Form 8-K ALBANY MOLECULAR RESEARC For: Jul 16

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

___________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 16, 2015

ALBANY MOLECULAR RESEARCH, INC.
(Exact Name of Registrant as Specified in Charter)

 

 

Delaware	001-35622	14-1742717
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

26 Corporate Circle Albany, NY	12212
(Address of principal executive offices)	(Zip Code)

 

Registrant’s telephone number, including area code: (518) 512-2000

 (Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

  

Item 1.01 Entry into Material Definitive Agreement.

  

Share Purchase Agreement

 

On July 16, 2015, Albany Molecular Research, Inc., a Delaware corporation (“AMRI”), Exirisk Spain, S. L., AMRI’s indirect wholly-owned subsidiary (“Acquisition Sub”), Gadea Grupo Farmaceutico, S.L. (“Gadea”) and certain other parties thereto (the “Vendors”), entered into a definitive Share Purchase Agreement (the “Share Purchase Agreement”) pursuant to which Acquisition Sub purchased 100% of Gadea’s capital stock (the “Transaction”) for $174 million, including the issuance of 2,200,000 shares of common stock, $0.01 par value of AMRI (the “Stock Consideration”), valued at $43.8 million, with the balance paid in $97 million in cash (the “Cash Consideration”) and through the assumption of existing debt.

 

 

The Stock Consideration consists of unregistered securities issued in accordance with applicable securities laws and subject to transfer restrictions. The Cash Consideration may be adjusted in connection with a working capital and net debt post-closing adjustment in accordance with the terms of the Share Purchase Agreement. Acquisition Sub deposited approximately $25 million of the Cash Consideration in an escrow account with Banco Bilbao Vizcaya Argentaria to be held in escrow and distributed in accordance with the terms of the Escrow Agreement (as defined in the Share Purchase Agreement).

 

The parties to the Share Purchase Agreement have made certain customary representations, warranties and covenants, among others: (i) representations by the Vendors with respect to Gadea’s business, operations and financial condition, (ii) covenants by the Vendors to keep information relating to Gadea’s business confidential, (iii) covenants by 3-Gutinever, S.L., the majority stockholder of Gadea, and Mr. Gerardo Gutiérrez, the owner of 3-Gutinever, S.L., to not compete with Gadea’s business and to not solicit employees from Gadea or AMRI, and (iv) covenants by AMRI and the Vendors to cooperate on specified matters.

 

A copy of the Share Purchase Agreement is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The foregoing description of the Share Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Share Purchase Agreement. The Share Purchase Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about AMRI, Acquisition Sub, Gadea, or the Vendors. In particular, the assertions embodied in the representations and warranties in the Share Purchase Agreement were made as of a specified date, are modified or qualified by information in confidential disclosure letters provided by each party to the other in connection with the signing of the Share Purchase Agreement, may be subject to contractual standards of materiality different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the parties. Accordingly, the representations and warranties in the Share Purchase Agreement is not necessarily characterizations of the actual state of facts about AMRI, Acquisition Sub, Gadea, or the Vendors at the time they were made or otherwise and should only be read in conjunction with the other information that AMRI makes publicly available in reports, statements and other documents filed with the Securities and Exchange Commission (the “SEC”).

 

 

Credit Agreement

  

On July 16, 2015, AMRI entered into a $230 million senior secured credit agreement (the “Credit Agreement”) with Barclays Bank PLC, as Administrative Agent, Collateral Agent, L/C Issuer and Swing Line Lender, and the lenders party thereto.

 

The Credit Agreement, subject to the terms and conditions set forth therein, provides for a (X) $200 million six-year term loan and (Y) a $30 million five-year revolving credit facility, which includes a $15 million sublimit for the issuance of standby letters of credit and a $5 million sublimit for swingline loans. Each of the maturity dates may be accelerated to a date that is six months prior to the scheduled maturity date of AMRI’s existing convertible notes if, on such date, more than a certain amount of those notes remain outstanding and AMRI has a secured leverage ratio over a certain amount. The Credit Agreement also includes an accordion feature that, subject to securing additional commitments from existing lenders or new lending institutions, will allow AMRI to increase the aggregate commitments under the Credit Agreement by up to $60 million (plus, to the extent utilized to effect an increase to the revolving credit facility, an additional $20 million), plus an unlimited amount subject to compliance with a pro forma secured leverage ratio. AMRI expects to use the proceeds of any borrowings under the Credit Agreement for the Transaction, working capital and other general corporate purposes of AMRI and its subsidiaries, subject to the terms and conditions set forth in the Credit Agreement.

 

At AMRI’s election, loans made under the Credit Agreement will initially bear interest at the Adjusted Eurodollar Rate (as defined below) plus 4.75% or the Base Rate (as defined below) plus 3.75%. Upon achievement of a certain senior secured leverage ratio, the rates will step down to 4.50% and 3.50%, respectively. The Base Rate means, for any day, a fluctuating rate per annum equal to the highest of (i) the federal funds rate plus ½ of 1.00%, (ii) the prime rate in effect on such day and (iii) the Adjusted Eurodollar Rate for a one month interest period beginning on such day (or, if such day is not a businessd day, the immediately preceding business day) plus 1.00%; provided that, in the case of the term loans, the Base Rate shall at all times be deemed to be not less than the 2.00%. The Adjusted Eurodollar Rate means for the interest period for each eurodollar loan comprising part of the same group, the quotient obtained (expressed as a decimal, carried out to five decimal places) by dividing (i) the applicable eurodollar rate for such interest ieriod by (ii) 1.00% minus the eurodollar reserve percentage; provided that, in the case of the term loans only, the Adjusted Eurodollar Rate shall at all times be deemed to be not less than 1.00%.

  

The Credit Agreement includes a springing maturity provision such that the loans under the Credit Agreement will mature 6 months prior to the convertible bond maturity date if more than $25 million of the bonds are outstanding and the secured leverage ratio is greater than 1.50:1.00 on such date. The Credit Agreement is currently being syndicated.

  

The borrowings under the Credit Agreement are prepayable at the option of AMRI, subject to a 1.00% prepayment premium in certain circumstances if prepaid within the first six month, and otherwise without premium or penalty (other than customary breakage costs for Eurodollar loans). Amounts prepaid under the term loan facility are not available for reborrowing, but amounts prepaid under the revolving credit facility are available for reborrowing unless AMRI determines to permanently reduce the commitments under the revolving credit facility, subject to the terms and conditions of the Credit Agreement.

 

The obligations under the Credit Agreement are guaranteed by each material domestic subsidiary of AMRI (each a “Guarantor”) and are secured by first priority liens on, and security interests in, substantially all of the present and after-acquired assets of AMRI and each Guarantor subject to certain customary exceptions.

 

The Credit Agreement contains customary representations and warranties relating to AMRI and its subsidiaries. The Credit Agreement also contains certain affirmative and negative covenants including negative covenants that limit or restrict, among other things, liens, indebtedness, investments and acquisitions, mergers and fundamental changes, asset sales, restricted payments, changes in the nature of the business, transactions with affiliates and other matters customarily restricted in such agreements. The Credit Agreement is also subject to certain customary “Market Flex” provisions, which, if utilized, could alter certain of the terms outlined herein.

 

If an event of default shall occur and be continuing under the Credit Agreement, the commitments under the Credit Agreement may be terminated and the principal amounts outstanding under the Credit Agreement, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable.

 

AMRI expects to file the Credit Agreement as an exhibit to a periodic report. The foregoing description is qualified in its entirety by reference to the complete text of the Credit Agreement when filed.

 

 

Existing Credit Agreement Amendment

  

On July 14, 2015, AMRI entered into an amendment (the “Amendment”) to its existing senior secured credit agreement, dated as of October 24, 2014 (as amended by Amendment No. 1 to Credit Agreement, dated as of December 23, 2014, and as further amended, restated, supplemented or otherwise modified from time to time, the “Existing Credit Agreement”), by and among AMRI, the lending institutions from time to time party thereto and Barclays Bank PLC, as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer (capitalized terms used but not defined herein having the meanings provided in the Existing Credit Agreement). The Amendment permitted AMRI to repay the entire outstanding principal outstanding under the Existing Credit Agreement and to apply that prepayment on a non-pro rata basis among the lenders under the Existing Credit Agreement. AMRI used the proceeds from borrowings under the Credit Agreement to repay the entire outstanding principal outstanding under the Existing Credit Agreement on July 16, 2015 in connection with the Transaction.

 

The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment attached hereto as Exhibit 10.1.

 

Item 2.01  Completion of Acquisition or Disposition of Assets.

  

The disclosure provided in Item 1.01 of this report is hereby incorporated by reference into this Item 2.01.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

  

The information in Item 1.01 above is incorporated into this Item 2.03 by reference.

  

Item 3.02  Unregistered Sales of Equity Securities.

  

The disclosure provided in Item 1.01 of this report is hereby incorporated by reference into this Item 3.02.

  

In connection with the Transaction, AMRI entered into a Registration Rights Agreement with 3-Gutinever, S.L. (“3-Gutinever”), pursuant to which AMRI agreed to (i) file a registration statement (the “Demand Registration Statement”) with the SEC covering the resale of the 2,200,000 shares of common stock, par value $0.01, of AMRI (“Shares”), no later than 30 days following the receipt of a demand notice from 3-Gutinever during the during the period from 9 months after the closing of the Transaction and the earlier of (A) the two (2) year anniversary of the closing of the Transaction or (B) the number of shares held by the Participating Holders (as defined in the Registration Rights Agreement) is less than one million (1,000,000), and (ii) use commercially reasonable efforts, subject to receipt of necessary information from 3-Gutinever, to cause the SEC to declare the Demand Registration Statement effective. AMRI also granted piggyback registration rights to 3-Gutinever, S.L.

  

The preceding summary of the Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached as Exhibit 3.2 hereto and incorporated herein by reference.

  

 

The Shares were offered and sold outside the United States to an eligible investor pursuant to Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). The Shares have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under or an applicable exemption from such registration requirements. This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to purchase, the Shares in any jurisdiction in which such offer or solicitation would be unlawful.

   

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

  

Based on the recommendation of the Nominating and Corporate Governance Committee of AMRI, the Board of Directors of AMRI (the “Board”) elected Gerardo Gutiérrez to the Board effective as of the closing of the Transaction. Mr. Gutierrez founded Gadea in 1991 and served as its President and Chief Executive Officer. Mr. Gutierrez graduated from the Complutense University of Madrid with a degree in chemistry and obtained a master’s degree in Management Production, Operations and Technology from ICADE Business School. Mr. Gerardo Gutiérrez has not been elected to any committees of the Board.

 

Prior to the Transaction, 3-Gutinver, an entity owned and controlled by Mr. Gutiérrez, held approximately 65% of the outstanding capital stock of Gadea. In connection with the Transaction as consideration for 3-Gutinver’s shares of Gadea, 3-Gutinver received $42 million in cash consideration and was issued 2,200,000 shares of common stock of AMRI. The disclosure provided in Item 1.01 of this report is hereby incorporated by reference into this Item 5.02.

 

There are no understandings or arrangements between Mr. Gutiérrez and any other person pursuant to which Mr. Gutiérrez was elected as a director.

 

Information concerning the membership of the Board’s committees is publicly available on AMRI’s website at http://www.amriglobal.com. AMRI intends to disclose changes in the membership of the Board’s committees by posting this information on its website and/or in its public filings with the Securities and Exchange Commission.

  

Item 7.01 Regulation FD Disclosure.

 

On July 16, 2015, AMRI issued a press release announcing the completion of the Transaction. A copy of the press release is attached hereto and furnished herewith as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits

 

(a)	Financial Statements of Business Acquired
	(1)	The financial statements required by Item 9.01(a) of Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed.
(b)	Pro Forma Financial Information
	(1)	The pro forma financial statements required by Item 9.01(b) of Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed.

 

 

 

(d)

Exhibits.

  

Exhibit No.		Description
2.1		Share Purchase Agreement by and among Albany Molecular Research, Inc., Gadea Grupo Farmaceutico, S.L., Exirisk Spain, S.L. and certain other persons thereto, dated as of July 16, 2015*
3.2		Registration Rights Agreement by and between Albany Molecular Research, Inc. and 3-Gutinver, S.L., dated as of July 16, 2015
10.1		Amendment No. 2 to Credit Agreement, dated as of July 14, 2015, among Albany Molecular Research, Inc., Barclays Bank PLC, as administrative agent and collateral agent, each Lender party Research, Inc., Barclays Bank PLC, as administrative agent and collateral agent, each Lender party thereto and each other Loan Party party thereto.
99.1		Press Release dated July 16, 2015.

  

*Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. AMRI hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

 

  

SIGNATURES

  

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  

 

	ALBANY MOLECULAR RESEARCH, INC.
	By:	/s/ Lori Henderson
		Name: Lori Henderson
		Title: Senior Vice-President, General Counsel & Secretary

 

 

Date:   July 16, 2015

 

 

 

EXHIBIT INDEX

  

 

(d)

Exhibits.

 

Exhibit No.		Description
2.1		Share Purchase Agreement by and among Albany Molecular Research, Inc., Gadea Grupo Farmaceutico, S.L., Exirisk Spain, S.L. and certain other persons thereto, dated as of July 16, 2015*
3.2		Registration Rights Agreement by and between Albany Molecular Research, Inc. and 3-Gutinver, S.L., dated as of July 16, 2015
10.1		Amendment No. 2 to Credit Agreement, dated as of July 14, 2015, among Albany Molecular Research, Inc., Barclays Bank PLC, as administrative agent and collateral agent, each Lender party Research, Inc., Barclays Bank PLC, as administrative agent and collateral agent, each Lender party thereto and each other Loan Party party thereto.
99.1		Press Release dated July 16, 2015.

  

*Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. AMRI hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.

 

 

Exhibit 2.1

 

EXECUTION VERSION

 

SHARE PURCHASE AGREEMENT

 

OF

 

GADEA GRUPO FARMACÉUTICO, S.L.

 

BY AND BETWEEN

 

EXIRISK SPAIN, S.L.U.

 

(as Purchaser)

 

Albany Molecular Research, Inc.

 

(as AMRI Parent)

 

AND

 

3-Gutinver, S.L.

Antartis Pharma, S.L.

Muggio Holding, S.L.

Iniciativas del Jarama, S.A.

Heliodoro Pedro Gutiérrez Fuentes

José Chavero Murillo

Antonio Lorente Bonde-Larsen

Maximiliano Ruiz López

Luis Prudencio García Burgos

Francisco Javier Gallo Nieto

Jesús Emilio Gutiérrez Fuentes

Gloria Mª del Carmen Gutiérrez Fuentes

José Antonio Gutiérrez Fuentes

Gutiérrez Campiña y Cia, S.R.C.

(as Vendors)

 

In Madrid on this 16^th July 2015

 

 

EXECUTION VERSION

 

AGREEMENT FOR THE SALE AND PURCHASE OF SHARES

 

In Madrid on this 16^th July 2015 (the “Signing Date”)

 

BETWEEN

 

OF THE ONE PART

 

(i)

Ms. Lori Marie Henderson, of legal age, married, of United States of America nationality, with professional domicile at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, County of New Castle, holding US passport number ****** and Spanish Identity Number (NIE) ******, for and on behalf of EXIRISK SPAIN, S.L.U. (hereinafter, the “Purchaser”), validly incorporated and existing under the Laws of Spain, domiciled at Doctor Fleming St. 3, 9º D, Madrid, and with tax identification number ******, incorporated for an indefinite period and registered at the Commercial Registry of Madrid at volume 33,479, Sheet 210, page M-602,674. Her powers for this act arise from her position as sole director of the Purchaser.

 

(ii)

Ms. Lori Marie Henderson, whose personal details are stated above, for and on behalf of Albany Molecular Research, Inc. (hereinafter, “AMRI Parent”), validly incorporated and existing under the Laws of the United States of America, domiciled at Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware, County of New Castle, incorporated for an indefinite period and registered at the Commercial Registry of Delaware with number 2930230. She acts by virtue of a special power of attorney granted before the US Notary Public Mr. Robin Riley on 8 July 2015.

 

The Purchaser and AMRI Parent shall hereinafter be referred to jointly as “AMRI”.

 

AND, OF THE OTHER PART

 

(i)

Mr. Luis Gerardo Gutiérrez Fuentes, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ******, for and on behalf of 3-Gutinver, S.L. (hereinafter, “3-Gutinver”), validly incorporated and existing under the Laws of Spain, domiciled at ******, and with tax identification number ******, incorporated for an indefinite period and registered at the Valladolid Commercial Registry under Volume 1433, Sheet 34, Section 8, Page VA-13374 and Entry 8. His powers for this act arise from his position as sole director of 3-Gutinver, pursuant to the incorporation public deed granted before the public notary of Madrid Mr. Luis Sánchez Marco on 20 December 2001 under number 3,522 of his official records.

 

 

EXECUTION VERSION

 

(ii)

Mr. Samuel Alonso Martínez, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ******, for and on behalf of Antartis Pharma, S.L. (hereinafter, “Antartis”), validly incorporated and existing under the Laws of Spain, domiciled at ******, and with tax identification number ******, incorporated for an indefinite period and registered at the Valladolid Commercial Registry under Volume 1344, Sheet 208, Section 8, Page VA-13942 and Entry 8. His powers for this act arise from his position as managing director of Antartis, pursuant to the public deed granted before the public notary of Boecillo (Valladolid) Mr. Gonzalo Guilarte Martín-Calero on 5 December 2008 under number 2,011 of his official records.

 

(iii)

Mr. Jose-Luis Stampa Jäger, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ******, for and on behalf of Muggio Holding, S.L. (hereinafter, “Muggio”), validly incorporated and existing under the Laws of Spain, domiciled at ******, with tax identification number ******, incorporated for an indefinite period and registered at the Barcelona Commercial Registry under Volume 9,195, Sheet 44, Section 8, Page B-341,185 and Entry 1. His powers for this act arise from his position as managing director of Muggio, pursuant to the public deed granted before the public notary of Barcelona Mr. Vicente Pons Llacer on 3 January 2007 under number 5 of his official records.

 

(iv)

Mr. Cristobal-Antonio Molleja Melgar, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card/passport number ******, for and on behalf of Iniciativas del Jarama, S.A. (hereinafter, “Iniciativas”), validly incorporated and existing under the Laws of Spain, domiciled at ******, and with tax identification number ******, incorporated for an indefinite period and registered at the Madrid Commercial Registry under Volume 15,277, Sheet 135, Section 8, Page M-255,923 and Entry 5. His powers for this act arise from his position as sole director of Iniciativas, pursuant to the public deed granted before the public notary of Alcobendas Ms. Pilar M. Ortega Rincón on 14 September 2010 under number 1,361 of his official records .

 

(v)

Mr. Francisco Javier Gallo Nieto on behalf of Mr. Heliodoro Pedro Gutiérrez Fuentes, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ******, by virtue of power of attorney granted before Public Notary of Castilla-León dated 2 July 2015 under number 887 of his official records (hereinafter, “Heliodoro Gutiérrez”).

 

(vi)

Ms. Maria- Inés Garcia Viana on behalf of Mr. José Chavero Murillo, of legal age, married a Spanish national, with professional domicile at Conde de Lemos 8, bajo Madrid, holding Spanish national identity card number ****** by virtue of Power of Attorney granted before Public Notary Mr. Fernando Goma dated 2 July 2015, under number 719 of his official records (hereinafter, “José Chavero”).

 

 

EXECUTION VERSION

 

(vii)

Mr. Antonio Lorente Bonde-Larsen, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ****** (hereinafter, “Antonio Lorente”).

 

(viii)

Mr. Maximiliano Ruiz López, of legal age, married, a Spanish national, with professional domicile at ****** holding Spanish national identity card number ****** (hereinafter, “Maximiliano Ruiz”).

 

(ix)

Mr. Luis Prudencio García Burgos, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ****** (hereinafter, “Luis García”).

 

(x)

Mr. Francisco Javier Gallo Nieto, of legal age, married, a Spanish national, with professional domicile at ****** holding Spanish national identity card number ****** (hereinafter, “Javier Gallo”).

 

(xi)

Mr. Daniel Jesus Gutierrez Lorenzo, Ms. Laura Andrea Gutierrez Lorenzo and Ms. Cristina Gutierrez Lorenzo on behalf of Mr. Jesús Emilio Gutiérrez Fuentes, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ****** by virtue of Power of Attorney granted before Public Notary of Madrid Mr. José Amerigo Ruiz dated 7 August 2013, under his number 530 of his official records (hereinafter, “Jesús Gutiérrez”).

 

(xii)

Ms. Gloria Mª del Carmen Gutiérrez Fuentes, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card/passport number ****** (hereinafter, “Gloria Gutiérrez”).

 

(xiii)

Mr. José Antonio Gutiérrez Fuentes, of legal age, married, a Spanish national, with professional domicile at Calle Santiago Bernabeu B 16, 1D, Madrid, holding Spanish national identity card number ****** (hereinafter, “José Antonio Gutiérrez”).

 

(xiv)

Mr. Francisco-Javier Jiménez Juárez, of legal age, married, a Spanish national, with professional domicile at ******, holding Spanish national identity card number ******, for and on behalf of Gutiérrez Campiña y Cia, S.R.C. (hereinafter, “Gutiérrez Campiña”), validly incorporated and existing under the Laws of Spain, domiciled at ******, and with tax identification number ******, incorporated for an indefinite period and registered at the Madrid Commercial Registry under Volume 29836, Sheet 102, Section 8, Page M-528,943 and Entry 1. His powers for this act arise from his position as sole director of Gutiérrez Campiña, pursuant to the public deed granted before the public notary of Madrid Mr. Antonio Huerta Trolez on 30 December 2011 under number 3,563 of his official records.

