ESCROW AGREEMENT
Exhibit 10.4
This
ESCROW AGREEMENT (this “Agreement”) made as of
April 25, 2008 by and among Nastech
Pharmaceutical Company Inc. (“Nastech Pharmaceutical” or the “Issuer”) and Maxim Group LLC (the
“Placement Agent”), whose addresses and other information appear on the Information Sheet (as
defined herein) attached to this Agreement, and American Stock Transfer & Trust Company, 00 Xxxxxx
Xxxx, Xxx Xxxx, XX 00000 (the “Escrow Agent”).
W I T
N E S E T H:
WHEREAS, the Issuer proposes to sell a minimum of $7,000,000 and a maximum of $10,000,000 of
the Issuer’s common stock and warrants (the “Securities”) in a private offering (the “Offering”)
to accredited investors only.
WHEREAS, the Issuer and the Placement Agent propose to establish an escrow account (the
“Escrow Account”), to which subscription monies which are received by the Escrow Agent from the
Placement Agent or the Issuer in connection with such private offering are to be credited, and the
Escrow Agent is willing to establish the Escrow Account on the terms and subject to the conditions
hereinafter set forth;
WHEREAS, the Escrow Agent has an agreement with XX Xxxxxx (the “Bank”) to establish a special
bank account into which the subscription monies, which are received by the Escrow Agent and
credited to the Escrow Account, are to be deposited;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. Information Sheet. Each capitalized term not otherwise defined in this Agreement
shall have the
meaning set forth for such term on the information sheet which is attached to this Agreement
as Exhibit A and is
incorporated by reference herein and made a part hereof (the “Information Sheet”).
2. Establishment of the Bank Account.
2.1 The Escrow Agent shall establish a non-interest-bearing bank account at the branch of the
Bank selected by the Escrow Agent, and bearing the designation set forth on the Information
Sheet (heretofore
defined as the “Bank Account”). The purpose of the Bank Account is for (a) the deposit of all
subscription monies
(checks or wire transfers) which are received from prospective purchasers of the Securities
and are delivered to the
Escrow Agent, (b) the holding of amounts of subscription monies which are collected through
the banking system,
and (c) the disbursement of collected funds, all as described herein.
2.2 On or before the date of the initial deposit in the Bank Account pursuant to this
Agreement, the Placement Agent shall notify the Escrow Agent of the date of the commencement
of the Offering
(the “Effective Date”), and the Escrow Agent shall not be required to accept any amounts for
credit to the Escrow
Account or for deposit in the Bank Account prior to its receipt of such notification.
2.3 The “Offering Period,” which shall be deemed to commence on the Effective Date, shall
consist of the number of calendar days or business days set forth on the Information Sheet.
The Offering Period
shall be extended at the mutual discretion of both the Company and the Placement Agent (an
“Extension Period”)
only if the Escrow Agent shall have received notice thereof prior to, or reasonable promptly
after the expiration of
the Offering Period. The Escrow Agent shall enquire as to whether there has been an extension
prior to releasing
any Escrow Funds. The Extension Period, which shall be deemed to commence on the next calendar
day following
the expiration of the Offering Period, shall consist of the number of calendar days or
business days set forth on the
Information Sheet. The last day of the Offering Period, or the last day of the Extension
Period (if the Escrow Agent
has received written notice thereof as herein above provided), is referred to herein as the
“Termination Date”.
Except as provided in Section 4.3 hereof, after the Termination Date, the Placement Agent
shall not deposit, and the
Escrow Agent shall not accept, any additional amounts representing payments by prospective
purchasers.
3. Deposits to the Bank Account.
3.1 The Placement Agent shall promptly deliver to the Escrow Agent all monies which it
receives from prospective purchasers of the Securities, which monies shall be in the form of
checks, or wire
transfers, provided, however, that “Cashiers” checks and “Money Orders” must
be in amounts greater than $10,000;
Cashiers checks or Money Orders in amounts less than $10,000 shall be rejected by the Escrow
Agent. Upon the
Escrow Agent’s receipt of such monies, same shall be credited to the Escrow Account. All
checks delivered to the
Escrow Agent shall be made payable to “Nastech Pharmaceutical Escrow Account.” Any check
payable other
than to the Escrow Agent as required hereby shall be returned to the prospective purchaser, or
if the Escrow Agent
has insufficient information to do so, then to the Placement Agent (together with any
subscription information or
other documents delivered therewith) by noon of the next business day following receipt of
such check by the
Escrow Agent, and such check shall be deemed not to have been delivered to the Escrow Agent
pursuant to the
terms of this Agreement.
