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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 29, 1996
NOVAMETRIX MEDICAL SYSTEMS INC.
(Exact name of registrant as specified in its charter)
Delaware 20-8969 06-0977422
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
One Barnes Industrial Park Road
Wallingford, Connecticut 06492
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203) 265-7701
(Not Applicable)
(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 99
Index to Exhibits at Page 6
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Item 5. Other Events.
On July 29, 1996 Novametrix Medical Systems Inc., a Delaware
corporation ("Novametrix"), and Andros Holdings Inc., a Delaware corporation
("Andros"), executed an Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which Novametrix Acquisition Corp., a Delaware corporation and a
wholly owned subsidiary of Novametrix, will merge (the "Merger") with and into
Andros, a subsidiary of Genstar Capital Partners II, L.P., a Delaware limited
partnership ("Genstar"). The Merger Agreement is included as an Exhibit to this
Report and the description of its terms is qualified in its entirety by
reference to such Exhibit.
Under the Merger Agreement, which has been unanimously
approved by the Boards of Directors of both Novametrix and Andros as well as by
Genstar, as principal stockholder of Andros, Novametrix will issue to the
stockholders of Andros and reserve for issuance to option and warrant holders of
Andros, the following: (i) shares of Novametrix Common Stock constituting 45
percent of the combined company at the effective time of the Merger, and (ii)
anti-dilution rights enabling such holders to maintain, without additional
payment, such 45 percent ownership level as Novametrix options and warrants
outstanding at the effective time of the Merger are exercised.
Page 2 of 99 pages
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William J. Lacourciere, President and Chief Executive Officer
of Novametrix, will continue as the President and Chief Executive Officer of the
combined company, and Richard D. Paterson, a Managing Director of Genstar and
Chairman of Andros, will be the Chairman of the Board of Directors.
The Merger, which is subject to customary closing conditions,
including the approval of the stockholders of Novametrix, lenders' consents and
the expiration of the Hart-Scott-Rodino waiting period, is expected to close
during Novametrix' fiscal quarter ending October 27, 1996. The Merger Agreement
provides for each party to pay a termination fee of $3 million under certain
circumstances. Tucker Anthony Incorporated has served as financial advisor to
Novametrix and has delivered an opinion that the transaction consideration is
fair to Novametrix from a financial point of view.
Andros is a supplier of instrumentation and a leading
worldwide designer and supplier to original equipment manufacturers of
non-dispersive infrared gas analyzers. Andros sells its products to
manufacturers of medical monitoring equipment, automobile and environmental
diagnostic equipment, and end users of its spectrum analysis instruments.
Page 3 of 99 pages
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
The exhibits required to be filed as part of this Current
Report on Form 8-K are listed on the attached Index to Exhibits.
Page 4 of 99 pages
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
NOVAMETRIX MEDICAL SYSTEMS INC.
By: /s/ Joseph A. Vincent
---------------------
Name: Joseph A. Vincent
Title: Vice President - Finance
Dated: August 5, 1996
Page 5 of 99 pages
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Index to Exhibits
Exhibit Sequential
Number Description Page Location
------ ----------- -------------
10(ee) Agreement and Plan of Merger dated
as of July 29, 1996 among
Novametrix Medical Systems Inc.,
Novametrix Acquisition Corp. and
Andros Holdings Inc. (including as
Exhibits A and B thereto forms of
the Voting Agreement and
Registration Rights Agreement to be
entered into in connection
therewith)
99 Press Release dated July 30, 1996
Page 6 of 99 pages
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AGREEMENT AND PLAN OF MERGER
dated as of July 29, 1996,
among
Novametrix Medical Systems Inc.,
Novametrix Acquisition Corp.,
and
Andros Holdings Inc.
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TABLE OF CONTENTS
Page
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ARTICLE I. THE MERGER.................................................... 1
SECTION 1.01 The Merger................................................ 1
SECTION 1.02 Conversion of Shares...................................... 2
SECTION 1.03 Surrender and Payment..................................... 3
SECTION 1.04 Stock Options, Equity Units and
Warrants. ............................................... 4
SECTION 1.05 Fractional Shares......................................... 6
SECTION 1.06 Limited Antidilution Rights............................... 7
ARTICLE II. THE SURVIVING CORPORATION AND
NOVAMETRIX.................................................... 9
SECTION 2.01 Certificate of Incorporation.............................. 9
SECTION 2.02 Bylaws.................................................... 9
SECTION 2.03 Directors and Officers.................................... 9
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY....................................................... 10
SECTION 3.01 Corporate Existence and Power............................. 10
SECTION 3.02 Corporate Authorization................................... 10
SECTION 3.03 Governmental Authorization................................ 11
SECTION 3.04 Non-Contravention......................................... 11
SECTION 3.05 Capitalization............................................ 11
SECTION 3.06 Subsidiaries.............................................. 12
SECTION 3.07 SEC Filings............................................... 13
SECTION 3.08 Financial Statements...................................... 14
SECTION 3.09 Proxy Statement........................................... 14
SECTION 3.10 Absence of Certain Changes................................ 14
SECTION 3.11 No Undisclosed Material
Liabilities............................................... 16
SECTION 3.12 Litigation................................................ 17
SECTION 3.13 Taxes..................................................... 17
SECTION 3.14 ERISA..................................................... 18
SECTION 3.15 Compliance with Laws...................................... 20
SECTION 3.16 Finders' Fees............................................. 20
SECTION 3.17 Vote Requred.............................................. 21
SECTION 3.18 Intellectual Property..................................... 21
SECTION 3.19 Permits; Company Products;
Regulation................................................ 21
SECTION 3.20 Section 203 of the Delaware Law........................... 24
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Page
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF
NOVAMETRIX.................................................... 24
SECTION 4.01 Corporate Existence and Power............................. 24
SECTION 4.02 Corporate Authorization................................... 25
SECTION 4.03 Governmental Authorization................................ 25
SECTION 4.04 Non-Contravention......................................... 25
SECTION 4.05 Capitalization............................................ 26
SECTION 4.06 Subsidiaries.............................................. 27
SECTION 4.07 SEC Filings............................................... 27
SECTION 4.08 Financial Statements...................................... 28
SECTION 4.09 Absence of Certain Changes................................ 28
SECTION 4.10 No Undisclosed Material
Liabilities............................................... 30
SECTION 4.11 Litigation................................................ 31
SECTION 4.12 Taxes..................................................... 31
SECTION 4.13 ERISA..................................................... 31
SECTION 4.14 Compliance with Laws...................................... 33
SECTION 4.15 Finders' Fees............................................. 34
SECTION 4.16 Opinion of Financial Advisor.............................. 34
SECTION 4.17 Vote Required............................................. 34
SECTION 4.18 Intellectual Property..................................... 34
SECTION 4.19 Permits; Company Products;
Regulation................................................ 35
SECTION 4.20 Rights Agreement; Delaware Section
203; Charter Supermajority
Provisions; Warrant Antidilution.......................... 37
SECTION 4.21 Proxy Statement........................................... 38
ARTICLE V. COVENANTS OF THE COMPANY...................................... 38
SECTION 5.01 Conduct of the Company.................................... 38
SECTION 5.02 Access to Information..................................... 40
SECTION 5.03 Other Offers.............................................. 40
SECTION 5.04 Notices of Certain Events................................. 41
SECTION 5.05 Affiliates................................................ 42
ARTICLE VI. COVENANTS OF NOVAMETRIX....................................... 42
SECTION 6.01 Conduct of Novametrix..................................... 42
SECTION 6.02 Access to Information..................................... 44
SECTION 6.03 Other Offers.............................................. 44
SECTION 6.04 Obligations of Merger Subsidiary.......................... 45
SECTION 6.05 Director and Officer Liability............................ 45
SECTION 6.06 Inclusion in Nasdaq National
Market.................................................... 46
SECTION 6.07 Notice of Certain Events.................................. 46
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Page
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ARTICLE VII. COVENANTS OF NOVAMETRIX AND THE COMPANY....................... 46
SECTION 7.01 Best Efforts.............................................. 46
SECTION 7.02 Certain Filings........................................... 47
SECTION 7.03 Public Announcements...................................... 47
SECTION 7.04 Further Assurances........................................ 47
SECTION 7.05 Stockholder Meeting....................................... 48
SECTION 7.06 Preparation of the Proxy Statement........................ 48
ARTICLE VIII. CONDITIONS TO THE MERGER...................................... 48
SECTION 8.01 Conditions to the Obligations of
Each Party................................................ 48
SECTION 8.02 Conditions to the Obligations of
Novametrix and Merger Subsidiary.......................... 50
SECTION 8.03 Conditions to the Obligations of
the Company............................................... 51
ARTICLE IX. TERMINATION..................................................... 52
SECTION 9.01 Termination............................................... 52
SECTION 9.02 Effect of Termination..................................... 53
SECTION 9.03 Fees and Expenses......................................... 53
ARTICLE X. MISCELLANEOUS................................................... 55
SECTION 10.01 Notices................................................... 55
SECTION 10.02 Amendments; No Waivers.................................... 56
SECTION 10.03 Successors and Assigns.................................... 56
SECTION 10.04 Governing Law............................................. 57
SECTION 10.05 Counterparts; Effectiveness............................... 57
SECTION 10.06 Entire Agreement.......................................... 57
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 29, 1996, among
Andros Holdings Inc., a Delaware corporation (the "Company"), Novametrix Medical
Systems Inc., a Delaware corporation ("Novametrix"), and Novametrix Acquisition
Corp., a Delaware corporation and a wholly owned subsidiary of Novametrix (the
"Merger Subsidiary").
WHEREAS, the Boards of Directors of Novametrix, the Merger
Subsidiary and the Company have approved this Agreement and the Merger (as
defined below); and
WHEREAS, for Federal income tax purposes, it is intended that
the Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Code (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I.