 

 

EXECUTION VERSION

 

3-Gutinver, Antartis, Muggio, Iniciativas, Heliodoro Gutiérrez, José Chavero, Antonio Lorente, Maximiliano Ruiz, Luis García, Javier Gallo, Jesús Gutiérrez, Gloria Gutiérrez, José Antonio Gutiérrez and Gutiérrez Campiña shall hereinafter be referred to jointly as the “Vendors” and individually as the “Vendor”.

 

Hereinafter the Purchaser, AMRI Parent and the Vendors shall be referred to jointly as the “Parties” and each of them individually as a “Party”.

 

 

EXECUTION VERSION

 

WITNESSETH

 

I.

Whereas, GADEA GRUPO FARMACÉUTICO, S.L. is a Spanish company, domiciled at Parque Tecnológico de Boecillo – Plot number 113, Boecillo, Valladolid, registered with the Commercial Registry of Valladolid at volume 1.402, Sheet 8, page VA-19,433 and holding tax identification number (CIF) **** (hereinafter, indistinctively “Gadea” or the “Company”).

 

II.

Whereas, Gadea is the parent company of a Group of companies comprising companies or entities that, directly or indirectly, are wholly owned by Gadea or in which Gadea holds a majority interest (“Gadea’s Subsidiaries”). A list of Gadea’s Subsidiaries, indicating Gadea’s direct and indirect holdings in the same and the charges and encumbrances affecting the shares of Gadea’s Subsidiaries has been attached as Schedule II to this Agreement. Hereinafter Gadea and Gadea’s Subsidiaries shall be referred to jointly as the “Gadea Group”.

 

Schedule II also contains a description of the business activity at which each member of the Gadea Group is aimed (jointly considered, the “Business”, and each of them a “Business”).

 

III.

Whereas, the Vendors, according to the breakdown of ownership attached hereto as Schedule III, hold full title to 2,618,923,039 shares (“participaciones sociales”), each with a nominal value of Eur0.01, numbered from 1 to 2,618,923,039, both inclusive, all common shares of the same class and series, fully subscribed and paid up, and representing one hundred percent (100%) of the capital stock of the Company (hereinafter, the “Shares”) by virtue of the titles described in Schedule III.(bis) (jointly considered, the “Title Deeds” (“escrituras de titularidad de las participaciones sociales”)):

 

IV.

Whereas, the Shares are free and clear of any Charges and Encumbrances, save for the first refusal rights set out in the Company´s by-laws as registered with the Commercial Registry on the Signing Date (hereinafter, the “By-laws”).

 

V.

Whereas, the Purchaser is the special purpose vehicle indirectly wholly owned by AMRI Parent, used by AMRI Parent to purchase and acquire the Shares.

 

VI.

Whereas, the Vendors represent one hundred percent (100%) of the share capital of Gadea and therefore expressly waive their first refusal rights (and also Gadea’s first refusal right) over the Shares and declare that they have complied with all requirements under the By-laws and under the Spanish Companies’ Act for the transfer of the Shares in favour of the Purchaser and, generally, for the execution of the Transaction.

 

 

EXECUTION VERSION

 

VII.

Whereas, prior to the Signing Date, AMRI has carried out a due diligence process on the Company and the Gadea Group based on the documentation provided by the Vendors included on a DVD (the “DVD”) which has been delivered to the Notary by the Parties on this same act (together with a certificate issued by DRooms as the data room service provider) (the “Due Diligence”) which shall not exonerate the Vendors from any liability under this Agreement to the extent as expressly stated in this Agreement and as expressly disclosed by the Vendors in the Disclosure Letter (as this term is defined below) and in the disclosure schedules which have been attached to this Agreement as Schedule 4.1.(a) (hereinafter, the “Disclosure Schedules”). The Vendors declare that the contents of the DVD are exactly the same as those provided to AMRI during the Due Diligence.

 

VIII.

Now therefore, subject to the terms and conditions set forth in below, the Purchaser intends to purchase and acquire, and the Vendors intend to sell and transfer, the Shares on the Signing Date (as this term is defined below), to which effect the Parties mutually recognize that they have the necessary and sufficient legal capacity to enter into this Agreement (hereinafter, the “Agreement”), which will be governed by the following

 

 

EXECUTION VERSION

 

CLAUSES

 

0.

DEFINITIONS

 

The terms and expressions appearing with initial capitalisation in this Agreement and not defined in the body of the same shall have the meaning specified in Schedule 0.

 

1.

SALE AND PURCHASE OF SHARES

 

1.1

Subject to the terms and conditions of this Agreement, the Vendors jointly and simultaneously sell and transfer the Shares to the Purchaser, who purchases and acquires them, free of Charges and Encumbrances, with all the economic and non-economic rights inherent to them. In particular, upon the Signing Date, the Purchaser shall be entitled to receive all dividends and distributions whether in cash or in kind, which will be payable or that are actually paid following the Signing Date, even if the same are so payable or paid in respect of a period prior to the Signing Date, but not at any time before the date of the Balance Sheet Prior to the Signing Date.

 

1.2

The consummation and effectiveness of the Transaction (the “Closing”) shall take place on the Signing Date through the Closing Deed.

 

2.

PURCHASE PRICE AND PAYMENT METHOD

 

2.1

Purchase Price

 

For the purposes of this Agreement, the purchase price payable for the Shares (the “Purchase Price”) shall be defined as the Closing Price as adjusted pursuant to the provisions in Clauses 2.2. and 2.3 below.

 

On the Signing Date, the Purchaser pays to the Vendors the amount of ONE HUNDRED TWENTY SEVEN MILLION EIGHT HUNDRED TEN THOUSAND THREE HUNDRED EIGHTY EIGHT EUROS AND SIXTY SEVEN CENTS (Eur 127,810,388.67) (the “Closing Price”), which is comprised of:

 

(i)

the amount of EIGHTY EIGHT MILLION FIFTY THOUSAND SIX HUNDRED AND TWENTY EUROS AND FORTY EIGHT CENTS (Eur 88,050,620.48), to be paid in cash (hereinafter, the “Cash Consideration”), and

 

(ii)

the amount of THIRTY NINE MILLION SEVEN HUNDRED FIFTY NINE THOUSAND SEVEN HUNDRED SIXTY EIGHT EUROS AND NINETEEN CENTS EUROS (Eur 39,759,768.19) is paid in kind by delivering 2,200,000 shares of Purchaser Common Stock (hereinafter, such number of shares, the “Stock Consideration”).

 

 

EXECUTION VERSION

 

The Parties declare that the Closing Price has been calculated as follows: the amount of Eur 158,009,444.24 minus the Target Net Debt. The Parties declare that the Closing Price has been also calculated on the basis of a Working Capital amount equal to the Target Working Capital.

 

A breakdown of the part of the Closing Price, divided into the Cash Consideration and Stock Consideration, which correspond to each of the Vendors and the different Shares transferred is attached as Schedule 2.1.1. Each Vendor consents to the receipt of the Cash Consideration (as adjusted following the Closing in accordance herewith) and the Stock Consideration set forth opposite its name on Schedule 2.1.1 as consideration for the Shares of such Vendor being transferred to the Purchaser hereunder.

 

The Closing Price has been agreed by the Parties on the basis of an aggregate of several reasons and, in particular, amongst others, on the basis of the consolidated balance sheet for the Gadea Group closed as of 31 May 2015 which has been attached as Schedule 2.1.2 to this Agreement (the “Balance Sheet Prior to the Signing Date”) the Vendors’ Representations and Warranties and the AMRI’s Representations and Warranties.

 

2.2

Closing Balance Sheet

 

(i)

Closing Balance Sheet. As soon as practicable, and in any event within 90 days after the Signing Date, the Purchaser shall prepare, or shall cause to be prepared, and deliver to the Vendors’ Representative a consolidated balance sheet of the Gadea Group as of the close of business on the Business Day preceding the Signing Date (the “Closing Balance Sheet”), prepared in accordance with Spanish GAAP, and consistent with all polices and practices as used in the preparation of the Balance Sheet Prior to the Signing Date, and shall include a statement of the amount of Net Debt and Working Capital that existed as of the close of business on the Business Day preceding the Signing Date. The Net Debt and Working Capital as finally determined pursuant to this Clause 2.2(i) is referred to herein as the “Final Net Debt” and the “Final Working Capital”. At the request of the Vendors’ Representative, representatives of the Purchaser shall be available to answer questions with respect to the Closing Balance Sheet and the determination of the Net Debt and Working Capital.

 

 

EXECUTION VERSION

 

(ii)

Disputes regarding Closing Balance Sheet. The Vendors’ Representative shall have 45 days after the date the Purchaser delivers the Closing Balance Sheet (the “Dispute Period”) to dispute any of the elements of or amounts reflected on the Closing Balance Sheet or the calculation of Net Debt or Working Capital (a “Dispute”). If the Vendors’ Representative does not give timely written notice to the Purchaser of a Dispute (a “Dispute Notice”) within the Dispute Period, the Closing Balance Sheet shall be treated as if it had been accepted and agreed to by the Vendors, in the form in which it was delivered, and the Final Net Debt and the Final Working Capital set forth therein shall be final and binding upon the Parties hereto. If the Vendors’ Representative has a Dispute, the Vendors’ Representative shall deliver to the Purchaser a Dispute Notice within the Dispute Period, setting forth, in reasonable detail, the elements and amounts with which it disagrees and the reasons therefor. During the 15-day period following the delivery of the Dispute Notice, the Purchaser and the Vendors’ Representative shall use commercially reasonable efforts to resolve the Dispute and agree in writing upon the final content of the disputed Closing Balance Sheet. If the Purchaser and the Vendors’ Representative agree as to the content of the Closing Balance Sheet, the Final Net Debt and Final Working Capital as so agreed shall be final and binding for purposes of this Agreement.

 

2.3

Appointment of the Independent Expert

 

(i)

Dispute Resolution. If the Purchaser and the Vendors’ Representative are unable to resolve any Dispute within the 15-day period after the Vendors’ Representative’s delivery of a Dispute Notice, the Vendors’ Representative and the Purchaser shall jointly engage PricewaterhouseCoopers the “Independent Expert”) as an arbitrator to promptly resolve any Disputes under the Closing Balance Sheet. In connection with the resolution of any Dispute, the Independent Expert shall have reasonable access during normal business hours upon at least three Business Days’ advance notice to all relevant portions of documents, records, work papers, facilities and financial and accounting personnel of the Company and the Gadea Group to the extent necessary to perform its function as arbitrator (but excluding Tax Returns of the Purchaser and its Affiliates other than the Company and its Gadea’s Subsidiaries). The Independent Expert’s function shall be to conform the Closing Balance Sheet to the requirements of this Clause 2. The Independent Expert shall allow the Purchaser and the Vendors’ Representative to present their respective positions regarding the Dispute. The Independent Expert may, at its discretion, conduct a conference concerning the Dispute, at which conference each of the Purchaser and the Vendors’ Representative shall have the right to present additional documents, materials and other information and to have present its advisors, counsel and accountants and each of the Purchaser and the Vendors’ Representative agree that they will deliver to the other party all such documents, materials and other information at least five Business Days in advance of such conference. In connection with such process, there shall be no other hearings or any oral examinations, testimony, depositions, discovery or other similar proceedings. The Independent Expert shall thereafter promptly render its decision on the question in writing and finalize the Closing Balance Sheet. Such written determination shall be final and binding for purposes of this Agreement. Upon the resolution of all Disputes, the Closing Balance Sheet shall be revised to reflect the resolution and the Net Debt and Working Capital amounts set forth thereon shall be treated as the Final Net Debt and the Final Working Capital. The fees and expenses of the Independent Expert shall be allocated between (A) the Vendors and (B) the Purchaser, so that the Vendors’ share of such fees and expenses (which shall be paid by the Vendors through the Vendors’ Representative who shall have the right to recover from the others Vendors the amount paid by the Vendors’ Representative in behalf of the others Vendors) shall be equal to the product of (i) the aggregate amount of such fees and expenses, multiplied by (ii) a fraction, the numerator of which is the amount in dispute that is ultimately unsuccessfully disputed by the Vendors’ Representative (as determined by the Independent Expert), and the denominator of which is the total amount in dispute.

 

 

EXECUTION VERSION

 

(ii)

Final Net Debt and Final Working Capital. Within five Business Days after the Final Net Debt and Final Working Capital amounts have been finally determined pursuant to Clauses 2.2 and 2.3(i) above:

 

(a)

For the purposes of this Clause 2.3:

 

a.

the “WC Adjustment Difference” means the difference between the Final Working Capital and the Target Working Capital expressed as a positive or negative figure against the Target Working Capital provided that (A) when calculating this difference, the first ± Eur 45,405.01 shall be ignored, (B) such difference shall not under any circumstances, in the case of a positive figure exceed Eur 908,100.25 in the case of a negative figure exceed minus Eur 908,100.25 and (C) the provisions of paragraph (ii) of this clause 2.3 shall apply;

 

b.

the “Debt Adjustment Difference” means the difference between the Final Net Debt and the Target Net Debt expressed as a positive or negative figure against the Target Net Debt; and

 

c.

the “Aggregate Adjustment Difference” means the WC Adjustment Difference minus the Debt Adjustment Difference.

 

(b)

If the WC Adjustment Difference is a positive figure, then it shall only be applied and payable for the purposes of this clause 2.3 in accordance with and subject to the following provisions:

 

 

EXECUTION VERSION

 

a.

the Purchaser will be obligated to procure the finalization and drawing-up of the 2015 consolidated annual accounts of the Gadea Group according to Spanish GAAP and which is consistent with the Gadea Group’s prior annual accounts in effect before the Signing Date (the “2015 Accounts”) no later than 31 March 2016 (the “2015 Accounts Date”). Within 15 Business Days of the 2015 Accounts Date (the “2015 Accounts Receipt Date”), the Purchaser will deliver to the Vendors’ Representative a copy of the 2015 Accounts. At the request of the Vendors’ Representative, representatives of the Purchaser shall be available to answer questions with respect to the 2015 Accounts.

 

b.

In the event that the 2015 Accounts reflect an EBITDA higher than nineteen million five hundred thousand Euros (Eur 19,500,000), the WC Adjustment Difference shall be payable.

 

c.

In the event that the 2015 Accounts reflect an EBITDA lower than nineteen million five hundred thousand Euros (Eur 19,500,000), the WC Adjustment Difference shall not be payable.

 

d.

Disputes regarding 2015 Accounts. The Vendors’ Representative shall have 30 days after the 2015 Accounts Receipt Date (the “2015 Accounts Dispute Period”) to dispute any of the elements of or amounts reflected on the 2015 Accounts or the calculation of the EBITDA (a “2015 Accounts Dispute”). If the Vendors’ Representative does not give timely written notice to the Purchaser of a 2015 Accounts Dispute (a “2015 Accounts Dispute Notice”) within the 2015 Accounts Dispute Period, the 2015 Accounts shall be treated as if they had been accepted and agreed to by the Vendors, in the form in which it was delivered, and the EBITDA set forth therein shall be final and binding upon the Parties hereto, the WC Adjustment Difference shall not be payable.

 

e.

If the Vendors’ Representative has a 2015 Accounts Dispute, the Vendors’ Representative shall deliver to the Purchaser a 2015 Accounts Dispute Notice within the 2015 Accounts Dispute Period, setting forth, in reasonable detail, the elements and amounts with which it disagrees and the reasons therefore. During the 15-day period following the delivery of the 2015 Accounts Dispute Notice, the Purchaser and the Vendors’ Representative shall use commercially reasonable efforts to resolve the Dispute and agree in writing upon the final content of the disputed 2015 Accounts and EBITDA. If the Purchaser and the Vendors’ Representative agree as to the content of the 2015 Accounts, the EBITDA as so agreed shall be final and binding for purposes of this Agreement and the WC Adjustment Difference shall or shall not be payable according to clause 2.3 (ii) (b) or (c) above, as the case may be.

 

 

EXECUTION VERSION

 

f.

2015 Accounts Dispute Resolution. If the Purchaser and the Vendors’ Representative are unable to resolve any 2015 Accounts Dispute within the 15-day period after the Vendors’ Representative’s delivery of a 2015 Accounts Dispute Notice, the Vendors’ Representative and the Purchaser shall jointly engage the Independent Expert as an arbitrator to promptly resolve any 2015 Accounts Disputes under the 2015 Accounts and the EBITDA figure thereto. In connection with the resolution of any 2015 Accounts Dispute, the Independent Expert shall have reasonable access during normal business hours upon at least three Business Days’ advance notice to all relevant portions of documents, records, work papers, facilities and financial and accounting personnel of the Company and the Gadea Group to the extent necessary to perform its function as arbitrator (but excluding Tax Returns of the Purchaser and its Affiliates other than the Company and its Gadea’s Subsidiaries). The Independent Expert’s function shall be to conform the 2015 Accounts to the requirements of this Clause 2.3(ii)(a). The Independent Expert shall allow the Purchaser and the Vendors’ Representative to present their respective positions regarding the 2015 Accounts Dispute. The Independent Expert may, at its discretion, conduct a conference concerning the 2015 Accounts Dispute, at which conference each of the Purchaser and the Vendors’ Representative shall have the right to present additional documents, materials and other information and to have present its advisors, counsel and accountants and each of the Purchaser and the Vendors’ Representative agree that they will deliver to the other party all such documents, materials and other information at least five Business Days in advance of such conference. In connection with such process, there shall be no other hearings or any oral examinations, testimony, depositions, discovery or other similar proceedings. The Independent Expert shall thereafter promptly render its decision on the question in writing and finalize the 2015 Accounts and the resultant EBITDA. Such written determination shall be final and binding for purposes of this Agreement. Upon the resolution of all 2015 Accounts Disputes, the 2015 Accounts shall be revised just for internal purposes to the effects of the 2015 Accounts Dispute, to reflect the resolution and the EBITDA amount set forth thereon shall be treated as the final EBITDA to be taken into consideration to the effects of the WC Adjustment Difference. The fees and expenses of the Independent Expert for this purpose shall be allocated between (A) the Vendors and (B) the Purchaser, so that the Vendors’ share of such fees and expenses (which shall be paid by the Vendors through the Vendors’ Representative who shall have the right to recover from the other Vendors the amount paid by the Vendors’ Representative on behalf of the other Vendors) shall be equal to the product of (i) the aggregate amount of such fees and expenses, multiplied by (ii) a fraction, the numerator of which is the amount in dispute that is ultimately unsuccessfully disputed by the Vendors’ Representative (as determined by the Independent Expert), and the denominator of which is the total amount in dispute.

 

 

EXECUTION VERSION

 

(c)

If, it is calculated that the Aggregate Adjustment Difference is a positive figure, then following implementation of the provisions of clause 2.3 (ii) above, such Aggregate Adjustment Difference shall, within 15 days, be payable by the Purchaser to the Vendors in accordance with their Pro Rata Portions.

 

(d)

In case, for any reason, the Purchaser fails to pay the Aggregate Adjustment Difference due under Clause 2.3(iii)within 10 Business Days after being given notice to do so, then the Vendors are entitled to have such amount paid out immediately from the Escrow Account, regardless of the fact that the payment obligation would still persist.

 

(e)

If, it is calculated that the Aggregate Adjustment Difference is a negative figure, then following implementation of the provisions of Clause 2.3 (ii) above, such Aggregate Adjustment Difference shall be deemed to constitute a reduction of the Closing Price and a portion of the Escrow Amount equal to the amount of such excess shall be set off, cancelled and retained by the Purchaser (the “Aggregate Excess”). In case, or to the extent that, the Aggregate Excess is not covered by the Escrow Amount, the amount not covered shall be directly paid by the Vendors as Damages pursuant to Clause 5.3.

 

2.4

Payment of Closing Price

 

(i)

Consideration Payable to Vendors at Closing. The Purchaser pays (or cause to be paid) to the Vendors at Closing the portion of the Cash Consideration in an amount (the “Vendors Closing Cash Consideration”) equal to:

 

(a)

the respective portion of the Cash Consideration owed to each Vendor as set forth on Schedule 2.1.1; minus

 

(b)

the allocable portion of the Escrow Amount attributable to each Vendor as set forth on Schedule 2.1.1.

 

 

EXECUTION VERSION

 

In addition, 3-Gutinver receives Stock Consideration allocable to such Vendor in accordance with Clause 3.1.(c) below.

 

(ii)

Escrow Amount. At the Closing, the Purchaser withholds from the Cash Consideration (i) an amount equal to EUR 20,987,758.81 (the “General Escrow Amount”), which includes, as part of that amount, an amount equal to EUR 1,816,200.51 (the “Tax Specific Indemnity Escrow Amount”) which shall specifically cover Damages arising from the Tax Specific Indemnity Events (as this term is defined in Clause 5.1.2; and (ii) an amount equal to Eur 3,632,401.02 (the “Environmental Escrow Amount”) (hereinafter, the General Escrow Amount and the Environmental Escrow Amount, amounting together to 24,620,159.83, shall be collectively referred to as the “Escrow Amount”) and deposits the Escrow Amount with the Escrow Agent.

