Exclusive Option Agreement - Applied Analytical Industries Inc.
EXCLUSIVE OPTION AGREEMENT
This Exclusive Option Agreement, effective as of May 28, 1996 (the "Effective
Date"), between Applied Analytical Industries, Inc. or one of its designated
affiliates (collectively, hereinafter, "AAI"), a Delaware corporation having
its principal place of business at 1206 North 23rd Street, Wilmington, North
Carolina 28405
and
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
WHEREAS, AAI and [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] and [CONFIDENTIAL TREATMENT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
(collectively, hereinafter "[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]") are in the business,
among others, of providing certain analytical, formulation development,
manufacturing, clinical, and regulatory services to the international
pharmaceutical industry; and
WHEREAS, AAI desires from [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], and [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] is willing to grant to AAI, an exclusive option to
purchase all of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] stock of [CONFIDENTIAL TREATMENT
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
NOW, THEREFORE, in consideration for the mutual covenants and agreements set
forth hereinafter, and for other mutually recognized and valuable
consideration, the parties agree as follows:
<PAGE> 2
ARTICLE I
DEFINITIONS
Section 1.1 General. When used in this Agreement, each of the following
terms shall have the meanings set forth in this Article I.
Section 1.2 AAI. "AAI" means Applied Analytical Industries, Inc., and its
affiliates.
Section 1.3 Affiliate. "Affiliate" means any existing or future
corporation partnership, joint venture, or other entity that directly or
indirectly, now or in the future, controls, is controlled by, or is in control
with a party of this Agreement.
"Control" means the possession of the power to direct or cause the direction of
the management and policies of a person or business entity, whether through
ownership of voting securities, by contract, or otherwise.
Section 1.4 Exclusive Option Period. "Exclusive Option Period" means the
period of time during which AAI may elect to acquire all of [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] stock of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] from
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], such period commencing on the Effective
Date of this Agreement and ending on November 28, 1996 at 11:59 p.m.
Wilmington, North Carolina time, unless sooner terminated by execution of a
Stock Purchase Agreement.
Section 1.5 "Stock Purchase Agreement" means the definitive agreement
pursuant to which AAI agrees to purchase from [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] all
of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] stock of [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
ARTICLE II
EXCLUSIVE OPTION GRANT
Section 2.1 The Option. In consideration of the Exclusive Option Fee set
forth below, [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION]:
<PAGE> 3
(a) grants to AAI an option (the "Option") to purchase all of the
outstanding stock of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] owned by [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] for a purchase price consisting of (i) the Exclusive
Option Fee, plus (ii) the additional payments described in Section 4.1 hereof,
plus (iii) any reimbursements payable to [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
pursuant to Section 3.1(a) hereof; and
(b) agrees not to solicit or encourage the submission of any proposal or
offer from any person relating to the acquisition of any stock or any of the
assets of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] (including by merger, consolidation or
share exchange) or participate in any discussions or negotiations regarding, or
furnish any information with respect to, any of the foregoing during the
Exclusive Option Period.
Section 2.2 Exclusive Option Fee. In consideration of the Option, AAI
shall place or cause to be placed within five banking days in [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] after the execution of the Escrow Agreement (as defined
hereinafter) which shall be executed promptly hereinafter, the sum of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] (the "Exclusive Option Fee") in escrow
pursuant to an escrow agreement in the form of Exhibit A hereto (the "Escrow
Agreement").
Section 2.3 Exercise of Option. AAI shall have the right to exercise the
Option by giving written notice to [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] at any time from
the Effective Date through the expiration of the Exclusive Option Period. Upon
such expiration, the parties will have no further obligations to each other
except those obligations set forth in Section 4.2 hereof and the Escrow
Agreement.
Section 2.4 Exclusive Negotiation Period. Upon AAI's exercise of the
Option, AAI shall have the exclusive right for a period of ninety days
thereafter to negotiate with [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] the terms and
conditions of a definitive Stock Purchase Agreement, provided, however, that
the parties hereto may agree in writing to extend such negotiation period if
necessary.
Section 2.5 Payment of Escrow Funds. The Exclusive Option Fee, including
any accrued interest, shall be paid to AAI if the conditions stated in Article
III hereof are not fulfilled, or if, after exercising the Option, the parties
are unable to negotiate a
<PAGE> 4
Stock Purchase Agreement to their mutual satisfaction within the ninety (90)
day period set forth in Section 2.4 and neither of the parties has initiated
the dispute resolution mechanism provided for in Article VII.
