EXHIBIT 2.2
INDEMNIFICATION, ESCROW AND PARTICIPATION AGREEMENT
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INDEMNIFICATION, ESCROW AND PARTICIPATION AGREEMENT dated as of September
21, 2000 (this "Agreement"), by and among Esperion Therapeutics, Inc., a
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Delaware corporation ("Esperion"), the stockholders of Talaria party hereto (the
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"Talaria Stockholders"), Rock Hill Ventures, Inc., as the representative of the
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Talaria Stockholders (the "Talaria Stockholder Representative"), and ▇▇▇▇▇
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Cummis Radin Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, as escrow agent (the "Escrow Agent").
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W I T N E S S E T H:
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WHEREAS, Esperion, Esperion Mergerco, Inc., a Delaware corporation
("Mergerco"), and Talaria Therapeutics, Inc., a Delaware corporation
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("Talaria"), have entered into an Agreement and Plan of Merger and
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Reorganization dated as of the date hereof (the "Merger Agreement"), pursuant to
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which Mergerco will be merged with and into Talaria, which, as the surviving
corporation (sometimes hereinafter called the "Surviving Corporation"), will
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become a wholly-owned subsidiary of Esperion; and
WHEREAS, one of the conditions precedent to the parties' respective
obligations under the Merger Agreement is that Esperion, Mergerco, the Talaria
Stockholders, the Talaria Stockholder Representative and the Escrow Agent shall
have executed and delivered this Agreement; and
WHEREAS, the purpose of this Agreement is to provide for certain
indemnification obligations of Esperion and the Talaria Stockholders and for the
escrow of certain of the consideration to be received by the Talaria
Stockholders pursuant to the Merger Agreement as security for the
indemnification obligations of the Talaria Stockholders.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Certain Capitalized Terms. Capitalized terms not otherwise
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defined herein shall have the meanings assigned to such terms in the Merger
Agreement.
2. Indemnification.
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(a) The Talaria Stockholders hereby agree to jointly and severally
indemnify, defend, protect and hold harmless each of Esperion and the Surviving
Corporation and their respective affiliates and all officers, directors,
stockholders, members, employees, agents, representatives, heirs, successors and
assigns of Esperion and the Surviving Corporation and their respective
affiliates (each an "Esperion Indemnified Party" and collectively, the "Esperion
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Indemnified Parties") at all times from and against any and all claims, damages,
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actions, suits, proceedings, demands, assessments, adjustments, Taxes, costs and
expenses (including specifically, but without limitation, reasonable attorneys'
fees and expenses of investigation) (collectively "Damages") incurred by any
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Esperion Indemnified Party as a result of, relating to or arising out of (a) any
breach of any representation or warranty of Talaria or any Talaria Stockholder
set forth in the Merger Agreement or any other Transaction Document or in any
certificate or other document delivered in connection with any of the foregoing;
(b) any breach or nonfulfillment by Talaria or by any Talaria Stockholder, or
any noncompliance by Talaria or by an Talaria Stockholder with, any covenant,
agreement or obligation contained in the Merger Agreement or
any other Transaction Document or in any certificate or other document delivered
in connection with any of the foregoing; or (c) any claim by a stockholder or
former stockholder of Talaria or any other person or entity seeking to assert,
or based upon: (i) ownership or rights of ownership to any shares of capital
stock of Talaria; (ii) any rights of the stockholder (other than the right to
receive the Merger consideration pursuant to the Merger Agreement or appraisal
rights under the applicable provisions of the Delaware Corporation Law or any
other rights arising under the Merger Agreement or any Transaction Document),
including any option, preemptive rights, or rights to notice or to vote; (iii)
any rights under the Charter or bylaws of Talaria; or (iv) any claim that his,
her or its shares were wrongfully repurchased by Talaria, regardless of whether
an action, suit or preceding can or has been made against Talaria; provided,
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that Damages hereunder shall be determined taking into account only the actual
damages, deficiency, cost or expense incurred or suffered by reason of the event
or condition giving rise to the obligation to indemnify and shall be net of any
insurance proceeds payable in respect of the claim, damage, action, suit,
proceeding, demand, assessment, adjustment, costs and expenses from and against
which such Esperion Indemnified Party seeks indemnification pursuant hereto.
