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* Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4), 200.83
and 240.246-2.
EXHIBIT 2.2
EXECUTION COPY
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is made as of March
26, 1999 by and among NEOSE TECHNOLOGIES, INC., a Delaware corporation
("Neose"), CYTEL CORPORATION, a Delaware corporation ("Cytel"), and CHASE
MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION (the "Escrow Agent").
Background
At the Closing today under the Asset Purchase Agreement dated as of
the date hereof (the "Asset Purchase Agreement"), Neose is purchasing the
Purchased Assets, including the Patents that are the subject of this Escrow
Agreement.
This Escrow Agreement is being entered into pursuant to the Asset
Purchase Agreement. Unless otherwise defined herein, terms are used herein as
defined in the Asset Purchase Agreement.
Witnesseth
NOW, THEREFORE, in consideration of the respective covenants
contained herein and in the Asset Purchase Agreement and intending to be legally
bound, the parties hereto agree as follows:
1. Appointment and Acceptance of Escrow Agent.
Neose and Cytel hereby appoint the Escrow Agent as their agent
hereunder to serve in accordance with the terms and conditions of this Escrow
Agreement. The Escrow Agent hereby accepts such appointment and agrees to act in
accordance with such terms and conditions.
2. Escrow Funds.
2.1 Simultaneously with the execution hereof, Neose shall deposit
with the Escrow Agent a portion of the Purchase Price in the amount of
$1,500,000 (the "Escrow Funds"), the receipt of which is hereby acknowledged by
the Escrow Agent.
2.2 The Escrow Funds shall be held and disbursed by the Escrow Agent
as hereinafter provided. The Escrow Funds shall not be subject to lien or
attachment by any creditor of any party hereto and shall be used solely for the
purpose set forth in this Escrow Agreement.
2.3 The Escrow Funds shall be invested exclusively in (i) any money
market mutual fund that invests exclusively in obligations of the United States
Government, or any agencies or instrumentalities thereof or any combination of
the foregoing, (ii) short-term obligations issued by the United States Treasury,
and (iii) such other government securities as may be approved
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jointly in writing from time to time by Neose and Cytel. Any interest income or
other investment proceeds earned on the Escrow Funds ("Investment Income") shall
be distributed as provided in Section 4.1 and/or Section 4.2.
3. Required Actions for Certain Patent Matters.
3.1 Cytel shall use commercially reasonable efforts to complete, by
no later than [***] (the "Completion Date"), the following actions set forth in
subsections 3.1.1, 3.1.2 and 3.1.3 hereof ("Required Actions") with respect to
certain Patents included in the Purchased Assets in accordance with the
applicable standard specified below (the "Applicable Standard"):
3.1.1 With respect to the Patents more specifically
described in Section 3.1.1 of Exhibit A hereto [***], by the
Completion Date Cytel shall provide documentation reasonably
satisfactory to Neose that (a) [***] associated with [***] listed in
the [***], and [***] and [***] associated with the [***] listed in
the [***], respectively, all of each such [***], at no additional
cost, obligation or burden to Neose, and (b) either [***] has been
[***], at no additional cost, obligation or burden to Neose, or [***]
have entered into an [***] in the [***], at no additional cost,
obligation or burden to Neose.
3.1.2 With respect to the Patents more specifically
described in Section 3.1.2 of Exhibit A hereto [***] by the
Completion Date Cytel shall provide documentation reasonably
satisfactory to Neose that each [***] of the [***] by the[***] and
each of the [***] at no additional cost, obligation or burden to
Neose, [***] of such [***], respectively, to the[***].
3.1.3 With respect to [***], by the Completion Date Cytel
shall provide documentation reasonably satisfactory to Neose that
[***] have been [***], at no additional cost, obligation or burden to
Neose, and in a manner that [***] and its [***] if any, [***] that
were the [***] at no additional cost, obligation or burden to[***]. A
grant by [***] to the other party to the [***] in connection with the
[***] of a [***] from the [***] that were the [***] shall not be
deemed to be at [***].
