ASSET PURCHASE AGREEMENT
BETWEEN
EDITEK, INC.
AND
BIOMAN PRODUCTS INC. AND NOVAMANN INTERNATIONAL INC.
DATED MAY 31, 1995
TABLE OF CONTENTS
ARTICLE I
ASSET SALE.................................................. 1
Section 1.1 Subsidiary Asset Sale............................................................ 1
Section 1.2 Parent Asset Sale................................................................ 1
Section 1.3 Other Assets..................................................................... 1
Section 1.4 Transfer of Title................................................................ 2
Section 1.5 Employees........................................................................ 2
Section 1.6 Names and Marks.................................................................. 2
Section 1.7 Trade Secrets.................................................................... 2
Section 1.8 Good Will........................................................................ 3
Section 1.9 License Rights................................................................... 3
Section 1.10 Affiliates....................................................................... 4
ARTICLE II
CONSIDERATION PAYABLE BY PURCHASER...................................... 4
Section 2.1 Purchase Price................................................................... 4
Section 2.2 Cash Payment..................................................................... 4
Section 2.3 Securities of Purchaser.......................................................... 4
Section 2.4 Liabilities...................................................................... 5
ARTICLE III
CLOSING................................................... 6
Section 3.1 Closing............................................................. 6
Section 3.2 Conditions to Each Party's Obligation to
Close............................................................... 6
Section 3.3 Conditions to Obligation of Parent and
Subsidiary to Close................................................. 7
Section 3.4 Conditions to Obligation of Purchaser to
Close............................................................... 7
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER................................. 8
Section 4.1 Corporate Organization and Good
Standing............................................................ 8
Section 4.2 Authorization; Binding Agreement.................................... 8
Section 4.3 SEC Reports......................................................... 9
Section 4.4 Certain Fees........................................................ 9
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBSIDIARY........................... 10
Section 5.1 Corporate Organization and Good
Standing............................................................ 10
Section 5.2 Authorization....................................................... 10
Section 5.3 Financial Statements................................................ 10
Section 5.4 Absence of Certain Changes.......................................... 11
Section 5.5 Certain Fees........................................................ 11
Section 5.6 Consents and Approvals; No Violations............................... 11
Section 5.7 Litigation.......................................................... 12
Section 5.8 Certain Employment Matters; Labor
Relations........................................................... 12
Section 5.9 Employee Benefit Plans.............................................. 13
Section 5.10 Tax Liabilities..................................................... 13
Section 5.11 Title to Assets..................................................... 13
Section 5.12 Contracts, Minutes and Other Instruments
and Information..................................................... 14
Section 5.13 Permits and Licenses................................................ 14
Section 5.14 Real Property; Environmental Matters................................ 15
Section 5.15 Rates for Use of Equipment.......................................... 15
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING................................... 15
Section 6.1 Conduct of Business by Parent and
Subsidiary Pending the Closing...................................... 15
ARTICLE VII
ADDITIONAL AGREEMENTS............................................ 17
Section 7.1 Access to Information............................................... 17
Section 7.2 Approvals........................................................... 17
Section 7.3 Expenses............................................................ 17
Section 7.4 Agreement to Cooperate.............................................. 17
Section 7.5 Public Statements................................................... 17
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER...................................... 18
Section 8.1 Termination......................................................... 18
Section 8.2 Effect of Termination............................................... 18
Section 8.3 Amendment........................................................... 18
Section 8.4 Waiver.............................................................. 18
ARTICLE IX
GUARANTY AND INDEMNIFICATION......................................... 19
Section 9.1 Guaranty............................................................ 19
Section 9.2 Indemnity of Purchaser.............................................. 19
Section 9.3 Setoff.............................................................. 19
Section 9.4 Indemnity of Parent and Subsidiary.................................. 19
ARTICLE X
GENERAL PROVISIONS.............................................. 19
Section 10.1 Survival of Representations, Warranties
and Agreements...................................................... 19
Section 10.2 Notices............................................................. 19
Section 10.3 Miscellaneous....................................................... 20
Section 10.4 Counterparts........................................................ 20
Section 10.5 Parties in Interest................................................. 20
Disclosure Schedules
Exhibit A - Form of Opinion of Petree Stockton, L.L.P.
Exhibit B - Form of Opinion of Brennen Partners
Exhibit C - Form of Distribution and Supply Agreement
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ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of May __, 1995 (the "Agreement"), between and
among EDITEK, Inc., a Delaware corporation ("Purchaser"), Bioman Products Inc.,
an Ontario corporation ("Subsidiary"), and NOVAMANN International Inc., a
Canadian corporation ("Parent").
WHEREAS, Parent and Subsidiary desire to sell to Purchaser all the
assets of Subsidiary and certain assets of Parent, and Purchaser desires to
purchase such assets, pursuant to the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound hereby, agree as follows:
ARTICLE I
ASSET SALE
Section 1.1 Subsidiary Asset Sale. Subsidiary agrees to sell, and
Purchaser agrees to purchase, all the tangible and intangible assets of
Subsidiary, including, without limitation, all inventory (including without
limitation all antibody, conjugate and hapten), cash and cash equivalents,
equipment, contracts, leases, subleases, licenses (subject to Section 1.9
hereof), customer and supplier lists, tradenames and marks, but excluding any
contracts or other assets rejected by Purchaser. Schedule 1.1 hereto contains a
list of all Assets of Subsidiary on March 31, 1995. Until the Closing Date
Subsidiary will not transfer any assets, except sales of inventory and cash
payments for payroll purposes, both of which shall be in the ordinary course of
business consistent with prior practices as explained to Purchaser. All assets
to be sold by Subsidiary hereunder, whether or not listed on Schedule 1.1
hereto, are hereinafter referred to as "Subsidiary Assets."
Section 1.2 Parent Asset Sale. Parent hereby agrees to cause its
Affiliates to sell, and Purchaser hereby agrees to purchase, the items listed on
Schedule 1.2 hereto (hereinafter referred to as the "Parent Assets").
Section 1.3 Other Assets. For a period of three years after the Closing
Parent will continue to provide Purchaser at rates listed on Schedule 1.3 hereto
use of the equipment and services which are listed on Schedule 1.3 hereto.
Subsidiary (or Parent in the name of Subsidiary) has applied for an investment
tax credit from the government of Canada, which tax credit may not be paid until
after Closing. Fifty (50%) Percent of any tax credit received by Parent or
Subsidiary in respect of research activities conducted by or on behalf of
Subsidiary shall be paid to Purchaser promptly upon receipt by Parent or
Subsidiary.
Section 1.4 Transfer of Title. Seller and Parent shall enter into such
agreements, sign such consents, and take any other actions as may be reasonably
necessary to convey title to the Subsidiary Assets and Parent Assets to
Purchaser, free and clear of all liens and encumbrances, except those
specifically assumed by Purchaser.
Section 1.5 Employees. Parent and Subsidiary shall take all actions
reasonably requested by Purchaser to assist Purchaser to convince personnel
selected by Purchaser to become employed by Purchaser. It is contemplated that
Purchaser shall hire the current employees of Subsidiary. However, Purchaser
shall have no obligation to hire any employees of Subsidiary or Parent. If the
transactions contemplated hereby are not completed, Purchaser agrees not to
solicit the employment of any employee of Parent or Subsidiary for a period of
three years from the dated of this Agreement.
Section 1.6 Names and Marks. From and after the Closing Date neither
Parent, Subsidiary nor any of their Affiliates shall use the names or marks sold
to Purchaser nor any name or mark similar to any name or mark sold to Purchaser.
Parent and Affiliates other than Subsidiary may continue to use their existing
names as shown on Schedule 1.6 hereto without there being a breach of this
Agreement. Within ten (10) days after the Closing Date, Subsidiary shall have
amended its corporate charter to change its corporate name. All rights to use
names and marks shall be assigned to Purchaser and on the Closing Date or at any
time after the Closing Date Parent and Subsidiary shall execute such documents
as are requested by Purchaser to allow Purchaser to use such names and marks.
Where any name or mark is registered or otherwise protected, Parent and
Subsidiary shall so inform Purchaser and facilitate transfer of such
registration or other protection to Purchaser. Notwithstanding any of the
foregoing, Purchaser shall not use the names or marks of Parent or any Affiliate
except to the extent any such names or marks were owned or used by Subsidiary
prior to the date hereof.
Section 1.7 Trade Secrets. From and after the Closing Date neither
Parent, Subsidiary nor any of their Affiliates shall use or disclose, whether
orally or in writing, the trade secrets sold to Purchaser. On or prior to the
Closing Date Subsidiary shall deliver a list to Purchaser of all the trade
secrets of Subsidiary, a list of those persons or entities with access to, or
copies of, such trade secrets and the information required to enable Purchaser
to utilize such trade secrets. All copies of such information in whatever form
not delivered to Purchaser shall be destroyed. Parent and Subsidiary shall cause
all others to whom such trade secrets have been disclosed to cease all use
(including all written or oral disclosure) of such trade secrets and to destroy
all copies thereof. From and after the date hereof, Parent, Subsidiary and their
Affiliates (i) shall not disclose such trade secrets to
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others, whether orally or in writing, and (ii) shall cooperate with Purchaser to
protect against future use of such trade secrets by others.
Section 1.8 Good Will. As Purchaser is paying for the good will of
Subsidiary as a going concern, from and after the date hereof neither Parent nor
Subsidiary, nor any of their Affiliates shall take any action that a reasonable
person would have reason to believe may harm the good will and reputation of the
business purchased from Subsidiary by Purchaser.
Section 1.9 License Rights. The Subsidiary Assets shall include all
rights of Subsidiary, Parent or any of their Affiliates under the License
Agreements between the Minister of Agriculture and Mann Testing Laboratories
with respect to Glycopyrrolate ELISA test kits and Crymoglycate ELISA test kits,
which agreements are listed on Schedule 1.9 hereto (the "License Rights").
Parent, Subsidiary and their Affiliates shall use their best efforts to arrange
for assignment or exclusive sublicense of such License Rights to Purchaser and
approval of such license assignment or sublicense by the Minister of
Agriculture. Failing that, for the duration of the respective License Rights
including any renewals or extensions thereof, Parent, Subsidiary and their
Affiliates shall take all necessary action to ensure that Purchaser has all the
economic benefits of such License Rights, including selling products to
Purchaser at cost (including the royalties payable to Agro-Canada), plus 10%.
Furthermore, Parent, Subsidiary and their Affiliates shall use their best
efforts to assist Purchaser in renewing or extending the License Rights. Any
such license, sublicense or other arrangement shall be without cost to purchaser
as the cost is included in the purchase price for the Assets paid by Purchaser
on the Closing Date.
