<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
MEDEX, INC.
(NAME OF SUBJECT COMPANY)
------------------------
FCY, INC.
FURON COMPANY
(BIDDERS)
------------------------
COMMON SHARES, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
------------------------
0005841051
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
DONALD D. BRADLEY, ESQ.
FURON COMPANY
29982 IVY GLENN DRIVE
LAGUNA NIGUEL, CALIFORNIA 92677
(714) 831-5350
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPY TO:
GARY J. SINGER, ESQ.
THOMAS E. WOLFE, ESQ.
O'MELVENY & MYERS LLP
610 NEWPORT CENTER DRIVE, SUITE 1700
NEWPORT BEACH, CALIFORNIA 92660-6429
(714) 760-9600
------------------------
NOVEMBER 12, 1996
(DATE OF EVENT WHICH REQUIRES FILING STATEMENT ON SCHEDULE 13D)
------------------------
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION AMOUNT OF
VALUATION* FILING FEE**
<S> <C>
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$159,301,474 $31,860
</TABLE>
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* For purposes of calculating fee only. This amount assumes the purchase price
of $23.50 per share of an aggregate of 6,216,601 Shares, and an aggregate of
$13,211,350 to be paid in connection with the surrender of outstanding stock
options.
** The amount of the filing fee, calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934, as amended, equals 1/50th
of one percentum of the aggregate of the cash offered by the bidders.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(A)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: ____ Filing Party: ____
Form or Registration No.: ____ Date File: ____
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<PAGE> 2
CUSIP NO. NONE
14D-1
<TABLE>
<C> <S>
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1 Name of Reporting Persons: FCY, Inc.
S.S. or I.R.S. Identification No. of Above Persons:
None
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2 Check the appropriate box if a member of a group
(a) [ ]
(b) [ ]
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3 SEC use only
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4 Source of funds:
AF
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5 Check if disclosure of legal proceedings is required pursuant to
items 2(e) or 2(f)
[ ]
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6 Citizenship or place of organization:
Ohio
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7 Aggregate amount beneficially owned by each reporting person:
1,279,302*
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8 Check box if the aggregate amount in row (7) excludes certain shares
[ ]
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9 Percent of class represented by amount in row (7):
20.6%*
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10 Type of reporting person:
CO
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</TABLE>
* See footnote on following page.
2
<PAGE> 3
CUSIP NO. 0003611061
14D-1
<TABLE>
<C> <S>
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1 Name of Reporting Persons: Furon Company
S.S. or I.R.S. Identification No. of Above Person:
95-1947155
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2 Check the appropriate box if a member of a group
(a) [ ]
(b) [ ]
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3 SEC use only
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4 Source of funds:
BK
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5 Check if disclosure of legal proceedings is required pursuant to
items 2(e) or 2(f)
[ ]
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6 Citizenship or place of organization:
California
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7 Aggregate amount beneficially owned by each reporting person:
1,279,302*
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8 Check box if the aggregate amount in row (7) excludes certain shares
[ ]
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9 Percent of class represented by amount in row (7):
20.6%*
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10 Type of reporting person:
CO
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</TABLE>
* On November 12, 1996, Furon Company ("Furon"), FCY, Inc. (the "Purchaser") and
the directors and officers of Medex, Inc. (the "Company") entered into
agreements (the "Director and Officer Agreements") pursuant to which the
directors and officers agreed to tender 526,104 shares (the "Director and
Officer Shares") to the Purchaser or to sell the Director and Officer Shares
to the Company after the later of the consummation of the Offer and January 2,
1997. The directors and officers each also agreed to grant the Purchaser an
option to purchase the Director and Officer Shares which is exercisable in the
event of a Purchase Event (as defined in the Offer to Purchase). On November
12, 1996, the Company granted Furon an option (the "Company Option") to
purchase 753,198 shares (the "Company Option Shares") which also is
exercisable in the event of a Purchase Event. The foregoing excludes 971,501
shares subject to stock options held by the directors and officers which they
have agreed to tender to the Purchaser or the Company under the Director and
Officer Agreements (the "Director and Officer Option Shares"). Furon and the
Purchaser hereby disclaim beneficial ownership of the Director and Officer
Shares, the Company Option Shares and the Director and Officer Option Shares.
3
<PAGE> 4
This Schedule 14D-1 Tender Offer Statement (this "Statement") relates to
the offer by FCY, Inc., an Ohio corporation ("Purchaser") and wholly owned
subsidiary of Furon Company, a California corporation ("Furon"), to purchase all
outstanding common shares, par value $.01 per share (the "Shares"), of Medex,
Inc., an Ohio corporation (the "Company"), including the associated common share
purchase rights (the "Rights") issued under the Rights Agreement, dated as of
October 12, 1996 and as amended, between the Company and the Huntington National
Bank, as rights agent (the "Rights Agreement"), at a price of $23.50 per Share
(and associated Right), net to the seller in cash, without interest thereon (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 15, 1996 (the "Offer to Purchase") and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer"). Copies of the Offer to Purchase and the Letter of
Transmittal are annexed hereto as Exhibits 99.1 and 99.2, respectively.
Capitalized terms not defined herein have the meanings assigned thereto in the
Offer to Purchase. This Tender Offer Statement on Schedule 14D-1 also
constitutes a statement on Schedule 13D with respect to an aggregate of
1,279,302 shares, which includes (i) the Director and Officer Shares that may be
acquired by the Purchaser under the Director and Officer Agreements, and (ii)
the Company Option Shares that may be acquired by Furon under the Company
Option. These 1,279,302 shares exclude the Director and Officer Option Shares
subject to stock options held by directors and officers which they have agreed
to tender to the Purchaser or the Company under the Director and Officer
Agreements. Furon and the Purchaser hereby disclaim beneficial ownership of the
Director and Officer Shares, the Company Option Shares and the Director and
Officer Option Shares. The item numbers and responses thereto below are in
accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Medex, Inc., an Ohio corporation,
with its principal executive offices at 3637 Lacon Road, Hilliard, Ohio 43026.
(b) The information set forth in the Introduction, and Sections 1 and 8 of
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in Section 6 of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a-d, g) This Statement is filed on behalf of Furon and Purchaser for
purposes of Schedule 14D-1. The information set forth in the Introduction,
Section 8 and Schedule I of the Offer to Purchase is incorporated herein by
reference.
(e-f) During the last five years, each of Furon and Purchaser and, to the
best knowledge of Furon and Purchaser, each of the persons listed in Schedule I
of the Offer to Purchase, has not been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violation of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a-b) The information set forth in Sections 8 and 10 of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a-c) The information set forth in Section 9 of the Offer to Purchase is
incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a-g) The information set forth in the Introduction and Sections 10, 11 and
13 of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a-b) The information set forth in Section 10 of the Offer to Purchase
under the captions "Director and Officer Agreements" and "Company Option
Agreement" is incorporated herein by reference. Except as set
4
<PAGE> 5
forth in the specified captions of Section 10 of the Offer to Purchase, each of
Furon and Purchaser and, to the best knowledge of Furon and Purchaser, each of
the persons listed in Schedule I to the Offer to Purchase and each associate or
majority-owned subsidiary of all such persons or entities neither beneficially
owns nor has any right to acquire, directly or indirectly, any Shares, and each
of Furon and Purchaser and, to the best knowledge of Furon and Purchaser, each
of the persons or entities referred to above and each executive officer,
director or subsidiary of any of the foregoing has not effected any transaction
in Shares during the past 60 days.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in Section 8 of the Offer to Purchase and the
information set forth in Section 10 of the Offer to Purchase under the captions
"Director and Officer Agreements" and "Company Option Agreement" is incorporated
herein by reference. Except as set forth in Section 8 of the Offer to Purchase
and in the specified captions of Section 10 of the Offer to Purchase, each of
Furon and Purchaser and, to the best knowledge of Furon and Purchaser, each of
the persons listed in Schedule I to the Offer to Purchase does not have any
contract, arrangement, understanding or relationship with any other person with
respect to any securities of the Company (including, but not limited to, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any such securities, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss or the giving or
withholding of proxies).
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Section 16 of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 of the Offer to Purchase is
incorporated herein by reference. The incorporation by reference herein does not
constitute an admission that such information is material to a decision by a
shareholder of the Company whether to sell, tender or hold Shares being sought
in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
<TABLE>
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(a) The information set forth in Section 10 of the
Offer to Purchase is incorporated herein by reference.
(b-c) The information set forth in Section 15 of the Offer
to Purchase is incorporated herein by reference.
(d) The information set forth in Section 13 of the Offer
to Purchase is incorporated herein by reference.
(e) To the best knowledge of Purchaser and Furon, there
are no pending legal proceedings relating to the Offer.
(f) The information set forth in the Offer to Purchase
and the Letter of Transmittal, to the extent not
otherwise incorporated herein by reference, is
incorporated herein by reference.
</TABLE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
99.1 Offer to Purchase, dated November 15, 1996.
99.2 Letter of Transmittal.
99.3 Notice of Guaranteed Delivery.
99.4 Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
99.5 Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C>
99.6 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
99.7 Press Release, dated November 13, 1996.
99.8 Summary Advertisement, dated November 15, 1996.
99.9 Credit Agreement, dated as of November 12, 1996, by and between
Furon Company and The Bank of New York for a $200,000,000 credit
facility (such amount subject to increase to $250,000,000).
99.10 Agreement and Plan of Merger, dated as of November 12, 1996, among
Furon Company, FCY, Inc. and Medex, Inc.
99.11 Form of Agreement, dated as of November 12, 1996, by and among
Furon Company, FCY, Inc. and the directors and officers of
Medex, Inc.
99.12 Company Option Agreement, dated as of November 12, 1996, by and
between Furon Company and Medex, Inc.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY
THAT THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
FCY, INC.
By: /s/ DONALD D. BRADLEY
--------------------------------------
Name: Donald D. Bradley
--------------------------------------
Title: Secretary
--------------------------------------
FURON COMPANY
By: /s/ MONTY A. HOUDESHELL
--------------------------------------
Name: Monty A. Houdeshell
--------------------------------------
Title: Vice President
--------------------------------------
Dated: November 15, 1996
6
<PAGE> 7
EXHIBIT INDEX
ITEM 12. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT NAME PAGE
- ------- ----------------------------------------------------------------------- -----------
<S> <C> <C>
99.1 Offer to Purchase, dated November 15, 1996.............................
99.2 Letter of Transmittal..................................................
99.3 Notice of Guaranteed Delivery..........................................
99.4 Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees...............................................................
99.5 Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees...........................................
99.6 Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9....................................................
99.7 Press Release, dated November 13, 1996.................................
99.8 Summary Advertisement, dated November 15, 1996.........................
99.9 Credit Agreement, dated as of November 12, 1996, by and between Furon
Company and The Bank of New York for a $200,000,000 credit facility
(such amount subject to increase to $250,000,000)......................
99.10 Agreement and Plan of Merger, dated as of November 12, 1996, among
Furon Company, FCY, Inc. and Medex, Inc. ..............................
99.11 Form of Agreement, dated as of November 12, 1996, by and among Furon
Company, FCY, Inc. and the directors and officers of Medex, Inc. ......
99.12 Company Option Agreement, dated as of November 12, 1996, by and between
Furon Company and Medex, Inc. .........................................
(d) None...................................................................
(e) Not applicable.........................................................
(f) None...................................................................
</TABLE>
7
<PAGE> 1
EXHIBIT 99.1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
AT
$23.50 NET PER SHARE IN CASH
BY
FCY, INC.
A WHOLLY OWNED SUBSIDIARY OF
FURON COMPANY
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 16, 1996, UNLESS THE OFFER IS EXTENDED.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH CONSTITUTES AT LEAST 3,729,961 SHARES, REPRESENTING 60% OF THE
OUTSTANDING SHARES AT NOVEMBER 12, 1996 (THE "MINIMUM CONDITION"), (2)
THE EXPIRATION OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE OF
SHARES PURSUANT TO THE OFFER AND (3) EITHER THE ACQUISITION OF
SHARES PURSUANT TO THE OFFER BEING AUTHORIZED BY THE SHAREHOLDERS
OF THE COMPANY PURSUANT TO THE OHIO CONTROL SHARE ACQUISITION LAW
OR FURON BEING SATISFIED, IN ITS REASONABLE DISCRETION, THAT THE
OHIO CONTROL SHARE ACQUISITION LAW IS INVALID OR INAPPLICABLE
TO THE ACQUISITION OF SHARES PURSUANT TO THE OFFER. SEE
SECTION 14.
------------------------
THE BOARD OF DIRECTORS OF MEDEX, INC. HAS UNANIMOUSLY APPROVED THE OFFER, THE
MERGER AGREEMENT AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER
AGREEMENT, HAS UNANIMOUSLY DETERMINED THAT EACH OF THE OFFER, THE
MERGER AGREEMENT AND THE MERGER IS FAIR TO AND IN THE BEST
INTERESTS OF THE SHAREHOLDERS OF MEDEX, INC. AND UNANIMOUSLY
RECOMMENDS THAT SUCH SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any Shareholder desiring to tender all or any portion of such Shareholder's
Shares (each as defined herein) should either (i) complete and sign the Letter
of Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and mail or deliver it together with the
certificate(s) representing tendered Shares and any other required documents to
the Depositary or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 or (ii) request such Shareholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such Shareholder. A Shareholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such Shareholder desires to tender such Shares.
A Shareholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer described in this Offer to Purchase
on a timely basis, may tender such Shares by following the procedures for
guaranteed delivery set forth in Section 3.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other tender offer materials,
may be directed to the Information Agent or the Dealer Manager at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase. Shareholders may also contact brokers, dealers, commercial
banks and trust companies for assistance concerning the Offer.
------------------------
THE DEALER MANAGER FOR THE OFFER IS:
DEAN WITTER REYNOLDS INC.
November 15, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
INTRODUCTION.......................................................................... 1
THE TENDER OFFER...................................................................... 4
1. Terms of the Offer; Expiration Date......................................... 4
2. Acceptance for Payment and Payment.......................................... 5
3. Procedures for Tendering Shares............................................. 6
4. Withdrawal Rights........................................................... 8
5. Certain Federal Income Tax Consequences..................................... 9
6. Price Range of Shares; Dividends............................................ 9
7. Certain Information Concerning the Company.................................. 10
8. Certain Information Concerning Purchaser and Furon.......................... 11
9. Financing of the Offer and the Merger....................................... 12
10. Background of the Offer, Contacts with the Company; The Merger Agreement;
Related Agreements.......................................................... 13
11. Purpose of the Offer and the Merger; Plans for the Company; Other Matters... 22
12. Dividends and Distributions................................................. 23
13. Effect of the Offer on the Market for the Shares; Nasdaq Quotation; Exchange
Act Registration; Margin Regulations........................................ 24
14. Certain Conditions of the Offer............................................. 25
15. Certain Legal Matters and Regulatory Approvals.............................. 26
16. Fees and Expenses........................................................... 31
17. Miscellaneous............................................................... 31
Schedule I -- Directors and Executive Officers of Furon and Purchaser................. I-1
</TABLE>
i
<PAGE> 3
To the Shareholders of Medex, Inc.:
INTRODUCTION
FCY, Inc., an Ohio corporation ("Purchaser") and wholly owned subsidiary of
Furon Company, a California corporation ("Furon"), hereby offers to purchase all
outstanding common shares, par value $.01 per share ("Shares"), of Medex, Inc.,
an Ohio corporation (the "Company"), including the associated share purchase
rights (the "Rights") issued under the Rights Agreement, dated as of October 12,
1996 and as amended, between the Company and Huntington National Bank, as rights
agent (the "Rights Agreement"), at a price of $23.50 per Share (and associated
Right), net to the seller in cash, without interest thereon (the "Offer Price"),
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which, as extended or amended from
time to time, together constitute the "Offer").
Shareholders of the Company ("Shareholders") tendering Shares will not be
obligated to pay brokerage fees or commissions or, except as set forth in
Instruction 6 of the Letter of Transmittal, stock transfer taxes with respect to
the purchase of Shares by Purchaser pursuant to the Offer. Purchaser or Furon
will pay all charges and expenses of Dean Witter Reynolds Inc., as Dealer
Manager (in such capacity, the "Dealer Manager"), The Bank of New York, as
Depositary (the "Depositary"), and MacKenzie Partners, Inc., as Information
Agent (the "Information Agent"), incurred in connection with the Offer. See
Section 16.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH CONSTITUTES AT LEAST 3,729,961 SHARES, REPRESENTING 60% OF THE
OUTSTANDING SHARES AT NOVEMBER 12, 1996 (THE "MINIMUM CONDITION"), (2) THE
EXPIRATION OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976 APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE
OFFER AND (3) EITHER THE ACQUISITION OF SHARES PURSUANT TO THE OFFER BEING
AUTHORIZED BY THE SHAREHOLDERS OF THE COMPANY PURSUANT TO THE OHIO CONTROL SHARE
ACQUISITION LAW OR THE PURCHASER BEING SATISFIED, IN ITS REASONABLE DISCRETION,
THAT THE OHIO CONTROL SHARE ACQUISITION LAW IS INVALID OR INAPPLICABLE TO THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER. SEE SECTION 14.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD OF DIRECTORS") HAS
UNANIMOUSLY APPROVED THE OFFER, THE MERGER AGREEMENT AND THE OTHER TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT, HAS UNANIMOUSLY DETERMINED THAT EACH OF
THE OFFER, THE MERGER AGREEMENT AND THE MERGER IS FAIR TO AND IN THE BEST
INTERESTS OF THE COMPANY'S SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE
OFFER.
Reference is made to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to Shareholders
herewith. Shareholders are urged to read the Schedule 14D-9 in its entirety for
a description of the assumptions made, factors considered and procedures
followed by the Board of Directors in making the approval, determination and
recommendation set forth above.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 12, 1996 (the "Merger Agreement"), among Furon, Purchaser and the
Company. The Merger Agreement provides, among other things, that promptly
following the purchase of Shares pursuant to the Offer (but no earlier than
January 2, 1997) and subject to the terms and conditions of the Merger
Agreement, and in accordance with the relevant provisions of the Ohio Revised
Code (the "ORC"), Purchaser will be merged with and into the Company (the
"Merger"). The Company will continue as the surviving corporation (the
"Surviving Corporation") and as a wholly owned subsidiary of Furon following
consummation of the Merger. As of the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding, together with the Rights
(other than Shares held in the treasury of the Company or any affiliates
thereof, any Shares owned by
<PAGE> 4
Purchaser or any affiliates thereof, and any Shares held by Shareholders
properly exercising appraisal rights pursuant to the ORC) will be cancelled and
extinguished and will be converted into and represent the right to receive the
Offer Price in cash without interest. See Section 10.
Certain Conditions to the Offer. The Offer is subject to the fulfillment
of a number of conditions including, without limitation, the following:
Minimum Condition. The Offer is conditioned upon there being validly
tendered and not withdrawn prior to the expiration of the Offer at least
3,729,961 Shares, which represent 60% of the outstanding Shares at November 12,
1996. The Company has represented to Purchaser that as of the close of business
on November 12, 1996, there were 6,216,601 Shares issued and outstanding, and
outstanding options to purchase 1,157,091 Shares (the "Stock Options").
Control Share Condition. Consummation of the Offer is conditioned upon the
acquisition of Shares pursuant to the Offer by the Purchaser being authorized by
the Shareholders of the Company pursuant to Section 1701.831 of the ORC (the
"Ohio Control Share Acquisition Law") at a special meeting of Shareholders of
the Company (the "831 Meeting") duly and validly called and held in accordance
with the Ohio Control Share Acquisition Law, or Furon being satisfied, in its
reasonable discretion, that the Ohio Control Share Acquisition Law is invalid or
inapplicable to the acquisition of Shares pursuant to the Offer (the "Control
Share Condition").
Under the Ohio Control Share Acquisition Law, unless a corporation's
articles of incorporation or code of regulations otherwise provide, any "control
share acquisition" of an "issuing public corporation" (such as the Company) may
be made only with the prior authorization of its shareholders in accordance with
the Ohio Control Share Acquisition Law. Neither the Company's Articles of
Incorporation ("Articles") nor its Code of Regulations ("Regulations") currently
contains a provision by which the Company "opts out" of the Ohio Control Share
Acquisition Law.
A "control share acquisition" is the acquisition, directly or indirectly,
by any person of shares that would entitle such person to exercise or direct the
exercise of 20% or more of the voting power in the election of directors
("Control Share Acquisition"). A Control Share Acquisition must be approved in
advance (i) by the holders of at least a majority of the voting power of the
corporation in the election of directors represented at the 831 Meeting at which
a quorum is present and (ii) by the holders of a majority of such voting power
excluding the voting shares owned by the acquiring person and certain other
"Interested Shares" (as defined in Section 15). The Ohio Control Share
Acquisition Law provides that a quorum shall be deemed to be present at the 831
Meeting if at least a majority of the Shares, and a majority of the Shares
excluding those that are "Interested Shares," are represented at such meeting in
person or by proxy.
Under the Ohio Control Share Acquisition Law, the Company must call the 831
Meeting to consider the authorization of an acquisition of Shares covered by the
Ohio Control Share Acquisition Law no later than 10 days, and it must be held no
later than 50 days, following its receipt of an "acquiring person statement"
from the acquiring person. However, the acquiring person may request, at the
time of delivery of the acquiring person statement, that the 831 Meeting not be
held sooner than 30 days after receipt by the Company of the statement.
Without waiving their right to challenge the validity of all or any part of
the Ohio Control Share Acquisition Law or to seek an amendment to the Company's
Articles or Regulations opting out of the Ohio Control Share Acquisition Law,
and reserving their right to take actions inconsistent with the applicability of
the Ohio Control Share Acquisition Law, Furon and the Purchaser delivered to the
Company on November 12, 1996 an acquiring person statement relating to the
Offer. Pursuant to the Ohio Control Share Acquisition Law, the Board of
Directors has, with the concurrence of Furon and Purchaser, set Friday, December
13, 1996, as the date of the 831 Meeting.
The Board of Directors will recommend that Shareholders approve the
proposed acquisition of the Shares at the 831 Meeting, unless (i) the Board of
Directors is advised by counsel that such recommendation would be inconsistent
with their fiduciary duties as directors or (ii) the Merger Agreement is
terminated. The Company is causing proxy materials with respect to the 831
Meeting to be prepared, filed with the Securities and Exchange Commission (the
"Commission") and distributed to the Company's shareholders in accor-
2
<PAGE> 5
dance with Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and will solicit proxies to be voted at the 831 Meeting.
In advance of the 831 Meeting, the Board of Directors will appoint an inspector
of election to act at such meeting and will request the inspector to use methods
for identifying Interested Shares (as defined in Section 1701.01(CC)(2) of the
ORC) mutually agreed upon by the Company and Furon in performing the inspector's
duties pursuant to Section 1701.50(C) and Section 1701.831(E)(1) of the ORC.
Certain other conditions to the Offer are described in Section 14. The
Offer is not conditioned on the receipt of financing.
Certain Conditions to the Merger. The consummation of the Merger is
subject to the satisfaction or waiver of certain conditions, including the
purchase of Shares in the Offer and, if necessary, the adoption of the Merger
Agreement by the requisite vote of Shareholders. See Section 10. The Board of
Directors has taken certain actions which have rendered inapplicable the
provisions of Chapter 1704 of the ORC concerning certain business combinations
and transactions with interested Shareholders to the Offer and the Merger. The
Board of Directors has also taken all necessary action under the Rights
Agreement so that (i) the Rights will not be exercisable, distributable,
separately tradeable or be otherwise affected by the Offer, the Merger or the
other transactions contemplated by the Merger Agreement, (ii) none of Furon,
Purchaser and its or their affiliates will be deemed to be an "Acquiring Person"
for purposes of the Rights Agreement and (iii) the Offer, the Merger and the
other transactions contemplated by the Merger Agreement will not constitute a
"Triggering Event" for purposes thereof. Further, the Board of Directors has
taken action which makes certain supermajority voting provisions of the Articles
inapplicable to the Merger.
Pursuant to the terms of the Articles, the Merger Agreement must be
approved and adopted by the affirmative vote of the holders of a majority of the
outstanding Shares. The Board of Directors has unanimously approved the Merger
Agreement and the transactions contemplated thereby, and, unless the Merger is
consummated pursuant to the short form merger provisions of the ORC as described
below, the only remaining required corporate action of the Company is the
approval and adoption of the Merger Agreement by the affirmative vote of the
holders of a majority of the issued and outstanding Shares. If the Minimum
Condition is satisfied, Purchaser will have sufficient voting power to cause the
adoption of the Merger Agreement without the affirmative vote of any other
Shareholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of the Shareholders as promptly as practicable
after the consummation of the Offer for the purpose of considering and taking
action on the Merger Agreement, if such action is required by the ORC. See
Section 10 for a more complete description of the Merger Agreement.
Under the ORC, if Purchaser acquires, pursuant to the Offer or otherwise,
at least 90% of the outstanding Shares, Purchaser will be able to effect the
Merger without a vote of the Shareholders. If, however, Purchaser does not
acquire at least 90% of the outstanding Shares pursuant to the Offer or
otherwise and a vote of the Shareholders is required under the ORC, a
significantly longer period of time would be required to effect the Merger.
Unless Purchaser owns 90% or more of the Shares, Furon and Purchaser will not be
obligated to effect the Merger if, among other reasons, there is any change (or
any development involving a prospective change) in the business, financial
condition or results of operations of the Company or any of its subsidiaries
that has had or is reasonably expected to have a material adverse effect upon
the Company and its subsidiaries taken as a whole. See Section 10.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
3
<PAGE> 6
THE TENDER OFFER
1. TERMS OF THE OFFER; EXPIRATION DATE
Upon the terms and subject to the conditions of the Offer, Purchaser will
accept for payment and pay for all Shares which are validly tendered prior to
the Expiration Date (as hereinafter defined) and not withdrawn in accordance
with Section 4. The term "Expiration Date" means 12:00 Midnight, New York City
time, on Monday, December 16, 1996. At the Company's request, Purchaser will,
and Furon will cause Purchaser to, extend the expiration date of the Offer from
time to time for up to an aggregate of an additional 10 business days if the
Minimum Condition is not fulfilled prior to the original Expiration Date. Furon
may at any time, at its sole discretion, increase the price per share payable in
the Offer or extend the Offer.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition, the expiration or earlier termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the regulations thereunder (the "HSR Act"), and the Control Share Condition.
See Section 14 which sets forth in full the conditions to the Offer. If any
condition to Furon's and Purchaser's obligation to purchase Shares under the
Offer is not satisfied at any time on or after the date of the Merger Agreement
and before the acceptance of such Shares for payment or the payment thereof,
Furon or Purchaser will not be required to accept for payment or to pay for any
Shares not theretofore accepted for payment or paid for, and, in its good faith
discretion, may terminate or amend the Offer and may postpone the acceptance for
payment of Shares pursuant thereto.
Subject to the applicable rules and regulations of the Commission and the
terms of the Merger Agreement, Purchaser expressly reserves the right, in its
sole discretion, at any time or from time to time, regardless of whether any of
the events set forth in Section 14 shall have occurred or shall have been
determined by Purchaser to have occurred, (i) to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary, and (ii) to amend the Offer in any respect by giving oral or
written notice of such amendment to the Depositary. The rights reserved by
Purchaser in this paragraph are in addition to Purchaser's rights to terminate
the Offer described in Section 14. Under no circumstances will interest be paid
on the purchase price for tendered Shares, even if Purchaser exercises its
rights to extend the Offer.
Any extension, amendment or termination of the Offer will be followed as
promptly as practicable by a public announcement thereof, such announcement, in
the case of an extension, to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
For purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or federal holiday and consists of the time period from 12:01 a.m.
through 12:00 midnight, New York City time. Subject to applicable law (including
Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that material
changes be promptly disseminated to Shareholders in a manner reasonably designed
to inform them of such changes) and without limiting the manner in which
Purchaser may choose to make any public announcement, Purchaser currently
intends to make announcements by issuing a press release to the Dow Jones News
Service.
If Purchaser extends the Offer, or if Purchaser (whether before or after
its acceptance for payment of Shares) is delayed in its purchase of or payment
for Shares or is unable to pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may retain tendered Shares on behalf of Purchaser, and such Shares may not be
withdrawn except to the extent tendering Shareholders are entitled to withdrawal
rights as described in Section 4. The ability of Purchaser to delay the payment
for Shares which Purchaser has accepted for payment is, however, limited by Rule
14e-1(c) under the Exchange Act, which requires that a bidder pay the
consideration offered or return the securities deposited by or on behalf of
holders of securities promptly after the termination or withdrawal of the
bidder's offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials and extend
the Offer in the manner and to the extent required by Rules 14d-4(c), 14d-6(d),
14e-l(b) and 14e-1 (d) under the Exchange Act. The minimum period during which
the Offer must remain open following
4
<PAGE> 7
material changes in the terms of the Offer or information concerning the Offer,
other than a change in price or a change in percentage of securities sought,
will depend upon the facts and circumstances, including the relative materiality
of the terms or information. With respect to a change in price or a change in
percentage of securities sought, a minimum 10 business day period is required to
allow for adequate dissemination to Shareholders and investor response. Subject
to the terms of the Merger Agreement, if, prior to the Expiration Date,
Purchaser should decide to decrease the number of Shares being sought or to
alter the consideration being offered in the Offer, such decrease in the number
of Shares being sought or alteration in the consideration being offered will be
applicable to all Shareholders whose Shares are accepted for payment pursuant to
the Offer.
The Company has agreed to provide Purchaser with mailing labels containing
the names and addresses of the record holders of Shares and lists of securities
positions of Shares held in stock depositories for the purpose of disseminating
the Offer to Shareholders. This Offer to Purchase and the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares and will be furnished to brokers, dealers, commercial banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the Shareholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT
Pursuant to the terms of, and subject to the prior satisfaction or waiver
of the conditions of, the Offer (as it may be extended or amended), Purchaser
will accept for payment and pay for all Shares validly tendered prior to the
Expiration Date as promptly as practicable following such Expiration Date.
Subject to applicable rules of the Commission and the terms of the Merger
Agreement, Purchaser expressly reserves the right to delay acceptance for
payment of or payment for Shares in order to comply, in whole or in part, with
any applicable law, including the HSR Act. See Sections 14 and 15.
Any such delays will be effected in compliance with Rule 14e-1(c) under the
Exchange Act (relating to a bidder's obligation to pay for or return tendered
securities promptly after the termination or withdrawal of such bidder's offer).
In all cases, payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (i) the certificates evidencing
such Shares (the "Share Certificates"), or timely confirmation of a book-entry
transfer (a "Book-Entry Confirmation") of such Shares, if such procedure is
available, into the Depositary's account at The Depositary Trust Company or the
Philadelphia Depositary Trust Company (each a "Book-Entry Transfer Facility"
and, collectively, the "Book-Entry Transfer Facilities") pursuant to the
procedures set forth in Section 3, (ii) the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined below) and (iii) any other documents required by the Letter of
Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not withdrawn as,
if, and when Purchaser gives oral or written notice to the Depositary of
Purchaser's acceptance of such Shares for payment. Upon the terms and subject to
the conditions of the Offer, payment for Shares accepted for payment pursuant to
the Offer will be made by deposit of the aggregate purchase price therefor with
the Depositary, which will act as agent for tendering Shareholders for the
purpose of receiving payment from Purchaser and transmitting payment to such
Shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT. Upon the deposit of funds with the Depositary for the purpose of
making payments to tendering Shareholders, Purchaser's obligation to make
5
<PAGE> 8
such payment will be satisfied and tendering Shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are submitted
evidencing more Shares than are tendered, Share Certificates evidencing
unpurchased or untendered Shares will be returned, without expense to the
tendering Shareholder (or, in the case of Shares tendered by book-entry transfer
into the Depositary's account at a Book-Entry Transfer Facility pursuant to the
procedure set forth in Section 3, such Shares will be credited to an account
maintained at such Book-Entry Transfer Facility), as promptly as practicable
following the expiration, termination or withdrawal of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration
offered to tendering Shareholders pursuant to the Offer, such increased
consideration will be paid to all holders whose Shares are purchased in the
Offer, whether or not such Shares were tendered prior to such increase in
consideration.
Purchaser reserves the right to transfer or assign, in whole at any time,
or in part from time to time, to Furon or to one or more of its affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering Shareholders to
receive payment for Shares validly tendered and accepted for payment pursuant to
the Offer.
3. PROCEDURES FOR TENDERING SHARES
Valid Tender of Shares. In order for Shares to be validly tendered
pursuant to the Offer, either (i) the Letter of Transmittal or a facsimile
thereof, properly completed and duly executed, with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other required documents, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase prior
to the Expiration Date and either the Share Certificates evidencing tendered
Shares must be received by the Depositary along with the Letter of Transmittal
or such Shares must be tendered pursuant to the procedure for book-entry
transfer described below and a Book-Entry Confirmation must be received by the
Depositary, in each case prior to the Expiration Date, or (ii) the tendering
Shareholder must comply with the guaranteed delivery procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at each Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in any of the Book-Entry Transfer
Facilities' systems may make book-entry delivery of Shares by causing a
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account at a Book-Entry Transfer Facility in accordance with such Book-Entry
Transfer Facility's procedures for transfer. However, although delivery of
Shares may be effected through book-entry transfer at a Book-Entry Transfer
Facility, the Letter of Transmittal or facsimile thereof, with any required
signature guarantees, or an Agent's Message, and any other required documents,
must, in any case, be transmitted to and received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date or the guaranteed delivery procedures described below must be
complied with. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a member firm of a registered national securities exchange, a
member of the National Association of Securities Dealers, Inc. ("NASD") or a
commercial bank or trust company having an office or correspondent in the United
States (each of the foregoing being referred to as an "Eligible Institution"),
unless the Shares tendered thereby are
6
<PAGE> 9
tendered (i) by a registered Shareholder who has not completed either the box
entitled "Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal, or (ii) for the account of an
Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or a Share
Certificate is not accepted for payment or is not tendered and is to be returned
to a person other than the registered holder(s), then the Share Certificate must
be endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
Guaranteed Delivery. If a Shareholder desires to tender Shares pursuant to
the Offer and such Shareholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all the
following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary as provided below prior to the Expiration Date;
and
(iii) the Share Certificates for all tendered Shares, in proper form
for transfer, or a Book-Entry Confirmation, together with a properly
completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) with any required signature guarantee (or, in the case
of a book-entry delivery, an Agent's Message) and any other documents
required by such Letter of Transmittal, are received by the Depositary
within three trading days after the date of execution of the Notice of
Guaranteed Delivery. A "trading day" is any day on which the NASDAQ
National Market System (the "NASDAQ National Market") operated by the NASD
is open for business.
Any Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will, in all cases, be made only after timely receipt by
the Depositary of (i) the Share Certificates evidencing such Shares, or a
Book-Entry Confirmation of the delivery of such Shares, (ii) a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
thereof) (or, in the case of a book-entry delivery, an Agent's Message) and
(iii) any other documents required by the Letter of Transmittal.
Backup Federal Withholding Tax. To prevent backup federal income tax
withholding with respect to payment of the purchase price of Shares purchased
pursuant to the Offer, each such Shareholder must provide the Depositary with
such Shareholder's correct taxpayer identification number and certify that such
Shareholder is not subject to backup federal income tax withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal.
Foreign Shareholders must submit a completed Form W-8 to avoid 31% backup
withholding. This form may be obtained from the Depositary. See Instruction 8 of
the Letter of Transmittal.
Appointment as Proxy; Distributions. By executing a Letter of Transmittal
as set forth above, a tendering Shareholder irrevocably appoints designees of
Purchaser as such Shareholder's attorneys-in-fact and proxies, in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such Shareholder's rights with respect to the Shares tendered by
such Shareholder and accepted for payment by Purchaser (and any and all non-cash
dividends, distributions, rights, other Shares, or other securities issued or
issuable in respect of such Shares on or after the date of this Offer to
Purchase). All such proxies shall be considered coupled with an interest in the
tendered Shares. This appointment will be effective if, when, and only to the
extent that, Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by such Shareholder
with respect to such Shares and other securities will, without further action,
be revoked, and no subsequent proxies may be given. The
7
<PAGE> 10
designees of Purchaser will, with respect to the Shares and other securities for
which the appointment is effective, be empowered to exercise all voting and
other rights of such Shareholder as they in their sole discretion may deem
proper at any annual, special, adjourned or postponed meeting of Shareholders,
by written consent or otherwise, and in order for Shares or other securities to
be deemed validly tendered, immediately upon Purchaser's acceptance for payment
of such Shares Purchaser must be able to exercise full voting rights with
respect to such Shares and other securities.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by Purchaser, in its sole discretion, whose determination will be
final and binding on all parties. Purchaser reserves the absolute right to
reject any or all tenders of any Shares determined by it not to be in proper
form or if the acceptance for payment of, or payment for, such Shares might, in
the opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right, in its sole discretion, to waive any of the conditions of the
Offer or any defect or irregularity in any tender with respect to Shares of any
particular Shareholder, whether or not similar defects or irregularities are
waived in the case of other Shareholders. Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto) will be final and binding. None of Furon, Purchaser, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or will incur any liability for failure to give any such notification.
Binding Agreement. Purchaser's acceptance for payment of Shares validly
tendered pursuant to the Offer will constitute a binding agreement between the
tendering Shareholder and Purchaser upon the terms and subject to the conditions
of the Offer.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn
at any time after January 14, 1997, or at such later time as may apply if the
Offer is extended.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to accept Shares for payment pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares,
and such Shares may not be withdrawn except to the extent that tendering
Shareholders are entitled to withdrawal rights as described in this Section 4.
Any such delay will be by an extension of the Offer to the extent required by
law.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the release
of such Share Certificates, the serial numbers shown on such Share Certificates
must be submitted to the Depositary and the signature(s) on the notice of
withdrawal must be guaranteed by an Eligible Institution, unless such Shares
have been tendered for the account of an Eligible Institution. If Shares have
been tendered pursuant to the procedure for book-entry transfer as set forth in
Section 3, any notice of withdrawal must also specify the name and number of the
account at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Furon, Purchaser, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
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<PAGE> 11
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income
tax consequences of the Offer and the Merger to Shareholders whose Shares are
purchased pursuant to the Offer or whose Shares are converted to cash as a
result of the Merger, including pursuant to the exercise of perfected appraisal
rights under the OCR. The discussion applies only to Shareholders in whose hands
Shares are capital assets, and may not apply to Shares received pursuant to the
exercise of employee stock options or otherwise as compensation, or to
Shareholders who are in special tax situations (such as insurance companies,
tax-exempt organizations or dealers in securities). This discussion does not
discuss the federal income tax consequences to a Shareholder who, for United
States federal income tax purposes, is a non-resident alien individual, a
foreign corporation, a foreign partnership or a foreign estate or trust.
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH SHAREHOLDER SHOULD CONSULT SUCH
SHAREHOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES
DISCUSSED BELOW TO SUCH SHAREHOLDER AND THE PARTICULAR TAX EFFECTS TO SUCH
SHAREHOLDER OF THE OFFER AND THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF
STATE, LOCAL AND OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Merger will be
a taxable transaction for federal income tax purposes (and also may be a taxable
transaction under applicable state, local and other income tax laws). In
general, for federal income tax purposes, a Shareholder will recognize gain or
loss equal to the difference between his or her adjusted tax basis in the Shares
sold pursuant to the Offer or converted to cash in the Merger and the amount of
cash received therefor. Gain or loss must be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single transaction)
sold pursuant to the Offer or converted to cash in the Merger. Such gain or loss
will be capital gain or loss and will be long-term gain or loss if the Shares
were held for more than one year on the date of sale (in the case of the Offer)
or the Effective Time of the Merger (in the case of the Merger). The receipt of
cash for Shares pursuant to the exercise of appraisal rights will generally be
taxed in the same manner as described above. Long-term capital gain of
individuals currently is taxed at a maximum rate of 28%.
6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares are listed and traded on the NASDAQ National Market and quoted
under the symbol "MDEX." The following table sets forth, for the fiscal quarters
indicated, the range of high and low closing prices per Share on (and as
reported by) the NASDAQ National Market:
<TABLE>
<CAPTION>
MARKET PRICE
-----------------
HIGH LOW
------ ------
<S> <C> <C>
FISCAL YEAR ENDED JUNE 30, 1995:
First Quarter.................................................... $14.25 $11.25
Second Quarter................................................... 17.25 12.50
Third Quarter.................................................... 13.75 10.00
Fourth Quarter................................................... 12.75 9.75
FISCAL YEAR ENDED JUNE 30, 1996:
First Quarter.................................................... $12.75 $ 9.75
Second Quarter................................................... 11.50 10.25
Third Quarter.................................................... 12.50 10.75
Fourth Quarter................................................... 14.25 11.50
FISCAL YEAR ENDED JUNE 30, 1997:
First Quarter.................................................... $15.63 $11.00
Second Quarter (through November 12, 1996)....................... 15.38 14.09
</TABLE>
9
<PAGE> 12
On November 12, 1996, the last full trading day prior to the announcement
of the execution of the Merger Agreement and of Purchaser's intention to
commence the Offer, the closing price per Share on the Nasdaq National Market
was $15.25, and the closing bid price per Share on such market was $15.00. On
November 14, 1996, the last full trading day prior to the commencement of the
Offer, the closing price per Share on the Nasdaq National Market was $23.13, and
the closing bid price per Share on such market was $23.00. SHAREHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
Pursuant to the Merger Agreement, the Company has agreed not to declare or
pay any dividends prior to the consummation of the Merger.
7. CERTAIN INFORMATION CONCERNING THE COMPANY
General. The Company is an Ohio corporation and its principal executive
offices are located at 3637 Lacon Road, Hilliard, Ohio 43026; telephone: (614)
876-2413. According to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996 (the "Company 10-K"), the Company designs,
manufactures, assembles and markets a broad range of health care products for
the diagnosis and treatment of patients receiving care in hospitals, alternative
health care facilities and the home health care environment. The Company
operates in one principal industry segment providing critical care accessories
and infusion systems for medical and surgical applications.
PROJECTED FINANCIAL INFORMATION. IN THE COURSE OF DISCUSSIONS BETWEEN
FURON'S AND THE COMPANY'S REPRESENTATIVES AND FURON'S DUE DILIGENCE REGARDING
THE COMPANY (SEE SECTION 10), THE COMPANY PROVIDED FURON WITH ITS FINANCIAL AND
CAPITAL BUDGETS FOR FISCAL 1997 AND WITH ITS MARCH 1996 STRATEGIC PLAN PROPOSAL
FOR THE 1996 THROUGH 2001 FISCAL YEARS. THIS FORWARD LOOKING INFORMATION WAS NOT
PREPARED WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED
GUIDELINES OF THE COMMISSION OR THE GUIDELINES ESTABLISHED BY THE AMERICAN
INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS REGARDING PROJECTIONS. THE INFORMATION
WAS NOT PREPARED WITH THE ASSISTANCE OF, OR REVIEWED BY, INDEPENDENT
ACCOUNTANTS, AND IS INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE IT WAS
PROVIDED TO FURON. NEITHER FURON, PURCHASER, THE COMPANY, THE DEALER MANAGER NOR
THE INFORMATION AGENT ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY,
REASONABLENESS, ACCURACY OR COMPLETENESS OF THIS FORWARD LOOKING INFORMATION.
THE MARCH 1996 STRATEGIC PLAN PROPOSAL SETS FORTH BEST, MIDDLE AND WORST CASE
SCENARIOS. WHILE PRESENTED WITH NUMERICAL SPECIFICITY, THIS INFORMATION IS BASED
UPON A VARIETY OF ASSUMPTIONS RELATING TO THE COMPANY'S BUSINESS AND OTHER
MATTERS THAT MIGHT NOT BE REALIZED AND ARE SUBJECT TO SIGNIFICANT UNCERTAINTIES
AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. CONSEQUENTLY,
THIS FORWARD LOOKING INFORMATION IS INHERENTLY IMPRECISE, AND THERE CAN BE NO
ASSURANCE THAT THE INDICATED RESULTS WILL BE REALIZED. ALSO, IT IS EXPECTED THAT
THERE WILL BE DIFFERENCES BETWEEN ACTUAL AND FORECASTED RESULTS, AND ACTUAL
RESULTS MAY VARY MATERIALLY FROM THOSE INDICATED. SET FORTH IN THE TABLE BELOW
IS CERTAIN SELECTED "BEST CASE" FORWARD LOOKING INFORMATION WITH RESPECT TO THE
COMPANY AND ITS SUBSIDIARIES INCLUDED IN THE COMPANY'S MARCH 1996 STRATEGIC PLAN
PROPOSAL. THE INCLUSION OF THIS FORWARD LOOKING INFORMATION SHOULD NOT BE
REGARDED AS FACT OR AS AN INDICATION THAT FURON, PURCHASER, THE COMPANY OR ANY
OF THEIR RESPECTIVE ADVISORS OR ANY OTHER PARTY WHO RECEIVED SUCH INFORMATION
CONSIDERS IT AS AN ACCURATE PREDICTION OF FUTURE EVENTS AND THIS INFORMATION
SHOULD NOT BE RELIED ON AS SUCH. NONE OF FURON, PURCHASER, THE COMPANY, THE
DEALER MANAGER AND THE INFORMATION AGENT ASSUMES ANY RESPONSIBILITY FOR THE
VALIDITY, REASONABLENESS, ACCURACY OR COMPLETENESS OF SUCH FORWARD LOOKING
INFORMATION AND THE COMPANY HAS MADE NO REPRESENTATIONS TO FURON AND PURCHASER
REGARDING SUCH FORWARD LOOKING INFORMATION.
MEDEX, INC.
SELECTED FORWARD LOOKING INFORMATION
(IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDING JUNE 30
---------------------------------------------------------------
1996 1997 1998 1999 2000 2001
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Sales.......................... $100,073 $104,187 $117,659 $140,384 $155,725 $165,719
Income Before Income Taxes......... 1,677 8,043 10,037 17,290 23,000 24,997
</TABLE>
10
<PAGE> 13
According to its Annual Report on Form 10-K, the Company's actual net sales
and income before income taxes were $99,297,459 and $1,792,866, respectively,
for the fiscal year ended June 30, 1996. The Company's capital budget for fiscal
1997 indicates net sales and income before income taxes of $106,047,000 and
$8,868,000, respectively.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, stock options granted to
them, the principal holders of the Company's securities, any material interests
of such persons in transactions with the Company and other matters is required
to be disclosed in proxy statements distributed to Shareholders and filed with
the Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
also should be available for inspection and copying at prescribed rates at the
following regional offices of the Commission: Seven World Trade Center, New
York, New York 10048; and 500 West Madison Street, Chicago, Illinois 60661.
Copies of such materials may also be obtained by mail, upon payment of the
Commission's customary fees, from the Commission's principal office at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a Web site that contains these materials, the address of which is
http://www.sec.gov. The materials should also be available for inspection at the
offices of the NASD located at 1735 K Street, N.W., Washington, D.C. 20006.
Except as otherwise noted in this Offer to Purchase, all the information
with respect to the Company and its affiliates set forth in this Offer to
Purchase has been derived from publicly available information. Although neither
Furon nor Purchaser has any knowledge that any such information is untrue,
neither Furon nor Purchaser takes any responsibility for the accuracy or
completeness of such information or for any failure by the Company to disclose
events that may have occurred and that may affect the significance or accuracy
of any such information.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND FURON
PURCHASER
Purchaser is a recently incorporated Ohio corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with its formation and capitalization and the
transactions contemplated by the Offer and the Merger. All the outstanding
capital stock of Purchaser is owned directly by Furon, 29982 Ivy Glenn Drive,
Laguna Niguel, California 92677.
FURON
Furon is a California corporation that designs, develops and manufactures
highly engineered components made primarily from specifically formulated high
performance polymer materials. Most of Furon's products are designed and
engineered to meet specific requirements of customers in the industrial process,
transportation, industrial equipment, electronics and healthcare industries. The
address of Furon's principal office is 29982 Ivy Glenn Drive, Laguna Niguel,
California 92677; Telephone (714) 831-5350.
Furon's common stock, without par value, has traded on the New York Stock
Exchange under the trading symbol "FCY" since March 8, 1995. Previously, it
traded on the NASDAQ National Market under the trading symbol "FCBN." As of
November 6, 1996, Furon had approximately 1,100 holders of record of its Common
Stock.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history for each of the directors and
executive officers of Furon are set forth in Schedule I hereto.
Financial Information. Furon's audited financial statements as of February
3, 1996 and January 28, 1995 and for each of the three years in the period ended
February 3, 1996, as set forth on pages 14-37 of Furon's Annual Report on Form
10-K for the fiscal year ended February 3, 1996, is incorporated herein by
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<PAGE> 14
reference. The unaudited financial statements as set forth on pages 3-10 of
Furon's Report on Form 10-Q for the quarter ended August 3, 1996 is incorporated
herein by reference.
Available Information. Furon is subject to the reporting requirements of
the Exchange Act and, in accordance therewith, is required to filed reports and
other information with the Commission relating to its business, financial
condition and other matters. Information as of particular dates concerning
Furon's directors and officers, their remuneration, the principal holders of
Furon's securities and any material interest of such persons in transactions
with Furon is required to be disclosed in proxy statements distributed to
Furon's shareholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
Commission, and copies thereof should be obtainable from the Commission, in the
same manner as set forth with respect to information concerning the Company in
Section 7.
OTHER INFORMATION
Except as set forth in this Offer to Purchase, neither Purchaser nor Furon
nor, to the best knowledge of Purchaser and Furon, any of the persons listed in
Schedule I hereto, or any associate or majority-owned-subsidiary of such
persons, beneficially owns or has a right to acquire any equity security of the
Company, and neither Purchaser nor Furon nor, to the best knowledge of Purchaser
and Furon, any of the other entities or persons referred to above, or any of the
respective directors, executive officers or subsidiaries of any of the
foregoing, has effected any transaction in any equity security of the Company
during the past 60 days.
Except as provided in the Merger Agreement and as otherwise set forth in
this Offer to Purchase, neither Purchaser nor Furon nor, to the best knowledge
of Purchaser and Furon, any of the persons listed in Schedule I hereto, has any
contract, arrangement, understanding or relationship with any other person with
respect to any securities of the Company, including, without limitation, any
contract, arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
neither Purchaser nor Furon nor, to the best knowledge of Purchaser and Furon,
any of the persons listed in Schedule I hereto, has had, since July 1, 1993, any
business relationships or transactions with the Company, or any of its executive
officers, directors or affiliates that would require reporting under applicable
rules of the Commission.
Except as set forth in this Offer to Purchase, there have been, since July
1, 1993, no contacts, negotiations or transactions between either Purchaser or
Furon or any subsidiary thereof, or, to the best knowledge of Purchaser and
Furon, between any of the persons listed in Schedule I hereto, on the one hand,
and the Company or its executive officers, directors or affiliates, on the other
hand, concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors, or a sale or other transfer of
a material amount of assets.
9. FINANCING OF THE OFFER AND THE MERGER
The Offer is not subject to any financing condition. The total amount of
funds required by Purchaser to consummate the Offer and the Merger and to pay
related fees and expenses is estimated to be approximately $159 million and is
expected to be obtained pursuant to borrowings under the Credit Agreement
described below.
Under a Credit Agreement, dated as of November 12, 1996 (the "Credit
Agreement"), by and among Furon, the lenders party thereto (the "Lenders") and
The Bank of New York ("BNY"), as Swing Line Lender and as Administrative Agent,
Furon may borrow up to an aggregate principal amount not to exceed $200,000,000
(the "Facility") (such amount subject to increase to $250,000,000 in aggregate
principal amount upon request of Furon and the agreement of lenders to provide
such additional amounts).
Amounts borrowed under the Credit Agreement will mature November 12, 2001
and may be prepaid by Furon at any time in whole, or from time to time in part.
Borrowings under the Credit Agreement will bear interest, at Furon's option, at
a rate per annum equal to either: (i) the greater of (a) BNY's prime commercial
lending rate as publicly announced to be in effect from time to time and (b)
1/2% plus the federal funds rate (as
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<PAGE> 15
published by the Federal Reserve Bank of New York); or (ii) LIBOR (adjusted for
reserves) plus an applicable margin determined on the basis of Furon's leverage
ratio for interest periods of 1, 2, 3 or 6 months or (iii) with respect to swing
line loans a rate negotiated between BNY and Furon. Any amounts not paid when
due bear interest at the rate otherwise applicable plus two percent.
The Credit Agreement provides for the payment of a commitment fee of a
certain rate per annum based on Furon's leverage ratio on the average daily
unused amount of the Facility, payable to BNY as Administrative Agent, for the
pro rata account of the Lenders, quarterly in arrears and on maturity or
termination. The Credit Agreement also contains representations and warranties,
covenants, conditions to borrowing and events of default customary for a
facility of this type.
The repayment of amounts borrowed pursuant to the Credit Agreement is
expected to be made through the application of general corporate funds
(including funds generated by the operations of the Company), new medium and
long-term borrowings by Furon or Furon's subsidiaries or any of the foregoing,
and through the use of financial instruments available in international markets.
Furon's management may propose to its board of directors that a part of the of
the Credit Agreement be refinanced through the issuance of new shares of Furon
capital stock or unsecured debt.
The foregoing description of the Credit Agreement is qualified in its
entirety by reference to the text thereof, a copy of which has been filed as an
exhibit to the Schedule 14D-1 and which may be obtained in the manner described
in Section 7 (except that it will not be available at the regional offices of
the Commission).
10. BACKGROUND OF THE OFFER, CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT;
RELATED AGREEMENTS
BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
On February 8, 1996, J. Michael Hagan, Chairman of Furon's Board, had a
conversation with Bradley P. Gould, the Company's Chief Executive Officer, at a
Medical Device and Manufacturing Show in Anaheim, California. They discussed the
potential benefits of utilizing Furon's materials technology in the Company's
product development. They did not discuss the possibility of an acquisition or
merger transaction involving the companies. Mr. Hagan followed up with a
February 12 letter to Mr. Gould suggesting a meeting of Furon's Vice President
of Technology, William Herbert, and its healthcare consultant, Dominick Arena,
with the Company's technology and marketing leaders.
On March 14, Mr. Arena met with Mr. Gould at the Company's headquarters in
Hilliard, Ohio. During this meeting, Mr. Arena raised the possibility of a more
significant relationship than a technology business partnership. Mr. Arena and
Mr. Gould met again on April 2 at the Company's headquarters. At this meeting,
Mr. Arena specifically indicated Furon's desire to acquire the Company.
On April 16, Mr. Hagan and Mr. C. Craig Waldbillig, the Company's Chairman
of the Board, discussed by telephone the possibility of combining Furon and the
Company. Later that day, Mr. Hagan wrote to Mr. Waldbillig describing the
benefits of combining the two companies.
On May 9, Mr. Hagan and Mr. Arena met with Mr. Gould and Mr. Waldbillig at
the Company's headquarters. They discussed a business combination and Mr.
Waldbillig indicated he would raise the matter with the Company's Board.
On May 16, Mr. Gould telephoned Mr. Hagan to inform him that the Company's
Board had decided to defer acquisition discussions for a six-month period to
allow the Company to pursue its turnaround program.
On June 10, Mr. Hagan sent a letter to Mr. Gould to express Furon's
continuing interest and, in July, telephoned Mr. Gould to inquire as to the
Company's status.
On August 29, Mr. Arena met with Mr. Gould at the Company's headquarters to
discuss Furon's continuing interest in acquiring the Company. Mr. Gould advised
Mr. Arena that Furon might be contacted shortly by the Company's financial
advisor, Smith Barney Inc. ("Smith Barney"), even though the Company's
self-imposed six-month moratorium on entertaining acquisition discussions had
not run.
13
<PAGE> 16
A representative of Smith Barney contacted Mr. Hagan during the week of
September 10 to inquire as to Furon's interest in the Company. On September 17,
Furon executed a confidentiality agreement with the Company. On September 19, a
representative of Smith Barney informed Mr. Hagan that the Company had received
an unsolicited offer, had decided to provide Furon and other interested parties
with the same information regarding the Company as had been provided to the
unidentified bidder, and had requested that Furon and such other parties submit
written proposals for the Board's consideration. Mr. Hagan was further informed
that Furon should bid at least $20 per share to receive serious consideration.
Furon did not engage in negotiations relating to price at that time.
On September 24, Mr. Hagan sent a letter setting forth Furon's preliminary
proposal. On October 1, a representative of Smith Barney informed Mr. Hagan that
the Company had received several proposals within the same price range and that
the Company would make Mr. Gould and Michael Barilla, the Company's Chief
Financial Officer, available to respond to questions concerning the Company. The
Smith Barney representative further informed Mr. Hagan that Furon should make a
bid with a specific price proposal. Over the next several days, an agenda for a
due diligence session with Mr. Gould and Mr. Barilla was scheduled and Furon
received a copy of the Company's financial budget for 1997.
On October 8, Mr. Arena, Allan Ruchman, from Dean Witter Reynolds Inc., and
other Furon representatives met with Mr. Gould and Mr. Barilla in Columbus, Ohio
to conduct due diligence. During the next several weeks, representatives of the
Company responded to certain inquiries Furon made regarding the Company's
business. In mid-October, a form of merger agreement prepared by the Company's
legal counsel was furnished to Furon. On October 25, 1996, Furon submitted a
formal offer to the Company, together with a mark-up of the Company's form of
merger agreement. On October 26, Furon responded to requests to clarify its
offer and that evening was informed that the Company's Board of Directors had
decided to pursue Furon's offer.
From October 29 through November 9, Furon's representatives travelled to
the Company's offices and facilities in Ohio, Georgia, the United Kingdom and
Europe to conduct due diligence. In addition, during this same period, Furon's
and the Company's representatives had numerous telephone conferences and
correspondence to negotiate the terms of a definitive agreement. On Monday,
November 11, Furon's Board of Directors met to consider and approve the Merger
Agreement. On Tuesday, November 12, the Company's Board of Directors met to
consider and approve the Merger Agreement. Furon and the Company executed the
Merger Agreement on Tuesday, November 12 and issued a joint press release the
morning of Wednesday, November 13. On Friday, November 15, Purchaser commenced a
tender offer to purchase all of the Shares.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which is
filed as an exhibit to the Schedule 14D-1 filed by Purchaser and Furon with the
Commission in connection with the Offer. Such summary is qualified in its
entirety by reference to the Merger Agreement.
The Offer. Pursuant to the Merger Agreement, at the earliest practicable
date, the Company will hold the 831 Meeting of its shareholders for the purpose
of considering a Control Share Acquisition as required by Section 1701.831 of
the ORC. At the 831 Meeting, the Company's Board of Directors will recommend
that its Shareholders approve the Control Share Acquisition.
The Company has represented that its Board of Directors has, among other
things, unanimously (i) approved the Merger Agreement, the Offer and the Merger,
(ii) determined that each of the Offer, the Merger Agreement and the Merger is
fair to and in the best interests of the Company's Shareholders, (iii)
recommended that its Shareholders adopt the Merger Agreement, if a vote is
necessary, and (iv) recommended that its Shareholders tender the Shares. The
Company has agreed to file with the Commission, concurrently with the
commencement of the Offer and mail to the holders of Shares the Schedule 14D-9.
In addition, the Company has agreed to furnish Furon with mailing labels
containing the names and addresses of the record holders of the Shares to assist
the Purchaser in communicating the Offer to the Shareholders.
