Doing Business in Spain

Montreal, 22nd May 2008

Invest in Spain: Economy, Business and Advantages for Canadian companies

Marian Scheifler Phd.Chief Operations Manager

May, 2008

1. Political Structure.

2. Spain in Figures (I-II).

3. Canada-Spain: Some things we share.

4. Main Agreements Spain-Canada.

5. Main Reasons to Invest in Spain (I-III).

6. About INTERES.

POLITICAL FRAMEWORK

Political organization Parliamentary Monarchy.

Head of State King Juan Carlos I.

President ofgovernment

José Luis Rodríguez Zapatero, since 11 April 2008 (2nd mandate).

Parliamentaryrepresentation

Congress of Deputies (350 members) and Senate (264 members).

Governing party Partido Socialista Obrero Español (PSOE).

TerritorialOrganization

The State is organized in municipalities, provinces and Autonomous Communities.

European UnionMember since 1986 and founding member of the European Monetary Union (January 1999).

Internationalorganizations

UN, OECD, OAS, World Bank, IMF, IDB, WTO, NATO, OSCE.

1. POLITICAL STRUCTURE

ECONOMIC DATA

Currency: Euro, divided into 100 cents.

Real GDP growth: 3.5% (fourth quarter 2007).

Population: 45.2 M, 1.10% growth rate.

GDP per capita: $ 33,433 (2007 first estimate).

Inflation: 4.5% (March 2008).

Public Accounts: 1.3% surplus in 2007 (Bank of Spain).

Unemployment rate: 8.6%.

Official interest rate: 4% (European Central Bank– July 2007).

Breakdown by sector(s) :

Services: 67% Manufacturing: 16% Building: 13% Agriculture: 4%

2. SPAIN IN FIGURES (I)

1. The world’s 8th largest economy (market exchange rate); 11th (purchasing power parity).

(IMF-2008)

2. The 3rd largest investor in the world and the 2nd largest in Latin America. (World Investment Report 2007 (UNCTAD)

3. The 8th largest FDI stock worldwide (6th in the EU). (World Investment Report 2007 (UNCTAD)

4. The 10th best place to live and the preferred work destination for Europeans. Worldwide Quality-of-life Index, Economist Intelligence Unit

5. The world’s 2nd tourist destination.(Tourism Organization (WTO))

2. SPAIN IN FIGURES (II)

3. CANADA – SPAIN: SOME THINGS WE SHARE

Multilingual and multicultural societies.

Highly decentralized administrations: important role played by

Provinces and Autonomous Communities.

Economic performance.

Great potential to strengthen trade and investment ties: current

trade and investment flows belie the similarities in economic

performance and complementarities in our economies.

CANADIAN COMPANIES IN SPAIN

4. MAIN AGREEMENTS SPAIN - CANADA

S&T: (Science and Technology)

Spain’s R&D Plan for 2008-2011 identifies Canada as one of the three non-EU strategic countries for cooperation.

Canadeka: Bilateral program for technological cooperaton, CDTI –NRC. Support to joint projects of Spanish-Canadian companies.

CSIC-NRC: Development of research and innovation projects.

Genoma España – Genome Canada: Joint research projects.

CESCE-EDC: Reinsurance agreement for joint operations of Canadian and Spanish companies.

Double taxation: Agreement to avoid double taxation on income and capital.

5. MAIN REASONS TO INVEST IN SPAIN (I)

Geostrategic location:

Privileged position for southern Europe's key markets, Latin America and North Africa.

Potential access to over 1.2 billion consumers:

45 million consumers in Spain. 443 million consumers in Europe. Entry point for non-EU Mediterranean countries with 264

million consumers. (privileged relations with Morocco and Algeria).

Hub for South and Central America, with 560 million consumers.

Financial protocols with North Africa and Latin America.

5. MAIN REASONS TO INVEST IN SPAIN (I)

Ultra Modern Transport Infrastructure

47 airports.

53 ports on both the Atlantic and the Mediterranean coasts.

3rd largest EU highway network.

Ambitious plans for high speed trains (Spain will be the world leader with 2,230 km in 2010).

State-of-the-Art metro system in major cities.

Economic criteria: Competitive operating costs

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0,0

5,0

10,0

15,0

20,0

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Hourly labor cost. 2006

Source: Eurostat 2008 Source: Cost of Living Survey 2007, Mercer Human Research Consulting

5. MAIN REASONS TO INVEST IN SPAIN (II)

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Electricity prices for industrial use (€ cents/ Kwh)

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600,0

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1500,0

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2100,0Office Utilization cost (€/ year an m2)

Source: Eurostat 2007

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120,0

140,0

Cost of life, 2007 (N. York =2007)

Source: Eurostat 2008

5. MAIN REASONS TO INVEST IN SPAIN (III)

Fiscal incentives framework map

INTERES Invest in Spain is the leading government organization that supports foreign companies seeking to set up or expand their business in Spain.