Until the later of (i) the sixth anniversary of the Closing Date, (ii)
the date the License Rights, including all renewals, modifications, extensions
and subsequent agreements regarding the same subject matter as the License
Rights, expire and cease to be held by Purchaser or any affiliate of Purchaser,
or any transferee or assignee of Purchaser or (iii) the date the licensor of
such License Rights shall cease negotiating with Purchaser or its affiliates, or
their transferees or assignees with respect to any renewal, modification or
extension of the License Rights or subsequent agreement regarding the same
subject matter as the License Rights, neither Parent or Subsidiary nor any of
their Affiliates shall seek or accept the License Rights or any rights having
the same subject matter as the License Rights, nor shall any of them act as
agent for or otherwise assist any other person or entity seeking such rights
during such period. Parent and its Affiliates shall, however, take any action at
the request of Purchaser to extend the term of the License Rights of Purchaser.
Parent shall not manufacture or sell to any person or entity any Reagents (as
defined below), except as specifically requested by Purchaser.
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"Reagents" means the reagent antibodies, conjugates and haptens and any
other reagent or raw materials provided by Parent to Subsidiary prior to the
date hereof in connection with any product of Subsidiary, specifically
including, without limitation, reagents manufactured pursuant to the License
Rights. Notwithstanding that Subsidiary is selling to Purchaser all its rights
pursuant to the agreement with ImmunoSystems described in Schedule 1.1 hereto
pursuant to Section 1.1, neither Parent nor Subsidiary is disclosing or
otherwise providing to Purchaser in any way any "plate coating" technology,
know-how or tradesecret information obtained by Parent or Subsidiary from the
ImmunoSystems Division of Milipore Corporation, nor shall any such technology,
know-how or tradesecret information be disclosed or provided to Purchaser
pursuant to this Agreement. If Purchaser desires to acquire such technology,
Purchaser must negotiate directly with Milipore Corporation, provided that
Parent shall assist Purchaser in such negotiations.
Section 1.10 Affiliates. The term Affiliates shall include all persons
and entities that would be "affiliates" under the Securities Exchange Act of
1934. "Affiliates" shall also include all of the current management of Parent
and Subsidiary.
ARTICLE II
CONSIDERATION PAYABLE BY PURCHASER
Section 2.1 Purchase Price. Purchaser shall pay to Parent and
Subsidiary an aggregate purchase price of One Hundred Forty Thousand ($140,000)
Dollars (Canadian) (the "Purchase Price"), which amount shall be allocated
between Parent and Subsidiary at the Closing in the percentages set forth in a
written notice executed by both Parent and Subsidiary and delivered to Purchaser
prior to the Closing. The Purchase Price shall be allocated equitably among
Subsidiary and Parent to reflect the value of assets sold by each.
Section 2.2 Cash Payment. 40% of the Purchase Price will be
paid by cash, certified check or bank draft at Closing in Canadian
currency.
Section 2.3 Securities of Purchaser. The remaining 60% of the Purchase
Price will be paid by the issuance of shares of Common Stock of Purchaser (the
"Purchase Shares") having on the date of Closing a market value equal to the
amount of the noncash Purchase Price. No fractional shares shall be issued.
Purchaser shall pay cash in lieu of fractional shares. The market price of the
Common Stock of Purchaser shall be deemed to be the average closing sale price
of a share of Common Stock of Purchaser on the American Stock Exchange during
the ten (10) trading days immediately preceding the Closing Date. Currency
values shall be equal to the average between the sales price of the respective
currencies and the purchase price for the respective currencies as identified in
the Wall Street Journal at the close of business on the last currency trading
date prior to the Closing Date.
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Purchaser shall cause the Purchase Shares to be listed for trading on
the American Stock Exchange at the time of the Closing or as soon as practicable
following the Closing. Notwithstanding such listing Parent and Subsidiary hereby
acknowledge and agree that resale by Parent or Subsidiary of the Purchase Shares
shall be subject to restriction under U. S. securities laws, the Purchase Shares
shall be issued with a restrictive legend and the Purchaser shall impose stock
transfer restrictions with the transfer agent.
Purchaser hereby agrees to include the Purchase Shares in the first
registration statement (other than a registration statement on Form S-8 or S-4)
filed by Purchaser with the U. S. Securities and Exchange Commission ("SEC")
following the Closing Date, provided SEC rules the allow the Purchase Shares to
be included in such registration statement. In any event, Purchaser shall cause
a registration statement covering the Purchase Shares to become effective not
later than 180 days after the Closing Date. Purchaser shall pay all its costs of
such registration. Parent and Subsidiary hereby agree to provide Purchaser with
such information as Purchaser reasonably requests to facilitate such
registration statement. Upon Parent and Subsidiary becoming able to sell all the
purchase Shares under the rules and regulations of the SEC, Purchaser shall
notify Parent and Subsidiary that the Purchased Shares can be resold under U. S.
securities laws. The date of such written notice is hereinafter referred to as
the "Restriction Termination Date."
If on the Restriction Termination Date the aggregate market value of
the Purchase Shares is less than the aggregate market value of the Purchase
Shares on the Closing Date (in both cases market value being calculated by the
ten trading date formula set forth above), Purchaser shall issue a number of
additional shares of Common Stock to Parent or Subsidiary equal to the number of
shares required to cause the aggregate market value of shares of Common Stock
held by Parent and Subsidiary to be the same on the Closing Date and the
Restriction Termination Date, provided that the number of additional shares
issued shall not exceed fifty percent (50%) of the number of shares issued on
the Closing Date. In the event that the price of the Purchase Shares on the
Restriction Termination Date shall exceed the price of the Purchase Shares at
Closing by more than One Hundred (100%) Percent, the price in excess of Two
Hundred (200%) Percent of the price at Closing shall be deemed to be payments of
the promissory note of Purchaser provided pursuant to Section 2.4 hereof.
Section 2.4 Liabilities. Purchaser shall not assume any liabilities of
Subsidiary or Parent, except that Purchaser shall assume (i) the obligation of
Subsidiary to pay to Parent or the Parent's Affiliates, as the case may be,
$40,000 (Canadian) of indebtedness that is currently outstanding (the "Fixed
Intercompany Liabilities"), (ii) up to $80,000 (Canadian) of intercompany
liabilities of Subsidiary to Parent or to Parent's Affiliates, as the case may
be, in existence at the time of the Closing (the "Fluctuating Intercompany
Liabilities") and (iii) trade payables and other usual and customary payables
(the "Trade Payables"),
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provided that the Trade Payables assumed by Purchaser shall not exceed the
current assets acquired by Purchaser in this transaction. The Fixed Intercompany
Liabilities and the Fluctuating Intercompany Liabilities are hereinafter
collectively referred to as the "Intercompany Liabilities."
Parent shall provide Purchaser a list of all Fluctuating Intercompany
Liabilities and all Trade Payables at least two (2) business days prior to the
Closing Date, together with reasonable evidence of the existence and nature of
such liabilities. If the list of Trade Payables exceeds the commitment of
Purchaser as provided above, Purchaser shall select those Trade Payables it will
assume and agrees to pay such assumed Trade Payables as and when they become due
in order to protect the credit of Parent and Subsidiary with such trade
creditors. Parent agrees to pay all Trade Payables of Subsidiary not assumed by
Purchaser as and when they become due in order to protect the credit of
Purchaser with such trade creditors.
At the Closing Purchaser shall issue to Parent a noninterest bearing
promissory note equal to the amount of Intercompany Liabilities assumed by
Purchaser as provided herein. The Promissory Note shall be payable in six equal
installments commencing one month after the Closing Date in Canadian currency.
On the Closing Date, Purchaser shall deposit in a bank account an amount equal
to the Intercompany Liabilities assumed by Purchaser and shall use the account
solely for the purpose of repaying the Promissory Note.
ARTICLE III
CLOSING
Section 3.1 Closing. The Closing for the transactions contemplated
hereby shall be held on June 1, 1995 or other mutually agreeable date (the
"Closing Date") at a location and time mutually agreeable to the parties.
Section 3.2 Conditions to Each Party's Obligation to Close. The
respective obligations of each party to Close the Merger shall be subject to the
fulfillment at or prior to the Closing of the following conditions:
(a) This Agreement and the transactions contemplated hereby
shall have been approved and adopted by the requisite vote of the shareholders
of Parent and Subsidiary and the Board of Directors of Purchaser, under
applicable law and applicable listing requirements;
(b) The shares of Common Stock of Purchaser issuable as
provided in Article II hereof shall have been authorized for listing on the
American Stock Exchange upon official notice of issuance;
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(c) No preliminary or permanent injunction or other order or
decree by any court which prevents the consummation of the transactions
contemplated hereby shall have been issued and remains in effect (each party
agreeing to use all best efforts to have any such injunction, order or decree
lifted); and
(d) All governmental consents and approvals required by law
for the consummation of the transactions contemplated hereby shall have been
obtained and be in effect on the Closing date on terms and conditions that would
not have a material adverse affect on the prospects of the business operated by
Subsidiary.
Section 3.3 Conditions to Obligation of Parent and Subsidiary to Close.
The obligation of Parent and Subsidiary to Close shall be subject to the
fulfillment at or prior to the Closing Date of the following additional
conditions which may be waived at Parent's option:
(a) Purchaser shall have performed in all material respects
its agreements contained in this Agreement required to be performed on or prior
to the Closing Date and the representations and warranties of Purchaser
contained in this Agreement shall be true and correct in all material respects
on and as of the date of this Agreement and at and as of the Closing Date as if
made on and as of such date or time, except as contemplated or permitted by this
Agreement, and Parent and Subsidiary shall have received a certificate of the
Chief Executive Officer and Chief Financial Officer of Purchaser to that effect;
(b) Parent and Subsidiary shall have received an opinion
addressed to Parent and Company from Petree Stockton, L.L.P., or other legal
counsel selected by Purchaser and reasonably satisfactory to Company, dated the
Closing Date, substantially in the forms set forth in Exhibit A hereto;
(c) Purchaser shall be ready, willing and able to pay
the Purchase Price in full as contemplated by Sections 2.1, 2.2 and
2.3 hereof; and
(d) Purchaser shall have executed and delivered to Parent a
Promissory Note in form and substance reasonably satisfactory to Parent and
deposited the funds in accordance with Section 2.4 hereof.
