Exhibit 10.9
REIMBURSEMENT
AND
SECURITY AGREEMENT
THIS AGREEMENT, dated as of December 22, 1999, by BIOSPHERE MEDICAL,
INC., a Delaware corporation (the "Company"), to SEPRACOR, INC. (the "Secured
Party").
W I T N E S S E T H
WHEREAS, BIOSPHERE MEDICAL, INC, a Delaware corporation (the
"Company"), and the Secured Party have entered into a Second Amended and
Restated Revolving Credit Agreement with Fleet National Bank dated as of the
date hereof (as amended from time to time, the "Credit Agreement") pursuant to
which the Secured Party has agreed, subject to the terms and conditions set
forth therein, to guaranty certain revolving loans to the Company (collectively,
the "BioSphere Loans") in accordance with the Guaranty Agreement by Sepracor
Inc. to Fleet National Bank, of even date (the "Guaranty Agreement"), such
BioSphere Loans to be evidenced by the Company's Promissory Note in the original
principal amount of $2,000,000 payable to the order of the Fleet National Bank
(as amended or supplemented from time to time, the "Note"); and
WHEREAS, the Guaranty Agreement will be beneficial to Biosphere; and
WHEREAS, the obligation of the Secured Party to guaranty the BioSphere
Loans is subject to the condition, among others, that the Company shall execute
and deliver this Reimbursement and Security Agreement;
NOW, THEREFORE, in consideration of the willingness of the Secured
Party to guaranty the BioSphere Loans to Fleet National Bank, and for other good
and valuable consideration, receipt of which is hereby acknowledged by the
Company, the Company hereby agrees as follows:
1. GRANT OF SECURITY INTEREST. As security for the prompt and
complete payment and performance when due of all the Secured
Obligations (as defined below), Company hereby pledges,
assigns, transfers and grants to Secured Party, a continuing
first priority security interest in and to all the following
property (collectively, the "Pledged Collateral"): all of the
right, title and interest of the Company in, to and under all
machinery, equipment, inventory, all accounts, accounts
receivable, contract rights, chattel paper, documents, all
investment property, securities, security accounts and
investment in joint ventures (excluding, in each case, the
Company's equity interest in BioSphere Medical France, S.A.
(the "French Stock")), all general intangibles, including all
royalties and license fees payable to the Company, and
including without limitation, all patents, patent
applications, copyrights, copyright applications, trademarks,
trademark applications, and all goodwill associated therewith,
each as it now exists or is
hereafter acquired from time to time, and all amounts from
time to time payable under or in connection with any of the
Pledged Collateral, and all products and proceeds of the
foregoing. This grant covers only the property of the Company
and not that of any other entity.
2. OBLIGATION TO REIMBURSE; SECURED OBLIGATIONS. The Company
hereby agrees that, subject to the provisions of the Guaranty
Agreement, it shall immediately reimburse the Secured Party
for any and all amounts paid to Fleet National Bank by Secured
Party under the Guaranty Agreement (such reimbursement
obligation being referred to herein as the "Secured
Obligations").
3. REPRESENTATIONS, WARRANTIES AND COVENANTS. Company represents,
warrants and covenants as follows:
(a) NO LIENS. Company is, as of the date hereof, and, as to
Pledged Collateral acquired by it from time to time after the
date hereof Company will be, the owner of all Pledged
Collateral and all French Stock free from any lien or other
right, title or interest of any person, and Company shall
defend the Pledged Collateral and the French Stock against all
claims and demands of all persons at any time claiming any
interest therein adverse to Secured Party. Company shall not
execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) relating to
the Pledged Collateral or the French Stock, except financing
statements filed or to be filed in respect of and covering the
security interest granted hereby by Company.
(b) AUTHORIZATION, ENFORCEABILITY. Company has full corporate
power, authority and legal right to pledge and grant a
security interest in all the Pledged Collateral pursuant to
this Agreement, and this Agreement constitutes the legal,
valid and binding obligation of Company, enforceable against
Company in accordance with its terms.
