Exhibit 2
ESCROW AGREEMENT
This Escrow Agreement (this "ESCROW AGREEMENT"), is dated as of April
18, 2006, by and among American Pharmaceutical Partners, Inc., a Delaware
corporation (the "COMPANY"), Xx. Xxxxxxx Soon-Shiong, solely in his
capacity as "Shareholder Representative" (the "SHAREHOLDERS'
REPRESENTATIVE"), and Fifth Third Bank, as escrow agent ("ESCROW AGENT").
The Company and American BioScience, Inc., a California corporation
("ABI"), and the other parties signatory thereto are parties to an
Agreement and Plan of Merger, dated as of November 27, 2005 (the "MERGER
AGREEMENT"), providing for, among other things, the merger of ABI with and
into the Company (the "MERGER") with the Company as the corporation
surviving the Merger. In the Merger, the outstanding shares of common
stock, par value $0.001 per share, of ABI, held by the shareholders of ABI
are being converted into a right to receive shares of common stock, par
value $0.001 per share, of the Company ("COMPANY COMMON STOCK").
Capitalized terms used but not otherwise defined in this Escrow Agreement
have the respective meanings given to them in the Merger Agreement. This is
the Escrow Agreement contemplated by Section 3.1(f) of the Merger
Agreement.
Pursuant to the Merger Agreement, the Company is depositing with the
Escrow Agent a number of the shares of Company Common Stock otherwise
deliverable pursuant to the Merger to the holders of the ABI Common Stock
pursuant to the Merger that is equal to 10% of the New Share Number (the
"FORMER SHAREHOLDERS") for the purpose of providing a fund (the "ESCROW
FUND") to reimburse the Indemnified Parties for the payment of any Losses
for which the Indemnified Parties are entitled to indemnification pursuant
to the terms of Article IX of the Merger Agreement.
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Establishment of Escrow.
-----------------------
(a) Pursuant to the Merger Agreement, at the Effective Time, the
Company shall, on behalf of the Former Shareholders, deposit with the
Escrow Agent stock certificates representing a number of shares of Company
Common Stock equal to 10% of the New Share Number to create the Escrow
Fund.
(b) Unless and until delivered to the Company in accordance with the
terms hereof, that number of shares of Company Common Stock in the Escrow
Fund (and the certificates representing such shares) equal to each Former
Shareholder's Pro Rata Percentage of the shares of Company Common Stock in
the Escrow Fund shall be registered in the name of such Former Shareholder.
The name and address of each of the Former Shareholders and the intial
number of shares of Company Common Stock included in the Escrow Fund to be
registered in the name of such Former Shareholder are set forth on Schedule
A hereto. Each Former Shareholder's "PRO RATA PERCENTAGE" of the shares of
Company Common Stock in the Escrow Fund shall be equal to (a) the number of
shares of Company Common Stock of such Former Shareholder initially
included in the Escrow Fund as set forth on Schedule A hereto, divided by
(b) the total number of shares of Company Common Stock of all Former
Shareholders initially included in the Escrow Fund as set forth on Schedule
A hereto.
(c) The parties hereby designate and appoint the Escrow Agent to serve
in accordance with the terms, conditions and provisions of this Escrow
Agreement, and Escrow Agent hereby agrees to act as escrow agent and to
hold in trust, safeguard, invest and disburse the Escrow Fund, pursuant to
the terms and conditions hereof.
(d) Cash, if any, or other securities (other than shares of Company
Common Stock) paid, issued or distributed in respect of shares of Company
Common Stock of a Former Shareholder in the Escrow Fund (as a result of a
merger, consolidation, reclassification, recapitalization, dividend,
distribution or otherwise) shall not be added to the Escrow Fund but shall
be distributed to the Former Shareholder in whose name such Company Common
Stock is registered
(e) Voting and granting consents with respect to any shares of Company
Common Stock in the Escrow Fund shall be as determined by the Former
Shareholder in whose name such shares are registered in such Former
Shareholder's absolute discretion, (provided that the foregoing shall not
affect the obligation of the parties to the Governance Agreement to comply
with their contractual obligations thereunder as to the voting of such
shares).
(f) To the extent that any portion of the Escrow Fund constitutes
cash, the Escrow Agent shall invest and reinvest such cash portion of the
Escrow Fund at the joint written instructions of the Company and the
Shareholders' Representative. In the absence of joint written directions
from the Company and the Shareholders' Representative, any cash in the
Escrow Fund shall be invested in a money market account of a U.S. bank.
