Exhibit 99.2
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated as of March
24, 1998, is by and among NaPro BioTherapeutics, Inc., a Delaware corporation
("NaPro"), Xxxxx Xxxxxx Pharmaceuticals, Inc., a Florida corporation ("BNP"),
and U.S. Bank National Association d/b/a Colorado National Bank (the "Escrow
Agent").
WHEREAS, NaPro, BNP, IVAX Corporation, a Florida corporation
("IVAX") and D&N Holding Company, a Delaware corporation ("D&N") are parties to
that certain Termination Agreement dated as of the same date hereof
("Termination Agreement"), pursuant to which BNP has agreed, inter alia, to
deposit two million dollars ($2,000,000) in an escrow account for release to
NaPro upon certain events set forth in such Termination Agreement; and
WHEREAS, this Agreement is being entered into in conjunction
with the Termination Agreement so as to govern the administration of such escrow
account;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. All capitalized terms used and not defined herein shall
have the meanings ascribed to such terms in the Termination Agreement.
2. Deposit of Funds.
(a) Deposit. BNP shall deliver herewith to the Escrow Agent the sum of two
million dollars ($2,000,000) by means of wire transfer. Such amount plus any
interest thereon, products and proceeds thereof, and any such amounts remaining
after disbursements made pursuant to the terms and conditions of this Agreement
are hereinafter referred to as the "Deposit". The Escrow Agent hereby agrees to
hold the Deposit in a separate and distinct interest-bearing account (the
"Escrow Account") as a trust fund. Except as set forth in Section 5(b) hereof,
the Deposit shall not be subject to any lien, attachment, trustee process, or
any other judicial process of any creditor of any party hereto, and shall be
used solely for the purposes of and subject to the terms and conditions of this
Agreement.
(b) Permissible Investments. The Escrow Agent shall follow the written
instructions of BNP with respect to the investment, reinvestment, purchase, or
sale of all amounts in the Escrow Account; provided, that permissible
investments shall be limited to any of the following (the following to be
referred to herein as the "Permissible Investments"): (i) marketable obligations
issued and guaranteed by the United States of America or its agencies or
instrumentalities, having maturities not exceeding thirty (30) days; (ii) bank
certificates of deposit having maturities not exceeding thirty (30) days issued
by United States national banks with assets in excess of one hundred million
dollars ($100,000,000); (iii) commercial paper rated at least "Prime
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1" by Xxxxx'x Investors Service, Inc. or "A-1" by Standard & Poor's Corporation
and having a maturity of not more than thirty (30) days; (iv) money market
mutual funds with daily liquidity that invests primarily in the Permissible
Investments; and (v) such other investments as BNP and NaPro may agree upon in
writing, provided that the Escrow Agent has been duly notified in writing of
such agreed upon investments. In the event that the Escrow Agent does not
receive investment instructions upon receipt of the Deposit, the Escrow Agent
shall, pending alternative investment instructions, invest the funds in mutual
funds, including First American Mutual Funds, investing in securities or
obligations that are Permissible Investments under this Agreement, including any
mutual fund from which the Escrow Agent or any of its Affiliates may receive
compensation.
3. Disbursement of Deposit.
(a) Disbursement on Delivery of Product. Upon shipment of Product by NaPro
to BNP, NaPro shall provide the Escrow Agent and BNP with (i) a copy of the
Certificate of Analysis for the shipped Product, (ii) a copy of the shipping
documents for such Product, and (iii) a document signed by an officer of NaPro
certifying the amount shipped and the total quantity of Product shipped to BNP
since the date of this Agreement. The Escrow Agent shall forward a copy of such
documents to BNP by facsimile. In the event BNP does not provide the Escrow
Agent with a written objection to disbursement of the Deposit within ten (10)
days of receipt of the foregoing information by BNP from the Escrow Agent, the
Escrow Agent shall disburse to NaPro the amount of the Deposit corresponding to
the amount of Product shipped by NaPro to BNP, as set forth on Exhibit A
attached hereto. Such disbursement shall be made by wire transfer of immediately
available funds.
(b) Disbursement on Cancellation. Upon cancellation of the remaining
scheduled deliveries of Product by BNP pursuant to Section 6(b)(iv) of the
Termination Agreement, BNP shall send a copy of the notice of cancellation to
both NaPro and the Escrow Agent. The Escrow Agent shall forward a copy of any
such cancellation notice to NaPro by facsimile. In the event that NaPro does not
provide the Escrow Agent with a written objection to disbursement of the Deposit
within ten (10) days of receipt of the cancellation notice by NaPro from the
Escrow Agent, the Escrow Agent shall disburse to BNP the entire balance of the
Deposit. Such disbursement shall be made by wire transfer of immediately
available funds to an account designated by BNP.
(c) Investment Earnings. In order to comply with IRS reporting
requirements, the Escrow Agent is hereby directed to allocate investment
earnings on the Deposit to NaPro, and to pay the investment earnings to NaPro
monthly as they are earned.
