Exhibit 99.1
EXECUTION COPY
================================================================================
ASSET PURCHASE AGREEMENT
by and between
CARSEN GROUP INC.
and
OLYMPUS AMERICA INC.
Dated as of July 31, 2000
================================================================================
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 31, 2000
("Effective Date"), is entered into by and between CARSEN GROUP INC., a
corporation organized under the laws of Ontario, Canada ("Seller") and OLYMPUS
AMERICA INC., a New York corporation ("Buyer").
WHEREAS, Seller desires to sell and Buyer desires to purchase
certain assets of Seller for the consideration provided herein;
NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and the representations, warranties, conditions and
promises hereinafter contained, Seller and Buyer hereby represent, warrant and
agree as follows:
GUIDE TO LOCATION OF DEFINED TERMS
DEFINED TERM SECTION
------------ -------
Assets 1(a)
Assumed Liabilities 1(f)
▇▇▇▇ of Sale 3
Buyer Introductory Paragraph
Buyer Indemnified Claim 5(d)(i)
Buyer Indemnified Party 5(d)(i)
Buyer's Actual Promotional Programs Payments 1(d)
Class A Inventory 1(a) (i)
Class A Inventory Price 1(b)(A)
Class B Inventory 1(a)(ii)
Class B Inventory Price 1(b)(B)
Closing 3
Closing Date 3
Confidential Information 5(b)
Consumer Products 2
Disputed Accounts Payable 1(h)
DEFINED TERM SECTION
------------ -------
Distribution Agreement 2
Effective Date Introductory Paragraph
Estimated Total Inventory Price 1(c)
GAAP 1(b)(A)
Initial Monthly Transition Fee 5(f)
Inventory 1(a)(iii)
Landed Cost 1(b)(D)
Losses 5(d)(i)
Net Accrued Amount 1(d)
Net Sales 5(f)
Notice of Disagreement 1(d)
Payoff Amount 1(h)
Person 1(f)
Promotional Programs 1(b)(A)
Proprietary Rights 5(c)
Reimbursed Expenses 1(g)
Reimbursed Expenses Price 1(g)
Seller Introductory Paragraph
Seller Indemnified Claim 5(d)(iii)
Seller Indemnified Party 5(d)(iii)
Seller's Statement of Assets 1(c)
Settlement Statement 3
Severance Coverage Payment 1(g)
Shareholder 5(a)
Spare Parts Inventory 1(a)(iii)
Spare Parts Inventory Price 1(b)(C)
Tax 4(a)(ix)
Tax Return 4(a)(ix)
Total Inventory Price 1(b)(C)
Transition Fee 5(f)
SECTION 1. SALE AND PURCHASE OF ASSETS.
(a) SALE AND TRANSFER OF ASSETS. In reliance on the
representations, warranties and covenants contained herein and subject to the
terms and conditions hereof, on the Closing Date (as hereinafter defined in
Section 3 hereof), Seller shall sell, convey, transfer, assign, and deliver to
Buyer, and Buyer shall purchase from Seller, all of which shall be deemed to
have occurred as of the Effective Date, the following assets of Seller
(collectively, the "Assets"):
2
(i) all of Seller's right, title, and interest in and to
the Consumer Products inventory listed on EXHIBIT A attached hereto consisting
solely of inventory items included on Buyer's current product price list
(attached hereto as EXHIBIT A-1) as of the Effective Date PLUS all Olympus brand
accessories corresponding to the items on such current product price list, each
of which is new, unused and in saleable condition (the "Class A Inventory");
(ii) all of Seller's right, title, and interest in and to
the Consumer Products inventory listed on EXHIBIT B attached hereto consisting
solely of non-Class A Inventory items included on Buyer's current product repair
list (attached hereto as EXHIBIT C-1) in each case as of the Effective Date, but
excluding Consumer Product samples and consigned inventory held by any person or
entity other than Seller's employed or independent Consumer Products sales
representatives (the "Class B Inventory");
(iii) all of Seller's right, title, and interest in and to
the Consumer Products inventory listed on EXHIBIT C attached hereto consisting
solely of non-discontinued spare parts currently used as of the Effective Date
to repair the corresponding Consumer Products included on Buyer's current
product repair list (attached hereto as EXHIBIT C-1) as of the Effective Date
(the "Spare Parts Inventory") (the Class A Inventory, Class B Inventory and
Spare Parts Inventory will be collectively referred to in this Agreement as the
"Inventory");
(iv) Buyer shall not purchase any inventory of Seller
other than the Inventory; Consumer Products returned by customers to Seller or
Buyer on or after August 1, 2000 will be treated in accordance with Section
1(j);
(v) copies of all books, ledgers, files, documents,
correspondence, lists and records material to the Assets being purchased by
Buyer pursuant to this Agreement, including
3
but not limited to all relevant sales and credit records, advertising and sales
material, literature, customer lists, and financial records; and
(vi) to the extent assignable, all governmental licenses,
permits and authorizations, if any, related to the Consumer Products business of
Seller.
(b) PURCHASE PRICE. At Closing, Buyer agrees to pay to Seller the
following amounts subject to the adjustments and terms and conditions of this
Agreement:
(A) the Landed Cost (as defined below) of the Class
A Inventory, MINUS CN $150,000.00 for
prospective warranty claims for which Buyer is
responsible after the Effective Date, MINUS
Seller's actual promotional program accruals as
of the Effective Date (including but not
limited to co-op advertising, volume rebates,
sales promotions, other accrued promotional
programs, price protection, charge-backs and
other unpaid commitments) (the "Promotional
Programs") at the maximum Promotional Programs
expense exposure less interim Promotional
Programs payments made by Seller to its
customers during calendar year 2000 (to be
reconciled pursuant to Section 1(d) based upon
Seller's proportionate share of Consumer
Product sales in calendar year 2000); all as
determined in accordance with United States
generally accepted accounting principles
consistent with the accounting principles
utilized by Seller in the preparation of its
financial statements for its most recent fiscal
year ("GAAP")(the "Class A Inventory Price");
and
4
(B) fifty percent (50%) of the Landed Cost of the
Class B Inventory, as determined in accordance
with GAAP (the "Class B Inventory Price"); and
(C) the Landed Cost of the Spare Parts Inventory,
determined in accordance with GAAP (the "Spare
Parts Inventory Price") (the Class A Inventory
Price, Class B Inventory Price and Spare Parts
Inventory Price will be collectively referred
to in this Agreement as the "Total Inventory
Price").