We provide comprehensive, efficient and confidential consultation at no cost during all stages of the investment process.

THE ONE-STOP SHOP FOR INVESTORS IN SPAIN.

6. About INTERES

Relocation

Retention

Up-to-date information

Market studies

Spanish offer

Practical pointers for doing business

Availability of grants and incentives

Help with cost appraisals

Organization of visits to potential sites

Identification of partners

Finding specialist advisors

Help with licences & permits

Provision of institutional contacts

Fostering expansion

Network development

Planning for retaining investments

Relocation studies (within Spain)

Expansion

Growthstrengtheningof loyalty

Operation

Support to new invertors

Installation

Benchmarking& Attraction

Pre-Installation

Investor Services

Thank you very much!

Doing Business in Spain

Montreal, 22nd May 2008

What makes Spain a winning location for the Life Sciences & Biotech industry?

Ana AriasBiotech & Life Sciences Investor Services Manager

INDEX

1. Why Spain?

2. Why biotechnology?

3. Why you can bet on Spanish biotech

4. A piece of history

5. Business opportunities

Highly qualified and competitive human resources

Quality and standard of living Geo-strategic location Cultural and educational levels Weather Natural resources Logistics...

Spain has solid scientific and technologicalcapabilities that have enabled a competitivebio industry to emerge

Why Spain?

Why Biotechnology?

• Employment: around 80,000 people• Over 500 enterprises involved in

biotech activities• Turnover: over €19,000 million and

investment of over €200 million in research and development (R&D).

• Annual growth of around 30% in total revenue.

………making Spain the mostdynamic European country inthis area after Ireland.Source: ASEBIO – Spanish Association of Bioenterprises (2004)

Why Biotechnology? (cont.)

• Bio-economy heads Spain’s strategic agenda.

• The Spanish pharmaceutical market is the fifth largest in the EU-15 and the seventh in the world.

• Favourable financial environment: increase in the volume of venture capital operations in biotechnology.

• New venture capital funds specialized in biotechnology and national networks of business angels are being created

Why you can bet on Spanish biotech

I. Solid Science

-Good scientific outputGroups and Centers of Excellence

-R&D Integrated SystemEfficient WorkFlowExcellent conditions for Translational ResearchModern Science Parks and state of the art facilitiesGood partnership opportunities

-“Value for Science” Every euro in the lab is put to good use

II. Great potential

-Huge body of knowledge yet to be exploited-Human Capital, very well trained

Why you can bet on Spanish biotech(cont.)

III. Emerging bio-economy

-Increasing support from Governments for R&D and bio-enterprise creation-Competition among local Governments for talent and capital-Good balance between being competitive on cost and competitivein differentiation

IV. Good personal attitudes

-Creativity-Sense of community and focus on colective objectives and challenges-Positive spirit and commitment

Why you can bet on Spanish biotech(cont.)

A. Solid Science: Scientific and Technological Facilities andCapabilities

The Genomics, Proteomics and Bioinformatics platforms boost thenational participation in biotechnological advances:

-National DNA Bank -Spanish National Genotyping Centre -National Proteomics Institute ProteoRed -National Bioinformatics Institute INB

A new framework for co-operative biomedical research is being created:

-The Biomedical Research Thematic Networks (RETICs)-The Biomedical Research Centers Network (CIBER)

A. Solid Science: Principal Bio-clusters

Geographic distribution of Spanish biotech companies

Source: ASEBIO Report – Spanish Association of Bioenterprises (2006)

<5%

5-15%

15-25%

>25%

18%

18%

7%

6%

26%

5% •Catalonia and Madrid, followed by the Valencia Region, Andalusia, Basque Country and Galicia have the highest concentration of biotech companies.

•The rest of the Spanish regions are also designing and implementing strategies.

Why you can bet on Spanish biotech (cont.)

B. Great potential to unlock: Workforce

7,000 researchers in biotechnology and biomedicine: 11th position in the world.

4th position in Europe in scientific output in biotechnology.

1995-2003: number of scientific research papers published in Spain grew by over 12%.

66% of biotechnology researchers working within the public Spanish R&D System were cited by U.S. patents.

Why you can bet on Spanish biotech (cont.)

C. Emerging bio-economy: Legal framework

The new Spanish Law on Biomedical Research: creation of a National Biobank Register

Favourable legal framework: Cultivation of Genetically Modified Organisms (GMO) and a unique Traceability and Labelling Law

Full Tax exemption on biofuels until Dec 2012.

Other Spanish instruments and laws.

Why you can bet on Spanish biotech (cont.)

C. Emerging bio-economy: Government support

The Ingenio 2010 Programme: to meet the Research, Development and Innovation convergence objectives of the Lisbon Strategy.