(b) Esperion hereby agrees to indemnify, defend, protect and hold
harmless each of the Talaria Stockholders and their respective affiliates and
all officers, directors, stockholders, members, employees, agents,
representatives, heirs, successors and assigns of the Talaria Stockholders and
their respective affiliates (each a "Talaria Indemnified Party" and
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collectively, the "Talaria Indemnified Parties") at all times from and against
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all Damages incurred by any Talaria Indemnified Party as a result of or arising
out of (a) any breach of any representation or warranty of Esperion or Mergerco
set forth in the Merger Agreement or any other Transaction Document or in any
certificate or other document delivered in connection with any of the foregoing;
or (b) any breach or nonfulfillment by Esperion or Mergerco, or any
noncompliance by Esperion or Mergerco with, any covenant, agreement or
obligation contained in the Merger Agreement or any other Transaction Document
or in any certificate or other document delivered in connection with any of the
foregoing; provided, that Damages hereunder shall be determined taking into
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account only the actual damages, deficiency, cost or expense incurred or
suffered by reason of the event or condition giving rise to the obligation to
indemnify and shall be net of any insurance proceeds payable in respect of the
claim, damage, action, suit, proceeding, demand, assessment, adjustment, costs
and expenses from and against which such Talaria Indemnified Party seeks
indemnification pursuant hereto.
(c) No person obligated to provide indemnification pursuant to this
Agreement (an "Indemnifying Party") shall be obligated hereunder with respect to
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any Damages unless a person entitled to indemnification with respect thereto (an
"Indemnified Party") delivers to the Indemnifying Party and the Escrow Agent on
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or before the expiration of the applicable survival period or, in the event that
there is no specific survival period, the expiration of the applicable statute
of limitations, a written certificate (a "Claim Certificate") to the effect that
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one or more of the Indemnified Parties has suffered Damages.
(d) No Esperion Indemnified Party shall be entitled to
indemnification hereunder until the aggregate amount of Damages incurred by all
Esperion Indemnified Parties exceeds $50,000, in which event such liability
shall apply to all Damages only to the extent they exceed $50,000. No Talaria
Indemnified Party shall be entitled to indemnification hereunder until the
aggregate amount of Damages incurred by all Talaria Indemnified Parties exceeds
$50,000, in which event such liability shall apply to all Damages only to the
extent they exceed $50,000.
(e) Except in the case of fraud or intentional misconduct, the right
of Esperion to proceed against the escrow provided herein shall be the sole and
exclusive remedy of Esperion against the
Talaria Stockholders for breaches of any representation, warranty or covenant or
otherwise with respect to the transactions contemplated by the Merger Agreement
or this Agreement.
3. Appointment of Talaria Stockholder Representative; Authority.
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(a) By their execution and delivery of this Agreement, each of the
Talaria Stockholders hereby authorizes the Talaria Stockholder Representative to
act as the representative of such stockholder and his or its successors under
this Agreement with the powers and authority herein provided, until a successor
representative is named as hereinafter provided. The Talaria Stockholder
Representative is authorized, on behalf of all of the Talaria Stockholders and
their successors, to review claims of the Esperion Indemnified Parties pursuant
to Section 2(a) hereof and dispute or question the accuracy thereof, to
interpret all the terms and provisions of this Agreement, to compromise and
settle any claims asserted hereunder, to authorize payments to be made with
respect thereto, and to take all such other actions which this Agreement
provides may be taken by the Talaria Stockholder Representative. All actions
taken by the Talaria Stockholder Representative hereunder shall be binding upon
the Talaria Stockholders and their successors as if expressly confirmed and
ratified in writing by each of them. The Talaria Stockholder Representative is
hereby authorized to retain counsel to assist it in matters relating to this
Agreement and its obligations hereunder, including the dispute of any claims of
the Indemnified Parties. Esperion and the Surviving Corporation and all other
Esperion Indemnified Parties shall have the right to rely on any action or
inaction of the Talaria Stockholder Representative without any independent
inquiry or investigation.
(b) The appointment of the Talaria Stockholder Representative
hereunder is irrevocable and any action taken by the Talaria Stockholder
Representative pursuant to the authority granted in this Agreement shall be
effective and absolutely binding on each Talaria Stockholder notwithstanding any
contrary action of or direction from a Talaria Stockholder. The death or
incapacity of any Talaria Stockholder shall not terminate the prior authority
and agency of the Representative.