The Exclusive Option Fee, including interest, shall be paid to [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] in all other events. The parties shall deliver a joint
written direction to the escrow agent under the Escrow Agreement to release the
escrowed funds to the appropriate party within five days after the delivery of
such written direction.
ARTICLE III
CONDITIONS
Section 3.1 Conditions. [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall use his
good faith efforts to cause the following conditions to be satisfied as soon as
possible:
(a) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] must own and be capable of delivering to
AAI, free of all liens and other encumbrances, all of [CONFIDENTIAL TREATMENT
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] stock of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. This condition will
only be met if:
(i) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] purchases the stock of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] not owned by [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION] as of the Effective Date, provided the
purchase price thereof does not exceed [CONFIDENTIAL TREATMENT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] in the aggregate (or if any such purchase is for less than
all of the stock not owned by [CONFIDENTIAL TREATMENT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] as
of the Effective Date, a pro rata portion of such amount); or
(ii) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] purchases the stock of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] not owned by [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE
<PAGE> 5
COMMISSION] as of the Effective Date for a purchase price of such
stock up to [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] in the
aggregate (or if any such purchase is for less than all of the stock
not owned by [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] as of the
Effective Date, a pro rata portion of such amount), provided that AAI
agrees to reimburse [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] such purchase
price.
(b) AAI shall receive a copy of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] consolidated
financial statements,
(i) for 1995, as certified by independent accountants,
(ii) for the first four months of 1996, as reviewed by independent
accountants, within thirty days of the effective date and
(iii) each month thereafter, as reviewed by independent accountants,
within fifteen days as of the end of each such month for the duration
of both the Exclusive Option Period and the negotiation period
described in Section 2.4, if any, together with a management
discussion letter.
(c) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] total indebtedness vis a vis the Banks and
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] must be reduced to seventy-five percent
(75%) of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] total indebtedness as of the end of April
1996 but not to exceed [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(d) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall not have incurred any new
indebtedness other than in the ordinary course of business without prior
written approval by AAI, except as permitted in Section 3.1(e) hereof;
(e) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall have assisted obtaining an additional
line of credit in the amount of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] on behalf of and
for the sole use of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
<PAGE> 6
(f) any and all claims resulting from the litigation with [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] shall have been settled with prejudice, and that no new
substantive litigation shall have been initiated against [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION];
(g) all operational and business facilities presently used by
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and rented from [CONFIDENTIAL TREATMENT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
shall be leased to AAI for the sum of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] per year for
each of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] following execution of a Stock Purchase
Agreement, such rent thereafter being established by [CONFIDENTIAL TREATMENT
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] as of the end of such [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] period;
(h) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] present employment contract shall have been
terminated and replaced with an employment contract for a term of [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. AAI expects [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] to cause
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] within twelve months after the Effective
Date to be generating pre-tax earnings from continued operations as measured in
accordance with generally accepted accounting principles consistent with
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] past practices, and if [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] employment is terminated at the end of such [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] period for failure to make [CONFIDENTIAL TREATMENT HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
generate such pre-tax earnings, [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall be
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION];
(i) [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall
have personally certified in writing, that [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED
<PAGE> 7
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] does not have any
unrecorded liabilities;
(j) AAI shall have received [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] evidencing
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] authority to sell the stock of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] pursuant to this Agreement;
(k) AAI shall have been granted complete access for due diligence purposes
to [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and all [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
records during the Exclusive Option Period; and
(l) AAI shall have completed its due diligence investigation of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] and the results of such investigation shall
be reasonably satisfactory to AAI. The information whether the results of such
investigations are satisfactory to AAI shall be given to [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] on or before six (6) months from the Effective Date of
this Agreement.
However there are no claims against [CONFIDENTIAL TREATMENT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] if any of
these conditions have not been met.
Section 3.2 AAI's Discretion. Notwithstanding the provisions of Section
3.1, AAI reserves the right to exercise the option herein granted even if all
conditions set forth in Section 3.1 have not been met.