Conditions to the Offer. Notwithstanding any other term of the Offer or
the Merger Agreement, Furon and Purchaser will not be required to accept for
payment or to pay for any Shares tendered pursuant to the
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<PAGE> 17
Offer, and, in their good faith discretion, may terminate or amend the Offer,
and may postpone the acceptance for payment of Shares pursuant thereto, unless,
(i) there have been validly tendered and not withdrawn prior to the expiration
of the Offer at least 3,729,961, Shares (representing 60% of the outstanding
Shares at November 12, 1996), and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer has expired or been
terminated. Furthermore, notwithstanding any other term of the Offer or the
Merger Agreement, Furon and Purchaser will not be required to accept for payment
or to pay for any Shares not theretofore accepted for payment or paid for, and,
in their good faith discretion, may terminate or amend the Offer and may
postpone the acceptance for payment of Shares pursuant thereto if, at any time
on or after November 12, 1996 and before the acceptance of such Shares for
payment or the payment therefor, any of the following conditions exists:
(a) any statute, rule, regulation or order is proposed, enacted,
entered or deemed applicable to the Offer or the Merger (i) making the
purchase of, or payment for, some or all of the Shares pursuant to the
Offer, or the Merger Agreement illegal, or resulting in a material delay in
the ability of Furon or Purchaser to accept for payment or pay for some or
all of the Shares, or to consummate the Offer or Merger or seeking to
obtain from the Company, Furon or Purchaser any damages or other remedy or
relief that would have a material adverse effect on the Company and its
subsidiaries taken as a whole, (ii) imposing material limitations on the
ability of Furon or Purchaser effectively to acquire or hold or to exercise
full rights of ownership of the Shares acquired by it, including the right
to vote the Shares purchased by it on all matters properly presented to the
shareholders of the Company, (iii) which would require Furon or any direct
or indirect subsidiary of Furon to dispose of or hold separate any of the
Shares or all or any material portion of the assets or business of the
Company and its subsidiaries taken as a whole; or (iv) prohibit or
materially limit the ability of Furon or any direct or indirect subsidiary
of Furon to own, control or operate the Company, or any of its subsidiaries
or all or any material portion of the businesses, operations or assets of
the Company and its subsidiaries taken as a whole; or
(b) any shareholder approval required by Section 1701.831 of the ORC
for a Control Share Acquisition by Furon or Purchaser is not obtained,
unless the Purchaser determines, in its reasonable discretion, that such
Section is invalid or inapplicable to the purchase of Shares pursuant to
the Offer; or
(c) any governmental or regulatory action or proceeding by or before
any court, government or governmental or regulatory authority, domestic or
foreign, shall be threatened, instituted or pending, or any action or
proceeding by any other person, domestic or foreign, is instituted or
pending, which would reasonably be expected to result in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above; or
(d) the Company has not complied in all material respects with its
agreements and covenants in the Merger Agreement, or its representations
and warranties in the Merger Agreement, when made or at and as of any time
thereafter, are untrue or incomplete in any material respect or Furon
becomes aware of any previously undisclosed liability that has a material
adverse effect on the Company and its subsidiaries taken as a whole; or
(e) an offer is publicly proposed to be made or has been made on or
after the date of this Offer to Purchase by another person or by a "group"
of persons as defined in Section 13(d)(3) of the Exchange Act, individually
or in the aggregate, to purchase or exchange for cash or other
consideration 20% or more of the Shares, or 20% or more of the Shares have
been or are proposed to be acquired by another person or by a group of
persons or another person or group of persons enters into a definitive
agreement or an agreement in principle with the Company with respect to a
merger, consolidation or other business combination transaction with, or an
acquisition of a material portion of the assets of, the Company or its
subsidiaries; or
(f) any change (or any development involving a prospective change)
occurs in the business, financial condition or results of operations of the
Company or any of its subsidiaries that has had or is reasonably expected
to have a material adverse effect upon the Company and its subsidiaries as
a whole (including changes in conditions, such as economic or political
developments, applicable to the business
15
<PAGE> 18
of the Company and its subsidiaries as set forth in the Company's strategic
business plan or applicable to the medical device manufacturing and
distributing business currently conducted by the Company); or
(g) there occurs (i) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange or in
the over-the-counter market, (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
(iii) the commencement of a war, armed hostilities or other international
or national calamity directly or indirectly involving the United States,
(iv) any limitation by any governmental authority on, or any other event
which, in the sole judgment of the Purchaser, affects the extension of
credit by banks or other financial institutions, (v) a material adverse
change in the United States exchange rates or a suspension of, or
limitation on, the markets therefor, (vi) a decrease of more than 25% in
the Dow Jones Industrial Average, or (vii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(h) the Merger Agreement is terminated or amended to provide for the
amendment or termination of the Offer;
which, in the good faith discretion of Furon, in any such case regardless of the
circumstances (including any action or omission by the Purchaser) giving rise to
any such conditions, makes it inadvisable to proceed with such acceptance for
payment or payment or makes it advisable to terminate or amend the Offer.
The foregoing conditions are for the sole benefit of Furon and Purchaser
and may be asserted by Furon and Purchaser regardless of the circumstances
giving rise to any such conditions or may be waived by Furon or Purchaser in
whole or in part, at any time and from time to time in their sole discretion.
The failure by Furon or Purchaser at any time to exercise any of the foregoing
rights will not be deemed a waiver of any such right and each right will be
deemed an on-going right which may be asserted at any time and from time to
time. Any determination by Furon or Purchaser concerning any events described in
the above conditions will be final and binding on all parties.
The Merger. Pursuant to the Merger Agreement, Purchaser will be merged
with and into the Company thereby making the Company (the "Surviving
Corporation") a wholly owned subsidiary of Furon (the "Merger"). If 90% or more
of the Shares are tendered, the Merger may be effected by way of a short-form
merger which will not require a vote of the Company's shareholders. If less than
90% of the Shares are tendered, the Merger must be effected by way of a merger
which will require a vote of the Shareholders. Each of the Shares, together with
each associated Right, will be converted into the right to receive the Offer
Price. Any Shareholder who validly exercises appraisal rights under Section
1701.85 of the ORC shall have such rights as are provided therein.
The Company's existing Articles, Regulations and By-laws will serve as such
documents for the Surviving Corporation. The Board of Directors of Purchaser
will be the Surviving Corporation's initial directors. The officers of the
Company will be the Surviving Corporation's initial officers.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto. The
representations and warranties will not survive the Offer.
Conduct of Business Pending the Merger. The Company's covenants are
standard and include, among others, operating in the ordinary course, engaging
in no unusual stock or capital activity and preserving intact its business
organization.
Additional Agreements. Furon covenants not to take any action in violation
of the Merger Agreement that would prohibit Furon from effecting the Merger.
Promptly after expiration of the Offer, the Company will take all action
necessary to convene a shareholders' meeting to vote upon the Merger, if such
meeting is required by the ORC. If such a meeting is required for the
consummation of the Merger, the Company will prepare and file with the
Commission a proxy statement or information statement for such a meeting to vote
upon the Merger.
Stock Options. As soon as practicable, the Company and Furon will take
such actions as are required to provide that at the earlier of the purchase of
Shares pursuant to the Offer and the Effective Time, each holder
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<PAGE> 19
of a then outstanding Stock Option whether or not exercisable or subject to
Shareholder approval will receive from the Company the difference between the
Offer Price and the exercise price of such Stock Option, net of any applicable
tax withholding.
No Solicitation. Except as set forth below, the Company may not, and will
direct each officer, director, employee, representative or agent and subsidiary
not to, directly or indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with or provide any information to any corporation,
partnership, company, person or other entity or group (other than Furon,
Purchaser, or an affiliate or an associate of Furon or Purchaser) concerning an
Acquisition Transaction (as defined below). Notwithstanding the foregoing, the
Company may, directly or indirectly, furnish information and access, in each
case in response to unsolicited requests therefor, to the same extent permitted
to Furon under the Merger Agreement, to any corporation, partnership, company,
person or other entity or group, pursuant to appropriate confidentiality
agreements, and may participate in discussions and negotiate with such
corporation, partnership, person or other entity or group concerning any
proposal or offer from any person relating to any direct or indirect acquisition
of the Company upon a merger, purchase of assets, purchase of or tender offer
for shares of the Company's Common Stock, recapitalization, plan of liquidation
or similar transactions involving the Company or any subsidiary (an "Acquisition
Transaction"), if the Company's Board of Directors determines in its good faith
judgment based on the opinion of the Company's counsel as to its fiduciary
duties that a failure to act would be inconsistent with its fiduciary duties. In
addition, in the event of such determination by the Company's Board of Directors
based upon such opinion of its counsel, the Company may authorize its officers
and other appropriate personnel to cooperate with and be reasonably available to
consult with any such corporation, partnership, company, person or other entity
or group so long as they enter into a confidentiality arrangement substantially
in the form of the confidentiality agreement with Furon, dated September 16,
1996, as amended. The Company must promptly notify Furon if it, on or after the
date hereof, enters into a confidentiality agreement with any third party in
response to any unsolicited request for information and access in connection
with a possible Acquisition Transaction involving the Company and such third
party. Notwithstanding receipt of any proposal relating to any other Acquisition
Transaction, until termination of the Merger Agreement, the Company will
continue to comply with its obligations under the Merger Agreement.
Neither the Board of Directors of the Company nor any committee thereof may
(i) withdraw or modify, or propose to withdraw or modify, in a manner adverse to
Furon or Purchaser, the approval or recommendation by such Board of Directors or
any such committee of the Control Share Acquisition, the Offer, the Merger
Agreement or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any takeover proposal or (iii) enter into any agreement with respect
to any takeover proposal. For purposes of the Merger Agreement, "takeover
proposal" means any proposal for an Acquisition Transaction (other than pursuant
to the Stock Option plans or the Merger Agreement) and "qualified takeover
proposal" means a proposal to acquire all Shares by merger, tender offer or
otherwise at a purchase price which includes cash consideration in excess of
$24.00 per share, which in the good faith determination of the Board of
Directors is reasonably likely to be fully financed. Notwithstanding the first
sentence of this paragraph, in the event the Board of Directors of the Company
receives a Superior Takeover Proposal (as defined below), the Board of Directors
may (subject to the limitations described in this section) withdraw or modify
its approval or recommendation of the Control Share Acquisition, the Offer, the
Merger Agreement or the Merger, approve or recommend any such Superior Takeover
Proposal, enter into a definitive agreement with respect to any such Superior
Takeover Proposal or terminate the Merger Agreement in each case at any time if
Furon has not increased the Offer Price to an amount at least equal to the
consideration offered in any such Superior Takeover Proposal after five business
days following Furon's receipt of written notice (a "Notice of Superior Takeover
Proposal") advising Furon that the Board of Directors has received a Superior
Takeover Proposal. The Company may take any of the foregoing actions pursuant to
the preceding sentence only if Purchaser has not accepted for payment the Shares
pursuant to the Offer ("Permitted Superior Takeover Actions"). Nothing contained
herein prohibits the Company from taking and disclosing to its Shareholders a
position contemplated by Rule 14e-2(a) following Furon's receipt of a Notice of
Superior Takeover Proposal provided that the Company does not withdraw or modify
its position with respect to the Offer or Merger or approve or recommend a
takeover proposal. For purposes of the Merger Agreement, a "Superior Takeover
Proposal" means a qualified takeover proposal having terms which the Board of
Directors of the Company determines in
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its good faith judgment (based, in part, on advice of a financial advisor of
nationally recognized reputation) to be more favorable to the Company's
Shareholders than the Offer and the Merger.
Directors' Pensions. Upon Furon's acceptance for payment of Shares
pursuant to the Offer, the Company will pay to each of its non-employee
directors, in full satisfaction of such director's rights under the Company's
Non-Employee Directors Retirement Plan, an amount equal to the retirement
benefit earned by such director under such Plan. The aggregate amount of such
payments is approximately $126,000.
Expenses. Except as provided below, all fees and expenses incurred in
connection with the Offer, the Merger, the Merger Agreement and the transactions
contemplated thereby will be paid by the party incurring such fees or expenses,
whether or not the Offer or the Merger is consummated. The Company must promptly
(in no event later than five business days) pay to Furon a break-up fee equal to
$7,965,074:
(i) at the time of termination if the Merger Agreement is terminated
because (a) the Company enters into a definitive agreement relating to any
Acquisition Transaction as described above or (b) takes a Permitted
Superior Takeover Action; or
(ii) at the time an Acquisition Transaction is consummated if any
person or group (as defined in Section 13(d)(3) of the Exchange Act) (other
than Purchaser, Furon or any of its or their affiliates) becomes the
beneficial owner (as defined in Rule 13d-3 of the Exchange Act) of at least
20% of any class or series of the Company's capital stock (including the
Shares) after November 12, 1996 and prior to its termination (except if the
Merger Agreement is terminated by Furon because the Company provided
information to a third party as described above) and within one year after
the acquisition of such beneficial ownership the Company consummates such
Acquisition Transaction with one or more such persons; or
(iii) at the time an Acquisition Transaction is consummated if any one
or more persons makes, directly or indirectly, any proposal respecting such
Acquisition Transaction to the Company or the Shareholders after the date
of the Merger Agreement and prior to its termination (except if the Merger
Agreement is terminated by Furon because the Company provided information
to a third party as described above) and the Company and within one year of
the making of the acquisition proposal, the Company consummates such
Acquisition Transaction with any such person.
Officers' and Directors' Insurance; Indemnification. Furon will cause the
Surviving Corporation to (i) purchase and maintain a directors' and officers'
insurance and indemnification policy substantially equivalent to the Company's
current policy for all of the Company's current officers and directors for six
years after the Effective Time or for such lesser period as can be purchased for
a premium not exceeding 200% of the last annual premium paid by the Company for
such insurance, (ii) assume the indemnification agreements currently in effect
between the Company and each of its directors and certain executive officers;
and (iii) maintain in effect the current provisions of the Articles relating to
the rights to indemnification for acts and omissions occurring prior to the
Effective Time. Furon will indemnify each officer and director of the Company
who surrenders Stock Options for cancellation pursuant to the Merger Agreement
against any cost of defense arising from claims made against such officer or
director under Section 16(b) of the Exchange Act alleging liability to the
Company thereunder as a result of the transactions contemplated by the Merger
Agreement. Furon will not, and will cause the Surviving Corporation not to,
bring any action alleging liability to the Company under Section 16(b) of the
Exchange Act as a result of the Merger Agreement's treatment of the Stock
Options against any of the Company's officers and directors who surrender Stock
Options for cancellation pursuant to the Merger Agreement.
Employee Benefits. Furon and the Company agree that (i) the Company's
employees immediately prior to the Effective Time will be employed by the
Surviving Corporation after the Effective Time, except that with respect to
employees with employment agreements, Furon will not be obligated to continue
employing such employees for any length of time; (ii) the Company's employees
will be entitled to the same benefits currently provided to them under the
Company's existing benefit plans including its existing severance practices for
a period of six months from the date of any purchase pursuant to the Offer; and
(iii) thereafter,
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<PAGE> 21
the Company's employees will be eligible to participate in Furon's retirement
plans on terms similar to the benefits provided to Furon's similarly situated
employees, with credit granted for purposes of eligibility and vesting for prior
service with the Company.
Antitrust Law. The Company, Furon and Purchaser will make all reasonably
required filings and submissions under the HSR Act.
Directors. Once Purchaser owns at least 3,729,961 Shares (representing 60%
of the outstanding Shares at November 12, 1996), it will be entitled to request
the resignations of up to five of the Company's nine directors and will be
entitled to designate new directors to fill the resulting vacancies.
Employment Agreements. Furon shall cause the Surviving Corporation to
assume and continue to be bound by (a) the employment agreements, as amended,
between the Company and each of Bradley P. Gould and Michael J. Barilla and (b)
the executive employment agreements approved by the Board of Directors of the
Company on November 12, 1996, and to be effective upon purchase of Shares by
Purchaser pursuant to the Offer, between the Company and each of Georg W.
Landsberg, Terry L. Sanborn, Kevin L. Barnett, Alan M. Fermier, Clint R. Lawson,
David G. Musgrove, Nigel S. Perry, Alan Upton and Julie A. Reichert.
Company Option Agreement. The Company has granted to Furon an irrevocable
option to purchase up to 753,198 Shares (together with any Rights), which is
exercisable upon a Purchase Event at an exercise price equal to the Offer Price.
See the description of the Company Option Agreement below.
Director and Officer Agreements. Each of the Company's directors and
officers has entered into an agreement pursuant to which each such person will
tender his Shares to the Purchaser pursuant to the Offer or cause the Shares to
be sold to the Company promptly following the purchase of Shares by the
Purchaser pursuant to the Offer (but is not required to sell earlier than
January 2, 1997). The Company shall purchase for an amount equal to the Offer
Price, all of the Shares tendered to the Company pursuant to such agreement.
Each director and officer also has granted to Purchaser an option with respect
to their outstanding Shares which is exercisable upon a Purchase Event (as
defined below) at an exercise price equal to the Offer Price. See the
description of Director and Officer Agreements below.
Conditions to Obligation of Each Party to Effect the Merger. Conditions to
the obligations of each party to effect the Merger include, (i) the approval and
adoption of the Merger Agreement and the Merger by the Company's shareholders if
required by the ORC; (ii) the expiration or termination of the applicable HSR
Act waiting period; and (iii) the absence of the issuance of a temporary
restraining order, preliminary injunction or permanent injunction or other order
preventing the consummation of the Merger.
Additional Condition to Obligations of the Company. The obligation of the
Company to effect the Merger is also subject to the condition that each of Furon
and Purchaser shall in all material respects have performed their obligations
under the Merger Agreement.
Additional Conditions to Obligations of Furon and Purchaser. Conditions to
the obligations of Furon and Purchaser to effect the Merger include (i) the
Company's performance in all material respects of its obligations under the
Merger Agreement; (ii) Furon's or Purchaser's purchase of Shares pursuant to the
Offer and (iii) the surrender or cancellation of all of the Stock Options.
Further, unless Purchaser owns 90% or more of the Shares, Furon and Purchaser
will not be obligated to effect the Merger if, among other reasons, there is any
change (or any development involving a prospective change) in the business,
financial condition or results of operations of the Company or any of its
subsidiaries that has had or is reasonably expected to have a material adverse
effect upon the Company and its subsidiaries taken as a whole (including changes
in conditions, such as economic or political developments, applicable to the
business of the Company and its subsidiaries as set forth in the Company's
strategic business plan or applicable to the medical device manufacturing and
distributing business currently conducted by the Company).
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Termination, Amendment and Waiver. The Merger Agreement may be terminated
at any time prior to the Effective Time, whether prior to or after approval by
the Shareholders:
(i) by mutual consent of the Board of Directors of each of Furon,
Purchaser and the Company;
(ii) by either the directors of Purchaser or by the Company (by action
of its continuing directors only, following the purchase of shares pursuant
to the Offer) if:
(a) (x) as a result of the failure, occurrence or existence of any
of the conditions to the Offer (1) Purchaser has failed to commence the
Offer within 15 days following November 12, 1996; or (2) the Offer has
terminated or expired in accordance with its terms without Purchaser
having accepted for payment any Shares pursuant to the Offer; or (y)
Purchaser has not accepted for payment any Shares pursuant to the Offer
by 75 days from November 12, 1996 (subject to certain extensions); or
(b) any governmental entity issues a final order, decree or ruling
or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for, the
Shares pursuant to the Offer or the Merger; or
(c) the Merger is not consummated by March 31, 1997.
(iii) by the directors of Purchaser if (a) no Shares have been
purchased pursuant to the Offer by December 31, 1996 or (b) Furon has
properly terminated the Offer in accordance with its terms;
(iv) by the directors of Purchaser if there has been any material
breach of a material obligation of the Company and the default is not
remedied within five days after receipt of written notice of such breach;
(v) by the directors of the Company in connection with entering into
any definitive agreement relating to any Acquisition Transaction;
(vi) by the directors of Purchaser if the Company's Board of Directors
has (i) exercised its rights to take a Permitted Superior Takeover Action
or (ii) provided any information to a third party in response to any
unsolicited request in connection with a possible Acquisition Transaction;
provided, however, that Purchaser may not terminate the Merger Agreement
if, as a result of the Company's receipt of a takeover proposal from a
third party, the Company, as required by applicable law, takes and
discloses to the Shareholders a position contemplated by Rule 14e-2(a)(2)
or (3) promulgated under the Exchange Act with respect to such proposal or
the transactions contemplated thereby and if within five business days of
taking and disclosing to the Shareholders the aforementioned position the
Company publicly reconfirms its recommendation of the Merger Agreement and
the transactions contemplated thereby; or
(vii) by the directors of the Company, if there has been any material
breach of a material obligation of Furon or Purchaser under the Merger
Agreement and such default is not remedied within five days after receipt
of written notice of such breach.
COMPANY OPTION AGREEMENT
The following is a summary of the Company Option Agreement, dated as of
November 12, 1996, by and between the Company and Furon (the "Company Option
Agreement"), a copy of which is filed as an exhibit to the Schedule 14D-1 filed
by Purchaser and Furon with the Commission in connection with the Offer. This
summary is qualified in its entirety by reference to the Company Option
Agreement.
Grant of Option. Pursuant to the terms and conditions of the Company
Option Agreement, the Company granted to Furon an irrevocable option (the
"Company Option") to purchase up to 753,198 shares (the "Option Shares") of the
Company's Common Stock, $.01 par value, together with any associated Rights, at
a purchase price equal to $23.50 per share.
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<PAGE> 23
Exercise of Option. Furon may exercise the Company Option, in whole or in
part, at any time and from time to time following the occurrence of a Purchase
Event and prior to termination of the Company Option. A "Purchase Event" means
any of the following events:
(a) any person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Furon or any subsidiary of Furon) becomes 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 the Company's capital stock
(including the Company's Common Stock);
(b) any one or more persons (other than Furon or any subsidiary of
Furon) commences or files a registration statement under the Securities Act
of 1933, as amended, with respect to, a tender offer or exchange offer to
purchase any shares of the Company's Common Stock such that, upon
consummation of such offer, such person would own or control 20% or more of
the Company's then outstanding Common Stock and the Company has redeemed
its rights under the Rights Agreement or such Rights Agreement has been
declared invalid or unenforceable by a court of competent jurisdiction;
(c) the Company's Board of Directors receives a Superior Takeover
Proposal and the Board of Directors or any committee thereof enters into a
definitive agreement with respect to a Superior Takeover Proposal;
(d) the Merger Agreement is terminated by the Company in connection
with entering into any definitive agreement relating to any Acquisition
Transaction; or
(e) the Merger Agreement is terminated by the directors of the
Purchaser if the Company's Board of Directors has exercised its right to
take a Permitted Superior Takeover Action.
If a Purchase Event has occurred, Furon has the right upon notice (the "Put
Notice") to the Company to cause the Company to pay to Furon in consideration
for the cancellation of the Company Option a cash amount equal to the difference
between the Offer Price and the average per share closing price of shares of the
Company's Common Stock on the NASDAQ National Market for the period of five
trading days ending on the trading day immediately prior to the Put Notice,
multiplied by the number of shares as to which the Company Option remains
exercisable. Furon is also entitled to certain registration rights upon the
exercise of the Company Option.
Termination. The Company Option Agreement terminates 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 Furon to the Company of a Put Notice or (iv) termination of
the Merger Agreement under certain circumstances.
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DIRECTOR AND OFFICER AGREEMENTS
Purchaser and Furon have entered into agreements (the "Director and Officer
Agreements") with each of the directors and officers of the Company with respect
to an aggregate of 526,104 Shares owned by them, together with Stock Options to
purchase an aggregate of 971,501 shares of the Company's Common Stock. The
following is a summary of the material terms contained in each of the Director
and Officer Agreements, a form of which is filed as an exhibit to the Schedule
14D-1 filed by Purchaser and Furon with the Commission in connection with the
Offer. This summary is qualified in its entirety by reference to such form of
the Director and Officer Agreement.
Tender of Shares. Pursuant to the Director and Officer Agreements, each
director and officer has agreed to tender and not withdraw all Shares owned by
him or her or to cause such Shares to be sold to the Company promptly after the
consummation of the Offer (but is not required to do so before January 2, 1997).
Furon and Purchaser have been advised and expect that the directors and officers
will sell their Shares to the Company after the consummation of the Offer and
therefore will not tender their Shares in the Offer. Each director and officer
also has agreed to tender all of his or her Stock Options to the Purchaser or
the Company as provided in the Merger Agreement. The Director and Officer
Agreement with Mr. C. Craig Waldbillig, the Chairman of the Board of the
Company, provides that any Option Shares acquired by Mr. Waldbillig within two
years prior to November 12, 1996 will be tendered by him to the Purchaser (or
the Company if such tender would not otherwise violate the Articles) at the
Effective Time.
Restrictions on Transfer; No Solicitation. The Director and Officer
Agreements also prohibit, among other things, and subject to certain exceptions,
certain transfers of the Shares and Stocks Options owned by the director or
officer and the solicitation of an acquisition proposal from a third party.
Option. Each director or officer has granted to Purchaser an exclusive and
irrevocable option to purchase all, but not less than all, of such director's or
officer's Shares at an exercise price equal to the Offer Price. The Option may
be exercised from and after the occurrence of a Purchase Event.
Additional Payment Under Certain Circumstances. If the Purchaser disposes
of any of the Shares acquired upon exercise of the Option (other than in the
Merger or the Offer), then the Purchaser must pay to the director or officer the
amount, if any, by which the aggregate net proceeds received by the Purchaser
exceeds the aggregate price paid by the Purchaser to the director or officer. If
the Purchaser has not sold or disposed of all such Shares by November 11, 1997,
then the fair market value of the remaining shares will be determined and the
Purchaser will pay the amount, if any, by which such fair value exceeds
Purchaser's purchase price.
Termination. The Director and Officer Agreements will terminate upon the
occurrence of events similar to those provided in the Company Option Agreement
(other than the Put Notice).
11. PURPOSE OF THE OFFER AND THE MERGER; PLANS FOR THE COMPANY; OTHER MATTERS
PURPOSE OF THE OFFER AND THE MERGER
The purpose of the Offer and the Merger is to enable Purchaser to acquire,
in one or more transactions, control of, and the entire equity interest in, the
Company. The Offer is intended to increase the likelihood that the Merger will
be completed promptly.
PLANS FOR THE COMPANY
Furon and Purchaser expect that if Shares are accepted and purchased in the
Offer, Purchaser will be merged with and into the Company, which will become
Furon's wholly owned subsidiary.
It is expected that initially following the Merger the business and
operations of the Company will, except as set forth in this Offer to Purchase,
be continued by the Company substantially as they are currently being conducted.
Furon will continue to evaluate the business and operations of the Company
during the pendency of the Offer and after the consummation of the Offer and the
Merger, and will take such actions as are deemed appropriate under the
circumstances then existing. Furon intends to seek additional information about
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<PAGE> 25
the Company during this period. Thereafter, Furon intends to review such
information as part of a comprehensive review of the Company's business,
operations, capitalization and management with a view to optimizing exploitation
of the Company's potential in conjunction with Furon's operations.
OTHER MATTERS
Shareholder Approval. Pursuant to the terms of the Company's Articles, the
Merger Agreement must be adopted by the affirmative vote of the holders of a
majority of the outstanding Shares. The Board of Directors has unanimously
approved and adopted the Merger Agreement and the transactions contemplated
thereby, and, unless the Merger is consummated pursuant to the short-form merger
provisions under the ORC as described below, the only remaining required
corporate action of the Company is the adoption of the Merger Agreement by the
affirmative vote of the holders of a majority of the issued and outstanding
Shares. Accordingly, if the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to cause the adoption of the Merger Agreement without
the affirmative vote of any other Shareholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of the Shareholders as soon as practicable after
the consummation of the Offer for the purpose of considering and taking action
on the Merger Agreement, if such action is required by the ORC.
Board Representation. If Purchaser purchases Shares pursuant to the Offer,
the Merger Agreement provides that once Purchaser owns at least 60% of the
Company's Shares, it will be entitled to request the resignations of up to five
of the Company's nine directors and will be entitled to designate new directors
to fill the resulting vacancies. See Section 10. Furon expects that such
representation, if exercised, would permit Furon to exert influence over the
Company's conduct of its business and operations.
Short Form Merger. Under the ORC, if Purchaser acquires, pursuant to the
Offer or otherwise, at least 90% of the Shares, Purchaser will be able to effect
the Merger without a vote of the Shareholders. If, however, Purchaser does not
acquire at least 90% of the Shares pursuant to the Offer or otherwise and a vote
of the Shareholders is required under the ORC, a significantly longer period of
time would be required to effect the Merger.
Going Private Transactions. Rule 13e-3 under the Exchange Act is
applicable to certain "going-private" transactions. The Purchaser does not
believe that Rule 13e-3 will be applicable to the Merger unless, among other
things, the Merger is completed more than one year after termination of the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information regarding the Company and certain information regarding
the fairness of the Merger and the consideration offered to minority
shareholders be filed with the Commission and disclosed to minority shareholders
prior to consummation of the Merger.
Ohio Business Combination Law. The Ohio Business Combination Law prohibits
certain business combinations and other transactions (each, a "Chapter 1704
Transaction"), such as the Merger, between an issuing public corporation (such
as the Company) and any "Interested Shareholder" (defined generally as any
person that, directly or indirectly, is entitled to exercise or direct the
exercise of 10% or more of the outstanding voting power of a corporation in the
election of directors) for a period of three years after the date the person
becomes an Interested Shareholder. After such three-year period, a Chapter 1704
Transaction between an issuing public corporation and such Interested
Shareholder is prohibited unless either certain "fair price" provisions are
complied with or the Chapter 1704 Transaction is approved by certain
supermajority shareholder votes. The Ohio Business Combination Law restrictions
do not apply to a Chapter 1704 Transaction with an Interested Shareholder if
either the acquisition of the corporation's shares that would cause the
Interested Shareholder to become an Interested Shareholder, or the Chapter 1704
Transaction, is approved by a resolution of the board of directors of the
corporation adopted prior to the date on which the Interested Shareholder became
an Interested Shareholder. The Company's Board of Directors has taken
appropriate action so that the Ohio Business Combination Law is not applicable
to the acquisition of Shares pursuant to the Offer or the Merger. See Section
15.
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12. DIVIDENDS AND DISTRIBUTIONS
The Company has agreed in the Merger Agreement that it will not issue or
sell any Shares prior to the Effective Time other than Shares issuable upon
exercise of the Stock Options. The Company has also agreed in the Merger
Agreement not to declare or pay any dividends prior to the consummation of the
Merger.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ QUOTATION;
EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of Shares that might otherwise trade publicly and the number
of Shareholders and could adversely affect the liquidity and market value of the
remaining Shares held by the public; if such purchase of Shares satisfies the
Minimum Condition, it will adversely affect the liquidity and may therefore
adversely affect the market value of the remaining Shares held by the public.
NASDAQ Quotation. Depending upon the number, aggregate market value and
per share price of any Shares not purchased pursuant to the Offer, the Shares
may no longer meet the standards of the NASD for continued inclusion in the
NASDAQ National Market, which require that an issuer have at least 200,000
publicly held shares, held by at least 400 shareholders (or 300 shareholders of
round lots), with a market value of at least $1,000,000, and have net tangible
assets of at least $1,000,000, $2,000,000 or $4,000,000, depending on
profitability levels during the issuer's four most recent fiscal years. If these
standards are not met, the Shares might nevertheless continue to be included in
the NASD's NASDAQ Stock Market (the "NASDAQ Stock Market") with quotations
published in the NASDAQ "additional list" or in one of the "local lists," but if
the number of Shareholders were to fall below 300, or if the number of publicly
held Shares were to fall below 100,000 or there were not at least two registered
and active market makers for the Shares, the NASD's rules provide that the
Shares would no longer be "qualified" for NASDAQ Stock Market reporting and the
NASDAQ Stock Market would cease to provide any quotations. Shares held directly
or indirectly by an officer or director of the Company, or by any beneficial
owner of more than 10 percent of the Shares, ordinarily will not be considered
as being publicly held for such purpose. The Company has advised Purchaser that
as of the close of business on November 12, 1996, there were 6,216,601 Shares
outstanding. If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in the NASDAQ National Market or in any other tier of the NASDAQ Stock
Market and the Shares are no longer included in the NASDAQ National Market or in
any other tier of the NASDAQ Stock Market, as the case may be, the market for
the Shares could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD
for continued inclusion in any tier of the NASDAQ Stock Market, it is possible
that the Shares would continue to trade in the over-the-counter market and that
price quotations would be reported by other sources. The extent of the public
market for the Shares and availability of such quotations would, however, depend
upon the number of Shareholders remaining at such time, the interest in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration under the Exchange Act, as described below, and
other factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its Shareholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with Shareholders' meetings and the related
requirement of furnishing an annual report to Shareholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or Rule 144A under the Securities Act of 1933,
as amended, may be impaired or eliminated. Purchaser intends to seek to cause
the Company to apply for termination of registration of the Shares under
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the Exchange Act as soon after the completion of the Offer as the requirements
for such termination are met. The Rights are registered under the Exchange Act,
but are attached to the Shares and are not currently separately transferable. If
registration of the Shares is not terminated prior to the Merger, then the
Shares will be delisted from the NASDAQ National Market and registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Margin Regulations. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers.
14. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement, Furon
and Purchaser will not be required to accept for payment or to pay for any
Shares tendered pursuant to the Offer, and, in their good faith discretion, may
terminate or amend the Offer, and may postpone the acceptance for payment of
Shares pursuant thereto, unless, (i) there have been validly tendered and not
withdrawn prior to the expiration of the Offer at least 3,729,961, Shares
(representing 60% of the Shares at November 12, 1996), and (ii) any waiting
period under the HSR Act applicable to the purchase of Shares pursuant to the
Offer has expired or been terminated. Furthermore, notwithstanding any other
terms of the Offer or the Merger Agreement, Furon and Purchaser will not be
required to accept for payment or to pay for any Shares not theretofore accepted
for payment or paid for, and, in their good faith discretion, may terminate or
amend the Offer and may postpone the acceptance for payment of Shares pursuant
thereto if, at any time on or after November 12, 1996 and before the acceptance
of such Shares for payment or the payment therefor, any of the following
conditions exists:
(a) any statute, rule, regulation or order is proposed, enacted,
entered or deemed applicable to the Offer or the Merger (i) making the
purchase of, or payment for, some or all of the Shares pursuant to the
Offer, or the Merger Agreement illegal, or resulting in a material delay in
the ability of Furon or Purchaser to accept for payment or pay for some or
all of the Shares, or to consummate the Offer or Merger or seeking to
obtain from the Company, Furon or Purchaser any damages or other remedy or
relief that would have a material adverse effect on the Company and its
subsidiaries taken as a whole, (ii) imposing material limitations on the
ability of Furon or Purchaser effectively to acquire or hold or to exercise
full rights of ownership of the Shares acquired by it, including the right
to vote the Shares purchased by it on all matters properly presented to the
Shareholders of the Company, (iii) which would require Furon or any direct
or indirect subsidiary of Furon to dispose of or hold separate any of the
Shares or all or any material portion of the assets or business of the
Company and its subsidiaries taken as a whole; or (iv) prohibit or
materially limit the ability of Furon or any direct or indirect subsidiary
of Furon to own, control or operate the Company, or any of its subsidiaries
or all or any material portion of the businesses, operations or assets of
the Company and its subsidiaries taken as a whole; or
(b) any shareholder approval required by Section 1701.831 of the ORC
for a Control Share Acquisition by Furon or Purchaser is not obtained,
unless the Purchaser determines, in its reasonable discretion, that such
Section is invalid or inapplicable to the purchase of Shares pursuant to
the Offer; or
(c) any governmental or regulatory action or proceeding by or before
any court, government or governmental or regulatory authority, domestic or
foreign, shall be threatened, instituted or pending, or any action or
proceeding by any other person, domestic or foreign, is instituted or
pending, which would reasonably be expected to result in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above; or
(d) the Company has not complied in all material respects with its
agreements and covenants in the Merger Agreement, or its representations
and warranties in the Merger Agreement, when made or at and as of any time
thereafter, are untrue or incomplete in any material respect or Furon
becomes aware of any
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previously undisclosed liability that has a material adverse effect on the
Company and its subsidiaries taken as a whole; or
(e) an offer is publicly proposed to be made or has been made on or
after the date of this Offer to Purchase by another person or by a "group"
of persons as defined in Section 13(d)(3) of the Exchange Act, individually
or in the aggregate, to purchase or exchange for cash or other
consideration 20% or more of the Shares, or 20% or more of the Shares have
been or are proposed to be acquired by another person or by a group of
persons or another person or group of persons enters into a definitive
agreement or an agreement in principle with the Company with respect to a
merger, consolidation or other business combination transaction with, or an
acquisition of a material portion of the assets of, the Company or its
subsidiaries; or
(f) any change (or any development involving a prospective change)
occurs in the business, financial condition or results of operations of the
Company or any of its subsidiaries that has had or is reasonably expected
to have a material adverse effect upon the Company and its subsidiaries as
a whole (including changes in conditions, such as economic or political
developments, applicable to the business of the Company and its
subsidiaries as set forth in the Company's strategic business plan or
applicable to the medical device manufacturing and distributing business
currently conducted by the Company); or
(g) there occurs (i) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange or in
the over-the-counter market, (ii) the declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States,
(iii) the commencement of a war, armed hostilities or other international
or national calamity directly or indirectly involving the United States,
(iv) any limitation by any governmental authority on, or any other event
which, in the sole judgment of Purchaser, affects the extension of credit
by banks or other financial institutions, (v) a material adverse change in
the United States exchange rates or a suspension of, or limitation on, the
markets therefor, (vi) a decrease of more than 25% in the Dow Jones
Industrial Average, or (vii) in the case of any of the foregoing existing
at the time of the commencement of the Offer, a material acceleration or
worsening thereof; or
(h) the Merger Agreement is terminated or amended to provide for the
amendment or termination of the Offer;
which, in the good faith discretion of Furon, in any such case regardless of the
circumstances (including any action or omission by the Purchaser) giving rise to
any such conditions, makes it inadvisable to proceed with such acceptance for
payment or payment or makes it advisable to terminate or amend the Offer.
The foregoing conditions are for the sole benefit of Furon and Purchaser
and may be asserted by Furon and Purchaser regardless of the circumstances
giving rise to any such conditions or may be waived by Furon or Purchaser in
whole or in part, at any time and from time to time in their sole discretion.
The failure by Furon or Purchaser at any time to exercise any of the foregoing
rights will not be deemed a waiver of any such right and each right will be
deemed an on-going right which may be asserted at any time and from time to
time. Any determination by Furon or Purchaser concerning any events described in
the above conditions will be final and binding on all parties.
15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS
General. Except as otherwise disclosed herein, based on a review of
publicly available filings by the Company with the Commission and the review of
certain information furnished by the Company to Furon and discussions by
representatives of Furon with representatives of the Company during Furon's
investigation of the Company (see Section 10), neither Purchaser nor Furon is
aware of (i) any license or regulatory permit that appears to be material to the
business of the Company and its subsidiaries, taken as a whole, that might be
adversely affected by the acquisition of Shares by Purchaser pursuant to the
Offer or the Merger or (ii) except as set forth below, any approval or other
action by any governmental, administrative or regulatory agency or authority,
domestic or foreign that would be required for the acquisition or ownership of
Shares by Purchaser as contemplated herein. Should any such approval or other
action be required, Purchaser currently
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contemplates that such approval or action would be sought. While Purchaser does
not currently intend to delay the acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or action, if needed, would be obtained or
would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, Purchaser or Furon or that
certain parts of the businesses of the Company, Purchaser or Furon might not
have to be disposed of in the event that such approvals were not obtained or any
other actions were not taken. Purchaser's obligation under the Offer to accept
for payment and pay for Shares is subject to certain conditions, including
conditions relating to the legal matters discussed in this Section 15. See
Section 14.
Antitrust Compliance. Under the HSR Act, and the rules and regulations
that have been promulgated thereunder by the Federal Trade Commission (the
"FTC"), certain acquisition transactions may not be consummated until certain
information and documentary material have been furnished for review by the FTC
and the Antitrust Division of the Department of Justice (the "Antitrust
Division") and certain waiting period requirements have been satisfied. The
acquisition of Shares pursuant to the Offer and the Merger are subject to such
requirements. Furon intends to file its Pre-merger Notification and Report Form
with the FTC and the Antitrust Division with respect to the Merger on November
18, 1996.
Under the provisions of the HSR Act applicable to the Merger, the purchase
of Shares pursuant to the Offer and the Merger may not be consummated until the
expiration of a 15-calendar day waiting period following the filing by Furon,
unless such waiting period is earlier terminated by the FTC or the Antitrust
Division. Accordingly, the waiting period with respect to the Offer is expected
to expire at 11:59 P.M., New York City time, on December 3, 1996, unless Furon
and the Company receive a request for additional information or documentary
material. If, within such 15-day waiting period, either the Antitrust Division
or the FTC requests additional information or material from Furon and the
Company concerning the Offer, the waiting period would expire at 11:59 P.M., New
York City time, on the twentieth calendar day after the date of substantial
compliance with such request by Furon and the Company. Thereafter, the waiting
period could be extended only by court order or with the consent of Furon and
the Company. The additional 20-calendar day waiting period may be terminated
sooner by the FTC or the Antitrust Division.
Purchaser will not accept for payment Shares tendered pursuant to the Offer
unless and until the waiting period requirements imposed by the HSR Act with
respect to the Offer and the Merger have been satisfied. See Section 14.
Pursuant to the HSR Act, Furon and the Company intends to request early
termination of the waiting period applicable to the Merger. There can be no
assurance, however, that such waiting period will be terminated early.
The Antitrust Division, the FTC, state and foreign antitrust enforcement
agencies frequently scrutinize the legality under the antitrust laws of
transactions such as Purchaser's acquisition of Shares pursuant to the Offer and
the Merger. At any time before or after Purchaser's acquisition of Shares, any
such agency could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture
of Shares acquired by Purchaser or divestiture of substantial assets of
Purchaser, Furon and/or the Company. Private parties may also bring legal action
under the antitrust laws under certain circumstances.
Based upon an examination of publicly available information relating to the
businesses in which Furon, the Company and their respective subsidiaries are
engaged, Furon and Purchaser believe that the acquisition of Shares pursuant to
the Offer and the Merger would not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer on antitrust grounds
will not be made or, if such a challenge is made, what the result will be. See
Section 14.
Ohio Business Combination Law. Chapter 1704 of the ORC (the "Ohio Business
Combination Law") provides that an issuing public corporation shall not engage
in certain business combinations (including mergers) and other transactions
(each, a "Chapter 1704 Transaction") with an "Interested Shareholder"
(generally, a person entitled to exercise or direct the exercise of 10% or more
of the outstanding voting power of the issuing public corporation in the
election of directors) for a period of three years following the date such
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person became an Interested Shareholder. After such three year period, a Chapter
1704 Transaction between an issuing public corporation and such Interested
Shareholder is prohibited unless either certain "fair price" provisions are
complied with or the Chapter 1704 Transaction is approved by certain
supermajority shareholder votes. The Ohio Business Combination Law does not
apply if prior to the date such person became an Interested Shareholder, the
board of directors of the issuing public corporation approved either the Chapter
1704 Transaction or the purchase of shares which resulted in the Interested
Shareholder becoming an Interested Shareholder. The Company's Board of Directors
has taken appropriate action so that the Ohio Business Combination Law is not
applicable to the acquisition of Shares pursuant to the Offer or the Merger.
Ohio Control Share Acquisition Law. The Ohio Control Share Acquisition Law
provides that unless the articles of incorporation or the regulations of an
issuing public corporation provide otherwise, any control share acquisition of
such corporation shall be made only with the prior authorization of the
shareholders. An "issuing public corporation" is a corporation organized for
profit under the laws of Ohio, with 50 or more shareholders, that has its
principal place of business, principal executive offices or substantial assets
in Ohio, and as to which there is no close corporation agreement in existence.
The Company is an issuing public corporation, as so defined.
A "control share acquisition" means the acquisition, directly or
indirectly, by any person of shares of an issuing public corporation that, when
added to all other shares of the issuing public corporation in respect of which
such person may exercise or direct the exercise of voting power, would entitle
such person, immediately after such acquisition, directly or indirectly, alone
or with others, to exercise or direct the exercise of the voting power of such
issuing public corporation in the election of directors within any of the
following ranges: (a) one-fifth or more but less than one-third of such voting
power; (b) one-third or more but less than a majority of such voting power; or
(c) a majority or more of such voting power. An acquisition of shares of an
issuing public corporation, however, does not constitute a control share
acquisition if, among other things, the acquisition is consummated pursuant to a
merger or consolidation adopted, or a combination or majority share acquisition
authorized, by shareholder vote in compliance with Sections 1701.78 or 1701.83
of the ORC if the issuing public corporation is the surviving or new corporation
in the merger or consolidation or is the acquiring corporation in the
combination or majority share acquisition.
Any person who proposes to make a control share acquisition must deliver an
"acquiring person statement" to the issuing public corporation, which statement
shall include: (a) the identity of the acquiring person, (b) a statement that
the acquiring person statement is being delivered pursuant to the Ohio Control
Share Acquisition Law, (c) the number of shares of the issuing public
corporation owned, directly or indirectly, by such acquiring person, (d) the
range of voting power in the election of directors under which the proposed
acquisition would, if consummated, fall (i.e., in excess of 20%, 33 1/3% or
50%), (e) a description of the terms of the proposed acquisition and (f)
representations of the acquiring person that the acquisition will not be
contrary to the law and that such acquiring person has the financial capacity to
make the proposed acquisition (including the facts upon which such
representations are based).
Within ten days of receipt of a qualifying acquiring person statement, the
directors of the issuing public corporation must call a special shareholders
meeting to vote on the proposed acquisition. Unless the acquiring person
otherwise agrees, the meeting must be held within 50 days of receipt of such
statement. The special meeting cannot be held later than certain other special
meetings of shareholders called by the corporation in compliance with the ORC
after receipt of a qualifying acquiring person statement.
The issuing public corporation is required to send a notice of the special
meeting as promptly as reasonably practicable to all shareholders of record as
of the record date set for such meeting, together with a copy of the acquiring
person statement and a statement of the issuing public corporation, authorized
by its directors, of its position or recommendation, or that it is taking no
position, with respect to the proposed control share acquisition.
The acquiring person may make the proposed control share acquisition only
if (a) at a meeting at which a quorum is present, a majority of the voting power
entitled to vote in the election of directors represented (in person or by
proxy) at such meeting and a majority of such voting power excluding "Interested
Shares," authorize the control share acquisition and (b) such acquisition is
consummated, in accordance with the terms
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so authorized, within 360 days following such authorization. For a quorum to be
present, both a majority of the voting power in the election of directors and a
majority of the portion of such voting power excluding the voting power
excluding "Interested Shares" must be represented at the meeting in person or by
proxy. "Interested Shares" means shares as to which any of the following may
exercise or direct the exercise of voting power in the election of directors:
(i) an acquiring person, (ii) an officer elected or appointed by the directors
of the issuing public corporation or (iii) any employee of the issuing public
corporation who is also a director of such corporation. "Interested Shares" also
means shares of the issuing public corporation acquired, directly or indirectly,
by any person or group for valuable consideration during the period beginning
with the date of the first public disclosure of a proposed control share
acquisition of the issuing public corporation and ending on the date of any
special meeting of the corporation's shareholders held thereafter pursuant to
the Ohio Control Share Acquisition Law for the purpose of voting on a control
share acquisition proposed by an acquiring person, if either of the following
apply: (i) the aggregate consideration paid or otherwise given by the person who
acquired the shares, and any other persons acting in concert with it, for all
shares exceeds $250,000, or (ii) the number of shares acquired by the person who
acquired the shares, and any other persons acting in concert with it, exceeds
1/2 of 1% of the outstanding shares of the corporation entitled to vote in the
election of directors.
Dissenters' rights are not available to shareholders of an issuing public
corporation in connection with the authorization of a control share acquisition.
Without waiving their right to challenge the validity of all or any part of
the Ohio Control Share Acquisition Law or to seek an amendment to the Company's
Articles or Regulations opting out of the Ohio Control Share Acquisition Law,
and reserving their right to take actions inconsistent with the applicability of
the Ohio Control Share Acquisition Law, Furon and Purchaser delivered to the
Company on November 12, 1996 an acquiring person statement relating to the
Offer. Pursuant to the Ohio Control Share Acquisition Law, the Company's Board
of Directors has, with the concurrence of Furon and Purchaser, set Friday,
December 13, 1996, as the date of the 831 Meeting.
Ohio Take-Over Act. Sections 1707.041, 1707.042, 1707.23 and 1707.26 of
the ORC (collectively, the "Ohio Take-Over Act") regulate tender offers. The
Ohio Take-Over Act applies to the purchase of or offer to purchase any equity
security of a subject company from a resident of Ohio if, after the purchase,
the offeror would directly or indirectly be the beneficial owner of more than
10% of any class of issued and outstanding equity securities of the Company (a
"control bid"). A subject company includes an issuer, such as the Company, that
either has its principal place of business or principal executive offices
located in Ohio or owns or controls assets located in Ohio that have a fair
market value of at least one million dollars, and that has more than one
thousand beneficial or record equity security holders who reside in Ohio. A
subject company, however, need not be incorporated in Ohio. Notwithstanding the
definition of subject company contained in the Ohio Take-Over Act, the Ohio
Division of Securities (the "Ohio Division"), by rule or an adjudicatory
proceeding, may make a determination that an issuer does not constitute a
subject company if appropriate review of control bids involving the issuer is to
be made by any regulatory authority of another jurisdiction. The Ohio Division
has not adopted any rules under this provision.
The Ohio Take-Over Act prohibits an offeror from making a control bid for
securities of a subject company pursuant to a tender offer until the offeror has
filed specified information with the Ohio Division. In addition, the offeror is
required to deliver a copy of such information to the subject company not later
than the offeror's filing with the Ohio Division and to send or deliver such
information and the material terms of the proposed offer to all offerees in Ohio
as soon as practicable after the offeror's filing with the Ohio Division.
Within three calendar days of such filing, the Ohio Division may by order
summarily suspend the continuation of the control bid if it determines that the
offeror has not provided all of the specified information or that the control
bid materials provided to offerees do not provide full disclosure of all
material information concerning the control bid. If the Ohio Division summarily
suspends a control bid, it must schedule and hold a hearing within ten calendar
days of the date on which the suspension is imposed and must make its
determination within three calendar days after the hearing has been completed
but no later than sixteen calendar days after the date on which the suspension
is imposed. The Ohio Division may maintain its suspension of the continuation of
the control bid if, based upon the hearing, it determines that all of the
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information required to be provided by the Ohio Take-Over Act has not been
provided by the offeror, that the control bid materials provided to offerees do
not provide full disclosure of all material information concerning the control
bid, or that the control bid is in material violation of any provision of the
Ohio securities laws. If, after the hearing, the Ohio Division maintains the
suspension, the offeror has the right to correct the disclosure and other
deficiencies identified by the Ohio Division and to reinstitute the control bid
by filing new or amended information pursuant to the Ohio Take-Over Act.
Purchaser and Furon are not aware of any judicial decision with respect to
the constitutionality of the Ohio Take-Over Act, as amended in April 1990.
Without prejudice to their position that such Act is unconstitutional or
conceding its applicability to the Offer, Furon and Purchaser are filing with
the Ohio Division the information specified by the Ohio Take-Over Act, together
with a copy of the Schedule 14D-1 relating to the Offer.
Other State Laws. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in Edgar v. MITE
Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the Indiana Control Share Acquisition Act was
constitutional. Such Act, by its terms, is applicable only to corporations that
have a substantial number of shareholders in Indiana and are incorporated there.
Subsequently, a number of Federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer and has not complied with any such laws. Should
any person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
and the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be required
to file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any Shares tendered pursuant to the Offer, or be delayed in
continuing or consummating the Offer. In such case, the Purchaser may not be
obligated to accept for payment any Shares tendered. See Section 14.
Foreign Laws. Purchaser understands that the Company and its subsidiaries
own property and conduct business in a number of foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer, the laws of certain of these foreign countries may require the filing of
information with, or obtaining the approval of, governmental authorities
therein. After commencement of the Offer, Purchaser will seek further
information regarding the applicability of any such laws and currently intends
to take such action as they may require. However, Purchaser has no present
intention to delay the acceptance for payment of or the payment for Shares
pursuant to the Offer pending the completion of such filings and the obtaining
of such approvals. Such governments might attempt to impose additional
conditions on the Company's operations conducted in such countries as a result
of the acquisition of Shares pursuant to the Offer. There can be no assurance
that Purchaser will be able to cause the Company or its subsidiaries to satisfy
or comply with such laws or that compliance or noncompliance will not have
adverse consequences for the Company or any subsidiary after the purchase of
Shares pursuant to the Offer. If any action is taken prior to completion of the
Offer by any such government which, directly or indirectly (i) prohibits, or
imposes any material limitations, other than limitations generally affecting the
industries in which the Company and Furon conduct their business, on, Furon's or
Purchaser's ownership or operation (or that of any of their respective
subsidiaries or affiliates) of all or a material portion of the Company's
businesses or assets as a whole, or compels Furon or the Purchaser or their
respective subsidiaries and affiliates to dispose of or hold separate any
material portion of the business or assets of the Company or Furon in each case
taken as a whole, (ii) prohibits, or makes illegal, the acceptance for payment,
payment for or purchase of Shares or the consummation of the Offer; the
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Merger or the other transactions contemplated by the Merger Agreement, (iii)
results in a material delay in the ability of Purchaser or renders Purchaser
unable, to accept for payment, pay for or purchase a material amount of the
Shares, or (iv) imposes material limitations on the ability of Purchaser or
Furon effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote the Shares purchased by it on all matters
properly presented to the Company's Shareholders, Purchaser will not be
obligated to accept for payment or pay for any Shares which are tendered. See
Section 14.
16. FEES AND EXPENSES
Except as set forth below, neither Furon nor Purchaser will pay any fees or
commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer.
Dean Witter Reynolds Inc. is acting as financial adviser and is acting as
the Dealer Manager in connection with the Offer and is acting as financial
advisor to Furon in connection with its effort to acquire the Company. Furon has
agreed to pay the Dealer Manager 3/4ths of one percent of the transaction value
of the acquisition of the Company in consideration for its services. Furon will
pay the Dealer Manager a retainer of $250,000 which will be credited against
such fee. Furon has also agreed to reimburse the Dealer Manager from time to
time, upon request, for certain out-of-pocket expenses incurred by the Dealer
Manager in connection with its activities as the Dealer Manager. The Dealer
Manager has rendered various investment banking and other advisory services to
Furon and its affiliates in the past and is expected to continue to render such
services, for which it has received and will continue to receive customary
compensation from Furon and its affiliates.
Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent in connection with the Offer. The Information Agent may contact
Shareholders by mail, telephone, facsimile, telegraph and personal interviews
and may request brokers, dealers and other nominee Shareholders to forward
materials relating to the Offer to beneficial owners of Shares. The Information
Agent will receive reasonable and customary compensation for its services, will
be reimbursed for certain reasonable out-of-pocket expenses and will be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the federal securities laws.
In addition, The Bank of New York has been retained as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in its
role as Depositary. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable out-of-
pocket expenses and will be indemnified against certain liabilities and expenses
in connection therewith, including certain liabilities under the federal
securities laws. Brokers, dealers, commercial banks and trust companies will be
reimbursed by Purchaser for customary mailing and handling expenses incurred by
them in forwarding offering material to their customers.
17. MISCELLANEOUS
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid
statute. If Purchaser becomes aware of any valid statute prohibiting the making
of the Offer or the acceptance of the Shares pursuant thereto, Purchaser will
make a good faith effort to comply with such statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with any such statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the Shareholders in such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of Purchaser by the Dealer Manager or one or more
registered brokers or dealers which are licensed under the laws of such
jurisdiction.
Furon and Purchaser have filed with the Commission a Tender Offer Statement
on Schedule 14D-1 (the "Schedule 14D-1"), together with exhibits, pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected at, and copies
may be obtained from, the same places and in the same manner as set forth in
Section 7 above (except that they will not be available at the regional offices
of the Commission). The Company's recommendation with respect to the Offer and
other information required to be disseminated to Shareholders pursuant to Rule
14d-9 is contained
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in the Company's Schedule 14D-9, which is being mailed to Shareholders herewith
and which has been filed by the Company with the Commission.
No person has been authorized to give any information or make any
representation on behalf of Furon or Purchaser not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
FCY, INC.
November 15, 1996
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF FURON AND PURCHASER
1. Directors and Executive Officers of Furon. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of each director and executive officer of Furon. The
principal address of Furon and the current business address for each individual
listed below is 29982 Ivy Glenn Drive, Laguna Niguel, California. Each of the
individuals listed below is a citizen of the United States.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------ ------------------------------------------------------------
<S> <C>
J. Michael Hagan.............. Chairman of the Board of Furon. Mr. Hagan has been employed
by Furon since 1967, serving as a Director and President
from 1980 to June 1991 when he was appointed Chairman of the
Board. Mr. Hagan is also a Director of Freedom
Communications, Inc. and Ameron, Inc.
Terrence A. Noonan............ President and Director of Furon. Mr. Noonan has been the
President of Furon since June 1991 and was elected as a
Director in August 1991. From 1989 to June 1991, he served
as an Executive Vice President in charge of various
operations. He joined Furon in 1987 as a Vice President,
having previously served since 1980 as a Group General
Manager of Eaton Corporation, a diversified manufacturing
company.
Monty A. Houdeshell........... Vice President, Chief Financial Officer and Treasurer of
Furon. Mr. Houdeshell joined Furon in 1988 as Vice
President, Chief Financial Officer and Treasurer and also
served as Secretary from 1988 to February 1991. From 1985 to
1988, Mr. Houdeshell served as Vice President, Chief
Financial Officer and Treasurer of Oak Industries, Inc., a
manufacturer of electronic components and controls.
Peter Churm................... Director of Furon. Mr. Churm has rendered management
consulting services to Furon since his retirement on
February 1, 1992. Mr. Churm was named Chairman Emeritus of
the Board of Directors in June 1991, having previously
served as Chairman of the Board of Furon from 1980 to June
1991 and as President from 1963 to 1980. Mr. Churm also is a
director of CKE Restaurants, Inc. and Diedrich Coffee, Inc.
H. David Bright............... Director of Furon. Mr. Bright currently is retired. Prior to
his retirement in 1989, he served as Chairman of the Board
of National Education Corporation, a training and
educational publishing company, from 1988 to 1989, and as
President and Chief Executive Officer from 1981 through
1988. Mr. Bright is a member of the Board of Trustees of
Marquette University.
Cochrane Chase................ Director of Furon. Mr. Chase currently is retired. Prior to
his retirement in 1988, he served for 21 years as Chairman
of the Board of Cochrane Chase, Livingston & Company, Inc.,
an advertising, marketing and public relations firm.
</TABLE>
I-1
<PAGE> 36
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------ ------------------------------------------------------------
<S> <C>
William D. Cvengros........... Director of Furon. Mr. Cvengros has served as President,
Chief Executive Officer and a director of PIMCO Advisors
L.P., a publicly traded investment management firm, since
November 1994. Previously, he served since 1990 as the Vice
Chairman and Chief Investment Officer of Pacific Mutual Life
Insurance Company, a life insurance and investment company.
He joined Pacific Mutual in 1972, and was elected Vice
President in 1982, Senior Vice President in 1985 and
Executive Vice President in 1986.
Bruce E. Ranck................ Director of Furon. Mr. Ranck has served as a director since
March 1990 and the President and Chief Executive Officer
since October 1995 of Browning-Ferris Industries, Inc., a
waste services provider. He had served as President and
Chief Operating Officer since November 1991 and Executive
Vice President (Solid Waste Operations -- North America)
from October 1989 to November 1991, having previously served
as a Regional Vice President for more than five years. Mr.
Ranck also is a director or trustee of several educational
and charitable organizations.
William C. Shepherd........... Director of Furon. Mr. Shepherd has been the Chairman of the
Board since January 1996 and the President and Chief
Executive Officer since January 1992 of Allergan, Inc., a
global provider of specialty therapeutic products. Mr.
Shepherd joined Allergan in 1966, has served as a director
since 1984 and was President and Chief Operating Officer
from 1984 to 1992. He also is a director of Ligand
Pharmaceuticals Incorporated and Allergan Ligand Retinoid
Therapeutics, Inc., as well as the Orange County Performing
Arts Center, the National Children's Eye Care Foundation and
the Pharmaceutical Partners for Better Health Care.
R. David Threshie............. Director of Furon. Mr. Threshie has served since 1979 as
Publisher and Chief Executive Officer of the Orange County
Register, a division of Freedom Communications, Inc., an
integrated communications company.
</TABLE>
I-2
<PAGE> 37
2. Directors and Executive Officers of Purchaser. Set forth below is the
name, current business address, citizenship and the present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of each director and officer of Purchaser. Each person
identified below has held his position since the formation of Purchaser on
November 8, 1996. The principal address of Purchaser and the current business
address for each individual listed below is 29982 Ivy Glenn Drive, Laguna
Niguel, California. Each of the individuals listed below is a citizen of the
United States.
<TABLE>
<CAPTION>
NAME AND CURRENT BUSINESS PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
ADDRESS MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
- ------------------------------ ------------------------------------------------------------
<S> <C>
Donald D. Bradley............. Director and Secretary of Purchaser. Mr. Bradley joined
Furon in June 1990 as Senior Attorney and Assistant
Secretary and was named Corporate Secretary in February 1991
and General Counsel in February 1992. Previously, he was a
Special Counsel with O'Melveny & Myers LLP, an international
law firm with which he had been associated since 1982.