Section 3.4 Conditions to Obligation of Purchaser to Close. The
obligation of Purchaser to Close shall be subject to the fulfillment at or prior
to the Closing Date of the additional following conditions which may be waived
at Purchaser's option:
(a) Parent and Subsidiary shall have performed in all material
respects their agreements contained in this Agreement required to be performed
at or prior to the Closing Date, and the
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representations and warranties of Parent and Subsidiary contained in this
Agreement shall be true and correct in all material respects on and as of the
date of this Agreement and at and as of the Closing Date as if made on and as of
such date or time, except as contemplated or permitted by this Agreement, and
Purchaser shall have received a Certificate of the Chief Executive Officer and
Chief Financial Officer of Parent and Subsidiary to that effect;
(b) Purchaser shall have received an opinion from Brennen
Partners, or other legal counsel selected by Parent and Subsidiary and
reasonably satisfactory to Purchaser, dated as of the Closing Date,
substantially in the form set forth in Exhibit B hereto;
(c) Parent and Subsidiary shall have executed and delivered
bills of sale assignments, consents to assignment and transfer, waivers of liens
and other documents of title and related documents as Purchaser shall reasonably
request, in any event sufficient to convey to Purchaser good and marketable
title to all the Parent Assets and the Subsidiary Assets free and clear of all
liens, charges, claims and encumbrances of any nature whatsoever ;
(d) Parent and Subsidiary shall have executed and
delivered to Purchaser a three-year Distribution and Supply
Agreement in form attached hereto as Exhibit C;
(e) Purchaser shall be reasonably satisfied that the key
employees of Subsidiary are willing to become employed by Purchaser
on terms and conditions acceptable to Purchaser;
(f) Parent and Subsidiary shall have executed and delivered to
Purchaser such other certificates and other documents as shall reasonably be
required to complete this transaction; and
(g) Since the date hereof, no event having a material
adverse effect on Subsidiary shall have occurred.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Parent and Subsidiary as
follows:
Section 4.1 Corporate Organization and Good Standing. Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware, with all requisite corporate power and authority to own, operate
and lease its properties and to carry on its business as it is now being
conducted, and is qualified or licensed to do business and is in good standing
in each jurisdiction in which the ownership or leasing of property by it or the
conduct of its business requires
8
such licensing or qualification, except for such failures to be so qualified or
licensed which would not have a material adverse effect on Purchaser.
Section 4.2 Authorization; Binding Agreement. At closing,
Purchaser will have all requisite corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder. The execution, delivery and performance of this Agree-
ment by Purchaser, and the consummation by Purchaser of the
transactions contemplated hereby, will at closing have been duly
authorized by Purchaser's Board of Directors, and no other
corporate action or proceeding on the part of Purchaser will be
necessary for the execution, delivery and performance of this
Agreement by Purchaser and the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and is a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in
accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally,
by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
Section 4.3 SEC Reports. Purchaser heretofore has delivered to Parent
and Subsidiary true and complete copies of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 ("SEC Report"). As of the filing date,
the SEC Report did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements (including any related notes) of
Purchaser included in the SEC Report were prepared in conformity with generally
accepted accounting principles applied on a consistent basis (except as
otherwise stated in such financial statements or, in the case of audited
statements, the related report of Ernst & Young, independent certified public
accountants of Purchaser), and present fairly the consolidated financial
position, results of operations and cash flows of Purchaser as of the dates and
for the periods indicated, subject, in the case of unaudited interim financial
statements to condensation, the absence of certain notes thereto and normal
year-end audit adjustments.
Section 4.4 Certain Fees. Neither Purchaser, any subsidiary of
Purchaser nor any of their officers, directors, employees or agents has employed
any broker or finder or incurred any liability for any financial advisory,
brokerage or finder's fee or commissions in connection with the transactions
contemplated herein. Purchaser agrees to indemnify and hold harmless Parent and
Subsidiary from and against any and all claims, suits, liabilities, costs and
expenses, including reasonable attorneys' fees, resulting
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from any claims that may be made against the parties by any broker or person
claiming a commission, fee or other compensation on the basis of any
communication or agreement such broker may have had or entered into with
Purchaser any of its subsidiaries, officers, directors, shareholders, employees
or agents.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBSIDIARY
Parent and Subsidiary hereby jointly and severally represent and
warrant to Purchaser as follows:
Section 5.1 Corporate Organization and Good Standing. Parent and
Subsidiary are corporations duly organized, validly existing and in good
standing under the laws of Canada and Ontario, respectively, with all requisite
corporate power and authority to own, operate and lease their properties and to
carry on their business as it is now being conducted, and are qualified or
licensed to do business and are in good standing in each jurisdiction in which
the ownership or leasing of property by them or the conduct of their business
requires such licensing or qualification, except for such failures to be so
qualified or licensed which would not have a material adverse effect on Parent
or Subsidiary. Parent and Subsidiary have delivered to Purchaser true and
correct copies of their Certificates of Incorporation and By-laws as in effect
on the date hereof.
Section 5.2 Authorization. At Closing, Parent and Subsidiary will have
all requisite corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. The execution, delivery and
performance of this Agreement by Parent and Subsidiary, and the consummation by
Parent and Subsidiary of the transactions contemplated hereby, will have been
duly authorized by the Board of Directors and the shareholders of Parent and
Subsidiary and no other corporate action or proceeding on the part of Parent or
Subsidiary will be necessary for the execution, delivery and performance of this
Agreement by Parent and Subsidiary and the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Parent and Subsidiary and constitutes legal, valid and binding
obligations of Parent and Subsidiary, enforceable against them in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
Section 5.3 Financial Statements. Parent and Subsidiary
have heretofore delivered to Purchaser true and complete copies of
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the financial statements of Subsidiary for the 13-month period ended November
30, 1994 and the four-month period ended March 31, 1995 (the "Financial
Statements"). The Financial Statements (including any related notes) were
prepared in conformity with generally accepted accounting principles applied on
a consistent basis (except as otherwise stated in such financial statements),
and present fairly the consolidated financial position, results of operations
and cash flows of Subsidiary as of the dates and for the periods indicated,
subject, in the case of unaudited interim financial statements to condensation,
the absence of certain notes thereto and normal year-end audit adjustments.
Section 5.4 Absence of Certain Changes. Except as set forth on
Disclosure Schedule 5.4, since the end of the period covered by the Financial
Statements no material adverse changes have occurred with respect to Subsidiary.
Section 5.5 Certain Fees. Neither Parent nor Subsidiary nor any of
their officers, directors, employees or agents has employed any broker or finder
or incurred any liability for any financial advisory, brokerage or finder's fee
or commissions in connection with the transactions contemplated herein. No other
agent or broker or other person is entitled to any commission or finder's fee in
connection with the transaction contemplated by this Agreement. Parent and
Subsidiary agree to indemnify and hold harmless Purchaser from and against any
and all claims, suits, liabilities, costs and expenses, including reasonable
attorneys' fees, resulting from any claims that may be made against the parties
by any broker or person claiming a commission, fee or other compensation on the
basis of any communication or agreement such broker may have had or entered into
with Parent or Subsidiary, or any of their officers, directors, shareholders,
employees or agents.
Section 5.6 Consents and Approvals; No Violations.
(a) Except as set forth in Disclosure Schedule 5.6, neither
Parent nor Subsidiary is in violation of any applicable law, statute, ordinance,
order, rule or regulation promulgated or judgment, decree, order, concession,
grant, permit, license or other governmental authorization or approval, issued
or entered by, any federal, state, provincial or local, court or governmental
authority relating to or affecting the operation, conduct or ownership of the
property or business of Parent or Subsidiary.
(b) Except as set forth in Disclosure Schedule 5.6, no filing
or registration with, no notice to and no permit, authorization, consent or
approval of any public or governmental body or authority is necessary for the
consummation by Parent and Subsidiary of the transactions contemplated by this
Agreement or to enable Purchaser after the Closing Date to continue to conduct
the
11
same business conducted by Subsidiary in a manner which is consistent with that
in which it is presently conducted by Subsidiary.
(c) Except as set forth in Disclosure Schedule 5.6, neither
the execution and delivery of this Agreement by Parent or Subsidiary, the
performance by Parent and Subsidiary of their obligations hereunder nor the
consummation by Parent and Subsidiary of the transactions contemplated hereby
will (i) conflict with or result in any breach of any provision of the
Certificate of Incorporation or By-laws of Parent or Subsidiary, (ii) result in
a violation or breach of, or constitute (with or without due notice or lapse of
time or the happening or occurrence of any other event) a default by Parent or
Subsidiary, or permit the termination of, or require the consent of any other
party to, or result in the acceleration of, or entitle any party to accelerate
(or give rise to the creation of any lien, charge, security interest or
encumbrance upon any properties or assets of Parent or Subsidiary) under, any of
the terms, conditions or provisions of any contract, note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which Parent
or Subsidiary is a party or by which they or any of their properties or assets
may be bound or (iii) violate any order, writ, injunction, decree, statute, rule
or regulation of any court or governmental authority applicable to Parent or
Subsidiary, or any of their properties or assets.
Section 5.7 Litigation. Except as set forth on Disclosure Schedule 5.7
hereof, there is no action, suit, set of related actions or suits concerning a
common issue, complaint, arbitration, inquiry, proceeding or investigation
pending or, to the knowledge of Parent or Subsidiary, threatened against or
involving Parent or Subsidiary, or any properties or rights of Parent or
Subsidiary, before any court, arbitrator or administrative or governmental body,
and there is no judgment, decree, injunction, rule or order of any court,
governmental department, commission, agency, instrumentality or arbitrator
outstanding against Parent or Subsidiary which would individually or in the
aggregate, if adversely determined, have a material adverse effect on Subsidiary
or result in any claim, lien or other encumbrance on any of the Parent Assets or
Subsidiary Assets. As of the date hereof, there are no actions, suits or
proceedings pending or, to the knowledge of Parent or Subsidiary, threatened
against Parent or Subsidiary arising out of or in any way related to this
Agreement, or any of the transactions contemplated hereby.
Section 5.8 Certain Employment Matters; Labor Relations. Except as set
forth in Disclosure Schedule 5.8, there are no written employment or consulting
agreements or contracts in effect between Parent or Subsidiary with any of the
employees of Subsidiary, nor any oral contracts or understandings of employment
or consultation, or any applicable law, which (i) are not terminable upon the
giving of notice not to exceed ten (10) days, or (ii) provide for any severance
or other payments to any employee
12
of Subsidiary upon termination of employment or upon any change of control of
Subsidiary or Parent or sale of the assets of Subsidiary or Parent. Except as
set forth on Disclosure Schedule 5.8, Parent and Subsidiary have complied with
all applicable laws, rules and regulations relating to the employment of labor
which could have a material adverse effect on the business, assets, condition or
prospects, financial or otherwise, of Subsidiary, including without limitation
those relating to wages, hours, collective bargaining, age and sex
discrimination and the payment and withholding of taxes; Parent and Subsidiary
have withheld all amounts required by law or agreement to be withheld from the
wages or salaries of employees of Subsidiary; and neither Parent nor Subsidiary
has any unaccrued liability for any arrears of wages or any taxes or penalties
for failure to comply with any of the foregoing with respect to employees of
Subsidiary. There are no controversies pending, threatened or reasonably
anticipated between Parent or Subsidiary and any employee or former employee of
Subsidiary. None of the employees of Subsidiary are represented by a labor
union, and no petition has been filed or proceeding instituted of which Parent
or Subsidiary has notice by any employee or group of employees with any labor
relations boards seeking recognition of a bargaining representative. There is no
material dispute or controversy with any union or other organization
representing employees, and no arbitration proceeding is pending or threatened
involving such a dispute or controversy.
