Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS
EMPLOYMENT AGREEMENT (the “Agreement”) is made as of this 1st day of January,
2005, by and between INLAND REAL ESTATE CORPORATION, a Maryland corporation
(the “Company”), and Mark Zalatoris (the “Executive”).

 

RECITALS:

 

A.                                   The
Company is a real estate investment trust which owns, operates and acquires
neighborhood retail centers and community centers within a 400 mile radius of
its headquarters in Oak Brook, Illinois (the “Business”).

 

B.                                     Executive
has served as the Company’s Operating Officer pursuant to an employment
agreement, dated as of June 15, 2001, by and between the Company and Executive
and during his employment thereunder, Executive has demonstrated certain unique
and particular talents and abilities with regard to the Business.

 

C.                                     The
Company desires to continue to assure itself of the availability of the talents
and abilities of Executive, by entering into a new employment agreement to
become effective January 1, 2005.

 

D.                                    Executive
desires to continue to be employed by the Company, subject to the terms,
conditions and covenants hereinafter set forth.

 

E.                                      As
a condition for the Company to enter into this Agreement, Executive has agreed
to restrict his ability to enter into competition with the Company.

 

NOW,
THEREFORE, in consideration of the foregoing and the agreements, covenants and
conditions set forth herein, Executive and the Company hereby agree as follows:

 

ARTICLE I

EMPLOYMENT

 

1.1                                                                            Employment.

 

(a)                                  The
Company hereby employs and engages Executive, and Executive hereby accepts
employment, upon the terms and conditions set forth in this Agreement.  Effective as of January 1, 2005 (the “Effective
Date”), Executive shall serve as Executive Vice President, Chief Operating
Officer and Treasurer, with duties commensurate with such position and such
other duties and responsibilities as assigned from time to time by the Company.

 

(b)                                 In
addition, Executive shall provide advice, consultation and services to any
other entities which control, are controlled by or are under common control
with the Company now or in the future (together “Affiliates”), as may be
requested by the Company.

 

1.2                                                                            Activities
and Duties During Employment. 
Executive represents and warrants to the Company that he is free to
engage in full-time employment with the Company, and that he has no prior or
other commitments or obligations of any kind to anyone else which would hinder
or interfere with his acceptance of his obligations under this Agreement, or
the

 

 

exercise of his reasonable commercial efforts
as an employee of the Company.  During
the Employment Term (as defined below), Executive agrees:

 

(a)                                  to
faithfully serve and further the interests of the Company in every lawful way,
giving honest, diligent, loyal and cooperative service to the Company and its
Affiliates;

 

(b)                                 to
comply with all reasonable rules and policies which are consistent with the
terms of this Agreement and which, from time to time, may be adopted by the
Company or its Affiliates; and

 

(c)                                  to
devote all of his business time, attention and efforts to the faithful and
diligent performance of his services to the Company and its Affiliates.

 

ARTICLE II

TERM

 

2.1                                                                            Term.  The term of employment under this Agreement
shall commence on the Effective Date and shall last through and including
December 31, 2006 (the “Employment Term”) except as this Agreement may be
terminated as provided in Section 2.2.

 

2.2                                                                            Termination.  The Employment Term and employment of
Executive may be terminated as follows:

 

(a)                                  By
the Company immediately for Cause (as hereinafter defined).

 

(b)                                 By
the Company immediately without Cause.

 

(c)                                  Automatically,
without the action of either party, upon the death of Executive.

 

(d)                                 By
either party upon a determination of Total Disability (as hereinafter defined)
of Executive.

 

(e)                                  Voluntarily
by Executive.

 

(f)                                    By
Executive, immediately for Good Reason (as hereinafter defined).

 

(g)                                 On
expiration of the Employment Term if not extended by the mutual consent of the
Company and Executive.

 

2.3                                                                            Definitions
of “Cause,” “Total Disability,” Good Reason” and “Change of Control”.

 

(a)                                  For
the purpose of this Agreement, “Cause” shall
mean:  (i) conduct amounting to fraud,
embezzlement, disloyalty or illegal misconduct in connection with Executive’s
duties under this Agreement and as an employee of the Company; (ii) conduct
that the Company reasonably believes has brought the Company into substantial
public disgrace or disrepute; (iii) failure to perform his duties hereunder as
reasonably directed by the Company after providing written notice of the
failure to Executive and Executive has failed to cure within ten days of
receiving notice; (iv) gross negligence or willful misconduct by the Executive
with respect to the Company, its clients, its employees and its activities; or
(v) material breach by the 

 

 

Executive of this Agreement or any other
agreement to which Executive and the Company are a party or any material breach
by the Executive of any written policy adopted by the Company concerning
conflicts of interest, standards of business conduct or fair employment
practices and any other similar matter, provided that the Company has provided
written notice of the breach to Executive and Executive has failed to cure the
breach within ten (10) days of receiving notice.

 

(b)                                 For
purposes of this Agreement, Executive shall be determined to have a “Total
Disability” upon the determination of a physician, acceptable to the Company
and Executive that Executive is unable, by reason of accident or illness, to
substantially perform his duties or is expected to be in the condition for
periods totaling six (6) months (whether or not consecutive) during any period
of twelve (12) months.  Nothing herein
shall limit Executive’s right to receive any payments to which Executive may be
entitled under any disability or employee benefit plan of the Company or under
any disability or insurance policy or plan. 
During a period of Total Disability prior to termination hereunder,
Executive shall continue to receive his full compensation (including base
salary) and benefits.

 

(c)                                  “Good
Reason” will mean any of the following events which have not been cured within
ten (10) days following the Company’s receipt of Executive’s written notice
specifying the events or factors constituting Good Reason:

 

(i)                                     the
Company requires Executive to relocate his principal residence to a location
outside the Greater Chicago Metropolitan Area in order to perform his duties
and responsibilities hereunder;

 

(ii)                                  the
Executive’s base salary or other compensation and benefits is reduced to less
than the amount of the Base Salary and other compensation and benefits as set
forth in Section 3.1 below; and

 

(iii)                               a
material breach by the Company of the provisions of this Agreement.

 

(iv)                              following
a Change of Control, the assignment to Executive of duties which constitute a
material reduction in Executive’s title or authority and which are materially
inconsistent with Executive’s position as contemplated by this Agreement.

 

(d)                                 “Change
of Control” shall mean:

 

(i)                                     that
the members of the Company’s board of directors as of the date of this
Agreement fail to constitute a majority of the members of the board provided,
however, that any individual becoming a member of the board who is nominated or
appointed to the board seat on the recommendation and approval of the Company’s
Nominating and Corporate Governance Committee shall be treated as if he or she
were a member of the board as of the date of this Agreement;

 

(ii)                                  the
disposition by the Company of all, or substantially all, of the assets of the
Company;

 

(iii)                               the
termination and liquidation of the Company.