(D) For purposes of this Section 1(b) and Section
5(i), "Landed Cost" shall mean the cost
(including freight and duty) of the particular
category of Inventory as of the Effective Date
based on Seller's cost from Buyer.
(c) SELLER'S STATEMENT OF ASSETS. At the Closing, Seller will
provide Buyer with a certificate in the form attached hereto as EXHIBIT D
containing Seller's good faith calculation of each element of the Total
Inventory Price as of the Effective Date, utilizing the methodology provided in
Section 1(b) and including all deductions (the "Seller's Statement of Assets").
The Total Inventory Price as determined in accordance with the Seller's
Statement of Assets is referred to herein as the "Estimated Total Inventory
Price". At Closing, Seller shall also provide to Buyer documentation supporting
the Estimated Total Inventory Price as Buyer may reasonably request.
(d) FINAL STATEMENT OF ASSETS. On or before January 31, 2001,
Buyer will provide Seller with a written notice stating whether it disagrees
with any item on the Seller's Statement of Assets, and, if Buyer disagrees with
any item on the Seller's Statement of Assets,
5
specifying the disputed items and setting forth the basis for Buyer's
disagreement in reasonable detail (the "Notice of Disagreement"). If Buyer does
not deliver a Notice of Disagreement to Seller by January 31, 2001, the Seller's
Statement of Assets delivered by Seller shall become final, conclusive and
binding upon the parties for all purposes under this Agreement. In addition to
the Notice of Disagreement, on or prior to February 16, 2001, Buyer shall
provide to Seller a Promotional Programs reconciliation statement comparing the
Promotional Programs accruals amount listed on Attachment 1 to Exhibit D (the
"Net Accrued Amount"), to the actual Promotional Programs payments paid or to be
paid by Buyer ("Buyer's Actual Promotional Programs Payments"). The Promotional
Programs reconciliation statement shall take into account (i) Consumer Product
purchases from Seller by Seller's customers from January 1, 2000 through the
Effective Date (PROVIDED that Seller supplies Buyer with corresponding customer
by customer information (e.g., accruals and pay-downs) within five days after
the Closing Date) and (ii) Consumer Product purchases by such customers from
Buyer from August 1, 2000 through December 31, 2000 and (iii) interim payments
made by Seller to the customers during calendar year 2000 in accordance with the
Promotional Programs. In the event the Net Accrued Amount is less than Buyer's
Actual Promotional Programs Payments, Seller shall remit the difference to Buyer
within three (3) days of the date that Buyer's Actual Promotional Programs
Payments becomes final, binding, and conclusive in accordance with this Section.
In the event the Net Accrued Amount exceeds Buyer's Actual Promotional Programs
Payments, Buyer shall remit such excess amount to Seller within three (3) days
of the date that Buyer's Actual Promotional Programs Payments become final,
binding, and conclusive in accordance with this Section. Buyer and Seller shall
attempt to resolve any disputed items in good faith for a period of fifteen (15)
6
days following Seller's receipt of the Notice of Disagreement or Promotional
Programs reconciliation statement, as the case may be. If Buyer and Seller are
unable to resolve all disputed items within such fifteen (15) day period, Buyer
and Seller shall mutually select one of (i) Deloitte and Touche, (ii) KPMG Peat
Marwick, or (iii) PricewaterhouseCoopers to act as arbiter with respect to all
disputed items relating to the Seller's Statement of Assets or Buyer's
Promotional Programs reconciliation statement (as the case may be) that have not
been resolved by the parties. The arbiter shall determine all disputed items on
the basis of GAAP (unless expressly rendered inapplicable by this Agreement) and
the applicable provisions of this Agreement and the Schedules and Exhibits
attached hereto. The arbiter shall be instructed to decide all disputed items by
no later than March 31, 2001. The decision of the arbiter shall be final,
conclusive and binding upon the parties. The fees and expenses of the arbiter
shall be shared equally by Buyer and Seller.
(e) POST-CLOSING ADJUSTMENT. If the Total Inventory Price as
finally determined under Section 1(d) above, is less than the Estimated Total
Inventory Price remitted by Buyer at Closing, Seller shall pay to Buyer an
amount equal to such difference. If the Total Inventory Price as finally
determined under Section 1(d) above, is greater than the Estimated Total
Inventory Price remitted by Buyer at Closing, Buyer shall pay to Seller an
amount equal to such difference. Any amount due from Seller or Buyer pursuant to
this Section 1(e) shall be paid within three (3) days of the date that the
Seller's Statement of Assets becomes final, binding, and conclusive in
accordance with Section 1(d) above.
(f) ASSUMPTION OF LIABILITIES. Buyer agrees to assume and become
responsible for (i) warranty obligations of Seller arising after the Effective
Date relating to (A) Consumer
7
Products sold by Seller on or prior to the Effective Date and (B) all Inventory
(but not non-Olympus brand accessories) purchased by Buyer hereunder and (ii)
the remittance of the Promotional Programs rebate payments to customers up to
the extent of the Net Accrued Amount, which amount was applied to reduce the
Class A Inventory Price paid by Buyer to Seller at Closing (collectively, the
"Assumed Liabilities"). Except for the Assumed Liabilities, Buyer is not
assuming any of Seller's liabilities or obligations (whether known or unknown,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated or due
or to become due), including but not limited to any liability or obligation of
Seller (i) for income taxes, sales taxes or any other taxes, including those
attributable to or resulting from the sale of the Assets pursuant to this
Agreement, (ii) for the unpaid Taxes (as hereinafter defined) of any person,
corporation, partnership, association, trust, joint stock company, joint
venture, unincorporated organization or governmental entity ("Person"), (iii) to
indemnify any Person, (iv) for costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby, (v) for sales
commissions owed by Seller to any person or entity, (vi) for obligations to
employees or former employees, including but not limited to compensation,
vacation and obligations under any employee benefit plan, (vii) for price
protection, if any, offered in connection with the Consumer Products, (viii)
unpaid expenses or other commitments, or (ix) under this Agreement.