Section 5.9 Employee Benefit Plans. Except as described on Disclosure
Schedule 5.9, the employees and former employees of Subsidiary have no right to
require Purchaser to continue any Employee benefit plans maintained by Parent or
Subsidiary and Purchaser has no liability for any failures by Parent or
Subsidiary to comply with any law, rule or regulation governing employee benefit
plans for employees and former employees of Subsidiary.
Section 5.10 Tax Liabilities. No fact exists which could constitute
grounds for assessment of any tax liability or lien against Purchaser or any
Parent Asset or Subsidiary Asset on account of any tax liability of Parent or
Subsidiary.
Section 5.11 Title to Assets. Parent and Subsidiary have good title to
all the Parent Assets and Subsidiary Assets (other than names and marks) to be
sold to Purchaser hereunder free and clear of any claim, lien or encumbrance of
any third person or entity of any nature whatsoever. The conduct of the business
of Subsidiary as heretofore carried on is free from any infringement of patents,
trademarks, trade names, copyrights or publication rights of others. Parent and
Subsidiary have taken all reasonable measures to protect the trade secrets of
Subsidiary and such trade secrets have not been disclosed to others except
pursuant to reasonable confidentiality agreements. To the best of their
knowledge and belief, Parent and Subsidiary have good title to all the names and
marks included in the Parent Assets and Subsidiary
13
Assets. None of the Parent Assets or Subsidairy Assets are leased or licensed
from any person or entity, except for any lease or license disclosed on Schedule
1.1 or 1.2 hereof.
The assets listed on Schedule 1.2 hereto constitute all assets owned by
Parent that are used by Subsidiary on a regular basis to conduct its business,
but which are not regularly used by Parent in its business, whether such use is
pursuant to a lease, license or other agreement or under a less formal
arrangement not constituting a written agreement. Purchaser will assume no
leases, licenses, or other agreements to which any of the Parent Assets or
Subsidiary Assets is subject unless such lease, license or other agreement has
been specifically identified on Schedule 1.1 or 1.2 hereto. Parent, Subsidiary
and their Affiliates have complied with all terms of all of the leases, licenses
and agreements disclosed on Schedule 1.2 up to Closing, and will indemnify and
hold Purchaser harmless against any damages, losses, claims and expenses
(including reasonable attorneys fees and expenses) suffered by Purchaser as a
result of the failure of Parent, Subsidiary or any of their Affiliates to comply
with such terms. Purchaser will indemnify and hold harmless Parent and
Subsidiary for any damages, losses, claims and expenses (including reasonable
attorneys fees and expenses) suffered as a result of Purchaser's failure to
comply with the terms of any of the leases, licenses or agreements disclosed on
Schedule 1.2, provided that Parent, Subsidiary and their Affiliates have
complied with the terms of such lease, license or agreement prior to Closing.
Section 5.12 Contracts, Minutes and Other Instruments and Information.
Parent and Subsidiary have provided to Purchaser true, correct and complete
copies of all contracts and agreements to which either Parent or Subsidiary is a
party or by which Parent or Subsidiary is bound, in the case of Parent such
representation being limited to contracts affecting the Parent Assets or
Subsidiary Assets. Parent and Subsidiary are in material compliance with all
such contracts and agreements, and to the knowledge of Parent and Subsidiary, no
other party is in breach thereof. Parent and Subsidiary have provided to
Purchaser true, correct and complete copies of all minutes and/or consents of
all actions taken by the shareholders and Board of Directors of Parent and
Subsidiary, in the case of Parent such representation being limited to minutes
and/or consents that affect the Parent Assets or Subsidiary Assets.
Section 5.13 Permits and Licenses. Subsidiary has acquired and
currently holds all permits, licenses, franchises, authorizations, approvals and
other certificates of authority (the "Licenses") as may be required for
Subsidiary to conduct its business, and copies of all such documents have been
provided to Purchaser. Except as disclosed on Disclosure Schedule 5.13,
Subsidiary is in material compliance with all the terms thereof, the Licenses
are transferable and are being transferred to
14
Purchaser with the Subsidiary Assets and neither Parent nor Subsidiary is aware
of any reason which any such License could not be renewed on terms at least as
advantageous to Purchaser as the current License held by Subsidiary. Neither
Parent nor Subsidiary is aware of any change in any law, rule or regulation,
whether or not yet effective, which is likely to require Purchaser to obtain in
the future any additional License to conduct the business currently conducted by
Subsidiary.
Section 5.14 Real Property; Environmental Matters. Subsidiary does not
own any real property and is not a party to any agreement to acquire ownership
of any real property or any interests in real property, and does not occupy or
otherwise use any real property, other than real property subject to lease(s) to
which Subsidiary is a party and are being assigned to Purchaser as part of the
Subsidiary Assets, copies of which have been provided to Purchaser. Except as
disclosed on Disclosure Schedule 5.14, neither Parent nor Subsidiary has (either
with or without negligence) caused or permitted the escape, disposal or release
in violation of applicable law of any biologically active or other hazardous
substances, or materials causing harm in or on any real property occupied or
utilized by Subsidiary in conducting its business (the "Premises"). Neither
Parent nor Subsidiary has allowed the storage or use of such substances or
materials in any manner not sanctioned by law or by commercially reasonable
standards in the industry for the storage and use of such substances or
materials. Neither Parent nor Subsidiary has allowed to be brought onto the
Premises any such materials or substances except to use in the ordinary course
of Subsidiary's business. During the use and occupancy of the Premises by
Subsidiary, Subsidiary has kept and maintained the Premises so as to be in
material compliance with all then existing statutes, laws, rules, ordinances,
orders, permits and regulations of all governmental and regulatory authorities,
agencies and bodies pertaining to environmental matters, or regulating,
prohibiting or otherwise having to do with asbestos and all other toxic,
radioactive or hazardous wastes or materials.
Section 5.15 Rates for Use of Equipment. The rates listed on Schedule
1.3 hereto for use of equipment and services of Parent are consistent with the
rates historically charged by Parent for use of equipment and services to assist
Subsidiary in the operation of its business.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
Section 6.1 Conduct of Business by Parent and Subsidiary Pending the
Closing. Except as otherwise expressly contemplated hereby, after the date
hereof and prior to the Closing or earlier termination of this Agreement, unless
Purchaser shall otherwise
15
agree in writing or as otherwise expressly contemplated by this Agreement,
Parent (in the case of Parent solely to the extent required to preserve its
ability to sell the Parent Assets and cause Subsidiary to sell Subsidiary
Assets) and Subsidiary shall:
(a) conduct its business in the ordinary and usual
course of business and consistent with past practice;
(b) use its best efforts to: preserve intact the business
organization and goodwill of Subsidiary, keep available the services of its
present officers and key employees, and preserve the goodwill and business
relationships with suppliers, distributors, customers, and others having
business relationships with Subsidiary;
(c) confer on a regular and frequent basis with one or more
representatives of Purchaser to discuss operational matters of materiality and
the general status of ongoing operations of Subsidiary;
(d) promptly notify Purchaser of any significant changes
in the business, properties, assets, condition (financial or
other), results of operations or prospects of Subsidiary;
(e) not directly or indirectly, (i) sell, lease, encumber or
otherwise transfer any Purchaser Assets or Subsidiary Assets, other than sales
of nonmaterial amounts of inventory in the ordinary course of business, (ii)
enter into or negotiate any agreement to make any such sale, lease, encumbrance
or other transfer, (iii) submit to any other person or entity any offer or
proposal for, or provide any information useful for, or relating to, any such
sale, lease, encumbrance or other transfer, (iv) otherwise participate in
discussions or take any other action that is designed to promote any such sale,
lease, encumbrance or other transfer or (v) take any other action that is
inconsistent with a good faith attempt to fulfill the purposes of this
Agreement;
(f) not increase the salary or other compensation of any
employee of Subsidiary or enter into or amend any employment, severance, bonus,
special pay arrangement with respect to termination of employment or other
similar arrangements or agreements;
(g) not adopt, enter into or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation, health
care, employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any employee or retiree of Subsidiary,
except (i) as required to comply with changes in applicable law occurring after
the date hereof and (ii) with respect to all plans other than in the ordinary
course of business and consistent with past practice;
16
(h) not agree orally or in writing, or otherwise, to take any
of the foregoing actions or any other action which would make any representation
or warranty contained in Article V untrue or incorrect in any material respect
as of the time of the Closing.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Access to Information. (a) Parent and
Subsidiary shall afford to Purchaser and its accountants, counsel,
and other representatives reasonable access during normal business
hours and upon reasonable notice throughout the period prior to the
Closing to all properties, books, contracts, commitments and
records related to the business of Subsidiary, the Parent Assets or
the Subsidiary Assets and all other information concerning the
businesses, properties and personnel of Subsidiary as Purchaser may
reasonably request; provided that no investigation pursuant to this
Section 7.1 shall affect any representations or warranties made
herein or the conditions to the obligations of the respective
parties to consummate the transactions contemplated hereby. Parent
and Subsidiary shall promptly advise Purchaser in writing of any
change or occurrence of any event after the date of this Agreement
having, or which, insofar as can reasonably be foreseen, in the
future may have, a material adverse affect on Subsidiary.
Section 7.2 Approvals. Parent and Subsidiary, in accordance with
applicable law, shall promptly submit this Agreement and the transactions
contemplated hereby for the approval of their respective Boards of Directors and
shareholders as soon as practicable after the date hereof. Purchaser shall
submit this Agreement for approval to its Board of Directors prior to the
Closing.
Section 7.3 Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such expenses, except that if either party breaches this
Agreement causing the Closing not to be held the breaching party shall pay the
expenses of the nonbreaching party.