 

 

ARTICLE III

COMPENSATION AND BENEFITS

 

3.1                                                                            Compensation.

 

(a)                                  Base
Salary.  During the Employment Term,
the Company shall pay Executive a base salary of $275,000 per annum.

 

(b)                                 Annual
Incentive Bonus.  The Company shall,
in addition to Executive’s Base Salary, pay Executive an Annual Incentive
Bonus, which shall be payable within 120 days of the end of each fiscal year in
accordance with the formula set forth on Exhibit A, attached hereto and
made a part hereof.

 

(c)                                  Annual
Long Term Share Award.  No later than
April 30 of each fiscal year during the Employment Term, the Company shall
grant Executive an Annual Long Term Share Award consisting of shares of the
common stock of the Company (“Long Term Shares”), subject to the conditions set
forth below and in accordance with the schedule set forth on Exhibit B,
attached hereto and made a part hereof. 
Twenty percent (20%) of any Long Term Shares granted hereunder shall
vest on each successive yearly anniversary of the grant of the Long Term Shares.

 

(i)                                     Executive
shall be the record owner of any Long Term Shares granted hereunder provided
that, any Long Term Shares which have not yet vested shall be forfeited and
redeemed by the Company, and without any further action on the part of the
Company or the Executive if Executive is no longer employed by the Company for
any reason, other than in connection with a termination as described in Section
2.2 (b), (c) or (d).  Executive may
not sell, transfer, hypothecate, pledge or assign any Long Term Shares which have
not vested.

 

(ii)                                  Upon
the occurrence of any forfeiture of Long Term Shares, Executive shall
immediately take all actions necessary to permit the Company to redeem any forfeited
Long Term Shares.

 

(iii)                               Unless
forfeited, Executive may exercise all rights of a stockholder, including the
right to vote and receive dividends with respect to any Long Term Shares
granted Executive.

 

(iv)                              If
the Company shall file a registration statement (other than a registration
statement on Form S-4, S-8 or S-3 or any successor form) with the Securities
and Exchange Commission while any vested Long Term Shares are outstanding, the
Company shall give Executive at least 30 days prior written notice of the
filing of such registration statement. 
If requested by Executive in writing within 20 days after receipt of any
such notice, the Company shall, at the Company’s sole expense (other than the
fees and disbursements of counsel for Executive, and the underwriting
discounts, if any, payable in respect of the vested Long Term Shares sold by
Executive), register all or, at Executive’s option, any portion of the vested
Long Term Shares requested by Executive, concurrently with the registration of any
other securities. The Company will use its commercially reasonable best efforts
to cause the registration statement to become 

 

 

effective as promptly as practicable.  Notwithstanding the forgoing, if the managing
underwriter of any such offering shall advise the Company in writing that, in the
opinion of the managing underwriter, the distribution of all or a portion of
the vested Long Term Shares requested to be included in the registration
concurrently with the securities being registered by the Company and the
securities of other holders of Company securities would materially adversely
affect the distribution of the securities by the Company for its own account,
the Company will include in the registration first,
the securities that the Company proposes to sell, and second, the registerable securities
requested to be included in the registration and other securities requested be
included in the registration by holders who have registration rights, pro
rata among the holders.

 

(v)                                 All
Long Term Shares which may be issuable hereunder shall be issued in reliance
upon the following representations, warranties and agreements of Executive,
each of which shall be true and correct as of the date of issuance and each of
which shall survive the termination of this Agreement.

 

(A)                              Executive
acknowledges that any Long Term Shares which may be issuable hereunder will not
have been registered under the Securities Act or under applicable state
securities laws;

 

(B)                                All
Long Term Shares issuable to Executive will be acquired by Executive solely for
investment purposes and for the account of Executive and not as nominee or
agent for others or with a view to or for sale in connection with any
distribution, and Executive has not and will not, at the time of issuance, have
entered into any arrangement or understanding with respect thereto, except in
accordance with the terms of this Agreement or otherwise in compliance with
applicable securities laws;

 

(C)                                Executive
acknowledges that any Long Term Shares issued hereunder may not be transferred
or sold except in compliance with the registration requirements of federal and
state securities law or exemptions therefrom;

 

(D)                               Executive
acknowledges that an investment in any Long Term Shares is subject to
significant risk, including the risks described, from time to time, in the
Company’s reports on Form 10-K.  Executive
represents and warrants that he has such knowledge and expertise in financial
and business matters as to be capable of evaluating the merits and risks of an
investment in the Long Term Shares and the ability to bear the economic risk of
the investment;

 

(E)                                 Executive
is an “Accredited Investor” as defined in Rule 501 to Regulation D promulgated
under the Securities Act;

 

(F)                                 Executive
represents and warrants that he has had the opportunity to ask questions of the
Company concerning its business and to obtain any information which he
considers necessary to verify the accuracy of or to amplify upon the Company’s
disclosures and that all

 

 

questions which have been asked have been
answered by the Company to Executive’s satisfaction.

 

3.2                                                                            Payment.  All Base Salary due Executive hereunder shall
be paid in accordance with the general payroll payment practice of the Company for executive level employees;
except that any payment relating to the termination of Executive shall be paid
as a lump sum payment within 15 days of termination.

 

3.3                                                                            Business
Expenses.

 

(a)                                  Reimbursement.  The Company shall reimburse Executive for all
ordinary and necessary business expenses incurred by him in connection with the
performance of his duties hereunder.  The
reimbursement of business expenses will be governed by the policies for the
Company as they are in effect from time to time during the term of this Agreement.

 

(b)                                 Accounting.  Executive shall provide the Company with an
accounting of any expenses, for which reimbursement is sought including a
description of the purpose for which each expense was incurred.  Executive shall provide the Company with such
other supporting documentation and other substantiation of reimbursable
expenses as may be required by Company to conform to Internal Revenue Service
or other requirements.  All such
reimbursements shall be payable by the Company to Executive within a reasonable
time after receipt by the Company of appropriate documentation required by the Company.

 

3.4                                                                            Other
Benefits. The Company shall provide Executive with such retirement benefits
and group health and other insurance coverage at such levels and on such terms
as the Company generally provides to its executive level employees in
accordance with its Company-sponsored benefit plans as they are in effect from
time to time during the term of the Agreement.