(g) OTHER EXPENSES. Buyer shall pay to Seller on the Closing Date,
(i) CN$36,905.85, representing certain expenses set forth on EXHIBIT E attached
hereto (the "Reimbursed Expenses") incurred by Seller exclusively in connection
with its Consumer Products business as of the Closing Date (the "Reimbursed
Expenses Price"); and (ii) US$180,575.95, representing potential severance and
related outplacement obligations which Seller has paid or
8
agreed to pay in connection with the winding down of its Consumer Products
business (the "Severance Coverage Payment"). Seller has provided Buyer with
supporting documentation satisfactory to Buyer to evidence the amounts described
in (i) and (ii) of this Section 1(g) including but not limited to proof of
payment or written obligation to pay.
(h) PAYOFF AMOUNT. On the Closing Date, Buyer shall retain out of
the Total Inventory Price an amount equal to US$250,000.00 (the "Payoff Amount")
representing a partial payment to be applied toward the anticipated resolution
of disputed accounts payable from Seller to Buyer as of the Closing Date with
respect to invoices issued by Buyer to Seller on or prior to September 15, 2000
relating to products other than Consumer Products ("Disputed Accounts Payable").
All Disputed Accounts Payable are listed by Seller, in good faith, on Schedule
1(h). Buyer and Seller will use their respective best efforts to resolve all
Disputed Accounts Payable within sixty (60) days after Closing. Any Disputed
Accounts Payable, if not earlier resolved, shall be resolved within one hundred
twenty (120) days after the Closing Date by an independent accounting firm
utilizing the procedures described in Section 1(d). All resolved amounts shall
be paid within ten (10) days following such resolution. Any invoices issued by
Buyer to Seller on or prior to September 15, 2000 which are not listed on
Schedule 1(h), shall no longer be disputed by Seller and shall be paid to Buyer
on or before the invoice due date.
(i) TRANSFER TAXES. Except for Taxes that Buyer is required to pay
under applicable law, Seller shall be solely responsible for the payment of any
and all transfer, sales, stamp or other Taxes payable with respect to the sale
of the Assets to Buyer and other transactions contemplated hereunder.
9
(j) CONSUMER PRODUCT RETURNS. Seller will, subject to Seller's
approval based on normal industry practices, accept the return of all Consumer
Products for which there are corresponding accounts receivable from Seller.
Seller's returns approval shall not be unreasonably withheld or delayed. Upon
approval, Seller will provide the relevant customer(s) with credit(s) to be
applied against such accounts receivable. Thereafter, Buyer will purchase the
returned Consumer Products from Seller based upon the pricing formulae set forth
in Section 1(b)(A) and 1(b)(B), as the case may be. Notwithstanding the
foregoing, Consumer Products returned due to manufacturer's defects discovered
on initial use ("dead on arrival") will be repurchased by Buyer using the
Section 1(b)(A) price formula.
(k) SALES FROM INVENTORY. Buyer shall be entitled to the benefit
of all sales of Inventory occurring after the Effective Date. Seller will
deliver to Buyer at Closing any and all cash, accounts receivable, proceeds, or
other consideration or benefits received by Seller between August 1, 2000 and
the Closing Date in connection with any such sales, together with any
instruments of assignment or transfer deemed by Buyer to be reasonably
necessary. Seller will deliver to Buyer any such amounts or assets received by
Seller after the Closing Date within three (3) business days of Seller's receipt
thereof.
SECTION 2. CONSUMER PRODUCTS. For purposes of this Agreement,
"Consumer Products" shall mean, without limitation, Olympus brand silver halide
cameras, digital cameras, binocular products, microcassette recorders and
transcribers, optical storage devices, computer peripheral products and other
Olympus brand consumer products manufactured by or for Buyer and distributed by
Seller pursuant to the Distribution Agreement between Buyer and
10
Seller dated April 1, 1994, as amended (the "Distribution Agreement"); and
Olympus brand related accessories, consumables and supplies manufactured by or
for Buyer.
SECTION 3. THE CLOSING. The closing of the purchase and sale of
the Assets (the "Closing") shall take place at the offices of Paul, Hastings,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, immediately
following the execution and delivery of this Agreement (the "Closing Date"). The
Closing shall be deemed to have occurred as at the close of business on the
Effective Date. On the Closing Date (i) Seller will deliver to Buyer the various
certificates, instruments, and documents including but not limited to those
referred to in Section 6 below; (ii) Buyer will deliver to Seller the various
certificates, instruments and documents referred to in Section 7 below; (iii)
Seller will execute and deliver to Buyer a ▇▇▇▇ of sale in the form of EXHIBIT F
attached hereto (the "▇▇▇▇ of Sale") and such other instruments of sale,
transfer and conveyance and assignment as Buyer may request; (iv) Seller will
continue to hold the Inventory as Buyer's bailee in accordance with the
provisions of Schedule 5(f); and (v) Seller will execute and deliver to Buyer a
settlement statement in the form of EXHIBIT I attached hereto (the "Settlement
Statement") and Buyer shall remit to Seller the Estimated Total Inventory Price,
the Reimbursed Expenses Price, the Severance Coverage Payment and the Initial
Monthly Transition Fee (as defined below), less the Payoff Amount, by certified
check or by wire transfer of immediately available federal funds to such bank
account or accounts as Seller shall have designated in writing to Buyer.
However, if the Payoff Amount exceeds the aggregate of the Estimated Total
Inventory Price, the Reimbursed Expenses Price, the Severance Coverage Payment
and the Initial Monthly Transition Fee (as defined below), Seller shall remit
the amount
11
of such excess to Buyer by certified check or by wire transfer of immediately
available federal funds to such bank account or accounts as Buyer shall have
designated in writing to Seller. Inventory delivered to Buyer by Seller at
Closing shall not include inventory that was sold by Seller for the benefit of
Buyer after the Effective Date. Moreover, Consumer Products shipped by Buyer to
the Bailment Location (as defined in Schedule 5(f)) after the Effective Date
shall be the exclusive property of Buyer.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. As of the Closing
Date, Seller represents and warrants to Buyer as follows:
(i) The Class A Inventory consists solely of Consumer
Products inventory that is new, unused, and in saleable condition and whose
corresponding models are listed on Buyer's current product price list (see
EXHIBIT A-1) as of the Effective Date PLUS all Olympus brand accessories
corresponding to the items on such current product price list that are new,
unused, and in saleable condition. The Class B Inventory consists solely of
non-Class A Inventory Consumer Products included on Buyer's current product
repair list as of the Effective Date (see EXHIBIT C-1) but excluding Consumer
Product samples and consigned inventory held by any person or entity other than
Seller's employed or independent Consumer Products sales representatives. The
Spare Parts Inventory consists solely of non-discontinued spare parts currently
used as of the Effective Date to repair the corresponding Consumer Products
included on Buyer's current product repair list as of the Effective Date (see
EXHIBIT C-1).