Section 7.4 Agreement to Cooperate. Subject to the terms and conditions
herein provided, each of the parties hereto shall use reasonable efforts to
take, or cause to be taken, all action to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Section 7.5 Public Statements. The parties shall consult
with each other prior to issuing any public announcement or
17
statement with respect to this Agreement or the transactions contemplated hereby
and shall not issue any such public announcement or statement prior to such
consultation, except as may be required by law or any listing agreement with the
American Stock Exchange or other national securities exchange.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Parent, Subsidiary and
Purchaser; or
(b) by either Parent or Subsidiary, if Purchaser shall have
breached any of its material obligations under this Agreement, if any material
representation or warranty of Purchaser shall have been untrue when made or
shall have subsequently become untrue as of any date prior to the Closing or if
the Closing shall not have been consummated on or before April 17, 1995 (the
"Termination Date") through no fault of either Parent or Subsidiary; or
(c) by Purchaser, if Parent or Subsidiary shall have breached
any of their material obligations under this Agreement, any material
representation or warranty of Parent or Subsidiary shall have been untrue when
made or shall have subsequently become untrue as of any date prior to the
Closing or if the Closing shall not have been consummated on or before April 17,
1995 through no fault of Purchaser.
Section 8.2 Effect of Termination. In the event of termination of this
Agreement, as provided in Section 8.1, this Agreement shall forthwith become
void, and there shall be no obligation hereunder on the part of any party except
pursuant to Section 7.3 hereof. Nothing in this Section 8.2 shall relieve any
party from liability for any breach of this Agreement.
Section 8.3 Amendment. This Agreement may be amended by the parties
hereto at any time. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
Section 8.4 Waiver. At any time prior to the Closing, the parties
hereto may (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein; provided, however, that waiver of compliance with
any agreements or conditions herein shall not limit the parties'
18
obligations to comply with all other agreements or conditions herein. Any
agreement on the part of a party hereto to any such extension or waiver shall be
valid if set forth in an instrument in writing signed on behalf of such party.
ARTICLE IX
GUARANTY AND INDEMNIFICATION
Section 9.1 Guaranty. Parent and Subsidiary hereby
guarantee to Purchaser all obligations of the other pursuant to
this Agreement.
Section 9.2 Indemnity of Purchaser. Parent and Subsidiary each
agree to indemnify Purchaser for any damages, losses, claims and expenses
(including reasonable attorneys fees and expenses) suffered on account of any
breach by Parent or Subsidiary of any representation, warranty or covenant of
this Agreement.
Section 9.3 Setoff. Purchaser may pay into an escrow account
maintained by Purchaser's lawyers any obligation due to Parent or Subsidiary to
the extent Purchaser has reason to believe (i) it is entitled to indemnification
hereunder and (ii) the amount of the indemnity obligation is equal to or greater
than the amount withheld. Upon determination of such indemnification rights, the
indemnity obligation may be set-off against the obligation for which payment was
withheld or any other obligation of Purchaser to Parent or Subsidiary, and funds
in the escrow account shall be paid accordingly.
Section 9.4 Indemnity of Parent and Subsidiary. Purchaser
agrees to indemnify Parent and Subsidiary for any damages, losses, claims and
expenses (including reasonable attorneys fees and expenses) suffered on account
of any claims for brokerage fees relating to the subject matter of this
Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Survival of Representations, Warranties
and Agreements. All representations, warranties and agreements in
this Agreement shall survive the Closing.
Section 10.2 Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) If to Purchaser to:
19
EDITEK, Inc.
1238 Anthony Rd.
Burlington, NC 27215
Attention: James D. Skinner
with copies to:
Petree Stockton, L. L. P.
4101 Lake Boone Trail, Suite 400
Raleigh, NC 27607
Attention: James F. Verdonik, Esq.
(b) If to Parent or Subsidiary, to:
John W. Martin, President and CEO
NOVAMANN International, Inc.
5540 McAdam Road
Mississauga, Ontario L42 1P1
with a copy to:
Brennen Partners
21 Four Seasons Place, Fifth Floor
Etobicoke, Ontario M9B 6J8
Attention: David Brennen
Section 10.3 Miscellaneous. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof;
(b) is not intended to confer upon any other person any rights or remedies
hereunder; (c) shall not be assigned except that Purchaser may assign this
agreement to any Affiliate of Purchaser or any subsequent purchaser of all or
any substantial part of the Assets, provided that the Purchaser shall not
thereby be relieved of its obligations under this Agreement, including, without
limitation, its obligations contained in Section 2.3 which shall remain the
obligations of the Purchaser; and (d) shall be governed in all respects,
including validity, interpretation and effect, by the laws of the Province of
Ontario (without giving effect to the provisions thereof relating to conflicts
of law). The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
Section 10.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement. Facsimile signatures shall be
binding on all parties upon delivery thereof.
20
Section 10.5 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under this Agreement.
21
IN WITNESS WHEREOF, Parent, Subsidiary and Purchaser have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
PURCHASER:
EDITEK, INC.
By: /s/ James D. Skinner
Title: President and CEO
SUBSIDIARY:
BIOMAN PRODUCTS INC.
By: /s/ John Martin
Title: President
PARENT:
NOVAMANN INTERNATIONAL INC.
By: /s/ John Martin
Title: CEO
22
SCHEDULE 1.1
"SUBSIDIARY ASSETS"
BIOMAN PRODUCTS, INC.
LIST OF ASSETS
Computer - Equipment
Macintosh Powerbook 160 (1 unit)
Macintosh LC475 (1 unit)
Macintosh lisi (3 units)
Macintosh 500 megabyte harddrive (1 unit)
Modem (2 units)
Texas Instruments mic Writer (1 unit)
GCC Technologies BPelite printer (1 unit)
Office - Equipment
Desks (7 units)
Computer tables (3 units)
Tables & Chairs
Book Shelves
Filing Cabinets
Answering Machine/Coffeemaker/Microwave
Telephone - Equipment
Meridian Black Handset Telephones (6 units)
Meridian Analog Terminal Adaptor
Meridian M8 x 24 and Software
Inventory
Product Inventory
Materials Inventory: bottles, substrate, BSA, FBS and other reagents
License Rights
An agreement with Immunosystems regarding the ELISA plate-coating technology
(provided EDITEK obtains the consent of of Immunosystems division of Milipore
Corporation to the assignment of this agreement, reserving to NovMann (Ontario)
Inc. the right to use the technology internally for the provision of services to
its clients.
SCHEDULE 1.1 - CONTINUED
"SUBSIDIARY ASSETS"
Other Assets
All Correspondence Files
All Customer Files/Complaint Letters
All Invoices
All Billing Records
All Shipping Records
All Financial Records
All Employment Records
All Purchasing Records
All Manufacturing Records
All Other Records
All Customer Relations/Goodwill
All Customer Lists
All Distributor Lists
All Supplier Lists
All Price Lists/Quotations
All Computer Software
All Computer Databases/Files/Floppy Disks
All Operating Manuals
All Policies & Procedures
All Advertising and Promotional Material
All Telephone Lists
All Telephone Numbers and Directory Listings
SCHEDULE 1.2
"PARENT ASSETS"
NOVAMANN LIST OF ASSETS
Agriculture Canada License to Distribute
(pending approval of Agriculture Canada of
assignment or sublicense to EDITEK, Inc.)
SCHEDULE 1.3
SCHEDULE OF APPLICABLE CHARGES FOR SERVICES
1. Quality Control on Biomek................................ $150.00/hr
including one NOVAMANN Technician
2. Rental of current premises until June 30, 1995........... $750/month
Occupancy costs to June 30, 1995
SCHEDULE 1.6
Trade Names and Trade Marks
NOVAMANN (Ontario) Inc.
NOVAMANN (Quebec) Inc.
NOVAMANN International Inc.
Mann Testing Laboratories Ltd.
Mann Testing Sampling Services
Mann Equitest Inc.
Chulenco Corp.
NOVAMANN (Sampling) Inc.
Trade marks: MANN
SCHEDULE 1.9
SCHEDULE OF LICENSED RIGHTS
Agriculture Canada
See Schedule 1.2
SCHEDULE 5.4
ABSENCE OF CERTAIN CHANGES
No material or adverse changes since end of period covered by
financial statements.
SCHEDULE 5.6
SCHEDULE OF CONSENTS, APPROVALS AND VIOLATIONS
The approval to assignment or sublicense to EDITEK, Inc. of the Agriculture
Canada license is required, has been requested from Agriculture Canada but has
not yet been received.
Continuation of supply of product by third party suppliers not within Parent's
or Subsidiary's control is subject to normal business risk, and consents or
approvals of such suppliers are excluded from the operation of this agreement.
Violations, filings, registrations, notices, permits, authorizations, consents,
approvals, breaches and defaults referred to in Section 5.6 are limited to those
within Parent and/or Subsidiary's knowledge. To the best of Parent's and
Subsidiary's knowledge, information and belief, there are and will be none.
The continued operation of the business of EDITEK, Inc. will be subject to laws
of general application including those relating to extra-provincial
registration, filing of corporate information, taxation and notification.
SCHEDULE 5.7
LITIGATION
No litigation that is known to be before the courts at the
time. None is expected in the future.
SCHEDULE 5.8
EMPLOYMENT OR CONSULTING AGREEMENTS
There are no written employment or consulting agreements in effect as of the
closing date. All employer/employee relationships are subject to the termination
provisions of the Employment Standards Act which prescribe minimum notices of
termination depending on the duration of employment and other factors.
SCHEDULE 5.9
EMPLOYEE BENEFIT PLANS
Obligation that EDITEK must continue to maintain under the Ontario governments:
Employment Standards Act Source Deductions
Canada Pension Plan
Unemployment Insurance
Income Tax
Workers Compensation
Employee Health Tax
SCHEDULE 5.13
PERMITS AND LICENSES
EDITEK, Inc. will have to obtain its own registrations, accounts and permits to
conduct business subject to laws of general application, includign Provincial
Sales vendor's permit, Goods and Services Tax registration, employer
registration, worker's compensation accounts, etc., which are not transferable.
SCHEDULE 5.14
REAL PROPERTY ENVIRONMENTAL MATTERS
SUBSIDIARY AND PARENT are clear of any
environmental violations on or off their premises.
EXHIBIT A
[PETREE STOCKTON LETTERHEAD]
May ____, 1995
NOVAMANN International, Inc.
Bioman Products, Inc.
Attention: John W. Martin
5540 McAdam Road
Mississauga, Ontario L42 1P1
RE: Sale of Certain Assets of Bioman Products, Inc.
and NOVAMANN International, Inc.
Gentlemen:
This opinion letter is being delivered pursuant to Section 3.3(b) of
that certain Asset Purchase Agreement (the "Purchase Agreement") dated May 12,
1995 among NOVAMANN International, Inc., a corporation organized under the laws
of Canada ("Parent"), and Bioman Products, Inc., a corporation organized under
the laws of Ontario, Canada ("Subsidiary") (collectively, "Sellers"), and
EDITEK, Inc., a Delaware corporation ("Purchaser"), in our capacity as counsel
to Purchaser in connection with the negotiation, execution and delivery of the
Purchase Agreement and the consummation of the transactions contemplated
therein.