Sustained annual growth rates of the government’s budgets in recent years.

The Spanish Tax System is one of the most advanced in the world, especially in the Research, Development and Innovation field.

The adoption of the Young Innovative Company Status will no doubt help biotechnology firms.

Why you can bet on Spanish biotech (cont.)

• 2001: The Spanish National Cancer Centre (CNIO) launches its first Oncochip.

• 2002: Abengoa signs a $35.5 M R&D project with the U.S Department of Energy (DOE).

• 2003: Serono concentrates global production of its growth hormone in Spain.

• 2005: Genetrix receives the first Orphan Status designation by the EMEA in Europe for a medicinal product based on the use of

stem cells of adult origin.• 2005: GSK opens its Molecular Screening and Tropical diseases

research facilities in Spain.• 2005: Natraceutical buys Braes Group (€80 M). In 2006 it acquires

Forté Pharma (€82M).• 2006: Spain continues to be the European leader in the cultivation of

genetically modified crop varieties with a total of 53,667 hectares under cultivation.

• 2007: The EMEA approves Zeltia's drug Yondelis for the treatment of soft tissue sarcomas.

• 2008: The OMS designated the ONT (Organización Nacional de Transplantes) as a WHO Collaborating Center on Donation and

Transplants

A piece of history

Business Opportunities

Biochips: towards a personalized medicine

Food quality and security

Private Equity

Functional foods

Organic farming

Spain offers specific opportunities in…………………….

BIO Business Opportunities

Nanobiotechnology Generic drugs

Gene silencing

Production of therapeutic proteins using non-genetically modified plants

Algae active ingredients

Spain offers specific opportunities in…………………….

BIO Business Opportunities (cont)

Production of enzymes with industrial applications in transgenic plants.

Drug development from target’s

structural determination.

Pharmacogenetics: Genetic biomarkers.

Molecular diagnosis. DNA and protein arrays.

Bioinformatics.

Spain offers specific opportunities in…………………….

BIO Business Opportunities (cont.)

Leading pharmaceutical & biotech multinationals are already successfully located in Spain

BIOSPAIN 2008

BIOSPAIN 2008 is the International Meeting on Biotechnology to be held in Granada from the 17th to the 19th of September 2008.

Five events in one:

BIOTEC 2008 " - Scientific Congress

Plenary Sessions: "Towards a Sustainable Bioeconomy“

Investment Forum

Partnering

Trade Fair and Bio-Regions Hall

Thank you very much

For further information please contact:

Ana AriasLife Sciences & Biotech Life Sciences & Biotech Investor Services Manager

Email: aarias@interes.org

See you at BIOSPAIN’08!www.biospain2008.org

Doing Business in Spain

Montreal, 22nd May 2008

SPAIN: Business opportunities in Aeronautics

Vanessa Guerrero, Investor Services ManagerINTERES Invest in SpainMay, 22th 2008 MONTREAL

Why Spain

Because the Spanish Aeroespace Industry is the fifth in Europe in terms of turnover (4,203 million euros)* and employment (29,521 employees)*

Because of its high growth – the industry has grown an average 13% in the last decade:

* 2006 Data

Why Spain

TURNOVER - SPANISH INDUSTRY

0500

10001500200025003000350040004500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Years

Mill

ion

eu

ros

1,421

4,2033,767

Because Spain is highly developed in aeronautical production:

Why Spain

TURNOVER BY SUB-SECTOR

Engines13%

Space10%

Equipment10%

Systems and frames

67%

2,816 M €546 M €

420 M €

420 M €

Total:

4,203 M €

Why Spain

Because Aeronautics companies based in Spain are leaders in:

Composite Aerostructures (especially, carbon fiber reinforced plastics)

Low pressure turbine engines

Air Traffic Management systems

- 3 out of 5 flights in the world use Spanish software for landing

Why Spain - Clusters

Spain has significant Aeronautics clusters: MADRID

63.6% of turnover58.4% of employees130 companies

ANDALUSIA16.8% of turnover21.0% of employees75 companies

BASQUE COUNTRY11.3% of turnover11.1% of employees54 companies

CASTILLA-LA MANCHA4.2% of turnover3.5% of employees12 companies

CATALONIA2.1% of turnover2.7% of employees53 companies

Why Spain – R&D

Because Aeronautics in Spain is a very innovative industry:

Investment: 575 M. € in 2006 (+26% from 2005)

48% by companies 13.7% of turnover 15% of turnover in the case of systems and frames

High quality public R&D Centers:

FIDAMCFIDAMC : Research, Development and Applications of CompositesOther important centers:

Public Research Organization specialized in aerospace research and technology development

Why Spain – R&D

Both AIRBUS and BOEING have developed important R&D Centers in Spain:

Boeing Research and Technology Europe (Madrid)

• First Boeing R&D center outside the USA

• Main areas: safety, ATM and environmental technologies

• April ’08: first flight of an airplane powered by hydrogen fuel cells

According to Boeing:

“The reason for choosing Spain was the outstanding role of the country in the EU and as a reference point with the Latin American countries.