4. PROVISIONS CONCERNING ALL PLEDGED COLLATERAL AND OTHER ASSETS.
(a) Company shall, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to Secured Party from time to
time such lists and descriptions of the Pledged Collateral,
financing statements, powers of attorney and other assurances
or instruments and take such further steps relating to the
Pledged Collateral and other property or rights covered by
this Agreement or the security interest hereby granted
(including, without limitation, rights in connection with the
French Stock), which Secured Party reasonably deems
appropriate or advisable to exercise and enforce its rights
and remedies hereunder with respect to any Pledged Collateral
(and any subsequent security interest in the French Stock) and
to perfect, preserve or protect the security interests in the
Pledged Collateral (and any subsequent security interest in
the French Stock) created by this Agreement or otherwise.
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(b) Company agrees that it will not, except as otherwise expressly
permitted by the Credit Agreement (i) sell, convey, assign or
otherwise dispose of, or grant any option with respect to, any
of the Pledged Collateral or the French Stock, other than
sales of inventory in the ordinary course of business or (ii)
create or permit to exist any lien upon or with respect to any
of the Pledged Collateral or the French Stock, other than the
lien and security interest granted to Secured Party under this
Agreement or as may be required by the Credit Agreement.
5. REMEDIES.
(a) OBTAINING THE PLEDGED COLLATERAL UPON EVENT OF DEFAULT. If any
event of default shall have occurred and be continuing after
any applicable cure period, including without limitation a
breach by the Company of any of its obligations hereunder
("Event of Default") then and in every such case, the Secured
Party may, at any time or from time to time during the
continuance of such Event of Default exercise all rights and
remedies of a secured party under the Uniform Commercial Code
and may, personally, or by agents or attorneys, immediately
take possession of the Pledged Collateral or any part thereof,
from Company or any other person who then has possession of
any part thereof with or without notice or process of law.
(b) WAIVER OF CLAIMS. Company hereby waives, to the fullest extent
permitted by applicable law, notice or judicial hearing in
connection Secured Party's taking possession of the Pledged
Collateral, to the extent permitted by applicable law.
(c) PLEDGE OF FRENCH STOCK. Upon the earlier to occur of (i) an
Event of Default hereunder, and (ii) the occurrence of a
default, and the continuance thereof beyond any applicable
cure period, under any agreement with respect to indebtedness
for borrowed money (other than purchase money financing and
capital leases) to which the Company is a party, including,
without limitation, the Credit Agreement, the Company shall
immediately pledge to the Secured Party, and grant to the
Secured Party a security interest in, the French Stock, and
take all actions and execute all documents necessary, at the
expense of the Company, to create and perfect the Secured
Party's interest in such French Stock.
6. APPLICATION OF PROCEEDS. The proceeds of any Pledged
Collateral obtained pursuant to the exercise of any remedy set
forth in Section 5 shall be applied promptly by Secured Party
(i) FIRST, to the payment of all costs and expenses made
or incurred by the Secured Party in connection with
the enforcement of the Company's obligations
hereunder and the exercise of the Secured Party's
rights and remedies;
(ii) SECOND, to the indefeasible payment in full in cash
of the unpaid Secured Obligations, and
(iii) THIRD, to Company, or its successors or assigns, or
to whomsoever may be
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lawfully entitled to receive the same or as a court
of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
7. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. Company hereby
appoints Secured Party its attorney-in-fact with an interest,
with full authority in the place and stead of Company and in
the name of Company, or otherwise, from time to time in
Secured Party's discretion, to take any action and to execute
any instrument consistent with terms of this Agreement and the
Credit Agreement which the Secured Party may deem necessary or
advisable to accomplish the purposes of this agreement. The
foregoing grant of authority is a power of attorney coupled
with an interest and such appointment shall be irrevocable for
the term of this Agreement. Company hereby ratifies all that
such attorney shall lawfully do or cause to do be done by
virtue hereof.
8. TERMINATION; RELEASE. When (i) all the Secured Party's
obligations under the Guaranty have been released and
terminated AND (ii) all the Secured Obligations have been
indefeasibly paid in full and have been terminated, this
Agreement shall terminate, and the Secured Party shall
promptly release all liens existing in connection herewith.
9. GOVERNING LAW. This Agreement, including the validity hereof
and the rights and obligations of the parties hereunder, shall
be construed in accordance with and governed by the laws of
the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the Company has executed this Agreement as a sealed
instrument as of the date first above written.
BIOSPHERE MEDICAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President & Chief
Financial Officer
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