Monty A. Houdeshell........... President and Treasurer of Purchaser. Mr. Houdeshell joined
Furon in 1988 as Vice President, Chief Financial Officer and
Treasurer and also served as Secretary from 1988 to February
1991. From 1985 to 1988, Mr. Houdeshell served as Vice
President, Chief Financial Officer and Treasurer of Oak
Industries, Inc., a manufacturer of electronic components
and controls.
</TABLE>
I-3
<PAGE> 38
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent by each Shareholder or such Shareholder's
broker, dealer, bank, trust company or other nominee to the Depositary as
follows:
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
Tender & Exchange (For Eligible Institutions Only) Tender & Exchange
Department (212) 815-6213 Department
P.O. Box 11248 101 Barclay Street
Church Street Station For Information Telephone: Receive and Deliver Window
New York, New York 10286-1248 (800) 507-9357 New York, New York 10286
</TABLE>
Questions and requests for assistance or for additional copies of the Offer
to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be directed to the Information Agent or the Dealer Manager at their respective
telephone numbers and locations listed below. You may also contact your broker,
dealer, bank, trust company or other nominee for assistance concerning the
Offer.
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500
The Dealer Manager for the Offer is:
[LOGO]
Two World Trade Center, 65th Floor
New York, New York 10048
(212) 392-9000
<PAGE> 1
EXHIBIT 99.2
LETTER OF TRANSMITTAL
TO TENDER COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 15, 1996
BY
FCY, INC.
A WHOLLY OWNED SUBSIDIARY OF
FURON COMPANY
(A COMPANY ORGANIZED UNDER THE LAWS OF CALIFORNIA)
- -------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON DECEMBER 16, 1996, UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
TO: THE BANK OF NEW YORK, DEPOSITARY
By Mail:
The Bank of New York
Tender & Exchange Department
P.O. Box 11248
Church Street Station
New York, New York 10286-1248
By Facsimile Transmission:
The Bank of New York
(212) 815-6213
(For Eligible Institutions Only)
Confirm by Telephone:
(800) 507-9357
By Hand or Overnight Courier:
The Bank of New York
Tender & Exchange Department
101 Barclay Street
Receive and Deliver Window
New York, New York 10286
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined below) is utilized, if delivery of Shares is to be made by
book-entry transfer to an account maintained by the Depositary at The Depository
Trust Company or the Philadelphia Depository Trust Company (each a "Book-Entry
Transfer Facility" and, collectively, the "Book-Entry Transfer Facilities")
pursuant to the book-entry transfer procedures set forth in Section 3 of the
Offer to Purchase. Shareholders who deliver certificates evidencing Shares
("Share Certificates") by book-entry transfer are referred to herein as
"Book-Entry Shareholders" and other shareholders are referred to herein as
"Certificate Shareholders." Shareholders whose Share Certificates are not
immediately available or who cannot deliver either the Share Certificates for,
or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase)
with respect to, their Shares and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares in accordance with the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. See Instruction 2.
Delivery of documents to a Book-Entry Transfer Facility in accordance with the
Book-Entry Transfer Facility's procedures does not constitute delivery to the
Depositary.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS)
- ----------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES)
OF REGISTERED OWNER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
SHARE CERTIFICATES (ATTACH ADDITIONAL LIST IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------
TOTAL
NUMBER
OF SHARES
SHARE REPRESENTED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
---------------------------------------------------
TOTAL SHARES
- ----------------------------------------------------------------------------------------------------------
* Need not be completed by Book-Entry Shareholders.
** Unless otherwise indicated, it will be assumed that all Shares described herein are being tendered.
See Instruction 4.
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT
MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
---------------------------------------------------------------------------------------
Check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account No.
-------------------------------------------------------------------------------------------------
Transaction Code No.
------------------------------------------------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s):
-----------------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
---------------------------------------------------------------
Name of Institution that Guaranteed Delivery
----------------------------------------------------------------------
If delivery is by book-entry transfer check box of Book-Entry Transfer Facility:
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Account No.
-------------------------------------------------------------------------------------------------
Transaction Code No.
------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby tenders to FCY, Inc., an Ohio corporation
("Purchaser") and a wholly owned subsidiary of FURON COMPANY, a California
corporation ("Furon"), the above-described common shares, including the
associated common share purchase rights (the "Rights") issued under the Rights
Agreement, dated as of October 12, 1996, between the Company and The Huntington
National Bank as rights agent, as amended (the "Rights Agreement"), par value
$.01 per share (the "Shares"), of Medex, Inc., an Ohio corporation (the
"Company"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated November 15, 1996 (the "Offer to Purchase"), and this Letter
of Transmittal (which, as amended from time to time, together constitute the
"Offer"), receipt of which is hereby acknowledged. The undersigned understands
that Purchaser reserves the right to transfer or assign, in whole at any time,
or in part from time to time, to Furon or one or more of its affiliates, the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby and all dividends, distributions
(including, without limitation, distributions of additional Shares) and rights
declared, paid or distributed in respect of such Shares on or after November 15,
1996 (collectively, "Distributions"), and irrevocably constitutes and appoints
The Bank of New York (the "Depositary"), the true and lawful agent and
attorney-in-fact of the undersigned, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to the full extent of the undersigned's rights with respect to such Shares and
all Distributions, to (i) deliver Share Certificates evidencing such Shares and
all Distributions or transfer ownership of such Shares and all Distributions on
the account books maintained by a Book-Entry Transfer Facility, together, in any
such case, with all accompanying evidences of transfer and authenticity to, or
upon the order of, Purchaser, (ii) present such Shares and all Distributions for
transfer on the Company's books and (iii) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and all
Distributions, all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby and all Distributions and, when the same are accepted for
payment by Purchaser, Purchaser will acquire good title thereto, free and clear
of all liens, restrictions, claims and encumbrances, and the same will not be
subject to any adverse claim. The undersigned will, upon request, execute any
additional documents deemed by the Depositary or Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby and all Distributions. In addition, the undersigned shall remit and
transfer promptly to the Depositary for the account of Purchaser all
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer, and, pending such remittance and transfer
or appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of such Distribution and may withhold the entire purchase
price of the Shares tendered hereby or deduct from such purchase price, the
amount or value of such Distribution as determined by Purchaser in its sole
discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Purchaser and its officers, and
each of them, and any other designees of Purchaser, the attorneys-in-fact and
proxies of the undersigned, each with full power of substitution, to vote at any
annual, special, adjourned or postponed meeting of the Company's shareholders or
otherwise in such manner as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, to execute
any written consent concerning any matter as each such attorney-in-fact and
proxy or his substitute shall in his sole discretion deem proper with respect
to, and to otherwise act as each such attorney-in-fact and proxy or his
substitute shall in his sole discretion deem proper with respect to, the Shares
tendered hereby that have been accepted for payment by Purchaser prior to the
time any such action is taken and with respect to which the undersigned is
entitled to vote (and any and all other Shares and Distributions). This
appointment is effective when, and only to the extent that, Purchaser accepts
for payment such Shares as provided in the Offer to Purchase. This power of
attorney and proxy are irrevocable and are granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Upon such acceptance for payment, all prior powers of attorney, proxies and
consents given by the undersigned with respect to such Shares (and all Shares
and other securities issued in Distributions in respect of such Shares) will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be deemed
effective) by the undersigned.
<PAGE> 5
The undersigned understands that Purchaser's acceptance for payment of
Shares validly tendered pursuant to any of the procedures described in Section 3
of the Offer to Purchase and in the Instructions hereto will constitute a
binding agreement between the undersigned and Purchaser upon the terms and
subject to the conditions of the Offer. Without limiting the foregoing, if the
price to be paid in the Offer is amended in accordance with the Offer, the price
to be paid to the undersigned will be the amended price notwithstanding the fact
that a different price is stated in this Letter of Transmittal.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price for all Shares purchased and/or
return all Share Certificates evidencing Shares not tendered or accepted for
payment in the name(s) of the registered holder(s) appearing under "Description
of Shares Tendered." Similarly, unless otherwise indicated under "Special
Delivery Instructions," please mail the check for the purchase price and/or
return any Share Certificates evidencing Shares not tendered or accepted for
payment (and accompanying documents, as appropriate) to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price and/or
return any Share Certificates evidencing Shares not tendered or accepted for
payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such Share Certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. Unless
otherwise indicated herein under "Special Payment Instructions," please credit
any Shares tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility designated
above. The undersigned recognizes that Purchaser has no obligation pursuant to
the Special Payment Instructions to transfer any Shares from the name of the
registered holder thereof if Purchaser does not accept for payment any of the
Shares so tendered.
<PAGE> 6
[ ] CHECK HERE IF ANY OF THE SHARE CERTIFICATES REPRESENTING SHARES THAT YOU
OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed Share Certificates:
---------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned, or if Shares delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account
maintained at a Book-Entry Transfer Facility other than the account
indicated above.
Issue [ ] check, and/or [ ] Share Certificates to:
Name
-------------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------
---------------------------------------------------------------
(ZIP CODE)
---------------------------------------------------------------
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
[ ] Credit unpurchased Shares delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
[ ] The Depository Trust Company
[ ] Philadelphia Depositary Trust Company
---------------------------------------------------------------
(ACCOUNT NUMBER)
---------------------------------------------------------------
---------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned,
or to the undersigned at an address other than that above.
Mail [ ] check, and/or [ ] Share Certificates to:
Name
-------------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------
---------------------------------------------------------------
(ZIP CODE)
---------------------------------------------------------------
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
---------------------------------------------------------------
<PAGE> 7
IMPORTANT
SHAREHOLDERS: SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF SHAREHOLDER(S))
Dated , 1996
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by person(s) authorized to
become registered holder(s) by certificates and documents transmitted herewith.
If signature is by trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, please provide the following information and see
Instruction 5.)
Name(s)
-------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title)
-----------------------------------------------------------
Address
-------------------------------------------------------------------------
(ZIP CODE)
Daytime Area Code and Telephone No.( )
--------------------------------------
Employer Identification or Social Security No.
----------------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
------------------------------------------------------------
Name
----------------------------------------------------------------------------
(PLEASE PRINT)
Title
---------------------------------------------------------------------------
Name of Firm
--------------------------------------------------------------------
Address
-------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone No.( )
----------------------------------------------
Dated:
----------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares
tendered herewith, unless such registered holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(an "Eligible Institution"). In all other cases, all signatures on this Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed
by shareholders either if Share Certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if delivery of Shares is to be made
pursuant to the procedures for book-entry transfer set forth in Section 3 of the
Offer to Purchase. For a stockholder validly to tender Shares pursuant to the
Offer, either (i) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or, in
the case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date and either the Share Certificates evidencing
tendered Shares must be received by the Depositary at one of such addresses or
Shares must be delivered pursuant to the procedures for book-entry transfer set
forth herein (and a Book-Entry Confirmation received by the Depositary), in each
case prior to the Expiration Date, or (ii) the tendering shareholder must comply
with the guaranteed delivery procedures set forth below and in Section 3 of the
Offer to Purchase. If Share Certificates are forwarded to the Depositary in
multiple deliveries, a properly completed Letter of Transmittal must accompany
each such Delivery.
Shareholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such
procedures, (i) such tender must be made by or through an Eligible Institution,
(ii) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, must be received by the
Depositary prior to the Expiration Date, and (iii) the Share Certificates for
all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation
with respect to all such Shares), together with a properly completed and duly
executed Letter of Transmittal or facsimile thereof, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message), and
any other required documents are received by the Depositary within three trading
days after the date of execution of the Notice of Guaranteed Delivery, all as
provided in Section 3 of the Offer to Purchase. A "trading day" is any day on
which the NASDAQ National Market operated by the National Association of
Securities Dealers, Inc. is open for business.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of this Letter of Transmittal and that the
Bidder may enforce such agreement against this participant.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING IN
THE CASE A OF BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering shareholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the Share
Certificate numbers, the number of Shares evidenced by such Share Certificates
and the number of Shares tendered should be listed on a separate schedule
attached hereto.
<PAGE> 9
4. Partial Tenders (Applicable to Certificate Shareholders Only). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." In any such case, new Share Certificate(s)
for the remainder of the Shares that were evidenced by the old Share
Certificate(s) will be sent to the registered holder, unless otherwise provided
in the appropriate box on this Letter of Transmittal, as soon as practicable
after the expiration of the Offer. All Shares represented by Share Certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the Share Certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several Share
Certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of Share
Certificates.
If this Letter of Transmittal or any Share Certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment or Share Certificates for
Shares not tendered or accepted for payment are to be issued to a person other
than the registered owner(s). Signatures on such Share Certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Share Certificates listed, the Share Certificates
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name or names of the registered owner or owners appear on
the Share Certificates. Signatures on such Share Certificates or stock powers
must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price of any Share is to be made to,
or if Share Certificates evidencing Shares not tendered or accepted for payment
are to be registered in the name of, any person(s) other than the registered
holder(s), or if tendered Share Certificates are registered in the name(s) of
any person(s) other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such person(s)) payable on account of the transfer to such person(s) will be
deducted from the purchase price of such Shares unless satisfactory evidence of
the payment of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES EVIDENCING THE
SHARES TENDERED HEREBY.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of, and/or Share Certificates evidencing Shares not accepted for
payment are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such Share Certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any shareholder(s) delivering Shares by
book-entry transfer may request that Shares not accepted for payment be credited
to such account maintained at a Book-Entry Transfer Facility as such
shareholder(s) may designate.
8. 31% Backup Withholding. In order to avoid "backup withholding" of
federal income tax on payments of cash pursuant to the Offer, a shareholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such shareholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify under
penalties of perjury that such TIN is correct and that such shareholder is not
subject to backup withholding. If a shareholder does not provide such
shareholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such
shareholder and payment of cash to such shareholder pursuant to the Offer may be
subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the shareholder upon filing an income tax
return.
<PAGE> 10
The shareholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to resort.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering shareholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the shareholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
shareholder if a TIN is provided to the Depositary within 60 days.
Certain shareholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign shareholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
9. Requests for Assistance or Additional Copies. Questions and requests
for assistance may be directed to the Information Agent or the Dealer Manager at
their respective addresses set forth below. Additional copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and the
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 may be obtained from the Information Agent or from brokers, dealers, or
commercial banks and trusts.
10. Lost, Destroyed or Stolen Certificates. If any Share Certificate has
been lost, destroyed or stolen, the shareholder should promptly notify the
Depositary by checking the box immediately preceding the special payment/special
delivery instructions and indicating the number of Shares lost. The shareholder
will then be instructed as to the steps that must be taken in order to replace
the Share Certificate. This Letter of Transmittal and related documents cannot
be processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER SHARE CERTIFICATES EVIDENCING
TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED
PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE
EXPIRATION DATE, OR THE TENDERING SHAREHOLDER MUST COMPLY WITH THE PROCEDURES
FOR GUARANTEED DELIVERY.
<PAGE> 11
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK, AS DEPOSITARY
- ---------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TAXPAYER
FORM W-9 IDENTIFICATION NUMBER ("TIN") IN THE BOX AT ----------------------------
DEPARTMENT OF THE TREASURY RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
INTERNAL REVENUE SERVICE OR
----------------------------
PAYER'S REQUEST FOR Employer Identification
TAXPAYER IDENTIFICATION Number(s)
NUMBER (TIN)
-----------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of
perjury, I certify that:
(1) the number shown on this form is my correct Part 3 --
Taxpayer Identification Number (or I am waiting for Awaiting TIN
a number to be issued to me) and [ ]
(2) I am not subject to backup withholding because ---------------------
(a) I am exempt from backup withholding or (b) I Part 4 --
have not been notified by the Internal Revenue Exempt TIN
Service (the "IRS") that I am subject to backup [ ]
withholding as a result of failure to report all
interest or dividends or (c) the IRS has notified
me that I am no longer subject to backup
withholding.
-----------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if
you have been notified by the IRS that you are subject to backup withholding
because of under reporting interest or dividends on your tax returns.
However, if after being notified by the IRS that you were subject to backup
withholding you received another notification from the IRS stating that you
are no longer subject to backup withholding, do not cross out such item (2).
If you are exempt from backup withholding, check the box in Part 4 above.
- ---------------------------------------------------------------------------------------------------------
Signature Date , 1996
- ---------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
<PAGE> 12
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the Depositary,
31% of all reportable payments made to me will be withheld, but will be refunded
if I provide a certified taxpayer identification number within 60 days.
- ------------------------------------------------------------
Signature Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
The Information Agent for the Offer is:
[LOGO]
156 Fifth Avenue
New York, NY 10010
Banks and Brokers Call Collect (212) 929-5500
Fax: (212) 929-0308
All Others Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
[LOGO]
Two World Trade Center, 65th Floor
New York, NY 10048
(212) 392-9000
<PAGE> 1
EXHIBIT 99.3
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for common shares, par value $.01 per share,
including the associated common share purchase rights (the "Shares"), of Medex,
Inc., an Ohio corporation (the "Company"), are not immediately available or time
will not permit all required documents to reach The Bank of New York (the
"Depositary") prior to the Expiration Date (as defined in the Offer to Purchase)
or the procedure for book-entry transfer cannot be completed on a timely basis.
This form may be delivered by hand to the Depositary or transmitted by mail,
overnight courier, hand or facsimile transmission to the Depositary and must
include a guarantee by an Eligible Institution (as defined in the Offer to
Purchase). See Section 3 of the Offer to Purchase.
TO: THE BANK OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight
Courier:
The Bank of New York The Bank of New York The Bank of New York
Tender & Exchange Department (212) 815-6213 Tender & Exchange Department
P.O. Box 11248 (For Eligible Institutions Only) 101 Barclay Street
Church Street Station Confirm by Telephone: Receive and Deliver Window
New York, New York 10286-1248 (800) 507-9357 New York, New York 10286
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE TRANSMISSION, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE
A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to FCY, Inc., an Ohio corporation
("Purchaser"), which is a wholly owned subsidiary of Furon Company, a California
corporation ("Furon"), upon the terms and subject to the conditions set forth in
the Purchaser's Offer to Purchase dated November 15, 1996 (the "Offer to
Purchase") and the related Letter of Transmittal, receipt of which is hereby
acknowledged, the number of Shares set forth below, all pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase.
Number of Shares:
---------------------------------------------------------------
Share Certificate Nos. (if available):
------------------------------------------
Check ONE box if Shares will be tendered by book-entry transfer:
[ ] The Depository Trust Company
[ ] Philadelphia Depositary Trust Company
Account Number:
-----------------------------------------------------------------
Name of Tendering Institution:
--------------------------------------------------
Name(s) of Record Holder(s):
----------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Address(es):
--------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone No.:
----------------------------------------------------
Signature (s)
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
- ---------------------------------
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby (i) represents that the tender of
Shares effected hereby complies with Rule 14c-4 under the Securities Exchange
Act of 1934, and (ii) guarantees to deliver to the Depositary either the
certificates representing the Shares tendered hereby, in proper form for
transfer, or a Book Entry Confirmation with respect to such Shares, in any such
case together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the case
of a book entry of Shares, an Agent's Message, and any other required documents,
within three trading days after the date hereof. A trading day is any day on
which the NASDAQ National Market operated by the National Association of
Securities Dealers, Inc. is open for business.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible Institution.
All terms used herein have the meanings set forth in the Offer to Purchase.
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(ZIP CODE)
Area Code and Telephone No.:
- --------------------------------------------------------------------------------
(AUTHORIZED SIGNATURE)
Name:
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Title:
- --------------------------------------------------------------------------------
Dated:
- --------------------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE; CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
EXHIBIT 99.4
DEAN WITTER REYNOLDS INC.
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
AT
$23.50 NET PER SHARE
BY
FCY, INC.
A WHOLLY OWNED SUBSIDIARY OF
FURON COMPANY
(A COMPANY ORGANIZED UNDER THE LAWS OF CALIFORNIA)
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON DECEMBER 16, 1996, UNLESS THE OFFER IS EXTENDED
- --------------------------------------------------------------------------------
NOVEMBER 15, 1996
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by FCY, Inc., an Ohio corporation ("Purchaser"), which
is a wholly owned subsidiary of Furon Company, a California corporation
("Furon"), and by Furon to act as Dealer Manager in connection with Purchaser's
offer to purchase all outstanding common shares, par value $.01 per share (the
"Shares"), of Medex, Inc., an Ohio corporation (the "Company"), including the
associated common share purchase rights (the "Rights") issued under the Rights
Agreement dated as of October 12, 1996, between the Company and The Huntington
National Bank as rights agent, as amended (the "Rights Agreement"), at $23.50
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 15, 1996 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer"). Please furnish
copies of the enclosed materials to those of your clients for whom you hold
Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated November 15, 1996;
2. Letter of Transmittal to be used by the Company's shareholders in
accepting the Offer and tendering Shares;
3. A letter to the Company's shareholders from C. Craig Waldbillig,
Chairman of the Board of Directors of Medex, Inc., together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
5. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or cannot
be delivered to The Bank of New York (the "Depository") by the Expiration Date
or if the procedure for book entry transfer cannot be completed by the
Expiration Date;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES WHICH CONSTITUTES AT LEAST 3,729,961 SHARES REPRESENTING 60% OF THE
OUTSTANDING SHARES AT NOVEMBER 12, 1996 (THE "MINIMUM CONDITION"), (2) THE
EXPIRATION OF ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENT ACT OF 1976 APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE
OFFER AND (3) EITHER THE ACQUISITION OF SHARES PURSUANT TO THE OFFER BEING
AUTHORIZED BY THE SHAREHOLDERS OF THE COMPANY PURSUANT TO THE OHIO CONTROL SHARE
ACQUISITION LAW OR THE PURCHASER BEING SATISFIED, IN ITS REASONABLE DISCRETION,
THAT THE OHIO CONTROL SHARE ACQUISITION LAW IS INVALID OR INAPPLICABLE TO THE
ACQUISITION OF SHARES PURSUANT TO THE OFFER.
We urge you to contact your clients promptly. Please note that the Offer
and withdrawal rights will expire at 12:00 Midnight, New York City time, on
December 16, 1996, unless the Offer is extended.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
either Share Certificates representing the tendered Shares should be delivered
to the Depositary, or Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Neither Purchaser nor Furon will pay any fees or commissions to any broker
or dealer or any other person (other than the Dealer Manager and the Information
Agent as described in the Offer to Purchase) for soliciting tenders of Shares
pursuant to the Offer. You will be reimbursed by Purchaser upon request for
customary mailing and handling expenses incurred by you in forwarding the
enclosed offering materials to your customers. Purchaser will pay or cause to be
paid any share transfer taxes payable on the transfer of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Additional copies of the enclosed material may be obtained by contacting
the Dealer Manager or the Information Agent at their respective addresses and
telephone numbers set forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
DEAN WITTER REYNOLDS INC.
Two World Trade Center, 65th Floor
New York, NY 10048
(212) 392-9000
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE COMPANY, PURCHASER, FURON, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.
<PAGE> 1
EXHIBIT 99.5
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
AT
$23.50 NET PER SHARE
BY
FCY, INC.
A WHOLLY OWNED SUBSIDIARY OF
FURON COMPANY
(A COMPANY ORGANIZED UNDER THE LAWS OF CALIFORNIA)
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON DECEMBER 16, 1996, UNLESS THE OFFER IS EXTENDED
- --------------------------------------------------------------------------------
November 15, 1996
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November 15,
1996 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended from time to time, together constitute the "Offer") relating to the
Offer by FCY, Inc., an Ohio corporation ("Purchaser"), which is a wholly owned
subsidiary of Furon Company, a California corporation ("Furon"), to purchase all
outstanding common shares, par value $.01 per share (the "Shares"), of Medex,
Inc., an Ohio corporation (the "Company"), including the associated common share
purchase rights (the "Rights") issued under the Rights Agreement, dated as of
October 12, 1996, between the Company and The Huntington National Bank as rights
agent, as amended (the "Rights Agreement"), at a price of $23.50 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer.
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date (as defined in the Offer to Purchase), or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Shares according to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $23.50 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions of the Offer.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has approved the Agreement and
Plan of Merger, dated as of November 12, 1996 (the "Merger Agreement"), by and
among Purchaser, Furon and the Company, and the transactions contemplated by the
Merger Agreement, has determined that each of the Offer and the Merger is fair
to and in the best interests of the Company's shareholders and unanimously
recommends that shareholders of the Company accept the Offer and tender their
Shares pursuant to the Offer and approve and adopt the Merger Agreement and the
Merger.
<PAGE> 2
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on December 16, 1996, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer a number
of shares which constitutes at least 3,729,961 Shares, representing 60% of the
outstanding Shares at November 12, 1996 (the "Minimum Condition"), (2) the
expiration of any waiting period under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976 applicable to the purchase of Shares pursuant to the
Offer, and (3) either the acquisition of Shares pursuant to the Offer being
authorized by the shareholders of the Company pursuant to the Ohio Control Share
Acquisition Law or the Purchaser being satisfied, in its sole discretion, that
the Ohio Control Share Acquisition Law is invalid or inapplicable to the
acquisition of Shares pursuant to the Offer. See Section 14.
6. Any stock transfer taxes applicable to a sale of Shares to the Purchaser
pursuant to the Offer will be borne by the Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf prior to the expiration of the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary") of (i) the certificates evidencing such Shares (the "Share
Certificates") or a timely Book-Entry Confirmation (as defined in the Offer to
Purchase) with respect to such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer effected pursuant
to the procedure set forth in Section 3 of the Offer to Purchase, an Agent's
Message (as defined in the Offer to Purchase), and (iii) any other documents
required by the Letter of Transmittal. Accordingly, tendering shareholders may
be paid at different times depending upon when Share Certificates or Book-Entry
Confirmations with respect to Shares are actually received by the Depositary.
Under no circumstances will interest be paid on the purchase price of the Shares
to be paid by Purchaser, regardless of any extension of the Offer or any delay
in making such payment.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. However, Furon may, in its discretion, take such action as it may
deem necessary to make to offer in any jurisdiction and extend the Offer to
holders of Shares in such jurisdictions.
In any jurisdiction where the securities, blue sky or other laws require
the offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of Purchaser by Dean Witter Reynolds Inc., or one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.
<PAGE> 1
EXHIBIT 99.6
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ---------------------------------------------------------
- ---------------------------------------------------------
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ---------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian The ward, minor, or
or committee for a designated incompetent
ward, minor or incompetent person(3)
person
7. a. The usual revocable savings The grantor-
trust account (grantor is trustee(1)
also trustee)
b. So-called trust account that The actual owner(1)
is not a legal or valid trust
under state law
- ---------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate or The legal entity
pension trust (Do not furnish the
identification
number of the
personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization
account
12. Partnership account The partnership
13. Association, club or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State
or local government, school
district or prison) that
receives agricultural program
payments
- ---------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a) of the Code.
- An exempt charitable remainder trust or a nonexempt trust described in
section 4947(a)(1) of the Code.
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852 of the Code).
- Payments described in section 6049(b)(5) of the Code to non-resident aliens.
- Payments on tax-free covenant bonds under section 1451 of the Code.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
EXEMPT PAYEES DESCRIBED ABOVE MUST STILL COMPLETE THE SUBSTITUTE FORM W-9
ENCLOSED HEREWITH TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE
SUBSTITUTE FORM W-9 WITH THE PAYER, REMEMBERING TO CERTIFY YOUR TAXPAYER
IDENTIFICATION NUMBER ON PART III OF THE FORM, WRITE "EXEMPT" ON THE FACE OF THE
FORM AND SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
Payments that are not subject to information reporting are also not subject to
backup withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045,
6049, 6050A and 6050N of the Code and their regulations.
PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of
dividends, interest or other payments to give taxpayer identification numbers to
payers who must report the payment to IRS. The IRS uses the numbers for
identification purposes and to help verify the accuracy of your tax return.
Payers must be given the numbers whether or not recipients are required to file
a tax return. Payers must generally withhold 31% of taxable interest, dividends
and certain other payments to a payee who does not furnish a taxpayer
identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
EXHIBIT 99.7
(BW)(FURON/MEDEX)(FCY)(MDEX) FURON, MEDEX SIGN MERGER PACT IN TRANSACTION VALUED
AT APPROXIMATELY $160 MILLION
BUSINESS EDITORS
LAGUNA NIGUEL, Calif. -- (BUSINESS WIRE) -- Nov. 13, 1996 -- Furon Company
(NYSE: FCY), headquartered in Laguna Niguel, California, and Medex, Inc.
(Nasdaq: MDEX) of Hilliard, Ohio today announced they have signed a definitive
merger agreement under which FCY, Inc., Furon's subsidiary, will commence a
tender offer to acquire all of Medex's outstanding shares for $23.50 per share.
The total transaction is valued at $160 million (including outstanding stock
options). The purchase price represents a premium of about 59% over the average
trading price of the last 30 days. Following consummation of the tender offer,
Furon intends to acquire any remaining Medex shares in a cash merger at the same
price as paid in the tender offer.
The merger agreement and tender offer have been unanimously approved by the
board of directors of each company.
Consummation of the tender offer is subject to customary terms and
conditions, including acceptance by the holders of at least 60% of the shares of
Medex along with certain regulatory approvals and the expiration of the waiting
period under the Hart-Scott-Rodino Act. The tender offer will be made pursuant
to definitive documents to be filed with the Securities and Exchange Commission.
Dean Witter Reynolds Inc. is Dealer Manager for the Offer, and MacKenzie
Partners, Inc. is the Information Agent.
In the event of a termination of the merger agreement due to a superior
takeover proposal or certain other circumstances, Medex would be obligated to
pay Furon a fee of approximately $8 million. Medex has granted Furon an option
to acquire 10 percent of the Medex common stock exercisable at the tender offer
price, upon termination of the merger agreement due to a superior takeover
proposal or certain other circumstances. Management shareholders and directors
of Medex have also granted Furon an option and have agreed to sell their shares
to Medex upon completion of the tender offer.
Medex, founded in 1959, had sales of $99.3 million for its fiscal year
ended June 30, 1996. The company manufactures polymer-based critical care
products and infusion systems for medical and surgical applications. Medex
products are sold in more than 50 countries to hospitals and alternate care
facilities and to original equipment manufacturers serving the health care
industry worldwide.
Furon, a leading international manufacturer of engineered polymer
components serving a number of industries, including health care, had sales of
$345 million for its fiscal year ended February 3, 1996. The company was founded
in 1955.
J. Michael Hagan, Furon's chairman and chief executive officer, said "The
acquisition of Medex represents an important step in the implementation of
Furon's growth strategy by leveraging our materials technology and manufacturing
know how in an industry sector that is non cyclical and provides a balance to
our overall business. In addition to its strong management, sales, marketing,
and manufacturing team, Medex has excellent channels to market directly to
health care providers. From this base, we can accelerate growth with new
products, product line extensions, and market penetration.
Hagan added that Furon has secured financing commitments to complete the
transaction.
Bradley P. Gould, president and chief executive officer of Medex, said
"Joining forces with Furon provides added resources that will permit us to
develop new medical products and expand our market penetration on a global
basis. The transaction signifies a quantum stride in our quest to attain greater
market recognition for our products in the neonatal and pediatric intensive care
and the adult critical care and anesthesia markets."
Furon currently manufactures a line of shunts, catheters, tubing and other
medical products primarily for original equipment manufacturers. Its medical
products comprised approximately three percent of the company's total sales
during fiscal 1996.
<PAGE> 2
Medex designs, manufactures and distributes critical care products and
infusion systems for a wide range of medical and surgical applications. Critical
care products are utilized in intravenous therapies such as fluid and drug
administration, as well as pressure monitoring and cardiac catheterization.
Infusion systems include a range of infusion pumps designed to deliver
prescribed doses of drugs and fluids to patients. With corporate headquarters in
Columbus, the company has domestic operations in Ohio and Georgia. Medex also
operates subsidiaries in the United Kingdom, Germany and France. Medex stock is
traded over-the-counter on the Nasdaq National Market under the MDEX symbol.
Furon is the world's leader in engineered polymer components for the
industrial marketplace. The company serves five key markets: electronics,
processing industries, capital goods, transportation, and health care.
Certain statements contained in this release are forward looking and may
involve risk and uncertainties including, but not limited to, product demand and
market acceptance risks, the effect of economic conditions, the impact of
competitive products and pricing, product development, and other risks disclosed
in the company's Securities and Exchange Commission filings.
CONTACT: Furon Company
Mike Hagan/Monty Houdeshell, 714/831-5350
or
Medex, Inc.
Bradley P. Gould/Michael J. Barilla, 614/529-3803
or
Pondel, Parsons & Wilkinson
Roger Pondel, 310/207-9300
<PAGE> 1
EXHIBIT 99.8
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell shares. The Offer is made solely by the Offer to Purchase dated
November 15, 1996 and the related Letter of Transmittal, and is not being
made to (nor will tenders be accepted from or on behalf of) holders of
Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of
such jurisdiction. In any jurisdiction where securities, blue sky
or other laws require the Offer to be made by a licensed broker
or dealer, the Offer is being made on behalf of the Purchaser
by Dean Witter Reynolds Inc. or one or more registered
brokers or dealers licensed under the laws of such
jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING COMMON SHARES
(INCLUDING THE ASSOCIATED COMMON SHARE PURCHASE RIGHTS)
OF
MEDEX, INC.
AT
$23.50 NET PER SHARE
BY
FCY, INC.
A WHOLLY OWNED SUBSIDIARY OF
FURON COMPANY
FCY, Inc. ("Purchaser"), an Ohio corporation and a wholly owned subsidiary
of Furon Company, a corporation organized under the laws of California
("Parent"), is offering to purchase all outstanding common shares of, par value
$.01 per share (the "Shares"), of Medex, Inc., an Ohio corporation (the
"Company"), at a price of $23.50 per Share, net to the seller in cash (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated November 15, 1996 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which, as amended from time to time, together
constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, DECEMBER 16, 1996, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of November 12, 1996 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company. The Merger Agreement provides, among other things,
for the making of the Offer by the Purchaser, and further provides that,
following the purchase of Shares pursuant to the Offer and promptly after the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger") but not earlier than January 2, 1997. The
Company will continue as the surviving corporation after the Merger. At the
effective time of the Merger, each outstanding Share (except for Shares owned by
Parent or any subsidiary of Parent, Shares held in the treasury of the Company
or any subsidiary thereof and Shares held by shareholders properly exercising
their appraisal rights under the Ohio General Corporation Law) will be converted
into the right to receive $23.50 per Share (or any higher price per Share paid
for Shares pursuant to the Offer), without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER,
THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT,
HAS UNANIMOUSLY DETERMINED THAT EACH OF THE OFFER, THE MERGER AGREEMENT AND THE
MERGER IS FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY
AND UNANIMOUSLY RECOMMENDS THAT SUCH SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST
3,729,961 SHARES (REPRESENTING 60% OF THE OUTSTANDING SHARES AT NOVEMBER 12,
1996). The Offer is also conditioned on other terms and conditions contained in
the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the
Offer to Purchase.
<PAGE> 2
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to The Bank of New York
(the "Depositary") of the Purchaser's acceptance for payment of such Shares.
Upon the terms and subject to the conditions of the Offer, payment for Shares
accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering shareholders for the purpose of receiving payment from the Purchaser
and transmitting payment to validly tendering shareholders. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for (or a timely
Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) with
respect to) such Shares, (ii) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or, in the case of a book-entry transfer, an Agent's Message (as defined in
Section 2 of the Offer to Purchase), and (iii) any other documents required by
the Letter of Transmittal. Under no circumstances will interest be paid on the
purchase price of the Shares to be paid by the Purchaser regardless of any
extension of the Offer or any delay in making such payment.
Except as otherwise provided below or in Section 4 of the Offer to
Purchase, tenders of Shares are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn pursuant to the procedures set forth below and in Section
4 of the Offer to Purchase at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after JANUARY 14, 1997 or at such later time as
may apply if the Offer is extended. The term "Expiration Date" means 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, DECEMBER 16, 1996, unless and until the
Purchaser, subject to the terms of the Merger Agreement, shall have further
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the date and time at which the Offer, as so
extended by the Purchaser, shall expire. The Purchaser expressly reserves the
right, in its sole discretion, at any time and from time to time, to extend the
period during which the Offer is open for any reason, including the
nonsatisfaction of any of the conditions specified in the Offer to Purchase, by
giving oral or written notice of such extension to the Depositary, followed as
promptly as practicable by public announcement no later than 9:00 A.M., New York
City time, on the next business day after the previously scheduled Expiration
Date. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the right of tendering
shareholders to withdraw such shareholder's Shares.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
such notice must specify the name of the person having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the registered
holder of the Shares to be withdrawn, if different from the name of the person
who tendered the Shares. If certificates evidencing Shares (the "Share
Certificates") to be withdrawn have been delivered or otherwise identified to
the Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and, unless such Shares have been tendered for the account of an
Eligible Institution (as defined in Section 3 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility (as defined in Section 2 of the Offer
to Purchase) to be credited with the withdrawn Shares and otherwise comply with
such Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Shares
may not be rescinded, and any Shares properly withdrawn will thereafter be
deemed not validly tendered for any purposes of the Offer. However, withdrawn
Shares may be tendered at any time prior to the Expiration Date by again
following one of the procedures described in Section 3 of the Offer to Purchase.
All questions as to the form and validity (including time of receipt) of notices
of withdrawal will be determined by the Bidder in its sole discretion, whose
determination will be final and binding.
Subject to the applicable rules and regulation of the Securities and
Exchange Commission and the terms of the Merger Agreement, the Bidder expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares whose names appear on the
Company's shareholder list and will be furnished, for subsequent transmittal to
beneficial owners of Shares, to brokers, dealers, commercial banks and trust
companies, and similar persons whose names, or the names of whose nominees,
appear on the shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
<PAGE> 3
Questions and requests for assistance or for copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer documents may be
directed to the Information Agent or the Dealer Manager, as set forth below, and
copies will be furnished at the Purchaser's expense. No fees or commissions will
be payable to brokers, dealers or other persons other than the Dealer Manager
and the Information Agent for soliciting tenders of Shares pursuant to the
Offer.
The Information Agent for the Offer is:
[LOGO]
156 FIFTH AVENUE
NEW YORK, NY 10010
Banks and Brokers Call Collect (212) 929-5500
Fax (212) 929-0308
All Others Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
[LOGO]
TWO WORLD TRADE CENTER, 65TH FLOOR
NEW YORK, NY 10048
(212) 392-9000
November 15, 1996
<PAGE> 1
Exhibit 99.9
================================================================================
CREDIT AGREEMENT
by and among
FURON COMPANY,
THE LENDERS PARTY HERETO,
AND
THE BANK OF NEW YORK,
AS SWING LINE LENDER AND AS ADMINISTRATIVE AGENT
with
BNY CAPITAL MARKETS, INC., as Arranging Agent
----------------
$200,000,000
----------------
Dated as of November 12, 1996
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION ............................................................ 1
1.1. Definitions .................................................................................... 1
1.2. Principles of Construction .................................................................... 24
2. AMOUNT AND TERMS OF LOANS ............................................................................ 25
2.1. Revolving Credit Loans ........................................................................ 25
2.2. Swing Line Loans .............................................................................. 26
2.3. Procedure for Borrowing ....................................................................... 27
2.4. Disbursement of Funds ......................................................................... 28
2.5. Increases in Aggregate Revolving Credit
Commitment Amount ............................................................................. 29
2.6. Termination or Reduction of Revolving Credit
Commitments and Swing Line Commitment ......................................................... 30
2.7. Prepayments ................................................................................... 32
2.8. Use of Proceeds ............................................................................... 33
2.9. Payments ...................................................................................... 34
2.10. Records ...................................................................................... 34
3. INTEREST, FEES, YIELD PROTECTIONS, ETC. .............................................................. 35
3.1. Interest Rate and Payment Dates ............................................................... 35
3.2. Fees .......................................................................................... 37
3.3. Conversions ................................................................................... 37
3.4. Concerning Interest Periods ................................................................... 39
3.5. Indemnification for Loss ...................................................................... 39
3.6. Increased Costs, Illegality, etc. ............................................................. 40
3.7. Taxes ......................................................................................... 42
3.8. Option to Fund ................................................................................ 44
3.9. Substitution of a Lender ...................................................................... 44
4. REPRESENTATIONS AND WARRANTIES ....................................................................... 45
4.1. Subsidiaries; Capitalization .................................................................. 45
4.2. Existence and Power ........................................................................... 45
4.3. Authority and Execution ....................................................................... 45
4.4. Binding Agreement ............................................................................. 46
4.5. Litigation .................................................................................... 46
4.6. Required Consents ............................................................................. 46
4.7. Absence of Defaults; No Conflicting Agreements ................................................ 47
4.8. Compliance with Applicable Laws ............................................................... 47
4.9. Taxes ......................................................................................... 47
4.10. Governmental Regulations ..................................................................... 47
4.11. Federal Reserve Regulations; Use of Loan
Proceeds ..................................................................................... 48
4.12. Plans ........................................................................................ 48
4.13. Financial Statements ......................................................................... 48
4.14. Property ..................................................................................... 49
4.15. Authorizations ............................................................................... 49
4.16. Environmental Matters ........................................................................ 49
4.17. Solvency ..................................................................................... 50
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
4.18. Medex Acquisition Documents .................................................................. 50
4.19. No Misrepresentation ......................................................................... 50
5. CONDITIONS TO EFFECTIVENESS, FIRST LOANS AND LOANS
MADE ON THE MERGER EFFECTIVE DATE .................................................................... 51
5.1. Conditions to Effectiveness ................................................................... 51
5.2. Conditions to First Loans ..................................................................... 52
5.3. Conditions to Loans on the Merger Effective
Date .......................................................................................... 54
6. ADDITIONAL CONDITIONS OF LENDING ..................................................................... 55
6.1. Compliance .................................................................................... 55
6.2. Borrowing Request ............................................................................. 55
7. AFFIRMATIVE COVENANTS ................................................................................ 55
7.1. Financial Statements and Information .......................................................... 55
7.2. Certificates; Other Information ............................................................... 57
7.3. Legal Existence ............................................................................... 59
7.4. Taxes ......................................................................................... 59
7.5. Insurance ..................................................................................... 59
7.6. Performance of Obligations .................................................................... 59
7.7. Condition of Property ......................................................................... 60
7.8. Observance of Legal Requirements .............................................................. 60
7.9. Inspection of Property; Books and Records;
Discussions ................................................................................... 60
7.10. Authorizations ............................................................................... 60
7.11. Financial Covenants .......................................................................... 60
7.12. Merger. ...................................................................................... 61
8. NEGATIVE COVENANTS ................................................................................... 61
8.1. Indebtedness .................................................................................. 61
8.2. Liens ......................................................................................... 62
8.3. Merger, Consolidations and Acquisitions ....................................................... 63
8.4. Dispositions .................................................................................. 64
8.5. Investments, Loans, Etc. ...................................................................... 65
8.6. Restricted Payments ........................................................................... 66
8.7. Business and Name Changes ..................................................................... 67
8.8. ERISA ......................................................................................... 67
8.9. Amendments, Etc. of Certain Agreements ........................................................ 67
8.10. Transactions with Affiliates ................................................................. 67
8.11. Issuance of Capital Stock .................................................................... 67
9. DEFAULT .............................................................................................. 67
9.1. Events of Default ............................................................................. 67
9.2. Contract Remedies ............................................................................. 69
10. THE ADMINISTRATIVE AGENT ............................................................................ 70
10.1. Appointment .................................................................................. 70
10.2. Delegation of Duties ......................................................................... 70
10.3. Exculpatory Provisions ....................................................................... 71
10.4. Reliance by Administrative Agent ............................................................. 71
10.5. Notice of Default ............................................................................ 72
</TABLE>
- 2 -
<PAGE> 4
<TABLE>
<S> <C>
10.6. Non-Reliance on Administrative Agent and Other
Lenders ...................................................................................... 72
10.7. Indemnification .............................................................................. 72
10.8. Administrative Agent in Its Individual
Capacity ..................................................................................... 73
10.9. Successor Administrative Agent ............................................................... 73
11. OTHER PROVISIONS .................................................................................... 74
11.1. Amendments and Waivers ....................................................................... 74
11.2. Notices ...................................................................................... 75
11.3. No Waiver; Cumulative Remedies ............................................................... 76
11.4. Survival of Representations and Warranties
and Certain Obligations ...................................................................... 76
11.5. Expenses ..................................................................................... 76
11.6. Applicable Lending Offices ................................................................... 77
11.7. Assignments and Participations ............................................................... 77
11.8. Indemnity .................................................................................... 79
11.9. Determination of Dollar Equivalent ........................................................... 79
11.10. Limitation of Liability ..................................................................... 80
11.11. Counterparts ................................................................................ 80
11.12. Adjustments; Set-off ........................................................................ 80
11.13. Construction ................................................................................ 81
11.14. Governing Law ............................................................................... 81
11.15. Headings Descriptive ........................................................................ 81
11.16. Severability ................................................................................ 81
11.17. Judgment Currency ........................................................................... 82
11.18. Integration ................................................................................. 82
11.19. Consent to Jurisdiction ..................................................................... 82
11.20. Service of Process .......................................................................... 83
11.21. No Limitation on Service or Suit ............................................................ 83
11.22. WAIVER OF TRIAL BY JURY ..................................................................... 83
11.23. Treatment of Certain Information ............................................................ 83
</TABLE>
- 3 -
<PAGE> 5
EXHIBITS
<TABLE>
<S> <C>
Exhibit A List of Commitments
Exhibit B Form of Borrowing Request
Exhibit C Form of Notice of Conversion
Exhibit D Form of Compliance Certificate
Exhibit E Form of Opinion of O'Melveney & Myers, LLP Counsel to
the Borrower and Acquisition Corp.
Exhibit E-1 Form of Opinion of Donald D. Bradley, General Counsel of
the Borrower and Counsel to Acquisition Corp.
Exhibit E-2 Form of Opinion of Vorys, Sater, Seymour and Pease,
Special Ohio Counsel to the Borrower and Acquisition
Corp.
Exhibit E-3 Form of Supplemental Opinion of Donald D. Bradley,
General Counsel of the Borrower and as Counsel to
Acquisition Corp.
Exhibit E-4 Form of Supplemental Opinion of Vorys, Sater, Seymour
and Pease, Special Ohio Counsel to the Borrower and
Acquisition Corp.
Exhibit F Form of Opinion of Special Counsel
Exhibit G Form of Assignment and Acceptance Agreement
Exhibit H Form of Note
SCHEDULES
Schedule 1.1 List of Applicable Lending Offices
Schedule 1.1A List of Applicable Payment Offices
Schedule 4.1 List of Subsidiaries; Capitalization
Schedule 4.5 List of Litigation
Schedule 4.7 Exception to Section 4.7 (No Conflicting Agreements)
Schedule 4.12 List of Existing Pension Plans
Schedule 8.1 List of Existing Indebtedness
Schedule 8.2 List of Existing Liens
Schedule 8.5 List of Existing Investments
</TABLE>
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<PAGE> 6
CREDIT AGREEMENT, dated as of November 12, 1996, by and among FURON
COMPANY, a California corporation (the "Borrower"), the lenders party hereto
(together with the Swing Line Lender and their respective assigns, the
"Lenders", each a "Lender") and THE BANK OF NEW YORK, as swing line lender (in
such capacity, the "Swing Line Lender") and THE BANK OF NEW YORK, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.1. Definitions
As used in this Agreement, terms defined in the preamble have
the meanings therein indicated, and the following terms have the following
meanings:
"ABR Advances": the Revolving Credit Loans (or any portions
thereof), at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Alternate Base Rate.
"Accountants": Ernst & Young, LLP (or any successor thereto),
or such other firm of certified public accountants of recognized national
standing selected by the Borrower and reasonably satisfactory to the
Administrative Agent.
"Accumulated Funding Deficiency": as defined in Section 302
of ERISA.
"Acquisition": with respect to any Person, the purchase or
other acquisition by such Person, by any means whatsoever (including through a
merger, dividend or otherwise and whether in a single transaction or in a series
of related transactions), of (i) any Capital Stock of, or other equity
securities of, any other Person if, immediately thereafter, such other Person
would be either a Subsidiary of such Person or otherwise under the control of
such Person, (ii) any Operating Entity, or (iii) any Property of (A) any other
Person or (B) any Operating Entity, in either case other than in the ordinary
course of business, provided, however, that no acquisition of all or
substantially all of the assets of such other Person or Operating Entity shall
be deemed to be in the ordinary course of business.
"Acquisition Corp.": FCY, Inc., an Ohio corporation and a
wholly-owned Subsidiary of the Borrower.
"Acquisition Cost": with respect to any Acquisition by any
Person, the sum of (i) all cash consideration paid or agreed to be paid by such
Person to make such Acquisition, plus (ii) the fair market value of all non-cash
consideration paid by such Person in connection therewith, plus (iii) an amount
equal to the principal or stated amount of all liabilities assumed or incurred
by such Person in connection therewith plus (iv) all transaction costs incurred
in connection therewith. The principal or stated amount of any liability assumed
or incurred by a Person in connection with an Acquisition which is a contingent
liability shall be an amount equal to the stated amount of such liability or, if
the same is not stated, the maximum reasonably anticipated amount payable by
such Person in respect thereof as determined by such Person in good faith.
"Advance": an ABR Advance, a Eurodollar Advance or an
Alternate Currency Euro Advance, as the case may be.
<PAGE> 7
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, (i) to vote 10% or more of the
securities or other interests having ordinary voting power for the election of
directors or other managing Persons thereof or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Aggregate Credit Exposure": at any time, the sum at such
time of (i) the outstanding principal balance (determined on the basis of
the Dollar Equivalent for each outstanding Alternate Currency Loan) of
the Revolving Credit Loans of all Lenders and (ii) the outstanding
principal balance of the Swing Line Loans.
"Aggregate Revolving Credit Commitment Amount": at any time,
the sum at such time of the Revolving Credit Commitment Amounts of all
Lenders at such time.
"Agreement": this Credit Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per
annum equal to the higher of (i) the Federal Funds Rate in effect on such
date plus 1/2 of 1% or (ii) the BNY Rate in effect on such date.
"Alternate Currencies": collectively, (i) German Marks,
Japanese Yen and Sterling Pounds and (ii) such other currencies as shall be
requested by the Borrower to be an Alternate Currency hereunder subject to the
approval of the Administrative Agent and all of the Lenders in their sole and
absolute discretion (each, an "Alternate Currency").
"Alternate Currency Euro Advances": collectively, the
Alternate Currency Loans (or any portions thereof) at such time as they (or such
portions) are maintained and/or being maintained in an Alternate Currency at a
rate of interest based upon an Alternate Currency Euro Rate; each a "Alternate
Currency Euro Advance".
"Alternate Currency Euro Rate": with respect to the Interest
Period applicable to any Alternate Currency Euro Advance, a rate of interest per
annum, as determined by the Administrative Agent, obtained by dividing (and then
rounding to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then
to the next higher 1/16 of 1%):
(a)(i) the rate per annum that appears on page 3750
of the Dow Jones Telerate Screen (or any successor page) for deposits of the
applicable Alternate Currency with a maturity comparable to such Interest
Period, determined as of 11:00 a.m. (London time) (x) on the date which is two
Business Days prior to the commencement of such Interest Period, in the case of
an Alternate Currency (other than Sterling Pounds) and (y) on the date of the
commencement of such Interest Period, in the case of Sterling Pounds or, if such
rate does not appear on page 3750 of the Dow Jones Telerate Screen (or any
successor page) or (ii) the rate per annum equal to the offered quotation
notified to the Administrative Agent by the Reference Lender as the offered
quotation by first class banks in the London interbank market to the Reference
Lender for such Alternate Currency deposits of amounts in immediately available
funds comparable to the principal amount of such Alternate Currency Euro Advance
of the Reference Lender with a maturity comparable to such Interest Period
determined as of 11:00 a.m. (London time) (x) on the date which is two Business
Days prior to the commencement of such Interest Period,
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<PAGE> 8
in the case of an Alternate Currency (other than Sterling Pounds) and (y) on the
date of the commencement of such Interest Period, in the case of Sterling
Pounds, by
(b) a number equal to 1.00 minus the aggregate of the
stated maximum rates in effect on such day (without duplication) of all reserve
requirements (including, without limitation, marginal, emergency, supplemental
and special reserves) and similar charges, expressed as a decimal, established
by any Governmental Authority, including those established by the Board of
Governors of the Federal Reserve System and any other banking authority to which
BNY and other major United States money center banks are subject in respect of
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System) maintained
by a member of the Federal Reserve System to the extent Applicable;
provided, in the event that the Administrative Agent has made any determination
pursuant to Section 3.6(a)(i) in respect of such Alternate Currency Euro
Advance, the Alternate Currency Euro Rate determined pursuant to clause (a) of
this definition shall instead be the rate reported to the Administrative Agent
by the Reference Lender as the rate based on the all-in cost of funds of the
Reference Lender to fund such Alternate Currency Euro Advance with a maturity
comparable to such Interest Period. The Alternate Currency Euro Rate shall be
adjusted automatically on and as of the effective date of any change in any such
reserve requirement.
"Alternate Currency Equivalent": with respect to any Alternate
Currency, on any date of determination thereof, the amount of such Alternate
Currency which could be purchased with the amount of Dollars involved in such
computation at the spot rate at which such Alternate Currency may be exchanged
into Dollars as set forth on such date on Dow Jones Telerate page RWRLD (or any
successor page) or, if such rate does not appear on such pages, at the spot
exchange rate therefor as determined by the Administrative Agent as of 11:00
a.m. (London time) on such date of determination thereof for delivery two
Business Days later.
"Alternate Currency Lending Office": in respect of (i) any
Lender listed on the signature pages hereof with respect to its Alternate
Currency Loans, initially, the office, branch or affiliate of such Lender
designated as such Lender's lending office for Alternate Currency Loans in such
Alternate Currency on Schedule 1.1; thereafter, such other office, branch or
affiliate of such Lender through which it shall be making or maintaining
Alternate Currency Euro Advances in such Alternate Currency, as reported by such
Lender to the Administrative Agent and the Borrower, and (ii) in the case of any
other Lender, initially, the office, branch or affiliate of such Lender
designated as such Lender's lending office for Alternate Currency Loans in such
Alternate Currency designated as such on Schedule 2 of the Assignment and
Acceptance Agreement or other document pursuant to which it became a Lender;
thereafter, such other office of such Lender, through which it shall be making
or maintaining Alternate Currency Euro Advances in such Alternate Currency, as
reported by such Lender to the Administrative Agent and the Borrower.
"Alternate Currency Loan": a Revolving Credit Loan
denominated in an Alternate Currency.
"Applicable": with respect to Regulation D being applicable
to any determination of an Alternate Currency Euro Rate, that Regulation D
reserves would be applicable to the Alternate Currency Euro
Advance as to which such interest rate would
- 3 -
<PAGE> 9
apply (including by giving effect to the assumption that the Lenders had funded
such Alternate Currency Euro Advance through the purchase of an Alternate
Currency deposit by a subsidiary or affiliate of such Lender in the London
interbank market and the transfer thereof to such Lender from
such subsidiary or affiliate).
"Applicable Currency": with respect to (i) any Revolving
Credit Loan, Dollars or an Alternate Currency and (ii) Swing Line Loan,
Dollars.
"Applicable Fee Percentage": with respect to the Commitment
Fee, at all times during which the applicable Pricing Level set forth be-
low is in effect, the percentage set forth below next to such Pricing
Level and under the applicable column:
<TABLE>
<CAPTION>
Pricing Level Applicable Fee Percentage
<S> <C>
Pricing Level I 0.250%
Pricing Level II 0.225%
Pricing Level III 0.200%
Pricing Level IV 0.175%
Pricing Level V 0.150%
Pricing Level VI 0.125%
Pricing Level VII 0.100%
</TABLE>
Changes in the Applicable Fee Percentage resulting from a
change in a Pricing Level shall become effective upon the date of the delivery
by the Borrower to the Administrative Agent of a Compliance Certificate pursuant
to Section 7.1(c) evidencing a change in the Leverage Ratio which would affect
the applicable Pricing Level. If the Borrower shall fail to deliver a Compliance
Certificate within 45 days after the end of each of the first three fiscal
quarters (or 90 days after the end of the last fiscal quarter) as required by
Section 7.1(c), Pricing Level I shall apply from and including the 46th day (the
91st day in the case of the last quarter) after the end of such fiscal quarter
to the date of the delivery by the Borrower to the Administrative Agent of a
Compliance Certificate demonstrating that a different Pricing Level is
applicable.
"Applicable Lending Office": in respect of (i) any Lender, (A)
in the case of such Lender's ABR Advances, its Domestic Lending Office, (B) in
the case of such Lender's Eurodollar Advances, its Eurodollar Lending Office,
and (C) in the case of such Lender's Alternate Currency Euro Advances, its
applicable Alternate Currency Lending Office, and (ii) the Swing Line Lender
with respect to its Swing Line Loans, its Domestic Lending Office.
- 4 -
<PAGE> 10
"Applicable Margin": with respect to the unpaid principal
balance of Eurodollar Advances and Alternate Currency Euro Advances, in each
case at all times during which the applicable Pricing Level set forth below is
in effect, the percentage set forth below next to such Pricing Level, subject to
the provisos set forth below:
<TABLE>
<CAPTION>
Pricing Level Applicable Margin
<S> <C>
Pricing Level I 1.1250%
Pricing Level II 0.8750%
Pricing Level III 0.6250%
Pricing Level IV 0.5000%
Pricing Level V 0.4375%
Pricing Level VI 0.3750%
Pricing Level VII 0.3125%
</TABLE>
Changes in the Applicable Margin resulting from a change in a
Pricing Level shall become effective upon the date of the delivery by the
Borrower to the Administrative Agent of a Compliance Certificate pursuant to
Section 7.1(c) evidencing a change in the Leverage Ratio which would affect the
applicable Pricing Level. If the Borrower shall fail to deliver a Compliance
Certificate within 45 days after the end of each of the first three fiscal
quarters (or 90 days after the end of the last fiscal quarter) as required by
Section 7.1(c), Pricing Level I shall apply from and including the 46th day (the
91st day in the case of the last quarter) after the end of such fiscal quarter
to the date of the delivery by the Borrower to the Administrative Agent of a
Compliance Certificate demonstrating that a different Pricing Level is
applicable.
"Applicable Payment Office": in respect of (i) all Loans
(other than Alternate Currency Loans), fees and other amounts owing under the
Loan Documents, the office of the Administrative Agent listed on Schedule 1.1A
as its "Domestic Payment Office", and (ii) in respect of Alternate Currency
Loans, the office of the Administrative Agent listed on Schedule 1.1A as its
payment office for the applicable Alternate Currency, or such other office or
offices as the Administrative Agent may from time to time hereafter designate in
writing as such to each Lender and the Borrower.
"Approved Bank": any bank whose (or whose parent company's)
unsecured non-credit supported short-term commercial paper rating from (i)
Standard & Poor's is at least A-1 or the equivalent thereof or (ii) Moody's is
at least P-1 or the equivalent thereof.
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by an assignor and an assignee,
substantially in the form of Exhibit G.
"Assignment Fee": as defined in Section 11.7(b).
"Authorized Signatory": as to (i) any Person which is a
corporation, the chairman of the board, the president, any vice president, the
chief financial officer or any other officer (acceptable to the Administrative
Agent) of such Person and (ii) any Person which is not a corporation, the
general partner or other managing Person thereof.
"Benefited Lender": as defined in Section 11.12.
"BNY": The Bank of New York.
- 5 -
<PAGE> 11
"BNY Rate": a rate of interest per annum equal to the rate of
interest publicly announced in New York City by BNY from time to time as its
prime commercial lending rate, such rate to be adjusted automatically (without
notice) on the effective date of any change in such publicly announced rate.
"BNY Capital Markets": BNY Capital Markets, Inc.
"Borrowing Date": any Business Day specified in (i) a
Borrowing Request as a date on which the Borrower requests the Lenders to make
Revolving Credit Loans or (ii) a Borrowing Request as a date on which the
Borrower requests the Swing Line Lender to make a Swing Line Loan.
"Borrowing Request": a request for Revolving Credit Loans or
a Swing Line Loan in the form of Exhibit B.
"Business Day": for all purposes other than as set forth in
clause (ii) below, (i) any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York City are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Advances and Alternate Currency Euro Advances, any day which is a
Business Day described in clause (i) above and which is also a day on which
trading by and between banks in the interbank market may be carried on in
London, England.
"Capital Lease Obligations": with respect to any Person, that
portion of capital leases of such Person which are required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capital Stock": as to any Person, all shares, interests,
partnership interests, limited liability company interests,
participations, rights in or other equivalents (however designated) of
such Person's equity (however designated) and any rights, warrants or op-
tions exchangeable for or convertible into such shares, interests,
participations, rights or other equity.
