ESCROW AGREEMENT
Exhibit 3
This Escrow Agreement (this “Agreement") is made and entered into as of July 5, 2006,
by and among Sirion Therapeutics, Inc., a North Carolina corporation (“Sirion”), Xxxxxxx
X. Xxxxxx, M.D., as the representative (the “Sytera Stockholders’ Representative”) of the holders
of certain securities of Sytera, Inc., a Delaware corporation (“Sytera”), Xxxxx Xxxxxx as the
representative (the “Sirion Shareholders’ Representative”) of the holders of certain securities of
Sirion and The Bank of New York, a New York banking institution, as escrow agent (the “Escrow
Agent”). Capitalized terms used and not otherwise defined in this Agreement shall have the
meanings given to them in the Merger Agreement (as defined below).
RECITALS
Whereas, simultaneously with the execution and delivery of this Agreement, Sytera,
Sytera II, Inc., a Delaware corporation, Sirion, the Sytera Stockholders’ Representative and the
Sirion Shareholders’ Representative are entering into that certain Agreement and Plan of Merger and
Reorganization (the “Merger Agreement”), dated as of even date herewith, a copy of which is
attached hereto as Exhibit A; and
Whereas, pursuant to Section 4.4 of the Merger Agreement, the holders of Sirion
Common Stock have agreed to deposit into escrow the Sirion Indemnification Escrow Shares in order
to secure certain indemnification rights of the Sytera Indemnitees pursuant to Section 8 of the
Merger Agreement.
Now, Therefore, in consideration of the foregoing and the respective covenants,
agreements and representations and warranties set forth herein, the parties to this Agreement
hereby agree as follows:
AGREEMENT
1. Establishment of Escrow Arrangement.
1.1 Creation of Escrow Fund. At or prior to the Closing, in accordance with Section 4.4 of
the Merger Agreement: (i) the Sirion Shareholders’ Representative shall deliver to the Surviving
Corporation, on behalf of each holder of Sirion Common Stock (each, a “Holder”), all stock
certificates representing the Sirion Common Stock; (ii) the Surviving Corporation shall deliver to
the Escrow Agent, on behalf of each Holder, a certificate, registered in the name of the Escrow
Agent, representing such Holder’s Pro-Rata Sirion Indemnification Escrow Shares to be held as
security for the indemnification rights of the Sytera Indemnitees pursuant to Section 8 of the
Merger Agreement; and (iii) the Surviving Corporation shall deliver to the Sirion Shareholders’
Representative, for further distribution to each Holder, stock certificates representing the Sirion
Common Stock previously held by each Holder less such Holder’s Pro-Rata Sirion Indemnification
Escrow Shares. The Sirion Indemnification Escrow Shares, together with any Derivative Property (as
defined below) delivered to the Escrow Agent pursuant to Section 2.3, shall collectively constitute
the “Escrow Fund”.
1.2 Appointment of Escrow Agent. The Surviving Corporation, the Sytera Stockholders’
Representative and the Sirion Shareholders’ Representative hereby appoint the
Escrow Agent, and the Escrow Agent hereby agrees, to act as escrow agent and to hold,
safeguard and disburse the Escrow Fund pursuant to the terms and conditions of this Agreement.
1.3 Fees and Expenses of Escrow Agent. The Escrow Agent shall be entitled to receive fees and
reimbursements for reasonable documented out-of-pocket expenses incurred in connection with this
Agreement in accordance with the schedule attached hereto as Exhibit B. All such fees and
expenses shall be paid by the Surviving Corporation.
