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EXHIBIT 2.1
English Translation
OPTION AGREEMENT
BETWEEN
Applied Analytical Industries, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
X.X.X.
("AAI")
and
My Asset Management GmbH
(Future name: Applied Analytical Industries Deutschland GmbH)
c/o Shearmen & Sterling
XxxxxxxxxxXx 0, 00000 Xxxxxxxxxx
Xxxxxxx
("NewCo")
- ON THE ONE SIDE -
A N D
Xxxxxxxxx Xxxxxx xxx Xxxxxxxxxxx
Xxxxxxx
00000 Xxxxxxxxxxxxxxx
Xxxxxxx
(the "Hofkammer")
- ON THE OTHER SIDE -
(AAI, NewCo and the Hofkammer are hereinafter collectively referred to as the
"Parties".)
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TABLE OF CONTENTS
Directory of Annexes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1 Call Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2 Financial Commitments by the Hofkammer Towards NewCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3 Financial Commitments by AAI Towards Hofkammer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4 Lease Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5 Prior Agreements; Distribution of Escrow Funds; Option Fee . . . . . . . . . . . . . . . . . . . . . . . . . 11
6 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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DIRECTORY OF ANNEXES
Annex 1.3 - Purchase Agreement
Annex 4.1 - Lease Agreement
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INTRODUCTION
A. Since May 10, 1995, the Hofkammer is holding a limited partnership
interest of DM 1,500,000 representing 75% of the limited liability
capital in L.A.B. Gesellschaft fur pharmakologische Untersuchungen mbH
& Co., Xxx-Xxx ("L.A.B."). Since July 31, 1995, the Hofkammer is
holding three shares with an aggregate nominal value of DM 50,000 in
L.A.B. GmbH & Co. KG's general partner, L.A.B. Verwaltungsgesellschaft
mbH, Xxx-Xxx (the Partner GmbH ), representing all of the share
capital of the Partner GmbH. Before that time the Hofkammer did not
hold any interest in either L.A.B. or the Partner GmbH. The
Hofkammer's sole aim in acquiring these interests was to secure for
the time being L.A.B. as a going concern including the preservation of
jobs and thereby avoiding the loss of its own claims against L.A.B.,
including payment of outstanding rent. Hofkammer was not active in the
business of L.A.B., nor will be in the future and wishes therefore to
sell its interests in L.A.B. and the Partner GmbH.
B. AAI is active in the same business as L.A.B. and intends to expand its
operations in Europe. AAI therefore is interested to purchase the
aforementioned interests of Hofkammer.
C. On May 28, 1996 the Parties entered into an Exclusive Option Agreement
which was notarized by Notary Xx. Xxxxxxx Wamister in Bale on July 8,
1996. This Exclusive Option Agreement granted AAI a six-month
exclusive option period which in the meantime was extended until
December 9, 1996. Under such agreement AAI was entitled to request
that Hofkammer sells its interests in the Partner GmbH and L.A.B.,
which interests at the time of such sale would represent all of its
interests in and to L.A.B. and the Partner GmbH (the "Transaction").
By letter agreement dated December 9, 1996, the Hofkammer granted to
AAI exclusivity for a period until December 24, 1996.
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In consideration thereof, the Parties agree as follows:
1 CALL OPTION
1.1 The Hofkammer hereby irrevocably grants to NewCo, subject to
the terms and conditions stated hereinafter, an option (the
"Call Option") to require the Hofkammer to sell to NewCo
(i) all outstanding shares in the Partner GmbH
representing a total nominal capital (Stammkapital)
of DM 50,000 (the "GmbH Shares") and,
(ii) all of Hofkammer's partnership interest in L.A.B.
representing today a 75% participation in L.A.B.,
with a registered limited liability amount
(Haftkapital) of DM 1,500,000 (the "L.A.B.
Partnership Interest"),
(The GmbH Shares and the L.A.B. Partnership Interest are
hereinafter collectively referred to as the "L.A.B.
Interests".)
1.2 NewCo may only exercise the Call Option until January 2, 1997
(the Call Option Period ). For the purpose of executing the
Call Option, the Hofkammer hereby irrevocably offers to NewCo
to sell the L.A.B. Interests within the Call Option Period by
accepting the offer of the Hofkammer by notarial deed. NewCo
shall give a notice to the Hofkammer promptly after having
accepted the offer.
1.3 The purchase of the L.A.B. Interests by NewCo pursuant to the
exercise of the Call Option shall take place pursuant to the
purchase agreement attached as Annex 1.3 (the "Purchase
Agreement"). Such Purchase Agreement shall become effective on
January 1, 1997, 00:00 o'clock or on December 31, 1996, 23:59
o'clock, at the choice of NewCo (the "Effective Date").
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1.4 Any exercise of the Call Option by NewCo shall in no way
constitute a waiver of any warranty rights or otherwise affect
any rights of NewCo under the Purchase Agreement unless
specifically otherwise stipulated.