Capitalized terms used in this opinion letter and not defined in it
have the respective meanings given to those terms in the Purchase Agreement.
Based upon the foregoing and subject to the qualifications and
limitations set forth herein, we are of the following opinions:
1. Purchaser is a corporation duly incorporated, organized and
entitled to conduct business under, and is validly existing and in good standing
under the laws of the State of Delaware.
2. Purchaser has all requisite corporate power and
authority to own, operate or lease its properties and to engage
in its business as conducted on the date hereof.
3. With respect to the Purchase Agreement, the
Distribution and Supply Agreement, the Promissory Note, an option
letter dated May 15, 1995 issued by Purchaser to Sellers
regarding the repurchase by Purchaser of the Purchased Shares,
NOVAMANN International, Inc.
Bioman Products, Inc.
May ____, 1995
Page 2
and any other agreements, instruments and documents executed and delivered by
Purchaser pursuant to the Purchase Agreement (collectively, together with the
Purchase Agreement, the "Purchaser Delivered Agreements"):
(a) Purchaser has all requisite corporate power
and authority to execute and deliver the Purchaser Delivered Agreements to which
it is a party and to consummate the transactions contemplated by, and otherwise
to comply with and perform under, the Purchaser Delivered Agreements;
(b) the execution and delivery by Purchaser of
the Purchaser Delivered Agreements, the consummation by Purchaser of the
transactions contemplated by them and Purchaser's other compliance with or
performance under them have been duly authorized by all necessary corporate
action on the part of Purchaser in compliance with any governing or applicable
agreements, instruments or other documents (including without limitation its
Articles of Incorporation and Bylaws) and applicable law; and
(c) Purchaser has duly and validly executed and
delivered the Purchaser Delivered Agreements.
4. The Purchaser Delivered Agreements constitute legal, valid
and binding obligations of Purchaser enforceable against it in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
5. The shares of Common Stock (the "Shares") issuable pursuant
to Section 2.3 of the Purchase Agreement have been duly authorized and reserved
for issuance by all necessary corporate action on the part of the Purchaser; and
the Shares, when issued and delivered in accordance with the provisions of the
Purchase Agreement, will be duly and validly issued, fully-paid and
nonassessable. No consent, approval, order or authorization of, notice to or
permit from, or registration, declaration or filing with, any United States
governmental authority acting in a regulatory capacity, is required in
connection with the issue and delivery to Purchaser of the Shares. The Shares
may not be resold by Parent or Subsidiary except pursuant to an effective
registration statement filed with the United States Securities
NOVAMANN International, Inc.
Bioman Products, Inc.
May ____, 1995
Page 3
and Exchange Commission or pursuant to an exemption from registration. No
opinion is expressed with respect to any Canadian or provincial restriction on
transfer of the Shares.
This opinion letter is delivered in connection with the consummation of
the transactions contemplated in the Purchase Agreement, may be relied upon only
by you and your counsel in connection therewith, may not be relied upon by you
for any other purpose or by anyone else for any purpose, and may not be quoted,
published or otherwise disseminated without our prior written consent.
Very truly yours,
EXHIBIT B
[BRENNEN PARTNERS LETTERHEAD]
May , 1995
EDITEK, Inc.
Attention: James D. Skinner
1238 Anthony Rd.
Burlington, North Carolina 27215
RE: Sale of Certain Assets of Bioman Products, Inc.
and NOVAMANN International, Inc.
Gentlemen:
This opinion letter is being delivered pursuant to Section 3.4(b) of
that certain Asset Purchase Agreement (the "Purchase Agreement") dated May ,
1995 among NOVAMANN International, Inc., a corporation organized under the laws
of Canada ("Parent"), Bioman Products, Inc., a corporation organized under the
laws of Ontario, Canada ("Subsidiary") (collectively, "Sellers"), and EDITEK,
Inc., a Delaware corporation ("Purchaser"), in our capacity as counsel to
Sellers in connection with the negotiation, execution and delivery of the
Purchase Agreement and the consummation of the transactions contemplated
therein.
Capitalized terms used in this opinion letter and not defined in it
have the respective meanings given to those terms in the Purchase Agreement.
Based upon the foregoing and subject to the qualifications and
limitations set forth herein, we are of the following opinions:
1. Subsidiary is a corporation duly incorporated, organized
and entitled to conduct business under, and is validly existing and in good
standing under the laws of Ontario, Canada. Parent is a corporation duly
incorporated, organized and entitled to conduct business under, and is validly
existing and in good standing under the laws of Canada.
2. Parent has all requisite corporate power and authority to
own, operate or lease its properties and to engage in its business as conducted
on the date hereof, and is qualified or licensed to do business and in good
standing in such jurisdictions as to which a failure to be so qualified or
licensed would have a material, adverse effect on the Parent.
3. Subsidiary has all requisite corporate power and
authority to own, operate or lease its properties and to engage
EDITEK, Inc.
May ____, 1995
Page 2
in its business as conducted on the date hereof, and is qualified or licensed to
do business and in good standing in such jurisdictions as to which a failure to
be so qualified or licensed would have a material, adverse effect on the
Subsidiary.
4. Parent has good and marketable title to all Parent
Assets, free and clear of all liens, charges, claims and
encumbrances.
5. Subsidiary has good and marketable title to all Subsidiary
Assets (including all names, marks and other intellectual property), free and
clear of all liens, charges, claims and encumbrances, and the conduct of
Subsidiary's business is free from infringement of patents, trademarks, trade
names, copyrights or publication rights of others.
6. With respect to the Purchase Agreement, the Distribution
and Supply Agreement and any other agreements, instruments and documents
executed and delivered by Sellers, pursuant to the Purchase Agreement
(collectively, together with the Purchase Agreement, the "Seller Delivered
Agreements"):
(a) Each of Sellers has the corporate power and
authority to execute and deliver the Seller Delivered Agreements to which it is
a party and to consummate the transactions contemplated by, and otherwise to
comply with and perform under, them;
(b) The execution and delivery by each of Sellers
of the Seller Delivered Agreements, the consummation by each of Sellers of the
transactions contemplated by them and each of Seller's other compliance with or
performance under them have been duly authorized by all necessary corporate
action on the part of each of Sellers in compliance with any governing or
applicable agreements, instruments or other documents (including without
limitation its Articles of Incorporation and Bylaws) and applicable law;
(c) Each of Sellers has duly executed and
delivered the Seller Delivered Agreements;
(d) The transfer instruments included in the
Seller Delivered Agreements effectively convey to, and vest in, Purchaser good
and marketable title to and in the Parent Assets and Subsidiary Assets free and
clear of all liens and encumbrances, except as specifically assumed by
Purchaser.
EDITEK, Inc.
May ____, 1995
Page 3
7. The Seller Delivered Agreements (including without
limitation the transfer instruments delivered by Sellers with respect to the
Parent Assets and Subsidiary Assets) constitute valid and binding obligations of
Sellers enforceable against each of them in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) or by an
implied covenant of good faith and fair dealing.
8. Neither the execution or delivery of the Seller Delivered
Agreements nor the consummation by Sellers of the transactions contemplated
thereby nor other compliance with or performance under them will (i) conflict
with or result in any breach of any provision of the Articles of Incorporation
(as amended) or Bylaws (as amended) of Parent or Subsidiary, (ii) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or the happening or occurrence of any other event) a default by Parent or
Subsidiary, or permit the termination of, or require the consent of any other
party to, or result in the acceleration of, or entitle any party to accelerate
(or give rise to the creation of any lien, charge, security interest or
encumbrance upon any properties or assets of Parent or Subsidiary) under, any of
the terms, conditions or provisions of any contract, note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to which Parent
or Subsidiary is a party or by which either Parent or Subsidiary or any of
either of their properties or assets may be bound or (iii) violate any order,
writ, injunction, decree, statute, rule or regulation of any court or
governmental authority applicable to Parent or Subsidiary, or any of either of
their properties or assets.
9. No consent, approval, order or authorization of, notice to
or permit from, or registration, declaration of filing with, any governmental
authority or other person on the part of either of Sellers is required in
connection with Sellers' execution or delivery of the Purchase Agreement or the
other Seller Delivered Agreements, Sellers' consummation of the transactions
contemplated by them, Sellers' other compliance with or performance under them
or to enable Purchaser after the Closing Date to continue to conduct the same
business conducted by Subsidiary in a manner which is consistent with that in
which it is presently conducted by Subsidiary.
EDITEK, Inc.
May ____, 1995
Page 4
10. To the best of our knowledge and except as may be
disclosed in any schedules to the Purchase Agreement, neither Parent nor
Subsidiary is in violation of any applicable law, statute, ordinance, order,
rule or regulation promulgated, or judgment, decree, order, concession, grant,
permit, license or other governmental authorization or approval, issued or
entered by any federal, state, provincial or local court or governmental
authority, relating to or affecting the operation, conduct or ownership of the
property or business of Parent or Subsidiary.
11. To the best of our knowledge, Subsidiary is in material
compliance with all Licenses and other contracts included in the Assets being
transferred to Purchaser by Parent and Subsidiary, and the Licenses are fully
valid and enforceable and are transferrable to Purchaser and renewable by
Purchaser on terms as advantageous to Purchaser as to Subsidiary.
12. To the best of our knowledge and except as disclosed in
any schedules to the Purchase Agreement, no litigation or other proceeding
against either of the Sellers or any of the Parent Assets or Subsidiary Assets
is pending or threatened, and there is no judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or arbitrator outstanding against Parent or Subsidiary which would individually
or in the aggregate, if adversely determined, have a material, adverse effect on
Subsidiary or result in any claim, lien or other encumbrance on any of the
parent Assets or Subsidiary Assets.
This opinion letter is delivered in connection with the consummation of
the transactions contemplated in the Purchase Agreement, may be relied upon only
by you and your counsel in connection therewith, may not be relied upon by you
for any other purpose or by anyone else for any purpose, and may not be quoted,
published or otherwise disseminated without our prior written consent.
Very truly yours,
--------------------
EXHIBIT C
TO ASSET PURCHASE AGREEMENT
AGREEMENT dated as of May 31, 1995, between EDITEK, INC., a Delaware
corporation, ("EDITEK"), and NOVAMANN INTERNATIONAL INC., a Canadian corporation
("NOVAMANN" is defined below to include certain other persons and entities) and
Bioman Products Inc., an Ontario corporation ("Bioman").
RECITALS
A. NOVAMANN is the licensee under certain license agreements between
Her Majesty the Queen in right of Canada acting through the Minister of
Agriculture and Mann Testing Laboratories (the "License Agreements").