 

(a)

On the 12th month anniversary of the Signing Date (the “12-Month Escrow Release Date”), an aggregate amount equal to 50% of the General Escrow Amount minus any claims for indemnification against the Vendors pursuant to Clauses 4, 5 and 7 (including any amounts that are the subject of any pending or disputed indemnification claim), minus the Aggregate Excess will be released from the Escrow Account to the Vendors, as applicable, in accordance with their Pro Rata Portions and the terms of the Escrow Agreement.

 

(b)

On the 18th month anniversary of the Signing Date (the “18-Month Escrow Release Date”), an aggregate amount equal to the then remainder of the General Escrow Amount, minus any claims for indemnification against the Vendors pursuant to Clauses 4, 5 and 7 (including any amounts that are the subject of any pending or disputed indemnification claim), minus the Tax Specific Indemnity Escrow Amount, which shall be kept in escrow only to the effects of covering any of the Tax Specific Indemnity Events, will be released from the Escrow Account to the Vendors, as applicable, in accordance with their Pro Rata Portions and the terms of the Escrow Agreement.

 

(c)

On the 48th month anniversary of the Signing Date (or, if earlier, on the date which is 15 days after the notification of the final amount challenged derived from Gadea Group´s tax audit which started with notifications of 19 th and 20th February 2015 –reference ****) (the “Final General Escrow Release Date”), an aggregate amount equal to the then remainder of the General Escrow Amount (which, for the avoidance of doubt, shall include only the remainder of the Tax Specific Indemnity Escrow Amount) subject to release upon such 18-Month Escrow Release Date or Final General Escrow Release Date, as applicablewill be released from the Escrow Account to the Vendors, as applicable, in accordance with their Pro Rata Portions and the terms of the Escrow Agreement.

 

 

EXECUTION VERSION

 

(d)

On the 24th month anniversary of the beginning of the Remediation Work (as this term is defined in Clause 5.1.6 below) (the “Environmental Escrow Release Date”) an aggregate amount equal to the then remainder of Environmental Escrow Amount, minus any claims for indemnification against the Vendors pursuant to Clause 5.1.6 (including any amounts that are the subject of any pending or disputed indemnification claim) will be released from the Escrow Account to the Vendors, as applicable, in accordance with their Pro Rata Portions and the terms of the Escrow Agreement

 

Once payment has been made in the manner indicated above, the Vendors shall grant to the Purchaser a payment receipt for the amounts respectively received at each of the indicated releases dates.

 

3.

CLOSING

 

3.1

Closing

 

The Closing takes place on the Signing Date before the Notary of Madrid Mr. Antonio de la Esperanza Rodríguez (the “Notary”).

 

On the Signing Date, all the steps listed below are going to be performed successively, and their effectiveness are conditional upon the performance of all of them:

 

(a)

The Parties shall record this Agreement into a public deed to be formalized before the Notary (the “Closing Deed”).

 

(b)

The Closing Deed shall also declare and state the effectiveness and completion of the sale and purchase of the Shares by the Vendors to the Purchaser, who acquires them, free and clear of Charges and Encumbrances as of the Closing.

 

(c)

Purchaser pays the Vendors the Closing Price pursuant to Clause 2.1 as follows:

 

(i)

Vendors Closing Cash Consideration is paid by the Purchaser as follows:

 

·

57,540,621,30 Euros are paid to the Vendors’ Representative by means of a wire transfer to the bank account indicated by the Vendors’ Representative to these effects, so that the Vendors’ Representative may distribute such amount amongst all the Vendors except for Muggio in such form and the proportion set out in Schedule 2.1.1 through different wire transfers to the bank accounts indicated by each Vendor to these effects; and

 

 

EXECUTION VERSION

 

·

5,889,839,35 Euros are paid to Muggio by means of a wire transfer to the bank account indicated by Muggio to these effects.

 

(ii)

AMRI shall deliver to Computershare, N.A., in its capacity as AMRI Parent’s transfer agent (“Computershare”), with a copy to 3-Gutinver, a letter in the form attached hereto as Schedule 3.1.(c)(ii) (instructing Computershare to treat certain letters of transmittal as irrevocable) and, as a consequence of such letter from AMRI to Computershare, Computershare shall deliver to 3-Gutinver during US business hours on the Signing Date (even if after the effective time of the Closing) a share balance statement evidencing the fact that the Stock Consideration has been transferred via book entry format to 3-Gutinver on the Signing Date.

 

The Vendors’ Representative (on behalf of all the Vendors except Muggio) and Muggio confirm and acknowledge, as applicable, such payment and deliver to the Purchaser a payment receipt for the Vendors Closing Cash Consideration. In addition, 3-Gutinver, through its representative on its act, confirms and acknowledge the receipt of the Stock Consideration and delivers to the Purchaser a payment receipt for the Stock Consideration.

 

(iii)

Purchaser deposits the Escrow Amount into the escrow account with number *** opened in the name of the Vendors (the “Escrow Account”), pursuant to the terms and conditions of the escrow agreement in the form attached as Schedule 3.1.(c)(iii) (the “Escrow Agreement”).

 

(d)

The Escrow Agreement is executed by all parties thereto.

 

(e)

The Disclosure Letter is signed by the Vendors and accepted by the Purchaser.

 

(f)

The Vendors represents to the Purchaser that the Transaction Expenses have been paid to the parties listed on Schedule 3.1(f) before the Signing Date.

 

(g)

The Vendors hand over to the Notary, to be notarized and recorded, the originals of the Title Deeds, and to make a note of the transfer in the abovementioned Title Deeds.

 

 

EXECUTION VERSION

 

(h)

The Vendors deliver to the Notary a certificate issued by the Company’s board secretary non-director, with the chairman’s approval, stating that all legal requirements and the requirements of the Bylaws have been fulfilled in order to transfer the Shares to the Purchaser, a copy of which has been attached as Schedule 3.1.(h).

 

(i)

The Vendors deliver to the Purchaser, who receives and accepts, the letters signed and authenticated by a notary in which all the members of the board of directors of the Company, as well as all the directors of all companies in the Gadea Group, relinquish their office and state that they have nothing further to claim from said company for any items arising from their membership of the managing bodies of the same.

 

(j)

The Purchaser takes all the necessary arrangements –included their recording into a public deed– to appoint the new members of the board of directors of the Company as well as all the new directors of all companies in the Gadea Group.

 

(k)

The Vendors deliver to, or place at disposal of, the Purchaser, who receives and accepts, the Company’s minutes registry book (“libro de actas”) and the shareholders' registry book (“libro registro de socios”) duly legalized and updated or alternatively certificate issued by the Commercial Registry of Valladolid stating that the aforementioned books have been duly closed and electronically legalized with the Commercial Registry of Valladolid.

 

(l)

The Vendors deliver to, or place at disposal of, the Purchaser, who receives and accepts, the minutes registry book (libro de actas) and shareholders' registry book (libro registro de socios) of each of Gadea’s Subsidiaries, duly legalized and updated or alternatively certificate issued by the corresponding Commercial Registry stating that the aforementioned books have been closed and electronically legalized with the corresponding Commercial Registry.

 

(m)

On Closing, the current directors of Crystal Pharma Limited (“CPL”) shall resign from their post as directors with immediate effect according to the resignation letter form attached as Schedule 3.1(m) to this Agreement

 

(n)

Gerardo Gutiérrez is appointed to AMRI Parent’s board of directors and AMRI Parent has (i) taken all necessary corporate action to effect such appointment and (ii) provided sufficient evidence to the Vendors’ Representative of such appointment, which  will be carried out by the delivery of a copy of the resolutions passed by AMRI Parent’s board electing him as a director effective as of the Closing.

 

(o)

The Vendors deliver to the Purchaser, who receives and accepts, the express consent to the Transaction obtained from the following counterparties exclusively in respect of the following contracts identified by AMRI Parent, a copy of them being attached as Schedule 3.1.(o) to this Agreement:

 

 

EXECUTION VERSION

 

i.

loan agreement entered into between Crystal Pharma and BBVA on April 2014;

ii.

loan agreement entered into between Crystal Pharma and Bankia on May 2014;

iii.

loan agreement entered into between Crystal Pharma and Banco Santander on May 2014;

iv.

loan agreement entered into between Crystal Pharma and BBVA on February 2015;

v.

loan agreement entered into between Crystal Pharma and Bankia on February 2015; and

vi.

loan agreement entered into between Crystal Pharma and Banco Santander on February 2015;

 

(p)

AMRI Parent and 3-Gutinver execute and deliver a Registration Rights Agreement substantially in the form set forth in Schedule 3.1(p) to this Agreement.

.

(q)

Javier Gallo delivers to the Purchaser a duly executed executive employment agreement.

 

(r)

The Vendors deliver to the Purchaser evidence of the subscription by the Gadea Group of the run-off coverage extension of the current D&O Tail Policy for an additional period of four (4) years, in order to cover eventual directors’ liability of the Gadea Group until Closing.

 

(s)

The Vendors deliver to the Purchaser, who receives and accepts, a letter evidencing the cancellation by Agencia de Innovación, Financiación, Internacionalización Empresarial de Castilla y León (“ADE”) in respect of the outstanding debt arising from the mortgage loan (EIB funds) granted to the Company on 25 July 2012 over the lands owned by Gadea Biopharma, S.L.U. in Leon at “Parcela de Terreno de Manzana M-1.1-1.2” and the facilities located there, declaring such outstanding debt as paid-off at Closing.

 

(t)

The Vendors deliver to the Notary a certificate issued by the Company’s board secretary non-director, with the chairman’s approval, stating the composition of the share capital of the Company as of the Signing Date (prior to Closing). A copy of this certificate is attached as Schedule 3.1.(t) hereto.

 

 

EXECUTION VERSION

 

3.2

Post-Closing Cooperation and obligations

 

(a)

After the Closing, each of the Parties will execute any documents and perform all actions, if any, as may reasonably be requested by the Purchaser to vest the full title to the Shares and to give to Purchaser the full benefit of the sale and purchase of the Shares.

 

(b)

After the Closing, the Vendors shall make their best efforts to cooperate in order to grant and register any corporate amendments and any changes to the administration bodies of any the companies, as well as any annual accounts or documents related thereto, of the Gadea Group as soon as possible, granting and signing to these effects as many private or public documents as may be necessary to get the registration.

 

(c)

Non-compete / Non-solicitation

 

For the period extending from the Signing Date to the second (2nd) anniversary of the Signing Date (regardless if he/it has sold his/its shareholding in the Gadea Group, or their successors, or AMRI Group during such period), both 3-Gutinver and Gerardo Gutiérrez (who signs also this Agreement to these effects) undertake not to:

 

	(i)	carry out, either directly or indirectly, personally or through other individuals or entities, any activity which may in fact compete with the Business or the business of AMRI Group, and, in particular but without limitation, not to cooperate in any manner whatsoever, and in particular as a salaried employee, director, manager or consultant, with any company which in fact competes with the Business or the business of AMRI Group;

(ii)

solicit, either directly or indirectly, employees or officers of the Gadea Group or of AMRI Group, or incite those employees or officers to leave any position they occupy now or in the future with the Gadea Group or AMRI Parent;

 

(iii)

purchase any shares equating to more than 5% of the equity ownership of any company which in fact competes with the Business or the business of AMRI Group; or

 

(iv)

use or commercialize any intellectual property rights that are identical or similar to those held or used by the Gadea Group or AMRI Group .

 

 

EXECUTION VERSION

 

The restrictions above indicated shall not apply when they refer to actions which 3-Gutinver or Gerardo Gutierrez have taken in the exercise of any duties for the Gadea Group or AMRI Parent. Both 3-Gutinver and Gerardo Gutierrez acknowledge and agree that strict compliance with the provisions of this Clause 3.2(c) is necessary and proper to preserve and protect the Business, including the goodwill of such Business, acquired by the Purchaser under this Agreement and to ensure that the Parties receive the benefits intended to be conveyed pursuant to this Agreement. 3-Gutinver and Gerardo Gutierrez agree that the obligations and restrictive covenants in this Clause 3.2(c) (either taken separately or together) are reasonable and fair considering the circumstances of the Transaction and the Purchase Price, and that the duration identified hereto is reasonably necessary for the protection of the Purchaser and the Gadea Group. Accordingly, 3-Gutinver and Gerardo Gutierrez agree that any breach or failure by them (directly or indirectly through any entity directly or indirectly controlled by them) to comply with the provisions of this section shall entitle the Purchaser and AMRI Parent to claim from them, as a penalty clause, exclusively the amount of EUR 1,000,000 for each breach (under the understanding that 3-Gutinver and/or Gerardo Gutierrez will be incurring a different breach for every different circumstances that results in a breach any of the obligations set out in points (i) to (iv) above).

 

(d)

As regards the share capital of CPL, Gerardo Gutierrez Fuentes undertakes and procures that he shall:

 

(i)

Within 4 weeks from the Closing Date, in his capacity as a shareholder of CPL, vote in favour of the necessary alterations to the Memorandum and Articles of Association of CPL in order to convert CPL into a private exempt company in terms of Art 211 of the Companies Act, Cap 386 of the Laws of Malta; and

 

(ii)

Not more than 10 Business Days from the registration by the Maltese Registrar of Companies of the changes to the Memorandum and Articles of Association of CPL in terms of (i) above, transfer the one (1) ordinary share with a nominal value of Eur0.89 in CPL that is currently registered in his name (the “CPL Share”) to the Company or such other entity indicated to him by the Company for the price of Eur0.89.

 

(iii)

Not at any time transfer, assign, pledge, charge or in any way convey or encumber the CPL Share except as provided above.

 

4.

VENDORS’ REPRESENTATIONS AND WARRANTIES

 

4.1

Except as disclosed in the Disclosure Letter and the Disclosure Schedules, attached to this Agreement as Schedule 4.1.(a), which disclosures shall be deemed to qualify the Vendors’ Representations and Warranties, each of the Vendors, acting jointly (“responsabilidad mancomunada”), hereby make the Vendors’ representations and warranties set forth in Schedule 4.1.(b) to this Agreement (the “Vendors’ Representations and Warranties”) in favour of the Purchaser on the Signing Date. Each of the Vendors’ Representations and Warranties are true, correct, accurate and complete in all material respects except as disclosed in the Disclosure Schedule.

 

 

EXECUTION VERSION

 

4.2

The Parties agree that the liability of the Vendors shall not be limited in any way by any inquiry, search, due diligence or investigation made by the Purchaser (or its advisors) or any disclosure made by the Vendors except as expressly disclosed by the Vendors in the Disclosure Schedules which have been attached to this Agreement as Schedule 4.1.(a). For the avoidance of any doubt, Vendors shall not be liable in respect of those circumstances disclosed against the relevant Vendors’ Representation and Warranty within the Disclosure Letter except for those circumstances under the Specific Indemnity Events.

 

In particular (without limitation), no letter, document or other communication (whether or not in writing) shall be deemed to constitute a disclosure unless it is expressly incorporated into the Disclosure Schedules.

 

4.3

Each of the Vendors’ Representations and Warranties shall have the scope set forth in Section 23 of the Vendors’ Representations and Warranties.

 

4.4

The Vendors shall not be entitled to raise as a defense to a claim by the Purchaser the fact that it had relied on information provided to it by the Gadea Group or any of their respective officers, employees, workers or agents (including advisors), unless it is incorporated into the Disclosure Schedules.

 

4.5

The Parties expressly exclude the legal regime of article 1,532 of the Spanish Civil Code regarding bulk sales, instead expressly subject the Transaction to the terms of this Agreement and, in particular, to the indemnity provisions set out in Clauses 5 and 7.

 

4.6

The liability of Vendors with respect to any Claim under the Vendors’ Representations and Warranties shall be limited only in accordance with this Clause 4 and the Clause 5.2 below.

 

5.

VENDORS’ LIABILITY

 

5.1

Scope of liability

 

5.1.1

The rules on liability regulated in this Agreement constitute the sole and exclusive remedy granted to AMRI, and AMRI waives any other remedies to which it may be entitled against the Vendors in conformity with the legislation currently in force.

 

 

EXECUTION VERSION

 

5.1.2

Subject to the limitations and terms provided for in this Agreement, the Vendors shall be liable and shall indemnify and hold AMRI and its Affiliates, officers, directors, representatives and agents harmless for any Damages caused to AMRI and its Affiliates, officers, directors, representatives and agents, the Company and/or any of the Gadea’s Subsidiaries, resulting from or in relation to:

 

•

any falsehood or inaccuracy with respect to any of the Vendors’ Representations and Warranties or in any document delivered by the Vendors in connection with or pursuant to this Agreement (hereinafter “Vendors’ Misrepresentation”), whether or not attributable to ordinary or tortious negligence or fraud (“culpa, negligencia o dolo”) of the Vendors;

 

•

any Damages arising out of, related to or based upon any breach of any covenant or obligation of the Vendors (other than Vendors’ Misrepresentations) contained in this Agreement or in any document delivered by the Vendors in connection with or pursuant to this Agreement;

 

•

Any of the following specific indemnification events (the “Specific Indemnification Events”):

 

(i)

liabilities arising from any of the specific events listed in Schedule 5.1.2 to this Agreement (the “Tax Specific Indemnity Events”);

 

(ii)

liabilities identified in Clause 5.1.6 below (the “Environmental Specific Indemnity Events”. For the avoidance of doubt, all Damages of an environmental nature which are not specifically covered within the Environmental Specific Events in Clause 5.1.6 shall be treated according to the general liability regime set out in this Clause 5. In the same line, all those Damages already covered within the Environmental Specific Indemnity Events in Clause 5.1.6 shall not be subject to any different liability other than that specifically set forth in Clause 5.1.6.

 

(iii)

Transaction Expenses to the extent that they are not included on Schedule 3.1(f).

 

5.1.3

Vendors’ liability vis-à-vis the Purchaser arising from Damages shall be joint – mancomunada - among the Vendors (each of which shall be liable for their Pro Rata Portion of such Damages).

 

5.1.4

However, as an exception to the above, each Vendor shall be individually liable (and, therefore just liable only for the Shares he/it has sold) to the Purchaser for the Damages resulting from or in relation to any falsehood or inaccuracy with respect to any each statement set forth in Sections 1, 3 and 20 of Schedule 4.1.(b) (hereinafter, the “Individual Representations and Warranties”) which, regarding each Vendor’s respective capacity (Sections 1 and 20 of Schedule 4.1.(b)) and regarding the ownership and non-existence of Charges and Encumbrances (Section 3 of Schedule 4.1.(b)), they each grant in Schedule 4.1.(b) in relation to their respective Shares.

 

 

EXECUTION VERSION

 

5.1.5

Except as specified in Clause 5.1.4 above regarding the Individual Representations and Warranties, the amount of the indemnification for Damages caused to the Company, the Purchaser and/or any of the Subsidiaries to be paid by the Vendors pursuant to this Clause shall be determined according to each Vendor’s Pro Rata Portion as set forth in Schedule III.

 

5.1.6

Environmental Specific Indemnity Event:

 

1

In this Clause, the following definitions shall apply:

 

(1)

“AEC Report”, “AEC No Remedy Necessary Report” and “AEC Remedy Necessary Report” shall have the meanings given in sub-clause 2 below;

 

(2)

“AMRI’s Environmental Consultants” means the consultants retained by AMRI professionally qualified to advise on potential contamination and, in particular, on contaminated soil/groundwater, at chemical manufacturing sites in Spain and appropriate remediation methods, who are used to work frequently on this subject with the Regional Authority (Environmental administration -Consejería de Medio Ambiente de la Junta Castilla y Leon-) and are accredited as an ECA (Administration Collaborator Entity). For the purposes of this Clause, the Vendors agree that Ramboll Environ qualify as AMRI’s Environmental Consultants at this time, but may be subject to change in the future;

 

(3)

“Environmental Escrow Amount” shall have the meaning given in sub-clause 5 below;

 

(4)

“Final Remediation Plan” or “FRP” means the final remediation plan to be issued by the AMRI in accordance with the provisions of sub-clause 2 below;

 

(5)

“FRP Dispute”, “FRP Dispute Period“ and “FRP Dispute Notice” shall have the meanings given in sub-clause 3 below;

 

(6)

“FRP Budget” means the total budget included in the FRP and, if the FRP includes a range of costs, then the higher values in such range (plus, in case the budget in the FRP does not include any contingency item, then an additional 5% for contingency) shall be used for the purposes of this definition;

 

 

EXECUTION VERSION

 

(7)

“Gadea’s Environmental Consultants” means the consultants retained by the Vendors’ Representative, on behalf of the Vendors, at the sole cost and expense of the Vendors, who are professionally qualified to advise on potential contamination and other environmental compliance issues at chemical manufacturing sites in Spain and appropriate remediation methods, provided, however, that they are used to work frequently on this subject with the Regional Authority (Environmental administration -Consejería de Medio Ambiente de la Junta Castilla y Leon-) and are accredited as an ECA (Administration Collaborator Entity), and that any Gadea’s Environmental Consultant shall be required to enter into a normal confidentiality and non-disclosure agreement with AMRI;

 

(8)

“Gadea’s Manufacturing Site” means any manufacturing site occupied by the Company and/or the Gadea Subsidiaries in Spain as of the date hereof, wherever located;

 

(9)

“Independent Environmental Expert” and “Independent Environmental Expert’s Function” shall have the meanings given in sub-clause 4 below; and

 

(10)

“Remediation Work” means the remediation work as contained in the FRP, but, in the case of a FRP Dispute, as determined in accordance with sub-clause 3 or 4 below, as the case may be, and in any case, in accordance with the provisions of Royal Decree 9/2005, (“RD 9/2005”) of 14 January, and provided that such remediation work is approved (if such approval is necessary) by the environmental authority of Castilla León Community according to article 38 (Voluntary Soil Remediation) of the Act 22/2011, on residues and contaminating materials.