(g) The Escrow Agent shall, upon receipt of a written instruction from
a Former Shareholder (with a copy to the Company) and subject to
documentation of the validity of such transfer reasonably acceptable to the
Company, present to the transfer agent of the Company, to be reregistered
in the name of another person the name and address of which is identified
in such written instruction (the "REPLACEMENT FORMER SHAREHOLDER"), all or
a portion of such Former Shareholder's shares of Company Common Stock
included in the Escrow Fund as shall be set forth in such written
instruction. From and after such reregistration, the Replacement Former
Shareholder shall be treated as the Former Shareholder pursuant to the
terms of this Agreement with respect to the shares of Common Stock
reregistered in the name of the Replacement Former Shareholder.
2. Indemnification Claims.
----------------------
(a) An Indemnification Claim for Losses to be paid from the Escrow
Fund pursuant to Article IX of the Merger Agreement may be made only if the
Company delivers to the Shareholders' Representative (with a copy to the
Escrow Agent) by the deadline for submitting such an Indemnification Claim
under the Merger Agreement (the "INDEMNITY TERMINATION DATE") a Claim
Notice that sets forth in reasonable detail the specific facts and
circumstances giving rise to such claim and a good faith estimate of the
dollar amount of the Losses for which the Indemnified Party claims it is
entitled to indemnification pursuant to the terms of the Merger Agreement
(the "INDEMNIFICATION AMOUNT"). If, within thirty (30) days following
receipt by the Shareholders' Representative of a Claim Notice, the
Shareholders' Representative gives notice (a "COUNTER NOTICE") to the
Company (with a copy to the Escrow Agent) disputing the applicable
Indemnified Party's entitlement to indemnification with respect to the
Indemnification Claim set forth in a Claim Notice or disputing the estimate
set forth in such Claim Notice of the dollar amount of the Losses for which
the Indemnified Party is entitled to indemnification pursuant to the terms
of the Merger Agreement, the applicable Indemnified Party's entitlement to
indemnification with respect to the Indemnification Claim and the dollar
amount of the Losses for which the Indemnified Party is entitled to
indemnification pursuant to the terms of the Merger Agreement shall be
resolved as provided in Section 2(c) below.
(b) If no Counter Notice is received by the Escrow Agent within such
thirty (30) day period, then the Indemnification Amount claimed in the
applicable Claim Notice shall be deemed established for purposes of this
Escrow Agreement, and, at the end of such thirty (30) day period, the
Escrow Agent shall promptly deliver to the Company from the Escrow Fund
shares of Company Common Stock with a Market Value (as defined below) as of
the date of the Claim Notice equal to the Indemnification Amount as claimed
in the Claim Notice. The shares of Company Common Stock so delivered to the
Company from the Escrow Fund shall be disbursed from the shares of Company
Common Stock of the Former Shareholders included in the Escrow Fund
proportionally in accordance with their respective Pro Rata Percentages.
The "MARKET VALUE" of a share of Company Common Stock as of any day shall
be equal to average of the Company Stock Prices over the ten consecutive
NASDAQ trading days (or, if the Company Common Stock is not traded on the
NASDAQ National Market, such number of trading days on any other exchange
or market on which the Company Common Stock is then trading) ending on and
including the second full trading day preceding such day.
(c) (i) If a Counter Notice is given by the Shareholders'
Representative with respect to an Indemnification Claim, the Escrow Agent
shall promptly (but in any event within two business days) disburse the
appropriate number of shares of Company Common Stock from the Escrow Fund
in respect of such Indemnification Claim only in accordance with (A) joint
written instructions of the Company and the Shareholders' Representative,
or (B) a final judgment with no further right to appeal, upon an award
rendered by a court of competent jurisdiction.
(ii) If the Indemnified Party and the Shareholders'
Representative are unable to resolve any dispute within thirty (30) days of
the Shareholders' Representative's delivery of a Counter Notice, such
dispute shall be resolved in accordance with Section 10.9 of the Merger
Agreement or by means of a settlement reached between Shareholders'
Representative and the Company with respect to the applicable
Indemnification Claim.
