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Exhibit 10.34
FUNDED COMMITMENT FACILITY ESCROW AGREEMENT
THIS FUNDED COMMITMENT FACILITY ESCROW AGREEMENT (this "Escrow
Agreement"), dated as of August 24, 1998 by and among Northstar High Total
Return Fund ("Northstar Return"), Northstar High Total Return Fund II
("Northstar Return III"), Northstar High Yield Fund ("Northstar Yield"),
Northstar Strategic Income Fund ("Northstar Income," together with Northstar
Return, Northstar Return II and Northstar Yield, the "Purchasers"), Intracel
Corporation, a Delaware corporation (the "Company"), and Bank of America NT &
SA, doing business as Seattle First National Bank, (together with its successors
and assigns, the "Escrow Agent").
W I T N E S S E T H:
WHEREAS, the Company has sold to the Purchasers and the
Purchasers have purchased on the date hereof, certain Guaranteed Senior Secured
Primary Promissory Notes (the "Primary Notes") in the aggregate amount of
$35,000,000 in accordance with the terms of the Securities Purchase Agreement
dated the date hereof among the Purchasers and the Company (the "Securities
Purchase Agreement"); and
WHEREAS, the Company has sold to the Purchasers and the
Purchasers have purchased on the date hereof, certain Guaranteed Senior Secured
Escrow Promissory Notes (the "Escrow Notes") in the aggregate amount of
$6,000,000 in accordance with the terms of the Securities Purchase Agreement
(the Primary Notes and the Escrow Notes are collectively referred to herein as
the "Notes"), and
WHEREAS, the obligations of the Company under the Securities
Purchase Agreement, the Notes and the Ancillary Agreements (the "Obligations"),
are secured on the terms and conditions contained in the Securities Documents
(as that term is defined in the Securities Purchase Agreement; and
WHEREAS, the Obligations of the Company are guaranteed by the
Company's Subsidiaries in accordance with the Guaranty Agreement dated the date
hereof among the Purchasers and the Company (the "Guaranty Agreement"); and
WHEREAS, in connection with the purchase and sale of the Notes,
the Company is obligated to deposit into escrow with the Escrow Agent Six
Million Dollars ($6,000,000), which sum represents all of the cash proceeds from
the sale of the Escrow Notes, to be held and disbursed by the Escrow Agent on
the terms and conditions hereinafter set forth;
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NOW THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants, agreements and other consideration
contained and exchanged in this Escrow Agreement, the receipt and sufficiency
of which are hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
1. Definitions. Capitalized terms defined in the Securities
Purchase Agreement, the Notes and the Ancillary
Agreements, when used herein without definition, shall
have the respective meanings set forth therein.
2. Appointment of Escrow Agent. The Purchasers and the
Company hereby designate and appoint the Escrow Agent to
serve in accordance with the terms, conditions and
provisions of this Escrow Agreement, and the Escrow
Agent hereby agrees to act as such upon the terms,
conditions and provisions provided in this Escrow
Agreement.
3. Escrow. On the date hereof, the Company has instructed
the Purchasers to deliver and the Purchasers have
delivered to the Escrow Agent the sum of Six Million
Dollars ($6,000,000) (the "Escrow Fund"), the receipt of
which the Escrow Agent hereby acknowledges. The Escrow
Fund shall be deposited in the account described on
Annex I hereto for receipt of such amount (the "Escrow
Account") and shall be held in such Escrow Account and
distributed in accordance with the terms and provisions
of this Escrow Agreement.
4. Investment of Escrow Fund. The Escrow Fund shall be held
and invested or reinvested by the Escrow Agent solely in
cash or three-month or six-month U.S. treasury bills,
and otherwise upon and in accordance with the written
instructions of the Company and the Purchasers.
Investments of monies in the Escrow Fund shall be made
in the foregoing securities in a manner that will ensure
that such investments mature or may be redeemed or may
be subject to liquidation by sale or otherwise at the
option of the Escrow Agent at such time as may be
necessary to make timely disbursements from said Escrow
Fund. The Escrow Agent may from time to time sell such
investments and reinvest the proceeds therefrom in other
investments of the type described in this Section 4. The
Escrow Fund shall be credited with all proceeds of sale
and income from such investment.
