EXHIBIT 10.15
October 20, 1998
CONFIDENTIAL
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Xx. Xxxxxx X. Xxxxxxxxx, Xx.
000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxxxxx:
This letter agreement (this "Agreement") formalizes the agreement that we
have reached regarding your voluntary resignation from Albany Molecular
Research, Inc. (the "Company") as of the date hereof (the "Resignation Date").
The purpose of this Agreement is to establish an amicable arrangement for ending
your employment relationship and to set forth our understanding with respect to
certain outstanding shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), and options to purchase Common Stock held by you or
your affiliates. For purposes of this Agreement, all references to the
"Company" shall include Albany Molecular Research, Inc., a New York corporation,
and any of its subsidiaries.
In exchange for the promises of you and the Company set forth below, you
and the Company agree as follows:
1. TERMINATION OF EMPLOYMENT. You hereby resign as Executive Vice
President, Chief Financial Officer, Treasurer and Secretary of the Company, as a
member of the Board of Directors of the Company and from any other position
(whether as an officer, director or employee) currently held by you with the
Company or any of its subsidiaries effective as of the eighth day following your
execution hereof (the "Resignation Date"). Said resignations are hereby
accepted by the Company and on behalf of its subsidiaries effective as of the
eighth day following your execution hereof.
2. SEVERANCE. You shall receive on the Resignation Date, in
consideration of the release of claims set forth in paragraph 10(a) and the
other covenants set forth in this Agreement, an amount equal to your annual base
salary as in effect on the date hereof plus an amount equal to your last bonus,
in all cases subject to withholding under applicable law.
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 2
Other than the payments described above, you shall not be entitled to any
additional payments from the Company relating to your employment with the
Company.
3. BENEFITS. You and your beneficiaries shall be entitled to participate
(at the Company's expense) in any and all medical and dental plans in which you
and your beneficiaries are currently enrolled until the first anniversary of the
Resignation Date at which time all such benefits shall terminate, subject to the
rights of you and your beneficiaries to continue certain benefits in accordance
with and subject to the law known as COBRA. In addition, the Company shall
allow you and your beneficiaries to continue enrollment in such plans at your
and their expense for the maximum period permitted under such plans. Your
eligibility to participate in the Company's other employee benefit plans and
programs ceases on or after the Resignation Date in accordance with the terms
and conditions of each of those benefit plans and programs.
4. STOCK OWNERSHIP IN THE COMPANY.
(a) You and the Xxxxxx X. Xxxxxxxxx, Xx. Family Trust I (the "Trust")
hereby agree to sell to the Company, and the Company hereby agrees to purchase,
on the Resignation Date all of the shares of the Company's Common Stock
beneficially owned or held of record by you or the Trust on the date hereof
(including any shares subject to options to purchase) (the "Company Shares"),
free and clear of any liens, claims or other encumbrances, at a price per share
of Twenty Dollars ($20), less any exercise price due with respect thereto in the
case of shares subject to options to purchase. Set forth on Appendix A hereto
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is a schedule of all of the Company Shares and the purchase price to be paid by
the Company with respect thereto. The Company hereby agrees that any option to
purchase shares of Common Stock issued to you shall be deemed fully vested on
the Resignation Date irrespective of the terms thereof and shall be deemed
exercised by you on such date. In consideration for the Company Shares, the
aggregate purchase price to be paid to you and the Trust is $9,919,800 (the
"Purchase Price"). The Purchase Price shall be paid to you and the Trust on the
Resignation Date by payments of $1,383,960 and $600,000 in cash, respectively,
and the issuance of secured promissory notes in substantially the form attached
hereto as Exhibit A in the principal amounts of $5,535,840 and $2,400,000 (the
---------
"Notes"), respectively. In connection with the Company's purchase of the
Company Shares, you, the Trust and the Company shall also enter into Pledge
Agreements in substantially the form attached hereto as Exhibit B (the "Pledge
---------
Agreements"). From time to time after the date hereof, at the request of the
Company and without further consideration, you and the Trust will execute and
deliver further instruments of transfer and assignment and take such other
action as the Company may reasonably require to more effectively transfer and
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 3
assign to, and vest in, the Company, the Company Shares. The Company
acknowledges and agrees that, notwithstanding a breach or claimed breach by you
or the Trust of any of your obligations under this Agreement other than under
this paragraph 4 at any time following the Resignation Date, the Company's
obligation to purchase the Company Shares and to pay the obligations under the
promissory notes described above will not be affected. In the event of any
breach other than under this paragraph 4, the Company's sole recourse is limited
to a claim for damages without set-off against the amounts due under the
promissory notes.