1.4 Successor Escrow Agent. In the event that the Escrow Agent becomes unwilling or unable to
continue as escrow agent under this Agreement, such Escrow Agent (the “Departing Escrow Agent”) may
resign by delivering a written notice of resignation to the Surviving Corporation, the Sytera
Stockholders’ Representative and the Sirion Shareholders’ Representative, which resignation shall
take effect not less than thirty (30) days following the date such notice of resignation is
delivered to the Surviving Corporation, the Sytera Stockholders’ Representative and the Sirion
Shareholders’ Representative. In connection with any such resignation of the Departing Escrow
Agent, the Surviving Corporation, the Sytera Stockholders’ Representative and the Sirion
Shareholders’ Representative shall mutually appoint a successor Escrow Agent (the “Successor Escrow
Agent”) within fifteen (15) days following their receipt of the Departing Escrow Agent’s notice of
resignation; provided, however, that if the Surviving Corporation, the Sytera
Stockholders’ Representative and the Sirion Shareholders’ Representative fail to appoint a
Successor Escrow Agent prior to the end of such fifteen (15) day period, the Departing Escrow Agent
shall be entitled to apply to any court of competent jurisdiction for the appointment of a
Successor Escrow Agent. Any Successor Escrow Agent appointed pursuant to this Section 1.4 shall
execute and deliver to the Surviving Corporation, the Sytera Stockholders’ Representative, the
Sirion Shareholders’ Representative and the Departing Escrow Agent an instrument accepting such
appointment, at which time the Successor Escrow Agent shall, without any further action, be
automatically vested with all the estates, property rights, powers, duties and responsibilities of
the Departing Escrow Agent as if such Successor Escrow Agent were originally named as Escrow Agent
herein. The Departing Escrow Agent shall act in accordance with written instructions from the
Surviving Corporation, the Sytera Stockholders’ Representative and the Sirion Shareholders’
Representative as to the transfer of the Escrow Fund to any Successor Escrow Agent.
2. Escrow Fund.
2.1 Trust Fund. The Escrow Fund shall be held as a trust fund and shall not be subject to any
lien, attachment, trustee process or any other judicial process of any creditor of any Holder or of
any other party hereto. Subject to Section 4.4, the Escrow Agent shall hold and safeguard the
Escrow Fund until the earlier of its release in full pursuant to the terms of this Agreement or the
Expiration Date. Notwithstanding the preceding portion of this Section 2.1, if the Escrow Fund
shall be attached, garnished or levied upon pursuant to judicial process, or the delivery of funds
held in the Escrow Fund shall be stayed or enjoined by any court order, or any court order or
judgment shall be made or entered into affecting the Escrow Fund or any part thereof, the Escrow
Agent is hereby expressly authorized to obey and comply with such judicial process, court order or
judgment. In the event the Escrow Agent so complies, it shall not be liable to any party hereto or
to any other Person by reason of such compliance, notwithstanding
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the subsequent reversal, modification, annulment, or setting aside of such judicial process,
court order or judgment.
2.2 Security Interest. The Sytera Indemnitees shall have, and the Sirion Shareholders’
Representative hereby grants to the Sytera Stockholders’ Representative (on behalf of the Sytera
Indemnitees), as of and from the Closing, a perfected, first-priority security interest in the
Escrow Fund to secure payment of any and all amounts payable to the Sytera Indemnitees pursuant to
Section 8 of the Merger Agreement. In connection with such security interest, the Sirion
Shareholders’ Representative expressly acknowledges and agrees that: (i) the Escrow Agent is acting
as an agent to the extent necessary to perfect the Sytera Indemnitees’ first-priority security
interest in the Sirion Indemnification Escrow Shares; and (ii) the Sirion Shareholders’
Representative shall execute and deliver such instruments as the Sytera Stockholders’
Representative may from time to time reasonably request for the purpose of evidencing and
perfecting such security interest.
2.3 Dividends, Interest, Etc. The Sirion Shareholders’ Representative and the Sytera
Stockholders’ Representative agree that any cash, securities or other property (collectively,
“Derivative Property”) distributable or issuable (whether by way of dividend, stock split or
otherwise) in respect of or in exchange for any Sirion Indemnification Escrow Shares (including
pursuant to or as a part of a merger, consolidation, acquisition of property or stock,
reorganization or liquidation involving the Surviving Corporation) shall not be distributed or
issued to the Holders, but rather shall be issued to, registered in the name of and held by the
Escrow Agent as part of the Escrow Fund.
