Document:

exv10w2

 

Exhibit
10.2

Execution Copy

ESCROW AGREEMENT

     THIS ESCROW AGREEMENT (“Agreement”) is made and entered into as of the 16th day of
August, 2007, by and among JPMorgan Chase Bank, N.A., a national banking association (the
“Escrow Agent”), Emisphere Technologies, Inc., a Delaware corporation (the
“Company”), and ThinkEquity Partners LLC (the “Placement Agent”).

Background

     WHEREAS, the Company proposes to sell an aggregate of up to 1,544,638 shares of its common
stock, par value $0.01 per share, and warrants to purchase up to 308,927 shares of its common stock
(collectively, the “Securities”), for an aggregate of up to $5,846,454.83, all as described
in the subscription agreements (collectively, the “Subscription Agreements”) dated the date
hereof between the Company and each purchaser named therein (each a “Purchaser,” and
collectively, the “Purchasers”);

     WHEREAS, the Securities are being offered by the Company to purchasers identified by the
Placement Agent, pursuant to the terms of the Subscription Agreements and the Placement Agency
Agreement (the “Placement Agency Agreement”) dated August 16, 2007 between the Company and
the Placement Agent;

     WHEREAS, unless the transactions contemplated by the Subscription Agreements and the Placement
Agency Agreement have been abandoned pursuant to the terms thereof, or unless otherwise agreed to
by the Company and the Placement Agent, the closing of the purchase and sale of the Securities
shall take place on August 22, 2007 (the “Closing Date”);

     WHEREAS, with respect to certain subscription payments received from the Purchasers, the
Company and the Placement Agent propose to establish an escrow account with the Escrow Agent in the
name of the Company at 4 New York Plaza, 21st Floor, New York, New York 10004; and

     WHEREAS, the Escrow Agent is willing to receive and disburse the proceeds from the offering of
the Securities in accordance herewith. The Escrow Agent’s duties are limited to this Agreement and
shall only act in accordance with the terms and conditions contained herein.

Terms

     NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1. Deposit of Escrowed Funds. Each Purchaser for the Securities identified on
Exhibit A attached hereto shall wire or deposit with the Escrow Agent immediately available
funds of such Purchaser delivered in payment for the Securities such Purchaser agrees to purchase
(the “Escrowed Funds”). Upon receipt of funds from each Purchaser, the Escrow Agent shall
credit such funds to a non-interest bearing account held by the Escrow Agent. The wire
instructions to which each Purchaser shall wire or deposit such funds are set forth in the notice
provision for the Escrow Agent in Section 9 to this Agreement.

 

 

     2. Acceptance. Upon receipt of the Escrowed Funds, the Escrow Agent shall acknowledge
such receipt in writing (which may be via electronic mail) to the Company and the Placement Agent
and shall hold and disburse the same pursuant to the terms and conditions of this Agreement. The
Escrow Agent shall have no duty to verify whether the amounts and property delivered comport with
the requirements of any other agreement.

     3. List of Purchasers. Exhibit A hereto contains the name of, the address of,
the number of Securities subscribed for by, and the subscription amount to be delivered to the
Escrow Agent on behalf of, each Purchaser whose funds are being deposited. The Escrow Agent shall
notify the Placement Agent and the Company of any discrepancy between the subscription amounts set
forth on any list delivered pursuant to this Section 3 and the subscription amounts received by the
Escrow Agent. The Escrow Agent is authorized to augment such list to reflect the actual
subscription amounts received and the release of any subscription amounts pursuant to Section 4.

     4. Withdrawal of Subscription Amounts.

          (a) If the Escrow Agent shall receive a notice, substantially in the form of Exhibit B
hereto (an “Offering Termination Notice”) from the Company, the Escrow Agent shall promptly
after receipt of such Offering Termination Notice, send to each Purchaser listed on the list held
by the Escrow Agent pursuant to Section 3 whose total subscription amount shall not have been
released pursuant to paragraph (b) or (c) of this Section 4, in the manner set forth in paragraph
(d) of this Section 4, a check to the order of such Purchaser in the amount of the remaining
subscription amount held by the Escrow Agent on behalf of such Purchaser as set forth on such list
held by the Escrow Agent. The Escrow Agent shall notify the Company and the Placement Agent of the
distribution of such funds to the Purchasers.