It also shows the relevant position that the Spanish Aerospace industry has acquired in the last few years and the capabilities of the country in environmental and ATM technologies”

Source: www.boeing.es

Why Spain – R&D

Both AIRBUS and BOEING have developed important R&D Centers in Spain:

Airbus Advanced Composites Center

Center of excellence for horizontal tail planes for all Airbus Aircraft worldwide

Airbus Spain: leader worldwide in composite material structures: first company in using carbon fiber for fuselage sections in commercial aircrafts over 100 seats

Specialised in large curvature panels from carbon fiber reinforced plastic

Why Spain – Industry

Ca. 170 companies Product manufacturers

AUXILIARY INDUSTRY

Systems or sub-systems manufacturers

SUBCONTRACTORS

Taking part in FAL. Intermediate added value products

OEMs – Original Equipment

Manufacturers

)Complete integration capability

PRIME CONTRACTORS

Why Spain – Industry

Growing importance of Spain in international programs:

Spanish participation share:

- Civil programs:4.2% in the first programs (manufacture)

10.8% in A380 (also design, development and certification); mostly in Madrid

- Military programs: 15% in A400M (including the Final Assembly Line, and simulation and training center, in Seville, Andalusia)

Eurofighter Typhoon: 14% (in Madrid, major components: right wing and leading edge slats)

Eurocopter: Brand-new plant in Albacete (Castilla-La Mancha), FAL and delivery center for NH-90, Tiger and EC-35

AIRBUSAIRBUS

EADSEADS

Why Spain – Government Support

New National Strategic Plan 2008-2016: Reinforcing traditional technological strengths Diversify toward new promising areas

OVERALL GOAL 2016 turnover 3 times higher than the current level of 4,600 M. €

R&D Support Budget

181246

306340

375409

442475

510550

0

100

200

300

400

500

600

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Years

Millio

n e

uro

s

Business Opportunities

Business Opportunities

Navigation and avionic systems

General aviation. Very Light Jets

Helicopters

Engines and propulsion engineering

Training centers for professional pilots for air transport

MRO (Maintenance, Repair and Overhaul) centers for transport aircrafts

MRO centers for aircrafts designed for general and business aviation, schools and aerial works

Simulators for aviation, based on low-cost technologies

Manufacturing of Unmanned Aerial Vehicles for civil uses

Flight Simulators

Used by both civil and military aviation for training, engineering, design, research, etc.

Development of Spanish Aeronautics and ITC industries

Spanish companies are mainly focused on the military market

Airlines outsourcing training activities

Growth in business aviation and low-cost carriers

Increase in flight training centers

Helicopters

Third Eurocopter FAL established in Spain

Opportunities

Services to ECE Helicopter FAL

Engineering services

Electronics and systems

Tooling

Helicopter maintenance

Sections manufacturing

Top Reasons

Total market: 53.6 Million €

Business size will increase: ECE – Participation in all future development

Presence of technological centers and parks

* Source: Own estimations, 50% outsourcing assumed

Thank you very much

Doing Business in Spain

Montreal, 22nd May 2008

“DOING BUSINESS IN SPAIN”

LEGAL ENVIRONMENTBest Practices

Toronto, Ottawa, MontrealMay 2008

Alberto EcharriPartner - Head of M&A

Gómez-Acebo & Pombo Abogados

59

INVEST IN SPAIN: FACTS & FIGURESINVEST IN SPAIN: FACTS & FIGURES

Spain is the world’s 8th largest economy, with sustained growth above the EU average. It is the country with the fastest rate of job creation in the OECD.

Spain is the 8th largest FDI recipient in the world and the 3rd largest investor in the world.

Spain has a privileged geo-strategic position: access to 1,300 million consumers in the world. It is an international business hub.

440 million people in the world speak Spanish.

60

INVEST IN SPAIN: FACTS & FIGURESINVEST IN SPAIN: FACTS & FIGURES

What foreign investors value most of Spain is:

1. Cost of investment2. Local human resources3. Geographical & Financial Environment

Generous incentives for R&D.

Access to the EU and Latin America.

61

INVEST IN SPAIN: FACTS & FIGURESINVEST IN SPAIN: FACTS & FIGURES

More than 11,000 foreign companies & 54 international banks are located in Spain.

Spain has modern infrastructures and excellent business opportunities, namely in ICT, Biotechnology, Renewable Energy, Environment & Water Treatment.

Quality of life: Spain is the first choice for European executives faced with relocation, according to Financial Times. It is the world’s 2nd tourist destination and is known for its passion for work, arts, sports, and life.