THE MERGER
SECTION 1.01 The Merger. (a) At the Effective Time (as defined
in Section 1.01(b)), the Merger Subsidiary shall be merged (the "Merger") with
and into the Company in accordance with the General Corporation Law of the State
of Delaware ("Delaware Law"), whereupon the separate existence of the Merger
Subsidiary shall cease, and the Company shall be the surviving corporation (the
"Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the
extent permitted hereunder, waiver of all conditions to the Merger, the Company
and the Merger Subsidiary will file a certificate of merger with the Secretary
of State of the State of Delaware and make all other filings or recordings
required by Delaware Law in connection with the Merger. The closing of the
Merger will take place at the offices of Haythe & Curley, 237 Park Avenue, New
York, New York 10017, or such other place as the parties may agree. The Merger
shall become effective at such time as the certificate of merger is duly filed
with the Secretary of State of the State of Delaware or at such later time as is
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specified in the certificate of merger (the "Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the assets, rights, privileges, powers and
franchises and be subject to all of the liabilities, restrictions, disabilities
and duties of the Company and the Merger Subsidiary, all as provided under
Delaware Law.
SECTION 1.02 Conversion of Shares. At the Effective Time:
(a) each outstanding share of common stock, par value $.01 per
share (the "Shares"), of the Company held by the Company as treasury
stock or owned by Novametrix or any subsidiary of Novametrix
immediately prior to the Effective Time shall be cancelled, and no
payment (whether in cash, shares of Novametrix' common stock, par value
$.01 per share (the "Novametrix Common Stock"), or other consideration)
shall be made with respect thereto;
(b) each share of common stock, par value $.01 per share, of
the Merger Subsidiary outstanding immediately prior to the Effective
Time shall be converted into and become one share of common stock, par
value $.01 per share, of the Surviving Corporation with the same
rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the
Surviving Corporation; and
(c) except as otherwise provided in Section 1.02(a), each
Share outstanding immediately prior to the Effective Time shall be
converted into the right to receive (i) that number (the "Exchange
Number") of fully paid and nonassessable shares of Novametrix Common
Stock equal to (x) .8181818 multiplied by the number of shares of
Novametrix Common Stock outstanding immediately prior to the Effective
Time (assuming conversion of all then outstanding shares of preferred
stock, $1.00 par value (the "Novametrix Preferred Stock"), of
Novametrix) divided by (y) the number of Shares outstanding immediately
prior to the Effective Time (assuming the exercise in full of all then
outstanding Company Options and Company Warrants (each as hereinafter
defined)), computed to four decimal places and (ii) one Right (as
defined in Section 1.06 hereof) (such Right together with the Exchange
Number
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of shares of Novametrix Common Stock are hereinafter referred to as the
"Merger Consideration").
SECTION 1.03 Surrender and Payment. (a) Each holder of Shares
that have been converted into a right to receive Novametrix Common Stock, upon
surrender to Novametrix of a certificate or certificates representing such
Shares, will be entitled to receive in exchange therefor (i) that number of
whole shares of Novametrix Common Stock which such holder has the right to
receive pursuant to Section 1.02, (ii) that number of Rights which such holder
has the right to receive pursuant to Section 1.02 and (iii) cash in lieu of
fractional shares of Novametrix Common Stock which such holder has the right to
receive pursuant to Section 1.05, and the certificate or certificates for the
Shares so surrendered shall be cancelled. Until so surrendered, each such
certificate shall, after the Effective Time, represent for all purposes, only
the right to receive upon such surrender the Merger Consideration and cash in
lieu of any fractional shares of Novametrix Common Stock as contemplated by this
Section 1.03 and Section 1.05.
(b) If any shares of Novametrix Common Stock are to be issued
to a Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such issuance that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such issuance shall pay to Novametrix any transfer or
other taxes required as a result of such issuance to a Person other than the
registered holder of such Shares or establish to the satisfaction of Novametrix
that such tax has been paid or is not payable. For purposes of this Agreement,
"Person" means an individual, a corporation, a partnership, an association, a
trust or any other entity or organization, including a government or political
subdivision or any agency or instrumentality thereof.
(c) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time, certificates
representing Shares are presented to the Surviving Corporation, they shall be
cancelled and exchanged as provided for, and in accordance with the procedures
set forth, in this Article I.
(d) Notwithstanding the foregoing, Novametrix shall not be
liable to any holder of Shares for any amount paid, or any shares of Novametrix
Common Stock or Rights delivered, to a public official pursuant to applicable
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abandoned property laws. Any shares of Novametrix Common Stock or any Rights or
other amounts remaining unclaimed by holders of Shares six months after the
Effective Time (or such earlier date immediately prior to such time as such
amounts would otherwise escheat to or become property of any governmental
entity) shall, to the extent permitted by applicable law, become the property of
Novametrix free and clear of any claims or interest of any Person previously
entitled thereto.
(e) The Surviving Corporation shall be entitled to deduct and
withhold from the cash, if any, payable in lieu of fractional shares otherwise
payable pursuant to this Agreement to any holder of Shares such amounts as the
Surviving Corporation is required to deduct and withhold with respect to the
making of such payment under the Code, or any provisions of state, local or
foreign tax law. To the extent that amounts are so withheld, such withheld
amounts shall be treated for all purposes of this Agreement as having been paid
to the holder of such Shares in respect of which such deduction and withholding
was made by the Surviving Corporation.
(f) No dividends or other distributions on shares of
Novametrix Common Stock shall be paid to the holder of any unsurrendered
certificates representing Shares until such certificates are surrendered as
provided in this Section. Upon such surrender, there shall be paid, without
interest, to the person in whose name the certificates representing the shares
of Novametrix Common Stock into which such Shares were converted are registered,
all dividends and other distributions paid in respect of such Novametrix Common
Stock on a date subsequent to, and in respect of a record date after, the
Effective Time.
SECTION 1.04 Stock Options, Equity Units and Warrants. (a) At
the Effective Time, each outstanding option to purchase Shares (a "Company
Option") issued pursuant to the Stock Option Plan of the Company (the "Company
Stock Option Plan"), whether vested or unvested, shall be assumed by Novametrix.
Each Company Option shall be deemed to constitute an option to acquire, on the
same terms and conditions as were applicable under such Company Option, (i) (x)
the same number of whole shares of Novametrix Common Stock as the holder of such
Company Option would have been entitled to receive pursuant to the Merger had
such holder exercised such option in full immediately prior to the Effective
Time and (y) a number of Rights equal to the number of Rights which the holder
of such Company Option would have been entitled to receive pursuant to the
Merger had such holder exercised such option in full
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immediately prior to the Effective Time, (ii) at a price per share (rounded up
to the nearest whole cent) equal to (A) the aggregate exercise price for the
Shares otherwise purchasable pursuant to such Company Option divided by (B) the
number of whole shares of Novametrix Common Stock deemed purchasable pursuant to
such Company Option; provided, however, that in the case of any Company Option
to which Section 421 of the Code applies by reason of its qualification under
Section 422 of the Code ("qualified stock options"), the option price, the
number of shares purchasable pursuant to such Company Option and the terms and
conditions of exercise of such Company Option shall be determined in order to
comply with Section 424(a) of the Code. No additional consideration shall be
required to be paid with respect to the Rights. Any partial exercise of a
Company Option shall result in a proportional issuance of the Rights subject to
such Company Option. As soon as practicable after the Effective Time, Novametrix
shall deliver to the holders of Company Options appropriate notices setting
forth such holders' rights with respect to such Company Options pursuant to the
Company Stock Option Plan and the certificates evidencing the grants of such
Company Options shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 1.04(a) after giving effect
to the Merger and the assumption by Novametrix as set forth above). Novametrix
shall comply with the terms of the Company Stock Option Plan and shall use
reasonable efforts to ensure, to the extent required by, and subject to the
provisions of, such Plan, that Company Options which qualified as qualified
stock options prior to the Effective Time continue to qualify as qualified stock
options of Novametrix after the Effective Time. Novametrix shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of Novametrix Common Stock for delivery upon exercise of Company Options assumed
by it in accordance with this Section 1.04(a).
(b) At the Effective Time, the Company will pay to each holder
of Equity Units (as defined in the Equity Unit Award Agreements, dated as of
March 25, 1996 between the Company and each of the holders thereof (the "EUA
Agreements")), pursuant to such holders' EUA Agreement, shares of Company Common
Stock.
(c) At the Effective Time, each outstanding warrant to
purchase Shares (a "Company Warrant") shall be assumed by Novametrix. Each
Company Warrant shall be deemed to constitute a warrant to acquire, on the same
terms and conditions as were applicable under such Company Warrant, (i) the same
number of whole shares of Novametrix Common
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Stock as the holder of such Company Warrant would have been entitled to receive
pursuant to the Merger had such holder exercised such warrant in full
immediately prior to the Effective Time and (y) a number of Rights equal to the
number of Rights which the holder of such Company Warrant would have been
entitled to receive pursuant to the Merger had such holder exercised such
warrant in full immediately prior to the Effective Time, (ii) at a price per
share (rounded up to the nearest whole cent) equal to (A) the aggregate exercise
price for the Shares otherwise purchasable pursuant to such Company Warrant
divided by (B) the number of whole shares of Novametrix Common Stock deemed
purchasable pursuant to such Company Warrant. No additional consideration shall
be required to be paid with respect to the Rights. Any partial exercise of
Company Warrant shall result in a proportional issuance of the Rights subject to
such Company Warrant. Novametrix shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Novametrix Common Stock
for delivery upon exercise of Company Warrants assumed by it in accordance with
this Section 1.04(c).
(d) Prior to the Effective Time, (i) the Company shall use its
best efforts to obtain any consents required from holders of Company Options
granted under the Company Stock Option Plan or holders of the Equity Units, as
the case may be, and (ii) the Company shall make any amendments to the terms of
such stock option award or plan or compensation plans or arrangements or other
applicable agreements that, in the case of either clauses (i) or (ii), are
necessary to give effect to the transactions contemplated by Section 1.04(a) and
(b).
SECTION 1.05 Fractional Shares. No fractional shares of
Novametrix Common Stock shall be issued in the Merger. All fractional shares of
Novametrix Common Stock that a holder of Shares would otherwise be entitled to
receive as a result of the Merger shall be aggregated and if a fractional share
results from such aggregation, such holder shall be entitled to receive, in lieu
thereof, an amount in cash determined by multiplying the average of the daily
closing sale price per share of Novametrix Common Stock on the Nasdaq National
Market for the ten trading days immediately preceding the Effective Time by the
fraction of a share of Novametrix Common Stock to which such holder would
otherwise have been entitled. No such cash in lieu of fractional shares of
Novametrix Common Stock shall be paid to any holder of Shares until certificates
representing such Shares are surrendered and exchanged in accordance with
Section 1.03.
