000
With a required copy to:
Xxxxxxx Xxxxx Ventures, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile Number: 000-000-0000
(b) Minrad Inc.
000 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx., Chief Executive Officer
With a required copy to:
Xxxxxxx Xxxx LLP
Xxx X&X Xxxxx, Xxxxx 0000
Xxxxxxx, Xxx Xxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
or to such other addresses as such party shall have specified by notice to the
other party hereto.
11. This Agreement constitutes the entire agreement and understanding
between the parties hereto as to the matters set forth herein and
supersedes and revokes all prior agreements and understandings,
oral and written, between the parties hereto or otherwise with
respect to the subject matter hereof. No change, amendment,
termination or attempted waiver of any of the provisions hereof
shall be binding upon any party unless set forth in an instrument
in writing signed by the party to be bound or their respective
successors in interest.
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12. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument. A
counterpart may consist of a signature page of this Agreement.
13. The section and other headings contained in this Agreement are
for reference purposes only and shall not be deemed to be a part
of this Agreement or to affect the meaning or interpretation of
this Agreement.
14. Within this Agreement, the singular shall include the plural and
the plural shall include the singular, and any gender shall
include all other genders, all as the meaning and the context of
this Agreement shall require.
15. The parties hereto shall cooperate fully at their own expense,
except as otherwise provided in this Agreement, with each other
and their respective counsel in connection with all steps to be
taken as part of their obligations under this Agreement.
16. If any term, covenant, condition or provision of this Agreement
or the application thereof to any circumstance shall be invalid
or unenforceable to any extent, the remaining terms, covenants,
conditions and provisions of this Agreement shall not be affected
thereby and each remaining term, covenant, condition and
provision of this Agreement shall be valid and shall be
enforceable to the fullest extent permitted by law. If any
provision of this Agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only as broad as is
enforceable.
17. GOVERNING LAW. The validity and interpretation of this Agreement
shall be construed in accordance with, and governed by, the
internal laws of the State of New York, without regard to
principles of conflicts of laws.
18. CONSENT TO JURISDICTION. THE PARTIES HEREBY AGREE THAT A NEW YORK
COURT, STATE OR FEDERAL, LOCATED IN NEW YORK COUNTY SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES PERTAINING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date hereof.
MINRAD INC.
By: /s/ Xxxx X. XxXxxxxxx
---------------------
Xxxx X. XxXxxxxxx
Senior Vice President &
Chief Technical Officer
XXXXX XXXXXXXXX PARTNERS LP
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------
Xxxxx X. Xxxxxxxxx
General Partner
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