(c) Each Talaria Stockholder hereby authorizes the Talaria Stockholder
Representative, on behalf and in the name of such Talaria Stockholder, to take
all actions necessary and/or appropriate to effectuate the transactions
contemplated by this Agreement and the Merger Agreement including, without
limitation, the following:
(i) To receive all consideration payable by Esperion to the
Talaria Stockholders under the Merger Agreement and to remit such consideration
to the Talaria Stockholders in accordance with their respective interests;
provided, however, that the Talaria Stockholder Representative shall have the
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right, in its discretion to deduct from such consideration, in accordance with
the respective interests of the Talaria Stockholders, all amounts as shall be
necessary to pay any expenses incurred the Talaria Stockholder Representative in
accordance with this Agreement.
(ii) To receive all notices or documents given or to be given to
such Talaria Stockholder by Esperion pursuant to this Agreement or in connection
herewith and to receive and accept service of legal process in connection with
any suit or other proceeding arising under this Agreement. The Talaria
Stockholder Representative promptly shall forward a copy of such notice or
process to each Talaria Stockholder.
(iii) To take all action necessary to comply with all applicable
laws in connection with the transactions contemplated by this Agreement
including, without limitation, the making of such filings and/or disclosures as
shall be necessary and/or appropriate.
(iv) To take any action in respect of any claim against Esperion
or any of the Talaria Stockholders under this Agreement including the payment or
settlement of any claim as the Talaria Stockholder Representative shall deem
appropriate.
(v) To take such action on behalf of such Talaria Stockholder
as the Talaria Stockholder Representative may deem appropriate in respect of:
(1) Waiving any inaccuracies in the representations and
warranties of Esperion contained in this Agreement or in any documents delivered
by Esperion pursuant hereto;
(2) Waiving the fulfillment of any of the conditions
precedent to the Talaria Stockholders' obligations hereunder;
(3) Taking such other action as the Talaria Stockholder
Representative is authorized to take under this Agreement; and
(4) All such other matters as the Talaria Stockholder
Representative may deem necessary or appropriate to consummate this Agreement
and the transactions contemplated hereby.
4. Third Party Claims; Notice and Opportunity to Settle.
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(a) Promptly after the receipt by an Indemnified Party of any
claim or demand (including but not limited to, notice of any action, suit or
proceeding) by any third party against an Indemnified Party which gives rise to
a right to indemnification for Damages hereunder, the Indemnified Party shall
promptly give the Indemnifying Parties written notice of such claim or demand
and, in each case, the basis therefor and such other information as the
Indemnifying Parties may reasonably request, all as part of the Claim
Certificate referred to in Section 2(c) hereof. The Talaria Stockholder
Representative shall act on behalf of all of the Talaria Stockholders and the
other Talaria Indemnified Parties with respect to all matters contained in this
Section 4.
(b) The Indemnifying Parties shall have the right (without
prejudice to the right of the Indemnified Parties to participate at their own
expense through counsel of their own choosing), to defend against such claim or
demand at their own expense and through counsel of their own choosing and to
control such defense if they give written notice to the Indemnified Parties of
their intention to do so within thirty (30) days of the receipt of the notice
referred to in Section 4(a) above. If the Indemnifying Parties shall decline to
assume the defense of such claim or demand, the Indemnified Parties shall have
the right to assume, at the Indemnifying Parties' expense, the control of such
defense.
(c) The Indemnifying Parties shall have the right to elect to
settle any claim or demand concerning which they have exercised their right to
defend and control the defense, subject to the consent of the Talaria
Stockholder Representative in the case of the Talaria Indemnified Parties and
Esperion in the case of the Esperion Indemnified Parties, which consent shall
not be unreasonably withheld or delayed.
5. Escrow Fund. Subject to the terms hereof, at the Effective Time
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Esperion shall deliver to the Escrow Agent, for the account of the Talaria
Stockholders, in accordance with their respective interests as
shown in Part I of Schedule 1 hereto, [****] shares of the Esperion Common to
be distributed by Esperion to the Talaria Stockholders pursuant to Section
2.3(b)(i) of the Merger Agreement (collectively, the "Initial Escrow").