          (b) In the event that (i) the Securities have been subscribed for and funds in respect thereof
shall have been deposited with the Escrow Agent in accordance with this Agreement and (ii) no
Offering Termination Notice shall have been delivered to the Escrow Agent, the Company and the
Placement Agent shall deliver to the Escrow Agent a joint notice, not more than three (3) business
days prior to the Closing Date, substantially in the form of Exhibit C hereto (a
“Closing Notice”), designating the proceeds which are to be distributed on such Closing
Date, and identifying the Purchasers and the number of Securities to be sold to each thereof on
such Closing Date. The Escrow Agent, after receipt of such Closing Notice, on such Closing Date,
shall pay, in federal or other immediately available funds and otherwise in the manner specified in
such Closing Notice, an amount equal to the aggregate of the subscription amounts paid by the
Purchasers identified in such Closing Notice for the Securities to be sold on such Closing Date as
set forth on the list held by the Escrow Agent pursuant to Section 3.

          (c) If at any time and from time to time prior to the release of any Purchaser’s total
subscription amount pursuant to paragraph (a) or (b) of this Section 4 from escrow, the Company
shall deliver to the Escrow Agent a notice, substantially in the form of Exhibit D hereto
(a “Subscription Termination Notice”), to the effect that any or all of the subscriptions
of such Purchaser have been rejected by the Company (a “Rejected Subscription”), the Escrow
Agent, promptly after receipt of such Subscription Termination Notice, shall promptly send to such
Purchaser, in the manner set forth in paragraph (d) of this Section 4, a check to the order of such
Purchaser in the amount of such Rejected Subscription amount.

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          (d) For the purposes of this Section 4, any check that the Escrow Agent shall be required to
send to any Purchaser shall be sent to such Purchaser by first class mail, postage prepaid, at such
Purchaser’s address furnished to the Escrow Agent pursuant to Section 3.

     5. Escrow Agent; Duties and Liabilities.

          (a) It is expressly understood and agreed by the parties that (i) the duties of the Escrow
Agent, as herein specifically provided, are purely ministerial in nature; (ii) the Escrow Agent
shall not have any duty to deposit the Escrowed Funds except as provided herein, (iii) the Escrow
Agent shall not be responsible or liable in any manner whatsoever for, or have any duty to inquire
into, the sufficiency, correctness, genuineness or validity of the notices it receives hereunder,
or the identity, authority or rights of any of the parties; (iv) the Escrow Agent shall have no
duties or responsibilities in connection with the Escrowed Funds, other than those specifically set
forth in this Agreement; (v) the Escrow Agent shall not incur any liability in acting upon any
signature, written notice, request, waiver, consent, receipt, or any other paper or document
believed by the Escrow Agent to be genuine; (vi) the Escrow Agent may assume that any person
purporting to have authority to give notices on behalf of any of the parties in accordance with the
provisions hereof has been duly authorized to do so; (vii) the Escrow Agent shall incur no
liability whatsoever except for such resulting from its bad faith, willful misconduct or gross
negligence; and (viii) upon the Escrow Agent’s performance of its obligations under Section 4
hereof, the Escrow Agent shall be relieved of all liability, responsibility and obligation with
respect to the Escrowed Funds or arising out of or under this Agreement.

          (b) The Escrow Agent shall not be under any obligation to take any legal action in connection
with this Agreement or towards its enforcement or performance, or to appear in, prosecute or defend
any action or legal proceeding, or to file any return, or pay or withhold any income or other tax
payable with respect to any Escrowed Funds or the disbursement thereof, any payment of or in
respect of which shall constitute a Loss under Section 6 below, and the Placement Agent and the
Company agree to provide to the Escrow Agent such information and documentation as the Escrow Agent
may reasonably request in connection therewith.