(b) In consideration of the Company's purchase of the Company Shares, you
and the Trust hereby represent and warrant to the Company each of the following
as of the date hereof:
(i) This Agreement constitutes, and the other documents and
instruments executed or to be executed hereunder, when executed and
delivered in accordance herewith, constitute or will constitute, the valid
and legally binding obligations of you and the Trust, enforceable against
you and the Trust in accordance with their terms, except as enforceability
may be restricted, limited or delayed by applicable bankruptcy or other
laws affecting creditors' rights generally.
(ii) You and the Trust hold beneficial and record title to 503,068
shares of Common Stock (which includes any shares subject to options to
purchase) in the aggregate, free and clear of all security interests,
liens, encumbrances, options, pledges and other restrictions (together
"Liens"), and such shares are the only shares of capital stock held by you
or the Trust or with respect to which you or the Trust has any rights in
the Company.
(iii) The execution and delivery of this Agreement by you and the
Trust and the consummation of the transactions contemplated hereby by you
and the Trust will not violate any order, writ, injunction or decree of any
court or other governmental body applicable to you or the Trust.
(iv) You have full right, authority, power and capacity to enter into
and deliver this Agreement on behalf of the Trust and each agreement,
document and instrument to be executed and delivered by or on behalf of the
Trust pursuant to, or as contemplated by, this Agreement and to carry out
the transactions contemplated hereby and thereby on behalf of the Trust.
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 4
5. REPRESENTATIONS OF THE COMPANY. In consideration of your and the
Trust's sale of the Company Shares, the Company hereby represents and warrants
to you and the Trust each of the following as of the date hereof:
(i) This Agreement constitutes, and the other documents and
instruments executed or to be executed hereunder, when executed and
delivered in accordance herewith, constitute or will constitute, the valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
restricted, limited or delayed by applicable bankruptcy or other laws
affecting creditors' rights generally.
(ii) The execution and delivery of this Agreement by the Company and
the consummation of the transactions contemplated hereby by the Company
will not violate any order, writ, injunction or decree of any court or
other governmental body applicable to the Company.
(iii) The Company hereby represents and warrants that the Company has
full right, authority, corporate power and capacity to enter into and
deliver, and the Company's Board of Directors has authorized, this
Agreement, and each agreement, document and instrument to be executed and
delivered by or on behalf of the Company pursuant to, or as contemplated
by, this Agreement and to carry out the transactions contemplated hereby
and thereby on behalf of the Company.
6. RELEASE OF GUARANTEE. The Company shall use reasonable commercial
efforts to have the Guarantee (the "Guarantee") made by you to the New York Job
Development Authority released. In the event the Company is unable to have the
Guarantee released, the Company hereby agrees to indemnify and hold harmless you
and your heirs and beneficiaries at law or by will (each, an "Indemnified
Party") from and against and in respect of all losses, liabilities, obligations,
damages, deficiencies, actions, suits, proceedings, demands, assessments,
orders, judgments, fines, penalties, costs and expenses (including the
reasonable fees, disbursements and expenses of attorneys) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing)
sustained, suffered or incurred by or made against any Indemnified Party arising
out of, based upon or in connection with the Guarantee.
7. CONFIDENTIALITY. You acknowledge that, in the course of performing
services for the Company, you have had, and will from time to time have until
the Resignation Date,
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 5
access to information of a confidential or proprietary nature, including without
limitation, all confidential or proprietary investment methodologies, trade
secrets, proprietary or confidential plans, client identities and information,
client lists, service providers, business operations or techniques, records and
data ("Intellectual Property") owned or used in the course of business by the
Company. You hereby agree always to keep secret and not ever publish, divulge,
furnish, use or make accessible to anyone any Intellectual Property of the
Company; provided that you may disclose Intellectual Property pursuant to (i) a
-------- ----
valid subpoena or (ii) as otherwise required by law, but in either case only
after providing the Company with prior written notice (to the attention of the
Chief Executive Officer) as soon as reasonably practicable, but in no event less
than five (5) business days before such disclosure is compelled, if practicable.
You understand that your obligations with respect to Intellectual Property will
continue until any such Intellectual Property has become, through no fault of
yours, generally known to the public.