 

3.5                                                                            Compensation
Upon Termination.  If Executive’s
employment hereunder and this Agreement is terminated in accordance with the
provisions of Article II, the Company will be obligated to provide to
Executive compensation and benefits, in lieu of any severance under any
severance plan that the Company may then have in effect, and subject to setoff
for any amounts owed by Executive to the Company or any affiliate of the
Company by reason of any contract, agreement, promissory note, advance, failure to return Company
property or loan document, as follows:

 

(a)                                  Upon
Termination for Death or Total Disability. 
If Executive’s employment hereunder and this Agreement is terminated by
reason of his death or Total Disability, under Sections 2.2 (c) or (d),
then within 30 days of the date of termination the Company will pay Executive
(or his estate or beneficiaries):

 

(i)                                     any
Base Salary that has been accrued but not paid as of the date of termination
(the “Accrued Base Salary”);

 

(ii)                                  any
compensation for unused vacation days accrued as of the termination date in an
amount equal to Executive’s Base Salary multiplied by a fraction, the numerator
of which is the number of accrued unused vacation days and the denominator of
which is 360 (the “Accrued Vacation Payment”);

 

 

(iii)                               any
expenses incurred by Executive prior to the date of termination that may be
reimbursed pursuant to this Agreement (the “Accrued Reimbursable Expenses”);

 

(iv)                              any
accrued and vested benefits required to be provided upon death or Total
Disability by the terms of any Company-sponsored benefit plans or programs
exclusive of any Long Term Shares (the “Accrued Benefits”), together with any
benefits required to be paid or provided in the event of Executive’s death or
Total Disability under applicable law; and

 

(v)                                 an
amount equal to either the prorated portion of the Annual Incentive Bonus that Executive
received for the last fiscal year completed prior to termination equal to the
relevant Annual Incentive Bonus multiplied by a fraction, the numerator of
which is the number of days in the year prior to the date of death or Total
Disability and the denominator of which is 360, or if the termination occurs in
the first year of the Employment Term, then the prorated portion of the Annual
Incentive Bonus as if the target bonus was received for that year (the “Accrued
Bonus”) calculated in the same fashion.

 

In addition,
if Executive’s employment and this Agreement is terminated under Section
2.2(c)-(d) any Long Term Shares issued to Executive under this Agreement
which have not yet vested shall immediately vest and shall no longer be subject
to forfeiture.

 

(b)                                 Upon
Termination by Company for Cause or Voluntarily by Executive.  If Executive’s employment hereunder and this
Agreement is terminated Sections 2.2 (a) or (e), within 15 days of the
date of such termination, the Company will pay Executive:

 

(i)                                     any
Accrued Base Salary;

 

(ii)                                  any
Accrued Vacation Payment;

 

(iii)                               any
Accrued Reimbursable Expenses; and

 

(iv)                              any
Accrued Benefits, together with any benefits required to be paid or provided
under applicable law.

 

In addition,
if Executive’s employment and this Agreement is terminated under Section
2.2(a) or (e) Long Term Shares issued to Executive which have not yet
vested shall immediately be forfeited by Executive.

 

(c)                                  Upon
Termination by the Company Without Cause or by Executive for Good Reason.  If Executive’s employment hereunder and this
Agreement is terminated under Sections 2.2 (b) or (f), the Company will pay
Executive:

 

(i)                                     any Accrued Base Salary;

 

(ii)                                  any
Accrued Vacation Payment;

 

(iii)                               any
Accrued Reimbursable Expenses;

 

(iv)                              any
Accrued Benefits, together with any benefits required to be paid or provided
under applicable law;

 

 

(v)                                 any
Accrued Bonus; and

 

(vi)                              an
amount equal to the sum of: (A) 1.25 times Executive’s then current Base
Salary; plus (B) an amount equal to the Annual Incentive Bonus which was paid
to Executive for the fiscal year immediately preceding the year of termination;
provided, however, that the payment to Executive pursuant to this Section
3.5(c)(vi) shall in no event exceed an amount which would cause Executive
to receive an “excess parachute payment” as defined in the Internal Revenue
Code of 1986, as amended (the “Code”); provided, however that if the
termination occurs within one year of a Change of Control, then in addition to
the amounts described in (i) – (v) above, the Company will pay Executive an
amount equal to 2.99 times the sum of: (A) Executive’s then current Base
Salary; plus (B) an amount equal to the Annual Incentive Bonus which was paid
to Executive for the fiscal year immediately preceding the year of termination;
plus (C) the value of the Annual Long Term Share Award which was granted to
Executive for the fiscal year immediately preceding the year of termination;
provided, however, that the payment to Executive pursuant to this Section 3.5(c)(vi)
shall in no event exceed an amount
which would cause Executive to receive an “excess parachute payment” as defined
in the Code.

 

In addition,
if Executive’s employment hereunder and this Agreement is terminated under Section
2.2(b) Long Term Shares issued to Executive which have not yet vested shall
immediately vest and shall no longer be subject to forfeiture by
Executive.  If Executive’s employment
hereunder is terminated under Section 2.2(f) Long Term Shares issued to
Executive which have not vested shall immediately be forfeited by Executive;
provided that if this Agreement is terminated under Section 2.2(f)
within one year of a Change of Control than any Long Term Shares issued to
Executive under this Agreement shall immediately vest and shall no longer be
subject to forfeiture by Executive.

 

3.6                                                                            Cessation
of Rights and Obligations: Survival of Certain Provisions.  On the date of expiration or earlier
termination of the Employment Term for any reason, all of the respective
rights, duties, obligations and covenants of the parties, as set forth herein,
shall, except as specifically provided herein to the contrary, cease and become
of no further force or effect as of the date of termination, and shall only
survive as expressly provided for herein.

 

ARTICLE IV

CONFIDENTIALITY AND NON-COMPETE AGREEMENT

 

4.1                                                                            Non-Disclosure
of Confidential Information. 
Executive hereby acknowledges and agrees that the duties and services to
be performed by Executive under this Agreement are special and unique and that
as a result of his employment by the Company hereunder Executive has developed
over time and will acquire, develop and use information of a special and unique
nature and value that is not generally known to the public or to the Company’s
industry, including but not limited to, certain records, secrets,
documentation, software programs, price lists, ledgers and general information,
employee records, mailing lists, shareholder lists, tenant lists and profiles,
prospective customer, acquisition candidate or tenant lists, accounts
receivable and payable ledgers, financial and other records of the Company or
its Affiliates, information regarding its shareholders, tenants or joint
venture partners, and other similar matters (all such information being
hereinafter referred to as “Confidential Information”).

 

 

Executive further acknowledges and agrees
that the Confidential Information is of great value to the Company and that the
restrictions and agreements contained in this Agreement are reasonably
necessary to protect the Confidential Information and the goodwill of the
Company and the Affiliates.  Accordingly,
Executive hereby agrees that:

 

(a)                                  Executive
will not, during the Employment Term or at any time thereafter, directly or
indirectly, except in connection with Executive’s performance of his duties
under this Agreement, or as otherwise authorized in writing by the Company for
the benefit of the Company or any Affiliate, divulge to any person, firm,
corporation, limited liability company , partnership or organization, or any
affiliated entity (hereinafter referred to as “Third Parties”), or use or cause or authorize any Third
Parties to divulge or use, the Confidential Information, except as required by
law; and

 

(b)                                 Upon
the termination of the Employment Term and this Agreement for any reason
whatsoever, Executive shall deliver or cause to be delivered to the Company any
and all Confidential Information, including drawings, notebooks, keys, data and
other documents and materials belonging to the Company or its Affiliates which
is in his possession or under his control relating to the Company or its
Affiliates, regardless of the medium upon which it is stored, and will deliver
to the Company upon termination, any other property of the Company or its
Affiliates which is in his possession or under his control.