62

PRIORITY SECTORS: ICTPRIORITY SECTORS: ICT

Spain has one of the most burgeoning ICT (Information & Communications Technologies) markets in Europe, with a turnover of 87+ billion €.

40% of private R&D investment in Spain is devoted to this sector.

Spain offers tax advantages / cost relief for companies.

The Spanish telecom network is completely digital and has over 1,400,000 km of transmission networks. Mobile phone penetration exceeds 105%. Growth in broadband connection was more than 45% in 2005, with 4.5 million users.

16% of employees in this sector are devoted to R&D.

63

PRIORITY SECTORS: RENEWABLE ENERGIESPRIORITY SECTORS: RENEWABLE ENERGIES

3 main renewable energy resources:1. Solar2. Wind3. Co-generation

Spain is one of the most attractive countries in the world for renewable energy projects: Spain is the 3rd country in the world in wind energy. Spain has 13% market share in this sector.

According to Greenpeace, if Spain exploited its natural energy resources, it would have 50 times more energy than necessary by 2050.

Spain possesses insulation towers for solar energy: Companies will invest over 1 billion $ in solar parks over the next few years.

64

PRORITY SECTORS: BIOTECH, PHARMA, HEALTHPRORITY SECTORS: BIOTECH, PHARMA, HEALTH

The biotech sector has expanded over 300% in the last 4 years. Spain is the 4th country in the EU for biotechnology scientific production.

Spain has 60 scientific & technological parks within the biotech industry, with 150 companies fully dedicated to biotech whose revenues total 420 million €.

The number of biotech companies has multiplied by 3 in the last 5 years, such that over 14,500 professionals & 425 research units are involved in biotech projects in Spain, producing over 4% of the world’s publications in this field.

Spain’s government wants R&D in this sector to reach 2% of GDP by 2010. As such, many new start-ups are funded by the government.

Spain collaborates with over 200 centers in the development of almost 128 clinical studies of the highest quality.

65

PRIORITY SECTORS: ENVIRONMENTPRIORITY SECTORS: ENVIRONMENT

Spain is the world’s leader in water treatment and desalination using reverse osmosis technology. There are over 900 desalination plants in Spain.

1.5 million m3 of desalinated water is produced per day.

The economy is looking for a new impulse in recycling. There are 814 Spanish companies authorized to work as used-vehicle treatment centers.

Cars & motors are increasingly environmentally friendly.

4 million tons of recycled waste was produced from 2000-2004. 250,000 tons of tires are recycled per year.

66

PRIORITY SECTORS: ENVIRONMENTPRIORITY SECTORS: ENVIRONMENT

According to European regulations, Spain and the rest of the EU countries must reuse and recover 95% of materials used in vehicle production by 2015.

Recycling culture also affects home appliances, such that they are dismantled rather than buried in landfills. Spain aims to manage 160,000 tons of this waste using environmentally-friendly methods. Currently, 100,000+ tons are treated.

The number of home appliances recovered grows by 10% every year. Spain is working to recover and transform sludge from construction material extraction processes and agricultural waste plastic.

67

MOST DYNAMIC SECTORSMOST DYNAMIC SECTORS

1. Private equity– Declining

Energy– Power companies: ENDESA/IBERDROLA– Renewable Energies

Air transport– IBERIA– SPANAIR

Hospitality

Chemical sector

Environment

Real estate

68

THE LEGAL ENVIRONMENTTHE LEGAL ENVIRONMENT

Sophisticated legal system– Meets EU/US/CAN standards– Principles equivalent to Common Law

Common legislation throughout the country– Civil law exceptions: inheritance / family law– Specific sector regulations:

• Generally central regulations• Regional legislation for delegated matters

– Transportation– Hospitality sector– Environment– Water treatment– Tax in Basque Country, Navarra and Canary Is.

Municipal regulations

69

THE LEGAL ENVIRONMENTTHE LEGAL ENVIRONMENT

Friendly and open environment– Contract law principle of freedom of will of the

parties– Contractual restraints limited by:

• EU competition regulations / vertical restraints

• Employment law– Freedom of investment / disinvestment– Freedom of establishment in the EU– Foreign investment deregulation

70

ESTABLISHING A BUSINESSESTABLISHING A BUSINESS

Incorporation formalities – Standard documentation– Notarized incorporation: 10 days– 15-30 days for registration of company– Companies may operate from day 1– SS and TAX registration: day 2

No registration of agreements except– Effects vis-à-vis third parties

• Corporate documents• Real Estate deals• Guarantees

71

HOME COUNTRY AGREEMENTSHOME COUNTRY AGREEMENTS

Generally adjustable to local requirements– Commercial agreements– Acquisition agreements

Choice of law

Choice of forum

Choice of language

Arbitration

72

MOST COMMON VEHICLESMOST COMMON VEHICLES

Common distribution agreements– Agency– Distribution / Licensing / Concession– Franchising