 

 

 

EXECUTION VERSION

 

2

The Purchaser has identified a concern that the subsurface (including the soil and water) at Gadea’s Manufacturing Site(s) may be subject to contamination. The Vendors and the Purchaser have agreed that further investigations are necessary. Accordingly, as soon as reasonably possible (and within not more than 4 months following Closing, or such other period as may be mutually agreed between the Vendors’ Representative and the AMRI), the AMRI shall arrange for a report to be prepared by AMRI’s Environmental Consultants (“AEC Report”) in order to determine, in respect of Gadea’s Manufacturing Sites, the nature and extent of any such contamination and provide professional recommendations regarding proposed remediation work. For this purpose, based on advice from AMRI’s Environmental Consultants, borehole and any other reasonably necessary tests may be conducted. If the AEC Report recommends that no remediation is necessary (“AEC No Remedy Necessary Report”), then no further steps will be taken. If the AEC Report recommends that any remediation work is necessary (“AEC Remedy Necessary Report”), then, following the receipt of the AEC Report and its professional recommendation, AMRI shall prepare a proposed remediation plan. Before, concluding any final remediation plan, the AMRI shall as soon as reasonably possible following receipt of the AEC Report, provide a draft of the proposed remediation plan to include a budget for such work (“Remediation Plan”) to the Vendors’ Representative who shall, within 3 weeks of receiving the same, be entitled to ask for a meeting in order to discuss such Remediation Plan with AMRI’s Environmental Consultants and AMRI. Such meeting shall be convened within 4 weeks. The Vendors’ Representative shall be entitled, at its sole cost and expense to review such Remediation Plan, and discuss the same with the Gadea Environmental Consultant, and such Gadea Environmental Consultant shall be entitled to attend the meeting requested by the Vendors’ Representative to discuss the Remediation Plan with AMRI and/or the AMRI Environmental Consultant. Following such consultation (if required), or after 3 weeks following the date of issuance of the Remediation Plan (if such consultation is not required), the AMRI shall present the final Remediation Plan (“Final Remediation Plan”) to the Vendors’ Representative. The Purchaser and the Vendors, through the Vendors’ Representative, shall co-operate with each other to ensure the process described in this paragraph works efficiently and effectively, and that, in the case of the AEC Report being a AEC Remedy Necessary Report, the Final Remediation Plan is issued no later than 6 months after the date of issue of the AEC Report.

 

3

The Vendors’ Representative shall have 45 days after the date of receipt of the Final Remediation Plan (“FRP Dispute Period”) to dispute any recommendations in the Final Remediation Plan as to the nature and extent of (a) any contamination to the subsurface at Gadea’s Manufacturing Sites, and (b) any necessary remediation work (“FRP Dispute”). If the Vendors’ Representative does not give timely written notice to the Purchaser of a FRP Dispute (“FRP Dispute Notice”) within the FRP Dispute Period, the FRP shall be treated as if it had been accepted and agreed to by the Vendors, in the form in which it was delivered. If the Vendors’ Representative has a FRP Dispute, the Vendors’ Representative shall deliver to the Purchaser a FRP Dispute Notice within the FRP Dispute Period, setting forth, in reasonable detail, the elements and issues with which it disagrees and the reasons therefor. During the 15 day period following the delivery of the FRP Dispute Notice, the Purchaser and the Vendors’ Representative shall use commercially reasonable efforts to resolve the FRP Dispute and agree in writing upon the final content of the disputed FRP. If the Purchaser and the Vendors’ Representative agree as to the content of the FRP, the FRP as so agreed shall be final and binding for the purposes of this Clause.

 

 

EXECUTION VERSION

 

4

If the Purchaser and the Vendors’ Representative are unable to resolve any FRP Dispute within the 15 day period after the Vendors’ Representative’s delivery of a FRP Dispute Notice, the Vendors’ Representative and the Purchaser shall jointly engage INERCO (“Independent Environmental Expert”) as an arbitrator to promptly resolve any FRP Disputes. In connection with the resolution of any FRP Dispute, the Independent Environmental Expert shall be given reasonable access to the relevant Gadea’s Manufacturing Site(s) and to the investigations conducted by AMRI’s Environmental Consultants. The Independent Environmental Expert shall be entitled to require the conduct of any further borehole or other tests as he or she may require. The Independent Environmental Expert’s function (“Independent Environmental Expert’s Function”) shall be (a) to confirm (or otherwise) the conclusions of the FRP as issued by AMRI; and (b) make such recommendations as he or she sees fit for any necessary remediation work, based on standard tests and analytical results according to RD 9/2005, and given the nature of Gadea’s Manufacturing Site, the severity of any contamination or non-compliance found at the site and the status of the Company as a Spanish company with a publicly traded US public company as its ultimate parent, subject to the requirements of US law (for the avoidance of doubt, the provisions of this clause are intended to ensure that any remediation works required to deal with contamination are designed and implemented in a way which will achieve compliance with the relevant requirements of the law in Spain or with the requirements which are standardly followed in similar works approved by the administration in Spain). The Independent Environmental Expert shall allow the Purchaser and the Vendors’ Representative to present their respective positions regarding the FRP Dispute. The Independent Environmental Expert may, at his or her discretion, conduct a conference concerning the FRP Dispute, at which conference each of the Purchaser and the Vendors’ Representative shall have the right to present additional documents, materials and other information and to have present its advisors, counsel and environmental consultants, and each of the Purchaser and the Vendors’ Representative agree that they will deliver to the other party all such documents, materials and other information at least five Business Days in advance of such conference. In connection with such process, there shall be no other hearings or any oral examinations, testimony, depositions, discovery or other similar proceedings. The Independent Environmental Expert shall thereafter promptly render his or her written decision on the question in relation to the Independent Environmental Expert’s Function. Such written decision shall be final and binding for the purposes of this Clause and shall be deemed an AEC Remedy Necessary Report for the purpose of this Clause. The fees and expenses of the Independent Environmental Expert shall be shared between the Vendors and the Purchaser on a 50:50 basis and the Vendors’ share shall be paid from the Escrow Account. Notwithstanding anything to the contrary contained herein and regardless of the written decision delivered by the Independent Environmental Expert, AMRI shall not be limited or restricted in any manner from investigating, pursuing and/or implementing any actions or remediation with respect to environmental and other matters at any Gadea Manufacturing Site(s); to the extent that any such actions or remediation are additional to any Remediation Work, the Vendors will not assume any payment or cost.

 

 

EXECUTION VERSION

 

AMRI agrees to use reasonable commercial endeavours to commence and complete the Remediation Work as soon as reasonably possible.

 

5

Except as set forth above, the costs of professional fees incurred in preparing the FRP and the cost of the Remediation Work shall be shared equally between the Vendors and the Purchaser on an equal, Euro for Euro basis provided that, except in the case of fraud, wilful concealment or intentional misrepresentation, the Vendors’ share of the Remediation Work shall not under any circumstances exceed Euros 3,632,401.02 (the Environmental Escrow Amount) which amount has been included as an additional amount in the Escrow Amount for the purposes only as described in this Clause (and not for any other purposes). Any claim for payment by the Vendors under this Clause 5.1.6 shall be satisfied by a withdrawal from the Escrow Account against this amount, as set out in sub-clause 6 below, and not in any other way, unless otherwise set forth herein.

 

6

In the case of the AEC Report being an AEC No Remedy Necessary Report, within fifteen days of receipt of such report, subject to deducting 50% of the costs of professional fees incurred in preparing such report, the Purchaser will execute any forms necessary to allow all the remainder of the Environmental Escrow Amount to be released from the Escrow Account to the Vendors in accordance with their Pro Rata Portions and the terms of the Escrow Agreement.

 

7

In the case of the AEC Report being an AEC Remedy Necessary Report, within fifteen days of receipt of such report, subject to deducting 50% of (a) the costs of professional fees incurred in preparing such report and (b) the value of the FRP Budget, the Purchaser will execute any forms necessary to allow all the remainder of the Environmental Escrow Amount to be released from the Escrow Account to the Vendors in accordance with their Pro Rata Portions and the terms of the Escrow Agreement. For the avoidance of doubt, if the deductions mentioned in (a) and (b) of this paragraph exceed the Environmental Escrow Amount, then no payment out of the Escrow Account under this paragraph shall apply.

 

8

In order to recover the Vendors’ share of any Remediation Works, until expiry of the period established in sub-clause 9 below, once per quarter, within 60 days following the end of each quarter, AMRI will provide the Vendors’ Representative with an invoice detailing costs spent in the prior quarter under any part of the Final Remediation Plan, with sufficient detail that the Vendor can review the major activities and categories of spending in such quarter (“Quarterly Report”). Within fifteen days of receipt of such report, the Vendors’ Representative will execute any forms necessary to allow for payment to AMRI or the Purchaser from the Escrow Account for 50% of the fees as set forth in the Quarterly Report.

 

 

EXECUTION VERSION

 

9

In the event that any residue of the Environmental Escrow Amount remains after 24 months from the date of the beginning of the Remediation Work within fifteen days, the Purchaser will execute any forms necessary to allow all such residue to be released from the Escrow Account to the Vendors in accordance with their Pro Rata Portions and the terms of the Escrow.

 

5.2

Limitation on Vendors’ liability

 

5.2.1

Quantitative limits on liability

 

Vendors’ obligations shall be subject to the following quantitative limitations:

 

a)

Threshold

 

Vendors shall have no obligation to indemnify the Purchaser until the accumulated amount of Damages exceeds five hundred thousand Euros (Eur500,000) (the “Overall Threshold”). Once such Overall Threshold has been reached, the Vendors must indemnify the Purchaser for the full amount of all the Damages back to the first Euro, subject in any case to the Liability Cap indicated below.

 

b)

Vendors’ Liability Cap

 

Once the Overall Threshold has been reached, the Vendors shall indemnify the Purchaser for the total amount of all the Damages up to the total amount equal to Eur 20,987,758.81, which is the cap on the Vendors’ total, maximum and aggregate liability for any concept (“Liability Cap”).

 

Notwithstanding anything to the contrary in this Agreement,

 

1.

the Overall Threshold shall not apply to breaches of the Fundamental Representations and Warranties, and instead, in respect of the Fundamental Representations and Warranties, the overall threshold shall be two hundred and fifty thousand euros (Eur 250,000) (the “FRW Overall Threshold”);

 

2.

the Liability Cap shall be increased in respect of the Fundamental Representations and Warranties up to the amount of Eur 25,562,077.73; and

 

 

EXECUTION VERSION

 

3.

the indemnification obligations of the Vendors shall have no limit on amount, and therefore (A) the Liability Cap established in the first paragraph of Clause 5.2.1(b) above and (B) the Overall Threshold established in Clause 5.2.1(a) shall not be applicable, in the event of claims related to a) lack of accuracy of the Individual Representations and Warranties, b) fraud or wilful concealment (‘dolo’) on the part of any of the Vendors, and (c) indemnification claims arising from any of the Specific Indemnification Events, except for the Tax Specific Indemnity Events, which shall have a specific cap liability equal to the Tax Specific Indemnity Escrow Amount, and the Environmental Specific Indemnity Events, which shall have the cap liability set forth according to Clause 5.1.6..

 

5.2.2

Time limit on liability

 

Expressly waiving the nontollable time period and statute of limitations established by the Civil Code, Commercial Code or any other applicable legislation, the Parties agree that the Purchaser may only claim from the Vendors the indemnification for Damages set out in this Clause with the following time limits:

 

¡

Fundamental Representations and Warranties and/or those Representations and Warranties of a social security nature, until the statute of limitations (as it may be interpreted from time to time by Spanish Courts) on said obligations has run according to applicable legislation in each case.

 

¡

Those arising from the lack of accuracy of the Individual Representations and Warranties shall remain unlimited.

 

¡

The remaining Damages, until 18 months have elapsed from the Signing Date.

 

¡

Those arising from the Environmental Specific Indemnity Events shall have the time limitations specifically agreed in Clause 5.1.6.

 

The Vendors shall not be obliged to indemnify the Purchaser for any claims filed by the Purchaser once the periods mentioned in this Clause 5.2.2 have expired.

 

5.2.3

Qualitative limits on liability

 

The Vendors shall not be liable to the Purchaser:

 

(i)

in cases where the liability originates from facts, events or acts taking place after the Signing Date, unless they arise from situations, facts or omissions prior to the Signing Date;

 

 

EXECUTION VERSION

 

(ii)

in cases where the liability is due to changes in legislation and/or in case law after the Signing Date;

 

(iii)

in cases where the Damage is covered by an insurance policy and the Company has recovered the amount by virtue of that policy, until the amount effectively received by the Company by said insurance policy;

 

(iv)

in cases where the Damage has been effectively recovered from third parties under a third-party action until the amount recovered from said third parties;

 

(v)

in cases where a provision has been recorded in the Balance Sheet Prior to the Signing Date to cover the Damage in question; and

 

(vi)

in cases involving risks directly or indirectly arising from force majeure or fortuitous events;

 

5.2.4

Calculation of indemnification

 

Any indemnification that may be owed by the Vendors to the Purchaser shall be calculated as follows:

 

(a)

The indemnification for the Damages suffered by the Company or the Purchaser shall be equal to the amount of the Damages suffered by the Company or Purchaser.

 

(b)

In calculating the indemnification payable by the Vendors, an amount relating to the Damage equal to (i) the corporate income tax or other tax deductions effectively deducted against the tax liability payable, minus (ii) the corporate income tax or other kind of taxes to be paid by the Purchaser, both as a consequence of the indemnification received; shall be deducted therefrom

 

Further to the above, it shall be deducted any tax credit related to double taxation as provided for in article 30.6 of Corporate Income Tax Law approved by Legislative Royal Decree 4/2004, dated March 5, and transitional provision Twenty-Three of Corporate Income Tax Law 27/2014, dated November 27, arising from dividend distributions carried out by Crystal Pharma during the 2015 fiscal year and before the Signing Date, provided that (i) the company is able to prove that an amount equal to the dividends received has been included in the tax base and has been taxed in respect of the gain obtained by the transferors of Crystal Pharma, (ii) the company obtained a favorable binding ruling from the Spanish Directorate of Taxes confirming the compliance with the requirements to apply such credit and its quantum and (ii) are effectively applied and deducted against Corporate Income Tax liability payable to Spanish Tax Authorities

 

 

EXECUTION VERSION

 

(c)

Where permitted by Law, the payments made by the Vendors to the Purchaser under this Clause 5 shall be considered a reduction of the Closing Price.

 

(d)

Any Damages for which any Claimant Party is entitled to indemnification under this Section 5 shall be determined without duplication of recovery by reason of the state of facts giving rise to such Damages constituting a breach of more than one representation, warranty, covenant or agreement

 

5.3

Manner of Payment; Escrow

 

Any Damages incurred as a result of any matter for which indemnification is required under Clauses 4, 5 and 7, except for the Environmental Specific Indemnity Events and the Tax Specific Indemnity Events, shall be initially satisfied out of the portion of the General Escrow Amount then held in escrow pursuant to the terms set forth in Clause 2.4.(ii) and the terms of the Escrow Agreement. Likewise, any Damages incurred as a result of any matter for which indemnification is required under Clause 5.1.6 (Environmental) shall be initially satisfied out of the portion of the Environmental Escrow Amount then held in escrow pursuant to the terms set forth in Clause 2.4.(ii) and the terms of the Escrow Agreement. Finally, any Damages incurred as a result of the Tax Specific Indemnity Events shall be initially satisfied out of the portion of the Tax Specific Indemnity Escrow Amount then held in escrow pursuant to the terms set forth in Clause 2.4.(ii).

 

In the event that the funds in the Escrow Account are not sufficient to cover indemnification obligations due and payable as applicable pursuant to this Agreement (and, in particular, in accordance with the quantitative and qualitative limitations set forth in Clause 5.2 above), the relevant Damages shall be paid in cash by the Vendors according to their Pro Rata Portion. As an exception to this, Damages arising from the Tax Specific Indemnity Events can be paid only from the Tax Specific Indemnity Escrow Amount.

 

According to the calendar set forth in the Escrow Agreement and in Clause 2.4.(ii), the Vendors shall be entitled to receive from the Escrow Account an amount equal to the funds remaining therein minus the aggregate amount, if any, which the Purchaser has claimed pursuant to Clauses 4, 5 and 7 (to the extent such claims, if any, remain unresolved), in accordance with the Escrow Agreement.

 

 

EXECUTION VERSION

 

6.

AMRI´S REPRESENTATIONS AND WARRANTIES AND AMRI’S LIABILITY

 

AMRI warrants to the Vendors, as of the date of this Agreement, that:

 

(i)

the representations made by the Purchaser in Schedule 6 (hereinafter, the “AMRI’s Representations and Warranties”) are true, correct, accurate and complete in all respects;

 

(ii)

it has concluded this Agreement based on the Vendors’ Representations and Warranties; and

 

(iii)

it has reviewed the documentation and information on the Gadea Group which is included in the DVD.

 

AMRI undertakes to indemnify and hold the Vendors harmless for any Damages caused to any of the Vendors at any time, resulting from or in relation to the lack of accuracy or untruthfulness of the AMRI’s Representations and Warranties.

 

AMRI’s liability vis-à-vis the Vendors arising from Damages shall be jointly and severally (“solidaria”) between the Purchaser and AMRI Parent.

 

AMRI shall have no obligation to indemnify the Vendors until the accumulated amount of Damages equals or exceeds five hundred thousand euros (Eur 500,000) (the “Purchaser Threshold”). Once such Purchaser Threshold has been reached, AMRI must indemnify the Vendors for the full amount of all the Damages back to the first Euro, subject in any case to the cap indicated below.

 

Once the Purchaser Threshold has been reached, AMRI shall indemnify the Vendors for the total amount of all the Damages up to the total amount of Eur 20,987,758.81, which is the cap on AMRI’s total, maximum and aggregate liability for any concept.

 

7.

PROCEDURE TO MAKE CLAIMS

 

7.1

Direct Claims

 

7.1.1

Where a Party (the “Claimant Party”) learns of any circumstance that may give rise to an obligation on the other Party (the “Respondent Party”) to indemnify, other than the third-party claims to which Clause 7.2 below refers (hereinafter, “Direct Claims”), it shall notify the Respondent Party, claiming such indemnification (hereinafter “Damage Notice”).

 

7.1.2

The Damage Notice shall include (i) a description of the circumstances that could give rise to the Damage; (ii) the amount thereof, with a breakdown of the various elements comprising the Damage (if it can be estimated); (iii) a reference to the provision in the Agreement pursuant to which indemnification must be paid; and (iv) any other information on which the Claimant Party deems fit to base its claim.

 

 

EXECUTION VERSION

 

7.1.3

Within the thirty (30) Business Days following receipt of the Damage Notice, the Respondent Party shall notify the Claimant Party of: (i) the Respondent Party’ acceptance of the claim and their obligation to settle the corresponding amount, as claimed by the Claimant Party; or (ii) the Respondent Party’ complete or partial objection (the “Damage Notice Response”).

 

7.1.4

In the case envisaged in Clause 7.1.3 (i) above, the corresponding amount shall be settled by the Respondent Party in accordance with Clauses 5.3 or 6 above, as applicable, within thirty (30) Business Days following the Damage Notice Response.

 

7.1.5

In the case set out in Clause 7.1.3 (ii) above or in Clause 7.1.7 below, the Claimant Party and the Respondent Party shall negotiate in good faith for a period of fifteen (15) Business Days in an attempt to reach an agreement on the existence of liability and the amount of the indemnification to be paid by reason thereof. As result of the negotiations:

 

(i)

If an agreement is not reached, the Claimant Party shall notify the Respondent Party in writing, within ten (10) Business Days following the end of the period of negotiations referred to above, of whether it rejects or acknowledges its liability and, in this case, the amount that it acknowledges as being obliged to pay.

 

(ii)

If liability is acknowledged, the amount acknowledged must be paid within not more than thirty (30) Business Days counted from the date on which the notice referred to in Clause 7.1.5.(i) above was sent, without prejudice to the right of the Claimant Party to seek the balance of its claim.

 

(iii)

It shall be assumed that liability is not accepted if within the period indicated in Clause 7.1.5.(i) above no written notice is sent to the Claimant Party by the Respondent Party.

 

7.1.6

If the Claimant Party and the Respondent Party do not arrive at an agreement in the negotiations provided for in Clause 7.1.5, the Claimant Party may initiate the procedure envisaged in Clause 14 of the Agreement for the items or amounts not accepted by the Respondent Party, within three (3) months from the end of the period of negotiation provided for in Clause 7.1.5.

 

7.1.7

If, within the thirty (30) Business Days following receipt of the Damage Notice, the Respondent Party have not provided the Damage Notice Response, they will be deemed to have accepted the claim outright.

