Item 1.01   –   Entry into a Material Definitive Agreement

        On August 16, 2006 (the “Closing Date”), Kendle International Inc. (the “Company”), together with certain of its subsidiaries, entered into a Credit Agreement (the “Credit Agreement”), with various lenders (“Lenders”), UBS Securities LLC, as sole lead arranger and sole bookrunner, UBS Loan Finance LLC, as swingline lender, UBS AG, Stamford Branch, as issuing bank, administrative agent, and as collateral agent, JPMorgan Chase Bank, N.A., as syndication agent, and KeyBank National Association, LaSalle Bank N.A. and National City Bank, as co-documentation agents.

        The Credit Agreement provides for a $200.0 million senior secured term loan facility and a $25.0 million senior secured revolving credit facility. The term loan facility matures six years from the Closing Date, while the revolving credit facility matures five years from the Closing Date. The term loan facility was drawn in full by the Company on the Closing Date to finance the acquisition of the Acquired Businesses (as described in Item 2.01 and incorporated herein by reference), and to pay fees, commissions, and expenses in connection with the acquisition. The revolving credit facility is available to provide financing for Permitted Acquisitions, working capital and general corporate purposes. Indebtedness under these facilities will be guaranteed by all of the existing and future direct and indirect subsidiaries of the Company, subject to certain exceptions. The interest rates applicable to the loans under the Credit Agreement, at the Company’s option, are either a U.S. base rate or a LIBOR rate plus a specified margin.

        The Credit Agreement imposes limitations on the ability of the Company and its subsidiaries to incur, assume, or permit additional indebtedness, create or permit liens on their assets, make investments and loans, engage in certain mergers or other fundamental changes, dispose of assets, make distributions or pay dividends or repurchase stock, enter into transactions with affiliates, engage in sale-leaseback transactions and make capital expenditures. In addition, the Credit Agreement requires the Company to comply on a quarterly basis with certain financial covenants, including a maximum total leverage ratio test and a minimum interest coverage ratio test. The Company also must comply with certain reporting requirements and other customary covenants, including compliance with laws and payment of taxes and other obligations.

        In connection with the Company’s acquisition of the Acquired Businesses the Company and Charles River Laboratories International, Inc., a Delaware corporation, entered into a First Amendment to the Stock Purchase Agreement dated as of the Closing Date whereby the parties amended, among other things, the definitions of Working Capital, Current Assets, Current Liabilities, Company, and Company Employees.

        The foregoing description of the Credit Agreement and First Amendment to the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the respective exhibits filed herewith and incorporated herein by reference.

Item 1.01    Entry into a Material Definitive Agreement

Stock Purchase Agreement

        On May 9, 2006, Kendle International Inc. (the “Company”) entered into a Stock Purchase Agreement, between the Company and Charles River Laboratories International, Inc., a Delaware corporation (“Charles River Laboratories”), pursuant to which the Company will acquire 100% of the capital stock of Inveresk Research Inc., a Delaware corporation (“Inveresk”), and Charles River Laboratories Clinical Services GmbH, a German limited liability company (together with Inveresk and, together with their subsidiaries, the “Acquired Businesses”). The Acquired Businesses comprise all of the Phase II-IV clinical services business of Charles River Laboratories. The aggregate purchase price for the acquisition of the Acquired Businesses, subject to a working capital adjustment at closing, is $215 million in cash.

        The Stock Purchase Agreement has been approved and adopted by the Company’s Board of Directors. The closing of the transaction is subject to customary conditions, including, but not limited to, (i) expiration or termination of the applicable Hart-Scott-Rodino waiting period, (ii) absence of any court order or decree or law prohibiting the closing, and (iii) subject to certain exceptions, the accuracy of representations and warranties. The Stock Purchase Agreement contemplates that the acquisition must be completed by August 31, 2006.