2 FINANCIAL COMMITMENTS BY THE HOFKAMMER TOWARDS NEWCO
In case the Call Option is validly exercised and NewCo pays the
Purchase Price under clause 4.2 (i) of the Purchase Agreement, the
Hofkammer herewith agrees as part of a global finacial reorganization
(Sanierung)
(i) to waive all of its claims against L.A.B. or against
any other company of L.A.B. (the "L.A.B. Group")
with effect as of the day preceding the Effective
Date except for an amount of DM 2,928,000 plus V.A.T.
if applicable (the "Hofkammer Entitlement") which is
part of the Purchase Price under the Purchase
Agreement,,
(ii) that neither L.A.B. nor any other company of the
L.A.B. Group shall make any payments for outstanding
rent or otherwise to the Hofkammer after November 26,
1996, and that Hofkammer shall reimburse to NewCo any
excess payments received thereafter, if any, plus
interest in an amount of 5.5% p.a.
3 FINANCIAL COMMITMENTS BY AAI TOWARDS HOFKAMMER
In case the Call Option is validly exercised, AAI herewith guarantees
that NewCo will pay the full amount of the purchase price as stated in
clause 4 of the Purchase Agreement. Upon request AAI shall provide to
Hofkammer a bank guarantee of a German bank of Hofkammer's choice
securing outstanding payments of the Purchase Price, provided that
Hofkammer bears the cost of such a bank guarantee.
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4 LEASE AGREEMENT
4.1 If the Call Option is validly exercised and NewCo pays the
Purchase Price under clause 4.2 (i) of the Purchase Agreement,
the Hofkammer and NewCo will take responsibility that the
Hofkammer Grundstucksgesellschaft GBR mbH and L.A.B. shall
amend the current two lease agreements relating to the head
offices of L.A.B. (the "Property") which are attached as Annex
4.1 (the Lease Agreements) as follows with effect as of the
Effective Date (the "Lease Commencement Date"):
4.1.1 The term of the Lease Agreements shall unitarily end
five years after the Lease Commencement Date. L.A.B.
has an option to extend the Lease Agreements for one
additional period of five years. Such option to be
exercised by written notice to the Hofkammer
Grundstucksgesellschaft GBR mbH at least 18 months
before expiration of the first five-year term.
4.1.2 As of the Lease Commencement Date the aggregate
yearly rent due for the first three years under the
Lease Agreements shall amount to DM 1,000,000 plus
V.A.T., payable on a monthly basis not later than on
the 15th of each month. After the third anniversary
of the Lease Commencement Date, such rent shall be
adjusted to market conditions in the Ulm area, if
possible on the basis of comparable properties at
comparable locations. In determining such market rent
any structural measures and installations financed by
the lessor which increase the value of the Property
shall be taken into consideration when fixing the
rent, but it shall not include improvements financed
by the lessee. In each such case, any rent adjustment
will be implemented on a forward looking basis only.
In case L.A.B. and the Hofkammer
Grundstucksverwaltungsgesellschaft cannot agree on
such adjustment of the rent, the amount of the rent
shall be determined by a pub-
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licly sworn expert to be jointly commissioned by the
Parties who shall act as an appraiser
(Schiedsgutachter) in the meaning of sect. 317 Civil
Code (BGB). The appraiser's determination shall be
binding. If the Parties are unable to agree on such
an appraiser, then he/she shall be appointed by the
President of the Ulm Chamber of Industry and Commerce
after hearing of the parties. The costs of the
appraisal shall be borne by the Parties in accordance
with sect. 91 Civil Procedure Act (ZPO).
The rent adjusted as described shall be applicable
until the end of the first five-year term. If L.A.B.
exercises the option for another five-year term, the
rent for such additional term shall be determined by
the same procedure as described in clause 4.1.2,
second sentence, above, including a customary index
clause.
4.1.3 In case that more than 50% of the property is
destroyed or otherwise not useable as intended,
L.A.B. may terminate the Lease Agreements with
immediate effect and is in any case entitled to
reduce the rent adequately.
4.1.4 All other terms of the Lease Agreements shall remain
in full force and effect. In the event of differences
between the two lease agreements, the one dated
October 22, 1992/January 4, 1993 shall prevail.
4.2 Any rent owed by L.A.B. pursuant to clause 4.1 is herewith
guaranteed by NewCo. For this purpose AAI declares the
following:
NewCo is a wholly owned subsidiary of AAI. NewCo is entrusted
with all of the activities of AAI in Germany. AAI intends to
continue to control NewCo and to entrust NewCo with its future
business activities in Germany. If AAI decides to cause
changes with respect to the control of NewCo and/or NewCo's
entrustment with AAI's business activities in Germany, AAI
will give the Hofkammer prior written notice upon which the
Hofkammer and AAI will
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agree on a solution which is comparable for the Hofkammer with
the situation as mentioned in the first two sentences.