 

 

EXECUTION VERSION

 

7.2

Third-party claims

 

In the event of any claim, requirement, inspection or action by a third party that may give rise to Damage (hereinafter, “Third-Party Claim”) for which a Party (“Respondent Party”) must indemnify the other Party (“Claimant Party”), the following procedure shall be followed:

 

(i)

Where the Claimant Party learns of a third-party claim that may give rise to a Damage, it shall notify the Respondent Party of such claim (hereinafter, the “Third-Party Damage Notice”), no later than ten (10) Business Days from such time, and in all cases before a third of the procedural or legally-established time to reply to said potential Third-Party Claims has elapsed, should such time limit legally exist.

 

(ii)

The Third-Party Damage Notice shall include: (i) a copy of the document containing the Third-Party Claim or the document through which the inspection or revision on which it is based is initiated, as the case may be; (ii) the amount claimed with a breakdown of the various elements of which it is comprised (if this can be estimated); (iii) a reference to the Vendors’ Representation and Warranty or AMRI’s Representation and Warranty, as applicable, pursuant to which the Damage must be indemnified, where applicable; and (iv) any other information that the Claimant Party deems appropriate. The Third-Party Damage Notice shall be accompanied by any reasonable and pertinent supporting documentation as it may have on the third-party claim to enable the Respondent Party to: (a) assess the advisability of settling or reaching an agreement on the claim; or (b) prepare a defense against the claim, if the Respondent Party consider the claim to be inappropriate and can assume the defense of the claim pursuant to the provisions of Clause 7.2.(iii).

 

(iii)

Within twenty (20) Business Days following receipt of the Third-Party Damage Notice or, if there is a shorter procedural or legal term in which to reply to the Third-Party Claim, before two-thirds of that term have elapsed, the Respondent Party shall notify (in case of the Respondent Party shall be done by the Vendors’ Representative) the Claimant Party: (i) if he refuses to accept the liability arising from the Third-Party Claim, where applicable, or (ii) if he accepts such liability in whole or in part. If the Respondent Party fails to reply, it shall be deemed that the liability arising from the Third-Party Claim has been rejected outright by the Respondent Party.

 

(iv)

In the event that the Respondent Party does not reply within the agreed time period set forth in Clause 7.2.(iii) or in the case he expressly refuse to take on the right of defense against the Third-Party Claim within the agreed time period set forth in Clause 7.2.(iii), the Claimant Party may, acting in good faith, take any such defensive action as it may deem appropriate, including a settlement in or out of court or an agreement. In all cases, the Respondent Party shall be entitled to be kept informed of the progress of the Third-Party Claim in question and shall have reasonable access to all the information and documentation regarding the same.

 

 

EXECUTION VERSION

 

(v)

In the case referred to in Clause 7.2.(iii).(i) and 7.2.(iii).(ii) above provided that the Respondent Party replies within the agreed time period set forth in Clause 7.2.(iiiI, the Respondent Party shall indicate in their reply whether they take on the right of defense against the Third-Party Claim. In such case, the Respondent Party shall be entitled to take any such defensive action as they may deem appropriate against the Third-Party Claim and they shall exclusively bear the expenses incurred in the defense of the Third-Party Claim, as well as any expenses in relation to the provision or maintenance of payments into court, security deposits or guarantees that may have to be granted as a result of said defense in any proceeding. However, the Respondent Party shall be entitled to recover such expenses from the Company, the Subsidiaries or the Purchaser in the event that the result of the dispute is favorable to any of the latter, in which case such expenses shall be paid within twenty (20) Business Days of the date on which the Third- Party Claim is resolved and becomes final. In all cases, the Claimant Party, alone or through the advisors it freely designates, shall have reasonable access to the information and documentation regarding the claim in question.

 

(vi)

Claimant Party shall supply the information necessary for the Respondent Party to take the defensive action to which this Clause 7.2 refers and shall provide the appropriate cooperation, including granting powers of attorney or other instruments of representation to the lawyers and court procedural representatives freely designated by the Respondent Party.

 

(vii)

In the event that the Respondent Party assume the defense, the Respondent Party or its advisors may only enter into a settlement, agreement or in any other manner reach a settlement in or out of court with the competent public authorities or with any third party, without the express, prior and written consent of the Purchaser where, simultaneously on entering into the settlement or agreement, they make available to the Claimant Party, the Company or the Gadea’s Subsidiaries, as the case may be, all the funds that they must pay the third party pursuant to the settlement or agreement. Said provision shall not be necessary where, following the posting of a bond by the Respondent sufficient to cover the liability in question, the bond has been enforced.

 

(viii)

In the event that the Respondent Party choose not to assume the right to take defensive action against the Third-Party Claim (in which case the Claimant Party may, acting in good faith, take the defensive action it deems appropriate, and the Respondent Party must give their consent to any settlement in or out of court), alone or through the advisors they freely choose, they shall be entitled to be informed of the progress of the claim in question and shall have reasonable access to all the information and documentation regarding the same.

 

 

EXECUTION VERSION

 

(ix)

In the event that Third-Party Damage Notice was delivered by the Claimant Party to the Respondent Party without due prior notice set forth in the Clause 7.2.(i), thereby preventing the Respondent Party reasonably taking charge of the defense against the Third-Party Claim, the Respondent Party shall be entitled to be indemnified by the Claimant Party for all Damages that said breach caused to the Respondent Party.

 

7.3

Determination of the obligation to provide indemnification

 

Pursuant to Clauses 5 and 6 of this Agreement, the indemnification obligations shall be governed by the following provisions:

 

(i)

With respect to Direct Claims envisaged in Clause 7.1 of this Clause, the payment obligation arising from the indemnification undertakings contained hereunder shall be enforceable against the Respondent Party where there is (i) an agreement between the Claimant Party and the Respondent Party regarding the suitability and amount to be indemnified, or (ii) from the existence of a final arbitral award pursuant to Clause 14, and in both cases provided that the debt resulting therefrom is net, due and payable.

 

(ii)

With respect to Third-Party Claims envisaged in Clause 7.2, the payment obligation arising from the indemnification undertakings hereunder shall be claimable once there is (i) an agreement between the Claimant Party and the Respondent Party regarding the suitability and amount to be indemnified, or (ii) a final arbitral award pursuant to Clause 14; as well as, (iii) in the event that the Respondent Party accept that the Third-Party Claim may give rise to Damages and fully assume the relevant liability, said payment obligation shall also be enforceable once there is a final judgment, decision, award or administrative act in relation to the Third-Party Claim, and in all cases provided that the debt resulting therefrom is net, due and payable.

 

7.4

Claims arising from the Individual Representations and Warranties

 

In the event of Direct Claims or Third-Party Claims arising from the inaccuracy, inauthenticity, incorrectness and/or a breach of the Individual Representations and Warranties, the provisions of the preceding sections of Clause 7 shall be applied mutatis mutandis, except for matters pertaining to the Vendors’ Representative and Vendors overall, which shall be deemed to refer to the Vendors against which the claim is aimed.

 

 

EXECUTION VERSION

 

8.

SEVERABILITY

 

Should any of the clauses of this Agreement be held, totally or partially, null and void or invalid, only that clause shall be affected and the Agreement shall otherwise continue to be valid and not affected as a result, unless the invalidity or defect affect an essential part of this Agreement.

 

Wherever possible, the legally invalid clause shall be substituted by a new one, or interpreted in a legally acceptable manner, that comes as close as possible to the spirit of the clause that the Parties would have executed had they known that the clause in question was invalid.

 

9.

NOTICES. VENDORS’ REPRESENTATIVE

 

9.1

Any notice or other communication that must be made pursuant to this Agreement shall be in writing and must be sent (at the choice of the Party sending such notice) via notary or via any other means which under Spanish law evidences the date of receipt and content of same:

 

To the Purchaser,

 

EXIRISK SPAIN, S.L.U.

Att. Lori M. Henderson

Senior Vice President, General Counsel and Secretary

200 West Street, 4th Floor, Waltham, MA 02451

Tel:  (781) 672-4535 

E-mail: [email protected]

 

To AMRI Parent,

 

ALBANY MOLECULAR RESEARCH, INC.

Att. Lori M. Henderson

Senior Vice President, General Counsel and Secretary

200 West Street, 4th Floor, Waltham, MA 02451

Tel:  (781) 672-4535 

E-mail: [email protected]

 

 

EXECUTION VERSION

 

To the Vendors,

 

3-GUTINVER, S.L. (Vendors’ Representative)

Att. Gerardo Gutiérrez

Parque Tecnológico de Boecillo, parcela 113

47151 Boecillo

Valladolid

Tel. +34 670 881 670

E-mail : [email protected]

 

9.2

Vendors designate 3-Gutinver as their representative for the purposes of this Agreement (hereinafter, “Vendors’ Representative”), granting him the broadest powers of attorney and authority so that he may act in their name and on their behalf, in particular in order to:

 

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receive or send any notice from or to AMRI,

 

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to receive the full or partial Closing Price (other than the part of the Closing Price corresponding to Muggio) as well as any other amount owed by the Purchaser by virtue of this Agreement (such as any adjustments to the Closing Price), which shall be considered as settlement by the Purchaser pursuant to article 1162 of the Civil Code, and to issue payment receipts for such amounts;

 

¡

take any steps for and on behalf of the Vendors which are related to this Agreement, and

 

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represent, in the broadest terms, the Vendors vis-à-vis the Purchaser, in any matter related to this Agreement, and, in relation to same, send and notify any notifications, settle, agree and approve any agreement related to the determination of Closing Balance Sheet or to any claim by or against, as applicable, AMRI for the purposes provided in Clause 7 in relation to Direct Claims or Third-Party Claims resulting or arising from (a) the Vendors’ Representations and Warranties other than the Individual Representations and Warranties, and/or (b) the AMRI’s Representations and Warranties, as applicable.

 

All of the foregoing, in such a manner that any notices or steps that AMRI sends to or takes with the Vendors’ Representative designated herein, shall be deemed to have been made for each and every one of the Vendors and AMRI shall be entitled to rely on the foregoing. Any notices or steps that the Vendors send to or take with AMRI shall only be valid where sent or made by the Vendors’ Representative designated herein, in which event it shall be deemed to have been made by the Vendors.

 

The Vendors may, unanimously, replace the person designated as Vendors’ Representative for another person at any time, but said replacement shall not be valid or take effect until ten (10) Business Days after the date on which AMRI has been duly notified (such notice bearing the signature of all the Vendors and the new data for communication and notification purposes).

 

 

EXECUTION VERSION

 

10.

EXPENSES AND TAXES

 

All the expenses arising from the transactions envisaged in this Agreement shall be paid by the Party incurring same and all taxes levied on this Agreement shall be paid by the Parties, pursuant to the Law.

 

The fees arising from the Notary before whom this Agreement is recorded in a public deed shall be borne by the Purchaser.

 

11.

CONFIDENTIALITY

 

11.1

The Parties agree to maintain confidentiality with respect to (a) the terms and conditions of this Agreement and its schedules; (b) the negotiations relating to this Agreement; and (c) those of any additional contract or document that the Parties execute in the performance of this Agreement (or related thereto), including the mere existence of the same (the “Confidential Information”). Consequently, they may not reveal any of its aspects to any person other than:

 

(i)

the individuals comprising the managing body or senior management, or employees directly involved in the Transaction or who participate professionally in the transaction in their capacity as a legal, accounting or financial advisor or other specialty;

 

(ii)

to the jurisdictional bodies, solely for the purpose of exercising the rights that correspond to the Parties under this Agreement;

 

(iii)

to any administrative or jurisdictional bodies, when legally obliged to make public all or part of the Confidential Information, pursuant to the procedure agreed below; and

 

(iv)

to the entities linked to the Parties (including partners, investors, shareholders and affiliates), potential investors, financial entities, investment Banks, legal advisors, intermediaries, insurance companies or any other provider or advisor of transaction services, provided that the recipients of the information are bound by the duty of confidentiality.

 

11.2

In the event that any of the Parties is legally obliged to make public all or part of the Confidential Information:

 

 

EXECUTION VERSION

 

(i)

The Party obliged to do so shall notify the other Party in writing as soon as possible and, in all cases, before disclosing or delivering the Confidential Information, attaching to such notice copies of the relevant documents and information for the other Party to take any measures it considers appropriate to safeguard its rights and the Confidential Information.

 

(ii)

The Parties shall determine, by mutual agreement, the content of the Confidential Information which it is legally necessary to disclose, unless such content is determined by a decision by the competent authority requiring the Parties to supply such information. In such event, the Party required to supply the information shall only reveal the part of the Confidential Information that it is legally required to reveal and shall make every effort to ensure that the information revealed is treated confidentially.

 

11.3

Notwithstanding the foregoing, the term Confidential Information does not include:

 

(i)

Any information which is in the public domain at the moment of its communication to each of the Parties or which becomes publicly known after being communicated to the Parties without any breach on the provisions stated in this Agreement;

 

(ii)

Information obtained by the Parties through non-confidential sources other than the Company, its shareholders, officers or directors, provided that its delivery was not forbidden at such time, pursuant to some other confidentiality agreement that existed; or

 

(iii)

Any information which must be disclosed in accordance with the applicable U.S. or Spanish laws, regulations, court order or is disclosed in connection with a requirement made by an U.S. or Spanish government administrative body, regulatory body, inspector, supervisor or stock exchange´s authorities.

 

11.4

In the case of press releases or communiqués of a commercial, advertising or similar nature, irrespective of how they are disclosed, the Parties shall obtain a prior written agreement regarding their content before issuing or disclosing same.

 

11.5

This confidentiality undertaking shall remain in force following the termination of this Agreement.

 

11.6

If the Agreement is terminated for any reason, AMRI shall destroy or return to the Vendors all of the information that it has received from the Vendors and is in the possession of any of its board members, employees or advisers, and may not use such information for commercial purposes under any circumstances.

 

 

EXECUTION VERSION

 

12.

ASSIGNMENT

 

This Agreement and the rights and obligations deriving therefrom may not be assigned by operation of Law or otherwise without the prior written consent of the other Party who may not refuse without reasonable cause provided however that Purchaser and AMRI may collateraly assign its rights (but not its obligations) under this Agreement to any lender providing financing to Purchaser or AMRI.

 

13.

ENTIRE AGREEMENT

 

All the Schedules of this Agreement form an integral part of same to all intents and purposes and are binding on the Parties. This Agreement and its schedules constitute the entire agreement reached between the Parties with respect to its subject-matter and it supersedes and replaces all other agreements, commitments, undertakings and prior negotiations, whether oral or in writing between the Parties, regarding the same subject- matter.

 

14.

APPLICABLE LAW. ARBITRATION

 

This Agreement shall be governed by and interpreted pursuant to common Spanish legislation (“legislación de derecho común española”).

 

With express waiver to any other jurisdiction the Parties may be entitled to, any dispute arising out of or relating to this Agreement, including any matter regarding its existence, validity or termination, shall be definitively settled by arbitration in law, administered by the Court of Arbitration of the Official Chamber of Commerce and Industry of Madrid, in accordance with its Arbitration Rules in force at the time the request for arbitration is filed. The arbitration tribunal appointed for such purpose will be formed by a sole arbitrator and the language to be used in the arbitration will be English. The place of arbitration will be Madrid, Spain.

 

IN WITNESS WHEREOF, the Parties sign the Agreement in a single counterpart, to be recorded in the Closing Deed, in the place and on the date first above written.

 

 

EXECUTION VERSION

 

THE PURCHASER:
/s/ Lori Marie Henderson
EXIRISK SPAIN, S.L.U.
P.p: Ms. Lori Marie Henderson
THE AMRI PARENT:
/s/ Lori Marie Henderson
Albany Molecular Research, Inc
P.p: Ms. Lori Marie Henderson

 

 

EXECUTION VERSION

 

THE VENDORS:

 

		/s/ Luis Gerardo Gutiérrez Fuentes
		3-Gutinver, S.L.
		P.p: Mr. Luis Gerardo Gutiérrez Fuentes
/s/ Samuel Alonso Martí		/s/ Jose-Luis Stampa Jäger
Antartis Pharma, S.L.		Muggio Holding, S.L.
P.p: Mr. Samuel Alonso Martínez		P.p: Mr. Jose-Luis Stampa Jäger

 

/s/ Cristobal-Antonio Molleja Melgar		/s/ Francisco-Javier Jiménez Juárez
Iniciativas del Jarama, S.A.		Gutiérrez Campiña y Cia, S.R.L.
P.p: Mr. Cristobal-Antonio Molleja Melgar		P.p: Mr. Francisco-Javier Jiménez Juárez
/s/ Heliodoro Pedro Gutiérrez Fuentes		/s/ José Chavero Murillo
Mr. Heliodoro Pedro Gutiérrez Fuentes		Mr. José Chavero Murillo
/s/ Antonio Lorente Bonde-Larsen		/s/ Maximiliano Ruiz López
Mr. Antonio Lorente Bonde-Larsen		Mr. Maximiliano Ruiz López
/s/ Luis Prudencio García Burgos		/s/ Francisco Javier Gallo Nieto
Mr. Luis Prudencio García Burgos		Mr. Francisco Javier Gallo Nieto

 

 

EXECUTION VERSION

 

/s/ Jesús Emilio Gutiérrez Fuentes		/s/ Gloria Mª del Carmen Gutiérrez Fuentes
Mr. Jesús Emilio Gutiérrez Fuentes		Mr. Gloria Mª del Carmen Gutiérrez Fuentes
/s/ José Antonio Gutiérrez Fuentes
Mr. José Antonio Gutiérrez Fuentes

 

 

EXECUTION VERSION

 

To the effects of the enforceability of certain covenants and obligations under the Agreement,

 

/s/ Gerardo Gutiérrez Fuentes
Mr. Gerardo Gutiérrez Fuentes

 

 

EXECUTION VERSION

 

List of Schedules

 

Number		Schedule
Schedule 0		Definitions
Schedule II		List of Gadea’s Subsidiaries
Schedule III		Breakdown of ownership
Schedule III.(bis)		Title Deeds
Schedule 2.1.1		Purchase Price breakdown
Schedule 2.1.2		Balance Sheet Prior to the Signing Date
Schedule 3.1.(c).(ii)		Letter instructing Computershare
Schedule 3.1.(c)(iii)		Escrow Agreement
Schedule 3.1.(f)		Transaction Expenses
Schedule 3.1.(m)		Certificate of the Board Secretary Non-Director
Schedule 3.1(m)		CPL Resignation Letter Form
Schedule 3.1.(o)		Third-party consents
Schedule 3.1.(p)		Registration Rights Agreement
Schedule 3.1.(t)		Certificate of composition of the Company’s share capital before Closing
Schedule 4.1.(a)		Disclosure Letter
Schedule 4.1.(b)		Vendors’ Representations & Warranties
Schedule 5.1.2		Tax Specific Indemnity Events
Schedule 6		Purchasers’ Representations & Warranties

 

 

EXECUTION VERSION

 

Schedule 0

 

Definitions

 

“Affiliate” shall mean, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For purposes of this definition, “control” when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Aggregate Excess” shall have the meaning set forth in Clause 2.3.(ii).(b)(e).

 

“Agreement” shall mean this agreement for the sale and purchase of the Shares.

 

“AMRI” shall mean Albany Molecular Research, Inc. and/or Exirisk Spain, S.L.U., as applicable.

 

“AMRI Group” shall mean AMRI Parent and the AMRI’s Subsidiaries.

 

“AMRI Parent” shall mean Albany Molecular Research, Inc.

 

“AMRI’s Representations and Warranties” shall have the meaning set forth in Clause 6.(i).

 

“AMRI’s Subsidiaries” shall mean the group of companies comprising companies or entities that, directly or indirectly, are wholly owned by AMRI Parent or in which AMRI Parent holds a majority interest.

 

“Antartis” shall mean Antartis Pharma, S.L.

 

“Antonio Lorente” shall mean Mr. Antonio Lorente Bonde-Larsen.

 

“Balance Sheet Prior to the Signing Date” shall have the meaning set forth in Clause 2.1.

 

“Banco Santander” shall mean Banco Santander, S.A.

 

“Bankia” shall mean Bankia, S.A.

 

“BBVA” shall mean Banco Bilbao Vizcaya Argentaria, S.A.

 

 

EXECUTION VERSION

 

“Business” shall have the meaning set forth in Schedule II.

 

“Business Day” shall mean any day of the week except Saturday, Sundays, public holidays in the cities of (i) Albany, New York, United States of America (when banks are generally closed) and (ii) Valladolid, Spain (when banks are generally closed).

 

“By-Laws” shall have the meaning set forth in Whereas IV.

 

“Cash Consideration” shall have the meaning set forth in Clause 2.1.(i).

 

“Change in Control Payments” means any bonuses or other employment related change in control payments, in each case payable by the Company or any of Gadea’s Subsidiaries to any employee solely as a result of the consummation of the transactions contemplated by this Agreement, but excluding any severance payments and any “double-trigger” payments and similar payments that are conditioned in part on any event other than the consummation of the transactions contemplated by this Agreement. For the avoidance of doubt, in no event shall a Change in Control Payment be included in the calculation of Net Debt.

 

“Charges and Encumbrances” shall mean any charge, claim, encumbrance, ancillary obligation, option, retrospective right of acquisition, retention of title, pooling agreement, third-party right, including preemptive rights of acquisition or transfer, or restrictions on the transferability of the Shares.

 

“Civil Code” shall mean the Spanish Civil Code (“Código Civil”) as approved under Royal Decree of 24 July 1889, with all its modifications and amendments, in force at the Signing Date.

 

“Claimant Party” shall have the meaning set forth in Clauses 7.1.1 and 7.2, as applicable.