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Additionally, if and when Esperion is obligated to make payment to the Talaria
Stockholders of any Prepaid Royalty Payment or Royalty pursuant to Section
5.4(a) or 5.4(b) of the Merger Agreement, respectively, Esperion shall deliver
to the Escrow Agent, for the account of the Talaria Stockholders, in accordance
with their respective interests as shown in Part II of Schedule 1 hereto, [****]
(***) of the amount of such Prepaid Royalty Payment or Royalty, as the
case may be (collectively, the "Additional Deposits" and, together with the
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Initial Escrow, the "Escrow Fund"). Subject to the requirements of Section
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5.4(b)(viii) of the Merger Agreement, the delivery by Esperion to the Escrow
Agent of the Additional Deposits, if any, shall be made by Esperion to the
Escrow Agent in cash, shares of Esperion Common or a combination thereof, in
Esperion's sole discretion. For this purpose, each share of Esperion Common
shall be valued at its Fair Market Value at the time the applicable Prepaid
Royalty Payment is achieved or the Royalty becomes due and payable, as the case
may be. All of the Escrow Fund shall be held by the Escrow Agent to secure the
Talaria Stockholders' obligations hereunder and shall not, except as expressly
provided herein, be disposed of by the Escrow Agent. To the extent the Escrow
Fund consists of shares of Esperion Common (the "Escrow Shares"), such Escrow
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Shares shall be registered in the names of the individual Talaria Stockholders,
in accordance with their respective interests as shown on Schedule 1 hereto. The
Talaria Stockholders shall have the right to vote the Escrow Fund in accordance
with their respective interests. The respective interests of the Talaria
Stockholders in the Escrow Fund shall not be transferable or assignable.
Simultaneously with the execution and delivery of this Agreement, each of the
Talaria Stockholders shall deliver to the Escrow Agent stock powers endorsed in
blank for use by the Escrow Agent in furtherance of the transactions
contemplated by this Agreement.
6. Claims for Indemnification. With respect to any claim by an
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Esperion Indemnified Party pursuant to Section 2(a) above:
(a) Subject to Section 6(b) below, upon receipt of any Claim
Certificate, the Escrow Agent shall on that date which is thirty (30) business
days after delivery to the Talaria Stockholder Representative and the Escrow
Agent of such Claim Certificate, pay to Esperion to the extent that the Escrow
Fund is sufficient for such purpose, the amount set forth in such Claim
Certificate.
(b) Unless, within thirty (30) business days after delivery to the
Talaria Stockholder Representative of any Claim Certificate, the Talaria
Stockholder Representative gives written notice to Esperion, the Surviving
Corporation and the Escrow Agent that it disputes the claim for indemnity
asserted in such Claim Certificate (a "Claim Denial"), such Claim Certificate
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shall constitute full authority to the Escrow Agent to take the action provided
for in the preceding paragraph and shall be conclusive on all parties hereto,
including the Talaria Stockholders, with respect to such claim for indemnity
hereunder by any of the Esperion Indemnification Parties.
(c) If the Talaria Stockholder Representative delivers a Claim
Denial to Esperion, the Surviving Corporation and the Escrow Agent, the Escrow
Agent shall not make any payment to Esperion or the Surviving Corporation
pursuant to this Section 6 until (i) it receives the written consent of the
Talaria Stockholder Representative, or (ii) there is a final determination of a
court or competent jurisdiction with respect to the dispute at issue (a "Final
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Determination") in favor of the Esperion Indemnified Parties adjudging that the
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Talaria Stockholders are liable for an amount claimed thereunder; in which case
the Escrow Agent shall pay the amount of the Escrow Fund authorized pursuant
thereto.