          (c) In the event of any disagreement relating to the Escrowed Funds or the disbursement
thereof resulting in adverse claims or demands being made in connection with the Escrowed Funds or
in the event that the Escrow Agent is in doubt as to what action it should take hereunder, the
Escrow Agent shall be entitled to retain the Escrowed Funds, but only to the extent of the Escrowed
Funds in controversy, until the Escrow Agent shall have received a final non-appealable order of a
court of competent jurisdiction directing delivery of the Escrowed Funds, in which event the Escrow
Agent shall disburse the Escrowed Funds in accordance with such order. Any court order shall be
accompanied by a legal opinion by counsel for the presenting party satisfactory to the Escrow Agent
to the effect that the order is final and non-appealable. The Escrow Agent shall act on such court
order and legal opinion without further question. If a proceeding for such determination is not
begun and diligently continued, the Escrow Agent may make an ex parte application, or bring any
appropriate action, for leave to deposit the Escrowed Funds in the Supreme Court of the State of
New York, County of New York seeking such determination or such declaratory relief as the Escrow
Agent shall deem reasonably necessary under the circumstances, and the parties each hereby
irrevocably consent to the entering of such an ex parte order pursuant to all applicable laws,
rules and procedures of the State of New York and such court. The Escrow Agent shall be reimbursed
by the Company, for all of the Escrow Agent’s reasonable costs and

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expenses of such action or proceeding, including, without limitation, reasonable attorneys’
fees and disbursements.

          (d) The Escrow Agent does not have any interest in the Escrowed Funds deposited hereunder and
is serving as escrow agent only and having only possession thereof. Section 5(c), Section 5(d) and
Section 6 shall survive any termination of this Agreement or the resignation or removal of the
Escrow Agent in accordance with Section 5(h) below except with regards to Section 7 in the event
the Escrow Agent is not paid its annual administration fee.

          (e) None of the provisions of this Agreement shall require the Escrow Agent to expend or risk
its own funds or otherwise to incur any liability, financial or otherwise, in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it
against such risk or liability is not assured to it.

          (f) The Escrow Agent may consult with independent counsel and the advice or any opinion of
counsel shall be full and complete authorization and protection in respect of any action taken or
omitted by it hereunder in good faith and in accordance with such advice or opinion of counsel.

          (g) The Escrow Agent may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or through agents, attorneys, custodians or nominees appointed with due
care, and shall not be responsible for any willful misconduct or gross negligence on the part of
any agent, attorney, custodian or nominee so appointed.

          (h) The Escrow Agent may at any time resign by giving ten (10) days written notice of
resignation to the Company and the Placement Agent. Upon receiving such notice of resignation, the
Company and the Placement Agent shall promptly appoint a successor and, upon the acceptance by the
successor of such appointment, release the resigning Escrow Agent from its obligations hereunder
(other than obligations and liabilities arising by reason of the prior bad faith, willful
misconduct or gross negligence of the Escrow Agent) by written instrument, a copy of which
instrument shall be delivered to the resigning Escrow Agent and the successor. If no successor
shall have been so appointed and have accepted appointment within forty-five (45) days after the
giving of such notice of resignation, the resigning Escrow Agent may petition any court of
competent jurisdiction for the appointment of a successor.

          The Company and the Placement Agent, by issuing a joint written instruction to the Escrow
Agent, shall have the right to terminate the appointment of the Escrow Agent. Such joint written
instruction shall specify the date upon which such termination shall take effect. Thereafter, the
Escrow Agent shall have no further obligation hereunder (other than obligations and liabilities
arising by reason of the prior bad faith, willful misconduct or gross negligence of the Escrow
Agent) except to hold the Escrowed Funds as depository. The Company and the Placement Agent agree
that in the event of such termination, they will cooperate with each other to jointly appoint a
banking corporation, trust company or attorney as successor Escrow Agent. The Escrow Agent shall
refrain from taking any action until receiving written instructions jointly signed by the Company
and the Placement Agent designating the successor Escrow Agent.

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          (i) Any partnership or other similar entity into which the Escrow Agent may be merged or
converted or with which it may be consolidated, or any partnership, corporation or other similar
entity resulting from any merger, conversion or consolidation to which the Escrow Agent shall be a
party, or any partnership, corporation or other similar entity succeeding to the business of the
Escrow Agent shall be the successor of the Escrow Agent hereunder without the execution or filing
of any paper with any party hereto or any further act on the part of any of the parties hereto
except where an instrument of transfer or assignment is required by law to effect such succession,
anything herein to the contrary notwithstanding.