8. RETURN OF PROPERTY. You hereby acknowledge that all documents,
records, materials, software, equipment (other than two computers that are
currently located at your home, provided that you delete or return all
Intellectual Property stored thereon), information and other physical or
Intellectual Property that have come into your possession or been produced or
created by you in connection with your employment with or for the Company
("Property") have been and remain the sole property of the Company. You hereby
acknowledge that you have returned to the Company all such Property.
9. LITIGATION COOPERATION. You agree to cooperate fully with the Company
in (i) the defense, prosecution or investigation of any claims or actions which
already have been brought or threatened and of which you have knowledge, or
which may be brought or threatened in the future against or on behalf of the
Company or actions which already have been brought or which may be brought in
the future against or on behalf of the Company relating to a period in which you
were an employee of the Company and (ii) responding to, cooperating with, or
contesting any governmental audit, inspection, inquiry or investigation, in
either case that relate to events or occurrences that transpired during your
employment with the Company. Your full cooperation in connection with such
claims or actions shall include, without implication of limitation: being
available to meet with counsel to prepare for discovery or trial; to testify
truthfully as a witness when reasonably requested and at reasonable times
designated by the Company; and to meet with counsel or other designated
representative of the Company to prepare responses to and to cooperate with the
Company's processing of governmental audits, inspections, inquiries or
investigations. You agree that you will maintain the confidences and privileges
of the Company. You will be reimbursed by the Company only
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 6
for any reasonable out-of-pocket expenses that you reasonably incur in
connection with such cooperation, subject to reasonable and satisfactory
documentation. The Company will not exercise their rights under this paragraph
so as to interfere with your ability to engage in gainful employment and shall
endeavor to schedule your responsibilities hereunder so as not to interfere with
your schedule so long as you promptly provide timely alternative dates on which
you can fulfill your obligations hereunder.
10. NON-DISPARAGEMENT AND COOPERATION DURING TRANSITION. You agree not to
make or cause to be made, directly or indirectly, any statement to any person
(other than immediate family members) criticizing or disparaging the Company or
any of its stockholders, directors, officers or employees or commenting
unfavorably or falsely on the character, business judgment, business practices
or business reputation of the Company or any of its stockholders, directors,
officers or employees. You agree that from the date of your receipt of this
Agreement, you will cooperate fully with the Company in arranging for an orderly
and professional transition of your responsibilities. You further agree that
you will present the circumstances of your departure in a light that will not
reflect unfavorably on the Company or its affiliates.
11. RELEASE.
(a) You and the Trust hereby irrevocably and unconditionally release,
acquit, and forever discharge the Company and its affiliates, securityholders,
subsidiaries, affiliates and related entities and their respective current and
former partners, members, officers, directors, agents, and employees, from any
and all claims, demands, or causes of action based upon any past action,
omission, or event, whether known or unknown, and whether or not in litigation
which you or the Trust may have had from the beginning of time until the date
hereof or which could be asserted by another on your behalf or the Trust's
behalf, based on any action, omission, or event relating to your employment at
the Company and/or the cessation thereof through the date hereof or your status
a stockholder or director of the Company. This release includes actions
claiming violation of Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. 2000e et seq., the Age Discrimination in Employment Act, the Americans
------
with Disabilities Act, the New York Human Rights Law, the Rights of Persons with
Disabilities Law of New York, the Smokers' Rights Law of New York, the Equal
Rights Law of New York, all other labor laws of New York, and any other federal,
state, or local law, order or regulation. This release also includes any claims
for wrongful discharge or that the Company has dealt with you unfairly or in bad
faith, and actions raising tortious claims, actions raising any claim of express
or implied contract of employment, or any other cause of action or claims
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 7
of violation of common law. This release is for any and all relief, without
regard to its form or characterization. Included in this release are any and all
claims for attorneys fees and for future damages allegedly arising from the
alleged continuation of the effects of any past action, omission or event.
Notwithstanding anything in this release to the contrary, this release shall not
be construed to limit your right or the Trust's right to enforce this Agreement,
the Notes or the Pledge Agreements. In executing this Agreement and agreeing to
this release, you and the Trust acknowledge that you and the Trust have been
informed that the Company may engage in an initial public offering of its Common
Stock or enter into other transactions which may substantially increase the
value of the Company's equity and that in selling the Company Shares pursuant to
this Agreement you and the Trust will not participate in or receive the
financial benefit of any such future events.