7. Distribution of Escrow Fund.
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(a) On the first business day immediately following the second
anniversary of the Effective Time (the "Release Date"), the Escrow Agent shall
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distribute to the Talaria Stockholder Representative, on behalf of the Talaria
Stockholders, the balance of the remaining Escrow Fund then held by the Escrow
Agent pursuant to this Agreement, less the aggregate amount of such Escrow Fund
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(if any) as is then subject to a pending Claim Certificate (whether or not a
Claim Denial has been given with respect thereto). To the extent any portion of
the Escrow Fund shall remain in escrow pursuant to the preceding sentence, the
form of such remaining Escrow Fund (cash, shares of Esperion Common or a
combination thereof) shall be in Esperion's sole discretion. For this purpose,
each share of Esperion Common shall be valued at [****] (**) of its Fair Market
Value as of the Release Date. Any part of the Escrow Fund that is not
distributed to the Talaria Stockholder Representative on the Release Date
because it is subject to a pending Claim Certificate shall be distributed (y) in
accordance with the written agreement of Esperion and the Talaria Stockholder
Representative, or (z) pursuant to a Final Determination.
(b) Subject to Section 5.4(b)(viii) of the Merger Agreement, all
payments to Esperion or any other Esperion Indemnified Parties from the Escrow
Fund in respect of Damages, if any, shall be made in the form of cash, shares of
Esperion Common or a combination thereof, in Esperion's sole discretion. For
this purpose, each share of Esperion Common shall be valued at its Fair Market
Value at the time the Escrow Agent is required to release such shares of
Esperion Common to Esperion or the other Esperion Indemnified Parties.
(c) In connection with any distribution of shares of Esperion Common
held in the Escrow Fund, the Escrow Agent shall execute and deliver any
instruments of assignment necessary to provide the recipient of such securities
with legal and valid title thereto and record ownership thereof. With respect
to such transfers of record ownership by the Escrow Agent, Esperion will take
all actions in connection with the issuance and re-issuance of certificates for
such shares of Esperion Common and the registration and re-registration of such
shares of Esperion Common on Esperion's books as may be necessary or appropriate
to reflect the record ownership of such securities contemplated by this
Agreement.
(d) All interest or dividends on any of the Escrow Fund and any
shares of capital stock distributed on account of any of the Escrow Shares shall
become part of the Escrow Fund and shall be subject to the provisions of this
Agreement.
8. Authority and Liability of the Escrow Agent.
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(a) The parties hereto acknowledge and agree that the Escrow Agent
(i) shall not be responsible for any of the agreements referred to herein but
shall be obligated only for the performance of such duties as are specifically
set forth in this Agreement as being the responsibility of the Escrow Agent;
(ii) shall not be obligated to take any legal or other action hereunder which
might be in its judgment involve any expense or liability unless it shall be
protected in acting or refraining from acting upon any written notice,
instruction, instrument, statement, request waiver, consent or other document
(collectively "Documents") (A) signed by any person required or entitled to
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execute and to deliver to the Escrow Agent any such Documents, not only as to
such Documents' due execution and the validity and effectiveness of the
provisions thereof but also as to the accuracy of the information contained
therein and (B) believed by it to be genuine and to have been signed or
presented by the proper person; and (iv) may
retain and consult counsel satisfactory to it, including in-house counsel, and
the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion of such counsel. Esperion shall
repay or reimburse the Escrow Agent for any reasonable fees, expenses and
disbursements of such counsel.
(b) Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to be taken
by it or any of its directors, officers or employees hereunder except in the
case of gross negligence or willful misconduct.
(c) Neither the Escrow Agent nor any of its members, directors,
officers, shareholders, managers, employees, agents or representatives shall be
liable to anyone for any action taken or omitted to be taken by it or any of the
foregoing except in the case of willful misconduct. Esperion and the Talaria
Stockholders, jointly and severally, covenant and agree to indemnify, defend,
protect and hold harmless the Escrow Agent, its affiliates and all officers,
directors, stockholders, members, employees, agents, representatives, heirs,
successors and assigns of the Escrow Agent and its affiliates from and against
any and all Damages arising out of or in connection with this Agreement or with
the administration of the Escrow Agent's duties hereunder, including but not
limited to legal fees and other costs and expenses of defending or preparing to
defend against any claim or liability relating to this Agreement, unless such
loss, liability or expense shall be caused by the liable for indirect, special
or consequential damages. The indemnification provided in this Section 8(c)
shall survive the resignation or removal of the Escrow Agent and the termination
of this Agreement.