"Cash Equivalents": (i) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in full support thereof) having maturities of not more than
one year from the date of acquisition, (ii) Dollar denominated time deposits,
certificates of deposit and bankers acceptances of (x) any Lender or (y) any
Approved Bank, in any such case with maturities of not more than one year from
the date of acquisition, (iii) commercial paper issued by any Approved Bank or
by the parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with an unsecured non-credit
supported short-term commercial paper rating of at least A-1 or the equivalent
by Standard & Poor's or at least P-1 or the equivalent by Moody's, or guaranteed
by any industrial or financial company with a long term unsecured non-credit
supported senior debt rating of at least A or A-2, or the equivalent, by
Standard & Poor's or Moody's, as the case may be, and in each case maturing
within one year after the date of acquisition, (iv) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's or Moody's and (v) investments in money market funds
- 6 -
<PAGE> 12
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above.
"Certificate of Merger": as defined in Section 5.3(j).
"Change of Control": any transaction or series of related
transactions (i) in which any Person or two or more Persons acting in concert
acquire beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act), directly or indirectly, of 35% or more of the common stock of the
Borrower, or (ii) in which individuals who as of the Effective Date constitute
the board of directors of the Borrower (the "Incumbent Board"), cease for any
reason to constitute at least a majority of the board of directors, provided
that any person becoming a director subsequent to the Effective Date whose
election, or nomination for election by the Borrower or shareholders, is
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board (other than an election or nomination of an individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election or removal of the directors of the
Borrower, as contemplated in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) shall, for purposes of this Agreement, be considered as thought
such person were a member of the Incumbent Board of the Borrower, or (iii)
constituting a "Change in Control," or other similar occurrence under
documentation evidencing or governing any Indebtedness of the Borrower of
$15,000,000 or more which results in an obligation of the Borrower to prepay,
purchase, offer to purchase, redeem or defease such Indebtedness.
"Code": the Internal Revenue Code of 1986, as the same may be
amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Commitment": a Revolving Credit Commitment or the Swing Line
Commitment, as the case may be.
"Commitment Fee": as defined in Section 3.2(a).
"Commitment Percentage": as to any Lender, the percentage
equal to such Lender's Revolving Credit Commitment Amount divided by the
Aggregate Revolving Credit Commitment Amount.
"Company Option Agreement": the Company Option Agreement,
dated as of November 12, 1996, by and between Medex and the Borrower, as
same may be amended, supplemented or otherwise modified from time to
time in accordance with Section 8.9.
"Compensatory Interest Payment": as defined in Section
3.1(c).
"Compliance Certificate": a certificate substantially in
the form of Exhibit D.
"Consolidated": the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Capital Expenditures": for any period, the
aggregate of all expenditures incurred by the Borrower and its
Subsidiaries determined on a Consolidated
- 7 -
<PAGE> 13
basis in accordance with GAAP during such period which, in accordance with GAAP,
are required to be included in "Additions to Property, Plant or Equipment" or
similar items reflected on the balance sheet of such Person, provided, however,
that "Capital Expenditures" shall not include (i) capitalized leases, or (ii)
expenditures of proceeds of insurance settlements in respect of lost, destroyed
or damaged assets, equipment or other property to the extent such expenditures
are made to replace or repair such lost, destroyed or damages assets, equipment
or other property within six months of the receipt of such proceeds or (iii)
Acquisition Costs incurred in connection with Permitted Acquisitions.
"Consolidated Debt Service": for any period, the sum of (i)
Consolidated Interest Expense for such period and (ii) all scheduled
payments of principal on Consolidated Total Debt during such period, all
as determined on a Consolidated basis in accordance with GAAP.
"Consolidated EBITDA": for any period, net income of the
Borrower and its Subsidiaries for such period, determined on a Consolidated
basis in accordance with GAAP plus the sum of, without duplication, (i)
Consolidated Interest Expense, (ii) taxes of the Borrower and its Subsidiaries
based on, or measured by, income and (iii) depreciation, amortization and other
non-cash charges of the Borrower and its Subsidiaries, each to the extent
deducted in determining such net income for such period, minus extraordinary
gains from sales, exchanges and other dispositions of Property not in the
ordinary course of business and other non-recurring items (other than losses).
Consolidated EBITDA shall be calculated by disregarding non-cash restructuring
charges taken by the Borrower in connection with the Transactions so long as
such charges are taken within six months after the first Borrowing Date;
provided, however, that in the event that the income realized from the sale or
other disposition of an asset would exceed the amount of income which would have
been realized but for the taking of such charge, such excess shall be excluded
from the calculation of Consolidated EBITDA. In addition, solely for purposes of
calculating the Leverage Ratio for the period of the four fiscal quarters ending
after the date on which the Medex Acquisition is consummated, Consolidated
EBITDA shall be calculated as if Medex was a Subsidiary of the Borrower during
such period but without deduction for Medex's non-cash restructuring expenses
taken for its fiscal year ended June 30, 1996 to the extent that such
restructuring charge would ordinarily be taken into account in calculating
Medex's net income for such period.
"Consolidated Fixed Charges": for any period, the sum of,
without duplication, (i) Consolidated Debt Service for such period, and (ii)
Consolidated Rent Expense for such period.
"Consolidated Interest Expense": for any period, the sum of,
without duplication, all cash interest (adjusted to give effect to all interest
rate swap, cap or other interest rate hedging arrangements and fees and expenses
paid in connection with the same, paid or accrued in respect of Consolidated
Total Debt during such period), all as determined on a Consolidated basis in
accordance with GAAP.
"Consolidated Rent Expense": for any period, the rent expense
of the Borrower and its Subsidiaries in respect of operating leases for such
period, determined on a Consolidated basis in accordance with GAAP, provided,
however, that for purposes of this definition, at any date of determination,
Consolidated Rent Expense shall be equal to the sum of (i) the amount of such
rent expense in respect of operating leases as set forth in the most recently
delivered annual reports required under Section 7.1(a) plus (ii) an amount, if
positive, equal to rent expense in respect of operating leases entered into
after
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<PAGE> 14
the end of the most recent fiscal year for which such statements were delivered
minus $750,000, in each case net of any sublease income during such period.
"Consolidated Total Debt": at any date of determination, the
aggregate of (i) all indebtedness for borrowing money, (ii) Capitalized
Lease Obligations, and (iii) Contingent Obligations in excess of
$100,000.
"Contingent Obligation": as to any Person ( a "secondary
obligor"), any obligation of such secondary obligor (i) guaranteeing or in
effect guaranteeing any return on any investment made by another Person, or (ii)
guaranteeing or in effect guaranteeing any Indebtedness, lease, dividend or
other obligation (a "primary obligation") of any other Person (a "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such secondary obligor, whether contingent, (A) to
purchase any primary obligation or any Property constituting direct or indirect
security therefor, (B) to advance or supply funds (x) for the purchase or
payment of any primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of a primary obligor, (C) to purchase Property, securities or services
primarily for the purpose of assuring the beneficiary of any primary obligation
of the ability of a primary obligor to make payment of a primary obligation, (D)
otherwise to assure or hold harmless the beneficiary of a primary obligation
against loss in respect thereof, and (E) in respect of the liabilities of any
partnership in which a secondary obligor is a general partner, except to the
extent that such liabilities of such partnership are nonrecourse to such
secondary obligor and its separate Property, provided, however, that the term
"Contingent Obligation" shall not include the indorsement of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation of a Person shall be deemed to be an amount equal to the
stated or determinable amount of a primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith.
"Conversion Date": the date on which (i) a Eurodollar Advance
is converted to an ABR Advance, (ii) the date on which an ABR Advance is
converted to a Eurodollar Advance, (iii) the date on which a Eurodollar Advance
is converted to a new Eurodollar Advance and (iv) the date on which an Alternate
Currency Euro Advance is converted to a new Alternate Currency Euro Advance.
"Credit Exposure": with respect to any Lender as at any time,
the sum at such time of (i) the outstanding principal balance of such Lender's
Revolving Credit Loans (determined on the basis of the Dollar Equivalent for
each outstanding Alternate Currency Loan), and (ii) the Swing Line Exposure of
such Lender.
"Currency": Dollars or any Alternate Currency.
"Default": any event or condition which constitutes an Event
of Default or which, with the giving of notice, the lapse of time, or any
other condition, would, unless cured or waived, become an Event of
Default.
"Disposition": with respect to any Person, any sale,
assignment, transfer or other disposition by such Person, by any means, of (i)
the Capital Stock of, or other equity interests of, any other Person, (ii) any
Operating Entity, or (iii) any other Property of such Person other than in the
ordinary course of business, provided, however, that no such sale, assignment,
transfer or other disposition of Property (other than inventory,
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<PAGE> 15
except to the extent subject to a bulk sale) shall be deemed to be in the
ordinary course of business (a) if the fair market value thereof is in excess of
$250,000, or (b) to the extent that the fair market value thereof, when
aggregated with all other sales, assignments, transfers and other dispositions
made by such Person within the same fiscal year, exceeds $750,000, and then only
to the extent of such excess, if any, or (c) it is the sale, assignment,
transfer or disposition of (1) all or substantially all of the Property of such
Person or (2) any Operating Entity. The contribution of Property to a joint
venture permitted by Section 8.5 (i) shall not be deemed to be a Disposition.
"Disposition Reduction/Prepayment Date": with respect to any
Disposition pursuant to Section 8.4(c), the earlier to occur of (i) the date on
which the Borrower delivers written notice to the Administrative Agent that the
Net Cash Proceeds of such Disposition are not to be used in whole or in part to
make Consolidated Capital Expenditures or Permitted Acquisitions within one year
after the receipt of such Net Cash Proceeds by the Borrower or any of its
Subsidiaries or (ii) the date which is one year after the date of such receipt.
"Disposition Reduction/Prepayment Amount": with respect to any
Disposition pursuant to Section 8.4(c), an amount equal to that portion of the
Net Cash Proceeds received by the Borrower or any of its Subsidiaries in respect
of such Disposition that constitutes Excess Disposition Proceeds minus the
amount thereof, if any, which constitutes
Reinvested Proceeds.
"Disqualified Stock": any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable at the option of the holder thereof by contract or
otherwise, is, or upon the happening of an event or passage of time would be,
required to be redeemed or is redeemable at the option of the holder thereof at
any time, or is convertible into or exchangeable at the option of the holder
thereof for debt securities.
"Dollar Equivalent": on any date of determination thereof, the
amount of Dollars which could be purchased with the amount of the relevant
Alternate Currency involved in such computation at the spot rate at which
Dollars may be exchanged into such Alternate Currency as set forth on such date
on Dow Jones Telerate page RWRLD (or any successor page) or, if such rate does
not appear on such page, as shall be determined by the Administrative Agent by
reference to such other publicly available service for displaying exchange rates
as the Administrative Agent and the Borrower agree or, in the absence of such
agreement, at the spot exchange rate therefor as determined by the
Administrative Agent as of 11:00 a.m. (London time) on such date of
determination thereof for delivery two Business Days later.
"Dollar Loan": each Dollar Revolving Credit Loan and each
Swing Line Loan.
"Dollar Revolving Credit Loan" and "Dollar Revolving Credit
Loans": a Revolving Credit Loan made in Dollars.
"Dollars" and "$": lawful currency of the United States.
"Domestic Lending Office": in respect of (i) any Lender
listed on the signature pages hereof, initially, the office, branch or
affiliate of such Lender designated as
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<PAGE> 16
such Lender's lending office for ABR Advances of such Lender on Schedule 1.1;
thereafter, such other office, branch or affiliate of such Lender, through which
it shall be making or maintaining ABR Advances, as reported by such Lender to
the Administrative Agent and the Borrower, (ii) in the case of any other Lender,
initially, the office, branch or affiliate of such Lender designated as such
Lender's lending office for ABR Advances of such Lender on Schedule 2 of the
Assignment and Acceptance Agreement or other document pursuant to which it
became a Lender; thereafter, such other office, branch or affiliate through
which it shall be making or maintaining ABR Advances, as reported by such Lender
to the Administrative Agent and the Borrower, and (iii) the Swing Line Lender,
initially, the office, branch or affiliate of the Swing Line designated as the
Swing Line Lender's lending office on Schedule 1.1; thereafter, such other
office, branch or affiliate of the Swing Line Lender, through which it shall be
making or maintaining the Swing Line Loans, as reported by the Swing Line Lender
to the Administrative Agent and the Borrower, provided that the Swing Line
Lender may report different Domestic Lending Offices for all of its ABR Advances
and all of its Swing Line Loans, whereupon references to the Domestic Lending
Office of such Lender shall mean either or both of such offices.
"Effective Date": the date on which the conditions to
effectiveness set forth in Section 5.1 have been satisfied.
"Eligible Assignee": a Lender, any affiliate of a Lender and
any other bank or insurance company.
"Employee Benefit Plan": an employee benefit plan within the
meaning of Section 3(3) of ERISA maintained, sponsored or contributed to by the
Borrower, any of its Subsidiaries or any ERISA Affiliate.
"Environmental Laws": any and all federal, state and local
laws relating to the environment, the use, storage, transporting, manufacturing,
handling, discharge, disposal or recycling of hazardous substances, materials or
pollutants or industrial hygiene, and including, without limitation, (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA Section 9601 et seq.; (ii) the Resource Conservation and
Recovery Act of 1976, as amended, 42 USCA Section 6901 et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 USCA Section 2601 et seq.; (iv) the Water
Pollution Control Act, as amended, 33 USCA Section 1251 et seq.; (v) the Clean
Air Act, as amended, 42 USCA Section 7401 et seq.; (vi) the Hazardous Materials
Transportation Authorization Act of 1994, as amended, 49 USCA Section 5101 et
seq. and (vii) all rules, regulations, judgments and restrictions thereunder and
any analogous state law.
"Equity Offering": any public offering or private placement
by the Borrower or any of its Subsidiaries of shares of its Capital
Stock (other than any such offering or placement solely for the Capital
Stock or Property of another Person in connection with a Permitted
Acquisition).
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations issued
thereunder, as from time to time in effect.
"ERISA Affiliate": when used with respect to an Employee
Benefit Plan, ERISA, the PBGC or a provision of the Code pertaining to employee
benefit plans, any Person which is a member of any group of organizations within
the meaning of Sections
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<PAGE> 17
414(b) or (c) of the Code (or, solely for purposes of potential liability under
Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f) of ERISA and Section 412(n) of the Code, Sections
414(m) or (o) of the Code) of which the Borrower or any of its Subsidiaries is a
member.
"ESOP": the Employee Stock Ownership Plan of Furon Company.
"Eurodollar Advances": collectively, the Revolving Credit
Loans (or any portions thereof), at such time as they (or such portions) are
made and/or being maintained at a rate of interest based upon the Eurodollar
Rate.
"Eurodollar Lending Office": in respect of (i) any Lender
listed on the signature pages hereof, initially, the office, branch or affiliate
of such Lender designated as such Lender's lending office for Eurodollar
Advances of such Lender on Schedule 1.1; thereafter, such other office, branch
or affiliate of such Lender, through which it shall be making or maintaining
Eurodollar Advances, as reported by such Lender to the Administrative Agent and
the Borrower and (ii) in the case of any other Lender, initially, the office,
branch or affiliate of such Lender designated as such Lender's lending office
for Eurodollar Advances of such Lender on Schedule 2 of the Assignment and
Acceptance Agreement or other document pursuant to which it became a Lender;
thereafter, such other office, branch or affiliate through which it shall be
making or maintaining Eurodollar Advances, as reported by such Lender to the
Administrative Agent and the Borrower.
"Eurodollar Rate": with respect to the Interest Period
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Administrative Agent, obtained by dividing (and then rounding
to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the
next higher 1/16 of 1%):
(a) the rate per annum for deposits having a maturity
most nearly comparable to the Interest Period in respect of such Eurodollar
Advance in Dollars which appears on page 3750 of the Dow Jones Telerate Screen
(or any successor page) as of 11:00 a.m. London time on the date that is two
Business Days prior to the first day of such Interest Period, or if such a rate
does not appear on page 3750 of the Dow Jones Telerate Screen, the rate of
interest per annum quoted by the Reference Lender at approximately 11:00 a.m.
London time (or as soon thereafter as practicable) two Business Days prior to
the first day of such Interest Period to leading banks in the interbank
eurodollar market as the rate at which the Reference Lender is offering Dollar
deposits in an amount approximately equal to its Commitment Percentage of such
Eurodollar Advance and having a period to maturity approximately equal to such
Interest Period, by
(b) a number equal to 1.00 minus the aggregate of the
then stated maximum rates during such Interest Period of all reserve
requirements (including, without limitation, marginal, emergency, supplemental
and special reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority to which
BNY and other major United States money center banks are subject, in respect of
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System) or in
respect of any other category of liabilities including deposits by reference to
which the interest rate on Eurodollar Advances is determined or any category of
extensions of credit or other assets which includes loans by non-domestic
offices of any Lender to United
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<PAGE> 18
States residents. Such reserve requirements shall include, without limitation,
those imposed under such Regulation D. Eurodollar Advances shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of credits for proration, exceptions
or offsets which may be available from time to time to any Lender under such
Regulation D. The Eurodollar Rate shall be adjusted automatically on and as of
the effective date of any change in any such reserve requirement.
"Event of Default": as defined in Section 9.1.
"Excess Cash Flow": with respect to any fiscal year,
Consolidated EBITDA for such fiscal year minus the sum of, without duplication
(i) the amount, if positive, equal to (a) the amount of the Loans (determined on
the basis of the Dollar Equivalent for each outstanding Alternate Currency Loan)
outstanding at the beginning of such fiscal year minus (b) the Aggregate
Revolving Credit Commitment Amount at the end of such fiscal year (without
giving effect to reductions thereof during such period required by Section
2.6(d)), (ii) scheduled payments of principal of Consolidated Total Debt during
such fiscal year, (iii) Consolidated Capital Expenditures made during such
fiscal year, (iv) taxes (other than income taxes) paid by the Borrower and its
Subsidiaries during such fiscal year, and (v) Cash Interest Expense for such
fiscal year.
"Excess Disposition Proceeds": with respect to any fiscal
year, the amount (if positive) equal to the amount of Net Cash Proceeds
received by the Borrower and/or any of its Subsidiaries during such
fiscal year minus $3,750,000.
"Exchange Act": the Securities Exchange Act of 1934, as
amended.
"Existing Furon Bank Debt": the Indebtedness of the
Borrower under the Existing Furon Loan Documents including, without limitation,
all outstanding principal, unpaid and accrued interest, unpaid and accrued fees
and other unpaid sums thereunder.
"Existing Furon Loan Documents": collectively (i) the Credit
Agreement, dated as of October 30, 1995, among the Borrower, the lenders party
thereto and Bank of America National Trust and Savings Association, as agent,
and (ii) all other documents executed and delivered in connection therewith,
each as amended to the first Borrowing Date.
"Existing Medex Bank Debt": the Indebtedness of the Medex
under the Revolving Credit Note, dated June 20, 1996, made by Medex to the order
of Huntington National Bank, including, without limitation, all outstanding
principal, unpaid and accrued interest, unpaid and accrued fees and other unpaid
sums thereunder.
"Existing Medex Bond Documents": collectively, (i) the Loan
Agreement, dated as of July 1, 1996, between the City of Hilliard, Ohio and
Medex, (ii) the Reimbursement Agreement, dated as of July 1, 1996, between Bank
One, Columbus, NA and Medex, (iii) the Project Note, dated July 16, 1996, made
by Medex in favor of Bank One Trust Company, N.A., and (iv) the Trust Indenture,
dated as of July 1, 1996, between the City of Hilliard, Ohio, as issuer and Bank
One Trust Company, NA, as trustee, in each case in connection with the City of
Hilliard, Ohio Adjustable Rate Industrial Development Revenue Bonds, Series 1996
(Medex, Inc. Project), as each may be amended, supplemented or otherwise
modified from time to time in accordance with Section 8.9.
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<PAGE> 19
"Existing Medfusion Bond Documents": collectively, (i) the
Loan Agreement dated as of June 1, 1992, between the Development Authority of
Fulton County and Medfusion, Inc., (ii) the Direct Pay Letter of Credit
Reimbursement Agreement, dated as of June 1, 1992, between Wachovia Bank of
Georgia, National Association, and Medfusion, Inc., (iii) the Trust Indenture
dated as of June 1, 1992, between Development Authority of Fulton County, as
issuer, and AmSouth Bank N.A., as trustee, in each case in connection with the
Development Authority of Fulton County Industrial Development Revenue Bonds
(Medfusion, Inc. Project), as each may be amended, supplemented or otherwise
modified from time to time in accordance with Section 8.9.
"Existing Pension Plans": as defined in Section 4.12.
"Federal Funds Rate": for any day, a rate per annum (expressed
as a decimal, rounded upwards, if necessary, to the next higher 1/100 of 1%)
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average of the quotations for such day on such transactions
received by BNY as determined by BNY and reported to the Administrative Agent.
"Fees": as defined in Section 2.9.
"Financial Officer": as to any Person, the chief financial
officer of such Person or such other officer as shall be satisfactory to
the Administrative Agent.
"Financial Statements": as defined in Section 4.13.
"Fixed Charge Coverage Ratio": at any date of determination,
the ratio of (i) Consolidated EBITDA plus Consolidated Rent Expense minus
Consolidated Capital Expenditures to (ii) Consolidated Fixed Charges for the
four fiscal quarter period ending on such date or, if such date is not the last
day of a fiscal quarter, for the immediately
preceding four fiscal quarter period.
"Fixed Rate Advance": a Eurodollar Advance, an Alternate
Currency Euro Advance or a Swing Line Negotiated Rate Advance, as the
case may be.
"Funded Current Liability Percentage": as defined in Section
401(a)(29) of the Code.
"GAAP": generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination, consistently applied.
"German Marks": freely transferable lawful money of Germany.
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<PAGE> 20
"Governmental Authority": any foreign, federal, state, munici-
pal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or
arbitrator.
"HSR Act": the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Hazardous Substance": any hazardous or toxic substance,
material or waste, including, but not limited to, (i) those substances,
materials, and wastes listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302) and amendments thereto and
replacements thereof and (ii) any substance, pollutant or material defined as,
or designated in, any Environmental Law as a "hazardous substance," "toxic
substance," "hazardous material," "hazardous waste," "restricted hazardous
waste," "pollutant," "toxic pollutant" or words of similar import.
"Highest Lawful Rate": as to any Lender, the maximum rate of
interest, if any, that at any time or from time to time may be contracted for,
taken, charged or received by such Lender on its Loans, or which may be owing to
such Lender pursuant the Loan Documents under the laws applicable to such Lender
and this transaction.
"Indebtedness": as to any Person, at a particular time, all
items which constitute, without duplication, (i) indebtedness for borrowed
money, (ii) indebtedness in respect of the deferred purchase price of Property
(other than trade payables incurred in the ordinary course of business), (iii)
indebtedness evidenced by notes, bonds, debentures or similar instruments, (iv)
obligations with respect to any conditional sale or title retention agreement,
(v) indebtedness arising under acceptance facilities and the amount available to
be drawn under all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder to the extent such Person shall
not have reimbursed the issuer in respect of the issuer's payment thereof, (vi)
all liabilities secured by any Lien on any Property owned by such Person even
though such Person has not assumed or otherwise become liable for the payment
thereof (other than carriers', warehousemen's, mechanics', repairmen's or other
like non-consensual statutory Liens arising in the ordinary course of business),
(vii) Capital Lease Obligations and (viii) Contingent Obligations.
"Indemnified Liability": as defined in Section 11.5.
"Indemnified Person": as defined in Section 11.8.
"Indemnified Tax": as to any Person, any Tax, except (i) a Tax
on the Income imposed on such Person and (ii) any interest, fees or penalties
for late payment imposed on such Person, in each case under clauses (i) and (ii)
to the extent not attributable to the failure of the Borrower or any of its
Subsidiaries to obtain any necessary approvals or consents of, or file or cause
to be filed any reports, applications, documents, instruments or information
required to be filed pursuant to any applicable law, rule, regulation or request
of, any Governmental Authority.
"Indemnified Tax Person": the Administrative Agent or any
Lender.
"Intercompany Indebtedness": loans which are (i) made by the
Borrower to any of its direct or indirect Subsidiaries or Affiliates or
(ii) made by direct or indirect
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<PAGE> 21
Subsidiaries or any Affiliates of the Borrower to the Borrower or to other
direct or indirect Subsidiaries or Affiliates of the Borrower.
"Interest Payment Date": (i) as to any ABR Advance, the last
day of each fiscal quarter of the Borrower commencing on the first of such days
to occur after such ABR Advance is made or any Eurodollar Advance is converted
to an ABR Advance, (ii) as to any Swing Line Loan, the date on which the
outstanding principal balance of such Swing Line Loan shall become due and
payable in accordance with Section 2.2(b), (iii) as to any Eurodollar Advance or
Alternate Currency Euro Advance as to which the Borrower has selected an
Interest Period of seven days, one, two or three months, the last day of such
Interest Period, (iv) as to any Eurodollar Advance or Alternate Currency Euro
Advance as to which the Borrower has selected an Interest Period of six months,
the last day of each three month interval occurring during such Interest Period
and the last day of such Interest Period; and (v) as to all Eurodollar Advances,
Alternate Currency Euro Advances and Swing Line Loans, the Maturity Date.
"Interest Period":
(a) subject to the provisions of Section 3.4, with
respect to any Eurodollar Advance or Alternate Currency Euro Advance requested
by the Borrower, the period commencing on, as the case may be, the Borrowing
Date or Conversion Date with respect to such Eurodollar Advance or Alternate
Currency Euro Advance and ending one, two, three or six months thereafter, as
selected by the Borrower in its irrevocable Borrowing Request or its irrevocable
Notice of Conversion, provided, however, that (i) during the Syndication Period,
Interest Periods of seven days shall be available, (ii) if any Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day and (iii) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(b) subject to the provisions of Section 3.4, with respect to
any Swing Line Loan requested by the Borrower, the period commencing on the
Borrowing Date with respect to such Swing Line Loan and ending on or between one
and five days thereafter, as selected by the Borrower in its irrevocable
Borrowing Request, provided, however, that (i) during the Syndication Period,
Interest Periods of up to seven days shall be available, (ii) if any Interest
Period would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day, and (iii) the
Borrower shall select Interest Periods so as not to have more than three
different Interest Periods outstanding at any one time for all Swing Line Loans.
(c) Interest Periods shall be subject to the provisions of
Section 3.4.
"Interest Rate Protection Arrangement": any interest rate
swap, cap or collar arrangement or any other derivative product customarily
offered by banks to their customers in order to reduce the exposure of such
customers to interest rate fluctuations, as the same may be amended,
supplemented or otherwise modified from time to time.
"Investments": as defined in Section 8.5.
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<PAGE> 22
"Japanese Yen": freely transferable lawful money of Japan.
"Judgment Currency": as defined in Section 11.17.
"Judgment Currency Conversion Date": as defined in Section
11.17.
"Leverage Ratio": at any date of determination, the ratio of
(x) Consolidated Total Debt on such date to (y) Consolidated EBITDA for the four
fiscal quarter period ending on such date or, if such date is not the last day
of a fiscal quarter, for the immediately preceding four fiscal quarter period.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit or preferential arrangement, encumbrance, lien (statutory or other), or
other security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
"Loan": a Revolving Credit Loan or a Swing Line Loan, as the
case may be.
"Loans": the Revolving Credit Loans and/or the Swing Line
Loans, as the case may be.
"Loan Documents": collectively, this Agreement and any
promissory notes issued pursuant to Section 2.10.
"Managing Person": with respect to any Person that is a (i)
corporation, its board of directors, (ii) a limited liability company, its board
of control, managing member or members, (iii) a limited partnership, its general
partner, (iv) a general partnership, its managing partner or executive committee
or (v) such other managing body or Person analogous to the foregoing.
"Mandatory Borrowing": as defined in Section 2.2(c).
"Margin Stock": any "margin stock", as defined in Regulation U
of the Board of Governors of the Federal Reserve System, as amended,
supplemented or otherwise modified from time to time.
"Material Adverse Change": a material adverse change in (i)
the financial condition, operations, business or Property of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any of
its Subsidiaries to perform its obligations under the Loan Documents to which it
is a party or (iii) the ability of the Administrative Agent and the Lenders to
enforce the Loan Documents.
"Material Adverse Effect": a material adverse effect on (i)
the financial condition, operations, business or Property of the Borrower and
its Subsidiaries taken as a whole, (ii) the ability of the Borrower or any of
its Subsidiaries to perform its obligations under the Loan Documents to which it
is a party or (iii) the ability of the Administrative Agent and the Lenders to
enforce the Loan Documents.
"Maturity Date": November 12, 2001, or such earlier date on
which the Loans shall become due and payable, whether by acceleration or
otherwise.
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<PAGE> 23
"Medex": Medex, Inc., an Ohio corporation.
"Medex Acquisition": the acquisition of Medex pursuant to the
Medex Acquisition Documents.
"Medex Acquisition Documents": collectively, the Merger
Documents and the Offer Documents.
"Medex Stock": the common stock of Medex, $0.01 per value.
"Medex Stock Purchase": the purchase of Medex Stock by
Acquisition Corp. pursuant to the Offer to Purchase.
"Merger": the merger of Medex with and into Acquisition Corp.
pursuant to and in accordance with the Merger Agreement, with Medex as the
survivor thereof.
"Merger Agreement": the Agreement and Plan of Merger, dated as
of November 12, 1996, by and among Medex, Acquisition Corp. and the Borrower, as
same may be amended, supplemented or otherwise modified from time to time in
accordance with Section 8.9.
"Merger Documents": collectively, (i) the Merger Agreement,
(ii) the Company Option Agreement, (iii) the Shareholder Option Agreements and
(iv) all exhibits, schedules, and disclosure letters referred to therein and any
side letters or other agreements affecting the terms of any thereof, as each may
be amended, supplemented or otherwise modified in accordance with the provisions
of Section 8.9.
"Merger Effective Date": the date upon which the Merger shall
become effective.
"Moody's": Moody's Investors Service, Inc., or any successor
thereto.
"Multiemployer Plan": a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Negotiated Rate": with respect to each Swing Line Negotiated
Rate Advance, the rate per annum agreed to by the Borrower and the Swing Line
Lender in accordance with section 2.3(b)(ii) as the interest rate that such
Swing Line Negotiated Rate Advance shall bear.
"Net Cash Proceeds": with respect to any Disposition by the
Borrower or any of its Subsidiaries, the aggregate gross sales proceeds received
by the Borrower or such Subsidiary in cash in connection with such Disposition
minus the sum of (i) sales and other commissions and legal and other expenses
incurred in connection with such Disposition, (ii) any taxes paid or payable by
the Borrower or such Subsidiary in connection therewith (determined on a
Consolidated basis after giving effect to net operating loss and other
deductions and applicable tax credits), and (iii) the amount of Indebtedness
(other than the Loans) secured by the Property subject to such Disposition
which, in accordance with the terms governing such Indebtedness, is required to
be repaid upon such Disposition.
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<PAGE> 24
"Net Issuance Proceeds": with respect to any issuance, sale or
incurrence of any Refinancing Debt or any Equity Offering, the aggregate amount
of cash received by or on behalf of the Borrower after deducting therefrom
placement agents' or underwriters' commissions and other reasonable fees and
expenses (including fees and expenses of counsel and investment bankers) payable
by the Borrower or any Subsidiary in connection with such issuance, sale or
incurrence.
"Notice of Conversion": a notice substantially in the form of
Exhibit C.
"Obligation Currency": as defined in Section 11.17.
"Offer Documents": collectively, a Tender Offer Statement on
Schedule 14D-1 together with all exhibits and schedules thereto and the Offer to
Purchase, as each may be amended, supplemented or otherwise modified from time
to time in accordance with Section 8.9.
"Offer to Purchase": the Offer to Purchase pursuant to which
the Borrower makes the Tender Offer, as the same may be amended, supplemented or
otherwise modified in accordance with Section 8.9.
"Other Taxes": as defined in Section 3.7(f).
"Operating Entity": any Person or any business or operating
unit of a Person which is, or could be, operated separate and apart from (i) the
other businesses and operations of such Person, or (ii) any other line of
business or business segment.
"Organizational Documents": as to any Person which is (i) a
corporation, the certificate or articles of incorporation and by-laws of such
Person, (ii) a limited liability company, the limited liability company
agreement or similar agreement of such Person, (iii) a partnership, the
partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or organization, the organizational documents analogous to the
foregoing.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Authority
succeeding to the functions thereof.
"Pension Plan": at any date of determination, any Employee
Benefit Plan (including a Multiemployer Plan), the funding requirements of which
(under Section 302 of ERISA or Section 412 of the Code) are, or at any time
within the six years immediately preceding such date, were in whole or in part,
the responsibility of the Borrower, any of its Subsidiaries or any ERISA
Affiliate.
"Permitted Acquisition": an Acquisition permitted by Section
8.3.
"Permitted Lien": a Lien permitted to exist under Section
8.2(a).
"Person": any individual, firm, partnership, limited liability
company, joint venture, corporation, association, business enterprise, joint
stock company, unincorporated association, trust, Governmental Authority or any
other entity, whether acting in an individual, fiduciary, or other capacity, and
for the purpose of the definition of "ERISA Affiliate", a trade or business.
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<PAGE> 25
"Pricing Level": Pricing Level I, Pricing Level II, Pricing
Level III, Pricing Level IV, Pricing Level V, Pricing Level VI or Pricing Level
VII, as applicable.
"Pricing Level I": any time when the Leverage Ratio is
greater than 3.50:1.00.
"Pricing Level II": any time when the Leverage Ratio is
greater than 3.00:1.00 but less than or equal to 3.50:1.00.
"Pricing Level III": any time when the Leverage Ratio is
greater than 2.50:1.00 but less than or equal to 3.00:1.00.
"Pricing Level IV": any time when the Leverage Ratio is
greater than 2.00:1.00 but less than or equal to 2.50:1.00.
"Pricing Level V": any time when the Leverage Ratio is
greater than 1.50:1.00 but less than or equal to 2.00:1.00.
"Pricing Level VI": any time when the Leverage Ratio is
greater than 1.00:1.00 but less than or equal to 1.50:1.00.
"Pricing Level VII": any time when the Leverage Ratio less
than or equal to 1.00:1.00.
"Prohibited Transaction": a transaction which is prohibited
under Section 4975 of the Code or Section 406 of ERISA and not exempt (by reason
of statutory, class or individual exemption) under Section 4975 of the Code or
Section 408 of ERISA.
"Property": all types of real, personal, tangible, intangible
or mixed property.
"Proposed Lender": as defined in Section 3.9.
"Real Property": all real property owned or leased by the
Borrower or any of its Subsidiaries.
"Reference Lender": The Bank of New York.
"Refinancing Debt": unsecured Indebtedness incurred by the
Borrower to refinance all or a portion of the Indebtedness incurred
hereunder to the extent permitted to be incurred by Section 8.1(v).
"Regulatory Change": (i) the introduction or phasing in of any
law, rule or regulation after the Effective Date, (ii) the issuance or
promulgation after the Effective Date of any directive, guideline or request
from any central bank or United States or foreign Governmental Authority
(whether or not having the force of law), or (iii) any change after the
Effective Date in the interpretation of any existing law, rule, regulation,
directive, guideline or request by any central bank or United States or foreign
Governmental Authority charged with the administration thereof.
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"Reinvested Proceeds": with respect to that portion of Net
Cash Proceeds of any Disposition pursuant to Sections 8.4(c) which constitute
Excess Disposition Proceeds, the portion of such Net Cash Proceeds which are
used to make Consolidated Capital Expenditures or Permitted Acquisitions within
one year after the receipt of such Net Cash Proceeds by the Borrower or any of
its Subsidiaries.
"Reportable Event": with respect to any Pension Plan, (i) any
event set forth in Sections 4043(c) (other than a Reportable Event as to which
the 30 day notice requirement is waived by the PBGC under applicable
regulations), 4062(c) or 4063(a) of ERISA or the regulations thereunder, (ii) an
event requiring the Borrower, any of its Subsidiaries or any ERISA Affiliate to
provide security to a Pension Plan under Section 401(a)(29) of the Code, or
(iii) any failure to make any payment required by Section 412(m) of the Code.
"Required Lenders": at any time when (i) no Loans are
outstanding, Lenders having Revolving Credit Commitment Amounts (or if no
Revolving Credit Commitments then exist, Lenders having Revolving Credit
Commitment Amounts on the last day on which Revolving Credit Commitments did
exist) greater than or equal to 51% of the Aggregate Revolving Credit Commitment
Amount and (ii) at any time when Loans are outstanding, Lenders with Credit
Exposure greater than or equal to 51% of the Aggregate Credit Exposure.
"Required Payment": as defined in Section 3.7(a).
"Restricted Payment": as to any Person (i) any dividend or
other distribution, direct or indirect, on account of any shares of Capital
Stock or other equity interest in such Person now or hereafter outstanding
(other than a dividend payable solely in shares of such Capital Stock to the
holders of such shares), (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition, direct or indirect, of any
shares of any class of Capital Stock or other equity interest in such Person now
or hereafter outstanding and (iii) any repayment of Intercompany Indebtedness.
"Revolving Credit Commitment": in respect of any Lender, such
Lender's undertaking during the Revolving Credit Commitment Period to make
Revolving Credit Loans, subject to the terms and conditions hereof, in an
aggregate outstanding principal amount not exceeding the Revolving Credit
Commitment Amount of such Lender.
"Revolving Credit Commitment Amount": as of any date and with
respect to any Lender, the amount set forth adjacent to its name under the
heading "Revolving Credit Commitment Amount" in Exhibit A on such date or, in
the event that such Lender is not listed in Exhibit A, the "Revolving Credit
Commitment Amount" which such Lender shall have assumed from another Lender in
accordance with Section 11.7 on or prior to such date, as the same may be
increased from time to time pursuant to Section 2.5 or reduced from time to time
pursuant to Section 2.6.
"Revolving Credit Commitment Period": the period from the
Effective Date until the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date": the earlier of
the Business Day immediately preceding the Maturity Date or such other date upon
which the Revolving Credit Commitments shall have been terminated in accordance
with Section 2.6 or Section 9.2.
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"Revolving Credit Loan" and "Revolving Credit Loans": as
defined in Section 2.1.
"SEC": the Securities and Exchange Commission or any
Governmental Authority succeeding to the functions thereof.
"Shareholder Option Agreements": collectively, each of the
Agreements, dated as of November 12, 1996, by and among certain shareholders of
Medex who are officers or directors of Medex, Acquisition Corp. and the
Borrower, as same may be amended, supplemented or otherwise modified from time
to time in accordance with Section 8.9.
"Solvent": with respect to any Person on a particular date,
the condition that on such date, (i) the fair value of the Property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature, and (iv) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's Property would constitute an unreasonably
small amount of capital. For purposes of this definition, the amount of any
contingent liability at any time shall be computed as the amount that, in light
of all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability after
taking into account probable payments by co-obligors.
"Special Counsel": Emmet, Marvin & Martin, LLP, special
counsel to the Administrative Agent.
"Standard & Poor's": Standard & Poor's Rating Services, a
division of The McGraw-Hill Companies, Inc., or any successor thereto.
"Sterling Pounds": freely transferable lawful money of the
United Kingdom.
"Subsidiary": as to any Person, any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which such Person or any Subsidiary of such Person, directly or indirectly,
either (i) in respect of a corporation, owns or controls more than 50% of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the Managing Person, irrespective of whether a class or classes shall or might
have voting power by reason of the happening of any contingency, or (ii) in
respect of an association, partnership, limited liability company, joint venture
or other business entity, is entitled to share in more than 50% of the profits
and losses, however determined.
"Swing Line ABR Advances": the Swing Line Loans (or any
portions thereof), at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Alternate Base Rate.
"Swing Line Commitment": the undertaking of the Swing Line
Lender during the Swing Line Commitment Period to make Swing Line Loans,
subject to the
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terms and conditions hereof, in an aggregate outstanding principal amount not in
excess of the Swing Line Commitment Amount, and the commitment of the Lenders to
participate therein as set forth in Section 2.2, as the same may be reduced
pursuant to Section 2.6.
"Swing Line Commitment Amount": $10,000,000.
"Swing Line Commitment Period": the period from the Effective
Date to, but excluding, the Swing Line Termination Date.
"Swing Line Exposure": at any time, in respect of any Lender,
an amount equal to the aggregate outstanding principal amount of the Swing Line
Loans at such time multiplied by such Lender's Commitment Percentage at such
time.
"Swing Line Loan" and "Swing Line Loans": as defined in
Section 2.2(a).
"Swing Line Negotiated Rate Advances": the Swing Line Loans
(or any portions thereof), at such time as they (or such portions) are made
and/or being maintained at a rate of interest based upon a Negotiated Rate.
"Swing Line Participation Amount": as defined in Section
2.2(d).
"Swing Line Termination Date": the date which is five Business
Days prior to the Maturity Date.
"Syndication Period": the period commencing on the Effective
Date and ending on the earlier of the day which is 90 days after the first
Borrowing Date and the date on which the Administrative Agent gives written
notice to the Borrower that the syndication of the Revolving Credit Commitments
and the Revolving Credit Loans have been completed.
"Tax": any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature and whatever called, by a
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"Tax on the Income": as to any Person, a Tax imposed by one of
the following jurisdictions or by any political subdivision or taxing authority
thereof: (i) the United States, (ii) the jurisdiction in which such Person is
organized, (iii) the jurisdiction in which such Person's principal office is
located, or (iv) in the case of each Lender or the Administrative Agent, any
jurisdiction in which such Person is deemed to be doing business; which Tax is
an income tax or franchise tax imposed on all or part of the net income or net
profits of such Person or which Tax represents interest, fees, or penalties for
late payment of such an income tax or franchise tax.
"Tender Offer": the offer by the Borrower to purchase all of
the issued and outstanding shares of Medex Stock pursuant to the Offer to
Purchase.
"Termination Event": with respect to any Pension Plan, (i) a
Reportable Event, (ii) the termination of a Pension Plan, or the filing of a
notice of intent to terminate a Pension Plan, or the treatment of a Pension Plan
amendment as a termination, in each case under Section 4041(c) of ERISA, (iii)
the institution of proceedings to terminate a Pension Plan under Section 4042 of
ERISA, or (iv) the appointment of a trustee to administer any Pension Plan under
Section 4042 of ERISA.
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"Transaction Documents": collectively, the Loan Documents and
the Merger Documents.
"Transactions": collectively, the making of the Loans, the
Tender Offer, the Medex Stock Purchase and the Merger.
"Type": with respect to any Revolving Credit Loan, the
character of such Revolving Credit Loan as an ABR Advance, an Alternate Currency
Euro Advance or a Eurodollar Advance, each of which constitutes a type of loan.
"Unfunded Pension Liabilities": with respect to any Pension
Plan, at any date of determination, the amount determined by taking the
accumulated benefit obligation, as disclosed in accordance with Statement of
Accounting Standards No. 87, "Employers' Accounting for Pensions", over the fair
market value of Pension Plan assets.
"United States": the United States of America (including the
States thereof and the District of Columbia).
"Unqualified Amount": as defined in Section 3.1(c).
"Unrecognized Retiree Welfare Liability": with respect to any
Employee Benefit Plan that provides postretirement benefits other than pension
benefits and other than as required by Section 601 through 608 of ERISA, the
amount of the transition obligation, as determined in accordance with Statement
of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," as of the most recent valuation
date, that has not been recognized as an expense in an income statement of the
Borrower and its Subsidiaries, provided that prior to the date such Statement is
applicable to the Borrower, such amount shall be based on an estimate made in
good faith of such transition obligation.
"U.S. Person": a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under any
laws of the United States, or any estate or trust that is subject to United
States federal income taxation regardless of the source of its income.
1.2. Principles of Construction
(a) All terms defined in a Loan Document shall have the
meanings given such terms therein when used in the other Loan Documents or any
certificate, opinion or other document made or delivered pursuant thereto,
unless otherwise defined therein.
(b) As used in the Loan Documents and in any certificate,
opinion or other document made or delivered pursuant thereto, accounting terms
not defined in Section 1.1, and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP. If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in this Agreement, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith
to amend such ratio or requirement to reflect such change in GAAP (subject to
the approval of the Required Lenders), provided that, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (ii) the Borrower shall provide to the Administrative
Agent and the Lenders
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financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and
similar words when used in a Loan Document shall refer to such Loan Document as
a whole and not to any particular provision thereof, and Section, schedule and
exhibit references contained therein shall refer to Sections thereof or
schedules or exhibits thereto unless otherwise expressly provided therein.
(d) The phrase "may not" is prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural include the
singular.
(f) Unless specifically provided in a Loan Document to the
contrary, any reference to a time shall refer to such time in New York.
(g) Unless specifically provided in a Loan Document to the
contrary, in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall
refer to that fiscal period of the Borrower.
2. AMOUNT AND TERMS OF LOANS
2.1. Revolving Credit Loans
Subject to the terms and conditions hereof, each Lender
severally (and not jointly) agrees to make revolving credit loans (each a
"Revolving Credit Loan" and, as the context may require, collectively with all
other Revolving Credit Loans of such Lender and with the Revolving Credit Loans
of all other Lenders, the "Revolving Credit Loans") to the Borrower from time to
time during the Revolving Credit Commitment Period, provided that immediately
after giving effect thereto (i) such Lender's Credit Exposure would not exceed
such Lender's Revolving Credit Commitment Amount, and (ii) the Aggregate Credit
Exposure would not exceed the Aggregate Revolving Credit Commitment Amount.
During the Revolving Credit Commitment Period, the Borrower may borrow, prepay
in whole or in part and reborrow under the Revolving Credit Commitments, all in
accordance with the terms and conditions of this Agreement. Subject to the
provisions of Sections 2.3 and 3.3, at the option of the Borrower, Revolving
Credit Loans may be (i) Dollar Revolving Credit Loans in which case they may be
made as one or more (A) ABR Advances, (B) Eurodollar Advances or (C) any
combination thereof or (ii) Alternate Currency Loans in which case they shall be
made as one or more Alternate Currency Euro Advances, provided, however, in no
event shall the aggregate outstanding principal balance of Alternate Currency
Loans (determined on the basis of the Dollar Equivalent of each Alternate
Currency Loan) exceed $30,000,000. The Revolving Credit Loans, together with all
accrued and unpaid interest thereon, shall mature and be due and payable in the
Applicable Currency on the Maturity Date.
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2.2. Swing Line Loans
(a) Subject to the terms and conditions of this Agreement, the
Swing Line Lender agrees to make swing line loans (each a "Swing Line Loan" and,
collectively, the "Swing Line Loans") to the Borrower in Dollars from time to
time during the Swing Line Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed the Swing Line Commitment Amount,
provided that immediately after making each Swing Line Loan, (i) the Swing Line
Lender's Credit Exposure would not exceed the Swing Line Lender's Revolving
Credit Commitment Amount (in its capacity as a Lender), (ii) the aggregate
unpaid balance of the Swing Line Loans would not exceed the Swing Line
Commitment Amount and (iii) the Aggregate Credit Exposure of all Lenders would
not exceed the Aggregate Revolving Credit Commitment Amount. During the Swing
Line Commitment Period, the Borrower may borrow, prepay in whole or in part and
reborrow under the Swing Line Commitment, all in accordance with the terms and
conditions of this Agreement. No Swing Line Loan shall be made prior to the
making of the first Revolving Credit Loans on the first Borrowing Date.
(b) The Swing Line Lender shall not be obligated to make any
Swing Line Loan at a time when any Lender shall be in default of its obligations
under this Agreement unless the Swing Line Lender has entered into arrangements
satisfactory to it and the Borrower to eliminate the Swing Line Lender's risk
with respect to such defaulting Lender's participation in such Swing Line Loan.
The Swing Line Lender will not make a Swing Line Loan if the Administrative
Agent, or any Lender by notice to the Swing Line Lender and the Borrower no
later than one Business Day prior to the Borrowing Date with respect to such
Swing Line Loan, shall have determined that the conditions set forth in Section
6 have not been satisfied and such conditions remain unsatisfied as of the
requested time of the making such Loan. Each Swing Line Loan shall be due and
payable on the day being the earliest of the last day of the Interest Period
applicable thereto, the date on which the Swing Line Commitment shall have been
voluntarily terminated by the Borrower in accordance with Section 2.6, and the
Maturity Date.
(c) On any Business Day on which a Swing Line Loan shall be
due and payable and shall remain unpaid, the Swing Line Lender may, in its sole
discretion, give notice to the Lenders and the Borrower that such outstanding
Swing Line Loan shall be funded with a borrowing of Revolving Credit Loans
(provided that such notice shall be deemed to have been automatically given upon
the occurrence of a Default or an Event of Default under Sections 9.1(g) or
(h)), in which case a borrowing of Revolving Credit Loans made as ABR Advances
(each such borrowing, a "Mandatory Borrowing"), shall be made by all Lenders pro
rata based on each such Lender's Commitment Percentage on the Business Day
immediately succeeding the giving of such notice. The proceeds of each Mandatory
Borrowing shall be remitted directly to the Swing Line Lender to repay such
outstanding Swing Line Loan. Each Lender irrevocably agrees to make a Revolving
Credit Loan pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swing Line Lender notwithstanding: (i) the amount of such Mandatory Borrowing
may not comply with the minimum amount for Loans otherwise required hereunder,
(ii) whether any condition specified in Section 6 is then unsatisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the Borrowing Date of
such Mandatory Borrowing, (v) the aggregate principal amount of all Loans then
outstanding (determined on the basis of the Dollar Equivalent of each
outstanding Alternate Currency Loan), (vi) the Aggregate Credit Exposure at such
time and (vii) the Aggregate Revolving Credit Commitment Amount at such time.
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(d) Upon each receipt by a Lender of notice of an Event of
Default from the Administrative Agent pursuant to Section 10.5, such Lender
shall purchase unconditionally, irrevocably, and severally (and not jointly)
from the Swing Line Lender a participation in the outstanding Swing Line Loans
(including accrued interest thereon) in an amount equal to the product of its
Commitment Percentage and the outstanding amount of the Swing Line Loans (the
"Swing Line Participation Amount"). Each Lender shall also be liable for an
amount equal to the product of its Commitment Percentage and any amounts paid by
the Borrower pursuant to this subsection (d) that are subsequently rescinded or
avoided, or must otherwise be restored or returned. Such liabilities shall be
unconditional and without regard to the occurrence of any Default or Event of
Default or the compliance by the Borrower with any of its obligations under the
Loan Documents.
(e) In furtherance of subsection (d) above, upon each receipt
by a Lender of notice of an Event of Default from the Administrative Agent
pursuant to Section 10.5, such Lender shall promptly make available to the
Administrative Agent for the account of the Swing Line Lender its Swing Line
Participation Amount at the Applicable Payment Office of the Administrative
Agent in lawful money of the United States and in immediately available funds.
The Administrative Agent shall deliver the payments made by each Lender pursuant
to the immediately preceding sentence to the Swing Line Lender promptly upon
receipt thereof in like funds as received. Each Lender shall indemnify and hold
harmless the Administrative Agent and the Swing Line Lender from and against any
and all losses, liabilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses resulting from any failure on the
part of such Lender to pay, or from any delay in paying the Administrative Agent
any amount such Lender is required to pay in accordance with this subsection (e)
upon receipt of notice of Event of Default from the Administrative Agent
pursuant to Section 10.5 (except in respect of losses, liabilities or other
obligations suffered by the Administrative Agent or the Swing Line Lender, as
the case may be, resulting from the gross negligence or willful misconduct of
the Administrative Agent or the Swing Line Lender, as the case may be), and such
Lender shall be required to pay interest to the Administrative Agent for the
account of the Swing Line Lender from the date such amount was due until paid in
full, on the unpaid portion thereof, at a rate of interest per annum equal to
the Federal Funds Rate, payable upon demand by the Swing Line Lender. The
Administrative Agent shall distribute such interest payments to the Swing Line
Lender upon receipt thereof in like funds as received.
(f) Whenever the Administrative Agent is reimbursed by the
Borrower, for the account of the Swing Line Lender, for any payment in
connection with Swing Line Loans and such payment relates to an amount
previously paid by a Lender pursuant to this Section, the Administrative Agent
will promptly pay over such payment to such Lender.
2.3. Procedure for Borrowing
(a) Revolving Credit Loans. The Borrower may borrow under the
Revolving Credit Commitments on any Business Day during the Revolving Credit
Commitment Period, provided that the Borrower shall notify the Administrative
Agent by the delivery of a Borrowing Request, which shall be sent by telecopy
and shall be irrevocable (confirmed promptly, and in any event within five
Business Days, by the delivery to the Administrative Agent of a Borrowing
Request manually signed by the Borrower), no later than: 11:00 a.m., four
Business Days prior to the requested Borrowing Date, in the case of Alternate
Currency Euro Advances, 2:00 p.m., three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Advances, and 2:00 p.m., one Business
Day prior to the requested Borrowing Date, in the case of ABR Advances,
specifying (A)
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the aggregate principal amount to be borrowed under the Revolving Credit
Commitments (stated in the applicable Alternate Currency in the case of an
Alternate Currency Loan), (B) the requested Borrowing Date, (C) whether such
borrowing is of a Dollar Revolving Credit Loan and, if so, whether such
borrowing is to consist of one or more Eurodollar Advances, ABR Advances, or a
combination thereof, (D) whether such borrowing is of an Alternate Currency Loan
and, if so, the applicable Alternate Currency, and (E) if the borrowing is to
consist of one or more Eurodollar Advances or Alternate Currency Euro Advances,
the length of the Interest Period for each such Eurodollar Advance or Alternate
Currency Euro Advance. Each (i) Eurodollar Advance to be made on a Borrowing
Date, when aggregated with all amounts to be converted to a Eurodollar Advance
on such date and having the same Interest Period as such first Eurodollar
Advance, shall equal no less than $5,000,000 or such amount plus a whole
multiple of $1,000,000 in excess thereof, (ii) Alternate Currency Euro Advance
to be made on a Borrowing Date shall equal no less than an amount in the
applicable Alternate Currency having a Dollar Equivalent of approximately
$5,000,000 or such amount plus a whole multiple of approximately $1,000,000 in
excess thereof, and (iii) ABR Advance made on each Borrowing Date shall equal no
less than $1,000,000 or such amount plus a whole multiple of $500,000 in excess
thereof or, if less, unused portion of the Aggregate Revolving Credit Commitment
Amount. Upon receipt of each Borrowing Request requesting Revolving Credit
Loans, the Administrative Agent shall promptly notify each Lender thereof.
(b) Swing Line Loans. The Borrower may borrow under the Swing
Line Commitment on any Business Day during the Swing Line Commitment Period,
provided that the Borrower shall notify the Administrative Agent and the Swing
Line Lender by the delivery of a Borrowing Request, which shall be sent by
telecopy and shall, subject to the agreement of the Borrower and the Swing Line
Lender as to the Negotiated Rate to be applicable to a requested Swing Line
Negotiated Rate Advance, be irrevocable (confirmed promptly, and in any event
within five Business Days, by the delivery to the Administrative Agent of a
Borrowing Request manually signed by the Borrower), no later than: 3:00 p.m. on
the requested Borrowing Date, specifying (i) the aggregate principal amount to
be borrowed under the Swing Line Commitment, (ii) the requested Borrowing Date,
(iii) whether such borrowing is to consist of one or more Swing Line Negotiated
Rate Advances, Swing Line ABR Advances, or a combination thereof and (iv) the
length of the Interest Period for each Swing Line Loan, provided, however, that
no Interest Period selected in respect of any Swing Line Loan shall end after
the Swing Line Termination Date. Each borrowing of Swing Line Loans shall be in
a principal amount not less than $1,000,000 or such amount plus a whole multiple
of $250,000 in excess thereof, or, if less, the unused portion of the Swing Line
Commitment Amount.
2.4. Disbursement of Funds
(a) Revolving Credit Loans. No later than (i) 12:00 noon
(local time in the city in which the proceeds of Alternate Currency Loans are to
be made available in accordance with the terms hereof) on the date specified in
each Borrowing Request for the borrowing of Alternate Currency Loans and (ii)
12:00 noon on the date specified in each Borrowing Request for the borrowing of
Dollar Revolving Credit Loans, each Lender will make available its pro rata
portion of the Loans requested to be made on such date in the Applicable
Currency. All Revolving Credit Loans shall be made available in immediately
available funds at the Applicable Payment Office of the Administrative Agent,
and the Administrative Agent, will, subject to the satisfaction of the terms and
conditions of this Agreement, as determined by the Administrative Agent, make
available to the Borrower at
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such Applicable Payment Office, in the Applicable Currency, and in like funds as
received, the aggregate of the amounts so made available by the Lenders.
(b) Swing Line Loans. The Swing Line Lender will, subject to
its determination that the terms and conditions of this Agreement have been
satisfied and, in the case of a Swing Line Negotiated Rate Advance, subject to
its agreement with the Borrower on the Negotiated Rate to be applicable thereto,
make the requested amount available promptly on that same day to the
Administrative Agent at its Applicable Payment Office who, thereupon, will
promptly make available to the Borrower at such Applicable Payment Office, in
like funds as received, the amount so made available by the Swing Line Lender,
to the extent of funds actually received by the Administrative Agent.
(c) Failure to Fund. Unless the Administrative Agent shall
have received prior notice from a Lender (by telephone or otherwise, such notice
to be promptly confirmed by telecopy or other writing) that such Lender will not
make available to the Administrative Agent such Lender's Commitment Percentage
of the Revolving Credit Loans requested by the Borrower, the Administrative
Agent may assume that such Lender has made such share available to the
Administrative Agent on the Borrowing Date in accordance with this Section,
provided that such Lender received notice of the requested Revolving Credit
Loans from the Administrative Agent, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on the Borrowing
Date a corresponding amount. If and to the extent such Lender shall not have so
made its Commitment Percentage of such Revolving Credit Loans available to the
Administrative Agent, such Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount (to the
extent not previously paid by the other), together with interest thereon for
each day from the date such amount is made available to the Borrower to the date
such amount is paid to the Administrative Agent, at a rate per annum equal to,
in the case of the Borrower, the applicable interest rate for such Revolving
Credit Loan as set forth in Section 3.1, and, in the case of such Lender, at a
rate of interest per annum equal to the Federal Funds Rate (or, in the case of
an Alternate Currency Loan, at a rate based upon the all-in cost of the funds
for the Applicable Currency as determined by the Administrative Agent). Such
payment by the Borrower, however, shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's
Revolving Credit Loan as part of the Revolving Credit Loans for purposes of this
Agreement, which Loan shall be deemed to have been made by such Lender on the
Borrowing Date applicable to such Revolving Credit Loans.
2.5. Increases in Aggregate Revolving Credit Commitment Amount
(a) Provided that no Default or Event of Default shall exist
immediately before and after giving effect thereto, the Borrower may, subject to
the provisions of this Section, from time to time elect that the Aggregate
Revolving Credit Commitment Amount be increased by an amount not in excess of
$50,000,000, provided that, in no event shall the Aggregate Revolving Credit
Commitment Amount exceed $250,000,000. Any such increase shall be in an amount
equal to $5,000,000 or such amount plus a whole multiple of $1,000,000 in excess
thereof. Such election shall be made in a writing delivered by the Borrower to
the Administrative Agent which shall, in turn, promptly deliver a copy thereof
to each Lender.
(b) In the event that the Borrower elects to increase the
Aggregate Revolving Credit Commitment Amount, (i) the Borrower may request any
one or more
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Lenders to elect to increase its Revolving Credit Commitment Amount (it being
understood that no Lender shall have a right to participate in whole or in part
in any such increase), (ii) any Lender requested by the Borrower to do so may
(but is not obligated to) elect to increase its Revolving Credit Commitment
Amount and (iii) with the written consent of the Administrative Agent and the
Swing Line Lender (such consents not to be unreasonably withheld), one or more
additional banks or other financial institutions may, by execution of this
Agreement, become parties hereto and undertake Revolving Credit Commitments
hereunder and any such Lender, bank or other financial institution shall
thereafter for all purposes be treated as a Lender as though it had been an
original signatory to this Agreement. To the extent that no such Lender or
acceptable additional bank or other financial institution is willing to increase
its Revolving Credit Commitment Amount or undertake a Revolving Credit
Commitment, as the case may be, the Aggregate Revolving Credit Commitment Amount
shall not be increased.