(b) The Company hereby irrevocably and unconditionally releases, acquits,
and forever discharges you and your (and your successors, assigns, heirs and
survivors, or any of them), from any and all claims, demands, or causes of
action based upon any past action, omission, or event, whether known or unknown,
and whether or not in litigation which the Company may have or which could be
asserted by another on the Company's behalf, based on any action, omission, or
event relating to your employment at the Company and/or the cessation thereof
through the date hereof or your status a stockholder or director of the Company
other than with respect to acts or omissions by you during the course of your
----- ----
employment that constitute gross misconduct, gross negligence or that you did
not believe in good faith were in, or not opposed to, the best interests of the
Company. This release is for any and all relief, without regard to its form or
characterization. Included in this release are any and all claims for attorneys
fees and for future damages allegedly arising from the alleged continuation of
the effects of any past action, omission or event. Notwithstanding anything in
this release to the contrary, this release shall not be construed to limit the
Company's right to enforce this Agreement, the Notes or the Pledge Agreements.
12. MISCELLANEOUS.
You are advised to consult with an attorney before signing this Agreement.
By signing this Agreement, you acknowledge that you are doing so
voluntarily and only after consultation with your personal attorney. You also
acknowledge that you are not relying on any representations by the undersigned
or any other representative of the Company or any of its representatives
concerning the meaning of any aspect of this Agreement.
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 8
You acknowledge that you have been given the opportunity, if you so
desired, to consider this Agreement for twenty-one (21) days before executing
it. If not signed by you and returned to Xxxxxx X. X'Xxxxx, Ph.D., Chairman and
Chief Executive Officer, Albany Molecular Research, Inc., 00 Xxxxxxxxx Xxxxxx,
Xxxxxx, XX 00000-0000, so that he receives it by close of business on the
twenty-second (22nd) day after your receipt of the Agreement, this Agreement
will not be valid. In addition, if you breach any of the conditions of the
Agreement within the twenty-one (21) day period, the offer of this Agreement
will be withdrawn and your execution of the Agreement will not be valid. In the
event that you execute and return this Agreement within twenty-one (21) days or
less of the date of its delivery to you, you acknowledge that such decision was
entirely voluntary and that you had the opportunity to consider this letter
agreement for the entire twenty-one (21) day period. The Company acknowledges
that for a period of seven (7) days from the date on which you execute this
Agreement, you shall retain the right to revoke this Agreement by written notice
delivered to Xx. X'Xxxxx at the address indicated above, and that this Agreement
shall not become effective or enforceable until the expiration of such
revocation period.
In the event of any dispute, this Agreement will be construed as a whole,
will be interpreted in accordance with its fair meaning, and will not be
construed strictly for or against either you or the Company. The laws of New
York will govern any dispute about this Agreement, including any interpretation
or enforcement of this Agreement. In the event that any provision or portion of
a provision of this Agreement shall be determined to be unenforceable, the
remainder of this Agreement shall be enforced to the fullest extent possible as
if such provision or portion of a provision were not included. This Agreement
may be modified only by a written agreement signed by you and the Trust and an
authorized representative of the Company.
The Company is executing this Agreement with you and the Trust on behalf of
itself and each of its subsidiaries.
Xx. Xxxxxx X. Xxxxxxxxx, Xx.
October 20, 1998
Page 9
If you and the Trust agree to these terms, please sign and date below and
return this Agreement to the undersigned within the time limitation set forth
above.
Sincerely,
ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Xxxxxx X. X'Xxxxx, Ph.D.
--------------------------------------
Name: Xxxxxx X. X'Xxxxx, Ph.D.
Title: Chairman and Chief Executive Officer
ACCEPTED AND AGREED TO:
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
--------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
Dated: October 20, 1998
XXXXXX X. XXXXXXXXX XX. FAMILY TRUST I
By:/s/ Xxxxxx X. Xxxxxxxxx, Xx.
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Trustee
Dated: October 20, 1998
APPENDIX A
SHARES
ISSUABLE AGGREGATE NET
NUMBER OF UPON EXERCISE EXERCISE PURCHASE
SECURITYHOLDER SHARES HELD OF STOCK OPTIONS PRICE PRICE
-------------------------- ------------- ---------------- ----------- --------
XXXXXX X. XXXXXXXXX, XX.
263,931 -- $5,278,620
75,000 $37,500 1,462,500
7,547 51,999 98,941
6,590 52,061 79,739
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TOTAL PURCHASE PRICE $6,919,800
XXXXXX X. XXXXXXXXX, XX.
FAMILY TRUST I
150,000 -- $3,000,000
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TOTAL PURCHASE PRICE $3,000,000
AGGREGATE PURCHASE PRICE $9,919,800
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EXHIBIT A
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SECURED PROMISSORY NOTE
$[5,535,840][2,400,000] October ___, 1998
FOR VALUE RECEIVED, Albany Molecular Research, Inc., a New York corporation
(the "Corporation"), hereby promises to pay to the order of [Xxxxxx X.
