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): May 5, 2016
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 May 5, 2016, Albany Molecular Research, Inc., a Delaware corporation (“AMRI”), and Lauro Cinquantasette S.p.A., a company organized under the laws of Italy (the “Seller”), entered into a Share Purchase Agreement (the “Share Purchase Agreement”) pursuant to which AMRI intends to purchase 100% of the capital stock of Prime European Therapeuticals S.p.A. – Euticals, a company organized under the laws of Italy (“Euticals”) for an aggregate purchase price of approximately €315 million, including (i) approximately €164 million in cash (the “Cash Consideration”), (ii) the issuance of approximately seven million shares of common stock, $0.01 par value of AMRI (the “Consideration Shares”), and (iii) approximately €55 million in deferred cash consideration payable to the Seller in the form of two seller notes (the “Transaction”). The governing bodies of AMRI, the Seller and Euticals have approved the Share Purchase Agreement and the Transaction.
The Consideration Shares will consist of unregistered securities issued in accordance with applicable securities laws and subject to transfer restrictions (see Registration Rights Agreement below). At the closing of the Transaction (the “Closing”), if the issuance of the Consideration Shares would (i) be in excess of 19.75% of the outstanding shares of AMRI common stock (as calculated pursuant to Rule 5635(d) of the Listing Rules of the NASDAQ) or (ii) require a vote of AMRI’s stockholders in connection with such issuance, then immediately prior to the Closing such lesser number of shares of AMRI common stock not to exceed 19.75% of the outstanding shares of AMRI common stock shall be issued as the Consideration Shares and the Cash Consideration will be increased by an amount equal to such shares that are in excess of the 19.75% threshold multiplied by the average of the volume weighted average prices for the ten consecutive business days leading up to the date of signing of the Share Purchase Agreement. The Cash Consideration may also be adjusted in connection with certain net working capital and net debt adjustments at Closing and post-Closing in accordance with the terms of the Share Purchase Agreement. At the Closing, AMRI will deposit €10 million of the Cash Consideration in an escrow account to be held in escrow and distributed in accordance with the terms of the a customary escrow agreement, the form of which is filed with this report as Schedule 1.1(e) to the Share Purchase Agreement.
€55,000,000 of the purchase price was financed through two unsecured promissory notes issued by AMRI to the Seller (the “Seller Notes”). The Seller Notes are guaranteed by AMRI and are subject to customary representations and warranties and events of default. The Seller Notes are to be repaid in three equal annual installments to be paid on the third, fourth and fifth anniversaries of the Closing date, a portion of which payments are subject to AMRI’s set off rights as described herein. For so long as Seller has indemnification obligations as described below, one of the Seller Notes with a principal amount equal to the then-applicable cap will be available for AMRI to set off against in order to satisfy certain indemnification obligations of the Seller described below. The principal amount of the Seller Notes that exceeds the indemnification caps described below is not subject to set off.
The Seller is required to indemnify AMRI, subject to certain exceptions and limitations set forth in the Share Purchase Agreement, with respect to breaches of representations, warranties and covenants (up to the amount available in the escrow account, or available with respect to the right of setoff described above). The representations and warranties set forth in the Share Purchase Agreement generally survive for 24 months after the Closing, with longer survival periods with respect to certain fundamental representations and warranties, which survive for 48 months. The Seller’s indemnification obligations are subject to a deductible of €500,000, with an indemnity cap of €31 million for the first two years and a reduced cap for the two years thereafter equal to the greater of (i) €15 million and (ii) the sum of €15 million and the amount of any pending claims. However, such deductible and cap do not apply with respect to breaches of Seller’s representation as to title to Euticals shares.
The parties to the Share Purchase Agreement have made certain customary representations, warranties and covenants, including, among others: (i) representations by the Seller, and Euticals and its subsidiaries (collectively, the “Group Companies”) with respect to the Group Companies’ business, operations and financial condition; (ii) covenants by the Seller to keep information relating to the Group Companies’ and AMRI’s business confidential; and (iii) covenants by the Seller to not compete with the Group Companies’ business and to not solicit employees from the Group Companies. During the period from the date of the Share Purchase Agreement until the earlier of the termination of the Share Purchase Agreement or the Closing, the Seller has agreed to customary interim operating covenants and an agreement not to solicit, initiate or encourage any proposals or offers for the purchase of any equity interest in or a portion of the assets of the Group Companies.
The Share Purchase Agreement also contains customary conditions to closing, including, among others: (i) receipt of required antitrust clearance and certain government approvals; (ii) maintaining employment arrangements with certain employees of the Group Companies; and (iii) the absence of any material adverse changes affecting AMRI or the Group Companies.
The Share Purchase Agreement provides for limited termination and withdrawal rights, including, among others, (i) certain breaches by the parties of the Share Purchase Agreement; (ii) action by a governmental authority that would permanently prevent the Closing of the Transaction, and (iii) the Closing not occurring on or before September 3, 2016. The Share Purchase Agreement is not subject to a financing condition.
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 and the other agreements and instruments filed with this report (the “Transaction Documents”) have been attached to provide investors with information regarding their respective terms. They are not intended to provide any other factual information about AMRI, the Seller or the Group Companies. In particular, the assertions embodied in the representations and warranties in the Transaction Documents 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 (and the other Transaction Documents), and 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 Transaction Documents are not necessarily characterizations of the actual state of facts about AMRI, the Seller or the Group Companies (or other parties thereto) 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”).
Subscription Agreement
Concurrent with the execution and delivery of the Share Purchase Agreement, AMRI and the Seller entered into a Subscription Agreement (the “Subscription Agreement”), pursuant to which the Seller agrees to subscribe for the Consideration Shares at the Closing of the Transaction, subject to certain conditions.
The Consideration Shares are proposed to be 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 Consideration 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.
The foregoing summary of the Subscription Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Subscription Agreement attached hereto as Exhibit 10.1.
Registration Rights and Lock-Up Agreement
Concurrent with the execution and delivery of the Share Purchase Agreement, AMRI and the Seller entered into a Registration Rights and Lock-Up Agreement (the “Registration Rights and Lock-Up Agreement”). The Registration Rights and Lock-Up Agreement provides that, as soon as practicable after the Closing, AMRI shall file a “shelf registration statement” with the SEC for the resale of the Consideration Shares. The Registration Rights and Lock-Up Agreement also provides for demand registration rights and piggyback registration rights under certain circumstances, for the Seller or any Participating Holders (as defined in the Registration Rights and Lock-Up Agreement) who will own a portion of the Consideration Shares. Moreover, the Registration Rights and Lock-Up Agreement imposes a 180-day lockup period (the “Lock-Up Period”) on any sales, transfers, hedges or similar dispositions of the Consideration Shares.
The foregoing summary of the Registration Rights and Lock-Up Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights and Lock-Up Agreement attached hereto as Exhibit 4.1.
Stockholders Agreement
AMRI, the Seller, and certain stockholders of AMRI and the Seller identified therein (the “Stockholders”) intend to enter into a Stockholders Agreement (the “Stockholders Agreement”) at the Closing. The Stockholders Agreement will provide that, on and after the Closing, the Seller shall have the right to select a designee to be elected to the board of directors of AMRI (the “Board”) as a Class I director (the “Seller Designee”), subject to certain director qualifications set forth in AMRI’s organizational documents. Thereafter, among other conditions, for so long as: (i) the Seller beneficially owns at least 5% of AMRI; (ii) within two years from the date of the Closing, the Seller’s Stockholders together or individually own more than 50% of the equity interest in the Seller; and (iii) such time after the two-year period from the date of the Closing, the Seller’s Stockholders together or individually own more than 35% of the equity interest in the Seller and have control (as such term is used in the definition of “Affiliate” as defined in the Stockholders Agreement) of the board of directors of the Seller, the Board shall include the Seller Designee as a Class I Board nominee. The Stockholders Agreement will terminate if the Seller no longer meets the requirements described above, or if there is a company sale.
The Stockholders Agreement also provides that, from and after the Closing, each AMRI Stockholder agrees to vote all Shares owned by such Stockholder in favor of the Seller Designee in any election of Class I board members. Additionally, for so long as the Seller has the right to designate the Seller Designee, the Seller agrees to vote all Shares owned by the Seller or its affiliates in favor of any director nominees recommended for election by the Board at any special or annual meeting. Moreover, the Stockholders Agreement provides for certain “standstill” restrictions that prevent the Seller proposing certain business combinations and acquiring additional beneficial ownership of AMRI so that the beneficial ownership of the Seller will be more than 19.99%, which restrictions will last for the longer of three years or such time as the Seller has the right to appoint the Seller Designee.
The foregoing summary of the Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stockholders Agreement the form of which is filed herewith as Schedule 1.1(p) to the Share Purchase Agreement.
Commitment Letter
Pursuant to the Share Purchase Agreement, AMRI is obligated to obtain financing to fund a portion of the consideration in respect of the Transaction.
Concurrently with the execution and delivery of the Share Purchase Agreement, JPMorgan Chase Bank, N.A. (“JPMorgan”) and Barclays Bank PLC (“Barclays” and together with JPMorgan, collectively, the “Lead Arrangers”) entered into a commitment letter with AMRI (the “Commitment Letter”) pursuant to which the Lead Arrangers and additional lenders (together, the “Lenders”) have committed to provide: (i) incremental senior secured first lien term loans (the “Incremental Term Facility”) in an aggregate principal amount of $230.0 million and incremental revolving loans in an aggregate amount not to exceed $5,000,000 (the “Incremental Revolving Loans” and together with the Incremental Term Loans, the “Incremental Loans”) under the Second Amended and Restated Credit Agreement, dated as of August 19, 2015, by and among AMRI, the lending institutions from time to time party thereto (the “Existing Lenders”) and Barclays, as administrative agent (as amended, restated, supplemented or otherwise modified from time to time, the “Existing Credit Agreement”)) if the requisite consents to approve an amendment to the Existing Credit Agreement to permit the Transaction and the Incremental Loans (the “Amendment”) are obtained from the Existing Lenders; or (ii) if the requisite consents to approve the Amendment are not obtained, senior secured first lien credit facilities consisting of $428.3 million of first lien term loans (the “Refinancing Term Facility” and together with the Incremental Term Facility, the “Term Facility”) and a $35.0 million first lien revolving credit facility (the “Refinancing Revolving Facility” and, the Refinancing Term Facility, together with the Refinancing Revolving Facility and the Incremental Loans, the “Debt Financing”); in each case, subject to the conditions set forth in the Commitment Letter. These conditions are described in more detail below. If AMRI decides to enter into the Debt Financing, AMRI would use the proceeds of the Debt Financing to: (i) pay a portion of the consideration; (ii) pay various fees and expenses incurred in connection with the Transaction and the Debt Financing; and (iii) repay certain indebtedness of AMRI, Euticals and their subsidiaries.
The obligations of the Lead Arrangers to provide the financing under the Commitment Letter for the Debt Financing are subject to a number of conditions (including conditions that do not relate directly to the Share Purchase Agreement), including, among others: (i) consummation of the Transaction in accordance with the Share Purchase Agreement (without giving effect to any amendments, modifications or waivers to the Share Purchase Agreement that are materially adverse to the interests of the Lead Arrangers or the Lenders without the prior consent of the Lead Arrangers); (ii) a 15 business day marketing period (with customary exclusions for holidays) for the Lead Arrangers to syndicate the Term Loan Facility; (iii) that since the date of the Commitment Letter, there has been no material adverse effect on the Group Companies; (iv) delivery of certain customary historical and pro forma financial statements with respect to AMRI and its subsidiaries and the Group Companies; (v) payment of all costs, fees, expenses and other compensation in connection with the Debt Financing; (vi) delivery of definitive loan documentation and certain customary closing documents; and (vii) the accuracy of certain customary representations and warranties.
The Commitment Letter expires on the earliest of (i) the date that is five business days after the valid termination of the Share Purchase Agreement in accordance with its terms prior to the closing of the Transaction; (ii) the consummation of the Acquisition; (iii) the Termination Date (as defined in the Share Purchase Agreement as in effect on the date hereof); and (iv) September 2, 2016.
The Term Facility will amortize in quarterly installments over the term of the Term Loan Facility, will be secured by substantially all assets of AMRI and its subsidiaries consistent with the terms of the Existing Credit Agreement and will be guaranteed by certain of AMRI’s subsidiaries consistent with the terms of the Existing Credit Agreement. In addition, the terms of the Term Facility will include the following, which shall be substantially consistent with the Existing Credit Agreement: (i) mandatory prepayment provisions from excess cash flow, certain debt issuances and certain dispositions; (ii) uncommitted incremental facilities; and (iii) customary representations and warranties, affirmative and negative covenants, and events of default.
Pursuant to the Commitment Letter and in accordance with the terms of a fee letter entered into among the Lead Arrangers and AMRI, the Lead Arrangers expect to receive from AMRI certain customary fees, some of which are based on their pro rata participation under the Commitment Letter, including certain fees payable depending on various circumstances and contingencies. In addition, the fee letter includes certain “market-flex” provisions.
Item 3.02 Unregistered Sales of Equity Securities.
Pursuant to the Share Purchase Agreement and Subscription Agreement described in Item 1.01 of this Current Report on Form 8-K, which descriptions are incorporated herein by reference, AMRI will issue Consideration Shares to the Seller at the Closing. The Share Purchase Agreement contains provisions providing for the reallocation of the Consideration Shares and Cash Consideration.
The Consideration Shares are proposed to be offered and sold outside the United States to an eligible investor pursuant to Regulation S of the Securities Act. The Consideration 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 3.03 Material Modification to Rights of Security Holders.
Please see the disclosure set forth under Item 1.01 under the captions Registration Rights and Lock-Up Agreement and Stockholders Agreement, which is incorporated by reference into this Item 3.03.
Item 7.01 Regulation FD Disclosure.
On May 5, 2016, AMRI issued a press release announcing the execution of the Share Purchase Agreement. A copy of the press release is attached hereto and furnished herewith as Exhibit 99.1.
AMRI held a conference call on May 5, 2016 to discuss the Transaction. Replays of the webcast can be accessed for up to 90 days after the call via the investor area of AMRI’s website at http://ir.amriglobal.com. The accompanying slide presentation is furnished herewith as Exhibit 99.2.
The information included in this Current Report on Form 8-K pursuant to Item 7.01, including Exhibits 99.1 and 99.2 attached hereto, is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Securities Exchange Act of 1934, except as expressly set forth by specific reference in such filing.
Forward Looking Statements
This report includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws that involve risks and uncertainties. These statements include, but are not limited to: statements regarding the proposed acquisition, including the consideration to be paid and the terms and conditions thereof, and the other transactions contemplated by the Share Purchase Agreement; and AMRI’s expectations regarding the financing and its commitment with the lenders and the issuance of the notes are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Readers should not place undue reliance on our forward-looking statements. Statements about AMRI’s or Euticals’ past financial results do not, and are not meant to, predict future results. AMRI can provide no assurance that such results and performance will continue. AMRI’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which AMRI may not be able to predict and may not be within AMRI’s control. Factors that could cause such differences include, but are not limited to: the ability of AMRI to satisfy the closing conditions set forth in the Share Purchase Agreement to consummate the proposed acquisition; the ability of AMRI to secure financing, or financing on satisfactory or anticipated terms, in amounts sufficient to consummate the acquisition; the ability of AMRI to effectively integrate the Euticals businesses; possible unexpected negative impacts to the revenue expected to be received by the Euticals businesses; trends in pharmaceutical and biotechnology companies’ outsourcing of manufacturing services and chemical research and development, including softness in these markets; the success of the sales of other products for which AMRI receives royalties; the risk that clients may terminate or reduce demand under any strategic or multi-year deal; AMRI’s ability to enforce its intellectual property and technology rights; AMRI’s ability to obtain financing sufficient to meet its business needs; AMRI’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operations, data integrity compliance, and other GMP regulations; the results of further FDA inspections; AMRI’s ability to effectively maintain compliance with applicable FDA and DEA regulations; AMRI’s ability to integrate past or future acquisitions, and make such acquisitions accretive to AMRI’s business model; AMRI’s ability to take advantage of proprietary technology and expand the scientific tools available to it; the ability of AMRI’s strategic investments and acquisitions to perform as expected; as well as those risks discussed in AMRI’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on March 30, 2016, and AMRI’s other SEC filings. Revenue, adjusted EBITDA, accretion and other financial guidance offered by senior management represent a point-in-time estimate and are based on information as of May 4, 2016. 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. AMRI 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 report.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits. |
Exhibit No. | Description | |
2.1 | Share Purchase Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016.* | |
4.1 | Registration Rights and Lock-Up Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016. | |
10.1 |
Subscription Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016. | |
99.1 | Press Release dated May 5, 2016.** | |
99.2 | Investor Presentation dated May 5, 2016.** |
* Certain exhibits and 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 exhibits and schedules upon request by the SEC; provided, however, that AMRI may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished.
** Furnished herewith.
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: May 6, 2016
Exhibit Index
Exhibit No. | Description | |
2.1 | Share Purchase Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016.* | |
4.1 | Registration Rights and Lock-Up Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016. | |
10.1 |
Subscription Agreement by and between AMRI and Lauro Cinquantasette S.p.A., dated as of May 5, 2016. | |
99.1 | Press Release dated May 5, 2016.** | |
99.2 | Investor Presentation dated May 5, 2016.** |
* Certain exhibits and 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 exhibits and schedules upon request by the SEC; provided, however, that AMRI may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any exhibits or schedules so furnished.
** Furnished herewith.
Exhibit 2.1
Execution Version
THIS SHARE PURCHASE AGREEMENT (Agreement) is made on 5 May 2016 among:
(1) | AMRI – Albany Molecular Research, Inc., a company incorporated under the laws of the State of Delaware (USA) (AMRI) whose registered office is in Albany (NY – USA), represented by Ms. Lori Henderson, in her capacity as General Counsel, Senior Vice President and Secretary, for itself and/or for one of its subsidiaries to be designated pursuant to Article 1401 and the following of the Code (as defined below) (Buyer); and |
(2) | Lauro Cinquantasette S.p.A, a company incorporated under the laws of Italy whose registered office is in Milan (Italy), Via del Lauro 7, Italian Tax Code No. 04849340965 represented by Mr. Maurizio Bottinelli, in his capacity as Director (Seller). |
Recitals
(a) | The Seller is the owner of Shares (as defined below) representing 100% of the fully paid-in corporate capital of Prime European Therapeuticals S.p.A. - Euticals, a company organized and existing under the laws of Italy, with registered office at Viale Bianca Maria 25, Milano Italy, Italian Tax Code No. 07254610152 (Company); |
(b) | Company owns 100% of the corporate capital of each of the Current Subsidiaries (as defined below); Company and the Current Subsidiaries (collectively, Group Companies) engage in the pharmaceutical and chemical business worldwide (Business); |
(c) | The Buyer has agreed to purchase from the Seller, and the Seller has agreed to sell to the Buyer, the Shares for the consideration and upon the terms and the conditions set out in this Agreement; and |
(d) | On the date hereof the Buyer and the Seller have also executed the Registration Rights Agreement, and the Subscription Agreement (as defined below) which set forth the investment of the Seller in the share capital of the Buyer in accordance with Article 2.3 (b) below. |
IN CONSIDERATION OF THE FOREGOING RECITALS which form, together with Annexes and Schedules herein, an integral and substantive part of this Agreement, the Parties (as defined below) hereby agree and covenant as follows:
ARTICLE 1 - CERTAIN DEFINITIONS
1.1 In addition to the other terms defined elsewhere in this Agreement, for the purposes of the same, the following words and terms shall have the meaning ascribed thereto in this Article 1.
1
231 Model shall have the meaning under clause 26.1 of the Warranties.
231 Supervisory Body means the supervisory body of the Company and, if any, of any Italian Current Subsidiary, appointed in connection with the approval of 231 Model.
Accounting Principles means: (i) in respect of the Company and those other Group Companies which have their registered office in Italy the accounting principles promulgated by IFRS and (ii) in respect of those Group Companies which have their registered office outside of Italy, the generally accepted accounting principles applied in the relevant country where such Group Companies have their respective registered office and (iii) with reference to the audited consolidated financial statement of the Group Companies, the IFRS using practices and methods applied on a consistent basis with those used in the preparation of the audited consolidated financial statement of the as at 31 December 2014 and 31 December 2015.
Accounts means in relation to any financial year of a Group Company:
(a) | the audited balance sheet of that company (and the audited consolidated balance sheet of the Company for financial year 2015) at the last day of, and in respect of, that financial year; |
(b) | the audited profit and loss account of that company (and the audited consolidated profit and loss account of the Company for the financial year 2015) in respect of that financial year; and |
(c) | together with any mandatory documentation and reports provided for by applicable law. |
Acquisition shall have the meaning under Article 2.1 of this Agreement.
Action means any claim, demand, proceeding, suit, litigation, investigation, audit, action or cause of action in contract, tort, under statute, under any applicable law or otherwise.
Adjustment Date shall have the meaning under Article 9.3(iii) of this Agreement.
Agents shall have the meaning under clause 18.3 of the Warranties.
Agreed Net Working Capital means the amount of 75.000.000,00 € which has been determined by the Parties prior to signature of this Agreement adopting the same formula used for the definition of Net Working Capital.
Agreed Net Working Capital Adjustment means the difference between the Estimated Net Working Capital and the Agreed Net Working Capital.
Agreed Rate shall have the meaning under Article 9bis.5 of this Agreement.
Agreement means this Share Purchase Agreement.
Alternative Transaction shall have the meaning under Article 3.2 of the Agreement.
2
Antitrust Laws means the Sherman Antitrust Act, as amended, the Clayton Antitrust Act, as amended, the HSR Act, the Federal Trade Commission Act, as amended, the Italian, French, German, EU and all applicable anti-trust laws and all other applicable law and orders issued by a governmental authority that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or lessening of competition through merger or acquisition.
Antitrust Authorities shall have the meaning under clause 4 of Schedule B.
Auditor means Ernst & Young LLP with registered office at Via Fernanda Wittgens 6/c, Milan or, in the event of its non-acceptance or its subsequent waiver of its appointment pursuant to this Agreement, another auditing company of international standing which shall be designated by the Parties jointly, or, in the absence of agreement, by the Chairman pro tempore of the Ordine dei Dottori Commercialisti of Milan.
Banks Pool means the pool formed by the following banks (each a Pool’s Bank): MedioCreval S.p.A. (Tax Code 00216050872), Banca Popolare di Milano Sooc. Coop. A.R.L. (Tax Code 00715120150); GE Capital Interbanca S.p.A. (Tax Code 00776620155) and Banca IMI S.p.A. (Tax Code 04377700150).
Banks Pool February 5, 2016 Waiver means the letter agreement entered into by Banca IMI (as agent of Banks Pool) and the Company on February 5, 2016.
Banks Pool Loan means the loan regulated by the Banks Pool Loan Agreement.
Banks Pool Loan Agreement means the loan agreement entered into between Company, the Seller and Banks Pool on February 8, 2011, as amended on April 1, 2015 and further amended pursuant to Banks Pool February 5, 2016 Waiver.
Banks Pool Other Security(ies) means and all of the following:
a) | Deed of Pledge between the Seller, Company and Banks Pool constituting pledge on GMBH Share to secure the obligations of the Company under the Banks Pool Loan Agreement; |
b) | Deed of Pledge between the Seller, Company and Banks Pool constituting pledge on SAS Share to secure the obligations of the Company under the Banks Pool Loan Agreement; and |
c) | Deed of Pledge between the Seller, Company and Banks Pool constituting pledge on INC Share to secure the obligations of the Company under the Banks Pool Loan Agreement; |
d) | Deed of Pledge between the Seller, Company and Banks Pool constituting pledge on Chorisis Quota to secure the obligations of the Company under the Banks Pool Loan Agreement; and |
e) | any and all other securities listed in Schedule 1.1(a). |
3
Banks Pool Pledge(s) means any and all of the following deed of pledge (together with all relevant documentation):
a) | Deed of Pledge between the Seller, Company and MedioCreval S.p.A. constituting pledge on N. 55.436.783 shares of the Company to secure the obligations of the Company under the Banks Pool Loan Agreement; |
b) | Deed of Pledge between the Seller, Company and Banca Popolare di Milano Sooc. Coop. A.R.L. constituting pledge on N. 55.436.783 shares of the Company to secure the obligations of the Company under the Banks Pool Loan Agreement; |
c) | Deed of Pledge between the Seller, Company and GE Capital Interbanca S.p.A. constituting pledge on N. 55.436.783 shares of the Company to secure the obligations of the Company under the Banks Pool Loan Agreement ; and |
d) | Deed of Pledge between the Seller, Company and Banca IMI S.p.A. constituting pledge on N. 55.436.783 shares of the Company to secure the obligations of the Company under the Banks Pool Loan Agreement. |
Banks Pool Release of Pledges and Other Securities means copies of deeds of cancellation, registrations of cancellations and any other documents, deeds or declaration reasonably acceptable to the Buyer to obtain evidence that at Closing (i) the Shares, GMBH Share, SAS Share, INC Share and Chorisis Quota are free from any Encumbrances deriving from such Banks Pool Pledge(s) and Banks Pool Other Security(ies) and (ii) any and all Banks Pool Pledge(s) and Banks Pool Other Security(ies) have been lawfully and properly released and cancelled.
Books and Records means the mandatory books and records as set forth under Article 2214 and 2215bis of the Code, and under any tax law, and the similar mandatory books and records applicable to the Current Subsidiaries different from Chorisis S.r.l.
Business shall have the meaning set forth in Recital (b) of this Agreement.
Business Day means a day (other than a Saturday or a Sunday) on which banks generally are open in Milan and New York for a full range of business.
Buyer means AMRI – Albany Molecular Research, Inc., as more fully identified in the introductory part of this Agreement or any of its Subsidiaries to be designated pursuant to Article 2.4 of this Agreement.
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Buyer Material Adverse Effect means any event that, individually or in the aggregate with all other events, has or would reasonably be expected to have (i) a material and adverse effect upon the business, assets, liabilities, financial condition or operating results of the Buyer on a consolidated basis, or (ii) an effect that would prevent, materially delay or materially impair the Buyer’s ability to consummate the Acquisition; provided, however, that none of the following shall be deemed to constitute or shall be taken into account in determining whether there has been a Buyer Material Adverse Effect: any event attributable to (A) changes in the economy or financial, capital, credit or securities markets, including, without limitation, any disruption thereof and any decline in the price of any security (including AMRI) or any market index, generally in the United States or any foreign market, (B) changes or proposed changes in, or in the application, enforcement, interpretation or implementation of, applicable accounting principles or laws, (C) general regulatory and industry changes, (D) a flood, hurricane, earthquake or other natural disaster or act of God or (E) the announcement, pendency or completion of the Acquisition or the other transactions contemplated by this Agreement or public or industry knowledge thereof, including losses or threatened losses of employees, customers, lenders or others having business relationships with the Buyer, or the communication by the Buyer of its plans or intentions with respect to the Company or; and provided further that, with respect to a matter described in any of the foregoing clauses (A), (B), (C) or (D), such matter shall only be excluded so long as such matter does not have a materially disproportionate effect on the Buyer relative to other comparable entities operating in the industry in which the Buyer operates. .
By-laws means the by-laws of the Company and of each of the Current Subsidiaries as publicly available on the date hereof.
Carry Over Amount shall have the meaning under Article 9.3(iii) of this Agreement.
Casaletto Plant Disposal means the transfer of the assets and liabilities relating to the Company’s Plant in Casaletto Lodigiano (LO), Via delle Rimembranze No. 1 to A. Menarini Industrie Farmaceutiche Riunite Spa and relevant sale and transfer agreement attached hereto as Schedule 1.1(c).
Casaletto Plant Disposal Expenses means any present or future liabilities related to the Casaletto Plant Disposal in connection to the article 9.2 and 9.3 (CIGS) of the Preliminary Agreement signed with Menarini on 14 January 2016, the articles 10.1, 10.2,10.3 and 10.4 (TAF) and article 5.1.2 (“Asset tax evaluation”) of the Preliminary Agreement, if not already settled before the Closing Date.
China Receivable means the outstanding amount related to the disposition of the Group Companies’ interest in Tianma Tianji.
Claim of Indemnity shall have the meaning under Article 9.4 of this Agreement.
Clearance means the approvals, clearances and exemptions defined under Article 11 of this Agreement.
Closing means the purchase and sale of the Shares, the payment of the Price, and, in general, the execution and exchange of all documents and the performance and consummation of all obligations, respectively required to be executed, exchanged, performed and consummated on the Closing Date pursuant to this Agreement.
Closing Accounts means the consolidated financial statements of the Group Companies as at the close of business on the Closing Date consolidating the accounts of the Group Companies, comprising the balance sheet as at that date and the income statement for the period then ended, to be prepared in accordance with the Accounting Principles applied on a consistent basis and reviewed pursuant to Article 6 of this Agreement.
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Closing Certificate means a certificate prepared at the Seller’s expense setting forth the Seller’s good faith estimates of the amount of Closing Date Net Financial Position, Closing Date Working Capital, Closing Date Debt Like Items and the Closing Date Transaction Costs, together with calculations of the Provisional Price, together with such schedules and data with respect to the determination of the foregoing estimates as is reasonably necessary to support such amounts included in the Closing Certificate.
Closing Date means (x) the latest of (i) July 31, 2016; (ii) the last Business Day of the month in which all conditions precedent set forth in Article 4 of this Agreement have been duly satisfied or waived; (iii) the last Business Day of the month in which the last day of the Marketing Period occurred; (iv) the last Business Day of the month in which the Clearance provided in Article 11 shall have been obtained; or (y) such other date as the Parties may agree in writing. Notwithstanding the foregoing requirement that the Closing Date fall on the final Business Day of a month, if all of the conditions otherwise required by clauses (ii), (iii) and (iv) are satisfied or waived, the Closing Date may occur, at Buyer’s election, on a date that is the prior to the last Business Day of the applicable month; provided that such date will be no less than 5 Business Days following the last day on which such conditions are so satisfied or waived.
Closing Date Debt Like Items means the Debt Like Items calculated as at the Closing Date.
Closing Date Net Financial Position means the consolidated net financial position of the Group Companies at the Closing Date as resulting from the Closing Accounts, to be prepared by Buyer utilizing the Schedule set out under the definition of Net Financial Position.
Closing Date Transaction Costs means, without duplication with respect to any other provision of this Agreement, to the extent unpaid as of Closing and required to be paid by or on behalf of a Group Company, (a) any transaction, change of control, severance, or similar bonuses to employees, consultants or contractors of any Group Company, payable in connection with the consummation of the transactions contemplated hereby (b) third party fees, costs and expenses incurred or expected to be incurred by the Group Companies and not paid at Closing (or for which the Group Companies will be responsible) in connection with the preparation, negotiation, execution and delivery of this Agreement or the consummation of the transactions contemplated hereby (including any commission, fees and expenses of investment bankers, accountants, brokers, legal counsel, financial advisors, consultants or other advisors), whether or not invoiced or billed prior to the Closing, and whether incurred on behalf of the Group Companies, and (c) costs and expenses incurred or expected to be incurred in connection with obtaining any third-party consents required for the Group Companies hereunder and (d) any Costs and expenses (including, without limitation, notarial fees and cost and Taxes) incurred or expected to be incurred and not paid at Closing in connection with (i) the repayment of the Banks Pool Loan, (ii) the obtaining of the cancellation of Banks Pool Pledges and Banks Pool Other Securities. The Parties agree that any Costs and expenses related to the Financing, are expressly excluded from this definition and shall not be deducted from the Purchase Price.
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Closing Date Net Working Capital means the Net Working Capital at the Closing Date as resulting from the Closing Accounts.
Code means the Italian Civil Code.
Collar Ceiling means Agreed Net Working Capital plus 1.000.000,00 €.
Collar Floor means Agreed Net Working Capital minus 1.000.000,00 €.
Company means Prime European Therapeuticals S.p.A. - Euticals S.p.A., as more fully identified in Recital (a) of this Agreement.
Company Acquisition Expenses shall mean any payables by the Company (not the Seller) that would be deemed Closing Date Transaction Costs but for the fact that such amounts have been paid by the Company prior to the Closing, on an after-Tax basis.
Company Closing Statement shall have the meaning under Article 6.1 of this Agreement.
Company Intellectual Property Rights means all Intellectual Property Rights owned by the Group Companies or used or held for use by the Group Companies in the Business or in connection with products.
Company Material Adverse Effect means any event that, individually or in the aggregate with all other events, has or would reasonably be expected to have (i) a material and adverse effect upon the business, assets, liabilities, financial condition or operating results of the Group Companies on a consolidated basis, or (ii) an effect that would prevent, materially delay or materially impair the Company’s or the Seller’s ability to consummate the Acquisition; provided, however, that none of the following shall be deemed to constitute or shall be taken into account in determining whether there has been a Company Material Adverse Effect: any event attributable to (A) changes in the economy, (B) changes or proposed changes in, or in the application, enforcement, interpretation or implementation of, applicable accounting principles or laws, (C) general regulatory and industry changes, (D) a flood, hurricane, earthquake or other natural disaster or act of God or (E) the announcement, pendency or completion of the Acquisition or the other transactions contemplated by this Agreement or public or industry knowledge thereof, including losses or threatened losses of employees, customers, lenders or others having business relationships with any of the Group Companies, or the communication by the Company or Seller of its plans or intentions with respect to the Buyer or; and provided further that, with respect to a matter described in any of the foregoing clauses (A), (B), (C) or (D), such matter shall only be excluded so long as such matter does not have a materially disproportionate effect on the Group Companies relative to other comparable entities operating in the industry in which the Group Companies operates.
Computershare shall have the meaning under Article 2.3 of this Agreement.
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Confidential Information shall have the meaning under Article 13.1 of this Agreement.
Contingent Workers shall have the meaning under clause 17.1 of the Warranties.
Current Subsidiaries means the following:
a) | Chorisis S.r.l., with offices at Via Cardinal Ferrari No. 6, Mariano Comense (CO), Italy, Italian Tax Code 01648330130, corporate capital € 30.600,00 represented by quotas (Chorisis Quota); |
b) | Euticals GMBH, with offices at INdustriepark Hoechst, Gebaude D 569, 65926 Frankfurt/Main, Germany, registered with the commercial register of the local court of Franckufurt/Main under HRB 77507, corporate capital 25.000,00 € (GMBH Share); |
c) | Eutical Sas, with offices at Zone Industrielle de Laville - 47240 Bon Encontre, France, registered with the Trade and Companies Register of Agen under number 490 756 038, corporate capital € 6,380,749.00 (SAS Share); and |
d) | Euticals Inc., with offices at 2460 W Bennett St, Springfield, MO 65807, U.S.A., American Tax Code D-U-N-S 07-712-0223, (INC Share). |
Cut-Off Date shall have the meaning under Article 9.6 of this Agreement.
Debt Like Items means the items listed under Schedule 1.1(d).
D&O Policy shall mean the insurance policy No. 82177741 issued for the benefit of, inter alia, directors, officers and other corporate bodies’ members with effect as from January 1st, 2016 between the Company and Chubb Insurance Company of Europe SE.
Direct Claim shall have the meaning under Article 9.4 of this Agreement.
DURC means “Documento Unico Continuità Retributiva” (single insurance contribution payment certificate) issued by INAIL and INPS.
Due Diligence means the due diligence activity carried out by the Buyer upon the data and information relating to the Group Companies made available by the Buyer in a Virtual Data Room.
Due Diligence Documents shall have meaning under Article 7.3 of this Agreement.
Employees shall have the meaning under clause 17.1 of the Warranties.
Employee Schedule shall have the meaning under clause 17.1 of the Warranties.
Employment Agreement GF means the current employment agreement of Mrs. Gabriella Fabotti CFO of Company, dated as of June 4, 2012 (as amended).
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Employment Agreement MF means the current directorship agreement by and between Ms. Margalit Fine and Seller and Company, dated as of February 28, 2014 (as amended).
Employment Agreement TP means the current employment agreement of Mrs. Teresa Pallotta of Company, dated as of July 9, 2013 (as amended).
Employment Integration Agreement GF means the Employment Agreement GF as integrated or amended.
Employment Integration Agreement MF means the Employment Agreement MF as integrated or amended.
Employment Integration Agreement TP means the Employment Agreement TP as integrated or amended.
ENASARCO means Ente Nazionale di Assistenza per gli Agenti e i Rappresentanti di Commercio.
Encumbrances means any pledges, mortgages, deeds of trust, hypothecations, claims, charges, conditional sale agreements or arrangements, security interests, adverse claims of ownership or use, restrictions on transfer (such as a right of first refusal or other similar right) or other restrictions, defects of title, servitudes, options, puts or calls rights, rights of first offer, adverse claims or rights, third party rights of any nature, privileges (including tax privileges), liens or other encumbrances or charges, usufructs or restrictions deriving from the law, or any contracts, agreements or acts of a judicial authority.
Environmental and Health and Safety Laws means all statutes, laws (including common law), rules, regulations, ordinances or agreements with judicial authority concerning environmental, health and safety, or risk prevention matters applicable in any relevant jurisdictions to the Group Companies.
Escrow Agent means Cordusio Fiduciaria S.p.A. with registered office at Via Dante no 4, Milan or, in the event of its non-acceptance or its subsequent waiver of its appointment pursuant to this Agreement, another escrow agent nationally recognized within the United States and Italy which shall be designated by Buyer and reasonably acceptable to the Seller (or as may otherwise be designated in accordance with the terms of the Escrow Agreement).
Escrow Agreement means the agreement in the form of Schedule 1.1(e) to be executed and delivered by the Parties and the Escrow Agent on Closing as provided in Article 5.
Escrow Account means a separate account maintained by the Escrow Agent that holds the Escrow Amount as a trust fund for the purpose of the Price Adjustment and the indemnification in accordance with Article 9.
Escrow Amount means 10.000.000,00 €.
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Estimated Debt Like Items shall have the meaning under Article 6.1 of this Agreement.
Estimated Net Financial Position means the estimated Net Financial Position at Closing as provided for by the Seller.
Estimated Net Financial Position Adjustment means the difference between the Estimated Net Financial Position and the Last Account Financial Provision.
Estimated Net Working Capital means the estimated Net Working Capital at Closing as provided for by the Seller.
Estimated Transaction Costs shall have the meaning under Article 6.1 of this Agreement.
Euro or € means euro, i.e. the lawful currency adopted by certain member states of the European Union.
Excess Shares shall have the meaning under Article 5.2 of this Agreement.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Factor A shall have the meaning under Article 6 of this Agreement.
Factor B shall have the meaning under Article 6 of this Agreement.
Factor C shall have the meaning under Article 6 of this Agreement.
Factor D shall have the meaning under Article 6 of this Agreement.
FCPA shall have the meaning under clause 29(a) of the Warranties.
FMEF Authorization shall have the meaning under Article 2.5(b) of this Agreement.
Financing means any and all bank debt financings by the Buyer and/or their respective subsidiaries, including without limitation one or more term loan facilities and a revolving credit facility, for the purpose of (i) financing the payment of the Price and (ii) any repayment or refinancing of Indebtedness contemplated by this Agreement.
Financing Sources means any lenders, arrangers and agents and any other Persons that have committed to provide or have otherwise entered into agreements in connection with providing the Financing, including any joinder agreements or credit agreements entered into pursuant thereto and their respective successors and permitted assigns.
Fundamental Warranties shall have the meaning under Article 9.3(ii)(1) of this Agreement.
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Group Company means the Company and the Current Subsidiaries and collectively Group Companies.
Hazardous Material means any substance or element the use, discharge, disposal or treatment of which is regulated by Environmental and Health and Safety Laws or any dangerous substances, including pollutants, contaminants, toxic substances, hazardous and special wastes, or any toxic, radioactive, ignitable, corrosive, reactive substance, or any oils, asbestos and asbestos products, petroleum and petroleum products, hazardous materials, chemicals and goods and any other materials which may be harmful to human health or the environment.
Hedging Contracts refers to the outstanding foreign exchange hedging contracts and arrangements of the Group Companies.
HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
INPS Payable shall mean the residual portion of payables to social contribution institution (INPS) subject to the agreement between the Company and INPS signed on December 16, 2014 at Closing (which amount was 895.000,00 € at December 31, 2015).
IFRS means the international accounting standards and related interpretation documents, as from time to time amended, prepared by the International Accounting Standards Board (I.A.S.B.) and adopted in compliance with the procedure of article 6 of the EU Regulation 19 July 2002 no. 1606/2002 of the European Parliament and of the European Council, generally referred to as IFRS.
INAIL means “Istituto Nazionale per L’Assicurazione contro gli Infortuni sul Lavoro”
Indebtedness with respect to any Person, means, at any time without duplication: (i) all indebtedness of such Person for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money, whether current or funded, secured or unsecured, or with respect to deposits or advances of any kind; (ii) all obligations of such Person for the deferred purchase price of property, goods or services and all contingent payment obligations for the purchase of property, goods or services (excluding obligations of such person to creditors of raw materials, inventory, services and supplies incurred in the ordinary course of business) or earn out obligations; (iii) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments and all liabilities in respect of mandatorily redeemable capital stock, shares or securities convertible into capital stock or shares; (iv) all obligations of such Person for the reimbursement of any obligor on any letter of credit, performance bond, banker’s acceptance, guarantee or similar credit transaction (excluding (A) letters of credit issued for the benefit of suppliers to support accounts payable to suppliers incurred in the ordinary course of business, (B) standby letters of credit relating to workers compensation insurance and (C) surety bonds and customs bonds used in the ordinary course of business); (v) all interest rate and currency swaps, caps, collars and similar agreements or hedging devices under which payments are obligated to be made by such Person, whether periodically or upon the happening of a contingency; (vi) all obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person; (vii) all obligations of such Person or another Person secured by an Encumbrance on any asset of such first Person, whether or not such obligation is assumed by such first Person; (viii) all obligations of such Person under leases required to be capitalized in accordance with IFRS, U.S. GAAP or other local Accounting Principles, as applicable, as consistently applied by such Person; (ix) all interest, fees and other expenses owed with respect to any indebtedness referred to above, including any prepayment fees or other fees, costs or expenses associated with payment of any such indebtedness; (x) any liabilities for statutory termination or retirement indemnities (as determined in accordance with IFRS or U.S. GAAP, or other local Accounting Principles as applicable) accruing prior to the Closing; (xi) any dividends irrevocably declared and payable; and (xii) all indebtedness referred to above which is directly or indirectly guaranteed by any such Person or for which such Person is liable, directly or indirectly, as obligor, guarantor, surety or otherwise or which any such Person has agreed (contingently or otherwise) to purchase or otherwise acquire or in respect of which it has otherwise assured a creditor against loss; provided, that in all cases, “Indebtedness” shall not include any item that is included in Closing Date Working Capital or Closing Date Net Financial Position or Closing Date Debt Like Items.
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Indemnified Parties shall have the meaning under Article 9.1 of this Agreement.
Indemnifying Parties shall have the meaning under Article 9.1 of this Agreement.
INPS means Istituto Nazionale della Previdenza Sociale.
INPS Repayment Plan means the repayment plan agreed upon by the Company and INPS attached herein as Schedule 1.1(f).
Intellectual Property Rights means (A) patents, patent applications of any kind, patent rights, inventions, discoveries and invention disclosures (whether or not patented) (collectively, Patents); (B) rights in registered and unregistered trademarks, service marks, trade names, trade dress, logos, packaging design, slogans and Internet domain names, and registrations and applications for registration of any of the foregoing (collectively, Marks); (C) copyrights in both published and unpublished works, including all compilations, databases and computer programs, manuals and other documentation and all copyright registrations and applications, and all derivatives, translations, adaptations and combinations of the above (Copyrights); (D) rights in know-how, trade secrets, confidential or proprietary information, research in progress, algorithms, data, designs, processes, formulae, drawings, schematics, blueprints, flow charts, models, strategies, prototypes, techniques, Beta testing procedures and Beta testing results (Trade Secrets); (E) any and all other intellectual property rights and/or proprietary rights relating to any of the foregoing and (F) any and all other intellectual property right owned by the third parties and used under license by the Group Companies.
Internal Revenue Code means the Internal Revenue Code of 1986, as amended.
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Inventory means the inventory of the Company on a consolidated basis (including raw materials, semi-finished goods, work in progress finished goods, packaging and goods in transit) after deducting adequate provisions for obsolete or slow moving/no moving items, calculated consistently with the criteria in the Last Accounts.
Key Employees means Gabriella Fabotti, Margalit Fine and Teresa Pallotta;
Last Account Net Financial Position means the Net Financial Position as calculated as of the Last Accounts Date.
Last Accounts means in relation to any of the Group Companies the audited approved definitive Accounts of such company and the consolidated accounts of the Company in respect of its financial year ended on the Last Accounts Date and herein as Schedule 1.1(g).
Last Accounts Date means 31 December 2015.
Loss means any loss, damage, cost, fine, penalty, expense of any kind (including reasonable attorneys and consultants fees and expenses) or other damage including for sake of clarity those of Tax nature, actually borne or suffered, which is the direct and immediate consequence of the breach of an obligation, representation or warranty, pursuant to article 1223 of the Italian Civil Code.
Marketing Period means a period (i) of fifteen (15) consecutive Business Days commencing on the date following the date on which the Buyer shall have received the Required Information (provided that, such marketing period shall (a) exclude July 4, 2016 (however, for the avoidance of doubt, the occurrence of July 4, 2016 shall not commence a new fifteen (15) consecutive Business Day period and (b) have ended on or prior to August 19, 2016) and (ii) throughout which nothing has occurred and no condition exists that would cause any of the conditions precedent set forth in Article 4 to fail to be satisfied, assuming the Closing were to be scheduled for any time during such period; provided, however, that (y) the Marketing Period shall not be deemed to have commenced if, prior to the completion of such period, (1) the Company’s auditor shall have withdrawn its audit opinion with respect to any financial statements included in clause (i)(a) of the definition of Required Information, unless and until a new unqualified audit opinion is issued with respect to such financial statements described in clause (i)(a) of the definition of Required Information for the applicable periods by the Company’s auditor or another independent public accounting firm of recognized national standing or (2) the Company shall have determined that it must restate in a material manner any financial statements included in the Required Information, unless and until such restatement has been completed and the applicable Required Information has been amended or the Company has determined and announced that no such restatement is required in accordance with the Accounting Principles, and (z) the Marketing Period in any event shall end on any earlier date on which all of the Financing has funded; provided, however, that if Seller in good faith reasonably believes that it has delivered to Buyer the Required Information, it may deliver to Buyer a written notice to that effect (stating when it believes it completed the delivery requirement), in which case the Marketing Period shall be deemed to have commenced on the date of the applicable notice, unless Buyer in good faith reasonably believes that Seller has not delivered the Required Information and, within three (3) Business Days after receipt of such notice from Seller delivers a written notice to Seller to that effect (stating with specificity the Required Information that has not been delivered).