(c) On and as of the date upon which an increase in the
Aggregate Revolving Credit Commitment Amount shall become effective, each Lender
increasing its Revolving Credit Commitment Amount and each existing Lender or
new bank or financial institution assuming a Revolving Credit Commitment shall
pay to the Administrative Agent such amount as may be necessary so that such
Lender's or such new bank's or financial institution's outstanding principal
balance of Revolving Credit Loans shall equal its Commitment Percentage of the
aggregate outstanding principal balance of the Revolving Credit Loans after
giving effect to such increase, and the Administrative Agent shall distribute
such amounts among the other Lenders accordingly. If the Administrative Agent
deems it appropriate in connection with any such increase, as a condition
thereto, the Borrower and the affected Lenders shall execute a master assignment
and acceptance agreement or other document mutually acceptable to the parties
thereto.
(d) Upon any increase of the Aggregate Revolving Credit
Commitment Amounts pursuant to this Section, the Administrative Agent shall
revise Exhibit A and Schedules 1.1 and 1.1A accordingly.
2.6. Termination or Reduction of Revolving Credit Commitments and
Swing Line Commitment
(a) Voluntary Reductions. (i) The Borrower shall have the
right, upon at least three Business Days' prior written notice to the
Administrative Agent, to reduce permanently the Aggregate Revolving Credit
Commitment Amount, in whole at any time, or in part from time to time, to an
amount not less than the sum of (A) the aggregate principal balance (determined
on the basis of the Dollar Equivalent for each Alternate Currency Loan) of the
Revolving Credit Loans then outstanding (after giving effect to any
contemporaneous prepayment thereof) and (B) the Swing Line Exposure, provided,
however, that each partial reduction of the Aggregate Revolving Credit
Commitment Amount shall be an amount equal to $5,000,000 or such amount plus a
whole multiple of $1,000,000 in excess thereof.
(ii) The Borrower shall have the right, upon at least
one Business Day's prior written notice to the Administrative Agent and the
Swing Line Lender to reduce permanently the Swing Line Commitment Amount in
whole at any time, or in part from time to time, to an amount not less than the
aggregate principal balance of the Swing Line Loans then outstanding (after
giving effect to any contemporaneous prepayment thereof), provided, however,
that each partial reduction of the Swing Line Commitment
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Amount shall be in an amount equal to of $1,000,000 or such amount plus a whole
multiple of $250,000 in excess thereof.
(b) Mandatory Reduction in Respect of an Equity Offering or
Issuance of Refinancing Debt. The Aggregate Revolving Credit Commitment Amount
shall be permanently reduced in the event of any Equity Offering or the issuance
of any Refinancing Debt by an amount equal to (i) in the case of an Equity
Offering consummated within one year after the consummation of the Medex Stock
Purchase, 100% of the Net Issuance Proceeds thereof, (ii) in the case of any
other Equity Offering, 50% of the Net Issuance Proceeds thereof and (iii) in the
case of the issuance of any Refinancing Debt, 100% of the Net Issuance Proceeds
thereof; provided, however, that the Aggregate Revolving Credit Commitment
Amount shall not be reduced to less than $150,000,000 pursuant to this
subsection.
(c) Mandatory Termination on Change of Control. Upon the
occurrence of a Change of Control, the Revolving Credit Commitments and the
Swing Line Commitment shall terminate as of the effective date of such Change of
Control unless the Borrower requests by written notice to the Administrative
Agent that the Lenders unanimously approve a waiver of this Section 2.6(c) and
agree that all or a portion of the Revolving Credit Commitments and the Swing
Line Commitment shall remain in effect. In the event that the Change of Control
has not been approved by the board of directors of the Borrower, the Lenders'
decision whether or not to grant a waiver under this Section 2.6(c) shall be in
their absolute and sole discretion. In the event that the Change of Control as
been approved by the board of directors of the Borrower, the Lenders' decision
whether or not to grant a waiver under this Section 2.6(c) shall be in their
reasonable judgment. Any waiver of this Section 2.6(c) shall not be effective
unless approved by all the Lenders in writing.
(d) Mandatory Reductions Relating to Dispositions. With
respect to each Disposition described in Section 8.4(c), the Aggregate Revolving
Credit Commitment Amount shall be permanently reduced on the applicable
Disposition Reduction/Prepayment Date by an amount equal to the Disposition
Reduction/Prepayment Amount in respect of such Disposition.
(e) In General. Reductions of the Aggregate Revolving Credit
Commitment Amount shall be applied pro rata according to the Revolving Credit
Commitment Amount of each Lender, provided, however, that in the event that at
any time during the Syndication Period, the Aggregate Revolving Credit
Commitments are to be reduced pursuant to subsection (b) above and if at such
time the Revolving Credit Commitment Amount of BNY exceeds the Revolving Credit
Commitment Amount of any other Lender, the first $100,000,000 of such reduction
(or such lesser amount as BNY shall direct) shall be applied first to reduce
BNY's Revolving Credit Commitment Amount and the balance thereof shall be
applied pro rata according to the Revolving Credit Commitment Amount of each
Lender (including BNY). In the event that the Aggregate Revolving Credit
Commitment Amount is reduced to any amount less than the Swing Line Commitment
Amount, the Swing Line Commitment Amount shall be permanently reduced to an
amount equal to such Aggregate Revolving Credit Commitment Amount as so reduced.
Simultaneously with each reduction of the Aggregate Revolving Credit Commitment
Amount under this Section, the Borrower shall pay the Commitment accrued on the
amount by which the Aggregate Revolving Credit Commitment Amount has been
reduced and prepay the Revolving Credit Loans and the Swing Line Loans as
required by Section 2.7(b).
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2.7. Prepayments
(a) Voluntary Prepayments. The Borrower may, at its option,
prepay the Revolving Credit Loans without premium or penalty (but subject to
Section 3.5), in full at any time or in part from time to time by notifying the
Administrative Agent in writing at least one Business Day prior to the proposed
prepayment date, in the case of Revolving Credit Loans consisting of ABR
Advances, and at least three Business Days prior to the proposed prepayment
date, in the case of Revolving Credit Loans consisting of Eurodollar Advances or
Alternate Currency Euro Advances, specifying whether the Revolving Credit Loans
to be prepaid consist of ABR Advances, Eurodollar Advances, Alternate Currency
Euro Advances or a combination thereof, the amount to be prepaid and the date
of prepayment. Each such notice shall be irrevocable and the amount specified in
each such notice shall be due and payable on the date specified, together with
accrued interest to the date of such payment on the amount prepaid. Upon receipt
of such notice, the Administrative Agent shall promptly notify each Lender
thereof. Each partial prepayment of ABR Advances pursuant to this subsection
shall be in an aggregate principal amount of $1,000,000 or such amount plus a
whole multiple of $500,000 in excess thereof, or, if less, the outstanding
principal balance of the ABR Advances. After giving effect to any partial
prepayment with respect to Eurodollar Advances which were made (whether as the
result of a borrowing or a conversion) on the same date and which had the same
Interest Period, the outstanding principal amount of such Eurodollar Advances
shall equal (subject to Section 3.3) $5,000,000 or such amount plus a whole
multiple of $1,000,000 in excess thereof. After giving effect to any partial
prepayment with respect to Alternate Currency Euro Advances which were made
(whether as the result of a borrowing or a conversion) on the same date and
which had the same Interest Period, the outstanding principal amount of such
Alternate Currency Euro Advances shall equal the Alternate Currency Equivalent
of approximately $5,000,000 or such amount plus a whole multiple of
approximately $1,000,000 in excess thereof.
(b) Mandatory Prepayments of Revolving Credit Loans and Swing
Line Loans Relating to Reductions of the Aggregate Revolving Credit Commitment
Amount and the Swing Line Commitment Amount. Simultaneously with each reduction
of the Aggregate Revolving Credit Commitment Amount or the Swing Line Commitment
Amount under Section 2.6, the Borrower shall prepay the Revolving Credit Loans
or the Swing Line Loans, as the case may be, by the amount, if any, by which (i)
in the case of a reduction of the Aggregate Revolving Credit Commitment Amount,
the Aggregate Credit Exposure exceeds the Aggregate Revolving Credit Commitment
Amount after giving effect to such reduction and (ii) in the case of a reduction
of the Swing Line Commitment Amount, the outstanding principal balance of the
Swing Line Loans exceeds the Swing Line Commitment Amount after giving effect to
such reduction.
(c) Mandatory Prepayments of Revolving Credit Loans and Swing
Line Loans Relating to a Termination of the Revolving Credit Commitments and
Swing Line Commitment. Upon the termination of the Revolving Credit Commitments
and Swing Line Commitment pursuant to Sections 2.6(a) or (c), the Borrower shall
(i) prepay in full the outstanding principal balance of the Revolving Credit
Loans and the Swing Line Loans, together with accrued and unpaid interest
thereon and (ii) pay in full all fees and other amounts payable under the Loan
Documents.
(d) Mandatory Prepayments in Respect of an Equity Offering or
Issuance of Refinancing Debt. In the event of an Equity Offering or the issuance
of Refinancing Debt, the Borrower shall prepay the Revolving Credit Loans by an
amount equal to (i)
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in the case of an Equity Offering consummated within one year after the
consummation of the Medex Stock Purchase, 100% of the Net Issuance Proceeds
thereof, (ii) in the case of any other Equity Offering, 50% of the Net Issuance
Proceeds thereof and (iii) in the case of the issuance of any Refinancing Debt,
100% of the Net Issuance Proceeds thereof. Each payment required to be made
under this subsection shall be made on the date of the receipt of the relevant
Net Issuance Proceeds.
(e) Prepayments Relating to Dollar Equivalent Calculation. If
on any date that the Dollar Equivalent is required to be calculated pursuant to
Section 11.9 the Aggregate Credit Exposure shall exceed the Aggregate Revolving
Credit Commitment Amount, the Borrower shall prepay the Loans in an aggregate
principal amount such that immediately after giving effect thereto, the
Aggregate Credit Exposure shall not exceed the Aggregate Revolving Credit
Commitment Amount. In addition, if on any date that the Dollar Equivalent is
required to be calculated pursuant to Section 11.9 the outstanding principal
balance of Alternate Currency Loans (determined on the basis of the Dollar
Equivalent for each outstanding Alternate Currency Loan) shall exceed
$30,000,000, the Borrower shall prepay the Alternate Currency Loans in an
aggregate principal amount such that immediately after giving effect thereto,
the outstanding principal balance of the Alternate Currency Loans (determined on
the basis of the Dollar Equivalent for each outstanding Alternate Currency Loan)
shall not exceed $30,000,000.
(f) Mandatory Prepayments Relating to Dispositions. In respect
of any Disposition described in Section 8.4(c), on the applicable Disposition
Reduction/Prepayment Date, the Borrower shall prepay the Revolving Credit Loans
by an amount equal to 100% of the Disposition Reduction/Prepayment Amount if
any.
(g) In General. Simultaneously with each prepayment of a Loan,
the Borrower shall prepay all accrued interest on the amount prepaid through the
date of prepayment. Unless otherwise specified by the Borrower, each prepayment
of (i) Revolving Credit Loans shall first be applied to ABR Advances and (ii)
Swing Line Loans shall first be applied to Swing Line ABR Advances. If any
prepayment is made in respect of any Eurodollar Advance, Alternate Currency Euro
Advance or any Swing Line Negotiated Rate Advance, in whole or in part, prior to
the last day of the applicable Interest Period, the Borrower agrees to indemnify
the Lenders in accordance with Section 3.5.
2.8. Use of Proceeds
The Borrower agrees that the proceeds of the Loans shall be
used solely, directly or indirectly, to (i) repay the Existing Furon Bank Debt,
(ii) make an equity contribution to Acquisition Corp. to enable Acquisition
Corp. to consummate the Tender Offer and the Merger and repay the Existing Medex
Bank Debt, the Indebtedness of Medex under the Existing Medex Bond Documents and
the Indebtedness of Medfusion, Inc. under the Existing Medfusion Bond Documents,
(iii) make Restricted Payments permitted under Section 8.6(iii), (iv) pay all of
the Fees due hereunder, (v) pay the reasonable out-of-pocket fees and expenses
incurred by the Borrower in connection with the Transaction Documents and (vi)
for the Borrower's general corporate purposes not inconsistent with the
provisions hereof. Notwithstanding anything to the contrary contained in any
Loan Document, the Borrower agrees that no part of the proceeds of any Loan will
be used, directly or indirectly, for a purpose which violates any law,
including, without limitation, the provisions of Regulations G, U or X of the
Board of Governors of the Federal Reserve System, as amended.
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2.9. Payments
(a) Each borrowing of Revolving Credit Loans by the Borrower
from the Lenders, any conversion of Revolving Credit Loans from one Type to
another and any reduction in the Revolving Credit Commitment Amount shall be
made pro rata according to the Commitment Percentage of such Lender. Each
payment, including each prepayment, of principal and interest on (i) the
Revolving Credit Loans, of the Commitment Fee, and of all of the other fees to
be paid to the Administrative Agent and the Lenders in connection with this
Agreement (the Commitment Fee, together with all of such other fees, being
sometimes hereinafter collectively referred to as the "Fees") shall be made by
the Borrower prior to 4:00 p.m. on the date such payment is due to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's Applicable Payment Office, in each case in the Applicable Currency, in
immediately available funds and without set-off or counterclaim. As between the
Borrower and the Lenders, any payment by the Borrower to the Administrative
Agent for the account of the Lenders shall be deemed to be payment by the
Borrower to the Lenders. The failure of the Borrower to make any such payment by
such time shall not constitute a Default, provided that such payment is made on
such due date, but any such payment made after 4:00 p.m. (local time in the city
in which the Administrative Agent's Applicable Lending Office is located) on
such due date shall be deemed to have been made on the next Business Day for the
purpose of calculating interest on amounts outstanding on the Revolving Credit
Loans. Promptly upon receipt thereof, the Administrative Agent shall remit, in
like funds as received, (i) to the Lenders according to the Commitment
Percentage of each Lender, in the case of the Commitment Fee, (ii) to the
Lenders pro rata according to the aggregate outstanding principal balance of the
Revolving Credit Loans, in the case of principal and interest due on the
Revolving Credit Loans and (iii) to the Swing Line Lender in the case of
principal and interest due on the Swing Line Loan.
(b) If any payment hereunder shall be due and payable on a day
which is not a Business Day, the due date thereof (except as otherwise provided
in the definition of Interest Period) shall be extended to the next Business Day
and (except with respect to payments in respect of the Fees) interest shall be
payable at the applicable rate specified herein during such extension, provided,
however that if such next Business Day is after the Maturity Date, any such
payment shall be due on the immediately preceding Business Day.
(c) The principal of and interest on each Alternate Currency
Loan shall be paid only in the Applicable Currency for such Alternate Currency
Loan.
2.10. Records
(a) Lender's Records. Each Lender will note on its internal
records with respect to each Revolving Credit Loan made by it and the Swing Line
Lender will note on its internal records with respect to each Swing Line Loan
made by it: (i) the date and amount of such Revolving Credit Loan or Swing Line
Loan, as the case may be, (ii) in the case of a Revolving Credit Loan, the
character of such Revolving Credit Loan as an ABR Advance, a Eurodollar Advance
or an Alternate Currency Euro Advance or a combination thereof, (iii) in the
case of a Swing Line Loan, the character of such Swing Line Loan as a Swing Line
ABR Advance or a Swing Line Negotiated Rate Advance, (iv) the Interest Period
and the interest rate (without regard to the Applicable Margin) or the
Negotiated Rate applicable to Eurodollar Advances, Alternate Currency Euro
Advances or Negotiated
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Rate Advances, as the case may be, and (v) each payment and prepayment of the
principal of each Revolving Credit Loan or Swing Line Loan, as the case may be.
(b) Administrative Agent's Records. The Administrative Agent
shall keep records regarding the Revolving Credit Loans, Swing Line Loans and
the Loan Documents in accordance with its customary procedures for agented
credits.
(c) Prima Facie Evidence. The entries made in the records
maintained pursuant to subsections (a) and (b) above shall, to the extent not
prohibited by applicable law, be prima facie evidence of the existence and
amount of the obligations of the Borrower recorded therein absent manifest
error; provided that the failure of the Administrative Agent, any Lender or the
Swing Line Lender, as the case may be, to make any notation on its records shall
not affect the Borrower's obligations in respect of the Revolving Credit Loans,
Swing Line Loans or any other Loan Documents. In the event of any inconsistency
between the Administrative Agent's records and the Lender's records, the
Administrative Agent's records shall govern.
(d) Notes. Upon the request of any Lender (in connection with
a proposed assignment to a Federal Reserve Bank as contemplated by Section
11.7(f)) to the Administrative Agent and the Borrower, the Borrower agrees, at
its expense, to execute and deliver to the Administrative Agent for the account
of such Lender one or more promissory notes evidencing the Loan or Loans of such
Lender to such Borrower, substantially in the form of Exhibit H.
3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1. Interest Rate and Payment Dates
(a) Prior to Maturity. Except as otherwise provided in Section
3.1(b) and 3.1(c), prior to maturity, the Loans shall bear interest on the
outstanding principal balance thereof at the applicable interest rate or rates
per annum set forth below:
ADVANCES RATE
Each ABR Advance Alternate Base Rate.
Each Eurodollar Advance Eurodollar Rate for the applicable
Interest Period plus the Applicable
Margin.
Each Alternate Currency
Euro Advance Alternate Currency, Euro Rate for the
applicable Interest Period plus the
Applicable Margin.
Each Swing Line ABR Advance Alternate Base Rate.
Each Swing Line Negotiated
Rate Advance Negotiated Rate applicable to such Swing
Line Negotiated Rate Advance for the
applicable Interest Period.
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(b) Late Charges. If all or any portion of the principal
balance of or interest payable on any of the Loans or any other amount payable
under the Loan Documents shall not be paid when due (whether at the stated
maturity thereof, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum (whether before or after the entry of a judgment
thereon) equal to 2% plus the rate which would otherwise be applicable pursuant
to Section 3.1(a), from the date such amount was due to, but not including, the
date such amount is paid in full. For purposes of the preceding sentence, the
rate applicable pursuant to Section 3.1(a) to any overdue, principal, interest
or other amount payable under the Loan Documents shall be (i) in the case of an
overdue principal balance of any Eurodollar Advance, the applicable Eurodollar
Rate plus the Applicable Margin until the last day of the applicable Interest
Period (or the earlier termination thereof pursuant to this Agreement) and
thereafter at the Alternate Base Rate, (ii) in the case of an overdue principal
balance of any Alternate Currency Euro Advance, the applicable Alternate
Currency Euro Rate plus the Applicable Margin until the last day of the
applicable Interest Period (or the earlier termination thereof pursuant to this
Agreement) and thereafter at the Alternate Currency Euro Rate for additional
Interest Periods of one month each (which the Borrower shall be deemed to have
elected) plus the Applicable Margin, (iii) in the case of an overdue principal
balance of any Swing Line Negotiated Rate Advance, the applicable Negotiated
Rate until the last day of the applicable Interest Period (or the earlier
termination thereof pursuant to this Agreement) and thereafter at the Alternate
Base Rate and (iv) in all other cases, the Alternate Base Rate. All such
interest shall be payable on demand.
(c) Highest Lawful Rate. At no time shall the interest rate
payable on the Loans of any Lender, together with the Fees and all other amounts
payable under the Loan Documents to such Lender, to the extent the same are
construed to constitute interest, exceed the Highest Lawful Rate applicable to
such Lender. If with respect to any Lender for any period during the term of
this Agreement, any amount paid to such Lender under the Loan Documents, to the
extent the same shall (but for the provisions of this Section) constitute or be
deemed to constitute interest, would exceed the maximum amount of interest
permitted by the Highest Lawful Rate applicable to such Lender during such
period (such amount being hereinafter referred to as an "Unqualified Amount"),
then (i) such Unqualified Amount shall be applied or shall be deemed to have
been applied as a prepayment of the Revolving Credit Loans of such Lender, and
(ii) if in any subsequent period during the term of this Agreement, all amounts
payable under the Loan Documents to such Lender in respect of such period which
constitute or shall be deemed to constitute interest shall be less than the
maximum amount of interest permitted by the Highest Lawful Rate applicable to
such Lender during such period, then the Borrower shall pay to such Lender in
respect of such period an amount (each a "Compensatory Interest Payment") equal
to the lesser of (x) a sum which, when added to all such amounts, would equal
the maximum amount of interest permitted by the Highest Lawful Rate applicable
to such Lender during such period, and (y) an amount equal to the Unqualified
Amount less all other Compensatory Interest Payments made in respect thereof.
(d) In General. Interest on (i) ABR Advances and Swing Line
ABR Advances to the extent based on the BNY Rate and on Alternate Currency Loans
in Sterling Pounds shall be calculated on the basis of a 365 or 366-day year (as
the case may be), and (ii) ABR Advances and Swing Line ABR Advances to the
extent based on the Federal Funds Rate, on Eurodollar Advances, on Alternate
Currency Loans (other than Alternate Currency Loans in Sterling Pounds) and on
Swing Line Negotiated Rate Advances shall be calculated on the basis of a
360-day year, in each case, for the actual number of days elapsed. Except as
otherwise provided in Section 3.1(b), interest shall be payable in
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arrears on each Interest Payment Date and upon each payment (including
prepayment) of the Loans. Any change in the interest rate on the Loans resulting
from a change in the Alternate Base Rate or reserve requirements shall become
effective as of the opening of business on the day on which change shall become
effective. The Administrative Agent shall, as soon as practicable, notify the
Borrower and the Lenders of the effective date and the amount of each such
change in the BNY Rate, but any failure to so notify shall not in any manner
affect the obligation of the Borrower to pay interest on the Loans in the
amounts and on the dates required. Each determination of the Alternate Base
Rate, a Eurodollar Rate, or an Alternate Currency Euro Rate by the
Administrative Agent pursuant to this Agreement shall be conclusive and binding
on all parties hereto absent manifest error. The Borrower acknowledges that to
the extent interest payable on ABR Advances or Swing Line ABR Advances is based
on the BNY Rate, such rate is only one of the bases for computing interest on
loans made by the Lenders, and by basing interest payable on ABR Advances on the
BNY Rate, the Lenders have not committed to charge, and the Borrower has not in
any way bargained for, interest based on a lower or the lowest rate at which the
Lenders may now or in the future make loans to other borrowers.
(e) If the Reference Lender shall for any reason no longer be
a Lender, it shall thereupon cease to be the Reference Lender. The
Administrative Agent and the Borrower shall, by notice to the Lenders, designate
another Lender as the Reference Lender so that there shall at all times be at
least one Reference Lender. The Reference Lender shall use its best efforts to
furnish quotations of rates to the Administrative Agent on a timely basis as
contemplated hereby.
3.2. Fees
(a) Commitment Fees. The Borrower agrees to pay to the
Administrative Agent, for the account of the Lenders in accordance with each
Lender's Commitment Percentage, a fee (the "Commitment Fee"), during the
Revolving Credit Commitment Period, at a rate per annum equal to the Applicable
Fee Percentage on the average daily excess of the Aggregate Revolving Credit
Commitment Amount over the sum of the aggregate outstanding principal balance of
the Revolving Credit Loans (excluding the outstanding principal balance of the
Swing Line Loans, if any). The Commitment Fee shall be payable quarterly in
arrears on the last day of each fiscal quarter of the Borrower commencing on the
first such day following the Effective Date, and ending on the date that the
Revolving Credit Commitments shall expire or otherwise terminate. The Commitment
Fee shall be calculated on the basis of a 360 day year for the actual number of
days elapsed.
(b) Administrative Agent's Fees. The Borrower agrees to pay to
the Administrative Agent, for its own account, such other fees as have been
agreed to in writing by the Borrower and the Administrative Agent.
3.3. Conversions
(a) The Borrower shall have the option to convert on any
Business Day all or a portion of the outstanding principal amount of ABR
Advances (other than ABR Advances constituting Swing Line Loans), Eurodollar
Advances or Alternate Currency Euro Advances into (i) in the case of an ABR
Advance, one or more Eurodollar Advances, (ii) in the case of a Eurodollar
Advance, one or more ABR Advances or one or
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more new Eurodollar Advances and (iii) in the case of an Alternate Currency Euro
Advance, one or more new Alternate Currency Euro Advances of the same Alternate
Currency, provided that (A) except as otherwise provided in Section 3.6(b),
Eurodollar Advances may be converted into ABR Advances or new Eurodollar
Advances only on the last day of the Interest Period applicable to the
Eurodollar Advances being converted, (B) except as otherwise provided in Section
3.6(b), Alternate Currency Euro Advances may be converted into new Alternate
Currency Euro Advances only on the last day of the Interest Period applicable to
the Alternate Currency Euro Advances being converted, (C) the outstanding
principal amount of the new Eurodollar Advances having the same Interest Period
shall be in an amount equal to $5,000,000 or such amount plus a whole multiple
of $1,000,000 in excess thereof, (D) the outstanding principal amount of the new
Alternate Currency Euro Advances having the same Interest Period shall be in an
amount equal to $5,000,000 or such amount plus a whole multiple of $1,000,000 in
excess thereof (or an amount in the applicable Alternate Currency having a
Dollar Equivalent of approximately $5,000,000 or such amount plus a whole
multiple of approximately $1,000,000 in excess thereof), (E) the outstanding
principal amount of the new ABR Advances shall be in an amount equal to
$1,000,000 or such amount plus a whole multiple of $500,000 in excess thereof,
(F) ABR Advances or Eurodollar Advances may not be converted into Eurodollar
Advances if any Default or Event of Default is in existence on the date of the
conversion and the Administrative Agent or the Required Lenders have determined
that such a conversion is not appropriate, and (G) no conversion pursuant to
this Section shall result in a greater number of Eurodollar Advances or
Alternate Currency Euro Advances than is permitted under Section 3.4(b).
(b) Each such conversion shall be effected by the Borrower by
giving the Administrative Agent written notice at its office set forth in
Section 11.2, no later than (i) 2:00 p.m. four Business Days prior to the
requested Conversion Date in the case of a conversion to Alternate Currency Euro
Advances, (ii) 2:00 p.m. three Business Days prior to the requested Conversion
Date in the case of a conversion to Eurodollar Advances, specifying the ABR
Advances, the Eurodollar Advances or the Alternate Currency Euro Advances to be
so converted, the date of such conversion (which shall be a Business Day) and,
if to be converted into Eurodollar Advances or Alternate Currency Euro Advances,
the Interest Period to be applicable thereto. Each such notice shall be
irrevocable and shall be given by the delivery by telecopy of a Notice of
Conversion (confirmed promptly, and in any event within five Business Days, by
the delivery to the Administrative Agent of a Notice of Conversion manually
signed by the Borrower). The Administrative Agent shall give each Lender prompt
notice of any such proposed conversion affecting any of its Loans.
(c) If with respect to the expiration of an existing Interest
Period for a Eurodollar Advance or an Alternate Currency Euro Advance the
Borrower has failed to deliver a Notice of Conversion with respect thereto, such
Borrower shall be deemed to have elected (i) if a Eurodollar Advance, to convert
such Eurodollar Advance to an ABR Advance and (ii) if an Alternate Currency Euro
Advance, to convert such Alternate Currency Euro Advance to a new Alternate
Currency Euro Advance with a one month Interest Period, in either case effective
as of the expiration date of such existing Interest Period.
(d) Each conversion shall be effected by each Lender by
applying the proceeds of its new ABR Advance Eurodollar Advance, or Alternate
Currency Euro Advance, as the case may be, to its Advances (or portion thereof)
being converted (it being understood that any such conversion shall not
constitute a borrowing for purposes of Sections 4, 5 or 6).
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3.4. Concerning Interest Periods
Notwithstanding any other provision of any Loan Document:
(a) No Interest Period selected in respect of the
conversion of any Eurodollar Advance or any Swing Line Loan shall end after the
Maturity Date.
(b) The Borrower shall not be permitted to have more
than an aggregate of ten Eurodollar Advances and Alternate Currency Euro
Advances outstanding at any one time, it being agreed that each borrowing of a
Eurodollar Advance or an Alternate Currency Euro Advance, as the case may be,
pursuant to a single Borrowing Request shall constitute the making of one
Eurodollar Advance for the purpose of calculating such limitation.
(c) Notwithstanding anything herein to the contrary,
during the Syndication Period, (i) the Borrower may only select Interest Periods
of either seven days or one month and (ii) such Interest Periods shall end, if
not sooner, on the last day of each calendar month and on the last day of the
Syndication Period.
3.5. Indemnification for Loss
Notwithstanding anything contained herein to the contrary, if
the Borrower shall fail to borrow or convert on a Borrowing Date or Conversion
Date after it shall have given notice to do so in which it shall have requested
a Eurodollar Advance or an Alternate Currency Euro Advance, or if the Borrower
shall fail to borrow a Swing Line Negotiated Rate Advance after the Swing Line
Lender shall have agreed to a Negotiated Rate with respect thereto in accordance
with Section 2.2, or if a Eurodollar Advance, an Alternate Currency Euro Advance
or a Swing Line Negotiated Rate Advance shall be terminated by the Borrower for
any reason prior to the last day of the Interest Period applicable thereto, or
if, while a Eurodollar Advance, an Alternate Currency Euro Advance or a Swing
Line Negotiated Rate Advance is outstanding, any repayment or prepayment of such
Eurodollar Advance, Alternate Currency Euro Advance or Swing Line Swing Line
Negotiated Rate Advance is made for any reason (including, without limitation,
as a result of acceleration or illegality) on a date which is prior to the last
day of the Interest Period applicable thereto, the Borrower agrees to indemnify
each Lender or the Swing Line Lender, as the case may be, against, and to pay on
demand directly to such Lender or the Swing Line Lender, as the case may be, the
amount (calculated by such Lender or the Swing Line Lender, as the case may be,
using any reasonable method which is customarily used by such Lender or the
Swing Line Lender for such purpose) equal to any loss or reasonable
out-of-pocket expense suffered by such Lender or the Swing Line Lender as a
result of such failure to borrow or convert (other than as a result of a default
by such Lender), or such termination, repayment or prepayment, including any
loss, cost or expense suffered by such Lender or the Swing Line Lender, as the
case may be, in liquidating or employing deposits acquired to fund or maintain
the funding of such Eurodollar Advance, Alternate Currency Euro Advance or Swing
Line Negotiated Rate Advance, as the case may be, or redeploying funds prepaid
or repaid, in amounts which correspond to such Eurodollar Advance, Alternate
Currency Euro Advance or Swing Line Negotiated Rate Advance, and any internal
processing charge customarily charged by such Lender or the Swing Line Lender,
as the case may be, in connection therewith.
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3.6. Increased Costs, Illegality, etc.
(a) In the event that the Administrative Agent, with respect
to clauses (i) and (iv) below or any Lender with respect to clauses (ii) and
(iii) below or shall have determined (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto):
(i) that, by reason of circumstances affecting the
applicable interbank market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of the Eurodollar Rate or the Alternate Currency Euro
Rate, as the case may be, with respect to any portion of the Revolving
Credit Loans that the Borrower has requested be made as Eurodollar
Advances or Alternate Currency Euro Advances, or Eurodollar Advances or
Alternate Currency Euro Advances that will result from the requested
conversion of any portion of the Advances into or of Eurodollar
Advances or Alternate Currency Euro Advances; or
(ii) at any time that such Lender has incurred
increased costs or reductions in the amounts received or receivable
hereunder with respect to any Fixed Rate Advance, in each case by an
amount such Lender deems to be material, because of any Regulatory
Change such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Lender of the principal of or
interest on such Fixed Rate Advance or any other amounts payable
hereunder (except for changes in the rate of tax on, or determined by
reference to, the Tax on the Income of such Lender), or (B) a change in
official reserve (including any marginal, emergency, supplemental,
special or other reserve) or similar requirements (except to the extent
included in the computation of the respective Eurodollar Rate, the
Alternate Currency Euro Rate or Swing Line Negotiated Rate, as the case
may be), or any special deposit, assessment or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender (or its Applicable Lending Office); or
(iii) at any time that the making or continuance of
any Fixed Rate Advance has been made (A) unlawful by any law, rule,
regulation or order or (B) impossible by compliance by any Lender in
good faith with any governmental directive or request (whether or not
having the force of law); or
(iv) at any time that any Alternate Currency is not
available in sufficient amounts, as determined in good faith by the
Administrative Agent, to fund any borrowing of Alternate Currency Loans
in such Alternate Currency;
then, and in any such event, the Administrative Agent, in the case of clause (i)
or (iv) above or such Lender, in the case of clause (ii) or (iii) above, shall
promptly give notice (by telephone confirmed in writing) to the Borrower, and,
except for the Administrative Agent, to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (w) in the case of clause (i) above, (A)
in the event that Eurodollar Advances or Alternate Currency Euro Advances are so
affected, Eurodollar Advances or Alternate Currency Euro Advances from such
applicable Lender or all of the Lenders, as the case may be, shall no longer be
available until such time as the Administrative Agent notifies the Borrower and
the Lenders that the circumstances giving rise to such notice by the
Administrative Agent
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<PAGE> 46
no longer exist, and any Borrowing Request or Notice of Conversion given by the
Borrower with respect to Eurodollar Advances or Alternate Currency Euro Advances
to be made which have not yet been incurred (including by way of conversion)
shall be deemed rescinded by the Borrower and (B) in the event that any
Alternate Currency Euro Advance is so affected, the interest rate for such
Alternate Currency Euro Advance shall be determined on the basis provided in the
proviso to the definition of Alternate Currency Euro Rate, (x) in the case of
clause (ii) above, the Borrower shall pay to such Lender, within five Business
Days of written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its reasonable discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Lender in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto), (y) in the case of clause (iii) above, the Borrower shall take
one of the actions specified in Section 3.6(b) and (z) in the case of clause
(iv) above, Alternate Currency Euro Advances in the affected Alternate Currency
shall no longer be available until such time as the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to the
notice referred to above by the Administrative Agent no longer exists, and any
Borrowing Request given by the Borrower with respect to such Alternate Currency
Euro Advances which have not yet been incurred shall be deemed rescinded by the
Borrower. Each of the Administrative Agent and the Lenders agree that if it
gives notice to the Borrower of any of the events described in clause (ii) and
(iii) above, it shall promptly notify the Borrower and the Administrative Agent,
if such event ceases to exist. If any such event described in clause (iii) above
with respect to Eurodollar Advances or Alternate Currency Euro Advances ceases
to exist as to a Lender, the obligations of such Lender, as the case may be, to
make Eurodollar Advances or Alternate Currency Euro Advances and to convert
Eurodollar Advances to new Eurodollar Advances or convert Alternate Currency
Euro Advances to new Alternate Currency Euro Advances on the terms and
conditions contained herein shall be reinstated.
(b) At any time that any Fixed Rate Advance is affected by the
circumstances described in Section 3.6(a)(ii) or (iii), the Borrower may (and in
the case of an affected Fixed Rate Advance by the circumstances described in
Section 3.6(a)(iii) shall) either (x) if the affected Fixed Rate Advance is then
being made initially or pursuant to a conversion, cancel the respective
borrowing or conversion by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that the Borrower was notified by the
affected Lender or the Administrative Agent pursuant to Section 3.6(a)(ii) or
(iii) or (y) if the affected Fixed Rate Advance is then outstanding, upon at
least three Business Days' written notice to the Administrative Agent and the
affected Lender, (A) in the case of a Eurodollar Advance, require the affected
Lender to convert such Eurodollar Advance into an ABR Advance as of the end of
the Interest Period then applicable to such Eurodollar Advance or, if earlier,
as soon as practicable within the time required by law and (B) in the case of an
Alternate Currency Euro Advance or Swing Line Negotiated Rate Advance, take such
action as the affected Lender may reasonably request with a view to minimizing
the obligations of the Borrower under Section 3.5.
(c) If any Lender determines that a Regulatory Change will
have the effect of reducing the rate of return on the capital required to be
maintained by such Lender or any corporation controlling such Lender based on
the existence of such Lender's Revolving Credit Commitment hereunder or its
obligations under the Loan Documents to a level below that which such Lender or
such corporation could have
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achieved but for such application or compliance (taking into account such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then the Borrower agrees to pay
such to such Lender, within five Business Days of its written demand therefor,
such additional amounts as shall be required to compensate such Lender or such
other corporation for the increased cost to such Lender or such other
corporation or the reduction in the rate of return to such Lender or such other
corporation as a result of such reduction. In determining such additional
amounts, each Lender will act reasonably and in good faith and will use
averaging and attribution methods which are reasonable, provided that such
Lender's reasonable good faith determination of compensation owing under this
Section 3.6(c) shall, absent manifest error, be final and conclusive and binding
on all the parties hereto. Each Lender, upon determining that any additional
amounts will be payable pursuant to this Section 3.6(c), will give prompt
written notice thereof to the Borrower, which notice shall show in reasonable
detail the basis for calculation of such additional amounts.
3.7. Taxes
(a) Payments to Be Free and Clear. Subject to subsections (d)
and (e) below, all payments by the Borrower under the Loan Documents shall be
made free and clear of, and without any deduction or withholding for, any
Indemnified Tax. If the Borrower or any other Person is required by any law,
rule, regulation, order, directive, treaty or guideline to make any deduction or
withholding (which deduction or withholding would constitute an Indemnified Tax)
from any amount required to be paid by the Borrower to or on behalf of any
Indemnified Tax Person under any Loan Document (each a "Required Payment"):
(i) the Borrower shall notify the Administrative
Agent and such Indemnified Tax Person of any such requirement or any change in
any such requirement as soon as the Borrower becomes aware of it;
(ii) the Borrower shall pay such Indemnified Tax be-
fore the date on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Borrower) for its own account or (if the
liability is imposed on such Indemnified Tax Person) on behalf of and in the
name of such Indemnified Tax Person;
(iii) the Borrower shall pay to such Indemnified Tax
Person an additional amount such that such Indemnified Tax Person shall receive
on the due date therefor an amount equal to the Required Payment had no such
deduction or withholding been required; and
(iv) the Borrower shall, within 30 days after paying
such Indemnified Tax, deliver to the Administrative Agent and the applicable
Indemnified Tax Person satisfactory evidence of such payment to the relevant
Governmental Authority.
(b) Other Indemnified Taxes. If an Indemnified Tax Person or
any affiliate thereof is required by any law, rule, regulation, order,
directive, treaty or guideline to pay any Indemnified Tax (excluding an
Indemnified Tax which is subject to Section 3.7(a) or an Other Tax described in
subsection (f) below) with respect to any sum paid or payable by the Borrower to
such Indemnified Tax Person under the Loan Documents:
(i) such Indemnified Tax Person shall notify the
Borrower of any such payment of Indemnified Tax; and
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<PAGE> 48
(ii) the Borrower shall pay to such Indemnified Tax
Person the amount of such Indemnified Tax within five Business Days of such
notice.
(c) Exception for Existing Taxes. No amount shall be required
to be paid to any Indemnified Tax Person under Section 3.7(a)(iii) or (b) with
respect to an Indemnified Tax to the extent that such Indemnified Tax would have
been required to have been paid under any law, rule, regulation, order,
directive, treaty or guideline in effect on the Effective Date.
(d) U.S. Tax Certificates. Each Lender that is organized under
the laws of any jurisdiction other than the United States or any political
subdivision thereof shall deliver to the Administrative Agent for transmission
to the Borrower, on or prior to the first Borrowing Date (in the case of each
Lender listed on the signature pages hereof) or on the effective date of the
Assignment and Acceptance Agreement or master assignment and acceptance
agreement pursuant to which it becomes a Lender in accordance with Section 11.7
(in the case of each other Lender), and at such other times as may be necessary
in the determination of the Borrower, the Borrower or the Administrative Agent
(each in the reasonable exercise of its discretion), such certificates,
documents or other evidence, properly completed and duly executed by such Lender
(including, without limitation, Internal Revenue Service Form 1001 or Form 4224)
to establish that such Lender is not subject to deduction or withholding of
United States federal income tax under Section 1441 or 1442 of the Code or
otherwise (or under any comparable provisions of any successor statute) with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under the Loan Documents. The Borrower shall not be required to
pay any additional amount to any such Lender under Section 3.7(a)(iii) if such
Lender shall have failed to satisfy the requirements of the immediately
preceding sentence; provided that if such Lender shall have satisfied such
requirements on the first Borrowing Date (in the case of each Lender listed on
the signature pages hereof) or on the effective date of the Assignment and
Acceptance Agreement or master assignment and acceptance agreement pursuant to
which it became a Lender (in the case of each other Lender), nothing in this
subsection shall relieve the Borrower of its obligation to pay any additional
amounts pursuant to Section 3.7(a)(iii) in the event that, as a result of any
change in applicable law (including, without limitation, any change in the
interpretation thereof), such Lender is no longer properly entitled to deliver
certificates, documents or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described in the
immediately preceding sentence.
(e) Other Tax Certificates. Each Indemnified Tax Person agrees
to use reasonable efforts to deliver to the Borrower, the Borrower, promptly
upon any request therefor from time to time by the Borrower, such forms,
documents and information as may be required by applicable law, regulation or
treaty from time to time and to file all appropriate forms to obtain a
certificate or other appropriate documents from the appropriate Governmental
Authorities to establish that payments made in respect of any Revolving Credit
Loan can be made without (or at a reduced rate of) withholding of Taxes,
provided, however, that if such Indemnified Tax Person is or becomes unable by
virtue of any applicable law, regulation or treaty, to establish such exemption
or reduction, the Borrower shall nonetheless remain obligated under Subsection
3.7(a) to pay the amounts described therein, and provided further, that no
Indemnified Tax Person shall be required to take any action hereunder which, in
the sole discretion of such Indemnified Tax Person, would cause such Indemnified
Tax Person or any affiliate thereof to suffer a material economic, legal or
regulatory disadvantage.
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(f) Other Taxes. The Borrower agrees to pay any current or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the
execution, delivery or registration of, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan
Documents or otherwise with respect to, the Loan Documents (collectively, the
"Other Taxes").
3.8. Option to Fund
Each Lender (including the Swing Line Lender) has indicated
that, if the Borrower requests a Eurodollar Advance, Alternate Currency Euro
Advance or a Swing Line Negotiated Rate Advance, as the case may be, such Lender
may wish to purchase one or more deposits in order to fund or maintain its
funding of its Commitment Percentage of such Eurodollar Advance, Alternate
Currency Euro Advance or such Swing Line Negotiated Rate Advance, as the case
may be, during the Interest Period with respect thereto; it being understood
that the provisions of this Agreement relating to such funding are included only
for the purpose of determining the rate of interest to be paid in respect of
such Eurodollar Advance, Alternate Currency Euro Advance or Swing Line
Negotiated Rate Advance, as the case may be, and any amounts owing under
Sections 3.5 and 3.7. Each Lender (including the Swing Line Lender) shall be
entitled to fund and maintain its funding of all or any part of each Eurodollar
Advance, Alternate Currency Euro Advance or Swing Line Negotiated Rate Advance,
as the case may be, in any manner it sees fit, but all such determinations
hereunder shall be made as if each Lender had actually funded and maintained its
Commitment Percentage of each Eurodollar Advance, Alternate Currency Euro
Advance and the Swing Line Lender had actually funded and maintained each Swing
Line Negotiated Rate Advance, as the case may be, during the applicable Interest
Period through the purchase of deposits in an amount equal to its Commitment
Percentage of such Eurodollar Advance, or Alternate Currency Euro Advance or its
Swing Line Negotiated Rate Advance, as the case may be, having a maturity
corresponding to such Interest Period. Any Lender may fund its Commitment
Percentage of each Eurodollar Advance or Alternate Currency Euro Advance and the
Swing Line Lender may fund a Swing Line Loan, from or for the account of any
branch or office of such Lender or the Swing Line Lender, as the case may be, as
such Lender or the Swing Line Lender, as the case may be, may choose from time
to time.
3.9. Substitution of a Lender
Notwithstanding anything to the contrary contained herein, if
any Lender shall request compensation pursuant to Sections 3.6 or 3.7 in an
aggregate amount in excess of $25,000, then, in each such case, the Borrower may
require that such Lender transfer all of its right, title and interest under the
Loan Documents to one or more of the other Lenders or any other lender
identified by the Borrower and acceptable to the Administrative Agent and the
Swing Line Lender (a "Proposed Lender"), if such Proposed Lender agrees to
assume all of the obligations of such Lender for consideration equal to the
outstanding principal amount of such Lender's Revolving Credit Loans, together
with interest thereon to the date of such transfer and all other amounts payable
under the Loan Documents to such Lender on or prior to the date of such transfer
(including, without limitation, any fees accrued hereunder and any amounts which
would be payable under Section 3.5 as if all of such Lender's Loans were being
prepaid in full on such date). Subject to the execution and delivery of an
instrument of assignment and assumption, and such other documents as such Lender
may reasonably require, such Proposed Lender shall be a "Lender" for all
purposes hereunder. Without prejudice to the survival of any other
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agreement of the Borrower hereunder, the agreements of the Borrower contained in
Sections 3.5, 3.6, 11.5 and 11.8 (without duplication of any payments made to
such Lender by the Borrower or the Proposed Lender) shall survive for the
benefit of any Lender replaced under this Section with respect to the time prior
to such replacement. The Borrower shall not have the right to so replace a
Lender unless it gives notice of its intention to do so within 90 days after its
right to replace such Lender arises under this Section .
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Revolving Credit Loans and the Swing Line
Lender to make the Swing Line Loans and the Lenders to participate therein, the
Borrower makes the following representations and warranties to the
Administrative Agent, each Lender and the Swing Line Lender:
4.1. Subsidiaries; Capitalization
As of the Effective Date, the Borrower has only the
Subsidiaries set forth on Schedule 4.1. Each of the Subsidiaries set forth on
Schedule 4.1 is a direct or indirect wholly-owned Subsidiary of the Borrower. As
of the Effective Date, except as set forth on Schedule 4.1, the shares of, or
partnership or other interests in, each Subsidiary of the Borrower are owned
beneficially and of record by the Borrower or another Subsidiary of the
Borrower, are free and clear of all Liens (other than Permitted Liens) and are
duly authorized, validly issued, fully paid and nonassessable.
4.2. Existence and Power
The Borrower is duly organized and validly existing in good
standing under the laws of the State of California. Each of the Borrower's
Subsidiaries is duly organized or formed and validly existing in good standing
under the laws of the jurisdiction of its incorporation or formation, except to
the extent that the failure to be duly organized or formed and validly existing
in good standing would not reasonably be expected to have a Material Adverse
Effect. Each of the Borrower and each of its Subsidiaries has all requisite
power and authority to own its Property and to carry on its business as now
conducted, and is in good standing and authorized to do business in each other
jurisdiction in which the nature of the business conducted therein or the
Property owned by it therein makes such qualification necessary, except where
such failure to qualify or be in good standing would not reasonably be expected
to have Material Adverse Effect.
4.3. Authority and Execution
Each of the Borrower and Acquisition Corp. have all requisite
corporate power and authority to enter into, execute, deliver and perform the
terms of the Transaction Documents to which it is a party and, in the case of
Acquisition Corp., to consummate the Medex Stock Purchase, all of which have
been duly authorized by all proper and necessary corporate action and do not
conflict with any provision of its Organizational Documents. Each of the
Borrower and Acquisition Corp. has duly executed and delivered the Transaction
Documents to which it is a party.
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4.4. Binding Agreement
The Transaction Documents constitute the valid and legally
binding obligations of the Borrower and Acquisition Corp., in each case to the
extent it is a party thereto, enforceable in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally.
4.5. Litigation
Except as set forth on Schedule 4.5, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority (whether purportedly on behalf of the Borrower or any of its
Subsidiaries) pending or, to the knowledge of the Borrower, threatened against
the Borrower or any of its Subsidiaries or maintained by the Borrower or any of
its Subsidiaries or which may affect any of their respective Properties or
rights, which (i) would reasonably be expected to have a Material Adverse Effect
or (ii) call into question the validity or enforceability of, or otherwise seek
to invalidate, any Loan Document.
4.6. Required Consents
(a) No consent, authorization or approval of, filing with,
notice to, or exemption by, stockholders or holders of any other equity interest
or any Governmental Authority is required to authorize, or is required in
connection with the execution and delivery by the Borrower of the Loan Documents
and the payment by the Borrower of all amounts due thereunder.
(b) Except for consents, authorizations, approvals, filings,
notices or exemptions, the failure to obtain or make would not reasonably be
expected to have a Material Adverse Effect and except as set forth on Schedule
4.7, no consent, authorization or approval of, filing with, notice to, or
exemption by, any Person (other than stockholders or holders of any other equity
interest or any Governmental Authority) is required to authorize, or is required
in connection with the execution, delivery and performance by the Borrower of
the Loan Documents.
(c) Except for consents, authorizations, approvals, filings,
notices or exemptions which are not required by the Offer Documents or the
Merger Documents to be obtained or made as a condition to the consummation of
the Medex Stock Purchase and the Merger, respectively, or which are set forth in
the Merger Documents as being so required, no consent, authorization or approval
of, filing with, notice to, or exemption by, stockholders or holders of any
other equity interest or any Governmental Authority is required (i) to
authorize, or is required in connection with the execution, delivery and
performance of the Merger Documents by the Borrower or Acquisition Corp. or (ii)
as a condition to the consummation of the Medex Stock Purchase by the Borrower
and Acquisition Corp.
(d) Except for consents, authorizations, approvals, filings,
notices or exemptions which are not required by the Offer Documents or the
Merger Documents to be obtained or made as a condition to the consummation of
the Medex Stock Purchase and the Merger, respectively, as set forth on Schedule
4.7 and except for consents, authorizations, approvals, filings, notices or
exemptions, the failure to obtain or make would not reasonably be expected to
have a Material Adverse Effect, no consent, authorization or
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approval of, filing with, notice to, or exemption by, any Person (other than
stockholders or holders of any other equity interest, the boards of directors of
the Borrower and Acquisition Corp. or any Governmental Authority) is required
(i) to authorize, or is required in connection with the execution, delivery and
performance of the Merger Documents by the Borrower or Acquisition Corp. or (ii)
as a condition to the consummation of the Medex Stock Purchase by the Borrower
and Acquisition Corp.
4.7. Absence of Defaults; No Conflicting Agreements
(a) Neither the Borrower nor any of its Subsidiaries is in
default under any mortgage, indenture, contract or agreement to which it is a
party or by which it or any of its Property is bound, the effect of which
default would reasonably be expected to have a Material Adverse Effect. Except
as set forth on Schedule 4.7, the execution, delivery or performance of the
terms of the Transaction Documents and the consummation of Medex Stock Purchase
will not constitute a default under, or result in the creation or imposition of,
or obligation to create, any Lien upon any Property of the Borrower or any of
its Subsidiaries or result in a breach of or require the mandatory repayment of
or other acceleration of payment under or pursuant to the terms of any such
mortgage, indenture, contract or agreement, except to the extent such default,
creation, imposition, breach or acceleration would not reasonably be expected to
have a Material Adverse Effect.
(b) Neither of the Borrower nor any of its Subsidiaries is in
default with respect to any judgment, order, writ, injunction, decree or
decision of any Governmental Authority which default would reasonably be
expected to have a Material Adverse Effect.
4.8. Compliance with Applicable Laws
The Borrower and each of its Subsidiaries is complying in all
material respects with all statutes, regulations, rules and orders of all
Governmental Authorities which are applicable to the Borrower or such
Subsidiary, a violation of which would reasonably be expected to have a Material
Adverse Effect.
4.9. Taxes
The Borrower and each of its Subsidiaries has filed or caused
to be filed all tax returns required to be filed and has paid, or has made
adequate provision for the payment of, all taxes shown to be due and payable on
said returns or in any assessments made against it (other than those being
contested as provided under Section 7.4), the failure of which to file or pay
would reasonably be expected to have a Material Adverse Effect, and no tax Liens
(other than Permitted Liens) have been filed with respect thereto. The charges,
accruals and reserves on the books of the Borrower and each of its Subsidiaries
with respect to all taxes are, to the best knowledge of the Borrower, adequate
for the payment of such taxes, and the Borrower knows of no unpaid assessment
which is due and payable against the Borrower or any of its Subsidiaries or any
claims being asserted which would reasonably be expected to have a Material
Adverse Effect, except such thereof as are being contested as provided under
Section 7.4, and for which adequate reserves have been set aside in accordance
with GAAP.
4.10. Governmental Regulations
Neither the Borrower, any of its Subsidiaries nor any Person
controlled by, controlling, or under common control with, the Borrower or
any of its Subsidiaries, is
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subject to regulation under the Public Utility Holding Company Act of 1935, as
amended, the Federal Power Act, as amended, or the Investment Company Act of
1940, as amended, or is subject to any statute or regulation which prohibits or
restricts the incurrence of Indebtedness, including, without limitation,
statutes or regulations relative to common or contract carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.
4.11. Federal Reserve Regulations; Use of Loan Proceeds
(a) Neither the Borrower nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
(b) Margin Stock will constitute less than 25% of the assets
(as determined by any reasonable method) of the Borrower and its Subsidiaries
after giving effect to the making of each Loan (i) prior to the consummation of
purchase of Medex Stock contemplated by the Tender Offer and (ii) after the
consummation of the Merger.
4.12. Plans
The only Pension Plans in effect as of the Effective Date (the
"Existing Pension Plans") are listed on Schedule 4.12. Each Employee Benefit
Plan of the Borrower, its Subsidiaries and the ERISA Affiliates is in compliance
with ERISA and the Code, where applicable, in all material respects. As of the
Effective Date, (i) the amount of all Unfunded Pension Liabilities under the
Pension Plans, excluding any plan which is a Multiemployer Plan, does not exceed
an amount which would reasonably be expected to have a Material Adverse Effect,
and (ii) the amount of the aggregate Unrecognized Retiree Welfare Liability
under all applicable Employee Benefit Plans does not exceed an amount which
would reasonably be expected to have a Material Adverse Effect. The Borrower and
each of its Subsidiaries and ERISA Affiliates has complied in all material
respects with the requirements of Section 515 of ERISA with respect to each
Pension Plan which is a Multiemployer Plan. As of the Effective Date, the
aggregate potential annual withdrawal liability payments, as determined in
accordance with Title IV of ERISA, of the Borrower and its Subsidiaries and
ERISA Affiliates with respect to all Pension Plans which are Multiemployer Plans
does not exceed an amount which would reasonably be expected to have a Material
Adverse Effect. The Borrower and its Subsidiaries and ERISA Affiliates have, as
of the Effective Date, made all contributions or payments to or under each such
Pension Plan required by law or the terms of such Pension Plan or any contract
or agreement with respect thereto. No material liability to the PBGC has been,
or is expected by the Borrower, any of its Subsidiaries or any ERISA Affiliate
to be, incurred by the Borrower, any such Subsidiary or any ERISA Affiliate.
Liability, as referred to in this Section includes any joint and several
liability. Each Employee Benefit Plan which is a group health plan within the
meaning of Section 5000(b)(1) of the Code is in material compliance with the
continuation of health care coverage requirements of Section 4980B of the Code.
4.13. Financial Statements
The Borrower has heretofore delivered to the Administrative
Agent and the Lenders copies of its Form 10-K for the fiscal year ending
February 3, 1996, containing the audited Consolidated Balance Sheets of the
Borrower and its Subsidiaries as of February 3, 1996 and January 28, 1995, and
the related Consolidated Statements of Income,
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Stockholders' Equity and Cash Flows for the periods then ended, and its Form
10-Q for the fiscal quarter ended August 3, 1996, containing the unaudited
Consolidated Balance Sheet of the Borrower and its Subsidiaries for such fiscal
quarter, together with the related Consolidated Statements of Income and Cash
Flows for the fiscal quarter then ended (with the applicable related notes and
schedules, the "Financial Statements"). The Financial Statements fairly present
the Consolidated financial condition and results of operations of the Borrower
and its Subsidiaries as of the dates and for the periods indicated therein and
have been prepared in conformity with GAAP. Except as reflected in the Financial
Statements or in the footnotes thereto, neither the Borrower nor any of its
Subsidiaries has any obligation or liability of any kind (whether fixed,
accrued, contingent, unmatured or otherwise) which, in accordance with GAAP,
should have been shown in the Financial Statements and was not. Since February
3, 1996, there has been no Material Adverse Change.
4.14. Property
The Borrower and each of its Subsidiaries has (i) good and
marketable title to all of its owned Property, title to which is material to the
Borrower or such Subsidiary and (ii) a valid leasehold interest in all leased
Property, a leasehold interest in which is material to the Borrower or such
Subsidiary, in each case subject to no Liens, except Permitted Liens.
4.15. Authorizations
The Borrower and each of its Subsidiaries possesses or has the
right to use all franchises, licenses and other rights as are material and
necessary for the conduct of its business, and with respect to which it is in
material compliance, with no known conflict with the valid rights of others
which would reasonably be expected to have a Material Adverse Effect. No event
has occurred which permits or, to the best knowledge of the Borrower, after
notice or the lapse of time or both, or any other condition, would reasonably be
expected to permit, the revocation or termination of any such franchise, license
or other right which revocation or termination would reasonably be expected to
have a Material Adverse Effect.
4.16. Environmental Matters
(a) No Hazardous Substances have been generated or
manufactured on, transported to or from, treated at, stored at or discharged
from any Real Property in violation of any Environmental Laws; no Hazardous
Substances have been discharged into subsurface waters under any Real Property
in violation of any Environmental Laws; no Hazardous Substances have been
discharged from any Real Property on or into Property or waters (including
subsurface waters) adjacent to any Real Property in violation of any
Environmental Laws, except in each case to the extent it would not reasonably be
expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any of its Subsidiaries (i) has
received notice (written or oral) of any claim, demand, suit, action,
proceeding, event, condition, report, directive, Lien, violation, non-compliance
or investigation indicating or concerning any potential or actual liability
(including, without limitation, potential liability for enforcement,
investigatory costs, cleanup costs, government response costs, removal costs,
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remedial costs, natural resources damages, Property damages, personal injuries
or penalties) arising in connection with: (x) any non-compliance with or
violation of the requirements of any applicable Environmental Laws, or (y) the
presence of any Hazardous Substance on any Real Property (or any Real Property
previously owned by the Borrower or any of its Subsidiaries) or the release or
threatened release of any Hazardous Substance into the environment which in each
case or cumulatively would reasonably be expected to have a Material Adverse
Effect, (ii) has any threatened or actual liability in connection with the
presence of any Hazardous Substance on any Real Property (or any Real Property
previously owned by the Borrower or any of its Subsidiaries) or the release or
threatened release of any Hazardous Substance into the environment which would
reasonably be expected to have a Material Adverse Effect, (iii) has received
notice of any federal or state investigation evaluating whether any remedial
action is needed to respond to the presence of any Hazardous Substance on any
Real Property (or any Real Property previously owned by the Borrower or any of
its Subsidiaries) or a release or threatened release of any Hazardous Substance
into the environment for which the Borrower or any of its Subsidiaries is or may
be liable which would reasonably be expected to have a Material Adverse Effect,
or (iv) has received notice that the Borrower or any of its Subsidiaries is or
may be liable to any Person under any Environmental Law which liability would
reasonably be expected to have a Material Adverse Effect.
4.17. Solvency
Immediately after giving effect to the transactions
contemplated by the Transaction Documents, the Borrower and its Subsidiaries on
a Consolidated basis are and will be Solvent.
4.18. Medex Acquisition Documents
The Borrower has delivered to the Administrative Agent a
complete and correct copy of the Merger Documents and the Offer Documents. The
Merger Agreement has been duly executed and delivered by the parties thereto and
is in full force and effect. The representations and warranties of the Borrower
and Acquisition Corp. and, to the best of the Borrower's knowledge, Medex,
contained in the Merger Agreement (including all exhibits, schedules, and
disclosure letters referred to therein or delivered pursuant thereto) will be
true and correct in all material respects on the first Borrowing Date as if made
on and as of such Borrowing Date, except that any such representation or
warranty stated to relate to a specific earlier date will be true and correct in
all material respects as of such earlier date.
4.19. No Misrepresentation
No representation or warranty contained in any Loan Document
and no certificate or report from time to time furnished by the Borrower or any
of its Subsidiaries in connection with the Loan Documents, contains or will
contain a misstatement of material fact, or, to the best knowledge of the
Borrower, omits or will omit to state a material fact required to be stated in
order to make the statements therein contained not misleading in the light of
the circumstances under which made, provided that any projections or proforma
financial information contained therein are based upon good faith estimates and
assumptions believed by the Borrower to be reasonable at the time made, it being
recognized by the Administrative Agent and the Lenders that such projections as
to future events are not to be viewed as facts, and that actual results during
the period or periods covered thereby may differ from the projected results.
