EXHIBIT 2.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made as of July 11,
2000, by and among Nastech Pharmaceutical Company Inc., a corporation
incorporated under the laws of the State of Delaware, (the "Company"), Castlebar
Enterprises Limited, a British Virgin Islands corporation ("Investor"), and
Xxxxxxx Xxxxxx & Green, P.C., (the "Escrow Agent"). Capitalized terms used but
not defined herein shall have the meanings set forth in the Equity Line of
Credit Agreement referred to in the first recital.
W I T N E S S E T H:
WHEREAS, the Investor will from time to time as requested by the
Company, purchase shares of the Company's Common Stock from the Company as set
forth in that certain Equity Line of Credit Agreement (the "Purchase Agreement")
dated the date hereof between the Investor and the Company, which will be issued
as per the terms and conditions contained herein and in the Purchase Agreement;
and
WHEREAS, the Company and the Investor have requested that the Escrow
Agent hold in escrow and then distribute the initial documents and certain funds
which are conditions precedent to the effectiveness of the Purchase Agreement,
and have further requested that upon each exercise of a Put, the Escrow Agent
hold the relevant documents and the applicable purchase price pending receipt by
the Investor of certificates representing the securities issuable upon such Put;
NOW, THEREFORE, in consideration of the covenants and mutual
promises contained herein and other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged and intending to be
legally bound hereby, the parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW FOR THE INITIAL CLOSING
1.1. The parties hereby agree to establish an escrow account with
the Escrow Agent whereby the Escrow Agent shall hold the funds and documents
which are referenced in Section 7.1 and 7.2 of the Purchase Agreement.
1.2. The Company shall deliver to the Escrow Agent:
(i) the original Initial Warrant certificate in the
form of Exhibit D to the Purchase Agreement;
(ii) the original executed Registration Rights
Agreement in the form of Exhibit C to the Purchase
Agreement;
(iii) the original executed opinion of Xxxxx X. Xxxx,
Esq., counsel of the Company, in the form of
Exhibit F to the Purchase Agreement;
(iv) the sum of $20,000;
(v) a warrant certificate to purchase up to 16,500
shares of Common Stock issued to Jesup and Xxxxxx
Securities Corporation otherwise identical in form
to that of the Initial Warrant (the "J&L
Warrant");
(vi) the original executed Company counterpart of this
Escrow Agreement; and
(vii) the original executed Company counterpart of the
Purchase Agreement.
1.3. Upon receipt of the foregoing, and receipt of executed
counterparts from Investor of the Purchase Agreement, the Registration Rights
Agreement and this Escrow Agreement (the "Initial Closing"), the Escrow Agent
shall calculate the exercise price of the Warrant and the J&L Warrant and enter
the exercise price, the commencement date and termination date of such warrants
on the faces thereof and immediately transfer the sum of Twenty Thousand Dollars
($20,000) to Xxxxxxx Xxxxxx & Green, P.C. ("EB&G"), 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 for the Investor's legal and administrative costs and the Escrow
Agent shall then arrange to have the Initial Warrant certificate, the Purchase
Agreement, this Escrow Agreement, the Registration Rights Agreement and the
opinion of counsel delivered to the Investor and the J&L Warrant certificate
delivered to Jesup & Xxxxxx Securities Corporation.
ARTICLE 2
TERMS OF THE ESCROW FOR EACH PUT
2.1. Each time the Company shall send a Put Notice to the Investor
as provided in the Purchase Agreement, it shall send a copy, by facsimile, to
the Escrow Agent.