(d) Each of the parties hereto agrees that, in the event a dispute or
conflict hereafter arises among the parties, such party shall not, on the basis
of an alleged conflict of interest with respect to such representation, object
to the representation of Esperion and/or the Surviving Corporation, by ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A. with respect to such matter. The
provisions of this Section 8(d) shall survive the resignation or removal of the
Escrow Agent and the termination of this Agreement.
(e) The Escrow Agent shall act only in accordance with the express
provisions of this Agreement or pursuant to an order of a court of competent
jurisdiction or the joint written instructions of Esperion and the Talaria
Stockholder Representative.
9. Liability of the Talaria Stockholder Representative. The Talaria
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Stockholder Representative shall have no duties or responsibilities except those
expressly set forth in this Agreement. The Talaria Stockholder Representative
may act upon any instrument or other writing believed by it in good faith to be
genuine and to be signed or presented by the proper person and shall not be
liable in connection with the performance by it of its duties pursuant to the
provisions of this Agreement or any action omitted to be taken by it in
connection herewith, except for its own willful misconduct or gross negligence.
The Talaria Stockholder Representative may retain counsel and act with respect
to this Agreement and its obligations hereunder on the advice of such counsel.
The Talaria Stockholder Representative shall be, and hereby is, jointly and
severally indemnified and held harmless by the Talaria Stockholders from all
losses, liabilities, damages, penalties, judgments, suits, costs and expenses
(including legal fees) which it may incur in connection with this Agreement.
10. Fees and Expenses. All expenses incurred by the Talaria Stockholder
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Representative in connection with this Agreement and its obligations hereunder,
including legal fees and expenses of
counsel retained by the Talaria Stockholder Representative pursuant to the terms
hereof, shall be paid by the Talaria Stockholders in accordance with their
respective interests from the Escrow Fund.
11. Participation. Each Talaria Stockholder hereby represents and
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warrants to and agrees with Esperion and Mergerco as follows:
(i) Such Talaria Stockholder is the owner of outstanding shares
of Talaria capital stock set forth on Schedule 2 hereto opposite such Talaria
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Stockholder's name, free and clear of all Liens, and collectively the Talaria
Stockholders are the holders of all of the outstanding capital stock of Talaria;
(ii) Such Talaria Stockholder has had an opportunity to review
the Merger Agreement, including all exhibits thereto, in substantially the form
agreed to by the parties;
(iii) Such Talaria Stockholder understands and agrees that all
Esperion Common issuable pursuant to the Merger Agreement (the "Merger Shares")
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may not be sold in open stock market transactions (which exclude privately
negotiated transactions) until February 10, 2001 (the "Holding Period") and that
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certificates representing the Merger Shares shall be legended accordingly;
(iv) Such Talaria Stockholder understands and agrees that the
Merger Shares have not been and will not be registered under the U.S. Securities
Act of 1933, as amended (the "1933 Act") or the securities laws of any state of
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the United States, except as contemplated by the Merger Agreement;
(v) Such Talaria Stockholder understands and agrees that the
issuance of the Merger Shares will be made in transactions not involving any
public offering within the meaning of the 1933 Act, and that, accordingly, such
shares are "restricted securities" within the meaning of Rule 144 under the 1933
Act ("Rule 144"), and therefore the Merger Shares may not be offered or sold by
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the undersigned, directly or indirectly, in the United States without
registration under United States federal and state securities laws or an
exemption therefrom;
(vi) Unless the Merger Shares are registered under the 1933 Act,
such Talaria Stockholder has not acquired the Merger Shares as a result of any
general solicitation or general advertising, including advertisements, articles,
notices or other communications published in any newspaper, magazine or similar
media or broadcast over radio or television, or any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising;
(vii) Unless the Merger Shares are registered under the 1933 Act,
such Talaria Stockholder will not offer, sell, pledge or otherwise transfer any
of the Merger shares except (i) outside the United States in accordance with
Rule 904 of Regulation S under the 1933 Act; (ii) in another transaction
otherwise exempt from registration under the 1933 Act in compliance with Rule
144 or Rule 145 under the 1933 Act, if applicable, and in compliance with any
applicable state securities laws of the United States; or (iii) pursuant to
another applicable exemption from such registration and applicable state
securities laws as evidenced by an opinion of counsel of recognized standing in
form reasonably satisfactory to Esperion; it being understood and acknowledged
by the Talaria Stockholder that Esperion is not obligated to file and has no
present intention of filing with the U.S. Securities and Exchange
Commission or with any state securities administrator any registration statement
in respect of resales of any of the Merger Shares in the United States, except
as contemplated by the Merger Agreement;
(viii) All certificates representing the Merger Shares, as well as
all certificates issued in exchange for or in substitution of the foregoing
securities, will bear the legends set forth in Section 2.3(f) of the Merger
Agreement; and
(ix) Esperion has the right to instruct its transfer agent not to
record a transfer by any person in the United States without first being
notified by Esperion that it is reasonably satisfied that such transfer is
exempt from or not subject to registration under the 1933 Act and any applicable
state securities laws.
