UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 Or 15(d) of The Securities Exchange Act of 1934
Date of earliest event reported: December 12, 2019
CANTEL MEDICAL CORP.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-31337 | 22-1760285 | ||
|
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 150 Clove Road, Little Falls, New Jersey | 07424 | (973) 890-7220 | ||
| (Address of Principal Executive Offices) | (Zip code) |
(Registrant’s telephone number, including area code) |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Common Stock | CMD | New York Stock Exchange | ||
| (Title of each class) | (Trading Symbol) |
(Name of each exchange on which registered) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
| Item 1.01. | Entry into a Material Definitive Agreement. |
On December 12, 2019, Cantel Medical Corp. (the “Company”) and Hu-Friedy Mfg. Co., LLC, its wholly owned subsidiary (“Hu-Friedy”), entered into a letter agreement (the “Letter Agreement”) with Dental Holding, LLC (“Dental Holding”) relating to the offering and sale of 438,359 of the shares of common stock of the Company (the “Excess Shares”) that were issued to Dental Holding at the closing of the Company’s acquisition of Hu-Friedy from Dental Holding in accordance with the terms of the Purchase and Sale Agreement, dated as of July 29, 2019, by and among the Company, Hu-Friedy, Dental Holding and, for limited purposes set forth therein, Ken Serota and Ron Saslow (the “Purchase and Sale Agreement”) and the Registration Rights Agreement, dated as of October 1, 2019, by and between the Company and Dental Holding (the “Registration Rights Agreement”).
The Letter Agreement amends the Registration Rights Agreement with respect to certain obligations of the Company to use its reasonable best efforts to file a registration statement on Form S-3 with the U.S. Securities and Exchange Commission covering the resale of all of the Excess Shares (a “Registration Statement”) in an offering to be made on a continuous or delayed basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), and to effect an underwritten offering of such Excess Shares (an “Offering”) following the filing of such Registration Statement and receipt of written notice from Dental Holding. Pursuant to the Letter Agreement, the Company may satisfy the above obligations under the Registration Rights Agreement, as amended, if it files a Registration Statement and completes an Offering on or before February 15, 2020.
The Letter Agreement does not affect the other 313,112 shares of common stock of the Company that were issued at the Closing, with respect to which Dental Holding and its permitted transferees are subject to a 12-month lock-up period that began on October 1, 2019, subject to certain exceptions for permitted transfers to related persons.
In addition, the Letter Agreement amends certain provisions of the Purchase and Sale Agreement relating to payments that may be due between Dental Holding and the Company derived from the amount of proceeds realized in the Offering in certain circumstances.
The foregoing descriptions of the Letter Agreement, the Purchase and Sale Agreement and the Registration Rights Agreement do not purport to be complete and are subject to, and qualified in its entirety by reference to, the full text of the Letter Agreement (filed as Exhibit 10.1 to this Current Report on Form 8-K), the Purchase and Sale Agreement (filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 30, 2019) and the Registration Rights Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 2, 2019). This filing does not constitute an offer to sell or the solicitation of an offer to buy any securities. The Excess Shares were issued in a private placement pursuant to the terms of the Purchase and Sale Agreement, and may only be offered or sold pursuant to an effective registration statement or an exemption from registration under the Securities Act.
| Item 9.01. | Financial Statements, Pro Forma Financial Information and Exhibits. |
(d) The following exhibits are filed as part of this report:
| Exhibit No. | Description of Exhibit | |
| 10.1 | Letter Agreement, dated as of December 12, 2019, by and between Dental Holding, LLC, Hu-Friedy Mfg. Co., LLC and Cantel Medical Corp. | |
| 104.1 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CANTEL MEDICAL CORP. | ||
| (Registrant) | ||
| Date: December 16, 2019 | By: | /s/ George L. Fotiades |
| George L. Fotiades | ||
| President and Chief Executive Officer | ||
Exhibit 10.1
Cantel Medical Corp.
150 Clove Road
Little Falls, New Jersey 07424
December 12, 2019
Dental Holding LLC
3232 North Rockwell Street
Chicago, Illinois 60618
Attention: Ron Saslow and Ken Serota
RE: Excess Shares
Dear Messrs. Saslow and Serota:
Reference is hereby made to the Purchase and Sale Agreement, dated as of July 29, 2019, by and among Cantel Medical Corp. (the “Purchaser”), Hu-Friedy Mfg. Co., LLC (the “Company”), Dental Holding, LLC (the “Seller”), and, for limited purposes set forth therein, Ken Serota and Ron Saslow (as amended through the date hereof, the “Purchase and Sale Agreement”), and the Registration Rights Agreement, dated as of October 1, 2019, by and between the Seller and the Purchaser (the “Registration Rights Agreement”). Capitalized terms used herein and not defined have the meanings ascribed thereto in the Purchase and Sale Agreement unless otherwise indicated herein.
