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Exhibit 99.12
COMPANY OPTION AGREEMENT
This COMPANY OPTION AGREEMENT (this "AGREEMENT") is entered
into as of November 12, 1996, by and between Medex, Inc., an Ohio corporation
("ISSUER"), and Furon Company, a California corporation ("GRANTEE").
BACKGROUND
A. Issuer, Grantee and a wholly-owned subsidiary of Grantee
(the "PURCHASER"), are entering into an Agreement and Plan of Merger of even
date herewith (the "MERGER AGREEMENT") providing for, among other things, the
merger of Purchaser with and into Issuer.
B. To induce Grantee and Purchaser to enter into the Merger
Agreement, Issuer has agreed to grant this Option to Grantee.
AGREEMENT
In consideration of the foregoing, and of the representations,
warranties, covenants and agreements contained herein, Issuer and Grantee hereby
agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"OPTION") to purchase up to 753,198 shares (the "OPTION SHARES") of Common
Stock, $.01 par value, of Issuer together with any stock purchase rights related
thereto ("ISSUER COMMON STOCK") at a purchase price of $23.50 per Option Share
(the "PURCHASE PRICE").
2. EXERCISE OF OPTION.
2.1 Grantee may exercise the Option, in whole or in part, at
any time and from time to time following the occurrence of a Purchase Event (as
defined below) and prior to termination as set forth in Section 10.11.
2.2 As used herein, a "PURCHASE EVENT" means any of the
following events:
2.2.1 any person or group (as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
(other than Grantee or any subsidiary of Grantee) shall have become the
beneficial owner (as such term is defined in Rule 13d-3 under the
Exchange Act), of at least 20% of any class or series of capital stock
of the Issuer (including the Issuer's Common Stock);
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2.2.2 any one or more persons (other than Grantee or any
subsidiary of Grantee) shall have commenced or shall have filed a
registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to, a tender offer or exchange
offer to purchase any shares of the Issuer's Common Stock such that,
upon consummation of such offer, such person would own or control 20%
or more of the then outstanding Issuer Common Stock and Issuer has
redeemed its rights under the Rights Agreement or such Rights Agreement
has been declared invalid or unenforceable by a court of competent
jurisdiction;
2.2.3 the Issuer's Board of Directors shall have received a
superior takeover proposal and the Board or any committee thereof
enters into a definitive agreement with respect to a superior takeover
proposal;
2.2.4 the Merger Agreement is terminated pursuant to
Section 8.1(e) thereof; or
2.2.5 the Merger Agreement is terminated pursuant to
Section 8.1(f)(i) thereof.
2.3 If Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"NOTICE DATE") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 15 business days from the Notice Date for the
closing of such purchase (the "CLOSING DATE"); provided that if the closing of
the purchase and sale pursuant to the Option (the "CLOSING") cannot be
consummated by reason of any applicable judgment, decree, order, law or
regulation, the period of time that otherwise would run pursuant to this
sentence shall run instead from the date on which such restriction on
consummation has expired or been terminated; and provided further, without
limiting the foregoing, that if prior notification to or approval of any
regulatory authority or shareholders of the Issuer is required in connection
with such purchase, Grantee shall promptly file the required notice or
application for approval and shall expeditiously process the same (and Issuer
shall cooperate with Grantee in the filing of any such notice or application and
the obtaining of any such approval), and the period of time that otherwise would
run pursuant to this sentence shall run instead from the date on which, as the
case may be, (A) any required notification period has expired or been terminated
or (B) such approval has been obtained, and in either event, any requisite
waiting period has passed.
2.4 Notwithstanding SUBSECTION 2.3, in no event shall any
Closing Date be more than one year after the related Notice Date, and if the
Closing Date shall not have occurred within one year after the related Notice
Date due to the failure to obtain
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any such required approval, the exercise of the Option effected on the Notice
Date shall be deemed to have expired. In the event (i) Grantee receives official
notice that an approval of any regulatory authority required for the purchase of
Option Shares would not be issued or granted or (ii) a Closing Date shall not
have occurred within six months after the related Notice Date due to the failure
to obtain any such required approval, Grantee shall nevertheless be entitled to
exercise its right as set forth in SECTION 7 or to exercise the Option in
connection with the resale of Issuer Common Stock or other securities pursuant
to a registration statement as provided in SECTION 8. The provisions of this
SECTION 2 and SECTION 3 shall apply with appropriate adjustments to any such
exercise.