Xxxxxxxxx, Xx., an individual] [the Xxxxxx X. Xxxxxxxxx, Xx. Family Trust I, a
trust formed under the laws of the State of [New York]] (the "Payee"), the
principal sum of [Five Million Five Hundred Thirty-Five Thousand Eight Hundred
Forty] [Two Million Four Hundred Thousand] Dollars ($[5,535,840][2,400,000])
(the "principal"), together with interest on the unpaid principal accruing at a
rate per annum equal to the prime rate, as published from time to time in The
Wall Street Journal (New York Edition) (the "Prime Rate"), subject to increase
after an Event of Default.
1. Payment of Principal and Interest. The Corporation shall pay to the
---------------------------------
Payee, within ten (10) days after the end of each calendar quarter, all accrued
and unpaid interest on the outstanding principal amount. The Corporation shall
also pay to the Payee, within ten (10) days after the end of each anniversary of
the date of this Note, an amount equal to one-fifth (1/5) of the original
principal amount (less any principal prepaid as of such date and not applied to
offset a prior principal payment), plus all accrued and unpaid interest thereon.
All payments made by the Corporation to the Payee under this Note shall be made
in lawful tender of the United States and shall be credited first to the accrued
interest and the remainder shall be applied to principal. In any event, any
principal then unpaid shall be due and payable, with accrued interest thereon,
on the earliest of: (i) the date of the closing of a public offering of the
Corporation's Common Stock, par value $.01 per share (the "Common Stock"),
pursuant to an effective registration statement under the Securities Act of
1933; or (ii) the fifth anniversary of the date of this Note (the "Maturity
Date").
2. Security for Note. To secure the obligations of the Corporation under
-----------------
this Note, the Corporation has executed and delivered to the Payee that certain
Pledge Agreement dated as of October ___, 1998 (the "Pledge Agreement"),
pursuant to which the Corporation has pledged [282,455][120,000] shares of the
Corporation's Common Stock.
3. Events of Default; Remedies. In the event that: (i) there occurs an
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assignment for the benefit of creditors or commencement of any proceeding under
any insolvency law by or against the Corporation, (ii) the Corporation shall
default in the payment or performance of any obligation represented by this Note
and such default shall continue for thirty days or (iii) any default shall occur
under the Pledge Agreement (each, an "Event of Default"), all principal and
interest shall, at any time, at the option of the Payee, forthwith become due
and payable notwithstanding the stated term and Maturity Date. The obligation
of the Corporation
to pay amounts due and payable hereunder shall be absolute and unconditional,
and the Payee shall have full recourse to recover amounts due and payable
hereunder. From and after an occurrence of an Event of Default and at all times
while it is continuing, until all obligations hereunder are paid in full, the
interest rate shall increase to two (2) percentage points above the Prime Rate.
4. Prepayment. This Note may be prepaid in whole or in part without
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penalty.
5. Fees and Expenses. Corporation agrees to pay all charges (including
-----------------
reasonable attorney's fees) of Payee in connection with the collection and/or
enforcement of this Note or in protecting or preserving the security for this
Note, whether or not suit is brought against Corporation.
6. Waivers of Certain Rights. The Corporation hereby waives presentment,
-------------------------
demand, notice and protest, and acceptance, endorsement, performance, default or
enforcement of this Note, assents to any and all extensions or postponements of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and/or to the addition or release of any other party or
person primarily or secondarily liable, and generally waives all suretyship
defenses and defenses in the nature thereof.
7. No Waiver. The failure of Payee at any time to exercise any option or
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right hereunder shall not constitute a waiver of Payee's right to exercise such
option or right at any other time.
8. Notices and Demands. Any notice or demand which, by any provision of
-------------------
this Note, except as otherwise provided herein, is required or provided to be
given shall be deemed to have been sufficiently given or served and received for
all purposes three days after being sent by certified or registered mail,
postage and charges prepaid, return receipt requested, or by express delivery
providing receipt of delivery.
9. Assignability. This Note shall be binding upon and inure to the
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benefit of the successors of each of the parties hereto, but it shall not be
assignable by the Corporation. The Payee may assign or otherwise transfer this
Note to any other person or entity, and such other person or entity shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment or transfer, with all the rights in respect thereof granted to
the Payee herein.