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5. Term. Subject to claims against the Escrow Fund as
hereinafter provided, the term of this Escrow Agreement
shall terminate upon the earlier of (a) the date on
which the Escrow Fund shall have been reduced to zero;
(b) the date on which the Company shall have repaid all
of the Escrow Notes from any source of funds whatsoever;
and (c) August 25, 2003 (the "Escrow Expiration Date").
6. Disbursement of Monies in the Escrow Fund Prior to
Escrow Termination Date. On each occasion that the
Company shall execute and deliver a written notice
substantially in the form of Exhibit A hereto (each, a
"Disbursement Notice") to the Escrow Agent providing the
Escrow Agent with disbursement instructions for all or
any part of the Escrow Fund, the Escrow Agent shall
disburse the portion of the Escrow Fund referred to in
such notice in accordance with the instructions
contained in such notice.
7. Disbursement of Monies in the Escrow Fund on Default or
on the Escrow Termination Date. On the earlier of (A)
any date on which there shall occur a Default, an Event
of Default, or an event that with the lapse of time or
the giving of notice or both, shall constitute an Event
of Default with respect to the Securities Purchase
Agreement, the Notes or any of the Ancillary Agreements
(the "Default Date") and unless the Purchasers shall
have waived the provisions of this Section 7 with
respect to a particular Default Date within five (5)
Business Days after such Default Date, or (B) the Escrow
Expiration Date, the Escrow Agent shall apply any
remaining amounts in the Escrow Fund in the following
order of priority: (A) to the Purchasers, an amount
equal to all accrued unpaid past due interest on the
Notes; (B) to the Purchasers, an amount equal to all
accrued unpaid interest due on the Notes; (C) to the
Purchasers, all accrued unpaid and past due amounts
under the Securities Purchase Agreement, the Notes and
any of the Ancillary Agreements; (D) to the Purchasers,
all other accrued unpaid amounts under the Securities
Purchase Agreement, the Notes and any of the Ancillary
Agreements;(E) the aggregate principal amount
outstanding under the Notes; and (F) to the Company;
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provided however, that the Escrow Agent shall not be required to make any
disbursements with respect to a Default Date until it shall have received a
notice from the Purchasers under this Section 7 in substantially the form set
forth in Exhibit B attached hereto, and further provided that it shall make such
disbursement as set forth above promptly after receipt of such notice from the
Purchasers.
8. Escrow Agent. The Escrow Agent shall be an Eligible
Institution as that term is defined in the Securities
Purchase Agreement. The duties of the Escrow Agent,
hereunder shall be entirely administrative and not
discretionary. The Escrow Agent shall be obligated to
act only in accordance with written instructions
received by it as provided in this Escrow Agreement and
is authorized hereby to comply with such written
instructions, any orders, judgments or decrees of any
court with proper jurisdiction and shall not be liable
as a result of its compliance with the same.
a. As to any legal questions arising in connection
with the administration of this Escrow
Agreement, the Escrow Agent may rely absolutely
upon the opinions given to it by its counsel and
shall be free of liability (except for liability
arising from its own gross negligence or wilful
misconduct), for acting in reliance on such
opinions.
b. The Escrow Agent may rely absolutely upon the
genuineness and authorization of the signature
and purported signature of any party upon any
instruction, notice, release, receipt or other
document delivered to it pursuant to this Escrow
Agreement.
c. The Escrow Agent may, as a condition to the
disbursement of monies or disposition of
securities as provided herein, require from the
payee or recipient a receipt therefor and, upon
final payment or disposition, a release of the
Escrow Agent from any liability arising out of
its execution or performance of this Escrow
Agreement, such release to be in a form
satisfactory to the Escrow Agent.
d. The parties agree that any compensation due to
the Escrow Agent for its services
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hereunder shall be paid entirely by the Company.