3. PAYMENT AND DELIVERY OF CERTIFICATES.
3.1 On each Closing Date, Grantee shall pay to Issuer in
immediately available funds by wire transfer to a bank account designated by
Issuer an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date.
3.2 At each Closing, simultaneously with the delivery of
immediately available funds as provided in SUBSECTION 3.1, Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever, and Grantee
shall deliver to Issuer a letter making the representations set forth
in Section 5.2 hereinbelow and agreeing that Grantee shall not offer to sell
or otherwise dispose of such Option Shares in violation of applicable law or
the provisions of this Agreement and shall represent and warrant that it and/or
its advisors have sufficient knowledge and experience in business and financial
matters to evaluate the Issuer, to evaluate the risk of an investment in the
Option Shares, to make an informed investment decision with respect thereto,
and to protect its interests in connection with its investment in the Option
Shares without need for the additional information which would be required to
be included in a more complete registration statement effective under the
Securities Act. The Grantee shall further acknowledge and agree that it and/or
its advisors have had an opportunity to ask questions of and to receive answers
from officers and other representatives of the Issuer and to obtain additional
information in writing to the extent that the Issuer possesses such information
or could acquire it without unreasonable effort or expense; (i) relative to the
Issuer and the Option Shares; and (ii) necessary to verify the accuracy of any
information, documents, projections, and books and records furnished.
3.3 Certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
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THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Grantee shall have delivered
to Issuer a copy of a letter from the staff of the SEC, or an opinion of counsel
in form and substance reasonably satisfactory to Issuer and its counsel, to the
effect that such legend is not required for purposes of the Securities Act.
4. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby
represents and warrants to Grantee as follows:
4.1 DUE AUTHORIZATION. Issuer has all requisite corporate
power and authority to enter into this Agreement and, subject to any approvals
referred to herein, to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer. This Agreement has been duly executed
and delivered by Issuer and constitutes a valid and binding obligation of
Issuer, enforceable against Issuer in accordance with its terms.
4.2 AUTHORIZED STOCK. Issuer has taken all necessary corporate
and other action to authorize and reserve for issuance, upon exercise of the
Option, shares of Issuer Common Stock necessary for Grantee to exercise the
Option, and Issuer will take all necessary corporate action to authorize and
reserve for issuance all additional shares of Issuer Common Stock or other
securities which may be issued pursuant to SECTION 6 upon exercise of the
Option. The shares of Issuer Common Stock to be issued upon due exercise of the
Option, including all additional shares of Issuer Common Stock or other
securities which may be issuable pursuant to SECTION 6 upon issuance pursuant
hereto, shall be duly and validly issued, fully paid and nonassessable, and
shall be delivered free and clear of all liens, claims, charges and encumbrances
of any kind or nature whatsoever, including any preemptive rights of any
shareholder of Issuer.
4.3 NO CONFLICTS. Except as disclosed pursuant to the Merger
Agreement, the execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not, conflict with or
violate any provision of the Articles of Incorporation or By-laws of Issuer or
any material agreement or obligation of Issuer.
5. REPRESENTATIONS AND WARRANTIES OF GRANTEE. Grantee hereby
represents and warrants to Issuer that:
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5.1 DUE AUTHORIZATION. Grantee has all requisite corporate
power and authority to enter into this Agreement and, subject to any approvals
or consents referred to herein, to consummate the transactions contemplated
hereby.
5.2 PURCHASE NOT FOR DISTRIBUTION. Any Option Shares or other
securities acquired by Grantee upon exercise of the Option will be acquired for
investment and not with a view to the public distribution thereof and will not
be transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
6.1 In the event of any change in Issuer Common Stock by
reason of a stock dividend, split-up, recapitalization, combination, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Option shall be adjusted appropriately, and proper provision
shall be made in the agreements governing such transaction, so that Grantee
shall receive upon exercise of the Option and payment of the aggregate Purchase
Price hereunder the number and class of shares or other securities or property
that Grantee would have received in respect of Issuer Common Stock if the Option
had been exercised in full immediately prior to such event, or the record date
therefor, as applicable. Whenever the number of shares of Issuer Common Stock
purchasable upon exercise of the Option is adjusted as provided in SECTION 6,
the Purchase Price shall be adjusted by multiplying the Purchase Price by a
fraction, the numerator of which shall be equal to the number of shares of
Issuer Common Stock purchasable prior to the adjustment and the denominator of
which shall be equal to the number of shares of Issuer Common Stock purchasable
after the adjustment.