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5. CONDITIONS TO EFFECTIVENESS, FIRST LOANS AND LOANS MADE ON THE
MERGER EFFECTIVE DATE
5.1. Conditions to Effectiveness
The effectiveness of this Agreement is subject to the prior or
simultaneous fulfillment of the following conditions precedent, it being
understood that in addition to the conditions set forth in this Section, (i) as
a condition to the making of the Loans on the first Borrowing Date, the
conditions in Section 5.2 shall be satisfied, (ii) as a condition to the making
of the Loans on the Merger Effective Date, the conditions in Section 5.3 shall
be satisfied, and (iii) as a condition to the making of all Loans (including the
Loans made on the first Borrowing Date and the Merger Effective Date), the
conditions in Section 6 shall be satisfied:
(a) Evidence of Action. The Administrative Agent
shall have received a certificate, dated the Effective Date, of the Secretary or
Assistant Secretary of each of the Borrower and Acquisition Corp. (i) attaching
a true and complete copy of the resolutions of its Managing Person (in form and
substance satisfactory to the Administrative Agent) authorizing the Transaction
Documents and the Transactions, in each case to which it is a party, (ii)
attaching a true and complete copy of its Organizational Documents, (iii)
setting forth the incumbency of its officer or officers who may sign the
Transaction Documents, including therein a signature specimen of such officer or
officers and (iv) attaching a certificate of good standing of the Secretary of
State of the jurisdiction of its incorporation and of each other jurisdiction in
which it is qualified to do business, except, in the case of such other
jurisdiction, when the failure to be in good standing in such jurisdiction would
not have a Material Adverse Effect.
(b) This Agreement. The Administrative Agent shall
have received counterparts of this Agreement signed by each of the parties
hereto (or receipt by the Administrative Agent from a party hereto of a telecopy
signature page signed by such party which shall have agreed to promptly provide
the Administrative Agent with originally executed counterparts hereof).
(c) Officer's Certificate. The Administrative Agent
shall have received a certificate of an officer of the Borrower, dated the
Effective Date, in all respects satisfactory to the Administrative Agent, to the
effect that (i) there exists no Default or Event of Default and (ii) the
representations and warranties contained in this Agreement are true and correct
on the Effective Date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties were true and correct on and as of such earlier date.
(d) Opinions of Counsel to the Borrower. The
Administrative Agent shall have received (i) an opinion of O'Melveny & Myers,
counsel to the Borrower, (ii) an opinion of Donald D. Bradley, Esq., General
Counsel of the Borrower and as counsel to Acquisition Corp., and (iii) an
opinion of Vorys, Sater, Seymour and Pease, special Ohio counsel to the Borrower
and Acquisition Corp., each addressed to the Administrative Agent, the Swing
Line Lender and the Lenders, and dated the Effective Date, substantially in the
forms of Exhibit E, E-1 and E-2, respectively. It is understood that such
opinion is being delivered to the Administrative Agent and the Lenders upon the
direction of the Borrower and that the Administrative Agent and the Lenders may
and will rely on such opinion.
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(e) Opinion of Special Counsel. The Administrative
Agent shall have received an opinion of Special Counsel, addressed to the
Administrative Agent, the Swing Line Lender and the Lenders and dated the
Effective Date substantially in the form of Exhibit F.
(f) Merger Documents. The Administrative Agent shall
have received a certificate of the Secretary or Assistant Secretary of the
Borrower (i) attaching a true and complete copy of each of the fully executed
Merger Documents, each of which shall be satisfactory to the Administrative
Agent, and (ii) certifying that each thereof is in full force and effect.
(g) Absence of Material Adverse Change. Since (i)
February 3, 1996, there shall have occurred no Material Adverse Change and (ii)
June 30, 1996, there shall have occurred no material adverse change in the
financial condition, operations or business of Medex and its Subsidiaries taken
as a whole, and the Administrative Agent shall have received a certificate of a
Financial Officer (or other officer acceptable to the Administrative Agent) of
the Borrower to the foregoing effect; provided, however, that to the extent that
such certificate relates to Medex and its Subsidiaries, such certificate may be
to the best of the Borrower's knowledge.
(h) Fees. All fees payable to the Administrative
Agent and the Lenders on the Effective Date shall have been paid.
(i) Fees and Expenses of Special Counsel. The fees
and expenses of Special Counsel in connection with the preparation, negotiation
and execution of this Agreement and the Transactions, incurred through the
Effective Date shall have been paid.
(i) Other Documents. The Administrative Agent shall
have received such other documents, each in form and substance reasonably
satisfactory to the Administrative Agent, as the Administrative Agent shall
reasonably require on or prior to the Effective Date.
5.2. Conditions to First Loans
The obligation of each Lender to make any Loan on the first
Borrowing Date is subject to the satisfaction on the Effective Date of the
conditions set forth in Section 5.1, the satisfaction of the conditions
precedent set forth in Section 6 and the satisfaction of the following
conditions precedent as of the first Borrowing Date:
(a) Resolutions; Organizational Documents. The
Administrative Agent shall have received a certificate, dated the first
Borrowing Date, of the Secretary or Assistant Secretary of each of the Borrower
and Acquisition Corp. certifying that neither its Organizational Documents nor
the resolutions delivered by it pursuant to Section 5.1(a) have been amended,
modified or changed in any manner since the Effective Date, or, if so, setting
forth the same, and that such resolutions remain in full force and effect,
provided that any such amendment, modification or change shall be reasonably
satisfactory to the Administrative Agent.
(b) Officer's Certificate. The Administrative Agent
shall have received a certificate of an officer of the Borrower, dated the first
Borrowing Date, in all respects satisfactory to the Administrative Agent, to the
effect that (i) there exists no
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Default or Event of Default and (ii) the representations and warranties
contained in the Loan Documents are true and correct on the first Borrowing
Date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
were true and correct on and as of such earlier date.
(c) Offer Documents. The Administrative Agent shall
have received a certificate of the Secretary or Assistant Secretary of the
Borrower (i) attaching a true and complete copy of each of the Offer Documents,
each of which shall be satisfactory to the Administrative Agent, and (ii)
certifying that (A) each thereof is in full force and effect, and (B) all action
required to be taken by the Borrower or Acquisition Corp. as a condition to the
Medex Stock Purchase has been taken other than the deposit of payment therefor.
(d) Existing Furon Bank Debt. Prior to or simultane-
ously with the making of the Loans on the first Borrowing Date, the Borrower
shall have fully repaid all Existing Furon Bank Debt, all commitments to lend
under the Existing Furon Loan Documents shall have been terminated, and the
Administrative Agent shall have received a reasonably satisfactory letter from
the agent thereunder with respect to such payment and evidencing the termination
of such commitment.
(e) Absence of Material Adverse Change. Since (i)
February 3, 1996, there shall have occurred no Material Adverse Change and (ii)
November 12, 1996, there shall have occurred no change (or any development
involving a prospective change) in the business, financial condition or results
of operations of Medex or any of its Subsidiaries that has had or is reasonably
expected to have a material adverse effect in the business, financial condition,
results of operations, properties, assets or liabilities of Medex and its
Subsidiaries (measured by reference to Medex and its Subsidiaries taken as a
whole, and the size of the transactions contemplated by the Offer to Purchase
and the Merger, taken together, and shall not be determined solely by reference
to accounting concepts of materiality unless the matter involves accounting
matters) and the Administrative Agent shall have received a certificate of a
Financial Officer (or other officer acceptable to the Administrative Agent) of
the Borrower to the foregoing effect; provided, however, that to the extent that
such certificate relates to Medex and its Subsidiaries, such certificate may be
to the best of the Borrower's knowledge.
(f) Satisfaction of Conditions in the Merger
Agreement. All of the conditions to the Borrower's and Acquisition Corp.'s
obligations to accept for payment or to pay for any Medex Stock tendered
pursuant to the Offer to Purchase shall have been satisfied in accordance with
the Merger Agreement (including, without limitation, Schedule 1.1(b) thereto)
with no amendment to, or waiver of, any of the provisions of the Merger
Agreement without the written consent of the Administrative Agent, and the
Administrative Agent shall have received a certificate of an officer of the
Borrower to the foregoing effect.
(g) Fees. All fees payable to the Administrative
Agent and the Lenders on the first Borrowing Date shall have been paid.
(h) Fees and Expenses of Special Counsel. The fees
and expenses of Special Counsel in connection with the Transactions to the
extent not theretofore paid shall have been paid.
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5.3. Conditions to Loans on the Merger Effective Date
The obligation of each Lender to make any Loan on the Merger
Effective Date is subject to the satisfaction on the Effective Date of the
conditions precedent to effectiveness set forth in Section 5.1, the satisfaction
on the first Borrowing Date of the conditions precedent set forth in Section
5.2, the satisfaction of the conditions precedent set forth in Section 6 and the
satisfaction of the following conditions precedent as of the Merger Effective
Date:
(a) Resolutions; Organizational Documents. The
Administrative Agent shall have received a certificate, dated the Merger
Effective Date, of the Secretary or Assistant Secretary of each of the Borrower
and Acquisition Corp. certifying that neither its Organizational Documents nor
the resolutions delivered by it pursuant to Section 5.1(a) have been amended,
modified or changed in any manner since the Effective Date, or, if so, setting
forth the same, and that such resolutions remain in full force and effect,
provided that any such amendment, modification or change shall be reasonably
satisfactory to the Administrative Agent.
(b) Disclosure. In the event that Medex is required
to conduct a proxy solicitation in respect of the Merger, the Administrative
Agent shall have received a copy of such proxy solicitation and related
disclosure filed by Medex with the SEC in connection therewith, certified by an
Authorized Signatory of the Borrower to be a true and complete copy thereof,
provided that any provision thereof which mentions BNY or BNY Capital Markets or
describes the Loan Documents or the credit facility established hereunder shall
be satisfactory to the Administrative Agent.
(c) Absence of Material Adverse Change. Since (i)
February 3, 1996, there shall have occurred no Material Adverse Change and (ii)
November 12, 1996, there shall have occurred no change (or any development
involving a prospective change) in the business, financial condition or results
of operations of Medex or any of its Subsidiaries that has had or is reasonably
expected to have a material adverse effect in the business, financial condition,
results of operations, properties, assets or liabilities of Medex and its
Subsidiaries (measured by reference to Medex and its Subsidiaries taken as a
whole, and the size of the transactions contemplated by the Offer to Purchase
and the Merger, taken together, and shall not be determined solely by reference
to accounting concepts of materiality unless the matter involves accounting
matters) and the Administrative Agent shall have received a certificate of a
Financial Officer (or other officer acceptable to the Administrative Agent) of
the Borrower to the foregoing effect; provided, however, that to the extent that
such certificate relates to Medex and its Subsidiaries, such certificate may be
to the best of the Borrower's knowledge.
(d) Satisfaction of Conditions in the Merger
Agreement. All of the conditions to the Borrower's and Acquisition Corp.'s
obligations to effect the Merger shall have been satisfied in accordance with
the Merger Agreement with no amendment to, or waiver of, any of the provisions
of the Merger Agreement without the written consent of the Administrative Agent,
and the Administrative Agent shall have received a certificate of an officer of
the Borrower to the foregoing effect.
(e) Certificate of Merger. Acquisition Corp. or Medex
shall have filed a Certificate of Ownership and Merger, duly executed by
Acquisition Corp. with respect to the Merger with the Secretary of State of the
State of Ohio (the "Certificate
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of Merger"), which shall comply as to form and substance with the laws of the
State of Ohio, and the Merger shall have become fully effective under applicable
law.
(f) Supplemental Opinions of Counsel. The
Administrative Agent shall have received (i) a supplemental opinion of Donald D.
Bradley, General Counsel of the Borrower and counsel to Acquisition Corp., and
(ii) a supplemental opinion of Vorys, Sater, Seymour and Pease, special Ohio
counsel to the Borrower and Acquisition Corp., each addressed to the
Administrative Agent, the Swing Line Lender and the Lenders, and dated the
Merger Effective Date, substantially in the forms of Exhibit E-3 and E-4,
respectively.
(g) Fees and Expenses of Special Counsel. The fees
and expenses of Special Counsel in connection with the Transactions to the
extent not theretofore paid shall have been paid.
6. ADDITIONAL CONDITIONS OF LENDING
The obligation of each Lender to make any Loan on any
Borrowing Date is subject to the satisfaction of the following conditions
precedent as of the date of such Loan:
6.1. Compliance
On each Borrowing Date and after giving effect to the Loans to
be made thereon (i) there shall exist no Default or Event of Default and (ii)
the representations and warranties contained in the Loan Documents shall be true
and correct with the same effect as though such representations and warranties
had been made on such Borrowing Date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such earlier date. Each borrowing by the Borrower shall constitute a
certification by the Borrower as of such Borrowing Date that each of the
foregoing matters is true and correct in all respects.
6.2. Borrowing Request
The Administrative Agent shall have received, a Borrowing
Request, duly executed by an Authorized Signatory of the Borrower.
7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any Loan
Document to any Lender or the Administrative Agent, the Borrower shall:
7.1. Financial Statements and Information
Maintain, and cause each of its Subsidiaries to maintain, a
standard system of accounting in accordance with GAAP, and furnish or cause to
be furnished to the Administrative Agent and each Lender:
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(a) As soon as available, but in any event within 90
days after the end of each fiscal year, a copy of its Consolidated Balance Sheet
as at the end of such fiscal year, together with the related Consolidated
Statements of Income, Stockholders' Equity and Cash Flows as of and through the
end of such fiscal year, setting forth in each case in comparative form the
figures for the preceding fiscal year. The Consolidated Balance Sheets and
Consolidated Statements of Income, Stockholders' Equity and Cash Flows shall be
audited and certified without qualification by the Accountants, which
certification shall (i) state that the examination by such Accountants in
connection with such Consolidated financial statements has been made in
accordance with generally accepted auditing standards and, accordingly, included
such tests of the accounting records and such other auditing procedures as were
considered necessary in the circumstances, and (ii) include the opinion of such
Accountants that such Consolidated financial statements have been prepared in
accordance with GAAP in a manner consistent with prior fiscal periods, except as
otherwise specified in such opinion. Notwithstanding any of the foregoing, the
Borrower may satisfy its obligation to furnish Consolidated Balance Sheets and
Consolidated Statements of Income, Stockholders' Equity and Cash Flows by
furnishing copies of the Borrower's annual report on Form 10-K in respect of
such fiscal year, together with the financial statements required to be attached
thereto, provided the Borrower is required to file such annual report on Form
10-K with the SEC and such filing is actually made.
(b) As soon as available, but in any event within 45
days after the end of each of the first three fiscal quarters of each fiscal
year, a copy of the Consolidated Balance Sheet of the Borrower as at the end of
each such quarterly period, together with the related Consolidated Statements of
Income and Cash Flows for such period and for the elapsed portion of the fiscal
year through such date, setting forth in each case in comparative form the
figures for the corresponding periods of the preceding fiscal year, certified by
a Financial Officer of the Borrower, as being complete and correct in all
material respects and as presenting fairly the Consolidated financial condition
and the Consolidated results of operations of the Borrower and its Subsidiaries.
Notwithstanding any of the foregoing, the Borrower may satisfy its obligation to
furnish quarterly Consolidated Balance Sheets and Consolidated Statements of
Operations and Cash Flows by furnishing copies of the Borrower's quarterly
report on Form 10-Q in respect of such fiscal quarter, together with the
financial statements required to be attached thereto, provided the Borrower is
required to file such quarterly report on Form 10-Q with the SEC and such filing
is actually made.
(c) Within 45 days after the end of each of the first
three fiscal quarters (120 days after the end of the last fiscal quarter), a
Compliance Certificate of the Borrower, executed by a Financial Officer.
(d) Within 90 days after the end of each fiscal year
of the Borrower, an annual financial forecast, with appropriate schedules, for
the then fiscal year, including, without limitation, a balance sheet, income
statement and statement of cash flow, as prepared for internal distribution to
management of Borrower.
(e) Such other information as the Administrative
Agent or any Lender may reasonably request from time to time.
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7.2. Certificates; Other Information
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness of
the Borrower or any of its Subsidiaries in an aggregate amount in excess of
$2,500,000 is declared or shall become due and payable prior to its stated
maturity, or is called and not paid when due, (ii) a default shall have occurred
under, or the holder or obligee of, any note, certificate, security or other
evidence of Indebtedness, with respect to any other Indebtedness of the Borrower
or any of its Subsidiaries has the right to declare Indebtedness in an aggregate
amount in excess of $2,500,000 due and payable prior to its stated maturity
(other than any default or right to accelerate the Indebtedness under the
Existing Medex Bond Documents and the Existing Medfusion Bond Documents to the
extent that such default or such right to accelerate results solely from the
consummation of the Medex Stock Purchase or the Merger), (iii) there shall occur
and be continuing a Default or an Event of Default or (iv) a Change of Control
should occur;
(b) Prompt written notice of: (i) any citation,
summons, subpoena, order to show cause or other document naming the Borrower or
any of its Subsidiaries a party to any proceeding before any Governmental
Authority which would reasonably be expected to have a Material Adverse Effect
or which calls into question the validity or enforceability of any of the Loan
Documents, and include with such notice a copy of such citation, summons,
subpoena, order to show cause or other document, (ii) any lapse or other
termination of any material license, permit, franchise or other authorization
issued to the Borrower or any of its Subsidiaries by any Person or Governmental
Authority, or any refusal by any Person or Governmental Authority to renew or
extend any such material license, permit, franchise or other authorization,
which lapse, termination, refusal or dispute would reasonably be expected to
have a Material Adverse Effect;
(c) Promptly upon becoming available, copies of all
(i) material regular, periodic or special reports, schedules and other material
which the Borrower or any of its Subsidiaries may now or hereafter be required
to file with or deliver to any securities exchange or the SEC, or any other
Governmental Authority succeeding to the functions thereof and (ii) material
news releases and annual reports relating to the Borrower or any of its
Subsidiaries;
(d) Prompt written notice in the event that the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows that (i) any
Termination Event with respect to a Pension Plan has occurred or will occur,
(ii) any condition exists with respect to a Pension Plan which presents a
material risk of termination of the Pension Plan, imposition of an excise tax in
a material amount, requirement to provide security to the Pension Plan or other
liability in a material amount on the Borrower, any of its Subsidiaries or any
ERISA Affiliate, (iii) the Borrower, any of its Subsidiaries or any ERISA
Affiliate has applied for a waiver of the minimum funding standard
under Section 412 of the Code with respect to a Pension Plan, (iv) the
aggregate amount of the Unfunded Pension Liabilities under all Pension Plans
would reasonably be expected to have a Material Adverse Effect, (v) the
aggregate amount of Unrecognized Retiree Welfare Liability under all applicable
Employee Benefit Plans would reasonably be expected to have a Material Adverse
Effect, (vi) the Borrower, any of its Subsidiaries or any ERISA Affiliate has
engaged in a Prohibited Transaction with respect to an Employee Benefit Plan,
(vii) the imposition of any tax under Section 4980B(a) of the Code in a
material amount or (viii) the assessment of a civil penalty under Section
502(c) of ERISA in a material amount, together with a certificate of
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a Financial Officer of the Borrower setting forth the details of such event and
the action which the Borrower, such Subsidiary or such ERISA Affiliate proposes
to take with respect thereto.
(e) Prompt written notice in the event that Bor-
rower, any of its Subsidiaries or any ERISA Affiliate shall receive a demand
letter from the PBGC notifying the Borrower, such Subsidiary or such ERISA
Affiliate of any final decision finding liability (other than liability for
premium payments) and the date by which such liability must be paid, together
with a copy of such letter and a certificate of a Financial Officer of the
Borrower setting forth the action which the Borrower, such Subsidiary or such
ERISA Affiliate proposes to take with respect thereto.
(f) Promptly upon the same becoming available, and in
any event by the date such amendment is adopted, a copy of any Pension Plan
amendment that the Borrower, any of its Subsidiaries or any ERISA Affiliate
proposes to adopt which would require the posting of security under Section
401(a)(29) of the Code, together with a certificate of a Financial Officer of
the Borrower setting forth the reasons for the adoption of such amendment.
(g) As soon as possible and in any event by the tenth
day after any required installment or other payment under Section 412 of the
Code owed to a Pension Plan shall have become due and owing and remain unpaid a
copy of the notice of failure to make required contributions provided to the
PBGC by the Borrower, any of its Subsidiaries or any ERISA Affiliate under
Section 412(n) of the Code, together with a certificate of a Financial Officer
setting forth the action which the Borrower, such Subsidiary or such ERISA
Affiliate proposes to take with respect thereto.
(h) If the termination of any Pension Plan would
result in the imposition of any tax under Section 4980 of the Code, then as soon
as possible, but in no event less than 60 days before the due date of the tax, a
certificate of a Financial Officer of the Borrower setting forth the estimated
amount of such tax, any reversion, and the proposed use of such reversion. This
subsection shall apply to a transaction notwithstanding a reduction or complete
elimination of a tax because of the operation of either Sections 4980(d) or
420(a)(3)(A) of the Code.
(i) Prompt written notice of any order, notice, claim
or proceeding received by, or brought against, the Borrower or any of its
Subsidiaries, or with respect to any of the Real Property, under any
Environmental Law which would reasonably be expected to have a Material Adverse
Effect.
(j) Subject to any confidentiality requirements, as
soon as reasonably practicable but in any event at least five Business Days in
advance of any Equity Offering or the issuance of Refinancing Debt, written
notice of such Equity Offering or issuance of Refinancing Debt, as the case may
be, together with copies of all registration statements, if any, filed in
connection therewith.
(k) Prompt written notice of any contest under
Section 7.4, 7.6 or 7.8.
(l) As soon as reasonably practicable but in any
event at least ten days in advance of any merger or consolidation described in
Section 8.3(a), written notice of such merger or consolidation.
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(m) Prompt written notice if the Borrower or any of
its Subsidiaries changes its name, structure or status.
(n) Such other information as the Administrative
Agent or any Lender shall reasonably request from time to time.
7.3. Legal Existence
Except as may otherwise be permitted by Sections 8.3 and 8.4,
maintain, and cause each of its Subsidiaries to maintain, its corporate,
partnership or analogous existence, as the case may be, in good standing in the
jurisdiction of its incorporation or formation and in each other jurisdiction in
which the failure so to do would reasonably be expected to have a Material
Adverse Effect provided, however, that any Subsidiary of the Borrower may be
dissolved if such dissolution would not reasonably be expected to have a
Material Adverse Effect.
7.4. Taxes
Pay and discharge when due, and cause each of its Subsidiaries
so to do, all Taxes, upon or with respect to the Borrower or such Subsidiary and
all Taxes upon the income, profits and Property of the Borrower and its
Subsidiaries, which if unpaid, would reasonably be expected to have a Material
Adverse Effect or become a Lien on Property of the Borrower or such Subsidiary
(other than a Lien described in Section 8.2(a)(i)), unless and to the extent
only that such Taxes, shall be contested in good faith and by appropriate
proceedings diligently conducted by the Borrower or such Subsidiary, provided
that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.5. Insurance
Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurers insurance with respect to its Property
and businesses against such casualties and contingencies of such types and in
such amounts as is customary in the case of Persons of established reputations
engaged in the same or similar businesses and similarly situated and furnish to
the Administrative Agent, upon written request, full information as to the
insurance carried; provided, however that the Borrower may maintain a
self-insurance program solely for worker's compensation.
7.6. Performance of Obligations
Pay and discharge when due, and cause each of its Subsidiaries
so to do, all lawful Indebtedness, obligations and claims for labor, materials
and supplies or otherwise which, if unpaid, would reasonably be expected to (i)
have a Material Adverse Effect, or (ii) become a Lien upon Property of the
Borrower or any of its Subsidiaries other than a Permitted Lien, unless and to
the extent only that the validity of such Indebtedness, obligation or claim
shall be contested in good faith and by appropriate proceedings diligently
conducted and provided that such reserve or other appropriate provision as shall
be required by the Accountants in accordance with GAAP shall have been made
therefor.
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7.7. Condition of Property
At all times, maintain, protect and keep in good repair,
working order and condition (ordinary wear and tear excepted), and cause each of
its Subsidiaries so to do, all Property necessary to the operation of the
Borrower's or such Subsidiary's business, except to the extent that the failure
to do so would not reasonably be expected to have a Material Adverse Effect.
7.8. Observance of Legal Requirements
Observe and comply in all respects, and cause each of its
Subsidiaries so to do, with all laws, ordinances, orders, judgments, rules,
regulations, certifications, franchises, permits, licenses, directions and
requirements of all Governmental Authorities, which now or at any time hereafter
may be applicable to it, a violation of which would reasonably be expected to
have a Material Adverse Effect, except such thereof as shall be contested in
good faith and by appropriate proceedings diligently conducted by it, provided
that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions
At all reasonable times, upon reasonable prior notice (which
notice shall specify the purpose and nature of the inspection), permit
representatives of the Administrative Agent and each Lender at their expense to
visit the offices of the Borrower and each of its Subsidiaries, to examine the
books and records thereof and Accountants' reports relating thereto, and to make
copies or extracts therefrom, to discuss the affairs of the Borrower and each
such Subsidiary with the respective officers thereof, and to examine and inspect
the Property of the Borrower and each such Subsidiary and to meet and discuss
the affairs of the Borrower and each such Subsidiary with the Accountants,
provided that (i) the Borrower shall have the right to be present during any
such discussions with the Accountants, (ii) unless otherwise agreed to by the
Borrower, no more than an aggregate of four inspections, visits or examinations
shall be conducted in any fiscal year of the Borrower (other than those
conducted after the occurrence and during the continuance of an Event of
Default) and (iii) after the occurrence and during the continuance of an Event
of Default (whether or not the Commitments have been terminated and whether or
not the Loans have been accelerated) all expenses of any visit, inspection or
examination pursuant to this Section shall be paid by the Borrower.
7.10. Authorizations
Maintain, and cause each of its Subsidiaries to maintain, in
full force and effect, all material licenses, franchises, permits, licenses,
authorizations and other rights as are necessary for the conduct of its
business, except to the extent that the failure to maintain would not reasonably
be expected to have a Material Adverse Effect.
7.11. Financial Covenants
(a) Fixed Charge Coverage Ratio. Maintain at all times a Fixed
Charge Coverage Ratio of not less than 1:75:1.00 for the period from the
Effective Date through January 31, 1998 and 2.00:1.00 thereafter.
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(b) Leverage Ratio. Maintain at all times during the periods
set forth below, a Leverage Ratio of not more than the ratios set forth below:
<TABLE>
<CAPTION>
Period Ratio
<S> <C>
Effective Date through
January 31, 1998 4.25:1.00
February 1, 1998 through
July 31, 1999 4.00:1.00
August 1, 1999 through
January 29, 2000 3.75:1.00
January 30, 2000 through
July 29, 2000 3.50:1.00
July 30, 2000 through
August 4, 2001 3.25:1.00
August 5, 2001 and
thereafter 3.00:1.00.
</TABLE>
(c) Revenues. Derive at all times not less than 90% of
Consolidated revenues from the lines of business in which (i) the Borrower or
its Subsidiaries engage on the Effective Date and (ii) Medex and its
Subsidiaries engage on the first Borrowing Date and, in each case, any related
business.
7.12. Merger.
Consummate the Merger in accordance with the provisions of
Section 5.3 no later than the earlier of 180 days after the first Borrowing Date
or the date on which the Merger Agreement shall be terminated pursuant to the
provisions thereof.
8. NEGATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect, any
Loan remains outstanding and unpaid, or any other amount is owing under any Loan
Document to any Lender or the Administrative Agent, the Borrower shall not,
directly or indirectly:
8.1. Indebtedness
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any of its Subsidiaries so to do, except (i)
Indebtedness due under the Loan Documents, (ii) Indebtedness of the Borrower or
any of its Subsidiaries existing on the Effective Date and Indebtedness of Medex
or any of its Subsidiaries existing on the first Borrowing Date, in each case as
set forth on Schedule 8.1 (other than the Existing Furon Bank Debt which is to
be repaid on the first Borrowing Date), excluding increases or refinancings
thereof, (iii) Indebtedness of Medex existing on the first Borrowing Date under
the Existing Medex Bond Documents in a principal amount not in excess of
$4,000,000, and Indebtedness of Medfusion, Inc. existing on the first Borrowing
Date under the Existing Medfusion Bond Documents in a principal amount not in
excess of $2,750,000, in each
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case including any related letter of credit reimbursement obligations, excluding
increases or refinancings thereof, (iv) Intercompany Indebtedness, (v)
Refinancing Debt in an aggregate amount not in excess of $150,000,000, provided
that (A) the terms and conditions thereof are no less favorable taken as a whole
to the Borrower that the terms and conditions of this Agreement, (B) the
maturity date thereof is not sooner than six months after the Maturity Date, (C)
interest thereon is payable in cash, (D) the Net Issuance Proceeds thereof are
applied to the repayment of the Loans and the reduction of the Aggregate
Revolving Credit Commitment Amount in accordance with Section 2.6 hereof and (E)
the Administrative Agent receives a copy of the agreement, indenture or other
documents governing such Indebtedness, (vi) Capitalized Lease Obligations not to
exceed $5,000,000 in the aggregate, (vii) Contingent Obligations not to exceed
$5,000,000 in the aggregate, (viii) reimbursement obligations in respect of
letters of credit (other than the letters of credit referred to in clause (iii)
above) not to exceed $10,000,000 in the aggregate, (ix) after the receipt by the
Administrative Agent of a satisfactory letter from the lender of the Existing
Medex Bank Debt confirming that all amounts due in respect of the Existing Medex
Bank Debt have been paid and the related line of credit cancelled, other
unsecured Indebtedness not to exceed $5,000,000 in the aggregate, (x) purchase
money Indebtedness and mortgage Indebtedness (other than any such Indebtedness
described in clause (ii) above) incurred in connection with the purchase, after
the date hereof, of any Property, in an aggregate principal amount not to exceed
$10,000,000, (xi) Indebtedness of the Borrower arising out of Interest Rate
Protection Arrangements covering a notional principal amount not in excess of
the aggregate outstanding principal balance of the Loans and the Refinancing
Debt, and (xii) Indebtedness assumed in connection with a Permitted Acquisition
in an aggregate amount not in excess of $2,500,000, provided, however, that such
Indebtedness was not incurred in contemplation of such Permitted Acquisition.
8.2. Liens
(a) Create, incur, assume or suffer to exist any Lien upon any
of its Property, whether now owned or hereafter acquired, or permit any of its
Subsidiaries so to do, except (i) Liens for Taxes in the ordinary course of
business which are not delinquent or which are being contested in accordance
with Section 7.4, provided that enforcement of such Liens is stayed pending such
contest, (ii) Liens in connection with workers' compensation, unemployment
insurance or other social security obligations (but not ERISA), (iii) deposits
or pledges to secure bids, tenders, contracts (other than contracts for the
payment of indebtedness for borrowed money), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
ordinary course of business, (iv) zoning ordinances, easements, rights of way,
minor defects, irregularities, and other similar restrictions affecting real
Property which do not materially adversely affect the value of such real
Property or the financial condition of the Borrower or such Subsidiary or
materially impair its use for the operation of the business of the Borrower or
such Subsidiary, (v) Liens arising by operation of law such as mechanics',
materialmen's, carriers', warehousemen's liens incurred in the ordinary course
of business which are not delinquent or which are being contested in good faith
and by appropriate proceedings diligently conducted, provided that enforcement
of such Liens is stayed pending such contest, (vi) Liens arising out of
judgments or decrees which are being contested in good faith and by appropriate
proceedings diligently conducted, provided that enforcement of such Liens is
stayed pending such contest, (vii) Liens in favor of the Administrative Agent
and the Lenders under the Loan Documents, (viii) Liens on Medex Stock so long as
such Medex Stock constitutes Margin Stock and more than 25% of the assets of the
Borrower and its
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Subsidiaries constitute Margin Stock, (ix) Liens on Property of the Borrower and
its Subsidiaries existing on the Effective Date as set forth on Schedule 8.2 as
renewed or refinanced from time to time, as long as the amounts secured thereby
are not increased, (x) Liens on Property securing Indebtedness permitted under
Section 8.1(xii), provided that (A) such Liens are limited to the Property
acquired in the Permitted Acquisitions and (B) were not created or assumed in
contemplation of such acquisition, (xi) purchase money Liens on Property of the
Borrower or any of its Subsidiaries acquired after the date hereof to secure
Indebtedness of the Borrower permitted by Section 8.1(x), incurred in connection
with the acquisition of such Property, provided that each such Lien is limited
to such Property so acquired, (xii) Liens on Property acquired in a Permitted
Acquisition to the extent that the Indebtedness secured thereby is permitted
pursuant to Section 8.1, (xiii) Liens consisting of leases and subleases granted
to third parties and not interfering in any material respect with the ordinary
conduct of the business of the Borrower and its Subsidiaries, (xiv) Liens
consisting of the interest or title of the lessor or sublessor under any lease
and any Liens arising from UCC financing statements relating solely to leases in
respect of which the Borrower or any of its Subsidiaries is the lessee; (xv)
Liens in favor of Governmental Authorities arising by operation of law to secure
the payment of custom duties in connection with the importation of goods in the
ordinary course of business; and (xvi) Liens consisting of licenses of patents,
trademarks and other intellectual property granted by the Borrower or any of its
Subsidiaries which does not interfere in any material respect with the conduct
of the Borrower's or such Subsidiary's business in the ordinary course.
(b) Subject to clause (viii) of subsection (a) above, enter
into or permit any of its Subsidiaries to enter into, any agreement which
prohibits or limits the ability of the Borrower or such Subsidiary to create,
incur, assume or suffer to exist any Lien upon any of its Property, whether now
owned or hereafter acquired, except (i) purchase money Liens or capital leases
otherwise permitted by this Agreement (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby) and (ii)
this Agreement.
8.3. Merger, Consolidations and Acquisitions
Consolidate with, be acquired by, merge into or with any
Person, make any Acquisition or enter into any binding agreement to do any of
the foregoing which is not contingent on obtaining the consent of the Required
Lenders, or permit any of its Subsidiaries so to do, except:
(a) provided that immediately before and after giving effect
thereto no Default or Event of Default shall exist, any direct or indirect
wholly-owned Subsidiary of the Borrower may merge or consolidate with the
Borrower or any other direct or indirect wholly-owned Subsidiary of the
Borrower, provided that in the event of a merger of the Borrower and such
wholly-owned Subsidiary, the Borrower shall be the survivor thereof;
(b) subject to the satisfaction of the conditions set forth in
Section 5.2, the Medex Stock Purchase, and Section 5.3, the Merger;
(c) mergers involving Subsidiaries as part of an Acquisition
permitted by subsections (e) or (f) below;
(d) Investments permitted by Section 8.5;
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(e) Acquisitions (other than the Medex Acquisition)
in respect of which the Acquisition Cost exceeds $25,000,000, provided that with
respect to any such Acquisition, (i) no Default or Event of Default shall exist
immediately before or after giving effect to such Acquisition, (ii) the Person
acquired is in the same or a related business as that of the Borrower or any of
its Subsidiaries, or the business or assets being acquired is or is used in the
same or related business to that of the Borrower or any of its Subsidiaries,
(iii) the Borrower will be in compliance with each of the financial covenants
contained in Section 7.11 on a pro-forma basis after giving effect to such
Acquisition and any Indebtedness incurred or assumed in connection therewith
which is permitted by Section 8.1, (iv) immediately after giving effect to each
such Acquisition, all of the representations and warranties contained
in Section 4 shall be true and correct as if then made, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true and correct
on and as of such earlier date and (v) the Administrative Agent shall have
received a certificate of a Financial Officer of the Borrower to such effect;
and
(f) Acquisitions (other than the Medex Acquisition
and Acquisitions described in subsection (e) above), provided that (i) no
Default or Event of Default shall exist immediately before or after giving
effect to such Acquisition, (ii) the Person acquired is in the same or a related
business as that of the Borrower or any of its Subsidiaries, or the business or
assets being acquired is or is used in the same or related business to that of
the Borrower or any of its Subsidiaries, (iii) the Borrower will be in
compliance with each of the financial covenants contained in Section 7.11 on a
pro-forma basis after giving effect to such Acquisition and any Indebtedness
incurred or assumed in connection therewith which is permitted by Section 8.1,
and (iv) immediately after giving effect to each such Acquisition, all of the
representations and warranties contained in Section 4 shall be true and correct
as if then made, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true and correct on and as of such earlier date.
8.4. Dispositions
Make any Disposition, or permit any of its Subsidiaries so to
do, except:
(a) Dispositions of any Investments permitted under
Section 8.5(a);
(b) Dispositions of Property which, in the rea-
sonable opinion of the Borrower or such Subsidiary, is obsolete or no longer
useful in the conduct of its business;
(c) other Dispositions as to which the following
conditions have been satisfied:
(i) no Default or Event of Default shall
exist immediately before or after giving effect thereto,
(ii) at least 75% of the total consideration
received or to be received therefor by the Borrower or any of its Subsidiaries
shall be payable in cash on or before the closing thereof and the total
consideration shall not be less than the fair market value thereof as reasonably
determined by the Managing Person of the Borrower or such Subsidiary, provided,
however, that with respect to any single Disposition in
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respect of which the total consideration to be paid is less than $2,500,000, all
or any portion of such consideration may be paid by a note or notes of the
buyer,
(iii) in the event that the Net Cash
Proceeds of such Disposition together with the Net Cash Proceeds of all
Dispositions made during the same fiscal year exceed $3,750,000 in the
aggregate, the Aggregate Revolving Credit Commitment Amount and Swing Line
Commitment Amount shall be permanently reduced and the Borrower shall prepay the
Loans at the times and in the amounts specified in Sections 2.6 and 2.7, if
applicable, and
(iv) in the event that the Net Cash Proceeds
of such Disposition together with the Net Cash Proceeds of all Dispositions made
after the Effective Date exceed $35,000,000 in the aggregate, the Administrative
Agent and the Required Lenders shall have consented thereto in writing and the
Administrative Agent and the Lenders shall have received a certificate in
respect thereto signed by an Authorized Signatory of the Borrower identifying
the Property to be sold or otherwise disposed of and stating (x) that
immediately before or after giving effect thereto, no Default or Event of
Default shall exist, (y) that the consideration received or to be received by
the Borrower or such Subsidiary for such Property has been determined by the
Managing Person thereof to be not less than the fair market value of such
Property and (z) the total consideration to be paid in respect of such
Disposition, together with estimates of items to be deducted therefrom in
arriving at the Net Cash Proceeds thereof;
(d) Disposition of the Borrower's structural bearings
division located in Texas;
(e) Dispositions consisting of transfers of assets
(i) by a wholly-owned Subsidiary of the Borrower to another wholly-owned
Subsidiary of the Borrower or to the Borrower and (ii) to joint ventures to the
extent permitted by Section 8.5(i); and
(f) Dispositions of Medex Stock so long as Medex
Stock constitutes Margin Stock and more than 25% of the assets of the Borrower
and its Subsidiaries constitute Margin Stock.
8.5. Investments, Loans, Etc.
At any time, purchase or otherwise acquire, hold or invest in
the Capital Stock of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment, whether by way of capital contribution,
time deposit or otherwise, in or with any Person, or permit any of its
Subsidiaries so to do, (all of which are sometimes referred to herein as
"Investments") except:
(a) Investments in Cash Equivalents;
(b) Investments existing on the date hereof as set
forth on Schedule 8.5;
(c) normal business banking accounts and short-term
certificates of deposit and time deposits in, or issued by, federally insured
institutions in amounts not exceeding the limits of such insurance;
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(d) Permitted Acquisitions;
(e) advances to employees for moving, entertainment
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business including under the Borrower's relocation program;
(f) notes received from buyers in connection with
Dispositions permitted by Section 8.4;
(g) Investments by the Borrower or any Subsidiary in
Intercompany Indebtedness;
(h) Investments by Acquisition Corp. in Medex Stock;
(i) other Investments (including contributions of
Property to joint ventures) not in excess of $7,500,000 in the aggregate;
(j) Investments consisting of loans by the Borrower
to the ESOP in connection with the operation of the ESOP in the ordinary course
not in excess of $10,000,000 in the aggregate; and
(k) Investments consisting of the Capital Stock of
Subsidiaries now existing or hereafter created, provided, however, that no
capital contribution or other Investment in any thereof shall be made unless
otherwise permitted by this Section 8.5.
(l) Investments consisting of Interest Rate
Protection Arrangements to the extent permitted by Section 8.1(xi).
8.6. Restricted Payments
Declare or pay any Restricted Payments payable in cash or oth-
erwise or apply any of its Property thereto or set apart any sum
therefor, or permit any of its Subsidiaries so to do, except (i) a wholly-owned
Subsidiary may declare and pay Restricted Payments to the Borrower or to any
other wholly-owned Subsidiary, (ii) provided that immediately before or after
giving effect to such declaration and payment no Default or Event of Default
shall exist, (A) the Borrower may declare and pay Restricted Payments in an
aggregate amount not exceeding 50% of Excess Cash Flow for the immediately
preceding fiscal year, provided that any such Restricted Payment shall be
determined on a noncumulative basis so that such Restricted Payments permitted
to be declared and paid in a fiscal year may not be carried over and paid in a
following year and (B) the Borrower may repay Intercompany Indebtedness in
respect of which it is the obligor and (iii) on or after the first Borrowing
Date but on or prior to the Merger Effective Date and subject to the
satisfaction of the conditions set forth in Section 5.2, (A) Medex may purchase
not more than 526,104 shares of Medex Stock (to the extent not purchased by
Acquisition Corp. pursuant to the Offer to Purchase) from officers and directors
of Medex who are parties to Shareholder Option Agreements and (B) without
duplication and so long as the same are cancelled, Medex or Acquisition Corp.
may purchase not more than an aggregate of 1,157,091 options to purchase Medex
Stock of which (x) 971,501 options are held by officers and directors of Medex
who are parties to Shareholder Option Agreements and (y) the balance thereof are
held by other employees of Medex or its Subsidiaries, provided that the price
paid for such shares and such options shall be equal to the Merger Consideration
under and as defined in the Merger Agreement.
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8.7. Business and Name Changes
Change its fiscal year or materially change the nature of the
business of the Borrower and its Subsidiaries as conducted on the Effective Date
or of Medex and its Subsidiaries as conducted on the first Borrowing Date or
permit any of its Subsidiaries so to do.
8.8. ERISA
Establish or contribute, or permit any of its Subsidiaries so
to do, to any Pension Plan (other than an Existing Pension Plan), cause any
Pension Plan to have a Funded Current Liability Percentage of less than 60%, or
increase benefits, or permit any of its Subsidiaries so to do, under any
Employee Benefit Plan or establish or contribute to any new Employee Benefit
Plan, except in each case to the extent required by law and except to the extent
it would not reasonably be expected to have a Material Adverse Effect.
8.9. Amendments, Etc. of Certain Agreements
Enter into or agree to any amendment, modification or waiver
of any term or condition of (i) its Organizational Documents, the Existing Medex
Bond Documents, the Existing Medfusion Bond Documents and, subject to the
provisions of clause (ii) below, the Offer Documents, in each case in any way
which would adversely affect the interests of the Administrative Agent and the
Lenders under any of the Loan Documents, (ii) the Offer Documents to the extent
that such amendment, modification or waiver mentions BNY, BNY Capital Markets or
describes the Loan Documents or the credit facility established hereunder; or
(iii) any term or condition of any Merger Document, or permit any of its
Subsidiaries so to do.
8.10. Transactions with Affiliates
Subject to Section 8.4(e) become a party to any transaction
with an Affiliate unless the Borrower's Managing Person shall have determined
that the terms and conditions relating thereto are as favorable to the Borrower
as those which would be obtainable at the time in a comparable arms-length
transaction with a Person other than an Affiliate, or permit any of its
Subsidiaries so to do.
8.11. Issuance of Capital Stock
Issue any Capital Stock, or permit any of its Subsidiaries so
to do, provided that if no Default or Event of Default would exist immediately
before or after giving effect thereto, the Borrower or any of its Subsidiaries
may issue additional Capital Stock (other than Disqualified Stock).
9. DEFAULT
9.1. Events of Default
The following shall each constitute an "Event of Default"
hereunder:
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(a) The failure of the Borrower to make any payment
of principal on any Loan when due and payable; or
(b) The failure of the Borrower to make any payment
of interest, Fees, expenses or other amounts payable under any Loan Document or
otherwise to the Administrative Agent with respect to the loan facilities
established hereunder within five days of the date when due and payable; or
(c) The failure of the Borrower to observe or per-
form any covenant or agreement contained in Sections 2.8, 7.3, 7.11 or Section
8; or
(d) The failure of the Borrower to observe or per-
form any other term, covenant, or agreement contained in any Loan Document and
such failure shall have continued unremedied for a period of 30 days after the
Borrower shall have obtained knowledge thereof; or
(e) Any representation or warranty made by the
Borrower (or by an officer thereof on its behalf) in any Loan Document or in any
certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto, shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(f) Liabilities and/or other obligations of the
Borrower (other than its obligations under the Loan Documents) or any of its
Subsidiaries, whether as principal, guarantor, surety or other obligor, for
the payment of any Indebtedness in an aggregate amount in excess of $10,000,000
(i) shall become or shall be declared to be due and payable prior to the
expressed maturity thereof, or (ii) shall not be paid when due or within any
grace period for the payment thereof or, (iii) any holder of any such obligation
shall have the right to declare such obligation due and payable or require the
Borrower or such subsidiary to redeem such obligation in each case prior to the
expressed maturity thereof;
(g) The Borrower shall suspend or discontinue its
business or the Borrower or any of its Subsidiaries shall (i) make an assignment
for the benefit of creditors, (ii) generally not be paying its debts as such
debts become due, (iii) admit in writing its inability to pay its debts as they
become due, (iv) file a voluntary petition in bankruptcy, (v) become insolvent
(however such insolvency shall be evidenced), (vi) file any petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment of
debt, liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, (vii) petition or apply to any
tribunal for any receiver, custodian or any trustee for any substantial part of
its Property, (viii) be the subject of any such proceeding filed against it
which remains undismissed for a period of 60 days, (ix) file any answer
admitting or not contesting the material allegations of any such petition filed
against it or any order, judgment or decree approving such petition in any such
proceeding, (x) seek, approve, consent to, or acquiesce in any such proceeding,
or in the appointment of any trustee, receiver, sequestrator, custodian,
liquidator, or fiscal agent for it, or any substantial part of its Property, or
an order is entered appointing any such trustee, receiver, custodian, liquidator
or fiscal agent and such order remains in effect for 60 days, or (xi) take any
formal action for the purpose of effecting any of the foregoing or looking to
the liquidation or dissolution of the Borrower or such Subsidiary; or
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(h) An order for relief is entered under the United
States bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower or any of its Subsidiaries bankrupt or
insolvent, (ii) approving as properly filed a petition seeking reorganization,
liquidation, arrangement, adjustment or composition of or in respect of the
Borrower or any of its Subsidiaries under the United States bankruptcy laws or
any other applicable Federal or state law, (iii) appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of the Borrower or any of its Subsidiaries or of any substantial part
of the Property of any thereof, or (iv) ordering the winding up or liquidation
of the affairs of the Borrower or any of its Subsidiaries, and any such decree
or order continues unstayed and in effect for a period of 60 days; or
(i) Judgments or decrees against the Borrower or any
of its Subsidiaries aggregating in excess of $10,000,000 (unless adequately
insured by a solvent unaffiliated insurance company which has acknowledged
coverage) shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 60 days; or
(j) Any Loan Document shall cease, for any reason, to
be in full force and effect (other than in accordance with its terms), or the
Borrower shall so assert in writing or shall disavow any of its obligations
thereunder; or
(k) (i) any Termination Event shall occur; (ii) any
Accumulated Funding Deficiency, whether waived, shall exist with respect to any
Pension Plan; (iii) any Person shall engage in any Prohibited Transaction
involving any Employee Benefit Plan; (iv) the Borrower, any of its Subsidiaries
or any ERISA Affiliate shall fail to pay when due an amount which is payable by
it to the PBGC or to a Pension Plan under Title IV of ERISA; (v) the imposition
of any tax under Section 4980B(a) of the Code; (vi) the assessment of a civil
penalty with respect to any Employee Benefit Plan under Section 502(c) of ERISA;
or (vii) any other event or condition shall occur or exist with respect to an
Employee Benefit Plan, which in the case of each of clauses (i) through (vii),
either individually or in the aggregate would have a Material Adverse Effect.
9.2. Contract Remedies
(a) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (a) if such event is an Event of
Default specified in clause (g) or (h) above, the Revolving Credit Commitments
of all of the Lenders and the Swing Line Commitment of the Swing Line Lender
shall immediately and automatically terminate and the Loans, all accrued and
unpaid interest thereon and all other amounts owing under the Loan Documents
shall immediately become due and payable, and the Administrative Agent may, and,
upon the direction of the Required Lenders shall, exercise any and all remedies
and other rights provided in the Loan Documents, and (b) if such event is any
other Event of Default, any or all of the following actions may be taken: (i)
with the consent of the Required Lenders, the Administrative Agent may, and upon
the direction of the Required Lenders shall, by notice to the Borrower, declare
the Revolving Credit Commitments of all of the Lenders and the Swing Line
Commitment of the Swing Line Lender terminated forthwith, whereupon such
Revolving Credit Commitments and the Swing Line Commitment shall immediately
terminate, and (ii) with the consent of the Required Lenders, the Administrative
Agent may, and upon the direction of the Required Lenders shall, by notice of
default to the Borrower, declare the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
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and the Administrative Agent may, and upon the direction of the Required Lenders
shall, exercise any and all remedies and other rights provided in the Loan
Documents. Except as otherwise provided in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived. The
Borrower hereby further expressly waives and covenants not to assert any
appraisement, valuation, stay, extension, redemption or similar laws, now or at
any time hereafter in force which might delay, prevent or otherwise impede the
performance or enforcement of any Loan Document.
(b) In the event that the Revolving Credit Commitments of all
the Lenders and the Swing Line Commitment of the Swing Line Lender shall have
been terminated or the Loans, all accrued and unpaid interest thereon and all
other amounts owing under the Loan Documents shall have been declared due and
payable pursuant to the provisions of this Section, any funds received by the
Administrative Agent and the Lenders from or on behalf of the Borrower shall be
applied by the Administrative Agent and the Lenders in liquidation of the Loans
and the other obligations of the Borrower under the Loan Documents in the
following manner and order: (i) first, to the payment of interest on, and then
the principal portion of, any Loans which the Administrative Agent may have
advanced on behalf of any Lender for which the Administrative Agent has not then
been reimbursed by such Lender or the Borrower; (ii) second, to the payment of
any fees or expenses due the Administrative Agent from the Borrower, (iii)
third, to reimburse the Administrative Agent and the Lenders for any expenses
(to the extent not paid pursuant to clause (ii) above) due from the Borrower
pursuant to the provisions of Section 11.5; (iv) fourth, to the payment of
accrued Fees and all other fees, expenses and amounts due under the Loan
Documents (other than principal and interest on the Loans), (v) fifth, to the
payment pro rata according to the outstanding principal balance of the Loans, of
interest due on the Loans of each Lender; (vi) sixth, to the payment of
principal outstanding on the Loans; and (vii) seventh, to the payment of any
other amounts owing to the Administrative Agent and the Lenders under any Loan
Document.
10. THE ADMINISTRATIVE AGENT
10.1. Appointment
Each Lender hereby irrevocably designates and appoints BNY as
the Administrative Agent of such Lender under the Loan Documents and each Lender
hereby irrevocably authorizes the Administrative Agent to take such action on
its behalf under the provisions of the Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Administrative
Agent by the terms of the Loan Documents, together with such other powers as are
reasonably incidental thereto. The duties of the Administrative Agent shall be
mechanical and administrative in nature, and, notwithstanding any provision to
the contrary elsewhere in any Loan Document, the Administrative Agent shall not
have any duties or responsibilities other than those expressly set forth
therein, or any fiduciary relationship with, or fiduciary duty to, any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Loan Documents or otherwise exist against the
Administrative Agent.
10.2. Delegation of Duties
The Administrative Agent may execute any of its duties under
the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to rely upon, and
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shall be fully protected in, and shall not be under any liability for, relying
upon, the advice of counsel concerning all matters pertaining to such duties.
10.3. Exculpatory Provisions
Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with the Loan Documents (except the Administrative Agent
for its own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in the Loan
Documents or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, the Loan Documents or for the value, validity, effectiveness,
genuineness, perfection, enforceability or sufficiency of any of the Loan
Documents or for any failure of the Borrower or any other Person to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the Loan
Documents, or to inspect the Property, books or records of the Borrower or any
of its Subsidiaries. The Lenders acknowledge that the Administrative Agent shall
not be under any duty to take any discretionary action permitted under the Loan
Documents unless the Administrative Agent shall be instructed in writing to do
so by Required Lenders and such instructions shall be binding on all Lenders;
provided, however, that the Administrative Agent shall not be required to take
any action which exposes the Administrative Agent to personal liability or is
contrary to law or any provision of the Loan Documents. The Administrative Agent
shall not be under any liability or responsibility whatsoever, as Administrative
Agent, to the Borrower, any of its Subsidiaries or any other Person as a
consequence of any failure or delay in performance, or any breach, by any Lender
of any of its obligations under any of the Loan Documents.
10.4. Reliance by Administrative Agent
The Administrative Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by a proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by the Administrative Agent. The Administrative Agent may treat
each Lender or the Person designated in the last notice filed with it under this
Section, as the holder of all of the interests of such Lender in its
Loans until written notice of transfer, signed by such Lender (or the Person
designated in the last notice filed with the Administrative Agent) and by the
Person designated in such written notice of transfer, in form and substance
satisfactory to the Administrative Agent, shall have been filed with the
Administrative Agent. The Administrative Agent shall not be under any duty to
examine or pass upon the validity, effectiveness, enforceability or genuineness
of the Loan Documents or any instrument, document or communication furnished
pursuant thereto or in connection therewith, and the Administrative Agent shall
be entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under the Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate.
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The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Loan Documents in accordance with a request or
direction of the Required Lenders, and such request or direction and any action
taken or failure to act pursuant thereto shall be binding upon all the Lenders
and all future holders of the Loans.
10.5. Notice of Default
The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the
Administrative Agent has received written notice thereof from a Lender or the
Borrower. In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the Lenders and the
Borrower. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be directed by the Required Lenders,
provided, however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders.
10.6. Non-Reliance on Administrative Agent and Other Lenders
Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact or affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any Lender, and based on such documents and information as it has
deemed appropriate made its own evaluation of and investigation into the
business, operations, Property, financial and other condition and
creditworthiness of the Borrower and the value and Lien status of any collateral
security and made its own decision to enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or any Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, evaluations and decisions in taking or not taking action under any
Loan Document, and to make such investigation as it deems necessary to inform
itself as to the business, operations, Property, financial and other condition
and creditworthiness of the Borrower and the value and Lien status of any
collateral security. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, Property, financial and other condition or creditworthiness of the
Borrower which at any time may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7. Indemnification
Each Lender agrees to indemnify and hold harmless the
Administrative Agent in its capacity as such (to the extent not promptly
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), pro rata according to the aggregate of the outstanding principal
balance of the Loans (or at any time when no Loans are outstanding, according to
its Commitment Percentage), from and against any and all
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liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever including, without
limitation, any amounts paid to the Lenders (through the Administrative Agent)
by the Borrower pursuant to the terms of the Loan Documents, that are
subsequently rescinded or avoided, or must otherwise be restored or returned)
which may at any time (including, without limitation, at any time following the
payment of the Loans) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents
or any other documents contemplated by or referred to therein or the
transactions contemplated thereby or any action taken or omitted to be taken by
the Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting
solely from the finally adjudicated gross negligence or willful misconduct of
the Administrative Agent. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its pro
rata share of any unpaid fees owing to the Administrative Agent, and any costs
and expenses (including, without limitation, reasonable fees and expenses of
counsel) payable by the Borrower under Section 11.5, to the extent that the
Administrative Agent has not been paid such fees or has not be reimbursed for
such costs and expenses, by the Borrower. The failure of any Lender to reimburse
the Administrative Agent promptly upon demand for its pro rata share of any
amount required to be by the Lenders to the Administrative Agent as provided in
this Section shall not relieve any other Lender of its obligation hereunder to
reimburse the Administrative Agent for its pro rata share of such amount, but no
Lender shall be responsible for the failure of other Lender to reimburse the
Administrative Agent for such other Lender's pro rata share of such amount. The
agreements in this Section shall survive the termination of the Revolving Credit
Commitments of all of the Lenders and the Swing Line Commitment and the payment
of all amounts payable under the Loan Documents.
10.8. Administrative Agent in Its Individual Capacity
BNY and its affiliates may make secured or unsecured loans to,
accept deposits from, issue letters of credit for the account of, act as trustee
under indentures of, and generally engage in any kind of business with, the
Borrower as though BNY were not Administrative Agent hereunder and BNY Capital
Markets did not arrange the transactions contemplated hereby. With respect to
the Revolving Credit Commitment and Swing Line Commitment made or renewed by
BNY, BNY shall have the same rights and powers under the Loan Documents as any
Lender and may exercise the same as though it were not the Administrative Agent,
and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent
If at any time the Administrative Agent deems it advisable, in
its sole discretion, it may submit to each of the Lenders and the Borrower a
written notice of its resignation as Administrative Agent under the Loan
Documents, such resignation to be effective upon the earlier of (i) the written
acceptance of the duties of the Administrative Agent under the Loan Documents by
a successor Administrative Agent and (ii) on the 30th day after the date of such
notice. Upon any such resignation, the Required Lenders shall have the right to
appoint from among the Lenders a successor Administrative Agent reasonably
acceptable to the Borrower. If no successor Administrative Agent shall have been
so appointed by the Required Lenders and accepted such appointment in writing
within 30
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days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which successor Administrative Agent shall be a
commercial bank organized under the laws of the United States or any State
thereof and having a combined capital, surplus, and undivided profits of at
least $100,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be terminated. The Borrower
and the Lenders shall execute such documents as shall be necessary to effect
such appointment. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of the Loan Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it, and any amounts
owing to it, while it was Administrative Agent under the Loan Documents. If at
any time there shall not be a duly appointed and acting Administrative Agent,
the Borrower agrees to make each payment due under the Loan Documents directly
and the Lenders entitled thereto during such time.
11. OTHER PROVISIONS
11.1. Amendments and Waivers
With the written consent of the Required Lenders, the
Administrative Agent and the Borrower may, from time to time, enter into written
amendments, supplements or modifications of the Loan Documents and, with the
consent of the Required Lenders, the Administrative Agent on behalf of the
Lenders may execute and deliver to any such parties a written instrument waiving
or a consent to a departure from, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the requirements of
the Loan Documents or any Default or Event of Default and its consequences;
provided, however, that:
(a) no such amendment, supplement, modification, waiver or
consent shall, without the consent of all of the Lenders, (i) increase the
Revolving Credit Commitment Amount of any Lender or the Aggregate Revolving
Credit Commitment Amount (except as permitted by Section 2.5), (ii) extend the
Maturity Date; (iii) decrease the rate, or extend the time of payment, of
interest of, or change or forgive the principal amount or extend the time of
payment of, or change the pro rata allocation of payments in respect of any
Loan, (iv) change the definition of Alternate Currency so as to add any
additional currency as an Alternate Currency, (v) change the provisions of
Sections 3.6, 3.7, 9.1(a), 9.1(b), 11.1 or 11.7(a), or (vi) change the
definition of "Required Lenders";
(b) without the written consent of the Administrative Agent,
no such amendment, supplement, modification or waiver shall amend, modify or
waive any provision of Section 10 or otherwise change any of the rights or
obligations of the Administrative Agent hereunder or under the Loan Documents;
and
(c) without the written consent of the Swing Line Lender, no
such amendment, supplement, modification or waiver shall change the Swing Line
Commitment or change any other term or provision that relates to the Swing Line
Commitment or the Swing Line Loans.
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Any such amendment, supplement, modification or waiver shall
apply equally to each of the Lenders and shall be binding upon the parties to
the applicable Loan Document, the Lenders, the Administrative Agent and all
future holders of the Loans. In the case of any waiver, the parties to the
applicable Loan Document, the Lenders and the Administrative Agent shall be
restored to their former position and rights under the Loan Documents to the
extent provided for in such waiver, and any Default or Event of Default waived
shall not extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. The Loan Documents may not be amended
orally or by any course of conduct.