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Material Contracts shall have the meaning under clause 20.4 of the Warranties.
NASDAQ means the NASDAQ Global Select Market.
Net Financial Position shall mean the net financial position of the Company on a consolidated basis, to be prepared on the basis and in accordance with Schedule 1.1(h).
Net Income Tax Payables shall mean all Taxes related to income tax liabilities (for example, for Italy: IRES and IRAP) of the Group Companies referred to prior year and to the accruals of the current year, net of any Tax advances paid in relation to such income Tax liabilities.
Net Working Capital shall mean the net working capital of the Company on a consolidated basis, to be calculated as the algebraic sum of the Trade Receivables minus Trade Payables plus Inventory excluding Overdue Trade Payables and Overdue Trade Receivables.
New Collective Bargaining Agreements: means the new collective bargaining agreements for employees and managers of Group Companies entered into in March 2016.
New York Convention shall have the meaning under Article 15.2(b) of this Agreement.
OFAC shall have the meaning under clause 28.2 of the Warranties.
Official shall have the meaning under clause 29(a) of the Warranties.
Overdue Trade Payables means any Trade Payables that, at the Closing Date, remain unpaid sixty (60) days from such payable’s respective remittance date.
Overdue Trade Receivables means any Trade Receivables that, at the Closing Date, are overdue between sixty (60) and three hundred and sixty (360) days.
Overdue Trade Receipts means those amounts actually received in remittance of the Overdue Trade Receivables.
PA Document shall have the meaning under Article 6.3 of this Agreement.
Parties means, collectively, the Buyer and the Seller and Party shall be construed accordingly.
Permits means the permits, licenses, certificates, orders, consents, consent decrees, authorizations, franchises and other approvals or certifications from, or required by, any governmental, quasi-governmental, self-regulating authority or other authority or agency in any jurisdiction that are currently required to operate the Business.
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Person means any individual, company, partnership, firm, association, unincorporated organization or other entity.
Price means the Provisional Price as adjusted pursuant to Article 6 of this Agreement.
Provisional Price means the aggregate of:
(1) 163,613,475.00 € (Cash) (a) minus Estimated Transaction Costs, (b) minus Last Account Net Financial Position equal to 67,949,000.00 €, (c) minus Estimated Net Financial Position Adjustment (which may be a negative number), (d) plus Agreed Net Working Capital Adjustment (which may be a negative number), and (e) minus Estimated Debt Like Items;
(2) no 7,051,295 shares of AMRI common stock corresponding to an agreed value of 96,386,525.00 € calculated based on the Signing Stock Value and to be issued by AMRI at Closing (Consideration Shares);
(3) promissory note “A” for an overall amount equal to 24.000.000,00 € to be issued by the Buyer pursuant to the provisions, terms and conditions set forth in Schedule 1.1(j) of this Agreement (Promissory Note A) to be delivered to Seller at Closing; and
(4) promissory note “B” for an overall amount equal to 31.000.000,00 € to be issued by the Buyer pursuant to the provisions, terms and conditions set forth in Schedule 1.1(k) of this Agreement (Promissory Note B) to be delivered to Seller at Closing.
Price Adjustment shall have the meaning under Article 6 of this Agreement.
Promissory Note C shall mean the promissory note “C” to be issued by the Buyer pursuant to the provisions, terms and conditions set forth in Promissory Note B (Promissory Note A, Promissory Note B and Promissory Note C together the Promissory Notes).
Properties shall have the meaning under clause 15.1 of the Warranties.
Proposal shall have the meaning under Article 3.2 of this Agreement.
PSF Refund shall mean the residual portion of any Tax refund related to Polichimica Sap Farmaceutici SpA agreed by the Commissione Tributaria Provinciale at Closing (which amount was 83.000,00 € at December 31, 2015).
REACH shall have the meaning under Article 23.8 of this Agreement.
Real Properties shall have the meaning under clause 15.4 of the Warranties.
Registered Rights means, in relation to any jurisdiction, any Intellectual Property Rights which are the subject of registration (or application for registration) with any competent authority in that jurisdiction.
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Registration Rights Agreement means the registration rights and lock-up agreement executed by and between the Seller and the Buyer on the date hereof, a copy of which is attached to this Agreement under Schedule 1.1(l).
Relevant Benefits shall have the meaning under clause 17.19 of the Warranties.
Representatives shall have the meaning under Article 3.2 of this Agreement.
Required Information means (i) (a) audited financial statements of the Group Companies covering fiscal years ended December 31, 2015, 2014 and 2013 and any fiscal years thereafter ended at least one hundred twenty (120) days prior to the Closing Date and (b) unaudited financial statements for any quarterly interim fiscal period or periods of the Group Companies ended after the date of the most recent audited financial statements delivered pursuant to clause (a) above and at least forty-five (45) days prior to the Closing Date, and (ii) such other information regarding the Group Companies and their business customarily required in connection with financings similar to the Financing, including information to be used in the preparation of an offering memorandum or prospectus regarding the business, operations, financial projections and prospects of the Group Companies and the business customary for financings similar to the Financing.
Revised Cap shall have the meaning under Article 9.3(iii) of this Agreement.
Rules shall have the meaning under Article 15.2(a) of this Agreement.
SEC means the U.S. Securities and Exchange Commission.
Securities Act means the Securities Act of 1933, as amended.
Seller means Lauro Cinquantasette S.p.A., as more fully identified in the introductory part of this Agreement.
Sellers’ Schemes shall have the meaning under clause 17.19 of the Warranties.
Seller’s Shareholders means the Seller’s shareholders listed on Schedule 1.1(m).
Seller’s Shareholders Letter Agreement means the letter attached hereto as Schedule 1.1(n) to be signed by each of the Seller’s Shareholders.
Seller’s Shareholder Loan means the shareholder loan dated April 3, 2012 granted by Seller to Company attached to this Agreement as Schedule 1.1(o).
Shares means, collectively, No. 65.852.365 ordinary shares of the Company having a par value of 0,62 € each and representing 100% of the share capital of the Company.
Signing Stock Value means 13,6693 €.
Stockholders Agreement means the stockholder agreement to be executed by the Seller and the Buyer and the other parties named therein on the Closing Date, a copy of which is attached to this Agreement under Schedule 1.1(p).
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Subsidiary means, with respect to any Person, a company, partnership, firm, association, unincorporated organization or other entity directly or indirectly controlled by or under common control with such Person, it being understood that, for purposes of this definition, control shall be determined in accordance with Article 2359, paragraph 1, no. 1 of the Code.
Subscription Agreement means the agreement executed by and between the Seller and the Buyer on the date hereof, a copy of which is attached to this Agreement under Schedule 1.1(q).
Taxes means any Italian or other jurisdiction taxes or similar charges, including corporate or business taxes (including in relation to the Group Companies having their registered office in Italy, the Imposta Regionale sulle Attività Produttive - IRAP), capital gain taxes, Tobin Tax, Italian Register Tax on the Promissory Notes, franchise taxes, profits taxes, unemployment taxes, health insurance taxes, excise taxes, securities taxes, severance taxes, disability taxes, production taxes, occupancy taxes, levy, assessment, value added taxes, stamp duties and registration and similar taxes, net asset taxes, capital taxes, real estate and real estate transfer taxes, taxes to be withheld, including penalties, interest, fines, or other additions to Tax and Tax shall be construed accordingly.
Tax Audits shall have the meaning under Article 10.7 of this Agreement.
Tax Measures shall have the meaning under Article 10.7 of this Agreement.
Tax Proceedings shall have the meaning under Article 10.9 of this Agreement.
Tax Representatives shall have the meaning under Article 10.9 of this Agreement.
Termination Date shall have the meaning under Article 2.6 of this Agreement.
Trade Payables shall mean suppliers accounts payable of the Group Companies (including invoices to be received, and credit notes to be received), determined consistently with the criteria applied in the Last Account financial statement.
Trade Receivables shall mean any receivables related to commercial transactions of the core business of the Group Companies (including invoices and credit notes to be issued), net of any adequate bad debt provisions, determined consistently with the criteria applied in the Last Account financial statement.
Transaction Documents means the Subscription Agreement, the Stockholders Agreement and the Registration Rights Agreement.
UKBA shall have the meaning under clause 29(a) of the Warranties.
U.S. GAAP means United States generally accepted accounting principles.
Virtual Data Room means the virtual data room containing data and information on the Group Companies organized by Merrill Corporation for the purpose of the Due Diligence.
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Warranties shall have the meaning under Article 7.1 of this Agreement and Warranty shall be construed accordingly.
1.2 Any statement qualified by the expression to the best knowledge of the Seller or so far as the Seller is aware or any similar expression shall be deemed to include an additional statement that it has been made after due and careful enquiry by the Seller, the Seller’s Shareholders and the Board of Directors of the Group Companies.
1.3 The headings of the Articles of this Agreement are inserted for convenience only and shall not affect the construction of this Agreement.
1.4. The definitions set forth or referred to in Article 1 shall apply equally to both the singular and plural forms of the terms defined. The words “include”, “includes” and “including” shall not be deemed to be terms of limitation, but rather shall be followed by the phrase “without limitation”. The words “herein”, “hereof” and “hereunder” and words of similar import shall be construed to refer to this Agreement (including the Schedules thereto) in its entirety and not to any part thereof, unless the context otherwise requires.
ARTICLE 2 – PURCHASE AND SALE OF THE SHARES; TERMINATION
2.1 Upon the terms and conditions set forth in this Agreement, the Seller hereby agrees to sell to the Buyer and the Buyer hereby agrees to purchase from the Seller all of the Seller’s rights, titles and interests in and to all the Shares free and clear of all Encumbrances against the payment of the Price (the Acquisition).
2.2 Without prejudice to Article 6 of this Agreement, on the Closing Date in accordance with Article 5.2 the Buyer shall pay to the Seller the Provisional Price.
2.3 The payment of the Provisional Price shall be made as follows:
(a) | as to Cash (net of the Escrow Amount), in immediately available funds by wire transfer to the bank account to be designated by the Seller at least five (5) Business Days prior to the Closing Date; |
(b) | as to Consideration Shares, in accordance with the terms and conditions of the Subscription Agreement, subject to the adjustment set forth in Article 5.2; and |
(c) | as to the Promissory Notes, the Buyer shall deliver to the Seller the Promissory Note A and the Promissory Note B. |
2.4 The Buyer may designate one Subsidiary to purchase all or part of the Shares, provided that such designation is made in accordance with the following provisions:
(a) | anything in Article 1403 of the Code to the contrary notwithstanding, each designation will be sufficiently made if notified in writing to the Seller together with the written acceptance of the Subsidiary so designated, |
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(b) | any designation pursuant hereto may be notified to the Seller (under penalty of forfeiture) not later than the Closing Date; |
(c) | each designee will be and shall remain (for so long as the Shares are held by it) a Subsidiary of the Buyer; |
(d) | the Buyer and the designated Subsidiary shall remain jointly and severally liable vis-à-vis the Seller for any obligation or liability under this Agreement; |
(e) | the Buyer shall no longer be entitled to any of the rights and actions under this Agreement in case the designated Subsidiary ceases to be a Subsidiary of the Buyer; and |
(f) | each designated Subsidiary will execute for acceptance this Agreement and shall become for all purposes hereof a Buyer. |
2.5 Before or upon signing of this Agreement, as appropriate:
(a) | the Buyer (with the cooperation of the Company) shall have filed the necessary documentation and application (attached herein as Schedule 2.5(a)) to the French Ministry of Economy and Finance in order to obtain the authorisation according to Art. L. 151/3 (“FMEF Authorization”); and |
(b) | the Seller shall have delivered to the Buyer the Seller’s Shareholders Letter Agreement duly executed by each Seller’s Shareholders. |
2.6 Prior to the Closing, this Agreement may be terminated:
(a) | by mutual written consent of the Buyer and the Seller; |
(b) | by the Buyer or the Seller if the Closing has not occurred on or before September 3, 2016 (Termination Date); provided, however, that (i) the Buyer shall not be entitled to terminate this Agreement pursuant to this Article 2.6(b) if the failure of the Closing to occur is due to the breach of this Agreement by the Buyer, and (ii) the Seller shall not be entitled to terminate this Agreement pursuant to this Article 2.6(b) if the failure of the Closing to occur is due to the breach of this Agreement by the Seller; provided, however, that the right to terminate this Agreement pursuant to this Article 2.6(b) shall not be made available to any Party whose breach of this Agreement has been the cause of or resulted in the issuance, promulgation, enforcement or entry of such decree, order or action. |
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(c) | by the Buyer if a breach of this Agreement by the Seller, the Seller’s Shareholders or any Group Company has occurred, which breach (i) individually or in the aggregate with any other breaches by the Seller, the Seller’s Shareholders or any Group Company, would give rise to the failure of a condition set forth and for the benefit of the Buyer in Article 4 to be satisfied if the date of termination were the Closing Date, (ii) has not been waived by the Buyer, and (iii) is incapable of being cured or has not been cured prior to the first to occur of (A) 5:00 p.m. CET on the date that is 15 (fifteen) days following receipt by the Seller of written notice of such breach or (B) 5:00 p.m. CET on the date immediately preceding the Termination Date; provided, however, that the Buyer shall not be entitled to terminate this Agreement pursuant to this Article 2.6(c) if, at the time of such termination, the Buyer is in breach of any representation, warranty, covenant or other agreement contained herein in a manner that has prevented the conditions to the Closing set forth in Article 4 from being satisfied; |
(d) | by the Seller if a breach of this Agreement by the Buyer has occurred, which breach (i) individually or in the aggregate with any other breaches by the Buyer, would give rise to the failure of a condition set forth and for the benefit of the Seller in Article 4 to be satisfied if the date of termination were the Closing Date, (ii) has not been waived by the Seller, and (iii) is incapable of being cured or has not been cured prior to the first to occur of (A) 5:00 p.m. CET on the date that is 15 (fifteen) days following receipt by the Buyer of written notice of such breach or (B) 5:00 p.m. CET on the date immediately preceding the Termination Date; provided, however, that the Seller shall not be entitled to terminate this Agreement pursuant to this Article 2.6(d) if, at the time of such termination, the Seller, any Seller’s Shareholder or any Group Company is in breach of any representation, warranty, covenant or other agreement contained herein in a manner that has prevented the conditions to the Closing set forth in Article 4 from being satisfied; or |
(e) | by the Buyer or the Seller if a governmental authority shall have issued a decree or order or taken any other action, in any case having the effect of permanently preventing, enjoining, restraining or otherwise prohibiting or making illegal the consummation of the transactions contemplated in this Agreement and such decree or order has become final and non-appealable; provided, however, that the right to terminate this Agreement pursuant to this Article 2.6(c) shall not be available to any Party whose breach of this Agreement has been the cause of or resulted in the issuance, promulgation, enforcement or entry of such decree, order or action. |
If this Agreement is terminated pursuant to this Article 2.6, all further liabilities and obligations of the Parties hereto under this Agreement shall thereupon automatically terminate, except that the provisions of Articles 2.6, 13, 14, 15 and the applicable defined terms, shall survive.
2.7 Notwithstanding anything to the contrary in this Agreement, the Buyer shall have the right of withdrawal from this Agreement pursuant to Article 1373 of the Code should any of the following occur on or prior to the Closing Date:
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(1) | Banks Pool terminates the Banks Pool Loan Agreement except in the event that such termination occurs as a result of substitution of Banks Pool Loan Agreement by new financing from Buyer; or |
(2) | in the event contemplated under Article 11.5. of this Agreement. |
Should the Buyer intend to exercise the right of withdrawal under this Article 2.7, it shall do so by sending to the Seller a written communication in accordance with Article 14.7 of this Agreement within five (5) Business Days following the occurrence either (1) or (2) above. Should the Buyer exercise its right of withdrawal, this Agreement shall automatically terminate and the Parties shall be released in full from any and all obligations hereunder except for any obligations arising under Articles 13, 14, 15 and the applicable defined terms of this Agreement.
ARTICLE 3 - Interim Period – Certain Undertakings of the Parties
3.1 The Seller hereby covenants and agrees, also pursuant to Article 1381 of the Code, that from the date of this Agreement to the earlier of (i) the Closing Date and (ii) the date of termination of or withdrawal from this Agreement in accordance with Article 2.6 and 2.7 the Group Companies will be managed in a diligent manner, in accordance with their respective normal and ordinary course. Without prejudice to the generality of the foregoing, the Seller covenants and agrees that each of the Group Companies, during the above-mentioned period of time, shall (to the extent it is relevant in respect of each of them):
(i) | all comply with all obligations under the Permits existing at the signing date and not amend, modify, terminate or withdraw from any of the contracts currently in force and effect which are material for the Business, except for those which expire in accordance with their stated term; |
(ii) | not assume any obligations or undertake expenses, duties or sale of goods in excess of a value equal to 1.000.000,00 € for each transaction or 5.000.000,00 € in the aggregate, except for the Casaletto Plant Disposal; |
(iii) | not issue any options, warrants, subscription or conversion rights and not execute contracts or agreements or assume obligations of any nature under which they shall be obliged, under condition or otherwise, to issue or sell new shares or any other security which could be exchanged with or converted into the Shares or be obliged to reimburse or repurchase its own shares; |
(iv) | not increase its corporate capital and not pay any dividends or make any distributions on, or repurchase or redeem any Share; |
(v) | not grant financing or release guarantees in favor of any third parties, other than Subsidiaries in the ordinary course of business; |
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(vi) | not create liens, mortgages or other types of Encumbrances on its Real Properties; |
(vii) | not (a) adopt, establish or enter into any new employee program; (b) cause or permit any existing employee program to be amended other than as required by law, subject to prior review and approval (with such approval not to be unreasonably withheld) by the Buyer; (c) amend or conclude any agreement with an employee representative body, such as a collective bargaining agreement or works council agreement having a material effect on the business as a whole; (d) issue a termination notice to any managing directors, officers, consultants or employees or offer to conclude a termination agreement with any managing directors, officers, freelancers or employees, unless where the termination is for just cause (“giusta causa”) or justified reason (“giustificato motivo”); (e) hire new employees having a role and/or functions and /or a salary similar to the Key Employees; (f) grant, make or pay any severance, bonus or profit-sharing or similar payment to any of its Employees, Agents, officers or consultants other than those accrued under the relevant individual or collective agreements; (g) increase or modify the economic wages, commissions, bonuses or benefits payable to any of its Employees, Agents, officers or consultants, save for increases due according to the provisions of any applicable individual or collective agreement already in force and effect as of the date of signing of this Agreement; (h) mutually or unilaterally materially change any term and condition of employment or service of any managing directors, officers, consultants or employees (except as provided under the individual or collective agreements); or (i) introduce or amend any retirement benefit scheme, except as provided under the individual or collective agreements; |
(viii) | not modify its accounting methods and principles; |
(ix) | use its reasonable best efforts to maintain no less than its customary historic aggregate level of business development activities with suppliers, customers, landlords, employees and others having business relations with the Group Company, necessary to maintain the Group Company’s pipeline of programs; |
(x) | promptly notify the Buyer of: (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with any of the transactions contemplated by this Agreement; and (b) any legal proceeding against, relating to, involving or otherwise affecting the Group Company that is commenced or threatened against the Group Company; |
(xi) | not amend the organizational documents of the Group Company, or effect or be a party to any merger, consolidation, share exchange, business combination, recapitalization, reclassification of shares, stock split, reverse stock split or similar transaction except as related to the transactions contemplated by this Agreement; |
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(xii) | not form any new Subsidiary or acquire any equity interest or other interest in any other Person and not sell or dispose any of Chorisis Quota, GMBH Share, SAS Share and INC Share; |
(xiii) | other than in the ordinary course business, not (A) lend money to any Person; (B) incur or guarantee any indebtedness for borrowed money; (C) guarantee any debt securities of others; or (D) make any capital expenditure or commitment in excess of 500.000,00 € individually or 2.000.000,00 € in the aggregate; |
(xiv) | without having obtained the prior approval of the Buyer, which shall not be unreasonably withheld or delayed, (A) not make, change or revoke any material Tax election; (B) not file any amendment to any Tax return; (C) not enter into any Tax allocation agreement, Tax sharing agreement or Tax indemnity agreement, other than commercial contracts entered into in the ordinary course of business consistent with past practice with vendors, customers or landlords; not settle or compromise any claim, notice, audit report or assessment in respect of Taxes; (D) not apply for or enter into any ruling from any Tax authority with respect to Taxes; (E) not surrender any right to claim a Tax refund; or (F) consent to any extension or waiver of the statute of limitations period applicable to any Tax claim or assessment; |
(xv) | not do anything which is inconsistent with the provisions of this Agreement or the consummation of the transactions contemplated by this Agreement; and |
(xvi) | not issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities. |
3.2 From the date of signing of this Agreement and until the earlier of (i) the Closing Date and (ii) the date of termination of or withdrawal from this Agreement in accordance with Articles 2.6 and 2.7, the Seller shall not and shall cause the Group Companies not to authorize or permit any of their affiliates or Subsidiaries, or any of their respective officers, directors, members, shareholders, affiliates, employees, agents, advisors (including financial advisors, attorneys and accountants), consultants or other representatives (collectively, Representatives) to, directly or indirectly, (i) solicit, initiate or encourage any inquiry, proposal or offer (whether written or oral) relating to an Alternative Transaction (each, a Proposal), (ii) participate in or encourage any discussions or negotiations (and shall immediately cease all such discussions or negotiations) relating to, or disclose, furnish or afford access to any Person or entity any information (including either one or both of the Company’s or its Subsidiaries’ businesses, properties, books or records) in connection with, or assist, or cooperate with any person or entity in making or proposing, or take any other action to facilitate, any Proposal or Alternative Transaction, or (iii) authorize, enter into any agreement, arrangement or understanding (whether binding or nonbinding, written or oral) relating to, or engage in or consummate, any Proposal or Alternative Transaction. The Seller will immediately advise the Buyer of any Proposal that has been submitted (including the identity of the Person making such Proposal), directly or indirectly, to the Seller, the Group Companies, or their respective affiliates or Subsidiaries or any of their respective Representatives, will provide the Buyer with a copy of the applicable written Proposal (or, if oral, the material terms and conditions of such Proposal) and will promptly advise the Buyer of any request for disclosure or access. Alternative Transaction means, in each case, other than with or by the Buyer, (a) any direct or indirect acquisition outside the ordinary course of business consistent with past practice (in each case regardless of the form of transaction) of either (i) all or substantially all of the assets of the Company or any of its Subsidiaries or (ii) any equity interest in the Company or any of its Subsidiaries, (b) any joint venture or other strategic investment in or involving the Company or any of its Subsidiaries or any of their respective affiliates (other than with or by the Buyer) outside the ordinary course of business consistent with past practice or (c) any transaction by the Company or any of its Subsidiaries outside the ordinary course of business consistent with past practice the consummation of which would reasonably be expected to prevent or materially impede, interfere with or delay the transactions contemplated by this Agreement.
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3.3 From the date of signing of this Agreement and until the earlier of (i) the Closing Date and (ii) the date of termination of or withdrawal from this Agreement in accordance with Articles 2.6 and 2.7:
(a) the Seller shall manage the Company and each Group Company in compliance with the provisions contained into the Banks Pool Loan Agreement, including, without limitation, the covenants contained therein;
(b) the Buyer and the Seller shall execute such instruments or documents and do such other things as are necessary, under applicable law to enable the Buyer to issue and deliver to the Seller and to enable the Seller to accept the Promissory Note A and the Promissory Note B at Closing; and
(c) subject to applicable law and applicable contractual restrictions, upon reasonable notice, the Seller shall (and shall cause the Group Companies to) permit the Buyer’s officers and Buyer’s other authorized Representatives access, during normal business hours, to its properties, books, contracts and records without interfering the ordinary course of business.
3.4 From the date of signing of this Agreement and up to the Closing:
(a) | all outstanding stock options, warrants and other rights to acquire the Company’s (and/or any Group Company’s) capital stock and all outstanding stock appreciation rights and other equity incentive interests will be exercised and/or cancelled, if so agreed by the Parties; and |
(b) | the Company’s (and/or any Group Company’s) option plans, stock appreciation rights plans and other equity incentives plans shall be terminated and cancelled if so agreed by the Parties |
provided, however, that the Buyer will not assume any options, warrants or other convertible or derivative securities of the Company (and/or of any Group Company) at the Closing Date (in case whether or not vested or exercisable). |
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3.5 From the date of signing of this Agreement and until the earlier of (i) the Closing Date and (ii) the date of termination of or withdrawal from this Agreement in accordance with Articles 2.6 and 2.7, the Seller shall (and it procures that each Group Company shall) use their respective reasonable best efforts, and shall use its reasonable best efforts to cause the respective senior management, Representatives to, as far as legally permissible, to provide to the Buyer such cooperation as is reasonably requested by Buyer in connection with the arrangement and consummation of the Financing, provided that such requested cooperation is legally permissible and does not unreasonably interfere with the ongoing operations of any Group Company, including taking the following actions:
(a) | furnishing Buyer as promptly as reasonably practicable following the delivery of a request therefor by the Buyer such financial and other information regarding the Group Companies as is customarily required in connection with the execution of financings of a type similar to the Financing, including, for the avoidance of doubt, the Required Information; |
(b) | make appropriate senior officers reasonably available for participation at reasonable times in a reasonable number of (1) meetings with prospective lenders at such times and in such places as mutually agreed (including one general bank meeting and a reasonable number of one on one meetings), (2) drafting sessions, (3) meetings with ratings agencies and (4) due diligence sessions; |
(d) | request accountants of the Group Companies to participate in due diligence sessions; |
(e) | provide reasonable assistance in the preparation of offering documents and bank information memoranda (including a bank information memorandum that does not include material non-public information), private placement memoranda, rating agency presentations, prospectuses, prospectus supplements and any similar documents used in connection with the syndication and marketing of the Financing; and |
(f) | at least five (5) days prior to the Closing Date (to the extent requested from the Company at least ten (10) Business Days prior to the Closing Date), provide all documentation and other information about the Group Companies as is reasonably requested by the Financing Sources with respect to applicable "know your customer" and anti-money laundering rules and regulations. |
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The foregoing notwithstanding, (A) no Group Company, nor any Persons who are directors of a Group Company, shall be required to pass resolutions or consents to approve or authorize the execution of the Financing or execute or deliver any certificate, document, instrument, or agreement that is effective prior to the Closing Date or that is prohibited by applicable law (other than, to the extent not prohibited by applicable law, customary authorization letters or customary representation letters to auditors) or agree to any change or modification of any existing certificate, document, instrument or agreement that is effective prior to the Closing Date, (B) no obligation of a Group Company undertaken pursuant to the foregoing shall be effective until the Closing Date and (C) no Group Company shall be required to pay any commitment or other similar fee or incur any other cost or expense that is not simultaneously reimbursed by Buyer in connection with the Financing. Nothing contained in this Article 3.5 shall require any Group Company, prior to the Closing, to be an issuer or other obligor with respect to the Financing. Buyer shall promptly reimburse the Seller or the Group Companies for all reasonable and documented out-of-pocket costs and expenses, including all reasonable and documented out-of-pocket fees and expenses of counsel, accountants and other advisors, incurred by any such Persons in connection with the cooperation contemplated by this Article 3.5 (to the extent not otherwise expressly required by this Agreement) and shall indemnify and hold harmless such Persons from and against any and all losses suffered or incurred by them in connection with the arrangement of the Financing, any action taken by them at the request of Buyer pursuant to this Article 3.5 and any information utilized in connection therewith (other than information provided by the Seller or the Group Companies).
Seller hereby consents to the use of the Group Companies’ logos in connection with the information package prepared for the Financing; provided, however, that such logos are used solely in a manner that is not intended, or reasonably likely, to harm, disparage or otherwise adversely affect the Group Companies or the reputation or goodwill of any of them.
3.6 The Seller shall procure that promptly after the signing of this Agreement and in any event not later than May 15, 2016, the Company and each of the Current Subsidiaries have approved the Last Accounts to the extent they have not been approved prior to the date hereof.
3.7 The Seller’s Shareholder Loan shall be reimbursed by the Company on or prior to the Closing.
3.8 The Seller shall procure that within five (5) Business Days from the date of signing of this Agreement the Company sends a letter, satisfactory to the Buyer, to the Banks Pool in order to inform them of the transaction object of this Agreement and request them: (i) to confirm the amount due should the repayment in full occur on a specified date and agree to update such information within two (2) Business Days from the relevant request, should the Company subsequently envisage a different repayment date; and (ii) confirm that upon the repayment in full in cash of all amount due under the Banks Pool Loan Agreement, provided that no event of default has occurred and is continuing and subject to the delivery by the Company on the repayment date of the documents listed in Annex 3.8 hereto, the Banks Pool will promptly (a) confirm the termination of the equity contribution agreement entered into in relation to the Banks Pool Loan, (b) release on the repayment date all Banks Pool Pledges and Banks Pool Other Securities and (c) put in place such formalities which are necessary to give effect to (a) and (b) above.
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3.9 The Seller shall negotiate ahead of Closing with the Banks Pool the drafts of the documents and formalities to be entered into on the Closing Date to implement the release of all the securities granted in connection with the Banks Pool Loan. Should the Banks Pool request any information of or declaration from the Buyer in connection to or as a consequence of the modalities chosen by the Buyer to repay the Banks Pool Loan (i.e. repayment made by the Buyer in the name and on behalf of the Company) the Buyer shall provide such information or declaration without delay.
3.10 The Buyer shall use its best efforts to arrange and consummate the Financing on the terms and conditions described in the executed commitment letter delivered to the Seller on the date hereof (the Commitment Letter), including using its best efforts to (A) satisfy on a timely basis all terms, covenants and conditions set forth in the Commitment Letter; (B) enter into definitive agreements with respect thereto on substantially the terms and conditions contemplated by the Commitment Letter (giving effect to the flex provisions in the fee letter referenced therein); and (C) consummate the Financing at or prior to Closing.
3.11 On the date hereof, but in any event prior to Closing, the Employment Integration Agreement MF the Employment Integration Agreement GF and the Employment Integration Agreement TP shall have been entered into with effect from and subject to the Closing Date, provided that the Seller shall procure that, prior to Closing, the Employment Agreement MF, the Employment Agreement GF and the Employment Agreement TP have been duly terminated in accordance with their terms and with the applicable labour provision, including, without limitation, the signature in front of the qualified labour Unions offices.
3.12 The Parties agree to use commercially reasonable efforts to extinguish the Hedging Contracts, the cost of which shall be borne by the Seller.
ARTICLE 4 - CONDITIONS PRECEDENT TO THE PARTIES’ OBLIGATIONS TO Close
Without prejudice, and in addition, to the provisions set forth under Article 11 (Antitrust Clearance) of this Agreement, it is expressly agreed that the obligation of the Parties to consummate the transactions contemplated hereby is subject to the satisfaction or waiver by the Parties on or prior the Closing Date of each of the following conditions precedent, as follows:
4.1 For the benefit of the Buyer: Since the date of this Agreement, no Company Material Adverse Effect shall have occurred, and no event shall have occurred that, individually or in the aggregate, with or without notice or the lapse of time, would reasonably be expected to result in a Company Material Adverse Effect.
4.2 For the benefit of the Seller: Since the date of this Agreement, no Buyer Material Adverse Effect shall have occurred, and no event shall have occurred that, individually or in the aggregate, with or without notice or the lapse of time, would reasonably be expected to result in a Buyer Material Adverse Effect.
4.3 For the benefit of the Buyer and the Seller: any and all consents, approvals and waivers from governmental authorities (including, without limitation, the FMEF Authorization) and other parties necessary to permit the Seller, the Buyer and the Group Companies to consummate the transactions contemplated hereby.
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4.4 For the benefit of the Buyer and the Seller: no suit, action, investigation, inquiry or other proceeding by any governmental or regulatory authority or other person shall be pending or threatened which (i) questions the validity or legality of the transactions contemplated hereby and by the Registration Rights Agreement, Stockholders Agreement and Subscription Agreement, (ii) could reasonably be expected to have material adverse effect on the Buyer or the Group Companies (taken as a whole), or (iii) could reasonably be expected to cause any of the transactions contemplated by this Agreement, the Registration Rights Agreement, the Stockholders Agreement or the Subscription Agreement to be rescinded following consummation or for such consummation to be materially delayed.
4.5 The Seller shall have delivered to the Buyer a letter by the Banks Pool containing the confirmation requested under point (iv) of Clause 3.8.
4.6 For the benefit of the Buyer: the Banks Pool shall have delivered to the Company at least five (5) Business Days prior to the Closing Date (and the Seller shall give a copy of it to the Buyer) a letter setting out the total aggregate amount due to prepay in full the Banks Pool Loan on the date fixed as Closing Date and the confirmation that simultaneously with the prepayment in full of the Banks Pool Loan, the Banks shall issue the Banks Pool Release of Pledges and Other Securities.
4.7 The Seller shall have used its best efforts in order to deliver to the Buyer change of control waivers from the entities and contracts set forth in Schedule 4.7(a).
4.7(bis) The failure by the Company to obtain the waiver of the change of control clauses from the entities and contracts set forth in Schedule 4.7(bis).
4.8 For the benefit of the Buyer: the Employment Agreement MF, the Employment Agreement TP and the Employment Agreement GF shall have not been terminated by the Company unless as a result of the execution of the Employment Integration Agreement MF, Employment Integration Agreement TP and Employment Integration Agreement GF, as the case may be.
4.9 The Seller shall have delivered to Buyer the DURC marked “positive” relating to the Company updated as of the twentieth (20th) Business Day prior to Closing and the Seller shall deliver to Buyer (in a form satisfactory to the Buyer) evidence that all debt installments due by the Company to INPS under the INPS Repayment Plan to be paid on or before the Closing Date have been fully paid.
4.10 For the benefit of the Buyer: the Seller shall have delivered to the Buyer evidence of the subscription by the Company of a run off coverage extension of the D&O Policy for an additional period of six (6) years from the Closing.
4.11 For the benefit of the Buyer: the Seller shall have delivered to the Buyer the Estimated Debt Like Items and the Company Closing Statement at least five (5) Business days prior to the Closing.
4.12 For the benefit of the Buyer: the Marketing Period shall have ended.
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ARTICLE 5 - THE CLOSING
5.1 The Closing shall take place at 9.00 a.m. local time of the Closing Date at the offices of Filippo Zabban, Notary Public in Milan, at Via Metastasio no 5, or at such other place, date and/or time as the Parties may hereafter determine by mutual written agreement.
5.2 In addition to any other action to be taken and to any other instrument to be executed and/or delivered pursuant to this Agreement, at the Closing:
(i) | the Buyer shall: |
(a) | procure the repayment of all amounts due under the Banks Pool Loan Agreement (including accrued interest and any breakage costs if due); |
(b) | pay or cause to be paid to the Seller the Provisional Price as follows: |
(1) | as to Cash, the amount set forth in the Closing Certificate in immediately available funds by wire transfer to the bank account to be designated by the Seller at least five (5) Business Days prior to the Closing Date, provided that the Escrow Amount shall be deposited into the Escrow Account, in accordance with the Escrow Agreement; |
(2) | as to Consideration Shares, the Buyer shall issue the Consideration Shares in accordance with the Subscription Agreement, subject to the adjustment below and, if applicable, in the Subscription Agreement; notwithstanding anything to the contrary contained in this Agreement, in no event will the Buyer issue Consideration Shares representing more than 19.75% of the outstanding shares of the Buyer common stock as of immediately prior to the Closing (as calculated pursuant to Rule 5635(d) of the Listing Rules of the NASDAQ) (or to issue any securities in any amounts as would require a vote of the Buyer’s stockholders in connection with such issuance. Such number of shares, if any, that, if issued, would exceed such threshold to require a vote of the Buyer’s stockholders are referred to as Excess Shares. The number of the Consideration Shares to be issued at Closing shall be reduced by the number of Excess Shares and the Cash component shall be increased by the product of the Excess Shares and the Signing Stock Value; and |
(3) | as to Promissory Notes, the Buyer shall deliver to the Seller the Promissory A and the Promissory Note B. |
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(c) | pay or cause to be paid by the appropriate entities or persons and in the appropriate manner, any stamp, transfer or similar Taxes and/or Italian Register Tax on the Promissory Notes or charges however levied by any governmental authority on the transfer of the Shares (if and to the extent due) to be incurred in relation to such transfer and the notarial fees relating thereto; |
(d) | execute and exchange with the Seller and the Escrow Agent the Escrow Agreement; and |
(e) | execute and deliver to the Seller a letter, in the form and substance set forth under Schedule 5.2(i)(e), by means of which the Buyer undertakes (i) to not propose (and, in any case, to vote against) any liability actions (or other judicial actions) against the directors, the statutory auditors and the members of the 231 Supervisory Board, for the activities carried out by the same in their capacity as directors, statutory auditors or members of the 231 Supervisory Board of each Group Company until the Closing Date provided that in no event shall the foregoing be applicable to any criminal liability. |
(ii) | the Seller shall: |
(a) | have caused all of the directors of the Group Companies to resign or otherwise cease from office effective as of the Closing by execution of a resignation letter in the form of Schedule 5.2(ii)(a) to acknowledge that such directors have no Action, or basis for an Action, against the Group Companies, in respect of fees, entitlements, salary, compensation for loss of office or otherwise; |
(b) | have used its best efforts to obtain the resignation of the statutory auditors (and Company’s members of the 231 Supervisory Body) of the Group Companies as of the Closing; |
(c) | have caused a shareholders’ meeting of the Group Companies to be validly called for the purpose of electing new directors and, with respect to the Company only and to the extent possible, statutory auditors and members of 231 Supervisory Body in substitution of the directors, the statutory auditors and members of 231 Supervisory Body ceased from office pursuant hereto according to the instructions which will be supplied by the Buyer; |
All resignations or other cessation of office provided under this Article 4.5 shall be without cost to the Company concerned, except for the payment of any accrued and unpaid compensation, provided that any amount constituting such compensation shall be considered for all purposes herein as the Closing Date Transaction Costs.
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(d) | execute such instruments or documents and do such other things as are necessary, under applicable law, to transfer to the Buyer good and marketable title to the Shares free and clear of any Encumbrances and to cause that the Buyer be properly registered in the shareholders’ book of the Company as owner of all such shares; provided, however, that the provisions of such further instruments and documents shall not affect nor novate the understanding contained herein which shall continue to be wholly and exclusively valid and enforceable between the Parties; |
(e) | execute and exchange with the Buyer and the Escrow Agent the Escrow Agreement; |
(f) | designate one (1) director for AMRI’s board of directors in accordance with the procedures and terms outlined in the Stockholders Agreement; |
(g) | deliver to the Buyer the signed D&O Insurance Policy entered into by the Company (and, to the extent applicable by all Group Companies); |
(h) | procure that the Group Companies perform any formality required under the applicable law to be performed by it to give effect to the Banks Pool Release of Pledges and Other Securities; and |
(i) | deliver to the Buyer, a properly executed statement, issued by INC Share, pursuant to United States Treasury Regulations Sections 1.897-2(h) and 1.1445-2(c)(3) dated no more than thirty (30) days prior to the Closing Date and signed by an officer of INC Share, and in form and substance reasonably satisfactory to the Buyer, certifying that interests in INC Share, including shares of capital stock of INC Share, do not constitute “United States real property interests” under Section 897(c) of the Code, together with written authorization for the Buyer to deliver such notice described in United States Treasury Regulations Section 1.897-2(h)(2) on behalf of INC Share to the Internal Revenue Service after the Closing. |
5.3 It is agreed that all actions and transactions constituting the Closing shall be regarded as one and a single transaction so that, at the option of the Party having an interest in the carrying out of any specific action or transaction, no action or transaction shall be deemed to have taken place if and until all other actions and transactions constituting the Closing shall have taken place as provided in this Agreement.
5.4 The Escrow Amount shall be held and disbursed by the Escrow Agent pursuant to the terms and conditions of the Escrow Agreement (i) for the purpose of satisfying all or part of any claims for indemnity pursuant to Article 9 and (ii) to offset the Purchase Adjustment to the Buyer in accordance with Article 6.9, as applicable. Unless disbursed in accordance with Article 9 or Article 6.9, as the case may be, and the Escrow Agreement, the Escrow Amount shall be held by the Escrow Agent and shall be maintained and used strictly in accordance with the terms of this Agreement and the Escrow Agreement.
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ARTICLE 6 - UNDERTAKINGS OF THE PARTIES IN RESPECT OF THE CLOSING ACCOUNTS - PRICE ADJUSTMENT
6.1 On or prior to the fifth (5th) Business Day prior to the Closing Date, the Company and/or the Seller shall prepare and deliver to the Buyer a statement (the Company Closing Statement) setting forth in reasonable detail the Company’s good faith estimate, which shall be prepared and calculated in the manner and on a basis consistent with the applicable definitions thereof, of (i) the Net Working Capital as at the Closing Date (the Estimated Net Working Capital), (ii) the Net Financial Position as at the Closing Date (the Estimated Net Financial Position), (iii) the aggregate Closing Date Transaction Costs to the extent not paid by the Company or the Seller prior to the Closing (the Estimated Transaction Costs), (iv) the Debt Like Items as of the Closing Date (the Estimated Debt Like Items) and the components thereof.
6.2 The Parties agree that following the Closing the Price shall be determined by adjusting the Provisional Price pursuant to the terms and the conditions set forth in this Article 6 and, on a Euro per Euro basis, in accordance with the following formula:
Provisional Price
minus
a) | The Closing Date Transaction Costs minus Estimated Transaction Costs (which difference may be a negative number) (Factor A), |
plus
b) | The Closing Date Net Working Capital minus Agreed Net Working Capital (which difference may be a negative number), calculated in accordance with the following: (Factor B) |
(i) If the Closing Date Net Working Capital is greater than the Collar Ceiling, the Provisional Price will be increased by an amount equal to the amount by which the Closing Date Net Working Capital exceeds the Agreed Net Working Capital, taking into account the Agreed Net Working Capital Adjustment; and
ii) If the Closing Date Net Working Capital is less than the Collar Floor, the Provisional Price will be decreased by an amount equal to the amount by which the Closing Date Net Working Capital exceeds the Agreed Net Working Capital, taking into account the Agreed Net Working Capital Adjustment; and
(iii) if the Closing Date Net Working Capital equals or is more than the Collar Floor but is less than or equals the Collar Ceiling, then no adjustment will be made under this clause (b), provided, however, that any Agreed Net Working Capital Adjustment will be allocated to the Party to which it pertains in accordance with these provisions.
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minus
c) | The Closing Date Net Financial Position minus the Estimated Net Financial Position (which difference may be a negative number) (Factor C), |
minus
d) | The Closing Date Debt Like Items minus the Estimated Debt Like Items (Factor D). |
6.3 Soon after the Closing Date, the Buyer shall, or shall cause the Company to, prepare the Closing Accounts and the Buyer, on the basis of the Closing Accounts shall prepare a document to be used for the purposes of the Price Adjustment (PA Document) containing the Closing Accounts and setting forth (which, in each case, shall be prepared and calculated in the manner and on a basis consistent with the applicable definitions thereof):
a) | the Closing Date Transaction Costs, together with any reasonable supporting documentation, together with the indication of the amount constituting Factor A; |
b) | the Closing Date Net Working Capital, together with the indication of the amount constituting Factor B; |
c) | the Closing Date Net Financial Position together with the indication of the amount constituting Factor C; |
d) | the Closing Date Debt Like Items together with the indication of the amount constituting Factor D; and |
e) | the Buyer determination of the Price in accordance with the provisions set forth in Article 6.2 above. |
6.4 Not later than thirty (30) Business Days after the Closing Date, the Buyer shall deliver to Seller the PA Document and the Seller shall be given reasonable access to (x) data and information of Group Companies used for the preparation of the PA Document and (y) the senior finance management of the Buyer (and of the Company) to discuss the contents and the determinations of the PA Document. If, within thirty (30) Business Days following delivery of PA Document the Seller has not given the Buyer written notice of its objection in reasonable detail, then the PA Document shall be binding and conclusive on the Parties.
6.5 If the Seller gives the Buyer written notice in accordance with Article 6.4 of objection to the PA Document the Buyer and the Seller shall attempt in good faith to agree upon the issues constituting the objections and if such agreement is reached the PA Document (as amended in writing pursuant to such agreement) shall become binding and conclusive on the Parties.
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6.6 If the Buyer and the Seller fail to resolve the issues raised by such objection within fifteen (15) Business Days of Buyer’s receipt of the Seller’s objection to the PA Document the Buyer and the Seller shall submit the issues remaining in dispute, including their respective calculations of Factor A, Factor B, Factor C and Factor D to binding resolution by the Auditor. The Auditor (A) may consider only those items and amounts comprising the PA Document that are in actual dispute, and shall make no other determination, (B) may only assign values to items which are the same as or between the values asserted by the Parties, and (C) will be bound by the express terms, conditions and covenants set forth in this Agreement, including the definitions contained herein.
6.7 If any issues are submitted to the Auditor for resolution, (x) the Buyer and the Seller shall furnish or cause to be furnished to the Auditor and to the other Party such work papers and other documents and information relating to the disputed issues as the Auditor may request and are reasonably available to that Party or its Agents and shall be afforded the opportunity to present to the Auditor any material relating to the disputed issues and to discuss the issues with the Auditor and (y) the determination by the Auditor of Factor A, Factor B, Factor C and Factor D, as appropriate and, consequently the determination of the Price, as set forth in an Auditor’s notice to be delivered to both the Buyer and the Seller within sixty (60) days of the submission to the Auditor of the issues remaining in dispute, shall be final, binding and conclusive on the Parties in accordance with Articles 1349 and 1473 of the Code and shall not be subject to appeal except in the case of manifest error (errore manifesto).
6.8 All fees and disbursements of the Auditor due in connection with the preparation and delivery of the documentation contemplated in Article 6.3 shall be borne as to fifty percent (50%) by the Buyer and as to fifty percent (50%) by the Seller.