        The foregoing description of the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stock Purchase Agreement, which is filed as Exhibit 2.1 and is incorporated herein by reference. The Stock Purchase Agreement has been included to provide investors and stockholders with information regarding its terms. It is not intended to provide any other factual information about the Company. The Stock Purchase Agreement contains representations and warranties that the parties to the Stock Purchase Agreement made to and solely for the benefit of each other. The assertions embodied in such representations and warranties are qualified by information contained in confidential disclosure schedules that the parties exchanged in connection with signing the Stock Purchase Agreement. Accordingly, investors and stockholders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Stock Purchase Agreement and are modified in important part by the underlying disclosure schedules. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Stock Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Commitment Letter

        In connection with the execution of the Stock Purchase Agreement, on May 9, 2006, the Company entered into a commitment letter (the “Commitment Letter”) with UBS Loan Finance LLC and UBS Securities LLC (collectively, “UBS”). Under the Commitment Letter, UBS has agreed to provide the Company senior secured credit facilities of up to $225 million. These committed credit facilities will be comprised of (i) a senior secured term loan facility of up to $200 million and (ii) a senior secured revolving credit facility of up to $25 million. After closing, the Company may request that the amount available under the revolving credit facility be increased to $40 million. Any such increase is subject to the approval of UBS and no lender is required to increase its commitment. Indebtedness under these facilities will be guaranteed by all of the existing and future direct and indirect subsidiaries of the Company, subject to certain exceptions. These credit facilities will be used by the Company, in part: to fund the acquisition consideration; to refinance existing indebtedness of the Company and the Acquired Businesses; to pay fees, commissions, and expenses in connection with the acquisition; and, following the acquisition, to provide ongoing working capital requirements of the Company and its subsidiaries.

        The foregoing description of the Commitment Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Commitment Letter, which is filed as Exhibit 10.1 and is incorporated herein by reference.

ITEM 1.01    ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On March 13, 2006, the Management Development and Compensation Committee (the “Committee”) of the Board of Directors of Kendle International Inc. (the “Company”) completed its annual performance and compensation review of the Company’s Named Executive Officers, who are set forth below in the table. Pursuant to the Committee’s review, the Committee approved the following actions:

The bonus awards set forth in the table above are in addition to mid-year bonus awards that were approved by the Committee in August 2005 and paid to the Named Executive Officers. The mid-year bonus for the Named Executive Officers was part of a Board-approved, mid-year bonus that was generally available to all of the Company’s employees.

Each recipient of an unrestricted stock award entered into an Unrestricted Stock Award Agreement in the form attached hereto as Exhibit 10.1, which is incorporated herein by reference. In connection with each award of unrestricted stock, the Committee approved the disposition of certain of the awarded shares to the Company in satisfaction of the award recipient’s tax obligations associated with the award.

ITEM 1.01    ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

        Effective August 31, 2005, the Management Development and Compensation Committee (the “Compensation Committee”) of the Board of Directors of Kendle International Inc. (the “Company”) approved a mid-year bonus for each Named Executive Officer set forth below in the table. The Compensation Committee approved each bonus set forth below in connection with a mid-year bonus opportunity for all of the Company’s employees meeting certain eligibility requirements.

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.

ITEM 1.01    Entry Into a Material Definitive Agreement

        On May 27, 2005, Kendle International Inc. (the “Company”) amended and restated its $10,000,000 revolving credit facility that was set to expire on May 31, 2005 by entering into the Second Amended and Restated Credit Agreement (the “Amended Credit Facility”) with the several lenders specified therein and JPMorgan Chase Bank, N.A., as agent for the lenders (the “Agent”). The Credit Facility provides for, among other things, up to $20,000,000 of revolving credit (the “Revolver”) and the right to convert up to $10,000,000 into term loans in connection with Permitted Acquisitions (as defined in the Amended Credit Facility). In connection with entering into the Amended Credit Facility, the Company also entered into amended and restated notes with respect to term loans with a principal amount of $6,000,000 (the “Term Loans”). The Amended Credit Facility amends and restates in its entirety the Amended and Restated Credit Agreement dated as of June 3, 2002, as amended (the “Original Credit Facility”), among the Company, the several lenders identified therein and the Agent but is not intended to be a novation or discharge of the Company’s obligations under the Original Credit Facility.

        The Company’s Revolver borrowings are subject to the terms and conditions set forth in a Third Amended and Restated Revolving Note between the Company and each of Keybank National Association (the “Keybank Revolving Note”) and JPMorgan Chase Bank, N.A. (the “JPMorgan Revolving Note”). Permitted borrowings under the Keybank Revolving Note and the JPMorgan Revolving Note are $6,000,000 and $14,000,000, respectively. No initial draw under the Revolver has been made. Borrowings under the Revolver may consist of a combination of Base Rate Loans and Eurodollar Loans (each as defined in the Amended Credit Facility). Borrowings under Base Rate Loans bear interest at a rate (the “Base Rate”) that is the greater of: (a) the Federal Funds Rate plus 0.5%; and (b) the prime rate. Borrowings under Eurodollar Loans bear interest equal to the quotient obtained by dividing: (a) the Interbank Offered Rate (as defined in the Amended Credit Facility) by (b) one minus the Reserve Requirement (as defined in the Amended Credit Facility). The Revolver expires May 30, 2008, at which time all outstanding principal amounts and related interest become due.

