Agreement of Settlement and Mutual General Release - Biopure Corp., Biopure Associates LP and Credit Francais International SA
AGREEMENT OF SETTLEMENT
AND MUTUAL GENERAL RELEASE
This Agreement is made December 19, 1996 by and among, on the one hand,
Biopure Corporation ("Biopure") and Biopure Associates Limited Partnership
("BALP") (collectively called "the Biopure Parties" herein), and, on the other
hand, Credit Francais International, S.A. ("CFI").
Whereas, CFI, the Biopure Parties, together with Peter Fisher and Balfour
Holdings, Inc. (together referred to as "Fisher"), are parties in consolidated
actions in the United States District Court for the District of Massachusetts,
Civil Actions No. 90-11775-T and No. 90-12688-T (the "Actions") in which CFI has
sought, among other things, the restitution of funds that were fraudulently
obtained from it by William Trainor and others, and in which Fisher has sought,
among other things, a share or portion of this restitution pursuant to an
alleged joint venture ("the Fisher Claims") and in which the Biopure Parties
have sought, among other things, the restitution of certain license rights and
equity interests allegedly fraudulently obtained from them by William Trainor
and others; and
Whereas, the Biopure Parties, on the one hand, and CFI, on the other,
under the circumstances giving rise to these Actions, and subject to the terms
and conditions set forth below, now wish to confirm the rescission of the
agreements described in paragraphs 2 and 3 below and provide restitution to the
undersigned parties to the extent feasible by way of a compromise and settlement
of all claims that have been or might have been brought by either against the
other;
Now therefore, the Biopure Parties and CFI hereby agree as follows:
1. Biopure and BALP agree to pay CFI three hundred thousand dollars
($300,000) (the "License Payment") on December 20, 1996 payable in cash.
2. In consideration for the License Payments and upon receipt of the same,
CFI shall, by operation of this agreement, relinquish and assign to BALP and
Biopure any and all right to product licenses for hemoglobin-based products in
any country regardless and notwithstanding the extent or percentage of such
right, under any and all agreements and
<PAGE> 2
purported agreements, written or oral, executed or in draft form, originally
between any Biopure Party and any party or affiliate of a party included in the
term "Other Parties" as defined in paragraph 9 below, including without
limitation the Investment Agreement ("Investment Agreement") and the License
Agreement, both of which are dated January 29, 1990, and all other agreements
that are the subject matter of either of the Actions.
3. Upon either the expiration of the time to appeal a decision granting
any motion for summary judgment or comparable motion seeking dismissal of the
Fisher Claims pursuant to Paragraph 8 below without any appeal being filed, or,
if such decision dismissing the Fisher Claims is appealed, upon affirmance of
the dismissal of the Fisher Claims by the United States Court of Appeals for the
First Circuit (hereinafter "Final Dismissal"), and upon receipt by CFI of all
payments by the Biopure Parties pursuant to paragraphs 1, 5(a) and 5(b), CFI
shall, by operation of this agreement, relinquish and assign to BALP and to
Biopure as their interests may appear: any and all right, title and interest of
CFI in and to any limited partnership interest in BALP or equity interest in
Biopure, or any other claim, interest or right that CFI may have as against
Biopure or BALP by reason of the June 28, 1994 Memorandum and Order of Senior
Judge Watson in the Action, including without limitation, a BALP interest
convertible into 350,000 shares of Common Stock, par value $.01 per share, of
Biopure for which $1,250,000 was paid and services were rendered pursuant to a
Purchase and Sale of Limited Partnership Interest Agreement (dated January 29,
1990), the License Agreement and the Investment Agreement by and among Biopure,
BALP and Bio-Vita, Ltd.
4. CFI agrees to dismiss its claims against the Biopure Parties, without
prejudice, within 30 days of the execution of this agreement, and the parties
shall commence no action relating to the subject matter of the Agreement against
any other party to this Agreement so long as there is no breach of this
Agreement, subject to the conditions provided in paragraph 8 below.