2.4 Voting of Sirion Indemnification Escrow Shares. In the event that any matter is brought
before the shareholders of the Surviving Corporation for a vote, the Sirion Shareholders’
Representative shall deliver written notice to the Escrow Agent (the “Voting Notice”) at least five
(5) days prior to the date of the taking of such vote (the “Voting Notice Date”) setting forth the
manner in which the Escrow Agent shall vote the Sirion Indemnification Escrow Shares. The Escrow
Agent shall vote the Sirion Indemnification Escrow Shares in the manner set forth in the Voting
Notice; provided, however, that the Escrow Agent shall have no obligation to vote
any of the Sirion Indemnification Escrow Shares if no Voting Notice is received on or prior to the
Voting Notice Date or if such Voting Notice does not clearly set forth the manner in which the
Escrow Agent shall vote the Sirion Indemnification Escrow Shares.
2.5 Tax Reporting Documentation. The parties hereto agree that, for Tax reporting purposes,
all income, if any, attributable to the Escrow Fund shall be allocable to each Holder based on the
ratio that such Holder’s Pro-Rata Sirion Indemnification Escrow Shares bear to the aggregate number
of Sirion Indemnification Escrow Shares (such ratio being referred to herein as each Holder’s “Pro
Rata Percentage”). Each Holder agrees to complete, sign and send to the Escrow Agent within sixty
(60) days following the Closing a Form W-9 and any other forms and documents that the Escrow Agent
may reasonably request for Tax reporting purposes (collectively, “Tax Reporting Documentation”).
Likewise, each Holder acknowledges and agrees that, if such Tax Reporting Documentation is not
delivered to the Escrow Agent pursuant to this Section 2.5, the Escrow Agent shall withhold a
portion of any interest or other income earned on the Escrow Fund and remit such withholding to the
Internal Revenue Service in accordance with the Code.
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2.6 Fractional Shares. No fractional Sirion Indemnification Escrow Shares shall be retained
in or released from the Escrow Fund pursuant to this Agreement. In connection with any release of
Sirion Indemnification Escrow Shares from the Escrow Fund, the Sytera Stockholders’ Representative
and the Sirion Shareholders’ Representative shall mutually agree upon appropriate rounding
procedures in order to avoid retaining in or releasing from the Escrow Fund any fractional shares.
2.7 Transferability. The interests of the Holders in the Escrow Fund shall not be assignable
or transferable, other than by operation of law, and no assignment or transfer of any of such
interests by operation of law shall be recognized or given effect until the Sytera Stockholders’
Representative and the Escrow Agent shall have received written notice of such assignment or
transfer.
3. Claims Against Escrow Fund.
3.1 Claim Notice. If any Sytera Indemnitee (each, a “Claimant”) has or claims to have
incurred or suffered Damages for which it is or may be entitled to indemnification pursuant to
Section 8 of the Merger Agreement, the Sytera Stockholders’ Representative shall deliver a written
notice of such claim (each, a “Claim Notice”) on behalf of such Claimant to the Sirion
Shareholders’ Representative and to the Escrow Agent. Each Claim Notice shall state: (i) that such
Claimant believes that it is entitled to indemnification pursuant to Section 8 of the Merger
Agreement; (ii) the basis, in reasonable detail, for such Claimant’s belief that it is entitled to
indemnification pursuant to Section 8 of the Merger Agreement; (iii) the amount of Damages such
Claimant claims to have so incurred or suffered (the “Claimed Amount”); and (iv) the amount of
Sirion Indemnification Escrow Shares and/or Derivative Property (in each case, valued at the
Stipulated Value (as defined below)) required to satisfy such Damages.