3.2 Upon receipt of documentation identified in writing as final
("final documentation") with respect to a Required Action under any subsection
of Section 3.1, Neose shall have 30 days to determine if such final
documentation satisfies the Applicable Standard with respect to any such
Required Action. If Neose does not provide a Dispute Notice (as defined in
Section 3.3) to Cytel within such 30-day period, the Required Action for which
Cytel submitted final documentation shall be deemed to have been completed. In
the case of Sections 3.1.1 and 3.1.2 above, Cytel may submit to Neose for its
review and approval in advance the proposed documentation to be submitted to the
applicable parties for signature in order to satisfy the Applicable Standard
with respect to the applicable Required Action. If Neose approves the form of
such proposed documentation prior to its execution, then Neose shall be deemed
to have
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determined that such documentation, when signed by the relevant parties and
submitted as final documentation by Cytel, satisfies the Applicable Standard
with respect to the applicable Required Action.
3.3 If Neose determines that the final documentation provided by
Cytel with respect to a Required Action does not satisfy the relevant Applicable
Standard, Neose shall provide written notice to Cytel of such determination (the
"Dispute Notice") within 30 days after receipt of the documentation from Cytel.
Following receipt of the Dispute Notice, Cytel may take either of the following
actions:
3.3.1 provide written notice to Neose within 15 days after
its receipt of the Dispute Notice that it does not intend to provide
any further documentation with respect to such disputed Required
Action and request in such notice that the parties promptly (and in
any event within 10 days) submit the dispute to patent counsel at a
law firm of national reputation mutually appointed by Neose and Cytel
(which counsel and firm do not then represent and have not previously
represented either Neose or Cytel or any of their Affiliates) (the
"IP Firm") for a determination in accordance with Section 3.5 of
whether the Applicable Standard has been satisfied with respect to
the disputed Required Action; or
3.3.2 at any time on or prior to the Completion Date,
provide further documentation to Neose to show compliance with the
Applicable Standard with respect to such Required Action accompanied
by written notice to Neose whether or not Cytel reserves the right to
provide additional further documentation with respect to such
Required Action on or prior to the Completion Date.
3.4 If, pursuant to Section 3.3.2, Cytel provides further
documentation to Neose with respect to a disputed Required Action, Neose shall
have 15 days after its receipt of the documentation to provide a Dispute Notice
to Cytel. If Neose does not provide a Dispute Notice to Cytel within such 15-day
period, the Required Action at issue shall be deemed to have been completed. If
Neose provides a Dispute Notice to Cytel within such 15-day period and Cytel's
notice to Neose pursuant to Section 3.3.2 did not reserve the right to provide
additional further documentation to Neose with respect to such Required Action,
the parties shall promptly (and in any event within 10 days) submit the dispute
to the IP Firm for a determination in accordance with Section 3.5 of whether the
Applicable Standard has been satisfied with respect to the disputed Required
Action.
3.5 Within 30 days after a submission by Neose and Cytel for
resolution of a disputed Required Action, the IP Firm shall determine and report
to the parties whether Cytel has satisfied the Applicable Standard with respect
to such disputed Required Action, and such report shall be final, binding and
conclusive on the parties. Neose and Cytel shall each pay one-half of the fees
and disbursements of the IP Firm incurred in connection with resolving any such
dispute.
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3.6 Upon a final determination that Cytel has satisfied the
Applicable Standard with respect to a Required Action, either by (i) Neose
failing to provide a Dispute Notice to Cytel with respect to such Required
Action by the end of the 30-day period specified in Section 3.2, or (ii) Neose
failing to provide a Dispute Notice to Cytel with respect to such Required
Action by the end of the 15-day period specified in Section 3.4, or (iii) by the
issuance by the IP Firm of a report to Neose and Cytel that Cytel has satisfied
the Applicable Standard with respect to such Required Action, Neose and Cytel
shall, within five days of the event specified in clauses (i), (ii) or (iii)
above, issue a joint written statement to the Escrow Agent that such relevant
Required Action has been completed (each, a "Completion Statement"). The
Completion Statement shall clearly identify which Required Action has been
completed by reference to the relevant subsection number of Section 3.1.
4. Payment of Escrow Funds and Investment Income; Termination of Escrow.
4.1 Upon its receipt of the first Completion Statement, if any, for a
Required Action under Section 3.1, the Escrow Agent shall promptly deliver to
Cytel from the Escrow Funds the amount of $500,000, plus all Investment Income
thereon, by cashier's check. Upon its receipt of the second Completion
Statement, if any, for a Required Action under Section 3.1, the Escrow Agent
shall promptly deliver to Cytel from the Escrow Funds the amount of $500,000
plus all Investment Income thereon, by cashier's check. Upon its receipt of the
third and final Completion Statement, if any, for a Required Action under
Section 3.1, the Escrow Agent shall promptly deliver to Cytel from the Escrow
Funds $500,000 plus all Investment Income thereon, by cashier's check.