<PAGE> 3
5. Biopure and BALP agree to pay to CFI the following (subject to the
provisions of paragraph 8 and the Escrow Agreement referenced therein):
(a) Two million three hundred thousand dollars ($2,300,000) in three
equal installments, plus interest on this amount calculated at the rate of
6% per annum from June 1, 1995 until fully paid (the "Buy Back Payments"),
payable in cash as follows (subject to the provisions set forth in
paragraphs 7 and 8 below): (i) $1,081,383.34 on August 31, 1997 (which
amount constitutes one-third of the principal ($766,666.67) and interest
on the $2,300,000 from June 1, 1995 until August 31, 1997); (ii)
$797,333.33 on December 31, 1997 (which amount constitutes one-third of
the principal ($766,666.67) and interest on the outstanding principal from
August 31, 1997 until December 31, 1997); and (iii) $778,166.67 on March
31, 1998 (which amount constitutes one-third of the principal
($766,666.66) and interest on the outstanding principal from December 31,
1997 until March 31, 1998).
(b) Seven hundred and fifty thousand dollars ($750,00O), plus
interest on this amount at the rate of 6% per annum from October 1, 1995,
until fully paid (the "Reimbursement Payments"), payable in cash as
follows (subject to the provisions set forth in paragraphs 6 and 7 below):
(i) $337,500 on August 31, 1997 (which amount constitutes one-third of the
principal ($250,000) and interest on the $750,000 from October 1, 1995
until August 31, 1997); (ii) $260,000 on December 31, 1997 (which amount
constitutes one-third of the principal ($250,000) and interest on the
outstanding principal from August 31, 1997 until December 31, 1997); and
(iii) $253,750 on March 31, 1998 (which amount constitutes one-third of
the principal ($250,000) and interest on the outstanding principal from
December 31, 1997 until March 31, 1998).
(c) If the Biopure Parties fail to make any payment to CFI as
required by paragraphs 1, 5(a) and 5(b) within five calendar days of the
deadlines set forth therein, CFI shall have the option of (1) enforcing
this Agreement; (2) reinstituting the Action; or (3) accepting late
payment of any such payment, in which case interest shall accrue at 6%
from the date payment was due until the day before payment is sent to CFI
by the Biopure Parties.
3
<PAGE> 4
6. Upon execution of this agreement, Biopure, by operation of this
Agreement, shall assign to CFI all of Biopure's right, title and interest in and
to certain equipment listed in Schedule A located in Guatemala ("the
Equipment"), the purchase price of which was paid by Biopure and not reimbursed
(but as to which Equipment Biopure makes no representations or warranties
whatsoever, including title).
7. Biopure and BALP may prepay the Buy Back Payments and the Reimbursement
Payments without penalty and such prepayments will be accepted by CFI, provided,
however, that any prepayment shall be made only on the first day of the month
and shall consist of the principal and interest for that day as set forth under
the Outstanding Balance Due column of Schedules B and C attached to this
agreement and incorporated herein.
8. The parties agree to file motions for summary judgment or comparable
motions ("the Motions") seeking dismissal of the Fisher Claims as soon as
practicable after this Agreement is executed. In the event that Final Dismissal
does not occur by the time the first Buy Back Payment or Reimbursement Payment
comes due, then Biopure and BALP shall make those payments as they become due to
an escrow account established by the parties to this agreement pursuant to a
separately executed Escrow Agreement substantially in the form attached to this
agreement as Exhibit 1 and incorporated herein as part of this agreement. Within
seven (7) days of Final Dismissal of the Fisher Claims, the parties shall cause
the funds held pursuant to the Escrow Agreement to be paid to CFI in accordance
with paragraph 6 of the Escrow Agreement. In the event the Fisher Claims are not
dismissed as a result of the filing of the Motions, or a judgment dismissing the
Fisher Claims is reversed, remanded or vacated by the United States Court of
Appeals for the First Circuit, then (i) the parties shall cause the funds to be
returned to the Biopure Parties in accordance with paragraph 7 of the Escrow
Agreement; (ii) the Biopure Parties shall not have any obligation to pay CFI any
amount under this Agreement, except as provided under paragraph 1 above; and
(iii) CFI may seek leave to reinstate its claims asserted in the Actions or to
file a new action based on any claim raised in them, and the Biopure Parties
hereby waive any opposition or challenge to the reinstatement or new filing on
grounds the statute of limitations has run, laches, or on any other grounds
relating to the passage of time or the voluntary dismissal of the action
pursuant to this Agreement. The parties further agree that the payment of the
License Payment and the assignment of
4
<PAGE> 5
the License rights to the Biopure Parties are final notwithstanding any further
adjudication of the Fisher Claims, any subsequent breach of this Agreement or
declaration that it is invalid in any other respect.