12
(ii) The Inventory is unencumbered (except for any
security interest or lien of Buyer) and is free of any liens, security interests
or other claims (adverse or otherwise) by any third party and has not been
consigned to any person or entity other than Seller's employed or independent
Consumer Products sales representatives.
(iii) Seller has good and valid title to all of the
Assets, free and clear of any liens, security interests, other claims (adverse
or otherwise) or restrictions on transfer, and, upon delivery of the ▇▇▇▇ of
Sale to Buyer at the Closing, Buyer shall have good and valid title to all of
the Assets, free of any liens, security interests, other claims (adverse or
otherwise) or restrictions on transfer.
(iv) Seller is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation and the execution and performance of this Agreement and all other
documents contemplated by this Agreement by Seller has been duly authorized by
all necessary shareholder, director, and other action or consents, and this
Agreement and all other documents contemplated by this Agreement are valid,
legally binding and enforceable in accordance with their terms.
(v) Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby (including the
assignments referred to in Section 3 above), will (i) violate any statute,
regulation, rule, injunction, judgment, order, decree, ruling charge, or other
restriction of any government, governmental agency, or court to which Seller is
subject or any provision of the charter or bylaws of Seller or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract,
13
lease, license, instrument, or other arrangement to which the Seller is a party
or by which it is bound or to which any of its assets is subject (including
without limitation, any agreements with secured parties or lenders) or result in
the imposition of any lien, charge, security interest or other encumbrance,
including but not limited to any price protection offered in connection with the
Consumer Products, upon any of its assets. The Seller does not need to give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order for Seller and Buyer
to consummate the transactions contemplated by this Agreement (including the
assignments referred to in Section 3 above).
(vi) Neither Seller nor any of its predecessors have
assigned, transferred or purported to assign or transfer the Assets to any
person, firm or entity, either voluntarily or involuntarily other than to Buyer
and pursuant to Schedule 5(f).
(vii) The assets of Seller exceed its liabilities and
Seller is not currently insolvent (unable to pay its debts as they become due in
the usual course of its business) and will not be rendered insolvent by the
execution of this Agreement or the consummation of the transactions hereunder.
(viii) Seller has complied with all applicable laws
(including rules, regulations, codes, orders, decrees, rulings) of governments
and all agencies thereof, and no action, suit, claim, demand, or notice which
might result in a material adverse effect on Seller, its revenues, properties or
assets has been filed or commenced against Seller alleging any failure to so
comply.
(ix) Seller has filed all Tax Returns that it was required
to file. All such Tax Returns were correct and complete in all material
respects. All Taxes owed by Seller (whether or
14
not shown on any Tax Return) have been paid. No material adverse claim has ever
been made by an authority in a jurisdiction where the Seller does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction. The
Seller has withheld and paid all Taxes required to have been withheld and paid
in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party. There is no unresolved
dispute or claim concerning any Tax Liability of Seller either (A) claimed or
raised by any authority in writing or (B) as to which any of the Seller's
directors, officers or employees with responsibility for Tax matters has
knowledge based upon personal contact with any agent of such authority. Seller
will timely file all Tax Returns and pay all Taxes due arising in connection
with the consummation of the transactions contemplated hereby. As used herein,
"Tax" means any federal, state, local or foreign income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not; and "Tax Return" means any return, declaration, report, claim,
for refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
(x) Seller has no present intention of terminating its
entire business (except for its Consumer Products business) following the
consummation of this Agreement.
(xi) Except as described in Schedule 4(a)(xi).1 attached
hereto and for warranty repairs in the ordinary course of business, to Seller's
knowledge there is no basis for any
15
present or future action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand against Seller giving rise to any liability for
replacement or repair of or other damages in connection with any Consumer
Products previously sold. No Consumer Product sold by Seller is subject to any
guaranty, warranty or other indemnity beyond the applicable standard terms and
conditions of sale, a copy of which are included in Schedule 4(a)(xi).2 attached
hereto.
(xii) Except as described in Schedule 4(a)(xii) or in
other Schedules to this Agreement, Seller has no known material liability (and
to Seller's knowledge there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
Seller giving rise to any material liability) arising out of any matter relating
to Seller's distribution of Consumer Products, including without limitation any
injury to individuals or property as a result of the ownership, possession, or
use of any Consumer Product sold by Seller.
(xiii) Schedule 4(a)(xiii) sets forth each instance in
which Seller (i) is subject to any outstanding injunction, judgement, order,
decree, ruling or charge relating to the Assets or (ii) is a party or, to
Seller's knowledge, is threatened to be made a party to any action, suit,
proceeding, hearing, or investigation of, in, or before any court or
quasi-judicial or administrative agency of any government or jurisdiction or
before any arbitrator relating to the Assets .
(xiv) Seller has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(xv) Seller has not sold any Inventory subsequent to the
Effective Date other than Inventory for which (i) Buyer was paid directly by the
customer or (ii) Seller has
16
remitted payment to Buyer pursuant to Section 1(k) above or (iii) Seller has
delivered corresponding account(s) receivable to Buyer pursuant to Section 1(k)
above.
(b) BUYER'S REPRESENTATIONS AND WARRANTIES. As of the Closing
Date, Buyer represents and warrants to Seller as follows:
(i) Buyer is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation and the execution and performance of this Agreement and all other
documents contemplated by this Agreement by Buyer has been duly authorized by
all necessary shareholder, director and other action or consents, and this
Agreement and all other documents contemplated by this Agreement are valid,
legally binding and enforceable in accordance with their terms.