(d) If the Shareholders' Representative and the Indemnified Party
reach a settlement with respect to any Indemnification Claim made by the
Company or if the number of shares of Company Common Stock to be disbursed
in respect of an Indemnification Claim is determined through a judgment not
subject to appeal as provided in Section 2(c), the Shareholders'
Representative and the Company shall jointly deliver written notice of such
settlement or judgement to the Escrow Agent, including (if applicable)
instructions to the Escrow Agent to disburse the appropriate number of
shares of Company Common Stock from the Escrow Fund to the Company, and the
Escrow Agent shall act promptly in accordance with such instructions. The
shares of Company Common Stock so disbursed to the Company from the Escrow
Fund shall be disbursed proportionally from the shares of Company Common
Stock of the Former Shareholders in accordance with their respective Pro
Rata Percentages.
(e) In the event that shares of Company Common Stock contained in the
Escrow Fund are required hereunder to be disbursed to the Company, any
Former Shareholder may deliver to the Company notice prior to the time of
disbursement of such shares electing to pay cash in an amount equal to the
Market Value of his, her or its Pro Rata Percentage of the shares of
Company Common Stock that would otherwise be disbursed from the Escrow Fund
to the Company. Upon the delivery of such cash amount by a Former
Shareholder (which shall in no event occur later than two Business Days
after the delivery of the notice electing to pay cash), the Company shall
deliver a written instruction to the Escrow Agent to deliver to such Former
Shareholder his, her or its Pro Rata Percentage of such shares of Company
Common Stock that would otherwise be disbursed from the Escrow Fund to the
Company in the absence of such cash payment, and the Escrow Agent shall act
in accordance with such instructions.
(f) To the extent the Escrow Agent is otherwise required hereunder to
disburse a fractional share of Company Common Stock of a Former
Shareholder, the Escrow Agent shall round such fractional share to the
nearest whole share, with one half of such Escrow Share being rounded
downward.
(g) The Escrow Agent shall requisition from the Company's stock
transfer agent stock certificates in appropriate denominations registered
as appropriate to facilitate the delivery or disbursement by the Escrow
Agent of shares of Company Common Stock hereunder or the reregistration of
shares of Company Common Stock in accordance with Section 1(g). The Company
shall cause its stock transfer agent to cooperate with the Escrow Agent in
connection therewith.
3. Termination of Escrow.
---------------------
(a) On the first business day following the 24 months after the
Closing (the "ESCROW RELEASE DATE") and subject to Section 3(b) of this
Escrow Agreement, unless any Indemnification Claims have previously been
asserted by delivery of a Claim Notice in accordance with Section 2(a) and
continue to be pending, the Escrow Agent shall promptly disburse the shares
of Company Common Stock in the Escrow Fund to the Former Shareholders in
accordance with their respective Pro Rata Percentages.
(b) If any Indemnification Claims were asserted by delivery of a Claim
Notice in accordance with Section 2(a) prior to the Indemnity Termination
Date with respect to such Indemnification Claims and such Indemnification
Claims continue to be unresolved as of the Escrow Release Date (such
Indemnification Claims, "PENDING CLAIMS"), the Escrow Agent shall disburse
the shares of Company Common Stock in the Escrow Fund to the Former
Shareholders in accordance with Secion 3(a); provided, however, that the
Escrow Agent shall exclude from such disbursement to each Former
Shareholder, and shall continue to hold in the Escrow Fund hereunder, for
each Former Shareholder, that number of such Former Shareholder's shares of
Common Stock (the "INDEMNITY HOLDBACK SHARES") equal to the aggregate of
(a) such Former Shareholder's Pro Rata Percentage, multiplied by (b) the
number of shares of Company Common Stock having an aggregate Market Value
as of the Escrow Release Date equal to 120% of the aggregate
Indemnification Amounts of all then Pending Claims (such aggregate amount,
the "INDEMNIFICATION HOLDBACK AMOUNT"); provided, however, that, any Former
Shareholder may, within 10 business days of the Escrow Release Date,
deliver to the Escrow Agent, cash (or with the approval of the Company not
to be unreasonably withheld, a letter of credit) in an amount equal to (a)
such Former Shareholder's Pro Rata Percentage, multiplied by (b) the number
of shares of Company Common Stock having an aggregate Market Value as of
the Escrow Release Date equal to 100% of the aggregate of the
Indemnification Amounts of all such pending Indemnification Claims, in
which case the Escrow Agent shall promptly disburse to such Former
Shareholder all of the Indemnity Holdback Shares of such Former
Shareholder. Any such cash (or letter of credit) deposited by a Former
Shareholder in lieu of Indemnity Holdback Shares shall be referred to as
such Former Shareholder's "ESCROW ASSETS." After the Escrow Release Date,
the Escrow Agent shall disburse or continue to hold in the Escrow Fund the
Indemnity Holdback Shares or Escrow Assets of each Former Shareholder, as
the case may be, in accordance with the provisions of Section 3(b) of this
Escrow Agreement.