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SECTION 1.06 Limited Antidilution Rights.
(a) Novametrix has authorized the issuance of contingent
rights to receive shares of Novametrix Common Stock (the "Rights") and, at the
Effective Time, will issue such Rights to holders of record of Shares as of the
Effective Time in accordance with Section 1.02(c) and to holders of Company
Options and Company Warrants who exercise such options or warrants after the
Effective Time in accordance with Section 1.04(a) or Section 1.04(c). The Rights
shall not be transferable, except that Genstar Capital Partners II, L.P., a
Delaware limited partnership ("Genstar"), may transfer Rights to its general and
limited partners upon receipt by Novametrix of (i) an opinion of counsel to
Genstar reasonably satisfactory to Novametrix to the effect that such transfer
will not violate the Securities Act or any state or foreign securities laws and
(ii) a representation letter from each such transferee in form and substance
reasonably satisfactory to Novametrix. The Rights shall not be evidenced by
certificates. Novametrix shall not issue fractional Rights.
(b) Novametrix has authorized the issuance of and will hold in
reserve the shares of Novametrix Common Stock issuable pursuant to the Rights
(the "Underlying Shares"), and monthly, on the first business day after the end
of each month in which an Antidilution Event (as hereinafter defined) shall have
occurred after the month in which the Effective Date shall have occurred (each
such date, an "Antidilution Date") (until and including the first business day
of the month immediately succeeding the later of the month in which the last of
the remaining warrants and options to acquire shares of Novametrix Common Stock
outstanding immediately prior to the Effective Time and Company Options and
Company Warrants shall have expired or been exercised), Novametrix will issue
Underlying Shares to Rights holders as set forth in Section 1.06(c) with respect
to any Antidilution Events (as hereinafter defined) which shall have occurred
during the immediately preceding month.
(c) Each Right grants to the holder thereof the right to
receive from Novametrix on each Antidilution Date a number of Underlying Shares
equal to (x) the sum of (i) .8181818 multiplied by the number of shares of
Novametrix Common Stock issued by Novametrix pursuant to warrants or options to
acquire shares of Novametrix Common Stock outstanding immediately prior to the
Effective Time (but excluding any such shares issued upon conversion of the
Novametrix Preferred Stock) and (ii) the number of shares of Novametrix Common
Stock which were issuable by Novametrix upon the exercise of Company Options or
Company Warrants
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(including Underlying Shares so issuable as provided in Section 1.06(e)), which
Company Options or Company Warrants were cancelled or otherwise expired
unexercised, in either case during the preceding month (or, in the case of the
first Antidilution Date after the issuance of such Right, after the Effective
Time) divided by (y) the number of Rights then outstanding or issuable upon the
exercise of all then outstanding Company Options and Company Warrants, computed
to four decimal places. The issuance by Novametrix of Novametrix Common Stock
pursuant to warrants or options and the cancellation or expiration of Company
Options or Company Warrants as aforesaid are herein referred to as "Antidilution
Events". Antidilution Events shall not include, and Rights shall not grant the
holders thereof the right to receive shares of Novametrix Common Stock in
respect of, issuances at or after the Effective Time of any Novametrix
Securities (as defined in Section 4.05) except for shares of Novametrix Common
Stock issued pursuant to options and warrants outstanding immediately prior to
the Effective Time.
(d) Novametrix shall deliver, or arrange to have delivered, on
each Antidilution Date certificate(s) representing the number of shares of
Novametrix Common Stock issuable pursuant to each Right on such Antidilution
Date registered in the name of the person to whom such Right was issued at the
address of such person as it appears on the records of Novametrix. Novametrix
shall not issue fractional shares of Novametrix Common Stock to Rights holders.
The number of shares of Novametrix Common Stock that each Rights holder shall be
entitled to receive on each Antidilution Date shall be rounded down to the
nearest whole share.
(e) Notwithstanding anything to the contrary contained herein,
upon the occurrence of an Antidilution Event, the number of shares of Novametrix
Common Stock issuable upon the exercise of each then outstanding Company Option
and Company Warrant shall be increased by the number of Underlying Shares which
would have been issuable pursuant to the Rights subject to such Company Option
or Company Warrant (assuming such Rights were then outstanding).
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ARTICLE II.
THE SURVIVING CORPORATION AND NOVAMETRIX
SECTION 2.01 Certificate of Incorporation. The certificate of
incorporation of the Merger Subsidiary in effect at the Effective Time shall
become the certificate of incorporation of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 2.02 Bylaws. The bylaws of the Merger Subsidiary in
effect at the Effective Time shall become the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 2.03 Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified in
accordance with applicable law, (i) the directors of the Merger Subsidiary at
the Effective Time and an equal number of directors appointed by the Board of
Directors of the Company prior to the Effective Time shall become the directors
of the Surviving Corporation, (ii) the officers of the Merger Subsidiary at the
Effective Time shall become the officers of the Surviving Corporation, (iii) the
directors of Novametrix shall be comprised of (A) all of the members of
Novametrix' Board of Directors at the Effective Time or such smaller number of
such members as may result from director resignations effective at the Effective
Time and (B) an equal number of directors appointed by the Board of Directors of
the Company prior to the Effective Time, one of whom shall be Richard D.
Paterson, and (iv) Richard D. Paterson shall be Chairman of the Board of
Directors of Novametrix. The continuing members of the Board of Directors of
Novametrix, on the one hand, and the members appointed by the Board of Directors
of the Company, on the other hand, as described in clause (iii) above, shall be
as equally distributed as possible among Class A, Class B and Class C Directors
of Novametrix. At the Effective Time, each committee of the Board of Directors
of Novametrix shall be composed of an equal number of the continuing members of
the Board of Directors of Novametrix, on the one hand, and the members appointed
by the Board of Directors of the Company, on the other hand, as described in
clause (iii) above.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Novametrix that:
SECTION 3.01 Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all governmental
licenses, permits, authorizations, consents and approvals required to carry on
its business as now conducted except where the failure to do so would not have
or reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the financial condition, business, assets or results of
operations of the Company and its Subsidiaries (as defined in Section 3.06(a)
hereof) taken as a whole (a "Company Material Adverse Effect"). The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have or
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company has heretofore delivered to Novametrix true
and complete copies of the Company's certificate of incorporation and bylaws as
currently in effect. The Company does not own and has never owned any assets or
properties other than the capital stock of Andros and Andros's predecessor and
is not engaged and has never engaged in any activities other than in connection
with Andros and Andros's Subsidiaries and in connection with or as contemplated
by this Agreement.
SECTION 3.02 Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger by the Company are within the Company's corporate powers and have been
duly authorized by all necessary corporate action. This Agreement constitutes a
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms. Copies of the resolutions duly adopted by the
Company's Board of Directors and Genstar, as holder of a majority of the Shares,
authorizing the Merger and the execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder have been furnished to
Novametrix.
<PAGE> 15
11
SECTION 3.03 Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the Merger by the Company require no action by or in respect of, or filing
with, any governmental body, agency, official or authority other than (i) the
filing of a certificate of merger in accordance with Delaware Law; and (ii)
compliance with any applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"), except where the failure of any such
action to be taken or filing to be made would not have or reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect or
prevent consummation of the transactions contemplated hereby.
SECTION 3.04 Non-Contravention. Except as disclosed on Exhibit
3.04 to the Company Disclosure Schedule delivered by the Company to Novametrix
simultaneously with the execution and delivery hereof (the "Company Disclosure
Schedule"), the execution, delivery and performance by the Company of this
Agreement and the consummation of the Merger by the Company do not and will not
(i) contravene or conflict with the certificate of incorporation or bylaws of
the Company, (ii) assuming compliance with the matters referred to in Section
3.03, contravene or conflict with or constitute a violation of any provision of
any law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any of its Subsidiaries, (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or any of its Subsidiaries or to a loss
of any benefit to which the Company or any of its Subsidiaries is entitled under
any material agreement or other instrument binding upon the Company or any of
its Subsidiaries or any license, franchise, permit or other similar
authorization held by the Company or any of its Subsidiaries, or (iv) result in
the creation or imposition of any Lien (as defined below) on any asset of the
Company or any of its Subsidiaries, except for any occurrences or results
referred to in clauses (ii), (iii) and (iv) which would not have or reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect or prevent consummation of the transactions contemplated hereby.
For purposes of this Agreement, "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance or adverse
claim of any kind in respect of such asset.
SECTION 3.05 Capitalization. The authorized capital stock of
the Company consists of 300,000 Shares of which 150,000 Shares are voting Class
A common stock, par
<PAGE> 16
12
value $.01 per share ("Class A Shares"), and 150,000 Shares are non-voting Class
B common stock, par value $.01 per share ("Class B Shares"). As of the date
hereof, there are outstanding (v) 89,787 Class A Shares (w) no Class B Shares,
(x) Company Options to purchase an aggregate of 2,559 Shares (none of which
Company Options were then exercisable), (y) Company Warrants to purchase an
aggregate of 8,000 Shares, 2,500 of which were issued to each of Banque Paribas
and the Bank of Nova Scotia and 3,000 of which were issued to BG Services
Limited and (z) Equity Units exercisable for 453.6 Shares or cash, at the
Company's option, as set forth in the EUA Agreements. All outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable and free of preemptive rights. Except as set
forth in this Section, there are outstanding as of the date hereof (i) no shares
of capital stock or other voting securities of the Company, (ii) no securities
of the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, and (iii) no options, warrants or other rights
to acquire from the Company, and no obligation of the Company to issue, any
capital stock, voting securities or securities convertible into or exchangeable
for capital stock or voting securities of the Company (the items in clauses (i),
(ii) and (iii) being referred to collectively as the "Company Securities").
Except as disclosed on Exhibit 3.05 to the Company Disclosure Schedule, there
are no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities.