6.9 The Parties agree that the price adjustment shall be the Price (as determined in accordance with this Article 6) minus the Provisional Price (the Price Adjustment) and:
a) If the Price Adjustment is a negative amount, then the Buyer shall be paid in immediately available funds through joint written instruction by the Seller and the Buyer to the Escrow Agent and by means of the amounts deposited in the Escrow Account by wire transfer to the bank accounts which will be designated by the Buyer in the Escrow Agreement, provided that if the Price Adjustment under this clause exceeds the amount in the Escrow Account the entire amount in the Escrow Account shall be paid to the Buyer in accordance thereof and the Seller shall be obliged to pay the remaining portion to the Buyer by wire transfer to the bank accounts which will be designated by the Buyer; provided, however that the Buyer shall, at the Buyer’s election, have the right to set-off and thereby deduct any such amounts from any monies owed and payable to the Seller.
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b) If the Price Adjustment is a positive amount, then the Buyer shall pay to the Seller the amount constituting the Price Adjustment by wire transfer to the bank accounts which will be designated by the Seller.
6.10 Any payment from the Buyer to the Seller or from the Seller to the Buyer, in relation to the Price Adjustment shall be effected within and not later than five (5) Business Days following the determination of the Price Adjustment.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES OF THE Seller and group companies
7.1 The Seller and the Group Companies hereby make to the Buyer the representations and warranties set out in Schedule A (Warranties), each of which shall be repeated on the Closing Date and shall be true and correct in all material respects also on the Closing Date (unless expressly provided otherwise).
7.2 Each of the Warranties shall be limited or restricted by reference to the disclosure schedules under Schedule A to the extent that a disclosure relates to a specific warranty and only to those facts expressly disclosed.
7.3 The Seller and the Group Companies represent and warrant the accuracy and completeness, in all respects, of documents, data and information made available to the Buyer during the Due Diligence (Due Diligence Documents) and that no information or document has been intentionally withheld.
7.4 Subject to Article 9, the rights and remedies of any of the Indemnified Parties in respect of the Warranties shall not be affected by (i) Closing or (ii) any investigation made into the affairs of any of the Group Companies or any knowledge held or gained of any such affairs by or on behalf of the Buyer.
ARTICLE 8 - Representations and Warranties of the Buyer
The Buyer hereby makes the following representations and warranties in all material respects to the Seller, each of which shall be true and correct also on the Closing Date (unless expressly provided otherwise).
8.1 The Buyer is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation and has full power and authority to conduct its business as presently conducted and to own its assets and properties as presently owned.
8.2 All corporate proceedings required to be taken by or on behalf of the Buyer to authorize the Buyer to enter into and to carry out this Agreement have been duly and properly taken, and this Agreement has been duly executed and delivered by the Buyer and constitutes the valid and binding obligation of the Buyer in accordance with its terms. No application to, or filing with, or consent, authorization or approval of, or exemption by, any governmental or public body or authority is required of the Buyer in connection with the execution and performance of this Agreement, except for any applicable requirements under Article 12, compliance with any applicable requirements of the Securities Act, the Exchange Act and any other applicable U.S. state or federal securities laws, or the rules or regulations of NASDAQ, and any actions or filing the absence of which would not reasonably be expected to have, individually or in the aggregate, a Buyer Material Adverse Effect.
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8.3 The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not conflict with, or result in a breach of, or constitute a default under the articles of incorporation or the by-laws of the Buyer or any agreement or instrument by which the Buyer is bound or violate any judgment, order, injunction, award, decree, law or regulation applicable to the Buyer.
8.4 Except for Nomura Securities International, Inc., the Buyer has not incurred any liability for any brokerage, finder’s or similar fees or commissions in connection with the transactions contemplated hereby, the payment of which could be validly claimed against the Seller.
8.5 In addition to any other representation or warranty however provided, the Buyer hereby makes to the Seller the representations and warranties set out in Schedule 8.5, each of which shall be repeated on the Closing Date and shall be true and correct also on the Closing Date (unless expressly provided otherwise). The Buyer hereby acknowledges that the Seller is expressly relying on the Buyer’s representations and warranties herein and that their accuracy constituted the basis for the consent of the Seller to the entering into of this Agreement.
ARTICLE 9 – INDEMNIFICATION
9.1 Without prejudice to Articles 2.6(b), 2.6(c) and 2.7, as exclusive remedy of the Buyer under this Agreement or the applicable law, the Seller (Indemnifying Party), shall without duplications indemnify and hold the Buyer and its holding company AMRI (collectively, Indemnified Parties) harmless in respect of the following:
(i) | the full amount of any and all Losses or damages incurred or suffered by the Group Companies (or any of them) which would not have been so incurred and/or suffered if all Warranties of the Seller contained in this Agreement had been true, correct and accurate; |
(ii) | the full amount of any and all Losses suffered by the Indemnified Parties as a result of any breach of the Warranties of the Seller contained in this Agreement or the breach of any representations and warranties provided under any applicable law, to the extent that such damages are not indemnified under Paragraph (i) preceding; |
(iii) | the full amount of any and all Losses suffered by the Indemnified Parties as a result of any breach by or failure of the Indemnifying Parties (or Group Companies) to perform any of their respective covenants or other agreements contained in this Agreement, including, without limitation, any Losses deriving from any breach of the Seller’s Shareholders under the Seller’s Shareholders Letter Agreement; and |
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(iv) | the full amount of any and all Losses suffered by Indemnified Parties in connection with any and all Actions, suits, proceedings, demands, assessments, judgments, costs and expenses incident to any of the foregoing. |
9.2 Without prejudice to Articles 2.6(b), 2.6(c) and 2.7, the rights and remedies provided in Article 9.1 shall be the exclusive remedy of the Indemnified Parties arising in connection with any breach of the Warranties and covenants of the Seller contained in this Agreement.
9.3 Anything in this Agreement or in any applicable law to the contrary notwithstanding, the Indemnifying Parties’ liability under Article 9.1 shall be subject to the following restrictions and limitations:
(i) | the Indemnifying Parties shall have no obligation until the aggregate of all amounts that would otherwise be due pursuant to Article 9.1 and under Section 6(c) of the Subscription Agreement exceeds 500.000,00 €, provided that, if such limit is exceeded, the Indemnifying Party’s liability shall be limited to the excess, except for the Fundamental Warranties (as defined below) in relation to which such deductible shall not apply; |
(ii) | in no event shall the Indemnifying Party be responsible to the Indemnified Parties in respect of: |
(1) | any actual or alleged breach of the Warranties (other than Warranties concerning title to the Shares including absence of liens and Encumbrances thereon, in connection with INC Share, taxes, compliance with Environmental and Health and Safety Laws authority and organization and any labor matters (collectively, Fundamental Warranties)) which is notified to the Seller later than twenty-four (24) months from the Closing Date; or |
(2) | any actual or alleged breach of the Fundamental Warranties which is notified to the Seller later than forty-eight (48) months from the Closing Date, provided that in relation to title to the Shares, including in connection with INC Share, the relevant statute of limitation shall apply; or |
(3) | notwithstanding the provisions of Sub-paragraphs (1) through (2) above, the Indemnifying Party’s obligations under Article 9.1 shall survive the expiration of the time limits as a result of the duration of the legal proceeding under Article 15 hereof, provided that the claim is raised within the time limits, and in accordance with provisions, set out by this Agreement; |
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(iii) | except for claims for indemnification for Losses relating to breach of the warranty relating to the title to Shares (including title on INC Share) in relation to which the liability of the Indemnifying Party shall not exceed the Price, the Indemnifying Party’s aggregate liability (together with all “Losses” the “Indemnified Party” may have under Section 6(c) of the Subscription Agreement, as such terms are defined therein) shall in no event exceed 31.000.000,00 € (Cap) in relation to Claim of Indemnity (as defined below) and (a) until the date that is twenty-four (24) months after the Closing Date, shall be limited to the Cap and (b) after the date that is twenty-four (24) months after the Closing Date and until the date that is forty-eight (48) months after the Closing Date, shall be limited to the Revised Cap. Starting from the date that is twenty-four (24) months following the Closing Date (the Adjustment Date), the Cap shall be reduced to a “Revised Cap” equal to the greater of (x) 15.000.000,00 € and (y) the sum of 15.000.000,00 € and the Carry Over Amount, provided that the Revised Cap shall under no circumstance exceed the Cap. For purposes hereof, “Carry Over Amount” means the aggregate value of Claims for Indemnity made prior to or on the date that is 24 months following the Closing Date which (a) the Indemnifying Party has acknowledged in writing to be due and payable to the Indemnified Parties, but have not been paid prior to the Adjustment Date or (b) have been notified to the Indemnifying Party by the Indemnified Party in a notice complying with Article 9.4 below. |
(v) | the amount of any Losses for which the Indemnifying Party is responsible hereunder shall be reduced for the entire amount of any specific funds existing in the Last Accounts and the Closing Accounts; and |
(vi) | the amount of any Losses for which the Indemnifying Party is responsible hereunder shall be reduced for the entire amount of any audited contingent assets arising out after the Last Account Date and/or the Closing Date. |
9.4 In the event that the Buyer becomes aware of any Loss claim, proceeding or other matter in respect of which the Indemnifying Parties are obliged to indemnify the Indemnified Parties pursuant to this Agreement, the Buyer shall promptly provide written notice to the Seller and the Escrow Agent of such event, which notice shall state the nature of the claim, basis for indemnification of such claim, the amount thereof (to the extent known or estimated, which amount shall not be conclusive of the final amount of such claim), the method of computation thereof (to the extent known or estimated), any other material details pertaining to such claim and, in the case of a Third Party Claim, the basis therefor and any remedy sought thereunder (collectively, Claim of Indemnity), provided that any delay in giving such notice shall not relieve the Indemnifying Parties of their obligations under this Agreement except to the extent of any damages actually suffered by the Indemnifying Parties as a result of such delay.
The Claim of Indemnity shall specify whether it arises as a result of a claim by a Person against an Indemnified Party (Third Party Claim) or whether the Claim of Indemnity does not so arise (Direct Claim).
(a) | With respect to any Direct Claim, |
(i) | following receipt of the Claim of Indemnity from the Buyer, the Seller shall have thirty (30) Business Days to make such investigation in connection with the Claim of Indemnity as it considers it reasonably required. |
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For the purpose of such investigation, the Buyer shall make available to the Seller the information relied upon by the Buyer to substantiate its request of indemnification in respect of the Claim of Indemnity, together with all such other information as the Seller may reasonably request. |
(ii) | If both Parties agree at or prior to the expiration of such thirty (30)-Business Day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim of Indemnity, then the Seller shall pay to the Buyer (from the Escrow Account or by means of offset against the Promissory Note B) the full agreed upon amount of the Claim of Indemnity, failing which the matter shall be referred to the legal proceedings as provided for under Article 15 hereof. |
(iii) | It is however further agreed that in any event in which within thirty (30) Business Days from the issuance of a Claim of Indemnity the Buyer does not receive the Seller’s written notice formally contesting it, such Claim of Indemnity shall be deemed as finally agreed and accepted by the Seller and such amount shall promptly be paid to the Buyer (by the Escrow Agent out of the Escrow Account without the need for instruction from the Seller or by means of offset against Promissory Note B regardless of the then-current holder of the Promissory Note B). |
(b) | With respect to any Third Party Claim, |
(i) | the Buyer shall properly and diligently defend (when applicable) any such claim; the Seller shall have the right to participate, and, where possible, join, at the Seller’s own cost by counsel or counsels of its election, in the defense of any such claim. |
(ii) | The Buyer shall not make or accept any settlement of any Third Party Claim, nor shall make acquiescence thereto nor shall (to the extent of its ability) without the prior written consent of the Seller, which consent shall not be withheld without reasonable justification. |
(iii) | If the nature of any Third Party Claim is such that any Indemnified Party is required by any judgment, order, injunction, award, decree, law or regulation to make a payment to any third party (including public offices and authorities) with respect to the Third Party Claim before the completion of settlement negotiations or related legal proceedings, the Indemnified Party may make such payment and the Seller shall, forthwith upon demand by the Buyer, reimburse the Indemnified Party for such payment (from the Escrow Account or by means of offset against the Promissory Note). If the amount of any liability of the Indemnified Parties under the Third Party Claim in respect of which such payment was made, as finally determined, proves to be less than the amount that was paid by the Seller to the Buyer (from the Escrow Account or by means of offset against the Promissory Note), the Buyer shall, forthwith upon receipt of the difference from the Third Party, pay the amount of such difference to the Seller [together with any interest accrued thereon at the Agreed Rate in the period between the date on which the Seller has reimbursed the Indemnified Parties for such third party payment and the date on which such difference is returned by the Buyer to the Seller]. |
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9.5 The Indemnified Party shall, subject to the limitations contained in this Article 9, be entitled to indemnification under this Article 9 only to the extent of amounts available in the Escrow Account and for the balance by means of set-off against the remaining outstanding principal of the Promissory Note B; it being understood that the Escrow Account and the Promissory Note B shall be the sole and exclusive source of recovery and remedy of any Indemnified Party with respect to any claim for indemnification under this Article 9 and, as such, the indemnification obligations, set forth in this Article 9 are non-recourse in all respects to Seller or any current, former or prospective stockholder, investor or limited partner, other Affiliate or the respective representatives of Seller; provided, however, that any Losses with respect to a breach of the Fundamental Warranty concerning the title to Shares shall be recoverable against, but such recourse and remedy shall not be limited by, the amounts available in the Escrow Account or by set-off against Promissory Note B (which instead shall be capped at the Price).
9.6 On the date that is eighteen (18) months following the Closing Date (Cut-off Date), the Escrow Agent shall upon joint written instructions from the Buyer and the Seller release the remaining Escrow Amount (to the extent not utilized to pay the Buyer for any indemnification claim and provided that no claim by Buyer is pending) and distribute the remaining Escrow Amount to the Seller, all in accordance with the provisions of the Escrow Agreement.
9.7 It is agreed that the Buyer may elect to qualify any amount received in connection with a Claim of Indemnity as a reduction of the Price.
Article 10- Tax Matters and Tax Returns
Tax filings and Co-operation in Tax Matters
10.1 Tax returns and any other declarations required to be filed or prepared under applicable law after the Closing Date shall be prepared and filed by the Buyer or the relevant Group Company, but as regards any accounts required for Tax purposes, Tax returns and any other declarations that concern also time periods until and including the Closing Date such statements, accounts, returns and other declarations shall be previously discussed with the Seller, provided that Seller shall procure that any tax filing and/or payment that has to be submitted and/or made prior to the Closing shall be respectively submitted and/or made by the Company and each of the Group Companies, at the date provided for the applicable law and in compliance thereof. Financial statements and accounts shall be prepared by the Buyer according to the Accounting Principles and the Tax returns and fiscal declarations shall be prepared in accordance with applicable Tax law.
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10.2 The Buyer shall not change any material Tax election for a taxable period ending on or before the Closing Date and or amend any material Tax return for a taxable period ending on or before the Closing Date that would give rise to any material Tax liability of any of the Seller or Group Companies, unless any such action is required by applicable law.
10.3 The Buyer and the Seller undertake to fully cooperate in connection with any Tax matter relating to time periods, or portions thereof, that end prior to or on the Closing Date.
10.4 After the Closing Date, the Buyer shall, in particular and without limitation, procure that:
(i) | each of the Group Companies provides all information reasonably requested by the Seller in connection with any Tax matter of the periods, or portions thereof, that end prior to or on the Closing Date; |
(ii) | each of the Group Companies keeps the Seller informed at all times about the status of any Tax matters relating to the aforesaid periods. The Buyer and the Group Company shall provide the Seller with the above mentioned information and documents within 15 (fifteen) days from the date in which they are available; and |
(iii) | each of the Group Companies cooperates in the preparation and submission of Tax returns, waivers, approvals, forms, court applications, the lodging of reimbursement claims, inclusive of such claims as may be raised on a third party’s request and complaints, legal remedies, powers of attorney and other such documents as are reasonably required by the Seller in connection with Tax matters. |
10.5 The Buyer shall retain, and shall procure that all Group Companies retain, until the expiration of any applicable statute of limitation, as possibly extended by law, all Books and Records, electronic data and other documentation relating to the Group Companies that may be relevant for all Tax matters relating to time periods, or portion thereof, ending prior to or on the Closing Date.
Tax allocation agreements
10.6 Any amount due to any of the Group Companies under a Tax allocation agreement will be fully and entirely paid on the Closing Date.
Co-operation on Tax Proceedings
10.7 The Buyer shall procure that the Seller is informed in writing immediately within thirty (30) days upon receipt of any notification by the Buyer or the concerned relevant Group Company of:
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(a) | any Tax audit, similar audits, inspections, investigations and other administrative Tax proceedings that are announced or notified to be brought forward or commenced by any Tax authority, |
(b) | all Tax claims that are asserted, assessed or claimed by any Tax authority, or |
(c) | all Tax assessments or similar measures of any Tax authority, |
each of (a) to (c) above relating at least also to time periods, or portions thereof, ending on or before, or including, the Closing Date. Such Tax audits, similar audits, inspections, investigations and other administrative Tax proceedings of Tax Authorities are herein referred to as “Tax Audits”; such Tax claims, Tax assessments and other Tax measures of Tax Authorities are herein referred to as “Tax Measures”.
10.8 The informative notice to be issued in accordance with Article 10.7 above shall provide:
(a) | information as to the Tax authority initiating the Tax Audit or Tax Measures relating thereto; |
(b) | information describing the object of the Tax Audit or Tax Measure; and |
(c) | full copies of any document received from any Tax authority relating thereto. |
10.9 The Seller and/or one or more representatives duly qualified to represent a taxpayer before the Tax authorities and the tax courts bound to confidentiality by professional regulations, including any individual having such qualifications and employed by the Seller, or the relevant Group Company or the Buyer or any of their affiliates as the case may be, (hereinafter referred to as Tax Representatives), as selected by such Seller, shall be entitled to join with the Buyer and the Group Company’s Tax Representatives (in each case at the Seller’s cost) any Tax Audits and/or proceedings in respect of Tax Measures (such Tax Audits and proceedings are herein referred to as Tax Proceedings).
10.10 The Seller may, in any event, join at its own expense each phase of a Tax Proceeding. In this case, the Buyer shall, and shall procure that the concerned relevant Group Company shall coordinate with the Seller any measures intended to be taken in respect of such Tax Proceeding, it being agreed that any final decision in respect thereto will pertain to the Buyer. The Buyer shall cause the concerned relevant Group Company or its respective successor to cooperate with the Seller and/or the Seller’s Tax Representatives in each phase of the Tax Proceeding.
ARTICLE 11 - ANTITRUST CLEARANCE
11.1 The obligation of the Parties to proceed with the transactions contemplated in this Agreement is subject to the conditions that, on or prior to the expiration of the term provided in Article 11.3 (as it may be extended), the purchase and sale of the Shares pursuant to this Agreement shall have been approved, cleared or granted an exemption, or any applicable waiting periods shall have expired or terminated by any competent authority of the European Union, of any Member State in the European Union, the United States and/or of any other jurisdiction worldwide, to the extent that any such approval, clearance or exemption is required under any Antitrust Laws.
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The approvals, clearances and exemptions contemplated herein are hereinafter collectively referred to as the Clearance, provided that a Clearance which will be subject to conditions to be satisfied by either the Buyer or the Seller, shall be considered a Clearance for the purpose of this Agreement also if so agreed by both Parties in writing.
11.2 Each Party shall in a timely fashion prepare and file all documents required on the part of such Party to secure, as soon as possible, the Clearance and, to this end, the other Party shall actively cooperate with such Party. The Buyer and the Seller agree each to pay fifty percent (50%) of any filing fees in connection with this Article 11.
11.3 In the event that, in spite of the Parties' efforts, the Clearance is not obtained on or prior to the date that is 90 days from the date of this Agreement at the request of either Party to be notified to the other within the following five (5) Business Days, the 90-day period may be extended to another 120 days from the date of the notification and the Parties shall forthwith consult with each other and shall use their commercially reasonable efforts in order to overcome any obstacle to the granting of the Clearance or arising in connection therewith. Notwithstanding anything to contrary in this Agreement, in order to secure a granting of the Clearance, neither the Buyer nor the Seller shall be required to agree to (a) any license, sale or other divestiture, disposition or holding separate (through establishment of a trust or otherwise) of any shares of its capital stock or of any of its businesses, assets or properties, its Subsidiaries or affiliates, (b) the imposition of any limitation on the ability of the Buyer, its Subsidiaries or affiliates or the Seller to conduct their respective businesses or own any capital stock or assets or to acquire, hold or exercise full rights of ownership of their respective businesses and, in the case of the Buyer, the business of the Seller, or (c) the imposition of any impediment on the Buyer, its Subsidiaries or affiliates or the Seller under any statute, rule, regulation, executive order, decree, order or other legal restraint governing competition, monopolies or restrictive trade practices. Nothing herein shall require the Buyer or the Seller to litigate with any third party, including without limitation, any governmental authority.
11.4 If the Clearance is not obtained on or prior to the term provided in Article 11.3 (as extended), this Agreement shall automatically terminate and the Parties shall be released of all obligations hereunder except (i) for any rights or obligations arising under Articles 13, 14.7 and 15 of this Agreement and (ii) for any rights or obligations arising in connection with any breach under Article 11.2 and 11.3 preceding.
11.5. The Buyer shall have the right to unilaterally terminate this Agreement, pursuant to Article 1373 of the Italian Civil Code, at any time prior to the Closing Date, by giving a written notice to the Seller, if the Clearance[s] is/are conditioned upon the fulfilment of certain material conditions and/or remedies (including divestment or limitation to trade in whatsoever manner) on the side of the Buyer, which the Buyer, in its discretion, acting in good faith, will consider excessively burdensome, it being understood that, in this event, the Buyer shall not be held liable vis-à-vis the Seller and that no indemnity or other payment of any nature whatsoever shall be due by the Buyer to the Seller.
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Article 12 – Non-Competition and Other Post-Closing Covenants
12.1 | The Seller undertakes for a period of three (3) years after the Closing Date: |
(a) | not to carry out in any geography, whether directly or indirectly, any manufacturing, R&D, trading activities in the Business which may compete with the activities of the Group Companies as they are currently being conducted and as they will be conducted at and following the Closing Date and therefore, without limitation: |
(i) | not to acquire or hold, whether directly or indirectly, interests or other holdings in any companies or enterprises which in any way operate in the Business or within the territorial area indicated above; and |
(ii) | not to act as director, agent or employee, nor assist, co-operate or consult with or howsoever provide information to third parties, whether on a full or part-time basis, in the Business and geographic area indicated above; |
(b) | not to use the name Euticals or any other similar or misleading name, in relation to any activity whatsoever; |
(c) | not to establish any business relationships of any kind whatsoever with persons or companies which, during the twelve (12) months before the date hereof, have supplied and/or distributed, including on a non-continuous basis, goods or services to the Group Companies; and |
(d) | not to offer consultancy or employment agreements or employment arrangements of any kind to any of the Employees and in any case not to establish any relationship whatsoever with any such Employee after the termination of their employment with the relevant Group Company; |
provided, however, that, if any of the above restrictions shall be adjudged by any court or authority of competent jurisdiction to be void and unenforceable but would be valid if part of the wording thereof were to be deleted and/or the period thereof were to be reduced and/or the area dealt with thereby were to be reduced, the said restriction shall apply within the jurisdiction of that court or competent authority with such modifications as are necessary to make it valid and effective.
12.2 The Parties agree that the strict compliance with the undertakings contained in Article 12.1 above constitutes an essential element in the Buyer’s intention to enter into this Agreement and that the Price has been determined also in consideration of the undertakings assumed by the Seller pursuant to Article 12.1 above.
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12.3 From and after the Closing Date, the Buyer agrees to reimburse to the Seller on a quarterly basis for any amounts of Overdue Trade Receipts, which, in each case, are in excess of 50.000,00 € (provided that the full amounts, and not just the excess over 50.000,00 €, shall be reimbursed to the Seller).
12.4 The Parties hereby agree that if and when the Company receives after the Closing the amount constituting the China Receivable, the Buyer shall pay to the Seller an equivalent amount of cash within and not later than fifteen (15) Business Days following receipt of the China Receivable by the Company.
ARTICLE 13 – Confidentiality – ANNOUNCEMENTS
13.1. The Parties agree to maintain confidentiality with respect to (a) the terms and conditions of this Agreement (including its Schedules and Annexes); (b) the negotiations relating to this Agreement; and (c) the terms and conditions 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 (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 transactions contemplated by this Agreement or who participate professionally in the transaction in their capacity as a legal, accounting or financial advisor or other specialty (in each case only on an as needed basis);
(ii) to any 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 available to such bodies 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.
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 Seller, its shareholders, officers or directors, provided that its delivery was not forbidden at such time, pursuant to some other confidentiality agreement that existed; or
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(iii) any information which must be disclosed in accordance with the applicable laws, regulations, court order or is disclosed in connection with a requirement made by a government administrative body, regulatory body, inspector, supervisor or stock exchange´s authorities.
This confidentiality undertaking shall remain in force following the termination of this Agreement. If the Agreement is terminated for any reason, the Buyer shall destroy or return to the Seller, at Buyer’s election, all of the information that it has received from the Seller 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.
Notwithstanding any other provisions of Article 13 to the contrary, nothing herein shall prohibit the Buyer from disclosing this Agreement or its terms, or any other information concerning the transactions contemplated hereby, if such disclosure is required for the Buyer to comply with the federal securities laws of the United States, or other laws applicable to Buyer.
13.2 For a period of five (5) years following the Closing, the Seller shall, and shall cause its representatives, affiliates, agents and assigns to, keep secret and confidential all information in their possession relating to the Business using at least the same level of effort as undertaken to maintain such confidential information in its conduct of the Business on the date hereof and through the Closing.
13.3 Except as otherwise mandatorily required under any law or rule issued by a government or other regulatory or stock exchange authority having jurisdiction on the Parties, no publicity, release or announcement concerning the execution or delivery of this Agreement, any of the provisions contained herein or the transactions contemplated hereby will be issued without the advance written consent and approval, as to both form and contents, of the Seller and the Buyer, which consent and approval shall not be unreasonably withheld.
ARTICLE 14 - MISCELLANEOUS PROVISIONS
14.1 Without prejudice to the provisions of Article 9.3, the Warranties and, in general, all other clauses of this Agreement providing for any obligation of the Parties to be performed after the Closing Date shall remain in full force and effect after the Closing, without necessity for any of the Parties to reiterate or otherwise confirm its commitment with respect thereto.
14.2 Except as otherwise specifically provided herein, neither Party may assign any of its rights, interests or obligations hereunder without the prior written consent of the other Party, it being understood that the Buyer shall, without prior written consent, have the right to assign this Agreement and all ancillary and related agreements to (i) one or more of its Subsidiaries pursuant to Article 2.4 of this Agreement and (ii) for collateral purposes, to any Person that provides financing to the Buyer
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14.3 No waiver by a Party of a failure by another Party to perform any provision of this Agreement shall operate or be construed as a waiver in respect of any other failure whether of a like or different character.
14.4 This Agreement may not be waived, changed, modified or discharged orally, but only by an agreement in writing signed by the Party against whom enforcement of any such waiver, change, modification or discharge is sought.
14.5 If any of the provisions of this Agreement is or becomes invalid, illegal or unenforceable under the laws of any jurisdiction, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired. The parties shall nevertheless negotiate in good faith in order to agree the terms of a mutually satisfactory provision, achieving so nearly as possible the same commercial effect, to be substituted for the provision so found to be void or unenforceable.
14.6 Except as otherwise provided in this Agreement, each of the parties shall pay its own costs, charges and expenses incurred in connection with the negotiation, preparation and implementation of this Agreement and the transactions contemplated by it. It is also agreed that costs and expenses incurred by the Seller and Group Companies in connection with (i) Financing and (ii) any SEC filings relating to the transaction contemplated under this Agreement involving activities of the Seller and Group Companies, shall be borne by Buyer.
14.7 (a) Any notice or other communication to be given hereunder shall be in writing in the English language and signed by or on behalf of the Party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out in clause 14.7(b) (or as otherwise notified from time to time hereunder).
(b) The addressees of the parties for the purpose of clause 14.7(a) are as follows:
(a)
|
Party: | Buyer |
Address: |
200 West Street, 4th Floor Waltham, MA 02451
| |
Facsimile No:
|
lori.henderson@amriglobal.com
518-512-2075
| |
Attn. of: | Lori M. Henderson |
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With a copy to (which shall not constitute notice): | Goodwin Procter LLP | |
Attn. of: | Stuart M. Cable and Danielle M. Lauzon | |
Address: | 53 State Street, Boston, MA 02109,
| |
Facsimile No.: |
scable@goodwinprocter.com and dlauzon@goodwinprocter.com
(617) 649-1484 | |
(b)
|
Party:
|
Seller
|
Address: |
Via del Lauro, 7 20131 Milano Italy | |
Facsimile No.: | +39-02-869522522 | |
Attn. of: | Chief Financial Officer | |
With a copy to (which shall not constitute notice): | Goodwin Procter LLP | |
Attn. of: | Francesco Tedeschini | |
Address: |
Chiomenti Studio Legale Via XXIV Maggio 43 I-00187 Rome
| |
Telephone No.: |
francesco.tedeschini@chiomenti.net
+39 06 4662 2370 |
Evidence of delivery shall be upon the delivering party to produce, if required.
14.8 All Schedules and Annexes attached to this Agreement are incorporated herein and made a part hereof as fully as if written in this Agreement.
14.9 The Parties hereby agree to execute and deliver all such instruments and documents and to perform all such acts and do all such other things as may be necessary to further the purposes of this Agreement provided however that the provisions of such further instruments and documents shall not affect the understanding contained herein which shall continue to be wholly and exclusively valid and enforceable between the Parties.
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14.10 Unless otherwise expressly provided, any reference to Articles, Paragraphs, clauses or Schedules or Annexes contained in this Agreement shall be deemed to be a reference to Articles, Paragraphs, clauses hereof and Schedules or Annexes hereto.
14.11 This Agreement together with the Promissory Notes, Stockholders Agreement, Subscription Agreement and Registration Rights Agreement constitute the entire agreement between the Parties in respect of the subject matter hereof and supersedes all prior agreements, if any, relating to the same matter.
14.12 Except for certain documents contained in the Schedules or in the Annexes hereto which are in Italian or other languages, this Agreement shall be executed in English which shall be the only language governing the Agreement.
14.13 Seller hereby agrees to act as the initial Representative (as such term, for this purpose is defined in the Promissory Notes) for all purposes under the Promissory Notes and the agreements and matters incidental thereto.
ARTICLE 15 – GOVERNING LAW
15.1 This Agreement and the rights and obligations of the Parties hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the Republic of Italy, without prejudice to what is expressly provided for in the Promissory Notes, Stockholders Agreement, Subscription Agreement and Registration Rights Agreement.
15.2 (a) Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereunder, including with respect to the formation, applicability, performance, breach, termination, validity or enforceability thereof, shall be fully and finally settled by arbitration. The arbitration shall be conducted by three arbitrators, in accordance with the Rules of Arbitration of the International Chamber of Commerce (Rules) in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the Parties. The seat of the arbitration shall be New York, New York, USA and it shall be conducted in English, provided that either party may submit testimony or documentary evidence in any language if it furnishes, upon the request of the other Party, a translation into English of any such testimony or documentary evidence. The arbitrators shall determine questions of arbitrability and jurisdiction and shall be empowered to grant interim relief.
(b) The arbitration award shall be final and binding on the Parties. The Parties undertake to carry out any award without delay and waive their right to any form of recourse based on grounds other than those contained in the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention, which shall govern the arbitration and enforcement of any arbitral award) insofar as such waiver can validly be made. The parties agree to the exclusive jurisdiction of the federal courts located in New York County, New York for purposes of enforcing this section, and any arbitral award, in accordance with the New York Convention. The parties agree to personal jurisdiction in said courts for such purposes and irrevocably waive any defense on the basis of forum non conveniens, lack of jurisdiction or improper venue in regard to any such proceedings brought in the federal courts located in New York County, New York.
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(c) The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within thirty (30) days of the receipt of the request for arbitration. The two arbitrators shall nominate a third arbitrator within 30 days after the nomination of the second arbitrator. The third arbitrator shall act as chair of the tribunal. If any of the three arbitrators is not nominated within the time prescribed above, then the International Court of Arbitration of the International Chamber of Commerce shall appoint that arbitrator.
(d) In order to facilitate the comprehensive and efficient resolution of related disputes, and upon request of any party to the arbitration proceeding, the arbitration tribunal may consolidate the arbitration proceeding with any other arbitration proceeding relating to this Agreement or to the Subscription Agreement, Registration Rights Agreement or Stockholders Agreement. The arbitration tribunal shall not consolidate such arbitrations unless it determines that (i) there are issues of fact or law common to the two proceedings so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party would be unduly prejudiced as a result of such consolidation through undue delay or otherwise.
(e) Notwithstanding anything to the contrary in this Agreement, a Party may make a request to a court of competent jurisdiction or pursuant to the Rules for interim or emergency measures necessary to preserve the party’s rights, including pre-arbitration attachments or injunctions. A request for such interim relief to a court shall not be deemed incompatible with, or a waiver of, this agreement to arbitrate. Each of the Parties hereto recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach or threatened breach of any provision of this Agreement the aggrieved party, in addition to any other remedy which may be available to such Party at law or in equity, will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.
(f) All disputes under this Agreement shall be kept confidential. In any arbitration proceeding, the arbitrators shall take all measures necessary for the protection of Confidential Information. All proceedings and any award and any information obtained from another Party in connection with the arbitration shall be deemed Confidential Information subject to Article 13; provided that the Parties further agree that such Confidential Information may be disclosed to the extent necessary to enforce any award or enforce this Agreement to arbitrate, provided, further, that the Parties agree to take all reasonable measures to protect the confidentiality of the proceedings and the disclosure of any Confidential Information in connection therewith, including to file all papers under seal.
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(g) The arbitrators shall have the power to make an award allocating the costs and expenses of the arbitration between the parties, including reasonable legal fees and other costs of legal representation. Any award shall be determined and payable in Euros. For the avoidance of doubt, the remedies that may be awarded by the arbitrators hereunder are limited as specifically set forth in Article 9 of the Agreement.
***************
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As witness this Agreement has been signed by the duly authorized representatives of the parties the day and year first before written.
DULY SIGNED by | ||
The Buyer | ||
By: | /s/ Lori Henderson | |
Name: Lori Henderson | ||
Title: General Counsel, Senior Vice President and Secretary | ||
The Seller | ||
By: | /s/ Maurizio Bottinelli | |
Name: Maurizio Bottinelli | ||
Title: Director |
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SCHEDULE 1.1 E
ESCROW AGREEMENT
by and among
(1) | AMRI – Albany Molecular Research, Inc., a company incorporated under the laws of the State of Delaware (USA) (AMRI) whose registered office is in Albany (NY – USA), Italian Tax Code No. _____________ represented by [Mr./ Mrs.] _______________, Italian Tax Code No. _____________, in his/her capacity as ____________ and duly empowered pursuant to ________________________, acting also on behalf of [designated buyer] (collectively Buyer) |
and
(2) | Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy whose registered office is in Milan (Italy), Via del Lauro 7, Italian Tax Code No. 04849340965, represented by Mr. / Mrs. __________________, in his/her capacity as _________________, duly empowered pursuant to _________________________ (Seller) |
and
(3) | Cordusio Fiduciaria Spa, a company incorporated under the laws of Italy, with registered office in Italy, at Via Dante n. 4, Milan, registered with the Companies’ Register of Milan under no. 01855720155 REA n. 863916, represented by [Mr./ Mrs.] _______________, in his/her capacity as special attorneys whose fiduciary activity shall be performed in compliance with Law n. 1966 of November 23, 1939 and duly empowered pursuant to a special power of attorney dated March 15, 2016 (Escrow Agent). |
(the Buyer, the Seller and the Escrow Agent shall be hereinafter referred to, collectively, as the Parties and each of them, individually, as a Party).
WHEREAS, on [_________] 2016, the Seller and the Buyer entered into a share purchase agreement (the Agreement) governing the terms and conditions for the transfer by the Seller to the Buyer of the shares representing the entire share capital of Prime European Therapeuticals S.p.A. – Euticals, a company organized and existing under the laws of Italy, with registered office at Viale Bianca Maria 25, Milano Italy, Italian Tax Code No. 07254610152 (Company). Capitalized terms used and not otherwise defined herein shall have the same meaning as in the Agreement.
WHEREAS, this Escrow Agreement is being entered into pursuant to the Agreement and constitutes the “Escrow Agreement” described in the Agreement.
WHEREAS, it is understood and agreed that the Escrow Agent's duties are only those expressly set out in this Escrow Agreement also considering that the Escrow Agent is not part of the Agreement.
WHEREAS, pursuant to article [5.2(i)(d)] of the Agreement, the Buyer has agreed that, on the Closing Date, it shall deposit in an escrow account opened with the Escrow Agent a portion of the Price due to the Seller equal to the Escrow Amount (as defined below) to be held by the Escrow Agent as a trust fund for the purpose of securing the payment by the Seller to the Buyer of the Price Adjustment (as defined in the Agreement), if any, and of certain indemnifications which may become due by the Seller to the Buyer under the Agreement in accordance with the provisions of this Escrow Agreement and of the Agreement.
WHEREAS, a copy of the Agreement has been delivered to the Escrow Agent prior to the date hereof.
WHEREAS, within the date hereof the Seller has entered into a Mandato Fiduciario no. …………… ( The “ Mandato Fiduciario”) also in the interest of the Buyer, pursuant to Article 1723, second paragraph, of the Italian Civil Code
NOW THEREFORE, in consideration of the recitals above and the schedules and annexes hereto, which form an integral and essential part of this Escrow Agreement, the Buyer, the Seller and the Escrow Agent, intending to be legally bound hereby, agree and covenant as follows.
1. | Interpretation |
1.1 | Definitions |
In addition to the other terms defined elsewhere in this Escrow Agreement, for the purposes of the same, the following words and terms shall have the meaning ascribed to them here below:
Authority means any competent regulatory, prosecuting, tax or governmental authority in any jurisdiction, domestic or foreign.
Business Day means a day, other than a Saturday or a Sunday or a public holiday, in which the banks are generally opened to the public for ordinary transactions in Milan (Italy) and New York (USA).
Buyer Designated Account means the following bank account:
Bank: | [________] |
SWIFT: | [________] |
Account Number: | [________] |
Account Name: | [________] |
IBAN: | [________] |
EUR means the lawful currency of the parts of the European Union known as the euro area.
Seller Designated Account means the following bank account:
Bank: | [________] |
SWIFT: | [________] |
Account Number: | [________] |
Account Name: | [________] |
IBAN: | [________] |
2. | Appointment of the Escrow Agent |
2.1. | The Seller hereby irrevocably appoints, also in the interest of the Buyer pursuant to articles 1723, paragraph 2, of the Italian Civil Code, the Escrow Agent to serve as, and the Escrow Agent hereby agrees and accepts to act as, escrow agent to keep the Escrow Amount and the relevant Interest (as defined below) accrued on the Escrow Amount in the interest of the Buyer and the Seller in accordance with, and limited to, the terms and conditions of this Escrow Agreement. |
2.2. | The Parties acknowledge and agree that, pursuant to Article 1723, second paragraph, of the Italian Civil Code, the appointment of the Escrow Agent may be revoked and the terms of the mandate may be changed only with the joint written consent of the Buyer and the Seller. |
3. | Establishment of Escrow Account |
3.1. | The Escrow Agent confirms that it has opened the escrow account, the details of which are set out below, (the “Escrow Account”) in the name of the Escrow Agent on behalf of Seller also in the interest of the Buyer pursuant to art. 1723 second paragraph of the Italian Civil Code , on the terms of this Escrow Agreement: |
Bank: | [______] |
SWIFT: | [______] |
Account number: | [______] |
Account Name: | Cordusio Fiduciaria Spa |
Currency: | EUR |
3.2. | The Escrow Account may not go into overdraft and copy of the general terms and conditions of the Escrow Accounts has been provided to, and accepted by, the Seller. |
3.3. | Any expenses and every taxes or fiscal duties, which may be due in relation to the Escrow Account, regulate directly on the Escrow Account. |
3.4. | Each of the Seller and the Buyer undertakes to the Escrow Agent that: |
(a) | it will provide to the Escrow Agent all documentation and other information reasonably required by the Escrow Agent from time to time to comply with any applicable law in relation to the Escrow Account forthwith upon request by the Escrow Agent[; and |
(b) | it will notify the Escrow Agent in writing within 30 (thirty) days of any change that affects its tax status pursuant to applicable law. |
4. | Escrow Amount |
4.1. | On the date hereof, the Buyer deposits, in the name and on behalf of the Seller, a portion of the Price equal to EUR 10,000,000.00 (ten million) (the Escrow Amount), by wire transfer of immediately available funds, with the date hereof as value date, into the Escrow Account, to be held by the Escrow Agent as a trust fund for the purpose of securing: |
(i) | the payment by the Seller to the Buyer of any Price Adjustment which may be due in accordance with Article [6.5] of the Agreement, and |
(ii) | the payment by the Seller to the Buyer of any indemnifications of any Losses due by the Seller to the Buyer under the Agreement sole and exclusively as a result of the occurrence of a Claim of Indemnity incurred or suffered by the Buyer which has been notified according to Article ● of the Agreement. |
4.2. | The Escrow Agent hereby acknowledges receipt of the Escrow Amount and undertakes to hold the Escrow Amount in the Escrow Account according to this Escrow Agreement solely for the purpose of securing the Seller’s obligations vis-à-vis the Buyer under Article 4.1 above. |
4.3. | The Parties agree and undertake, each as far as it is concerned, that neither the Escrow Account nor the Escrow Amount are or shall be subject to any lien or attachment by any third party or creditor (including the Escrow Agent) and shall be used solely for the purposes and subject to the conditions set forth in this Escrow Agreement and in the Agreement. |
4.4. | The Escrow Amount will be held, managed and released solely by the Escrow Agent, pursuant to the terms and conditions set forth in this Escrow Agreement. |
4.5. | The Parties acknowledge that interests will accrue on the Escrow Amount at the rate of [•]. Any interest accrued on the Escrow Amount or portion thereof (the Interest) shall be paid to the Seller on a [period] basis. |
4.6. | The Interest has been agreed between the Seller and Unicredit S.p.A. under the standard terms and conditions applicable to the Escrow Account; it is understood that, the rate of interest applicable to the Escrow Amount has been determined in accordance with the terms and conditions governing the Escrow Account. |
4.7. | The Escrow Agent shall not be liable of any changes of the interest rate agreed directly between Sellers and Unicredit S.p.A.. |
5. | Release of the Escrow Amount |
5.1. | The Seller and the Buyer authorize the Escrow Agent (pursuant to Article 1723, paragraph 2, of the Italian Civil Code) to release the Escrow Amount, in whole or in part, exclusively as follows: |
(a) | for the purposes of the payment of any Price Adjustment: upon receipt of the joint written request of the Seller and the Buyer substantially in the form of Schedule 5.1 (Part 1) hereto, signed by an authorized representative of each of the Seller and the Buyer (a Joint Payment Instruction), pursuant to which the Escrow Agent is requested to proceed with the release of the Escrow Amount (in whole or in part), in favor of the Seller and/or the Buyer, as the case may be; or |
(b) | for the purposes of the Claim of Indemnity: upon receipt of the written request of the Buyer, signed by an authorized representative of the Buyer and with copy to the Seller (a Buyer Payment Instruction and together with the Joint Payment Instruction a Payment Instruction), in such case in favor of the Buyer provided and on condition that either |
(i) the Buyer Payment Instruction encloses a copy of an enforceable arbitration award issued under the Agreement ordering the release in whole or in part of the Escrow Amount in favor of the Buyer – in which case the Buyer Payment Instruction shall be given substantially in the form of Schedule 5.1 (Part 2) hereto, or
(ii) the Buyer Payment Instruction is given pursuant to article 9 of the Agreement and confirms that (1) following the submission of a prior Claim of Indemnity to the Seller with copy to the Escrow Agent, the [30 (thirty)] Business Day term provided in article [9.5] of the Agreement for the Seller to object to the relevant Claim of Indemnity has elapsed without any objection having been raised or (2) Buyer and Seller have agreed the amount of Losses under the relevant Claim of Indemnity - whichever (1) and (2) come first - and, therefore, the Escrow Agent is requested and instructed to proceed with the release in favor of the Buyer of the amount indicated in the Claim of Indemnity – in which case the Buyer Payment Instruction shall be given substantially in the form of Schedule 5.1 (Part 3) hereto; or
(c) | in favor of the Seller upon the elapse of the 18th (eighteenth) month following the date hereof, save for: |
(i) the amounts necessary to cover any pending Payment Instruction received by the Escrow Agent before the expiry of such 18 (eighteen)-month term, and in such a case, the Escrow Agreement shall continue to be in full force and effect until the amounts hereof are paid; and/or
(ii) the amounts necessary to cover any pending Claim of Indemnity as at the expiry of such 18 (eighteen)-month term, provided that the Buyer has notified in writing the Escrow Agent and the Seller with a written notice thereof no later than 5 (five) Business Days prior to the expiry of such 18 (eighteen)-month term, and in such a case, the Escrow Agreement shall continue to be in full force and effect up to the date on which the last of any then pending Claim of Indemnity is resolved and/or settled according to the Agreement.