Joint ventures

Direct acquisition of– Shares– Assets– Securities

73

AGENCY AGREEMENTSAGENCY AGREEMENTS

Free will of the parties

Contractual restraints– In-term– Post-term

Public order rules / Agency Act– Goodwill indemnity payment– Spanish law– Spanish forum

74

DISTRIBUTION AGREEMENTSDISTRIBUTION AGREEMENTS

COMMERCIAL DISTRIBUTION– Exclusive / Non-exclusive– Contractual restraints– Limited non-compete clauses

• EU Regulations on concessionaires

LICENSING/TECHNOLOGY TRANSFER– Know-How, Technical Assistance, IP– EU BER on licensing agreements

FRANCHISING– Represents almost 8% of retail trade– Governed by agreement– Pre-contractual information required– BE Regulation for anti-compete clauses

75

JOINT VENTURES (I)JOINT VENTURES (I)

Common SPVs– Limited liability company (SA / SL)– UTE– EIG

Legal Structure/Documentation– Corporate SPV– By-laws of SPV– Shareholders´ Agreement– Business Plan

76

JOINT VENTURES (II)JOINT VENTURES (II)

Corporate governance rulesNon-compete clausesTerritorial scopeVeto rightsInvestment restraintsFinancial provisionsStep-out clauses

– Russian Roulette– Put and call options

77

ACQUISITION (I)ACQUISITION (I)

Standard international practicesPlayersLOIOffer letter and exclusivity periodNDADD Review

– Legal– Tax & Finance

Acquisition agreementAgreements with managers and directorsNon-compete covenants

78

ACQUISITION (II)ACQUISITION (II)

Price– Price retention– Escrow / bank guarantees

Reps. & Warranties– Standard Common Law provisions– Time limitations– Caps– Labour contingencies

Conditions precedent (antitrust)

Interim period clauses (MAE, BAU)

79

ACQUISITION (III)ACQUISITION (III)

Public companies– 30% threshhold– Reporting obligations

Financing– Acquisition finance

• Financial assistance prohibited• Guarantees

– Project finance• Project guarantees

– Shareholder loans: subordinated/Equity– Capital contributions

80

REAL ESTATE DEALSREAL ESTATE DEALS

Corporate acquisitionAssetsDue diligence

– Land Registry searches– Zoning certificates– Leased property

Purchase agreement– Notarized deed

Complex acquisitions– Shopping malls– Sites under construction

81

GUIDE FOR FOREIGN INVESTORSGUIDE FOR FOREIGN INVESTORS

Friendly legal environment– Sophisticated legal advisors– Reliable judiciary– Arbitration

Standardized practices– Adjustment of home agreements– Choice of law and forum. English language

Exchange control de-regulationTax-efficient SPVs/Spanish HoldcosStandard business and financial practicesMinor business culture differences

Doing Business in Spain

Montreal, 22nd May 2008

Title

Case study of a biotechnology startup in Spain

The path to Spain

Alec Mian

CanadaB.Sc. McGill University, Montreal.

UKPh.D. University of Cambridge, UK

USAHarvard Medical School, Boston.Co-founded Gamera Biosciences (Cambridge, MA). Sold to Tecan Holding (SWX: TECN) in 2000

Spain3 year sabbatical, co-founded a design company La Evolucion, SL.Currently on Board of Directors of Santa & Cole, SA. (Design)

Started Genmedica Therapeutics, SL.

Company goals and strategy

Goal• Create a focused portfolio of drug candidates for diabetes• Financable, milestone driven development path (seed, Series A, B and C…)• Product partnering opportunities with large pharma in 2009/2010• Exit by trade sale or IPO (2011)

Strategy• Focus on an emerging, protectable area within diabetes• Leverage local resources to get started• Attract international resources to accelerate growth and value

History

2005• Incorporated• Licensing with University of Barcelona - first drug candidate (GMC-1)

2006• GMC-1: research and additional patents filed• GMC-2: drug candidates researched and patents filed• Initiated formation of Board of Directors (BOD) and Scientific Advisory Board (SAB)

2007• Largest first round biotechnology financing in Spain (Spanish VC’s: BCN-Empren, Innova31, Unirisco; Public: ENISA, CIDEM, Torres Quevedo)• GMC-3 research and patents filed• Initial development team hired. CRO’s work initiated

2008• Cellular and animal based development of drug candidates , additional patents filed• More hiring.