SECTION 3.06 Subsidiaries. (a) Each Subsidiary of the Company
is a corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, has all corporate powers and all
governmental licenses, permits, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where failure to have such licenses,
permits, authorizations, consents or approvals or to be so qualified would not
have or reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. For purposes of this Agreement, "Subsidiary" of
any Person means (i) any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are
directly
<PAGE> 17
13
or indirectly owned by such Person, and (ii) any partnership of which such
Person is a general partner.
(b) Except as disclosed on Exhibit 3.06(b) to the Company
Disclosure Schedule, all of the outstanding capital stock of each Subsidiary of
the Company is owned by the Company, directly or indirectly, free and clear of
any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock). There are no outstanding (i) securities of the Company or any of its
Subsidiaries convertible into or exchangeable for shares of capital stock or
other voting securities in any Subsidiary of the Company, or (ii) options or
other rights to acquire from the Company or any of its Subsidiaries, and no
other obligation of the Company or any of its Subsidiaries to issue, any capital
stock or voting securities in, or any securities convertible into or
exchangeable for any capital stock or voting securities in, any Subsidiary of
the Company (the items in clauses (i) and (ii) being referred to collectively as
the "Company Subsidiary Securities"). There are no outstanding obligations of
the Company or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any outstanding Company Subsidiary Securities.
SECTION 3.07 SEC Filings. (a) The Company has delivered to
Novametrix (i) the annual report on Form 10-K of Andros Incorporated, a Delaware
corporation and wholly owned Subsidiary of the Company ("Andros"), for the
fiscal year ended July 30, 1995 (the "Andros 10-K"), (ii) Andros' quarterly
reports on Form 10-Q for Andros' fiscal quarters ended October 29, 1995 and
January 28, 1996, (iii) Andros' current reports on Form 8-K dated December 28,
1993 and March 25, 1996, (iv) Andros' proxy or information statements relating
to meetings of, or actions taken without a meeting by, the stockholders of the
Company held since January 1, 1993, and (v) all of Andros' other reports,
statements, schedules and registration statements filed with the Securities and
Exchange Commission (the "SEC") since January 1, 1993, and all materials
incorporated therein by reference (the filings referred to in clauses (i)
through (v) above and delivered to Novametrix prior to the date hereof being
hereinafter referred to as the "Andros SEC Filings").
(b) As of its filing date, each such report or statement filed
pursuant to the Securities Exchange Act of 1934 and the rules and regulations
promulgated thereunder (the "Exchange Act") complied as to form in all material
respects with the requirements of the Exchange Act and did not contain any
untrue statement of a material fact or omit
<PAGE> 18
14
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement and any amendment thereto
filed pursuant to the Securities Act of 1933 and the rules and regulations
promulgated thereunder (the "Securities Act"), as of the date such statement or
amendment became effective, complied as to form in all material respects with
the Securities Act and did 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 therein not misleading.
SECTION 3.08 Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements of
the Company and its consolidated Subsidiaries included as Exhibit 3.08 to the
Company Disclosure Schedule and those included in the Andros 10-K and the
quarterly reports on Form 10-Q referred to in Section 3.07 fairly present, in
conformity with generally accepted accounting principles applied on a consistent
basis (except as may be indicated in the notes thereto), the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and their consolidated results of operations and cash flows for
the periods then ended (subject, in the case of any unaudited interim financial
statements, to normal year-end adjustments, none of which, individually or in
the aggregate, would have a Company Material Adverse Effect).
SECTION 3.09 Proxy Statement. None of the information supplied
by the Company for inclusion in the proxy statement relating to the meeting of
Novametrix' stockholders to be held in connection with the Merger (the "Proxy
Statement"), to be filed by Novametrix with the SEC, and any amendments or
supplements thereto, will, at the respective times such documents are filed, and
at the time the Proxy Statement or any amendment or supplement thereto is first
mailed to stockholders of Novametrix, at the time such stockholders vote on
adoption of this Agreement and at the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 3.10 Absence of Certain Changes. Except as
contemplated hereby or as described in any Andros SEC Filing or as disclosed on
Exhibit 3.10 to the Company Disclosure Schedule, since July 30, 1995, the
Company and
<PAGE> 19
15
its Subsidiaries have conducted their business in all material respects in the
ordinary course consistent with past practices and there has not been:
(a) any event, occurrence or development or state of
circumstances or facts, which affects or relates to the Company, which
has had or would reasonably be expected to have a Company Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend
or other distribution with respect to any shares of capital stock of
the Company, or any repurchase, redemption or other acquisition by the
Company or any of its Subsidiaries of any outstanding shares of capital
stock or other securities of, or other ownership interests in, the
Company or any of its Subsidiaries;
(c) any amendment of any material term of any
outstanding security of the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or
any of its Subsidiaries of any indebtedness for borrowed money other
than in the ordinary course of business and in amounts and on terms
consistent with past practices;
(e) any creation or assumption by the Company or any of its
Subsidiaries of any Lien on any material asset other than in the
ordinary course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in wholly owned Subsidiaries of the
Company made in the ordinary course of business consistent with past
practices;
(g) any change in any method of accounting or accounting
practice by the Company or any of its Subsidiaries, except for any such
change required by reason of a concurrent change in generally accepted
accounting principles or to conform a Subsidiary's accounting policies
and practices to those of the Company;
(h) except for contractual obligations existing on the date
hereof, other than in the ordinary course of business consistent with
past practices, any
<PAGE> 20
16
(i) grant of any severance or termination pay to any director, officer
or employee of the Company or any of its Subsidiaries, (ii) entering
into of any employment, deferred compensation or other similar
agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company or any of its
Subsidiaries, (iii) increase in benefits payable under any existing
severance or termination pay policies or employment agreements, (iv)
increase in compensation, bonus or other benefits payable to directors,
officers or employees of the Company or any of its Subsidiaries, or (v)
acceleration of the exercisability or vesting of any Company Options,
Equity Units or Company Warrants, as the case may be;
(i) any labor dispute, other than individual grievances, which
would have a Company Material Adverse Effect, or any activity or
proceeding by a labor union or representative thereof to organize any
employees of the Company or any of its Subsidiaries, which employees
were not subject to a collective bargaining agreement at July 30, 1995
or any lockouts, strikes, slowdowns, work stoppages or threats thereof
by or with respect to such employees;
(j) any actual or, to the Company's knowledge, threatened
dispute between the Company or any of its Subsidiaries and any vendor
or customer, other than disputes which would not have or reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect;
(k) any actual or, to the Company's knowledge, threatened
suspension or cancellation of any governmental license, permit,
authorization, consent or approval, other than those the suspension or
cancellation of which would not have or reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; or
(l) any change in any Federal or state law, rule or regulation
applicable to the Company or any of its Subsidiaries, or in the
interpretation or application thereof, which individually or in the
aggregate has had or would reasonably be expected to have a Company
Material Adverse Effect.
SECTION 3.11 No Undisclosed Material Liabilities. Except as
described in any Andros SEC Filing or on Exhibit 3.11 to the Company Disclosure
Schedule, there are no liabilities of the Company or any of its Subsidiaries of
any
<PAGE> 21
17
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, and there is no existing condition, situation or set of
circumstances which, individually or in the aggregate, have or would reasonably
be expected to have a Company Material Adverse Effect, other than:
(i) liabilities incurred in the ordinary course of business
consistent with past practices since January 28, 1996, which in the
aggregate are not material to the Company and its Subsidiaries, taken
as a whole; and
(ii) liabilities under this Agreement.
SECTION 3.12 Litigation. Except as described in the Andros
10-K or as disclosed on Exhibit 3.12 to the Company Disclosure Schedule, there
is no action, suit, investigation or proceeding pending against, or to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective properties before any court or
arbitrator or any governmental body, agency or official which would have or
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. To the best of the knowledge of the Company, there is
no toxic waste condition or other pollution condition of any nature, including,
without limitation, the presence of asbestos or other carcinogens, existing at
any location leased or owned by the Company or any of its Subsidiaries which
could reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
SECTION 3.13 Taxes. (i) The Company and each of its
Subsidiaries have timely filed all tax returns, statements, reports and forms
required to be filed with any tax authority when due in accordance with all
applicable laws except where the failure to do so would not have or reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect; (ii) no deficiency in payment of any taxes for any period has
been asserted by any taxing authority which remains unsettled at the date hereof
except for deficiencies which would not have or reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; and (iii)
neither the Company nor any of its Subsidiaries is liable and it is not
reasonably likely that the Company or any of its Subsidiaries will be liable for
any taxes not reserved against in Andros' consolidated balance sheet as of
January 28, 1996 included in Andros' quarterly report on Form 10-Q for the
fiscal quarter then ended except those which would not have or reasonably be
expected to have,
<PAGE> 22
18
individually or in the aggregate, a Company Material Adverse Effect.
For purposes of this Agreement, "Code" means the Internal
Revenue Code of 1986, as amended; and "tax" or "taxes" means all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, accumulated
earnings, personal holding company, excess profits, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority (domestic or foreign).
SECTION 3.14 ERISA. (a) "Employee Plans" shall mean each
"employee benefit plan", as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), which (i) is subject to any provision of
ERISA and (ii) is maintained, administered or contributed to by the Company or
any affiliate (as defined below) and covers any employee or former employee of
the Company or any affiliate or under which the Company or any affiliate has any
liability. Copies of such plans (and, if applicable, related trust agreements)
and all amendments thereto and written interpretations thereof have been
furnished to Novametrix. For purposes of this Section, "affiliate" of any Person
means any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code. No Employee Plan individually or
collectively constitutes a "defined benefit plan" as defined in Section 3(35) of
ERISA.