5.2. | Notwithstanding the above, the Parties acknowledge and agree that: |
(i) | the Escrow Agent shall be under no obligation to release the Escrow Amount or any portion thereof or to take action in relation thereto if it is prevented or prohibited from doing so or if it is instructed or ordered not to do so, in each case, by the terms of any order, judgment, award, decision or decree made by a court or other competent Authority with which the Escrow Agent is required to comply or if the Escrow Agent is otherwise not legally permitted to do so; and |
(ii) | if the Escrow Agent becomes aware that a transfer of any part of the Escrow Amount has been made to the wrong account, it must (where such transfer has been made through its own error) use all reasonable endeavours to reverse such transfer. |
5.3. | Each of the Seller and the Buyer undertakes to the other that it shall promptly sign and deliver any Joint Payment Instruction as is required or necessary to give full effect to the relevant provisions of the Agreement. |
5.4. | Upon receipt of any Payment Instruction complying with the formal requirements set forth under Article 5.1, letter (a) or (b), or upon elapse of the 18 (eighteen) months term referred to in Article 5.1, letter (c), above (or such other term as extended pursuant thereof), (i) the Escrow Agent shall perform the relevant payment to the relevant beneficiary as soon as practicable and, in any case, not later than 5 (five) Business Days from the receipt of the Payment Instruction or the elapse of the 18 (eighteen) months term referred to in Article 5.1, letter (c) (or such other term as extended pursuant thereof), as the case may be, it being understood that (ii) any payment to the Seller shall be made on the Seller Designated Bank Account (or the different bank account which may be notified by the Seller to the Escrow Agent pursuant to Article 9.2 hereto) and any payment to the Buyer shall be made on the Buyer Designated Bank Account (or the different bank account which may be notified by the Seller to the Escrow Agent pursuant to Article 9.2 hereto). |
6. | Duties, Obligations and Indemnity of the Escrow Agent |
6.1. | The duties and obligations of the Escrow Agent shall be limited to, and determined solely by, the provisions of this Escrow Agreement, and the Escrow Agent is not charged with knowledge of or any duties or responsibilities in respect of any other agreement or document. |
6.2. | The Escrow Agent shall not be subject to, nor required to comply with, any other agreement between the Buyer and the Seller and any other party, or to which the Buyer or the Seller are a party, or to comply with any direction or instruction (other than those contained herein also by means of reference thereto made herein, or delivered in accordance with this Escrow Agreement) from any other party or any entity acting on behalf of the Buyer or the Seller. |
6.3. | The Escrow Agent shall not be required to, and shall not, expend or risk any of its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. The Seller and the Buyer, pro quota, shall indemnify and keep harmless the Escrow Agent against any liability, procedure, legal action, damage, duty, liabilities and loss, as well as cost, debit or expense which the Escrow Agent may incur to a third party as a result of anything lawfully and properly done by the Escrow Agent in accordance with the Escrow Agreement and/or any instructions received in accordance herewith, save in the event of gross negligence, willful misconduct or fraud of the Escrow Agent or its violation of public policy provisions. The Escrow Agent shall carry out all the activities necessary to perform its duties and obligations set forth in this Escrow Agreement with the highest diligence and due care pursuant to article 1176, paragraph 2, of the Italian Civil Code. |
6.4. | The Escrow Agent does not have any interest in the Escrow Amount held hereunder but is serving as escrow holder only, and having only possession thereof. |
6.5. | The Escrow Agent irrevocably and unconditionally waives any right of set off, deductions, withdrawals, seizure or attachment, including pursuant to Article 1853 of the Italian Civil Code or at any other title or by virtue of any type of relationship it might have towards the Seller or the Buyer, as the case may be, with reference to the Escrow Amount. |
6.6. | The Escrow Agent cannot be held responsible for not compliance of the provisions of this Agreement due as a consequence of the enforcement of “azioni esecutive o cautelari” related to the Escrow Amount. It being understood that if at any time the Escrow Amount becomes subject to any levy, attachment, order, judgment, decree, injunction or other judicial, administrative, or regulatory process (an “Order”), the Escrow Agent will promptly provide the Seller and the Buyer with a copy of such Order in order to enable them to seek an appropriate protective order or other remedy, or to take steps to resist or narrow the scope of such Order. If a protective order or other remedy is not obtained, the Escrow Agent may comply with any such Order. The Escrow Agent cannot be held responsible for not compliance of the provisions of this Agreement due as a consequence of such Order. |
7. | Termination of the Escrow Agreement - Removal of the Escrow Agent |
7.1. | This Escrow Agreement and Mandato Fiduciario shall automatically terminate upon the earlier of (i) the date of payment by the Escrow Agent of the entire Escrow Amount, as the case may be, to the Buyer and/or the Seller in accordance with the terms and conditions set forth herein or (ii) the date following 18 (eighteen) months from the date hereof (or such other term as extended pursuant to article 5.1(c) above. |
7.2. | The Buyer and the Seller may remove the Escrow Agent solely by giving joint written instruction thereof, pursuant to section 1723, second paragraph, of the Italian Civil Code. Such removal shall be effective upon delivery of the entire Escrow Amount (outstanding as at the time of the removal) to the successor escrow agent designated in writing by the Buyer and the Seller, the Escrow Agent being thereupon discharged from all obligations under this Escrow Agreement arising following the removal. |
7.3. | In the event the Escrow Agent becomes unavailable or unwilling to continue in his appointed capacity hereunder, the Escrow Agent may resign and be discharged from his duties and obligations hereunder by giving notice of resignation to the Buyer and the Seller, specifying a date no less than (60) sixty days following such notice date when such resignation will take effect; provided, however, that such resignation shall in no event take effect before the successor to the Escrow Agent shall have been appointed pursuant to Section 2 of this Escrow Agreement. |
8. | Fees and Expenses |
8.1. | As remuneration for the services rendered under this Escrow Agreement (and therefore related to the management and release of the Escrow Amount), the Escrow Agent shall be entitled to the fees and reimbursement of expenses as provided for under Schedule 8.1 hereto. |
8.2. | The fees and expenses of the Escrow Agent shall be borne by the Seller and the Buyer on a 50/50 (fifty / fifty) basis. It is agreed and understood that the Escrow Agent is not entitled to satisfy its rights at any title whatsoever by debiting all or part of the relevant amounts to the Escrow Amount and the Interest. |
9. | General Provisions |
9.1. | This Escrow Agreement, including this Article 9.1, may not be changed or modified other than by a written instrument signed by and on behalf of all Parties. |
9.2. | The Parties acknowledge and agree that, there is a separate document listing some additional terms regulating the relationship with the Escrow Agent1. Mandato Fiduciario and this Escrow Agreement shall be construed as a single agreement, but the provisions of this Escrow Agreement are intended supplement and amend the provisions of the Mandato Fiduciario and in all cases of discrepancies or conflict between the provisions of the Mandato Fiduciario and this Escrow Agreement, the provisions of this Escrow Agreement shall prevail. |
9.3. | Any notice or communication required or permitted to be given by any of the Parties to any other Party pursuant to this Escrow Agreement or in furtherance thereto shall be validly made if sent through registered letter with return receipt (“Raccomandata A.R.”), anticipated via fax or e-mail, according to the following provisions: |
(i) | if to the Buyer, to: |
AMRI – Albany Molecular Research, Inc.
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
with copy to:
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
(ii) | if to the Seller, to: |
Lauro Cinquantasette S.p.A.
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
with copy to:
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
(iii) | if to the Escrow Agent, to: |
Cordusio Fiduciaria Spa
[__________]
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
with copy to:
[__________]
Fax: [__________]
Email: [__________]
Attention: [__________]
or at such other address and/or fax numbers and/or e-mail addresses as either Party may hereafter provide to the other Parties by written notice to be given in accordance with the provisions herein above.
9.4. | This Escrow Agreement and the rights arising hereof shall not be assignable by either Party without the prior written consent of the other Parties. |
9.5. | The headings of sections in this Escrow Agreement are provided for convenience only and shall not affect its construction or interpretation. |
9.6. | This Escrow Agreement shall be binding upon and inure to the benefit of each Party hereto and its successors and assignees. |
9.7. | No waiver of any breach or default hereunder shall be considered valid unless in writing and signed by the Party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature. |
9.8. | If any provision of this Escrow Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Escrow Agreement, such provision shall be fully severable. This Escrow Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Escrow Agreement and the remaining provisions of this Escrow Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Escrow Agreement. Furthermore, the Parties shall negotiate in good faith the replacement of such illegal, invalid, or unenforceable provision with another provision as similar in terms to such provision substituted as may be possible and be legal, valid and enforceable. |
10. | Governing law and jurisdiction |
10.1. | This Escrow Agreement and the documents signed pursuant to it shall be regulated, performed, and interpreted in accordance with Italian law. |
10.2. | Any dispute between the Parties arising out of or in connection with this Escrow Agreement shall be finally settled by arbitration in accordance with the Rules of the Arbitration Chamber of Milan (Regolamento della Camera Arbitrale di Milano) (the Arbitration). The Arbitration panel shall be composed of three arbitrators (the Arbitrators, and each an Arbitrator). The Arbitrators shall be appointed by mutual agreement between the Parties involved in the litigation within 20 (twenty) Business Days after the receipt by the respondent(s) of the request for arbitration or, in the event the Arbitrators are not mutually appointed within such term, by the Arbitration Chamber of Milan in accordance with its Rules. The place of Arbitration shall be Milan (Italy). |
The Arbitrators shall act on the following basis:
a. | If requested by any of the parties involved, the language of the Arbitration shall be English and the panel shall render its decision within 180 (one hundred eighty) days from the date it accepts the office; |
b. | the parties may submit any evidence and/or document in the Italian or English language; |
c. | the panel shall decide in accordance with the rules of law (secondo diritto), pursuant to the Italian Civil Code and to the Italian Code of Civil Procedure (arbitrato rituale); |
d. | the final award shall also fix the costs of the arbitration and decide which of the parties or in what proportion the parties shall bear them; and |
e. | the award of the Arbitrators shall be final and binding and shall not be subject to appeal. |
Save as provided in this clause, the Arbitration shall be regulated by the Rules of the Arbitration Chamber of Milan (Regolamento della Camera Arbitrale di Milano).
10.3. | Each Party hereby designates its respective addresses for the giving of notice, as set forth in clause 9.2, as its respective domiciles at which service of process may be made in any legal action or proceeding arising hereunder. |
*** ***
Schedule 5.1
Part 1
Form of Joint Payment Instruction
REGISTERED LETTER WITH RETURN RECEIPT
References of the escrow agent: [•]
CC
[References of […]: [•]]
Subject: Joint Payment Instruction
Dear Sirs,
Reference is made to the Escrow Agreement executed between AMRI – Albany Molecular Research, Inc., Lauro Cinquantasette S.p.A. and [Escrow Agent] on [•], 2016 (the Escrow Agreement). Capitalized terms used and not otherwise defined herein shall have the same meaning as in the Escrow Agreement.
Pursuant to Article 5.1, letter (a) of the Escrow Agreement, we hereby jointly instruct you to transfer the amount of EUR [•] from the Escrow Account IBAN [•] opened in the name of Lauro Cinquantasette S.p.A. for further credit to the [Seller Designated Account / Buyer Designated Account].
This Payment Instruction and any non-contractual obligation arising out of or in connection with the same are governed by and shall be construed in accordance with Italian law.
Best regards.
AMRI – Albany Molecular Research, Inc. | Lauro Cinquantasette S.p.A. |
_______________________________ | |
_______________________________ | |
Represented by ___________________ | Represented by |
_______________________ | |
Date: ___________________________ | Date: |
___________________________ |
Part 2
Form of Buyer Payment Instruction pursuant to article 5.1(b)(i)
REGISTERED LETTER WITH RETURN RECEIPT
[place and date]
References of the escrow agent: [•]
CC
[References of […]: [•]]
and
References of Lauro Cinquantasette S.p.A.: [•]
Subject: Buyer Payment Instruction pursuant to article 5.1(b)(i) of the Escrow Agreement
Dear Sirs,
Reference is made to the Escrow Agreement executed between AMRI – Albany Molecular Research, Inc., Lauro Cinquantasette S.p.A. and [Escrow Agent] on [•], 2016 (the Escrow Agreement). Capitalized terms used and not otherwise defined herein shall have the same meaning as in the Escrow Agreement.
Pursuant to Article 5.1(b)(i) of the Escrow Agreement, please find attached hereto copy of an enforceable arbitration award issued under the Agreement ordering the release from the Escrow Account in favor of AMRI – Albany Molecular Research, Inc. of the amount of EUR [•]. In light of the above, we therefore instruct you to transfer the above amount of EUR [•] from the Escrow Account IBAN [•] opened in the name of Lauro Cinquantasette S.p.A. to the Buyer Designated Account.
This Payment Instruction and any non-contractual obligation arising out of or in connection with the same are governed by and shall be construed in accordance with Italian law.
Best regards.
AMRI – Albany Molecular Research, Inc. | ||
Represented by |
Part 3
Form of Buyer Payment Instruction pursuant to article 5.1(b)(ii)
REGISTERED LETTER WITH RETURN RECEIPT
[place and date]
References of the escrow agent: [•]
CC
[References of […]: [•]]
and
References of Lauro Cinquantasette S.p.A.: [•]
Subject: Buyer Payment Instruction pursuant to article 5.1(b)(ii) of the Escrow Agreement
Dear Sirs,
Reference is made to the Escrow Agreement executed between AMRI – Albany Molecular Research, Inc., Lauro Cinquantasette S.p.A. and [Escrow Agent] on [•], 2016 (the Escrow Agreement). Capitalized terms used and not otherwise defined herein shall have the same meaning as in the Escrow Agreement.
Reference is also made to the Claim of Indemnity dated [_____] addressed to the Seller with copy to the Escrow Agent, and received by the Seller on [_____], whereby we requested payment from the Seller of the amount of EUR [_____]. With this letter, pursuant to Article 5.1(b)(ii) of the Escrow Agreement, we confirm that the:
[ ] (1) [30 (thirty)] Business Day term provided article [9.5] of the Agreement for the Seller to object to the Claim of Indemnity has elapsed without any objection having been raised or
[ ] (2) Buyer and Seller have agreed the amount of Losses under the Claim of Indemnity.
[mark (1) or (2) as appropriate]
We therefore request and instruct you to proceed with the release in favor of the Buyer of the amount indicated in the Claim of Indemnity of EUR [______] from the Escrow Account IBAN [•] opened in the name of Lauro Cinquantasette S.p.A. to the Buyer Designated Account.
This Payment Instruction and any non-contractual obligation arising out of or in connection with the same are governed by and shall be construed in accordance with Italian law.
Best regards.
AMRI – Albany Molecular Research, Inc. | ||
Represented by |
Schedule 9.1
Escrow Agent Fees
Fee Item | Time of payment | Amount | ||
One off set-up fee | Within 30 days from receipt of the relevant invoice | Euro 10.000,00 | ||
Annual fee for all fiduciary services | Within 30 days from receipt of the relevant invoice | 0.2% of the Escrow Amount actually deposited in the Escrow Account | ||
Annual fee for all administrative services | Within 30 days from receipt of the relevant invoice | Euro 150 |
All payments are exclusive of VAT.
SCHEDULE 1.1 (J)
FORM OF PROMISSORY NOTE A
THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND NO INTEREST HEREIN MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ABSENT REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.
Original Principal Amount: €24,000,000 | Issue Date: [______], 20161 |
FOR VALUE RECEIVED, the undersigned [Albany Molecular Research, Inc.], a company incorporated under the laws of the State of Delaware (the “Maker”), hereby promises to pay Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy (the “Initial Holder”) or its registered permitted assigns as set forth in Section 6 (the “Holder”), the aggregate principal amount of Twenty Four Million Euros (€24,000,000) (the “Initial Principal Amount”), or such lesser amount as may be outstanding under this Note from time to time and any applicable outstanding interest. Concurrently with this execution of this Note, Albany Molecular Research Inc., a company incorporated under the laws of the State of Delaware (the “Guarantor”) is delivering a Guaranty Agreement, dated as of [___________], 20162 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty Agreement”), pursuant to which the Guarantor guarantees the Maker’s payment obligations hereunder on the terms set forth therein. This Note is issued by the Maker pursuant to a certain Share Purchase Agreement, dated as of [___________], 20163 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Purchase Agreement”), by and among the Maker, [the Guarantor] and the Initial Holder. All capitalized terms not defined herein shall have the respective meanings given to them in the Purchase Agreement. This Note is one of a series of promissory notes issued by the Maker on [_______], 20164 pursuant to the Purchase Agreement (collectively, and together with any notes issued in exchange hereof or thereof, the “Promissory Notes”). The Holder, together with the holders of the other Promissory Notes shall be referred to collectively as the “Holders”. This Note shall be pari passu in right of priority and payment with each of the other Promissory Notes.
1 NTD: To be the Closing Date under the SPA.
2 NTD: To be the Closing Date under the SPA.
3 NTD: To be the Closing Date under the SPA.
4 NTD: To be the Closing Date under the SPA.
1. Principal Payments.
(a) The Maker shall pay to Lauro Cinquantasette S.p.A., in its capacity as Representative of the Holders (in such capacity, the “Representative”), for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes, the Initial Principal Amount in three (3) equal installments of Eight Million Euros (€8,000,000) each (each such payment, an “Installment Payment”), with one Installment Payment due and payable on each anniversary of the Closing Date, commencing on the third (3rd) anniversary of the Closing Date (each such date, an “Installment Payment Date”); provided however, that the final Installment Payment shall be of an amount equal to the remaining outstanding balance under the Promissory Notes together with any unpaid interest thereon.
(b) The Maker shall have the option to prepay the Promissory Notes, in whole or in part, on a pro rata basis at any time without premium or penalty, together with payment of accrued and unpaid interest on the principal amount prepaid. Amounts paid pursuant to this Section 1(b) shall be applied to reduce the remaining Installment Payments as directed by the Maker.
(c) After all amounts due on this Note have been paid in full, this Note shall be surrendered to the Maker for cancellation and shall not be reissued.
2. Interest Payments.
(a) The outstanding principal amount under this Note shall bear interest from the date hereof through and including the date when the outstanding principal amount under this Note is paid in full, at a rate equal to 0.25% per annum (the “Interest Rate”), which shall be due and payable in cash on the first day of January, April, July and October during each calendar year until the Initial Principal Amount is fully paid (each an “Interest Payment Date”) and on the final Installment Payment Date.
(b) Interest hereunder shall be calculated on the basis of a 365 day year and actual days elapsed. Payments of the principal amount of this Note and interest hereunder shall be made in Euros and in immediately available funds to the account of the Representative, for distribution to the Holder at the account set forth on the signatures pages hereof or as may be designated in writing by the Holder to the Representative at least five (5) business days before the applicable Installment Payment Date or Interest Payment Date.
(c) If an Event of Default has occurred and is continuing, the interest on the outstanding principal amount under this Note shall automatically increase and bear interest from such date at the rate of the three-month LIBOR Rate plus 7.50% to the fullest extent permitted by applicable laws and shall be payable upon demand for so long as the Event of Default exists.
(d) All interest to be paid by the Maker under this Note shall be paid to the Representative for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes.
3. Representations and Warranties. The Maker represents and warrants, as of the date hereof, that:
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(a) Existence, Power. The Maker (i) is duly organized or formed, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation or organization, and (ii) has all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Note.
(b) Authorization; No Contravention. The execution, delivery and performance by the Maker of this Note (i) has been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action, and (ii) does not and will not (x) contravene the terms of any of the Maker’s organization documents, (y) conflict with or result in any breach or contravention of any contractual obligation to which the Maker is a party or any order, injunction, writ or decree of any governmental authority or any arbitral award to which the Maker or its property is subject or (z) violate any law.
(c) Governmental Authorization. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority, is required by or with respect to the Maker in connection with the execution and delivery of this Note by the Maker or the performance by the Maker hereunder, except for such filings, authorizations, consents and approvals that if not obtained or made would not have, individually or in the aggregate, a material adverse effect on the ability of the Maker to consummate the transactions contemplated by this Note.
(d) Binding Effect. This Note has been duly executed and delivered by the Maker. This Note constitutes a legal, valid and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws.
4. Defaults and Remedies.
The occurrence of any of the following shall constitute an “Event of Default” under this Note:
(a) the Maker shall fail to pay (i) any Installment Payment or (ii) any interest with respect to this Note, in each case, when due and payable on the applicable Installment Payment Date or Interest Payment Date, as the case may be, or as otherwise expressly required hereunder and such failure shall continue unremedied for a period of five (5) business days;
(b) (i) the Maker, the Guarantor or any of their respective subsidiaries shall fail to comply in any material respect with any of its agreements or covenants in, or provisions of, this Note (other than any failure to comply with principal and interest payment obligations, which are addressed by clause (a) above) and, in each case, such failure shall continue unremedied for a period of thirty (30) days following written notice thereof or (ii) any representation or warranty made or deemed made by the Maker, the Guarantor or any of their respective subsidiaries herein shall be incorrect or misleading in any material respect when made;
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(c) (i) the Guarantee shall cease to be in full force and effect or the Guarantor shall deny or disaffirm any of such Guarantor’s obligations under the Guarantee or (ii) there occurs a Change of Control and, in each case, such default shall be immediate;
(d) a Guarantor Default shall continue unremedied for a period of thirty (30) days following written notice thereof;
(e) any event or condition that results in any indebtedness of the Maker or the Guarantor in an aggregate principal amount exceeding $34,500,000 (“Material Indebtedness”),5 whether such indebtedness now exists or shall be created hereafter, becoming due prior to its scheduled maturity or that enables or permits, after the expiration of any applicable grace period provided in the applicable agreement or instrument under which such indebtedness was created, the holder or holders of such Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (e) shall not apply to secured Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Material Indebtedness;
(f) one or more judgments for the payment of money in an aggregate amount in excess of $28,750,0006 shall be entered against the Maker or the Guarantor and the same shall remain unpaid or undischarged for a period of sixty (60) consecutive days after such judgment becomes final during which execution shall not be effectively stayed; provided that any such amount shall be calculated after deducting from the sum so payable any amount of such judgment or order that is covered by (x) a valid and binding policy of insurance in favor of the Maker or the Guarantor (but only if the applicable insurer shall have been advised of such judgment and of the intent of the Maker or the Guarantor to make a claim in respect of any amount payable by it in connection therewith and such insurer shall not have disputed coverage) or (y) any third-party indemnification obligation;
(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, examination, composition, assignment, arrangement, moratorium of any indebtedness, reorganization or other relief in respect of the Maker or the Guarantor or its debts, or of a substantial part of its assets, under any Debtor Relief Laws now or hereafter in effect or (ii) the appointment of a receiver, liquidator, examiner, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; and
5 NTD: Will be calculated consistently with credit agreement with 15% cushion.
6 NTD: Will be calculated consistently with credit agreement with 15% cushion.
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(h) the Maker or the Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, examination, reorganization compromise, composition, assignment, arrangement with any creditor or other relief under any Debtor Relief Laws now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Section 4, (iii) apply for or consent to the appointment of a receiver, examiner, liquidator, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing.
Promptly and in any event within five (5) business days of becoming aware of any Event of Default or event or occurrence that with the passage of time or notice or both would constitute an Event of Default, each of the Holder and the Maker shall furnish to the other party written notice thereof.
Upon the occurrence and during the continuance of an Event of Default, the Representative may, at its option and without notice (such notice being expressly waived), declare and demand that the unpaid principal of and any accrued interest on this Note immediately due and payable, and the Representative may pursue all rights and remedies available hereunder. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (g) or (h) of this Section 4 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Representative. The Representative may, in its sole discretion, rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.
Additionally, the Representative may resort to every other right or remedy available at law or in equity without first exhausting the rights and remedies contained herein, all in the Representative’s sole discretion. Failure of the Representative, for any period of time or on more than one occasion, to declare and demand this Note immediately due and payable shall not impair the right or remedy or constitute a waiver of the right to exercise the same at any time from and after any Event of Default. All remedies are cumulative to the extent permitted by law.
Notwithstanding anything to the contrary set forth in any Promissory Note or the Guaranty Agreement, each of the Maker and the Holder agrees that this Note and the Guaranty Agreement may be enforced only by the action of the Representative and that no Holder (in its capacity as such) shall have any right individually to seek to enforce this Note or any other Promissory Note, the Guaranty Agreement or any other agreement entered into in connection herewith.
5. Defined Terms.
The following terms shall have the following meanings in this Note:
“Assignment and Assumption Agreement” means an assignment and assumption agreement in substantially the form of Exhibit A hereto.
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“Bankruptcy Code” means Title 11 of the United States Code, as now and hereafter in effect, or any successor statute, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.
“Change of Control” means (a) any Person or group of persons within the meaning of § 13(d)(3) of the Securities Exchange Act of 1934 becomes the beneficial owner, directly or indirectly, of 50% or more of the ordinary voting power represented by the issued and outstanding equity interests of the Guarantor or (b) the Guarantor shall cease to own and control, of record and beneficially, 100% of each class of outstanding equity interests of the Maker free and clear of all liens (except liens created in connection with the Senior Credit Agreement); provided, however, that the foregoing shall not restrict a merger of the Maker with and into Target, with Target assuming the obligations of the Maker under this Note.
“Closing Date” means [________], 2016.7
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, federal, state or foreign or other applicable jurisdictions from time to time in effect.
“Guarantor Default” means that the Guarantor or the Maker permits the Secured Leverage Ratio (as defined in the senior credit agreement of the Guarantor, dated as of the Closing Date (as amended, restated, supplemented or otherwise modified from time to time, the “Senior Credit Agreement”)) of the Guarantor and its subsidiaries on a consolidated basis as of the last day of any four fiscal quarter period of the Guarantor, commencing with the first such date following the Closing Date to exceed the applicable ratio set forth below: 8
Test Period | Secured Leverage Ratio |
[______] through [______] | [___]:1.00 |
[______] and thereafter | [___]:1.00 |
[______] and thereafter | [___]:1.00 |
7 NTD: The closing date under the Purchase Agreement.
8 NTD: The leverage ratio will be calculated consistently with the leverage ratio in the senior credit agreement, and subject to a 15% cushion to the leverage ratio in the senior credit agreement.
6 |
In the event the Maker fails to comply with the financial covenant set forth above as of the last day of any fiscal quarter, any cash proceeds of the issuance of equity interests of the Maker that are included in the calculation of “Consolidated EBITDA” under the Senior Credit Agreement for any fiscal quarter shall be included in the calculation of “Consolidated EBITDA” hereunder for purposes of calculating the Secured Leverage Ratio hereunder (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”) under the Senior Credit Agreement. No Holder shall accelerate any Promissory Note or otherwise exercise any remedies available to it during the continuance of a default or Event of Default as a result of a Guarantor Default prior to the date that is fifteen (15) Business Days following the date on which the financial statements of the Maker are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR) or any successor filing system of the U.S. Securities and Exchange Commission.
“LIBOR Rate” means the London Interbank Offered Rate per annum that appears on the page of the Reuters Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (such page currently being the LIBOR01 page) for the corresponding deposits of Euros as of approximately 11:00 a.m. (London, England time), two business days prior to the commencement of the three-month interest period.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof.
“Target” means Prime European Therapeuticals S.p.A. - Euticals, a company organized and existing under the laws of Italy.
6. Assignments.
(a) The Holder may sell, transfer, pledge, assign, hypothecate or otherwise dispose of this Note or any right, title or interest herein to any other person, in each case without the prior written consent of the Maker.
(b) The Maker may not assign this Note or its obligations hereunder to any other person without the prior written consent of the Representative; provided, however, that the Maker shall have the right to assign this Notes and its obligations hereunder (i) to the Guarantor or (ii) to the Target in connection with any merger of Maker with and into the Target.
(c) No sale, transfer, pledge, assignment hypothecation or other disposition of any Promissory Note shall be effective unless and until an assignment and assumption is entered into by the assigning Holder and the assignee (with the consent of the Maker, if applicable pursuant to the terms hereof), substantially in the form of Exhibit A and delivered to the Maker and the Representative.
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(d) The Representative, acting solely for this purpose as a non-fiduciary agent of the Maker, will keep at its principal office in Via del Lauro, 7 - 20131 Milano (or such other location of its principal office from time to time) a register (the “Register”) in which the Representative will provide for the registration and transfer of the Note and will record the name and address of each Holder and principal amounts (and related interest amounts) of the Promissory Notes owing to each Holder. The entries in the Register shall be conclusive absent manifest error. The Representative and the Maker, and any agent of the Representative and the Maker, shall treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of the principal amount of this Note and interest on the unpaid balance of such principal amount and for all other purposes, whether or not this Note is overdue, and neither the Maker nor any such agent shall be affected by notice to the contrary. The Register shall be available for inspection by the Maker and, with respect to its own interest only, any Holder, in each case, at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon surrender of this Note for registration of transfer or for exchange to the Maker at its principal office set forth above, in each case in accordance with this Section 6, the Maker will execute and deliver in exchange therefor one or more new Promissory Notes. Such new Promissory Notes shall (A) have an aggregate principal amount equal to the principal amount of the surrendered Note and such principal amount shall be divided into equal installment payments over the then-remaining Installment Payment Dates (as adjusted to reflect any prepayments made pursuant to Section 1(b)), (B) be registered in each case in the name of the permitted transferee and, in the case of a partial assignment, the initial Holder and (C) be dated as of the quarterly interest payment date coinciding with or immediately preceding the date of such surrender.
(f) By accepting this Note, the Holder acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Holder shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Holder shall be void and without force and effect.
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(g) Subject to each of the foregoing, the rights and obligations of the Maker and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Notices.
Any notice or other communication to be given in connection with this Note or the Guaranty Agreement shall be in writing in the English language and signed by or on behalf of the party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out below (or such other address designated by a party pursuant to written notice):
Maker: | c/o Albany Molecular Research, Inc. 26 Corporate Circle Albany, New York 12212 Fax: (518) 512-2075 Attn: Chief Financial Officer |
With a copy to: | Goodwin Procter LLP 620 Eighth Avenue New York, NY 10018-1405 Phone: (212) 813-8857 Fax: (212) 355-3333 Attn: Jennifer K. Bralower |
Holder:
|
Lauro Cinquantasette S.p.A +39-02-8995221 Fax: +39-02-869522522 Attn: Chief Financial Officer |
With a copy to: | Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 Phone: (212) 909-6306 Fax: (212) 909-6836 Attn: Maurizio Levi-Minzi |
Any notice or other communication in connection with the Promissory Notes shall be delivered to the Representative, for distribution to the Holders.
9 |
8. Miscellaneous.
(a) No failure or delay on the part of the Holder hereof in the exercise of any power, right, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
(b) This Note and each of the other Promissory Notes may not be amended, modified or supplemented, and no provision hereof or thereof shall be waived, without the prior written approval of the Representative and the Maker; provided that an amendment, modification, supplement or waiver which would materially and adversely affect a particular Holder differently from all other Holders shall be effective only with the consent of the Holder so affected.
(c) The Maker shall not have the right to set off or otherwise reduce the amount of any payment (or any part of such amount) owed by it to the Holder hereunder, whether contingent or otherwise, by or against any amount owed to the Maker or its Affiliates under the Purchase Agreement or otherwise.
(d) If any payment hereunder becomes due and payable on a day other than a business day, the maturity thereof shall be extended to the next succeeding business day. As used herein, the term “business day” shall mean a day other than a Saturday, Sunday or day on which commercial banks are authorized to close under the laws of the State of New York or Milan, Italy.
(e) Nothing contained in this Note shall be construed as conferring upon the Holder or any other person any right as an equity holder of the Maker.
(f) In the event any interest is paid on this Note which is deemed to be in excess of then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.
(g) This Note shall be executed in English which shall be the only language governing this Note.
(h) This Note and the rights and obligations of the Maker and the Holder hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof.
(i) Any dispute between the Maker and the Holder which relates to this Note or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Note.
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(j) The Holder hereby irrevocably appoints Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy, to act on its behalf as the Representative hereunder and under the other Promissory Notes and authorizes the Representative to take such actions (including, without limitation, receipt of notices and payments) on its behalf and to exercise such powers as are delegated to the Representative by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The Maker and the Holder hereby acknowledge and agree that the Representative may resign by delivery of thirty (30) days prior written notice to the Maker, so long as the Representative designates a successor representative reasonably satisfactory to the Maker (provided that Maker’s consent shall not be required for Representative’s designation of a shareholder of the Representative as of the date hereof as the successor representative).
[Signature page follows.]
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IN WITNESS WHEREOF, the Maker has executed this Promissory Note as of the date first above written.
MAKER: | ||
[ALBANY MOLECULAR RESEARCH, INC.] | ||
By: | ||
Name: | ||
Title: |
Accepted and Agreed:
HOLDER: | ||
[LAURO CINQUANTASETTE S.p.A] | ||
By: | ||
Name: | ||
Title: | ||
[Signature Page to Promissory Note]
Exhibit A
Form of Assignment and Assumption Agreement
Exhibit A
EXHIBIT A
[Form of] Assignment and Assumption Agreement
This Assignment and Assumption Agreement (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [ASSIGNOR NAME] (the “Assignor”) and [ASSIGNEE NAME] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Promissory Note identified below (as amended, restated, supplemented or otherwise modified from time to time, the “Note”), issued in connection with the Share Purchase Agreement, dated as of [___________], 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), by and among the Maker (as defined below), [the Guarantor] and the Initial Holder (as defined below). The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full (the “Standard Terms and Conditions”).
For an agreed consideration or otherwise in accordance with applicable law, the Assignor hereby irrevocably sells or otherwise transfers to the Assignee, and the Assignee hereby irrevocably assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Note, as of the Effective Date inserted by the Representative as contemplated below all of the Assignor’s rights and obligations in its capacity as a Holder under the Note and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor (the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor or the Maker.
1. | Assignor: | [Assignor Name] |
2. | Assignee: | [Assignee Name] |
3. | Maker: | [BUYER] (the “Maker”) |
5. | Note: | Promissory Note [A][B][C], dated as of [_______], by the Maker in favor of, and as accepted and agreed to by, [INITIAL HOLDER] (“Initial Holder”) |
6. | Assigned Interest: |
Aggregate
Principal Amount of Note Outstanding | Amount
of Principal Assigned* | Percentage
of Principal Assigned | ||||||||
$ | $ | $ | % | |||||||
545454 | 545454 | 545454 |
8. | Effective Date:1 | __________________, 20__ |
[Signature Page Follows]
1 To be inserted by the Representative and which shall be the effective date of recordation of transfer in the register therefor.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR | ||
[NAME OF ASSIGNOR] | ||
By: | ||
Title: | ||
ASSIGNEE | ||
[NAME OF ASSIGNEE] | ||
By: | ||
Title: | ||
Consented to and Accepted: | ||
[BUYER] | ||
as the Maker | ||
By: | ||
Title: |
Annex 1 to Assignment and Assumption
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. | Representations and Warranties. |
a. Assignor. The Assignor (i) represents and warrants that (A) it is the legal and beneficial owner of the Assigned Interest, (B) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (C) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (ii) assumes no responsibility with respect to (A) any statements, warranties or representations made in or in connection with the Note, (B) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Note, (C) the financial condition of the Maker, any of its subsidiaries or affiliates or any other person obligated in respect of the Note or (D) the performance or observance by the Maker, any of its subsidiaries or affiliates or any other person of any of their respective obligations under the Note.
b. Assignee. The Assignee (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Holder of the Note, (B) from and after the Effective Date, it shall be bound by the provisions of the Note and the other instruments or documents furnished pursuant thereto as a Holder thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Holder thereunder, and (C) it has received a copy of the Note and the Purchase Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Representative, the Maker or the Assignor; and (ii) agrees that (A) it will, independently and without reliance on the Representative, the Maker, the Assignor or any other Holder, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Note and (B) it will perform in accordance with their terms all of the obligations that by the terms of the Note are required to be performed by it as a Holder.
c. Investment Representation. The Assignee further acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Assignee shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Assignee shall be void and without force and effect.
2. [[Reserved.]//[No Novation. The Assignee further acknowledges that the Note was initially issued pursuant to the Purchase Agreement and, for the avoidance of doubt, agrees that the Note is, and after giving effect to the transactions contemplated by this Assignment and Assumption shall continue to be, subject in all respects to the Maker’s set off rights contained in the Purchase Agreement (as interpreted in accordance with the Purchase Agreement) and in Section [8(c)] of the Note.]2]
2 Note: Section 2 to be “Reserved” in Promissory Note A and Promissory Note C, and “No Novation” language only to be included in Assignment & Assumption Agreement attached to Promissory Note B.
3. Payments and Notices. From and after the Effective Date referred to in this Assignment and Assumption, to the extent Representative receives any payment in respect of the Promissory Notes from Maker, the Representative shall distribute all or a portion, as applicable, of such payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) (i) to the Assignor, in accordance with the terms and conditions of the Note, for amounts which have accrued to but excluding [Insert Date] and (ii) to the Initial Holder, as agent for the Assignee, for amounts which have accrued from and after [Insert Date].
4. General Provisions. This Assignment and Assumption shall be executed in English, which shall be the only language governing this Assignment and Assumption. This Assignment and Assumption and the rights and obligations of the Assignor, the Assignee and the Maker hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof. Any dispute between the Assignee and the Assignor which relates to this Assignment and Assumption or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Assignment and Assumption. This Assignment and Assumption may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Assignment and Assumption by signing any such counterpart.
SCHEDULE 1.1 (K)
FORM OF PROMISSORY NOTE B
THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND NO INTEREST HEREIN MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ABSENT REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.
Original Principal Amount: €31,000,000 | Issue Date: [______], 20161 |
FOR VALUE RECEIVED, the undersigned Albany Molecular Research, Inc., a company incorporated under the laws of the State of Delaware (USA) (the “Maker”), hereby promises to pay Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy (the “Initial Holder”) or its registered permitted assigns as set forth in Section 6 (the “Holder”), the aggregate principal amount of Thirty-One Million Euros (€31,000,000) (the “Initial Principal Amount”), or such lesser amount as may be outstanding under this Note from time to time and any applicable outstanding interest. Concurrently with this execution of this Note, Albany Molecular Research Inc., a company incorporated under the laws of the State of Delaware (the “Guarantor”) is delivering a Guaranty Agreement, dated as of [___________], 20162 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty Agreement”), pursuant to which the Guarantor guarantees the Maker’s payment obligations hereunder on the terms set forth therein. This Note is issued by the Maker pursuant to a certain Share Purchase Agreement, dated as of [___________], 20163 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Purchase Agreement”), by and among the Maker, [the Guarantor] and the Initial Holder. All capitalized terms not defined herein shall have the respective meanings given to them in the Purchase Agreement. This Note is one of a series of promissory notes issued by the Maker on [_______], 20164 pursuant to the Purchase Agreement (collectively, and together with any notes issued in exchange hereof or thereof, the “Promissory Notes”). The Holder, together with the holders of the other Promissory Notes shall be referred to collectively as the “Holders”. Subject to Section 8(c) hereof, this Note shall be pari passu in right of priority and payment with each of the other Promissory Notes.
1. | Principal Payments. |
(a) The Maker shall pay to Lauro Cinquantasette S.p.A., in its capacity as Representative of the Holders (in such capacity, the “Representative”), for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes (for the avoidance of doubt, giving effect to the Maker’s setoff rights under Section 8(c) hereof), the Initial Principal Amount in three (3) equal installments of Ten Million, Three Hundred Thirty-Three Thousand, Three Hundred Thirty-Three and 33/100 Euros (€10,333,333.33) each (each such payment, an “Installment Payment”), with one Installment Payment due and payable on each anniversary of the Closing Date, commencing on the third (3rd) anniversary of the Closing Date (each such date, an “Installment Payment Date”); provided however, that the final Installment Payment shall be of an amount equal to the remaining outstanding balance under the Promissory Notes together with any unpaid interest thereon.
1 | NTD: To be the Closing Date under the SPA. |
2 | NTD: To be the Closing Date under the SPA. |
3 | NTD: To be the Closing Date under the SPA. |
4 | NTD: To be the Closing Date under the SPA. |
(b) The Maker shall have the option to prepay the Promissory Notes, in whole or in part, on a pro rata basis (for the avoidance of doubt, giving effect to the Maker’s setoff rights under Section 8(c) hereof) at any time without premium or penalty, together with payment of accrued and unpaid interest on the principal amount prepaid. Amounts paid pursuant to this Section 1(b) shall be applied to reduce the remaining Installment Payments as directed by the Maker.
(c) After all amounts due on this Note have been paid in full, this Note shall be surrendered to the Maker for cancellation and shall not be reissued.
2. | Interest Payments. |
(a) The outstanding principal amount under this Note shall bear interest from the date hereof through and including the date when the outstanding principal amount under this Note is paid in full, at a rate equal to 0.25% per annum (the “Interest Rate”), which shall be due and payable in cash on the first day of January, April, July and October during each calendar year until the Initial Principal Amount is fully paid (each an “Interest Payment Date”) and on the final Installment Payment Date.
(b) Interest hereunder shall be calculated on the basis of a 365 day year and actual days elapsed. Payments of the principal amount of this Note and interest hereunder shall be made in Euros and in immediately available funds to the account of the Representative, for distribution to the Holder at the account set forth on the signatures pages hereof or as may be designated in writing by the Holder to the Representative at least five (5) business days before the applicable Installment Payment Date or Interest Payment Date.
(c) If an Event of Default has occurred and is continuing, the interest on the outstanding principal amount under this Note shall automatically increase and bear interest from such date at the rate of the three-month LIBOR Rate plus 7.50% to the fullest extent permitted by applicable laws and shall be payable upon demand for so long as the Event of Default exists.
(d) All interest to be paid by the Maker under this Note shall be paid to the Representative for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes (for the avoidance of doubt with respect to such principal amount, giving effect to the Maker’s setoff rights under Section 8(c) hereof).
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3. | Representations and Warranties. The Maker represents and warrants, as of the date hereof, that: |
(a) Existence, Power. The Maker (i) is duly organized or formed, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation or organization, and (ii) has all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Note.
(b) Authorization; No Contravention. The execution, delivery and performance by the Maker of this Note (i) has been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action, and (ii) does not and will not (x) contravene the terms of any of the Maker’s organization documents, (y) conflict with or result in any breach or contravention of any contractual obligation to which the Maker is a party or any order, injunction, writ or decree of any governmental authority or any arbitral award to which the Maker or its property is subject or (z) violate any law.
(c) Governmental Authorization. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority, is required by or with respect to the Maker in connection with the execution and delivery of this Note by the Maker or the performance by the Maker hereunder, except for such filings, authorizations, consents and approvals that if not obtained or made would not have, individually or in the aggregate, a material adverse effect on the ability of the Maker to consummate the transactions contemplated by this Note.
(d) Binding Effect. This Note has been duly executed and delivered by the Maker. This Note constitutes a legal, valid and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws.
4. | Defaults and Remedies. |
The occurrence of any of the following shall constitute an “Event of Default” under this Note:
(a) the Maker shall fail to pay (i) any Installment Payment or (ii) any interest with respect to this Note, in each case, when due and payable on the applicable Installment Payment Date or Interest Payment Date, as the case may be, or as otherwise expressly required hereunder and such failure shall continue unremedied for a period of five (5) business days;
(b) (i) the Maker, the Guarantor or any of their respective subsidiaries shall fail to comply in any material respect with any of its agreements or covenants in, or provisions of, this Note (other than any failure to comply with principal and interest payment obligations, which are addressed by clause (a) above) and, in each case, such failure shall continue unremedied for a period of thirty (30) days following written notice thereof or (ii) any representation or warranty made or deemed made by the Maker, the Guarantor or any of their respective subsidiaries herein shall be incorrect or misleading in any material respect when made;
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(c) (i) the Guarantee shall cease to be in full force and effect or the Guarantor shall deny or disaffirm any of such Guarantor’s obligations under the Guarantee or (ii) there occurs a Change of Control and, in each case, such default shall be immediate;
(d) a Guarantor Default shall continue unremedied for a period of thirty (30) days following written notice thereof;
(e) any event or condition that results in any indebtedness of the Maker or the Guarantor in an aggregate principal amount exceeding $34,500,000 (“Material Indebtedness”),5 whether such indebtedness now exists or shall be created hereafter, becoming due prior to its scheduled maturity or that enables or permits, after the expiration of any applicable grace period provided in the applicable agreement or instrument under which such indebtedness was created, the holder or holders of such Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (e) shall not apply to secured Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Material Indebtedness;
(f) one or more judgments for the payment of money in an aggregate amount in excess of $28,750,0006 shall be entered against the Maker or the Guarantor and the same shall remain unpaid or undischarged for a period of sixty (60) consecutive days after such judgment becomes final during which execution shall not be effectively stayed; provided that any such amount shall be calculated after deducting from the sum so payable any amount of such judgment or order that is covered by (x) a valid and binding policy of insurance in favor of the Maker or the Guarantor (but only if the applicable insurer shall have been advised of such judgment and of the intent of the Maker or the Guarantor to make a claim in respect of any amount payable by it in connection therewith and such insurer shall not have disputed coverage) or (y) any third-party indemnification obligation;
(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, examination, composition, assignment, arrangement, moratorium of any indebtedness, reorganization or other relief in respect of the Maker or the Guarantor or its debts, or of a substantial part of its assets, under any Debtor Relief Laws now or hereafter in effect or (ii) the appointment of a receiver, liquidator, examiner, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; and
5 NTD: Will be calculated consistently with credit agreement with 15% cushion.
6 NTD: Will be calculated consistently with credit agreement with 15% cushion.
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(h) the Maker or the Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, examination, reorganization compromise, composition, assignment, arrangement with any creditor or other relief under any Debtor Relief Laws now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Section 4, (iii) apply for or consent to the appointment of a receiver, examiner, liquidator, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing.
Promptly and in any event within five (5) business days of becoming aware of any Event of Default or event or occurrence that with the passage of time or notice or both would constitute an Event of Default, each of the Holder and the Maker shall furnish to the other party written notice thereof.
Upon the occurrence and during the continuance of an Event of Default, Representative may, at its option and without notice (such notice being expressly waived), declare and demand that the unpaid principal of and any accrued interest on this Note immediately due and payable, and the Representative may pursue all rights and remedies available hereunder. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (g) or (h) of this Section 4 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Representative. The Representative may, in its sole discretion, rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.
Additionally, the Representative may resort to every other right or remedy available at law or in equity without first exhausting the rights and remedies contained herein, all in the Representative’s sole discretion. Failure of the Representative, for any period of time or on more than one occasion, to declare and demand this Note immediately due and payable shall not impair the right or remedy or constitute a waiver of the right to exercise the same at any time from and after any Event of Default. All remedies are cumulative to the extent permitted by law.
Notwithstanding anything to the contrary set forth in any Promissory Note or the Guaranty Agreement, each of the Maker and the Holder agrees that this Note and the Guaranty Agreement may be enforced only by the action of the Representative and that no Holder (in its capacity as such) shall have any right individually to seek to enforce this Note or any other Promissory Note, the Guaranty Agreement or any other agreement entered into in connection herewith.
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5. | Defined Terms. |
The following terms shall have the following meanings in this Note:
“Assignment and Assumption Agreement” means an assignment and assumption agreement in substantially the form of Exhibit A hereto.
“Bankruptcy Code” means Title 11 of the United States Code, as now and hereafter in effect, or any successor statute, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.