9. Indemnity.
a. The Purchasers and the Company agree to and
hereby waive any suit, claim, demand or cause of
action of any kind which they or it may have or
may assert against the Escrow Agent arising out
of or relating to the execution or performance
by the Escrow Agent of this Escrow Agreement,
unless such suit, claim, demand or cause of
action is based upon the wilful misconduct,
gross negligence or bad faith of the Escrow
Agent. The Purchasers and the Company further
agree, jointly and severally, to indemnify the
Escrow Agent against and from any and all
claims, demands, costs, liabilities and
expenses, including reasonable counsel fees,
which may be asserted against it or to which it
may be exposed or which it may incur by reason
of its execution or performance of this Escrow
Agreement, except such claims, demands, costs,
liabilities and expenses that are based upon or
the result of the wilful misconduct, gross
negligence or bad faith of the Escrow Agent.
Such agreement to indemnify shall survive the
termination of this Escrow Agreement until
extinguished by any applicable statute of
limitations.
b. In case any litigation is brought against the
Escrow Agent in respect of which indemnity may
be sought hereunder, the Escrow Agent shall give
prompt notice of that litigation to the
Purchasers and the Company and the Purchasers
and the Company upon receipt of that notice
shall have the obligation and the right to
assume the defense of such litigation, provided
that failure of the Escrow Agent to give that
notice shall not relieve the Purchasers or the
Company from any of their obligations under this
Section 9 unless that failure prejudices the
defense of such litigation by said parties. At
its own expense, the Escrow Agent may employ
separate counsel and participate in the defense.
The Purchasers and the Company shall not be
liable hereunder pursuant to any settlement
without their respective consents.
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10. Acknowledgment by the Escrow Agent. By execution and
delivery of this Escrow Agreement, the Escrow Agent
acknowledges that the terms and provisions of this
Escrow Agreement are acceptable to it and it agrees to
carry out the provisions of this Escrow Agreement on its
part.
11. Resignation or Removal of Escrow Agent; Successors.
a. The Escrow Agent may resign as such following
the giving of ten (10) days' prior written
notice to the other parties hereto. Similarly,
the Escrow Agent may be removed and replaced
following the giving of ten (10) days' prior
written notice to the Escrow Agent by the
Purchasers and the Company. In either event,
subject to subsection 11(b), the duties of the
Escrow Agent shall terminate ten (10) days after
the date of such notice (or as of such earlier
date as may be mutually agreeable among the
parties hereto); and the Escrow Agent shall then
deliver the balance of the Escrow Fund then in
its possession to a successor Escrow Agent as
shall be appointed by the other parties hereto
as evidenced by a written notice filed with the
Escrow Agent. Any successor Escrow Agent
appointed hereunder shall be an Eligible
Institution (as that term is defined in the
Securities Purchase Agreement), that is
appointed by the Purchasers and the Company.
b. If for any reason any bank or trust company is
unwilling to serve as successor Escrow Agent and
if the other parties hereto are unable to agree
upon a successor or shall have failed to appoint
a successor prior to the expiration of ten (10)
days following the date of the notice of
resignation or removal, the then acting Escrow
Agent may petition any court of competent
jurisdiction for the appointment of a successor
Escrow Agent or other appropriate relief and
until any such appointment is made or
appropriate relief granted, the then acting
Escrow Agent shall continue as the Escrow Agent;
and any such resulting appointment shall be
binding upon all of the Parties hereto.
C. Every successor appointed hereunder shall
execute, acknowledge and deliver to its
predecessor and also to the Purchasers and the
Company, an instrument in writing accepting such
appointment hereunder, and thereupon such
successor, without
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any further act, shall become fully vested with
all the duties, responsibilities and obligations
of its predecessor; but such predecessor shall,
nevertheless, on the written request of its
successor or any of the parties hereto, execute
and deliver an instrument or instruments
transferring to such successor all the rights of
such predecessor hereunder, and shall duly
assign, transfer and deliver all property,
securities and monies held by it pursuant to
this Escrow Agreement to its successor. Should
any instrument be required by any successor for
more fully vesting in such successor the duties,
responsibilities and obligations hereby vested
or intended to be vested in the predecessor, any
and all such instruments in writing shall, on
the request of any of the parties hereto, be
executed, acknowledged and delivered by the
predecessor or any other party so requested.
d. In the event of an appointment of a successor,
the predecessor shall cease to be custodian of
any funds, securities or other assets and
records it may hold pursuant to this Escrow
Agreement, and the successor shall become such
custodian.
e. Upon acknowledgment by any successor Escrow
Agent of the receipt of the then remaining
balance of the Escrow Fund, which acknowledgment
shall be given promptly after such receipt, the
then acting Escrow Agent shall be fully released
and relieved of all duties, responsibilities and
obligations under this Escrow Agreement.