(ii) Neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated hereby (including the
assumption by Buyer of the Assumed Liabilities), will (i) violate any statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which Buyer is
subject or any provision of the charter or bylaws of Buyer or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Buyer is a party or by which it is
bound or to which any of its respective assets is subject (including without
limitation, any agreements with secured parties or lenders) or result in the
imposition of any lien, charge, security interest or other encumbrance, upon any
of its assets. The Buyer does not need to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any
17
government or governmental agency in order for Buyer to consummate the
transactions contemplated by this Agreement (including the assumption by Buyer
of the Assumed Liabilities).
(iii) The assets of Buyer exceed its liabilities and Buyer
is not currently insolvent (unable to pay its debts as they become due in the
usual course of its business) and will not be rendered insolvent by the
execution of this Agreement or the consummation of the transactions hereunder.
(iv) Buyer has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Seller could become liable or
obligated.
SECTION 5. CERTAIN COVENANTS AND AGREEMENTS.
(a) NONCOMPETITION. In consideration of Buyer's agreement to
extend the term of the Distribution Agreement to March 31, 2004, each of Seller
and Cantel Medical Corp., a Delaware corporation and the owner of 100% of the
issued and outstanding capital stock of Seller ("Shareholder"), agrees that, for
a period of three years following the Closing, it will not (i) directly or
indirectly participate or engage in any business which is, or as a result of
Seller's or Shareholder's engagement or participation would become, competitive
with the Consumer Products business of Buyer in any geographic area where Buyer
now conducts such business. Ownership by Seller or Shareholder of less than 10%
of the outstanding shares of capital stock of any corporation with one or more
classes of its capital stock listed on a national securities exchange or
publicly traded in the over-the-counter market shall not constitute a violation
of the foregoing covenant.
18
(b) NONDISCLOSURE. Each of Seller and Shareholder agrees that it
will not at any time after the date of this Agreement divulge, furnish or make
accessible to anyone any knowledge or information with respect to confidential
or secret processes, inventions, discoveries, improvements, formulae, financial
information, sales and marketing plans, materials, devices, ideas or know-how,
whether patentable or not, with respect to Buyer's Consumer Products business
("Confidential Information"); PROVIDED, HOWEVER, that nothing herein shall
prohibit Seller or Shareholder from complying with any order or decree of any
court of competent jurisdiction or governmental authority, but Seller or
Shareholder, as the case may be, will give Buyer timely notice of the receipt of
any such order or decree. Any information, which (i) at or prior to the time of
disclosure by Seller or Shareholder was generally available to the public
through no breach of this covenant, (ii) was available to the public on a
nonconfidential basis prior to its disclosure by Seller or Shareholder or (iii)
was made available to the public from a third party provided that such third
party did not obtain or disseminate such information in breach of any legal
obligation to Seller or Shareholder, shall not be deemed Confidential
Information for purposes hereof, and the undertakings in this covenant with
respect to Confidential Information shall not apply thereto.
(c) BUYER'S INTELLECTUAL PROPERTY. Except as expressly set forth
in Sections 3.6 and 6.1 of the Distribution Agreement, each of Seller and
Shareholder covenants that it has no right, title or interest in any patent,
trademark, service ▇▇▇▇, trade name or copyright or other intellectual property
right of Buyer (collectively, the "Proprietary Rights"). Beginning on the
Closing Date, Seller shall immediately discontinue any previously authorized use
of any of Buyer's Proprietary Rights with respect to Consumer Products and cease
all conduct, other than as contemplated pursuant to Schedule 5(f) attached
hereto, that might cause anyone to believe
19
that Seller is a distributor, dealer, reseller, or provider of technical
assistance or repair for Buyer's Consumer Products.
(d) INDEMNITY. (i) Seller shall indemnify and hold harmless Buyer
and all of its shareholders, officers, directors, employees, representatives,
and/or agents, successors and assigns and each of them (each a "Buyer
Indemnified Party") from and against any and all judgments, claims, damages,
liabilities, losses and expenses including, without limitation, reasonable
attorneys' fees and disbursements or sales or use taxes (collectively, "Losses"
and individually, a "Loss"), arising out of (A) the breach, untruth or
inaccuracy of any representation, warranty or covenant of Seller contained in
this Agreement, the ▇▇▇▇ of Sale or in any certificate, instrument or agreement
delivered by Seller pursuant hereto or in connection with the transactions
contemplated hereby, or any facts or circumstances constituting any such breach,
untruth or inaccuracy, (B) any liability or obligation of Seller other than
Assumed Liabilities (whether absolute, accrued, contingent or otherwise, and
whether a contractual, Tax or any other type of liability, obligation or claim)
(including but not limited to any liability for severance payments to former
employees of Seller or any liability of the Seller that becomes a liability of
the Buyer under any bulk transfer law of any jurisdiction, under any common law
doctrine of de facto merger or successor liability, under any law relating to
health, safety or the protection of the environment or otherwise by operation of
law); (C) any liability of Seller for unpaid Taxes; (D) any liabilities of
Seller for fees, costs or expenses relating to or arising out of the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, legal and
accounting fees and Taxes; (E) any demands, claims, suits or actions against any
Buyer Indemnified Party by Seller or any third party or otherwise as a result of
the
20
transactions contemplated by this Agreement under a bulk transfer or bulk sales
statute or doctrine (including without limitation a claim regarding Taxes); and
(F) all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by the Buyer Indemnified Parties, or any of them, in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against under this Section (each a
"Buyer Indemnified Claim").
(ii) Buyer shall promptly inform Seller of any claims made
against any Buyer Indemnified Party that are Buyer Indemnified Claims. Provided
that the Buyer Indemnified Claim is not brought by Seller (or a
successor-in-interest or assignee of Seller) or a Canadian or U.S. federal or
state tax authority, Seller shall have the right to control the defense and
settlement of such Buyer Indemnified Claim subject to the approval of Buyer,
which approval shall not be unreasonably withheld or delayed. Buyer shall have
the right to assume the defense of, and continue to be indemnified with respect
to, any Buyer Indemnified Claim listed as an exception in the previous sentence
and any other Buyer Indemnified Claim with respect to which Seller fails to or
elects not to conduct such defense and such failure continues for thirty (30)
days after Buyer notifies Seller in writing of its intent to assume the defense.
Notwithstanding the previous sentence, if in the defense of a Buyer Indemnified
Claim some performance is required in less than thirty (30) days, Buyer shall
have the right to so perform and continue to be indemnified by Seller.