“Change of Control” means (a) any Person or group of persons within the meaning of § 13(d)(3) of the Securities Exchange Act of 1934 becomes the beneficial owner, directly or indirectly, of 50% or more of the ordinary voting power represented by the issued and outstanding equity interests of the Guarantor or (b) the Guarantor shall cease to own and control, of record and beneficially, 100% of each class of outstanding equity interests of the Maker free and clear of all liens (except liens created in connection with the Senior Credit Agreement); provided, however, that the foregoing shall not restrict a merger of the Maker with and into Target, with Target assuming the obligations of the Maker under this Note.
“Closing Date” means [________], 2016.7
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, federal, state or foreign or other applicable jurisdictions from time to time in effect.
“Guarantor Default” means that the Guarantor or the Maker permits the Secured Leverage Ratio (as defined in the senior credit agreement of the Guarantor, dated as of the Closing Date (as amended, restated, supplemented or otherwise modified from time to time, the “Senior Credit Agreement”)) of the Guarantor and its subsidiaries on a consolidated basis as of the last day of any four fiscal quarter period of the Guarantor, commencing with the first such date following the Closing Date to exceed the applicable ratio set forth below: 8
Test Period | Secured Leverage Ratio | |
[______] through [______] | [___]:1.00 | |
[______] and thereafter | [___]:1.00 | |
[______] and thereafter | [___]:1.00 |
7 NTD: The closing date under the Purchase Agreement.
8 NTD: The leverage ratio will be calculated consistently with the leverage ratio in the senior credit agreement, and subject to a 15% cushion to the leverage ratio in the senior credit agreement.
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In the event the Maker fails to comply with the financial covenant set forth above as of the last day of any fiscal quarter, any cash proceeds of the issuance of equity interests of the Maker that are included in the calculation of “Consolidated EBITDA” under the Senior Credit Agreement for any fiscal quarter shall be included in the calculation of “Consolidated EBITDA” hereunder for purposes of calculating the Secured Leverage Ratio hereunder (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”) under the Senior Credit Agreement. No Holder shall accelerate any Promissory Note or otherwise exercise any remedies available to it during the continuance of a default or Event of Default as a result of a Guarantor Default prior to the date that is fifteen (15) Business Days following the date on which the financial statements of the Maker are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR) or any successor filing system of the U.S. Securities and Exchange Commission.
“LIBOR Rate” means the London Interbank Offered Rate per annum that appears on the page of the Reuters Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (such page currently being the LIBOR01 page) for the corresponding deposits of Euros as of approximately 11:00 a.m. (London, England time), two business days prior to the commencement of the three-month interest period.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof.
“Target” means Prime European Therapeuticals S.p.A. - Euticals, a company organized and existing under the laws of Italy.
6. | Assignments. |
(a) Subject to Section 6(e):
(i) On or prior to the second anniversary of the Closing Date (the “Second Anniversary”), the Holder may not sell, transfer, pledge, assign, hypothecate or otherwise dispose of this Note or any right, title or interest herein or thereto to any other person.
(ii) From the Second Anniversary until the third anniversary of the Closing Date (the “Third Anniversary”), and subject to Section 6(d), the Holder may sell, transfer, pledge, assign, hypothecate or otherwise dispose of any of this Note or any right, title or interest therein or thereto to any person who was a shareholder of the Initial Holder on the Closing Date.
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(iii) From and after the Third Anniversary, the Holder may sell, transfer, pledge, assign, hypothecate or otherwise dispose of this Note or any right, title or interest herein to any other person, in each case with the prior written consent of the Maker, which consent shall not be unreasonably withheld, conditioned or delayed.
(b) The Maker may not assign this Note or its obligations hereunder to any other person without the prior written consent of the Representative; provided, however, that the Maker shall have the right to assign this Notes and its obligations hereunder (i) to the Guarantor or (ii) to the Target in connection with any merger of Maker with and into the Target.
(c) No sale, transfer, pledge, assignment hypothecation or other disposition of any Promissory Note shall be effective unless and until an assignment and assumption is entered into by the assigning Holder and the assignee (with the consent of the Maker, if applicable pursuant to the terms hereof), substantially in the form of Exhibit A and delivered to the Maker and the Representative. By accepting this Note, each Holder unconditionally and irrevocably acknowledges and agrees that this Note is subject to any and all of the Maker’s set off rights contained in Section 8(c) and in the Purchase Agreement (as interpreted in accordance with the Purchase Agreement).
(d) The Representative, acting solely for this purpose as a non-fiduciary agent of the Maker, will keep at its principal office in Via del Lauro, 7 20131 Milano (or such other location of its principal office from time to time) a register (the “Register”) in which the Representative will provide for the registration and transfer of the Note and will record the name and address of each Holder and principal amounts (and related interest amounts) of the Promissory Notes owing to each Holder. The entries in the Register shall be conclusive absent manifest error. The Representative and the Maker, and any agent of the Representative and the Maker, shall treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of the principal amount of this Note and interest on the unpaid balance of such principal amount and for all other purposes, whether or not this Note is overdue, and neither the Maker nor any such agent shall be affected by notice to the contrary. The Register shall be available for inspection by the Maker and, with respect to its own interest only, any Holder, in each case, at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon surrender of this Note for registration of transfer or for exchange to the Maker at its principal office set forth above, in each case in accordance with this Section 6, the Maker will execute and deliver in exchange therefor one or more new Promissory Notes; provided that promptly after the Second Anniversary, the Holder will surrender this Note to the Maker and the Maker will execute and deliver in exchange therefor (x) one Promissory Note substantially in the form of this Note in a principal amount equal to the Revised Cap (as defined in the Purchase Agreement) and (y) a second Promissory Note in the form of Exhibit B attached hereto (“Promissory Note C”) in a principal amount equal to the difference between the then outstanding principal and related interest on this Note and the Revised Cap. Such new Promissory Notes shall (A) have an aggregate principal amount equal to the principal amount of the surrendered Note and such principal amount shall be divided into equal installment payments over the then-remaining Installment Payment Dates (as adjusted to reflect any prepayments made pursuant to Section 1(b)), (B) be registered in each case in the name of the permitted transferee and, in the case of a partial assignment, the initial Holder and (C) be dated as of the quarterly interest payment date coinciding with or immediately preceding the date of such surrender.
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(f) By accepting this Note, the Holder acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Holder shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Holder shall be void and without force and effect.
(g) Subject to each of the foregoing, the rights and obligations of the Maker and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. | Notices. |
Any notice or other communication to be given in connection with this Note or the Guaranty Agreement shall be in writing in the English language and signed by or on behalf of the party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out below (or such other address designated by a party pursuant to written notice):
Maker: | c/o Albany Molecular Research, Inc. 26 Corporate Circle Albany, New York 12212 Fax: (518) 512-2075 Attn: Chief Financial Officer |
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With a copy to: | Goodwin Procter LLP 620 Eighth Avenue New York, NY 10018-1405 Phone: (212) 813-8857 Fax: (212) 355-3333 Attn: Jennifer K. Bralower |
Holder:
|
Lauro Cinquantasette S.p.A +39-02-8995221 Fax: +39-02-869522522 Attn: Chief Financial Officer |
With a copy to: | Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 Phone: (212) 909-6306 Fax: (212) 909-6836 Attn: Maurizio Levi-Minzi |
Any notice or other communication in connection with the Promissory Notes shall be delivered to the Representative, for distribution to the Holders.
8. | Miscellaneous. |
(a) No failure or delay on the part of the Holder hereof in the exercise of any power, right, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
(b) This Note and each of the other Promissory Notes may not be amended, modified or supplemented, and no provision hereof or thereof shall be waived, without the prior written approval of the Representative and the Maker; provided that an amendment, modification, supplement or waiver which would materially and adversely affect a particular Holder differently from all other Holders shall be effective only with the consent of the Holder so affected.
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(c) The Holder acknowledges and agrees that the Maker shall have the right, in accordance with and on the terms set forth in the Purchase Agreement (including Article 9 of the Purchase Agreement), to set off Permitted Amounts against payments due hereunder of (x) up to Thirty-One Million Euros (€31,000,000) for any Claims of Indemnity properly notified under the Purchase Agreement within twenty four (24) months following the Closing Date and (y) thereafter up to the Revised Cap; provided further that any Permitted Amounts, if applicable, shall be applied to reduce the Installment Payments in direct order of maturity. For purposes hereof, “Permitted Amounts” means Losses (1) for any Claims that have been properly noticed under the Purchase Agreement and agreed upon by the Buyer and the Seller pursuant to Article 9.4(a)(i) and (a)(ii) of the Purchase Agreement, (2) for any Claims for which the Seller does not provide timely notice contesting such amounts pursuant to Article 9.4(a)(iii) of the Purchase Agreement, (3) actually paid to a third party with the prior written consent of Seller under Article 9.4(b)(ii) or pursuant to a judgment, order, injunction, award, decree, law or regulation under Article 9.4(b)(iii), in each case, with respect to Third Party Claims or (4) finally determined pursuant to a judgment or arbitration award not subject to further appeal to be due and payable by the Seller to an Indemnified Party in accordance with the dispute provisions of the Purchase Agreement. If any Permitted Amounts set off under Article 9.4(b)(iii) proves to be more than the amount to which any Indemnified Party is entitled, as finally determined, the Buyer shall, forthwith upon receipt of the difference from the third party, pay the amount of such difference to the Seller for distribution to the Holders together with any interest accrued thereon at the Agreed Rate (as defined in the Purchase Agreement) in the period between the date on which the set off for such third party payment occurred and the date on which such difference is returned by the Maker to the Seller.
(d) If any payment hereunder becomes due and payable on a day other than a business day, the maturity thereof shall be extended to the next succeeding business day. As used herein, the term “business day” shall mean a day other than a Saturday, Sunday or day on which commercial banks are authorized to close under the laws of the State of New York or Milan, Italy.
(e) Nothing contained in this Note shall be construed as conferring upon the Holder or any other person any right as an equity holder of the Maker.
(f) In the event any interest is paid on this Note which is deemed to be in excess of then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.
(g) This Note shall be executed in English which shall be the only language governing this Note.
(h) This Note and the rights and obligations of the Maker and the Holder hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof.
(i) Any dispute between the Maker and the Holder which relates to this Note or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Note.
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(j) The Holder hereby irrevocably appoints Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy, to act on its behalf as the Representative hereunder and under the other Promissory Notes and authorizes the Representative to take such actions (including, without limitation, receipt of notices and payments) on its behalf and to exercise such powers as are delegated to the Representative by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The Maker and the Holder hereby acknowledge and agree that the Representative may resign by delivery of thirty (30) days prior written notice to the Maker, so long as the Representative designates a successor representative reasonably satisfactory to the Maker (provided that Maker’s consent shall not be required for Representative’s designation of a shareholder of the Representative as of the date hereof as the successor representative).
[Signature page follows.]
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IN WITNESS WHEREOF, the Maker has executed this Promissory Note as of the date first above written.
MAKER: | ||
[ALBANY MOLECULAR RESEARCH, INC.] | ||
By: | ||
Name: | ||
Title: |
Accepted and Agreed:
HOLDER:
[LAURO CINQUANTASETTE S.p.A] | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Promissory Note]
Exhibit A
Form of Assignment and Assumption Agreement
Exhibit A
EXHIBIT A
[Form of] Assignment and Assumption Agreement
This Assignment and Assumption Agreement (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [ASSIGNOR NAME] (the “Assignor”) and [ASSIGNEE NAME] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Promissory Note identified below (as amended, restated, supplemented or otherwise modified from time to time, the “Note”), issued in connection with the Share Purchase Agreement, dated as of [___________], 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), by and among the Maker (as defined below), [the Guarantor] and the Initial Holder (as defined below). The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full (the “Standard Terms and Conditions”).
For an agreed consideration or otherwise in accordance with applicable law, the Assignor hereby irrevocably sells or otherwise transfers to the Assignee, and the Assignee hereby irrevocably assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Note, as of the Effective Date inserted by the Representative as contemplated below all of the Assignor’s rights and obligations in its capacity as a Holder under the Note and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor (the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor or the Maker.
1. | Assignor: | [Assignor Name] |
2. | Assignee: | [Assignee Name] |
3. | Maker: | [BUYER] (the “Maker”) |
5. | Note: | Promissory Note [A][B][C], dated as of [_______], by the Maker in favor of, and as accepted and agreed to by, [INITIAL HOLDER] (“Initial Holder”) |
6. | Assigned Interest: |
Aggregate
Principal Amount of Note Outstanding | Amount
of Principal Assigned* | Percentage
of Principal Assigned | ||||||||
$ | $ | $ | % |
8. | Effective Date:1 | __________________, 20__ |
[Signature Page Follows]
1 To be inserted by the Representative and which shall be the effective date of recordation of transfer in the register therefor.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR | ||
[NAME OF ASSIGNOR] | ||
By: | ||
Title: | ||
ASSIGNEE | ||
[NAME OF ASSIGNEE] | ||
By: | ||
Title: | ||
Consented to and Accepted: | ||
[BUYER] | ||
as the Maker | ||
By: | ||
Title: |
Annex 1 to Assignment and Assumption
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. | Representations and Warranties. |
a. Assignor. The Assignor (i) represents and warrants that (A) it is the legal and beneficial owner of the Assigned Interest, (B) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (C) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (ii) assumes no responsibility with respect to (A) any statements, warranties or representations made in or in connection with the Note, (B) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Note, (C) the financial condition of the Maker, any of its subsidiaries or affiliates or any other person obligated in respect of the Note or (D) the performance or observance by the Maker, any of its subsidiaries or affiliates or any other person of any of their respective obligations under the Note.
b. Assignee. The Assignee (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Holder of the Note, (B) from and after the Effective Date, it shall be bound by the provisions of the Note and the other instruments or documents furnished pursuant thereto as a Holder thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Holder thereunder, and (C) it has received a copy of the Note and the Purchase Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Representative, the Maker or the Assignor; and (ii) agrees that (A) it will, independently and without reliance on the Representative, the Maker, the Assignor or any other Holder, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Note and (B) it will perform in accordance with their terms all of the obligations that by the terms of the Note are required to be performed by it as a Holder.
c. Investment Representation. The Assignee further acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Assignee shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Assignee shall be void and without force and effect.
2. [[Reserved.]//[No Novation. The Assignee further acknowledges that the Note was initially issued pursuant to the Purchase Agreement and, for the avoidance of doubt, agrees that the Note is, and after giving effect to the transactions contemplated by this Assignment and Assumption shall continue to be, subject in all respects to the Maker’s set off rights contained in the Purchase Agreement (as interpreted in accordance with the Purchase Agreement) and in Section [8(c)] of the Note.]2]
2 Note: Section 2 to be “Reserved” in Promissory Note A and Promissory Note C, and “No Novation” language only to be included in Assignment & Assumption Agreement attached to Promissory Note B.
3. Payments and Notices. From and after the Effective Date referred to in this Assignment and Assumption, to the extent Representative receives any payment in respect of the Promissory Notes from Maker, the Representative shall distribute all or a portion, as applicable, of such payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) (i) to the Assignor, in accordance with the terms and conditions of the Note, for amounts which have accrued to but excluding [Insert Date] and (ii) to the Initial Holder, as agent for the Assignee, for amounts which have accrued from and after [Insert Date].
4. General Provisions. This Assignment and Assumption shall be executed in English, which shall be the only language governing this Assignment and Assumption. This Assignment and Assumption and the rights and obligations of the Assignor, the Assignee and the Maker hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof. Any dispute between the Assignee and the Assignor which relates to this Assignment and Assumption or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Assignment and Assumption. This Assignment and Assumption may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Assignment and Assumption by signing any such counterpart.
Exhibit B
Form of Promissory Note C
Exhibit B
FORM OF PROMISSORY NOTE C
THIS PROMISSORY NOTE (THIS “NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND NO INTEREST HEREIN MAY BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF ABSENT REGISTRATION THEREUNDER OR AN EXEMPTION THEREFROM.
Original Principal Amount: €[_________]1 | Issue Date: [___________]2 |
FOR VALUE RECEIVED, the undersigned Albany Molecular Research, Inc., a company incorporated under the laws of the State of Delaware (USA) (the “Maker”), hereby promises to pay Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy (the “Initial Holder”) or its registered permitted assigns as set forth in Section 6 (the “Holder”), the aggregate principal amount of [_________] Euros (€[_________]) (the “Initial Principal Amount”), or such lesser amount as may be outstanding under this Note from time to time and any applicable outstanding interest. Concurrently with this execution of this Note, Albany Molecular Research Inc., a company incorporated under the laws of the State of Delaware (the “Guarantor”) is delivering a Guaranty Agreement, dated as of [___________], 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Guaranty Agreement”), pursuant to which the Guarantor guarantees the Maker’s payment obligations hereunder on the terms set forth therein. This Note is issued by the Maker pursuant to a certain Share Purchase Agreement, dated as of [___________], 2016 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Purchase Agreement”), by and among the Maker, [the Guarantor] and the Initial Holder. All capitalized terms not defined herein shall have the respective meanings given to them in the Purchase Agreement. This Note is one of a series of promissory notes issued by the Maker on [_______], 2016 pursuant to the Purchase Agreement (collectively, and together with any notes issued in exchange hereof or thereof, the “Promissory Notes”). The Holder, together with the holders of the other Promissory Notes shall be referred to collectively as the “Holders”. This Note shall be pari passu in right of priority and payment with each of the other Promissory Notes.
1. Principal Payments.
(a) The Maker shall pay to Lauro Cinquantasette S.p.A., in its capacity as Representative of the Holders (in such capacity, the “Representative”), for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes, the Initial Principal Amount in [three (3)]3 equal installments of [_________] Euros (€[_________])4 each (each such payment, an “Installment Payment”), with one Installment Payment due and payable on each anniversary of the Closing Date, commencing on the [third (3rd)]5 anniversary of the Closing Date (each such date, an “Installment Payment Date”); provided however, that the final Installment Payment shall be of an amount equal to the remaining outstanding balance under the Promissory Notes together with any unpaid interest thereon.
1 | NTD: To be issued with a principal amount determined in accordance with §6(e) of Promissory Note B. |
2 | NTD: To be issued on the date determined in accordance with §6(e) of Promissory Note B. |
3 | NTD: To be equal to the number of Installment Payment Dates remaining when this Note is issued in accordance with §6(e) of Promissory Note B. |
4 | NTD: To be equal to the Initial Principal Amount above divided by the number of Installment Payment Dates remaining when this Note is issued in accordance with §6(e) of Promissory Note B. |
5 | NTD: To be equal to the number of Installment Payment Dates remaining when this Note is issued in accordance with §6(e) of Promissory Note B. |
(b) The Maker shall have the option to prepay the Promissory Notes, in whole or in part, on a pro rata basis at any time without premium or penalty, together with payment of accrued and unpaid interest on the principal amount prepaid. Amounts paid pursuant to this Section 1(b) shall be applied to reduce the remaining Installment Payments as directed by the Maker.
(c) After all amounts due on this Note have been paid in full, this Note shall be surrendered to the Maker for cancellation and shall not be reissued.
2. Interest Payments.
(a) The outstanding principal amount under this Note shall bear interest from the date hereof through and including the date when the outstanding principal amount under this Note is paid in full, at a rate equal to 0.25% per annum (the “Interest Rate”), which shall be due and payable in cash on the first day of January, April, July and October during each calendar year until the Initial Principal Amount is fully paid (each an “Interest Payment Date”) and on the final Installment Payment Date.
(b) Interest hereunder shall be calculated on the basis of a 365 day year and actual days elapsed. Payments of the principal amount of this Note and interest hereunder shall be made in Euros and in immediately available funds to the account of the Representative, for distribution to the Holder at the account set forth on the signatures pages hereof or as may be designated in writing by the Holder to the Representative at least five (5) business days before the applicable Installment Payment Date or Interest Payment Date.
(c) If an Event of Default has occurred and is continuing, the interest on the outstanding principal amount under this Note shall automatically increase and bear interest from such date at the rate of the three-month LIBOR Rate plus 7.50% to the fullest extent permitted by applicable laws and shall be payable upon demand for so long as the Event of Default exists.
(d) All interest to be paid by the Maker under this Note shall be paid to the Representative for distribution to the Holders in accordance with their pro rata portion of the principal amount of the Promissory Notes.
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3. Representations and Warranties. The Maker represents and warrants, as of the date hereof, that
(a) Existence, Power. The Maker (i) is duly organized or formed, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation or organization, and (ii) has all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to execute, deliver and perform its obligations under this Note.
(b) Authorization; No Contravention. The execution, delivery and performance by the Maker of this Note (i) has been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action, and (ii) does not and will not (x) contravene the terms of any of the Maker’s organization documents, (y) conflict with or result in any breach or contravention of any contractual obligation to which the Maker is a party or any order, injunction, writ or decree of any governmental authority or any arbitral award to which the Maker or its property is subject or (z) violate any law.
(c) Governmental Authorization. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority, is required by or with respect to the Maker in connection with the execution and delivery of this Note by the Maker or the performance by the Maker hereunder, except for such filings, authorizations, consents and approvals that if not obtained or made would not have, individually or in the aggregate, a material adverse effect on the ability of the Maker to consummate the transactions contemplated by this Note.
(d) Binding Effect. This Note has been duly executed and delivered by the Maker. This Note constitutes a legal, valid and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, except as such enforceability may be limited by applicable Debtor Relief Laws.
4. Defaults and Remedies.
The occurrence of any of the following shall constitute an “Event of Default” under this Note:
(a) the Maker shall fail to pay (i) any Installment Payment or (ii) any interest with respect to this Note, in each case, when due and payable on the applicable Installment Payment Date or Interest Payment Date, as the case may be, or as otherwise expressly required hereunder and such failure shall continue unremedied for a period of five (5) business days;
(b) (i) the Maker, the Guarantor or any of their respective subsidiaries shall fail to comply in any material respect with any of its agreements or covenants in, or provisions of, this Note (other than any failure to comply with principal and interest payment obligations, which are addressed by clause (a) above) and, in each case, such failure shall continue unremedied for a period of thirty (30) days following written notice thereof or (ii) any representation or warranty made or deemed made by the Maker, the Guarantor or any of their respective subsidiaries herein shall be incorrect or misleading in any material respect when made;
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(c) (i) the Guarantee shall cease to be in full force and effect or the Guarantor shall deny or disaffirm any of such Guarantor’s obligations under the Guarantee or (ii) there occurs a Change of Control and, in each case, such default shall be immediate;
(d) a Guarantor Default shall continue unremedied for a period of thirty (30) days following written notice thereof;
(e) any event or condition that results in any indebtedness of the Maker or the Guarantor in an aggregate principal amount exceeding $34,500,000 (“Material Indebtedness”)6, whether such indebtedness now exists or shall be created hereafter, becoming due prior to its scheduled maturity or that enables or permits, after the expiration of any applicable grace period provided in the applicable agreement or instrument under which such indebtedness was created, the holder or holders of such Material Indebtedness or any trustee or agent on its or their behalf to cause such Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (e) shall not apply to secured Material Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Material Indebtedness;
(f) one or more judgments for the payment of money in an aggregate amount in excess of $28,750,0007 shall be entered against the Maker or the Guarantor and the same shall remain unpaid or undischarged for a period of sixty (60) consecutive days after such judgment becomes final during which execution shall not be effectively stayed; provided that any such amount shall be calculated after deducting from the sum so payable any amount of such judgment or order that is covered by (x) a valid and binding policy of insurance in favor of the Maker or the Guarantor (but only if the applicable insurer shall have been advised of such judgment and of the intent of the Maker or the Guarantor to make a claim in respect of any amount payable by it in connection therewith and such insurer shall not have disputed coverage) or (y) any third-party indemnification obligation;
(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, examination, composition, assignment, arrangement, moratorium of any indebtedness, reorganization or other relief in respect of the Maker or the Guarantor or its debts, or of a substantial part of its assets, under any Debtor Relief Laws now or hereafter in effect or (ii) the appointment of a receiver, liquidator, examiner, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; and
6 | NTD: Will be calculated consistently with credit agreement with 15% cushion |
7 | NTD: Will be calculated consistently with credit agreement with 15% cushion |
4 |
(h) the Maker or the Guarantor shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, examination, reorganization compromise, composition, assignment, arrangement with any creditor or other relief under any Debtor Relief Laws now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (g) of this Section 4, (iii) apply for or consent to the appointment of a receiver, examiner, liquidator, trustee, custodian, sequestrator, conservator or similar official for the Maker or the Guarantor or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing.
Promptly and in any event within five (5) business days of becoming aware of any Event of Default or event or occurrence that with the passage of time or notice or both would constitute an Event of Default, each of the Holder and the Maker shall furnish to the other party written notice thereof.
Upon the occurrence and during the continuance of an Event of Default, the Representative may, at its option and without notice (such notice being expressly waived), declare and demand that the unpaid principal of and any accrued interest on this Note immediately due and payable, and the Representative may pursue all rights and remedies available hereunder. Upon such declaration the principal and interest shall be due and payable immediately. If an Event of Default specified in clause (g) or (h) of this Section 4 occurs, such an amount shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Representative. The Representative may, in its sole discretion, rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration.
Additionally, the Representative may resort to every other right or remedy available at law or in equity without first exhausting the rights and remedies contained herein, all in the Representative’s sole discretion. Failure of the Representative, for any period of time or on more than one occasion, to declare and demand this Note immediately due and payable shall not impair the right or remedy or constitute a waiver of the right to exercise the same at any time from and after any Event of Default. All remedies are cumulative to the extent permitted by law.
Notwithstanding anything to the contrary set forth in any Promissory Note or the Guaranty Agreement, each of the Maker and the Holder agrees that this Note and the Guaranty Agreement may be enforced only by the action of the Representative and that no Holder (in its capacity as such) shall have any right individually to seek to enforce this Note or any other Promissory Note, the Guaranty Agreement or any other agreement entered into in connection herewith.
5 |
5. Defined Terms.
The following terms shall have the following meanings in this Note:
“Assignment and Assumption Agreement” means an assignment and assumption agreement in substantially the form of Exhibit A hereto.
“Bankruptcy Code” means Title 11 of the United States Code, as now and hereafter in effect, or any successor statute, or any similar United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or relief of debtors or any amendment to, succession to or change in any such law.
“Change of Control” means (a) any Person or group of persons within the meaning of § 13(d)(3) of the Securities Exchange Act of 1934 becomes the beneficial owner, directly or indirectly, of 50% or more of the ordinary voting power represented by the issued and outstanding equity interests of the Guarantor or (b) the Guarantor shall cease to own and control, of record and beneficially, 100% of each class of outstanding equity interests of the Maker free and clear of all liens (except liens created in connection with the Senior Credit Agreement); provided, however, that the foregoing shall not restrict a merger of the Maker with and into Target, with Target assuming the obligations of the Maker under this Note.
“Closing Date” means [________], 2016.8
“Code” means the United States Internal Revenue Code of 1986, as amended.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States, federal, state or foreign or other applicable jurisdictions from time to time in effect.
“Guarantor Default” means that the Guarantor or the Maker permits the Secured Leverage Ratio (as defined in the senior credit agreement of the Guarantor, dated as of the Closing Date (as amended, restated, supplemented or otherwise modified from time to time, the “Senior Credit Agreement”)) of the Guarantor and its subsidiaries on a consolidated basis as of the last day of any four fiscal quarter period of the Guarantor, commencing with the first such date following the Closing Date to exceed the applicable ratio set forth below: 9
Test Period |
Secured Leverage Ratio |
[______] through [______] | [___]:1.00 |
[______] and thereafter | [___]:1.00 |
[______] and thereafter | [___]:1.00 |
8 | NTD: The closing date under the Purchase Agreement. |
9 | NTD: The leverage ratio will be calculated consistently with the leverage ratio in the senior credit agreement, and subject to a 15% cushion to the leverage ratio in the senior credit agreement. |
6 |
In the event the Maker fails to comply with the financial covenant set forth above as of the last day of any fiscal quarter, any cash proceeds of the issuance of equity interests of the Maker that are included in the calculation of “Consolidated EBITDA” under the Senior Credit Agreement for any fiscal quarter shall be included in the calculation of “Consolidated EBITDA” hereunder for purposes of calculating the Secured Leverage Ratio hereunder (any such equity contribution so included in the calculation of Consolidated EBITDA, a “Specified Equity Contribution”) under the Senior Credit Agreement. No Holder shall accelerate any Promissory Note or otherwise exercise any remedies available to it during the continuance of a default or Event of Default as a result of a Guarantor Default prior to the date that is fifteen (15) Business Days following the date on which the financial statements of the Maker are publicly available as posted on the Electronic Data Gathering, Analysis and Retrieval system (EDGAR) or any successor filing system of the U.S. Securities and Exchange Commission.
“LIBOR Rate” means the London Interbank Offered Rate per annum that appears on the page of the Reuters Screen which displays the London interbank offered rate administered by ICE Benchmark Administration Limited (such page currently being the LIBOR01 page) for the corresponding deposits of Euros as of approximately 11:00 a.m. (London, England time), two business days prior to the commencement of the three-month interest period.
“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivisions thereof.
“Target” means Prime European Therapeuticals S.p.A. - Euticals, a company organized and existing under the laws of Italy.
6. Assignments.
(a) The Holder may sell, transfer, pledge, assign, hypothecate or otherwise dispose of this Note or any right, title or interest herein to any other person, in each case without the prior written consent of the Maker.
(b) The Maker may not assign this Note or its obligations hereunder to any other person without the prior written consent of the Representative; provided, however, that the Maker shall have the right to assign this Notes and its obligations hereunder (i) to the Guarantor or (ii) to the Target in connection with any merger of Maker with and into the Target.
(c) No sale, transfer, pledge, assignment hypothecation or other disposition of any Promissory Note shall be effective unless and until an assignment and assumption is entered into by the assigning Holder and the assignee (with the consent of the Maker, if applicable pursuant to the terms hereof), substantially in the form of Exhibit A and delivered to the Maker and the Representative.
7 |
(d) The Representative, acting solely for this purpose as a non-fiduciary agent of the Maker, will keep at its principal office in Via del Lauro, 7 20131 Milano (or such other location of its principal office from time to time) a register (the “Register”) in which the Representative will provide for the registration and transfer of the Note and will record the name and address of each Holder and principal amounts (and related interest amounts) of the Promissory Notes owing to each Holder. The entries in the Register shall be conclusive absent manifest error. The Representative and the Maker, and any agent of the Representative and the Maker, shall treat the Person in whose name this Note is registered as the owner of such Note for the purpose of receiving payment of the principal amount of this Note and interest on the unpaid balance of such principal amount and for all other purposes, whether or not this Note is overdue, and neither the Maker nor any such agent shall be affected by notice to the contrary. The Register shall be available for inspection by the Maker and, with respect to its own interest only, any Holder, in each case, at any reasonable time and from time to time upon reasonable prior notice.
(e) Upon surrender of this Note for registration of transfer or for exchange to the Maker at its principal office set forth above, in each case in accordance with this Section 6, the Maker will execute and deliver in exchange therefor one or more new Promissory Notes. Such new Promissory Notes shall (A) have an aggregate principal amount equal to the principal amount of the surrendered Note and such principal amount shall be divided into equal installment payments over the then-remaining Installment Payment Dates (as adjusted to reflect any prepayments made pursuant to Section 1(b)), (B) be registered in each case in the name of the permitted transferee and, in the case of a partial assignment, the initial Holder and (C) be dated as of the quarterly interest payment date coinciding with or immediately preceding the date of such surrender.
(f) By accepting this Note, the Holder acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Holder shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Holder shall be void and without force and effect.
8 |
(g) Subject to each of the foregoing, the rights and obligations of the Maker and the Holder shall be binding upon and benefit the successors, assigns, heirs, administrators and transferees of the parties.
7. Notices.
Any notice or other communication to be given in connection with this Note or the Guaranty Agreement shall be in writing in the English language and signed by or on behalf of the party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out below (or such other address designated by a party pursuant to written notice):
Maker: |
c/o Albany Molecular Research, Inc. 26 Corporate Circle Albany, New York 12212 Fax: (518) 512-2075 Attn: Chief Financial Officer |
With a copy to: | Goodwin Procter LLP 620 Eighth Avenue New York, NY 10018-1405 Phone: (212) 813-8857 Fax: (212) 355-3333 Attn: Jennifer K. Bralower |
Holder:
|
Lauro Cinquantasette S.p.A +39-02-8995221 Attn: Chief Financial Officer
|
With a copy to: | Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 Phone: (212) 909-6306 Fax: (212) 909-6836 Attn: Maurizio Levi-Minzi |
Any notice or other communication in connection with the Promissory Notes shall be delivered to the Representative, for distribution to the Holders.
8. Miscellaneous.
(a) No failure or delay on the part of the Holder hereof in the exercise of any power, right, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
9 |
(b) This Note and each of the other Promissory Notes may not be amended, modified or supplemented, and no provision hereof or thereof shall be waived, without the prior written approval of the Representative and the Maker; provided that an amendment, modification, supplement or waiver which would materially and adversely affect a particular Holder differently from all other Holders shall be effective only with the consent of the Holder so affected.
(c) The Maker shall not have the right to set off or otherwise reduce the amount of any payment (or any part of such amount) owed by it to the Holder hereunder, whether contingent or otherwise, by or against any amount owed to the Maker or its Affiliates under the Purchase Agreement or otherwise.
(d) If any payment hereunder becomes due and payable on a day other than a business day, the maturity thereof shall be extended to the next succeeding business day. As used herein, the term “business day” shall mean a day other than a Saturday, Sunday or day on which commercial banks are authorized to close under the laws of the State of New York or Milan, Italy.
(e) Nothing contained in this Note shall be construed as conferring upon the Holder or any other person any right as an equity holder of the Maker.
(f) In the event any interest is paid on this Note which is deemed to be in excess of then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.
(g) This Note shall be executed in English which shall be the only language governing this Note.
(h) This Note and the rights and obligations of the Maker and the Holder hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof.
(i) Any dispute between the Maker and the Holder which relates to this Note or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Note.
(j) The Holder hereby irrevocably appoints Lauro Cinquantasette S.p.A., a company incorporated under the laws of Italy, to act on its behalf as the Representative hereunder and under the other Promissory Notes and authorizes the Representative to take such actions (including, without limitation, receipt of notices and payments) on its behalf and to exercise such powers as are delegated to the Representative by the terms hereof, together with such actions and powers as are reasonably incidental thereto. The Maker and the Holder hereby acknowledge and agree that the Representative may resign by delivery of thirty (30) days prior written notice to the Maker, so long as the Representative designates a successor representative reasonably satisfactory to the Maker (provided that Maker’s consent shall not be required for Representative’s designation of a shareholder of the Representative as of the date hereof as the successor representative).
[Signature page follows.]
10 |
IN WITNESS WHEREOF, the Maker has executed this Promissory Note as of the date first above written.
MAKER: | ||
[ALBANY MOLECULAR RESEARCH, INC.] | ||
By: | ||
Name: | ||
Title: |
Accepted and Agreed: | ||
HOLDER: | ||
[LAURO CINQUANTASETTE S.p.A] | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Promissory Note]
Exhibit A
Form of Assignment and Assumption Agreement
Exhibit A
EXHIBIT A
[Form of] Assignment and Assumption Agreement
This Assignment and Assumption Agreement (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [ASSIGNOR NAME] (the “Assignor”) and [ASSIGNEE NAME] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Promissory Note identified below (as amended, restated, supplemented or otherwise modified from time to time, the “Note”), issued in connection with the Share Purchase Agreement, dated as of [___________], 2016 (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”), by and among the Maker (as defined below), [the Guarantor] and the Initial Holder (as defined below). The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full (the “Standard Terms and Conditions”).
For an agreed consideration or otherwise in accordance with applicable law, the Assignor hereby irrevocably sells or otherwise transfers to the Assignee, and the Assignee hereby irrevocably assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Note, as of the Effective Date inserted by the Representative as contemplated below all of the Assignor’s rights and obligations in its capacity as a Holder under the Note and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor (the “Assigned Interest”). Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor or the Maker.
1. | Assignor: | [Assignor Name] |
2. | Assignee: | [Assignee Name] |
3. | Maker: | [BUYER] (the “Maker”) |
5. | Note: | Promissory Note [A][B][C], dated as of [_______], by the Maker in favor of, and as accepted and agreed to by, [INITIAL HOLDER] (“Initial Holder”) |
6. | Assigned Interest: |
Aggregate
Principal Amount of Note Outstanding | Amount
of Principal Assigned* | Percentage
of Principal Assigned | ||||||||
$ | $ | $ | % |
8. | Effective Date:1 | __________________, 20__ |
[Signature Page Follows]
1 To be inserted by the Representative and which shall be the effective date of recordation of transfer in the register therefor.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR | ||
[NAME OF ASSIGNOR] | ||
By: | ||
Title: | ||
ASSIGNEE | ||
[NAME OF ASSIGNEE] | ||
By: | ||
Title: | ||
Consented to and Accepted: | ||
[BUYER] | ||
as the Maker | ||
By: | ||
Title: |
Annex 1 to Assignment and Assumption
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. | Representations and Warranties. |
a. Assignor. The Assignor (i) represents and warrants that (A) it is the legal and beneficial owner of the Assigned Interest, (B) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (C) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (ii) assumes no responsibility with respect to (A) any statements, warranties or representations made in or in connection with the Note, (B) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Note, (C) the financial condition of the Maker, any of its subsidiaries or affiliates or any other person obligated in respect of the Note or (D) the performance or observance by the Maker, any of its subsidiaries or affiliates or any other person of any of their respective obligations under the Note.
b. Assignee. The Assignee (i) represents and warrants that (A) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Holder of the Note, (B) from and after the Effective Date, it shall be bound by the provisions of the Note and the other instruments or documents furnished pursuant thereto as a Holder thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Holder thereunder, and (C) it has received a copy of the Note and the Purchase Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Representative, the Maker or the Assignor; and (ii) agrees that (A) it will, independently and without reliance on the Representative, the Maker, the Assignor or any other Holder, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Note and (B) it will perform in accordance with their terms all of the obligations that by the terms of the Note are required to be performed by it as a Holder.
c. Investment Representation. The Assignee further acknowledges and agrees that: (i) the Note has not been registered under the Securities Act or the securities laws of any state and may not be sold or transferred in the absence of such registration or an exemption therefrom under said Securities Act or the securities laws of any state and (ii) the Note may not be transferred, sold, pledged, hypothecated or otherwise disposed of unless (A) (x) such disposition is pursuant to an effective registration statement under the Securities Act, (y) the Assignee shall have delivered to the Maker a written opinion of counsel, which opinion and counsel shall be reasonably satisfactory to the Maker, to the effect that such disposition is exempt from the provisions of Section 5 of such Securities Act or the securities laws of any state or (z) a no-action letter from the Securities and Exchange Commission, reasonably satisfactory to the Maker, shall have been obtained with respect to such disposition, (B) such disposition is pursuant to registration under any applicable securities laws of any state or an exemption therefrom and (C) such disposition is in accordance with Section 6 hereof. Any other purported transfer of the Note by the Assignee shall be void and without force and effect.
2. [[Reserved.]//[No Novation. The Assignee further acknowledges that the Note was initially issued pursuant to the Purchase Agreement and, for the avoidance of doubt, agrees that the Note is, and after giving effect to the transactions contemplated by this Assignment and Assumption shall continue to be, subject in all respects to the Maker’s set off rights contained in the Purchase Agreement (as interpreted in accordance with the Purchase Agreement) and in Section [8(c)] of the Note.]2]
2 Note: Section 2 to be “Reserved” in Promissory Note A and Promissory Note C, and “No Novation” language only to be included in Assignment & Assumption Agreement attached to Promissory Note B.
3. Payments and Notices. From and after the Effective Date referred to in this Assignment and Assumption, to the extent Representative receives any payment in respect of the Promissory Notes from Maker, the Representative shall distribute all or a portion, as applicable, of such payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) (i) to the Assignor, in accordance with the terms and conditions of the Note, for amounts which have accrued to but excluding [Insert Date] and (ii) to the Initial Holder, as agent for the Assignee, for amounts which have accrued from and after [Insert Date].
4. General Provisions. This Assignment and Assumption shall be executed in English, which shall be the only language governing this Assignment and Assumption. This Assignment and Assumption and the rights and obligations of the Assignor, the Assignee and the Maker hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of New York, without giving effect to the conflict of laws rules thereof. Any dispute between the Assignee and the Assignor which relates to this Assignment and Assumption or arises in connection herewith shall be submitted to exclusive jurisdiction of the competent federal courts in Manhattan, New York, United States of America. Each party hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Assignment and Assumption. This Assignment and Assumption may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Assignment and Assumption by signing any such counterpart.
SCHEDULE 1.1 (P)
EXECUTION COPY
ALBANY MOLECULAR RESEARCH, INC.
STOCKHOLDERS AGREEMENT
DATED AS OF [●], 2016
EXECUTION COPY
THIS STOCKHOLDERS AGREEMENT is dated as of [●], 2016 (this “Agreement”), by and among Albany Molecular Research, Inc., a Delaware corporation (the “Company”), Lauro Cinquantasette S.p.A, a company incorporated under the laws of Italy (“Lauro”), each stockholder of the Company’s common stock, par value $0.01 per share, set forth on Schedule A, strictly in their capacity as a stockholder of the Company (the “Stockholders”)1 and, solely for purposes of Section 5.2, Mandarin and Lauro 48 (each as defined below).
WHEREAS, the Company, Lauro, and the other persons named therein are parties to that certain Share Purchase Agreement, dated as of May 5, 2016 (as it may be amended from time to time, the “Share Purchase Agreement”), pursuant to which, among other things, the Company has purchased and Lauro has sold 100% of the capital stock of Prime European Therapeuticals S.p.A. – Euticals (“Euticals Stock”), a company organized and existing under the laws of Italy, with registered office at Viale Bianca Maria 25, Milano Italy, Italian Tax Code No. 07254610152;
WHEREAS, as partial consideration for Lauro’s sale of the Euticals Stock pursuant to the Share Purchase Agreement, the Company has issued and sold to Lauro pursuant to the terms of the Share Purchase Agreement and that certain Subscription Agreement, dated as of [●], 2016 (as it may be amended from time to time, the “Subscription Agreement”) a number of shares of common stock, par value $0.01 per share, of the Company as provided for in Section 2 of the Subscription Agreement (“Consideration Shares”);
WHEREAS, the Company and the Stockholders desire to provide Lauro with the right, among other rights set forth herein, to designate the election of one (1) member of the board of directors of the Company (the “Board”) in accordance with the terms of this Agreement; and
WHEREAS, in connection with the transactions contemplated by the Share Purchase Agreement and the other transaction documents, the parties hereto wish to enter in this Agreement.
NOW, THEREFORE, the parties agree as follows:
1. 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 as of the date on which, or at any time during the period for which, the determination of affiliation is being made (which, for the avoidance of doubt, definition includes, for Lauro, each of Mandarin and Lauro 48). For the purpose of this definition, the term “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” shall have the meaning assigned in the preamble.
1 Note: Thomas and Costance D’Ambra, the Bessemer Trust Company, William Marth and Gerardo Gutierrez.
“Applicable Law” shall mean, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise, including, as it relates to the Consideration Shares and/or other Shares, the requirements of any applicable federal or state securities laws or the rules, regulations or listing standards promulgated by any national securities exchange on which such shares are traded.
“Board” shall have the meaning assigned in the recitals.
“Business Combination” shall have the meaning assigned in Section 5.2.
“Closing” shall have the meaning assigned in the Share Purchase Agreement.
“Company” shall have the meaning assigned in the preamble.
“Confidential Information” shall have the meaning assigned in the Share Purchase Agreement.
“Consideration Shares” shall have the meaning assigned in the recitals.
“Euticals Stock” shall have the meaning assigned in the recitals.
“Lauro” shall have the meaning assigned in the preamble.
“Lauro 48” shall mean Lauro Quarantotto S.p.A.
“Lauro Designee” shall have the meaning assigned in Section 2.1.
“Lock-Up Period” shall have the meaning assigned in the Registration Rights Agreement.
“Mandarin” shall mean Mandarin Capital Partner SCA SICAR.
“New York Convention” shall have the meaning assigned in Section 5.4(c).
“Permitted Transferees” shall have the meaning assigned in the Registration Rights Agreement.
“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.
“Registration Rights Agreement” shall mean that Registration Rights and Lock-Up Agreement, dated as of May 5, 2016, by and between Lauro and the Company.
2 |
“Rules” shall have the meaning assigned in Section 5.4(b).
“Sale of the Company” shall mean (A) a sale (or multiple related sales) or conveyance of all or substantially all of the assets or securities of the Company to one Person or a group of Persons acting in concert, whether by way of merger, consolidation, recapitalization, reclassification, reorganization or sale of all or substantially all of the assets or securities, (B) a sale (or multiple related sales) of a subsidiary or subsidiaries of the Company or all or substantially all of its or their assets if the assets of the subsidiary or subsidiaries being sold or the assets being sold constitute all or substantially all of the assets of the Company, or (C) a merger or consolidation of the Company after which the Company’s stockholders own less than 50% of the voting securities of the surviving company (other than in connection with the sale of voting securities the primary purpose of which is to fund the Company’s operations).
“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.
“Shares” shall mean shares of common stock, $0.01 par value per share, of the Company.
“Stockholders” shall have the meaning assigned in the preamble.
“Subscription Agreement” shall have the meaning assigned in the recitals.
2. Voting Provisions Regarding Board of Directors.
2.1 Board Appointment. On and after the Closing, Lauro shall have the right to select a designee to be elected to the Board (the “Lauro Designee”), who shall initially be _________. Any such designee must meet the qualifications for director set forth in the Company’s organizational documents and corporate governance policies, and must be willing to serve and to comply with Applicable Law and stock exchange rules, including filing any necessary or advisable reports with, or otherwise submitting any necessary or advisable information to, the SEC. The Company shall take all such steps as are necessary, subject to Applicable Law, to cause the election of the Lauro Designee to the Board as a Class I director promptly following the Closing, including increasing the number of directors constituting the Board to ten (10). Thereafter, upon request from Lauro and subject to Applicable Law, shall include the Lauro Designee for so long as such individual continues to meet the foregoing requirements, as a Class I Board nominee (or such other class as the Board may so determine) in proxy materials soliciting stockholder votes in the election of members of Class I (or such other class as the Board may so determine) of the Board at any annual meeting or special meeting at which such Class I directors are to be elected, and shall recommend to the Company’s stockholders the election of the Lauro Designee. Subject to the foregoing, the director nominees to be presented to the stockholders at any annual or special meeting called for the purpose of electing directors shall be selected by the nominating committee of the Board (it being understood and agreed that the nominating committee shall be comprised at all times of a majority of independent Directors).