2.2. Each time the Investor shall purchase shares pursuant to a Put,
the Investor shall send the applicable Investment Amount of the Put Shares to
the Escrow Agent on or before the Closing Date for such Put. The Company shall
promptly, but no later than five (5) Trading Days after receipt of notice from
the Escrow Agent that it has the funds for the Investment Amount cause its
Transfer Agent to deliver the Put Shares to Investor's account through the
Depository Trust Company, if possible, or else to deliver such certificates to
the Escrow Agent and deliver the applicable Put Warrant and Short Term Warrant
to the Investor and a warrant certificate to purchase up to 1,000 shares of
Common Stock for each $100,000 of Put Shares purchased pursuant to such Put
issued to Jesup & Xxxxxx Securities Corporation otherwise identical in form to
that of the Warrant (each an "Additional J&L Warrant"). In the event that the
certificates representing the Put Shares, the applicable Put Warrant and the
applicable Additional J&L Warrant have not been delivered to the Investor or the
Escrow Agent, as applicable, within five (5) Trading Days of the date of the
Escrow Agent's notice, then Investor shall have the right to demand, by notice,
the return of the Investment Amount, and the Put Notice shall be deemed
cancelled. The Escrow Agent shall calculate the exercise price of the Put
Warrant, Short Term Warrant and the Additional J&L Warrant and enter the
exercise price, the commencement date and termination date of such warrants on
the faces thereof and within one (1) Trading Day of Closing wire the Investment
Amount per the written instructions of the Company net of a brokerage fee equal
to four percent (4%) of the Investment Amount of each Put payable to Jesup &
Xxxxxx Securities Corporation (Six Thousand Five Hundred Dollars shall be
deducted from Jesup & Xxxxxx Securities Corporation brokerage fee at the
initial Put and One Thousand Five Hundred Dollars ($1,500) shall be deducted
from Jesup & Xxxxxx Securities Corporation's brokerage fee at each Put
thereafter as escrow expenses to the Escrow Agent). The Escrow Agent shall remit
Jesup & Xxxxxx Securities Corporation's fee in accordance with wire instructions
that will be sent to Escrow Agent from Jesup & Xxxxxx Securities Corporation and
deliver the Warrants to the appropriate parties.
ARTICLE 3
MISCELLANEOUS
3.1. No waiver or any breach of any covenant or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach
thereof, or of any other covenant or provision herein contained. No extension of
time for performance of any obligation or act shall be deemed an extension of
the time for performance of any other obligation or act.
All notices or other communications required or permitted hereunder
shall be in writing, and shall be sent by fax, overnight courier, registered or
certified mail, postage prepaid, return receipt requested, and shall be deemed
received upon receipt thereof, as set forth in the Purchase Agreement.
3.2. This Escrow Agreement shall be binding upon and shall inure to
the benefit of the permitted successors and permitted assigns of the parties
hereto.
3.3. This Escrow Agreement is the final expression of, and contains
the entire agreement between, the parties with respect to the subject matter
hereof and supersedes all prior understandings with respect thereto; provided,
however, that in the event of any conflict between the terms of this Escrow
Agreement and the Purchase Agreement, the Purchase Agreement shall control. This
Escrow Agreement may not be modified, changed, supplemented or terminated, nor
may any obligations hereunder be waived, except by written instrument signed by
the parties to be charged or by their respective agents duly authorized in
writing or as otherwise expressly permitted herein.
3.4. Whenever required by the context of this Escrow Agreement, the
singular shall include the plural and masculine shall include the feminine. This
Escrow Agreement shall not be construed as if it had been prepared by one of the
parties, but rather as if both parties had prepared the same. Unless otherwise
indicated, all references to Articles are to this Escrow Agreement.
3.5. The parties hereto expressly agree that this Escrow Agreement
shall be governed by, interpreted under and construed and enforced in accordance
with the laws of the State of New York. Except as expressly set forth herein,
any action to enforce, arising out of, or relating in any way to, any provisions
of this Escrow Agreement shall brought through the American Arbitration
Association at the designated locale of New York, New York as is more fully set
forth in the Purchase Agreement.
3.6. The Escrow Agent's duties hereunder may be altered, amended,
modified or revoked only by a writing signed by the Company, each Investor and
the Escrow Agent.
