Item 1.01 Entry into a Material Definitive Agreement.
On November 17, 2017, Amyris, Inc. (the
“
Company
”) and AB Technologies LLC, a wholly owned subsidiary of the Company (together with the Company,
the “
Seller
”), entered into a Quota Purchase Agreement (the “
QPA
”) with DSM
Produtos Nutricionais Brasil S.A. (together with its affiliates, “
DSM
”). The Company has a commercial
and financial relationship with DSM, an owner of greater than five percent of the Company’s outstanding common stock, as
previously reported in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017, filed
with the Securities and Exchange Commission on November 20, 2017 (the “
10-Q
”), which disclosure is incorporated
herein by reference.
Pursuant to the QPA, DSM agreed to purchase
all of the quotas of capital stock of Amyris Brasil Ltda. (“
AB
”) from the Seller for a price of $30,650,000,
subject to certain adjustments (the “
Purchase Price
”), plus certain additional amounts contingent on
future Brazilian tax savings realized by DSM; provided, that the Seller will have a right of first refusal to purchase the existing
manufacturing facility owned by AB located in Brotas, Brazil (the “
Brotas 1 Facility
”) in the event that
DSM determines to close or significantly reduce production at the Brotas 1 Facility.
In connection
with the closing of the transactions contemplated by the QPA (the “
Closing
”), (i) AB will undergo a corporate
restructuring (the “
Pre-Closing Restructuring
”) whereby AB will transfer certain assets to SMA Indústria
Química Ltda. (“
SMA
”), a subsidiary of AB that will be transferred to the Seller, including (A)
the transfer of AB’s assets in Campinas, Brazil to SMA and (B) the execution by AB and SMA of a sublease with respect to
land in Brotas, Brazil leased by AB and on which the Company proposes to construct a manufacturing facility (the “
Brotas
2 Facility
”), (ii) DSM will repay certain indebtedness of AB outstanding as of the Closing, which amount will be
deducted from the Purchase Price, and (iii) the Company will borrow $25 million from DSM under a credit agreement (the “
Credit
Agreement
”), the proceeds of which will be used to repay all outstanding amounts under the Company’s credit
facility with Guanfu Holding Co., Ltd., as further described in Note 5, “Long-term Debt” to the unaudited financial
statements contained in the 10-Q.
Pursuant to the QPA, in connection with
the Closing, the Seller and DSM expect to enter into the following agreements (the “
Ancillary Agreements
”):
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a transition services agreement, pursuant to which (i) the Company will provide certain services
to AB to allow for the operation of the Brotas 1 Facility in the ordinary course of business and (ii) DSM and AB will provide certain
services to the Seller in connection with the operation of the Brotas 2 Facility;
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a supply agreement, pursuant to which DSM will supply the Company with certain products manufactured
at the Brotas 1 Facility;
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a value sharing agreement, pursuant to which the Company and DSM will share in the margins from
sales of certain products to be manufactured and commercialized by DSM using the Company’s intellectual property;
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a performance agreement, pursuant to which the Company will provide certain research and development
services to DSM in exchange for related funding; and
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The Closing is subject to several conditions
(the “
Closing Conditions
”), including the completion of the Pre-Closing Restructuring, the assignment
or transfer of certain contracts and instruments, obtaining certain third party and governmental approvals and consents, and the
execution and delivery of the Ancillary Agreements.
Subject to certain exceptions and cure
periods, either party may terminate the QPA if (i) a governmental order enjoining the transactions contemplated by the QPA has
become final, (ii) the other party has breached any of its representations, warranties or covenants in the QPA that would cause
the failure of a Closing Condition, or (iii) the Closing has not occurred by March 31, 2018.
In connection with the entry into the QPA,
the Company and DSM entered into a license agreement for certain intellectual property useful in connection with DSM’s purchase
of the Brotas 1 Facility, which license agreement will become effective upon the Closing. At the Closing, DSM will pay the Company
an upfront license fee of $27.5 million.
The QPA contains customary terms, provisions,
covenants, representations and warranties of the parties. The foregoing description of the QPA and the transactions contemplated
thereby does not purport to be complete and is qualified in its entirety by reference to the full text of the QPA, a copy of which
is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
The QPA and the
above description have been included to provide investors and securityholders with information regarding the terms of the QPA and
the transactions contemplated thereby. They are not intended to provide any other factual information about the Seller, DSM, AB
or their respective subsidiaries or affiliates or stockholders. The representations, warranties and covenants contained in the
QPA were made only for purposes of the QPA and as of specific dates; were solely for the benefit of the parties to the QPA; and
may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made by each party
to the other for the purposes of allocating contractual risk between them. Investors and securityholders should be aware that the
representations, warranties and covenants or any description thereof may not reflect the actual state of facts or condition of
the Seller, DSM, AB or any of their respective subsidiaries, affiliates, businesses or stockholders. Moreover, information concerning
the subject matter of the representations, warranties and covenants may change after the date of the QPA. Accordingly, investors
and securityholders should read the representations, warranties and covenants contained in the QPA not in isolation but only in
conjunction with the other information about the Company and its subsidiaries that the Company includes in filings it makes with
the Securities and Exchange Commission.