(b) No Employee Plan constitutes a "multi-employer plan", as
defined in Section 3(37) of ERISA, and no Employee Plan is maintained in
connection with any trust described in Section 501(c)(9) of the Code. No
Employee Plan is subject to Title IV of ERISA. Neither the Company nor any of
its affiliates has incurred, nor has reason to expect to incur, any liability
under Title IV of ERISA arising in connection with the termination of, or
complete or partial withdrawal from, any plan previously covered by Title IV of
ERISA that would have, or reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Nothing done or omitted to be done
and no transaction or holding of any asset under or in connection with any
Employee Plan has or will make the Company or any of its Subsidiaries or any
officer or director of the Company or any of its Subsidiaries subject to any
liability under Title I of ERISA or liable for any
<PAGE> 23
19
tax pursuant to Section 4975 of the Code that would have, or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(c) Except as disclosed on Exhibit 3.14 to the Company
Disclosure Schedule and except to the extent it would not have, or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, (i) each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
from its adoption to date, and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code, and (ii) each Employee Plan has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, final rules and final regulations, including but
not limited to, ERISA and the Code, which are applicable to such Employee Plan.
(d) Except to the extent it would not have, or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, there is no contract, agreement, plan or arrangement covering any
employee or former employee of the Company or any of its Subsidiaries that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible due to Sections 162(m) or 280G of the Code.
(e) "Benefit Arrangement" of any party shall mean each
employment, severance or other similar contract, arrangement or policy and each
plan or arrangement (written or oral) providing for compensation, bonus,
profit-sharing, stock option, or other stock related rights or other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, health or medical insurance or other benefits) which (i) is not an
Employee Plan, (ii) is entered into, maintained or contributed to, as the case
may be, by such party or any of its affiliates and (iii) covers any employee or
former employee of such party or any of its affiliates. Copies or descriptions
of the Benefit Arrangements of the Company have been furnished to Novametrix.
Exhibit 3.14(e) to the Company Disclosure Schedule sets forth all outstanding
Company Options as of the date hereof, including the applicable exercise price
with respect thereto. Except to the extent that it would not have, or reasonably
be expected to have, individually or in the aggregate, a Company
<PAGE> 24
20
Material Adverse Effect, each of the Company's Benefit Arrangements has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations that are applicable to such
Benefit Arrangement.
(f) Except to the extent that it would not have, or reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect, the transactions contemplated hereby will not result in any
liability for severance pay to any employee or accelerate the exercisability or
vesting of any Company Options or Company Warrants, as the case may be, nor will
any employee be entitled to any payment by reason of such transactions or the
termination of such employee within a specified time period after such
transactions.
(g) Neither the Company nor any of its Subsidiaries provides,
nor has any of them made any current or past commitment to provide,
post-retirement health or medical benefits for retired employees of the Company
or any of its Subsidiaries.
(h) Except as disclosed on Exhibit 3.14(h) to the Company
Disclosure Schedule and subject to the provisions of Section 3.10(h), there has
been no amendment to, written interpretation or announcement (whether or not
written) by the Company or any of its affiliates relating to, or change in
employee participation or coverage under, any Employee Plan or Benefit
Arrangement of the Company which in the aggregate would increase the per
employee expense of maintaining such Employee Plan or Benefit Arrangement above
the level of the expense incurred on a per employee basis in respect thereof for
the six months ended January 28, 1996 except to the extent, with respect to all
employees, as would not have, or reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
SECTION 3.15 Compliance with Laws. Except as described in any
Andros SEC Filing, neither the Company nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any laws, statutes,
ordinances or regulations other than violations which would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect.
SECTION 3.16 Finders' Fees. Except for CS First Boston
("CSFB"), there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of the Company or
any of its
<PAGE> 25
21
Subsidiaries who might be entitled to any fee or commission in connection with
the transactions contemplated by this Agreement. The Company has heretofore
furnished to Novametrix a complete and correct copy of all agreements between
the Company and CSFB pursuant to which such firm would be entitled to any
payment relating to the transactions contemplated by this Agreement.
SECTION 3.17 Vote Required. The affirmative vote of the
holders of a majority of the outstanding Shares is the only vote of the holders
of any class or series of the Company's capital stock necessary to approve this
Agreement and the transactions contemplated hereby and such approval has been
obtained.
SECTION 3.18 Intellectual Property. Set forth on Exhibit 3.18
to the Company Disclosure Schedule is a list and brief description of all of the
patents, registered and common law trademarks, service marks, tradenames,
copyrights, licenses and other similar rights of the Company and its
Subsidiaries. The Company or one of its Subsidiaries, as applicable, owns all
right, title and interest in and to all such proprietary rights. The proprietary
rights listed are all such rights necessary to the conduct of the business of
the Company and its Subsidiaries as currently conducted; no adverse claim has
been made and no dispute has arisen with respect to any of the said proprietary
rights; and the operations of the business of the Company and its Subsidiaries
and the use by the Company or its Subsidiaries of such proprietary rights do not
involve infringement or claimed infringement of any patent, trademark, service
mark, tradename, copyright, license or similar right. The Company has taken
reasonable measures to maintain the confidentiality of the processes and
formulae, research and development and other know-how of the Company, the value
of which to the Company is dependent upon the maintenance of the confidentiality
thereof. Neither the Company nor any of its Subsidiaries has licensed or
otherwise permitted the use by any third party of any proprietary information on
terms or in a manner that is reasonably likely to have a Company Material
Adverse Effect.
SECTION 3.19 Permits; Company Products; Regulation. (a) Except
as disclosed on Exhibit 3.19(a)(i) to the Company Disclosure Schedule, the
Company and each of its Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exceptions, consents,
certificates, approvals and orders of any governmental body, agency, official or
authority necessary for the Company or such Subsidiary, as applicable, to own,
lease and operate its properties or to carry on its
<PAGE> 26
22
business as it is now being conducted (the "Company Permits"), and no suspension
or cancellation of any of the Company Permits is pending or, to the knowledge
any of the officers of the Company or any of its Subsidiaries, threatened,
except where the failure to have, or the suspension or cancellation of, any of
the Company Permits would not have a Company Material Adverse Effect. A list of
the material Company Permits is set forth on Exhibit 3.19(a)(ii) to the Company
Disclosure Schedule. Except as disclosed on Exhibit 3.19(a)(i) to the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries is in
default under or violation of (i) any law, regulation, judgment, injunction,
order or decree applicable to the Company or any of its Subsidiaries or by which
any property or asset of the Company or any of its Subsidiaries is bound or
affected, (ii) any of the Company Permits or (iii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries or any property or
asset of the Company or any of its Subsidiaries is bound or affected, except for
defaults or violations that, individually or in the aggregate, would not have a
Company Material Adverse Effect.
(b) Except as disclosed on Exhibit 3.19(b) to the Company
Disclosure Schedule and except as would not have a Company Material Adverse
Effect, since July 30, 1995, there have been no written notices, citations or
decisions by any governmental or regulatory body that any product produced,
manufactured or marketed at any time by the Company or any of its Subsidiaries
(the "Company Products"), other than a Company Third Party Product (as defined
below) is defective or fails to meet any applicable standards promulgated by any
such governmental or regulatory body, and no officer of the Company or any of
its Subsidiaries knows of any such defect or failure. In the case of products
which are produced or manufactured by third parties and are distributed by the
Company or any of its Subsidiaries (the "Company Third Party Products"), to the
knowledge of any of the officers of the Company or any of its Subsidiaries,
there have been no written notices, citations or decisions by any governmental
or regulatory body that any Company Third Party Product distributed at any time
by the Company or any of its Subsidiaries is defective or fails to meet any
applicable standards promulgated by any such governmental or regulatory body,
and none of the officers of the Company or any of its Subsidiaries knows of any
such defect or failure. The Company and each of its Subsidiaries has complied
with the laws, regulations, policies, procedures and specifications applicable
to the Company or such Subsidiary, as applicable,
<PAGE> 27
23
with respect to the design, manufacture, labelling, testing and inspection of
Company Products in the United States and the operation of manufacturing
facilities in the United States promulgated by the Food and Drug Administration
(the "FDA"), and has complied with the laws, regulations, policies, procedures
and specifications applicable to the Company or such Subsidiary, as applicable,
in any jurisdiction outside the United States with respect to the design,
manufacture, labelling, testing and inspection of Company Products and the
operation of manufacturing facilities outside of the United States except for
such non-compliance as would not have a Company Material Adverse Effect. Except
as disclosed on Exhibit 3.19(b) to the Company Disclosure Schedule, since July
30, 1995, there have been no recalls, field notifications or seizures ordered
or, to the knowledge of any of the officers of the Company or any of its
Subsidiaries, threatened by any such governmental or regulatory body with
respect to any of the Company Products, other than Company Third Party Products,
and neither the Company nor any of its Subsidiaries has independently engaged in
recalls or field notifications. In the case of Company Third Party Products
distributed by the Company or any of its Subsidiaries, neither the Company nor
any of its Subsidiaries has received any notices of any recalls, field
notifications or seizures ordered or threatened by any such governmental or
regulatory body with respect to any of such Company Third Party Products, and
neither the Company nor any of its Subsidiaries has independently engaged in
recalls or field notifications. Except as set forth on Exhibit 3.19(b) to the
Company Disclosure Schedule, neither the Company nor any of its Subsidiaries has
received, and to the knowledge of any of the officers of the Company or any of
its Subsidiaries, there is no reasonable basis for, any warning letter or
Section 305 notices from the FDA.
(c) Except as set forth on Exhibit 3.19(c)(i) to the Company
Disclosure Schedule, the Company or one or more of its Subsidiaries has
obtained, in all countries where the Company or such Subsidiary, as applicable,
is marketing or has marketed the Company Products, all applicable licenses,
registrations, approvals, clearances and authorizations required to be obtained
by it by local, state or federal agencies (including the FDA) in such countries
regulating the safety, effectiveness and market clearance of the Company
Products that are currently marketed by the Company or such Subsidiary, as
applicable, except where the failure to obtain such licenses, registrations,
approvals, clearances and authorizations would not have a Company Material
Adverse Effect. The Company has made available to Novametrix all information
relating to the Company Products
<PAGE> 28
24
in the United States, and Exhibit 3.19(c)(ii) to the Company Disclosure Schedule
sets forth a list of all licenses, registrations, approvals, permits and device
listings. Exhibit 3.19(c)(iii) to the Company Disclosure Schedule sets forth a
description of all inspections by regulatory authorities, recalls, product
actions and audits of Company Products since July 30, 1995.