3.2 Promptly after receiving subscription monies as described in Section 3.1, the Escrow
Agent shall deposit the same into the Bank Account. Amounts of monies so deposited are
hereinafter referred to as
“Escrow Amounts”. The Escrow Agent shall cause the Bank to process all Escrow Amounts for
collection through
the banking system.
3.3 The Escrow Agent shall not be required to accept for credit to the Escrow Account or for
deposit into the Bank Account checks or wires that are not accompanied by the appropriate
subscription information.
3.4 The Escrow Agent shall not be required to accept in the Escrow Account any amounts
representing payments by prospective purchasers, whether by check or wire, except during the
Escrow Agent’s
regular business hours.
3.5 Those Escrow Amounts which have been deposited in the Bank Account and which have
cleared the banking system and have been collected by the Escrow Agent are herein referred to
as the “Fund”.
3.6 If the Offering is terminated before the Termination Date, the Escrow Agent shall refund
any portion of the Fund prior to disbursement of the Fund in accordance with Article 4 hereof
upon instructions in
writing signed by the Issuer and the Placement Agent.
3.7 If prior to the disbursement of the Fund in accordance with Section 4.2 below, the
Escrow Agent has received notice from the Issuer that the subscription of a purchaser has been
rejected since such
purchaser does not qualify as an investor in the Offering, the Escrow Agent shall promptly
refund to such purchaser
the amount of payment received from such purchaser which is then held in the Fund or which
thereafter clears the
banking system, without interest thereon or deduction therefrom, by drawing a check on the
Bank Account for the
amount of such payment and transmitting it to the purchaser.
4. Disbursement from the Bank Account.
4.1 Subject to Section 4.3 below, if the Offering is terminated before the Termination Date
by the Issuer, the Escrow Agent shall, upon its receipt of written instructions signed by both
the Issuer and the
Placement Agent, refund to each prospective subscriber the aggregate amount of the payment
from said subscriber
then held in the Fund or which thereafter clears the banking system, without interest thereon
or deduction therefrom.
4.2 Subject to Section 4.3 below, if at any time up to the close of regular banking hours on
the Termination Date, the Escrow Agent has received joint written instructions from the Issuer
and the Placement
Agent that all conditions for release of funds and the issuance of Securities have been met
for closing, the Escrow
Agent shall promptly disburse the Fund in accordance with such instructions; the parties
hereto acknowledge and
agree that there may be multiple closings of the Offering prior to the Termination Date.
4.3 Upon disbursement of all amounts in the Fund pursuant to the terms of this Article 4, the
Escrow Agent shall be relieved of further obligations and released from all liability under
this Agreement with
respect to the Escrow Account. It is expressly agreed and understood that in no event shall the
aggregate amount of payments made by the Escrow Agent exceed the amount of the Fund.
5. Rights, Duties and Responsibilities of Escrow Agent. It is understood and agreed
that the duties
of the Escrow Agent are purely ministerial in nature, and that:
5.1 The Escrow Agent shall notify the Placement Agent, on a daily basis, of the Escrow
Amounts which have been deposited in the Bank Account and of the amounts, constituting the
Fund, which have
cleared the banking system and have been collected by the Escrow Agent.
5.2 The Escrow Agent shall not be responsible for or be required to enforce any of the terms
or conditions of the subscription agreement or any other agreement between the Placement Agent
and the Issuer and
any prospective purchaser nor shall the Escrow Agent be responsible for the performance by the
Issuer of its
obligations under this Agreement.
5.3 The Escrow Agent shall not be required to accept from the Placement Agent or the Issuer
any subscription information pertaining to prospective purchasers unless such
subscription information is
accompanied by checks or wire transfers meeting the requirements of Section 3.1, nor shall the
Escrow Agent be
required to keep records of any information with respect to payments deposited by the
Placement Agent or the Issuer
except as to the amount and date of such payments; however, the Escrow Agent shall notify the
Placement Agent or
the Issuer within a reasonable time of any discrepancy between the amount set forth in any
subscription information
and the amount delivered to the Escrow Agent therewith. Such amount need not be accepted for
deposit in the
Escrow Account until such discrepancy has been resolved.
5.4 The Escrow Agent shall be under no duty or responsibility to enforce collection of any
check delivered to it hereunder. The Escrow Agent, within a reasonable time, shall return to
the Placement Agent
any check received which is dishonored, together with the subscription information, if any,
which accompanied such
check.