 

“Closing” shall mean the consummation and effectiveness of the Transaction.

 

“Closing Balance Sheet” shall have the meaning set forth in Clause 2.2.1.

 

“Closing Deed” shall have the meaning set forth in Clause 3.1.(a)

 

“Closing Price” shall have the meaning set forth in Clause 2.1.

 

“Company” shall mean GADEA GRUPO FARMACÉUTICO, S.L.

 

“Commercial Code” shall mean the Spanish Code of Commerce (“Código de Comercio”) as approved under Royal Decree of 22 August, 1885, with all its modifications and amendments, in force at the Signing Date.

 

 

EXECUTION VERSION

 

“Computershare” shall have the meaning set forth in Clause 3.1.(c).(ii).

 

“Confidential Information” shall have the meaning set forth in Clause 11.1.

 

“CPL” shall mean Crystal Pharma Limited.

 

“CPL Share” shall have the meaning set forth in Clause 3.2(d)(ii).

 

“Crystal Pharma” shall mean CRYSTAL PHARMA, S.A.U.

 

“Damage” means any direct or indirect damages and losses.

 

“Damage Notice” shall have the meaning set forth in Clause 7.1.1.

 

“Damage Notice Response” shall have the meaning set forth in Clause 7.1.3.

 

“Direct Claims” shall have the meaning set forth in Clause 7.1.1.

 

“Disclosure Letter” shall mean the letter containing the Disclosure Schedules dated the same date as this Agreement.

 

“Disclosure Schedules” means the disclosure schedules which have been attached to this Agreement as Schedule 4.1.(a).

 

“Dispute” shall have the meaning set forth in Clause 2.2.(ii).

 

“Dispute Notice” shall have the meaning set forth in Clause 2.2.(ii).

 

“Dispute Period” shall have the meaning set forth in Clause 2.2.(ii).

 

“D&O Tail Policy” shall mean the directors and officers’ insurance tail policy entered into with effects as from 1 January 2015 between the Company (as policy holder) and XL Insurance Company SE, Sucursal en España (as insurer).

 

“Due Diligence” shall mean a due diligence process carried out by AMRI on the Company and the Gadea Group prior to the Signing Date.

 

“DVD” shall have the meaning set forth in Recital VII.

 

“EBITDA” shall mean the earnings before interest, taxes, depreciation and amortization of the Company, prepared and calculated in accordance with the Spanish GAAP and the Spanish General Accounting Plan for a twelve-month period corresponding to the 2015 Company’s financial year.

 

 

EXECUTION VERSION

 

“Effective Time” shall mean the time of the Closing.

 

“Escrow Account” shall have the meaning set forth in Clause 3.1.(c)(ii).

 

“Escrow Agent” shall mean Banco Bilbao Vizcaya Argentaria, S.A.

 

“Escrow Agreement” shall have the meaning set forth in Clause 3.1.(c)(iii).

 

“Escrow Amount” shall have the meaning set forth in Clause 2.4.(ii).

 

“Final General Escrow Release Date” shall have the meaning set forth in Clause 2.4.(ii)(c).

 

“Environmental Escrow Amount” shall have the meaning set forth in Clause 2.4.(ii).

 

“Environmental Escrow Release Date” shall have the meaning set forth in Clause 2.4.(ii)(d).

 

“Environmental Specific Indemnity Events” shall have the meaning set forth in Clause 5.1.2(ii).

 

“Final Net Debt” shall have the meaning set forth in Clause 2.2.(i).

 

“Final Working Capital” shall have the meaning set forth in Clause 2.2.(i).

 

“Financial Statements” means the balance sheet, the income statement, the notes to financial statements, the statement of changes in equity and the cash flow statement, including, if applicable, the directors’ report and the auditors’ report of each of the companies of the Gadea Group.

 

“FRW Overall Threshold” shall have the meaning set forth in Clause 5.2.1.b).1.

 

“Fundamental Representations and Warranties” shall mean the Vendors’ Representations and Warranties set out in section 17 of Schedule 4.1.(b) to this Agreement.

 

“GAAP” shall mean the accounting rules and principles in force in each of the Gadea Group’s jurisdictions (Spain and Malta) and established under applicable Laws, consistently applied.

 

“Gadea” shall mean GADEA GRUPO FARMACÉUTICO, S.L.

 

“Gadea Group” shall mean Gadea and the Gadea’s Subsidiaries.

 

“Gadea’s Subsidiaries” shall mean the group of companies comprising companies or entities that, directly or indirectly, are wholly owned by Gadea or in which Gadea holds a majority interest.

 

 

EXECUTION VERSION

 

“General Escrow Amount” shall have the meaning set forth in Clause 2.4.(ii).

 

“Gerardo Gutierrez” shall mean Mr. Gerardo Gutiérrez Fuentes.

 

“Gloria Gutiérrez” shall mean Ms. Gloria Mª del Carmen Gutiérrez Fuentes.

 

“Governmental Entity” shall mean any supranational, national, Federal, state, provincial or local, whether U.S. or non-U.S., government or any court of competent jurisdiction, governmental agency, commission, authority, instrumentality or body entitled to exercise any administrative, executive, judicial, legislative, police, regulatory, self-regulatory or Taxing Authority, whether foreign or domestic, including any arbitral tribunal.

 

“Group” shall mean a group of companies in accordance with the terms provided for in article 42 of the Commercial Code.

 

“Gutiérrez Campiña” shall mean Gutiérrez Campiña y Cia, S.R.C.

 

“Heliodoro Gutiérrez” shall mean Mr. Heliodoro Pedro Gutiérrez Fuentes.

 

“Indebtedness” shall mean, in respect of any company of the Gadea Group, any borrowing or indebtedness in the nature of borrowing (including any indebtedness for monies borrowed or raised under any bank or third party guarantee, acceptance credit, bond, note, bill of exchange or commercial paper, letter of credit, finance lease, hire purchase agreement, forward sale or purchase agreement or conditional sale agreement or other transaction having the commercial effect of a borrowing and all finance, loan and other obligations of a kind required to be included in the balance sheet of a company or other entity pursuant to the applicable GAAP, other than trade liabilities incurred in the Ordinary Course of Business and payable in accordance with customary practices-), whether or not evidenced in writing.

 

“Independent Expert” shall have the meaning set forth in Clause 2.3.(i).

 

“Individual Representations and Warranties” shall have the meaning set forth in Clause 5.1.4.

 

“Iniciativas” shall mean Iniciativas del Jarama, S.A.

 

“Javier Gallo” shall mean Mr. Francisco Javier Gallo Nieto.

 

“Jesús Gutiérrez” shall mean Mr. Jesús Emilio Gutiérrez Fuentes.

 

 

EXECUTION VERSION

 

“José Antonio Gutiérrez” shall mean Mr. José Antonio Gutiérrez Fuentes.

 

“José Chavero” shall mean Mr. José Chavero Murillo.

 

“Key Employees” shall mean Mr. Javier Gallo.

 

“Law” shall mean any law (including any common law), statute, legally binding rule, ordinance or regulation.

 

“Liability Cap” shall have the meaning set forth in Clause 5.2.1.b).

 

“Luis García” shall mean Mr. Luis Prudencio García Burgos.

 

“Material Contract” shall mean any mortgage, indenture, lease, contract, license or other written or oral agreement which, in each case, is legally binding on the Company, any member of Gadea’s Subsidiary or any of their respective properties, so long as the following requirements are met: (a) with an annual value in excess of Eur100,000 and/or (b) any contract which cannot be terminated with notice exceeding 6 months.

 

“Maximiliano Ruiz” shall mean Mr. Maximiliano Ruiz López.

 

“Muggio” shall mean Muggio Holding, S.L.

 

“Net Cash” shall mean the amount of cash remaining in any member of the Gadea Group.

 

“Net Debt” shall mean (A) short and long term debt with explicit financial cost, either with financial institutions along with other third parties, plus (B) the debts arising from the issuance of bonds, promissory notes, convertible bonds or similar instruments, less (C) Net Cash and less (D) temporary investments.

 

“Notary” shall have the meaning set forth in Clause 3.1.

 

“Ordinary Course of Business” shall mean fulfillment of the following requirements by the applicable member of the Gadea Group or the AMRI Group, as the case may be: (i) that the applicable member’s acts or omissions are consistent (in nature and amount) with its usual practices prior to the Signing Date in its normal course of business; and (ii) that no resolution or decision of the governing body is needed in order to perform such acts.

 

“Overall Threshold” shall have the meaning set forth in Clause 5.2.1(a).

 

“Parties” shall mean the Purchaser, AMRI Parent and the Vendors.

 

 

EXECUTION VERSION

 

“Pro Rata Portion” shall mean, with respect to any Vendor, the number as set forth on Schedule III.

 

“Purchaser” shall mean Exirisk Spain, S.L.U.

 

“Purchaser Common Stock” shall mean shares of common stock, $0.01 par value per share, of AMRI Parent.

 

“Purchase Price” shall have the meaning set forth in Clause 2.1.

 

“Related Party” shall mean any companies of the Gadea Group, all their shareholders, directors and officers and, in respect of any of them, any natural or legal person who is in any of the situations listed in article 231 of the Spanish Companies’ Act.

 

“Respondent Party” shall have the meaning set forth in Clauses 7.1.1 and 7.2, as applicable.

 

“Shares” shall mean the 2,618,923,039 shares (“participaciones sociales”) into which the Company’s share capital is divided, numbered from 1 through 2,618,923,039, each with a par value of one (1) cent euros, fully paid in.

 

“Signing Date” shall mean the date of signature of this Agreement by the Parties.

 

“Specific Indemnification Events” shall have the meaning set forth in Clause 5.1.2.

 

“Social Charges” shall mean, in respect of any applicable Laws, any social security contributions and any other charges and liabilities relating to employment including contributions relating to pensions, unemployment, medical costs, disability, death and retirement.

 

“Spanish Companies’ Act” shall mean the Royal Legislative Decree 1/2010, of 2 July, approving the Spanish Capital Companies’ Act (“Ley de Sociedades de Capital”), with all its modifications and amendments, in force at the Signing Date.

 

“Spanish GAAP” shall mean the accounting rules and principles in force in Spain and established under applicable law, including the Commercial Code and the Spanish General Accounting Plan.

 

“Spanish General Accounting Plan” shall mean the general accounting plan approved by Royal Decree 1514/2007, of 16 November, as amended and in force on the Signing Date.

 

“Stock Consideration” shall have the meaning set forth in Clause 2.1.(ii).

 

“Target Net Debt” shall mean Eur 30,199,055.58.

 

 

EXECUTION VERSION

 

“Target Working Capital” shall mean Eur 33,094,000.

 

“Tax Authorities” shall mean any Tax authority or other authority competent to impose, assess or enforce any liability to Tax whether in Spain and Malta or any other place where the Gadea Group performs its Business.

 

“Tax Specific Indemnity Events” shall have the meaning set forth in Clause 5.1.2(i).

 

“Taxes” shall mean any tax, levy, assessment, rate, fee, charge or any kind or amount or encumbrance of any analogous nature, required by any Tax Authority, including surcharges, interests and penalties which are due (and “Tax” shall be construed accordingly).

 

“Tax Returns” shall mean all returns, reports, elections, forms or similar statements filed or required to be filed with any Taxing Authority (including any schedules or attachments thereto and amendments thereof).

 

“Tax Specific Indemnity Escrow Amount” shall have the meaning set forth in clause 2.4(ii).

 

“Third Party Claim” shall have the meaning set forth in Clause 7.2.

 

“Third-Party Damage Notice” shall have the meaning set forth in Clause 7.2.(i).

 

“Title Deeds” shall mean the relevant deeds recording the ownership title over the Shares set forth in Schedule III.(bis).

 

“Transaction” shall mean the acquisition of all of the Shares by the Purchaser.

 

“Transaction Expenses” shall mean without duplication with other terms such as Net Debt or Working Capital, (a) all out-of-pocket costs and expenses incurred by the Company in connection with the negotiation of, and the consummation of the transactions contemplated by this Agreement with respect to services provided by third-party representatives, which Transaction Expenses shall be estimated in good faith and identified in the Schedule 3.1.(f) and (b) Change in Control Payments.

 

“Vendors” shall mean 3-Gutinver, Antartis, Muggio, Iniciativas, Heliodoro Gutiérrez, José Chavero, Antonio Lorente, Maximiliano Ruiz, Luis García, Javier Gallo, Jesús Gutiérrez, Gloria Gutiérrez, José Antonio Gutiérrez and Gutiérrez Campiña.

 

“Vendors Closing Cash Consideration” shall have the meaning set forth in Clause 2.4.(i).

 

 

EXECUTION VERSION

 

“Vendors´ Knowledge” means the knowledge that each of the Vendors has or should have in accordance with the diligence to be expected from an orderly business man and of a loyal representative (“ordenado comerciante y representante leal”), after reasonable inquiry of either party and, in particular, of 3-Gutinver, and taking into account the person’s position and seniority and assuming due and reasonable enquiries were made by such persons by requesting confirmation from the relevant managers and senior executives of the Gadea Group, as to the facts and circumstances of such statement.

 

“Vendors´ Misrepresentation” shall have the meaning set forth in Clause 5.1.2.

 

“Vendors’ Representations and Warranties” shall have the meaning set forth in Clause 4.1.

 

“Vendors’ Representative” shall have the meaning set forth in Clause 9.2

 

“Working Capital” shall mean, in relation to the Gadea Group (i) current assets including, but not limited to, inventory, trade receivables, prepaid expenses and other receivables less (ii) current liabilities, including but not limited to trade payables, Taxes and social security liabilities, deferred revenues, advance payments and other payables, provided that, to the extent items are contained in Net Debt, they shall be excluded from this definition.

 

“12-Month Escrow Release Date” shall have the meaning set forth in Clause 2.4.(ii).

 

“18-Month Escrow Release Date” shall have the meaning set forth in Clause 2.4.(ii).

 

“2015 Accounts” shall have the meaning set forth in Clause 2.3(ii)(b)a.

 

“2015 Accounts Date” shall have the meaning set forth in Clause 2.3(ii)(b)a.

 

“2015 Accounts Dispute” shall have the meaning set forth in Clause 2.3(ii)(b)d.

 

“2015 Accounts Dispute Period” shall have the meaning set forth in Clause 2.3(ii)(b)d.

 

“2015 Accounts Dispute Notice” shall have the meaning set forth in Clause 2.3(ii)(b)d.

 

“2015 Accounts Receipt Date” shall have the meaning set forth in Clause 2.3(ii)(b)a.

 

“3-Gutinver” shall mean 3-Gutinver, S.L.

 

 

 

Exhibit 3.2

 

EXECUTION VERSION

 

ALBANY MOLECULAR RESEARCH, INC.

REGISTRATION RIGHTS AGREEMENT

DATED AS OF JULY 16, 2015

 

 

THIS REGISTRATION RIGHTS AGREEMENT is dated as of July 16, 2015 (this “Agreement”), by and among Albany Molecular Research, Inc., a Delaware corporation (the “Company”) and Holder.

 

WHEREAS, the Company, Exirisk Spain, S.L.U., a Spanish company (“AMRI Sub”), certain persons named therein (“Vendors”) are parties to an Share Purchase Agreement, dated as of July 16, 2015 (as it may be amended from time to time, the “Share Purchase Agreement”), pursuant to which, among other things, the Company, AMRI Sub and the Vendors intend to sell 100% of the capital stock (“Gadea Stock”) of GADEA GRUPO FARMACÉUTICO, S.L. a Spanish company, domiciled at Parque Tecnológico de Boecillo – Plot number 113, Boecillo, Valladolid, registered with the Commercial Registry of Valladolid at volume 1.402, Sheet 8, page VA-19,433 and holding tax identification number (CIF) **** (hereinafter, indistinctively “Gadea”) (the “Transaction”);

 

WHEREAS, the Holder shall, as consideration for its portion of the Gadea Stock, receive a number of shares of common stock, par value $0.01 per share, of the Company (“Stock Consideration”) as provided for in the Share Purchase Agreement; and

 

WHEREAS, in connection with the Transaction, the Company and the Holder desire to establish certain rights, terms and conditions in connection with the Stock Consideration.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

Article I

DEFINITIONS

 

Section 1.01.         Definitions. As used in this Agreement, the following terms shall have the meanings indicated below:

 

“Affiliate” shall mean, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, such Person, and with respect to any individual, shall mean any trust or similar entity formed for legitimate estate planning purposes or his or her spouse, sibling, child, step child, grandchild, niece, nephew or parent of such Person, or the spouse thereof.

 

“Agreement” shall have the meaning assigned in the preamble.

 

“Blackout Period” shall have the meaning assigned in Section 2.02.

 

“Claims” shall have the meaning assigned in Section 2.05(a).

 

“Closing” shall have the meaning assigned in the Share Purchase Agreement.

 

 

“Common Stock” shall mean shares of common stock, $0.01 par value per share, of Company.

 

“Company” shall have the meaning assigned in the preamble.

 

“Demand Notice” shall have the meaning assigned in Section 2.01(a).

 

“Demand Registration Period” means any period of time after the nine (9) month anniversary of the Signing Date, but before the earlier of (A) the two (2) year anniversary of the Signing Date or (B) the number of Participating Shares then held by the Participating Holders is less than one million (1,000,000).

 

“Demand Registration Statement” shall mean a registration statement on Form S-3, or if the Company is not eligible to use Form S-3, a registration statement on Form S-1, in each case for an offering to be made pursuant to Rule 415 under the Securities Act.

 

“Effective Period” shall have the meaning assigned in Section 2.03(a)(iii).

 

“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

 

“Excluded Registration” means (i) a registration statement relating to the sale of securities to employees of the Company or a subsidiary of the Company pursuant to a stock option, stock purchase, or similar equity incentive plan; (ii) a registration statement relating to an SEC Rule 145 transaction; or (iii) a registration statement relating to the issuance by the Company of securities other than (A) the Company’s Common Stock or (B) any securities having substantially equivalent rights and ranking with the Common Stock.

 

“Gadea Capital Stock” shall mean the Gadea Common Stock.

 

“Gadea Common Stock” shall mean shares of common stock, each with a nominal value of €0.01, of Gadea.

 

“Holder” shall mean 3-Gutinver, S.L. which has executed and delivered a counterpart of this Agreement, for so long as 3-Gutinver, S.L. is the registered owner of any Registrable Shares.

 

“Holder’s Counsel” shall have the meaning assigned in Section 2.03(a)(i).

 

“NASDAQ” shall mean the NASDAQ Global Market.

 

“Participating Holder” shall mean the Holder and/or a Permitted Transferee provided that such Person has provided the Required Information prior to the delivery of a Demand Notice.

 

“Participating Shares” shall mean any Registrable Shares, the registered owner of which is a Participating Holder, that is subject of a Demand Registration Statement.

 

 

“Person” shall mean any individual, firm, partnership, corporation, trust, joint venture, association, joint stock company, limited liability company, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof, and shall include any successor (by merger or otherwise) of such entity.

 

“Permitted Transferee” shall mean (A) any Stockholder that is a natural person, (B) any trust or similar entity formed by the Holder or any Stockholder (or any of heir of a Stockholder) for legitimate estate planning purposes or (C) in connection with a transfer of Participating Shares by will or intestacy, the spouse, sibling, child, step child, grandchild, niece, nephew or parent of any Stockholder, or the spouse of any such person.

 

“register,” “registered” and “registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration or document pursuant to the Securities Act.

 

“Registrable Shares” shall mean (i) any outstanding Stock Consideration issued to the Holder and (ii) any outstanding shares or other securities issued by the Company directly or indirectly with respect to outstanding Stock Consideration by way of dividend, stock split, or distribution; provided, that such securities shall cease to be Registrable Shares after they (w) (A) have been replaced by the Company with the delivery of new certificates not bearing a legend restricting transfer under the Securities Act and (B) may be publicly resold (without volume or method of sale restrictions) without registration under the Securities Act, (x) have been distributed to the public pursuant to an offering registered under the Securities Act (including through an exchange or merger registered on Form S-4), (y) have been sold to the public through a broker, dealer or market maker in compliance with Rule 144 of the regulations promulgated under the Securities Act (or any similar rule then in force) or (z) have ceased to be outstanding.

 

“Required Information” shall have the meaning assigned in Section 2.01(e).

 

“Rule 144” shall mean Rule 144 under the Securities Act (or any similar rule then in force).

 

“SEC” shall mean the Securities and Exchange Commission, or any successor agency having jurisdiction to enforce the Securities Act.

 

“Securities Act” shall mean the United States Securities Act of 1933, as amended.

 

“Share Purchase Agreement” shall have the meaning assigned in the recitals.

 

“Signing Date” shall have the meaning assigned in the Share Purchase Agreement.

 

“Stockholder” shall mean a stockholder of the Holder as of the date hereof.

 

“Transaction” shall have the meaning assigned in the recitals.

 

 

All capitalized terms not otherwise defined in this Agreement shall have the meanings assigned thereto in the Share Purchase Agreement.

 

Article II

REGISTRATION RIGHTS

 

Section 2.01.         Registration.