10. Record of Payments. The Payee need not enter payments of principal or
------------------
interest upon this Note but may maintain a record thereof on a separate ledger
maintained by the Payee.
11. Governing Law. This Note shall be governed by, construed, and
-------------
enforced in accordance with the laws of the State of New York. If any provision
of this Note is held to be
12
invalid or unenforceable by a court of competent jurisdiction, the other
provisions of this Note shall remain in full force and effect. If the payment of
any interest due hereunder would subject Payee to any penalty under applicable
law, then the payments due hereunder shall be automatically reduced to what they
would be at the highest rate authorized under applicable law. Any dispute or
controversy in connection with this Note shall be determined and settled by a
court of competent jurisdiction. Each party shall bear his or its own expenses,
including fees and disbursements of attorneys, accountants and witnesses;
provided that, in the event the court determines that the Corporation has
breached its payment obligations under this Note, the Corporation shall
reimburse the Payee for all reasonable expenses incurred by [him][it] to enforce
[his][its] rights under this Note.
12. Maximum Rate of Interest. All agreements between the Corporation and
------------------------
the Payee are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Payee for the use, forbearance or detention of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof, provided,
however, that in the event there is a change in the law which results in a
higher permissible rate of interest, then this Note shall be governed by such
new law as of its effective date. If, from any circumstance whatsoever,
fulfillment of any provision hereof at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
law, then the obligation to be fulfilled shall automatically be reduced to the
limit of such validity, and if from any circumstances the Payee should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest.
This Note shall take effect as an instrument under seal.
WITNESS: CORPORATION:
ALBANY MOLECULAR RESEARCH, INC.
------------------------- By: -------------------------
Name: Name: Xxxxxx X. X'Xxxxx, Ph.D.
Title: Chairman and Chief Executive Officer
13
EXHIBIT B
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PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Agreement"), dated as of October ___, 1998, is
entered into by and between Albany Molecular Research, Inc., a New York
corporation (the "Corporation"), and [Xxxxxx X. Xxxxxxxxx, Xx., an individual]
[the Xxxxxx X. Xxxxxxxxx, Xx. Family Trust I, a trust formed under the laws of
the State of [New York]] (the "Pledgee"). In consideration of the Pledgee
accepting a promissory note (the "Note") from the Corporation as partial
consideration for the Corporation's purchase all of the Pledgee's shares of the
Corporation's Common Stock, par value $.01 per share (the "Common Stock"), the
Corporation hereby agrees as follows:
Section 1. Pledge. The Corporation hereby pledges, assigns and transfers
------
to the Pledgee, and grants to the Pledgee a security interest in,
[282,454][120,000] shares of the Corporation's Common Stock (as adjusted to
reflect stock splits, stock dividends or the like) ("Collateral"), including any
distributions, dividends or other payments made in connection with the
Collateral or other securities, instruments and other property issued or
accepted in substitution for or in addition to any of the Collateral (in each
case determined as if such shares were issued and outstanding at the time of any
distributions, dividends or other payments on shares of Common Stock or the
issuance or acceptance of any other securities, instruments and other property
in substitution for or in addition to shares of Common Stock).
Section 2. Obligations. This Agreement and the security interest granted
-----------
hereby secure the payment of all obligations of the Corporation to the Pledgee
under the Note issued by the Corporation to the Pledgee on the date hereof (the
"Obligations"), and the Obligations of the Corporation under this Agreement, and
any and all renewals or extensions thereof. So long as any of the Obligations
are outstanding, unless and until the Corporation shall be in default hereunder
or there shall be any default of any of the Obligations, the Corporation shall
retain all rights of ownership with respect to the Collateral. In the event the
Obligations shall be in default or in the event that the Corporation shall be in
default under the terms hereof, the Pledgee may, in its discretion, vote and
exercise all of the powers of an owner with respect to any of the relevant
Collateral. Without limiting the generality of the other remedies provided
herein and in addition thereto, in the event any of the Obligations shall be in
default or upon any default by the Corporation hereunder, the Pledgee after the
occurrence of an Event of Default may take all steps necessary to cause the
Collateral to be transferred into the name of the Pledgee, including but not
limited to taking steps necessary to comply with restrictions on sale or
transfer of the interest constituting such Collateral, and in connection
therewith the Corporation appoints the Pledgee such Corporation's attorney-in-
fact to execute and deliver such offers, tender offers, certificates, documents
or instruments of every nature or description required for the purpose of the
transfer of such Collateral into the name of the Pledgee, or any other person.