Notwithstanding the foregoing, the failure of Buyer to give prompt notice shall
not result in the loss of indemnification unless (and then solely to the extent)
Seller shall have been materially prejudiced thereby.
21
(iii) Buyer shall indemnify and hold harmless Seller and
all of its shareholders, officers, directors, employees, representatives, and/or
agents, successors and assigns and each of them (each a "Seller Indemnified
Party") from and against any and all Losses arising out of (A) the breach,
untruth or inaccuracy of any representation, warranty or covenant of Buyer
contained in this Agreement or in any certificate, instrument or agreement
delivered by Buyer pursuant hereto or in connection with the transactions
contemplated hereby, or any facts or circumstances constituting any such breach,
untruth or inaccuracy, (B) any liability or obligation of Buyer (whether
absolute, accrued, contingent or otherwise, and whether a contractual, Tax or
any other type of liability, obligation or claim); (C) any liabilities of Buyer
for fees, costs or expenses relating to or arising out of the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, legal and
accounting fees and Taxes; and (D) all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by the Seller
Indemnified Parties, or any of them, in connection with any action, suit,
proceeding, demand, assessment or judgment incident to any of the matters
indemnified against under this Section (each a "Seller Indemnified Claim").
(iv) Seller shall promptly inform Buyer of any claims made
against any Seller Indemnified Party that are Seller Indemnified Claims.
Provided that the Seller Indemnified Claim is not brought by Buyer (or a
successor-in-interest or assignee of Seller) or a Canadian or U.S. federal or
state tax authority, Buyer shall have the right to control the defense and
settlement of such Seller Indemnified Claim subject to the approval of Seller,
which approval shall not be unreasonably withheld or delayed. Seller shall have
the right to assume the defense of, and continue to be indemnified with respect
to, any Seller Indemnified Claim listed as an exception in
22
the previous sentence and any other Seller Indemnified Claim with respect to
which Buyer fails to or elects not to conduct such defense and such failure
continues for thirty (30) days after Seller notifies Buyer in writing of its
intent to assume the defense. Notwithstanding the previous sentence, if in the
defense of a Seller Indemnified Claim some performance is required in less than
thirty (30) days, Seller shall have the right to so perform and continue to be
indemnified by Buyer. Notwithstanding the foregoing, the failure of Seller to
give prompt notice shall not result in the loss of indemnification unless (and
then solely to the extent) Buyer shall have been materially prejudiced thereby.
(e) COLLECTION OF RECEIVABLES. Following the Closing Date, Seller
shall utilize reasonable and customary collection practices in connection with
its collection of its remaining accounts receivable relating to Consumer
Products and will provide advance notice to Buyer of any legal or collection
action (other than "in-house" telephone calls and written communications
consistent with Seller's procedural policies and commercially reasonable
standards) Seller plans to initiate against any account debtor with respect to
Consumer Products accounts receivable. Each party to this Agreement has a duty
to promptly (but in no event more than ten (10) days) remit to the other party
accounts receivable payments received by such party and which is rightfully due
to the other party. If one party offers or offered a Promotional Program to
customers, before or after the Effective Date (as the case may be), such party
shall be responsible for reimbursing the other party in the event and in the
amount a customer unilaterally deducts the Promotional Program claim from the
payment due to the other party.
(f) TRANSITION FEE. Seller has provided certain services to Buyer
relating to the transition of Seller's Consumer Products business in Canada, as
such services are described in
23
Schedule 5(f) attached hereto. In consideration of such transition services,
Buyer shall pay to Seller the following amounts on the corresponding dates
(collectively, the "Transition Fee"):
Amount Date Due
------ --------
CN$85,000 Closing Date
("Initial Monthly Transition Fee")
CN$85,000 30 days after Closing Date
US$500,000 March 31, 2001
12-1/2% of Net Sales,
from August 1, 2000 through March 31,
2001, in excess of US$8,000,000 April 30, 2001
As used herein, "Net Sales" shall mean the gross amount invoiced for sales of
Consumer Products by Buyer in Canada, less any Promotional Program accruals,
cash discounts allowed, shipping charges, taxes, adjustments, credits, returns,
allowances, or any other similar costs, expenses or additions applied to
customer accounts which are related to the Consumer Products sold between August
1, 2000 and March 31, 2001, all as determined in accordance with GAAP. For
informational purposes only, Buyer shall provide Seller with non-binding monthly
sales reports from August 1, 2000 through March 31, 2001 relating to monthly Net
Sales and one final report (covering the entire eight-month period) by April 30,
2001. Subject to Section 5(b), Buyer shall provide Seller's independent auditor
reasonable access, during Buyer's normal business hours and upon reasonable
notice to Buyer, to Buyer's books and records specifically corresponding to
Buyer's sales of Consumer Products in Canada during the eight-month period. Any
dispute with respect to the amount of Net Sales shall be resolved by an
independent accounting firm within 45 days after April 30, 2001 utilizing the
procedures described in Section 1(d). The Transition Fee
24
payments due on March 31, 2001 and April 30, 2001 shall be increased by (i) the
amount of any unpaid Seller Indemnified Claim pursuant to Section 5(d), (ii) any
unpaid post-Closing adjustments in favor of Seller pursuant to Section 1(e), and
(iii) any other outstanding amounts payable from Buyer to Seller under this
Agreement. The Transition Fee payments due on March 31, 2001 and April 30, 2001
shall be reduced by (i) the amount of any unpaid Buyer Indemnified Claim
pursuant to Section 5(d), (ii) any unpaid post-Closing adjustments in favor of
Buyer pursuant to Section 1(e), and (iii) any other outstanding amounts payable
from Seller to Buyer under this Agreement including, but not limited to, amounts
resulting from the resolution of any Disputed Accounts Payable listed on
Schedule 1(h). Seller shall pay to Buyer on April 30, 2001 the amount (if any)
in which items (i), (ii), and (iii) in the immediately preceding sentence
exceeds, in the aggregate, the Transition Fee payments due on March 31, 2001 and
April 30, 2001 (as such payments may be increased pursuant to the sentence prior
to the immediately preceding sentence).
(g) FURTHER ASSURANCES. From time to time, at Buyer's request,
Seller will execute and deliver such other instruments of conveyance and
transfer and take such other action as Buyer may reasonably request to more
effectively convey, transfer to and vest in Buyer and to put Buyer in possession
and operating control of all or any part of the Assets.