(c) From and after the Escrow Release Date, each Pending Claim for
which an Indemnification Amount was included in the Indemnification
Holdback Amount, shall be treated as follows:
(i) if a Counter Notice relating to such Pending Claim was not timely
delivered by the Shareholders' Representative, then the Escrow Agent
shall promptly thereafter disburse to the Company, with respect to
each Former Shareholder, (A) such number of such Former Shareholder's
Indemnity Holdback Shares having an aggregate Market Value (measured
as of the date of the applicable Claim Notice) equal to, or (B) cash
from such Former Shareholder's Escrow Assets in an amount equal to
such Former Shareholder's Pro Rata Percentage of the Indemnification
Amount included in the Indemnity Holdback Amount and claimed in the
Claim Notice relating to such Pending Claim ; and
(ii) if a Counter Notice relating to such Pending Claim was timely
delivered by the Shareholders' Representative, then the Escrow Agent
shall thereafter either (A) disburse to the Company and each Former
Shareholder, (x) such number of such Former Shareholder's Indemnity
Holdback Shares having an aggregate Market Value equal to, or (y) cash
from such Former Shareholder's Escrow Assets in an amount agreed by,
and set forth in joint written instructions to the Escrow Agent from,
the Company and the Shareholders' Representative (in which case, the
date that the Market Value of the Indemnity Holdback Shares shall be
calculated for purposes of paying the Pending Claims shall be
specified in the joint instructions), or (B) disburse Indemnity
Holdback Shares and/or cash from such Former Shareholder's Escrow
Assets in accordance with any final judgment with no further right to
appeal, upon an award rendered with respect to the Pending Claim by a
court of competent jurisdiction (in which case the Market Value of any
Indemnity Holdback Shares to be disbursed to the Company to pay the
Pending Claims shall be calculated based on and as of the date of such
final judgment).
(d) In the event that PSS, his affiliates and any PSS Entities at any
time become the beneficial owner of all of the outstanding shares of
Company Common Stock during the term of this Agreement, the Shareholders'
Representative and the Company shall promptly deliver a joint written
notice to the Escrow Agent, instructing the Escrow Agent to distribute to
the Former Shareholders all the shares of Company Common Stock or Escrow
Assets in the Escrow Fund, and the Escrow Agent shall act in accordance
with such instructions and thereupon the Escrow Agent's duties hereunder
shall cease and this agreement automatically shall terminate.
4. Duties of Escrow Agent.
----------------------
(a) The Escrow Agent shall not be under any duty to give the Escrow
Fund held by it hereunder any greater degree of care than it gives its own
similar property.
(b) The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein or the propriety
or validity of the service thereof. The Escrow Agent may act in reliance
upon any instrument or signature believed by it to be genuine and may
assume that the person purporting to give receipt or advice or make any
statement or execute any document in connection with the provisions hereof
has been duly authorized to do so. The Escrow Agent may conclusively
presume, at any time prior to the 2007 annual meeting of the stockholders
of the Company, that any two Outside Independent Directors of the Company
specified on Schedule C attached hereto (acting jointly) and, at any time
after the the 2007 annual meeting of the stockholders of the Company, two
members of the Company's audit committee (acting jointly) have the full
power and authority to instruct the Escrow Agent on behalf of the Company
unless written notice to the contrary is delivered by the Company to the
Escrow Agent. The Company shall provide prompt written notice to the Escrow
Agent and shall deliver an updated Schedule C upon the election of
successor Outside Independent Directors pursuant to the Governance
Agreement, and after the 2007 annual meeting of the stockholders of the
Company, the Company shall provide a schedule reflecting the members of the
audit committee from time to time in office.
(c) The Escrow Agent shall provide the Shareholders' Representative
and the Company with quarterly reports of the status of the Escrow Fund,
and shall permit the Shareholders' Representative and representatives of
the Company to inspect and obtain copies of the records of the Escrow Agent
regarding the Escrow Fund, during normal business hours and upon one
business day's prior written notice.
(d) The Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Escrow Agreement and shall not be
liable for any action taken or omitted by it in good faith in accordance
with such advice.
(e) The Escrow Agent does not have any interest in the Escrow Fund
deposited hereunder but is serving as escrow holder only to administer the
Escrow Fund in acordance with the terms hereof.
(f) The Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other document
or instrument held by or delivered to it.