B. Under the License Agreements, NOVAMANN is licensed to make, use,
sell, and sublicense test kits known as the Glycopyrrolate ELISA test kits and
the Cromoglycate ELISA test kits (both of which are hereinafter referred to as
the "ELISA Test Kits").
C. The ELISA Test Kits were manufactured (in part by Bioman and in part
by subcontractors to Bioman) and distributed for NOVAMANN by Bioman using, in
part, materials including Reagents (as defined below) supplied to Bioman by
NOVAMANN.
D. On June 1, 1995, EDITEK purchased the assets of Bioman and certain
assets of NOVAMANN, including NOVAMANN's entire inventory of Reagents with the
exception of Reagents owned by the Canadian Government which shall be provided
to EDITEK as provided herein, with the exception of IMI plate coating technology
which shall be acquired by EDITEK, if at all, directly from Immunosystems
Division of Milipore Corporation (the "Asset Purchase").
E. The purchase price paid by EDITEK for Bioman's assets was based in
part on EDITEK's expectation of continued purchases by NOVAMANN (as defined
below) of Bioman Products (as defined and in the circumstances described below)
at historical volumes of purchases consistent with the current business
practices of NOVAMANN and the transfer to EDITEK and continuation by EDITEK of
Bioman's relationships with suppliers of products sold by Bioman.
NOW, THEREFORE, in consideration of the recitals and the mutual
covenants and promises set out below, the parties agree as follows:
1. DEFINITIONS
1.1 "Bioman Products" shall mean all products produced, marketed,
distributed and/or remarketed by Bioman (and any improved or similar test kits)
on behalf of itself, NOVAMANN or any other supplier at any time prior to the
Asset Purchase, including, without limitation, ELISA test kits and other test
kits.
1.2 "NOVAMANN" shall mean NOVAMANN INTERNATIONAL, Inc., any entities
controlled by NOVAMANN, and all officers and key employees thereof.
1.3 "Reagents" shall mean the reagent antibodies, conjugates and
haptens and any other reagent or raw materials provided by NOVAMANN to Bioman
prior to the date hereof in connection with the ELISA Test Kits or any other
product of Bioman.
2. TERM. The term of this Agreement shall commence upon the
day first above written and shall continue in force for a period
of three (3) years until June 1, 1998.
3. PRODUCT MANUFACTURE/PURCHASE.
3.1 Subject to the terms of this Agreement, EDITEK agrees to sell to
NOVAMANN and NOVAMANN agrees to purchase from EDITEK the Bioman Products. EDITEK
shall be the exclusive supplier to NOVAMANN of ELISA Test Kits, which NOVAMANN
may not either manufacture for itself or acquire from any supplier other than
EDITEK so long as EDITEK continues to supply NOVAMANN with ELISA Test Kits of
competitive quality, quantity, delivery and price. EDITEK shall be a
nonexclusive supplier to NOVAMANN of Bioman Products other than ELISA Test Kits,
but for Bioman Products other than ELISA Test Kits EDITEK shall be NOVAMANN's
supplier of first resort, provided that EDITEK continues to afford NOVAMANN such
other Bioman Products on competitive terms, as to quality, quantity, delivery
and price. EDITEK shall have the right to cease selling or to substantially
change any Bioman Products at any time upon ninety (90) days notice to NOVAMANN,
and thereafter NOVAMANN may buy such Bioman Products from any supplier it
chooses. Notwithstanding anything herein contained NOVAMANN may continue to
purchase from Forensic Diagnostics any products presently being supplied to
NOVAMANN by it.
3.2 EDITEK shall sell Bioman Products to NOVAMANN at prices consistent
with the prices paid by NOVAMANN to Bioman for such Bioman Products with such
adjustments made by EDITEK as shall be commercially reasonable under the
circumstances, provided that the prices paid by NOVAMANN shall at all times be
equal to or less than the prices paid by EDITEK's other customers for similar
products. The adjusted prices shall be effective thirty (30)
2
days after the date of such notice and shall remain effective until subsequently
adjusted. To facilitate EDITEK meeting the delivery and quality consistent with
that of Bioman prior to the Asset Purchase, NOVAMANN shall provide EDITEK with a
non-binding estimation (the "NOVAMANN Requirements Notice") of its total
requirements for Bioman Products during the next calendar quarter at least
thirty (30) days prior to the beginning of each calendar quarter. NOVAMANN may
purchase Bioman Products from other suppliers if Bioman Products are not offered
to NOVAMANN by EDITEK on competitive terms as to quality, quantity, delivery and
price. NOVAMANN shall notify EDITEK if NOVAMANN purchases Bioman Products from
other suppliers on account of EDITEK's failure to meet price or other terms of
the other suppliers.
3.3 If EDITEK requires additional Reagents over and above the entire
inventory of NOVAMANN of Reagents purchased by EDITEK in the Asset Purchase on
the date hereof, at the option of EDITEK NOVAMANN shall assist EDITEK to the
best of its ability to manufacture the Reagents, including, without limitation,
providing EDITEK with all trade secrets which NOVAMANN is free to disclose
without breach of confidentiality obligations to third parties and other
information required for manufacturing the Reagents, in which case NOVAMANN
shall use its best efforts to obtain the consent of such third parties to
disclosure to, and use by EDITEK. NOVAMANN hereby represents that the only trade
secrets NOVAMANN is not free to disclose without breaching confidentiality
obligations to third parties are listed in Schedule 3.3 hereto. NOVAMANN shall
not manufacture or sell to any person or entity any Reagents, except as
specifically requested by EDITEK.
4. CERTAIN NOVAMANN OBLIGATIONS; RESERVATION OF RIGHTS.
4.1 NOVAMANN shall not manufacture any Bioman Products, whether for its
own use or for resale. Except as provided in Sections 3.1 and 3.2, during the
Term, NOVAMANN will not purchase, whether for its own use or for resale or act
as agent or broker or otherwise arrange for sale by others, any Bioman Products.
4.2 Except as provided in Sections 3.1, 3.2 and 8.1(b), NOVAMANN shall
not contact, discuss, negotiate with, or solicit any offer from, any Bioman
Supplier relating to any purchase, sale, distribution or manufacture of any
Bioman Products. NOVAMANN shall take any reasonable action requested by EDITEK
to assist EDITEK to cause the arrangements, agreements, history of dealing and
other relationships between EDITEK and any Bioman Supplier to be transferred
from Bioman to EDITEK, at EDITEK's expense. Neither shall NOVAMANN knowingly
take any action or make any communication that would have a reasonable
possibility of disrupting any arrangement, agreement, history of dealing or
other relationship between EDITEK and any Bioman Supplier. A
3
"Bioman Supplier" is any person or entity who at any time prior to the Asset
Purchase sold products to Bioman for its own use or for resale by Bioman.
4.3 NOVAMANN hereby appoints EDITEK as the exclusive distributor
worldwide of any products manufactured, purchased for resale or otherwise
distributed by NOVAMANN, if at any time prior to the Asset Purchase, Bioman
acted as a distributor or purchased such products from NOVAMANN.
5. CONTINUITY. The purchase price paid by EDITEK for Bioman's assets was based
in part on EDITEK's expectation of (i) continued purchases by NOVAMANN (assuming
continued sales by NOVAMANN at historical levels) of Bioman Products at
historical volumes consistent with the current business practices of NOVAMANN
prior to the Asset Purchase and (ii) the transfer to EDITEK and continuation by
EDITEK of the relationship of Bioman with suppliers of Bioman Products sold by
Bioman prior to the Asset Purchase. In the event that in any year during the
term of this Agreement purchases by NOVAMANN are less than the historical
volumes of purchases by NOVAMANN from Bioman or if NOVAMANN shall fail to comply
with any provision of Section 4 of this Agreement without just cause, NOVAMANN
shall rebate to EDITEK a part of the purchase price of the assets paid by EDITEK
sufficient to equitably compensate EDITEK, except to the extent that continued
purchases by NOVAMANN of Bioman Products are reduced as a result of (i)
diminished sales by NOVAMANN of services requiring the use of the types of
products covered by this Agreement, (ii) failure by EDITEK to offer Bioman
Products to NOVAMANN on competitive terms as to quality, quantity, delivery or
price, or (iii) the availability from other suppliers of products utilizing
technology which the industry as a whole would consider new, which provides an
improvement over existing technology, and which is not made available by EDITEK
to NOVAMANN. Both NOVAMANN and EDITEK shall act reasonably and in good faith to
reach agreement on the amount of such rebate prior to EDITEK bringing any legal
action.
6. ORDERS/INVOICING/SHIPMENT.
6.1 Each party shall provide the other with written orders on forms
acceptable to one another for products to be purchased from one another.
6.2 EDITEK and NOVAMANN shall invoice the other for each shipment of
products at the time it is delivered. The full amount of each invoice shall be
payable within thirty (30) days of the date of delivery at the purchaser's
specified location. All products shall be invoiced at prices established in
accordance with this Agreement as of the earlier of the date of invoice or
shipment, plus all applicable taxes.
4
6.3 All products shall be shipped F.O.B. purchaser's desti-
nation. The destination of the shipment shall be specified by in
the applicable order. "F.O.B." is a delivery term meaning that
the purchaser shall have the risk of loss, damage and/or delay in
shipment until the Product is properly delivered to the
purchaser's destination.
7. WARRANTIES.
7.1 Each product sold by one party to the other hereunder shall be
subject to the warranties inserted by the seller of the product into or on the
product packaging. Each party shall assign to the other any assignable
warranties of manufacturers, distributors or other persons or entities with
respect to products sold hereunder.
THE EXPRESS WARRANTIES SET FORTH ABOVE ARE MADE IN LIEU OF ANY AND ALL OTHER
WARRANTIES, VERBAL OR WRITTEN, EXPRESS OR IMPLIED, RELATING TO THE PRODUCT OR
THE WORKMANSHIP OR MATERIALS INCORPORATED THEREIN. EDITEK AND NOVAMANN EACH
DISCLAIM ANY AND ALL OTHER WARRANTIES APPLICABLE TO THE PRODUCTS IMPLIED BY
OPERATION OF LAW OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO ANY WARRANTIES OF
MERCHANTABILITY AND/OR FITNESS FOR A PARTICULAR PURPOSE.
The provisions of this Section 7 shall survive the termination of this
Agreement.
