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EXHIBIT 10.30
INTEREST ESCROW SECURITY AGREEMENT
This INTEREST ESCROW SECURITY AGREEMENT (the "Agreement"),
dated as of August 25, 1998, among Northwestern Trust and Investors Advisory
Company, as Depositary (in such capacity, the "Depositary"), the holders set
forth on Schedule A attached hereto (the "Holders") of the certain promissory
notes (the "Notes") dated the date hereof, of Intracel Corporation, a Delaware
corporation (the "Company"), and the Company. All references herein to the "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in the
State of New York, and all references herein to the "Revised UCC" shall mean the
1994 Official Text of Article 8 of the Uniform Commercial Code with conforming
amendments to Article 9.
RECITALS
A. Pursuant to that certain Securities Purchase Agreement
dated as of August 25, 1998 (the "Securities Purchase Agreement"), between the
Company, its Subsidiaries and the Holders, the Company is issuing the Notes (as
that term is defined in the Securities Purchase Agreement).
B. Pursuant to the Securities Purchase Agreement, the Company
shall initially deposit in the Securities Account (as defined in Section 2(a)
hereof) Four Million Nine Hundred and Twenty Thousand Dollars ($4,920,000) in
cash (which amount will be sufficient to pay, together with the proceeds from
the investment thereof, a minimum of twelve months interest on the Notes) to be
held in the Securities Account subject to the terms and conditions of this
Agreement.
C. Pursuant to the Securities Purchase Agreement, the Company
shall be required to deposit certain additional amounts in the Securities
Account in cash.
D. As security for its Obligations (as such term is defined in
the Security Agreement, dated as of the date hereof among the Company and the
Holders (the "Securities Agreement")) under the Securities Purchase Agreement,
the Notes and the Ancillary Agreements, the Company hereby grants to the
Holders, a first priority perfected Security Interest in and Lien upon the
Securities Account.
E. The parties have entered into this Agreement in order to
(i) create the Security Interest in favor of the Holders of the Securities
Account, (ii) obtain certain assurances herein from the Depositary, including,
without limitation, establishing the Holders' control (within the meaning of the
Revised UCC) over the Securities Account, and (iii) set forth the manner in
which funds will be disbursed from the Securities Account and released from the
Security Interest and Lien described above.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants, agreements and other consideration
contained and
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exchanged herein, the receipt and sufficiency of which are hereby acknowledged
and intending to be legally bound, the parties hereto covenant and otherwise
agree as follows:
1. Defined Terms. For all purposes of this Agreement, all
capitalized terms not otherwise defined below, shall have the same meaning set
forth in the Securities Purchase Agreement.
"Affiliate" has the meaning specified in Section 1.1 of the
Securities Purchase Agreement.
"Available Funds" means (A) the sum of (i) the cash equal to
the Initial Deposit Amount, (ii) subsequent cash amounts deposited, if any, into
the Securities Account, (iii) cash interest or dividends paid into the
Securities Account with respect to the funds in the Securities Account from time
to time and (iv) the Fair Market Value of holdings of Marketable Securities in
the Securities Account, less (B) the aggregate cash disbursements previously
made pursuant to this Agreement.
"Business Day" means any day of the week other than Saturday,
Sunday and days on which banking institutions in Seattle, Washington are closed.
"Collateral" shall have the meaning given in Section 5(a)
hereof.
"Default" shall have the meaning ascribed to it in the Notes.
"Eligible Institution" has the meaning specified in Section
1.1 of the Securities Purchase Agreement.
"Event of Default" shall have the meaning ascribed to it in
the Notes.
"Initial Deposit Amount" shall mean $4,920,000
"Interest Payment Date" means, for any year, November 25,
February 25, May 25 and August 25, beginning with the Interest Payment Date of
November 25, 1998.
"Issue Date" means August 25, 1998.
"Marketable Securities" means the following securities or
financial Assets maturing not later than 180 days after their acquisition: (i)
U.S. Treasury Bills, notes and bonds payable thereby and agreements to
repurchase such instruments; (ii) any certificate of deposit issued by, or time
deposit of, an Eligible Institution; (iii) commercial paper issued by a
corporation (other than an Affiliate of the Company) with a rating, at the time
as of which any investment therein is made, of "A-1" (or higher) according to
S&P or "P-1" (or higher) according to Moody's; (iv) any banker's acceptances or
money market deposit accounts issued or offered by an Eligible Institution; and
(v) any Investment Company (as such term is defined by the Investment Company
Act of 1940) fund investing exclusively in investments of the types described in
clauses (i) through (iv) above.
