-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L8ypcdzx3yi5xF1sfL/uDcKFnofHba0ySj46B8KP6xhvI5IKEHfEcFJwbsvKjqBc 9aNWWphM5RPU2mdbF1SZsw== 0000902664-04-000941.txt : 20040520 0000902664-04-000941.hdr.sgml : 20040520 20040520141951 ACCESSION NUMBER: 0000902664-04-000941 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040520 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PICOWER JEFFRY M CENTRAL INDEX KEY: 0000906036 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 950 THIRD AVENUE STREET 2: 30TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2129359860 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALARIS MEDICAL SYSTEMS INC CENTRAL INDEX KEY: 0000817161 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 133492624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-40264 FILM NUMBER: 04820990 BUSINESS ADDRESS: STREET 1: 10221 WATERIDGE CIRCLE CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 8584587000 MAIL ADDRESS: STREET 1: 10221 WATERIDGE CIRCLE CITY: SAN DIEGO STATE: CA ZIP: 92121 FORMER COMPANY: FORMER CONFORMED NAME: ALARIS MEDICAL INC DATE OF NAME CHANGE: 19970512 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED MEDICAL INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED MEDICAL TECHNOLOGIES INC DATE OF NAME CHANGE: 19901116 SC 13D/A 1 srz9650790v2.txt ALARIS MEDICAL SYSTEMS, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 18) ALARIS MEDICAL SYSTEMS, INC. (Name of Issuer) COMMON STOCK $0.01 PAR VALUE (Title of Class of Securities) 00754C101 (CUSIP Number) Jeffry M. Picower c/o William D. Zabel, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 (212) 756-2000 with a copy to: Andre Weiss, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 (212) 756-2000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) MAY 18, 2004 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] - ------------------- ----------------- CUSIP No. 00754C101 SCHEDULE 13D AMENDMENT NO. 18 Page 2 of 5 Pages - ------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NUMBERS Jeffry M. Picower - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY 0 ------------------------------------------- OWNED BY EACH 8 SHARED VOTING POWER REPORTING PERSON WITH 46,643,209 ------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------- 10 SHARED DISPOSITIVE POWER 46,643,209 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 46,643,209 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 64.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- - ------------------- ----------------- CUSIP No. 00754C101 SCHEDULE 13D AMENDMENT NO. 18 Page 3 of 5 Pages - ------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NUMBERS Decisions Incorporated - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY 0 ------------------------------------------- OWNED BY EACH 8 SHARED VOTING POWER REPORTING PERSON WITH 46,643,209 ------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------- 10 SHARED DISPOSITIVE POWER 46,643,209 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 46,643,209 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 64.6% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- - ------------------- ----------------- CUSIP No. 00754C101 SCHEDULE 13D AMENDMENT NO. 18 Page 4 of 5 Pages - ------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NUMBERS JA Special Partnership Limited - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY 0 ------------------------------------------- OWNED BY EACH 8 SHARED VOTING POWER REPORTING PERSON WITH 2,489,463 ------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------- 10 SHARED DISPOSITIVE POWER 2,489,463 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,489,463 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 3.4% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- - ------------------- ----------------- CUSIP No. 00754C101 SCHEDULE 13D AMENDMENT NO. 18 Page 5 of 5 Pages - ------------------- ----------------- - -------------------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NUMBERS JD Partnership, L.P. - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)|X| (b)|_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS - -------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER BENEFICIALLY 0 ------------------------------------------- OWNED BY EACH 8 SHARED VOTING POWER REPORTING PERSON WITH 24,074,269 ------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 ------------------------------------------- 10 SHARED DISPOSITIVE POWER 24,074,269 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 24,074,269 - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 33.3% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON PN - -------------------------------------------------------------------------------- This statement ("Statement") constitutes Amendment No. 18 to the Schedule 13D filed on behalf of Jeffry M. Picower with the Securities and Exchange Commission (the "Commission") on April 7, 1989, as amended to date, concerning the common stock, par value $0.01 per share (the "Common Stock"), of Alaris Medical Systems, Inc., a Delaware corporation formerly known as "Alaris Medical, Inc." and "Advanced Medical Technologies, Inc." (the "Issuer"). This Statement is being filed as a joint statement pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act") by Jeffry M. Picower ("Picower"), Decisions Incorporated ("Decisions"), JD Partnership, L.P. ("JD") and JA Special Partnership Limited ("JD", and together with Picower, Decisions and JD, the "Reporting Persons") pursuant