11.2. Notices
All notices, requests and demands to or upon the respective
parties to the Loan Documents to be effective shall be in writing and, unless
otherwise expressly provided therein, shall be deemed to have been duly given or
made when delivered by hand, one Business Day after having been sent by
overnight courier service, or three Business Days after having been deposited in
the mail, certified with return receipt requested (postage prepaid), or, in the
case of notice by telecopy, when sent (provided that the sender shall have
received a confirmation of transmission), addressed as follows in the case of
the Borrower or the Administrative Agent, addressed to the Domestic Lending
Office, in the case of each Lender, or addressed to such other addresses as to
which the Administrative Agent may be hereafter notified by the respective
parties thereto or any future holders of the Loans:
The Borrower:
Furon Company
29982 Ivy Glenn Drive
Laguna Niguel, California 92677
Attention: Monty A. Houdeshell,
Vice President and
Chief Financial Officer
Telephone: (714) 831-5350
Telecopy: (714) 643-1548
The Administrative Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Kalyani Bose
Telephone: (212) 635-4693
Telecopy: (212) 635-6365 or 6366 or 6367
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with a copy to:
The Bank of New York
10990 Wilshire Boulevard - Suite 1125
Los Angeles, California 90024
Attention: Rebecca K. Levine,
Assistant Vice President
Telephone: (310) 996-8659
Facsimile: (310) 996-8667
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.3 or 3.3 shall not be
effective until received. Any party to a Loan Document may rely on signatures of
the parties thereto which are transmitted by telecopy or other electronic means
as fully as if originally signed.
11.3. No Waiver; Cumulative Remedies
No failure to exercise and no delay in exercising, on the part
of the Administrative Agent or any Lender, any right, remedy, power or privilege
under any Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege under any Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties and Certain
Obligations
(a) All representations and warranties made under the Loan
Documents and in any document, certificate or statement delivered pursuant
thereto or in connection therewith shall survive the execution and delivery of
the Loan Documents.
(b) The obligations of the Borrower under Sections 3.5, 3.6,
3.7, 11.5 and 11.8 shall survive the termination of the Revolving Credit
Commitments of all of the Lenders and the Swing Line Commitment and the payment
of the Loans and all other amounts payable under the Loan Documents.
11.5. Expenses
The Borrower agrees, promptly upon presentation of a statement
or invoice therefor, and whether any Loan is made (i) to pay or reimburse the
Administrative Agent and BNY Capital Markets for all their respective
out-of-pocket costs and expenses reasonably incurred in connection with the
development, preparation, execution and syndication of, the Loan Documents and
any amendment, supplement or modification thereto (whether or not executed or
effective), any documents prepared in connection therewith and the consummation
of the transactions contemplated thereby, including, without limitation, the
reasonable fees and disbursements of Special Counsel, (ii) to pay or reimburse
the Administrative Agent and the Lenders for all of their respective costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel, incurred in connection with (A) any Default or Event of Default and any
enforcement or collection proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether consummated or not)
of the obligations of the Borrower under any of the Loan Documents and (B) the
enforcement of this Section and (iii) to pay, indemnify
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and hold each Lender and the Administrative Agent and each of their respective
officers, directors and employees harmless from and against any and all other
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of the Loan
Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement involving the
Administrative Agent and the Lenders (all the foregoing, collectively, the
"Indemnified Liabilities") and, if and to the extent that the foregoing
indemnity may be unenforceable for any reason, the Borrower agrees to make the
maximum payment not prohibited under applicable law; provided, however, that the
Borrower shall have no obligation to pay Indemnified Liabilities to the
Administrative Agent or any Lender arising from the finally adjudicated gross
negligence or willful misconduct of the Administrative Agent or such Lender or
claims between one indemnified party and another indemnified party. The
agreements in this Section shall survive the termination of the Revolving Credit
Commitments of all of the Lenders and the Swing Line Commitment and the payment
of all amounts payable under the Loan Documents.
11.6. Applicable Lending Offices
(a) Each Lender shall have the right at any time and from time
to time to transfer its Revolving Credit Loans to a different office, provided
that such Lender shall promptly notify the Administrative Agent and the Borrower
of any such change of office. Such office shall thereupon become such Lender's
Domestic Lending Office, Eurodollar Lending Office or Alternate Currency Lending
Office for the applicable Alternate Currency, as the case may be, provided,
however, that no Lender shall be entitled to receive any greater amount under
Section 3.6(a)(ii) or (iii), or Section 3.7, as a result of a transfer of any
such Revolving Credit Loans to a different office of such Lender than it would
be entitled to immediately prior thereto unless such claim would have arisen
even if such transfer had not occurred.
(b) Each Lender agrees that on the occurrence of any event
giving rise to the operation of Section 3.6(a)(ii) or (iii) or Section 3.7, with
respect to any Revolving Credit Loan, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another Applicable Lending Office for such Revolving Credit Loan
affected by such event, provided that such designation is made on such terms
that such Lender and its Applicable Lending Office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the right of
any Lender provided in Sections 3.5, 3.6, 3.7, 11.5 and 11.8.
11.7. Assignments and Participations
(a) The Loan Documents shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Loans, and their respective successors and assigns, except that
the Borrower may not assign, delegate or transfer any of its rights or
obligations under the Loan Documents without the prior written consent of the
Administrative Agent and each Lender.
(b) Each Lender shall have the right at any time, upon written
notice to the Administrative Agent of its intent to do so, to sell, assign,
transfer or negotiate all or
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any part of its rights and obligations under the Loan Documents to one or more
of its affiliates, to one or more of the other Lenders (or to affiliates of such
other Lenders) or, with the prior written consent of the Borrower, the Swing
Line Lender and the Administrative Agent (which consents shall not be
unreasonably withheld and, in the case of the Borrower, shall not be required if
an Event of Default shall have occurred and be continuing for a period of 90
days with no cure or waiver thereof), to sell, assign, transfer or negotiate all
or any part of its rights and obligations under the Loan Documents to any
Eligible Assignee, provided that (i) each such sale, assignment, transfer or
negotiation (other than sales, assignments, transfers or negotiations (x) to its
affiliates or (y) its entire interest) shall be in a minimum amount of
$5,000,000 and (ii) there shall be paid to the Administrative Agent by it a fee
(an "Assignment Fee") of $3,000. For each assignment, the parties to such
assignment shall execute and deliver to the Administrative Agent for its
acceptance and recording an Assignment and Acceptance Agreement. Upon such
execution, delivery, acceptance and recording by the Administrative Agent, from
and after the effective date specified in such Assignment and Acceptance
Agreement, the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance Agreement, the assignor Lender
thereunder shall be released from its obligations under the Loan Documents. Upon
any such sale, assignment or other transfer, the Revolving Credit Commitment
Amounts set forth in Exhibit A shall be adjusted accordingly by the
Administrative Agent and a new Exhibit A shall be distributed by the
Administrative Agent.
(c) Each Lender may, with the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld), grant
participations in all or any part of its rights under the Loan Documents to one
or Eligible Assignees, provided that (i) its obligations under the Loan
Documents shall remain unchanged, (ii) it shall remain solely responsible to the
other parties to the Loan Documents for the performance of such obligations,
(iii) the Borrower, the Administrative Agent and the Lenders, as applicable,
shall continue to deal solely and directly with it in connection with its rights
and obligations under the Loan Documents, (iv) no sub-participations shall be
permitted and (v) the voting rights of any holder of any participation shall be
limited to decisions that only do any of the following: (A) subject the
participant to any additional obligation, (B) reduce the principal of, or
interest on the Loans or any fees or other amounts payable under the Loan
Documents, (C) postpone any date fixed for the payment of principal of, or
interest on the Loans or any fees or other amounts payable under the Loan
Documents, (D) release any security interest or Collateral, except to the extent
that such release is specifically provided for in any Loan Document or (E)
release any guarantor under any guarantee. The Borrower acknowledges and agrees
that any such participant shall for purposes of Sections 3.5, 3.6 and 3.7, be
deemed to be a "Lender"; provided, however, the Borrower shall not, at any time,
be obligated to pay any participant in any interest of any Lender hereunder any
sum in excess of the sum which the Borrower would have been obligated to pay to
such Lender in respect of such interest had such Lender not sold such
participation.
(d) If any (i) assignment is made pursuant to subsection (b)
above or (ii) any participation is granted pursuant to subsection (c) above, to
any Person that is not a U.S. Person, such Person shall furnish such
certificates, documents or other evidence to the Borrower and the Administrative
Agent in the case of clause (i), and to the Borrower or the Lender which sold
such participation, as the case may be, in the case of clause (ii), as shall be
required by Sections 3.7(d) and 3.7(e).
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(e) No Lender shall, as between and among the Borrower, the
Administrative Agent, the Swing Line Lender and such Lender, as the case may be,
be relieved of any of its obligations under the Loan Documents as a result of
any sale, assignment, transfer or negotiation of, or granting of participations
in, all or any part of its Loans or its Revolving Credit Commitment of Swing
Line Commitment, except that it shall be relieved of its obligations to the
extent of any such sale, assignment, transfer, or negotiation of all or any part
of its Loans, its Revolving Credit Commitment, the Swing Line Commitment, as the
case may be, pursuant to subsection (b) above.
(f) Notwithstanding anything to the contrary contained in this
Section , any Lender may at any time or from time to time assign all or any
portion of its rights under the Loan Documents to a Federal Reserve Bank,
provided that any such assignment shall not release such assignor from its
obligations thereunder.
11.8. Indemnity
The Borrower agrees to defend, protect, indemnify, and hold
harmless the Administrative Agent, BNY Capital Markets and each and all of the
Lenders, each of their respective Affiliates and each of the respective
officers, directors, employees and agents of each of the foregoing (each an
"Indemnified Person" and, collectively, the "Indemnified Persons") from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including, without limitation, the reasonable fees and
disbursements of counsel to such Indemnified Persons in connection with any
investigative, administrative or judicial proceeding, whether direct, indirect
or consequential and whether based on any federal or state laws or other
statutory regulations, including, without limitation, securities and commercial
laws and regulations, under common law or at equitable cause, or on contract or
otherwise, including any liabilities and costs under Environmental Laws,
regulations, or common law principles, arising from or in connection with the
past, present or future operations of the Borrower, its predecessors in
interest, or the past, present or future environmental condition of the Property
of the Borrower or any of its Subsidiaries, the presence of asbestos-containing
materials at any such Property, or the release or threatened release of any
Hazardous Substance into the environment from any such Property) in any manner
relating to or arising out of the Loan Documents, any commitment letter or fee
letter executed and delivered by the Borrower or any of its Subsidiaries and/or
the Administrative Agent, the capitalization of the Borrower or any of its
Subsidiaries, the Commitments, the making of, management of and participation in
the Loans, or the use or intended use of the proceeds of the Loans hereunder,
provided that the Borrower shall have no obligation under this Section to an
Indemnified Person with respect to any of the foregoing to the extent found in a
final judgment of a court having jurisdiction to have resulted from the gross
negligence or wilful misconduct of such Indemnified Person or arising from
claims between one such Indemnified Person and another such Indemnified Person.
The indemnity set forth herein shall be in addition to any other obligations or
liabilities of the Borrower to each Indemnified Person under the Loan Documents
or at common law or otherwise, and shall survive any termination of the Loan
Documents, the expiration of the Commitments and the payment of all Indebtedness
of the Borrower under the Loan Documents.
11.9. Determination of Dollar Equivalent
For purposes of the Loan Documents, the Dollar Equivalent of
each Alternate Currency Loan designated in an Alternate Currency shall be
recalculated (i) on each
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Borrowing Date, (ii) on each date that the Aggregate Revolving Credit Commitment
Amount or the Swing Line Commitment Amount is reduced and (iii) on the last
Business Day of each month. The Dollar Equivalent for each Alternate Currency
Loan shall remain in effect until the same is recalculated by the Administrative
Agent as provided above and notice of such recalculation is sent to the
Borrower. The Administrative Agent shall promptly notify the Borrower, the Swing
Line Lender and the Lenders of each such determination of the Dollar Equivalent
for each Alternate Currency Loan.
11.10. Limitation of Liability
No claim may be made by the Borrower, any of its Subsidiaries,
any Lender or other Person against the Administrative Agent, any Lender, or any
directors, officers, employees, or agents of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by any Loan Document, or any act, omission or event
occurring in connection therewith, and each of the Borrower, its Subsidiaries,
any Lender or other Person hereby waives, releases and agrees not to sue upon
any claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
11.11. Counterparts
This Agreement may be executed by one or more of the parties
thereto on any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same document. It shall
not be necessary in making proof of any Loan Document to produce or account for
more than one counterpart signed by the party to be charged. A counterpart of
any Loan Document or to any document evidencing, and of any an amendment,
modification, consent or waiver to or of any Loan Document transmitted by
telecopy shall be deemed to be an originally executed counterpart. A set of the
copies of the Loan Documents signed by all the parties thereto shall be
deposited with each of the Borrower and the Administrative Agent. Any party to a
Loan Document may rely upon the signatures of any other party thereto which are
transmitted by telecopy or other electronic means to the same extent as if
originally signed.
11.12. Adjustments; Set-off
(a) If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or any part of the principal of its Loans owing to
such Lender, or receive any collateral in respect thereof (whether voluntarily
or involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9.1(g) or (h), or otherwise), in a greater proportion
than any such payment to and collateral received by any other Lender in respect
of the principal of such other Lender's Loans owing to such other Lender, or
interest thereon, such Benefited Lender shall purchase for cash from each of the
other Lenders such portion of each such other Lender's Loans, and shall provide
each of such other Lenders with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such Benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Lenders, provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. The Borrower agrees that each
Lender so purchasing a portion of another Lender's Loans may exercise all rights
of payment (including, without limitation, rights of set-off, to the extent not
prohibited by
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law) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence of an Event of Default and the acceleration
of the obligations owing in connection with the Loan Documents, or at any time
upon the occurrence and during the continuance of an Event of Default, under
Section 9.1(a) or (b), each Lender shall have the right, without prior notice to
the Borrower, any such notice being expressly waived by the Borrower to the
extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of the Borrower to such Lender any
amount owing from such Lender to the Borrower at, or at any time after, the
happening of any of the above-mentioned events. To the extent not prohibited by
applicable law, the aforesaid right of set-off may be exercised by such Lender
against the Borrower or against any trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of the Borrower or against anyone else claiming
through or against the Borrower or such trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the making, filing
or issuance, or service upon such Lender of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
11.13. Construction
Each party to a Loan Document represents that it has been
represented by counsel in connection with the Loan Documents and the
transactions contemplated thereby and that the principle that agreements are to
be construed against the party drafting the same shall be inapplicable.
11.14. Governing Law
The Loan Documents and the rights and obligations of the
parties thereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without regard to
principles of conflict of laws, but including Section 5-1401 of the General
Obligations Law.
11.15. Headings Descriptive
Section headings have been inserted in the Loan Documents for
convenience only and shall not be construed to be a part thereof.
11.16. Severability
Every provision of the Loan Documents is intended to be sever-
able, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the
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validity, legality and enforceability of the remaining provisions thereof shall
not be affected or impaired thereby, and any invalidity, illegality or
unenforceability in any jurisdiction shall not affect the validity, legality or
enforceability of any such term or provision in any other jurisdiction.
11.17. Judgment Currency
(a) The Borrower's obligations under the Loan Documents to
make payments in the Applicable Currency (the "Obligation Currency") shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that, on the Business Day immediately following the date of
such tender or recovery, the Administrative Agent, the Swing Line Lender or the
applicable Lender, as the case may be, may, in accordance with normal banking
procedures, purchase the Obligation Currency with such other currency. If for
the purpose of obtaining or enforcing judgment against the Borrower in any court
or in any jurisdiction, it becomes necessary to convert into any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
conversion shall be made at the rate of exchange at which, in accordance with
normal banking procedures in the relevant jurisdiction, the Obligation Currency
could be purchased with the Judgment Currency as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If the amount of Obligation Currency purchased pursuant to
the last sentence of subsection (a) above is less than the sum originally due in
the Obligation Currency, the Borrower covenants and agrees to indemnify the
applicable recipient against such loss, and if the Obligation Currency so
purchased exceeds the sum originally due to such recipient, such recipient
agrees to remit to the Borrower such excess.
11.18. Integration
All exhibits to a Loan Document shall be deemed to be a part
thereof. Except for agreements between the Administrative Agent and the Borrower
with respect to certain fees, the Loan Documents embody the entire agreement and
understanding among the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter thereof and supersede all prior agreements and
understandings among the Borrower, the Administrative Agent and the Lenders with
respect to the subject matter thereof.
11.19. Consent to Jurisdiction
Each party to a Loan Document hereby irrevocably submits to
the jurisdiction of any New York State or Federal court sitting in the City of
New York over any suit, action or proceeding arising out of or relating to the
Loan Documents. Each party to a Loan Document hereby irrevocably waives, to the
fullest extent permitted or not prohibited by law, any objection which it may
now or hereafter have to the laying of the venue of any such suit, action or
proceeding brought in such a court and any claim that any such suit, action or
proceeding brought in such a court has been brought in an inconvenient forum.
The Borrower hereby agrees that a final judgment in any such suit, action or
proceeding brought in such a court, after all appropriate appeals, shall be
conclusive and binding upon it.
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11.20. Service of Process
Each party to a Loan Document hereby irrevocably consents to
the service of process in any suit, action or proceeding by sending the same by
first class mail, return receipt requested or by overnight courier service, to
the address of such party set forth in Section 11.2 of the applicable Loan
Document executed by such party. Each party to a Loan Document hereby agrees
that any such service (i) shall be deemed in every respect effective service of
process upon it in any such suit, action, or proceeding, and (ii) shall to the
fullest extent enforceable by law, be taken and held to be valid personal
service upon and personal delivery to it.
11.21. No Limitation on Service or Suit
Nothing in the Loan Documents or any modification, waiver,
consent or amendment thereto shall affect the right of the Administrative Agent
or any Lender to serve process in any manner permitted by law or limit the right
of the Administrative Agent or any Lender to bring proceedings against the
Borrower in the courts of any jurisdiction or jurisdictions in which the
Borrower may be served.
11.22. WAIVER OF TRIAL BY JURY
EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN.
FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR ADMINISTRATIVE
AGENT OF THE ADMINISTRATIVE AGENT OR THE LENDERS, OR COUNSEL TO THE
ADMINISTRATIVE AGENT OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT THE ADMINISTRATIVE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE
BORROWER ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS
SECTION.
11.23. Treatment of Certain Information
Each Lender and the Administrative Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature, all non-public information supplied by either Borrower or
any Subsidiary pursuant to this Agreement which (a) is identified by such Person
as being confidential at the time the same is delivered to such Lender or the
Administrative Agent, or (b) constitutes any financial statement, financial
projections or forecasts, budget, compliance certificate, audit report,
management letter or accountants' certification delivered hereunder, provided,
however, that nothing herein shall limit the disclosure of any such information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) on a confidential basis, to counsel for any of the Lenders or the
Administrative Agent, (iii) to the extent required or requested to bank
examiners, auditors or accountants, and any analogous counterpart thereof acting
in any such capacity, (iv) to the Administrative Agent or the Lenders, (v) in
connection with any suit, action or proceeding
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relating to the Transaction Documents or the Transactions, (vi) to any assignee
or participant (or prospective assignee or participant) so long as such assignee
or participant (or prospective assignee or participant) agrees to keep such
information confidential on substantially the same basis as set forth in this
Section and the Borrower shall have received prior notice of such disclosure, or
(vii) subject to the confidentiality provisions of this Section, to affiliates
of the Administrative Agent and each Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
FURON COMPANY
By: /s/ J. MICHAEL HAGAN
-----------------------------------
Name: J. Michael Hagan
---------------------------------
Title: Chairman
---------------------------------
By: /s/ MONTY A. HOUDESHELL
-----------------------------------
Name: Monty A. Houdeshell
---------------------------------
Title: Vice President
---------------------------------
THE BANK OF NEW YORK, Individually,
as Swing Line Lender and as
Administrative Agent
By: /s/ REBECCA K. LEVINE
-----------------------------------
Name: Rebecca K. Levine
Title: Assistant Vice President
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EXHIBIT 99.10
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement"), dated as of
November 12, 1996, is among Furon Company, a California corporation (the
"Purchaser"), FCY, Inc., an Ohio corporation and wholly owned subsidiary of the
Purchaser ("Merger Sub"), and Medex, Inc., an Ohio corporation (the "Company").
WITNESSETH:
WHEREAS, the Board of Directors of the Purchaser and the Board of Directors
of the Company have each determined that it is advisable to merge the Company
with Merger Sub (the "Merger") pursuant to this Merger Agreement, with the
result that the holders of the outstanding Common Stock of the Company, $.01 par
value, together with any stock purchase rights related thereto (the "Shares"),
shall receive a payment in cash for each Share as provided in this Merger
Agreement and the Company shall become a wholly owned subsidiary of the
Purchaser.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Purchaser, Merger Sub and the Company hereby agree as
follows:
1. THE OFFER
1.1 831 Meeting; The Offer.
(a) The Company shall call and hold a special meeting of shareholders
of the Company for the purpose of voting on the proposed control share
acquisition of the Company by Merger Sub (the "831 Meeting"). The record
date for, and the date, time and place of, the 831 Meeting shall be as
heretofore or hereafter fixed by the directors of the Company, subject to
the consent of the Purchaser. The Company shall give notice of the 831
Meeting as promptly as reasonably practicable to all shareholders of record
as of the record date set for such meeting. The notice shall include or be
accompanied by the information specified in Section 1701.831(D) of Title 17
of the Ohio Revised Code (the "Ohio Law"). The directors of the Company
shall recommend that the Company's shareholders approve the proposed
control share acquisition at the 831 Meeting, unless (i) the directors of
the Company are advised by counsel that such recommendation would be
inconsistent with their fiduciary duties as directors or (ii) this Merger
Agreement is terminated in accordance with Section 8. The Company, the
Purchaser and Merger Sub shall promptly cause joint proxy materials with
respect to the 831 Meeting to be prepared, filed with the Securities and
Exchange Commission and distributed to shareholders of the Company in
accordance with Regulation 14A under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and shall jointly solicit proxies to be
voted at the 831 Meeting. In advance of the 831 Meeting, the directors of
the Company shall appoint an inspector of election to act at such meeting
and shall request the inspector to use methods for identifying interested
shares (as defined in Section 1701.01(CC)(2) of the Ohio Law) mutually
agreed upon by the Company and the Purchaser in performing its duties
pursuant to Section 1701.50(C) and Section 1701.831(E)(1) of the Ohio Law.
(b) Provided that nothing shall have occurred which would result in a
failure to satisfy any of the conditions set forth in Schedule 1.1(b)
hereto, Merger Sub shall, and the Purchaser shall cause Merger Sub to,
promptly, and in no event later than one business day after the date
hereof, publicly announce, and within five business days thereafter
commence (within the meaning of Rule 14d-2 under Exchange Act) a tender
offer for any and all Shares at a price of $23.50 per Share net to the
seller in cash (the "Offer") and, subject to the conditions set forth in
such Schedule 1.1(b), shall consummate the Offer in accordance with its
terms. The Offer shall be made by means of an Offer to Purchase having only
the conditions set forth in Schedule 1.1(b) (the "Offer Conditions")
hereto, which may be asserted by the Purchaser in its sole discretion,
except that the Purchaser shall not waive the condition set forth in
paragraph (b) of Schedule 1.1(b) or purchase any Shares pursuant to the
Offer if the shareholder approval required by Section 1701.831 of the Ohio
Law shall not have been obtained unless the Purchaser is satisfied, in its
reasonable discretion, that said Section 1701.831 is invalid or
inapplicable to the
<PAGE> 2
purchase of shares pursuant to the Offer. The expiration date of the Offer
will not be later than 5:00 p.m. on the second business day after the
conclusion of the 831 Meeting. At the Company's request, Merger Sub will,
and the Purchaser will cause Merger Sub to, extend the expiration date of
the Offer from time to time for up to an aggregate of an additional ten
business days following the conclusion of the 831 Meeting if the condition
set forth in clause (1) of the first paragraph of the Offer Conditions is
not fulfilled prior to 5:00 p.m. on the second business day after the
conclusion of the 831 Meeting. The Purchaser may at any time, at its sole
discretion, increase the price per Share payable in the Offer or extend the
Offer.
1.2 Company Action.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors of the Company, at a meeting duly
called and held, duly adopted resolutions approving this Merger Agreement,
the Offer and the Merger, determining that the terms of the Offer and the
Merger are fair to, and in the best interests of, the Company's
shareholders and recommending that the Company's shareholders approve and
adopt this Merger Agreement, if a vote is required by applicable law, and
that the Company's shareholders accept the Merger Agreement and the Offer
and tender their Shares pursuant to the Offer. The Company represents that
its Board of Directors has received the opinion of Smith Barney Inc. to the
effect that, as of the date of this Merger Agreement, the cash
consideration to be received by holders of Shares (other than the Purchaser
and its affiliates) in the Offer and the Merger is fair to such holders
from a financial point of view.
(b) Concurrently with the commencement of the Offer, the Company shall
file with the Securities and Exchange Commission (the "SEC") and mail to
the holders of Shares a Solicitation/Recommendation Statement on Schedule
14D-9 together with all amendments and supplements thereto and including
the exhibits thereto (the "Schedule 14D-9"), which shall reflect the
recommendations described in the preceding paragraph (a). The Company
agrees that the Schedule 14D-9, including all amendments and supplements
thereto, shall, (i) in all material respects, comply with the requirements
of the Exchange Act and the rules and regulations thereunder and other
applicable laws; (ii) include all information required by Rule 14f-1 of the
Exchange Act; and (iii) not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representation shall not apply with respect to
the accuracy of information furnished in writing by the Purchaser
specifically for inclusion in the Schedule 14D-9 or taken from reports
filed by the Purchaser under the Exchange Act. None of the information
furnished in writing or confirmed in writing by the Company for inclusion
in the Offer Documents (as defined in Section 3.4), will contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
Purchaser and Merger Sub and their counsel shall be given an opportunity to
review the Schedule 14D-9 prior to it being filed with the SEC and
disseminated to shareholders. The Company agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material
respect.
(c) The Company will promptly furnish the Purchaser with mailing
labels containing the names and addresses of the record holders of Shares
and lists of securities positions of Shares held in stock depositories,
each as of a recent date, and shall furnish the Purchaser with such
additional information (including updated lists of shareholders, mailing
labels and lists of securities positions) and assistance as the Purchaser
or its agents may reasonably request to communicate the Offer to the
shareholders of the Company.
2. THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.3 hereof),
in accordance with this Merger Agreement and the Ohio Law, Merger Sub shall be
merged with and into the Company (the
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"Merger"), the separate existence of Merger Sub (except as may be continued by
operation of law) shall cease, and the Company shall continue as the surviving
corporation. The Company hereinafter sometimes is referred to as the "Surviving
Corporation."
2.2 Effect of the Merger. The Merger shall have the effects set forth in
Section 1701.82 of the Ohio Law.
2.3 Consummation of the Merger. As soon as is practicable after the
satisfaction or waiver of the conditions hereinafter set forth but in no event
earlier than January 2, 1997, the parties hereto will cause the Merger to be
consummated by filing a Certificate of Merger with the Secretary of State of the
State of Ohio, in such form as required by, and executed in accordance with, the
relevant provisions of applicable law. The time of the filing of the Certificate
of Merger with the Secretary of State of the State of Ohio is referred to herein
as the "Effective Time."
2.4 Articles of Incorporation; Code of Regulations; By-Laws. The Articles
of Incorporation, Code of Regulations and By-Laws of the Company, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation,
Code of Regulations and By-Laws of the Surviving Corporation, and thereafter
shall continue to be its Articles of Incorporation, Code of Regulations and
By-Laws until amended as provided therein and under the Ohio Law.
2.5 Directors and Officers of Surviving Corporation.
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, the directors of Merger Sub shall be the
initial directors of the Surviving Corporation and shall hold office from
the Effective Time until their respective successors are duly elected or
appointed and qualify in the manner provided in the Articles of
Incorporation, Code of Regulations and By-Laws of the Surviving
Corporation, or as otherwise provided by law.
(b) At the Effective Time, by virtue of the Merger and without any
action on the part of Merger Sub, the officers of the Company at the
Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office from the Effective Time until their respective
successors are duly elected or appointed and qualify in the manner provided
in the Articles of Incorporation, Code of Regulations and By-Laws of the
Surviving Corporation, or as otherwise provided by law.
2.6 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Merger Sub, the Company or the
holder of any of the securities of the Company or Merger Sub:
(a) Each Share issued and outstanding immediately prior to the
Effective Time (other than Shares to be canceled pursuant to Section 2.6(b)
hereof), together with the associated common stock purchase rights issued
under the Rights Agreement (as hereinafter defined) shall be canceled and
extinguished and be converted into and represent the right to receive from
the Surviving Corporation $23.50 in cash, without interest, or such higher
price per Share as may have been paid pursuant to the Offer (the "Merger
Consideration"). All such Shares and any such stock purchase rights, by
virtue of the Merger and without any action on the part of the holders
thereof, shall no longer be outstanding and shall be canceled and retired
and shall cease to exist, and each holder of a certificate representing any
such Shares shall thereafter cease to have any rights with respect to such
Shares or stock purchase rights, except the right to receive the Merger
Consideration for such Shares and any associated stock purchase rights upon
the surrender of such certificate in accordance with Section 2.8.
(b) Each Share issued and outstanding immediately prior to the
Effective Time and held in the treasury of the Company or owned by the
Purchaser or any direct or indirect subsidiary of the Purchaser (including
Merger Sub) shall be canceled and retired and no payment shall be made with
respect thereto.
(c) All of the issued and outstanding common shares of Merger Sub (all
of which shall be owned by the Purchaser immediately prior to the Effective
Time), taken together, shall be converted into that number of
validly-issued, fully-paid and non-assessable common shares, par value
$0.01 per share, of the
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Surviving Corporation that equals the number of common shares, par value
$0.01 per share, of the Company issued and outstanding immediately prior to
the Effective Time.
(d) Notwithstanding anything in this Merger Agreement to the contrary,
any issued and outstanding Shares held by a person (a "Dissenting
Shareholder") who objects to the Merger and complies with all the
provisions of the Ohio Law concerning the right of shareholders to dissent
from the Merger and require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 2.6(a) but shall become the
right to receive such consideration as may be determined to be due to such
Dissenting Shareholder pursuant to the Ohio Law. If after the Effective
Time, such Dissenting Shareholder withdraws his demand or fails to perfect
or otherwise loses his dissenter's rights, in any case pursuant to the Ohio
Law, his Shares shall be deemed to be converted as of the Effective Time
into the right to receive the Merger Consideration, without interest. The
Company shall give the Purchaser (i) prompt notice of any demands by
Dissenting Shareholders received by the Company and (ii) the opportunity to
participate in and direct all negotiations and proceedings with respect to
any such demands. The Company shall not, without the prior written consent
of the Purchaser, make any payment with respect to, or settle, offer to
settle or otherwise negotiate, any such demands.
2.7 Payment Fund. Concurrently with the Effective Time, the Purchaser
shall deposit or shall cause to be deposited with the Disbursing Agent (as
defined in Section 2.8) in a separate fund established for the benefit of the
holders of Shares, for payment in accordance with this Section 2, through the
Disbursing Agent (the "Payment Fund"), immediately available funds in amounts
necessary to make the payments pursuant to this Section 2 to holders of Shares
(other than the Company, any subsidiary of the Company, the Purchaser, Merger
Sub or any other subsidiary of the Purchaser or holders of Dissenting Shares).
The Disbursing Agent shall, pursuant to irrevocable instructions, pay the Merger
Consideration out of the Payment Fund.
From time to time at or after the Effective Time, the Purchaser shall take
or cause to be taken all lawful action necessary to permit the Surviving
Corporation to make the appropriate cash payments, if any, to holders of
Dissenting Shares. The Disbursing Agent shall invest portions of the Payment
Fund as the Purchaser directs in obligations of or guaranteed by the United
States of America, in commercial paper obligations receiving the highest
investment grade rating from both Moody's Investors Services, Inc. and Standard
& Poor's Corporation, or in certificates of deposit, bank repurchase agreements
or banker's acceptances of commercial banks with capital exceeding
$1,000,000,000 (collectively, "Permitted Investments"); provided, however, that
the maturities of Permitted Investments shall be such as to permit the
Disbursing Agent to make prompt payment to former holders of Shares entitled
thereto as contemplated by this Section. The Purchaser shall cause the Payment
Fund to be promptly replenished to the extent of any losses incurred as a result
of Permitted Investments. All earnings of Permitted Investments shall be paid to
the Purchaser. If for any reason (including losses) the Payment Fund is
inadequate to pay the amounts to which holders of Shares shall be entitled under
Section 2, the Purchaser shall in any event be liable for payment thereof. The
Payment Fund shall not be used for any purpose except as expressly provided in
this Merger Agreement. Six months after the Effective Date, all portions of the
Payment Fund not theretofore paid to former holders of Shares shall be remitted
to the Surviving Corporation and former holders of Shares shall thereafter look
solely to the Surviving Corporation for payment of the Merger Consideration.
2.8 Payment of Cash for Shares. Each holder of a certificate or
certificates representing Shares canceled upon the Merger pursuant to Section
2.6(a) hereof may thereafter surrender such certificate to a disbursing agent to
be designated by the Purchaser and reasonably satisfactory to the Company (the
"Disbursing Agent"), as agent for such holders of Shares, to effect the
surrender of such certificates on their behalf for a period ending six months
after the Effective Time. The Purchaser agrees that promptly after the Effective
Time it will distribute to such holders a form of letter of transmittal and
instructions for use in effecting the surrender of the certificates which,
immediately prior to the Effective Time, represented Shares in exchange for
payment therefor. Each such holder shall be entitled upon surrender of one or
more certificates formerly representing Shares, together with a letter of
transmittal, duly executed and completed in accordance with the instructions
thereto, to receive in exchange therefor a check representing the amount to
which such holder is entitled in respect of the canceled Shares represented by
such certificates after giving effect to any required tax withholding. Until so
surrendered and exchanged, each such certificate shall, after
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the Effective Time, be deemed to represent only the right to receive such
amount. If payment is to be made to a person other than the person in whose name
a surrendered certificate is registered, it shall be a condition to such payment
that the certificate so surrendered shall be endorsed or shall be otherwise in
proper form for transfer, with the registered owner's signature guaranteed by a
firm which is a member of a registered national securities exchange or of the
National Association of Securities Dealers, Inc. or by a commercial bank or
trust company having an office or correspondent in the United States, and that
the person requesting such payment shall have paid any transfer and other taxes
required by reason of such payment in a name other than that of the registered
holder of the certificate surrendered or shall have established to the
satisfaction of the Purchaser or the Disbursing Agent that such tax either has
been paid or is not payable. If any of the cash deposited with the Disbursing
Agent pursuant to Section 2.7 hereof for purposes of payment in exchange for
such Shares remains unclaimed following the expiration of six months after the
Effective Time, such cash shall be delivered to the Purchaser by the Disbursing
Agent, and thereafter the Disbursing Agent shall not be liable to any persons
claiming any amount of such cash and the surrender and exchange shall be
effected directly with the Purchaser. No interest shall accrue or be payable
with respect to any amounts which any holder shall be entitled to receive. The
Purchaser or the Disbursing Agent shall be authorized to pay the cash
attributable to any certificate theretofore issued which has been lost or
destroyed, but only upon receipt of satisfactory evidence of ownership of the
Shares represented thereby and of appropriate indemnification. From and after
the Effective Time, the holders of certificates evidencing ownership of Shares
outstanding immediately prior to the Merger shall cease to have any rights with
respect to such Shares except as otherwise provided herein or by law.
2.9 Taking of Necessary Action; Further Action. If, at any time after the
Effective Time, any further action is necessary or desirable to carry out the
purposes of this Merger Agreement and to vest the Surviving Corporation with
full rights, title and possession to all assets, properties, rights, privileges,
immunities and franchises of either the Company or Merger Sub, the officers and
directors of each such corporation are fully authorized in the name of such
corporation or otherwise to take, and shall take, all such lawful and necessary
action.
2.10 Closing. The closing of the Merger shall take place at the offices of
the Purchaser, 29982 Ivy Glenn Drive, Laguna Niguel, California, at 9:00 a.m.
local time, on the second business day after the satisfaction or waiver of the
conditions set forth in Article 7 but in no event earlier than January 2, 1997.
2.11 Transfer of Shares After Effective Time. No transfers of Shares shall
be made on the stock transfer books of the Surviving Corporation at or after the
Effective Time.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company as follows:
3.1 Organization and Qualification. Each of the Purchaser and Merger
Sub is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and has the requisite
corporate power to carry on its respective business as now conducted. The
Purchaser is duly qualified as a foreign corporation to do business and is
in good standing in each jurisdiction where the character of its properties
owned or leased or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not have a
material adverse effect on the Purchaser and its subsidiaries taken as a
whole.
3.2 Authority Relative to this Merger Agreement. Each of the
Purchaser and Merger Sub has the requisite corporate power and authority to
enter into this Merger Agreement and to carry out its respective
obligations hereunder. The execution and delivery of this Merger Agreement
by the Purchaser and Merger Sub and the consummation by the Purchaser and
Merger Sub of the transactions contemplated hereby have been duly
authorized by the respective Boards of Directors of the Purchaser and
Merger Sub and by the Purchaser as the sole shareholder of Merger Sub, and
no other corporate proceedings on the part of the Purchaser or Merger Sub
are necessary to authorize this Merger Agreement and the transactions
contemplated hereby. This Merger Agreement has been duly executed and
delivered by the Purchaser and Merger Sub and constitutes a valid and
binding obligation of each
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such company, enforceable against each such company in accordance with its
terms, except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditor's rights in general and subject to general principles of equity.
Neither the Purchaser nor Merger Sub is subject to or obligated under any
provision of (i) its respective Certificate or Articles of Incorporation,
Code of Regulations, if any, or By-Laws, (ii) any contract, (iii) any
license, franchise or permit or (iv) any law, regulation, order, judgment
or decree, which would be breached or violated or in respect of which a
right of termination or acceleration or any encumbrance on any of its
assets would be created by its execution and performance of this Merger
Agreement. The consummation of the Offer and the Merger by the Purchaser
and Merger Sub will not require the consent or approval of any party, or
filing with any governmental authority, other than (i) approval by the
Purchaser as the sole shareholder of Merger Sub, (ii) applicable
requirements, if any, of the Exchange Act, state "blue sky" or takeover
laws and the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR
Act"), (iii) filing and recordation of appropriate merger documents as
required by the Ohio Law and (iv) where failure to obtain such consents or
approvals would not prevent or materially delay the Purchaser or Merger Sub
from performing its obligations under this Merger Agreement.
3.3 Financing. The Purchaser has cash, marketable securities and
lines of credit available for use in connection with the acquisition of the
Company in an aggregate amount necessary to consummate the Offer and the
Merger.
3.4 Tender Offer Documents. The Tender Offer Statement on Schedule
14D-1 filed with the SEC, which shall contain the Offer to Purchase and a
related letter of transmittal and summary advertisement (such Schedule
14D-1 and the documents therein pursuant to which the Offer will be made,
together with any supplement or amendment thereto, are hereafter referred
to as the "Offer Documents"), will comply in all material respects as to
form with the applicable provisions of the Exchange Act. Such Offer
Documents will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which
made, not misleading; provided, however, that the foregoing representation
shall not apply with respect to the accuracy of information furnished in
writing by the Company specifically for inclusion in the Offer Documents or
which is taken from reports filed by the Company under the Exchange Act,
which accuracy shall be the sole responsibility of the Company.
3.5 Brokers. Except for Dean Witter Reynolds Inc., no broker,
investment banker, financial advisor or other person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Merger Agreement
based upon arrangements made by or on behalf of the Purchaser or any of its
Subsidiaries.
3.6 Information Supplied. None of the information supplied or to be
supplied in writing by the Purchaser or Merger Sub for inclusion in the
Schedule 14D-9 or the Proxy Material (as hereinafter defined) will, at the
time the Schedule 14D-9 or any amendments or supplements thereto are filed
with the SEC or the Proxy Material is mailed to the Company's shareholders,
contain an untrue statement of a material fact or omit to state any
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 or, in the case of the Proxy Material, at the time of
the meeting of shareholders to which the Proxy Material relates or at the
Effective Time, omit to state any material fact necessary to correct any
statement that has become false or misleading in any earlier communication
with respect to the solicitation of any proxy for such meeting.
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Each of the following representations and warranties is qualified by the
disclosure letter (the "Disclosure Letter") delivered to Purchaser prior to the
execution hereof, whether or not reference is made to the Disclosure Letter in
such representation or warranty. Except as set forth in the Disclosure Letter or
in the
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"SEC Documents" (as hereinafter defined), the Company represents and warrants to
the Purchaser and Merger Sub as follows:
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Ohio and has the requisite corporate power to carry on its
business as it is now being conducted. The Company is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not have a "Material Adverse Effect".
As used in this Merger Agreement, the term "Material Adverse Effect" shall
mean a material adverse effect in the business, financial condition,
results of operations, properties, assets or liabilities of the Company and
its Subsidiaries (as defined below) and shall be measured by reference to
the Company and its Subsidiaries, taken as a whole, and the size of the
transactions contemplated by the Offer and the Merger, taken together, and
shall not be determined solely by reference to accounting concepts of
materiality unless the matter involves accounting matters or the context of
this Merger Agreement otherwise requires.
4.2 Articles of Incorporation, Code of Regulations and By-Laws. The
Articles of Incorporation, Code of Regulations and By-Laws in the form
attached hereto as Exhibits 1, 2, and 3, respectively, are the Articles of
Incorporation, Code of Regulations and By-Laws of the Company as in effect
on the date of this Merger Agreement.
4.3 Subsidiaries. Each subsidiary of the Company (each a "Subsidiary"
and collectively the "Subsidiaries") is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has the requisite corporate power to carry on its
business as it is now being conducted. Each Subsidiary is duly qualified as
a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the
nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each of the Subsidiaries
are validly issued, fully paid and nonassessable and are owned by the
Company or by a wholly owned Subsidiary of the Company, free and clear of
all liens, claims, or encumbrances, and there are no proxies outstanding
with respect to such shares and no one has the right to acquire any such
shares. The Company has delivered to the Purchaser a true and complete list
of the ownership interests of the Company in the Subsidiaries and the
Company has no ownership interests in any other corporation, partnership,
joint venture or other business association or entity.
4.4 Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 20,000,000 Shares. As of the date hereof,
(i) 6,216,601 Shares were outstanding, all of which were validly issued,
fully paid and nonassessable, (ii) 150,590 Shares were held in the treasury
of the Company or any of its Subsidiaries, (iii) 2,307,938 Shares were
reserved for issuance pursuant to the Company's Administrative Stock Option
Plan, Key Employee Nonstatutory Stock Option Plan, Executive Stock Option
Plan, the Non-Employee Director Restricted Stock Option Plans and the
Employees' Stock Purchase Plan (the "Stock Option Plans"), copies of which
have heretofore been furnished to the Purchaser, and (iv) options to
purchase 1,157,091 Shares (the "Stock Options") were outstanding pursuant
to the Stock Option Plans. The Disclosure Letter sets forth a true and
complete listing of all Stock Options, the number of Stock Options so held
and the exercise prices of such Stock Options. Pursuant to a Rights
Agreement dated as of October 12, 1995, as amended, between the Company and
Huntington National Bank, as Rights Agent (the "Rights Agreement"), the
Company has issued to its shareholders certain rights to purchase
additional shares of Common Stock of the Company. Except as set forth above
or pursuant to the Employees' Stock Purchase Plan and except as set forth
in the Disclosure Letter, there are not now, and at the Effective Time
there will not be, any shares of capital stock or other equity securities
of the Company issued or outstanding or any options, warrants or other
rights, agreements, arrangements or commitments obligating the Company or
any of its Subsidiaries to issue or sell any shares of capital stock of the
Company or of any Subsidiary. There are no outstanding contracts of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any
capital stock or other equity securities of the Company or any Subsidiary.
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4.5 Authority Relative to this Merger Agreement. The Company has the
requisite corporate power and authority to enter into this Merger Agreement
and to perform its obligations hereunder. The execution and delivery of
this Merger Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by the Board
of Directors of the Company and no other corporate proceedings on the part
of the Company are necessary to authorize this Merger Agreement and the
transactions contemplated hereby, except for any required approval of the
Merger by the Company's shareholders as set forth in Section 6.1 of this
Merger Agreement. This Merger Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditor's
rights in general and subject to general principles of equity. Except as
set forth in the Disclosure Letter, neither the Company nor any Subsidiary
is subject to or obligated under any provision of (i) its respective
Certificate or Articles of Incorporation, Code of Regulations or By-Laws,
(ii) any contract (excluding all contracts which are terminable upon 90
days or less notice without premium or penalty or contracts involving not
more than $100,000 per fiscal year in payments expected to be paid or
received by the Company or any Subsidiary), (iii) any license, franchise or
permit, or (iv) any law, regulation, order, judgment or decree, which would
be breached, violated or defaulted (with or without due notice or lapse of
time or both) or in respect of which a right of termination or acceleration
or a loss of a material benefit or any encumbrance on any of its assets
would be created or suffered by its execution and performance of this
Merger Agreement. Except as set forth in the Disclosure Letter, the
consummation of the Offer and the Merger by the Company will not require
the consent or approval of or registration or filing with any Federal,
state or local government or any court, administrative or regulatory agency
or commission or other governmental authority or agency, domestic or
foreign, other than (i) approval of the holders of Shares if required by
applicable law or by the Company's Articles of Incorporation, Code of
Regulations or By-Laws, (ii) applicable requirements, if any, of the
Exchange Act, state "blue sky" or takeover laws and the HSR Act, (iii)
filing and recordation of appropriate merger documents as required by the
Ohio Law and (iv) where failure to obtain such consents or approvals or to
make such registration or filing would not have individually or in the
aggregate a Material Adverse Effect on or prevent or materially delay the
Company from performing its obligations under this Merger Agreement. Except
as set forth in the Disclosure Letter, to the best of the Company's
knowledge, no state takeover statute or similar statute or regulation
applies or purports to apply to the Offer, the Merger, this Merger
Agreement or any of the transactions contemplated hereby.
4.6 Commission Filings. The Company has heretofore delivered to the
Purchaser its (i) Annual Reports on Form 10-K for the years ended June 30,
1994, June 30, 1995 and June 30, 1996, as filed with the SEC, (ii) proxy
statements relating to the Company's meetings of shareholders (whether
annual or special) during 1994, 1995 and 1996, and (iii) all other reports
filed by the Company with the SEC since June 30, 1995 (collectively, the
"SEC Documents"). As of their respective dates, the SEC Documents complied
in all material respects with the requirements of the Exchange Act and the
rules and regulations of the SEC promulgated thereunder and applicable to
such SEC Documents, and none of the SEC Documents contained any untrue
statement of a material fact or omitted 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 of the Company included in the SEC Documents
previously provided to the Purchaser comply as to form in all material
respects with applicable accounting requirements and published rules of the
SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto and
except, in the case of unaudited statements, as permitted by Form 10-Q and
Regulation S-X of the SEC) and fairly present the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and the consolidated results of their operations, changes in
shareholders' equity and statements of cash flow for the periods then
ended, subject, in the case of the unaudited consolidated interim financial
statements, to normal year-end adjustments and any other adjustments
described therein. The unaudited
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financial statements of the Company for the three months ended September
30, 1996 (the "Unaudited First Quarter Financial Statements"), previously
provided to the Purchaser have been prepared using the same accounting
principles and policies and in a manner consistent with the financial
statements of the Company and its Subsidiaries for the period ended June
30, 1996 and fairly present the consolidated financial position of the
Company and its consolidated Subsidiaries as of September 30, 1996, and the
consolidated results of their operations, changes in shareholders' equity
and statements of cash flow for the three months ended September 30, 1996.
Except as set forth in the SEC Documents or in the Unaudited First Quarter
Financial Statements, and except for liabilities and obligations incurred
in the ordinary course of business consistent with past practice, since
, 30, 1996, neither the Company nor any Subsidiary has any
material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by generally accepted
accounting principles to be set forth on the consolidated balance sheet of
the Company and its consolidated Subsidiaries or in the notes thereto.
4.7 Absence of Certain Changes or Events. Since September 30, 1996,
except as previously disclosed in writing to the Purchaser, neither the
Company nor any Subsidiary has: (a) suffered any Material Adverse Effect or
any event, change or condition, known as of the date hereof, likely to
cause or have any such Material Adverse Effect, other than as a result of
changes in conditions, including economic or political developments,
applicable to the business of health care generally or the business of
manufacturing or selling medical devices generally not having a
disproportionate effect on the Company's business relative to the effect of
any such change on other entities in the business of manufacturing or
selling medical devices; or (b) conducted its business and operations other
than as permitted by Section 5.1 hereof.
4.8 Litigation and Liabilities. Except as disclosed in the Disclosure
Letter or SEC Documents, there are no actions, suits or proceedings pending
or, to the knowledge of the Company, threatened against the Company or any
of the Subsidiaries that are reasonably likely to result in damages to the
Company in excess of $50,000.
4.9 Employee Benefits. (a) True and complete copies of all documents
comprising Benefit Plans have been provided to the Purchaser. For purposes
of this Merger Agreement, the term "Benefit Plan" includes any plan,
contract or arrangement (regardless of whether funded or unfunded, or
foreign or domestic) which is sponsored by the Company or any of the
Subsidiaries, or to which the Company or any of the Subsidiaries makes
contributions or which covers any Employee of the Company or any Subsidiary
in his or her capacity as an Employee or to which the Company or any
Subsidiary has any obligation with respect to any current or former
employee, and which is (i) an "Employee Benefit Plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (ii) a severance contract with (an) employee(s) or
former employee or any severance plan applicable to employees or former
employees, (iii) a stock option plan, stock appreciation plan, stock
purchase plan or any plan of deferred compensation, or (iv) any other plan
or program providing fringe benefits to employees or former employees
involving costs or obligations of the Company or its Subsidiaries which,
individually or in the aggregate, could result in costs to the Company in
excess of $50,000.
(b) All Benefit Plans are valid and binding and in full force and
effect and there are no material defaults thereunder. Each Benefit Plan
complies currently, and has complied in the past, in form and operation,
with all applicable provisions of ERISA, the Internal Revenue Code of 1986,
as amended (the "Code"), and other applicable law, except for failures to
comply which would not have a Material Adverse Effect. Except as set forth
in the Disclosure Letter, the Company does not sponsor any "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA ("Pension
Plan") which is intended to be qualified under Section 401(a) of the Code
or any plan providing for welfare benefits to former employees under any
Benefit Plan (excluding continuation coverage required under the
Consolidated Omnibus Budget Reconciliation Act of 1985). There is no
pending or, to the best knowledge of the Company, threatened litigation
relating to the Benefit Plans, except for routine claims for benefits that
are not, individually or in the aggregate, reasonably likely to have a
Material Adverse Effect. Neither the Company nor any of the Subsidiaries
has engaged in, or failed to engage in, a transaction with respect to
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any Benefit Plan that is reasonably likely to subject the Company or any of
the Subsidiaries to a tax or penalty imposed by either Section 4975 or
4980B of the Code or Section 502(i), 502(c), and 502(l), which,
individually or in the aggregate, could result in costs to the Company in
excess of $50,000, and neither the Company nor any of its Subsidiaries has
been assessed a penalty or tax under any such section.
(c) No Benefit Plan subject to Title IV of ERISA (including any
"multiemployer plan" as defined in ERISA) has been sponsored or contributed
to by the Company or any Subsidiary during the six year period immediately
preceding the date of this Merger Agreement.
(d) All contributions required to be made, and claims to be paid,
under the terms of any Benefit Plan have been timely made or reserves
therefor on the balance sheet of the Company have been established, which
reserves are adequate in all material respects.
(e) Except as described in the Disclosure Letter, no severance
benefits shall become payable under any Benefit Plan as a result of the
Merger, the Offer or the transactions contemplated herein.
4.10 Taxes. For the purposes of this section, the term "tax" shall
include all taxes, charges, withholdings, fees, levies, penalties,
additions, interest or other assessments imposed by any United States
federal, state or local authority or any other taxing authority on the
Company or any of its respective Tax Affiliates (as defined below) as to
their respective income, profit, franchise, gross receipts, payroll, sales,
employment, worker's compensation, use, property, withholding, excise,
occupancy, environmental and other taxes, duties or assessments of any
nature, whatsoever. The Company has filed or caused to be filed timely all
material federal, state, local and foreign tax returns required to be filed
by each of it and any member of its consolidated, combined, unitary or
similar group (each such member a "Tax Affiliate"). Such returns, reports
and other information are accurate and complete in all material respects
and have been made available to the Purchaser or its representatives. The
Company has paid or caused to be paid or has made adequate provision or set
up an adequate accrual or reserve for the payment of, all taxes shown to be
due in respect of the periods for which returns are due, and has
established (or will establish at least quarterly) an adequate accrual or
reserve for the payment of all material taxes payable in respect of the
period subsequent to the last of said periods required to be so accrued or
reserved. Neither the Company nor any of its Tax Affiliates has any
material liability for taxes in excess of the amount so paid or accruals or
reserves so established. Except as set forth in the Disclosure Letter,
neither the Company nor any of its Tax Affiliates is delinquent in the
payment of any material tax in excess of the amount reserved or provided
therefor, and no deficiencies for any tax, assessment or governmental
charge in excess of the amount reserved or provided therefor have been
threatened, claimed, proposed or assessed. Except as set forth below, no
waiver or extension of time to assess any taxes has been given or requested
and remains in effect on the date hereof. The Company's U.S. federal income
tax returns for all years ending on or prior to June 30, 1990 have been
audited (and such audits have been completed), however, the statute of
limitations remains open for such year as to certain amendments to such
return. The Company's U.S. federal tax returns for all years ending on or
prior to June 30, 1989 are no longer subject to audit by reason of the
applicable statute of limitations. All years ended subsequent to such date
have never been audited by the Internal Revenue Service or comparable state
agencies.
4.11 Information Supplied. Any proxy statement relating to the 831
Meeting or the Merger Meeting (as hereinafter defined) mailed by the
Company to the holders of Shares after the date hereof and all amendments
and supplements thereto (the "Proxy Material") will comply as to form in
all material respects with the applicable requirements of the Exchange Act
and the rules and regulations thereunder and will not, at the time of (a)
the first mailing thereof or (b) the meeting called pursuant to Section 6.1
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by the Company
with respect to (i) information supplied by the Purchaser or Merger Sub
expressly for inclusion in any Proxy Material or (ii) any proxy statement
prepared and mailed after the Purchaser has obtained a majority of seats on
the Company's Board of Directors.
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4.12 Licenses and Permits. (a) The Company and the Subsidiaries have
obtained all licenses and permits necessary to conduct their respective
businesses and to own and operate their respective assets and such licenses
and permits are valid and in full force and effect except where the failure
to obtain such licenses and permits would not individually or in the
aggregate have a Material Adverse Effect. No defaults or violations exist
or have been recorded in respect of any license or permit of the Company
and the Subsidiaries other than defaults or violations which would not
reasonably be expected individually or in the aggregate to have a Material
Adverse Effect. No proceeding is pending or, to the best knowledge of the
Company, threatened looking toward the revocation, limitation or
non-renewal of any such license or permit, except for pending or threatened
proceedings that would not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) The Company has delivered or made available for inspection to the
Purchaser a true and complete list of each material license and permit, and
each material pending application for any license or permit, relating to
the Company and the Subsidiaries. All of such pending applications are in
good standing and without challenge of any kind, and each statement,
application and other document submitted or filed by the Company or any
Subsidiary to or with any federal, state or other governmental agency or
authority, or to or with any other person or entity, for purposes of
obtaining a new or renewed license or permit of any type described in this
Section 4.12 in connection with the transactions contemplated hereby is
true and complete, and except as set forth in the Disclosure Letter, none
of the rights of the Company or any Subsidiary under any license or permit
will be impaired by the consummation of the transactions contemplated
hereby, except, as to the foregoing matters, for such challenges,
incompletenesses or inaccuracies, nondisclosures or impairments which would
not, individually or taken in the aggregate, have a Material Adverse
Effect.
(c) Since June 30, 1996, except as set forth in the SEC Documents and
the Disclosure Letter, the Company has not received any written notice from
and has not been made a party to any proceeding which would, individually
or in the aggregate, have a Material Adverse Effect brought by any
governmental authority alleging that (a) the Company is, or may be in
violation of, any such law, governmental regulation or order, (b) the
Company must change any of its business practices to remain in compliance
with such law, governmental regulation or order, (c) the Company has failed
to obtain any license or permit required for the conduct of its business,
or (d) the Company is in default under or violation of any license or
permit.
4.13 Compliance with Laws. Except as set forth in the Disclosure
Letter, the Company and the Subsidiaries have complied in a timely manner
with all laws and governmental regulations and orders relating to any of
the property now or in the past owned, leased or used by them, or
applicable to their business, including, but not limited to, the labor,
equal employment opportunity, occupational safety and health,
environmental, hazardous or medical waste disposal and antitrust laws,
except where the failure to so comply would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.14 Insurance. As of the date hereof, the Company and each of its
Subsidiaries are covered under insurance policies and programs which
provide coverage to the Company by insurers, reasonably believed by the
Company to be of recognized financial responsibility and solvency, against
such losses and risks and in such amounts as are customary in the
businesses in which they are engaged. All material policies of insurance
and fidelity or surety bonds insuring the Company or any of its
Subsidiaries or their respective businesses, assets, employees, officers
and directors of which the Company has copies have previously been made
available for inspection by the Purchaser and are in full force and effect.
Except as otherwise set forth in the Disclosure Letter or SEC Documents, as
of the date hereof, there are no material claims by the Company or any
Subsidiary under any such policy or instrument as to which any insurance
company is denying liability or defending under a reservation of rights
clause. All necessary notifications of claims have been made to insurance
carriers other than those where the failure to so notify will not have a
Material Adverse Effect.
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4.15 Contracts. Except as set forth in the Disclosure Letter, all
contracts, agreements, commitments and other documents to which the Company
or any Subsidiary is a party or by which the Company, any Subsidiary, or
any of their assets is in any way affected or bound, including all
amendments and supplements thereto and modifications thereof (excluding all
contracts which are terminable upon 90 days or less notice without premium
or penalty or contracts involving not more than $100,000 per fiscal year in
payments expected to be paid or received by the Company or any Subsidiary)
(collectively, the "Material Contracts"), are legally valid and binding and
in full force and effect, enforceable against the Company or any such
Subsidiary in accordance with their terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditor's rights in general and subject to
general principles of equity, except where failure to be legally valid and
binding and in full force and effect and enforceable would not have a
Material Adverse Effect or results from changes in applicable laws or legal
interpretations after the date hereof, and there are no defaults
thereunder, except those defaults that would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. Except
as set forth in the Disclosure Letter, the Company has previously made
available for inspection by the Purchaser all written Material Contracts.
The Company has previously provided the Purchaser with copies of any
agreement with any executive officer or other key employee (other than
employees in Europe whose current salary is not in excess of $100,000 per
year) of the Company or any Subsidiary (A) the benefits of which are
contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving the Company or any Subsidiary of the
nature of any of the transactions contemplated by this Merger Agreement,
(B) providing any term of employment or compensation guarantee extending
for a period longer than 90 days or (C) providing severance benefits or
other benefits after the termination of employment of such executive
officer or key employee not comparable to benefits available to employees
generally.
4.16 Title to Properties. Except as set forth in the Disclosure
Letter, the Company and its Subsidiaries have good title to all real,
personal and intangible property reflected in the Company's September 30,
1996 balance sheet previously delivered to the Purchaser (except as
disposed of since such date in the ordinary course of business), and any
property acquired since the date of such balance sheet, free and clear of
all mortgages, security interests, liens, encumbrances, restrictions and
other burdens ("Liens") other than Liens under the Industrial Development
Bond issued to finance the Atlanta facility and such other liens which in
the aggregate do not and will not materially interfere with its ability to
conduct its business as presently conducted.
4.17 Labor Matters. There are no collective bargaining or other labor
union agreements to which the Company or any of its Subsidiaries is a party
or by which any of them is bound. To the best knowledge of the Company,
since September 30, 1996, neither the Company nor any of its Subsidiaries
has encountered any labor union organizing activity, or had any actual or
threatened employee strikes, work stoppages, slowdowns or lockouts.