4.2 If Cytel shall have failed to complete all Required Actions under
Section 3.1 prior to the Completion Date, as evidenced by the Escrow Agent's
failure to receive a Completion Statement for each of the Required Actions under
Sections 3.1.1, 3.1.2 and 3.1.3 on or prior to [***], then promptly after such
date the Escrow Agent shall deliver to Neose by cashier's check all remaining
Escrow Funds, plus all Investment Income thereon, that have not been disbursed
by the Escrow Agent to Cytel pursuant to Section 4.1.
4.3 Upon the delivery by the Escrow Agent of all Escrow Funds and
Investment Income pursuant to Section 4.1 and/or Section 4.2, this Escrow
Agreement shall terminate. All rights and obligations of the parties hereto
arising prior to the termination of this Escrow Agreement shall survive any such
termination.
5. Expenses.
All expenses and fees (including reasonable attorneys' fees) of the
Escrow Agent shall be paid in equal amounts by Neose and Cytel. The Escrow
Agent's fee schedule is attached hereto as Exhibit B and incorporated herein. To
the extent the Escrow Agent requires the advance
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payment of any expenses and fees, Neose and Cytel each shall pay one-half of
such expenses and fees simultaneously with the execution hereof and the deposit
of the Escrow Funds. Neose and Cytel shall each bear their own expenses in
connection with the resolution of any Required Action or other dispute with
respect to this Escrow Agreement, except as otherwise expressly provided herein
or in the Asset Purchase Agreement.
6. Notices.
All notices that are required or permitted hereunder shall be in
writing and shall be sufficient if personally delivered or sent by mail,
facsimile message or Federal Express or other delivery service. Any notices
shall be deemed given upon the earlier of the date when received at, or the
third day after the date when sent by registered or certified mail or the day
after the date when sent by Federal Express to, the address or fax number (with
such receipt being confirmed by the sender) set forth below, unless such address
or fax number is changed by notice to the other parties hereto:
6.1 If to Neose:
Neose Technologies, Inc.
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
FAX: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxx, Esquire
6.2 If to Cytel:
Cytel Corporation
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
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Xxxxxx Godward LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: L. Xxx Xxxxxxxx, Esquire
6.3 If to the Escrow Agent:
Chase Manhattan Trust Company,
National Association
Corporate Trust Department
0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attn.: Xxxxxx X. Xxxxxxxxxxxxx, Asst.
Vice President
Fax: (000) 000-0000
7. Liability of Escrow Agent.
7.1 Neose and Cytel, jointly and severally, shall indemnify the
Escrow Agent and hold it harmless from and against any losses, liabilities,
expenses (including reasonable attorneys' fees and expenses), claims or damages
arising out of or in connection with the performance of its obligations in
accordance with the provisions of this Escrow Agreement, except for losses,
liabilities, expenses, claims or damages resulting from the gross negligence or
willful misconduct of the Escrow Agent. These indemnities shall survive the
resignation of the Escrow Agent and the termination of this Escrow Agreement.
7.2 The Escrow Agent shall have no duties except those specifically
set forth in this Escrow Agreement and shall not be subject to, nor have any
liability or responsibility under, any other agreement or document the parties
hereto may be responsible for, even if same is referenced herein.
7.3 The Escrow Agent shall be protected in acting upon written
instructions from Neose and Cytel if it, in good faith, believes such written
instructions to be genuine and what they purport to be.
7.4 The Escrow Agent may confer with legal counsel, including its own
in-house counsel, in the event of any dispute or questions as to the
construction of any of the provisions hereof, or its duties hereunder, and it
shall incur no liability and be fully protected in acting in accordance with the
opinions of such counsel except to the extent of any willful misconduct or gross
negligence of the Escrow Agent.