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"Payment Notice and Disbursement Request" means a notice sent
by the Required Holders to the Depositary, which may be in the form of Exhibit A
hereto.
"Qualified Equity Transaction" means the sale by the Company
of its securities, whether in a public offering registered under the Securities
Act of 1933, as amended, or otherwise, which sale has an aggregate offering
price of not less than $40,000,000 and results in aggregate proceeds to the
Company (net of selling expenses and underwriters' discount or selling agent's
commission) of not less than $35,000,000.
"Required Holders" has the meaning specified in Section 1.1 of
the Securities Purchase Agreement.
"Securities Account" shall have the meaning given in Section
2(a).
"Security Interest" has the meaning specified in Section 1(a)
of the Security Agreement.
2. Securities Account.
(a) Establishment of Securities Account. The Depositary hereby
confirms and agrees that (i) the Depositary has established account number
"000398" under the name "Escrow A/C" (such account and any successor account,
the "Securities Account"), (ii) the Securities Account is a "securities account"
as such term is defined in Section 8-501(a) of the Revised UCC, (iii) the
Depositary shall, subject to the terms of this Agreement, treat the Holders as
the parties entitled to exercise the rights that comprise any financial Asset
credited to the Securities Account, (iv) all Assets delivered to, and actually
received by, the Depositary pursuant, to this Agreement will be promptly
credited to the Securities Account, and (v) all securities or other Assets
underlying any financial Assets credited to the Securities Account shall be
registered in the name of the Depositary or one of its agents or nominees,
indorsed to the Depositary or in blank or credited to another securities account
maintained in the name of the Depositary and in no case will any financial Asset
credited to the Securities Account be registered in the name of the Company,
payable to the order of the Company or specially indorsed to the Company except
to the extent the foregoing have been specially indorsed to the Depositary or in
blank.
(b) Investment of Funds in Securities Account. Funds deposited
in the Securities Account shall be invested and reinvested only upon the
following terms and conditions:
(i) Acceptable Investments. All funds deposited or
held in the Securities Account at any time shall be invested
in cash or Marketable Securities. Unless a Default or Event of
Default or any event that with the lapse of time or the giving
of notice, or both, would constitute an Event of Default has
occurred or would result therefrom or the Required Holders
have otherwise notified the Depositary, the Company may
instruct the Depositary in writing with respect to the
Marketable Securities in which the funds will be invested. The
Depositary shall have the right with acquittance and without
liability to rely on any such instructions from the Company
unless the Depositary shall have been notified otherwise in
writing by the Required Holders.
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(ii) Security Interest in Investments. No investment
of funds in the Securities Account shall be made unless the
Company has certified to the Required Holders, with a copy of
the certification being sent to the Depositary, that, upon
such investment, the Holders will have a first priority
perfected security interest in the applicable investment.
(iii) Interest and Dividends. All interest earned and
dividends paid on funds invested in cash or Marketable
Securities shall be deposited in the Securities Account as
additional Collateral for the exclusive benefit of the Holders
of the Notes and shall be reinvested in accordance with the
terms hereof at the Company's direction, unless a Default or
Event of Default or an event that with the lapse of time or
the giving of a notice or both, would constitute an Event of
Default has occurred and the Required Holders have notified
the Depositary in writing that it should only take direction
from the Required Holders or should no longer take further
written direction from the Company.