3.2 Response Notice. Within thirty (30) days after receipt by the Sirion Shareholders’
Representative of a Claim Notice, the Sirion Shareholders’ Representative shall deliver to the
Sytera Stockholders’ Representative and to the Escrow Agent a written response (the “Response
Notice”) stating that the Holders: (i) agree that Sirion Indemnification Escrow Shares and/or
Derivative Property (in each case, valued at the Stipulated Value) equal to the full Claimed Amount
may be released from the Escrow Fund and delivered to the Claimant; (ii) agree that Sirion
Indemnification Escrow Shares and/or Derivative Property (in each case, valued at the Stipulated
Value) equal to a portion, but not all, of the Claimed Amount (the “Agreed Amount”) may be released
from the Escrow Fund and delivered to the Claimant; or (iii) contest the Claim Notice entirely and
believe that no portion of the Sirion Indemnification Escrow Shares and/or Derivative Property
should be released from the Escrow Fund to the Claimant in respect of the Claimed Amount (any such
contested portion of the Claimed Amount being referred to herein as the “Contested Amount”). In
the event that the Escrow Agent does not receive a Response Notice prior to the end of the thirty
(30) day period specified above, the Holders shall be conclusively deemed to have agreed that
Sirion Indemnification Escrow Shares and/or Derivative Property (in each case, valued at the
Stipulated Value) equal to the full Claimed Amount may be released from the Escrow Fund to the
Claimant.
3.3 Resolution of Disputes as to Contested Amounts. In the event of any dispute as to a
Contested Amount, the Sytera Stockholders’ Representative, on behalf of the Claimant, and
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the Sirion Shareholders’ Representative, on behalf of the Holders, shall attempt in good faith
to resolve such dispute. Any such resolution reached by the Sirion Shareholders’ Representative
and the Sytera Stockholders’ Representative shall be binding on the Claimant and the Holders in all
respects and shall be set forth in a written settlement agreement signed by the Sirion
Shareholders’ Representative and the Sytera Stockholders’ Representative, which written settlement
agreement shall be sent to, and complied with by, the Escrow Agent. If the Sirion Shareholders’
Representative and the Sytera Stockholders’ Representative are unable to resolve such dispute, then
each of the Sytera Stockholders’ Representative and the Holders shall be entitled to exercise any
and all other remedies provided for in this Agreement and the Merger Agreement in order to resolve
such dispute.
3.4 Stipulated Value. The Sirion Shareholders’ Representative and the Sytera Stockholders’
Representative expressly acknowledge and agree that, for purposes of this Agreement, in the case of
any Sirion Indemnification Escrow Shares and/or Derivative Property to be released to a Claimant
pursuant to this Agreement, the value (the “Stipulated Value”) of: (i) each Sirion Indemnification
Escrow Share and each share of Surviving Corporation Common Stock issued as Derivative Property
(whether by way of stock dividend, stock split or otherwise) shall be deemed to be equal to $100
(As-Adjusted); and (ii) any other Derivative Property issued in respect of (whether by way of stock
dividend or otherwise) or in exchange for (including pursuant to or as a part of a merger,
consolidation, acquisition of property or stock, reorganization or liquidation involving the
Surviving Corporation) any Sirion Indemnification Escrow Shares shall be deemed to be equal to (a)
$100 (As-Adjusted), multiplied by (b) aggregate number of Sirion Indemnification Escrow Shares
underlying or exchanged for such Derivative Property.
4. Release of Escrow Fund.
4.1 Release of Claimed Amount. In the event that: (i) the Sirion Shareholders’ Representative
delivers a Response Notice pursuant to Section 3.2 agreeing that Sirion Indemnification Escrow
Shares and/or Derivative Property (in each case, valued at the Stipulated Value) equal to the full
Claimed Amount may be released from the Escrow Fund to the appropriate Claimant; or (ii) the Sirion
Shareholders’ Representative fails to deliver a Response Notice pursuant to Section 3.2 prior to
the end of the thirty (30) day period referenced in Section 3.2, the Escrow Agent shall, within
five (5) Business Days following the receipt of such Response Notice or the expiration of such
thirty (30) day period, as applicable, deliver to the appropriate Claimant an amount of Sirion
Indemnification Escrow Shares and/or Derivative Property equal in value (in each case, valued at
the Stipulated Value) to the Claimed Amount, which Sirion Indemnification Escrow Shares and/or
Derivative Property shall be deemed to satisfy in full the claim described in the underlying Claim
Notice.