(g) The Escrow Agent shall not be called upon to advise any party as
to the wisdom in selling or retaining or taking or refraining from any
action with respect to any securities or other property deposited
hereunder.
(h) The Escrow Agent may resign as the Escrow Agent by notice to the
other parties hereto (the "RESIGNATION NOTICE"). If, prior to the
expiration of sixty (60) business days after the delivery of the
Resignation Notice, the Escrow Agent shall not have received written
instructions from the Shareholders' Representative and the Company
designating a banking corporation or trust company organized either under
the laws of the United States or of any state as successor escrow agent and
consented to in writing by such successor escrow agent, the Escrow Agent
may apply to a court of competent jurisdiction to appoint a successor
escrow agent. Alternatively, if the Escrow Agent shall have received such
written instructions from the Company and the Shareholders' Representative,
it shall promptly transfer the Escrow Fund to such successor escrow agent.
Upon the appointment of a successor escrow agent and the transfer of the
Escrow Fund thereto, the duties of the Escrow Agent hereunder shall
terminate.
(i) In the event of any disagreement between the other parties hereto
resulting in adverse claims or demands being made in connection with the
Escrow Fund, or in the event that the Escrow Agent is in doubt as to what
action it should take hereunder, the Escrow Agent shall be entitled to (a)
retain the Escrow Fund until the Escrow Agent shall have received (i)
judgment upon an award rendered by a court of competent jurisdiction
directing delivery of the Escrow Fund (or portion thereof), or (ii) a
written agreement executed by the Shareholders' Representative and the
Company directing delivery of the Escrow Fund (or portion thereof); or (b)
be permitted to interplead all of the Escrow Fund held hereunder into a
court of competent jurisdiction described in Section 10.9 of the Merger
Agreement, and thereafter be fully relieved from any and all liability or
obligation with respect to such interpleaded assets. The parties hereto
other than the Escrow Agent further agree to pursue any redress or recourse
in connection with such a dispute, without making the Escrow Agent a party
to same.
(j) The Escrow Agent shall not be liable for any action taken or
omitted under this Escrow Agreement so long as it shall have acted in good
faith and without gross negligence.
(k) The Escrow Agent shall never be required to use or advance its own
funds or otherwise incur personal financial liability in the performance of
any of its duties or the exercise of any of its rights and powers
hereunder.
(l) The Escrow Agent shall have the right to perform any of its duties
hereunder through agents, attorneys, custodians or nominees selected in
good faith.
(m) Any banking association or corporation into which the Escrow Agent
may be merged, converted or with which the Escrow Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent shall be a party, or any banking
association or corporation to which all or substantially all of the
corporate trust business of the Escrow Agent shall be transferred, shall
succeed to all the Escrow Agent's rights, obligations and immunities
hereunder without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
(n) This Escrow Agreement expressly sets forth all the duties of the
Escrow Agent, which shall be deemed purely ministerial in nature with
respect to any and all matters pertinent hereto. The Escrow Agent shall
under no circumstance be deemed a fiduciary for any of the parties to this
Escrow Agreement. No implied duties or obligations shall be read into this
Escrow Agreement against the Escrow Agent. The Escrow Agent shall not be
bound by the provisions of any agreement among the other parties hereto
except this Escrow Agreement. IN NO EVENT SHALL THE ESCROW AGENT BE LIABLE,
DIRECTLY OR INDIRECTLY, FOR ANY (i) DAMAGES OR EXPENSES ARISING OUT OF THE
SERVICES PROVIDED HEREUNDER, OTHER THAN DAMAGES WHICH RESULT FROM THE
ESCROW AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (ii) SPECIAL OR
CONSEQUENTIAL DAMAGES, EVEN IF THE ESCROW AGENT HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
5. Notices.
-------
Any notices or other communications required or permitted under, or
otherwise made or given in connection with this Escrow Agreement, shall be
in writing and shall be deemed to have been duly given when delivered in
person or upon confirmation of receipt when transmitted by facsimile
transmission (but only if followed by transmittal by national overnight
courier or hand for delivery on the next business day) or on receipt after
dispatch by registered or certified mail, postage prepaid, addressed, or on
the next business day if transmitted by national overnight courier, in each
case as follows:
If to the Company, addressed to it at:
American Pharmaceutical Partners, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
and further copies (which shall not constitute notice) to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx, Esq. and Xxxxxxx X. X'Xxxxx, Esq
Fax: (000) 000-0000
If to the Shareholders' Representative, addressed to him at:
Xx. Xxxxxxx Soon-Shiong c/o American Pharmaceutical
Partners, Inc. 00000 Xxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
If to the Escrow Agent, addressed to it at:
Fifth Third Bank
0000 Xxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile: (000) 000-0000
6. Counterparts.
------------
This Escrow Agreement may be executed by facsimile signature and in two or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same
agreement.