3. Funding Requirements. The Company shall direct the
Purchasers to and the Purchasers shall deposit by wire transfer in accordance
with the written instruction received from the Depositary on the Closing Date in
the Securities Account the Initial Deposit Amount. Thereafter, the Company shall
be required to replenish the funds in the Securities Account to the extent
necessary on each Interest Payment Date at such times when the Available Funds
in the Securities Account are less than the appropriate amounts as specified in
clauses (A) and (B) of this Section 3 (the "Shortfall"), and such replenishment
shall be made in the amount of such Shortfall within five (5) Business Days
after such notification of the Shortfall has been provided. The Company shall be
entitled to rely conclusively in making the foregoing determination on
information provided to it by the Depositary. The balance in the Securities
Account shall be maintained, as of each Interest Payment Date, at an amount
sufficient to provide (A) for the period prior to the date on which the Company
notifies the Depositary in writing of the consummation of a Qualified Equity
Transaction (the "Effective Date") (and thereafter if the Effective Date is not
on or before July 1, 1999), for the next four successive payments of interest on
the then Outstanding Notes on the applicable Interest Payment Dates, and, if
necessary, (B) provided the Effective Date is on or before July 1, 1999,
thereafter, the funds in the Securities Account shall be replenished to an
amount sufficient to pay the next four successive payments of interest, and,
after two successive full payments of interest thereafter, the funds shall
thereafter be maintained at a level sufficient to pay the next two successive
payments of interest on the then Outstanding Notes on the applicable Interest
Payment Dates. The Company's obligation to provide such funds and to maintain
such balance as described in either clause (A) or (B) above shall, in all
respects, terminate on the date on which the Company shall have fully paid all
interest accrued through and including the twelfth successive Interest Payment
Date (the "Termination Date"). The Depositary agrees to send a statement not
less frequently than quarterly by the fifteenth day of each month in which the
Depositary provides such statement, a statement of the balance and activity in
the Securities Account for the period covered by such statement.
4. Disbursements.
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(a) Payment Notice and Disbursement Requests; Disbursements.
Prior to the disbursement of any funds from the Securities Account by the
Depositary, the Company must deliver to the Depositary the written consent of
the Holders to such disbursement. The Company shall obtain such written consent
by delivering notice (the "Disbursement Notice") to the Holders of a proposed
disbursement five (5) Business Days prior to such date on which such
disbursement is to be made (the "Disbursement Date"), which Disbursement Notice
shall contain the time period to which such payment applies and the amount of
the disbursement. Promptly after receipt of the Disbursement Notice from the
Company, the Holders shall notify the Depositary of their consent, if any, to
the disbursement of funds on the Disbursement Date by delivery of a Payment
Notice and Disbursement Request substantially in the form of Exhibit A attached
hereto. No disbursements of funds from the Securities Account shall be made by
the Depositary without receipt of the Payment Notice and Disbursement Request
from the Holders authorizing such disbursement.
(b) All disbursements from the Securities Account must be made
in cash and shall apply solely to the payment of interest due under the Notes,
except in the event of a Default, an Event of Default, or an event that with the
lapse of time or the giving of notice, or both, would constitute an Event of
Default, or termination of this Agreement in accordance with the provisions of
Section 6 hereof, in which case written notice thereof shall be provided to the
Depositary by the Required Holders and disbursements of amounts from the
Securities Account shall be made in accordance with the provisions of Section
6(b)(v) of the Notes.
(c) Notwithstanding the provisions contained in Section 4(a)
above, the Holders may, at any time or from time to time, issue a written
payment demand to the Depositary without any prior notice to or from the Company
if: (i) there shall be interest due under the Notes which is five (5) or more
days past due; or (ii) in their reasonable judgment, the Required Holders have
concluded that a Default, Event of Default or event that with the lapse of time
or the giving of notice, or both, would constitute an Event of Default has
occurred and is continuing, or would result therefrom under Section 6(a)(vi) of
the Notes and written notice thereof shall be provided to the Depositary by the
Required Holders. The Depositary shall pay to the Holders promptly after receipt
of their payment demand, the sums specified therein with respect to any payments
due pursuant to the provisions of this Section 4(c).
(d) Retired Notes. In the event that the funds held in the
Securities Account exceed the respective amounts provided for in Section 3
hereof (or, in the event an interest payment or payments have been made, an
amount sufficient to provide for payment in full of any interest payment
remaining, up to and including such scheduled interest payments), the Required
Holders will be permitted to release to the Company any such excess amount if no
Default or Event of Default or event that with the lapse of time, or the giving
of notice, or both, would constitute an Event of Default, then exists under the
Notes.