4.18 Environmental Matters. Except as set forth in the Disclosure
Letter, the Company and its Subsidiaries have complied in all material
respects with all federal, state or local statutes, ordinances, orders,
judgments, rulings or regulations relating to environmental pollution or to
environmental regulation or control. Neither the Company nor any of its
Subsidiaries, nor any of their respective officers, employees,
representatives or agents acting on behalf of the Company or any of its
Subsidiaries, nor, to the best knowledge of the Company, any other person,
has utilized, treated, stored, processed, discharged, spilled or otherwise
disposed of any substance defined as hazardous or toxic by any applicable
federal, state or local law, rule regulation, order or directive, or any
waste or by-product thereof, at any real property or any other facility
(provided that with respect to any person who is not an officer, employee,
representative or agent of the Company or any of its Subsidiaries, only
with respect to any real property or facility owned, leased or used by the
Company or any of its Subsidiaries), in violation of any applicable
statutes, regulations, ordinances or directives of any governmental
authority or court, which violations may reasonably be expected to have a
Material Adverse Effect. To the knowledge of the Company, no environmental
condition exists at any property owned, leased or used by the Company or
any Subsidiary,
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now or in the past, or to which the Company or any Subsidiary sent
hazardous substances or waste, that would give rise to any loss or
liability of the Company or any Subsidiary, including, without limitation,
liability associated with the cleanup or remedy of such condition, other
than loss or liability not constituting a Material Adverse Effect.
4.19 Vote Required. The only vote of the holders of any class or
series of capital stock of the Company necessary to approve the Merger is
the affirmative vote of the holders of a majority of the outstanding
Shares. The supermajority voting provisions of ARTICLE TWELFTH of the
Articles and the prohibitions of Chapter 1704 of the Ohio Law are not
applicable to the Merger Agreement or the transactions contemplated hereby.
4.20 Rights Agreement. Neither the execution and delivery of this
Merger Agreement nor the consummation of the transactions contemplated
hereby will trigger the distribution or exercisability of any rights under
the Rights Agreement or otherwise affect any rights or obligations under
the Rights Agreement. There has been no prior distribution of any rights
under the Rights Agreement.
4.21 Cumulative Exceptions. The exceptions to the representations and
warranties set forth in this Article 4 in the aggregate do not have a
Material Adverse Effect.
4.22 Full Disclosure. The representations and warranties made by the
Company in this Merger Agreement, or in any documents referenced or
delivered pursuant hereto or thereto, do not, and will not, contain any
untrue statement of fact or omit to state a fact required to be stated
herein or therein, or necessary to make the statements and facts contained
herein or therein, in light of the circumstances in which they are made,
not false or misleading other than untrue statements of fact or omissions
which, in the aggregate, do not, and are not reasonably likely to,
constitute a Material Adverse Effect. Copies of all documents heretofore or
hereafter delivered or made available to Merger Sub and the Purchaser
pursuant hereto were or will be complete and accurate copies of such
documents.
5. CONDUCT OF BUSINESS PENDING THE MERGER
5.1 Conduct of Business by the Company Pending the Merger. The Company
covenants and agrees that, prior to the Effective Time, unless the Purchaser
shall otherwise agree in writing or as otherwise expressly contemplated by this
Merger Agreement:
(a) The businesses of the Company and its Subsidiaries shall be
conducted only in, and the Company and the Subsidiaries shall not take any
action except in, the ordinary course of business and consistent with past
practice;
(b) the Company shall not (i) sell or pledge or agree to sell or
pledge any stock owned by it in any of its Subsidiaries; (ii) amend its
Articles of Incorporation, Code of Regulations, By-Laws or the last
sentence of Section 1(c) of its Rights Agreement; or (iii) split, combine
or reclassify any shares of its outstanding capital stock or declare, set
aside or pay any dividend or other distribution payable in cash, stock or
property or redeem or otherwise acquire any shares of its capital stock or
shares of the capital stock of any of its Subsidiaries;
(c) the Company shall not, and shall cause each of its Subsidiaries
not to (i) authorize for issuance, issue or sell any additional shares of,
or rights of any kind to acquire any shares of, its capital stock of any
class (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise), except for
unissued Shares reserved for issuance upon the exercise of Stock Options in
accordance with their existing terms, as such Stock Options may be
accelerated pursuant to their existing terms; (ii) acquire, dispose of,
transfer, lease, license, mortgage, pledge or encumber any fixed or other
substantial assets other than in the ordinary course of business and
consistent with past practices; (iii) incur, assume or prepay any material
indebtedness or any other material liabilities other than in the ordinary
course of business and consistent with past practices, provided that the
Company may borrow money for use in the ordinary course of business on
terms reasonably acceptable to the Purchaser; (iv) assume, endorse (other
than in the ordinary course of business consistent with past practices),
guarantee or otherwise become liable or responsible (whether directly,
contingently or
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otherwise) for the material obligations of any other person (other than a
Subsidiary); (v) make any material loans, advances or capital contributions
to, or investments in, any other person, other than to Subsidiaries, or
otherwise enter into any Material Contract other than in the ordinary
course of business and consistent with past practices; (vi) make any loans
to employees, other than travel advances in the ordinary course of
business; (vii) fail to maintain adequate insurance consistent with past
practices for their businesses and properties; (viii) undertake, make or
commit to undertake or make any capital expenditures in an amount greater
than $100,000; or (ix) enter into any contract, agreement, commitment or
arrangement with respect to any of the foregoing or which requires payment
by the Company in an aggregate amount of $100,000 or more;
(d) the Company shall use reasonable business efforts to preserve
intact the business organization of the Company and its Subsidiaries to
keep available the services of its and their present officers and key
employees, and to preserve the goodwill of those having business
relationships with it and them;
(e) the Company shall not and shall cause its Subsidiaries not to (i)
enter into any new agreements (other than in its ordinary course of
business consistent with past practice) or amend or modify any existing
agreements (other than in its ordinary course of business consistent with
past practice and except as contemplated by Section 6.3) with any of their
respective officers, directors or employees or with any "disqualified
individuals" (as defined in Section 28OG(c) of the Code), (ii) grant any
increases in the compensation of their respective directors, officers and
employees or any "disqualified individuals" (as defined in Section 28OG(c)
of the Code) other than increases in the ordinary course of business and
consistent with past practice to persons who are not directors or corporate
officers of or "disqualified individuals" with respect to the Company or
any Subsidiary, (iii) enter into, adopt, amend or terminate, or grant any
new benefit not presently provided for under, any employee benefit plan or
arrangement, except as required by law or to maintain the tax qualified
status of the plan; provided, however, it is understood that the Company is
permitted to pay bonuses pursuant to its 1996 incentive compensation plan
and additional bonuses not to exceed in the aggregate amounts accrued
therefor in the Unaudited First Quarter Financial Statements; or (iv)
except as contemplated by Section 6.15, take any action with respect to the
grant of any severance or termination pay other than in the ordinary course
of business and consistent with past practice and pursuant to policies in
effect on the date of this Merger Agreement;
(f) the Company shall not, and shall not permit any Subsidiary to,
acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree to acquire
any assets (other than equipment, inventory and supplies in the ordinary
course of business) that are material, individually or in the aggregate, to
the Company and its Subsidiaries taken as a whole;
(g) the Company shall take all actions reasonably necessary so that
the conditions to the Purchaser's or Merger Sub's obligations to consummate
the Offer and the Merger are satisfied on a timely basis, except as
contemplated by this Merger Agreement; and
(h) the Company will not call any meeting of its shareholders to be
held prior to December 31, 1996 other than as required by law or this
Merger Agreement (it being understood and agreed that the holding of the
1996 Annual Meeting of Shareholders scheduled for November 13, 1996, and
any adjournment thereof, shall not be prohibited by this Merger Agreement).
5.2 Actions by the Purchaser and Merger Sub Pending the Merger. None of
the provisions contained in Section 5.1 of this Merger Agreement shall prohibit
the Purchaser or Merger Sub (or any of their respective subsidiaries), during
the period between the payment for Shares pursuant to the Offer and the
Effective Time, from taking or causing to be taken any action with respect to
the business of the Company and the Subsidiaries that the Purchaser or Merger
Sub (or any of their respective subsidiaries) would legally be permitted to take
or cause to be taken with respect to a majority owned subsidiary of the
Purchaser or Merger Sub (or any of their respective subsidiaries), provided that
the Purchaser shall not take any action in violation of the terms of this Merger
Agreement that would cause the Purchaser's obligations to effect the Merger
hereunder to not be satisfied.
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6. ADDITIONAL AGREEMENTS
6.1 Meeting of Shareholders of the Company. (a) Promptly after expiration
of the Offer, the Company shall take all action necessary in accordance with the
Ohio Law and its Articles of Incorporation, Code of Regulations and By-Laws to
convene a meeting of its shareholders promptly to consider and vote upon the
Merger (the "Merger Meeting"), if such meeting is required by the Ohio Law. The
Board of Directors of the Company will recommend that the shareholders of the
Company vote to adopt and approve the Merger and this Merger Agreement, if such
vote is required or sought, and the Company shall use all reasonable efforts to
solicit from shareholders of the Company proxies in favor of such adoption and
approval unless, in either case, (i) the Board of Directors of the Company shall
have properly exercised its rights set forth in the third sentence of Section
6.4(b) or (ii) the Purchaser owns sufficient shares to approve the Merger and
this Merger Agreement by its own vote and requests the Company not to solicit
proxies. At any such meeting, the Purchaser shall vote, or cause to be voted,
all of the Shares then owned by the Purchaser or any subsidiary of the Purchaser
in favor of the Merger.
(b) If permitted by applicable law the Purchaser may elect to effect the
Merger without the holding of a meeting of the shareholders of the Company.
6.2 Proxy Statement. If required by law for the consummation of the
Merger, promptly after expiration of the Offer, the Company shall prepare and
(subject to the Purchaser's approval) file with the SEC under the Exchange Act,
and shall use all reasonable efforts to have cleared by the SEC, a proxy
statement or information statement, as appropriate, with respect to the meeting
of the Company's shareholders referred to in Section 6.1. The Proxy Material
relating to the Merger Meeting shall contain the recommendation of the Board of
Directors of the Company in favor of the Merger and for approval and adoption of
this Merger Agreement.
6.3 Stock Options; Stock Purchase Plan. As soon as practicable following
the date of this Merger Agreement, the Company (or, if appropriate, any
committee administering the Stock Option Plan) and the Purchaser shall take such
actions as are required (including, if necessary, the provision of funds by the
Purchaser to the Company) to provide that at the earlier of the purchase of
Shares pursuant to the Offer and the Effective Time each holder of a then
outstanding Stock Option (as defined in Section 4.4) whether or not then
exercisable or subject to shareholder approval shall, upon surrender thereof to
the Company, receive from the Company (except as otherwise may be provided in
the Director and Officer Agreements contemplated by Section 6.16) the difference
between the Merger Consideration and the exercise price for each share of
Company Common Stock covered by each Stock Option, net of any applicable tax
withholding. The holders of the Stock Options shall be entitled to enforce such
agreements against the Company, the Surviving Corporation and the Purchaser.
6.4 No Solicitation. (a) Except as set forth in this Section 6.4(a), the
Company shall not, and will direct each officer, director, employee,
representative or agent and Subsidiary not to, directly or indirectly,
encourage, solicit, participate in or initiate discussions or negotiations with
or provide any information to any corporation, partnership, company, person or
other entity or group (other than the Purchaser, Merger Sub, or an affiliate or
an associate of the Purchaser or Merger Sub) concerning an Acquisition
Transaction (as herein defined). Notwithstanding the foregoing, the Company may,
directly or indirectly, furnish information and access, in each case in response
to unsolicited requests therefor, to the same extent permitted to the Purchaser
by Section 6.10, to any corporation, partnership, company, person or other
entity or group, pursuant to appropriate confidentiality agreements, and may
participate in discussions and negotiate with such corporation, partnership,
person or other entity or group concerning any proposal or offer from any person
relating to any direct or indirect acquisition of the Company upon a merger,
purchase of assets, purchase of or tender offer for shares of the Company's
Common Stock, recapitalization, plan of liquidation or similar transactions
involving the Company or any Subsidiary (an "Acquisition Transaction"), if the
Company's Board of Directors determines in its good faith judgment based on the
opinion of the Company's counsel as to its fiduciary duties that a failure to
act would be inconsistent with its fiduciary duties. In addition, in the event
of such determination by the Company's Board of Directors based upon such
opinion of its counsel, the Company may authorize its officers and other
appropriate personnel to cooperate with and be reasonably
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available to consult with any such corporation, partnership, company, person or
other entity or group so long as they enter into a confidentiality arrangement
substantially in the form of the confidentiality agreement with the Purchaser,
dated September 16, 1996, as amended. The Company shall promptly notify the
Purchaser if it shall, on or after the date hereof, have entered into a
confidentiality agreement with any third party in response to any unsolicited
request for information and access in connection with a possible Acquisition
Transaction involving the Company and such third party. Notwithstanding receipt
of any proposal relating to any other Acquisition Transaction, until termination
of this Merger Agreement in accordance with Section 8 hereof, the Company will
continue to comply with its obligations under Sections 6.6 and 6.10 hereof.
(b) Neither the Board of Directors of the Company nor any committee thereof
shall (i) withdraw or modify, or propose to withdraw or modify, in a manner
adverse to the Purchaser or Merger Sub, the approval or recommendation by such
Board of Directors or any such committee of the "control share acquisition," the
Offer, this Merger Agreement or the Merger, (ii) approve or recommend, or
propose to approve or recommend, any takeover proposal or (iii) enter into any
agreement with respect to any takeover proposal. For purposes of this Merger
Agreement, "takeover proposal" means any proposal for an Acquisition Transaction
(other than pursuant to the Stock Option Plans or the Stock Purchase Plan or
this Merger Agreement) and "qualified takeover proposal" means a proposal to
acquire all Shares by merger, tender offer or otherwise at a purchase price
which includes cash consideration in excess of $24.00 per share, which in the
good faith determination of the Board of Directors is reasonably likely to be
fully financed. Notwithstanding the first sentence of this paragraph (b), in the
event the Board of Directors of the Company receives a superior takeover
proposal (as defined below), the Board of Directors may (subject to the
limitations contained in this Section) withdraw or modify its approval or
recommendation of the "control share acquisition," the Offer, this Merger
Agreement or the Merger, approve or recommend any such superior takeover
proposal, enter into a definitive agreement with respect to any such superior
takeover proposal or terminate this Merger Agreement in each case at any time if
the Purchaser has not increased the Merger Consideration hereunder to an amount
at least equal to the consideration offered in any such superior takeover
proposal after five (5) business days following the Purchaser's receipt of
written notice (a "Notice of Superior Takeover Proposal") advising the Purchaser
that the Board of Directors has received a superior takeover proposal. The
Company may take any of the foregoing actions pursuant to the preceding sentence
only if Merger Sub shall not have accepted for payment the Shares pursuant to
the Offer. Nothing contained herein shall prohibit the Company from taking and
disclosing to its shareholders a position contemplated by Rule 14e-2(a)
following the Purchaser's receipt of a Notice of Superior Takeover Proposal
provided that the Company does not withdraw or modify its position with respect
to the Offer or Merger or approve or recommend a takeover proposal. For purposes
of this Merger Agreement, a "superior takeover proposal" means a qualified
takeover proposal having terms which the Board of Directors of the Company
determines in its good faith judgment (based, in part, on advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's shareholders than the Offer and the Merger.
6.5 Directors' Pensions. The Purchaser agrees that, upon acceptance by the
Purchaser for payment of Shares pursuant to the Offer, the Company shall pay to
each non-employee director of the Company, in full satisfaction of such
director's rights under the Non-Employee Directors Retirement Plan, an amount
equal to the retirement benefit earned by such director under such Plan, as
previously disclosed to the Purchaser in the Disclosure Letter.
6.6 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by the Offer and this
Merger Agreement, including (i) filing the Certificate of Merger referred to in
Section 2.3, (ii) using reasonable efforts to remove any legal impediment to the
consummation or effectiveness of such transactions and (iii) using reasonable
efforts to obtain all necessary waivers, consents and approvals and to effect
all necessary registrations and filings, including, but not limited to, filings
under the HSR Act and submissions of information requested by governmental
authorities.
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6.7 Expenses. (a) Except as provided below, all fees and expenses incurred
in connection with the Offer, the Merger, this Merger Agreement and the
transactions contemplated hereby shall be paid by the party incurring such fees
or expenses, whether or not the Offer or the Merger is consummated.
(b) If (i)(A) this Merger Agreement is terminated due to the occurrence of
any event specified in Section 8.1(e) hereof, or (B) any person or group (as
defined in Section 13(d)(3) of the Exchange Act) (other than the Purchaser,
Merger Sub or any of its or their affiliates) shall have become the beneficial
owner (as defined in Rule 13d-3 promulgated under the Exchange Act) of at least
20% of any class or series of capital stock of the Company (including the
Shares), after the date hereof and prior to the termination of this Merger
Agreement (except if this Merger Agreement shall have been terminated in
accordance with Section 8.1(f)(ii)), and within one year after the acquisition
of such beneficial ownership the Company consummates an Acquisition Transaction
(as defined in Section 6.4 hereof) with one or more persons (other than a party
hereto) or (ii) any one or more persons shall directly or indirectly make any
proposal respecting an Acquisition Transaction to the Company or its
shareholders (an "Acquisition Proposal") after the date hereof and prior to the
termination of this Merger Agreement (except if this Merger Agreement shall have
been terminated in accordance with Section 8.1(f)(ii)) and within one year of
the making of such Acquisition Proposal the Company shall have consummated an
Acquisition Transaction with any such person, then at the time of termination of
this Merger Agreement under Section 8.1(e) or 8.1(f)(i) or at the time of
consummation of such an Acquisition Transaction as contemplated by (i)(B) or
(ii) above, the Company shall promptly (but in no event later than five business
days) pay to the Purchaser a break-up fee equal to $7,965,074, in immediately
available funds.
6.8 Officers' and Directors' Insurance; Indemnification. The Purchaser
will cause the Surviving Corporation to (i) purchase and maintain a directors'
and officers' insurance and indemnification policy substantially equivalent to
the Company's current policy for all current officers and directors of the
Company on the date of this Merger Agreement to cover acts and omissions of
directors and officers of the Company occurring prior to the Effective Time for
six years after the Effective Time (or for such lesser period as can be
purchased for a premium not exceeding 200% of the last annual premium paid by
the Company for directors' and officers' insurance), (ii) assume and continue to
be bound by the Indemnification Agreements currently in effect between the
Company and each of the directors and certain executive officers of the Company
as set forth in the Disclosure Letter, and (iii) maintain in effect the current
provisions of the Articles of Incorporation of the Company (which shall be
contained in the Articles of Incorporation of Merger Sub and the Surviving
Corporation) relating to the rights to indemnification of officers and directors
with respect to indemnification for acts and omissions occurring prior to the
Effective Time. The Purchaser will indemnify each director and officer who
surrenders options for cancellation pursuant to Section 6.3 above against any
costs of defense arising from claims made against such officer or director under
Section 16(b) of the Exchange Act alleging liability to the Company thereunder
as a result of the transactions contemplated by this Merger Agreement. The
Purchaser will not, and will cause the Surviving Corporation not to, bring any
action alleging liability to the Company under Section 16(b) of the Exchange Act
as a result of the transactions contemplated by this Merger Agreement against
any director and officer of the Company who surrenders options for cancellation
pursuant to Section 6.3.
6.9 Notification of Certain Matters. The Company shall give prompt notice
to the Purchaser, and the Purchaser shall give prompt notice to the Company, of
(i) the occurrence, or failure to occur, of any event, which occurrence or
failure would be likely to cause any representation or warranty contained in
this Merger Agreement to be untrue or inaccurate at any time from the date
hereof to the Effective Time, provided that each party's obligation hereunder is
limited to events of which it has knowledge, and (ii) any material failure of
the Company or the Purchaser, as the case may be, or any officer, director,
employee or agent thereof, to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder.
6.10 Access to Information. The Company shall, and shall cause its
Subsidiaries, officers, directors, employees and agents to, afford the officers,
employees and agents of the Purchaser complete access at all reasonable times,
from the date hereof to the Effective Time, to its officers, employees, agents,
properties, books and records, and shall furnish the Purchaser all financial,
operating and other data and information as the Purchaser, through its officers,
employees or agents, may reasonably request. Subject to applicable law, the
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Purchaser shall cause all such information of a non-public nature to be retained
confidentially. If this Merger Agreement is terminated, the Purchaser shall
promptly comply with the provisions of the Confidentiality Agreement dated
September 16, 1996, as amended, between the Purchaser and the Company with
respect to the return of confidential information to the Company by the
Purchaser.
6.11 Employee Benefits. The Purchaser and the Company agree that all
employees of the Company immediately prior to the Effective Time shall be
employed by the Surviving Corporation immediately after the Effective Time, it
being understood that, except for employees of the Company with employment
agreements as set forth in Section 6.15, the Purchaser shall not have any
obligation to continue employing such employees for any length of time
thereafter. The Purchaser and the Company agree that, after the Effective Time,
all employees of the Company shall continue to be entitled to and shall receive
the same benefits currently provided the employees of the Company under the
existing Company benefit plans including its existing severance practices
("Company Benefit Plans") through six months from the date of any purchase
pursuant to the Offer so long as the continued provision of such Company Benefit
Plans to such employees does not cause any Purchaser benefit plan to be in
violation of any law or regulation governing such plans. From and after six
months from the date of any purchase pursuant to the Offer, the then employees
of the Surviving Corporation shall be entitled to and shall receive such
benefits as the then constituted management of the Surviving Corporation deems
necessary and appropriate for the Purchaser, subject to consent and advise from
the Purchaser's executive management. With respect to any such revised benefit
plans ("Benefit Plans"), the Purchaser shall grant all employees of the Company
and the Subsidiaries, who become participants in such plans after the Effective
Time credit for all service with the Company and the Subsidiaries, or their
respective predecessors (or any other party for which service has been
recognized by the Company) prior to the Effective Time for all purposes for
which such service was recognized by the Company prior to the Effective Time,
including but not limited to eligibility to participate, vesting in benefits
accrued while participating in such Benefit Plans, and the rate at which
benefits accrue while participating in such Benefit Plans; provided, however,
that such employees shall not accrue benefits under the Benefit Plans during or
on account of the period before they participated in such Benefit Plans. Thus,
by way of example and not limitation, if a Benefit Plan were to provide that
vacation benefits accrue for participants at a rate of one week per year for the
first five years of employment, and at a rate of two weeks per year thereafter,
an employee with five years of service upon his or her commencement of
participation would begin to accrue benefits at the rate of two weeks per year
immediately upon commencement of participation, but would not be granted
vacation benefits under the Benefit Plan for the years of employment prior to
becoming a participant. To the extent that the Benefit Plans provide medical or
dental welfare benefits after the Effective Time, the Purchaser shall cause all
pre-existing condition exclusions and actively-at-work requirements, to the
extent such requirements would have been met by the employees of the Company
under the Company Benefit Plans, to be waived and the Purchaser shall provide
that any expenses incurred on or before the Effective Time shall be taken into
account under the Benefit Plans for purposes of satisfying the applicable
deductible, coinsurance and maximum out-of-pocket provisions. Subject to the
rules governing eligibility, vesting and all other terms of any 401(k) plan or
other qualified retirement plan or ERISA pension plan (the "Retirement Plans"),
the employees of the Company, and the Subsidiaries, shall be eligible to
participate in the Retirement Plans on terms similar to the benefits provided to
similarly situated employees of the Purchaser, with credit granted for purposes
of eligibility and vesting for prior service with the Company and the
Subsidiaries.
6.12 Antitrust Laws. As promptly as practicable, the Company, the
Purchaser and Merger Sub shall make all filings and submissions under the HSR
Act as may be reasonably required to be made in connection with this Merger
Agreement and the transactions contemplated hereby. Subject to Section 6.10
hereof, the Company will furnish to the Purchaser and Merger Sub, and the
Purchaser and Merger Sub will furnish to the Company, such information and
assistance as the other may reasonably request in connection with the
preparation of any such filings or submissions. Subject to Section 6.10 hereof
and to the preservation of attorney-client privilege and work-product doctrine,
the Company will provide the Purchaser and Merger Sub, and the Purchaser and
Merger Sub will provide the Company, with copies of all correspondence, filings
or communications (or memoranda setting forth the substance thereof) between
such party or any of its representatives, on the one hand, and any governmental
agency or authority or members of their respective staffs, on the other hand,
with respect to this Merger Agreement and the transactions contemplated hereby;
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<PAGE> 19
provided, however, that the Purchaser and Merger Sub shall not be required to
provide the Company with copies of confidential documents or information
included in the Purchaser's filings and submissions under the HSR Act.
6.13 Public Announcements. The Purchaser and Merger Sub, on the one hand,
and the Company, on the other hand, agree that they will use reasonable efforts
to consult with the other party prior to issuing any press release or otherwise
making any public statement or responding to any press inquiry with respect to
this Merger Agreement or the transactions contemplated hereby, except as may be
required by applicable law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or national securities
quotation system.
6.14 Directors. Subject to Section 14(f) of the Exchange Act and Rule
14f-1 promulgated thereunder, upon the acceptance for payment of, and payment
for, any Shares by Merger Sub pursuant to the Offer which, represent at least
sixty percent (60%) of the then outstanding Shares, Merger Sub shall be entitled
to request and receive resignations of up to but not exceeding five (5)
directors on the Board of Directors of the Company and to designate new
directors to fill the resulting vacancies. Any number of directors requested to
resign by Merger Sub in accordance with the preceding sentence shall resign in
reverse order of seniority on the Board of Directors.
6.15 Employment Agreements. The Purchaser shall cause the Surviving
Corporation to assume and continue to be bound by (a) the Employment Agreements
currently in effect between the Company and each of Bradley P. Gould and Michael
J. Barilla, as amended (including the amendment which eliminates the obligation
to provide letters of credit), and (b) the Executive Employment Agreements
approved by the Board of Directors of the Company on the date hereof, effective
upon purchase of Shares by Merger Sub pursuant to the Offer, between the Company
and each of Georg W. Landsberg, Terry L. Sanborn, Kevin L. Barnett, Alan M.
Fermier, Clint R. Lawson, David G. Musgrove, Nigel S. Perry, Alan Upton and
Julie Reichert, in each case in the form previously received by the Purchaser.
6.16 Director and Officer Agreements. The Company will use its best
efforts to obtain from each director and officer an agreement that each such
person will tender his Shares to the Purchaser pursuant to the Offer or to the
Company, promptly following the purchase of Shares by the Purchaser pursuant to
the Offer but not earlier than January 2, 1997. The Company shall purchase, and
Purchaser shall cause the Company to purchase, for an amount equal to the Merger
Consideration, all of the Shares tendered to the Company pursuant to such
agreement. Each director and officer shall be entitled to enforce such
agreements against the Company, the Surviving Corporation and the Purchaser. In
addition, each of the directors and officers listed in Schedule 6.16 shall grant
to the Purchaser an option to acquire (but not a proxy or other right to vote,
directly or indirectly) his shares expiring upon termination of the Merger
Agreement with an exercise price equal to the Merger Consideration.
6.17 State Takeover Laws. The Purchaser shall file all information
required to be filed in connection with the Offer pursuant to Section
1707.041(A)(2) of the Ohio Law with the division of Securities of the State of
Ohio. If any other "fair price," "moratorium," or "control share acquisition"
statute or other similar statute or regulation becomes applicable to the
transactions contemplated by this Merger Agreement, the Company, the Purchaser,
and Merger Sub and their respective Boards of Directors will use all reasonable
efforts to grant such approvals and take such actions as are necessary so that
the transactions contemplated by this Merger Agreement may be consummated as
promptly as practicable on the terms contemplated hereby and otherwise act to
minimize the effects of such statute or regulation on the transactions
contemplated hereby.
6.18 Company Option. The Company shall grant to the Purchaser an option to
purchase (but not a proxy or other right to vote, directly or indirectly) up to
753,198 shares of common stock of the Company, together with any stock purchase
rights related thereto, at an exercise price equal to the Merger Consideration
and exercisable upon specified third party events, as set forth in the Option
Agreement attached hereto as Exhibit 4.
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7. CONDITIONS
7.1 Conditions to Obligation of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) This Merger Agreement and the Merger shall have been approved and
adopted by the requisite vote of the shareholders of the Company if
required by the Ohio Law;
(b) The waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act shall have expired or been
terminated; and
(c) No temporary restraining order, preliminary injunction or
permanent injunction or other order preventing the consummation of the
Merger shall have been issued by any Federal or state court and shall
remain in effect.
7.2 Additional Conditions to Obligation of the Company. The obligation of
the Company to effect the Merger is also subject to the condition that each of
the Purchaser and Merger Sub shall in all material respects have performed each
obligation and agreement and complied with each covenant to be performed and
complied with by it hereunder at or prior to the Effective Time.
7.3 Additional Conditions to Obligations of the Purchaser and Merger
Sub. The obligations of the Purchaser and Merger Sub to effect the Merger are
also subject to the following conditions:
(a) The Company shall in all material respects have performed each
obligation and agreement and complied with each covenant to be performed
and complied with by it hereunder on or prior to the Effective Time;
(b) The Purchaser or any of its subsidiaries shall have purchased
Shares pursuant to the Offer; (c) All Stock Options under the Stock Option
Plans shall have been surrendered or canceled; and
(d) The condition set forth in subsection (f) of Schedule 1.1(b) shall
not have occurred, provided, however, this Section 7.3(d) shall not be
applicable if Merger Sub owns 90% or more of the Shares.
8. TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Merger Agreement may be terminated at any time prior
to the Effective Time, whether prior to or after approval by the shareholders of
the Company:
(a) By mutual consent of the Boards of Directors of the Purchaser,
Merger Sub and the Company;
(b) By either the directors of Merger Sub or by the Company (by action
of its continuing Directors only, following the purchase of shares pursuant
to the Offer) if:
(i) (x) as a result of the failure, occurrence or existence of any
of the conditions set forth in Schedule 1.1(b) hereto (1) Merger Sub
shall have failed to commence the Offer within 15 days following the
date of this Merger Agreement; or (2) the Offer shall have terminated or
expired in accordance with its terms without Merger Sub having accepted
for payment any shares of Company Common Stock pursuant to the Offer or
(y) Merger Sub shall not have accepted for payment any shares of Company
Common Stock pursuant to the Offer by 75 days from the date hereof,
provided, however, that the passage of the period referred to in clause
(y) shall be tolled for any part thereof during which any party shall be
subject to a non-final order, decree, ruling or action restraining,
enjoining or otherwise prohibiting the purchase of shares of Company
Common Stock pursuant to the Offer or the consummation of the Merger;
and provided further that the right to terminate this Merger Agreement
pursuant to this Section 8.1(b)(i) shall not be available to any party
whose failure to perform any of its obligations under this Merger
Agreement results in the failure, occurrence or existence of any such
condition; or
(ii) any governmental entity shall have issued an order, decree or
ruling or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or
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payment for, shares of the Company Common Stock pursuant to the Offer or
the Merger and such order, decree or ruling or other action shall have
become final and nonappealable; or
(iii) the Merger shall not have been consummated by March 31, 1997;
(c) By the directors of Merger Sub if (i) neither the Purchaser nor
any subsidiary of the Purchaser shall have purchased any Shares pursuant to
the Offer by December 31, 1996 or (ii) the Purchaser has properly
terminated the Offer in accordance with its terms;
(d) By the directors of Merger Sub if there shall have been any
material breach of a material obligation of the Company hereunder and such
default shall not have been remedied within 5 days after receipt by the
Company of notice in writing from the Purchaser or Merger Sub specifying
such breach and requesting that it be remedied;
(e) By the directors of the Company in connection with entering into
any definitive agreement relating to any Acquisition Transaction in
accordance with Section 6.4;
(f) By the directors of Merger Sub, if the Board of Directors of the
Company shall have (i) exercised its rights set forth in the third sentence
of Section 6.4(b) or (ii) provided any information to any party in
accordance with Section 6.4(a); provided, however, that the Purchaser shall
not terminate this Merger Agreement pursuant to Section 8.1(f)(i) if, as a
result of the Company's receipt of a takeover proposal from a third party,
the Company, as required by applicable law, takes and discloses to the
Company's shareholders a position contemplated by Rule 14e-2(a)(2) or (3)
promulgated under the Exchange Act with respect to such proposal or the
transactions contemplated thereby and if within five business days of
taking and disclosing to its shareholders the aforementioned position the
Company publicly reconfirms its recommendation of the transactions
contemplated as set forth in Section 1.2 hereof; or
(g) By the directors of the Company, if there shall have been any
material breach of a material obligation of the Purchaser or Merger Sub
hereunder and such default shall have not been remedied within 5 days after
receipt by the Purchaser or Merger Sub, as the case may be, of notice in
writing from the Company specifying such breach and requesting that it be
remedied.
8.2 Effect of Termination. In the event of termination of this Merger
Agreement as provided in Section 8.1, this Merger Agreement shall forthwith
become void and there shall be no liability on the part of the Purchaser, Merger
Sub or the Company, except that (i) the provisions of Section 6.7 hereof, and
the last two sentences of Section 6.10 hereof, shall survive any such
termination, and (ii) nothing herein will relieve any party from liability for
any willful breach of any representation or warranty or any breach prior to such
termination of any covenant or agreement contained herein.
8.3 Amendment. This Merger Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
8.4 Waiver. At any time prior to the Effective Time, any party hereto may
(a) extend the time for the performance of any of the obligations or other acts
of any other party hereto or (b) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations. 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 by a duly
authorized officer.
9. GENERAL PROVISIONS
9.1 Brokers. The Company represents and warrants that no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
commission in connection with the Offer or the Merger based upon arrangements
made by or on behalf of the Company, other than the arrangements with Smith
Barney Inc. and that a true and complete copy of the engagement letter between
the Company and Smith Barney Inc. has previously been delivered to the
Purchaser. No valid claim exists against the Company or the Surviving
Corporation on or, based on any action by the Company or any Subsidiary, against
the Purchaser or Merger
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Sub for payment of any "topping", "break-up" or "bust-up" fee or any similar
compensation or payment arrangement as a result of the transactions contemplated
hereby, including the Offer and the Merger.
9.2 Survival of Representation, Warranties and Agreements. No
representations or warranties contained herein shall survive beyond the
Effective Time or, in the case of the Company, shall survive the acceptance for
payment of, and payment for, shares of Common Stock of the Company by Merger Sub
pursuant to the Offer. This Section 9.2 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after the
Effective Time.
9.3 Notices. All notices and other communications hereunder shall be given
by telephone and immediately confirmed 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 the Purchaser or Merger Sub:
Furon Company
29982 Ivy Glenn Drive
Laguna Niguel, California 92677
Attention: Donald D. Bradley, Esq.
With copies to:
O'Melveny & Myers LLP
610 Newport Center Drive
Suite 1700
Newport Beach, California 92660-6429
Attention: Gary J. Singer, Esq.
(b) if to the Company:
Medex, Inc.
3637 Lacon Road
Hilliard, Ohio 43026
Attention: Bradley P. Gould
With copies to:
Boyd & Boyd Co., L.P.A.
Suite 401
150 East Broad Street
Columbus, Ohio 43215
Attention: Robert E. Boyd, Jr., Esq.
And
Troutman Sanders LLP
600 Peachtree Street, N.W.
Suite 5200
Atlanta, Georgia 30308-2216
Attention: James L. Smith, III, Esq.
9.4 Interpretation. When a reference is made in this Merger Agreement to
subsidiaries of the Purchaser or the Company, the word "subsidiaries" or
"Subsidiaries" means any corporation more than fifty percent (50%) of whose
outstanding voting securities are directly or indirectly owned by the Purchaser
or the Company, as the case may be. The headings contained in this Merger
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Merger Agreement.
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9.5 No Third Party Beneficiaries. Except for the provisions of Section 2
and Sections 6.3, 6.5, 6.8, 6.11, 6.15 and 6.16, there are no third party
beneficiaries of this Merger Agreement and nothing else in this Merger
Agreement, express or implied, is intended to or shall confer upon any person
other than the parties hereto and their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities.
9.6 Miscellaneous. This Merger Agreement (including the documents and
instruments referred to herein) (i) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof
except that the Confidentiality Agreement dated September 16, 1996, as amended,
between the Company and the Purchaser shall continue in effect; (ii) is not
intended to confer upon any other person any rights or remedies hereunder; (iii)
shall not be assigned by operation of law or otherwise, provided that the
Purchaser or Merger Sub may assign its rights and obligations hereunder to a
direct or indirect subsidiary of the Purchaser, but no such assignment shall
relieve the Purchaser or Merger Sub, as the case may be, of its obligations
hereunder; and (iv) shall be governed in all respects, including validity,
interpretation and effect, by the internal laws of the State of Ohio without
giving effect to the principles of conflict of laws thereof. This Merger
Agreement may be executed in one or more counterparts which together shall
constitute a single agreement.
9.7 Specific Performance. The parties hereto agree that irreparable damage
would occur in the event any of the provisions of this Merger Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
IN WITNESS WHEREOF, the Purchaser, Merger Sub and the Company have caused
this Merger Agreement to be executed as of the date first written above by their
respective officers thereunder duly authorized.
FURON COMPANY
By: /s/ J. MICHAEL HAGAN
------------------------------------
Title: Chairman
FCY, INC.
By: /s/ MONTY A. HOUDESHELL
------------------------------------
Title: President
MEDEX, INC.
By: /s/ BRADLEY P. GOULD
------------------------------------
Title:
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SCHEDULE 1.1(B)
CONDITIONS TO THE OFFER
Notwithstanding any other term of the Offer or this Merger Agreement, the
Purchaser or Merger Sub will not be required to accept for payment or to pay for
any Shares tendered pursuant to the Offer, and, in their good faith discretion,
may terminate or amend the Offer, and may postpone the acceptance for payment of
Shares pursuant thereto, unless, (i) there shall have been validly tendered and
not withdrawn prior to the expiration of the Offer 3,729,961 Shares (the
"Minimum Tender Condition"), and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated (the "HSR Condition"). Furthermore, notwithstanding any other
term of the Offer or this Merger Agreement, the Purchaser or Merger Sub shall
not be required to accept for payment or to pay for any Shares not theretofore
accepted for payment or paid for, and, in their good faith discretion, may
terminate or amend the Offer and may postpone the acceptance for payment of
Shares pursuant thereto if, at any time on or after the date of this Merger
Agreement and before the acceptance of such Shares for payment or the payment
therefor, any of the following conditions exists:
(a) any statute, rule, regulation or order shall be proposed, enacted,
entered or deemed applicable to the Offer or the Merger (i) making the
purchase of, or payment for, some or all of the Shares pursuant to the
Offer, or the Merger Agreement illegal, or resulting in a material delay in
the ability of the Purchaser to accept for payment or pay for some or all
of the Shares, or to consummate the Offer or Merger or seeking to obtain
from the Company, the Purchaser or Merger Sub any damages or other remedy
or relief that would have a Material Adverse Effect on the Company and its
Subsidiaries taken as a whole, (ii) imposing material limitations on the
ability of the Purchaser effectively to acquire or hold or to exercise full
rights of ownership of the Shares acquired by it, including the right to
vote the Shares purchased by it on all matters properly presented to the
shareholders of the Company, (iii) which would require the Purchaser or any
direct or indirect subsidiary of the Purchaser to dispose of or hold
separate any of the Shares or all or any material portion of the assets or
business of the Company and the Subsidiaries taken as a whole; or (iv)
prohibit or materially limit the ability of the Purchaser or any direct or
indirect subsidiary of the Purchaser to own, control or operate the
Company, or any of its subsidiaries or all or any material portion of the
businesses, operations or assets of the Company and its Subsidiaries taken
as a whole; or
(b) any shareholder approval required by Section 1701.831 of the Ohio
Law for a "control share acquisition" by the Purchaser or Merger Sub shall
not have been obtained; or
(c) any governmental or regulatory action or proceeding by or before
any court, government or governmental or regulatory authority, domestic or
foreign, shall be threatened, instituted or pending, or any action or
proceeding by any other person, domestic or foreign, shall be instituted or
pending, which would reasonably be expected to result in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a)
above; or
(d) the Company shall not have complied in all material respects with
its agreements and covenants in the Merger Agreement, or its
representations and warranties in the Merger Agreement, when made or at and
as of any time thereafter, are untrue or incomplete in any material respect
or the Purchaser shall have become aware of any previously undisclosed
liability that has a Material Adverse Effect; or
(e) an offer shall have been publicly proposed to be made or have been
made on or after the date of this Offer to Purchase by another person or by
a "group" of persons as defined in Section 13(d)(3) of the Exchange Act,
individually or in the aggregate, to purchase or exchange for cash or other
consideration 20% or more of the Shares, or 20% or more of the Shares have
been or are proposed to be acquired by another person or by a group of
persons or another person or group of persons shall have entered into a
definitive agreement or an agreement in principle with the Company with
respect to a merger, consolidation or other business combination
transaction with, or an acquisition of a material portion of the assets of,
the Company or its Subsidiaries; or
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(f) any change (or any development involving a prospective change)
shall have occurred in the business, financial condition or results of
operations of the Company or any of its Subsidiaries that has had or is
reasonably expected to have a Material Adverse Effect upon the Company and
its Subsidiaries as a whole (including changes in conditions, such as
economic or political developments, applicable to the business of the
Company and its Subsidiaries as set forth in the Company's strategic
business plan or applicable to the medical device manufacturing and
distributing business currently conducted by the Company); or
(g) there shall have occurred (i) any general suspension of trading
in, or limitation on prices for, securities on the New York Stock Exchange
or in the over-the-counter market, (ii) the declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) the commencement of a war, armed hostilities or other
international or national calamity directly or indirectly involving the
United States, (iv) any limitation by any governmental authority on, or any
other event which, in the sole judgment of the Purchaser, affects the
extension of credit by banks or other financial institutions, (v) a
material adverse change in the United States exchange rates or a suspension
of, or limitation on, the markets therefor, (vi) a decrease of more than
25% in the Dow Jones Industrial Average, or (vii) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(h) the Merger Agreement shall have been terminated or amended to
provide for the amendment or termination of the Offer;
which, in the good faith discretion of the Purchaser, in any such case
regardless of the circumstances (including any action or omission by the
Purchaser) giving rise to any such conditions, makes it inadvisable to proceed
with such acceptance for payment or payment or makes it advisable to terminate
or amend the Offer.
The foregoing conditions are for the sole benefit of the Purchaser and
Merger Sub and may be asserted by the Purchaser and Merger Sub regardless of the
circumstances giving rise to any such conditions or may be waived by the
Purchaser or Merger Sub in whole or in part, at any time and from time to time
in their sole discretion. The failure by the Purchaser or Merger Sub at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each right shall be deemed an on-going right which may be asserted at
any time and from time to time. Any determination by the Purchaser or Merger Sub
concerning any events described in the above conditions shall be final and
binding on all parties.
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EXHIBIT 99.11
AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of November 12,
1996, is by and among Furon Company, a California corporation ("PARENT"), FCY,
Inc., an Ohio corporation and a subsidiary of Parent ("PURCHASER"), and
_______________________ ("SHAREHOLDER").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement,
Parent, Purchaser and Medex, Inc., an Ohio corporation (the "COMPANY") have
entered into an Agreement and Plan of Merger (the "MERGER AGREEMENT"), pursuant
to which (i) Purchaser has agreed, among other things, to commence a cash tender
offer (as such tender offer may hereafter be amended from time to time in
accordance with the Merger Agreement, the "OFFER") to purchase all shares of
common stock, $.01 par value, of the Company (the "COMPANY COMMON STOCK") and
(ii) Purchaser will be merged with and into the Company (the "MERGER"); and
WHEREAS, Shareholder is the record and beneficial owner of,
and has the sole right to vote and dispose of, the number of shares of Company
Common Stock set forth on Schedule A hereto together with any stock purchase
rights related thereto (the "SHARES"); and
WHEREAS, as an inducement and a condition to its entering into
the Merger Agreement and incurring the obligations set forth therein, including
the Offer and the Merger, Parent has required that Shareholder enter into this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties and agreements contained herein and in the
Merger Agreement, the parties agree as follows:
1. Certain Definitions. Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger Agreement. In
addition, for purposes of this Agreement:
"AFFILIATE" means, with respect to any specified Person, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. Affiliate shall not include the Company or its Subsidiaries.
"BENEFICIALLY OWN," "BENEFICIAL OWNER" or "BENEFICIAL
OWNERSHIP" with respect to any securities means having "BENEFICIAL OWNERSHIP" of
such securities (as determined pursuant to Rule 13d-3 under the Exchange Act ).
<PAGE> 2
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"OPTION SHARES" means any options, warrants, rights or other
securities convertible into or exercisable or exchangeable for Company Common
Stock.
"OWNED SHARES" means the shares of Company Common Stock owned
by Shareholder (either of record or through a nominee), together with any other
shares of Company Common Stock now or hereafter Beneficially Owned by
Shareholder in each case together with any stock purchase rights related
thereto.
"PERSON" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
"TRANSFER" means, with respect to a security, the sale,
transfer, pledge, hypothecation, encumbrance, assignment or disposition of such
security or the Beneficial Ownership thereof, the offer to make such a sale,
transfer or other disposition, and each option, agreement, arrangement or
understanding, whether or not in writing, to effect any of the foregoing. As a
verb, "TRANSFER" shall have a correlative meaning.
2. Tender of Shares; Exercise of Options.
(a) Shareholder hereby agrees to tender and not withdraw all
Owned Shares (or cause the record owner thereof to tender and not withdraw such
Owned Shares), pursuant to and in accordance with the terms of the Offer or to
cause such Shares to be sold to the Company promptly after the consummation of
the Offer (but in no event is tender required earlier than January 2, 1997) as
contemplated by Section 6.16 of the Merger Agreement.
(b) Immediately after the expiration of the Offer (but in no
event is tender required earlier than January 2, 1997) Shareholder will cause
all Option Shares to be tendered to the Purchaser or the Company as provided in
Section 6.3 of the Merger Agreement.
3. Intentionally Deleted.
4. Restrictions on Transfer and Proxies; No Solicitation.
(a) Shareholder shall not directly or indirectly: (i) until
the Merger Agreement is consummated or terminated (unless a Purchase Event has
occurred hereunder or such termination results in a Purchase Event hereunder),
and except as provided in Section 2 hereof, Transfer (including the Transfer of
any securities of an Affiliate which is the record holder of Owned Shares if, as
the result of such Transfer, such Person would cease to be an Affiliate of
Shareholder) to any Person any or all Owned Shares or Option Shares; (ii) except
for proxies or powers of attorney granted in connection with the 831 Meeting,
deposit any Owned Shares into a voting trust or enter into a voting agreement,
understanding or arrangement with respect
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<PAGE> 3
to such Owned Shares; or (iii) take any action that would make any
representation or warranty of Shareholder contained herein untrue or incorrect
or would result in a breach by Shareholder of its obligations under this
Agreement.
(b) Shareholder shall, and shall cause its Affiliates and its
and their officers, directors, employees, representatives and agents (the
"Covered Persons") to, immediately cease any existing discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal. Shareholder will not, and will cause the Covered Persons
not to, (i) solicit, directly or through an intermediary, any inquiries with
respect to, or the making of, any Acquisition Proposal, or (ii) engage in
negotiations or discussions with, or furnish any confidential information
relating to the Company or its Subsidiaries to, any Third Party relating to an
Acquisition Proposal; provided, that nothing in this Agreement shall prohibit
Shareholder or any Covered Person from taking or omitting to take any action
permitted to be taken or omitted to be taken by the Company under Section 6.4(a)
of the Merger Agreement in their capacities as officers, directors, employees,
representatives and agents of the Company.
5. The Option.
(a) Grant of Option. Shareholder hereby grants to Purchaser an
exclusive and irrevocable option (an "OPTION") to purchase, during the period
specified in Section 5(c)(i) hereof and subject to the conditions set forth in
Section 5(e) hereof, all, but not less than all, of such Shareholder's Owned
Shares at the exercise price specified in Section 5(b) hereof.
(b) Exercise Price. The exercise price for each Owned Share
(the "PER SHARE EXERCISE PRICE") with respect to which an Option is exercised
shall be the merger consideration provided for in the Merger Agreement;
provided, however, that if the Merger Consideration of $23.50 provided for in
the Merger Agreement is increased after the date hereof, the Per Share Exercise
Price shall be increased in the same proportion, and if the Option shall have
been exercised before such increase in the merger consideration, then, if and
when the Merger becomes effective, Purchaser shall promptly pay or deliver to
the Shareholder whose Owned Shares have been purchased pursuant to the Option
the additional consideration which such Shareholder would have been entitled to
receive if such purchase had occurred after such increase in the merger
consideration.
(c) Exercise of Option.
(i) Each Option may be exercised, with respect to the
Owned Shares, by Purchaser at any time, from and after the occurrence
of a Purchase Event (as defined in Section 5(c)(ii) below) and prior to
one year after the Purchase Event by sending a written notice (a
"NOTICE OF EXERCISE") to such Shareholder at the address specified for
notice pursuant to Section 9(f), specifying (ii) the location, date and
time
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<PAGE> 4
for the closing (a "CLOSING") of such purchase (which date shall be no
later than 10 business days and no earlier than two business days after
the date such notice is given, and in no event earlier than the date on
or by which the condition specified in Section 5(e)(i) has been
satisfied or waived) and (ii) the Per Share Exercise Price.
(ii) Each of the following events is a Purchase
Event;
1) any person or group (as defined in Section
13(d)(3) of the Exchange Act) (other than Parent or any
subsidiary of Parent) 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 Company (including the Company's Common Stock);
2) any one or more persons (other than Parent or any
subsidiary of Parent) shall have commenced or shall have filed
a registration statement under the Securities Act of 1933, as
amended, with respect to, a tender offer or exchange offer to
purchase any shares of the Company's Common Stock such that,
upon consummation of such offer, such person would own or
control 20% or more of the then outstanding Company 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;
3) the Company'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;
4) the Merger Agreement is terminated pursuant to
Section 8.1(e) thereof; or
5) the Merger Agreement is terminated pursuant to
Section 8.1(f)(i) thereof.
(d) Closing. At the Closing:
(i) Purchaser shall deliver to the Shareholder who
owns the Shares subject to the Option (x) the Per Share Exercise Price
multiplied by (y) the number of such Shareholder's Owned Shares in
immediately available funds; and
(ii) the Shareholder shall deliver to Purchaser
certificates representing such Shareholder's Owned Shares free and
clear of all liens, claims, charges, encumbrances, rights or interests
of any kind or nature whatsoever, duly
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<PAGE> 5
endorsed for transfer or accompanied by stock powers duly executed in
blank, and any other documents necessary to effectuate and evidence the
transfer.
(e) Shareholder's Condition to Closing. The obligations of a
Shareholder to proceed with any Closing shall be subject to no order,
statute, rule, regulation, executive order, stay, decree, judgment or
injunction having been enacted, entered, issued, promulgated or
enforced by any court or governmental authority, subsequent to the date
of this Agreement, which prohibits or restricts any of the transactions
contemplated by this Agreement.
6. Additional Payment Under Certain Circumstances. If after the
Purchaser has exercised the Option, the Purchaser directly or indirectly sells
or otherwise disposes of any Shares purchased pursuant to the Option (other than
in the Merger or the offer) then the Purchaser shall pay to the Shareholder, as
promptly as practicable after such sale or other disposition, the amount, if any
(the "Excess Amount"), by which the aggregate net proceeds received by the
Purchaser upon such sale or other disposition exceeds the aggregate price paid
by the Purchaser to the Shareholder upon exercise of the Option for the purchase
of the Shares so sold or disposed of. In the event that the Purchaser receives
securities or other property other than cash upon such sale or disposition, the
"price," for purposes of calculating the Excess Amount, if any, shall be deemed
to be the amount of cash received upon the sale of the Shares plus the fair
market value of such securities and the property at the time of receipt. For
purposes of the foregoing, (i) the fair market value of securities which are
publicly traded shall be deemed to be the closing price for such securities on
the date of receipt (or, if not a business day, on the next preceding business
day) on the New York Stock Exchange, if the securities are listed thereon, or,
if not so listed, on any other national securities exchange or national
quotation system on which such securities are listed and principally traded, or,
if not so listed on any national securities exchange or national quotation
system, the average of the closing bid and asked prices in the over-the-counter
market on the date of receipt (or, if not a business day, on the next preceding
business day); (ii) the fair market value of any other property shall be as
determined by a nationally recognized investment banking firm (the fees of which
will be borne equally by the Company and the Purchaser) mutually selected by the
parties or, if none can be so selected, then as selected by the President of the
New York Stock Exchange, Inc. For purposes of determining the Excess Amount, if
the Purchaser has not sold or disposed of all the Shares by November 11, 1997,
then the Excess Amount shall be paid promptly to the Shareholder on any
remaining Shares and shall be determined based on the fair market value of such
remaining Shares on such date as determined above and the provisions of this
Section 6 shall thereupon terminate.
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<PAGE> 6
7. Representations and Warranties of Shareholder. Shareholder hereby
represents, warrants and covenants to Parent and Purchaser as follows:
(a) Shareholder has all necessary power and authority to
execute and deliver this Agreement and perform its obligations hereunder. This
Agreement has been duly and validly executed and delivered by Shareholder and
constitutes the valid and binding agreement of Shareholder, enforceable against
Shareholder in accordance with its terms except to the extent (i) such
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors rights and (ii) the remedy of specified performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(b) Shareholder is the Beneficial Owner of the shares of
Company Common Stock set forth on Schedule A and has the right to tender such
shares as contemplated by this Agreement so that, upon the consummation of the
Offer or the sale by Shareholder to the Company following the Offer, Purchaser
or the Company will own such shares free and clear of all liens, claims,
options, proxies, voting agreements, security interests, charges and
encumbrances. Shareholder holds options for the purchase of shares of Company
Common Stock as set forth on Schedule A. Except as set forth on Schedule A,
Shareholder has the power to dispose of the Owned Shares, and the power to issue
instructions with respect to the Owned Shares to the extent appropriate in
respect of the matters set forth in this Agreement, power to demand appraisal
rights and power to agree to all of the matters set forth in this Agreement, in
each case which respect to all of the Owned Shares, with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
(c) Except for filings, authorizations, consents and approvals
as may be required by Shareholder under, and other applicable requirements of
the Hart-Scott- Rodino Antitrust Improvements Act of 1976 (the "HSR ACT") and
the Exchange Act, in each case as amended, (i) no filing by Shareholder will,
and no permit, authorization, consent or approval of, any state or federal
governmental body or authority is required to be obtained by Shareholder for the
execution of this Agreement by Shareholder and the consummation by Shareholder
of the transactions contemplated hereby and (ii) none of the execution and
delivery of this Agreement by Shareholder, the consummation by Shareholder of
the transactions contemplated hereby or compliance by Shareholder with any of
the provisions hereof shall (A) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Shareholder is a party or by which Shareholder
or any of its properties or assets (including the Owned Shares) may be
bound, or (B) violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to Shareholder or any of its properties or assets.
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<PAGE> 7
(d) Shareholder understands and acknowledges that Parent is
entering into, and causing the Purchaser to enter into, the Merger Agreement,
and is incurring the obligations set forth therein, in reliance upon
Shareholder's execution and delivery of this Agreement.
(e) Shareholder agrees with and covenants to Parent that
Shareholder shall not request that the Company or Parent, as the case may be,
register the Transfer (book-entry or otherwise) of any certificated or
uncertificated interest representing any of the securities of the Company or of
Parent, as the case may be, unless such Transfer is made in compliance with this
Agreement.
8. Representations and Warranties of Parent and Purchaser.
Parent and Purchaser hereby represent, warrant and covenant to Shareholder as
follows:
(a) Parent is a corporation duly organized and validly
existing under the laws of the State of California, and Purchaser is a
corporation duly organized and validly existing under the laws of the State of
Ohio and each of them is in good standing under the laws of the state of its
incorporation. Parent and Purchaser have all necessary corporate power and
authority to execute and deliver this Agreement and perform their respective
obligations hereunder. The execution and delivery by Parent and Purchaser of
this Agreement and the performance by Parent and Purchaser of their respective
obligations hereunder have been duly and validly authorized by the Board of
Directors of each of Parent and Purchaser and no other corporate proceedings on
the part of Parent or Purchaser are necessary to authorize the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
(b) This Agreement has been duly and validly executed and
delivered by Parent and Purchaser and constitutes a valid and binding agreement
each of Parent and Purchaser, enforceable against each of them in accordance
with its terms except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(c) Except for filings, authorizations, consents and approvals
as may be required under, and other applicable requirements of the HSR Act and
the Exchange Act, and applicable state law, including the provisions of Section
1701.831(B) of Title 17 of the Ohio Revised Code, (i) no filing with, and no
permit, authorization, consent or approval of, any state or federal public body
or authority is necessary for the execution of this Agreement by Parent or
Purchaser and the consummation by Parent or Purchaser of the transactions
contemplated hereby and (ii) none of the execution and delivery of this
Agreement by Parent or Purchaser, the consummation by Parent or Purchaser of the
transactions contemplated hereby or compliance by Parent or Purchaser with any
of the provisions hereof shall (A)
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<PAGE> 8
conflict with or result in any breach of the certificate of incorporation or
by-laws of Parent or Purchaser, or (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which Parent or Purchaser is a party or by which
Parent or Purchaser or any of their respective properties or assets may be
bound, or violate any order, writ, injunction, decree, judgment, statute, rule
or regulation applicable to Parent or Purchaser or any of their respective
properties or assets.
9. Termination. This Agreement (and all covenants of
Shareholder hereunder) shall terminate on the earlier of (i) the purchase by
Purchaser of the Owned Shares and the Option Shares pursuant to this Agreement
and the Merger Agreement; (ii) one year after the first occurrence of a Purchase
Event; or (iii) termination of the Merger Agreement pursuant to Sections 8.1(a),
8.1(b)(iii), 8.1(f)(ii), 8.1(c) (so long as a Purchase Event has not otherwise
occurred) or 8.1(g).
10. Miscellaneous.
(a) This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof.
(b) Shareholder agrees that this Agreement and the respective
rights and obligations of Shareholder hereunder shall attach to any shares of
Company Common Stock, and any securities convertible into such shares, that may
become Beneficially Owned by Shareholder.
(c) All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such expenses.
(d) This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned or delegated by any
party (whether by operation of Law or otherwise) without the prior written
consent of the other parties; provided, that Purchaser may assign or delegate
its rights and obligations hereunder to Parent or any Subsidiary of Parent, but
no such assignment or delegation shall relieve Purchaser of its obligations
hereunder. 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 or shall confer upon any other Person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
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<PAGE> 9
(e) This Agreement may not be amended, changed, supplemented,
or otherwise modified or terminated, except upon the execution and delivery of a
written agreement executed by each of the parties hereto. The parties may waive
compliance by the other parties hereto with any representation, agreement or
condition otherwise required to be complied with by such other party hereunder,
but any such waiver shall be effective only if in writing executed by the
waiving party.
(f) All notices and other communications hereunder shall be in
writing and shall be deemed given upon (a) transmitter's confirmation of a
receipt of a facsimile transmission, (b) confirmed delivery by a standard
overnight carrier or when delivered by hand or (c) the expiration of five
business days after the day when mailed by certified or registered mail, postage
prepaid, addressed at the following addresses (or at such other address for a
party as shall be specified by like notice):
If to Shareholder: To the Address specified under the
Shareholder's name on the signature page
hereto.
If to Parent or To the Address specified in the Merger
Purchaser: Agreement.
(g) Each of the parties hereto acknowledges and agrees that in
the event of any breach of this Agreement, each non-breaching party would be
irreparably and immediately harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto (a) will waive, in any
action for specific performance, the defense of adequacy of a remedy at law and
(b) shall be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in any state or federal court.
(h) All rights, powers and remedies provided under this
Agreement or otherwise available in respect hereof at law or in equity shall be
cumulative and not alternative, and the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any other such right,
power or remedy by such party. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(i) This Agreement shall be governed and construed in
accordance with the Laws of the State of Ohio (regardless of the Laws that might
otherwise govern under applicable principles of conflict of laws) as to all
matters, including matters of validity, construction, effect, performance and
remedies.
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(j) The descriptive headings used herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
(k) This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
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IN WITNESS WHEREOF, Parent, Purchaser and Shareholder have
caused this Agreement to be duly executed as of the day and year first above
written.
Furon Company,
a California corporation
By:
----------------------------------
Name:
Title:
FCY, Inc.,
an Ohio corporation
By:
----------------------------------
Name:
Title:
SHAREHOLDER
----------------------------------
Address:
----------------------------------
----------------------------------
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SCHEDULE A
[Company Common Stock
Beneficially Owned by the
Shareholder, including Options]
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<PAGE> 1
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);
<PAGE> 2
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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<PAGE> 3
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/ BRADLEY P. GOULD
--------------------------------
Name: Bradley P. Gould
----------------------------
Title: President & CEO
----------------------------
"GRANTEE"
By: /s/ MONTY A. HOUDESHELL
--------------------------------
Name: Monty A. Houdeshell
----------------------------
Title: Vice President
----------------------------
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