12. Entire Agreement, Amendments and Waivers. This Escrow
Agreement contains the entire agreement (including
representations, warranties and covenants) among the
parties hereto pertaining to the subject matter hereof
and supersedes all prior and contemporaneous agreements,
negotiations, discussions, arrangements or
understandings with respect thereto. No amendment,
supplement, modification or waiver of this Escrow
Agreement shall be binding unless executed in writing by
the Escrow Agent, the Required Holders (as that term is
defined in the Securities Purchase Agreement) and the
Company, provided however that, except with the prior
written consent of one hundred percent (100%) of the
Purchasers, no amendment to this Agreement can affect
the time, amount or allocation of any payments, change
the percentage
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specified in the definition of Required Holders as
contained in the Securities Purchase Agreement or
consent to the assignment or transfer by the Company or
any of its Subsidiaries of their respective obligations
under this Agreement. Any amendment or waiver of any
provision herein shall be effective only for the
purposes and period of time expressly set forth therein
and shall not entitle the Company to any other waiver or
amendment in similar or other circumstances. No course
of dealing between the Company and any Purchaser, nor
any failure to exercise or any delay in exercising on
the part of the Purchasers, any right, remedy, power or
privilege herein shall operate as a waiver thereof; nor
shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other
right, remedy, power or privilege. The rights, remedies,
powers and privileges hereunder are cumulative and not
exclusive of any rights remedies, powers and privileges
provided by law. In addition to the remedies provided in
this Escrow Agreement, any party may pursue any and all
remedies now or hereafter existing at Law or in equity.
13. Execution in Counterparts. This Escrow Agreement may be
executed in one or more counterparts each of which shall
be regarded as an original and all of which shall
constitute but one and the same instrument.
14. Severability. If any provision of this Escrow Agreement,
or any covenant, obligation or agreement contained
herein is determined by a court of competent
jurisdiction to be invalid or unenforceable, such
determination shall not affect any other provision,
covenant, obligation or agreement contained herein, each
of which shall be construed and enforced as if such
invalid or unenforceable portion were not contained
herein. Such invalidity or unenforceability shall not
affect any valid and enforceable application thereof,
and each such provision, covenant, obligation or
agreement shall be deemed to be effective, operative,
made, entered into or taken in the manner and to the
full extent permitted by law.
15. Captions. The captions and headings in this Escrow
Agreement shall be solely for convenience of reference
and shall in no way define, limit or
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describe the scope or intent of any provisions or
sections of this Escrow Agreement.
16. Notices. All notices, requests, consents or other
communications which are required or permitted hereunder
shall be in writing and shall be deemed to be
sufficiently given when delivered personally, mailed by
registered or certified mail, postage prepaid, or
nationwide overnight delivery service (with charges
prepaid) and addressed as follows:
if to the Purchasers:
Northstar High Total Return
Northstar High Total Return II
Northstar High Yield Fund
Northstar Strategic Income Fund
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
With a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx
& Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
a. if to the Company:
Intracel Corporation
0000 X.X. Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Chief Executive Officer
b. if to the Escrow Agent:
c. Bank of America NT & SA
doing business as
Seattle First National Bank
10500 Northeast 0xx Xxxxxx
Xxxxx 0
Xxxxxxxx, Xxxxxxxxxx 00000
or, in any such case, at such other addresses or addresses as shall have been
furnished in writing by such party to the other. Any notice given hereunder
shall be deemed given and delivered three (3) Business Days after mailing by
mail, or one day after
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delivery to an overnight express service for next day delivery, or upon
delivery, if personally delivered, as the case may be.
17. Expenses. The Company shall pay its own expenses and the
expenses of the Purchasers in connection with the
transactions contemplated hereby, including, but not
limited to, the execution and enforcement of this
Agreement and any indemnity payments by Purchasers to
the Escrow Agent in accordance with Section 9 hereto.