Current Timelines

Metabolic syndrome: first defined in 1998 by the WHO

Abdominal obesity (waist circumference, men above 102 cm; women 88 cm)

Fasting triglyceride(above 1.69 mmol/L)

HDL cholesterol (men above 1.04 mmol/L; women, 1.29 mmol/L)

Blood pressure(above 130/85 mm Hg)

Fasting glucose(> 6.1 mmol/L)

Metabolic syndrome: epidemic rates

General population > 60 years

Pathogenesis of metabolic syndrome

• Current diabetes therapies target symptoms not cause of diabetes

Anti-inflammatories in diabetes: salicylates

Compound

Phase Date Study leaders Subjects Length

(months) Dose

(g/ day)

Efficacy

(mg/dl glycemia)

Comments

Triflunisal Phase II 2004 Fernández-Real* (Hospital Trueta)

28 obese non-diabetic

3 3

0.6

0.9

2.8 4.4

insulin secretion

Salsalate Phase II 2006 Shoelson* &

Goldfine (Joslin/Harvard)

a) 20 obese non-diabetic b) 9 DM Type 2

c) 7 T2D

d) 8 T2D

1

0.5

0.5

1

4 3

4

4, 3.5

7

18 17 mg/dl TG

21 69 mg/dl TG

20

insulin sensitivity

Salsalate Phase III

(in progress) 2010

Shoelson* &

Goldfine (Joslin/Harvard)

900 36 m

References 1 Fernández-Real, J Clin. Endocrin. Metab. (in press, 2008) 2 Fleischman et al. Diabetes Care (2008) 3 Goldfine et al., in press (2008)

•The anti-diabetic effects of salicylates are the most studied of non-traditional anti-diabetics

Company architecture

• Leveraging local and international resources

Financing

• Leveraging local and international resources

Early stage sources (local)

ENISA (1m)CDTI (00’s K)CDEM (00’s K)Torres Quevedo (50% R&D employees)Local investors (m’s)

Later stage UK, Switzerland, France, USA

ExitIPO (Spain, Switzerland, UK, USA)Trade Sale (European or US companies)

Spanish resource availability: the good, the bad…

Basic science

EXCELLENT LACKINGEmployeesIP

Early stage financingLate stage financing

Clinical science

SAB/BOD

Next steps for Genmedica

• Continue to fund early development in Spain• Continue to build team in Spain, continue work with international CRO’s (France, India)• API chemistry will be done in Spain• Clinical studies in Germany or UK• Next financing round probably European Union or US-based

Doing Business in Spain

Montreal, 22nd May 2008

CAE Corporate Overview

May 2008

CAE Inc. Confidential and/or Proprietary Information

Agenda

Corporate Overview

Market leader in Civil and Military simulation equipment

Civil Training and Services

OEM Relationships

Global Academy & Ab-Initio Training

CAE Inc. Confidential and/or Proprietary Information

Overview of CAE Inc.

One of Canada’s Largest Aerospace Companies

Founded in 1947 in Montreal

5,000 employees worldwide

• More than 3,000 in Canada

• More than 1,000 in USA

• More than 1,000 in the rest of the world

Annual revenues of more than C$1.2 billion

Over 90% of revenues from global exports and international activities in 50 countries

Operations and training facilities in 19 countries on 5 continents

Train over 50,000 pilots/year

Civil

Military

CAE Inc. Confidential and/or Proprietary Information

Market leader in Civil and Military simulation equipment

Largest Manufacturer of Aviation Simulation Equipment in World

Desktop Trainers

(CAE Simfinity)

Full Mission

Simulators (FMS)Full Flight

Simulators (FFS)Reconfigurable,

Deployable Trainers

Flight Training Devices (FTD)/ Cockpit

Procedures Trainers

(CPT)

Part Task Trainers

(PTT)Integrated Procedures

Trainers

(CAE Simfinity)

CAE Inc. Confidential and/or Proprietary Information

Civil Training & Services Market presence

MARKET LEADER IN PILOT TRAINING

23 training centres across 5 continents

110 full-flight simulators deployed

Serving approximately 3,500 customers

Training and Services segments addressed

• Commercial

• Regional

• Business

• General aviation

Global market reach across all market segments

CAE Inc. Confidential and/or Proprietary Information

Over 23 training locations worldwide

VancouverVancouver

SeattleSeattle

DenverDenver

PhoenixPhoenix

DallasDallas

MontrealMontrealTorontoToronto

WashingtonWashington

TampaTampa

MiamiMiami

São PauloSão Paulo

BensonBenson

BrusselsBrussels

MadridMadrid

EvoraEvora

Moscow

Dubai ZhuhaiZhuhai

SingaporeSingapore

SydneySydney

Civil TrainingCivil Training

Military TrainingMilitary Training

New Jersey*New Jersey*

SantiagoSantiago

Burgess HillBurgess Hill

Kuala LumpurKuala Lumpur

RomeSesto Calende

London*London*

CharlotteCharlotte

MaastrichtBueckeburg*

Holzdorf*Fassburg*

Amsterdam

CAE Inc. Confidential and/or Proprietary Information

OEM Relationships

AirbusAirbusEmbraerEmbraerDassaultDassaultBombardierBombardierAgustaAgustaLockheed MartinLockheed Martin