9. The Biopure Parties and Carl W. Rausch ("Rausch"), on their own
respective behalfs and on behalf of their respective executors, administrators,
legal or personal representatives, affiliates, successors or assigns, on the one
hand, and CFI, on its own behalf, and on behalf of its affiliates, successors
and assigns, on the other hand, do hereby mutually and reciprocally remise,
release and forever discharge each other and the respective administrators,
executors, legal or personal representatives, successors and assigns of each
other, of and from all, and all manner of, actions, causes of action, suits,
debts, dues, sums of money, accounts, reckonings, covenants, contracts,
controversies, agreements, promises, commissions, damages, judgments, extents,
executions, claims, third-party claims and demands whatsoever in law or in
equity that they or either of them ever had, now has, or that they or their
administrators, executors, legal or personal representatives, successors and
assigns hereafter can or may have, by reason of any act, omission, matter, cause
or thing whatsoever occurring at any time prior to the execution of these
presents, whether known or unknown, suspected or unsuspected, foreseen or
unforeseen, liquidated or unliquidated, matured or unmatured, including, without
limitation, all claims which are or could be asserted by them in the Actions.
This reciprocal general release is specifically conditioned upon and does not
become effective until CFI has actually received final payment of all the
License Payment, the Buy Back Payments, and the Reimbursement Payments
(collectively the "Settlement Payments"). Upon CFI's actual receipt of the
Settlement Payments, its voluntary dismissal of its claims in the Actions will
be with prejudice. This release does not affect any rights or relationships
among the Biopure Parties inter sese. This reciprocal general release shall not
limit the respective rights of the parties to enforce the terms of this
Agreement, nor shall it operate to release or impair any claim that CFI or any
of the Biopure Parties or Rausch may have against any party to either of the
Actions (including Fisher or Ideal Environmental Systems, Inc., which has sought
to assert claims in the Actions) who is not a party to this Agreement
(collectively the "Other Parties"). If this release among the present parties
would have that unintended effect, as to that claim or claims this release shall
be and operate as a covenant not to sue only.
5
<PAGE> 6
10. No person other than the parties signatory to this Agreement shall be
deemed a beneficiary of this Agreement with the sole exception of Rausch who the
parties agree is a party to and a beneficiary of the mutual general release set
forth in paragraph 9.
11. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts applicable to agreements made in and wholly to be
performed within the Commonwealth of Massachusetts. The United States District
Court for the District of Massachusetts shall have exclusive jurisdiction over
any dispute or enforcement action arising out of this agreement or the Escrow
Agreement, and each of the parties hereto submits to the jurisdiction of that
Court for that purpose.
12. Any notice given hereunder shall be given in writing as follows:
Any Biopure Party:
c/o Carl W. Rausch
Biopure Corporation
11 Hurley Street
Cambridge, MA 02141
CFI:
c/o Conway Von Girsewald
970 Andora Avenue
Miami, FL 33146
13. The parties represent that this instrument represents the entire
agreement of the parties with regard to the subject matter hereof, that there
are no other representations or warranties regarding the subject matter of this
instrument except those expressly set forth in this instrument, and that this
instrument supersedes all prior agreements and understandings, express or
implied, written or oral. Any modification of this agreement may be made only by
an instrument in writing signed by the parties hereto or their duly authorized
representatives.