5. Grant of Security Interest.
(a) The Company hereby irrevocably grants a first priority
perfected security interest in and pledges, assigns and sets over to the Holders
all of the Company's right, title and interest in the Securities Account, and
all Assets now or hereafter placed or deposited in, or delivered to the
Depositary for placement or deposit in, the Securities Account, including,
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without limitation, all cash and other funds held therein, all Marketable
Securities in the Securities Account established by (or otherwise maintained in
the name of) the Depositary pursuant to Section 2 and security entitlements
credited to or held in the Securities Account, and all proceeds thereof as well
as all rights of the Company under this Agreement (collectively, the
"Collateral"), in order to secure all Obligations (as defined in the Security
Agreement) of the Company under the Securities Purchase Agreement, the Notes and
the Ancillary Agreements.
The Depositary and the Company hereby acknowledge the Holders' security
interest as set forth above. The Company shall take all actions necessary on its
part to perfect, protect, maintain and insure the continuance of a first
priority perfected Security Interest in the Collateral in favor of the Holders
in order to secure all Obligations.
The rights and powers granted herein to the Holders have been granted
in order to perfect their Security Interest in the Securities Account, are
powers coupled with an interest and shall neither be affected by the bankruptcy
of the Company nor by the lapse of time.
(b) Upon demand, the Company will execute and deliver to the
Holders such instruments and documents as the Holders may reasonably deem
necessary or advisable to confirm or perfect their rights under this Agreement
and their interest in the Collateral. The Holders shall be entitled to take all
necessary action to preserve and protect the Security Interest created hereby as
a Lien and encumbrance upon the Collateral.
(c) The Company hereby appoints the Holders as its
attorney-in-fact with full power of substitution to do any act which the Company
is obligated hereunder to do, and the Holders may exercise such rights as the
Company might exercise with respect to the Collateral and take any action in the
Company's name to protect the Holders' Security Interest hereunder.
(d) In addition to the rights provided in this Agreement upon
a Default or an Event of Default, and for so long as such Default or Event of
Default or event that with the lapse of time or the giving of notice, or both,
would constitute an Event of Default continues or would result therefrom, the
Holders may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party under the UCC, the Revised UCC (if applicable)
or other applicable Law, including, without limitation, collecting payment from
the Company of any attorney fees incurred by the Holders in exercising such
rights and remedies. The Holders may also, upon a Default or an Event of Default
or event that with the lapse of time or the giving of notice, or both, would
constitute an Event of Default, without notice to the Company except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker's board or at any of the
Holders' offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Required Holders may deem commercially reasonable.
The Company acknowledges and agrees that any such private sale may result in
prices and other terms less favorable to the seller than if such sale were a
public sale. The Company agrees that, to the extent notice of sale shall be
required by law, ten (10) days' notice to the Company of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification within the meaning of the UCC, the Revised
UCC, or any other applicable law. The Required Holders shall not be obligated to
make any sale
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regardless of notice of sale having been given. The Required Holders may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
6. Termination. (a) On the Termination Date, all funds remaining in the
Securities Account shall be disbursed by wire transfer as follows:
(i) to the Holders, in an amount equal to all accrued unpaid
past due interest on the Notes;
(ii) to the Holders in an amount equal to all accrued unpaid
interest due on the Notes;
(iii) to the Holders in an amount equal to all accrued unpaid
and past due amounts under the Securities Purchase Agreement, the Notes
and any of the Ancillary Agreements;
(iv) to the Holders in an amount equal to all other accrued
unpaid amounts under the Securities Purchase Agreement, the Notes and
any of the Ancillary Agreements;
(v) to the Holders in an amount equal to the aggregate
principal amount Outstanding under the Notes; and
(vi) any surplus of such cash or cash proceeds held by the
Holders through the Depositary and remaining on or after the
Termination Date shall be paid over to the Company or to whosoever may
be lawfully entitled to receive such surplus or as a court of competent
jurisdiction may direct.
(b) The Company and the Required Holders shall provide the
Depositary with written instructions regarding the disbursements to be made
pursuant to Section 6(a) on the Termination Date at least five (5) Business Days
prior to the Termination Date.
(c) This Agreement shall terminate automatically ten (10) days
following disbursement of all funds remaining in the Securities Account
(including proceeds from the sale of Marketable Securities), unless sooner
terminated by agreement of the parties hereto (in accordance with the terms
hereof, not in violation of the Notes, and provided that the Holders may not
agree to such earlier termination unless they have received the consent of all
Holders of all of the Notes then outstanding); provided, however, that until
such tenth day, the Company will cause this Agreement (or any permitted
successor agreement) to remain in effect and will cause the Depositary
(including any permitted successor thereto) to continue to act hereunder (or
under any such permitted successor agreement).