4.2 Release of Agreed Amount. In the event that the Sirion Shareholders’ Representative
delivers a Response Notice pursuant to Section 3.2 agreeing that Sirion Indemnification Escrow
Shares and/or Derivative Property equal in value (in each case, valued at the Stipulated Value) to
an Agreed Amount may be released from the Escrow Fund to the appropriate Claimant, the Escrow Agent
shall, within five (5) Business Days following its receipt of such Response Notice, deliver to the
appropriate Claimant an amount of Sirion Indemnification Escrow Shares and/or Derivative Property
equal in value (in each case, valued at
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the Stipulated Value) to the Agreed Amount. Such Sirion Indemnification Escrow Shares and/or
Derivative Property shall not be deemed to satisfy in full the claim described in the underlying
Claim Notice, but shall count toward the satisfaction of such claim.
4.3 Release of Contested Amount. In the event that the Escrow Agent receives: (i) a copy of a
written settlement agreement executed by the Sirion Shareholders’ Representative and the Sytera
Stockholders’ Representative in accordance with Section 3.3 providing for the release of Sirion
Indemnification Escrow Shares and/or Derivative Property equal in value (in each case, valued at
the Stipulated Value) to all or any portion of a Contested Amount; or (ii) a certified copy of an
Order issued or rendered by a court of competent jurisdiction specifying that Sirion
Indemnification Escrow Shares and/or Derivative Property equal in value (in each case, valued at
the Stipulated Value) to all or any portion of a Contested Amount shall be released to the
appropriate Claimant, accompanied by a certificate executed by the Sirion Shareholders’
Representative and the Sytera Stockholders’ Representative to the effect that such Order is a final
non-appealable Order from a court of competent jurisdiction and setting forth in reasonable detail
the substance of such Order, the Escrow Agent shall, within five (5) Business Days following its
receipt of such written settlement agreement or Order and certificate, as applicable, deliver to
the appropriate Claimant an amount of Sirion Indemnification Escrow Shares and/or Derivative
Property equal in value (in each case, valued at the Stipulated Value) to all or such portion of
the Contested Amount, as applicable, which Sirion Indemnification Escrow Shares and/or Derivative
Property shall be deemed to satisfy in full the claim described in the underlying Claim Notice.
4.4 Release on Expiration Date. Within five (5) Business Days following the Expiration Date,
the Escrow Agent shall distribute to the Holders, in accordance with each Holder’s Pro Rata
Percentage, all of the Sirion Indemnification Escrow Shares and Derivative Property then remaining
in the Escrow Fund. Notwithstanding the foregoing, in the event that, prior to the Expiration
Date, the Sytera Stockholders’ Representative has delivered a Claim Notice to the Sirion
Shareholders’ Representative and the Escrow Agent in accordance with Section 3.1 pertaining to a
claim that has not been resolved as of the Expiration Date, the Escrow Agent shall retain in the
Escrow Fund following the Expiration Date an amount of Sirion Indemnification Escrow Shares and/or
Derivative Property equal in value (in each case, valued at the Stipulated Value) to the Claimed
Amount, minus any Agreed Amount for which Sirion Indemnification Escrow Shares and/or Derivative
Property equal in value (in each case, valued at the Stipulated Value) shall have been released to
the appropriate Claimant prior to the Expiration Date.