to a joint filing agreement filed as Exhibit 31 hereto. As part of this Statement, JD is being added as a reporting person. ITEM 2. IDENTITY AND BACKGROUND Item 2 is hereby amended to add the following: J.D. Partnership, L.P. ("JD") is being added as a reporting person to this Statement. The business address of JD is c/o William D. Zabel, Esq., Schulte Roth & Zabel LLP, 919 Third Avenue, New York, NY 10022. The principal business of JD is that of investment in securities. JD has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years. JD has not, during the last five years, been 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 violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 4. PURPOSE OF TRANSACTION. Item 4 is hereby amended to add the following: The purpose of this filing is to report a Support Agreement (the "Support Agreement") dated May 18, 2004, among the Reporting Persons and Cardinal Health, Inc ("Cardinal"), in connection with that certain Agreement and Plan of Merger (the "Merger Agreement"), among Cardinal, Blue Merger Corp. and the Issuer dated as of May 18, 2004. The Support Agreement is attached hereto as Exhibit 32 incorporated by reference in its entirety into this Item 4. ITEM 5. INTEREST IN SECURITIES OF THE ISSUES. Item 5 (a) is hereby amended and restated in its entirety by replacing Item 5 (a) with the following: (a) (i) Mr. Picower may be deemed to beneficially own in the aggregate 46,643,209 shares of common stock, comprising approximately 64.6% of common stock; (ii) Decisions may be deemed to beneficially own in the aggregate 46,643,209 shares of common stock, comprising approximately 64.6% of common stock; (iii) JD may be deemed to beneficially own in the aggregate 24,074,269 shares of common stock, comprising approximately 33.3% of common stock; and (iv) JA may be deemed to beneficially own in the aggregate 2,489,463 shares of common stock, comprising approximately 3.4% of common stock, based upon the common - 6 - stock stated to be outstanding by the Issuer, as of April 12, 2004, on Issuer's filing on form 10-Q for the fiscal year quarter ending March 31, 2004. Item 5 (b) is hereby amended and restated in its entirety replacing Item 5 (b) with the following: (b) Mr. Picower may also be deemed to have shared power to vote and shared power to direct the disposition of 46,643,209 shares of common stock. Decisions may be deemed to have shared power to vote and shared power to direct the disposition of 46,643,209 shares of common stock. JA may be deemed to have shared power to vote and shared power to direct the disposition of 2,489,463 shares of common stock. JD may be deemed to have shared power to vote and shared power to direct the disposition of 24,074,269 shares of common stock. ITEM 6. CONTRACTS, ARRANGEMENT, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Item 6 is hereby amended to add the following: On May 18, 2004, the Reporting Persons and Cardinal entered into the Support Agreement, in connection with the execution as of such date of the Merger Agreement. The Support Agreement is attached hereto as Exhibit 32 and is incorporated by reference into this Item 6. ITEM 7. MATERIALS TO BE FILED AS EXHIBITS Exhibit 31 Joint Filing Agreement, dated as of May 18, 2004. Exhibit 32 Support/Tender Agreement, dated as of May 18, 2004. Exhibit 33 Agreement and Plan of Merger, dated as of May 18, 2004, incorporated by reference to Exhibit 2.1 to the Form 8-K of Issuer filed on May 20, 2004. 7 SIGNATURES After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: May 19, 2004 /s/ Jeffry M. Picower ---------------------------------- Jeffry M. Picower DECISIONS INCORPORATED By: /s/ April C. Freilich ------------------------------ Name: April C. Freilich Title: President JA SPECIAL PARTNERSHIP LIMITED By: Decisions Incorporated, its General Partner By: /s/ April C. Freilich ------------------------------ Name: April C. Freilich Title: President JD PARTNERSHIP, L.P. By: Decisions Incorporated, its General Partner By: /s/ April C. Freilich ------------------------------ Name: April C. Freilich Title: President EX-99 2 exhibit99.txt JOINT FILING AGREEMENT Exhibit 31 JOINT FILING AGREEMENT In accordance with Rule 13D-1(f) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to Shares of common stock, par value $0.01 per share, of Alaris Medical Systems, Inc., and further agree that this Joint Filing Agreement be included as an Exhibit to such joint filings. In evidence thereof, the undersigned, being duly authorized, have executed this Joint Filing Agreement this 18th day of May, 2004. /s/ Jeffry M. Picower ---------------------------------------- Jeffry M. Picower DECISIONS INCORPORATED By: /s/ April C. Freilich ------------------------------------ Name: April C. Freilich Title: President JA SPECIAL PARTNERSHIP LIMITED By: Decisions Incorporated, its General Partner By: /s/ April C. Freilich ------------------------------------ Name: April C. Freilich Title: President JD PARTNERSHIP, L.P. By: Decisions Incorporated, its General Partner By: /s/ April C. Freilich ------------------------------------ Name: April C. Freilich Title: President EX-99 3 agreement.txt SUPPORT/TENDER AGREEMENT Exhibit 32 SUPPORT/TENDER AGREEMENT May 18, 2004 Cardinal Health, Inc. 7000 Cardinal Place Dublin, Ohio 43017 Re: SUPPORT/TENDER AGREEMENT Dear Sirs: Concurrently with the execution and delivery of this letter agreement, Cardinal Health, Inc. ("CARDINAL HEALTH"), Blue Merger Corp., a wholly owned subsidiary of Cardinal Health ("SUBCORP"), and ALARIS