Section 3.20 Section 203 of the Delaware Law. As of the date
hereof and pursuant to Section 203(a)(1) and (b)(4) of the Delaware Law, the
restrictions on the Company contained in Section 203 of the Delaware Law are,
and at all times on or prior to the Effective Time such restrictions shall be,
inapplicable to the Merger and the other transactions contemplated by this
Agreement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF NOVAMETRIX
Novametrix represents and warrants to the Company that:
SECTION 4.01 Corporate Existence and Power. Novametrix is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and has all corporate powers and all governmental
licenses, permits, authorizations, consents and approvals required to carry on
its business as now conducted except where the failure to do so would not have
or reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the financial condition, business, assets or results of
operations of Novametrix and its Subsidiaries taken as a whole (a "Novametrix
Material Adverse Effect"). Novametrix is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except for those jurisdictions where the
failure to be so qualified would not have or reasonably be expected to have,
individually or in the aggregate, a Novametrix Material Adverse Effect.
Novametrix has heretofore delivered to the Company true and complete copies of
Novametrix' certificate of incorporation and bylaws as currently in effect.
Since the date of its incorporation, the Merger Subsidiary has not engaged in
any activities other than in connection with or as contemplated by this
Agreement.
<PAGE> 29
25
SECTION 4.02 Corporate Authorization. The execution, delivery and
performance by Novametrix and the Merger Subsidiary of this Agreement and the
consummation of the Merger by the Merger Subsidiary are within the corporate
powers of Novametrix and the Merger Subsidiary and have been duly authorized by
all necessary corporate action, except for any required approval by Novametrix'
stockholders of the issuance of Novametrix Common Stock in connection with the
Merger. This Agreement constitutes a valid and binding agreement of Novametrix
and the Merger Subsidiary enforceable against Novametrix and the Merger
Subsidiary in accordance with its terms.
SECTION 4.03 Governmental Authorization. The execution, delivery and
performance by Novametrix and the Merger Subsidiary of this Agreement and the
consummation of the Merger by the Merger Subsidiary require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (i) the filing of a certificate of merger in accordance with Delaware
Law; (ii) compliance with any applicable requirements of the HSR Act, the
Exchange Act and the Securities Act; (iii) compliance with the applicable
requirements of the Nasdaq National Market; and (iv) compliance with any
applicable state securities or Blue Sky laws, except where the failure of any
such action to be taken or filing to be made would not have or reasonably be
expected to have, individually or in the aggregate, a Novametrix Material
Adverse Effect or prevent consummation of the transactions contemplated hereby.
SECTION 4.04 Non-Contravention. Except as disclosed on Exhibit 4.04 to
the Novametrix Disclosure Schedule delivered by Novametrix to the Company
simultaneously with the execution and delivery hereof (the "Novametrix
Disclosure schedule"), the execution, delivery and performance by Novametrix and
the Merger Subsidiary of this Agreement and the consummation of the Merger by
the Merger Subsidiary do not and will not (i) contravene or conflict with the
certificate of incorporation or bylaws of Novametrix or the Merger Subsidiary,
(ii) assuming compliance with the matters referred to in Section 4.03,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to Novametrix or any of its Subsidiaries, (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of Novametrix or any of its Subsidiaries or to a loss of
any benefit to which Novametrix or any of its Subsidiaries is entitled under any
material agreement or other instrument binding upon
<PAGE> 30
26
Novametrix or any of its Subsidiaries or any license, franchise, permit or other
similar authorization held by Novametrix or any of its Subsidiaries, or (iv)
result in the creation or imposition of any Lien on any asset of Novametrix or
any of its Subsidiaries, except for any occurrences or results referred to in
clauses (ii), (iii) and (iv) which would not have or reasonably be expected to
have, individually or in the aggregate, a Novametrix Material Adverse Effect or
prevent consummation of the transactions contemplated hereby.
SECTION 4.05 Capitalization. The authorized capital stock of Novametrix
consists of 20,000,000 shares of Novametrix Common Stock and 1,000,000 shares of
Novametrix Preferred Stock. As of June 28, 1996, there were outstanding (w)
6,647,512 shares of Novametrix Common Stock, (x) 40,000 shares of Novametrix
Preferred Stock, (y) employee and other stock options to purchase an aggregate
of 413,734 shares of Novametrix Common Stock (of which options to purchase an
aggregate of 248,734 shares of Novametrix Common Stock were then exercisable)
("Novametrix Options") and (z) warrants to purchase, subject to certain
conditions, up to 2,547,514 shares of Novametrix Common Stock ("Novametrix
Warrants"). All outstanding shares of capital stock of Novametrix have been duly
authorized and validly issued and are fully paid and nonassessable and free of
preemptive rights. Except as set forth in this Section , and except for changes
since June 28, 1996 resulting from the exercise of employee stock options,
issuances pursuant to Novametrix' employee stock purchase plan or other
obligations to issue shares of Novametrix Common Stock referred to above
outstanding on such date, there are outstanding as of the date hereof (i) no
shares of capital stock or other voting securities of Novametrix, (ii) no
securities of Novametrix convertible into or exchangeable for shares of capital
stock or voting securities of Novametrix, and (iii) no options, warrants or
other rights to acquire from Novametrix, and no obligation of Novametrix to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Novametrix (the items in
clauses (i), (ii) and (iii) being referred to collectively as the "Novametrix
Securities"). Except as set forth on Exhibit 4.05 to the Novametrix Disclosure
Schedule, there are no outstanding obligations of Novametrix or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any Novametrix
Securities. The shares of Novametrix Common Stock to be exchanged for Shares in
the Merger and the Underlying Shares have been duly authorized, except for any
required approval by Novametrix' stockholders of the issuance of Novametrix
Common Stock in connection with the Merger, and when issued
<PAGE> 31
27
and delivered in accordance with the terms of this Agreement, will have been
validly issued and will be fully paid and nonassessable and the issuance thereof
is not subject to any preemptive or other similar right.
SECTION 4.06 Subsidiaries. (a) Each Subsidiary of Novametrix is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, has all corporate powers and all
governmental licenses, permits, authorizations, consents and approvals required
to carry on its business as now conducted and is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its activities
makes such qualification necessary, except where failure to have such licenses,
permits, authorizations, consents or approvals or to be so qualified would not
have or reasonably be expected to have, individually or in the aggregate, a
Novametrix Material Adverse Effect.
(b) Except as disclosed on Exhibit 4.06(b) to the Novametrix Disclosure
Schedule, all of the outstanding capital stock of each Subsidiary of Novametrix
is owned by Novametrix, directly or indirectly, free and clear of any Lien and
free of any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock). There are no
outstanding (i) securities of Novametrix or any of its Subsidiaries convertible
into or exchangeable for shares of capital stock or other voting securities in
any Subsidiary of Novametrix, or (ii) options or other rights to acquire from
Novametrix or any of its Subsidiaries, and no other obligation of Novametrix or
any of its Subsidiaries to issue, any capital stock or voting securities in, or
any securities convertible into or exchangeable for any capital stock or voting
securities in, any Subsidiary of Novametrix (the items in clauses (i) and (ii)
being referred to collectively as the "Novametrix Subsidiary Securities"). There
are no outstanding obligations of Novametrix or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any outstanding Novametrix Subsidiary
Securities.
SECTION 4.07 SEC Filings. (a) Novametrix has delivered to the Company
(i) Novametrix's annual report on Form 10-KSB for the fiscal year ended April
28, 1996 (the "Novametrix 10-KSB"), (ii) its current report on Form 8-K dated
April 28, 1993, (iii) its proxy or information statements relating to meetings
of, or actions taken without a meeting by Novametrix' stockholders held (or
scheduled to be held) since January 1, 1993, and (iv) all of its other
<PAGE> 32
28
reports, statements, schedules and registration statements filed with the SEC
since January 1, 1993, and all materials incorporated therein by reference (the
filings referred to in clauses (i) through (iv) above and delivered to the
Company prior to the date hereof being hereinafter referred to as the
"Novametrix SEC Filings").
(b) As of its filing date, each such report or statement filed pursuant
to the Exchange Act complied as to form in all material respects with the
requirements of the Exchange Act and did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
(c) Each such registration statement and any amendment thereto filed
pursuant to the Securities Act, as of the date such statement or amendment
became effective, complied as to form in all material respects with the
Securities Act and did 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 therein not misleading.
SECTION 4.08 Financial Statements. The audited consolidated financial
statements of Novametrix and its consolidated Subsidiaries included in the
Novametrix 10-KSB fairly present, in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
in the notes thereto), the consolidated financial position of Novametrix and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended.
SECTION 4.09 Absence of Certain Changes. Except as contemplated hereby
or as described in any Novametrix SEC Filing or as disclosed on Exhibit 4.09 to
the Novametrix Disclosure Schedule, since April 28, 1996, Novametrix and its
Subsidiaries have conducted their business in all material respects in the
ordinary course consistent with past practices and there has not been:
(a) any event, occurrence or development or state of circumstances or
facts, which affects or relates to Novametrix, which has had or would
reasonably be expected to have a Novametrix Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any
<PAGE> 33
29
shares of capital stock of Novametrix other than the Novametrix
Preferred Stock, or any repurchase, redemption or other acquisition by
Novametrix or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of, or other ownership interests in,
Novametrix or any of its Subsidiaries;
(c) any amendment of any material term of any outstanding
security of Novametrix or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by Novametrix or
any of its Subsidiaries of any indebtedness for borrowed money other
than in the ordinary course of business and in amounts and on terms
consistent with past practices;
(e) any creation or assumption by Novametrix or any of its
Subsidiaries of any Lien on any material asset other than in the
ordinary course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in wholly owned Subsidiaries of
Novametrix made in the ordinary course of business consistent with past
practices;
(g) any change in any method of accounting or accounting
practice by Novametrix or any of its Subsidiaries, except for any such
change required by reason of a concurrent change in generally accepted
accounting principles or to conform a Subsidiary's accounting policies
and practices to those of Novametrix;
(h) except for contractual obligations existing on the date
hereof, other than in the ordinary course of business consistent with
past practices, any (i) grant of any severance or termination pay to
any director, officer or employee of Novametrix or any of its
Subsidiaries, (ii) entering into of any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director or officer of Novametrix or any
of its Subsidiaries, (iii) increase in benefits payable under any
existing severance or termination pay policies or employment
agreements, (iv) increase in compensation, bonus or other benefits
payable to directors, officers or employees of Novametrix or any of its
Subsidiaries,
<PAGE> 34
30
or (v) acceleration of the exercisability or vesting of any Novametrix
Options or Novametrix Warrants, as the case may be;
(i) any labor dispute, other than individual grievances, which
would have a Novametrix Material Adverse Effect, or any activity or
proceeding by a labor union or representative thereof to organize any
employees of Novametrix or any of its Subsidiaries, which employees
were not subject to a collective bargaining agreement at April 28, 1996
or any lockouts, strikes, slowdowns, work stoppages or threats thereof
by or with respect to such employees;
(j) any actual or, to Novametrix' knowledge, threatened
dispute between Novametrix or any of its Subsidiaries and any vendor or
customer, other than disputes which would not have or reasonably be
expected to have, individually or in the aggregate, a Novametrix
Material Adverse Effect;
(k) any actual or, to Novametrix' knowledge, threatened
suspension or cancellation of any governmental license, permit,
authorization, consent or approval, other than those the suspension or
cancellation of which would not have or reasonably be expected to have,
individually or in the aggregate, a Novametrix Material Adverse Effect;
or
(l) any change in any Federal or state law, rule or regulation
applicable to Novametrix or any of its Subsidiaries, or in the
interpretation or application thereof, which individually or in the
aggregate has had or would reasonably be expected to have a Novametrix
Material Adverse Effect.