4. Termination. This Escrow Agreement shall automatically
terminate on the date on which all amounts in the Escrow Account have been
distributed pursuant to the provisions of Section 3 hereof; provided, however,
if the Deposit is not distributed pursuant to Section 3 hereof on or before
March 20, 2013, the Escrow Agent is instructed to release and then distribute
the Deposit in the Escrow Account to BNP. Upon release of the Deposit hereunder,
the Escrow Agent shall be relieved of all liability arising under this
Agreement.
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5. The Escrow Agent.
(a) Escrow Agent's Conduct. In performing its duties hereunder, the Escrow
Agent may, without liability for sufficiency, correctness, or validity thereof,
rely on statements, writings, or signatures furnished to it by the parties
hereto, or on any other evidence deemed by the Escrow Agent to be reliable. The
Escrow Agent's duties shall be limited to the safekeeping of the Escrow Account
and discharge of same in accordance with the written instructions described
above. The Escrow Agent undertakes to perform only such duties as are expressly
set forth herein, and no implied duties or obligations shall be read into this
Agreement with respect to the Escrow Agent. The Escrow Agent shall not be liable
for any act it may do or omit to do as agent, while acting in good faith and in
the exercise of its own best judgment. Any act done or omitted by the Escrow
Agent on the advice of its own attorneys shall be deemed conclusively to have
been done or omitted in good faith. The Escrow Agent shall have the right at any
time to consult with counsel on any question arising under this Agreement. The
Escrow Agent shall incur no liability for any delay reasonably required to
obtain the advice of counsel. The Escrow Agent shall not be a party to and shall
not be bound by any agreements related hereto other than this Agreement.
Furthermore, the Escrow Agent shall have no duty to know or determine the
performance or nonperformance of any provision of any agreement that exists
between BNP and NaPro and/or any other third parties.
(b) Escrow Agent's Fees and Expenses. The Escrow Agent shall receive fees
for performance of this Agreement, and shall be entitled to the payment of
reasonable out-of-pocket expenses, including reasonable attorneys' fees, if any,
incurred in connection with performing its duties hereunder, which fees and
expenses shall be billed directly to and paid by NaPro, it being understood that
the payment of such fees and expenses shall be deemed to satisfy in full any
obligations on the part of the parties hereto with respect to the Escrow Agent.
The Escrow Agent's fees for the performance of ordinary duties are as follows:
(i) setting up fees equal to five hundred dollars ($500), (ii) annual fees
(payable in advance, per year or any portion thereof) equal to one thousand
dollars ($1000), billed quarterly at two hundred fifty dollars ($250) or any
portion thereof, and (iii) fifty dollars ($50) per buy or sell of any investment
other than First American Mutual Fund investments. The Escrow Agent shall have a
first and prior lien on the Deposit to secure its indemnification and payment of
fees and expenses. In the event payment is not received promptly from NaPro, the
Escrow Agent is authorized to deduct fees and expenses first from the investment
earnings otherwise payable to NaPro, and then from any remaining Deposit.
(c) New Escrow Agent. The Escrow Agent may, upon ten (10) business days
written notice to each of NaPro and BNP, resign and cease acting as Escrow
Agent. NaPro and BNP may at any time remove the Escrow Agent with or without
cause by an instrument signed by BNP and NaPro and delivered to the Escrow
Agent. If the Escrow Agent shall resign or cease to act as Escrow Agent, BNP and
NaPro shall mutually agree upon a successor, which will be deemed to be the
Escrow Agent for all purposes of this Agreement. The Escrow Agent shall, upon
selection of a successor, deliver the amount in the Escrow Account to such
successor and shall be relieved from any further liability and responsibility
under this Agreement.
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(d) Protection of Escrow Agent. In consideration of the acceptance of this
escrow by the Escrow Agent, the parties hereby agree, jointly and severally, for
themselves and their successors and assigns, that (i) any party may examine the
books and records evidencing the Escrow Account at any time at the office of the
Escrow Agent during the Escrow Agent's normal business hours; (ii) no
assignment, transfer, conveyance, or hypothecation of any right, title, or
interest of any party or its successor in and to the Escrow Account shall be
binding upon the Escrow Agent, unless and until written evidence of such
assignment, transfer, conveyance, or hypothecation in form satisfactory to the
Escrow Agent shall be filed with and accepted by the Escrow Agent; (iii) the
Escrow Agent shall not be personally liable for any act it may do or omit to do
as Escrow Agent under this Agreement, unless resulting from gross negligence or
wilful misconduct; (iv) the Escrow Agent may disregard any and all notices or
warnings given by any of the parties hereto (except notices expressly envisioned
in this Escrow Agreement), or by any other person or entity, excepting only
orders or process of court, and is hereby expressly authorized to comply with
and obey any and all orders, judgments, or decrees of any court reasonably
believed by the Escrow Agent to have jurisdiction of the subject matter and the
parties, and in case the Escrow Agent obeys or complies with any such order,
judgment, or decree of any such court it shall not be liable to any of the
parties hereto or to any other person or entity by reason of such compliance,
notwithstanding any such order, judgment, or decree being subsequently reversed,
modified, annulled, set aside or vacated, or found to have been entered without
jurisdiction; and (v) NaPro and BNP shall jointly, but not severally, indemnify
and hold the Escrow Agent harmless as to any loss, claim, damage, or liability
incurred by the Escrow Agent to any other person or entity by reason of the
Escrow Agent's having acted as Escrow Agent hereunder, or in connection herewith
(collectively, "Losses"), other than those Losses resulting from the Escrow
Agent's gross negligence or willful misconduct.