          (j) No printed or other matter in any language which mentions the Escrow Agent’s name or the
rights, powers, or duties of the Escrow Agent shall be issued by the other parties hereto or on
such parties’ behalf unless the Escrow Agent shall first have given its specific written consent
thereto. The Escrow Agent hereby consents to the use of its name and the reference to the escrow
arrangement in the Subscription Agreements and the Placement Agency Agreement.

     6. Indemnification of Escrow Agent. The Company hereby agrees to indemnify and hold
the Escrow Agent harmless from any and all liabilities, obligations, damages, losses, claims,
encumbrances, costs or expenses (including reasonable attorneys’ fees and expenses) (any or all of
the foregoing herein referred to as a “Loss”) arising hereunder or under or with respect to
the Escrowed Funds, except for Losses resulting from the bad faith, willful misconduct or gross
negligence of the Escrow Agent. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Escrow Agent be liable for special, indirect or consequential loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been
advised of the likelihood of such loss or damage and regardless of the form of action.

          The parties hereto acknowledge that the foregoing indemnities shall survive the resignation or
the removal of the Escrow Agent or the termination of this Agreement.

     7. Fees. The Company agrees to (a) pay the Escrow Agent the annual administration fee
of $2,500 per annum without pro-ration for partial years, upon execution of this Agreement and from
time to time thereafter reasonable compensation for the services to be rendered hereunder, which
unless otherwise agreed in writing shall be as described in Schedule 1 attached hereto, and
(b) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances,
including reasonable attorney’s fees and expenses, incurred or made by it in connection with the
preparation, execution, performance, delivery, modification and termination of this Agreement.

     8. Security Procedures. In the event funds transfer instructions are given (other
than in writing at the time of execution of this Agreement, as indicated in Schedule 2
attached hereto), whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to
seek confirmation of such instructions by telephone call-back to the person or persons designated
on Schedule 3 hereto, and the Escrow Agent may rely upon the confirmation of anyone
purporting to be the person or persons so designated. The individuals authorized to give and
confirm funds transfer instructions may be changed only in a writing actually received and
acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized
representatives identified in Schedule 3, the Escrow Agent is hereby authorized to seek
confirmation of such instructions by telephone call-back to any one or more of your executive
officers (“Executive Officers”), as the Escrow Agent may select. Such Executive Officer
shall deliver to the Escrow Agent a fully executed Incumbency Certificate, and the Escrow Agent may
rely

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upon the confirmation of anyone purporting to be any such officer. The Escrow Agent and the
beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar
identifying numbers provided by the Company or the Placement Agent to identify (a) the beneficiary,
(b) the beneficiary’s bank, or (c) an intermediary bank. The Escrow Agent may apply any of the
escrowed funds for any payment order it executes using any such identifying number, even when its
use may result in a person other than the beneficiary being paid, or the transfer of funds to a
bank other than the beneficiary’s bank or an intermediary bank designated. The parties to this
Agreement acknowledge that these security procedures are commercially reasonable. All funds
transfer instructions must include the signature of the person(s) authorizing said funds transfer,
which shall be an individual who is designated to give funds transfer instructions as designated in
Schedule 3.

     9. Notices. Any notice or demand desired or required to be given hereunder shall be
in writing and deemed given when sent by facsimile transmission with receipt confirmed to the
telephone number below and addressed as follows:

          a. If to the Escrow Agent, to:

JPMorgan Chase Bank, N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004

Facsimile: (212) 623-6168

Attention: Glenn Sturman / Florence Hanley

with wire transfers to:

JPMorgan Chase Bank

ABA # 021000021

Account No.: 304954950

Account Name: Emisphere / ThinkEquity

          b. If to the Company, to:

Emisphere Technologies, Inc.

765 Old Saw Mill River Road

Tarrytown, New York 10591

Facsimile: (914) 593-8253

Attention: Chief Executive Officer

with copies to:

Brown Rudnick Berlack Israels LLP

One Financial Center

Boston, Massachusetts 02111

Facsimile: (617) 289-0413

Attention: Timothy C. Maguire, Esq.