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If any cash distribution or dividend is made in respect of any Collateral
(other than from the Pledgee pursuant to Section 3 hereof), the Corporation
shall accept the same in trust for the Pledgee.
If any stock certificate or option is issued, whether as an addition to, as
a distribution, dividend or payment on, in substitution of, in exchange for or
as evidence of Corporation's interest in any Collateral, or otherwise, the
Corporation shall accept same in trust for the Pledgee.
The Corporation is herewith delivering to the Pledgee all certificates or
instruments representing or evidencing Collateral, if any, in suitable form for
transfer or delivery, or accompanied by duly executed instruments of transfer or
assignment to be held subject to the preceding paragraph.
Section 3. Release of Collateral. Upon each principal payment by the
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Corporation to the Pledgee under the Note, the Pledgee shall promptly release a
proportionate amount of the Collateral such that the total amount of Collateral
released at any time shall always bear the same proportion to the amount of the
total Collateral hereunder as the amount of principal paid at such time bears to
the amount of original principal under the Note.
Section 4. Representations and Warranties. The Corporation represents and
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warrants to the Pledgee as follows:
(a) The Corporation is, and (as to any substitute or additional Collateral)
shall be, the sole owner of the Collateral pledged by the Corporation, free and
clear of any lien, security interest, option or other charge or encumbrance,
except for (i) the security interest created by this Agreement and (ii)
restrictions imposed by applicable laws, and, subject to the same exceptions,
the Corporation has and shall have the right to transfer such Collateral and to
grant a security interest therein to the Pledgee as provided in this Agreement.
(b) No effective financing statement or similar notice covering any
Collateral pledged by the Corporation is or shall be on file in any recording
office, and no other pledge or assignment thereof has been made, or shall have
been made, other than in favor of the Pledgee, except as the Pledgee may
approve.
Section 5. Further Action by Corporation. The Corporation shall, at the
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expense of the Corporation, promptly execute and deliver all further notices,
instruments and documents, including, without limitation, financing statements,
and take all such further action as may be reasonably necessary or reasonably
advisable or as the Pledgee at any time may reasonably request, in order to
perfect, preserve and protect the security interest granted or purported to be
granted hereby or to enable the Pledgee to exercise and enforce such rights,
powers and remedies with respect to Collateral.
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Section 6. Preservation of Collateral.
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(a) The Pledgee shall give to the Collateral the same degree of care and
protection which it gives to its own property, provided, however, that the
Pledgee shall have no liability to the Corporation for any losses, costs,
expenses or damages due to any acts or omissions of third parties, or due to any
acts of God or other causes beyond its control. The Pledgee shall have no duty
to preserve any rights with respect to any Collateral, including, without
limitation, rights against prior parties, or to take, or to notify the
Corporation of the need to take, any action respecting any rights, privileges or
options relating to any Collateral. To replace any certificates, however, the
Corporation shall not be required to supply any bond or other indemnity.
(b) The Corporation shall furnish to the Pledgee, promptly upon receipt
thereof, copies of all material notices, requests and other documents received
by the Corporation relating to Collateral unless the same were sent by the
Pledgee.
(c) The Corporation shall not (i) sell, assign, transfer or otherwise
dispose of any Collateral, or create or suffer to exist any lien, security
interest, assignment by operation of law or other charge or encumbrance on, or
with respect to, any Collateral, except for the security interest created by
this Agreement, or (ii) attempt any action prohibited by paragraph (c)(i) of
this Section 6.
Section 7. Defaults. A default (an "Event of Default") shall be deemed to
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have occurred hereunder if (a) the Corporation fails in any material respect to
perform any material obligation hereunder, if any material representation or
warranty hereunder was untrue in any material respect when made, or if any
default or Event of Default by the Corporation occurs under the Note or any
agreement evidencing, or constituting or granting security for, the Obligations,
and (b) the Pledgee gives to the Corporation written notice thereof and such
default shall not have been cured within fourteen (14) days or such additional
time as may be required to effect such cure if diligently pursued.
Section 8. Remedies. Upon and after the occurrence of any Event of
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Default which is then continuing or which has not been cured within the time
period given for such cure:
(a) The Pledgee may exercise its rights with respect to the Collateral,
without regard to the existence of any other security or source of payment for
Obligations, including without limitation the rights set forth in Section 2, and
may demand, xxx for collection or make any other compromise or settlement with
respect to other rights and remedies provided for herein or otherwise available
to it, and the Pledgee shall have all of the rights and remedies of a secured
party in New York under the Uniform Commercial Code.