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7.5 If a dispute arises between or among any of the parties to this
Escrow Agreement, the Escrow Agent shall be entitled, at its option, and upon
written notice to Neose and Cytel, to tender into the custody of any court of
competent jurisdiction in Delaware the Escrow Funds, any Investment Income and
all materials that the Escrow Agent may be holding under this Escrow Agreement
and to begin such legal proceedings as the Escrow Agent deems appropriate. After
taking such actions, the Escrow Agent shall then be discharged from any further
duties and liability under this Escrow Agreement except to the extent of any
prior willful misconduct or gross negligence of the Escrow Agent.
8. Resignation and Removal of Escrow Agent.
The Escrow Agent may resign at any time and for any reason upon
notice to Neose and Cytel given at least 30 days prior to the effective date of
such resignation. During such 30-day period, Neose and Cytel shall endeavor to
agree upon a successor Escrow Agent. If Neose and Cytel fail to agree on a
successor Escrow Agent within such 30-day period, the Escrow Agent shall deliver
the Escrow Funds, any Investment Income and all materials that it may then be
holding to a court in accordance with Section 7.5 above. If the Escrow Agent
becomes unable to fulfill its duties hereunder, or if for any reason, Neose and
Cytel desire to remove the Escrow Agent hereunder, Neose and Cytel may jointly
appoint a successor Escrow Agent for the purposes of this Escrow Agreement. Upon
the appointment of any successor Escrow Agent under this Escrow Agreement, the
successor Escrow Agent shall have all the rights, duties and powers that applied
to the original Escrow Agent hereunder. Upon any resignation or removal of the
Escrow Agent under this Section 8, all amounts paid or to be paid to the Escrow
Agent shall be prorated from the date of this Agreement through the effective
date of such resignation or removal.
9. General.
9.1 This Escrow Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware without regard to its
provisions concerning conflict of laws.
9.2 The parties hereto agree to execute and deliver any and all
papers and documents necessary to complete the actions contemplated hereby.
9.3 This Escrow Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective legal representatives,
successors and permitted assigns of the parties hereto. Nothing in this Escrow
Agreement, express or implied, is intended to confer on any person other than
the parties hereto, or their respective successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Escrow
Agreement. Neither Neose nor Cytel shall assign or otherwise transfer this
Escrow Agreement or any right, benefit or obligation hereunder (whether by
operation of law or otherwise) to any other person without the prior written
consent of the other party; provided, however, that (i) Neose may (a) assign or
otherwise transfer any or all of its rights and interests hereunder to one or
more of its Affiliates,
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and (b) designate one or more of its Affiliates to perform its obligations
hereunder (in any or all of which cases Neose nonetheless shall remain
responsible for the performance of all of its obligations hereunder), and (ii)
either party may assign or otherwise transfer any or all of its rights and
interests hereunder in connection with the sale of all or substantially all of
its assets or business, whether by way of merger, sale of stock, sale of assets
or other similar transaction (in any or all of which cases such party
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
9.4 This Agreement may be amended, modified or supplemented only by a
written instrument duly executed by each of the parties hereto. This Agreement
(including the Exhibits hereto), together with the Asset Purchase Agreement,
sets forth the entire agreement and understanding of the parties hereto with
respect to the matters set forth herein and supersedes all prior agreements or
understandings, oral or written, between the parties regarding those matters.
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9.5 This Escrow Agreement may be executed in two or more
counterparts, each of which shall be binding as the date first written above,
all of which shall constitute one and the same instrument. Each such copy shall
be deemed an original, and it shall not be necessary in making proof of this
Escrow Agreement to produce or account for more than one such counterpart.
IN WITNESS WHEREOF, the parties hereto have duly executed this Escrow
Agreement as of the date first written above.
NEOSE TECHNOLOGIES, INC.
By: /s/ P. Xxxxxxxx Xxxx
-------------------------------------
P. Xxxxxxxx Xxxx
President and Chief Financial Officer
CYTEL CORPORATION
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Xxxxxx Xxxxxxxx
President and Chief Executive Officer
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION,
as Escrow Agent
By: /s/ Xxxxxx X. Xxxxxxxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxxxxxxx
Assistant Vice President
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EXHIBIT A
Section 3.1.1
[***] and all [***] of any of the foregoing, and any [***] from any of the
foregoing.
Section 3.1.2
[***] any related [***] of any of the foregoing, and any [***] from any of the
foregoing.
* Confidential Treatment Requested