Medical Systems, Inc. ("ALARIS") are entering into the Agreement and Plan of Merger, dated the date of this letter agreement (the "MERGER AGREEMENT"), providing for, among other things, a tender offer (the "OFFER") by Subcorp for all of the outstanding common stock, par value $0.01 per share, of ALARIS ("ALARIS COMMON STOCK") at a price per share of $22.35 net to the seller in cash (such price or any higher price paid in the Offer, the "OFFER PRICE"), to be followed by a merger of Subcorp with and into ALARIS, with ALARIS as the surviving corporation (the "MERGER"), pursuant to which each share of ALARIS Common Stock then-outstanding (other than as specifically provided for to the contrary in the Merger Agreement), shall be converted into the right to receive an amount in cash without interest equal to the Offer Price pursuant to the terms of the Merger Agreement. Each of Decisions Incorporated ("DI"), JD Partnership, L.P. ("JD") and JA Special Partnership Limited ("JA") is a holder of record of ALARIS Common Stock on the date of this Agreement. Jeffry M. Picower ("PICOWER") is the sole stockholder of DI, which is the sole general partner of JD and JA. Each of JA, DI and JD is a "STOCKHOLDER", all of them together are collectively the "STOCKHOLDERS", the Stockholders and Picower are collectively the "STOCKHOLDER PARTIES" and each one of the Stockholder Parties is a "STOCKHOLDER PARTY". Since execution of this letter agreement is a condition to Cardinal Health's willingness to proceed with the transactions contemplated by the Merger Agreement, the Stockholder Parties are entering into this letter agreement to induce Cardinal Health to enter into the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement. Capitalized terms used but not defined in this letter agreement shall have the same meanings as in the Merger Agreement. For purposes of this letter agreement, the term "CONTROL AFFILIATE" means any Affiliate of any Stockholder Party (other than ALARIS and its subsidiaries), and the term "AFFILIATE" has the meaning set forth in the definition of "AFFILIATE" in Rule 12b-2 under the Securities Exchange Act of 1934, as amended. Upon a Control Affiliate's execution and delivery to Cardinal Health of a Joinder (as hereinafter defined), such Control Affiliate shall be deemed to be a Cardinal Health, Inc. May 18, 2004 Page 2 "Stockholder" and one of the "Stockholders" and "Stockholder Parties" for purposes of this letter agreement. The parties hereto agree as follows: 1. Each Stockholder severally represents and warrants that, as of the date of this letter agreement: such Stockholder is the record and/or beneficial owner of the shares of ALARIS Common Stock indicated with respect to such Stockholder Party on Schedule I attached hereto (the "STOCKHOLDER'S SHARES" and, collectively with the shares of ALARIS Common Stock owned beneficially or of record by all of the Stockholder Parties, the "STOCKHOLDERS' SHARES"), free and clear of all liens, charges, encumbrances, voting agreements, and commitments of every kind, except for the obligations undertaken by the parties under this letter agreement. Picower represents and warrants that he is the sole stockholder of DI, which is the sole general partner of JD and JA and that each Stockholder Party is the record and/or beneficial owner of the Stockholder's Shares indicated with respect to such Stockholder Party on Schedule I attached hereto free and clear of all liens, charges, encumbrances, voting agreements, and commitments of every kind, except for the obligations undertaken by the parties under this letter agreement. 2. Each Stockholder severally, and Picower, represents and warrants that, except as set forth on Schedule I, as of the date of this letter agreement, neither that Stockholder Party nor any Control Affiliate of that Stockholder Party: (a) owns beneficially or of record, or has any rights to acquire, any shares of ALARIS Common Stock or any other shares of the capital stock of ALARIS, (b) has any other interest in shares of ALARIS Common Stock or (c) has any voting rights with respect to any other shares of ALARIS Common Stock or any other shares of the capital stock of ALARIS. 3. Each Stockholder severally, and Picower, agrees that during the Term (as hereinafter defined) it will not, and will not permit any of its Control Affiliates to, sell or otherwise transfer, or dispose of or grant any interest in any of the Stockholder's Shares of that Stockholder Party or any direct or indirect economic or other interest in those shares of ALARIS Common Stock or securities convertible into shares of ALARIS Common Stock or any voting rights with respect to any of those shares, or agree to do any of the foregoing (a "TRANSFER"), other than transfers, dispositions or grants thereof: (a) pursuant to the Offer or the Merger, (b) to any Control Affiliate of which Picower (and members of his immediate family) directly or indirectly, owns 100% of the economic interest, but only if such Control Affiliate has executed and delivered to Cardinal Health, prior to the time of such Transfer, a writing in which such Control Affiliate agrees to be bound by all of the provisions of this letter agreement to the same extent as any other Stockholder is so bound (each, a "JOINDER") or (c) with Cardinal Health's prior written consent. For the avoidance of doubt, the term "Transfer," shall also include any pledge, hypothecation, encumbrance, assignment or constructive sale or other disposition of such security or the record or beneficial ownership thereof, the