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2.2 Failure to Designate a Board Member. In the absence of any designation from Lauro as specified above, the director previously designated by it and then serving shall be presented to the stockholders at any annual or special meeting called for the purpose of electing directors if still eligible to serve as provided herein.
2.3 Voting.
(a) Prior to the Closing, each Stockholder agrees to vote (or execute a written consent with respect to), or cause to be voted (or cause a written consent to be executed with respect to), all Shares owned by such Stockholder, or which such Stockholder has the right to vote, for approval of (x) the issuance of the Consideration Shares, if submitted to a vote of the Company’s stockholders, and any matter related thereto and (y) all such further acts and things, if any, necessary in order to carry out the intent and purposes of the Share Purchase Agreement and Subscription Agreement and consummate the transactions contemplated thereunder. From and after the Closing, each Stockholder agrees to vote (or execute a written consent with respect to), or cause to be voted (or cause a written consent to be executed with respect to), all Shares owned by such Stockholder, or which such Stockholder has the right to vote, from time to time and at all times at each annual or special meeting of stockholders at which the election of Class I directors is held (or pursuant to any consent solicitation) for the Lauro Designee who is nominated for election to the Board pursuant to Section 2.1, provided that should Lauro request, at any time, that the Lauro Designee be replaced, each Stockholder shall take any and all actions required, to the extent permissible under Applicable Law and the Company’s organizational documents and corporate governance policies, to remove the Lauro Designee and appoint the replacement designated by Lauro so long as such replacement designee meets the requirements provided in Section 2.1.
(b) Lauro agrees that, from and after the Closing and for so long as Lauro has the right to designate the Lauro Designee, Lauro shall vote (or execute a written consent with respect to), or cause to be voted (or cause a written consent to be executed with respect to), all Shares owned by Lauro and its Affiliates, or which Lauro or its Affiliates have the right to vote, from time to time and at all times at each annual meeting, or special meeting where directors are being elected, of stockholders (or pursuant to any consent solicitation), for any director nominees recommended for election by the Board.
(c) In furtherance of Section 2.3(b), from and after the Closing, Lauro shall be, and shall cause each of its Affiliates who own or are entitled to vote any Shares to be, and each Stockholder shall be, present in person or represented by proxy at all meetings of stockholders to the extent necessary so that all voting securities of the Company as to which they are entitled to vote shall be counted as present for the purpose of determining the presence of a quorum at such meeting.
2.4 No Liability for Election of Recommended Directors. No Stockholder shall have any liability as a result of voting for any Lauro Designee in accordance with the provisions of this Agreement. Neither Lauro nor its Affiliates shall have any liability as a result of voting for any Board recommended director nominee in accordance with the provisions of this Agreement.
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3. Remedies.
3.1 Covenants of Parties. The parties agree to use their respective reasonable best efforts, within the requirements of Applicable Law, to ensure that the rights granted under this Agreement are effective and that the parties enjoy the benefits of this Agreement. Such actions include, without limitation, the use of the Stockholders’ respective reasonable best efforts to cause the approval of the issuance of the Consideration Shares, if required, and the nomination and election of the Lauro Designee as provided in this Agreement and the use of Lauro’s reasonable best efforts to cause the nomination and election of the directors as provided in this Agreement.
3.2 Irrevocable Proxy and Power of Attorney. Each Stockholder and Lauro respectively hereby constitutes and appoints as the proxy, and hereby grants a power of attorney to, the General Counsel of the Company with full power of substitution, with respect to the matters set forth herein, including, without limitation, election of persons as members of the Board in accordance with Section 2 hereof, and hereby authorizes her to represent and vote, if and only if the Stockholder or Lauro (or its Affiliates), as the case may be, (i) fails to vote, or (ii) attempts to vote (whether by proxy or in person), in a manner which is inconsistent with the terms of this Agreement, all of such Stockholder’s or Lauro’s (or its Affiliates) Shares in favor of the election of persons as members of the Board determined pursuant to and in accordance with the terms and provisions of this Agreement. Each of the proxy and power of attorney granted pursuant to the immediately preceding sentence is given in consideration of the agreements and covenants of the parties in connection with the transactions contemplated by this Agreement and, as such, each is coupled with an interest and shall be irrevocable unless and until this Agreement terminates or expires pursuant to Section 4 hereof. Each Stockholder and Lauro hereby revokes any and all previous proxies or powers of attorney with respect to the Shares respectively held or controlled and shall not hereafter, unless and until this Agreement terminates or expires pursuant to Section 4 hereof, purport to grant any other proxy or power of attorney with respect to any of the Shares, deposit any of the Shares into a voting trust or enter into any agreement (other than this Agreement), arrangement or understanding with any Person, directly or indirectly, to vote, grant any proxy or give instructions with respect to the voting of any of the Shares, in each case, with respect to any of the matters set forth herein
3.3 Injunctive Relief. Each of the parties hereto recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach or threatened breach of any provision of this Agreement the aggrieved party, in addition to any other remedy which may be available to such party at law or in equity, will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.
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4. Term.
4.1 Termination Events. This Agreement shall be effective as of the date hereof and shall continue in effect until, and shall terminate upon, the earliest to occur of (a) when Lauro’s issued and outstanding stock ownership in the Company falls below 5% of the outstanding Shares (subject to Section 4.2 below in cases where Lauro’s issued and outstanding stock ownership in the Company falls below 5% of the outstanding Shares for reasons other than a sale or transfer of Shares by Lauro); (b) at any time prior to [●], 2018, 2 such time as Mandarin and Lauro 48 together or individually no longer own more than 50% of the equity interest in Lauro; (c) any time from and after [●], 2018, such time as Mandarin and Lauro 48 together or individually (i) no longer own more than 35% of the equity interest in Lauro and (ii) no longer have control (as such term is used in the definition of “Affiliate” herein) of Lauro; (d) the consummation of a Sale of the Company; and (d) the termination of the Share Purchase Agreement.
4.2 Notification; Change in Voting Power. From and after the Closing, Lauro agrees to provide the Company with written notice as promptly as practicable, and in any event within five (5) business days, following any sale or other transfer of Shares, which notice shall include the aggregate number of Shares held (beneficially or of record) by Lauro following such sale or transfer, and to make any requisite filings with the SEC in connection with transactions involving Shares. The Company and Lauro agree that, in the event that Lauro’s issued and outstanding ownership in the Company ceases to be more than 5% of the outstanding Shares for reasons other than a sale or transfer of Shares by Lauro, no termination of Lauro’s rights and obligations under Section 2 shall occur unless (i) the Company has provided Lauro with written notice that the aggregate ownership percentage of Lauro has ceased to be more than 5% of the outstanding Shares and (ii) Lauro fails to increase its aggregate ownership percentage to more than 5% of the outstanding Shares within twenty (20) business days following receipt of such notice (or, in the event that Lauro is unable to purchase Shares at any time during such twenty (20)-business day period as a result of the application of any applicable securities laws (including as a result of the possession by Lauro or any of its Affiliates of any non-public information) and Lauro has provided written notice to the Company during such period of its intention to purchase Shares, the twenty (20)-business day period following the lapse of any such restrictions). Lauro agrees to provide the Company with written notice as promptly as practicable, and in any even within one (1) business day, prior to any sale, transfer or other transaction of Mandarin’s and/or Lauro 48’s voting interests in Lauro, which has the effect of causing Mandarin and/or Lauro 48 to (i) prior to [●], 2018 own, together or individually, less than a majority of the voting power of Lauro, and (ii) from and after [●], 2018, cease to control (as such term is used in the definition of “Affiliate” herein) Lauro.
5. Miscellaneous.
5.1 Successors and Assigns. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto 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 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. This Agreement shall not be assigned by Lauro, and no rights or obligations hereunder may be transferred by Lauro, without the prior consent of the Company; provided, that Lauro may assign this Agreement to Permitted Transferees; provided, further, that such Permitted Transferees shall have executed a joinder to, and agreed to be bound by, the obligations of this Agreement, including the voting and standstill obligations. Notwithstanding anything to the contrary herein, in no event shall Lauro’s right to designate the Lauro Designee be transferable or assignable to any other Person, whether by contract or operation of law or any other manner whatsoever.
2 Note: Two years from Closing.
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5.2 Standstill. For a period of the longer of (x) three (3) years from the date of this Agreement and (y) for so long thereafter as Lauro has the right to designate the Lauro Designee to the Board pursuant to Section 2, unless otherwise agreed in writing by the Company, neither Lauro (directly or indirectly) nor any representatives acting on its behalf, nor any of Mandarin, Lauro 48 or their Affiliates will: (a) propose any merger, consolidation, business combination, tender or exchange offer, purchase of the Company’s assets or businesses, or similar transactions involving the Company or any recapitalization, restructuring, liquidation or other extraordinary transaction with respect to the Company; (b) acquire beneficial ownership of more than 19.99% of any securities (including in derivative form) of the Company except as permitted by this Agreement (any transaction or series of transactions specified in (a) or (b) involving a majority of the Company’s outstanding capital stock or consolidated assets, is referred to as a “Business Combination”); (c) propose or seek, whether alone or in concert with others, any “solicitation” (as such term is used in the rules of the SEC) of proxies or consents to vote any securities (including in derivative form) of the Company except in accordance with this Agreement; (d) nominate any person as a director of the Company except for the Lauro Designee in accordance with the terms of this Agreement; (e) propose any matter to be voted upon by the stockholders of the Company; (f) directly or indirectly, form, join or in any way participate in a third party “group” (as such term is used in the rules of the SEC) (or discuss with any third party the potential formation of a group) with respect to any securities (including in derivative form) of the Company or a Business Combination involving the Company; (g) request the Company (or any of its officers, directors or representatives), directly or indirectly, to amend or waive any provision of this Section 5.2 (including this sentence); or (h) take any action that could require the Company to make a public announcement regarding such potential Business Combination. Notwithstanding the foregoing, (I) nothing in this Agreement shall limit Lauro’s (or its Permitted Transferees’) rights under the Registration Rights Agreement, (II) nothing contained in this Section 5.2 shall prohibit Lauro from making confidential, non-public proposals to the Company for a Business Combination; and (III) the provisions of this Section 5.2 shall terminate and be of no further force or effect (A) upon the Company’s announcement that it has entered into a definitive agreement for a Business Combination with a third party or (B) if any Person(s) or “group” publicly announces or commences a tender or exchange offer or any other offer transaction pursuant to which Shares could be sold that, if successful, would result in such Person or group beneficially owning more than 35% of the assets or securities of the Company determined as of its most recent quarterly financial statement.
5.3 Amendments; Waiver. This Agreement may be amended only by an agreement in writing executed by all parties hereto (unless such amendment does not adversely affect the rights of a Stockholder, in which case such Stockholder need not execute such writing). A 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.
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5.4 Governing Law; ICC Arbitration.
(a) This Agreement and the rights and obligations hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the conflict of laws rules thereof.
(b) Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement, or the transactions contemplated hereunder, including with respect to the formation, applicability, performance, breach, termination, validity or enforceability thereof, shall be fully and finally settled by arbitration. The arbitration shall be conducted by three arbitrators, in accordance with the Rules of Arbitration of the International Chamber of Commerce (“Rules”) in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The seat of the arbitration shall be New York, New York, USA and it shall be conducted in English, provided that any party hereto may submit testimony or documentary evidence in any language if it furnishes, upon the request of the other party, a translation into English of any such testimony or documentary evidence. The arbitrators shall determine questions of arbitrability and jurisdiction and shall be empowered to grant interim relief.
(c) The arbitration award shall be final and binding on the parties. The parties undertake to carry out any award without delay and waive their right to any form of recourse based on grounds other than those contained in the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention,” which shall govern the arbitration and enforcement of any arbitral award) insofar as such waiver can validly be made. The parties agree to the exclusive jurisdiction of the federal courts located in New York County, New York for purposes of enforcing this section, and any arbitral award, in accordance with the New York Convention. The parties agree to personal jurisdiction in said courts for such purposes and irrevocably waive any defense on the basis of forum non conveniens, lack of jurisdiction or improper venue in regard to any such proceedings brought in the federal courts located in New York County, New York.
(d) The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within thirty (30) days of the receipt of the request for arbitration. The two (2) arbitrators shall nominate a third arbitrator within thirty (30) days after the nomination of the second arbitrator. The third arbitrator shall act as chair of the tribunal. If any of the three (3) arbitrators is not nominated within the time prescribed above, then the International Court of Arbitration of the International Chamber of Commerce shall appoint that arbitrator.
(e) In order to facilitate the comprehensive and efficient resolution of related disputes, and upon request of any party to the arbitration proceeding, the arbitration tribunal may consolidate the arbitration proceeding with any other arbitration proceeding relating to this Agreement or to the Share Purchase Agreement, Registration Rights Agreement or Subscription Agreement. The arbitration tribunal shall not consolidate such arbitrations unless it determines that (i) there are issues of fact or law common to the two proceedings so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party would be unduly prejudiced as a result of such consolidation through undue delay or otherwise.
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(f) Notwithstanding anything to the contrary in this Agreement, a party may make a request to a court of competent jurisdiction or pursuant to the Rules for interim or emergency measures necessary to preserve the party’s rights, including pre-arbitration attachments or injunctions as provided in Section 3.3. A request for such interim relief to a court shall not be deemed incompatible with, or a waiver of, this agreement to arbitrate.
(g) All disputes under this Agreement shall be kept confidential. In any arbitration proceeding, the arbitrators shall take all measures necessary for the protection of Confidential Information. All proceedings and any award and any information obtained from another party in connection with the arbitration shall be deemed Confidential Information subject to Article 13 of the Share Purchase Agreement; provided that the parties further agree that such Confidential Information may be disclosed to the extent necessary to enforce any award or enforce this Agreement to arbitrate, provided, further, that the parties agree to take all reasonable measures to protect the confidentiality of the proceedings and the disclosure of any Confidential Information in connection therewith, including to file all papers under seal.
(h) The arbitrators shall have the power to make an award allocating the costs and expenses of the arbitration between the parties, including reasonable legal fees and other costs of legal representation. Any award shall be determined and payable in Euros. For the avoidance of doubt, the remedies that may be awarded by the arbitrators hereunder are limited as specifically set forth in Section 6 of the Subscription Agreement.
5.5 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.
5.6 Headings. The heading references herein are for convenience purposes only, and shall not be deemed to limit or affect any of the provisions hereof.
5.7 Notices. Any notice or other communication to be given hereunder shall be in writing in the English language and signed by or on behalf of the party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out below:
(a) | Party: | Company |
Address: | 200 West Street, 4th Floor, Waltham, MA 02451 | |
Email: | lori.henderson@amriglobal.com | |
Attn. of: |
Lori M. Henderson Senior Vice President, General Counsel and Head of Business Development
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With a copy to (which shall not constitute notice): | Goodwin Procter LLP | |
Attn. of: | Danielle Lauzon | |
Address: | 53 State Street, Boston, MA 02109, or if after June 24, 2016, 100 Northern Avenue, Boston, MA 02210 | |
Email: |
dlauzon@goodwinprocter.com | |
Facsimile No.: | (617) 649-1484 | |
(b) | Party: | Lauro |
Address: | Lauro Cinquantasette S.p.A Via del Lauro, 7 - 20131 Milano | |
Facsimile No.: | +39-02-869522522 | |
Attn. of: | Chief Financial Officer | |
With a copy to (which shall not constitute notice): | Mandarin | |
Address: | 10, Rue Jans Antoine, L-1820 Luxembourg | |
Grand Duchè de Luxembourg | ||
Email: | massimolongoni@groupelecta.lu | |
Attn. of: | Mr. Massimo Longoni | |
Mandarin Advisory Srl | ||
Address: | Corso Porta Nuova, 3 | |
20121 Milan | ||
Email: | e.ricotta@mandarincp.com | |
Attn. of: | Mr. Enrico Ricotta |
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With a copy to (which shall not constitute notice): |
Lauro 48 | |
Address: |
Lauro Cinquantasette S.p.A
Via del Lauro, 7 - 20131 Milano | |
Facsimile No.: | +39-02-869522522 | |
Attn. of: | Chief Financial Officer | |
(c) | Party: | Stockholders – See Schedule A. |
5.8 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.
5.9 Integration. This Agreement, the Share Purchase Agreement and the other transaction documents contemplated in the Share Purchase Agreement, including that certain Subscription Agreement and the Registration Rights Agreement, constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof and thereof.
5.10 Manner of Voting. The voting of Shares pursuant to this Agreement may be effected in person, by proxy or in any other manner permitted by Applicable Law. For the avoidance of doubt, voting of the Shares pursuant to the Agreement need not make explicit reference to the terms of this Agreement.
5.11 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Stockholders Agreement as of the date first written above.
ALBANY MOLECULAR RESEARCH, INC. | ||
By: | ||
Name: | ||
Title: | ||
LAURO CINQUANTASETTE S.P.A. | ||
By: | ||
Name: | ||
Title: | ||
3-GUTINVER, S.L. | ||
By: | ||
Name: Luis Gerardo Gutierrez Fuentes | ||
Title: Sole Administrator | ||
Thomas E. D’Ambra Family Trust I u/a/d | ||
2/26/97 f/b/o Abigail D’Ambra | ||
By: Bessemer Trust Company of Delaware NA, | ||
as Trustee | ||
Name: | ||
Title: |
Signature Page to Stockholders Agreement
Thomas E. D’Ambra Family Trust I u/a/d | |
2/26/97 f/b/o Agatha D’Ambra | |
By: Bessemer Trust Company of Delaware NA, | |
as Trustee | |
Name: | |
Title: | |
Thomas E. D’Ambra Family Trust I u/a/d | |
2/26/97 f/b/o Geoffrey D’Ambra | |
By: Bessemer Trust Company of Delaware NA, | |
as Trustee | |
Name: | |
Title: | |
William S. Marth | |
Thomas E. D’Ambra | |
Constance M. D’Ambra |
And solely for the purposes of Section 5.2 of this Agreement:
LAURO QUARANTOTTO S.P.A. | ||
By: | ||
Name: | ||
Title: |
2 |
MANDARIN CAPITAL PARTNER SCA SICAR | ||
By: | ||
Name: | ||
Title: |
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SCHEDULE A
STOCKHOLDERS
William S. Marth
Thomas E. D’Ambra
Constance M. D’Ambra
Thomas E. D’Ambra Family Trust I u/a/d 2/26/97 f/b/o Abigail D’Ambra
Thomas E. D’Ambra Family Trust I u/a/d 2/26/97 f/b/o Agatha D’Ambra
Thomas E. D’Ambra Family Trust I u/a/d 2/26/97 f/b/o Geoffrey D’Ambra
3-Gutinver, S.L.
Exhibit 4.1
EXECUTION COPY
ALBANY MOLECULAR RESEARCH, INC.
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
DATED AS OF May 5, 2016
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT is dated as of May 5, 2016 (this “Agreement”), by and among Albany Molecular Research, Inc., a Delaware corporation (the “Company”) and Lauro Cinquantasette S.p.A, a company incorporated under the laws of Italy (“Lauro” or “Holder”).
WHEREAS, the Company, Lauro and certain other persons named therein are parties to a Share Purchase Agreement, dated as of the date hereof (as it may be amended from time to time, the “Share Purchase Agreement”), pursuant to which, among other things, the Company intends to purchase and Lauro intends to sell 100% of the capital stock of Prime European Therapeuticals S.p.A. – Euticals (the “Euticals Stock”), a company organized and existing under the laws of Italy, with registered office at Viale Bianca Maria 25, Milano Italy, Italian Tax Code No. 07254610152 (hereinafter, indistinctively “Euticals”) (the “Transaction”);
WHEREAS, as partial consideration for Lauro’s sale of the Euticals Stock pursuant to the Share Purchase Agreement, the Company intends to issue and sell to Lauro pursuant to the terms of the Share Purchase Agreement and that certain Subscription Agreement, dated as of the date hereof (as it may be amended from time to time, the “Subscription Agreement”), a number of shares of common stock, par value $0.01 per share, of the Company as provided for in Section 2 of the Subscription Agreement (“Consideration Shares”); and
WHEREAS, in connection with the Transaction, the Company and Lauro desire to establish certain rights, terms and conditions in connection with the Consideration Shares.
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 as of the date on which, or at any time during the period for which, the determination of affiliation is being made; provided, that for purposes of this Agreement, no Participating Holder shall be deemed an Affiliate of the Company or any of its Subsidiaries. For the purpose of this definition, the term “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Agreement” shall have the meaning assigned in the preamble.
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“Automatic Shelf Registration Statement” shall mean an automatic shelf registration statement as defined in Rule 405 on Form S-3.
“Blackout Certificate” shall have the meaning assigned in Section 2.02(a).
“Blackout Period” shall have the meaning assigned in Section 2.02(a).
“Claims” shall have the meaning assigned in Section 2.05(a).
“Closing” shall have the meaning assigned in the Share Purchase Agreement.
“Closing Date” 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 the Company.
“Company” shall have the meaning assigned in the preamble.
“Consideration Shares” shall have the meaning assigned in the preamble.
“Demand Notice” shall have the meaning assigned in Section 2.01(e).
“Demand Registration Period” means any period of time after the Closing but before the earlier of (A) the three (3) year anniversary of the Closing or (B) the number of Participating Shares then held by the Participating Holders is less than 5% of the then-outstanding Common Stock of the Company (determined in accordance with Section 4.2 of the Stockholders Agreement in cases where the Participating Holders’ issued and outstanding stock ownership in the Company falls below 5% of the outstanding Common Stock for reasons other than a sale or transfer of Shares by the Participating Holders).
“Demand Registration Statement” shall mean a registration statement on Form S-3 (or any comparable or successor form or forms or any similar short-form registration), 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 2.01(f).
“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 a Rule 145 transaction; or (iii) a registration statement relating to the issuance by the Company of non-convertible debt securities.
“Expense Cap” shall have the meaning assigned in Section 2.04(a).
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“Euticals” shall have the meaning assigned in the preamble.
“Euticals Stock” shall have the meaning assigned in the preamble.
“FINRA” shall mean the Financial Industry Regulatory Authority.
“Free Writing Prospectus” shall have the meaning assigned in Section 2.03(a)(i).
“Holder” shall have the meaning assigned in the preamble.
“Lauro” shall have the meaning assigned in the preamble.
“Lock-up Period” shall have the meaning assigned in Section 3.01(a).
“NASDAQ” shall mean the NASDAQ Global Market.
“New York Convention” shall have the meaning assigned in Section 4.04(c).
“Participating Holders” shall mean the Holder and/or any Permitted Transferees.
“Participating Shares” shall mean any Registrable Shares, the registered owner of which is a Participating Holder, that is subject of a 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 stockholder of Lauro on the date hereof, provided, in each case, that such stockholder agrees to be bound by the terms hereof and the obligations and restrictions contained in the Stockholders Agreement (if not terminated in accordance with its terms), including the voting and standstill provisions thereof, and that such stockholder executes a joinder agreement binding such stockholder to the provisions of this Agreement and the Stockholders Agreement (if not terminated in accordance with its terms).
“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A, 430B or 430C promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, relating to Registrable Shares, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such prospectus.
“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.
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“Registrable Shares” shall mean (i) any outstanding Consideration Shares held by a Participating Holder and (ii) any other shares or securities issued or issuable, directly or indirectly, by the Company with respect to the Consideration Shares by way of conversion or exchange thereof, dividend, stock split or distribution, or in connection with a combination of shares, reclassification, recapitalization, merger, consolidation or other reorganization; 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) have been 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 or (z) have ceased to be outstanding.
“Registration Statement” shall mean any registration statement of the Company filed with the SEC under the Securities Act which covers any of the Registrable Shares pursuant to the provisions of this Agreement, including any Demand Registration Statement, the Shelf Registration Statement, Prospectus, Free Writing Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.
“Required Information” shall have the meaning assigned in Section 2.03(c).
“Rule 144” shall mean Rule 144 under the Securities Act (or any similar rule then in force).
“Rule 145” shall mean Rule 145 under the Securities Act (or any similar rule then in force).
“Rule 405” shall mean Rule 405 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.
“Shares” shall mean shares of Common Stock.
“Shelf Registration Statement” shall mean a registration statement on Form S-3 (or any comparable or successor form or forms or any similar short-form registration), or if the Company is not eligible to use Form S-3, a registration statement on Form S-1, in each case constituting a “shelf” registration statement providing for the registration of, and the sale by the Participating Holders on a continuous or delayed basis of, all of the Registrable Shares, pursuant to Rule 415 under the Securities Act.
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“Shelf Takedown” shall have the meaning assigned in Section 2.01(b).
“Stockholders Agreement” shall mean the certain Stockholders Agreement by and among the Company, Lauro and certain other parties thereto, dated as of the date hereof.
“Subscription Agreement” shall have the meaning assigned in the recitals.
“Takedown Notice” shall have the meaning assigned in Section 2.01(c).
“Transaction” shall have the meaning assigned in the recitals.
“Underwriter Cutbacks” shall have the meaning assigned in Section 2.01(g).
“WKSI” shall mean a well-known seasoned issuer as defined in Rule 405.
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 Rights.
(a) Shelf Registration Statement. As soon as practicable (and in any event within eighty (80) days) after the Closing Date, the Company shall file the Shelf Registration Statement with the SEC for the resale of all of the Consideration Shares by the Participating Holders, and the Company shall use its reasonable best efforts to cause such Shelf Registration Statement to become effective as promptly as practicable after the filing thereof and in any event prior to the final day of the Lock-Up Period and to maintain the effectiveness of such Shelf Registration Statement in accordance with Section 2.01(f). The Company agrees that it shall use its reasonable best efforts to include in such Shelf Registration Statement such disclosures as may be required by Rule 430B under the Securities Act (referring to the unnamed selling security holders in a generic manner by identifying the initial offering of the securities to the Participating Holders) in order to ensure that the Participating Holders may be added to such Shelf Registration Statement at a later time through the filing of a supplement to the Prospectus rather than a post-effective amendment to the Shelf Registration Statement. The “Plan of Distribution” section of such Shelf Registration Statement shall provide for all permitted means of disposition of Registrable Shares requested in writing to be included therein by Lauro including, if so requested in writing by Lauro, firm commitment underwritten public offerings, agented transactions, sales directly into the market, purchases or sales by brokers and sales or distributions not involving a public offering.
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(b) Shelf Takedowns. Following the Closing and subject to Section 2.02(a) and Article III hereof, the Participating Holders shall be entitled, at any time and from time to time when the Shelf Registration Statement is then effective, to sell such Registrable Shares held by them as are then registered pursuant to such Shelf Registration Statement (each, a “Shelf Takedown”). The number of Shelf Takedowns that the Participating Holders may effect pursuant to this Section 2.01(b) in any twelve (12) month period shall not exceed four (4). Any such Shelf Takedown may be made by and pursuant to any method or combination of methods legally available to the Participating Holders (including an underwritten offering, a direct sale to purchasers, a sale to or through brokers, dealers or agents, a sale over the internet, block sales, derivative transactions with third parties, sales in connection with short sales and other hedging transactions). The Company shall use its commercially reasonable efforts to comply with the applicable provisions of the Securities Act to facilitate the disposition of all Registrable Shares covered by the Shelf Registration Statement in accordance with the intended methods of disposition by the Participating Holders participating in such Shelf Takedown. The Participating Holders selling any Registrable Shares pursuant to a Shelf Takedown shall provide the Company with ten (10) days prior written notice of its intention to undertake a Shelf Takedown. Shelf Takedowns will not be subject to Underwriter Cutbacks; provided, that if a Participating Holder proposes to piggyback on a shelf takedown by the Company under a registration statement other than the Shelf Registration Statement provided for the Participating Holders hereunder, Section 2.01(g) shall apply, including the Underwriter Cutbacks.
(c) Cooperation with Shelf Takedowns and Filing of Shelf Registration Statement. Upon receipt of written notice by the Participating Holders that they intend to effect a Shelf Takedown (“Takedown Notice”), the Company shall use its reasonable best efforts to cooperate in such Shelf Takedown, by post-effectively amending or supplementing the Prospectus related to such Shelf Registration Statement as may be reasonably requested by the Participating Holders during the Demand Registration Period. From the date of signing of this Agreement and until the earlier of (i) the Closing Date and (ii) the date of termination of or withdrawal from the Share Purchase Agreement in accordance with the terms thereof, the Holder (x) shall, and shall cause each Group Company to, use its reasonable best efforts and (y) shall use its reasonable best efforts to cause the respective senior management and Representatives, in each case of (x) and (y), as far as legally permissible, to provide to the Company such cooperation as is reasonably requested by the Company in connection with the filing of the Shelf Registration Statement, including furnishing the Company such financial, business and other information regarding the Group Companies to the extent necessary to allow the Company to prepare unaudited pro forma financial statements of the Company giving effect to the acquisition of the Group Companies that are in all material respects in compliance with and for the periods required by Article 11 of Regulation S-X under the Securities Act or as may be required in order for the Company to comply with the rules and regulations of the SEC.
(d) Automatic Shelf Registration Statements. To the extent the Company is or becomes a WKSI at a time when it is obligated to file the Shelf Registration Statement pursuant to this Agreement, the Company shall file an Automatic Shelf Registration Statement in accordance with the requirements of the Securities Act and the rules and regulations of the SEC thereunder, that covers the Registrable Shares (which shall serve as the Shelf Registration Statement contemplated by this Agreement). The Company shall pay the registration fee for all Registrable Shares to be registered pursuant to an Automatic Shelf Registration Statement at the time of filing of the Automatic Shelf Registration Statement and shall not elect to pay any portion of the registration fee on a deferred basis. If at any time following the filing of an Automatic Shelf Registration Statement when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, the Company shall use its reasonable best efforts to (i) post-effectively amend the Automatic Shelf Registration Statement to a shelf registration statement that is not automatically effective or file a new shelf registration statement, in each case to serve as the Shelf Registration Statement contemplated by this Agreement; (ii) have such Registration Statement declared effective by the SEC; and (iii) keep such Registration Statement effective during the period during which such Registration Statement is required to be kept effective in accordance with Section 2.01(f) hereof.
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(e) Demand Registration Statement. If for any reason the Company ceases to be eligible to register the Registrable Shares on the Shelf Registration Statement following the date hereof or the Shelf Registration Statement is not available for resale of the Registrable Shares after the expiration of the Lock-Up Period, subject to the Company’s timely receipt of the Required Information from the Participating Holders as contemplated by Section 2.03(c) and subject to Section 2.02(a) and Article III hereof, (i) at any time during the Demand Registration Period, the Participating Holders owning and proposing to register Registrable Shares representing, in the aggregate, at least $5,000,000 as of such time may by notice (a “Demand Notice”) to the Company request that the Company file a Demand Registration Statement and (ii) upon such request, the Company shall as soon as practicable, and in any event within the later of thirty (30) days after the date such Demand Notice is given by the Participating Holder or ten (10) days after the Participating Holders have provided the Required Information to the Company, file a Demand Registration Statement under the Securities Act covering the Registrable Shares that the Participating Holders request be included in such Registration Statement. The Company shall use its reasonable best efforts to cause such Demand Registration Statement to become effective as soon as practicable and remain effective until all Registrable Shares included in such Registration Statement are sold. A previous participation in any registrations effected by the Company pursuant to Section 2.01(g) will not affect the Participating Holder’s registration rights under clause (i) above; provided that Participating Holders may not make any demand pursuant to clause (i) above if a Registration Statement is in effect for such Participating Holder’s Registrable Shares pursuant to a previous demand under such clause (i). The Company shall not be obligated to effect, or to take any action to effect, any Registration Statement pursuant to this Section 2.01(e) during the period that ends on a date that is ninety (90) days after the effective date of a Company-initiated registration of Common Stock, provided that the Company shall use its reasonable best efforts to cause such Registration Statement to become effective as soon as practicable thereafter.
(f) Continued Effectiveness. Subject to the applicability of Blackout Periods, the Company shall use its reasonable best efforts to keep (i) the Shelf Registration Statement filed pursuant to this Agreement continuously effective and usable for the resale of the Registrable Shares covered thereby until the earlier of (A) three (3) years from the later of the effective date of such Shelf Registration Statement and the date on which the Lock-Up Period ends and (B) the date on which all of the Registrable Shares covered by such Shelf Registration Statement have been sold pursuant to such Shelf Registration Statement and (ii) any Demand Registration Statement effective for a period of at least six (6) months after the effectiveness thereof or such period during which all Registrable Shares included therein shall have actually been sold (such period, the “Effective Period”); provided, however, that in the event the Company suspends, postpones or delays the filing of a Registration Statement required to be filed pursuant to this Agreement, the Effective Period shall be extended by the duration of each such applicable suspension, postponement or delay.
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(g) Piggyback Registration. After the expiration of the Lock-Up Period, if no Registration Statement is effective and available for resale of the Registrable Shares and the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Participating Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (which, for the avoidance of doubt, shall not include registration statements on Forms S-8 or Forms S-4, or other comparable forms not available for registering Registrable Shares to the public), the Company shall, at such time, promptly give the Participating Holders notice of such registration. Upon the request of a 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 Holders request to be included in such registration; provided, however, that if the Company is advised in writing in good faith by any managing underwriter of the Company’s securities being offered in a public offering pursuant to such registration statement that the amount to be sold by persons other than the Company is greater than the amount which can be offered without materially adversely affecting the Company’s offering, the Company may (subject to any existing contractual obligations in place prior to this Agreement) reduce the amount offered for the accounts of the selling stockholders (including such holders of Registrable Shares) to a number deemed satisfactory by such managing underwriter; provided further, that any securities to be excluded shall be determined in the following order of priority (subject to any existing contractual obligations in place prior to this Agreement): (i) securities held by any Persons not having any such contractual, incidental registration rights; (ii) securities held by any Persons having contractual, incidental registration rights pursuant to an agreement other than this Agreement and (iii) the Registrable Shares sought to be included under this Agreement by the holders thereof on a prorated basis (the “Underwriter Cutbacks”). If, as a result of the exclusion provisions set forth above, any Participating Holder shall only be permitted to include 75% or fewer of the Registrable Shares in such public offering that such Permitted Holder has requested to be included, such Permitted Holder may elect to withdraw its request to include Registrable Shares in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.01(g) before the effective date of such registration, whether or not any 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.
(h) Priority of Registration. If the Company is advised in writing in good faith by any managing underwriter of the Company’s securities being offered in a public offering pursuant to a Demand Registration Statement hereunder that the amount to be sold is greater than the amount which can be offered without materially adversely affecting the Company’s offering, the Company may reduce the amount offered (including for such holders of Registrable Shares) pursuant to the Underwriter Cutbacks to a number deemed satisfactory by such managing underwriter (subject to any existing contractual obligations in place prior to this Agreement). If, as a result of the exclusion provisions set forth above, any Participating Holder shall only be permitted to include 75% or fewer of the Registrable Shares in such public offering that such Permitted Holder has requested to be included, such Permitted Holder may elect to withdraw such Demand Registration Statement before the effective date of such registration. The expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.04.
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Section 2.02. Limitations on Registrations.
(a) Blackout Period. Notwithstanding the foregoing obligations, if the Company furnishes to the Participating Holders a certificate signed by the Company’s chief executive officer or chief financial officer (a “Blackout Certificate”) stating (x) that the filing, initial effectiveness or continued use of a Registration Statement would require, in the opinion of the Company’s external counsel, the Company to make a public disclosure of material non-public information that, in the good faith judgment of the Company’s board of directors (A) would (i) be required to be made in any Registration Statement so that such Registration Statement would not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, (ii) not be required to be made at such time but for the filing, effectiveness or continued use of such Registration Statement and (iii) reasonably be expected to have a material adverse effect on a bona fide business or financing transaction, including a significant acquisition, corporate reorganization, or other similar transaction involving the Company; or (B) would render the Company unable to comply with requirements under the Securities Act or Exchange Act, then in each case of (A) and (B), the Company shall have the right to delay the filing or effectiveness, but not the preparation, of the Registration Statement, or suspend the offer or sale of Participating Shares thereunder to the extent such Registration Statement has been declared effective, in each case, for a period of not more than sixty (60) days after the date of the Blackout Certificate (a “Blackout Period”) and (y) the expected duration of such Blackout Period; provided, however, that the Company may invoke this right in any number of instances, but may not invoke this right for, in the aggregate, more than sixty (60) days during 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 Blackout Period other than in connection with an Excluded Registration.
Upon receipt of a Blackout Certificate, each Participating Holder shall keep the fact of any such Blackout Certificate and its contents strictly confidential and, during any Blackout Period, promptly halt any offer, sale, trading or transfer by it of any Participating Shares pursuant to an effective Registration Statement for the duration of the Blackout Period set forth in such Blackout Certificate (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 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.
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.
(b) Other Limitations on Demand Registration Statements. The Company shall not be obligated to effect, or to take any action to effect, a Demand Registration Statement pursuant to any Demand Notice in accordance with 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;
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(ii) after the Company has filed with the SEC three (3) Demand Registration Statements pursuant to Section 2.01 (counting for these purposes only Demand Registration Statements which have been declared or ordered effective and in respect of which all Participating Shares have been sold thereunder); or
(iii) if the Company has filed with the SEC a Demand Registration Statement pursuant to Section 2.01 within the preceding six (6) months, and such Demand Registration Statement has been declared or ordered effective.
Section 2.03. Registration Procedures.
(a) Registration Procedures. 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 effect such registration to permit the sale of such Registrable Shares in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall cooperate in the facilitation of the resale of such Registrable Shares and shall use its reasonable best efforts to:
(i) make, as promptly as practicable, all required filings with FINRA, and, if such Registration Statement is not automatically effective upon filing, use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable and to remain effective as provided herein; provided, however, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including free writing prospectuses under Rule 433 (each a “Free Writing Prospectus”)), the Company shall furnish or otherwise make available to the Participating Holders (who shall be permitted to furnish to their counsel and the managing underwriter(s), if any), draft copies of all such documents proposed to be filed (including exhibits thereto), which documents will be subject to the reasonable review and comment of such counsel, and such other documents reasonably requested by such counsel, including any comment letter from the SEC, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein. The Participating Holders shall select one counsel to represent all such Participating Holders for purposes of this Agreement. The Company shall not file any such Registration Statement or Prospectus, or any amendments or supplements thereto (including Free Writing Prospectuses) to which Participating Holders or the managing underwriter(s), if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Company, such filing is necessary to comply with applicable law; provided, that the Company shall not be liable for any breach of or default under this Agreement arising as a result of the Company’s cooperation with this paragraph (i);
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(ii) prepare and file with the SEC as promptly as practicable such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith and such Free Writing Prospectuses and Exchange Act reports as may be necessary to keep such Registration Statement continuously effective during the Effective Period provided herein and comply in all material respects with the provisions of the Securities Act applicable to the Company with respect to the disposition of all securities covered by such Registration Statement; and cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act in each case, until such time as all of such securities have been disposed of in accordance with the intended method or methods of disposition set forth in such Registration Statement;
(iii) 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;
(iv) notify promptly the Participating Holders after becoming aware of any of the events described in sub-clauses (A) through (F) of this paragraph (iv), to provide the Participating Holder copies of the relevant documentation (if requested), and in the case of sub-clauses (B) through (F), to provide the Participating Holders a reasonable opportunity to review and comment on the Company’s response thereto (if requested): (A) when such Registration Statement, or any related Prospectus or any Free Writing 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 other federal or U.S. state securities authority for amendments or supplements to such Registration Statement or the related Prospectus or for additional information, (C) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time the Company has reason to believe that the representations and warranties of the Company contained in any agreement (including any underwriting agreement) contemplated by Section 2.03(a)(xii) below cease to be true and correct in any material respect, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of such Participating Shares for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (F) 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 related Prospectus, Free Writing Prospectus, amendment or supplement thereto, or any document incorporated or deemed to be incorporated therein by reference, as then in effect, untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it 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, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (which notice shall notify the Participating Holders only of the occurrence of such an event or fact and shall provide no additional information regarding such event or fact to the extent such information would constitute material non-public information);
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(v) 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 (or exemption from qualification) of any of the Participating Shares for sale in any jurisdiction;
(vi) if requested by the Participating Holders or the managing underwriter(s) of an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the Participating Holders or such managing underwriter(s), as the case may be, may reasonably request in order to facilitate the disposition of the Participating Shares in accordance with the intended method or methods of distribution of such securities set forth in the Registration Statement and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 2.03(a)(vi) that are not, in the opinion of external counsel for the Company, in compliance with applicable law;
(vii) deliver promptly to the Participating Holders, upon written request therefor, copies of (A) material and non-sensitive correspondence between the SEC and the Company, 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) and (B) the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto (including any Free Writing Prospectus) as such Persons may reasonably request from time to time in order to facilitate the disposition of the Participating Shares in accordance with the intended method or methods of disposition thereof; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Participating Holders of Participating Shares and the underwriters, if any, in connection with the offering and sale of the Participating Shares covered by such Prospectus and any such amendment or supplement thereto;
(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;
(ix) cooperate with the Participating Holders of Participating Shares and the managing underwriter(s), if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing 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, and cause such Participating Shares to be issued in such denominations and registered in such names as instructed by the Participating Holder or the managing underwriter(s), if any;
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(x) to register or qualify or cooperate with the selling Participating Holders of Participating Shares, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Participating Shares for offer and sale under the securities or blue sky laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and to take any other action that may be necessary or advisable to enable such Participating Holders of Participating Shares to consummate the disposition of such Participating Shares in such jurisdiction in accordance with the intended method or methods of disposition thereof; provided that nothing in this Section 2.03(a)(x) shall require the Company to (A) qualify to do business as a foreign corporation in any jurisdiction where it would not otherwise be required to be so qualified, (B) execute or file any general consent to service of process under the laws of any jurisdiction, (C) 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 (D) subject itself to taxation in any jurisdiction where it would not otherwise be obligated to do so;
(xi) upon the occurrence of any event contemplated by Section 2.03(a)(iv)(D) above, prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Participating Shares being sold thereunder, such Prospectus will 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 the light of the circumstances under which they were made, not misleading;
(xii) in the case of any underwritten offering in which any Participating Holders participates, enter into, a customary underwriting agreement containing such provisions (including customary provisions for indemnification, lockups, opinions of counsel and comfort letters), in form reasonably satisfactory to the Company and outside legal counsel, and take all such other customary and reasonable actions as the managing underwriters of such offering may request in order to facilitate the disposition of such Participating Shares, including adding information requested by the managing underwriters to the Prospectus, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, and make such customary and reasonable representations and warranties (in form reasonably satisfactory to the Company and outside counsel) to the holders of such Participating Shares and the underwriters, if any, with respect to the business of the Company and its material subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested;
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(xiii) in the case of any underwritten offering in which any Participating Holders participates, (A) make reasonably available, for inspection by the managing underwriters of such underwritten offering and one law firm acting for such managing underwriters, pertinent corporate documents and financial and other records of the Company and its subsidiaries and controlled Affiliates, (B) cause the Company’s officers and employees to supply information reasonably requested by such managing underwriters or law firm in connection with such offering, (C) make the Company’s independent auditor available for any such managing underwriters’ due diligence and use commercially reasonable efforts to have them provide customary comfort letters to such underwriters in connection therewith and to each Participating Holder selling Participating Shares in such offering (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and (D) cause the Company’s outside counsel to furnish customary legal opinions and updates thereof (which legal opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriter(s)) to such underwriters and to each Participating Holders selling Participating Shares in such offering in connection therewith (subject to delivery to outside counsel of each such Participating Holders’ representation that it is knowledgeable with respect to the due diligence review process that an underwriter would perform in connection with an offering of securities registered pursuant to the Securities Act), covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters; provided, however, that any such records and other information provided under clauses (A) and (B) above that is not generally publicly available shall be subject to such confidential treatment as is customary for underwriters’ due diligence reviews (provided that the foregoing shall not require the Company (a) to provide access to or otherwise make available or furnish any books, contracts or records if and to the extent the provision of such information would, in the advice of external counsel, violate a confidentiality, non-disclosure or other similar agreement of the Company in effect as of the date hereof, (b) to provide access to or otherwise make available or furnish any information if and to the extent that the provision of such information would in the good faith judgment of the Company based on advice of counsel jeopardize any attorney-client, work product or other legal privilege or protection, or (d) to provide access to or otherwise make available or furnish any information if and to the extent that the provision of such information would in the good faith judgment of the Company based on advice of counsel violate any applicable law);
(xiv) in the case of any underwritten offering in which any Participating Holders participates, cause its management to use their reasonable best efforts to support the marketing of the Participating Shares covered by the Registration Statement (including participation in such number of “road shows” as the underwriter(s) reasonably request, and in any management diligence meetings or teleconferences as the managing underwriter or their counsel reasonably request); and
(xv) cooperate with each seller of Participating Shares and each underwriter or agent participating in the disposition of such Participating Shares and their respective counsel in connection with any filings required to be made with the FINRA.
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(b) Updated Documents. In the event that the Company would be required, pursuant to Section 2.03(a)(iv)(F), to notify the Participating Holders of the happening of any event specified therein, the Company shall as promptly as practicable, prepare and furnish to the Participating Holders 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. Each Participating Holder agrees that, upon receipt of any notice from the Company pursuant to Section 2.03(a)(iv)(F), 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 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.
(c) Required Information. The Company may request each Participating Holder to provide to the Company such written 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 (the “Required Information”). The Company may decline to take any action pursuant to this Agreement 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 or Shelf Takedown) if a Participating Holder shall have unreasonably failed to furnish 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 unreasonably 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 or Takedown Notice, as applicable, the Company may elect to exclude such Participating Holder’s Registrable Shares from such Demand Registration or Shelf Takedown, as applicable and in such case, the Company shall have no obligation to file or take any action to cause to be effective a Demand Registration Statement or Shelf Takedown with respect to any of such Participating Holder’s Registrable Shares.
(d) Plan of Distribution. With respect to Demand Registration Statements, each Participating Holder shall furnish to the Company in writing such information regarding the Participating Holder’s 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.
(e) Selection of Underwriters. If at any time or from time to time, the Participating Holders desire to sell Registrable Shares in an underwritten offering pursuant to a Shelf Takedown or Demand Registration Statement, the underwriters, including the managing underwriter, shall be selected by such Participating Holders after consultation with the Company.