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          c. If to the Placement Agent, to:

ThinkEquity Partners LLC

31 West 52nd Street

Suite 1700

New York, New York 10019

Facsimile: (212) 468-7044

Attention: Mark Spiegel

with copies to:

Lowenstein Sandler PC

1251 Avenue of the Americas

New York, NY 10020

Facsimile: (973) 422-6873

Attention: Michael D. Maline, Esq.

or to such other address or account information as hereafter shall be designated in writing by the
applicable party to the other parties hereto. Notwithstanding the above, in the case of
communications delivered to the Escrow Agent pursuant to this section, such communications shall be
deemed to have been given on the date received by the Escrow Agent. In the event that the Escrow
Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use
such other means of communication as the Escrow Agent deems appropriate. For the purposes of this
section, “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which
the Escrow Agent located at the notice address set forth in this section is authorized or required
by law or executive order to remain closed.

     10. Entire Agreement. This Agreement and any exhibits and schedules hereto constitute
the entire agreement between the parties hereto pertaining to the subject matters hereof, and
supersede all negotiations, preliminary agreements and all prior and contemporaneous discussions
and understandings of the parties in connection with the subject matters hereof. Any exhibits and
schedules hereto are hereby incorporated into and made a part of this Agreement.

     11. Amendments. No amendment, waiver, change or modification of any of the terms,
provisions or conditions of this Agreement shall be effective unless made in writing and signed by
the parties or by their duly authorized agents. Waiver of any provision of this Agreement shall
not be deemed a waiver of future compliance therewith and such provision shall remain in full force
and effect.

     12. Severability. In the event any provision of this Agreement is held invalid,
illegal or unenforceable, in whole or in part, the remaining provisions of this Agreement shall not
be affected thereby and shall continue to be valid and enforceable.

     13. Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of New York without regard to any applicable principles of conflicts of law.

     14. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF

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NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS
AND APPELLATE COURTS FROM ANY THEREOF. EACH PARTY HERETO HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF TO SUCH PARTY BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, RETURN
RECEIPT REQUESTED, TO SUCH PARTY, AT ITS ADDRESS SPECIFIED HEREIN. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.

     15. Headings and Captions. The titles or captions of paragraphs in this Agreement are
provided for convenience of reference only, and shall not be considered a part hereof for purposes
of interpreting or applying this Agreement, and such titles or captions do not define, limit,
extend, explain or describe the scope or extent of this Agreement or any of its terms or
conditions.

     16. Gender and Number. Words and phrases herein shall be construed as in the singular
or plural number and as masculine, feminine or neuter gender, according to the context.

     17. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all of which together shall constitute one and the
same instrument. Facsimiles may also be deemed originals for the purpose of this Agreement.

     18. Binding Effect on Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective legal representatives,
heirs, successors and assigns, and the subscribers of the Securities. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties hereto (and their
respective legal representatives, heirs, successors and assigns), any rights, remedies, obligations
or liabilities.

     19. Account Opening Information. To help the government fight the funding of
terrorism and money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an account. When an
account is opened, the Escrow Agent will ask for information that will allow it to identify
relevant parties. Upon execution of this Agreement, each party shall provide the Escrow Agent with
a fully executed W-8 or W-9 Internal Revenue Service form, which shall include their Tax
Identification Number (TIN) as assigned by the Internal Revenue Service.

     20. Force Majeure. In the event that any party or the Escrow Agent is unable to
perform its obligations under the terms of this Agreement because of acts of God, strikes,
equipment or transmission failure or damage reasonably beyond its control, or other cause
reasonably beyond its control, the Escrow Agent shall not be liable for damages to the other
parties for any damages resulting from such failure to perform otherwise from such causes.
Performance under this Agreement shall resume when the Escrow Agent is able to perform
substantially.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 	 	 	 	 	 
	ESCROW AGENT:	 	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A.	 	 	 	EMISPHERE TECHNOLOGIES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	PLACEMENT AGENT:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	THINKEQUITY PARTNERS LLC	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 