offer to make a sale, transfer, constructive sale or other disposition, and each agreement, arrangement or understanding whether or not in writing, to effect any of the foregoing. The term "CONSTRUCTIVE SALE" means a short sale with respect to such security, entering into or acquiring a derivative contract with respect Cardinal Health, Inc. May 18, 2004 Page 3 to such security, entering into or acquiring a futures or forward contract to deliver such security or entering into any transaction that has substantially the same effect as any of the foregoing. For a period of 18 months after the Term, each Stockholder severally agrees, and Picower agrees to and agrees to cause each such Stockholder, immediately upon the occurrence of a Transfer of the Stockholder's Shares, to provide written notice to Cardinal Health of such Transfer and the material terms and conditions associated with such Transfer. 4. Each Stockholder severally agrees, and Picower agrees to and agrees to cause each such Stockholder, during the Term, to irrevocably tender (and, to the extent applicable, to cause the record owner of those Stockholder's Shares to tender) all of the Stockholder's Shares of that Stockholder Party and its Control Affiliates by physical delivery of the certificates therefor to the extent that such Shares are filed in certificated form or by book-entry delivery to the extent that such shares are not in certificated form pursuant to and in accordance with the terms of the Offer, as soon as practicable but in no event later than seven business days after the Offer is commenced, and, prior to the end of the Term, to not withdraw from the Offer any of such Stockholder's Shares. The Stockholder Parties hereby permit Cardinal Health and Subcorp to publish and disclose in a Tender Offer Statement on Schedule TO with respect to the Offer and ALARIS to publish and disclose in a Solicitation/Recommendation Statement on Schedule 14D-9, and, if approval of the ALARIS Stockholders is required under the Delaware General Corporation Law, any proxy statement relating to the Merger (including, in each case, all documents and schedules filed with the Securities and Exchange Commission), the Stockholder Parties' identities and the ownership by each of the Stockholder Parties of the Stockholders' Shares and the nature of the Stockholder Parties' commitments, arrangements and understandings hereunder. Cardinal Health, on behalf of itself and Subcorp, hereby permits the Stockholder Parties to disclose in a Schedule 13D (including any amendments or supplements thereto and all documents and schedules affixed to or referenced therein) pertaining to the Offer filed with the Commission the nature of the commitments, arrangements and understandings of the parties hereunder. 5. Except as permitted by this letter agreement, each Stockholder severally, and Picower, agrees not to, and agrees to cause its Control Affiliates not to take any action to, frustrate or interfere with the Offer, the Merger, the Merger Agreement or the transactions contemplated by the Merger Agreement. Each Stockholder severally, and Picower, agrees that it will not, and will not permit any of its Control Affiliates to, authorize or permit any of its directors, officers, partners, employees, agents or representatives, directly or indirectly, to: (i) solicit, initiate, knowingly encourage or knowingly facilitate, or knowingly furnish or otherwise disclose nonpublic information in furtherance of, any inquiries or the making of any proposal with respect to any recapitalization, merger, consolidation or other business combination involving ALARIS, or acquisition of any capital stock from ALARIS (other than upon exercise of ALARIS Options that are (i) outstanding as of the date of this Agreement or (ii) permitted to be granted under the terms of this Agreement) or Picower or the ALARIS Stockholders generally or a material amount of the assets of ALARIS and any of its subsidiaries, taken as a whole, in a single transaction or a series of related transactions not in the ordinary course of business, or any acquisition by ALARIS of any material assets or capital stock of any other person not in the ordinary course of business, or any combination of the foregoing (an "ALTERNATIVE TRANSACTION"), or (ii) negotiate or otherwise engage Cardinal Health, Inc. May 18, 2004 Page 4 in discussions with any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization, representative office, branch, governmental body or other entity (each, a "PERSON") with respect to any Alternative Transaction or potential Alternative Transaction or (iii) enter into any agreement, arrangement or understanding requiring ALARIS or Picower to abandon, terminate or fail to consummate the Offer, the Merger or any other transactions contemplated by the Merger Agreement, or to otherwise assist in the effectuation of any Alternative Transaction; PROVIDED, HOWEVER, that, at any time prior to the Appointment Time, (x) each of the Stockholder Parties may negotiate or otherwise engage in discussions with, or furnish or disclose information to, any Person that makes a written proposal for an Alternative Transaction that was not solicited or knowingly encouraged or knowingly facilitated by any of the Stockholder Parties in violation of the terms of the letter agreement to the extent (but only to the extent) ALARIS is so entitled to do so with such Person under Section 6.3(b) of the Merger Agreement (it being understood and agreed that if ALARIS advises Picower in writing that ALARIS is