SECTION 4.10 No Undisclosed Material Liabilities. Except as described
in any Novametrix SEC Filing or on Exhibit 4.10 to the Novametrix Disclosure
Schedule, there are no liabilities of Novametrix or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or set
of circumstances which, individually or in the aggregate, have or would
reasonably be expected to have a Novametrix Material Adverse Effect, other than:
(i) liabilities incurred in the ordinary course of business
consistent with past practices since April 28, 1996, which in the
aggregate are not material
<PAGE> 35
31
to Novametrix and its Subsidiaries, taken as a whole; and
(ii) liabilities under this Agreement.
SECTION 4.11 Litigation. Except as described in the Novametrix 10-KSB
or as disclosed on Exhibit 4.11 to the Novametrix Disclosure Schedule, there is
no action, suit, investigation or proceeding pending against, or to the
knowledge of Novametrix threatened against, Novametrix or any of its
Subsidiaries or any of their respective properties before any court or
arbitrator or any governmental body, agency or official which would have or
reasonably be expected to have, individually or in the aggregate, a Novametrix
Material Adverse Effect. To the best of the knowledge of Novametrix, there is no
toxic waste condition or other pollution condition of any nature, including,
without limitation, the presence of asbestos or other carcinogens, existing at
any location leased or owned by Novametrix or any of its Subsidiaries which
could reasonably be expected to have, individually or in the aggregate, a
Novametrix Material Adverse Effect.
SECTION 4.12 Taxes. (i) Novametrix and each of its Subsidiaries have
timely filed all tax returns, statements, reports and forms required to be filed
with any tax authority when due in accordance with all applicable laws except
where the failure to do so would not have or reasonably be expected to have,
individually or in the aggregate, a Novametrix Material Adverse Effect; (ii) no
deficiency in payment of any taxes for any period has been asserted by any
taxing authority which remains unsettled at the date hereof except for
deficiencies which would not have or reasonably be expected to have,
individually or in the aggregate, a Novametrix Material Adverse Effect; and
(iii) neither Novametrix nor any of its Subsidiaries is liable and it is not
reasonably likely that Novametrix or any of its Subsidiaries will be liable for
any taxes not reserved against in Novametrix' consolidated balance sheet as of
April 28, 1996 included in the Novametrix 10-KSB except those which would not
have or reasonably be expected to have, individually or in the aggregate, a
Novametrix Material Adverse Effect.
SECTION 4.13 ERISA. (a) "Novametrix Employee Plans" shall mean each
"employee benefit plan", as defined in Section 3(3) of ERISA, which (i) is
subject to any provision of ERISA and (ii) is maintained, administered or
contributed to by Novametrix or any affiliate (as defined in Section 3.14(a))
and covers any employee or former employee of Novametrix or any affiliate or
under which Novametrix or
<PAGE> 36
32
any affiliate has any liability. No Novametrix Employee Plan individually or
collectively constitutes a "defined benefit plan" as defined in Section 3(35) of
ERISA.
(b) No Novametrix Employee Plan constitutes a "multi-employer plan", as
defined in Section 3(37) of ERISA, and no Novametrix Employee Plan is maintained
in connection with any trust described in Section 501(c)(9) of the Code. No
Novametrix Employee Plan is subject to Title IV of ERISA. Neither Novametrix nor
any of its affiliates has incurred, nor has reason to expect to incur, any
liability under Title IV of ERISA arising in connection with the termination of,
or complete or partial withdrawal from, any plan previously covered by Title IV
of ERISA that would have, or reasonably be expected to have, individually or in
the aggregate, a Novametrix Material Adverse Effect. Nothing done or omitted to
be done and no transaction or holding of any asset under or in connection with
any Novametrix Employee Plan has or will make Novametrix or any of its
Subsidiaries or any officer or director of Novametrix or any of its Subsidiaries
subject to any liability under Title I of ERISA or liable for any tax pursuant
to Section 4975 of the Code that would have, or reasonably be expected to have,
individually or in the aggregate, a Novametrix Material Adverse Effect.
(c) Except as disclosed on Exhibit 4.13(c) to the Novametrix Disclosure
Schedule and except to the extent it would not have, or reasonably be expected
to have, individually or in the aggregate, a Novametrix Material Adverse Effect,
(i) each Novametrix Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code, and (ii) each Novametrix
Employee Plan has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, final rules and final
regulations, including but not limited to ERISA and the Code, which are
applicable to such Employee Plan.
(d) Except to the extent that it would not have, or reasonably be
expected to have, individually or in the aggregate, a Novametrix Material
Adverse Effect, there is no contract, agreement, plan or arrangement covering
any employee or former employee of Novametrix or any of its Subsidiaries that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible due to Sections 162(m) or 280G of the Code.
<PAGE> 37
33
(e) Copies or descriptions of Novametrix' Benefit Arrangements have
been furnished to the Company. Exhibit 4.13(e) to the Novametrix Disclosure
Schedule sets forth all outstanding Novametrix Options as of the date hereof,
including the applicable exercise price with respect thereto. Except to the
extent that it would not have, or reasonably be expected to have, individually
or in the aggregate, a Novametrix Material Adverse Effect, each of Novametrix'
Benefit Arrangements has been maintained in compliance with its terms and with
the requirements prescribed by any and all statutes, orders, rules and
regulations that are applicable to such Benefit Arrangement.
(f) Except to the extent it would not have, or reasonably be expected
to have, individually or in the aggregate, a Novametrix Material Adverse Effect,
the transactions contemplated hereby will not result in any liability for
severance pay to any employee or accelerate the exercisability or vesting of any
Novametrix Options, nor will any employee be entitled to any payment by reason
of such transactions or the termination of such employee within a specified time
period after such transactions.
(g) Neither Novametrix nor any of its Subsidiaries provides, nor has
any of them made any current or past commitment to provide, post-retirement
health or medical benefits for retired employees of Novametrix or any of its
Subsidiaries.
(h) Except as disclosed on Exhibit 4.13(h) to the Novametrix Disclosure
Schedule and subject to the provisions of Section 4.09(h), there has been no
amendment to, written interpretation or announcement (whether or not written) by
Novametrix or any of its affiliates relating to, or change in employee
participation or coverage under, any Novametrix Employee Plan or Benefit
Arrangement of Novametrix which in the aggregate would increase the per employee
expense of maintaining such Novametrix Employee Plan or Benefit Arrangement of
Novametrix above the level of the expense incurred on a per employee basis in
respect thereof for the six months ended October 29, 1995 except to the extent,
with respect to all employees, as would not have, or reasonably be expected to
have, individually or in the aggregate, a Novametrix Material Adverse Effect.
SECTION 4.14 Compliance with Laws. Except as described in any
Novametrix SEC Filing, neither Novametrix nor any of its Subsidiaries is in
violation of, or has violated, any applicable provisions of any laws, statutes,
ordinances or regulations other than violations which would
<PAGE> 38
34
not, in the aggregate, reasonably be expected to have a Novametrix Material
Adverse Effect.
SECTION 4.15 Finders' Fees. Except for Tucker Anthony Incorporated
("Tucker"), there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf of Novametrix or
any of its Subsidiaries who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement. Novametrix has
heretofore furnished to the Company a complete and correct copy of all
agreements between Novametrix and Tucker pursuant to which such firm would be
entitled to any payment relating to the transactions contemplated by this
Agreement.
SECTION 4.16 Opinion of Financial Advisor. Novametrix has received the
oral opinion of Tucker to the effect that as of the date hereof the Merger
Consideration is fair to Novametrix from a financial point of view, and a copy
of the written opinion to such effect shall be delivered to the Company prior to
August 3, 1996.
SECTION 4.17 Vote Required. The affirmative vote of the holders of a
majority of the voting power represented by the shares of Novametrix Common
Stock and Novametrix Preferred Stock (voting together as a single class) voted
at a meeting of stockholders is the only vote of the holders of any class or
series of Novametrix' capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
SECTION 4.18 Intellectual Property. Set forth on Exhibit 4.18 to the
Novametrix Disclosure Schedule is a list and brief description of all of the
patents, registered and common law trademarks, service marks, tradenames,
copyrights, licenses and other similar rights of Novametrix and its
Subsidiaries. Novametrix or one of its Subsidiaries, as applicable, owns all
right, title and interest in and to all such proprietary rights. The proprietary
rights listed are all such rights necessary to the conduct of the business of
Novametrix and its Subsidiaries as currently conducted; no adverse claim has
been made and no dispute has arisen with respect to any of the said proprietary
rights; and the operations of the business of Novametrix and its Subsidiaries
and the use by Novametrix or its Subsidiaries of such proprietary rights do not
involve infringement or claimed infringement of any patent, trademark, service
mark, tradename, copyright, license or similar right. Novametrix has taken
reasonable measures to maintain the confidentiality of the processes and
formulae, research and development and other know-how of
<PAGE> 39
35
Novametrix, the value of which to Novametrix is dependent upon the maintenance
of the confidentiality thereof. Neither Novametrix nor any of its Subsidiaries
has licensed or otherwise permitted the use by any third party of any
proprietary information on terms or in a manner that is reasonably likely to
have a Novametrix Material Adverse Effect.