14. The parties warrant that they have read this agreement, that they
intend to be legally bound by it, that they have sought and obtained the advice
of their respective counsel in regards to this agreement and that they have the
full right, power, authority, and capacity to enter into and execute this
agreement.
6
<PAGE> 7
15. Nothing contained in this agreement or any other agreement or
instrument delivered by any party shall constitute an admission that any party
is, or ever was, liable to the other party or has committed or done any of the
acts or things alleged by the other party concerning the matters raised or which
could have been raised in connection with or arising out of the Actions.
16. The parties may disclose this agreement, the Escrow Agreement and
their terms to the Court or to any party in the Actions, and any appeals
therefrom. The parties further agree that this agreement, the Escrow Agreement
and their terms shall be kept confidential by the parties as to all others
except as necessary to persons with a legitimate need to know. CFI agrees that
CFI will not disclose this agreement, the Escrow Agreement or their terms to any
party which participates in, or seeks to participate in, the market for medical
or biological products. However, if CFI determines that it is necessary to make
such disclosure to a party participating in, or seeking to participate in, the
market for medical or biological products, CFI shall seek the consent of the
Biopure Parties and such consent may not be unreasonably withheld.
CREDIT FRANCAIS INTERNATIONAL, S.A.
By: /s/ Giles Duret
----------------------------------
Title: Director
BIOPURE CORPORATION
By: /s/ Carl W. Rausch
----------------------------------
Title:
BIOPURE ASSOCIATES LIMITED PARTNERSHIP
By: /s/ Carl W. Rausch
----------------------------------
General Partner
7
<PAGE> 8
27-JUL-94 GUATEQIP
SCHEDULE "A"
BIOPURE CORPORATION
LISTING OF GUATEMALA EQUIPMENT
<TABLE>
<CAPTION>
Invoice Purchase
Equipment Description Vendor Serial # Date Price
--------------------- ------ ------- ---- -----
<S> <C> <C> <C> <C>
7 Liter Reactor Appilkon 01/18/90 $3,573
Pump Aries Medical, Inc. Mthly 20,415
503 S 170rpm Drive Bacon Technical Industries 133814 01/26/90 1,394
3 - 640U/R 165rpm Bacon Technical Industries 139303,4&5 01/19/90 8,231
RCS Air Sampler Biotest 7945 01/22/90 1,734
Tube Sealer Engineering & Research Assoc 10901573 01/18/90 2,093
BAL EL PM200 115/230V Fisher Scientific 01/24/90 1,549
Conductivity Meter Fisher Scientific 01/26/90 961
Model 200L w/Probe Met One, Inc. 90023665 01/23/90 8,698
MC2 2 Speed Rotor Wheaton 01/23/90 2,011
2 Clean Rooms Envirco 01/23/90 32,598
Getinge Autoclave Healthstar, Inc. 34702 01/18/90 27,500
286 Computer & Printer Alpine Computer Systems 01/30/90 2,889
Balance A-160 Fisher Scientific 01/30/90 1,579
Balance EL GT8000 Fisher Scientific 02/02/90 1,259
Bath Shaking Small 120V Fisher Scientific 01/30/90 1,496
Glassware Washer Fisher Scientific 01/31/90 2,756
SCD Device Haemonetics 50809 02/06/90 7,933
Olympus Microscope Micro-Tech Optical TBHTU001A 02/07/90 6,272
CFT-75A PD2 230/60 NESLAB Instrument 02/08/90 2,371
PH Meter Radiometer 92R16N23 02/13/90 6,287
PH Meter Radiometer 92R16N23 02/07/90 3,307
Spectra 21 DV VWR Scientific 02/08/90 2,368
MCC/34O Mark II Flow Laboratories 02/09/90 12,812
Centrifuge 120V 50/60HZ Fisher Scientific 01/29/90 7,176
Refurb Demo DDW Marquette Electronics FE4736997605 02/23/90 6,060
Vaponics Still Model #ST1-5 Healthstar, Inc. 048421352-1 01/25/90 9,500