 

4.2                                                                            Non-Solicitation
and Covenant Not to Compete.

 

(a)                                  General.  Executive acknowledges that the covenants set
forth in this Section 4.2 are reasonable in scope and essential to the
preservation of the business and the goodwill of the Company, and are
consideration for the amounts to be paid to Executive hereunder.  Executive also acknowledges that the
enforcement of the covenant set forth in this Section 4.2 will not
preclude Executive from being gainfully employed in such manner and to the
extent as to provide a standard of living for himself, the members of his
family and the others dependent upon him of at least the level provided by this
Agreement.  In addition, Executive
acknowledges that the Company and its Affiliates have obtained an advantage
over their competitors that is characterized by relationships with clients,
principals, tenants and other contacts.

 

(b)                                 Covenant.  Executive hereby covenants and agrees that, except
as permitted by the Company, during the Employment Term, and any extensions
thereof, and for a period of one year following the expiration, termination or
extension of this Agreement, Executive shall not, directly or indirectly: (i)
alone, together or in association with others, either as a principal, agent,
owner, shareholder, officer, director, partner, employee, lender, investor or
in any other capacity, engage in, have any financial interest in or be in any
way connected or affiliated with, or render advice or services to, any business
engaged in purchasing, selling, financing, managing, leasing, brokering or
providing services for retail shopping centers or any new business or lines of
business which the Company may enter prior which business or businesses are
conducted in the greater metropolitan area of Chicago, Illinois, other than as
an employee of The Inland Group, Inc. (“TIGI”) or an affiliate of TIGI or
otherwise on behalf of the Company as an employee thereof or such other
business as may be permitted by the Company in writing, (ii) directly or
indirectly divert, take away, solicit or interfere with or attempt to divert,
take away, solicit or interfere with any present or prospective customer,
except on behalf of the Company as an employee thereof; (iii) directly or
indirectly solicit, induce, influence or attempt to solicit, induce or
influence any employee or agent of the Company to leave his employment or 

 

 

engagement with the Company; or offer
employment or engagement to or employ or engage any such employee of the
Company, or assist or attempt to assist any such employee of the Company in
seeking other employment; (iv) in any manner slander, libel or by other means
take action which is or intended, or could reasonably be expected, to be
detrimental to the Company or an Affiliate or their respective employees or
operations; (v) knowingly make or participate in any “solicitation” of “proxies”
or “consents” (as such terms are used in the proxy rules of the United States
Securities and Exchange Commission) or make proposals for approval of the
Company’s stockholders; (vi) knowingly form, join or participate in a “group”
(within the meaning of Section 13(d)(3) of the Exchange Act) with respect to
the Company’s securities; (vii) otherwise knowingly act to control or seek to
control the management, board of directors or policies of the Company (except
with respect to actions taken solely in Executive’s capacity as an officer of
the Company in the exercise of his fiduciary duties; or (viii) make any
agreement to do any of the foregoing to the extent restricted thereby.  As used in this Section 4.2, the term “Company”
shall mean the Company or an Affiliate. 
As used in this Section 4.2(b), “customer” and “prospective
customer” shall include: (i) any tenant of the Company’s properties or any
other person or entity with whom the Company is negotiating for the leasing of
real property from the Company or an Affiliate at the time of the termination
of this Agreement or during the six month period immediately prior to such
termination; (ii) any owner or prospective owner of real property the purchase
or sale of which is being negotiated by the Company at the time of the
termination of this Agreement or during the six month period immediately prior
to such termination; or (iii) any joint venture partner of the Company.  The restrictions imposed by this subparagraph
4.2(b) shall not apply to the ownership of one percent (1%) or less of all
of the outstanding securities of any entity whose securities are listed on a
national securities exchange, or included for quotation on any interdealer
quotation system.

 

4.3                                                                            Remedies.

 

(a)                                  Injunctive
Relief.  Executive expressly
acknowledges and agrees that the business of the Company is highly competitive
and that a violation of any of the provisions of Sections 4.1 or 4.2
would cause immediate and irreparable harm, loss and damage to the Company or
an Affiliate not adequately compensable by a monetary award.  Executive further acknowledges and agrees
that the time periods and territorial areas provided for herein are the minimum
necessary to adequately protect the business of the Company, the enjoyment of
the Confidential Information and the goodwill of the Company.  Without limiting any of the other remedies
available to the Company at law or in equity, or the Company’s right or ability
to collect money damages, Executive agrees that any actual or threatened
violation of any of the provisions of Sections 4.1 or 4.2 may be
immediately restrained or enjoined by any court of competent jurisdiction, and
that a temporary restraining order or emergency, preliminary or final
injunction may be issued in any court of competent jurisdiction, upon
twenty-four (24) hour notice and without bond.

 

(b)                                 Enforcement.  Executive expressly acknowledges and agrees
that the provisions of Sections 4.1 or 4.2 shall enforced to the fullest
extent permissible under the laws and public policies in each jurisdiction in
which enforcement might be sought. 
Accordingly, if any particular portion of Sections 4.1 or 4.2
shall ever be adjudicated as invalid or unenforceable, or if the application
thereof to any party or circumstance shall be adjudicated to be prohibited by
or invalidated by such laws or public policies, such section or sections shall
be: (i) deemed amended to delete therefrom such portions so adjudicated; or
(ii) modified as determined appropriate by such a court, such deletions or
modifications to apply only with 

 

 

respect to the operation of such section or
sections in the particular jurisdictions so adjudicating on the parties and
under the circumstances as to which so adjudicated.

 

ARTICLE V

MISCELLANEOUS

 

5.1                                                                            Notices.  All notices or other communications required
or permitted hereunder shall be in writing and shall be deemed given or
delivered: (i) when delivered personally or by commercial messenger; (ii) one
business day following deposit with a recognized overnight courier service,
provided such deposit occurs prior to the deadline imposed by such service for
overnight delivery; (iii) when transmitted, if sent by facsimile copy, provided
confirmation of receipt is received by sender and such notice is sent by an
additional method provided hereunder, in each case above provided such communication
is addressed to the intended recipient thereof as set forth below:

 

To Executive
at his home address.