7. Fees.
----
The Company shall pay the Escrow Agent the fees set forth on Schedule B
attached hereto for its services as the Escrow Agent hereunder and shall
reimburse the Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by it in the performance of its duties hereunder
(including, without limitation, the reasonable out-of-pocket fees, expenses
and disbursements of its counsel). The Company shall indemnify and hold the
Escrow Agent harmless from and against any and all taxes, out-of-pocket
expenses (including reasonable counsel fees, assessments, liabilities,
claims, damages, actions, suits or other charges incurred by or assessed
against it for any thing done or omitted by it in the performance of its
duties hereunder, except as a result of its own gross negligence or willful
misconduct. The agreements contained in this Section 8 shall survive any
termination of the duties of the Escrow Agent hereunder or its resignation.
8. Section Headings.
----------------
The headings of sections in this Escrow Agreement are provided for
convenience only and will not affect its construction or interpretation.
9. Amendments; No Waiver; Enforcement.
----------------------------------
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by the Shareholders' Representative, the Company and the
Escrow Agent, or in the case of a waiver, by the party against whom the
waiver is to be effective; provided that no such amendment or waiver on
behalf of the Company shall be effective without the approval of (i) at any
time prior to the 2007 annual meeting of the stockholders of the Company, a
majority of the Outside Independent Directors designated on Schedule C, as
from time to time amended, or (ii) at any time after the 2007 annual
meeting of the stockholders of the Company, by a majority of the members of
the audit committee of the Company.
(b) Any action to be taken by the Company to amend, modify, waive,
suspend or enforce its rights under this Agreement shall be taken at the
direction of, at any time prior to the 2007 annual meeting of the
stockholders of the Company, a majority of the Outside Independent
Directors designated on Schedule C, as from time to time amended, or, at
any time after the 2007 annual meeting of the stockholders of the Company,
by a majority of the members of the audit committee of the Company.
(c) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law. 10. Exclusive Agreement; No Third Party
Beneficiaries.
This Escrow Agreement and the Merger Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral,
between the parties, or any of them, with respect to the subject matter
hereof. This Escrow Agreement shall be binding upon and inure solely to the
benefit of each party hereto and their respective successors and assigns,
and nothing in this Agreement, express or implied is intended to or shall
confer upon any other person any right, benefit or remedy of any nature
whatsoever under or by reason of this Escrow Agreement.
11. Governing Law.
-------------
This Escrow Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Delaware, without regard to laws that may be
applicable under conflicts of laws principles. It is the intention of the
parties hereto that the situs of the Escrow Fund is and shall be
administered in the state in which the principal office of the Escrow Agent
from time to time acting hereunder is located.
[signature page follows]
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to
be duly executed as of the day and year first above written.
AMERICAN PHARMACEUTICALS PARTNERS, INC.
By: /s/ Xxxx X. Weidenbruck
-------------------------------------------
Name: Xxxx X. Weidenbruck
Title: Assistant Secretary/General Counsel
/s/ Xx. Xxxxxxx Soon-Shiong
------------------------------------------------
Xx. Xxxxxxx Soon-Shiong,
as Shareholders' Representative
Fifth Third Bank, as Escrow Agent
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
SCHEDULE A
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Name and Address of Former Shareholder Number of Shares
-------------------------------------- ----------------
1. California Capital Limited Partnership 2,380,614
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
2. Themba 2005 Trust I 2,547,884
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
3. Themba 2005 Trust II 2,547,884
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
4. The 2005 Two-Year Annuity Trust A 406,942
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
5. The 2005 Two-Year Annuity Trust A 406,942
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
6. RSU Plan, LLC 228,549
Address: Att: Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
7. Veron International Limited 90,837
Address: Att: Xxxxxx Xxxxx
Top Floor, Chinachem Golden Plaza
00 Xxxx Xxxx, Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
SCHEDULE B
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Fees of Escrow Agent
The escrow agent fees shall be $5,000 annually.
SCHEDULE C
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Outside Independent Directors
1. Xxxx Xxxxxxx
2. Xxxxxxx Xxxxxxx
3. Xxxxx Xxxx
4. Xxxxxxx Xxxxx