7. "Financial Assets" Election. The Depositary hereby agrees that each
item of property (whether investment property, financial Asset, security,
instrument or cash) comprising the Initial Deposit Amount, Available Funds,
Collateral, or any other property otherwise credited to the Securities Account
shall be treated as a "financial asset" within the meaning of Section
8-102(a)(9) of the Revised UCC.
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8. Entitlement Orders. If at any time the Depositary shall receive an
"entitlement order" (within the meaning of Section 8-102(a)(8) of the Revised
UCC) issued by the Holders and relating to the Securities Account, the
Depositary shall comply with such entitlement order without further consent by
the Company or any other person.
9. Subordination of Lien; Waiver of Setoff. In the event that the
Depositary has or subsequently obtains by agreement, operation of law or
otherwise a security interest in the Securities Account or any security
entitlement credited thereto, the Depositary hereby agrees that such security
interest shall be subordinate to the Security Interest of the Holders. The
financial Assets and other items deposited to the Securities Account shall not
be subject to deduction, set-off, banker's Lien, or any other right in favor of
any person other than the Holders (except that the Depositary may set off (a)
all amounts due to the Depositary in respect of the Depositary's customary fees
and expenses for the routine maintenance and operation of the Securities Account
and (b) the face amount of any checks which have been credited to the Securities
Account but are subsequently returned unpaid because of uncollected or
insufficient funds).
10. Representations, Warranties and Covenants of the Company. The
Company hereby represents and warrants that this Agreement has been duly
authorized, executed and delivered on its behalf and constitutes the legal,
valid and binding obligation of the Company. The execution, delivery and
performance of this Agreement by the Company does not violate any applicable Law
to which the Company is subject and does not require the consent of any
governmental or other regulatory body to which the Company is subject, except
for such consents and approvals as have been obtained and are in full force and
effect.
11. Representations, Warranties and Covenants of the Depositary. The
Depositary hereby makes the following representations, warranties and covenants:
(a) The Securities Account has been established as set forth
in Sections 2 through 4 above and shall be maintained in the manner set forth
herein until termination of this Agreement. The Depositary shall not change the
name or account number of the Securities Account without the prior written
consent of the Required Holders.
(b) No financial Asset is or shall be registered in the name
of the Company, payable to the Company's order, or specially endorsed to the
Company, except to the extent such financial asset has been endorsed to the
Depositary or in blank.
(c) This Agreement is the valid and legally binding obligation
of the Depositary duly authorized, executed and enforceable in accordance with
its terms.
(d) The Depositary has not entered into, and until the
termination of this Agreement shall not enter into, any agreement with any other
Person relating to any of the Securities Account and/or any financial Assets
credited thereto pursuant to which it has agreed to comply with entitlement
orders (as defined in Section 8-102(a)(8) of the Revised UCC) of such person.
The Depositary has not entered into any other agreement with the Company or the
Holders purporting to limit or condition the obligation of the Depositary to
comply with entitlement orders as set forth in Section 8 hereof.
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(e) The Depositary shall at all times act as a "financial
intermediary" (within the meaning of Section 8-313(4) of the UCC) or as a
"securities intermediary" (within the meaning of Section 8-102(a)(14) of the
Revised UCC), and as a custodian of funds, as applicable, and will comply with
all applicable regulations.
12. Automatic Stay. If the Company becomes the subject of a bankruptcy
or a reorganization case under the United States Bankruptcy Code, the automatic
stay imposed by section 362 of the United States Bankruptcy Code will be deemed
lifted (or, in the event that a court does not recognize the validity of such
deemed lifting of the automatic stay, the parties will use their best efforts to
seek relief from the stay), insofar as such stay affects enforcement of the
security interest in the Securities Account granted thereby.
13. Fees and Expenses. The Company agrees to pay the Depositary
reasonable compensation for its basic services rendered pursuant to this
Agreement. The fees shall be paid within 30 days after the Company has been
billed by the Depositary, except for the document review and set-up fee of $1000
plus out-of-pocket legal review expenses which shall be paid by the Company upon
establishment of the Securities Account. In the event the Depositary renders any
material service not contemplated in this Agreement, or there is any assignment
of interest in the subject matter of this Agreement, or any material
modification hereof, or if any material controversy arises hereunder, or the
Depositary is made a party to any litigation pertaining to this Agreement, or
the subject matter hereof, then the Depositary shall also be reasonably
compensated by the Company for such extraordinary services and reimbursed by the
Company for all costs and expenses, including reasonable attorneys' fees,
occasioned by any controversy, litigation or event.