3.7. The Escrow Agent shall be obligated only for the performance of
such duties as are specifically set forth herein and may rely and shall be
protected in relying or refraining from acting on any instrument reasonably
believed by the Escrow Agent to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall not be personally liable
for any act the Escrow Agent may do or omit to do hereunder as the Escrow Agent
while acting in good faith, excepting only its own gross negligence or willful
misconduct, and any act done or omitted by the Escrow Agent pursuant to the
advice of the Escrow Agent's attorneys-at-law (other than Escrow Agent itself)
shall be
conclusive evidence of such good faith.
3.8. The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person
or corporation, excepting only orders or process of courts of law and is hereby
expressly authorized to comply with and obey orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such order, judgment
or decree, the Escrow Agent shall not be liable to any of the parties hereto or
to any other person, firm or corporation by reason of such decree being
subsequently reversed, modified, annulled, set aside, vacated or found to have
been entered without jurisdiction.
3.9. The Escrow Agent shall not be liable in any respect on account
of the identity, authorization or rights of the parties executing or delivering
or purporting to execute or deliver the Purchase Agreement or any documents or
papers deposited or called for thereunder or hereunder.
3.10. The Escrow Agent shall be entitled to employ such legal
counsel and other experts as the Escrow Agent may deem necessary properly to
advise the Escrow Agent in connection with the Escrow Agent's duties hereunder,
may rely upon the advice of such counsel, and may pay such counsel reasonable
compensation therefor. The Escrow Agent has acted as legal counsel for the
Investor, and may continue to act as legal counsel for the Investor, from time
to time, notwithstanding its duties as the Escrow Agent hereunder. The Company
consents to the Escrow Agent in such capacity as legal counsel for the Investors
and waives any claim that such representation represents a conflict of interest
on the part of the Escrow Agent. The Company understands that the Investor and
the Escrow Agent are relying explicitly on the foregoing provision in entering
into this Escrow Agreement.
3.11. The Escrow Agent's responsibilities as escrow agent hereunder
shall terminate if the Escrow Agent shall resign by written notice to the
Company and the Investor. In the event of any such resignation, the Investors
and the Company shall appoint a successor Escrow Agent.
3.12. If the Escrow Agent reasonably requires other or further
instruments in connection with this Escrow Agreement or obligations in respect
hereto, the necessary parties hereto shall join in furnishing such instruments.
3.13. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the documents
or the escrow funds held by the Escrow Agent hereunder, the Escrow Agent is
authorized and directed in the Escrow Agent's sole discretion (1) to retain in
the Escrow Agent's possession without liability to anyone all or any part of
said documents or the escrow funds until such disputes shall have been settled
either by mutual written agreement of the parties concerned by a final order,
decree or judgment or a court of competent jurisdiction after the time for
appeal has expired and no appeal has been perfected, but the Escrow Agent shall
be under no duty whatsoever to institute or defend any such proceedings or (2)
to deliver the escrow funds and any other property and documents held by the
Escrow Agent hereunder to a state or federal court having competent subject
matter jurisdiction and located in the State and City of New York in accordance
with the applicable procedure therefor.
3.14. The Company and the Investor agree jointly and severally to
indemnify and hold harmless the Escrow Agent and its partners, employees, agents
and representatives from any and all claims, liabilities, costs or expenses in
any way arising from or relating to the duties or performance of the Escrow
Agent hereunder or the transactions contemplated hereby or by the Purchase
Agreement other than any such claim, liability, cost or expense to the extent
the same shall have been determined by final, unappealable judgment of a court
of competent jurisdiction to have resulted from the gross negligence or willful
misconduct of the Escrow Agent.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of this 11th day of July, 2000.
NASTECH PHARMACEUTICAL COMPANY INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
Title: Chief Executive Officer
INVESTOR:
CASTLEBAR ENTERPRISES LIMITED
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Authorized Signatory
ESCROW AGENT:
XXXXXXX XXXXXX & GREEN, P.C.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxxxxx, Authorized Signatory