5.5 The Escrow Agent shall be entitled to rely upon the accuracy, act in reliance upon the
contents, and assume the genuineness of any notice, instruction, certificate, signature,
instrument or other document
which is given to the Escrow Agent pursuant to this Agreement without the necessity of the
Escrow Agent verifying
the truth or accuracy thereof. The Escrow Agent shall not be obligated to make any inquiry
as to the authority,
capacity, existence or identity of any person purporting to give any such notice or
instructions or to execute any such
certificate, instrument or other document.
5.6 If the Escrow Agent is uncertain as to its duties or rights hereunder or shall receive
instructions with respect to the Bank Account, the Escrow Amounts or the Fund which, in its
sole determination, are
in conflict either with other instructions received by it or with any provision of this
Agreement, it shall be entitled to
hold the Escrow Amounts, the Fund, or a portion thereof, in the Bank Account pending the
resolution of such
uncertainty to the Escrow Agent’s sole satisfaction, by final judgment of a court or courts of
competent jurisdiction
or otherwise.
5.7 The Escrow Agent shall not be liable for any action taken or omitted hereunder, or for the
misconduct of any employee, agent or attorney appointed by it, except in the case of willful
misconduct or gross
negligence. The Escrow Agent shall be entitled to consult with counsel of its own choosing and
shall not be liable
for any action taken, suffered or omitted by it in accordance with the advice of such counsel,
except in the case of
willful misconduct or gross negligence on the part of Escrow Agent.
5.8 The Escrow Agent shall have no responsibility at any time to ascertain whether or not
any security interest exists in the Escrow Amounts, the Fund or any part thereof or to file
any financing statement
under the Uniform Commercial Code with respect to the Fund or any part thereof.
6. Amendment: Resignation. This Agreement may be altered or amended only with the
written
consent of the Issuer, the Placement Agent and the Escrow Agent. The Escrow Agent may resign
for any reason
upon five (5) business days’ written notice to the Issuer and the Placement Agent. Should the
Escrow Agent resign as herein provided, it shall not be required to accept any deposit, make any
disbursement or otherwise dispose of the Escrow Amounts or the Fund, but its only duty shall be to
hold the Escrow Amounts until they clear the banking system and the Fund for a period of not more
than five (5) business days following the effective date of such resignation, at which time (a) if
a successor escrow agent shall have been appointed and written notice thereof (including the name
and address of such successor escrow agent) shall have been given to the resigning Escrow Agent by
the Issuer or the Placement Agent and such successor escrow agent, then the resigning Escrow Agent
shall deliver over to the successor escrow agent the Fund, less any portion thereof previously paid
out in accordance with this Agreement; or (b) if the resigning Escrow Agent shall not have received
written notice signed by the Issuer or the Placement Agent, and a successor escrow agent, then the
resigning Escrow Agent shall promptly refund the amount in the Fund to each prospective purchaser,
without interest thereon or deduction therefrom, and the resigning Escrow Agent shall promptly
notify the Issuer and the Placement Agent in writing of its liquidation and distribution of the
Fund; whereupon, in either case, the Escrow Agent shall be relieved of all further obligations and
released from all liability under this Agreement.
7. Representations and Warranties. The Issuer and the Placement Agent hereby
severally represent
and warrant to the Escrow Agent that:
7.1 No party other than the parties hereto and the prospective purchasers have, or shall have,
any lien, claim or security interest in the Escrow Amounts or the Fund or any part thereof.
7.2 No financing statement under the Uniform Commercial Code is on file in any jurisdiction
claiming a security interest in or describing (whether specifically or generally) the Escrow
Amounts or the Fund or
any part thereof.
7.3 The subscription information submitted with each deposit shall, at the time of submission
and at the time of the disbursement of the Fund, be deemed a representation and warranty that
such deposit
represents a bona fide payment by the purchaser described therein for the amount of Securities
set forth in such
subscription information.
7.4 All of the information contained in the Information Sheet is, as of the date hereof, and
will be, at the time of any disbursement of the Fund, true and correct.
8 Fees and Expenses. The Escrow Agent shall be entitled to the Escrow Agent Fees set
forth on the
Information Sheet, payable by the Issuer as and when stated therein. In addition, the Issuer
agrees to reimburse the Escrow Agent for any reasonable expenses incurred in connection with this
Agreement, including, but not limited to, reasonable counsel fees of one counsel. The Escrow Agent
confirms that no additional expenses shall be incurred absent extraordinary conditions.