14. Resignation or Removal of the Depositary. The Depositary may resign
upon 30 days' advance written notice of resignation to the Company and the
Holders. The Company and the Holders may also jointly at any time remove the
Depositary by giving written notice to the Depositary. If the Depositary shall
resign or be removed, a successor Depositary, which shall be either a bank,
trust company or other financial institution constituting an Eligible
Institution (as that term is defined in Section 1.1 of the Securities Purchase
Agreement) having an office in the State of Washington and satisfactory to the
Company and the Holders, shall be appointed by written instrument executed and
delivered by the Company and the Holders to the Depositary and to such successor
depositary, and upon the resignation or removal of the predecessor Depositary,
the successor depositary shall, without any further act, deed or conveyance,
become vested with all the right, title and interest to all property held
hereunder, of such predecessor Depositary; provided that such predecessor
Depositary shall, on the written request of the Company and the Holders, execute
and deliver to such successor depositary an instrument transferring to such
successor depositary all right, title and interest hereunder in and to the
Securities Account and all other rights hereunder, of such predecessor
Depositary. If no successor depositary has been appointed at the end of 30 days
after notice of resignation by the Depositary, the Depositary hereunder may
petition any court of competent jurisdiction to name a successor depositary.
15. Depositary Not a Party to Other Agreement. By entering into this
Agreement, the Depositary is a party only to this Agreement and the Depositary
does not become a party to any other agreement, including, but not limited to,
the Securities Purchase Agreement.
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16. Reliance. The Depositary may act upon any instrument or other
writing believed by it in good faith to be genuine and to be signed or presented
by the proper person or persons and shall not be liable in connection with the
performance by it of its duties pursuant to the previsions hereof, except for
its own willful default or gross negligence. The Company and the Holders shall,
jointly and severally, indemnify and save harmless the Depositary for all
claims, losses, costs, damages, liabilities and expenses which may be incurred
on the part of the Depositary, arising out of or in connection with its entering
into this Agreement and carrying out its duties hereunder due to:
(a) The Depositary's failure to ascertain or comply with the
terms of any document, other than this Agreement, and all Exhibits and Schedules
attached hereto, unless that document is filed and the Depositary is expressly
instructed by this Agreement to comply with a specified paragraph or provision
of that document. The Company agrees to indemnify and pay the Holders for any of
the Holders' losses, costs, damages, liabilities and expenses ("Holders'
Losses") which may be incurred by the Holders as a result of the indemnity
provided to the Depositary under this Section 16 except for any Holders' Losses
paid to the Depositary by the Holders as a result of the Holders' gross
negligence or willful misconduct.
(b) Forgeries or false impersonations.
(c) Exercise of the Depositary's discretion in any particular
manner in any situation in which the Depositary is authorized by this Agreement
to exercise its discretion.
(d) Any reason other than the Depositary's gross negligence or
willful misconduct in following this Agreement and acting as Depositary
hereunder.
17. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach
of this Agreement by any other party (provided, in the case of any such waiver
by a Holder, that it shall first have obtained the written consent of the
Required Holders, but no such waiver shall be deemed to have been given unless
such waiver is in writing, signed by the waiving party and specifically
designating the breach waived, nor shall any such waiver constitute a continuing
waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more
of the provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties
hereto, and the rights and duties of any party hereunder shall not be assignable
except with the prior written consent of the Company and the Holders.
Notwithstanding the foregoing, this Agreement shall inure to and be binding upon
the parties and their successors and permitted assigns.
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(d) Benefit. The parties hereto and their successors and
permitted assigns, but no others, shall be bound hereby and entitled to the
benefits hereof and to enforce this Agreement.
(e) Time. Time is of the essence with respect to each
provision of this Agreement.