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(f) Certain Additional Agreements. If any Registration Statement or comparable statement under state blue sky laws refers to any Participating Holder by name or otherwise as the Participating Holder of any securities of the Company and in such Participating Holder’s judgment, based on the advice of counsel, such Participating Holder might reasonably be deemed to be an underwriter or a controlling person of the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), then such Participating Holder shall have the right to require (i) the insertion therein of language, in form and substance satisfactory to such Participating Holder and the Company, to the effect that the holding by such Participating Holder of such securities is not to be construed as a recommendation by such Participating Holder of the investment quality of the Company’s securities covered thereby and that such holding does not imply that such Participating Holder will assist in meeting any future financial requirements of the Company, or (ii) in the event that such reference to such Participating Holder by name or otherwise is not in the judgment of the Company required by the Securities Act or any similar federal statute or any state blue sky or securities law then in force, the deletion of the reference to such Participating Holder.
Section 2.04. Registration Expenses.
(a) All fees and expenses incurred in the performance of or compliance with this Agreement by the Company including (i) all registration and filing fees (including fees and expenses (A) with respect to filings required to be made with the SEC, all applicable securities exchanges and/or FINRA, including any fees and disbursements of counsel for the underwriters in connection with any filings required to be made with FINRA and (B) of compliance with securities or blue sky laws, including any fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Participating Shares pursuant to Section 2.03(a)(x)), (ii) printing expenses (including expenses of printing certificates for Participating Shares in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriter(s), if any, of an underwritten offering, or by the Participating Holders, (iii) messenger, telephone and delivery expenses of the Company, (iv) fees and disbursements of counsel for the Company, (v) expenses of the Company incurred in connection with any road show, and (vi) fees and disbursements of all independent registered public accounting firms referred to in Section 2.03(a)(xiii) hereof (including the expenses of any comfort letters required by this Agreement) and any other persons, including special experts retained by the Company, shall be borne by the Company whether or not any Registration Statement is filed or becomes effective (all such expenses, “Registration Expenses”); provided, that, in no event will the Company be obligated to pay, incur, reimburse or otherwise be liable for more than $100,000 of Registration Expenses (excluding for this purpose Registration Expenses described in clause (a)(iv) and clause (a)(vi) above) (the “Expense Cap”). In addition, the Company shall pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Company are then listed and rating agency fees and the fees and expenses of any Person, including special experts, retained by the Company.
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(b) The Participating Holders shall pay all registration expenses (i) to the extent required to be paid by such Participating Holders under applicable law and all underwriting commissions and transfer and other taxes associated with the sale of Registrable Shares by such Participating Holders and (ii) in excess of the Expense Cap (excluding for this purpose Registration Expenses described in clause (a)(iv) and clause (a)(vi) above, which will be borne by the Company).
Section 2.05. Indemnification; Contribution.
(a) Company Indemnity of Participating Holders. The Company shall, and hereby agrees to, indemnify and hold harmless the Participating Holders, its controlling Persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), if any, and their respective shareholders, partners, members, managers, directors, officers and employees, from and against any losses, claims, damages, costs, fees (including reasonable attorney’s fees) or liabilities, actions or proceedings (whether commenced or threatened), judgments, fines, penalties and amounts paid in settlement in respect thereof (with the consent required hereby) and expenses (including reasonable fees of counsel) (collectively, “Claims”) to which each such indemnified person may become subject (and the Company will pay to a Participating Holder or other aforementioned indemnified 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, or actions or proceedings in respect thereof, are incurred, 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, offering circular, or other document (including any related Registration Statement, notification, or the like or Free Writing Prospectus or any amendment thereof 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 other than in the case of a Registration Statement in light of the circumstances in which they were made, not misleading or (iii) any violation or alleged violation by the Company (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 the Required Information furnished to the Company by any Participating Holder with respect to any Participating Holder expressly for use therein, or any Participating Holder’s intended method of distribution, that is the subject of the untrue statement or omission, or if any 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.
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(b) Participating Holders Indemnity of Company. The Participating Holders shall, and each hereby agrees to, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, employees and controlling Persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), if any, from and against any Claims to which each such indemnified party may become subject, insofar as such Claims, or actions or proceedings in respect thereof, are incurred, 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, offering circular, or other document (including any related Registration Statement, notification, or the like or Free Writing Prospectus or any amendment thereof or supplement thereto or any document incorporated by reference therein) or (ii) 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 the Required Information furnished to the Company by a 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 the respective 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) Indemnity Procedures. 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; provided, however, that the delay or failure to so notify the indemnifying party shall not relieve the indemnifying party from any obligation or liability except to the extent that the indemnifying party has been materially prejudiced by such delay or failure. 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.
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(d) Contribution. The Participating Holders 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, in connection with the actions, statements or omissions that resulted in such Claims as well as any other relevant equitable considerations. 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 a 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.
(e) Primacy of Indemnification. The Company hereby acknowledges that a Participating Holder may have certain rights to indemnification, advancement of expenses and/or insurance provided by certain of its Affiliates. The Company hereby agrees that (i) it is the indemnitor of first resort (i.e., its obligations to the Participating Holder are primary and any obligation of the Affiliates of such Participating Holder to advance expenses or to provide indemnification for the same Claims incurred by such Participating Holder are secondary to any such obligation of the Company) and (ii) that it shall be liable for the full amount of all Claims to the extent legally permitted and as required by the terms of this Agreement, without regard to any rights such Participating Holder may have against its Affiliates. No advancement or payment by an Affiliate of a Participating Holder with respect to any Claim for which indemnification has been sought from the Company hereunder shall affect the foregoing. The Affiliates of a Participating Holder shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery which such Participating Holder would have had against the Company if such Affiliate had not advanced or paid any amount to or on behalf of such Participating Holder.
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Section 2.06. Rule 144 Reporting. With a view to making available to the Holder or Participating Holders 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; and
(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).
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
LOCK-UP
Section 3.01. Lock-up Agreement.
(a) Each Participating Holder hereby agrees, without the Company’s prior written consent, not to sell or otherwise transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, of any Registrable Shares during the 180-day period beginning on the Closing Date (the “Lock-Up Period”). The Company may impose stop-transfer instructions with respect to securities subject to the foregoing restriction until the end of the Lock-Up Period.
(b) Notwithstanding the foregoing, in compliance with the applicable securities laws and insider trading policies, the Participating Holders shall be permitted to:
(i) engage in transactions relating to securities acquired in open market transactions after the Closing Date; and
(ii) enter into any trading plan established pursuant to Rule 10b5-1 under the Exchange Act, provided that such plan does not provide for any sales or other dispositions of Registrable Shares during the Lock-Up Period and no public announcement or filing under the Exchange Act is made by or on behalf of such Participating Holder or the Company regarding the establishment of such plan.
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(c) Holder agrees that, except for any transfer of Consideration Shares by the Holder to a Permitted Transferee in accordance with and subject to the terms of this Agreement, it and any Permitted Transferees shall not, and shall cause their respective Affiliates not to, sell, transfer or otherwise dispose of any Consideration Shares at any time after the expiration of the Lock-Up Period except (i) pursuant to a registered public offering in accordance with Article II or (ii) pursuant to privately negotiated sales in transactions exempt from the registration requirements under the Securities Act to any Person, including Permitted Transferees; provided that, in the case of this clause (ii), as a condition to consummation of a privately negotiated sale to a Person (other than a Permitted Transferee) in excess of 1% of the Company’s Common Stock (or in excess of 5% of the Company’s Common Stock when taken together with all other privately negotiated sales by the Holder of 1% or less of the Company’s Common Stock during the preceding 12 month period), the Company shall have consented thereto in writing, which consent shall not be unreasonably withheld or delayed, but may be conditioned, including to require a transferee who would be the holder of 5% or more of the Company’s Common Stock following such transfer, to sign a joinder to this Agreement and/or the Stockholders Agreement.
Article IV
MISCELLANEOUS
Section 4.01. Successors and Assigns; Permitted Transfers; Third Party Beneficiaries; Term. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the Company and by the Participating Holders and their respective successors and permitted assigns, and no term or provision of this Agreement (other than Section 2.05) is for the benefit of, or intended to create any obligations to, any other Person. Notwithstanding anything in this Agreement to the contrary, so long as not prohibited by applicable law, the Holder shall be permitted to distribute or otherwise transfer its Registrable Shares to a Permitted Transferee. This Agreement shall not be assigned and no rights or obligations hereunder may be transferred by the Holder, except that (a) the Holder will be permitted to assign its rights and obligations under this Agreement to any Permitted Transferee solely in connection with Holder’s transfer of Registrable Shares to such Permitted Transferee as contemplated in the prior sentence and (b) Holder’s rights and obligations shall be automatically assigned to Permitted Transferees who then own the Holder’s shares in the event of dissolution of the Holder. This Agreement shall not be assigned and no rights or obligations hereunder may be transferred by any Permitted Transferee. The Holder shall provide to the Company written notice of an intended transfer of Shares to a Permitted Transferee at least ten (10) business days’ prior to the intended date 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. This Agreement shall terminate and be of no further force or effect if the Share Purchase Agreement is terminated prior to the Closing.
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Section 4.02. Amendments; Waiver. This Agreement may be amended only by an agreement in writing executed by the Company and the Participating Holders representing at least a majority of the Consideration Shares. Any 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 4.03. 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., Att. Lori M. Henderson Senior Vice President, General Counsel and Head of Business Development 200 West Street, 4th Floor, Waltham, MA 02451 Tel: (781) 672-4535 E-mail: lori.henderson@amriglobal.com |
if to the Holder: |
Lauro Cinquantasette S.p.A +39-02-8995221 Attn: Chief Financial Officer |
with a copy to (which shall not constitute notice): |
Debevoise & Plimpton LLP 919 Third Avenue New York, NY 10022 Phone: (212) 909-6306 Fax: (212) 909-6836 Attn: Maurizio Levi-Minzi |
if to a Permitted Transferee: | To such Permitted Transferee as provided in its joinder agreement |
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Section 4.04. Governing Law; ICC Arbitration.
(a) This Agreement and the rights and obligations hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the conflict of laws rules thereof.
(b) Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereunder, including with respect to the formation, applicability, performance, breach, termination, validity or enforceability thereof, shall be fully and finally settled by arbitration. The arbitration shall be conducted by three arbitrators, in accordance with the Rules of Arbitration of the International Chamber of Commerce (“Rules”) in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The seat of the arbitration shall be New York, New York, USA and it shall be conducted in English, provided that either party may submit testimony or documentary evidence in any language if it furnishes, upon the request of the other party, a translation into English of any such testimony or documentary evidence. The arbitrators shall determine questions of arbitrability and jurisdiction and shall be empowered to grant interim relief.
(c) The arbitration award shall be final and binding on the parties. The parties undertake to carry out any award without delay and waive their right to any form of recourse based on grounds other than those contained in the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention,” which shall govern the arbitration and enforcement of any arbitral award) insofar as such waiver can validly be made. The parties agree to the exclusive jurisdiction of the federal courts located in New York County, New York for purposes of enforcing this section, and any arbitral award, in accordance with the New York Convention. The parties agree to personal jurisdiction in said courts for such purposes and irrevocably waive any defense on the basis of forum non conveniens, lack of jurisdiction or improper venue in regard to any such proceedings brought in the federal courts located in New York County, New York.
(d) The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within thirty (30) days of the receipt of the request for arbitration. The two (2) arbitrators shall nominate a third arbitrator within thirty (30) days after the nomination of the second arbitrator. The third arbitrator shall act as chair of the tribunal. If any of the three (3) arbitrators is not nominated within the time prescribed above, then the International Court of Arbitration of the International Chamber of Commerce shall appoint that arbitrator.
(e) In order to facilitate the comprehensive and efficient resolution of related disputes, and upon request of any party to the arbitration proceeding, the arbitration tribunal may consolidate the arbitration proceeding with any other arbitration proceeding relating to this Agreement or to the Share Purchase Agreement, Subscription Agreement or Stockholders Agreement. The arbitration tribunal shall not consolidate such arbitrations unless it determines that (i) there are issues of fact or law common to the two proceedings so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party would be unduly prejudiced as a result of such consolidation through undue delay or otherwise.
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(f) Notwithstanding anything to the contrary in this Agreement, a party may make a request to a court of competent jurisdiction or pursuant to the Rules for interim or emergency measures necessary to preserve the party’s rights, including pre-arbitration attachments or injunctions. A request for such interim relief to a court shall not be deemed incompatible with, or a waiver of, this agreement to arbitrate. Each of the parties hereto recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach or threatened breach of any provision of this Agreement the aggrieved party, in addition to any other remedy which may be available to such party at law or in equity, will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.
(g) All disputes under this Agreement shall be kept confidential. In any arbitration proceeding, the arbitrators shall take all measures necessary for the protection of Confidential Information. All proceedings and any award and any information obtained from another party in connection with the arbitration shall be deemed Confidential Information subject to Article 13 of the Share Purchase Agreement; provided that the parties further agree that such Confidential Information may be disclosed to the extent necessary to enforce any award or enforce this Agreement to arbitrate, provided, further, that the parties agree to take all reasonable measures to protect the confidentiality of the proceedings and the disclosure of any Confidential Information in connection therewith, including to file all papers under seal.
(h) The arbitrators shall have the power to make an award allocating the costs and expenses of the arbitration between the parties, including reasonable legal fees and other costs of legal representation. Any award shall be determined and payable in Euros. For the avoidance of doubt, the remedies that may be awarded by the arbitrators hereunder are limited as specifically set forth in Section 6 of the Subscription Agreement.
Section 4.05. Headings. The heading references herein are for convenience purposes only, and shall not be deemed to limit or affect any of the provisions hereof.
Section 4.06. Integration. This Agreement, the Share Purchase Agreement and the other transaction documents contemplated in the Share Purchase Agreement, including the Subscription Agreement and the Stockholders Agreement, constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof and thereof.
Section 4.07. 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 4.08. 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.
* * *
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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: | General Counsel, Senior Vice President and Secretary |
[Signature Page to Registration Rights and Lock-Up Agreement]
LAURO CINQUANTASETTE S.P.A. | ||
By: | /s/ Maurizio Bottinelli | |
Name: | Maurizio Bottinelli | |
Title: | Director |
[Signature Page to Registration Rights and Lock-Up Agreement]
Exhibit A
Required Information
The attached questionnaire (the “Questionnaire”) is being furnished to you (the “Stockholder”) in connection with a registration statement (the “Registration Statement”) to register for public offering and resale the shares of Common Stock of Albany Molecular Research, Inc. (“AMRI”) issued by AMRI (the “Registrable Shares”) in connection with its acquisition of shares of Prime European Therapeuticals S.p.A. - Euticals (“Euticals”).
Rules of the Securities and Exchange Commission require information about the holders of Common Stock of AMRI to be included in the registration statement. In addition, rules of the Financial Industry Regulatory Authority also require that AMRI confirm certain matters relating to relationships that stockholders may have with registered broker-dealers regulated by FINRA. This Questionnaire requests information responsive to these requirements, and AMRI will rely on the information that each stockholder supplies in preparing the Registration Statement and related regulatory filings.
Please answer every question fully in accordance with the instructions in the Questionnaire. If you have questions about the Questionnaire, please contact Benjamin Seisler of AMRI at 518-512-2264 or Benjamin.Seisler@amriglobal.com.
Certain legal consequences
arise from being named as a stockholder in the Registration Statement and the related prospectus, and you may wish to consult with
your own lawyer about those consequences.
**********************
PLEASE COMPLETE, SIGN, DATE AND RETURN THE QUESTIONNAIRE NO LATER THAN [ ], [ ] TO:
Benjamin Seisler
Albany Molecular Research, Inc.
26 Corporate Circle
Albany, NY 12212
Benjamin.Seisler@amriglobal.com
A-1
Questionnaire
Please answer every question fully. If the answer to any question is “None” or “Not Applicable,” please so state in the space provided. If the space provided is insufficient, please attach additional sheets with your complete answer. If, after you have returned the Questionnaire, you learn of any inaccuracy in your responses or of information that would change your responses in any way, please contact Benjamin Seisler of AMRI at 518-512-2264 or Benjamin.Seisler@amriglobal.com.
Terms appearing in boldface have the meanings assigned to them in Schedule A to this Questionnaire.
****************
1. | (a) | Full Legal Name of Stockholder: |
(b) | Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Shares listed in Item 3, below, are held: | |
(c) | Full Legal Name and Title of Persons with Investment/Voting Power of Stockholder Relating to the Registrable Shares: | |
2. | Mailing Address for Notices to Stockholder: | ||||
Telephone: | Fax: | ||||
Contact Person: | |||
Email: | |||
Taxpayer I.D. # (SSN): |
3. Interest in AMRI
3.1 Indicate the number of shares of AMRI’s equity securities “beneficially owned” by you (including those attributable to you) as of the date you sign this Questionnaire, excluding shares of AMRI Common Stock received in exchange for your Euticals shares in AMRI’s acquisition of Euticals.
Number of Equity Securities and |
Number of Equity Securities |
Number of Equity Securities Owned of Record of which You Disclaim Beneficial Ownership | ||
Common Stock: |
3.2 Do you have the right (through conversion rights, exercise of options, warrants or similar rights, or termination or revocation of a trust or other discretionary account) to acquire “beneficial ownership” of shares of any AMRI equity securities within the 60 days following the date hereof (excluding shares of AMRI Common Stock received in exchange for your Euticals shares)? If yes, indicate the type of right, the number of shares covered by such right, whether the right is currently exercisable or, if not, when the right becomes exercisable.
No_____ Yes _____ (describe below)
Type of Right |
Number of Shares or Securities Covered |
Time Becomes Exercisable | ||
4. Relationship with AMRI.
Except as set forth below, neither the undersigned nor any of the undersigned’s “affiliates,” officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with AMRI (or its predecessors or affiliates) during the past three years. For purposes of this Item, please include information with respect to any position or office or other material relationship with AMRI that any of your “immediate family members” may have had during the relevant period.
State any exceptions:
| |
5. | Are you (i) a “member” of the Financial Industry Regulatory Authority, or FINRA, (ii) an owner of stock or other securities of a “member” of FINRA, (iii) an “affiliate” of a “member” of FINRA, (iv) a “person associated with a member” or “associated person of a member” of FINRA, or (v) an “underwriter or related person” with respect to the proposed public offering? |
No ____ Yes ____
If you answered yes, please describe the relationship: | |
6. | If your answer to Item 5 was yes, please indicate below information as to all of your purchases and acquisitions (including contracts for the purchase or acquisition) of any securities of the “issuer,” regardless of the time acquired or the source from which derived: |
Seller or Prospective Seller |
Amount and Nature of Securities |
Price or Other Consideration |
Date | |||
7. | If your answer to Item 5 was yes, then in connection with your direct or indirect “affiliation” or “association” with a “member” of FINRA as set forth above in Item 5, please furnish the identity of such FINRA “member” and any information, if known, as to whether such FINRA “member” intends to “participate” in any capacity in the proposed public offering, including the details of such “participation.” |
Description: | |
8. | Please indicate below information as to all sales and dispositions (including contracts for the sale or disposition) of any securities of the “issuer” during the last six months by you to any “underwriter or related person” with respect to the proposed public offering, “member” of FINRA, “affiliate of a member” of FINRA, “person associated with a member” or “associated person of a member” of FINRA: |
Buyer or Prospective Buyer |
Amount and Nature of Securities |
Price or Other Consideration |
Date | |||
9. | If you have had during the last six months, or are to have within the next six months, any transaction of the character referred to in either Item 6 or 8 above, describe briefly the relationship, affiliation or association of both you and, if known, the other party or parties to any such transaction with any “underwriter or related person” with respect to the proposed offering. In any case where the purchaser (whether you or any such party) is known by you to be a member of a private investment group, such as a hedge fund or other group of purchasers, furnish, if known, the names of all persons comprising the group and their association with or relationship to any broker-dealer. |
Description: | |
10. | Indicate below whether or not you have any information pertaining to any arrangement entered into since [Insert Date][NOTE: Should be the date that is 180 days prior] or that will be entered into at any time within 90 days following the date of commencement of sales in the offering providing for the receipt of any “item of value” from the “issuer” to any “underwriter or related person,” except for information regarding nonconvertible or non-exchangeable debt securities acquired or “derivative instruments” entered into for a “fair price” in the ordinary course of business in a transaction “unrelated to the public offering.” |
¨ I know of no such information.
¨ I know of such information, which is described below.
Description: | |
[Remainder of page intentionally left blank]
The undersigned agrees to notify AMRI promptly of any inaccuracies or changes in the information provided herein that occur subsequent to the date hereof at any time while the Registration Statement is being prepared or is effective. All notices hereunder shall be made in writing to the attention of the persons specified at the address provided herein.
By signing below, the undersigned consents to inclusion of information contained in its answers to this Questionnaire in the Registration Statement and the related prospectus. The undersigned understands that AMRI will rely on the information provided by the Stockholder in this Questionnaire (or updates thereto) in connection with the preparation or any amendment or supplement of the Registration Statement and the related prospectus and any other related regulatory filings.
IN WITNESS WHEREOF, the undersigned hereby certifies that the foregoing answers to this Questionnaire are accurate and complete.
DATED: _____________ ____, 2016
Print Name: | ||
Print Title (if applicable): |
Exhibit 10.1
Execution Version
ALBANY MOLECULAR RESEARCH, INC.
SUBSCRIPTION AGREEMENT
DATED AS OF May 5, 2016
THIS SUBSCRIPTION AGREEMENT, dated as of May 5, 2016 (this “Agreement”), is made by and among Albany Molecular Research, Inc., a company incorporated under the laws of Delaware, United States (the “Company”) and Lauro Cinquantasette S.p.A, a company incorporated under the laws of Italy (the “Subscriber”).
WHEREAS, the Company and the Subscriber are parties to that certain Share Purchase Agreement, dated as of the date hereof (as it may be amended from time to time, the “Share Purchase Agreement”), pursuant to which, among other things, the Company intends to buy and the Subscriber intends to sell 100% of the capital stock of Prime European Therapeuticals S.p.A. – Euticals (the “Euticals Stock” and “Euticals,” respectively), a company organized and existing under the laws of Italy, with registered office at Viale Bianca Maria 25, Milano Italy, Italian Tax Code No. 07254610152 (the “Transaction”);
WHEREAS, the Company, as partial consideration for the Subscriber’s sale of the Euticals Stock, intends to (i) issue and sell to the Subscriber the Consideration Shares (as defined herein) pursuant to the terms of this Agreement and (ii) issue to the Subscriber Promissory Note A and Promissory Note B, each dated as of the date of Closing, issued by the Company to the Subscriber;
WHEREAS, concurrently with entering into this Agreement, the Company and the Subscriber shall enter into the Registration Rights and Lock-Up Agreement (the “Registration Rights Agreement”); and
WHEREAS, concurrently with the Closing, the Subscriber and the other parties named therein shall enter into the Stockholders Agreement in the form set forth on Schedule 1.1(P) to the Share Purchase Agreement (the “Stockholders Agreement”, and together with the Registration Rights Agreement, the “Rights Agreements”).
NOW, THEREFORE, in consideration of the foregoing, the agreements set forth in this Agreement, and other good and valuable consideration, the adequacy and receipt of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. For the purposes of this Agreement, the following terms shall have the following respective meanings.
“Adjustment Date” shall have the meaning assigned in Section 6(d)(iii).
“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.
“Agreement” shall have the meaning assigned in the preamble.
“Applicable Law” means, with respect to any Person, any transnational, domestic or foreign federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a governmental authority that is binding upon or applicable to such Person, as amended unless expressly specified otherwise, including, as it relates to the Consideration Shares/Shares, the requirements of any applicable federal or state securities laws or the rules, regulations or listing standards promulgated by any national securities exchange on which such shares are traded.
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“Board” shall mean the board of directors of the Company.
“Business Day” shall mean a day (other than a Saturday or a Sunday) on which banks generally are open in Milan, Italy and New York, New York.
“Buyer” shall have the meaning assigned in the Share Purchase Agreement.
“Carry Over Amount” shall have the meaning assigned in Section 6(d)(iii).
“Claim of Indemnity” shall have the meaning assigned in Section 6.(d)(iv).
“Company” shall have the meaning assigned in the preamble.
“Company Indemnitees” shall have the meaning assigned in Section 6.(c).
“Company Public Filings” shall have the meaning assigned in Section 4.
“Computershare” shall have the meaning assigned in Section 2.(a).
“Consideration Shares” shall have the meaning assigned in Section 2.(a).
“Direct Claim” shall have the meaning in Section 6.(d)(v).
“Escrow Agent” shall mean Cordusio Fiduciaria S.p.A., a company incorporated under the laws of Italy, with registered office in Italy, at Via Dante n. 4, Milan, registered with the Companies’ Register of Milan under no. 01855720155, REA n. 863916, or, in the event of its non-acceptance or its subsequent waiver of its appointment pursuant to this Agreement, another escrow agent nationally recognized within the United States and Italy which shall be designated by the Company and reasonably acceptable to the Subscriber (or as may otherwise be designated in accordance with the terms of the Escrow Agreement).
“Escrow Agreement” shall mean the agreement in the form of Schedule 1.1(E) of the Share Purchase Agreement to be executed and delivered by the parties and the Escrow Agent at Closing.
“Euticals Stock” shall have the meaning assigned in the recitals.
“Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.
“FCPA” shall have the meaning assigned in Section 4.(q).
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“Fundamental Representations” shall mean (a) with respect to the Company, the representations and warranties in Sections 4(a) (Existence, Qualification and Power); 4(b) Authorization, Noncontravention); 4(c) (Governmental Authorization); 4(d) (Binding Effect); 4(e) (Capitalization); 4.(i) (Issuance of Company Common Stock); 4(t) (Brokers and Finders) and (b) with respect to the Subscriber, the representations and warranties in Sections 3.(a) (Existence, Qualification and Power); 3.(b) (Authorization; Noncontravention); 3.(c) (Governmental Authorization); 3.(d) (Binding Effect); and 3.(g) (U.S. Securities Law Representations) of this Agreement.
“Indemnified Party” shall mean the Company Indemnitee or the Subscriber Indemnitee, as the case may be.
“Indemnifying Party” shall mean the Company or the Subscriber, as the case may be.
“Indemnity Escrow Account” means a separate account maintained by the Escrow Agent that holds the Indemnity Escrow Amount as a trust fund for the purpose of the indemnification in accordance with Section 6 of this Agreement according to the Escrow Agreement.
“Indemnity Threshold” shall have the meaning assigned in Section 6.(d)(i).
“Intellectual Property Rights” shall have the meaning assigned in Section 4.(s).
“Lien” shall means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, easement, right-of-way or other encumbrance on title, lien (statutory or otherwise), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing); provided that any operating lease or license, and any filing of a UCC financing statement that is a protective lease filing in respect of an operating lease and any filings with the governmental authority in respect of any license do not constitute Liens.
“Litigation” means any action, cease and desist letter, demand, suit, arbitration proceeding, administrative or regulatory proceeding, citation, summons or subpoena of any nature, civil, criminal, regulatory or otherwise, in law or in equity.
“Losses” means any damage, loss, liability or expense (including reasonable expenses of investigation, enforcement and collection and reasonable attorneys’ and accountants’ fees and expenses in connection with any Litigation and any incidental, indirect or consequential damages, losses, liabilities or expenses, and any lost profits or diminution in value), whether or not involving a Third Party Claim.
“Period 1 Cap” shall mean, with respect to each of the Company and the Subscriber, €31,000,000.
“New York Convention” shall have the meaning assigned in Section 8.(d)(iii).
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“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.
“Revised Cap” shall have the meaning assigned in Section 6.(d)(ii).
“Rights Agreements” shall have meaning assigned in the recitals.
“Rules” shall have meaning assigned in Section 8.(d)(ii).
“SEC” shall mean the Securities and Exchange Commission, or any successor agency having jurisdiction to enforce the Securities Act.
“SEC Documents” shall mean all reports, schedules, forms, statements and other documents with the SEC required to be filed by the Company or furnished by the Company since January 1, 2014 (including any items incorporated by reference or attached as schedules thereto).
“Securities Act” shall mean the United States Securities Act of 1933, as amended.
“Shares” shall mean shares of common stock, $0.01 par value per share, of the Company.
“Share Purchase Agreement” shall have the meaning assigned in the recitals.
“Stockholders Agreement” shall have the meaning assigned in the Share Purchase Agreement.
“Subscriber” shall have the meaning assigned in the preamble.
“Subscriber Indemnitees” shall have the meaning assigned in Section 6.(b).
“Subsidiary” shall mean, with respect to the Company or the Subscriber, as applicable, any domestic or foreign corporation, partnership, limited liability company, association or other business entity of which (i) if a corporation, more than 50% of the total voting power of stock entitled (other than stock or such other ownership interest having such power only by reason of the happening of a contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, or (ii) if a partnership, limited liability company, association or business entity other than a corporation, more than 50% of the partnership or other similar ownership interests thereof (other than stock or such other ownership interest having such power only by reason of the happening of a contingency) is at the time owned or controlled, directly or indirectly.
“Third Party Claim” shall have the meaning assigned in Section 6.(d)(v).
“Transaction” shall have the meaning assigned in the recitals.
“UKBA” shall have the meaning assigned in Section 4.(q).
“United States” shall have the meaning assigned in Section 3.(g)(vii).
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“U.S. Person” shall have the meaning assigned in Section 3.(g)(vii).
All capitalized terms not otherwise defined in this Agreement shall have the meanings assigned thereto in the Share Purchase Agreement.
2. Issuance of Shares.
(a) Issuance. Subject to (i) the terms and conditions hereof, (ii) closing under the Share Purchase Agreement, (iii) receipt by the Subscriber on the Closing Date of a certificate signed by a duly authorized officer of the Company stating (x) that the representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date with the same effect as though made at and as of such time (unless such representation and warranty speaks as of an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date), (y) that the Company shall have in all material respects duly performed and complied with all agreements, covenants and conditions required by this Agreement to be performed or complied with by the Company at or prior to the Closing and (z) the total number of Shares outstanding on the Closing Date prior to giving effect to the issuance of the Consideration Shares, (iv) receipt by the Company on the Closing Date of a certificate signed by a duly authorized officer of the Subscriber stating (x) that the representations and warranties of the Subscriber contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date with the same effect as though made at and as of such time (unless such representation and warranty speaks as of an earlier date, in which case such representation and warranty shall have been true and correct in all material respects as of such earlier date) and (y) that the Subscriber shall have in all material respects duly performed and complied with all agreements, covenants and conditions required by this Agreement to be performed or complied with by the Subscriber at or prior to the Closing, and (v) the Company having delivered to Computershare, N.A., in its capacity as the Company’s transfer agent (“Computershare”), with a copy to the Subscriber, a letter in the form attached hereto as Schedule A and, as a consequence of such letter from the Company to Computershare, the Company shall cause Computershare to, and Computershare shall, deliver to the Subscriber a share balance statement evidencing the fact that the Consideration Shares have been transferred via book-entry format to the Subscriber on and as of the Closing Date, then the Company shall issue to the Subscriber, and the Subscriber shall subscribe for and receive from the Company as partial consideration for the Transaction, 7,051,295 Shares issuable pursuant hereto and as contemplated by Article 5.2(i) of the Share Purchase Agreement (the “Consideration Shares”).
(b) Adjustment to Shares. (x) If the Company shall, at any time after the date hereof and until the Closing, (i) pay a dividend or make any other distribution upon any Shares of the Company common stock or any other capital stock of the Company payable in Shares, (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding Shares of the Company common stock into a greater number of Shares of the Company common stock, the number of Shares of the Company common stock to be issued to the Subscriber at the Closing shall be proportionately increased, and (y) if for any reason there exist any Excess Shares at the Closing, the number of Consideration Shares issued to the Subscriber at the Closing hereunder shall be decreased by such number of Excess Shares.
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3. Representations and Warranties of the Subscriber. The Subscriber represents and warrants to the Company, as of the date hereof (unless such representation and warranty speaks as of another date, in which case such representation and warranty is made as of such date), as follows:
(a) Existence, Qualification and Power The Subscriber (a) is duly organized or formed, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation or organization, (b) has all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business as presently conducted except to the extent that failure to possess such governmental licenses, authorizations, consents and approvals would not reasonably be expected to have a material adverse effect and (ii) execute, deliver and perform its obligations under this Agreement and the Rights Agreements and (c) is duly qualified and is licensed and in good standing under the laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license except to the extent that failure to do so would not reasonably be expected to have, individually or in the aggregate, a material adverse effect.
(b) Authorization; Noncontravention. The execution, delivery and performance by the Subscriber of this Agreement and each of the Rights Agreements (a) has been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action, and (b) do not and will not (i) contravene the terms of any of the Subscriber’s organization documents, or (ii) conflict with or result in any breach or contravention of any contractual obligation to which the Subscriber is a party, any Applicable Law, or any order, injunction, writ or decree of any governmental authority or any arbitral award to which the Subscriber or their respective property is subject, except in the case of this clause (ii) any such conflict, breach or contravention that would not reasonably be expected to have, individually or in the aggregate, a material adverse effect.
(c) Governmental Authorization. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority, is required by or with respect to the Subscriber in connection with the execution and delivery of this Agreement or the Rights Agreements by the Subscriber or the consummation by the Subscriber of the transactions contemplated hereby or thereby, except for such filings, authorizations, consents and approvals that if not obtained or made would not have, individually or in the aggregate, a material adverse effect on the ability of the Subscriber to consummate the transactions contemplated by this Agreement and the Rights Agreements.
(d) Binding Effect. This Agreement has been, and each of the Rights Agreements, when delivered hereunder, will have been, duly executed and delivered by the Subscriber. This Agreement constitutes, and each of the Rights Agreement when so delivered will constitute, a legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, examinership, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally.
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(e) Litigation. There is no Litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to the knowledge of the Subscriber, threatened in writing against the Subscriber, nor is the Subscriber subject to any outstanding order, writ, judgment, injunction or decree that, in any case, would (i) prevent, hinder or materially delay the consummation of the transactions contemplated by this Agreement or the Share Purchase Agreement or (ii) otherwise prevent, hinder or materially delay performance by the Subscriber of any of its respective obligations under this Agreement, the Share Purchase Agreement or the Rights Agreements.
(f) Proceedings. The Subscriber has not been: (i) subject to voluntary or involuntary petition under the U.S. or foreign federal bankruptcy laws or any state insolvency law or the appointment of a receiver, fiscal agent or similar officer by a court for the Subscriber’s business or property or that of any partnership of which the Subscriber was a general partner or any corporation or business association of which the Subscriber was an executive officer; (ii) convicted in a criminal proceeding or named as a subject of a pending criminal proceeding (excluding traffic violations and other minor offenses) or been otherwise accused of any act of moral turpitude; (iii) the subject of any order, judgment, or decree (not subsequently reversed, suspended or vacated) of any court of competent jurisdiction permanently or temporarily enjoining the Subscriber or otherwise imposing limits or conditions on the Subscriber’s ability to engage in any securities, investment advisory, banking, insurance or other type of business or acting as an officer or director of a public company; or (iv) found by a court of competent jurisdiction in a civil action or by the SEC to have violated any U.S. or foreign federal or state commodities, securities or unfair trade practices law.
(g) U.S. Securities Law Representations.
(i) U.S. Person. The Subscriber is not (a) a “U.S. Person”, and (b) acquiring any Consideration Shares for the account or benefit of a U.S. Person.
(ii) No U.S. Offer. No offer relating to the Consideration Shares was made to the Subscriber in the United States and, at the time of execution by the Subscriber of this Agreement and at the Closing, the Subscriber will be organized outside the United States.
(iii) Regulation S. Unless and until a valid registration statement is available to the Subscriber to resell the Consideration Shares in the public market, the Subscriber will resell the Shares received as Consideration Shares only in compliance with Regulation S or pursuant to another available exemption from the registration requirements of the Securities Act.
(iv) No Hedging. The Subscriber will not engage in hedging transactions with regard to any Shares issued under this Agreement unless in compliance with the Securities Act.
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(v) Unregistered Securities. The Subscriber understands that Shares will not, as of the Closing, be registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act, which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of the Subscriber’s representations as expressed herein and in the Share Purchase Agreement. The Subscriber understands that the Consideration Shares will be “restricted securities” under applicable U.S. federal and state securities laws when issued at the Closing.
(vi) Stock Legend. The Subscriber understands that the Shares and any securities issued in respect of or exchange for such Shares, may be notated with one or all of the following legends until such time as such Shares or such securities are no longer “restricted securities” under applicable U.S. federal securities laws as a result of registration under the Securities Act or otherwise:
“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NO SUCH TRANSFER MAY BE EFFECTED UNLESS IT IS DONE IN COMPLIANCE WITH REGULATION S OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933.
THE SHARES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCKHOLDERS AGREEMENT AND A REGISTRATION RIGHTS AND LOCK-UP AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.”
(vii) For purposes of this clause: “United States” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia. For purposes of this clause; “U.S. Person” means: (a) any natural person resident in the United States; (b) any partnership or corporation organized or incorporated under the laws of the United States; (c) any estate of which any executor or administrator is a U.S. Person; (d) any trust of which any trustee is a U.S. Person; (e) any agency or branch of a foreign entity located in the United States; (f) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. Person; (g) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the United States; and (h) any partnership or corporation if: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. Person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501 (a) under the Securities Act) who are not natural persons, estates or trusts; provided, however, the following are not “U.S. Persons”: (a) any discretionary account or similar account (other than an estate or trust) held for the benefit or account of a non-U.S. Person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States; (b) any estate of which any provisional fiduciary acting as executor or administrator in a U.S. Person if (i) an executor or administrator of the estate who is not a U.S. Person has sole or shared investment discretion with respect to the assets of the estate; and (ii) the estate is governed by foreign law; (c) any trust of which any professional fiduciary acting as trustee is a U.S. Person, if a trustee who is not a U.S. Person has sole and shared investment discretion with respect to the trust assets, and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. Person; (d) an employee benefit plan established and administered in accordance with the law of a country other than the United States and customary practices and documentation of such country; (e) any agency or branch of a U.S. Person located outside the United States if: (i) the agency or branch operates for valid business reasons; and (ii) the agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located; and; (f) the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, and their agencies, affiliates and pension plans, and any other similar international organizations, their agencies, affiliates and pension plans.
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4. Representations and Warranties of the Company. Except as otherwise set forth in and as would be required to be set forth in the publicly available reports, schedules, forms, statements and other documents (other than risk factors or forward looking statements) filed or furnished by the Company with the SEC since January 1, 2014 (the “Company Public Filings”), the Company hereby represents and warrants to the Subscriber, as of the date hereof (unless such representation and warranty speaks as of another date, in which case such representation and warranty is made as of such date), as follows:
(a) Existence, Qualification and Power. Each of the Company and its Subsidiaries (a) is duly organized or formed, validly existing and in good standing (to the extent such concept exists in the relevant jurisdiction) under the laws of the jurisdiction of its incorporation or organization, (b) taken as a whole, have all requisite corporate or other organizational power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own their assets and carry on their businesses as presently conducted except to the extent that failure to possess such governmental licenses, authorizations, consents and approvals would not reasonably be expected to have a material adverse effect and (ii) execute, deliver and perform their obligations under this Agreement and the Rights Agreements and (c) are duly qualified and are licensed and in good standing under the laws of each jurisdiction where their ownership, lease or operation of properties or the conduct of their businesses require such qualification or license except to the extent that such failures to do so would not, in the aggregate, reasonably be expected to have a material adverse effect on the Company and its Subsidiaries, taken as a whole.
(b) Authorization; No Contravention. The execution, delivery and performance by the Company of each of this Agreement and the Rights Agreements (a) has been duly authorized by all necessary corporate, partnership, limited liability company or other organizational action, and (b) do not and will not (i) contravene the terms of any of the Company’s or any of its Subsidiaries’ organization documents or (ii) conflict with or result in any breach or contravention of any contractual obligation to which the Company or any of its Subsidiaries is a party or any order, injunction, writ or decree of any governmental authority or any arbitral award to which the Company or any of its Subsidiaries or their property is subject or (iii) violate any law.
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(c) Governmental Authorization. No consent, waiver, approval, order or authorization of, or registration, declaration or filing with, or notice to, any governmental authority, is required by or with respect to the Company in connection with the execution and delivery of this Agreement or the Rights Agreements by the Company or the consummation by the Company of the transactions contemplated hereby or thereby, except for such filings, authorizations, consents and approvals that if not obtained or made would not, individually or in the aggregate, have a material adverse effect on the ability of the Company to consummate the transactions contemplated by this Agreement and the Rights Agreements.
(d) Binding Effect. This Agreement has been, and each of the Rights Agreements, when delivered hereunder, will have been, duly executed and delivered by the Company. This Agreement constitutes, and each of the Rights Agreements when so delivered will constitute, a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, examinership, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally.
(e) Capitalization. As of May 4, 2016, the authorized and outstanding capital stock of the Company consists of (a) 2,000,000 shares of preferred stock, none of which are outstanding, and (b) 100,000,000 Shares of the Company common stock, of which 35,702,763 Shares are outstanding. As of the date hereof and as of the Closing Date, (i) there are no options, warrants, securities or instruments convertible into or exchangeable for, or other rights, agreements, arrangements or commitments relating to, or obligating the Company or any of its Subsidiaries to issue or sell any Shares of, the capital stock of, or any other interest in the Company (other than this Agreement and the Rights Agreements), (ii) there have not been any non-cash dividends or in-kind distributions, including dividends or distributions of assets, property, rights, or options to acquire any assets property or rights of the Company, including securities issued by or the assets or properties of its Subsidiaries, declared or payable, or (iii) there has not been any issuance of equity securities (or any instrument exercisable or exchangeable for or convertible into the equity securities) of the Company for consideration per Share less than $15.5460, whether pursuant to a “shelf takedown” from the Company’s registration statement on Form S-3 filed with the SEC on December 8, 2014 or otherwise, in the case of this clause (iii), other than (x) any issuance pursuant to a registration statement on Form S-8 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 or (y) issuances of equity securities (or any instrument exercisable or exchangeable for or convertible into the equity securities) for consideration in the aggregate less than $5,000,000, and in each case of clause (i), (ii) and (iii), except as set forth in the Company Public Filings that are filed with the SEC prior to the date hereof.
(f) SEC Documents.
(i) The Company has filed the SEC Documents. None of the Company’s Subsidiaries is required to make any filings of SEC Documents. As of their respective dates of filing, the SEC Documents complied as to form in all material respects with the requirements of the Securities Act, or the Exchange Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable thereto, and none of the SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. There are no outstanding comments from the SEC with respect to any SEC Document.
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(ii) The audited consolidated financial statements and the unaudited quarterly financial statements (including, in each case, the notes thereto) of the Company included in the SEC Documents when filed complied as to form in all material respects with the published rules and regulations of the SEC with respect thereto, have been prepared in all material respects in accordance with U.S. GAAP (except, in the case of unaudited quarterly statements, as permitted by Form 10-Q of the SEC or other rules and regulations of the SEC) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited quarterly statements, to normal year-end adjustments).
(iii) The Company (i) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to Company, including its consolidated Subsidiaries, is made known to the principal executive officer and the principal financial officer of Company, and (ii) has disclosed, based on its most recent evaluation prior to the date hereof, to Company’s outside auditors and the audit committee of the Board of the Company (A) any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that are reasonably likely to adversely affect Company’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
(g) Exemption from Registration. Based in part on the representations made and warranties given by the Subscriber in this Agreement and in the Share Purchase Agreement, the offer and issuance by the Company of the Consideration Shares will be exempt from registration under the Securities Act.
(h) Short-Form Registration. The Company qualifies for registration on Form S-3 or any comparable or successor form or forms or any similar short-form registration.
(i) Issuance of Company Common Stock. The issuance of the Consideration Shares at the Closing shall have been duly authorized as of the Closing and, when issued and delivered and paid for as provided herein, the Consideration Shares will be validly issued, fully paid and non-assessable, free and clear of all Liens, and will not be subject to preemptive rights of the Company.
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(j) No Consent. Except for (a) compliance with the applicable requirements of the Exchange Act and the rules and regulations promulgated thereunder, (b) compliance with the rules and regulations of the NASDAQ and (c) compliance with any applicable blue sky laws, no material consent or approval of, or filing, license, permit or authorization, declaration or registration with, any governmental authority, any stock market or stock exchange on which the Shares of Company common stock are listed for trading are necessary for the execution and delivery of this Agreement by the Company, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereunder.
(k) Listing Compliance. The Company is in compliance with the requirements of the NASDAQ for continued listing of the common stock of the Company thereon. The Company has taken no action designed to terminate the registration of the common stock of the Company under the Exchange Act or the listing of the common stock of the Company on the NASDAQ, nor as of the date of this Agreement has the Company received any written notification that the SEC or the NASDAQ is contemplating terminating such registration or listing.
(l) Litigation. There is no Litigation, action, suit, proceeding, claim, arbitration or investigation pending or, to the knowledge of the Company, threatened in writing against the Company or its Subsidiaries, nor are the Company or its Subsidiaries subject to any outstanding order, writ, judgment, injunction or decree that, in any case, would (i) prevent, hinder or materially delay the consummation of the transactions contemplated by this Agreement or the Share Purchase Agreement or (ii) otherwise prevent, hinder or materially delay performance by the Company of any of its obligations under this Agreement, the Share Purchase Agreement or the Rights Agreements.
(m) Taxes. The Company and its Subsidiaries, taken as a whole, have timely filed, or caused to be filed, all federal, state, provincial, local and foreign Tax returns required to be filed, and paid all Taxes owing by it (including in their capacity as a withholding agent), whether or not shown on any such Tax returns, except Taxes the validity or the amount of which are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with U.S. GAAP. To the knowledge of the Company, there is no pending investigation, Tax audit or deficiencies of the Company or its Subsidiaries by any taxing authority or proposed Tax assessments against the Company or its Subsidiaries.
(n) Subsidiaries. Schedule 4(n) sets forth a complete and accurate list as of the date hereof of all Subsidiaries of the Company and the jurisdiction of formation of each such Subsidiary.
(o) Investment Company Act. The Company is not an “investment company” registered or required to be registered under the Investment Company Act of 1940, as amended.