entitled to do so under such Section 6.3(b) and Picower promptly so notifies Cardinal Health, such advice shall be dispositive for purposes of establishing such entitlement under this clause (x) unless to Picower's actual knowledge, ALARIS' advice is not correct) and (y) each of the Stockholder Parties may otherwise engage in discussions with the ALARIS Board in response to such an Alternative Transaction. Each Stockholder Party shall promptly advise Cardinal Health in writing of the receipt, directly or indirectly, by such Stockholder Party of any inquiries or proposals relating to an Alternative Transaction and cooperate fully with Cardinal Health in connection with the Offer and the Merger. Each Stockholder Party shall promptly furnish to Cardinal Health a copy of any inquiry or proposal that is received and a copy of any information provided to or by the Stockholder Party or any third party relating thereto. 6. Each Stockholder severally, and Picower, agrees that, at any meeting of the ALARIS Stockholders held during the Term, however called, or if action by written consent of the ALARIS Stockholders is sought during the Term, the Stockholder Parties each will (and, to the extent applicable, will cause the appropriate Stockholder to): (a) vote (or execute a consent with respect to) the Stockholder's Shares of that Stockholder Party in favor of the Merger; (b) vote (or execute a consent with respect to) the Stockholder's Shares of that Stockholder Party against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of ALARIS under the Merger Agreement; and (c) vote (or execute a consent with respect to) the Stockholder's Shares of that Stockholder Party against any action or agreement (other than the Merger Agreement or the transactions contemplated by the Merger Agreement) that would, directly or indirectly, impede, interfere with, delay, postpone or, directly or indirectly, discourage the Offer or the Merger. 7. The term of this letter agreement (the "TERM") shall commence on the date hereof and, unless this letter agreement sooner terminates by its terms as provided for in this paragraph or is terminated by Picower as provided for in this paragraph, shall expire upon completion of the Merger. The Term shall terminate automatically upon termination of the Merger Agreement or the expiration of the Offer. In addition, Picower may, upon notice to Cardinal Health to that effect, terminate the Term if, without the prior express written consent of Picower, any one or more of the following shall have occurred: (i) the Offer or the Merger Agreement shall have been amended to provide that the Cardinal Health, Inc. May 18, 2004 Page 5 amount to be paid for any of the Stockholders' Shares is less than $22.35, net to the seller, in cash, (ii) all of the Stockholders' Shares shall have been tendered into the Offer and shall not have been purchased and fully paid for pursuant to the Offer prior to the later of (x) July 30, 2004, or (y) the first business day after the Expiration Date of the Offer (including any extensions pursuant to Section 1.1 of the Merger Agreement), PROVIDED THAT except as provided below in no event shall such date go beyond August 31, 2004 (it being agreed that if prior to such date a Bona Fide Proposal (as hereinafter defined) shall have been made or disclosed, Picower shall not have the right to terminate the Term pursuant to this clause) or (iii) the Offer or the Merger Agreement is amended such that the Minimum Condition represents a portion of the shares of ALARIS Common Stock outstanding on the date of purchase greater than the fraction equal to (x) one share more than the number of shares equal to (A) shares of ALARIS Common Stock held by Picower and/or the Stockholders PLUS (B) a majority of the then issued and outstanding shares of ALARIS Common Stock (other than (1) shares of ALARIS Common Stock held by Picower and/or the Stockholders and (2) shares of ALARIS Common Stock owned beneficially or of record by directors or executive officers of ALARIS (and/or any other persons required by applicable law to have their shares of ALARIS Common Stock owned beneficially or of record excluded from such calculation)) divided by (y) the number of shares of ALARIS Common Stock outstanding on the date of purchase. Notwithstanding anything to the contrary contained herein, the provisions of Sections 8 through 16 of this letter agreement shall survive the expiration or sooner termination of the Term, except as expressly set forth therein. 8. Each Stockholder Party severally, and Picower, agrees that, in the event (a) of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock of ALARIS or any of its subsidiaries of, or affecting the Stockholder Shares of, that Stockholder Party, (b) that Stockholder Party purchases or otherwise acquires beneficial ownership of or an interest in any shares of capital stock of ALARIS or any of its subsidiaries after the execution of this letter agreement (including by conversion) or (c) that Stockholder Party voluntarily acquires the right to vote or share in the voting of any shares of capital stock of ALARIS or any of its subsidiaries other than Stockholder's Shares (collectively, "NEW SHARES"), that Stockholder Party shall deliver promptly to Cardinal Health written notice of its acquisition of New Shares which notice shall state the number of New Shares so acquired. Each Stockholder Party severally, and Picower, agrees: (a) not to purchase shares of ALARIS Common Stock from the date of this letter agreement until the final Expiration Date