        If the Company applies borrowings under the Revolver toward a Permitted Acquisition (as defined in the Amended Credit Facility), these borrowings will convert automatically into a five-year Acquisition Term Loan (as described in the Amended Credit Facility) upon the commencement of the calendar quarter subsequent to the Permitted Acquisition. Permitted Acquisitions are subject to several conditions that are set forth in the Amended Credit Facility. These conditions include, but are not limited to, a limit of $30,000,000 in aggregate consideration for any one or more Permitted Acquisitions in any calendar year. In addition, any borrowings converted to an Acquisition Term Loan will reduce, on a dollar-for-dollar basis, the Company’s permitted borrowing limit under the Revolver.

        As of the date of the Amended Credit Facility, the Company’s outstanding principal amount for the Term Loans was $6,000,000. Term Loans are subject to the terms and conditions of an Amended and Restated Term Note between the Company and each of Keybank National Association (the “Keybank Term Note”) and JPMorgan Chase Bank, N.A. (the “JPMorgan Term Note”). The outstanding principal amount under the Keybank Term Note is $1,800,000, and quarterly principal payments of $225,000 commence on the last business day of June 2005. The outstanding principal amount under the JPMorgan Term Note is $4,200,000, and quarterly principal payments of $525,000 commence on the last business day of June 2005. The Term Loans bear interest at the Base Rate plus the Applicable Percentage (as defined in the Amended Credit Facility), which is an interest rate corresponding to the Company’s Leverage Ratio (as defined in the Amended Credit Facility). The terms and conditions of the Keybank Term Note and the JPMorgan Term Note are substantially similar to the terms and conditions of the prior notes representing the Term Loans. The entire outstanding principal of the Term Loans and all remaining accrued interest thereon will be due and payable in full on or before March 31, 2007.

        Under the Amended Credit Facility, the Company agreed to various covenants and limitations. These covenants include, but are not limited to, financial covenants to maintain a minimum Fixed Charge Coverage Ratio, a minimum Leverage Ratio and a minimum liquidity ratio (each as defined in the Amended Credit Facility). The Company’s payment obligations are subject to acceleration upon failure to meet any such ratio as well as other specified events of default.

        Borrowings under the Amended Credit Facility are secured by cash deposits with the lenders under an Amended and Restated Pledge Agreement, as well as Pledged Securities, General Intangibles and Proceeds, each as defined in the Amended and Restated Pledge and Security Agreement dated June 3, 2002 (the “Security Agreement”). The Company, including certain of its subsidiaries, entered into the Security Agreement in connection with the Original Credit Facility, and the Security Agreement remains in full force and effect with respect to borrowings under the Amended Credit Facility. In addition, the Company and certain of its subsidiaries entered into an Amended and Restated Guarantee Agreement dated June 3, 2002 (the “Guarantee Agreement”) to guarantee, on a joint-and-several basis, the repayment of borrowings under the Original Credit Facility. This Guarantee Agreement remains in full force and effect with respect to borrowings under the Amended Credit Facility.

        A copy of the Amended Credit Facility is filed as Exhibit 10.1 to this Form 8-K, which is incorporated herein by reference. Exhibit 10.1 also includes copies of the notes related to the Revolver and the Term Loans, the form of Acquisition Term Loan, the Amended and Restated Pledge Agreement and other documents related to the Amended Credit Facility. Copies of the Security Agreement and the Guarantee Agreement are filed as Exhibit 10.2 and 10.3, respectively, to this Form 8-K and are incorporated herein by reference. The description herein of the Company’s rights and obligations under the Amended Credit Facility is intended to be a summary and is qualified in its entirety by reference to the complete terms and conditions of the Amended Credit Facility, including its related documents and agreements.

ITEM 1.01     ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

        On February 17, 2005, the Management Development and Compensation Committee of the Board of Directors of Kendle International Inc. (the “Company”) completed its annual performance and compensation review of the Company’s Named Executive Officers, who are set forth below in the table, and approved the base salary level for each Named Executive Officer. The adjusted base salary for each Named Executive Officer becomes effective March 28, 2005.

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.