(b) Except as specifically reserved herein, the Corporation waives all
suretyship defenses at law and in equity, including waste and impairment of
Collateral, and further waives the requirement of any demand and presentment.
Twenty-one (21) days' prior notice to the Corporation at the address provided
below or at such other address as the Corporation shall
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provide to the Pledgee in writing for such purpose, of the time and place of any
public sale of Collateral, or of the time after which any private sale or any
other intended disposition is to be made, shall constitute reasonable
notification.
(c) The Pledgee is authorized at any such sale (including without
limitation any sale to itself or any affiliate of the Pledgee, the same being
expressly authorized and contemplated herein), if the Pledgee deems it advisable
to do so, in order to comply with any applicable securities laws, to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are purchasing the Collateral for their own account for investment,
and not with a view to the distribution or resale thereof. Sales made subject
to such restriction shall not, solely by reason thereof, be deemed not to have
been made in a commercially reasonable manner.
(d) The Pledgee is specifically authorized, with respect to any Collateral
that consists of security, to acquire such Collateral itself or to transfer such
Collateral to any affiliate of the Pledgee at a price which shall be determined
reasonably and in good faith by the mutual agreement of the Corporation and the
Pledgee. The Corporation expressly waives any requirement that the Pledgee
conduct a public or private sale with respect to such security and agrees that
such a disposition is commercially reasonable.
(e) In case of any sale of all or part of the Collateral on credit for
future delivery, the Collateral so sold shall be retained by the Pledgee until
the purchase price is paid. The Pledgee shall incur no liability in case of the
failure of the purchaser to pay for the Collateral as so sold if the Collateral
is recovered, or of the failure of the Pledgee to make any sale of Collateral
after giving notice thereof, and in case of any such failure, such Collateral
may again be sold.
(f) All cash proceeds received by the Pledgee in respect of any sale,
collection or other enforcement or disposition of Collateral shall be applied
(after deduction of any amounts payable to the Pledgee for reasonable expenses
of the sale, collection or disposition of Collateral) against Obligations in
such order as the Pledgee shall elect in accordance with the terms of the Note.
Upon payment in full of all Obligations, the Corporation shall be entitled to
the return of all Collateral pledged by it and all proceeds thereof, which have
not been used or applied toward the payment of Obligations as herein authorized.
Section 9. Waivers and Remedies. Except as otherwise provided herein or
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by law, the Corporation waives presentment, demand, notice and protest, notice
of acceptance of this Agreement, and except as provided in Section 8(b) notice
of all action by the Pledgee in reliance hereon. No failure by the Pledgee to
exercise, no delay by the Pledgee in exercising, and no single or partial
exercise of, any right, remedy or power hereunder or under any other agreement
relating to the Obligations or to Collateral shall operate as a waiver thereof,
or of any other right, remedy or power at any time. No amendment, modification
or waiver of any provision of this Agreement shall be effective unless contained
in a writing signed by the Pledgee. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The rights, remedies and powers of the Pledgee and the
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Corporation, not only hereunder, but also under any promissory note or notes of
the Corporation held by the Pledgee, any other agreements of the Corporation
with the Pledgee and applicable law, are cumulative and may be exercised
successively, concurrently or alternatively.
Section 10. Term; Binding Effect. This Agreement shall remain in full
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force and effect until payment and satisfaction in full of all Obligations,
shall be binding upon the Corporation and its successors and assigns and shall
inure to the benefit of the Pledgee and its successors and assigns.
Section 11. Governing Law. This Agreement shall be governed by and
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construed in accordance with the laws of the State of New York, except to the
extent that the perfection of the security interest granted hereby in respect of
any item of Collateral may be governed by the law of another jurisdiction.
Unless otherwise defined herein, all words and terms used in this Agreement
shall have the meanings provided in the New York Uniform Commercial Code. If
any provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid, such provision shall be deemed to be modified to
comply with applicable law or if not able to be so modified, shall be deemed to
be severed from the Agreement, the remaining provisions of which to be valid and
enforceable.
Section 12. Signatures. This Agreement may be executed in counterparts.
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Section 13. Headings. The captions in this Agreement have been included
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for reference only and shall not define or limit the provisions hereof.
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EXECUTED as of the date first set forth above.
CORPORATION:
ALBANY MOLECULAR RESEARCH, INC.
By: ________________________________
Name: Xxxxxx X. X'Xxxxx, Ph.D.
Title: Chairman and Chief Executive Officer
PLEDGEE:
____________________________________