Computer and Word Perfect Alpine Computer Systems 02/28/90 2,982
Power Base Fisher Scientific 02/28/90 987
7010RA Monitor Marquette Leasing Mthly 99,239
Air Sampler New Brunswick Scientific 090119835 02/26/90 3,055
PACS 50 Base Unit Getinge International 02/22/90 2,134
2 8" X 24" TFE Pipe Spools AMSCO Sales 03/13/90 6,520
Filtration Beds Kaloyanides & Assoc. 03/15/90 12,288
Analyzer Stat Profile Nova Biomedical Mthly 2,539
Used LAL - 5000 Assoc. of Cape Cod 91-021 04/26/90 7,672
Tube Sealer Engineering & Research Assoc 10901611 04/26/90 2,106
Data SIM 6000 w/CO Module Marquette Electronics 02/14/90 2,062
----------------------------------------------------------------
TOTAL PURCHASE PRICE OF EQUIPMENT $326,407
================================================================
</TABLE>
<PAGE> 9
SCHEDULE B
Principal: $2,300,000
Interest: 6% from June 1, 1995
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------
Date Principal Required Interest Outstanding Required
Balance Principal Balance Balance for Payment
Installments Prepayment
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
08/31/97 $2,300,000.00 $766,666.67 $314,716.67 $2,614,716.67 $1,081,383.34
09/31/97 $1,533,333.33 $7,666.67 $1,541,000.00
10/31/97 $1,533,333.33 $15,333.33 $1,548,666.66
11/31/97 $1,533,333.33 $23,000.00 $1,556,333.33
12/31/97 $1,533,333.33 $766,666.67 $30,666.67 $1,564,000.00 $797,333.33
01/31/98 $766,666.67 $3,833.33 $770,500.00
02/28/98 $766,666.67 $7,666.67 $774,333.34
03/31/98 $766,666.67 $766,666.67 $11,500.00 $778,166.67 $778,166.67
04/30/98 $0.00 $0.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------
</TABLE>
<PAGE> 10
SCHEDULE C
Principal: $750,000
Interest: 6% from October 1, 1995
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Date Principal Required Interest Outstanding Required
Balance Principal Balance Balance for Payment
Installments Prepayment
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
08/31/97 $750,000.00 $250,000.00 $87,500.00 $837,500.00 $337,500.00
09/31/97 $500,000.00 $2,500.00 $502,500.00
10/31/97 $500,000.00 $5,000.00 $505,000.00
11/31/97 $500,000.00 $7,500.00 $507,500.00
12/31/97 $500,000.00 $250,000.00 $10,000.00 $510,000.00 $260,000.00
01/31/98 $250,000.00 $1,250.00 $251,250.00
02/28/98 $250,000.00 $2,500.00 $252,500.00
03/31/98 $250,000.00 $250,000.00 $3,750.00 $253,750.00 $253,750.00
04/30/98 $0.00 $0.00 $0.00 $0.00 $0.00
--------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
EXHIBIT "1"
ESCROW AGREEMENT
This Escrow Agreement is made and entered into this 19th day of December,
1996 by and between Biopure Corporation and Biopure Associates Limited
Partnership (collectively, "Biopure"), on the one hand, and Credit Francais
International, S.A. ("CFI"), on the other hand.
WHEREAS, Biopure and CFI have entered an Agreement of Settlement and
Mutual General Release dated December 19th, 1996 (the "Agreement") to confirm
the rescission of certain agreements described in paragraphs two and three of
the Agreement and to provide restitution to CFI and Biopure, subject to the
terms and conditions set forth in the Agreement and in this Escrow Agreement,
which is incorporated in and part of the Agreement;
WHEREAS, the Agreement is a compromise and settlement of all claims that
have been or might have been brought by and between Biopure and CFI, including,
without limitation, all claims which were awarded to CFI pursuant to the
Memorandum Opinion and Order of the United States District Court (Watson, J.)
dated June 28, 1994 in the consolidated actions, C.A. No 90-11775-T and C.A. No.