4.3 AAI and the Hofkammer shall procure that L.A.B. and Hofkammer
Grundstucksgesellschaft GBR mbH shall execute as soon as
possible a new lease agreement in due form reflecting the
terms of this clause 4. As part of such new lease agreement
the Hofkammer shall procure NewCo or its assignee one option
to acquire of the three buildings presently used by L.A.B. and
the underlying land. The conditions for such purchase shall
be based on market value; such option to be registered at the
land register (Grundbuch). In case the parties cannot agree on
market value, an independent expert acting as an appraiser
shall determine such market conditions. Until said option is
duly registered Hofkammer shall take responsibility that the
property will not be sold or otherwise transferred to a third
party.
5 Prior Agreements; Distribution of Escrow Funds; Option Fee
5.1 This Agreement supersedes in its entirety the Exclusive Option
Agreement, except for the Escrow Agreement which is part of
the Exclusive Option Agreement and which will remain in full
force and effect.
5.2 It is understood that in case the Call Option is not validly
exercised, the Hofkammer is obliged to agree that the Escrow
Fund as defined in the Escrow Agreement including interest
shall be distributed to AAI, except for an amount in the
equivalent of $15,000 (currency value as of the Effective
Date); such amount to be regarded as an option fee for the
Hofkammer as consideration for the granting of the Call Option
hereunder.
5.3 In case that the Call Option is validly exercised, AAI is
obliged to agree that the Escrow Fund shall be distributed to
the Hofkammer as satisfaction of the purchase price stated
under clause 4.2 (i) of the Purchase Agreement.
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6 MISCELLANEOUS
6.1 In case the Call Option is validly exercised, only NewCo is
entitled and obliged to inform the Partner GmbH about the
transfer of the GmbH Shares pursuant to sect. 16 (1) Limited
Corporation Act (GmbHG).
6.2 Each Party shall bear its own costs and expenses in connection
with the negotiation, preparation and implementation of this
Agreement with the exception of notarial and court costs and
similar charges which shall be shared equally between the
Parties. Transfer taxes will be borne by NewCo.
6.3 If any of the provisions contained in this Agreement are or
become invalid or impracticable for any reason, including by
virtue of the omission of any other provision, the validity of
the remaining provisions shall remain unaffected. The invalid
or impracticable provision shall be substituted or
supplemented by provisions that ensure the economic purpose of
the invalid or impracticable provision as far as possible.
6.4 Unless otherwise specified in this Agreement, all notices and
other communications hereunder shall be in writing and in
English.
IF TO THE HOFKAMMER:
Hofkammer des Hauses Wurttemberg
- Direktion -
SchloB
88045 Friedrichshafen
Fax (+49-7541) 307-126
IF TO NEWCO:
Applied Analytical Industries Deutschland GmbH
c/o Shearman & Sterling
XxxxxxxxxxXx 0
00000 Xxxxxxxxxx
Fax (x00-000) 0 00 00-00
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IF TO AAI:
Applied Analytical Industries, Inc.
attn. General Counsel
0000 Xxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
X.X.X.
Fax: (x0-000) 000-0000
6.5 All Annexes in this Agreement are considered a part
hereof.
6.6 Each of the Parties shall execute and deliver all
such further documents and agreements and do such
further acts as are reasonably required hereby and
are not inconsistent with any other provisions of
this Agreement.
6.7 The Parties agree to keep confidential all
information obtained in connection with this
Agreement and its performance as long as and to the
extent that it has not been made known to the public
without fault of any of the Parties. If this
Agreement is terminated for any reason, this
confidentiality obligation shall remain in effect
indefinitely.
6.8 Neither this Agreement nor any right hereunder may be
assigned without the prior written consent of the
other Parties unless specifically stated otherwise.
Any attempt to assign any right hereunder without
such approval will be void unless it is an assignment
or transfer by operation of law. Subject to the
preceding sentence, this Agreement is binding upon,
inures to the benefit of, and is enforceable by the
Parties and their respective successors and
assignees.
6.9 Each Party shall execute any further legal acts which
are required to achieve the goal of this agreement.
This also includes that the Hofkammer, upon request,
will render all necessary statements so that for the
Buyer no undesirable consequences will result from
the exclusion of the Xxxxxxx agreed on by the
shareholders' meeting. This clause 6.9 contains no
financial commitments for either Party.
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6.10 This Agreement shall be governed by the laws of the
Federal Republic of Germany. The exclusive place of
jurisdiction is Frankfurt am Main.
IN WITNESS THEREOF, this public deed and the Annexes have been read out in
their entirety in the presence of the appeared persons and in my presence.
After reading, this public deed and the Annexes have been found to be correct
and approved. After that the appeared persons have signed the public deed in my
presence, thereupon I, the notary public, have also signed this public deed and
affixed my official seal.
BALE, this 23rd (twenty-third) day of December 1996 (nineteen hundred and
ninety-six)
[Signatures and seal of notary public.]