6.2 (a) In the event that Issuer shall enter into an agreement
(other than the Merger Agreement) (a) to consolidate with or merge into any
person, other than Purchaser or one of its subsidiaries, and shall not be the
continuing or surviving corporation of such consolidation or merger, (b) to
permit any person other than Purchaser or one of its subsidiaries, to merge into
Issuer and Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property or then outstanding shares of
Issuer Common Stock shall after such merger represent less than 50% of the
outstanding shares and share equivalents of the surviving corporation or (c) to
sell or otherwise transfer all or substantially all of its assets to any person,
other than Purchaser or one of its subsidiaries, then, and in each such case,
proper provision shall be made in the agreements governing such transaction so
that Purchaser shall receive upon exercise of the Option the number and class of
shares or other securities or
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property that Purchaser would have received in respect of Issuer Common Stock if
the Option had been exercised immediately prior to such transaction, or the
record date thereof, as applicable, and elected, to the fullest extent it would
have been permitted to elect, to receive such securities, cash or other
property.
(b) The provisions of this Agreement, including, without
limitation, Sections 7 and 8, shall apply with appropriate adjustments to any
securities for which the Option becomes exercisable pursuant to Section 6.2(a).
7. REPURCHASE.
7.1 If a Purchase Event shall have occurred, Purchaser shall
have the right, upon five business days' prior written notice to Issuer (or any
successor in interest to Issuer by merger, sale of all or substantially all of
the assets, or otherwise) (the "Put Notice"), to cause Issuer (or any successor
in interest to Issuer by merger, sale of all or substantially all of the assets,
or otherwise) to have a Closing and to pay at such closing (and Issuer and such
successor, jointly and severally, shall be obligated to pay to Purchaser in
consideration for the cancellation of the Option) an aggregate cancellation
price (the "Cancellation Price") equal to the product of (x) the number of
shares of Issuer Common Stock as to which the Option remains exercisable
multiplied by (y) the excess of (i) the average per share closing price of
shares of Issuer Common Stock as quoted on NASDAQ (NMS) (or if not then quoted
thereon, on such other quotation system or exchange on which Issuer Common Stock
is quoted) for the period of five trading days ending on the trading day
immediately prior to the occurrence of the Put Notice over (ii) the Purchase
Price.
7.2 At any closing contemplated by the Put Notice, issuer
shall pay to Purchaser the Cancellation Price for the number of shares of Issuer
Common Stock as to which the Option is to be cancelled by delivering to
Purchaser a certified or bank check payable to or on the order of Purchaser in
an amount equal to the Cancellation Price.
8. REGISTRATION RIGHTS. Issuer shall, if requested by Grantee
at any time and from time to time within three years of the first exercise of
the Option as expeditiously as possible prepare and file up to two registration
statements under the Securities Act if such registration is necessary in order
to permit the sale or other disposition of any or all shares of Issuer Common
Stock or other securities that have been acquired by or are issuable to Grantee
upon exercise of the Option in accordance with the intended method of sale or
other disposition stated by Grantee, including a "shelf" registration statement
under Rule 415 under the Securities Act or any successor provision, and Issuer
shall use its best efforts to qualify such shares or other securities under any
applicable state securities
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laws. Such request shall be for a minimum of 1% of Issuer's outstanding Common
Stock. Grantee agrees to use all reasonable efforts to cause, and to cause any
underwriters of any sale or other disposition to cause, any sale or other
disposition pursuant to such registration statement to be effected on a widely
distributed basis so that upon consummation thereof no purchaser or transferee
shall own beneficially more than 2% of the then outstanding voting power of
Issuer. Issuer shall use all reasonable efforts to cause each such registration
statement to become effective, to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sale or other disposition. In the event that Grantee requests Issuer
to file a registration statement following the failure to obtain a required
approval for an exercise of the Option as described in SUBSECTION 2.4, the
closing of the sale or other disposition of Issuer Common Stock or other
securities pursuant to such registration statement shall occur substantially
simultaneously with the exercise of the Option. Any registration statement
prepared and filed under this SECTION 8, and any sale covered thereby, shall be
at Issuer's expense except for underwriting discounts or commissions, brokers'
fees and the fees and disbursements of Grantee's counsel related thereto.