(h) FULL ACCESS. From the Effective Date through and including
April 30, 2001, Seller shall provide Buyer's employees and representatives
reasonable access, during Seller's normal business hours and upon reasonable
notice to Seller, to all personnel, books, records, contracts and documents of
or pertaining to the transition services provided by Seller hereunder and the
Assets to insure compliance by Seller with this Section 5 and Schedule 5(f).
From the Effective Date through and including the date of Seller's complete
delivery of the Inventory to
25
Buyer, Buyer shall have reasonable access, during Seller's normal business hours
and upon reasonable notice to Seller, to the Bailment Location (as defined in
Schedule 5(f)).
(i) DISCOUNT POLICIES; CUSTOMER SERVICE. Buyer hereby agrees that
in the event that Buyer deviates from Seller's discount policies which were in
effect on the Effective Date, and such deviation directly results in increased
discount amounts, such amounts will not be deducted from the Landed Cost of
Class A Inventory under Section 1(b)(A). Prior to the Closing Date, Seller has
provided Buyer with a true and complete set of such discount policies, and on
the Closing Date Seller hereby agrees to execute and deliver to Buyer a
certificate of authenticity in the form of EXHIBIT G attached hereto. Seller
hereby agrees to undertake in good faith reasonable measures to assist Consumer
Product customers who contact Seller after the Closing Date by promptly
forwarding customer inquiries to Buyer and treating the customers courteously
and professionally.
(j) REWARDS PROGRAM. Seller shall continue to administer and be
responsible for its rewards program in effect as of the Effective Date, and
agrees to reimburse Buyer for any costs Buyer elects to assume in connection
with said rewards program after consultation with Seller.
(k) OUTSTANDING ORDERS. All customer purchase orders for Consumer
Products submitted to Seller prior to August 1, 2000 that are unfilled as of
August 1, 2000 will be cancelled by Seller. Seller has provided Buyer with an
accurate list of all such purchase orders.
(l) INVENTORY. On the date of delivery of the Inventory to Buyer,
Seller will deliver said Inventory unencumbered (except for any security
interest or lien of or created by Buyer), free of any liens, security interests
or other claims (adverse or otherwise) by any third
26
party and said Inventory will not have been consigned to any person or entity
except to the extent consigned to Seller's Consumer Products sales
representatives.
SECTION 6. CONDITIONS TO OBLIGATIONS OF BUYER. The obligation of
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, or the waiver by Buyer, on or prior to the Closing
Date, of the following conditions:
(a) SELLER'S PERFORMANCE. Each of the obligations of Seller to be
performed on or before the Closing Date, pursuant to the terms of this
Agreement, shall have been duly performed in all material respects by the
Closing Date. At the Closing, Seller shall pay to Buyer the amount (if any) by
which the Payoff Amount exceeds the aggregate of the Estimated Total Inventory
Price, Reimbursed Expenses Price, Severance Coverage Payment and the Initial
Monthly Transition Fee.
(b) LITIGATION. No claim, action, suit, investigation or other
proceeding shall be pending or threatened before any court or administrative
agency or by any governmental agency challenging the transactions provided for
herein.
(c) APPROVALS AND CONSENTS. Seller shall have obtained all
requisite approvals and consents from governmental or regulatory bodies or
agencies, whether federal, state or local, necessary for the performance of its
obligations hereunder.
(d) NO CHANGE IN LAW. There shall not have been any action taken
or any statute enacted by any governmental authority which would render the
parties unable to consummate the transactions contemplated herein or make the
transactions contemplated herein illegal or prohibit, restrict or substantially
delay the consummation of the transactions contemplated herein.
27
(e) INSTRUMENTS OF CONVEYANCE AND TRANSFER . At the Closing and/or
upon delivery of the Inventory to Buyer, Seller shall have delivered to Buyer
such deeds, bills of sale, endorsements, assignments and other good and
sufficient instruments of conveyance and transfer as are effective to vest in
Buyer all of the right, title and interest of Seller in and to the Assets.
Simultaneously with such delivery, Seller shall take or cause to be taken all
such other steps as are reasonably necessary to put Buyer in actual possession
and operating control of the Assets.
(f) REPRESENTATIONS AND WARRANTIES. Seller's representations and
warranties set forth in Section 4(a) above shall be true and correct.
(g) OFFICER'S CERTIFICATE. Seller shall have delivered to Buyer a
certificate to the effect that each of the conditions specified above in Section
6(a)-(f) is satisfied in all respects.
(h) LEGAL OPINION. The Buyer shall have received from counsel to
the Seller an opinion in form and substance as set forth in EXHIBIT H attached
hereto, addressed to the Buyer and dated as of the Closing Date.
SECTION 7. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate the transactions contemplated hereby shall be subject to
the fulfillment, or the waiver by Seller, on or prior to the Closing Date, of
the following conditions:
(a) BUYER'S PERFORMANCE. Each of the obligations of Buyer to be
performed on or before the Closing Date, pursuant to the terms of this
Agreement, shall have been duly performed in all material respects by the
Closing Date. At the Closing, Buyer shall pay to Seller the amount (if any) by
which the aggregate of the Estimated Total Inventory Price, the Reimbursed
Expenses Price, the Severance Coverage Payment and the Initial Monthly
Transition
28
Fee exceeds the Payoff Amount.
(b) NO CHANGE IN LAW. There shall not have been any action taken
or any statute enacted by any governmental authority which would render the
parties unable to consummate the transactions contemplated herein or make the
transactions contemplated herein illegal or prohibit, restrict or substantially
delay the consummation of the transactions contemplated herein.
(c) LITIGATION. No claim, action, suit, investigation or other
proceeding shall be threatened or pending before any court or administrative
agency or by any governmental agency challenging the transactions provided for
herein,
(d) APPROVALS AND CONSENTS. Buyer shall have obtained all
requisite approvals and consents from governmental or regulatory bodies or
agencies, whether federal, state or local, necessary for the performance of its
obligations hereunder.
(e) REPRESENTATIONS AND WARRANTIES. Buyer's representations and
warranties set forth in Section 4(b) above shall be true and correct.
(f) OFFICER'S CERTIFICATE. Buyer shall have delivered to Seller a
certificate to the effect that each of the conditions specified above in Section
7(a)-(e) is satisfied in all respects.