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EXHIBIT A

SUMMARY OF ESCROWED FUNDS TO BE RECEIVED

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of	 	 	Number of	 	 	Subscription	 	 	Receipt Confirmed	 
	Name and Address of Purchaser	 	Shares	 	 	Warrants	 	 	Amount	 	 	by Escrow Agent	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT B

FORM OF OFFERING TERMINATION NOTICE

                     ___, 2007

JPMorgan Chase Bank, N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004

Attention: Florence Hanley / Glenn Sturman

Dear                     :

          Pursuant to Section 4(a) of the Escrow Agreement dated as of August 16, 2007 (the “Escrow
Agreement”) by and among ThinkEquity Partners LLC, Emisphere Technologies, Inc. (the
“Company”) and you, the Company hereby notifies you of the termination of the offering of
the Securities (as that term is defined in the Escrow Agreement) and directs you to make payments
to the Purchasers as provided for in Section 4(a) of the Escrow Agreement.

	 	 	 	 	 
	 	Very truly yours,

EMISPHERE TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

EXHIBIT C

FORM OF CLOSING NOTICE

                    , 2007

JPMorgan Chase Bank, N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004

Attention: Florence Hanley / Glenn Sturman

Dear                     :

          Pursuant to Section 4(b) of the Escrow Agreement dated as of August 16, 2007 (the “Escrow
Agreement”), by and among ThinkEquity Partners LLC (the “Placement Agent”), Emisphere
Technologies, Inc. (the “Company”) and you, the Company hereby certifies that it has
received subscriptions for the Securities (as that term is defined in the Escrow Agreement) and
the Company will sell and deliver Securities to the Purchasers thereof at a closing to be held on
August 22, 2007 (the “Closing Date”). The names of the Purchasers concerned, the number of
Securities subscribed for by each of such Purchasers and the related subscription amounts are set
forth on Schedule A annexed hereto.

          Please accept these instructions as standing instructions for the closing to be held on the
Closing Date. The parties hereto certify that their instructions may be transmitted to you via
facsimile.

          We hereby request that the aggregate subscription amount be paid as follows:

1. To the Company, $                    , pursuant to the following wire transfer instructions:

Bank: JPMorgan Chase Bank, N.A.

ABA number: 021000021

Account Number: 323-871-895

Account Name: Emisphere Technologies

2. To ThinkEquity Partners LLC, $                    , pursuant to the following wire transfer instructions:

Bank: First Republic Bank

ABA number: 321-081-669

Account Number: 995-0081-6089

Account Name: ThinkEquity Partners LLC

Reference: ThinkEquity Partners LLC, Main Operating Account

3. To JPMorgan Chase Bank, N.A. as Escrow Agent, $2,500.00, pursuant to the following wire
transfer instructions:

Bank: JPMorgan Chase Bank, N.A.

ABA #: 021000021

Account Number:304865893

Account Name: Escrow Pending

Ref: Escrow Agent Fees

Attn: Glenn Sturman

 

 

4. To Lowenstein Sandler PC, $                    , pursuant to the following wire transfer instructions:

Bank Name: PNC Bank New Jersey

ABA#: 031207607

Account #: 8019327261

Account Name: Lowenstein Sandler PC

                    Attorney Business Account

Ref: ThinkEquity 18922-5

     These instructions may be executed in counterparts, each of which shall be deemed to be an
original, and all of which together shall constitute one and the same instrument.

[Signatures on following page]

C-2

 

	 	 	 	 	 
	 	Very truly yours,

EMISPHERE TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THINKEQUITY PARTNERS LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

C-3

 

SCHEDULE A

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number	 	 	Number of	 	 	Subscription	 
	Name of Purchaser	 	of Shares	 	 	Warrants	 	 	Amount	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

 

 

EXHIBIT D

FORM OF SUBSCRIPTION TERMINATION NOTICE

                    , 2007

JPMorgan Chase Bank, N.A.