ARTICLE IV
OBLIGATIONS
Section 4.1 Good Faith Negotiations. Upon exercise of the Option, the
parties shall diligently proceed in good faith to complete and execute the
Stock Purchase Agreement. The Stock Purchase Agreement shall provide that
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
Section 4.2 Confidentiality. Except as otherwise expressly provided in
this Agreement, each party shall retain in confidence and not use any and all
business and/or scientific information belonging to the other party
("Confidential Information").
<PAGE> 8
Each party shall exercise the same level of care which it uses to prevent the
unauthorized use or disclosure of its own confidential information of similar
importance. Such obligations of confidentiality and nonuse shall be waived for
Confidential Information which (i) is known to the public prior to disclosure
hereunder; (ii) becomes known to the public through no fault of the receiving
party; (iii) was known to the receiving party prior to disclosure hereunder;
(iv) is disclosed to the receiving party by a third party who is not under an
obligation of confidentiality to the disclosing party; or (v) the receiving
party has been given the express written consent from the disclosing party to
make such disclosures. The obligations of confidentiality and nonuse created
hereunder shall expire seven years from the Effective Date of this Exclusive
Option Agreement unless such period is extended under a Stock Purchase
Agreement.
ARTICLE V
INDEMNIFICATION
Section 5. Indemnification of AAI. Notwithstanding any negligent acts
committed by AAI, its employees or agents, and following the execution of a
Stock Purchase Agreement, [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall indemnify AAI for
all liabilities of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] not disclosed on the
financial statement of [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] provided to AAI at the
closing of the Stock Purchase Agreement [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
ARTICLE VI
WARRANTIES
Section 6. Warranties. Each party warrants to the other party that it
has full power and authority to execute, deliver, and perform this Agreement.
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] further warrants that he owns the majority
right, title, and interest in and to [CONFIDENTIAL TREATMENT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. Each party
further warrants that within the Exclusive Option Period specified herein, each
such party has the full power and authority to enter into a Stock Purchase
Agreement.
<PAGE> 9
ARTICLE VII
DISPUTE RESOLUTION
Section 7.1 Applicability. If the parties fail to reach an agreement with
respect to the terms of the Stock Purchase Agreement within the exclusive
negotiation period provided for under Section 2.4 and such dispute or
difference cannot be settled by friendly discussions, the dispute resolution
mechanism described hereinafter shall be the sole and exclusive method of
dispute resolution for such dispute or difference.
Section 7.2 Appraiser Panel. The dispute or difference referred to in 7.1
shall be resolved by a panel of three independent experts who shall act as
appraisers [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] and not as arbitrators [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] in accordance with [CONFIDENTIAL TREATMENT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Each party may nominate one appraiser and such two appraisers shall elect the
chairman. If the appraisers cannot agree on a chairman within two weeks, the
chairman shall be appointed by [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] after
consultation of both parties. The appraiser panel shall meet in [CONFIDENTIAL
TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION].
Section 7.3 Procedure. The procedure for the appraisal shall be conducted
in accordance with [CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. The parties shall
make every effort that the appraiser panel renders a decision within sixty (60)
days and shall instruct the appraisers accordingly. The provisions of
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shall also apply for the costs of the
procedure.
ARTICLE VIII
CORRESPONDENCE AND NOTICE
Until advised in writing to the contrary by the parties herein, all
documentation, reports, notices, of any other communications hereunder shall be
effective upon receipt when mailed by Federal Express or other reliable courier
service and addressed to:
<PAGE> 10
AAI
Forrest Waldon
Vice President and General Counsel 5051 New Center Drive
Wilmington, North Carolina
United States of America 28403
[CONFIDENTIAL TREATMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
ARTICLE IX
MISCELLANEOUS
Section 9.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of [CONFIDENTIAL TREATMENT
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Section 9.2 Assignment. The parties shall not have the right to assign
this Agreement without prior written consent of the other party, except that
AAI may transfer its right to exercise the Option to any person.
Section 9.3 Entire Agreement and Amendment. This Agreement constitutes
the entire agreement between the parties with respect to subject matter hereof.
This Agreement may not be amended, supplemented, or otherwise modified except
by an instrument in writing executed by authorized representatives of both
parties.
Section 9.4 Titles. The recitals and titles of the Articles and Sections
of this Agreement are for general information and reference only, and this
Agreement shall not be construed by reference to such titles.
Section 9.5 No Other Rights. Except as expressly provided herein, nothing
contained herein shall be construed as conferring any license or other rights,
by implication, estoppel, or otherwise, to either party.