CAE Delivers factory training for sever of world’s largest CAE Delivers factory training for sever of world’s largest aircraft manufacturesaircraft manufactures

CAECAE

CAE Inc. Confidential and/or Proprietary Information

CAE Global Academy

Addressing Global Pilot Shortage

Network of Ab-Initio Flight Schools

•Formed in 2005 to address Global Shortage of Airline pilots

•Currently consists of 6 Flight Schools

•Production Capability of over 1000 pilots/year

•Expected to increase to 3,000 pilots/year in 2008

•Delivery of Multi-Crew Pilot License (MPL)

CAE Inc. Confidential and/or Proprietary Information

Thank You!

Doing Business in Spain

Montreal, 22nd May 2008

International Technology Cooperation With Spain - CANADEKA

Claude MorasseNational Research Council Canada

Director, IRAP OntarioMay 20, 2008

National Research Council Canada Industrial Research Assistance Program

NRC- IRAP

NRC - Industrial Research Assistance Program

Our Mandate :

Stimulate wealth creation in Canada throughtechnological innovation.

Our Mission :

Stimulate innovation in Canadian SMEs.

Our strategic objective :Increase innovation capacity of Canadian SMEs.

.

NRC’s Industrial Research Assistance Program

• In existence since 1947

• In Canada :– Invests over $100M per year in contribution to SMEs ( less than

500 employees )

– Work with over 10,000 SMEs / year and provide funding support to over 2,500 projects / year

The Toolbox

• Support to Firms for R&D• Financial Support for Firms’ Technology

Development• Financial Support to Bring New Skills to Firms• Financial Support for Organizations Providing

Innovation Assistance to SMES• Technology and Advisory Services• Networking and Linkages

Firms eligible to NRC-IRAP financial support

• For profit, incorporated commercial entity;

• 500 employees or less;

• Willingness and potential to improve their technological innovation capability;

• Open to establishing a trusted relationship with NRC-IRAP;

• With a coherent business plan demonstrating required skills in marketing, technology and management, as well as the appropriate financial capacity to undertake the project and exploit its results.

IRAP’s International Partnering Goals

• Key to IRAP’s strategic planning is growing SMEs to a mid size and ready for international technology opportunities

• We work in close collaboration with Canadian embassies and other federal government departments

• IRAP has long supported SMEs to seek out international technology partners

• Our support includes:– Information and competitive intelligence on international markets

and technologies– Host foreign SMEs and missions that visit Canada– Funding to Canadian SMEs to carry out technology missions– Funding to support international R & D collaboration projects

International Partnering Approach

• Across Canada, IRAP’s Industrial Technology Advisors monitor clients for international interests

• This results in individual SMEs visiting research institutions and firms, or organized missions with several firms ( 5-15 SMEs )

• Increasingly, our planning involves competitive intelligence and activities

• Support follow-up activities by Canadian SMEs to pursue international collaborative projects

• Seek to partner with organizations in other countries with similar mandates

CANADEKA

NRC-IRAP’s ultimate goal is to encourage science and technology development and commercialization by SMEs and realizes that partnerships and agreements like the one held with Spain’s Centre for the Development of Industrial Technology (CDTI) will assist in achieving this goal.

   

CANADEKA

• NRC-IRAP and  CDTI  are collaborating on a reciprocal basis to further each other’s support of SME growth, technology transfer and technology development for the purpose of generating economic benefits for both Canada and Spain.

• This agreement allows for mutual collaboration between our countries, and is an opportunity to build greater partnerships between Canadian and Spanish companies as well as research institutions that continue to make headway in all areas of innovation. 

CANADEKA - CRITERIA

1. Involve at least one qualified company from each country (Spain and Canada).

2. Be directed at developing a product, process or service having a wide market potential.

3. Have some identified expected benefit from pursuing the project on a cooperative basis.

4. Be directed towards the development or use of advanced technologies.

5. Aim to secure a significant technological advance with regards to the product, process or service concerned.

6. Clearly identify a commercial application to benefit mankind.

PROJECTS TO DATE

• 7 to date in manufacturing engineering, ICT, bioenergy and biotechnology

• 8 in development in bioenergy, ICT, and biotech

KEY CONTACTS

In Canada

National Coordinator

George Ortega

(204) 984-4400

george.ortega@nrc-cnrc.gc.ca

Executive Coordinator

Bill Dobson

(416) 954-8330

bill.dobson@nrc-cnrc.gc.ca

In Spain

National Coordinator

Ismael Rodrigo Barco

rodrigo_ismael@cdti.es

Executive Coordinator

Jose Manuel Leceta

jmlg@cdti.es

Doing Business in Spain

Toronto, 20th May 2008