 

	
  To the Company at:

  	
   

  	
  Inland Real Estate Corporation

  
	
   

  	
   

  	
  2901 Butterfield Road

  
	
   

  	
   

  	
  Oak Brook, Illinois 60523

  
	
   

  	
   

  	
  Attn: Robert D. Parks

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Shefsky & Froelich Ltd.

  
	
   

  	
   

  	
  444 N. Michigan Ave., Suite 2500

  
	
   

  	
   

  	
  Chicago, IL 60611

  
	
   

  	
   

  	
  Attn: Michael J. Choate

  
	
   

  	
   

  	
  Telephone: (312) 836-4066

  
	
   

  	
   

  	
  Facsimile: (312) 527-5921

  

 

Any party may
change its address for purposes of this paragraph by giving the other party
written notice of the new address in the manner set forth above.

 

5.2                                                                            Entire
Agreement; Amendments, Etc.  This
Agreement contains the entire agreement and understanding of the parties
hereto, and supersedes all prior agreements and understandings relating to the
subject matter thereof.  No modification,
amendment, waiver or alteration of this Agreement or any provision or term
hereof shall in any event be effective unless the same shall be in writing,
executed by both parties hereto, and any waiver so given shall be effective
only in the specific instance and for the specific purpose for which given.

 

5.3                                                                            Benefit.  This Agreement shall be binding upon, and
inure to the benefit of, and shall be enforceable by, the heirs, successors and
legal representatives of Executive and the successors, assignees and
transferees of the Company and its current or future Affiliates.  This Agreement or any right or interest
hereunder may not be assigned by Executive.

 

5.4                                                                            No
Waiver.  No failure or delay on the
part of any party hereto in exercising any right, power or remedy hereunder or
pursuant hereto shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder or pursuant thereto.

 

 

5.5                                                                            Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law but, if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.  If any part of any
covenant or other provision in this Agreement is determined by a court of law
to be overly broad thereby making the covenant unenforceable, the parties
hereto agree, and it is their desire, that the court shall substitute a
judicially enforceable limitation in its place, and that as so modified the
covenant shall be binding upon the parties as if originally set forth herein.

 

5.6                                                                            Compliance
and Headings.  The headings in this
Agreement are intended to be for convenience and reference only, and shall not
define or limit the scope, extent or intent or otherwise affect the meaning of
any portion hereof.

 

5.7                                                                            Governing
Law.  The parties agree that this
Agreement shall be governed by, interpreted and construed in accordance with
the internal laws of the State of Illinois, and the parties agree that any
suit, action or proceeding with respect to this Agreement shall be brought in
the state courts in Chicago, Illinois or in the U.S. District Court for the
Northern District of Illinois.  The
parties hereto hereby accept the exclusive jurisdiction of those courts for the
purpose of any such suit, action or proceeding. 
Venue for any such action, in addition to any other venue permitted by
statute, will be in Chicago, Illinois.

 

5.8                                                                            Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which
together will constitute one and the same instrument.

 

5.9                                                                            No
Presumption Against Drafter.  Each of
the parties hereto has jointly participated in the negotiation and drafting of
this Agreement.  In the event an ambiguity
or a question of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by each of the parties hereto and no
presumptions or burdens of proof shall arise favoring any party by virtue of
the authorship of any provisions of this Agreement.

 

5.10                                                                      Enforcement.  In the event either of the parties to this
Agreement shall bring an action against the other party with respect to the
enforcement or breach of any provision of this Agreement, the prevailing party
in such action shall recover from the non-prevailing party the costs incurred
by the prevailing party with respect to such action including court costs and
reasonable attorneys’ fees.

 

5.11                                                                      Recitals.  The Recitals set forth above are hereby
incorporated in and made a part of this Agreement by this reference.

 

 

IN WITNESS
WHEREOF, each of the parties
hereto has caused this Agreement to be executed and delivered as of the day and
year first above written.

 

	
   

  	
  INLAND REAL ESTATE CORPORATION,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  a Maryland corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert D. Parks

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Robert D. Parks

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President and CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  EXECUTIVE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark E. Zalatoris

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name: 

  	
  Mark E. Zalatoris

  	
   

  	
   

  
	
   

  	
   

  	
   

  
										

 

 

EXHIBIT A

 

(FORMULA FOR DETERMINING ANNUAL
INCENTIVE BONUS)

 

I.                                         The
Executive’s Annual Incentive Bonus Opportunity (“AIBO”) shall be determined
based on performance of the Company, measured to either a Threshold, Target, or
High level of performance.

 

•                                          The
Company will have achieved a Threshold level of performance if the Company’s
growth in FFO per fully-diluted share when compared to the prior year, for the
fiscal year for which the AIBO is calculated is not less than 80% of the median
FFO growth rate for the applicable year as published by NAREIT for the Retail
Property Sector.

 

•                                          The
Company will have achieved a Target level of performance if the Company’s
growth in FFO per fully-diluted share when compared to the prior year, for the
fiscal year for which the AIBO is calculated is not less than 100% of the
median FFO growth rate for the applicable year as published by NAREIT for the
Retail Property Sector.

 

•                                          The
Company will have achieved a High level of performance if the Company’s growth
in FFO per fully-diluted share when compared to the prior year, for the fiscal
year for which the AIBO is calculated is not less than 130% of the median FFO
growth rate for the applicable year as published by NAREIT for the Retail
Property Sector.

 

For purposes
of calculating AIBO, “FFO” shall have the same meaning ascribed to that term in
the Company’s report on Form 10-K as filed with the SEC for the year in which
the bonus is to be calculated.

 

Subject to II
below, if the Company achieves a Threshold level of performance, the Executive’s
AIBO will be equal to 20% of Executive’s Base Salary for the applicable
year.  If the Company achieves a Target
level of performance, the Executive’s AIBO will be equal to 30% of Executive’s
Base Salary for the applicable year.  If
the Company achieves a High level of performance, the Executive’s AIBO will be
equal to 50% of Executive’s Base Salary for the applicable year.

 

II.                                     The
Executive’s Annual Incentive Bonus for the applicable year shall be determined
by adding two components:

 

A.                                   The
first component shall be equal to 50% of the Executive’s AIBO.

 

B.                                     The
second component shall be determined by the Company’s CEO, as recommended to
and approved by the Company’s board of directors, based on a subjective
assessment of the Executive’s performance, and may be up to but not in excess
of 50% of the Executive’s AIBO.

 

 

EXHIBIT B

 

(FORMULA FOR DETERMINING ANNUAL AWARD OF LONG
TERM SHARES)

 

I.                                         The Executive’s
Annual Award of Long Term Shares (“LTS”) shall be determined based on
performance of the Company, measured to either a Threshold, Target, or High level
of performance.

 

•                                          The
Company will have achieved a Threshold level of performance if the Company’s
growth in FFO, per fully-diluted share when compared to the prior year, for the
fiscal year for which the grant of Long Term Shares is calculated is not less
than 80% of the median FFO growth rate for the applicable year as published by
NAREIT for the Retail Property Sector.