and (b) that any New Shares acquired or purchased during the Term and after the final Expiration Date of the Offer by that Stockholder Party shall be subject to the terms of this letter agreement and shall constitute Stockholder's Shares of that Stockholder Party to the same extent as if those New Shares were owned by that Stockholder Party as a Stockholder on the date of this letter agreement. In any such case, however, the warranties and representations set forth in Section 1 or Section 2 of this letter agreement shall be deemed amended accordingly to be made as of the date thereof. Cardinal Health, Inc. May 18, 2004 Page 6 9. Alternative Transaction Payment. (a) If (i) the Merger Agreement shall have been terminated, by Cardinal Health under Section 8.1(d) thereof, Section 8.1(g) thereof or Section 8.1(f) thereof, or by ALARIS under Section 8.1(i) thereof, or by ALARIS or Cardinal Health under Section 8.1(a), (c) or (e) thereof (but only if such termination under such Section 8.1(a), (c) or (e) results from a failure to satisfy any one or more of the conditions set forth in clauses (c), (d), (e), (f), (g) or (i) of Annex A of the Merger Agreement), in each case, under circumstances in which a Bona Fide Proposal shall have been made or disclosed during the Term, (ii) within twelve months after the end of the Term, ALARIS enters an Acquisition Agreement with a Person other than Cardinal Health or any of Cardinal Health's Affiliates providing for an Alternative Transaction and (iii) the Alternative Transaction so provided for in such Acquisition Agreement is consummated within eighteen months after the end of the Term, then each Stockholder shall pay to Cardinal Health (and Picower shall pay (in lieu of such Stockholder) or shall cause each Stockholder to so pay to Cardinal Health) immediately upon receipt an amount equal to 100% of the Profit (as hereinafter defined) received by such Stockholder Party, if any, in connection with such transaction. Any payment to Cardinal Health hereunder shall be made in the same form as the consideration received from the Alternative Transaction (and, if the consideration so received was in more than one form, then in the same proportion as the forms of consideration so received). For purposes of this letter agreement, a "BONA FIDE PROPOSAL" is a proposal by a Person other than Cardinal Health or its Affiliates regarding an Alternative Transaction that shall have been made on a bona fide basis to ALARIS or any of ALARIS' directors, officers, employees, agents, Stockholder Parties or representatives or that shall have been publicly disclosed or that a Person other than Cardinal Health or its Affiliates has indicated publicly or to ALARIS or any of ALARIS' directors, officers, employees, agents, Stockholder Parties or representatives a bona fide interest in making or pursuing such a proposal. (b) If (i) Cardinal Health shall have increased the amount paid per share of ALARIS Common Stock over the Per Share Amount set forth in the Merger Agreement as of the date of this letter agreement and the Stockholders' Shares shall have been transferred to Cardinal Health pursuant to the Offer, or (ii) (x) the Merger Agreement shall have been terminated, by Cardinal Health under Section 8.1(d) thereof, Section 8.1(g) thereof or Section 8.1(f) thereof, or by ALARIS under Section 8.1(i) thereof, or by ALARIS or Cardinal Health under Section 8.1(a), (c) or (e) thereof (but only if such termination under such Section 8.1(a), (c) or (e) results from a failure to satisfy any one or more of the conditions set forth in clauses (c), (d), (e), (f), (g) or (i) of Annex A of the Merger Agreement), in each case, under circumstances in which a Bona Fide Proposal shall have been made or disclosed during the Term, (y) within twelve months after the end of the Term, ALARIS shall have entered into an Acquisition Agreement with Cardinal Health or any of its Affiliates providing for a transaction in which any Stockholders' Shares are to be transferred to Cardinal Health or any of its Affiliates and (z) the transaction so provided for in such Acquisition Agreement is consummated within eighteen months after the end of Term, then, in each such case, each Stockholder shall pay to Cardinal Health (and Picower Cardinal Health, Inc. May 18, 2004 Page 7 shall pay or shall cause such Stockholder to so pay to Cardinal Health) immediately upon receipt an amount equal to 80% of the Profit obtained by such Stockholder Party, if any, in connection with such transaction. Any payment to Cardinal Health hereunder shall be made in the same form as the consideration received from the transaction (and, if the consideration so received was in more than one form, then in the same proportion as the forms of consideration so received). (c) For purposes of this Section 9, (i) "PROFIT" of a Stockholder Party shall equal the aggregate consideration received by that Stockholder Party, directly or indirectly, in respect of the Transfer of Stockholder's Shares, valuing any non-cash consideration (including any residual interest in ALARIS whether represented by ALARIS Common Shares or other securities of ALARIS to extent that ALARIS has engaged in a spin-off, recapitalization or similar transaction) at its fair market value as of the date of consummation less the product obtained by multiplying the Per Share Amount set forth in the Merger Agreement as of the date of this letter agreement by the number of Stockholder's Shares Transferred by that Stockholder Party in that Transfer. Any amounts to be