8. COVENANT NOT TO COMPETE.
8.1 (a) NOVAMANN covenants that for a period of three (3) years
beginning on the date hereof, it shall not, within the United States, Canada, or
any other place in the world (the "Noncompetition Area"), without the written
consent of EDITEK, (1) manufacture, distribute, market or sell ELISA Test Kits,
or otherwise compete in any line of business similar to the business acquired by
EDITEK from Bioman; (2) distribute the products of any third party if at any
time Bioman acted as a distributor of such products or similar products for such
third party; (3) be an owner of a controlling interest in a partnership, limited
liability company, corporation or other entity which performs any of the acts
described in (1) or (2) above, except that NOVAMANN may own a controlling
interest in a partnership, limited liability company, corporation or other
entity, of which (a) less than one half (1/2) of the gross revenue arises from
the performance of the acts described in (1) or (2) above in countries other
than the United States or Canada, and (b) none of the gross revenue arises from
the performance of the acts described in (1) or (2) above in the United States
or Canada; or (4) assist others in performing any of the acts described in (1)
through (3) above. NOVAMANN agrees to use its best efforts to prevent any entity
in which it owns an interest other than a controlling interest from performing
any of the acts described in
5
(1) or (2) above. In the event the Noncompetition Area specified above shall be
determined by judicial action to define too broad a territory to be enforceable,
the country or countries causing the territory to be overly broad shall be
deleted and the Noncompetition Area shall be the remaining countries or areas.
In the event the Noncompetition Area specified in the first sentence of this
paragraph (a) is determined by judicial action to define too broad a territory
to be enforceable and the Noncompetition Area cannot be reformed pursuant to the
immediately preceding sentence to define a territory which is not too broad to
be enforceable, the Noncompetition Area shall be the United States and Canada.
(b) It is recognized that NOVAMANN may from time to time be presented
with opportunities to develop, distribute or manufacture technology or products
within the Noncompetition Area, which activities would be prohibited by the
terms of this Section 8.1. During the term hereof, NOVAMANN may present such
opportunities to EDITEK under such confidentiality agreements and circumstances
as are mutually acceptable to NOVAMANN and EDITEK. EDITEK agrees to negotiate in
good faith with NOVAMANN to pursue such opportunities; provided, however, that
if, after such negotiations, EDITEK chooses not to pursue such opportunities,
NOVAMANN shall continue to be prohibited by the terms of this Section 8.1 from
independently pursuing such opportunities; provided further that if EDITEK
chooses not to pursue such opportunities, NOVAMANN may approach EDITEK's
suppliers with such opportunities with the consent of EDITEK which shall not
unreasonably be denied or delayed. Denial of consent shall be reasonable if
NOVAMANN's or such supplier's pursuit of such opportunities would be detrimental
to EDITEK.
(c) Notwithstanding the provisions of Section 8.1(a), (1) Smith
Laboratory Service Limited in Toronto may continue its current minimal level of
business in competition with Bioman, and (2) the member of the board of
directors of Parent who currently indirectly acts as a supplier in Mexico of
Sepelco products may continue to conduct his present business activities without
there being a breach of this agreement.
8.2 NOVAMANN acknowledges that the covenants included Section 9.1 are
critical to the success of EDITEK and that violation of the covenants would
immeasurably damage EDITEK. EDITEK shall be entitled to an injunction to be
issued by any court of competent jurisdiction enjoining and restraining NOVAMANN
from committing any violation or threatened violation of this Section, without
the necessity of posting bond. The prevailing party in such litigation shall, in
addition to any other rights or remedies available to it, at law or otherwise,
be entitled to reimbursement from the losing party of court costs, attorney's
fees, and other expenses incurred, if and to the extent awarded by a Court
having jurisdiction.
6
9. DEFAULT/REMEDIES.
9.1 If, through no fault of the other party, one or more of the
following events shall occur and shall continue for such time after any required
notice is given as provided below, such shall constitute a default (hereinafter
called "Events of Default"):
9.1.1 If a party shall fail to pay any sum due hereunder when
due in accordance with the terms of this Agreement and such default shall
continue for a period of ten (10) days after written notice thereof;
9.1.2 If a party shall fail to keep or perform or abide by any
other term or condition of this Agreement and such default shall continue for a
period of thirty (30) days after written notice thereof;
9.1.3 If a party shall file a petition in bankruptcy or take
or consent to any other action seeking any such judicial decree or shall make
any assignment for the benefit of its creditors or shall admit in writing its
inability to pay its debts generally as they become due, or if any court of
competent jurisdiction shall enter a decree or order adjudicating it bankrupt or
insolvent, or if any trustee or receiver for such party or for any substantial
part of its property be appointed at such party's request, or if any person
shall file a petition for involuntary bankruptcy against such party or if a
trustee or receiver for such party or for any substantial part of its property
be appointed at the request of a third party and such appointment or petition
shall not be stayed or vacated within sixty (60) days of entry thereof.
9.2 Upon the occurrence of any Event of Default, the non-defaulting
party, immediately or at any time thereafter, shall have the right, to recover
any and all direct damages (including, but not limited to, reasonable attorney
fees and expenses) resulting from the Event of Default. The non-defaulting party
shall also have the right at its option to terminate any provision of this
Agreement related to the default, but the other provisions of this Agreement
shall remain in effect.
9.3 Upon any breach of this Agreement, regardless of whether such
breach is, or becomes, an Event of Default, the non-defaulting party shall be
reimbursed for any and all expenses incurred by it (including reasonable
attorneys' fees and expenses) in enforcement of the terms and provisions of this
Agreement.
9.4 The exercise by a party of any one or more of the
remedies provided in this Agreement shall not prevent the subse-
quent exercise of any one or more of the other remedies herein
provided. All remedies provided for in this Agreement are
7
cumulative and may be exercised alternatively, successively or in any other
manner and are in addition to any other rights provided by law.
10. TERMINATION.
Upon a termination of this Agreement:
(a) Neither party will have any further obligations under this
Agreement, except as to those obligations which have accrued as of the date of
termination or are specifically contemplated to survive this Agreement;
(b) A party may immediately recover all sums due from
the other; and,
(c) Each party will promptly return property of the
other which is in its possession or under its control.
11. MISCELLANEOUS.
11.1 Entire Agreement. This Agreement (together with any Exhibits
attached and documents incorporated herein) constitutes the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
any and all prior agreements, arrangements and understandings, whether oral or
written, between the parties with respect to the subject matter hereof.
11.2 Modification. No modification of this Agreement shall be binding
unless in writing, attached hereto, and signed by the party against whom or
which it is sought to be enforced.
11.3 Waiver. No waiver of any right or remedy shall be effective unless
in writing and nevertheless shall not operate as a waiver of any other right or
remedy or of the same right or remedy on a future occasion.
11.4 Headings. The captions and headings contained herein
are solely for convenience and reference and do not constitute a
part of this Agreement.
11.5 Binding Effect. This Agreement shall be binding upon
and shall inure to the benefit of the parties and their succes-
sors and permitted assigns.
11.6 Construction. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
local, internal law of the Province of Ontario without giving effect to its
conflict of laws principles. This Agreement shall not be modified or altered by
any subsequent course of performance between the parties. No provision of this
Agreement shall be construed against or interpreted to the
8
disadvantage of any party by any court or other governmental or judicial
authority by reason of such party's having or being deemed to have prepared or
imposed such provision. Whenever the context of this Agreement requires, the
personal pronouns (masculine, feminine or neuter genders) shall be
interchangeable, and the singular and plural numbers shall be interchangeable.
11.7 Exhibits. All Exhibits and Schedules, if any, attached hereto are
hereby incorporated by reference and made a part hereof. The term "Agreement" as
used herein shall be deemed to include all such Exhibits and Schedules.
11.8 Counterparts. This Agreement may be executed in two
(2) or more counterparts as the parties may desire, and each
counterpart shall constitute an original.
11.9 Additional Acts. Each party will execute and deliver
all additional documents and do all such other acts as may be
reasonably necessary to carry out the provisions and intent of
this Agreement.
11.10 Notices. All notices under this Agreement shall be in writing.
Unless delivered personally, all notices shall be given by certified mail,
postage prepaid, return receipt requested addressed to the appropriate addresses
set forth in Exhibit D hereto or as otherwise noted in writing in accordance
with this provision.
11.11 Disclosure. It is acknowledged that in the course of negotiation
and preparation of this Agreement and the Contract of Sale, certain proprietary
information was exchanged between the parties. No party, without the express
written consent of the other, shall divulge to third parties any such
information, except where such information is:
(i) generally known to the public through no fault
of the disclosing party,
(ii) obtainable from other sources without restric-
tion, or,
(iii) known by the recipient prior to the disclosure
thereof.
No publicity, advertising or public announcement in connection with this
Agreement shall be released or made without the prior written approval of all
parties, which approval shall not be unreasonably withheld. Notwithstanding the
foregoing, either party shall be permitted to make such disclosures to
governmental authorities or agencies as its counsel deems reasonably necessary
to comply with any applicable laws. The provisions of this Section 12.11 shall
survive the termination of this Agreement.
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11.12 Costs. Each party will bear all costs incurred by it in
connection with the preparation and negotiation of this Agreement and neither
shall have any right to any reimbursement, payment, or compensation of any kind
from the other in respect of such costs.
11.13 Commissions. Each party represents and warrants that no broker or
finder is entitled to any brokerage or finder's fee or other commission in
connection with the transactions contemplated hereby. Each party will pay or
discharge, and will indemnify and hold the others harmless from and against any
and all claims or liabilities for brokerage commissions or finder's fees
incurred by reason of any action taken by it.
11.14 Assignment. This Agreement may not be assigned by any party
without the consent of the other party, which consent shall not be unreasonably
withheld; except that this Agreement may be assigned to a successor entity that
assumes the assignor's obligations hereunder. Any permitted assignment shall
not, however, relieve the assignor from any obligations hereunder unless
otherwise agreed in writing by the parties hereto.
11.15 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision is illegal, invalid, or unenforceable, for
any reason whatsoever, such shall not affect the validity of the remainder. In
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms as
necessary to render such provision legal, valid, and enforceable.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed, sealed in their name, and delivered all on the date first above
written.
NOVAMANN INTERNATIONAL INC.
BY: /s/ John Martin
Title: CEO
ATTEST:
- -----------------------
________ Secretary
(CORPORATE SEAL)
BIOMAN PRODUCTS INC.
BY: /s/ John Martin
Title: President
ATTEST:
- -----------------------
________ Secretary
(CORPORATE SEAL)
EDITEK, INC.
BY: /s/ James D. Skinner
Title: President & CEO
ATTEST:
/s/ Peter J. Heath
________ Secretary
(CORPORATE SEAL)
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SCHEDULE 3.3
RESTRICTED TRADE SECRETS
Bioman is restricted from disclosing information in relation to "plate-coating"
technology which is the property of Immunosystems Division of Milipore
Corporation. The parties acknowledge and agree that no such information has been
or will be disclosed by NOVAMANN or Bioman to EDITEK, Inc. under this agreement
or otherwise, and that should EDITEK, Inc. wish to obtain this technology it
must negotiate directly with Milipore Corporation.
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