(b) Covenants of Talaria Stockholders. Each Talaria Stockholder
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hereby covenants and agrees with Esperion and Mergerco to vote all shares of
Talaria capital stock now owned or controlled, or hereafter acquired or
controlled by such Talaria Stockholder, IN FAVOR OF the consummation of the
Merger and the transactions contemplated by the Merger Agreement (subject to the
conditions contained therein), whether such vote is taken at a meeting of
stockholders pursuant to due notice or by circulation of a written consent of
stockholders in lieu of such meeting.
(c) Restrictions Prior to the Merger. Each Talaria Stockholder
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hereby covenants and agrees with Esperion and Mergerco that prior to the
Effective Time such Talaria Stockholder shall not, directly or indirectly
(including through his, her or its agents), enter into any agreement, solicit or
entertain offers from, discuss or negotiate with or in any manner consider any
proposal of any other person relating to the acquisition, by any means, of
Talaria, the business of Talaria or any or all of the shares of Talaria owned or
controlled by such Talaria Stockholder; provided that the foregoing covenant and
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agreement shall terminate upon the termination of the Merger Agreement. If a
Talaria Stockholder shall receive any unsolicited communication, offer or
proposal relating to the acquisition of Talaria, the business of Talaria or any
or all of the shares of capital stock of Talaria owned or controlled by such
Talaria Stockholder, such communication, offer or proposal shall be
unqualifiedly refused and such Talaria Stockholder shall advise Esperion and
Mergerco of such receipt and refusal in reasonable detail (including a copy of
any written communication, offer or proposal).
(d) Transfer Restrictions Following the Merger. Each Talaria
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Stockholder hereby covenants and agrees with Esperion that, until the expiration
of the Holding Period, such Talaria Stockholder shall not trade in open stock
market transactions (which exclude privately negotiated transactions) any of
such Talaria Stockholder's Merger Shares.
12. Notices. All notices and other communications under this Agreement
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shall be in writing and shall be delivered by hand or overnight courier service,
mailed or sent by telex, as follows:
If to Esperion:
Esperion Therapeutics, Inc.
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇ Cummis Radin Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
If to the Talaria Stockholders or the Talaria Stockholder
Representative:
Rock Hill Ventures, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
Duane, Morris & Heckscher LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
If to the Escrow Agent:
▇▇▇▇▇ Cummis Radin Tischman ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
only be effective upon receipt. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt (or rejection of delivery) if
delivered by hand or overnight courier service or sent by telex, or on the date
five (5) business days after dispatch by certified or registered mail if mailed,
in each case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 12 or in accordance with the latest unrevised direction
from such party given in accordance with this Section 12.
13. Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware.
14. Binding Effect. This Agreement and all action taken hereunder in
--------------
accordance with its terms shall be binding upon and insure to the benefit of the
parties hereto and their respective successors, assigns, heirs, executors,
administrators and legal representatives.
15. Successor Talaria Stockholder Representative. The Talaria Stockholder
--------------------------------------------
Representative, or any successor to it hereafter appointed, may resign and shall
be discharged of its duties hereunder upon the appointment of a successor
Talaria Stockholder Representative as herein provided. In case of such
resignation, or inability to act of the Talaria Stockholder Representative, a
successor shall be named by unanimous consent of the remaining Talaria
Stockholders, or, if no replacement is so appointed within forty five (45) days
of such resignation, or inability to act, by written agreement of Talaria
Stockholders whose respective interests in the Escrow Fund exceed a majority of
the total thereof. Each such successor Talaria Stockholder Representative shall
have all the power, authority, rights and privileges hereby conferred upon the
original Talaria Stockholder Representative, and the term "Talaria Stockholder
Representative" as used herein shall be deemed to include a successor Talaria
Stockholder Representative.