Escrow Services

4 New York Plaza, 21st Floor

New York, NY 10004

Attention: Florence Hanley / Glenn Sturman

Dear                     :

          Pursuant to Section 4(c) of the Escrow Agreement dated as of August 16, 2007 (the “Escrow
Agreement”), by and among ThinkEquity Partners LLC, Emisphere Technologies, Inc. (the
“Company”) and you, the Company hereby notifies you that the following subscription(s) have
been rejected:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Dollar Amount of
	Name of	 	Number of Subscribed	 	Number of Subscribed	 	REJECTED
	PURCHASER	 	SHARES REJECTED	 	WARRANTS REJECTED	 	SUBSCRIPTION
	 
	 	 	 	 	 	 

	 	 	 	 	 
	 	Very truly yours,

EMISPHERE TECHNOLOGIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

D-1

 

SCHEDULE 1

$2,500 per annum without pro-ration for partial years.

 

 

SCHEDULE 2

Name of Company: Emisphere Technologies, Inc.

Wiring Instructions:

Bank Name: JPMorgan Chase Bank, N.A.

ABA/Routing Number: 021000021

Account Number: 323-871-895

Account Name: Emisphere Technologies

Name of Placement Agent:

ThinkEquity Partners LLC

Wiring Instructions:

Bank Name: First Republic Bank

ABA/Routing Number: 321-081-669

Account Number: 995-0081-6089

Account Name: ThinkEquity Partners LLC

Ref: ThinkEquity Partners LLC, Main Operating Account

Name of Attorney: Lowenstein Sandler, P.C.

Wiring Instructions:

Bank Name: PNC Bank New Jersey

ABA/Routing Number: 031207607

Account Number: 8019327261

Account Name: Lowenstein Sandler PC

Ref: ThinkEquity 18922-5

 

 

SCHEDULE 3

Telephone Number(s) for Person(s) 

Designated to Give and Confirm Funds Transfer Instructions

If to Company:

	 	 	 	 	 	 	 
	 	 	Name	 	Telephone Number	 	Signature Specimen
	 
	 	 	 	 	 	 
	1.

	 	William T. Rumble
	 	(914) 785-4717	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 

If to Placement Agent:

	 	 	 	 	 	 	 
	 	 	Name	 	Telephone Number	 	Signature Specimen
	 
	 	 	 	 	 	 
	1.

	 	Ted Mitchell
	 	(415) 249-6388	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	2.
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	3.EXHIBIT 10-15
	 

	 
		[Execution Copy]
	 

	 
		 
	 

	 
		CEI FOSSIL NOTE
	 

	 
		 
	 

	 
			
				
				  $383,130,939.05
				

			 	
				
				  October 24, 2005
				

			 

 

	 
		FIRSTENERGY GENERATION CORP., an Ohio
		corporation (the “Corporation”), for value received, hereby promises
		to pay to the order of THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, an Ohio
		corporation, its successors and assigns (“Payee”), the principal
		amount of Three Hundred Eighty-Three Million One Hundred Thirty Thousand Nine
		Hundred Thirty-Nine Dollars and Five Cents, ($383,130,939.05) and to pay
		interest (calculated on the basis of a 365-day year and charged on the basis of
		the actual number of days elapsed) on the unpaid balance of such principal
		amount at a rate per annum of 5.99% from the due date thereof until the
		obligation of the Corporation with respect to the payment thereof shall be
		discharged. 
	 

	 
		Interest on the outstanding principal amount
		of this Note shall be payable semi-annually in arrears, commencing on May 1,
		2006, and on the 1st day of each May and November thereafter (the
		“Interest Payment Dates”). The principal balance of this Note,
		together with all accrued and unpaid interest thereon, on shall be due and
		payable on November 1, 2025.
	 

	 
		Payments of principal and interest hereunder
		may be made either (a) in such coin or currency of the United States of America
		as at the time of payment shall be legal tender therein for the payment of
		public and private debts or (b) by way of the Corporation’s assumption of
		Payee’s liabilities and obligations under certain Pollution Control
		Revenue Bonds of the Payee as set forth and described in the Purchase Agreement
		referred to in Section 1 below.
	 