 

•                                          The
Company will have achieved a Target level of performance if the Company’s
growth in FFO per fully-diluted share when compared to the prior year for the
fiscal year for which the grant of Long Term Shares is calculated is not less
than 100% of the median FFO growth rate for the applicable year as published by
NAREIT for the Retail Property Sector.

 

•                                          The
Company will have achieved a High level of performance if the Company’s growth
in FFO per fully-diluted share when compared to the prior year for which the
grant of Long Term Shares is calculated is not less than 130% of the median FFO
growth rate for the applicable year as published by NAREIT for the Retail
Property Sector.

 

For purposes
of calculating the LTS grant, “FFO” shall have the same meaning ascribed to
that term in the Company’s report on Form 10-K as filed with the SEC for the
year in which the bonus is to be calculated.

 

Subject to II
below, if the Company achieves a Threshold level of performance, the Executive’s
LTS grant will be 5000 shares.  If the
Company achieves a Target level of performance, the Executive’s LTS grant will
be 10,000 shares.  If the Company achieves
a High level of performance, the Executive’s LTS grant will be 15,000
shares.

 

II.                                     The
Executive’s Annual Award of Long Term Shares for the applicable year shall be
determined by adding two components:

 

A.                                   The
first component shall be equal to 50% of the Executive’s LTS grant hereunder.

 

B.                                     The
second component shall be determined by the Company’s CEO, as recommended to
and approved by the Company’s board of directors, based on a subjective
assessment of the Executive’s performance, and may be up to but not in excess
of 50% of the Executive’s LTS grant.Exhibit
10.1

 

VOTING
AGREEMENT

 

VOTING AGREEMENT, dated as of April 18,
2005 (this “Agreement”), among Orphan Medical, Inc., a Delaware
corporation (the “Company”), Jazz Pharmaceuticals, Inc., a Delaware
corporation (“Buyer”), Twist Merger Sub, Inc., a Delaware corporation (“Sub”),
and certain stockholders of the Company whose names appear on Schedule I
hereto (each a “Stockholder” and collectively, the “Stockholders”).

 

W I T N E S S E T H:

 

WHEREAS, contemporaneously with the execution
and delivery of this Agreement, the Company, Buyer and Sub are entering into a
Merger Agreement (as such agreement may hereafter be amended from time to time,
the “Merger Agreement”), which provides for, upon the terms and subject
to the conditions set forth therein, the merger of a Sub with and into the
Company (as set forth in the Merger Agreement) in exchange for a cash payment
for all of the issued and outstanding shares of capital stock of the Company
(the “Merger”);

 

WHEREAS, as of the date hereof, each
Stockholder beneficially owns (as such term is defined pursuant to Rule
13d-3(a) promulgated under the Exchange Act) the number of shares and/or
warrants to purchase the number of shares of Senior Convertible Preferred
Stock, $0.01 par value per share (the “Senior Preferred Stock”), Series
B Convertible Preferred Stock, $0.01 par value per share (the “Series B
Preferred Stock”), Series C Convertible Preferred Stock, $0.01 par value
per share (the “Series C Preferred Stock”) and Series D Non-Voting
Convertible Preferred Stock, $0.01 par value per share (the “Series D
Preferred Stock,” together with the Senior Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock, the “Company Preferred
Stock”), and Common Stock, $0.01 par value per share (“Company Common
Stock” and, together with Company Preferred Stock, the “Company Capital
Shares”), of the Company set forth opposite such Stockholder’s name on Schedule I
hereto (all such shares so owned and for which beneficial ownership may
hereafter be acquired by such Stockholder prior to the termination of this
Agreement, whether upon the exercise of options, conversion of convertible
securities, exercise of warrants or by means of purchase, dividend,
distribution or otherwise, being referred to herein as such Stockholder’s
Subject Shares);

 

WHEREAS, approval of the Merger Agreement by
(i) the holders of a majority of the issued and outstanding shares of Company
Common Stock voting together with the holders of the Senior Preferred Stock
voting on an as converted basis and (ii) the holders of a majority of the
issued and outstanding shares of Senior Preferred Stock, voting as a separate
class, is required in order to consummate the transactions contemplated by the
Merger Agreement;

 

WHEREAS, as a condition to the willingness of
Buyer to enter into the Merger Agreement, Buyer has requested that each
Stockholder enter into this Agreement; and

 

WHEREAS, in order to induce Buyer to enter
into the Merger Agreement, each of the Stockholders is willing to enter into
this Agreement.

 

 

NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and agreements herein contained, and
intending to be legally bound hereby, Buyer, Sub, the Company and the
Stockholders hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Certain capitalized terms used and not
otherwise defined herein have the meanings ascribed to them in the Merger
Agreement.  Unless the context otherwise
requires, such terms shall include the singular and plural and the conjunctive
and disjunctive forms of the terms defined.

 

ARTICLE II.

 

VOTING OF SHARES

 

SECTION 2.1.                       Agreement
to Vote.  From the date hereof until
the termination of this Agreement pursuant to Section 4.1 hereof (the “Term”),
at every time as the Company convenes a meeting of or otherwise seeks a vote
of, the Company’s stockholders for the purpose of approving the Merger, each of
the Stockholders hereby agrees to vote, or cause to be voted, to the extent not
voted by Buyer as appointed by the Proxy, all of Stockholder’s Subject Shares:

 

(a)  in favor of the approval and
adoption of the Merger Agreement and the approval of the Merger and the
transactions contemplated by the Merger Agreement;

 

(b)  against approval of any
proposal made in opposition to, or in competition with, the Merger and the
transactions contemplated by the Merger Agreement; and

 

(c)  against any actions (other
than those actions that relate to the Merger and the transactions contemplated
by the Merger Agreement) that are intended to, or could be reasonably expected
to, impair the ability of the Company to consummate the Merger or otherwise
impede, interfere with, delay, postpone, discourage or adversely affect the
consummation of the Merger in accordance with the terms of the Merger
Agreement.

 

Each Stockholder further agrees not to enter into any agreement or
understanding with any person to vote or give instructions in any manner
inconsistent with or violative of the terms of this Section 2.1.