9. Indemnification and Contribution.
9.1 The Issuer and the Placement Agent (collectively referred to as the “Indemnitors”)
jointly and severally agree to indemnify the Escrow Agent and its officers, directors,
employees, agents and
shareholders (collectively referred to as the “Indemnitees”) against, and hold them harmless
of and from, any and
all loss, liability, cost, damage and expense, including without limitation, reasonable
counsel fees, which the
Indemnitees may suffer or incur by reason of any action, claim or proceeding brought against
the Indemnitees
arising out of or relating in any way to this Agreement or any transaction to which this
Agreement relates, unless
such action, claim or proceeding is the result of the willful misconduct or gross negligence
of any of the
Indemnitees.
9.2 If the indemnification provided for in Section 9.1 is applicable, but for any reason is
held
to be unavailable, the Indemnitors shall contribute such amounts as are just and equitable to
pay, or to reimburse the
Indemnitees for, the aggregate of any and all losses, liabilities, costs, damages and
expenses, including reasonable
counsel fees, actually incurred by the Indemnitees as a result of or in connection with, and
any amount paid in
settlement of, any action, claim or proceeding arising out of or relating in any way to any
actions or omissions of the
Indemnitors.
9.3 The provisions of this Section 9 shall survive any termination of this Agreement,
whether by disbursement of the Fund, resignation of the Escrow Agent or otherwise.
10. Governing Law and Assignment. This Agreement shall be construed in accordance with
and
governed by the laws of the State of New York and shall be binding upon the parties hereto and
their respective
successors and assigns; provided, however, that any assignment or transfer by
any party of its rights under this
Agreement or with respect to the Escrow Amounts or the Fund shall be void as against the
Escrow Agent unless (a)
written notice thereof shall be given to the Escrow Agent; and (b) the Escrow Agent shall have
consented in writing
to such assignment or transfer.
11. Notices. All notices required to be given in connection with this Agreement shall
be sent by
registered or certified mail, return receipt requested, or by hand delivery with receipt
acknowledged, or by the
Express Mail service offered by the United States Postal Service, or by overnight courier, and
addressed, if to the
Issuer or the Placement Agent, at their respective addresses set forth on the Information
Sheet, and if to the Escrow
Agent, at its address set forth above.
12. Severability. If any provision of this Agreement or the application thereof to any
person or
circumstance shall be determined to be invalid or unenforceable, the remaining provisions of
this Agreement or the
application of such provision to persons or circumstances other than those to which it is held
invalid or
unenforceable shall not be affected thereby and shall be valid and enforceable to the fullest
extent permitted by law.
13. Execution in Several Counterparts. This Agreement may be executed in several
counterparts or by
separate instruments, and all of such counterparts and instruments shall constitute one
agreement, binding on all of
the parties hereto.
14. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto
with respect to the subject matter hereof and supersedes all prior agreements and
understandings (written or oral) of
the parties in connection therewith.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above written.
| AMERICAN STOCK TRANSFER & TRUST COMPANY |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
| NASTECH PHARMACEUTICAL COMPANY INC.
|
||||
| By: | /s/ Xx. Xxxxxx X. Xxxx | |||
| Name: | Xx. Xxxxxx X. Xxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| MAXIM GROUP LLC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
EXHIBIT A
ESCROW AGREEMENT INFORMATION SHEET
| 1. | The Issuer |
| Name: | Nastech Pharmaceutical Company Inc. | ||
| Address: | 0000 Xxxxx Xxxxx Xxxxxxx Xxxxxxx, XX 00000 |
| State of incorporation of organization: Delaware |
| 2. | The Placement Agent |
| Name: | Maxim Group LLC | ||
| Address: | 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 |
| 3. | The Securities $7,000,000-$10,000,000 of the Issuer’s Common stocks and warrants (the “Securities”) in a registered direct (the “Offering”) to accredited investors only. There is 100% warrant coverage (the “Warrants”). |
|
| 4. | Minimum Amounts and Conditions Required for Disbursement of the Escrow Account Aggregate dollar amount that must be collected before the Escrow Account may be disbursed to the Issuer: $7,000,000. |
|
| 5. | Plan of Distribution of the Securities: Initial Offering Period: (04/20/2008 through 04/31/2008) Extension Period, if any: (05/31/2008) |
|
| 6. | Title of Escrow Account “Nastech Pharmaceutical Escrow Account” |
|
| 7. | Escrow Agent Fees and
Charges $2,500: payable at the first Closing. |