4.5 Certificates for Sirion Indemnification Escrow Shares. The parties hereto acknowledge
that the Escrow Agent is not the transfer agent for the Surviving Corporation Common Stock or the
Sirion Bridge Notes and that whenever any Sirion Indemnification Escrow Shares are to be released
pursuant to this Agreement, the Escrow Agent must coordinate with the Surviving Corporation and its
transfer agent to cause: (i) all or the appropriate number of Sirion Indemnification Escrow Shares
represented by the stock certificates registered in the name of Escrow Agent to be cancelled; and
(ii) one or more new stock certificates registered in the name of the appropriate Person
representing the corresponding number of Sirion Indemnification Escrow Shares be issued to such
appropriate Person; and (iii) if applicable, an additional new stock certificate registered in the
name of the Escrow Agent representing the remaining balance,
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if any, of Sirion Indemnification Escrow Shares resulting from the actions referenced in the
foregoing clauses “(i)” and “(ii)” to be issued to the Escrow Agent. In light of the foregoing,
the parties hereto expressly acknowledge and agree that, for purposes of this Agreement, the Escrow
Agent shall be deemed to have delivered Sirion Indemnification Escrow Shares to the Person entitled
to receive such Sirion Indemnification Escrow Shares as of the date that the Escrow Agent has
delivered instructions to the Surviving Corporation or its transfer agent specifying the details
regarding the stock certificate representing the Sirion Indemnification Escrow Shares that must be
issued and delivered to such Person.
4.6 Pro Rata Percentages. The aggregate amount of any Sirion Indemnification Escrow Shares
and/or Derivative Property released to a Claimant pursuant to this Agreement shall be deemed to
have been derived from each Holder’s portion of the Escrow Fund in accordance with such Holder’s
Pro Rata Percentage. Likewise, in the event of any release of Sirion Indemnification Escrow Shares
and/or Derivative Property to the Holders pursuant to this Agreement, each Holder shall receive
such Holder’s Pro Rata Percentage of the aggregate amount of such Sirion Indemnification Escrow
Shares and/or Derivative Property.
5. Duties, Limited Liability and Assumptions of Escrow Agent.
5.1 Duties and Responsibilities. The Escrow Agent undertakes to perform only such duties and
responsibilities as are expressly set forth in this Agreement or any other document or certificate
delivered pursuant hereto, and no implied covenants or obligations shall be read into this
Agreement or any such other document or certificate to expand the duties or responsibilities of the
Escrow Agent hereunder. The Escrow Agent shall discharge its duties set forth herein without
regard to the terms of the Merger Agreement. The Escrow Agent has no responsibility for and shall
incur no liability in connection with the effectiveness, sufficiency or enforceability of the
security interest that Section 2.2 is intended to create and perfect.
5.2 Advice of Counsel. The Escrow Agent may seek the advice of any legal counsel selected
with reasonable care in the event of any dispute or question as to the construction of any of the
provisions of this Agreement or the Escrow Agent’s duties or responsibilities pursuant to this
Agreement. In the event that the Escrow Agent shall in any instance, after seeking the advice of
such legal counsel, in good faith remain uncertain as to its duties or responsibilities hereunder,
the Escrow Agent shall be entitled to refrain from taking any action in such instance and shall
have as its sole obligation hereunder, in addition to the performance of those of its duties and
responsibilities pursuant to this Agreement as to which there is no such uncertainty, to keep
safely all property held in the Escrow Fund until it shall be directed otherwise in writing by each
of the parties hereto or by a final, non-appealable Order; provided, however, in
the event that the Escrow Agent has not received such written direction or Order within one hundred
eighty (180) days after notifying the parties hereto as to its uncertainty, the Escrow Agent shall
have the right to interplead the Sytera Stockholders’ Representative and the Sirion Shareholders’
Representative in any court of competent jurisdiction for the purpose of requesting that such court
definitively determine the Escrow Agent’s duties and responsibilities hereunder.
5.3 Limitation of Liability. The parties hereto expressly acknowledge and agree that the
Escrow Agent shall incur no liability with respect to: (i) any error of judgment, or for any act
done or omitted by such Escrow Agent, or for any mistake in fact or law, or for anything that
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such Escrow Agent may do or refrain from doing pursuant to or in connection with this
Agreement; and (ii) such Escrow Agent’s good-faith reliance upon the advice of legal counsel
pursuant to Section 5.2 or any written certification, notice, direction, request, waiver, consent,
receipt or other document that the Escrow Agent reasonably believes to be genuine and duly
authorized, executed and delivered pursuant to this Agreement; provided, however,
that notwithstanding any other provision in this Agreement, the Escrow Agent shall be liable in all
respects for its gross negligence, willful misconduct or willful breach of this Agreement; but
provided further that in no event shall the Escrow Agent be liable for incidental,
punitive or consequential damages.