(f) Entire Agreement; Amendments. This Agreement, the
Securities Purchase Agreement, the Notes and the other Ancillary Agreements
identified in the Securities Purchase Agreement contain the entire agreement
among the parties with respect to the subject matter hereof and supersede any
and all prior agreements, understandings and commitments, whether oral or
written. This Agreement may be amended only with the consent of the Company and
the Required Holders, and in the case of any provision referring to the rights
and duties of the Depositary, the Depositary.
(g) Notices. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; (b) three Business Days
following the day sent, when sent by United States certified mail, postage and
certification fee prepaid, return receipt requested, addressed as set forth
below; or (c) one Business Day following the day timely delivered to a next-day
air courier addressed as set forth below:
To the Company:
Intracel Corporation
0000 XX Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
To the Holders:
000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Telecopy: 000-000-0000
Telephone:000-000-0000
To the Depositary:
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(j) Choice of Law. The existence, validity, construction,
operation and effect of any and all terms and provisions of this Agreement shall
be determined in accordance with and governed by the Laws of the State of New
York, without regard to principles of conflicts of Laws that would result in the
application of the Law of any jurisdiction other than the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC or
the Revised UCC, New York shall be deemed to be the Depositary's location and
the Securities Account (as well as the securities entitlements related thereto)
shall be governed by the Laws of the State of New York. The parties to this
Agreement hereby agree that jurisdiction over such parties and over the subject
matter of any action or proceeding arising under this Agreement may be exercised
by a competent Court of the State of New York, or by a United States Court,
sitting in New York City. The Company hereby submits to the personal
jurisdiction of such courts, hereby waives personal service of process upon it
and consents that any such service of process may be made by certified or
registered mail, return-receipt requested, directed to the Company at its
address last specified for notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed, and
hereby waives the right to a trial by jury in any action or proceeding with the
Depositary.
(k) Each of the Depositary and the Holders hereby represents
and warrants that this Agreement has been duly authorized, executed and
delivered on its behalf and constitutes its legal, valid and binding obligation.
(l) Conflict With Other Agreements. There are no other
agreements entered into between the Depositary and the Company with respect to
the Securities Account. In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail.
(m) Notice of Adverse Claims. Except for the claims and
interest of the Holders and of the Company in the Securities Account, the
Depositary does not know of any claim to, or interest in, the Securities Account
or in any "financial Asset" (as defined in Section 8-102(a) of the Revised UCC)
credited thereto. If any Person asserts any Lien, encumbrance or adverse claim
(including any writ, garnishment, judgment, warrant of attachment, execution or
similar process) against the Securities Account or in any financial Asset
carried therein, the Depositary shall promptly notify the Holders and the
Company thereof.
(n) Execution of Agreement. The execution of this Agreement by
the Depositary shall conclusively evidence its acceptance and agreement to the
terms hereof.
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IN WITNESS WHEREOF, the parties have executed and delivered
this Interest Escrow Security Agreement as of the day first above written.
COMPANY: Intracel Corporation
By: /s/ XXXXX XxXXXXXX
------------------------------------
Name: Xxxxx XxXxxxxx
Title: President and Chief
Executive Officer
HOLDERS: NORTHSTAR HIGH YIELD FUND
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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 STRATEGIC INCOME FUND
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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DEPOSITARY: NORTHWESTERN TRUST AND INVESTORS
ADVISORY COMPANY, as Depositary
By: /s/ XXXXX X. XXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
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EXHIBIT A
Form of Payment Notice and Disbursement Request
[Date]
___________________
___________________
___________________
Attention: Corporate Agent
Administration Department
Re: Disbursement Request No. ____
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Interest Escrow Security Agreement, dated as of
_________ (the "Interest Escrow Security Agreement") among you (the
"Depositary"), the undersigned as Holders, and Intracel Corporation, a Delaware
corporation (the "Company"). Capitalized terms used herein shall have the
meaning given in the Interest Escrow Security Agreement.
This letter constitutes a Payment Notice and Disbursement Request
under the Interest Escrow Security Agreement.
The undersigned hereby directs that you make a disbursement of
funds contained in the Securities Account in the amount of $________ to the
Holders for payment of _________.
The Depositary is entitled to rely on the foregoing in disbursing
funds relating to this Payment Notice and Disbursement Request.
_________, as Holders
By: __________________________________
Name:
Title:
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EXHIBIT B
Investment Instructions
All sums on deposit shall be invested
in cash or Marketable Securities.
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EXHIBIT C
Depositary Fees