(p) Compliance with Law. The Company and its Subsidiaries, taken as a whole, are in compliance with all requirements of law applicable to them or to their properties. To the knowledge of the Company, neither the Company nor its Subsidiaries nor any of their material properties or assets are in default with respect to any judgment, writ, injunction, decree or order of any court or other governmental authority. As of the date hereof, neither the Company nor its Subsidiaries has received any written communication from any governmental authority that alleges that the Company or its Subsidiaries are not in compliance in any material respect with any law, except for allegations that have been satisfactorily resolved and are no longer outstanding.
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(q) Anti-Corruption Laws. None of the Company and its Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or Company or its Subsidiary is aware of or has taken or failed to take any action, directly or indirectly, that has violated the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), the U.K. Bribery Act 2010 (“UKBA”), or any other applicable anti-corruption laws, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization or approval of the payment of any money, or other property, gift, promise to give or authorization of the giving of anything of value, directly or indirectly, to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office in contravention of the FCPA, or to any person, in contravention of the UKBA, or any other applicable anti-corruption laws. The Company, and its Subsidiaries and their respective Affiliates have conducted their businesses in compliance with the FCPA, the UKBA, and all other applicable anti-corruption laws and have instituted and will maintain policies and procedures designed to promote and achieve compliance with such laws and with the representation and warranty contained herein.
(r) Environmental Matters; Health and Safety Matters.
(i) The Company and its Subsidiaries, taken as a whole, are not and have not been in violation of any Environmental and Health and Safety Laws and the operations of the Company and its Subsidiaries at all plants, offices and other working sites are in compliance therewith.
(ii) No Real Properties (x) have been contaminated by any Hazardous Materials; (y) contain underground storage tanks; or (z) contain any asbestos containing material, in each case, in a manner that would reasonably be expected to result in material liabilities to the Company and its Subsidiaries under Environmental and Health and Safety Laws.
(s) Intellectual Property. The Company and its Subsidiaries, taken as a whole, and, with respect to patents and patent rights, subject to the knowledge of the Company, own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works of authorship, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted and as presently proposed to be conducted. The Company’s and its Subsidiaries’ Intellectual Property Rights have not expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within six (6) months from the date of this Agreement, other than resulting from reasonable business judgment of the Company. The Company has no knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company, being threatened, against the Company or its Subsidiaries regarding their Intellectual Property Rights. The Company is not aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.
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(t) Brokers and Finders. Except for Nomura Securities International, Inc., there is no investment banker, broker, finder or other intermediary retained by or authorized to act on behalf of the Company and its Subsidiaries who might be entitled to any fee or commission from the Subscriber or any of its Subsidiaries or Affiliates upon consummation of the transactions contemplated hereby.
(u) Transactions With Affiliates. Except as set forth in the Company Public Filings, none of the officers, directors or employees of the Company or any of its Subsidiaries, to the knowledge of the Company, is presently a party to any transaction with the Company or any of its Subsidiaries (other than for ordinary course services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation, partnership, trust or other Person in which any such officer, director, or employee has a substantial interest or is an employee, officer, director, trustee or partner.
5. Covenant of the Company. From the date hereof until the earlier of (i) the Closing or (ii) the termination of this Agreement in accordance with its terms, the Company and its Subsidiaries shall not enter into any definitive agreements for any merger, acquisition or business combination with an aggregate value of $50,000,000 or more other than the agreements and instruments related to the Share Purchase Agreement and the transactions contemplated therein and hereunder.
6. Indemnification.
(a) Survival. The representations and warranties of the Subscriber and the Company contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing and for twenty-four (24) months after the Closing; provided that the Fundamental Representations shall survive the execution and delivery of this Agreement and the Closing for forty-eight (48) months after the Closing.
(b) Indemnification by the Company. From and after the Closing, and subject to this Section 6, the Company shall defend, indemnify and hold harmless each of the Subscriber and its officers, directors, employees, agents, successors and assigns (collectively, the “Subscriber Indemnitees”) from and against, and pay or reimburse the Subscriber Indemnitees for, any and all Losses resulting from (i) any inaccuracy in or breach of any representation or warranty (except for an inaccuracy in or breach of Section 4.(i) (Issuance of Company Stock)) when made or deemed made by the Company in or pursuant to this Agreement, (ii) any inaccuracy in or breach of Section 4.(i) (Issuance of Company Stock) or (iii) any breach or default in performance by the Company of any covenant or agreement under this Agreement.
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(c) Indemnification by the Subscriber. From and after the Closing, and subject to this Section 6, the Subscriber shall defend, indemnify and hold harmless the Company and its officers, directors, employees, agents, successors and assigns (collectively, the “Company Indemnitees”) from and against, and pay or reimburse the Company Indemnitees for, any and all Losses resulting from (i) any inaccuracy in or breach of any representation or warranty when made or deemed made by the Subscriber in or pursuant to this Agreement or (ii) any breach or default in performance by the Subscriber of any covenant or agreement under this Agreement.
(d) Limitations on Indemnity. The Subscriber and the Company agree, for themselves and on behalf of the Subscriber Indemnitees and the Company Indemnitees:
(i) Limitations on Subscriber Indemnities. Except for claims for indemnification for Losses in respect of Fundamental Representations, no Subscriber Indemnitee will assert any claims for indemnification under Section 6(b) in respect of any Loss incurred or suffered by such Subscriber Indemnitee until such time as the aggregate of all Losses (including Losses in respect of Fundamental Representations) that the Subscriber Indemnitees may have under Section 6(b) exceeds €500,000 (the “Indemnity Threshold”), and then only for the aggregate amount of all Losses in excess of the Indemnity Threshold. The aggregate liability of the Company in respect of claims for indemnification pursuant to (x) Section 6(b)(i) and (iii) shall never exceed €31,000,000 and (I) until the date that is 24 months after the Closing Date, shall be limited to the Period 1 Cap and (II) after the date that is 24 months after the Closing Date and until the date that is 48 months after the Closing Date, shall be limited to the Revised Cap and (y) Section 6(b)(ii) shall be limited to €109,000,000.
(ii) Limitations on Company Indemnities. Except for claims for indemnification for Losses in respect of Fundamental Representations, no Company Indemnitee will assert any claims for indemnification under Section 6(c) in respect of any Loss incurred or suffered by such Company Indemnitee until such time as the aggregate of all Losses (including Losses in respect of Fundamental Representations) that Company Indemnitees may have under Section 6(c) together with all “Losses” that the “Indemnified Party” may have under Article 9.1 of the Share Purchase Agreement (as such terms are defined therein) exceeds the Indemnity Threshold, and then only for the aggregate amount of all Losses in excess of the Indemnity Threshold. Except for claims for indemnification for Losses relating to the title to shares (including title to INC Shares) representation and warranty of the Subscriber under the Share Purchase Agreement (the “SPA Title Representation”), the aggregate liability of the Subscriber in respect of claims for indemnification pursuant to Section 6(c) together with all “Losses” that the “Indemnified Party” may have under Article 9.1 of the Share Purchase Agreement (as such terms are defined therein) shall never exceed €31,000,000, and (I) until the date that is 24 months after the Closing Date, shall be limited to the Period 1 Cap and (II) after the date that is 24 months after the Closing Date and until the date that is 48 months after the Closing Date, shall be limited to the Revised Cap. For the avoidance of doubt, the aggregate liability of the Subscriber in respect of the SPA Title Representation shall be the Price.
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(iii) Revised Cap. For all and any Claim of Indemnity notified by the Indemnified Parties to the Indemnifying Party pursuant to this Agreement after the date that is 24 months following the Closing Date (the “Adjustment Date”), the Cap shall be reduced to a “Revised Cap” equal to the greater of (x) €15,000,000.00 and (y) the sum of €15,000,000.00 and the Carry Over Amount, provided that the Revised Cap shall under no circumstance exceed €31,000,000. For purposes hereof, “Carry Over Amount” means the aggregate value of Claims for Indemnity made prior to or on the date that is 24 months following the Closing Date which (a) the Indemnifying Party has acknowledged in writing to be due and payable to the Indemnified Party, but have not been paid prior to the Adjustment Date or (b) have been notified to the Indemnifying Party by the Indemnified Party in a notice complying with Section 6(d)(iv) below.
(iv) Claims. In the event that the Indemnified Party becomes aware of any Loss claim, proceeding or other matter in respect of which the Indemnifying Party is obliged to indemnify the Indemnified Parties pursuant to this Agreement, the Indemnified Party shall promptly provide written notice to the Indemnifying Party and, if applicable, the Escrow Agent of such claim, which notice shall state the nature of the claim, basis for indemnification of such claim, the amount thereof (to the extent known or estimated, which amount shall not be conclusive of the final amount of such claim), the method of computation thereof (to the extent known or estimated), any other material details pertaining to such claim and, in the case of a Third Party Claim (as defined below), the basis therefor and any remedy sought thereunder (collectively, the “Claim of Indemnity”), provided that any delay in giving such notice shall not relieve the Indemnifying Party of its obligations under this Agreement except to the extent of any damages actually suffered by the Indemnifying Party as a result of such delay.
(v) The Claim of Indemnity shall specify whether it arises as a result of a claim by a Person against an Indemnified Party (the “Third Party Claim”) or whether the Claim of Indemnity does not so arise (the “Direct Claim”).
(A) With respect to any Direct Claim,
(1) Following receipt of the Claim of Indemnity from the Indemnified Party, the Indemnifying Party shall have thirty (30) Business Days to make such investigation in connection with the Claim of Indemnity as it considers is reasonably required. For the purpose of such investigation, the Indemnified Party shall make available to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate its request of indemnification in respect of the Claim of Indemnity, together with all such other information as the Indemnifying Party may reasonably request.
(2) If both parties agree at or prior to the expiration of such thirty (30)-Business Day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim of Indemnity, then the Indemnifying Party shall pay to the Indemnified Party the full agreed upon amount of the Claim of Indemnity, failing which the matter shall be referred to the legal proceedings as provided for under Section 8.(d) (if in such instance a Company Indemnitee is the Indemnified Party, such amount shall be paid from the Indemnity Escrow Account or by means of offset against the Promissory Note B).
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(3) It is however further agreed that in any event in which within thirty (30) Business Days from the issuance of a Claim of Indemnity the Indemnified Party does not receive Indemnifying Party’s written notice formally contesting it, such Claim of Indemnity shall be deemed as finally agreed and accepted by the Indemnifying Party and such amount shall promptly be paid to the Indemnified Party (if in such instance the Indemnified Party is a Company Indemnitee, such amount shall be paid by the Escrow Agent out of the Escrow Account without the need for instruction from the Indemnifying Party or by means of offset against Promissory Note B regardless of the then-current holder of the Promissory Note B) .
(B) With respect to any Third Party Claim,
(1) The Indemnified Party shall properly and diligently defend (when applicable) any such Claim; the Indemnifying Party shall have the right to participate, and, where possible, join, at the Indemnifying Party’s own cost by counsel or counsels of its election, in the defense of any such claim.
(2) The Indemnified Party shall not make or accept any settlement of any Third Party Claim, nor shall make acquiescence thereto nor shall (to the extent of its ability) without the prior written consent of the Indemnifying Party, which consent shall not be withheld without reasonable justification.
(3) If the nature of any Third Party Claim is such that any Indemnified Party is required by any judgment, order, injunction, award, decree, law or regulation to make a payment to any third party (including public offices and authorities) with respect to the Third Party Claim before the completion of settlement negotiations or related legal proceedings, the Indemnified Party may make such payment and the Indemnifying Party shall, forthwith upon demand by the Indemnifying Party, reimburse the Indemnified Party for such payment (which, in instances where the Indemnified Party is a Company Indemnitee, such payment may be made from the Indemnity Escrow Account or by means of offset against the Promissory Note B). If the amount of any liability of the Indemnified Parties under the Third Party Claim in respect of which such payment was made, as finally determined, proves to be less than the amount that was paid by the Indemnifying Party to the Indemnified Party (including amounts paid from the Indemnity Escrow Account or by means of offset against the Promissory Note B), the Indemnified Party shall, forthwith upon receipt of the difference from the third party, pay the amount of such difference to the Indemnifying Party.
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(vi) Sole Remedy. Each party agrees that, from and after the Closing, the sole liability and obligations of each party and the sole right, remedy and entitlement of each party for recovery of any monetary claim with respect to this Agreement (and this Agreement only) shall be limited to indemnification under this Section 6, and each party hereby waives any and all other statutory and common law rights and remedies (including other rights of indemnification and contribution) which it now has or may hereafter have, provided that such waiver shall in no event be construed to prevent such party from seeking specific performance or other equitable relief or remedies or from bringing an action for actual fraud.
(vii) Escrow. Notwithstanding anything else herein, the Company Indemnitees shall, subject to the limitations contained in this Section 6, be entitled to indemnification under this Section 6 only to the extent of amounts available in the Indemnity Escrow Account or the remaining outstanding principal of Promissory Note B; it being understood that the Indemnity Escrow Account and Promissory Note B shall be the sole and exclusive source of recovery and remedy of any of the Company Indemnitees with respect to any claim for indemnification under this Section 6 and, as such, the indemnification obligations, set forth in this Section 6 are non-recourse in all respects to the Subscriber or any current, former or prospective stockholder, investor or limited partner, other Affiliate or the respective representatives of the Company. The amounts held in the Indemnity Escrow Account and set off against Promissory Note B shall be applied in the order claims related to the applicable Losses are resolved (i.e., Losses related to claims resolved at an earlier date will be satisfied before Losses related to claims resolved at a later date).
7. Termination. Without affecting any other right or remedy available to it, this Agreement shall terminate immediately without further action from either party if the Share Purchase Agreement is terminated pursuant to Article 2.6 or Article 2.7 of the Share Purchase Agreement.
8. Miscellaneous.
(a) Successors and Assigns; Third Party Beneficiaries. This Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto 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 (except for the Indemnified Parties under Section 6). The Subscriber shall not be permitted to distribute or otherwise transfer its Consideration Shares to any Person except in the manner set forth in the Rights Agreements (including, for the avoidance of doubt, in registered sales and/or private placements following the Lock-Up Period as provided in the Registration Rights Agreement). Prior to the Closing, this Agreement shall not be assigned and no rights or obligations hereunder may be transferred by the Subscriber. After the Closing, this Agreement shall not be assigned and no rights or obligations hereunder may be transferred by the Subscriber except that the Subscriber will be permitted to assign its rights and obligations to any Permitted Transferee as provided in (and as such term is defined in) the Rights Agreements (including, for the avoidance of doubt, in connection with private placements as provided in Section 3.01(c) and 4.01 of the Registration Rights Agreement). 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.
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(b) Amendment; Waiver. This Agreement may be amended only by an agreement in writing executed by all parties hereto. A 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.
(c) Headings. The heading references herein are for convenience purposes only, and shall not be deemed to limit or affect any of the provisions hereof.
(d) Governing Law; ICC Arbitration.
(i) This Agreement and the rights and obligations hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, without giving effect to the conflict of laws rules thereof.
(ii) Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement or the transactions contemplated hereunder, including with respect to the formation, applicability, performance, breach, termination, validity or enforceability thereof, shall be fully and finally settled by arbitration. The arbitration shall be conducted by three (3) arbitrators, in accordance with the Rules of Arbitration of the International Chamber of Commerce (“Rules”) in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The seat of the arbitration shall be New York, New York, USA and it shall be conducted in English, provided that either party may submit testimony or documentary evidence in any language if it furnishes, upon the request of the other party, a translation into English of any such testimony or documentary evidence. The arbitrators shall determine questions of arbitrability and jurisdiction and shall be empowered to grant interim relief.
(iii) The arbitration award shall be final and binding on the parties. The parties undertake to carry out any award without delay and waive their right to any form of recourse based on grounds other than those contained in the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the “New York Convention,” which shall govern the arbitration and enforcement of any arbitral award) insofar as such waiver can validly be made. The parties agree to the exclusive jurisdiction of the federal courts located in New York County, New York for purposes of enforcing this section, and any arbitral award, in accordance with the New York Convention. The parties agree to personal jurisdiction in said courts for such purposes and irrevocably waive any defense on the basis of forum non conveniens, lack of jurisdiction or improper venue in regard to any such proceedings brought in the federal courts located in New York County, New York.
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(iv) The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within thirty (30) days of the receipt of the request for arbitration. The two arbitrators shall nominate a third arbitrator within thirty (30) days after the nomination of the second arbitrator. The third arbitrator shall act as chair of the tribunal. If any of the three arbitrators is not nominated within the time prescribed above, then the International Court of Arbitration of the International Chamber of Commerce shall appoint that arbitrator.
(v) In order to facilitate the comprehensive and efficient resolution of related disputes, and upon request of any party to the arbitration proceeding, the arbitration tribunal may consolidate the arbitration proceeding with any other arbitration proceeding relating to this Agreement or to the Share Purchase Agreement, Registration Rights Agreement or Stockholders Agreement. The arbitration tribunal shall not consolidate such arbitrations unless it determines that (i) there are issues of fact or law common to the two (2) proceedings so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no party would be unduly prejudiced as a result of such consolidation through undue delay or otherwise.
(vi) Notwithstanding anything to the contrary in this Agreement, a Party may make a request to a court of competent jurisdiction or pursuant to the Rules for interim or emergency measures necessary to preserve the party’s rights, including pre-arbitration attachments or injunctions. A request for such interim relief to a court shall not be deemed incompatible with, or a waiver of, this agreement to arbitrate. Each of the parties hereto recognizes and agrees that money damages may be insufficient and, therefore, in the event of a breach or threatened breach of any provision of this Agreement the aggrieved party, in addition to any other remedy which may be available to such party at law or in equity, will be entitled to seek specific performance and injunctive relief, without posting bond or other security, and without the necessity of proving actual or threatened damages, which remedy such damaged party will be entitled to seek in any court of competent jurisdiction.
(vii) All disputes under this Agreement shall be kept confidential. In any arbitration proceeding, the arbitrators shall take all measures necessary for the protection of Confidential Information. All proceedings and any award and any information obtained from another party in connection with the arbitration shall be deemed Confidential Information subject to Article 13 of the Share Purchase Agreement; provided that the parties further agree that such Confidential Information may be disclosed to the extent necessary to enforce any award or enforce this Agreement to arbitrate, provided, further, that the parties agree to take all reasonable measures to protect the confidentiality of the proceedings and the disclosure of any Confidential Information in connection therewith, including to file all papers under seal.
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(viii) The arbitrators shall have the power to make an award allocating the costs and expenses of the arbitration between the parties, including reasonable legal fees and other costs of legal representation. Any award shall be determined and payable in Euros. For the avoidance of doubt, the remedies that may be awarded by the arbitrators hereunder are limited as specifically set forth in Section 6 of this Agreement.
(e) 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.
(f) Notices. Any notice or other communication to be given hereunder shall be in writing in the English language and signed by or on behalf of the party giving it and may be served by sending it by email, fax, delivering it by hand or sending it by registered mail return receipt requested to the address and for the attention of the relevant party as set out below:
(a) |
Party: | Company |
Address: | 200 West Street, 4th Floor, Waltham, MA 02451 | |
Email: |
lori.henderson@amriglobal.com | |
Telephone No.: | (781) 672-4535 | |
Attn. of: | Lori M. Henderson, Senior Vice President, General Counsel and Head of Business Development | |
With a copy to (which shall not constitute notice): | Goodwin Procter LLP | |
Attn. of: | Danielle M. Lauzon | |
Address: | 53 State Street, Boston, MA 02109, or if after June 24, 2016, 100 Northern Avenue, Boston, MA 02210 | |
Email: |
dlauzon@goodwinprocter.com | |
Telephone No.: | (617) 570-1000 | |
Facsimile No.: | (617) 523-1231 |
21
(b) |
Party: |
Subscriber |
Address: |
Lauro Cinquantasette S.p.A Via del Lauro, 7 - 20131 Milano | |
Phone:
Facsimile No.: |
+39-02-96953394 +39-02-8995221 +39-02-869522522 | |
Attn. of: | Chief Financial Officer | |
With a copy to (which shall not constitute notice): | Debevoise & Plimpton LLP | |
Attn. of: | Maurizio Levi-Minzi | |
Address: |
919 Third Ave., New York, NY 10022 | |
Email: Telephone No.: Facsimile No.: |
mleviminzi@debevoise.com (212) 909-6306 (212) 909-6836 |
(g) 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.
(h) Integration. This Agreement and the Share Purchase Agreement and the other transaction documents contemplated in this Agreement and the Share Purchase Agreement, including the Rights Agreements, constitute the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior agreements and understandings, both oral and written, among the parties hereto with respect to the subject matter hereof and thereof.
(i) Further Assurances. Each party shall use all reasonable best efforts to take or cause to be taken all actions, and to do or cause to be done all other things, that are necessary, proper or advisable in order for such party to fulfill and perform its respective obligations in respect of this Agreement and the Rights Agreements to cause the conditions to its respective obligations set forth in each therein, as applicable, to be fulfilled and otherwise to consummate and make effective the transactions contemplated hereby and thereby.
(j) Other Agreements. Nothing contained in this Agreement shall affect or prejudice in any manner the rights, obligations and remedies of either party under other agreements or documents entered into in connection with the Transaction, including but not limited to, the Share Purchase Agreement, the Rights Agreements and other agreements contemplated thereby.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties hereto have duly executed this Subscription Agreement as of the date first written above.
ALBANY MOLECULAR RESEARCH, INC. | ||
By: | /s/ Lori Henderson | |
Name: | Lori Henderson | |
Title: | General Counsel, Senior Vice President and Secretary |
[Signature Page to Subscription Agreement]
LAURO CINQUANTASETTE S.P.A. | ||
By: | /s/ Maurizio Bottinelli | |
Name: | Maurizio Bottinelli | |
Title: | Director |
[Signature Page to Subscription Agreement]
Schedule A
Form of Letter to Computershare
Executive Version
[●], 2016
Computershare Trust Company, N.A.
8742 Lucent Blvd., Suite 225
Highlands Ranch, CO 80129
[Contact Person]
Re: Issuance of shares of Albany Molecular Research, Inc.
Dear [●]:
In connection with the acquisition of Prime European Therapeuticals S.p.A. – Euticals (“Euticals”) by Albany Molecular Research Inc. (the “Company”), the Company hereby instructs Computershare Trust Company, N.A., as transfer agent for the Company, to take the necessary steps to issue the shares of Common Stock of the Company as indicated in Exhibit A attached hereto in book entry form-restricted accounts (the “Shares”). The effective date of the issuance shall be [●], 2016. The Shares shall bear the restrictive legends set forth on Exhibit B attached hereto, to be removed only upon the receipt of an opinion of counsel that such restricted legends can be removed.
Please debit the Company’s “Unallocated” shares for a total of [●] shares and post this transaction on [●], 2016.
The Company hereby instructs Computershare to treat this instruction letter as irrevocable and to carry out the actions referenced in this instruction letter without regard to any subsequent communications that Computershare may receive from the Company. Lauro Cinquantasette S.p.A. is an express third party beneficiary of this letter, authorized by the Company to enforce it in accordance with its terms.
Additionally, please immediately forward to the attention of counsel to the Company, Qing Nian at Goodwin Procter LLP, by email PDF copies of the book entry account evidencing the shares issued to the person listed on Exhibit A hereto. Ms. Nian’s email is qnian@goodwinprocter.com.
If you have any questions regarding this request, please contact Qing Nian at (617) 570-8707.
[remainder of page intentionally left blank]
Sincerely,
ALBANY MOLECULAR RESEARCH, INC. | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Instruction Letter]
Exhibit A
Name | Address | Tax Identification Number |
Number of Shares of Common Stock | |||
Lauro Cinquantasette S.p.A. |
Via Del Lauro n.7 Milan, Italy |
[●] | [●] |
Exhibit B
LEGEND required.
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. NO SUCH TRANSFER MAY BE EFFECTED UNLESS IT IS DONE IN COMPLIANCE WITH REGULATION S OR PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OF 1933.
THE SHARES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF A STOCKHOLDERS AGREEMENT AND A REGISTRATION RIGHTS AND LOCK-UP AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
Schedule 4(n)
Company Subsidiaries
Subsidiary | Jurisdiction of Formation | |
AMRI Bothell Research Center, Inc. | Delaware, USA | |
AMRI Burlington, Inc. | Massachusetts, USA | |
AMRI Rensselaer, Inc. | Delaware, USA | |
AMRI SSCI, LLC | Delaware, USA | |
ALO Acquisition, LLC | Delaware, USA | |
OSO Biopharmaceutials Manufacturing, LLC | Delaware, USA | |
Cedarburg Pharmaceuticals, Inc. | Delaware, USA | |
INB: Hauser Pharmaceutical Services, Inc. | Delaware, USA | |
Cedarburg Generics, LLC | Wisconsin, USA | |
Whitehouse Analytical Laboratories, LLC | New Jersey, USA | |
Albany Molecular Research Spain, S.L.U. | Spain | |
Gadea Grupo Farmaceutico, S.L. | Spain | |
Crystal Pharma, S.A. | Spain | |
Crystal Pharma, Ltd. | Malta | |
Gadea Biopharma, S.L. | Spain | |
Bioraw, S.L. | Spain | |
Bionice, S.L. | Spain | |
Albany Molecular Research (Glasgow) Limited | United Kingdom | |
Albany Molecular Research Limited | United Kingdom | |
Albany Molecular Research (UK) Limited | United Kingdom | |
Albany Molecular Luxembourg S.à r.l. | Luxembourg | |
Albany Molecular Research Mauritius Pvt. Ltd. | Mauritius | |
AMRI India Pvt. Ltd. | India | |
FineKem Laboratories Pvt. Ltd. | India | |
Albany Molecular Research Hyderabad Research Centre Pvt. Ltd. | India | |
Albany Molecular Research Singapore Research Centre, Pte. Ltd. | Singapore | |
Evergreen S.r.l. | Italy |
Exhibit 99.1
AMRI to Acquire Euticals in a Strategic
Transaction
That Expands its API Development and Manufacturing Business
· | Enters definitive agreement to acquire Euticals for $358 million in stock, cash and a seller note |
· | Positions AMRI as one of the largest independent developers and suppliers of API to the pharmaceutical industry |
· | Significantly expands AMRI’s presence in the European community |
· | Transaction expected to be accretive to AMRI’s 2016 non-GAAP diluted EPS |
· | AMRI’s 2017 pro forma revenue expected to exceed $750 million, with 2017 adjusted EBITDA margins of 20% |
Albany, NY (May 5, 2016) – AMRI (NASDAQ: AMRI) today announced that it has signed a definitive agreement to acquire all outstanding shares of Prime European Therapeuticals S.p.A., also known as “Euticals”, in a transaction valued at approximately $358 million (EUR 315 million), consisting of shares of AMRI common stock, cash, and a seller note.
Euticals is a privately-held company headquartered in Lodi, Italy, specializing in custom synthesis and the manufacture of active pharmaceutical ingredients (APIs). It operates a network of API facilities primarily in Italy, Germany, U.S. and France.
“The acquisition of Euticals will provide us an established custom synthesis presence in Europe and will further build on our expertise in complex APIs, positioning AMRI as a preeminent provider of contract research, development and manufacturing services to the pharmaceutical industry,” said William S. Marth, AMRI’s president and chief executive officer.
“Euticals’ expertise with niche and high barrier to entry technologies and products, including certain tetracyclines, monobactams, sterile and fermented APIs and controlled substances, will be a tremendous asset to us. Additionally, Euticals’ large base of over 400 customers will provide us with a number of new large pharma, biotech and generics partners, further extending our global reach and diversifying our revenue.
“Importantly, I am pleased that in connection with the closing of the transaction, Fernando Napolitano will be joining our Board of Directors on behalf of Lauro Cinquantesette, S.p.A (Lauro 57) and its majority investors, Clessidra Capital Partners II and Mandarin Capital Partner SCA SICAR. Clessidra’s and Mandarin’s combined expertise, deep contacts within the European pharmaceutical community and continued guidance will be invaluable to our efforts going forward. Margalit Fine, Euticals’ chief executive officer and former head of European API at Teva, will be leading Euticals’ operations as a senior executive for the combined company,” Mr. Marth said.
“On behalf of Lauro 57 and its investors, we couldn’t be more pleased to be joining AMRI,” said Clessidra Chief Executive Officer, Maurizio Bottinelli. “Its expertise in developing and manufacturing complex pharmaceutical products is well known and we look forward to joining forces to further expand our presence in the European community.”
Strategic Benefits of the Transaction
· | Significantly expands AMRI’s capabilities in custom and complex APIs |
o | Provides AMRI with an established European custom synthesis presence |
o | Expands expertise in multiple areas: sterile API, steroids, generics, fermentation, controlled substances and monobactams |
o | Provides an API portfolio that includes 50 active US Drug Master Files (DMFs), 17 EU Certificates of Suitability (COS) or Compliance with the European Pharmacopeia (CEP), 13 Japanese DMFs and 6 South Korean DMFs; with several APIs having filings in more than one of these areas and over two dozen other international filings |
· | Provides AMRI with global scale and a diverse customer and revenue base |
o | Euticals brings over 400 customers with no customer concentration |
o | With 75% of revenue outside North America, Euticals opens up many new markets for AMRI; more than half AMRI’s combined proforma revenue is expected to be ex U.S. |
o | Euticals brings additional portfolio diversification in generics; AMRI to leverage U.S. base to include Euticals’ strong generic portfolio |
Euticals operates a highly regarded API, custom synthesis and fine chemical development and manufacturing business with 2015 revenue and EBITDA of approximately $245 million and $27 million respectively. On a stand-alone basis, Euticals’ full year 2016 revenue is forecast to be between $245 million and $255 million, with adjusted EBITDA1 of between $34 million and $38 million, implying a purchase price multiple, prior to anticipated synergies, of approximately 9.9 times 2016 adjusted EBITDA at the midpoint of the range and excluding deal related costs or purchase accounting impacts. The transaction is expected to be accretive to AMRI’s 2016 non-GAAP diluted earnings per share. AMRI expects to generate operational synergies of $13 to $15 million over the next three years. On a pro forma basis including synergies, AMRI’s full year 2017 revenue is forecast to exceed $750 million, with adjusted EBITDA margins of approximately 20%.
Transaction Details, Financing and Closing
AMRI expects to finance the transaction through the issuance of approximately 7 million shares of AMRI common stock (currently valued at $110 million, equal to approximately 19.75% of AMRI common stock); a seller note of $63 million; and the remainder in cash. Including Euticals, AMRI believes that it will have the financial strength to manage its increased debt and plans to de-lever based on a combination of EBITDA growth and/or principal re-payments.
AMRI has entered into debt financing commitments with JP Morgan and Barclays for amounts that are expected to be sufficient to provide funds necessary to consummate the transaction. In addition to the financing, the closing of the transaction is subject to customary closing conditions, including Hart-Scott-Rodino clearance in the U.S.
1EBITDA reflects IFRS with an adjustment to U.S. GAAP only for capitalization of R&D expenses
The 7 million shares of AMRI common stock (the “Shares”) to be issued in connection with the transaction will be offered and sold outside the United States to Lauro 57, 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.
Nomura acted as exclusive financial advisor to AMRI in connection with this transaction and Goodwin Procter LLP and LCA Studio Legale acted as AMRI’s legal advisors. Lincoln International acted as sole financial advisor to Lauro 57, and Chiomenti Studio Legale and Debevoise & Plimpton LLP acted as Lauro 57’s legal advisors.
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 today 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 4868381. 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 (DPM). 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 supports the chemical development and cGMP manufacture of complex API, including potent and cytotoxic compounds, controlled substances, steroids, hormones, and sterile API. DPM supports development through commercial scale production of complex liquid-filled and lyophilized parenterals, sterile suspensions and ophthalmic formulations. For more information about AMRI, please visit our website at www.amriglobal.com or follow us on Twitter (@amriglobal).
About Euticals
Established in 1984, Euticals is a chemical company focused on Active Pharmaceutical Ingredients (APIs), Custom Synthesis and Fine Chemicals projects and products.
Today Euticals Group is one of the leading players in the Pharmaceutical & Fine Chemicals Industry with a global scale production and diversified manufacturing plants, offering multiple technology platforms.
Euticals’ mission is to be the partner of choice for pharmaceutical and related chemical industries, by supplying its API portfolio and providing custom manufacturing and custom synthesis with large industrial capacity and broad R&D developmental capabilities.
Forward Looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws that involve risks and uncertainties. These statements include, but are not limited to, statements regarding the acquisition of Euticals, the projected revenue and non-GAAP EBITDA of Euticals, the potential synergies associated with the transaction, the potential impact on AMRI’s operations and financial results and its accretive nature, and statements made by AMRI’s chief executive officer and a principal investor of Euticals, the expected timing for the closing of the transaction and AMRI’s expectations for financing the transaction, including the type of such financing; expectations regarding Euticals employees joining AMRI following the closing of the transaction and the contributions and responsibilities of those employees to AMRI’s and Euticals’ continued operations, the appointment of Fernando Napolitano to the AMRI board of directors after closing, the sufficiency of committed debt financing and AMRI’s existing cash to finance the transaction, repay AMRI’s current credit facilities and pay fees and expenses related to the transaction. Readers should not place undue reliance on our forward-looking statements. AMRI’s actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which AMRI may not be able to predict and may not be within AMRI’s control. Factors that could cause such differences include, but are not limited to, the ability of AMRI to effectively integrate the Euticals businesses; possible negative impacts to the revenue expected to be received by the Euticals businesses; trends in pharmaceutical and biotechnology companies’ outsourcing of manufacturing services and chemical research and development, including softness in these markets; the success of the sales of other products for which AMRI receives royalties; the risk that clients may terminate or reduce demand under any strategic or multi-year deal; AMRI’s ability to enforce its intellectual property and technology rights; AMRI’s ability to obtain financing sufficient to meet its business needs; AMRI’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operations; the results of further FDA inspections; AMRI’s ability to effectively maintain compliance with applicable FDA and DEA regulations; AMRI’s ability to integrate past or future acquisitions, and make such acquisitions accretive to AMRI’s business model, AMRI’s ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of AMRI’s strategic investments and acquisitions to perform as expected, as well as those risks discussed in AMRI’s Annual Report on Form 10-K for the year ended December 31, 2015 as filed with the Securities and Exchange Commission on March 30, 2016, and AMRI’s other SEC filings. Revenue, adjusted EBITDA, accretion and other financial guidance offered by senior management today with respect to 2016 and 2017 represent a point-in-time estimate and are based on information as of May 4, 2016. 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. AMRI 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
patty.eisenhaur@amriglobal.com
518-512-2261
Media
Carolyn Hawley
Canale Communications
Carolyn@canalecomm.com
619-849-5382
Exhibit 99.2
Acquisition of Euticals Discussion Materials May 5, 2016
Forward - Looking Statements This presentation may contain projections, estimates and other forward - looking statements that involve a number of risks and uncertainties, including those discussed in the Company’s filings with the Securities and Exchange Commission. While this presentation represents management’s current judgment on the future direction of the Company’s business, such risks and uncertainties could cause actual results to differ materially from any future performance suggested herein. The Company undertakes no obligation to release publicly the results of any revisions to these forward - looking statements to reflect events or circumstances arising after the date hereof. 1 1. For further information on Forward Looking Statements see Appendix A. 1
Euticals Transaction Summary 2 Euticals • One of the leading players in API in the EU Benefits • Doubles API revenues • Significantly expands EU footprint and customer base Consideration • $358 million in AMRI stock ¹ , seller note and cash Expected Closing • Third quarter of 2016 subject to customary closing conditions, including HSR clearance in the U.S. Leadership • Margalit Fine , CEO of Euticals to join AMRI • Fernando Napolitano to join Board of Directors ¹See Appendix B
AMRI is Uniquely Positioned to Capitalize on a Growing Trend in Pharmaceutical Outsourcing • Fast - growing contract research, development and manufacturing company serving the brand and generic pharmaceutical markets • Growing portfolio of complex API • Integrating legacy drug discovery expertise with expanding product development and manufacturing capabilities • Service offering spans entire drug development spectrum from discovery to manufacturing Discovery & Development Services (DDS) API Manufacturing Drug Product Manufacturing 3
AMRI is Building a Preeminent C ontract Research, Development and Manufacturing Organization for Complex Science Discovery & Development Services (DDS) API Manufacturing Drug Product Manufacturing Sold State Chemistry 2015 API, Drug Product EU Footprint 2015 Commercial Scale Sterile Fill/Finish 2014 Labs Qualification Testing & Analytical 2015 Formulation & Manufacturing 2014 Glasgow API, Custom Synthesis EU Footprint 2016 Integrated Drug Discovery Center Operational; New Alliances 2015 Controlled Substance API 2014 Initiated Generic Development & Manufacturing 2014 4
Strategic Rationale for Euticals Transaction 5 Elevates AMRI to a leading global player in API Addition of complex assets with high barriers to entry Expands footprint in generics Further growth into Europe Opportunity in fermentation and EU custom synthesis Potential operating, revenue and capital expenditure synergies to drive incremental value
Euticals Acquisition Elevates AMRI to a Leading Global API Developer and Manufacturer More than doubles API contract revenue 1 • Euticals 2015 total revenue: $245M Significantly expands portfolio of niche, high barrier to entry APIs • Sterile API, steroids, monobactams, boronic acids, controlled substances • Significantly expands generic portfolio Expands AMRI’s global footprint • Headquartered in Italy, additional facilities in US, France, Germany • 75% of Euticals revenue is generated ex - US • Provides European - based custom synthesis capabilities Expands and diversifies customer base • 400 customers; little customer concentration Adds new capabilities/technologies • Hydrogenation, fermentation, photocatalytic chemistry , industrial chromatography and spray drying 6 1. On a pro forma basis. All of Euticals revenues have been included in the API segment. Further analysis to be completed to confirm
Euticals Significantly Diversifies AMRI Geographic Revenue Streams 60% 27% 7% 6% Sales US EU 48% 31% 11% 11% Sales RoW Asia EU US 7 Asia RoW AMRI Standalone 2015 Pro Forma 2015
API MANUFACTURING CUSTOM SYNTHESIS CONTRACT MANUFACTURING FINE CHEMICALS 65% 20% 15% Extensive product portfolio, >200 APIs Global market leadership in many products P rocess development, scale - up, validation and rapid volume escalation N on - GMP to full cGMP synthesis and chemical manufacturing services Broad technological expertise Euticals is a Leading Player in the Pharmaceutical & Fine Chemicals Industry 863 Employees | 9 Manufacturing sites | 17 EU COS/CEPs | 50 US DMFs 8
Euticals 2015 Key Figures 9 Extensive Portfolio Over 61 active projects in CS/CMO including 17 CEP granted 400 & 66 EU & US DMF Filed 11 API handled in CS/CMO Qualifications on going 4 Main new launches expected in 2016 More than 70 New Sales More than $244 million t urnover Business 3 Business segments Over 70 c ountries s erved More than 400 c ustomers Global Presence 8 out of top 10 p harma served 1) 2016 estimate 2) Based on 2015 financials Top 15 products ~50% of revenues 1 Top 5 customers ~30% of revenues 2
Hyderabad Singapore Aurangabad Albuquerque, NM Burlington, MA Grafton, WI Glasgow, UK West Lafayette, IN Valladolid Léon San Cristóbal Malta Rensselaer, NY Albany, NY Buffalo, NY Lebanon, NJ Euticals Significantly Expands EU Footprint Adds to AMRI’s Global Service and Product Offering Euticals Expertise Location Lodi, Italy Large volumes High potency API Rozzano, Italy Fermentation (2 facilities) Semi - synthesis Monobactams Origgio, Italy Hydrogenation Tetracyclines Tonneins, France Aseptic filtration Crystallization Bon - encountre, Organometallic chemistry France Cryogenic chemistry Aseptic filtration Custom synthesis Frankfurt, Boronic acids Germany T3P® reagent Custom synthesis Springfield, MO Controlled substances Custom products Missouri Italy France Germany 10
Synergies are Financially Compelling Fully - phased in synergies of $13M to $15M will have a significant impact on EPS and bring EBITDA margins inline with AMRI Expected to be accretive to non - GAAP EPS in 2016 2017 pro forma revenue forecast to exceed $750 million, with adjusted EBITDA margins of approximately 20% Potential cap ex avoidance synergies are > $ 30M • Adds additional fermentation and sterile API capacity • Fine Chemicals business provides key support to API business 11
Euticals Transaction Details 12 Consideration • $358 million in AMRI stock ¹ , seller note and cash Financing • $63 million seller note • 0.25% annual interest, 5 - year note, amortization in years 3 - 5 Debt Terms • Senior credit facility commitment by JP Morgan and Barclays • Adds $230M to existing loan, pending consent • Repayment of $30M revolver • Remaining cash for general operations Leverage • Accretive to AMRI’s 2016 non - GAAP diluted EPS • Projected organic growth supports delevering next 18 months • Co - development royalties starting in 2017 will also facilitate debt pay down ¹See Appendix B
The API Market Environment Market Characteristics Global pharmaceutical market to grow from ~ $750 billion in 2014 to almost $1,000 billion by 2020 • Generics are driving volume growth • US is growing by 5% with 88% of prescriptions being filled as generics • Japan is pushing to be at 60% generics by 2018 • Europe is less than 40% generic …but, growing. Estimated API market we are targeting is $16 to $20 billion and growing Recent record of 51 new molecular entities were approved by the FDA in 2015 • 28 small molecules • 16 cancer (i.e. cytotoxic) • 5 peptides • 20 biologics (6 by CBER); remainder by CDER Rule of Thumb: API costs are < 5 % of the price a typical branded product and 20% of a generic product . Therefore, generics can be more profitable. 13
Targeted Segments for Growth in APIs √ Controlled Substances • C - II API’s must be manufactured domestically limiting foreign competition • Constant stream of NCEs. Constant reformulation of old opioids (e.g. abuse deterrent forms of “Vicodin ®” • Likely Pathway: Organic Peptides/Proteins • Specialized chemistry that has not gotten the attention from Asian companies. (Western companies are selling API to India today.) • Constant stream of NCEs • Most dosage form products are injectable and some complex injectables • Likely Pathway: Inorganic √ Custom/Complex Chemistry • Segments with barrier to entry (like Cytotoxic, Vitamin D derivatives) • This segment must be grown through robust selling, relationships, retention of early stage development customers and repeat customers • Constant stream of NCEs • Likely Pathway: Organic and Inorganic 14 √ Steroids/Hormones • European regulations regarding isolation of steroid manufacturing have limited competition • Likely Pathway: Inorganic and Organic
Entering A New Growth Era as Outsourcing Trends Increase Global pharma simplifying to core competencies • Reducing internal resources • Generic competition • Divesting fixed assets • Avoiding technology investments Early to mid - stage companies accessing outsourcing • VCs / Academia / Virtual pharma Increased funding fueling increase in early discovery and development Industry consolidation triggering interest in larger outsourcing partners • Vendor consolidation programs benefitting integrated providers Clear Trend Back to Western Supply Quality and i ntegrity issues IP protection Enhanced collaboration 15
16 Acquisition Supports Goal to Achieve $1B in Revenues in 2018 $0 $200 $400 $600 $800 $1,000 $1,200 2013 2014 2015 2016E 2017 Pro Forma 2018E $479 > $750 $1,000 $403 $277 $247 DDS API Drug Product Royalties Total 1. 2016E is midpoint of guidance 2. 2017 proforma includes Euticals revenues 3. 2018 guidance as of Feb. 2016
17 AMRI Strategy – Disciplined Expansion • Capitalizing on expertise in chemistry • Leverage global recognition in chemistry to build biology • Accelerate growth through attractive partnerships and M&A Discovery & Development Services • Expanding generic portfolio and global footprint • Focusing on high value, niche APIs; Controlled substances, steroids, proteins, peptides, complex and cytotoxics • Additional acquisitions feasible for the right deal • Generic product alliances API Manufacturing • Increasing scale to take advantage of growing market needs • Focusing on high value, technically challenging areas • Capitalize on end - to - end sterile fill/finish capabilities • Identify key technologies to acquire • Generic product alliances Drug Product Manufacturing Organic Growth and C ontinued F ocus on Strategic and Opportunistic Acquisitions 17
Appendix
Appendix A Forward Looking Statements This presentation includes forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws that involve risks and uncertainties. These statements include, but are not limited to, statements re gar ding the acquisition of Euticals, the projected revenue and non - GAAP EBITDA of Euticals, the potential synergies associated with the transaction, the potential impact on the Company’s operations and financial results and its accretive nature, the expected timing for the closing of the transaction and the Company’s expectations for financing the transaction, including the type of such financing ; expectations regarding Euticals employees joining the Company following the closing of the transaction and the contributions and responsibilities of those employees to the Company’s and Eutical’s continued operations, the appointment of Fernando Napolitano to the Company’s Board of Directors after closing, the sufficiency of committed debt financing and the Company’s existing cash to finance the transaction, repay the Company’s current credit facilities and pay fees and expenses related to the transaction . Readers should not place undue reliance on our forward - looking statements. The Company’s 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 Com pany expressly disclaims any current intention or obligation to update the guidance provided or any other forward - looking statement i n this presentation 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 presentation. 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. Fa ctors that could cause such differences include, but are not limited to, the ability of the Company to effectively integrate the Eutical s b usinesses; possible negative impacts to the revenue expected to be received by the Euticals businesses; trends in pharmaceutical and biotechnolog y c ompanies’ outsourcing of manufacturing services and chemical research and development, including softness in these markets; the success of the sales of other products for which the Company receives royalties; the risk that clients may terminate or reduce demand under any strat egi c or multi - year deal; the Company’s ability to enforce its intellectual property and technology rights; the Company’s ability to obtain finan cin g sufficient to meet its business needs; the Company’s ability to successfully comply with heightened FDA scrutiny on aseptic fill/finish operatio ns; the results of further FDA inspections; the Company’s ability to effectively maintain compliance with applicable FDA and DEA regulations; th e C ompany’s ability to integrate past or future acquisitions, and make such acquisitions accretive to the Company’s business model, the Com pany’s ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of the Company’s strate gic 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 e nded December 31, 2015 as filed with the Securities and Exchange Commission on March 30, 2016, and the Company's other SEC filings . R evenue, adjusted EBITDA, accretion and other financial guidance offered by senior management as part of this presentation with respec t t o 2016 and 2017 represent a point - in - time estimate and are based on information as of May 4, 2016. 19
Appendix B The shares of Company common stock (the “Shares”) to be issued in connection with the acquisition of Euticals will be offered and sold outside the United States to Lauro 57, 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 presentation 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. 20
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