 

(a)                Demand Registration. Subject to the Company’s timely receipt of the Required Information prior to the submission of a notice by the Participating Holder as set forth below, (i) at any time during the Demand Registration Period, the Participating Holder may by notice (a “Demand Notice”) to the Company request that the Company file a Demand Registration Statement with respect to at least an aggregate of 660,000 Registrable Shares of the Participating Holder and (ii) upon such request, the Company shall as soon as practicable, and in any event within thirty (30) days after the date such request is given by the Participating Holder, file a Demand Registration Statement under the Securities Act covering the Registrable Shares that the Participating Holder requests to be included in such registration statement. The Company shall actively employ commercially reasonable efforts to cause such registration statement to become effective as soon as practicable and remain effective until all Registrable Shares that the Participating Holder requests to be included in such registration statement are sold. Notwithstanding anything contained herein to the contrary, the Participating Holder may not make any demand pursuant to Section 2.01(a)(i) after a registration statement has become effective for Registrable Shares of the Participating Holder pursuant to a previous demand under Section 2.01(a)(i). A previous participation in any registrations effected by the Company pursuant to Section 2.01(f) will not affect the Participating Holder’s registration rights under Section 2.01(a)(i). The Company shall not be obligated to effect, or to take any action to effect, any registration statement pursuant to Section 2.01(a)(i) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration of Common Stock, provided, that the Company is actively employing commercially reasonable efforts to cause such registration statement to become effective as soon as practicable.

 

(b)          Notwithstanding the foregoing obligations, if the Company furnishes to the Participating Holder a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Company’s board of directors it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) in accordance with the written advice of the Company’s inside counsel, require disclosure of material information that the Company has a bona fide business purpose for preserving as confidential in the prospectus of the registration statement that would not otherwise be required by law to be publicly disclosed; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to delay the filing or effectiveness, but not the preparation, of the registration statement, for a period of not more than sixty (60) days after the request of the Participating Holder is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided, further, that the Company shall not register any securities for its own account or that of any other stockholder during such sixty (60) day period other than any registration specified in clauses (i), (ii) or (iv) of the definition of Excluded Registration.

 

 

(c)          Limitations on Requested Registration. The Company shall not be obligated to effect, or to take any action to effect, a registration pursuant to any Demand Notice in accordance with this Section 2.01:

 

(i)          in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;

 

(ii)         after the Company has filed with the SEC three (3) Demand Registration Statements pursuant to this Section 2.01 (counting for these purposes only (1) registrations which have been declared or ordered effective and in respect of which all Participating Shares have been sold thereunder and (2) registrations that are interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court for any reason and the Company fails to have such stop order, injunction or other order or requirement removed, withdrawn or resolved to the Participating Holder’s satisfaction within 30 days); or

 

(iii)        if the Company has filed with the SEC a Demand Registration Statement pursuant to this Section 2.01 within the preceding six (6) months, and such Demand Registration Statement has been declared or ordered effective.

 

(d)          Continued Effectiveness. Subject to the applicability of Blackout Periods, the Company shall use its reasonable best efforts to keep such Demand Registration Statement continuously effective under the Securities Act in order to permit the prospectus forming a part thereof to be usable by the Participating Holder so long as it holds Participating Shares.

 

(e)          Required Information. The Participating Holder agrees to provide to the Company, prior to the delivery of a Demand Notice, such written information (the “Required Information”) regarding itself, all Registrable Shares held by it, and the intended method of disposition of such Registrable Shares, as set forth in Exhibit A. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2.01 with respect to any Registrable Shares held by the Participating Holder (including filing or taking any action to cause to be effective a Demand Registration Statement) that the Company shall have received the Required Information (with respect to such Participating Holder, all Registrable Shares held by it, and the intended method of disposition of such Registrable Shares), it being understood that the Participating Holder shall consult as appropriate with its own counsel and advisors in connection with the completion of the Required Information. For the avoidance of doubt, if the Participating Holder fails to provide the Required Information (with respect to itself, all Registrable Shares held by it, and the intended method of disposition of such Registrable Shares) prior to the Demand Notice, (i) such Participating Holder’s Registrable Shares shall not be Participating Shares and (ii) the Company shall have no obligation to file or take any action to cause to be effective a Demand Registration Statement with respect to any of such Participating Holder’s Registrable Shares.

 

 

(f)          Piggyback Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Participating Holder) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash, the Company shall, at such time, promptly give the Participating Holder notice of such registration. Upon the request of the Participating Holder given within twenty (20) days after such notice is given by the Company, the Company shall cause to be registered all of the Registrable Shares that the Participating Holder requests to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.01(f) before the effective date of such registration, whether or not the Participating Holder has elected to include Registrable Shares in such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.04.

 

Section 2.02.         Blackout Period. Notwithstanding anything in this Agreement to the contrary, the Company shall be entitled to postpone and delay, for a reasonable period of time, from time to time, but in no event more than once during any six (6) month period for up to forty-five (45) days (a “Blackout Period”), the effectiveness of any registration statement, and the offer or sale of Participating Shares thereunder to the extent the registration statement has been declared effective, if the Company shall determine that any such offering or sale of any Participating Shares thereunder would (a) have a material adverse effect on a bona fide business or financing transaction or (b) require disclosure of material non-public information that, if disclosed at such time, would be materially harmful to the Company or its stockholders; provided, however, that the Company shall give written notice to the Participating Holder of its determination to impose a Blackout Period as promptly as practicable and of its determination to lift a Blackout Period. Upon notice by the Company to the Participating Holder of any such determination, the Participating Holder shall keep the fact of any such notice strictly confidential and, during any Blackout Period, promptly halt any offer, sale, trading or transfer by it of any Participating Shares pursuant to the Demand Registration Statement for the duration of the Blackout Period set forth in such notice (or until such Blackout Period shall be earlier terminated in writing by the Company) and promptly halt any use, publication, dissemination or distribution of any prospectus or prospectus supplement covering any Participating Shares for the duration of the Blackout Period and, if so directed by the Company, shall deliver to the Company any copies then in its possession of any such prospectus or prospectus supplement. Upon the termination of a Blackout Period, the Company shall promptly cure the postponement and delay of the filing or effectiveness of any registration statement, and the offer or sale of Participating Shares thereunder, as soon as practicable.

 

Section 2.03.         Registration Procedures.

 

(a)          Without limiting the rights of the Company under Section 2.02, in connection with a registration statement prepared pursuant to Section 2.01 pursuant to which Participating Shares will be offered and sold, the Company shall use reasonable best efforts to:

 

  

(i)          furnish to the Participating Holder and, if any, any single legal counsel designated by the Participating Holder (“Holder’s Counsel”), draft copies of such registration statement or prospectus or any amendments or supplements thereto (but excluding all documents incorporated or deemed incorporated therein by reference provided that such documents are publicly filed) proposed to be filed at least five (5) calendar days prior to such filing;

 

(ii)         cause such registration statement to comply as to form in all material respects with the requirements of the applicable form;

 

(iii)        keep such registration statement effective until such time as all of the securities covered thereby cease to be either Participating Shares or held by the Participating Holder (the “Effective Period”), to prepare and file with the SEC such amendments, post-effective amendments and supplements to such registration statement and the prospectus as may be reasonably requested by the Participating Holder (to the extent such request relates to information relating to or provided by such Participating Holder) or as may be necessary to maintain the effectiveness of such registration for the Effective Period and cause the prospectus (and any amendments or supplements thereto) to be filed with the SEC;

 

(iv)        cause all Participating Shares covered by such registration statement to be continually listed on NASDAQ or on the principal securities exchange or interdealer quotation system on which the Common Stock is then listed or quoted;

 

(v)         notify promptly the Participating Holder after becoming aware of any of the events described in sub-clauses (A) through (E) of this paragraph (v), to provide the Participating Holder copies of the relevant documentation (if requested), and in the case of sub-clauses (B) through (E), to provide the Participating Holder an opportunity to review and comment on the Company’s response thereto: (A) when such registration statement or any related prospectus or any amendment or supplement thereto has been filed, and, with respect to such registration statement or any post-effective amendment, when the same has become effective, (B) of any request by the SEC or any United States state securities authority for amendments or supplements to such registration statement or the related prospectus or for additional information (other than comment letters relating to the documents incorporated or deemed incorporated therein by reference), (C) of the issuance by the SEC of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Participating Shares for sale in any jurisdiction or the initiation of any proceeding for such purpose or (E) during the Effective Period, of the happening of any event or the existence of any fact which makes any statement in such registration statement or any post-effective amendment thereto, prospectus or any amendment or supplement thereto, or any document incorporated therein by reference untrue in any material respect or which requires the making of any changes in such registration statement or post-effective amendment thereto or any prospectus or amendment or supplement thereto so that they will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

 

(vi)        during the Effective Period, obtain the withdrawal of any stop order or other order enjoining or suspending the use or effectiveness of such registration statement or any post-effective amendment thereto or the lifting of any suspension of the qualification of any of the Participating Shares for sale in any jurisdiction;

 

(vii)       deliver promptly to the Participating Holder, upon written request therefor, copies of all correspondence between the SEC and the Company, its counsel or auditors including any comment and response letters with respect to such registration statement (but excluding any comment and response letters relating to any documents incorporated or deemed incorporated by reference into such registration statement);

 

(viii)      provide and cause to be maintained a transfer agent and registrar for all Participating Shares covered by such registration statement not later than the effective date of such registration statement; and

 

(ix)         cooperate with the Participating Holder to facilitate the timely preparation and delivery of certificates representing the Participating Shares to be sold under such registration statement in a form eligible for deposit with the Depository Trust Company and not subject to any stop transfer order with any transfer agent (which certificates shall have any restrictive legends removed promptly following (A) such sale and (B) receipt by the Company of a “prospectus” letter from the broker and such other information as the Company may reasonably request with respect to such sale) and cause such Participating Shares to be issued in such denominations and registered in such names as instructed by the Participating Holder.

 

(b)          Nothing in this Agreement shall require the Company to (i) qualify to do business as a foreign corporation in any jurisdiction where it would not otherwise be required to be so qualified, (ii) execute or file any general consent to service of process under the laws of any jurisdiction, (iii) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of Participating Shares covered by a registration statement prepared pursuant to Section 2.01 in any jurisdiction where it is not already subject to service of process, or (iv) subject itself to taxation in any jurisdiction where it would not otherwise be obligated to do so.

 

(c)          In the event that the Company would be required, pursuant to Section 2.03(a)(v)(E), to notify the Participating Holder of the happening of any event specified therein, the Company shall as promptly as practicable, prepare and furnish to the Participating Holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Participating Shares that have been registered pursuant to this Agreement, such prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The Participating Holder agrees that, upon receipt of any notice from the Company pursuant to Section 2.03(a)(v)(E), it shall, and shall cause its sales or placement agent or agents for the Participating Shares to forthwith discontinue disposition of such Participating Shares pursuant to the Demand Registration Statement until such Person shall have received copies of such amended or supplemented prospectus and, if so directed by the Company, to destroy all copies, other than permanent file copies, then in its possession of the prospectus (prior to such amendment or supplement) covering such Participating Shares as soon as practicable after the Participating Holder’s receipt of such notice.

 

 

(d)          The Participating Holder shall furnish to the Company in writing such information regarding the Participating Holder and its intended method of distribution of the Participating Shares as the Company may from time to time reasonably request in writing, including to the extent that such information is required in order for the Company to comply with its obligations under all applicable securities and other laws and to ensure that the prospectus relating to such Participating Shares conforms to the applicable requirements of the Securities Act and the rules and regulations thereunder. The Participating Holder shall notify the Company of any inaccuracy or change in information previously furnished by such Participating Holder to the Company or of the occurrence of any event, in either case as a result of which any prospectus relating to the Participating Shares contains or would contain an untrue statement of a material fact or omits to state any material fact with respect to such Participating Holder required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

Section 2.04.         Registration Expenses. The Company shall pay the fees and disbursements of all the Company’s counsel and accountants in connection with any registration of any Participating Shares and all registration and filing fees and printing costs; provided, that the Participating Holder shall pay all registration expenses to the extent required to be paid by such Participating Holder under applicable law and all underwriting commissions and transfer and other taxes associated with the sale of Registrable Shares by such Participating Holder. The Company shall pay the reasonable, documented fees and disbursements of one counsel for all Participating Holders in such registration in connection with any registration of any Participating Shares and all registration and filing fees and printing costs.

 

 

Section 2.05.         Indemnification; Contribution.

 

(a)          The Company shall, and hereby agrees to, indemnify and hold harmless the Participating Holder and its partners, members, directors, officers, employees and controlling Persons, if any, in any offering or sale of the Participating Shares pursuant to a registration statement hereunder, against any losses, claims, damages (including reasonable attorney’s fees) or liabilities, actions or proceedings (whether commenced or threatened) in respect thereof and expenses (including reasonable fees of counsel) (collectively, “Claims”) to which each such indemnified party may become subject (and the Company will pay to the Participating Holder or other aforementioned person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any Claim as such expenses are incurred), insofar as such Claims (including any amounts paid in settlement effected with the consent of the Company as provided herein), or actions or proceedings in respect thereof, arise out of or are based upon (i) an untrue statement or alleged untrue statement of a material fact contained in any registration statement, or any preliminary or final prospectus contained therein, or any amendment or supplement thereto, or any document incorporated by reference therein, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in each case in light of the circumstances in which they were made, not misleading or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; provided, that the Company shall not be liable to the Participating Holder in any such case to the extent that any such Claims arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary or final prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by the Participating Holder with respect to such Participating Holder expressly for use therein, by such Participating Holder’s failure to furnish the Company, upon request, with the information with respect to such Participating Holder, or such Participating Holder’s intended method of distribution, that is the subject of the untrue statement or omission, or if such Participating Holder sold securities to the Person alleging such Claims without sending or giving, at or prior to the written confirmation of such sale, a copy of the applicable prospectus (excluding any documents incorporated by reference therein) or of the applicable prospectus, as then amended or supplemented (excluding any documents incorporated by reference therein), if the Company had previously furnished copies thereof to the Participating Holder, and such prospectus corrected such untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement.

 

(b)          The Participating Holder shall, and hereby agrees to, indemnify and hold harmless the Company, its directors, officers, employees and controlling Persons, if any, in any offering or sale of Participating Shares pursuant to a registration statement hereunder, against any Claims to which each such indemnified party may become subject, insofar as such Claims (including any amounts paid in settlement as provided herein), or actions or proceedings in respect thereof, arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any registration statement, or any preliminary or final prospectus contained therein, or any amendment or supplement thereto, or any document incorporated by reference therein, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case only with respect to any written information furnished to the Company by the Participating Holder expressly for use in the preparation of such registration statement or prospectus or any amendment or supplement thereto; provided, that in no event shall any indemnity under this Section 2.05 exceed the net proceeds from the offering received by such Participating Holder unless such liability arises out of or is based on fraud or willful misconduct by such Participating Holder as finally determined by a court of competent jurisdiction.

 

 

(c)          Promptly after receipt by an indemnified party under Section 2.05(a) or Section 2.05(b) of written notice of the commencement of any action or proceeding for which indemnification under Section 2.05(a) or Section 2.05(b) may be requested, such indemnified party shall notify such indemnifying party in writing of the commencement of such action or proceeding. In case any such action or proceeding shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall determine, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that (i) if the indemnifying party fails to take reasonable steps necessary to defend diligently the action or proceeding within twenty (20) days after receiving notice from such indemnified party that the indemnified party believes it has failed to do so; (ii) if such indemnified party who is a defendant in any action or proceeding which is also brought against the indemnifying party reasonably shall have concluded that there may be one or more legal defenses available to such indemnified party which are not available to the indemnifying party; or (iii) if representation of both parties by the same counsel is otherwise inappropriate under applicable standards of professional conduct, then, in any such case, the indemnified party shall have the right to assume or continue its own defense as set forth above (but with no more than one firm of counsel for all indemnified parties) and the indemnifying party shall be liable for any expenses therefor (including, without limitation, any such reasonable counsel’s fees). If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel for each indemnified party with respect to such claim. The indemnifying party will not be subject to any liability for any settlement made without its consent, which shall not be unreasonably withheld, conditioned or delayed. No indemnifying party shall, without the prior written consent of the indemnified party (which shall not be unreasonably withheld, conditioned or delayed), compromise or consent to entry of any judgment or enter into any settlement agreement with respect to any action or proceeding in respect of which indemnification is sought under Section 2.05(a) or Section 2.05(b) (whether or not the indemnified party is an actual or potential party thereto), unless such compromise, consent or settlement is solely for monetary damages and includes an unconditional release of the indemnified party from all liability in respect of such claim or litigation, and does not include a statement or admission of fault, culpability or a failure to act, by or on behalf of the indemnified party.

 

(d)          The Participating Holder and the Company agree that if, for any reason, the indemnification provisions contemplated by Section 2.05(a) or Section 2.05(b) hereof are unavailable to or are insufficient to hold harmless an indemnified party in respect of any Claims referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such Claims in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other hand, with respect to the applicable offering of securities. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. If, however, the allocation in the first sentence of this Section 2.05(d) is not permitted by applicable law, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault, but also the relative benefits of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 2.05(d) were to be determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the preceding sentences of this Section 2.05(d). Notwithstanding any of the foregoing, in no event shall any contribution by any Participating Holder under this Section 2.05(d), when combined with any amounts payable or paid by such Participating Holder under Section 2.05(b), exceed the net proceeds from the offering received by such Participating Holder, unless such liability arises out of or is based on fraud or willful misconduct by such Participating Holder. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

 

Section 2.06.         Rule 144 Reporting. With a view to making available to the Holder or Participating Holder the benefits of certain rules and regulations of the SEC that may permit the sale of the Registrable Shares to the public without registration, the Company agrees to use its reasonable best efforts to:

 

(a)          make and keep current public information available, within the meaning of Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times that it is subject to the reporting requirements of the Exchange Act;

 

(b)          file with the SEC, in a timely manner, all reports and other documents required under the Securities Act and Exchange Act (at all times that it is subject to such reporting requirements); and

 

(c)          so long as any party hereto owns any Registrable Shares, furnish to such Person forthwith upon written request (i) a written statement as to its compliance with the current information requirements of Rule 144 to the extent applicable and (ii) such reports and documents as such Person may reasonably request in availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.

 

Section 2.07.         Grant of Registration Rights to Third Parties. Nothing in this Agreement shall limit the Company’s ability to grant to any third party, in its sole and absolute discretion, rights with respect to the registration of any securities issued or to be issued by the Company.

 

 

Article III

MISCELLANEOUS

 

Section 3.01.         Successors and Assigns; Third Party Beneficiaries.

 

(a)          This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the Company and by the Holder, the Permitted Transferees and their respective successors and permitted assigns, and no term or provision of this Agreement is for the benefit of, or intended to create any obligations to, any other Person. This Agreement shall not be assigned and no obligations hereunder may be transferred by the Holder, provided, that the Holder will be permitted to assign its rights under this Agreement to any Permitted Transferee solely in connection of such Holder’s Registrable Shares, provided that such Permitted Transferee agrees to sign a joinder agreement to be bound by the provisions of this Agreement. The Holder shall provide to the Company prior written notice of a transfer to a Permitted Transferee at least ten (10) business days’ of the transfer. This Agreement shall be binding upon a party hereto only upon the manual execution and delivery (which delivery may be by telecopy or facsimile or electronic mail) of a signature page to a counterpart hereto.

 

Section 3.02.         Amendments; Waiver. This Agreement may be amended only by an agreement in writing executed by the Company and the Holder or a Permitted Transferee, as applicable. Either party may waive in whole or in part any benefit or right provided to it under this Agreement, such waiver being effective only if contained in a writing executed by the waiving party. No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon breach thereof shall constitute a waiver of any such breach or of any other covenant, duty, agreement or condition, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right accruing to it thereafter.

 

Section 3.03.         Notices. All notices and communications hereunder shall be deemed to have been duly given and made if in writing and if served by personal delivery upon the party for whom it is intended or delivered by registered or certified mail, return receipt requested, or if sent by telecopier or email, provided, that the telecopy or email is promptly confirmed by telephone confirmation thereof, to the Person at the address set forth below, or such other address as may be designated in writing hereafter, in the same manner, by such Person:

 

	if to the Company:	Albany Molecular Research, Inc. 26 Corporate Circle Albany, NY 12203 Attention: Lori M. Henderson Facsimile: (518) 512-2075
	if to the Holder:	To the 3-Gutinver, S.L. as provided in the Share Purchase Agreement.

 

Section 3.04.         Governing Law; Exclusive Jurisdiction. Each of the parties hereto irrevocably consents to the exclusive jurisdiction and venue of any court within the Borough of Manhattan, New York, and any appellate court from any thereof, in connection with any matter based upon or arising out of this Agreement or the matters contemplated herein, agrees that process may be served upon them in any manner authorized by the laws of the State of New York for such Persons and waives and covenants not to assert or plead any objection which they might otherwise have to such jurisdiction, venue and such process. Each party agrees not to commence any legal proceedings related hereto except in such courts.

 

 

Section 3.05.           Injunctive Relief. Each of the parties hereto recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach of any provision of this Agreement the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which such party may have.

 

Section 3.06.         WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AND ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY PARTY HERETO IN NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.

 

Section 3.07.          Headings. The heading references herein and the table of contents hereof are for convenience purposes only, and shall not be deemed to limit or affect any of the provisions hereof.

 

Section 3.08.          Integration. This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements and undertakings, both written and oral, among the parties, or any of them, with respect to the subject matter hereof.

 

Section 3.09.          Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.

 

Section 3.10.         Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same Agreement.

  

*        *        *

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective authorized officers as of the date first written above.