5.4 Indemnification. The Surviving Corporation, the Sytera Stockholders’ Representative and
the Sirion Shareholders’ Representative hereby agree jointly and severally to indemnify and hold
harmless the Escrow Agent and its officers, directors, employees and agents (each, an “Escrow Agent
Indemnified Party”) from and against, any loss, liability or expense incurred by any such Escrow
Agent Indemnified Party arising out of or in connection with the Escrow Agent’s undertaking to
assume the duties of Escrow Agent hereunder and its performance under this Agreement;
provided, however, that the indemnity obligations set forth in this Section 5.4
shall not apply to any loss, liability or expense incurred by any such Escrow Agent Indemnified
Party arising out of or in connection with such Escrow Agent Indemnified Party’s gross negligence,
willful misconduct or willful breach of this Agreement. The foregoing indemnities shall survive
the termination of this Agreement and the resignation or removal of the Escrow Agent.
5.5 Acknowledged Assumptions. For purposes of determining and performing its duties and
obligations pursuant to this Agreement, the Escrow Agent shall be entitled to assume, without
further inquiry or verification, that: (i) any notice (including, without limitation, any Claim
Notice or Response Notice) received by the Escrow Agent has likewise been received by any and all
other parties entitled to receive such notice on the date such notice is received by the Escrow
Agent; (ii) unless and until the Escrow Agent has received any notice (including, without
limitation, any Claim Notice or Response Notice) provided for in this Agreement, no such notice has
been delivered to any of the other parties entitled to receive such notice; and (iii) unless and
until the Escrow Agent has received the written settlement agreement or Order and certificate
provided for in Section 4.3 relating to the resolution of any dispute as to a Contested Amount,
such dispute has not been resolved.
6. Termination.
6.1 Expiration Date. This Agreement shall terminate on the Expiration Date or upon the
earlier release by the Escrow Agent of the entire Escrow Fund in accordance with Section 4 of this
Agreement; provided, however, that if on or prior to the Expiration Date the Escrow
Agent has received from the Sytera Stockholders’ Representative a Claim Notice setting forth a
claim that has not been resolved as of the Expiration Date, then this Agreement shall continue in
full force and effect until such claim has been fully resolved and the Escrow Fund has been
released in accordance with Section 4 of this Agreement.
6.2 Effect of Termination. Sections 5 and 7 of this Agreement shall survive the termination
or expiration of this Agreement for any reason.
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7. Miscellaneous.
7.1 Attorneys’ Fees. If any action or proceeding relating to this Agreement or the
enforcement of any provision of this Agreement is brought against any party hereto, the prevailing
party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements in addition
to any other relief to which the prevailing party may be entitled.
7.2 Notices. All notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the party to be
notified; (ii) when sent by confirmed electronic mail or facsimile if sent during normal business
hours of the recipient; if not, then on the next Business Day; (iii) three (3) Business Days after
having been sent by registered or certified mail, return receipt requested, postage prepaid; or
(iv) one (1) Business Day after deposit with a nationally recognized overnight courier, specifying
next-day delivery, with written verification of receipt. All communications shall be sent to the
respective parties at the following addresses (or at such other addresses as shall be specified by
notice given in accordance with this Section 7.2):
If to the Sytera Stockholders’ Representative:
Xxxxxxx X. Xxxxxx, M.D.
c/o Sytera, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxx.xxx
c/o Sytera, Inc.
000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxx.xxx
With a copy (which shall not constitute notice) to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
E-mail: xxxxxxxxxxx@xxxxxxxxxxxx.xxx
0000 Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
E-mail: xxxxxxxxxxx@xxxxxxxxxxxx.xxx
If to the Sirion Shareholders’ Representative:
Xxxxx Xxxxxx
c/o Sirion Therapeutics, Inc.