The Seller, the Purchaser and the Company acknowledge and agree as follows:
| 1. | Post-Closing Payment in Respect of Offering Proceeds. Section 2.11(a) of the Purchase and Sale Agreement is hereby amended and restated as follows: |
If, following the Closing, a Post-Closing Offering is completed pursuant to the Registration Rights Agreement and the aggregate net proceeds received by the Seller in such Post-Closing Offering (the “Aggregate Post-Closing Offering Proceeds”) is less than $35,000,117, then promptly (and in any event within five (5) Business Days) following the consummation of the Post-Closing Offering, the Purchaser shall pay or cause to be paid to the Seller, by wire transfer of immediately available funds to an account designated in writing by the Seller, an amount in cash equal to $35,000,117 minus the Aggregate Post-Closing Offering Proceeds. For avoidance of doubt, if, following the Closing, a Post-Closing Offering is completed pursuant to the Registration Rights Agreement and the Aggregate Post-Closing Offering Proceeds exceed $35,000,117, such excess shall the retained by the Seller without any requirement that such excess be paid to the Purchaser.
| 2. | Tax Gross-up in Respect of Offering Proceeds. For purposes of Section 2.11(b) of the Purchase and Sale Agreement and all calculations and determinations thereunder or in connection therewith (including the definition of “Excess Capital Loss” and of “Short-Term Capital Gain”) the Aggregate Post-Closing Offering Proceeds shall not exceed $35,000,117 (even if Aggregate Post-Closing Offering Proceeds actually exceed such amount). |
| 3. | Registration Statement and Underwritten Offering. (a) Notwithstanding the terms of the Registration Rights Agreement, unless otherwise agreed by the Purchaser and the Seller in writing, the Purchaser will effect an underwritten offering (with the underwriter(s) for such offering selected by the Purchaser) in accordance with the Registration Rights Agreement that includes all of the Eligible Securities (as defined in the Registration Rights Agreement) at a time determined by the Purchaser; provided, that such offering is effected at a time that results in the proceeds from the sale of such Eligible Securities being received by Seller no later than February 15, 2020. Purchaser will file with the SEC a Shelf Registration Statement (as defined in the Registration Rights Agreement) as contemplated by Section 2.1 when necessary to permit such underwritten offering to be completed in accordance with this paragraph 3(a). (b) In furtherance of the foregoing, (i) notwithstanding Purchaser’s obligation under Section 2.1 of the Registration Rights Agreement to use its reasonable best efforts to file with the SEC a Shelf Registration Statement (as defined in the Registration Rights Agreement) within no later than (90) days following the date thereof, the Purchaser shall not be in breach of the Registration Rights Agreement solely on account of its failure to file a Shelf Registration Statement (as defined in the Registration Rights Agreement) during such period and (ii) the other terms and conditions of the Registration Rights Agreement shall be interpreted and applied in a manner consistent with the agreements of the Purchaser and the Seller set forth in paragraph 3(a) above. |
Except as expressly contemplated hereby, all the terms, conditions and provisions of the Purchase and Sale Agreement and the Registration Rights Agreement shall remain in full force and effect. This letter agreement is limited precisely as written and shall not be deemed to be an amendment to any other term or condition of the Purchase and Sale Agreement or the Registration Rights Agreement or any of the documents referred to therein.
This letter agreement, including its existence, validity, construction and operating effect, and the rights of the parties, shall be governed by and construed in accordance with the laws of the State of Delaware. The headings in this letter agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof. This letter agreement may be executed by facsimile and in one or more counterparts, all of which shall constitute one and the same instrument.
This letter agreement shall form a part of the Purchase and Sale Agreement and the Registration Rights Agreement for all purposes, and each party thereto and hereto shall be bound hereby. From and after the execution of this letter agreement by the parties hereto, any reference to the Purchase and Sale Agreement or the Registration Rights Agreement shall be deemed a reference to the Purchase and Sale Agreement or the Registration Rights Agreement, as applicable, as amended, altered and modified hereby. This letter agreement shall be deemed to be in full force and effect from and after the execution of this letter agreement by the parties hereto.
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| Very truly yours, | ||
| CANTEL MEDICAL CORP. | ||
| By: | /s/ Seth M. Yellin | |
| Name: | Seth M. Yellin | |
| Title: | Executive Vice President, Corporate Strategy | |
| HU-FRIEDY MFG. CO., LLC | ||
| By: | /s/ Peter Clifford | |
| Name: | Peter Clifford | |
| Title: | Chief Operating Officer | |
| ACCEPTED AND AGREED: | ||
| DENTAL HOLDING, LLC | ||
| By: | /s/ Ken Serota | |
| Name: | Ken Serota | |
| Title: | President | |
[Signature Page to Letter Agreement Regarding Excess Shares]