 

SECTION 2.2.                       Proxy;
Reliance.  Each Stockholder hereby
constitutes and appoints Buyer, acting through each of Matt Fust and Carol
Gamble, each with the power to act alone and with full power of substitution
and resubstitution, at any time during the Term, as its true and lawful
attorneys-in-fact and proxies (its “Proxy”), for and in its name, place
and stead, to vote such Stockholder’s Subject Shares as its Proxy, at every
annual, special, adjourned or postponed meeting of the stockholders of the
Company called for purposes of considering whether to approve the Merger
Agreement or any of the other transactions or matters contemplated by, or
directly or indirectly affecting, the Merger Agreement or to execute a

 

2

 

written consent of stockholders in lieu of any such meeting.  Each Stockholder understands and acknowledges
that Buyer and Sub have entered into the Purchase Agreement in reliance upon
each Stockholder’s execution and delivery of this Agreement.  The parties agree that by reason of the
Merger Agreement, the Proxy is a proxy coupled with an interest.  At Buyer’s request, each Stockholder will
perform such further acts and execute such further documents as may be required
to vest in Buyer or its Representatives the sole power to vote Stockholder’s
Subject Shares with respect to the matters set forth in Section 2.1 during
the Term in accordance with the terms of this Agreement.

 

THE FOREGOING PROXY
AND POWER OF ATTORNEY ARE IRREVOCABLE AND COUPLED WITH AN INTEREST THROUGHOUT
THE TERM.

 

SECTION 2.3.                       Limitation.  Each Stockholder shall retain at all times
the right to vote such Stockholder’s Subject Shares in such Stockholder’s sole
discretion and without any other limitation on those matters other than those
set forth in Section 2.1 that are at any time or from time to time presented
for consideration by the Company’s stockholders generally.

 

SECTION 2.4.                       Capacity.  The parties hereby agree that the
Stockholders are executing this Agreement solely in their capacity as
stockholders of the Company.  Nothing
contained in this Agreement shall limit or otherwise affect, in any manner, the
conduct or exercise of the Stockholders’ fiduciary duties as officers or
directors of the Company, where applicable.

 

SECTION 2.5.                       Transfer
of Subject Shares.  Except as
otherwise contemplated by the Merger Agreement, from and after the date of this
Agreement until the termination of this Agreement, each Stockholder agrees that
it will be the beneficial owner of all of such Stockholder’s Subject Shares and
will hold such Subject Shares free and clear of all Liens and will not,
directly or indirectly, without the prior written consent of Buyer:

 

(a)  offer for sale, sell,
transfer, tender, pledge, encumber, assign or otherwise in any way dispose of,
or enter into any contract, option or other agreement (oral or written) with
respect to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, assignment or any other disposition of, any or all of such
Stockholder’s Subject Shares, or any interest therein;

 

(b)  grant any proxies or powers of
attorney, deposit any of the Subject Shares into a voting trust or enter into a
voting agreement with respect to any of the Subject Shares;

 

(c)  take any action that would
reasonably be expected to have the effect of preventing or disabling such Stockholder
from performing its obligations under this Agreement or making any
representation or warranty of such contained in this Agreement untrue or
incorrect; or

 

(d)  enter into any agreement or
arrangement providing for any of the actions described in clause (a), (b) or
(c) above.

 

3

 

ARTICLE III.

 

REPRESENTATIONS AND WARRANTIES OF
THE STOCKHOLDERS

 

Each Stockholder hereby, severally and not
jointly, represents and warrants to Buyer and Sub as follows:

 

(a)  Schedule I hereto
correctly sets forth the number of Company Capital Shares beneficially owned by
such Stockholder as of the date of this Agreement, and such Stockholder has
good title to all of the Company Capital Shares set forth below his, her or its
name on the signature page hereto free and clear of all Liens.

 

(b)   Such Stockholder has all
requisite legal capacity, power and authority to enter into and perform all of
its obligations under this Agreement. 
This Agreement has been duly and validly executed and delivered by such
Stockholder and when duly and validly executed and delivered by Buyer and Sub
will constitute a valid and binding agreement of such Stockholder, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors’ rights generally and by general equitable principles.  There is no beneficiary or holder of a voting
trust certificate or other interest of any trust of which such Stockholder is
trustee whose consent is required for the execution and delivery of this
Agreement or the consummation by such Stockholder of the transactions
contemplated hereby.

 

(c)  Except as contemplated by the
Merger Agreement, no filing or registration with, and no permit, authorization,
order, filing, registration consent or approval of, any federal, state, local,
municipal, foreign or other public body or authority is necessary for the
execution of this Agreement by such Stockholder and the consummation by it of
the transactions contemplated hereby, and none of the execution and delivery of
this Agreement by such Stockholder, the consummation by it of the transactions
contemplated hereby or compliance by it with any of the provisions hereof will
(i) conflict with or result in any breach of any applicable organizational
documents applicable to such Stockholder, (ii) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, agreement or other instrument or obligation of any
kind to which such Stockholder is a party or by which it or any of its
properties or assets may be bound, except as could not reasonably be expected
to impair the ability of such Stockholder to perform its obligations hereunder,
(iii) require any material consent, authorization or approval of any Person or
Governmental Entity that has not been obtained, or (iv) violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
such Stockholder or any of the Subject Shares.

 

4

 

ARTICLE IV.

 

MISCELLANEOUS

 

SECTION 4.1.                       Termination.  This Agreement shall terminate upon the
earliest to occur of (i) the Merger Effective Time, (ii) the valid
termination of the Merger Agreement in accordance with its terms, (iii) the
execution of any amendment to the Merger Agreement that modifies the amount,
form or timing of payment of the Merger Consideration in a manner adverse to
any Stockholder without the prior written consent of such Stockholder or
(iv) the mutual agreement of the parties hereto.  In the event this Agreement is terminated,
this Agreement shall immediately become void, there shall be no liability under
this Agreement on the part of Buyer, its officers or directors or the
Stockholders, and all rights and obligations of the parties to this Agreement
shall cease and be of no further legal effect, except that nothing herein shall
relieve any party from any liabilities or damages arising out of its material
breach of this Agreement.

 

SECTION 4.2.                       Expenses.  Except as otherwise expressly set forth
herein, all fees, costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such fees, costs and expenses. 

 

SECTION 4.3.                       Notice.  All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made (a) as of the date delivered or sent by facsimile if delivered
personally or by facsimile, and (b) on the third business day after deposit in
the U.S. mail, if mailed by registered or certified mail (postage prepaid,
return receipt requested), in each case to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):

 

	
  (a)

  	
   

  	
  if to Buyer and Sub:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jazz Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  3180 Porter Drive

  
	
   

  	
   

  	
  Palo Alto, CA 94304

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
  Facsimile: (650) 496-3781

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Simpson Thacher & Bartlett LLP

  
	
   

  	
   

  	
  3330 Hillview Avenue

  
	
   

  	
   

  	
  Palo Alto, CA 94304

  
	
   

  	
   

  	
  Attention: Kirsten Jensen, Esq.

  
	
   

  	
   

  	
  Facsimile: (650) 251-5002

  

 

5

 

	
  (b)

  	
   

  	
  if to the Company:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Orphan Medical, Inc.