16. Resignation/Removal of Escrow Agent. The Escrow Agent may at any time
-----------------------------------
resign as Escrow Agent hereunder by giving thirty (30) days' prior written
notice of resignation to Esperion, Talaria, the Surviving Corporation and the
Talaria Stockholder Representative. Prior to the effective date of the
resignation as specified in such notice, Esperion will issue to the Escrow Agent
a written instruction authorizing redelivery of the amounts held by it hereunder
to a bank or trust company that it selects as the successor escrow agent,
subject to the consent of the Talaria Stockholder Representative, which consent
shall not be unreasonably withheld or delayed. Such bank or trust company
selected as successor escrow agent shall have capital, surplus and undivided
profits in excess of $50,000,000. If, however, Esperion shall fail to name a
successor escrow agent within twenty (20) days after the notice of resignation
from the Escrow Agent, the Talaria Stockholder Representative shall be entitled
to name such successor escrow agent. If no successor escrow agent is named by
Esperion or the Talaria Stockholder Representative, the Escrow Agent may apply
to a court of competent jurisdiction for appointment of a successor escrow agent
at the expense of Esperion and the Talaria Stockholders. Any successor escrow
agent shall execute and deliver to the parties hereto a counterpart of this
Agreement.
17. Confirmation of Escrow Agent's Appointment. Esperion, the Surviving
------------------------------------------
Corporation, the Talaria Stockholder Representative and the Talaria Stockholders
hereby confirm the appointment of the Escrow Agent under this Agreement, and the
Escrow Agent hereby accepts such appointment.
18. Entire Agreement. This Agreement contains the entire agreement among
----------------
the parties hereto with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings, whether written or oral,
among the parties hereto with respect to the subject matter of this Agreement.
19. Severability. The invalidity or unenforceability of a particular
------------
provision of this Agreement shall not effect any other provisions, and this
Agreement shall be construed in all respects as though such invalid or
unenforceable provisions were omitted.
19. Amendments. This Agreement may only be amended or modified by a
----------
written instrument executed by Esperion, Talaria Stockholders then holding a
majority-in-interest of the Escrow Fund, and the Escrow Agent.
20. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Indemnification,
Escrow and Participation Agreement to be signed as of the date first above
written.
ESPERION THERAPEUTICS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
ESPERION MERGERCO, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
TALARIA STOCKHOLDERS:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustees Under
Agreement of Trust Dated 8/26/68
For ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustees Under
Agreement of Trust Dated 8/26/68
For ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustees Under
Agreement of Trust Dated 8/26/68
For ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustees Under
Agreement of Trust Dated 8/26/68
For Juliet ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇,
Trustees of the ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust U/A dated November 18, 1985
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Trustee
HCC Investments, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Reverse Transport Licensing and Consulting, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
ROCK HILL VENTURES, INC., as Talaria Stockholder
Representative
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ CUMMIS RADIN TISHCMAN ▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.A., as
Escrow Agent
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Schedule 1
----------
I. Issuance of Shares at the Effective Time of the Merger:
Shares To Be Escrowed
Name of Talaria Stockholder Delivered Shares Total
----------------------------- ------------ -------- ------
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
[****] [****] [****] [****]
------ ------ ------
[****] [****] [****]
II. Consideration To Be Paid After the Effective Time:
Percent of
Name Consideration
---- -------------
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
[****] [****]%
---------
100.0000%
________________________
1. If any consideration is paid in a combination of cash and shares, the cash
and shares shall be allocable pro rata to each Talaria Stockholder.
2. The shares are to be issued in the names of the respective Talaria
Stockholders as shown in this Schedule.
3. All consideration payable to the Talaria Stockholders shall be delivered to
Rock Hill Ventures, Inc. (attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) as the Talaria
Stockholder Representative.
September 21, 2000
Schedule 2
----------
I. Holders of Common Stock
-----------------------------
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
II. Holders of Series B Convertible Preferred Stock
----------------------------------------------------
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares
[****] [****] shares