18. Successors. This Escrow Agreement shall be binding
upon, and inure to the benefit of the successors and
assignees of the parties hereto (including without
limitation, in the case of Purchaser and Seller, by
merger), and no other person shall have any right,
benefit or obligation hereunder.
19. Applicable Law. This Escrow Agreement shall be governed
by and construed and enforced in accordance with the
internal laws (and not the laws of conflicts) of the
State of New York as permitted by Section 5-401 of the
New York General Obligations Law (or any similar
successor provision) without giving effect to any
choice of law rule that would cause the application of
the Laws of any jurisdiction other than New York. Each
of the parties hereto hereby (i) submits for itself and
its respective Assets to the nonexclusive general
jurisdiction of the Courts of the State of New York,
County of New York and the Courts of the United States
of America for the Southern District of New York, (ii)
irrevocably agrees that, at the Purchasers' election,
all actions or proceedings arising out of or relating to
this Escrow Agreement may be litigated in such courts,
(iii) waives any objection that it may have to the venue
of any such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the
same, and (iv) agrees that service of process in any
such action or proceeding may be effected by mailing a
copy thereof by registered or certified mail, postage
prepaid, to it at its address set forth in or determined
pursuant Section 16 of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Escrow Agreement to be executed on its behalf as of the day and year first above
written.
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NORTHSTAR HIGH TOTAL RETURN FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH TOTAL RETURN FUND II
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
NORTHSTAR STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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INTRACEL CORPORATION
By /s/ XXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
Bank of America NT & SA
doing business as
Seattle First National Bank
By:
-------------------------------
Name:
Title:
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INTRACEL CORPORATION
By /s/ XXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Executive Officer
Bank of America NT & SA
doing business as
Seattle First National Bank
By: /s/ X. XXXXXX
-------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Assistant Vice-President and Relationship Officer
Seafirst Investment Management
and Trust Services
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Exhibit A
[Form of]
DISBURSEMENT NOTICE
To: Bank of America NT & SA, doing business as Seattle First National Bank, as
Escrow Agent (the "Escrow Agent") under the Escrow Agreement dated as of
August 24, 1998 by and among Northstar High Total Return Fund, Northstar
High Total Return Fund II, Northstar Yield Fund, Northstar Strategic
Income Fund, Intracel Corporation and the Escrow Agent
Ladies and Gentlemen:
You are hereby instructed, pursuant to Section 6 of the referenced Escrow
Agreement, to disburse funds from the Escrow Fund (as defined therein) as
follows:
[INSERT PAYMENT INSTRUCTIONS AND AMOUNTS]
Very truly yours,
INTRACEL CORPORATION
By: _______________________________
Name:
Title:
Bank of America NT & SA
doing business as
Seattle First National Bank
By: _______________________________
Name:
Title:
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Exhibit B
[Form of]
DISBURSEMENT NOTICE
To: Bank of America NT & SA, doing business as Seattle First National Bank, as
Escrow Agent (the "Escrow Agent") under the Escrow Agreement dated as of
August 24, 1998 by and among Northstar High Total Return Fund, Northstar
High Total Return Fund II, Northstar Yield Fund, Northstar Strategic Income
Fund, Intracel Corporation and the Escrow Agent
Ladies and Gentlemen:
You are hereby instructed, pursuant to Section 7 of the referenced
Escrow Agreement, to disburse funds from the Escrow Fund (as defined therein)
as follows:
(A) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid past due interest on the Notes;
(B) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid interest due on the Notes;
(C) to _________________, the amount of $__________, which amount is
equal to all accrued unpaid and past due amounts under the
Securities Purchase Agreement, the Notes and any of the Ancillary
Agreements;
(D) to _________________, the amount of $__________, which amount is
equal to all other accrued unpaid amounts under the Securities
Purchase Agreement, the Notes and any of the Ancillary Agreements;
(E) to _________________, the amount of $__________, which amount is
equal to the aggregate principal amount Outstanding under the Notes;
and
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(F) to the Company, the amount of $____________
Very truly yours,
NORTHSTAR [ ]
By:________________________________
Name:
Title:
Bank of America NT & SA
doing business as
Seattle First National Bank
By:_________________________________
Name:
Title:
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