 

	ALBANY MOLECULAR RESEARCH, INC.
	By:	/s/ Lori Henderson
	Name:	Lori Henderson
	Title:	Senior Vice President and Secretary
	3-GUTINVER, S.L.
	By:	/s/ Gerardo Gutierrez
	Name:	Gerardo Gutierrez
	Title:	Sale Administrator

 

[Signature Page to Registration Rights Agreement]

  

 

Exhibit 10.1

 

Execution Version

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of July 14, 2015 (this “Agreement”), by and among Albany Molecular Research, Inc., a Delaware corporation (the “Borrower”), Barclays Bank PLC, as administrative agent and collateral agent (in such capacities, the “Administrative Agent”), each Lender party hereto (collectively, the “Lenders”) and each other Loan Party party hereto.

 

RECITALS:

 

WHEREAS, reference is hereby made to the Credit Agreement, dated as of October 24, 2014 (as amended by Amendment No. 1 to Credit Agreement, dated as of December 23, 2014, and as further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among the Borrower, the lending institutions from time to time party thereto and Barclays Bank PLC, as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer (capitalized terms used but not defined herein having the meanings provided in the Credit Agreement);

 

WHEREAS, the Borrower, through its indirect wholly-owned subsidiary EXIRISK SPAIN, S.L.U., a Spanish company, intends to acquire (the “Acquisition”) 100% of the Equity Interests of GADEA GRUPO FARMACÉUTICO, S.L., a Spanish company and its subsidiaries (collectively, the “Acquired Business”), pursuant to a Share Purchase Agreement, to be dated on or about July 16, 2015 (including the exhibits and schedules thereto, the “Acquisition Agreement”), among the Borrower, EXIRISK SPAIN, S.L.U. and the various Vendors party thereto;

 

WHEREAS, the Borrower has notified the Administrative Agent and the Lenders that, upon the consummation of the Acquisition, it will immediately repay the entire outstanding principal, interest, fees and other amounts (other than Letters of Credit issued and outstanding under the Credit Agreement, but including the repayment of any Participation Interests in Letters of Credit) owing to the Lenders under the Credit Agreement, and that the repayment of such amounts then so held by JPMorgan Chase Bank, N.A. and Morgan Stanley Bank N.A. (and/or their respective lending affiliates) shall be accompanied by a permanent reduction to $0 and termination of the related Revolving Commitments of JPMorgan Chase Bank, N.A. and Morgan Stanley Bank N.A. (and/or their respective lending affiliates); and

 

WHEREAS, in connection with the Acquisition and the transactions related thereto (including the anticipated payment of the entire outstanding principal, interest, fees and other amounts owing to the Lenders under the Credit Agreement upon the consummation of the Acquisition), and in accordance with Section 10.01 of the Credit Agreement, the Borrower wishes to make certain amendments and the other modifications to the Credit Agreement set forth herein.

 

NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:

 

1.

Credit Agreement Amendments. Effective as of the Effective Date (as defined below), the Credit Agreement is hereby amended as follows:

 

(a)

Section 1.01 of the Credit Agreement is hereby amended by inserting the following new definitions in their correct alphabetical order:

 

 

“Acquisition” has the meaning specified in the definition of “Acquisition Agreement.”

 

“Acquisition Agreement” means the acquisition by the Borrower, through its indirect wholly-owned subsidiary EXIRISK SPAIN, S.L.U., a Spanish company (the “Acquisition”) of 100% of the Equity Interests of GADEA GRUPO FARMACÉUTICO, S.L., a Spanish company and its subsidiaries (collectively, the “Acquired Business”), pursuant to a Share Purchase Agreement, to be dated on or about July 16, 2015 (including the exhibits and schedules thereto, the “Acquisition Agreement”), among the Borrower, EXIRISK SPAIN, S.L.U. and the various Vendors party thereto.

 

“Acquisition Closing Date” means the date of the consummation of the Acquisition in accordance with the terms and conditions of the Acquisition Agreement.

 

“Amendment No. 2” means Amendment No. 2 to this Agreement, dated as of July 14, 2015, among the Borrower, the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent.

 

“Amendment No. 2 Effective Date” means the “Effective Date” under and as defined in Amendment No. 2.

 

(b)

Schedule 2.01 of the Credit Agreement is, immediately after consummation of the Acquisition, hereby amended and restated in its entirety by replacing the existing Schedule 2.01 with the new Schedule 2.01 attached to this Agreement as Exhibit A.

 

(c)

Section 2.10(a) of the Credit Agreement is hereby amended by replacing the third sentence thereof in its entirety with the following: “Any partial reduction of the Revolving Committed Amount pursuant to this Section 2.10(a) shall be applied to the Revolving Commitments of the Lenders pro rata based upon their respective Revolving Commitment Percentages (other than, in connection with the reduction of the Revolving Commitment Amount accompanying the repayment of Revolving Loans and other amounts contemplated by Amendment No. 2 to be made on or about the Acquisition Closing Date, which shall be applied to reduce the Revolving Commitments of JPMorgan Chase Bank, N.A. and Morgan Stanley Bank N.A. (and/or their respective lending affiliates) but not reduce the Revolving Commitments of any other Lender at such time).”

 

(d)

Section 2.12(a) of the Credit Agreement is hereby amended by adding the following immediately following the phrase “each reduction of the Revolving Committed Amount”: “(other than as described in Section 2.10(a))”.

 

2.

Effective Date. This Agreement will become effective on the date (the “Effective Date”) on which each of the following conditions have been satisfied (or waived) in accordance with the terms therein:

 

(i)

this Agreement shall have been executed and delivered by the Borrower, the other Loan Parties, the Administrative Agent and the Lenders; and

 

(ii)

the Acquisition shall have been consummated in accordance with the terms and conditions of the Acquisition Agreement; provided that if the Acquisition is not consummated on or prior to July 23, 2015, the Acquisition shall be deemed to have not occurred for purposes of this Agreement.

 

 

3.

Representations and Warranties. By its execution of this Agreement, each Loan Party hereby represents and warrants that:

 

(i)

the execution, delivery and performance by each Loan Party of this Agreement (a) have been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action and (b) do not and will not (x) contravene the terms of any of such Person’s Organization Documents, (y) conflict with or result in any breach or contravention of, or the creation of any Lien (other than Permitted Liens) under, any Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject except in the case of this clause (y) any such conflict, breach or contravention that would not reasonably be expected individually or in the aggregate to have a Material Adverse Effect or (z) violate any Law, except in any case for such violations that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and

 

(ii)

this Agreement has been duly executed and delivered by each Loan Party that is party thereto and this Agreement constitutes a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, examinership, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and (ii) that rights of acceleration and the availability of equitable remedies may be limited by equitable principles of general applicability (regardless of whether enforcement is sought by proceedings in equity or at law).

 

4.

Reaffirmation of the Loan Parties. Each Loan Party hereby consents to the amendment of the Credit Agreement effected hereby and confirms and agrees that, notwithstanding the effectiveness of this Agreement, each Loan Document to which such Loan Party is a party is, and the obligations of such Loan Party contained in the Credit Agreement, this Agreement or in any other Loan Document to which it is a party are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, in each case as amended by this Agreement. For greater certainty and without limiting the foregoing, each Loan Party hereby confirms that the existing security interests granted by such Loan Party in favor of the Administrative Agent for the benefit of the Finance Parties pursuant to the Loan Documents in the Collateral described therein shall continue to secure the obligations of the Loan Parties under the Credit Agreement and the other Loan Documents as and to the extent provided in the Loan Documents.

 

5.

Amendment, Modification and Waiver. This Agreement may not be amended, modified or waived except as permitted by Section 10.01 of the Credit Agreement.

 

6.

Counterparts; Integration. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. The recitals are incorporated into and shall be an integral part of this Agreement. This Agreement, the Credit Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof; provided that, notwithstanding anything contained herein, the Fee Letter shall survive the Closing Date. Delivery of an executed counterpart of a signature page of this Agreement by telecopier or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

 

 

7.

Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

8.

Governing Law. This Agreement and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement, the Credit Agreement and the other Loan Documents, and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the Law of the State of New York.

 

9.

WAIVER OF JURY TRIAL. Each party hereby waives, to the full extent permitted by applicable Laws, any right it may have to a trial by jury in any legal proceeding directly or indirectly arising out of or relating to this Agreement, any other Loan Document or the transactions contemplated hereby (whether based on contract, tort or any other theory). Each party hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 9.

 

10.

Loan Document. On and after the Effective Date, this Agreement shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents (it being understood that for the avoidance of doubt this Agreement may be amended or waived solely by the parties hereto as set forth in Section 5 hereof).

 

11.

Notice of Prepayment and Reduction of Commitments. This Agreement shall be deemed to constitute a notice of prepayment and reduction of commitments, in each case contingent upon the occurrence of the consummation of the Acquisition, in compliance with Section 2.09(d) and Section 2.10(a) of the Credit Agreement, respectively, including a waiver of the notice periods specified therein.

 

[Signature pages to follow]

 

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized officer to execute and deliver this Agreement as of the date first set forth above.

 

	ALBANY MOLECULAR RESEARCH, INC.,
	as the Borrower
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Senior Vice President, General Counsel
		and Secretary
	ALO ACQUISITION LLC, as a Guarantor
	By:	/s/ Lori M. Henderson
		Name:  Lori M. Henderson
		Title: Manager
	AMRI BURLINGTON, INC., as a Guarantor
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Senior Vice President, General Counsel
		and Secretary
	AMRI RENSSELAER, INC., as a Guarantor
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Senior Vice President, General Counsel
		and Secretary
	CEDARBURG PHARMACEUTICALS, INC.,
	as a Guarantor
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Senior Vice President, General Counsel
		and Secretary
	OSO BIOPHARMACEUTICALS MANUFACTURING LLC, as a Guarantor
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Manager

 

[Signature Page to Amendment No. 2 to Credit Agreement]

  

  

	AMRI SCCI, LLC
	By:	/s/ Lori M. Henderson
		Name: Lori M. Henderson
		Title: Manager

 

 

	BARCLAYS BANK PLC,
	as the Administrative Agent and as a Lender
	By:	/s/ Vanessa A. Kurbatskiy
		Name: Vanessa A. Kurbatskiy
		Title: Vice President

 

[Signature Page to Amendment No. 2 to Credit Agreement]

 

 

	MORGAN STANLEY BANK N.A.,
	as a Lender
	By:	/s/ Allen Chang
		Name: Allen Chang
		Title: Authorized Signatory

 

[Signature Page to Amendment No. 2 to Credit Agreement]

 

 

	JPMorgan Chase Bank, N.A.,
	as a Lender
	By:	/s/ Thomas C. Strasenburgh
		Name: Thomas C. Strasenburgh
		Title: Vice President & Authorized Officer

 

[Signature Page to Amendment No. 2 to Credit Agreement]

 

 

 

Exhibit 99.1

 

For Immediate Release

 

AMRI Acquires Gadea Pharmaceutical Group

 

·

Strategically expands AMRI’s API portfolio through Crystal Pharma, positioning AMRI as a source of specialty and generic API

·

Establishes a European base for sales and operations and significantly increases AMRI’s presence in non-US markets

·

Immediately Accretive to non-GAAP diluted EPS

·

Gadea CEO Gerardo Gutiérrez joins AMRI Board of Directors

·

Conference Call Today at 8:30 am ET to Discuss Transaction

 

Albany, NY (July 16, 2015) – AMRI (NASDAQ: AMRI) today announced that it has acquired all the outstanding shares of Gadea Pharmaceutical Group, a privately-held company located in Valladolid, Spain, specializing in technically complex active pharmaceutical ingredients (APIs) and finished drug product. The purchase price was $174 million, including the issuance of 2.2 million shares of common stock to Gadea’s owners, valued at $43.8 million, with the balance paid in cash and through the assumption of existing debt.

 

“The acquisition of Gadea marks another milestone in our company’s path towards becoming the preeminent supplier of custom and complex drug development services and product to both the branded and generic pharmaceutical industry,” said William S. Marth, AMRI’s president and chief executive officer. “This mutually beneficial transaction presents an exciting opportunity for our two companies that builds upon our growth, adding a strong portfolio of complex API that will augment our existing capabilities and services, and new customer relationships that will extend our global reach.”

 

“Importantly, I am pleased to welcome Gerardo Gutiérrez, Gadea’s founder and chief executive officer, who has joined our Board of Directors. With more than 36 years of experience in the industry and nearly 25 years at Gadea, Gerardo has demonstrated a track record of success in innovation and management in specialty API and his continued guidance will be invaluable to our efforts going forward. Mr. Javier Gallo will be leading AMRI’s day to day operations in Spain in his new position as managing director, reporting to Mr. George Svokos, senior vice president, API and chief commercial officer.”

 

“For Gadea, this transaction will build on our company’s proud past and position it for a powerful future,” said Mr. Gutiérrez, CEO of Gadea. “Our capabilities in technically challenging API and diverse customer base are highly complementary to AMRI. With this combination, we achieve our goal of being a comprehensive provider of steroid API and gain access to the US market. I look forward to joining the AMRI Board and working together to achieve our common goals.”

 

 

Strategic Benefits of the Transaction

·

Gadea’s Crystal Pharma division significantly expands AMRI’s marketable API portfolio and squarely positions the company as a source of specialty and generic API.

Crystal’s API portfolio includes 22 active US Drug Master Files (DMFs), 17 EU Certificate of Suitability (COSs), 13 Japanese DMFs and 2 South Korean DMFs; with several APIs having filings in more than one of these areas. Additionally, Crystal brings sterile API capabilities which will complement AMRI’s sterile drug product business.

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Gadea’s portfolio further extends AMRI’s API development and manufacturing capabilities in steroids and hormones, providing the company with a comprehensive steroid offering.

These API are uniquely complex and provide high barriers to entry. Gadea is also backward integrated to fermentation of certain steroidal and hormonal intermediates and further develops other families of non-steroidal final APIs.

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Acquisition augments AMRI’s sterile drug product offerings with the addition of ophthalmic and parenteral suspension dosage forms and prefilled syringe and lyophilization capability.

Gadea and its customers will be able to leverage AMRI’s end-to-end sterile drug product services from pre-formulation to commercial filling of complex API.

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Establishes a strong European base for sales and operations and significantly increases AMRI’s presence into non-US markets

Gadea brings a robust customer base and diverse revenue stream, with over 400 customers selling into 70 countries. With approximately 80% of revenue in non-US markets, Gadea provides many new markets for AMRI. AMRI will be able to leverage its strength in the U.S. markets with the addition of Gadea’s offerings.

 

Gadea, based in Valladolid, Spain, just north of Madrid, operates a highly regarded API and finished dose development and manufacturing business with 2014 revenue of approximately $83 million and 2014 adjusted EBITDA of approximately $17 million. Gadea is expected to continue to operate independently within AMRI’s API segment. On a stand-alone basis, Gadea’s forecasted full year 2015 revenue is estimated to be between $80 million and $90 million, with adjusted EBITDA of between $18 million and $20 million, implying a purchase price multiple of approximately 9 times 2015 adjusted EBITDA at the midpoint of the range. Adjusted EBITDA excludes any deal related costs or purchase accounting impacts. The transaction is expected to be immediately accretive to AMRI’s non-GAAP diluted earnings per share, with nominal synergies. AMRI intends to provide an update to its 2015 financial guidance in mid-September 2015.

 

Transaction Details and Financing
The transaction was signed and closed simultaneously. AMRI financed the transaction through the issuance of 2.2 million shares ($43.8 million of value) of AMRI common stock, the assumption of $33.2 million of net debt, and $97.0 million cash consideration. AMRI has secured $230 million of new Senior Secured Credit Facilities from Barclays, a portion of which were used to fund the cash portion of the transaction, repay AMRI’s $75 million revolving credit facility and pay transaction related fees and expenses. For details regarding the transaction and the financing, please refer to the Form 8-K filed today with the Securities & Exchange Commission. Barclays acted as financial advisor to AMRI in the transaction and is the arranger for the debt, which will be syndicated. Gomez-Acebo & Pombo Abogados, S.L.P. and Goodwin Procter LLP acted as AMRI’s legal advisors.

 

 

The 2.2 million shares of AMRI common stock (the “Shares”) issued in connection with the transaction were offered and sold outside the United States to an eligible investor pursuant to Regulation S of the Securities Act of 1933, as amended (the “Securities Act”). The Shares have not been registered under the Securities Act, or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under or an applicable exemption from such registration requirements. This press release does not constitute an offer to sell, or a solicitation of an offer to purchase, the Shares in any jurisdiction in which such offer or solicitation would be unlawful.

 

Use of Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, such as EBITDA, which is adjusted to exclude, among other things, the impact of interest income and expense, depreciation and amortization expense, and income tax expense or benefit. We exclude these items from the non-GAAP financial measures because they are outside our normal operations. There are limitations in using non-GAAP financial measures, as they are not prepared in accordance with generally accepted accounting principles, and may be different than non-GAAP financial measures used by other companies. In particular, we believe that the inclusion of supplementary non-GAAP financial measures in this press release helps investors to gain a meaningful understanding of our core operating results and future prospects without the effect of these often-one-time charges, and is consistent with how management measures and forecasts the company's performance, especially when comparing such results to prior periods or forecasts. Non-GAAP results also allow investors to compare the company’s operations against the financial results of other companies in the industry who similarly provide non-GAAP results. The non-GAAP financial measures included in this press release are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. It is not feasible to provide reconciliation to the most comparable projected U.S. GAAP measure because the excluded items are difficult to predict and estimate and are primarily dependent on future events.

 

Conference Call and Webcast
AMRI will hold a conference call at 8:30 a.m. ET on July 16, 2015 to discuss the transaction. The conference call can be accessed by dialing (866) 208-5728 (domestic calls) or (224) 633-1279 (international calls) at 8:20 a.m. ET and entering passcode 85754326. A live webcast with slides will also be available and can be accessed on the company’s website at www.amriglobal.com. Replays of the webcast can also be accessed for up to 90 days after the call via the investor area of the company’s website at http://ir.amriglobal.com.

 

About AMRI

Albany Molecular Research Inc. (AMRI) is a global contract research and manufacturing organization that has been working with the Life Sciences industry to improve patient outcomes and the quality of life for more than two decades. With locations in North America, Europe and Asia, our key business segments include Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API) and Drug Product Manufacturing. Our DDS segment provides comprehensive services from hit identification to IND, including expertise with diverse chemistry, library design and synthesis, in vitro biology and pharmacology, drug metabolism and pharmacokinetics, as well as natural products. API Manufacturing supports the chemical development and cGMP manufacture of complex API, including potent, controlled substances, biologics, peptides, steroids and cytotoxic compounds. Drug Product Manufacturing supports drug product development through commercial scale production of complex liquid-filled and lyophilized parenteral formulations. For more information about AMRI, please visit our website at www.amriglobal.com or follow us on Twitter (@amriglobal).
 

About Gadea Pharmaceutical Group
Gadea is a Spanish group of affiliated companies dedicated to the technical development and production of API and finished drug forms. Gadea’s Crystal Pharma business unit, is recognized as a leader in large scale commercial API production, specializing in steroids, high potency hormones and sterile steroids (by filtration).

 

Forward Looking Statements

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include, but are not limited to, statements regarding the acquisition of Gadea, the projected revenue and non-GAAP EBITDA of Gadea, the potential synergies associated with the transaction, the potential impact on AMRI’s operations and financial results, and statements made by the company’s chief executive officer and by Gadea’s founder and chief executive officer. Readers should not place undue reliance on our forward-looking statements. The company’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the company may not be able to predict and may not be within the company’s control. Factors that could cause such differences include, but are not limited to, the ability of the company to effectively integrate the Gadea businesses; possible negative impacts to the revenue expected to be received by the Gadea businesses; trends in pharmaceutical and biotechnology companies’ outsourcing of manufacturing services and chemical research and development, including softness in these markets; the termination of the royalties received by the Company under the the Allegra® license agreement, based on the expiration in 2015 of the patents underlying the license; the success of the sales of other products for which the company receives royalties; the risk that the company will not be able to replicate either in the short or long term the revenue stream that has been derived from the royalties payable under the Allegra® license agreements; the risk that clients may terminate or reduce demand under any strategic or multi-year deal; the company’s ability to enforce its intellectual property and technology rights; the company’s ability to obtain financing sufficient to meet its business needs; the company’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operations; the results of further FDA inspections; the company’s ability to effectively maintain compliance with applicable FDA and DEA regulations; the company’s ability to integrate past or future acquisitions, and make such acquisitions accretive to the company’s business model, the company’s ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of the company’s strategic investments and acquisitions to perform as expected, as well as those risks discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on March 16, 2015, and the company's other SEC filings. Revenue, adjusted EBITDA and other financial guidance offered by senior management today with respect to 2015 represent a point-in-time estimate and are based on information as of July 15, 2015. Senior management has made numerous assumptions in providing this guidance which, while believed to be reasonable, may not prove to be accurate. Numerous factors, including those noted above, may cause actual results to differ materially from the guidance provided. The company expressly disclaims any current intention or obligation to update the guidance provided or any other forward-looking statement in this press release to reflect future events or changes in facts assumed for purposes of providing this guidance or otherwise affecting the forward-looking statements contained in this press release.

  

Contacts:

Investors: Patty Eisenhaur, AMRI Investor Relations, 518-512-2936
Media: Gina Rothe, AMRI Communications, 518-512-2512

 

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