90-12688-T (hereafter, the "Consolidated Action");
WHEREAS, the Agreement provides that certain funds may be paid by Biopure
to CFI, in the amounts and on the dates set forth in paragraph five of the
Agreement, but that those amounts may be paid into escrow and thereafter
released to CFI or Biopure under certain circumstances;
NOW, THEREFORE, Biopure and CFI, in consideration of the mutual promises
contained in the Agreement and in this Escrow Agreement, further covenant and
agree as follows:
<PAGE> 12
2
1. Deposit of Funds Into Escrow. If as of August 31, 1997, and subsequent
dates on which payments become due, as set forth in paragraph five of the
Agreement, any motion to dismiss, motion for summary judgment or motion seeking
to dispose of the claims of Peter Fisher or Balfour Holding Inc. which has been
filed in the Consolidated Action by Biopure and/or CFI as set forth in paragraph
eight of the Agreement (a "Dispositive Motion") has not been ruled upon by the
District Court or, if any Dispositive Motion has been granted by the District
Court but an appeal of the decision granting the Dispositive Motion is pending
in the United States Court of Appeals for the First Circuit (the "First
Circuit"), then Biopure agrees to make the payments set forth in paragraph five
of the Agreement, as they become due, to an escrow account established as set
forth in paragraph two below. If as of August 31, 1997, any Dispositive Motion
has been denied by the District Court or has been granted by the District Court
but vacated, reversed or remanded by the First Circuit on appeal, then Biopure
has no obligation to make any payment whatsoever under the terms of paragraph
five of the Agreement or under the terms of this Escrow Agreement.
2. The Escrow Account. Biopure agrees to open and to make the deposits
required to be made pursuant to paragraph one above, if any, into an escrow
account to be opened and maintained at Fleet Bank, One Federal Street, Boston,
Massachusetts, or another entity mutually agreed to by the parties (the "Escrow
Account"), with Fleet Bank or the other entity mutually agreed to by the parties
acting as escrow agent (the "Escrow Agent"). Biopure and CFI agree that, unless
otherwise directed in a joint written instruction from Biopure and CFI, the
Escrow Agent shall invest the escrowed funds only in the Escrow Agent's
certificates of
<PAGE> 13
3
deposit having maturity fewer than 180 days, or U.S. government securities
having maturity fewer than 180 days.
3. Payment of the Escrow Agent's Fees. At the time the Escrow Account is
opened, Biopure and CFI agree to share in equal amounts any fees or compensation
required by the Escrow Agent for its normal services in connection with opening
the Escrow Account. Furthermore, unless and until a deposit is required to be
made into the Escrow Account pursuant to paragraph one, Biopure and CFI agree to
pay in equal amounts the expenses of the Escrow Agent, if any, incurred in
connection with the administration of the Escrow Account after it is opened. If
any deposit is required to be made into the Escrow Account pursuant to paragraph
one, then Biopure and CFI agree that the expenses of the Escrow Agent, if any,
incurred after that deposit may be paid out of the balance in the Escrow
Account, and any expenses incurred at the time the Escrow Account is closed may
be paid from the balance of the Escrow Account before it is paid to CFI or
Biopure pursuant to paragraphs six or seven below.
4. Modifications or Additional Documentation Required by the Escrow Agent.
Biopure and CFI agree to modify this Escrow Agreement pursuant to paragraph
twelve below in accordance with the reasonable, future requests of the Escrow
Agent, if any, or to execute any additional documentation reasonably required by
the Escrow Agent in connection with the Escrow Account or this Escrow Agreement.
5. Interest and Taxes. Biopure and CFI agree that any interest earned in
the Escrow Account shall be paid along with the principal balance of the Escrow
Account, to Biopure or CFI, as the case may be, in accordance with paragraphs
six or seven below. Biopure and
<PAGE> 14
4
CFI further agree that any taxes required to be paid on any taxable income
earned by the principal in the Escrow Account before the balance of the Escrow
Account is paid to CFI or Biopure pursuant to paragraphs six or seven below may
be reimbursed by the Escrow Agent from the balance of the Escrow Account to the
party which has paid the taxes or, if possible, paid by the Escrow Agent
directly. Biopure and CFI further agree that any taxes required to be paid on
any taxable income earned by the principal in the Escrow Account after the
balance of the Escrow Account has been paid to CFI or Biopure pursuant to
paragraphs six or seven shall be paid by the party to whom the balance of the
Escrow Account has been paid.