SECTION 8. BULK SALES ACT. Buyer and Seller hereby waive
compliance with the provisions of any applicable bulk sales laws, including but
not limited to Article 6 of the Uniform Commercial Code and Ontario's Bulk Sales
Act, R.S.O. 1990, c.B. 14 or similar legislation in force in any other province
of Canada.
SECTION 9. SELLER'S PERSONNEL. Nothing expressed in or implied
from this Agreement is intended to confer upon any member or former member of
Seller's personnel any
29
rights or remedies (including, but not limited to, any rights of employment for
any specified period of time), nor shall any member or former member of Seller's
personnel or incumbent labor organization be considered to be a third-party
beneficiary to this Agreement.
SECTION 10. PRESS RELEASES. Neither Seller and Shareholder on the
one hand nor Buyer on the other hand will issue any press releases or public
announcements (written or oral) of any of the transactions contemplated by this
Agreement except as may be agreed to in writing by both Seller and Buyer or as
Seller or Buyer may be required to make under applicable law or securities
exchange requirements PROVIDED THAT, with respect to press releases or
announcements required by law or securities exchange requirements, the parties
shall consult with one another as to the content thereof but the issuing party
shall retain ultimate discretion over the content and timing of its
announcements.
SECTION 11. THIRD PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any person or entity other than parties and
their respective successors and permitted assigns.
SECTION 12. ENTIRE AGREEMENT; AMENDMENTS. This Agreement
(including its Schedules and Exhibits) sets forth the entire agreement and
understanding of the parties with respect to the transactions contemplated
hereby and supersedes and cancels all prior or contemporaneous agreements,
arrangements, proposals, representations, communications, and understandings
relating to the subject matter hereof, whether written or oral, between or
involving Seller and Buyer. This Agreement may be amended or modified only by a
written instrument
30
executed by both Buyer and Seller.
SECTION 13. NOTICES, ETC. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given, if delivered in person, by facsimile transmission, telegraphed, or
mailed by certified, express or registered mail, postage prepaid:
By Mail or Hand by Telecopy
--------------- -----------
If to Seller:
Carsen Group Inc. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
& ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
and:
Cantel Medical Corp. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
If to Buyer:
Olympus America Inc. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: President
with a copy to Buyer's General Counsel at the same address
(telecopy: 631-844-5296)
31
SECTION 14. ASSIGNMENT; BINDING EFFECT. Neither Buyer nor Seller
may assign all or any part of its rights and obligations under this Agreement
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed. Any purported assignment in contravention of
this Section shall, at the option of the non-assigning party, be null and void
and of no effect. Except as otherwise provided above, this Agreement will be
binding upon and inure to the benefit of the successors and permitted assigns of
the parties.
SECTION 15. ARBITRATION. Except for (i) the right of either party
to apply to a court of competent jurisdiction for a temporary restraining order,
a preliminary injunction or other equitable relief to preserve the status quo or
prevent irreparable harm pending the selection and confirmation of arbitrators
or (ii) issues expressly requiring resolution pursuant to Section 1(d), any
controversy or claim arising out of or relating to this Agreement shall be
settled by arbitration conducted by three arbitrators in accordance with the
then current rules of the American Arbitration Association. The arbitration
shall be held in Suffolk County or New York City, New York, U.S.A. applying New
York law without regard to the rules of conflicts of law. Judgment on an award
rendered by the arbitrators may be entered and enforced in any court of
competent jurisdiction.
SECTION 16. SEVERABILITY. If any provision or part thereof of this
Agreement is held to be invalid, void or unenforceable, the remaining provisions
or parts thereof of this Agreement shall continue in full force without being
impaired or invalidated in any way, to the maximum extent possible consistent
with the intent of the parties in entering into this Agreement.
32
SECTION 17. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
instrument.
SECTION 18. NO WAIVER. No waiver of any right under this Agreement
shall be deemed effective unless contained in a writing signed by the party
charged with such waiver, and no waiver of any breach or failure to perform
shall be deemed to be a waiver of any future breach or failure to perform or of
any other provisions of this Agreement.
SECTION 19. HEADINGS. The headings contained herein are for
reference only and are not a part of this Agreement and shall not be used in
connection with the interpretation of this Agreement.
SECTION 20. CONTRACT INTERPRETATION. Each party hereto
acknowledges that it has had ample opportunity to review and comment on this
Agreement. This Agreement shall be read and interpreted according to its plain
meaning and an ambiguity shall not be construed against either party. It is
expressly agreed by the parties that the judicial rule of construction that a
document should be more strictly construed against the draftsperson thereof
shall NOT apply to any provision of this Agreement. When a reference is made in
this Agreement to Sections, Exhibits or Schedules, such reference shall be to a
Section of or Exhibit or Schedule to this Agreement unless otherwise indicated.
Whenever the words "include," "includes" or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation." The phrases "date of this Agreement," "the date hereof" and terms
of
33
similar import, unless the context otherwise requires, shall be deemed to refer
to the date set forth in the first paragraph of this Agreement. All references
to "$" or "dollars" shall be deemed to refer to United States Dollars, unless
the context otherwise requires. All accounting terms used herein shall have the
meanings ascribed to such terms under GAAP, unless the context indicates
otherwise. All monetary amounts, payments or adjustments provided in this
Agreement shall be calculated, paid or adjusted, as the case may be, in United
States Dollars utilizing the currency exchange rate between Canadian Dollars and
US Dollars published in THE WALL STREET JOURNAL on the Effective Date (i.e.,
US$0.67240 per CN$1.00).
SECTION 21. SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS AND
OBLIGATIONS. The representations, warranties, covenants and obligations
contained in this Agreement (including its Schedules and Exhibits) shall survive
the Closing Date.
[Remainder of page intentionally left blank]
34
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement the day and year first above written.
SELLER:
CARSEN GROUP INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
BUYER:
OLYMPUS AMERICA INC.
By /s/ F. ▇▇▇▇ ▇▇▇▇
-------------------------------
Name: F. ▇▇▇▇ ▇▇▇▇
Title: President
WITH RESPECT TO SECTIONS 5(a), 5(b), 5(c)
AND 10 ONLY,
ACKNOWLEDGED AND AGREED BY
SHAREHOLDER:
CANTEL MEDICAL CORP.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President/CEO
35