  
	
   

  	
   

  	
  Ridgedale Office Center

  
	
   

  	
   

  	
  13911 Ridgedale Drive, Suite 250

  
	
   

  	
   

  	
  Minnetonka, MN 55305

  
	
   

  	
   

  	
  Attention: Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile: (952) 541-9209

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dorsey & Whitney LLP

  
	
   

  	
   

  	
  50 South Sixth Street

  
	
   

  	
   

  	
  Suite 1500

  
	
   

  	
   

  	
  Minneapolis, Minnesota 55402-1498

  
	
   

  	
   

  	
  Attention: Philip E. Bauer, Esq.

  
	
   

  	
   

  	
  Facsimile: (612) 340-7800

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  if to a Stockholder, at the address set
  forth below such Stockholder’s name on Schedule I hereto.

  

 

SECTION 4.4.                       Counterparts.  This Agreement may be executed via facsimile
in two or more counterparts, each of which, when executed, shall be deemed to
be an original and all of which together shall constitute one and the same
document.

 

SECTION 4.5.                       Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of laws thereof.

 

SECTION 4.7.                       Certain
Events.  Each Stockholder agrees that
this Agreement and such Stockholder’s obligations hereunder shall attach to
such Stockholder’s Subject Shares and shall be binding upon any person or
entity to which legal or beneficial ownership of such Subject Shares shall
pass, whether by operation of law or otherwise, including, without limitation,
such Stockholder’s heirs, guardians, administrators or successors.  Notwithstanding any transfer of Subject
Shares, the transferor shall remain liable for the performance of all its
obligations under this Agreement.

 

SECTION 4.8.                       Specific
Performance.  Each Stockholder
acknowledges that if such Stockholder fails to perform any of its obligations
under this Agreement, immediate and irreparable harm or injury would be caused
to Buyer  and Sub for which money damages
would not be an adequate remedy.  In such
event, each Stockholder agrees that Buyer and Sub shall have the right, in
addition to any other rights either party may have, to specific performance of
this Agreement.  Accordingly, if Buyer
and Sub should institute an action or proceeding seeking specific enforcement
of the provisions hereof, each Stockholder hereby waives the claim or defense
that Buyer and Sub have an adequate remedy at law and hereby agrees not to
assert in any such action or proceeding the claim or defense that such a remedy
at law exists.  Each

 

6

 

Stockholder further agrees to waive any requirements for the securing
or posting of any bond in connection with obtaining any such equitable relief.

 

[The remainder of this page is intentionally left blank; signature page
follows]

 

7

 

IN WITNESS WHEREOF, Buyer, Sub, the Company
and each of the Stockholders have caused this Agreement to be executed as of
the date first written above.

 

	
   

  	
  ORPHAN MEDICAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Howell Bullion

  	
   

  
	
   

  	
   

  	
  Name: John Howell Bullion

  
	
   

  	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JAZZ PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Samuel Saks

  	
   

  
	
   

  	
   

  	
  Name: Samuel Saks

  
	
   

  	
   

  	
  Title: CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TWIST MERGER SUB, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Carol Gamble

  	
   

  
	
   

  	
   

  	
  Name: Carol Gamble

  
	
   

  	
   

  	
  Title: Vice President

  

 

Signature Page to Voting
Agreement

 

 

	
   

  	
  ALTA BIOPHARMA PARTNERS II, L.P.

  
	
   

  	
  By:

  	
  Alta BioPharma Management II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Farah Champsi

  	
   

  
	
   

  	
   

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALTA EMBARCADERO BIOPHARMA

  PARTNERS II, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hilary Strain

  	
   

  
	
   

  	
   

  	
  V.P. of
  Finance & Admin.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ John Howell Bullion

  	
   

  
	
   

  	
  John Howell Bullion

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ORBIMED ADVISORS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Sheffrey

  	
   

  
	
   

  	
   

  	
  Name: Michael Sheffrey

  
	
   

  	
   

  	
  Title: General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UBS CAPITAL II LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marc A. Unger/Richard C. Capone

  	
   

  
	
   

  	
   

  	
  Name: Marc A. Unger/Richard C. Capone

  
	
   

  	
   

  	
  Title: Attorneys-in-Fact

  
					

 

Signature Page to Voting
Agreement

 

 

SCHEDULE I

 

	
  Name and Address of

  Stockholder

  	
   

  	
  Company Common

  Stock

  	
   

  	
  Company Preferred

  Stock (including

  designation of Class of

  Preferred Stock)

  	
   

  	
  Stock Options and
  Warrants

  exercisable for Company Capital

  Shares (including designation of

  Class of Company Capital Shares

  into which such Stock Options

  and Warrants are exercisable)

  	
   

  	
  Aggregate Number of
  Company

  Capital Shares (on a Fully

  Diluted and As-if-Converted to

  Common Stock Basis)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta Partners II,
  Inc.

  One Embarcadero Center,

  Suite 4050

  San Francisco, CA 94111 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta
  BioPharma Partners II,

  L.P.

  	
   

  	
  1,169,113

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  1,169,113

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alta
  Embarcadero BioPharma

  Partners II, LLC

  	
   

  	
  43,008

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  43,008

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John Howell
  Bullion

  6016 Shane Drive

  Edina, MN 55439

  	
   

  	
  465,312

  	
   

  	
  N/A

  	
   

  	
  Options to purchase 244,833 shares of Common Stock

  	
   

  	
  710,145

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OrbiMed Advisors
  LLC

  767 Third Avenue -

  6th Floor

  New York, NY

  10017-2023

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Caduceus
  Capital

  Master Fund Limited

  	
   

  	
  537,302

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  537,302

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Caduceus
  Capital II,

  L.P.

  	
   

  	
  300,000

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS
  Eucalyptus Fund

  L.L.C.

  	
   

  	
  690,000

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  690,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS
  Eucalyptus Fund

  Ltd.

  	
   

  	
  90,000

  	
   

  	
  N/A

  	
   

  	
  N/A

  	
   

  	
  90,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UBS Capital II
  LLC

  299 Park Avenue

  New York, NY

  10171-0026

  	
   

  	
  289,986

  	
   

  	
  8,706 shares of Senior Convertible Preferred Stock ,
  convertible into 1,069,533 shares of Common Stock

   

  4,420 shares of Series B Preferred Stock, convertible
  into 680,000 shares of Common Stock

  	
   

  	
  Options to acquire 40,000 shares of Common Stock

   

  Warrant to purchase up to 2,050 shares of non-voting
  Series C Convertible Preferred Stock or 315,385 shares of Series D Non-Voting
  Convertible Preferred Stock, convertible into 315,385 shares of Common Stock

   

  Warrant purchase up to 282,353 shares of Series D
  Non-Voting Convertible Preferred Stock, convertible into 282,353 shares of
  Common Stock

  	
   

  	
  2,677,257

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00083-of-00352.parquet"}]]