6. Release of Escrow Funds to CFI. If at any time after a payment is made
into the Escrow Account by Biopure, the District Court shall grant any
Dispositive Motion and the time to file an appeal of that decision shall have
expired without the filing of such an appeal, or if an appeal of the decision
granting any Dispositive Motion has been filed and the First Circuit shall
affirm the decision of the District Court granting any Dispositive Motion, then
within seven (7) days of the happening of either of those events, Biopure and
CFI shall jointly instruct the Escrow Agent in writing to release the total
balance of the Escrow Account, less any unpaid reasonable compensation of the
Escrow Agent, to CFI. The Escrow Agent shall release those funds to CFI within
ten business days after the joint notice has been received by the Escrow Agent.
If any payments by Biopure under paragraph five of the Agreement have not become
due as of the time the balance of the Escrow Account is paid to CFI pursuant to
the terms of this paragraph, then Biopure agrees to make
<PAGE> 15
5
those payments in the amounts and on the dates set forth in paragraph five of
the Agreement directly to CFI.
7. Release of Escrow Funds to Biopure. If at any time after a payment is
made into the Escrow Account by Biopure, the District Court shall deny any
Dispositive Motion, or if an appeal of the decision granting any Dispositive
Motion has been filed and the First Circuit shall vacate, reverse or remand that
decision, then within seven (7) days of the happening of either of those events,
Biopure and CFI shall jointly instruct the Escrow Agent in writing to release
the total balance of the Escrow Account, less any unpaid reasonable compensation
of the Escrow Agent, to Biopure. The Escrow Agent shall release those funds to
Biopure within ten business days after the joint notice has been received by the
Escrow Agent. Biopure shall then have no further obligation to make any payment
under paragraph five of the Agreement or under this Escrow Agreement.
8. Resolution of Disputes. In the event that a dispute arises between
Biopure and CFI concerning the instructions to be given to the Escrow Agent
pursuant to paragraphs six or seven above, Biopure and CFI agree to submit that
dispute to the United States District Court for the District of Massachusetts
and Biopure and CFI hereby agree to submit to the jurisdiction of that Court to
resolve any such dispute.
9. No Liability of Escrow Agent. The Escrow Agent can incur no liability,
and cannot be sued in any action, in connection with the discharge of its duties
under this Escrow Agreement. The Escrow Agent's duties hereunder are purely
ministerial in nature and the Escrow Agent shall not be liable for any error of
judgment, fact or law, or any act done or omitted to be done. Biopure and CFI
jointly and severally, agree to
<PAGE> 16
indemnify and hold harmless the Escrow Agent from and against any suits,
actions, charges, liabilities, loss, expense, claims, judgments, obligations or
damages, including without limitation, reasonable attorneys' fees arising out of
or in connection with this Escrow Agreement.
10. Governing Law. This Escrow Agreement shall be effective as a sealed
instrument and shall be governed in all respects by and under the laws of the
Commonwealth of Massachusetts.
11. Counterparts. This Escrow Agreement may be executed in one or more
separate counterparts, each of which shall be an original and all of which
together shall constitute one and the same instrument.
12. Modifications. This Escrow Agreement cannot be modified except by the
written agreement of Biopure and CFI.
13. Binding Effect. This Escrow Agreement shall be binding upon the
respective parties hereto and their successors or assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a contract under SEAL in their names and on their behalves, as of
the date set forth above.
BIOPURE CORPORATION CREDIT FRANCAIS
INTERNATIONAL, S.A.
/s/ Carl W. Rausch /s/ Giles Duret
------------------ -------------------
BY: BY: Giles Duret
--------------- ---------------
Director
BIOPURE ASSOCIATES
LIMITED PARTNERSHIP
/s/ Carl W. Rausch
------------------
BY:
---------------