	 
		SECTION 1. The Note; Definitions. As used herein, the term “Note” refers to
		this Secured Promissory Note of the Corporation, dated the date hereof, and
		originally issued, executed and delivered by the Corporation in the principal
		amount of Three Hundred Eighty-Three Million One Hundred Thirty Thousand Nine
		Hundred Thirty-Nine Dollars and Five Cents, ($383,130,939.05) pursuant to and
		subject to the terms of the Purchase and Sale Agreement dated as of May 18,
		2005 (the “Purchase Agreement”), between the Corporation and Payee.
		Unless the context otherwise requires, the term “holder” is used
		herein to mean the person named as Payee herein. Capitalized terms used in this
		Note and not otherwise defined herein shall have the meanings set forth in the
		Purchase Agreement.
	 

	 
		SECTION 2. Security. This
		Note is secured pursuant to the terms and provisions of a Security Agreement of
		even date herewith.
	 

	 
		SECTION 3. Prepayments. The
		Corporation may, at its option and subject to the giving of notice as provided
		herein, at any time prepay this Note, without penalty, in whole or in part upon
		payment of the principal amount thereof, together with interest on the
		principal amount so prepaid accrued to the prepayment date.
	 

	 
		SECTION 4. Amendments and Waivers. This Note may not be modified or amended, except upon
		the written consent of the holder of this Note, and no covenant, agreement or
		condition contained in this Note may be waived (either generally or in a
		particular instance and either retroactively or prospectively) without the
		written consent of the holder of this Note.
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
		 
	 

	 
	 

	 

	 
		SECTION 5. Events of Default.
	 

	 
		(a) Each of the following shall constitute
		an “Event of Default” hereunder:
	 

	 
		(i) Failure by Corporation to pay the
		interest on, or principal of, this Note within thirty (30) days of the date
		due; or
	 

	 
		(ii) Filing by Corporation of a voluntary
		petition in bankruptcy or a voluntary petition or any answer seeking
		arrangement or readjustment of its debts or for any other relief under the
		Bankruptcy Reform Act of 1994, as amended (“Bankruptcy Code”), or
		under any other existing or future federal or state insolvency act or law, or
		any formal written consent to, approval of, or acquiescence in, any such
		petition or proceeding by Corporation, the application by Corporation for, or
		the appointment by consent or acquiescence of, a receiver or trustee of
		Corporation or for all or a substantial part of its property; the making by
		Corporation of an assignment for the benefit of creditors; or
	 

	 
		(iii) Filing of any involuntary petition
		against Corporation in bankruptcy or seeking arrangement or readjustment of its
		debts or for any other relief under the Bankruptcy Code, or under any other
		existing or future federal or state insolvency act or law; or the involuntary
		appointment of a receiver or trustee of Corporation, or for all or a
		substantial part of the property of Corporation; and the continuance of any of
		such events for a period of ninety (90) days undismissed or undischarged;
		or
	 

	 
		(iv) In the event that Debtor shall fail to
		perform any term, covenant or agreement, in any material respect, under the
		Purchase Agreement or the Security Agreement, each of even date herewith,
		between Corporation and Payee or under this Note.
	 

	 
		(b) Upon the occurrence of an Event of
		Default, then, and in such event, Payee may declare this Note to be due and
		payable, whereupon the entire unpaid balance of principal, together with all
		accrued interest thereon, shall become immediately due and payable without
		presentment, demand, protest or other notice of any kind, all of which are
		hereby expressly waived, anything herein to the contrary
		notwithstanding.
	 

	 
		SECTION 6. Extension of Maturity. Should the principal of, or interest on, this Note
		become due and payable on other than a business day, the maturity thereof shall
		be extended to the next succeeding business day, and, in the case of principal,
		or an installment of principal, interest shall be payable thereon at the rate
		per annum herein specified during such extension. The term “business
		day” shall mean any day that is not a Saturday, Sunday or legal holiday in
		the State of Ohio.
	 

	 
		SECTION 7. Governing Law.
		This Note shall be governed by, and construed in accordance with, the laws of
		the State of Ohio without regard to its rules or principles relating to
		conflicts of laws.
	 

	 
		IN WITNESS WHEREOF, the Corporation
		has caused this Note to be executed on the date first set forth above.
	 

	 
		 
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  FIRSTENERGY GENERATION
				  CORP.
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				  By: 
				

			 	
				
				  
 /s/ Charles D. Lasky

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