Grantee shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder. If during the
time periods referred to in the first sentence of this SECTION 8 Issuer effects
a registration under the Securities Act of Issuer Common Stock for its own
account or for any other shareholders of Issuer (other than on Form S-4 or Form
S-8, or any successor form), it shall allow Grantee the right to participate in
such registration, and such participation shall not affect the obligation of
Issuer to effect two registration statements for Grantee under this SECTION 8;
provided that, if the managing underwriters of such offering advise Issuer in
writing that in their opinion the number of shares of Issuer Common Stock
requested to be included in such registration exceeds the number which can be
sold in such offering Grantee shall reduce the number of shares included therein
down to 20% of the number of shares intended to be included therein, if
necessary, and thereafter Issuer shall reduce the number of shares included
therein by any further amount deemed necessary by the managing underwriters, if
any. In connection with any registration pursuant to this SECTION 8, Issuer and
Grantee shall provide each other and any underwriter of the offering with
customary representations, warranties, covenants, indemnification and
contribution and holdback agreements in connection with such registration.
9. LISTING. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then listed on any national
securities exchange or national market
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system, Issuer will promptly file an application to list the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
such exchange or system and will use its best efforts to obtain approval of such
listing as soon as practicable.
10. MISCELLANEOUS.
10.1 EXPENSES. Except as otherwise provided in SECTIONS 7 and
8, each of the parties hereto shall bear and pay all costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
10.2 WAIVER AND AMENDMENT. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
10.3 ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARY;
SEVERABILITY, ETC. Except as otherwise set forth in the Merger Agreement, this
Agreement (including the Merger Agreement and the other documents and
instruments referred to herein) (i) constitutes the entire agreement and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a Federal or state
regulatory agency to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
If for any reason such court or regulatory agency determines that the Option
does not permit Grantee to acquire, or does not require Issuer to repurchase,
the full number of shares of Issuer Common Stock as provided in SECTIONS 2 and 7
(as adjusted pursuant to SECTION 6), it is the express intention of Issuer to
allow Grantee to acquire or to require Issuer to repurchase such lesser number
of shares as may be permissible without any amendment or modification hereof.
10.4 GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Ohio without regard to any
applicable conflicts of law rules.
10.5 DESCRIPTIVE HEADINGS. The descriptive headings contained
herein are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
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10.6 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the addresses set forth in the Merger
Agreement (or at such other address for a party as shall be specified by like
notice).
10.7 COUNTERPARTS. This Agreement and any amendments hereto
may be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart.
10.8 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder or under the Option shall be assigned by any
of the parties hereto (whether by operation of law or otherwise) without the
prior written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee. Subject to the preceding
sentence, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
10.9 FURTHER ASSURANCES. In the event of any exercise of the
Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
10.10 SPECIFIC PERFORMANCE. The parties hereto agree that this
Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
10.11 TERMINATION. The Option shall terminate and be of no
further force and effect upon the earliest to occur of (i) the consummation of
the transactions contemplated by the Merger Agreement, (ii) 12 months after the
first occurrence of a Purchase Event, (iii) upon the delivery by Grantee to
Issuer of a Put Notice pursuant to Section 7.1, or (iv) termination of the
Merger Agreement pursuant to Sections 8.1(a), 8.1(b) (iii), 8.1(c) (so long as a
Purchase Event has not otherwise occurred) 8.1(f)(ii) or 8.1(g) thereof. The
rights set forth in SECTIONS 7 and 8 shall not terminate when the right to
exercise the Option terminates as set forth herein, but shall extend to such
time as is provided in SECTIONS 7 and 8, respectively. Notwithstanding the
termination of the Option, Grantee shall be entitled to
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purchase those Option Shares with respect to which it has exercised the Option
in accordance with the terms hereof prior to the termination of the Option.
10.12 CERTAIN DEFINITIONS. Capitalized terms used and not
defined herein have the respective meanings ascribed to them in the Merger
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.
"ISSUER"
By: /s/ XXXXXXX X. XXXXX
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Name: Xxxxxxx X. Xxxxx
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Title: President & CEO
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"GRANTEE"
By: /s/ XXXXX X. XXXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxxx
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Title: Vice President
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