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
c/o Sirion Therapeutics, Inc.
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxxxxxx@xxxxxxxxxxxxxxxxxx.xxx
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With a copy (which shall not constitute notice) to:
Xxxx Xxxxxx, P.A.
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxx.xxx
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, Esq.
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxxxx.xxx
and
Smith, Anderson, Blount, Dorsett, Xxxxxxxx
& Xxxxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxx
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
& Xxxxxxxx, L.L.P.
0000 Xxxxxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxxxxx X. Xxxxx
Fax: (000) 000-0000
E-mail: xxxxxx@xxxxxxxx.xxx
If to the Escrow Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx
0 Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
000 Xxxxxxx Xxxxxx
0 Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxx
Fax: (000) 000-0000
7.3 Headings. The headings contained in this Agreement are for convenience of reference only,
shall not be deemed to be a part of this Agreement and shall not be referred to in connection with
the construction or interpretation of this Agreement.
7.4 Governing Law; Jurisdiction and Venue. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of New York without giving
effect to its principles of conflicts of laws.
7.5 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors and assigns, if any. Neither party shall assign or
delegate, by operation of law or otherwise, its rights or obligations under this Agreement to any
Person with the prior written consent of the other party, except that a party may make such an
assignment without the other party’s consent to Affiliates or to a successor to substantially all
of the business of such party, whether in a merger, sale of stock, sale of assets or other
transaction. Any assignment or attempted assignment by either party in violation of the terms of
this Section 7.5 shall be null and void and of no legal effect.
7.6 Waiver. No failure on the part of any Person to exercise any power, right, privilege or
remedy under this Agreement, and no delay on the part of any Person in exercising
10
any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such
power, right, privilege or remedy and no single or partial exercise of any such power, right,
privilege or remedy shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such
claim, power, right, privilege or remedy is expressly set forth in a written instrument duly
executed and delivered on behalf of such Person, and any such waiver shall not be applicable or
have any effect except in the specific instance in which it is given.
7.7 Amendments. This Agreement may not be amended, modified, altered or supplemented other
than by means of a written instrument duly executed and delivered on behalf of all of the parties
hereto.
7.8 Severability. If one or more provisions of this Agreement are held by a court of
competent jurisdiction to be unenforceable under applicable Legal Requirements, the parties agree
to promptly renegotiate such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement in writing for such provision, then: (i) such
provision shall be excluded from this Agreement; (ii) the balance of the Agreement shall be
interpreted as if such provision were so excluded; and (iii) the balance of the Agreement shall be
enforceable in accordance with its terms.
7.9 Entire Agreement. This Agreement, together with the schedules and exhibits hereto and
thereto, sets forth the entire understanding of the parties hereto relating to the subject matter
hereof and thereof and supersedes all prior agreements and understandings among or between any of
the parties relating to the subject matter hereof and thereof.
7.10 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
instrument. The exchange of copies of this Agreement or amendments thereto and of signature pages
by facsimile transmission or by e-mail transmission in portable digital format, or similar format,
shall constitute effective execution and delivery of such instrument(s) as to the parties and may
be used in lieu of the original Agreement or amendment for all purposes. Signatures of the parties
transmitted by facsimile or by e-mail transmission in portable digital format, or similar format,
shall be deemed to be their original signatures for all purposes.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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In Witness Whereof, the parties have duly executed this Escrow Agreement as
of the date first set forth above.
| Sirion Therapeutics, Inc. | Sytera Stockholders’ Representative | |||||
| By: |
/s/ Xxxxx Xxxxxx
President |
By: | /s/ Xxxxxxx X. Xxxxxx, M.D.
|
|||
| Sirion Shareholders’ Representative | The Bank of New York | |||||
| By: |
/s/ Xxxxx Xxxxxx
|
By: Name: Title: |
/s/ Xxxxxxx X. Xxxxx
|
|||
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Exhibit A
MERGER AGREEMENT
Exhibit B
SCHEDULE OF FEES