recovered under this Section 9(c)(i) shall be reduced by the actual amount of any damages paid to Cardinal Health in respect of any breach of the Merger Agreement by ALARIS; it being understood that Cardinal Health shall have no duty or obligation to seek any such damages. (ii) The fair market value of any non-cash consideration consisting of (A) securities listed on a national securities exchange or traded on the Nasdaq National Market of The Nasdaq Stock Market, Inc. ("NASDAQ NATIONAL MARKET") shall be equal to the average of the closing prices per share of such security as reported on such exchange or Nasdaq National Market for each of the five trading days prior to the date of determination, PROVIDED THAT, such securities are not subject by law or agreement with Cardinal Health or Subcorp to any transfer restrictions and such securities do not represent in the aggregate 10% or more of the outstanding securities of the same class of securities of which such securities are a part; and (B) consideration which is other than cash or securities of the type specified in subclause (A) above shall be the amount a reasonable, willing seller would pay a reasonable, willing buyer, taking into account the nature and terms of such property. In the event of a dispute as to the fair market value of such property, such disputed amounts shall be determined, which determination shall be binding on all parties to this letter agreement and shall be made by a Cardinal Health, Inc. May 18, 2004 Page 8 nationally recognized independent investment banking firm mutually agreed upon by the parties within 10 business days of the event requiring selection of such banking firm; PROVIDED, HOWEVER, that if the parties are unable to agree within two business days after the date of such event as to the investment banking firm, then Cardinal Health, on the one hand, and Picower, on the other hand, shall each select one firm, and those firms shall select a third investment banking firm, which third firm shall make such determination; PROVIDED FURTHER, that the fees and expenses of such investment banking firm shall be borne by Cardinal Health. The determination of investment banking firm shall be binding upon the parties hereto. (iii) In the event that ALARIS shall declare and pay a stock or extraordinary dividend or other distribution, or effect a stock split, reverse stock split, reclassification, reorganization, recapitalization, combination or other like change with respect to shares of ALARIS Common Stock, the calculations set forth in this Section 9 shall be adjusted to reflect fully such dividend, distribution, stock split, reverse stock split, reclassification, reorganization, recapitalization, combination or other like change and the value of any such dividend, distribution, stock split, reclassification, reorganization, recapitalization, combination (including any residual interest in ALARIS whether represented by ALARIS Common Shares or other securities of ALARIS to extent that ALARIS has engaged in a spin-off, recapitalization or similar transaction) shall be considered in determining the Profit as provided in this Section 9, in each case, to the extent not previously adjusted pursuant to Section 8(a). (d) Any payment to be made hereunder on account of Profit (i) received in cash, shall be paid by wire transfer of same day funds to an account designated by Cardinal Health and (ii) received in the form of securities or other property, shall be paid through delivery of the securities or property received, suitably endorsed for transfer free and clear of all liens, charges, encumbrances, voting agreements, and commitments of every kind (other than those imposed by, through or under the Alternative Transaction or as required by law, as the case may be). 10. Each Stockholder severally, Picower (with respect to himself and each Stockholder) and Cardinal Health each represent and warrant that such party has all necessary power and authority to enter into this letter agreement and that this letter agreement is the legal, valid and binding agreement of such party, enforceable against such party in accordance with its terms. 11. The transactions contemplated by this letter agreement are unique. Accordingly, each of the parties hereto acknowledges and agrees that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to a decree of specific performance, PROVIDED that such party Cardinal Health, Inc. May 18, 2004 Page 9 hereto is not in material default hereunder. The parties hereto agree that, if for any reason a party hereto shall have failed to perform its obligations under this letter agreement, then the party hereto seeking to enforce this letter agreement against such nonperforming party under this letter agreement shall be entitled to specific performance and injunctive and other equitable relief, and the parties hereto further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. This provision is without prejudice to any other rights that any party hereto may have against another party hereto for any failure to perform its obligations under this letter agreement. 12. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (when confirmed) or dispatched by a nationally recognized overnight courier service (upon receipt): (a) if to Cardinal Health, at such party's address set forth in Section 9.2 of the Merger Agreement, with a copy to such party's counsel at such party's counsel's address set forth in Section 9.2 of the Merger Agreement (or, in each case, at such other address for such party (or such party's counsel) as shall be specified by like notice) and a copy to ALARIS at its address set forth in Section 9.2 of the Merger Agreement (or at such other address for ALARIS as shall be specified by like notice), or (b) if to any of the Stockholder Parties, at such party's address set forth on Schedule I hereto, with a copy to such party's counsel at such party's counsel's address set forth on Schedule I hereto (or, in each case, at such other address for such party (or such party's counsel) as shall be specified by like notice) and a copy to ALARIS at its address set forth in Section 9.2 of the Merger Agreement (or at such other address for ALARIS as shall be specified by like notice). 13. Except to the extent that the laws of the jurisdiction of organization of any party to this letter agreement, or any other jurisdiction, are mandatorily applicable to matters arising under or in connection with this letter agreement, this letter agreement shall be governed by the laws of the State of Delaware. All Actions arising out of or relating to this letter agreement shall be heard and determined in the Delaware Court of Chancery or, if under applicable law exclusive jurisdiction is vested in the federal courts, then in any federal court sitting in the United States District Court for the District of Delaware. 14. Each of the parties to this letter agreement irrevocably submits to the exclusive jurisdiction of the Delaware Court of Chancery or, if under applicable law exclusive jurisdiction is vested in the federal courts, then in any federal court sitting in the United States District Court for the District of Delaware, for the purpose of any Action arising out of or relating to this letter agreement, and each of the parties to this letter agreement irrevocably agrees that all claims in respect to such Action may be heard and determined exclusively in the Delaware Court of Chancery or, if under applicable law exclusive jurisdiction is vested in the federal courts, then in any federal court sitting in the United States District Court for the District of Delaware. Each of the parties to this letter agreement agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each of the parties to this letter agreement irrevocably consents to the service of any summons and complaint and any other process in any other Action relating to the Offer and Merger, on such party's behalf or such party's property, by the personal Cardinal Health, Inc. May 18, 2004 Page 10 delivery of copies of such process to such party. Nothing in this Section 14 shall affect the right of any party to this letter agreement to serve legal process in any other manner permitted by law. 15. This letter agreement shall be binding upon and inure to the benefit of each of the parties to this letter agreement and their respective successors, including by will or intestate succession. This letter agreement may not be assigned to any other Person without the prior written consent of the other parties to this letter agreement, which consent may be withheld for any reason or for no reason. 16. This letter agreement constitutes the entire agreement among the parties to this letter agreement with respect to the matters covered hereby, and supersedes all prior agreements, understandings or representations among the parties to this letter agreement, written or oral, with respect to the subject matter of this letter agreement. If you are in agreement that the foregoing correctly states the agreement among us, please sign and return to me an executed counterpart of this letter agreement. This letter agreement shall become effective among the parties specified herein, upon the undersigned's receipt of executed counterparts of this letter agreement from each of such parties. Cardinal Health, Inc. May 18, 2004 Page 11 Very truly yours, By: /s/ Jeffry M. Picower ----------------------------------- Jeffry M. Picower DECISIONS INCORPORATED By: /s/ April C. Freilich ----------------------------------- Name: April C. Freilich Title: President JD PARTNERSHIP, L.P. BY: DECISIONS INCORPORATED, its general partner By: /s/ April C. Freilich ----------------------------------- Name: April C. Freilich Title: President JA SPECIAL PARTNERSHIP LIMITED BY: DECISIONS INCORPORATED, its general partner By: /s/ April C. Freilich ----------------------------------- Name: April C. Freilich Title: President Cardinal Health, Inc. May 18, 2004 Page 12 Confirmed on the date first above written. Cardinal Health, Inc. By: /s/ Robert D. Walter ------------------------------ Name: Robert D. Walter Title: Chairman and Chief Executive Officer SCHEDULE I Stock Ownership Owned Beneficially by Jeffry M. Picower: 46,643,209 shares of ALARIS Common Stock* Jeffry M. Picower Decisions Incorporated JD Partnership, L.P. JA Special Partnership Limited c/o William D. Zabel, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 Telecopier: (212) 593-5955 with copies of notices to: Andre Weiss, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, NY 10022 Telecopier: (212) 593-5955 * Includes 20,079,477 shares of common stock owned of record by Decisions Incorporated ("DECISIONS"), 2,489,463 shares of common stock owned of record by JA Special Partnership Limited ("JA SPECIAL") and 24,074,269 shares of common stock owned of record by JD Partnership, L.P. ("JD PARTNERSHIP"). Mr. Picower is the sole stockholder and director of Decisions, which is the sole general partner of JA Special and JD Partnership and is the beneficial owner of all such shares. -----END PRIVACY-ENHANCED MESSAGE-----