(e) Interpleader. In the event of any disagreement or uncertainty regarding
the determination of the arbitrators pursuant to Section 6(f) of this Agreement,
the interpretation of this Agreement, the rights and obligations set forth in
this Agreement, or the propriety of any action contemplated to be taken by the
Escrow Agent hereunder, the Escrow Agent may, in its sole discretion, file an
action in interpleader to resolve such disagreement or uncertainty. The Escrow
Agent shall be entitled to recover from the parties hereto all reasonable fees
and expenses in connection with the filing of any such action.
(f) Reports. The Escrow Agent shall furnish NaPro and BNP with written
reports on a monthly basis as to the amount of funds contained in the Escrow
Account, the investments contained in the Escrow Account, and describing each
transaction made with respect to this Agreement during the term of this
Agreement.
6. Miscellaneous.
(a) Counterparts. This Agreement may be executed by facsimile and in one or
more counterparts, all of which taken together will constitute one and the same
agreement.
(b) Governing Law. All questions concerning the construction, validity, and
interpretation of this Agreement will be governed by and construed in accordance
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with the domestic laws of the State of New York, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.
(c) Notices. All notices, communications, and deliveries hereunder shall be
made in writing by registered mail, return receipt requested, or by overnight
courier, and shall be deemed given on the date received. Notices shall be sent
to the following addresses:
To the Escrow Agent:
Colorado National Bank
000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attn: Xxxx Xxxxx
Corporate Trust Department
To NaPro:
NaPro BioTherapeutics, Inc.
0000 Xxxxx Xxxx, Xxxx X
Xxxxxxx, Xxxxxxxx 00000
Fax: 000-000-0000
Attn: Chief Executive Officer
To BNP:
Xxxxx Norton Pharmaceuticals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Attn: General Counsel
or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing.
(d) Successors and Assigns. All covenants and agreements contained in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
(e) Entire Agreement. This Agreement and the Termination Agreement contain
the complete agreement between the parties and supersede any prior
understandings,
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agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way.
(f) Arbitration. Any dispute of the parties arising out of or in connection
with this Agreement, including any question regarding its existence,
interpretation, validity, or termination shall be submitted to binding
arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). If any such dispute arises, the aggrieved
party shall give the other party written notice of such controversy, claim, or
dispute in accordance with Section 6(c) hereof, and if the parties are unable in
good faith to resolve such controversy, claim, or dispute within ten (10) days
of such notice, NaPro and BNP shall have thirty (30) days to each select an
arbitrator, and such arbitrators shall together choose a third arbitrator within
thirty (30) days. If one party does not designate an arbitrator within thirty
(30) days, the other party shall notify the AAA who shall designate an
arbitrator for the nonselecting party. Within sixty (60) days after their
selection, the arbitrators shall submit a written report of their determination
to the parties hereto. The determination of a majority of the arbitrators shall
be binding upon the parties hereto. The losing party shall pay all costs of all
arbitrators and all other costs of the arbitration; provided, that such costs
shall not include either party's legal fees or preparation costs associated with
such arbitration. Any decision, determination, or award rendered as a result of
such arbitration shall be final, conclusive, and binding on the parties hereto
and may be reduced to judgment in any appropriate court having jurisdiction
thereof in accordance with the provisions of any applicable law relating
thereto. The arbitration shall be conducted in New York, New York. Escrow Agent
shall not be a party to any arbitration, but shall cooperate with parties and
arbitrators in providing requested information about the Escrow Account.
(h) Amendments. This Escrow Agreement may be amended or modified at any
time or from time to time in a writing executed by NaPro, BNP and the Escrow
Agent.
(i) Severability. The provisions of this Agreement shall be severable, and
if any of them are held invalid or unenforceable, for any reason, such provision
shall be replaced with a provision which accomplishes, to the extent possible,
the original business purpose of such provision in a valid and enforceable
manner. The invalidity or unenforceability of one provision shall not affect any
other provision of this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Escrow Agreement as of the day and year first set forth above.
NAPRO BIOTHERAPEUTICS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman of the Board
XXXXX XXXXXX PHARMACEUTICALS, INC.
By: /s/ArmandoTabernilla
Name: Xxxxxxx Xxxxxxxxxx
Title: Secretary
U.S. BANK NATIONAL ASSOCIATION
D/B/A COLORADO NATIONAL BANK
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
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