SECTION 4.19 Permits; Company Products; Regulation. (a) Except as
disclosed on Exhibit 4.19(a)(i) to the Novametrix Disclosure Schedule,
Novametrix and each of its Subsidiaries is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exceptions,
consents, certificates, approvals and orders of any governmental body, agency,
official or authority necessary for Novametrix or such Subsidiary, as
applicable, to own, lease and operate its properties or to carry on its business
as it is now being conducted (the "Novametrix Permits"), and no suspension or
cancellation of any of the Novametrix Permits is pending or, to the knowledge of
any of the officers of Novametrix or any of its Subsidiaries, threatened, except
where the failure to have, or the suspension or cancellation of, any of the
Novametrix Permits would not have a Novametrix Material Adverse Effect. A list
of the material Novametrix Permits is set forth on Exhibit 4.19(a)(ii) to the
Novametrix Disclosure Schedule. Except as disclosed on Exhibit 4.19(a)(i) to the
Novametrix Disclosure Schedule, neither Novametrix nor any of its Subsidiaries
is in default under or violation of (i) any law, regulation, judgment,
injunction, order or decree applicable to Novametrix or any of its Subsidiaries
or by which any property or asset of Novametrix or any of its Subsidiaries is
bound or affected, (ii) any of the Novametrix Permits or (iii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Novametrix or any of its Subsidiaries is
a party or by which Novametrix or any of its Subsidiaries or any property or
asset of Novametrix or any of its Subsidiaries is bound or affected, except for
any such defaults or violations that, individually or in the aggregate, would
not have a Novametrix Material Adverse Effect.
(b) Except as disclosed on Exhibit 4.19(b) to the Novametrix Disclosure
Schedule and except as would not have a Novametrix Material Adverse Effect,
since April 28, 1996, there have been no written notices, citations or decisions
by any governmental or regulatory body that any product produced, manufactured
or marketed at any time by Novametrix or any of its Subsidiaries (the
"Novametrix Products"), other than a Novametrix Third Party Product (as defined
<PAGE> 40
36
below), is defective or fails to meet any applicable standards promulgated by
any such governmental or regulatory body, and no officer of Novametrix or any of
its Subsidiaries knows of any such defect or failure. In the case of products
which are produced or manufactured by third parties and are distributed by
Novametrix or any of its Subsidiaries (the "Novametrix Third Party Products"),
to the knowledge of any of the officers of Novametrix or any of its
Subsidiaries, there have been no written notices, citations or decisions by any
governmental or regulatory body that any Novametrix Third Party Product
distributed at any time by Novametrix or any of its Subsidiaries is defective or
fails to meet any applicable standards promulgated by any such governmental or
regulatory body, and none of the officers of Novametrix or any of its
Subsidiaries knows of any such defect or failure. Novametrix and each of its
Subsidiaries has complied with the laws, regulations, policies, procedures and
specifications applicable to Novametrix with respect to the design, manufacture,
labelling, testing and inspection of Novametrix Products in the United States
and the operation of manufacturing facilities in the United States promulgated
by the FDA, and has complied with the laws, regulations, policies, procedures
and specifications applicable to Novametrix or such Subsidiary, as applicable,
in any jurisdiction outside the United States with respect to the design,
manufacture, labelling, testing and inspection of Novametrix Products and the
operation of manufacturing facilities outside of the United States except for
such non-compliance as would not have a Novametrix Material Adverse Effect.
Except as disclosed on Exhibit 4.19(b) to the Novametrix Disclosure Schedule,
since April 28, 1996, there have been no recalls, field notifications or
seizures ordered or, to the knowledge of any of the officers of Novametrix or
any of its Subsidiaries, threatened by any such governmental or regulatory body
with respect to any of the Novametrix Products, other than Novametrix Third
Party Products, and neither Novametrix nor any of its Subsidiaries has
independently engaged in recalls or field notifications. In the case of
Novametrix Third Party Products distributed by Novametrix or any of its
Subsidiaries, neither Novametrix nor any of its Subsidiaries has received any
notices of any recalls, field notifications or seizures ordered or threatened by
any such governmental or regulatory body with respect to any of such Novametrix
Third Party Products, and neither Novametrix nor any of its Subsidiaries has
independently engaged in recalls or field notifications. Except as set forth on
Exhibit 4.19(b) to the Novametrix Disclosure Schedule, neither Novametrix nor
any of its Subsidiaries has received, and to the knowledge of any of the
officers of Novametrix or any of its Subsidiaries, there
<PAGE> 41
37
is no reasonable basis for, any warning letter or Section 305 notices from the
FDA.
(c) Except as set forth on Exhibit 4.19(c)(i) to the Novametrix
Disclosure Schedule, Novametrix or one or more of its Subsidiaries has obtained,
in all countries where Novametrix or such Subsidiary, as applicable, is
marketing or has marketed the Novametrix Products, all applicable licenses,
registrations, approvals, clearances and authorizations required to be obtained
by it by local, state or federal agencies (including the FDA) in such countries
regulating the safety, effectiveness and market clearance of the Novametrix
Products in such countries that are currently marketed by Novametrix or such
Subsidiary, as applicable, except where the failure to obtain such licenses,
registrations, approvals, clearances and authorizations would not have a
Novametrix Material Adverse Effect. Novametrix has made available to the Company
all information relating to the Novametrix Products in the United States, and
Exhibit 4.19(c)(ii) to the Novametrix Disclosure Schedule sets forth a list of
all licenses, registrations, approvals, permits and device listings. Exhibit
4.19(c)(iii) to the Novametrix Disclosure Schedule sets forth a description of
all inspections by regulatory authorities, recalls, product actions and audits
of Novametrix Products since April 28, 1996.
SECTION 4.20 Rights Agreement; Delaware Section 203; Charter
Supermajority Provisions; Warrant Antidilution. (a) The Board of Directors of
Novametrix has taken such action as is necessary to ensure that a Distribution
Date (as defined in the Rights Agreement of Novametrix dated March 14, 1989, as
amended (the "Rights Agreement")) does not occur, that Genstar does not become
an Acquiring Person (as defined in the Rights Agreement) and that the Rights (as
defined therein) do not become exercisable, in each case by reason of this
Agreement or any transaction contemplated by this Agreement.
(b) As of the date hereof and pursuant to Section 203(a)(1) of the
Delaware Law, the restrictions on Novametrix and the Merger Subsidiary contained
in Section 203 of the Delaware Law are, and at all times on, prior to or after
the Effective Time such restrictions shall be, inapplicable to the Merger, the
other transactions contemplated by this Agreement and Genstar and its affiliates
by reason of the Merger and the other transactions contemplated by this
Agreement.
<PAGE> 42
38
(c) The Board of Directors of Novametrix has taken such action as is
necessary to ensure that Article Twelfth of the Certificate of Incorporation of
Novametrix shall be inapplicable to the Merger, the other transactions
contemplated by this Agreement and Genstar and its affiliates by reason of the
Merger and the other transactions contemplated by this Agreement.
(d) The Board of Directors of Novametrix has taken such action as is
necessary to ensure that no antidilution adjustments to the Novametrix Warrants
shall occur as a result of the Merger and the other transactions contemplated by
this Agreement, including, without limitation, the issuance of the Rights.
(e) The Board of Directors of Novametrix shall have taken such action
as is necessary to ensure that no "Change in Control" under the Employment
Agreement dated as of June 1, 1988, as amended, between Novametrix and William
J. Lacourciere shall have occurred.
(f) Novametrix has heretofore delivered to the Company a true, complete
and correct copy of the resolutions of the Board of Directors of Novametrix
effectuating Section 4.20(a), (b), (c), (d) and (e).
SECTION 4.21 Proxy Statement. None of the information supplied by
Novametrix for inclusion in the Proxy Statement to be filed by Novametrix with
the SEC, and any amendments or supplements thereto, will, at the time the Proxy
Statement or any amendment or supplement thereto is first mailed to stockholders
of Novametrix, at the time such stockholders vote on adoption of this Agreement
and at the Effective Time, contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
ARTICLE V.
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 5.01 Conduct of the Company. Except as expressly contemplated
by this Agreement or as set forth on Exhibit 5.01 to the Company Disclosure
Schedule, from the date hereof until the Effective Time, the Company and its
Subsidiaries shall conduct their business in the ordinary
<PAGE> 43
39
course consistent with past practice and shall use their best efforts to
preserve intact their business organizations and relationships with third
parties and to keep available the services of their present officers and
employees. Except as otherwise approved in writing by Novametrix or as expressly
contemplated by this Agreement, and without limiting the generality of the
foregoing, from the date hereof until the Effective Time:
(a) the Company will not adopt or propose any change in its
certificate of incorporation or bylaws;
(b) the Company will not, and will not permit any of its
Subsidiaries to, merge or consolidate with any other Person (other than
another wholly owned Subsidiary) or acquire a substantial amount of
equity in or assets of any other Person;
(c) the Company will not, and will not permit any of its
Subsidiaries to, sell, lease, license or otherwise dispose of any
material assets or property except (i) pursuant to existing contracts
or commitments, (ii) in the ordinary course consistent with past
practice or (iii) for transfers between the Company and/or its
Subsidiaries;
(d) the Company will not declare or pay any dividends or make
any distributions on its Shares;
(e) the Company will not, and will not permit any of its
Subsidiaries to, (i) issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any Company Securities or Company
Subsidiary Securities, other than the issuance of Shares upon the
exercise of Company Options or Company Warrants outstanding on the date
hereof, (ii) split, combine or reclassify any Company Securities or
Company Subsidiary Securities or (iii) except as required or permitted
by this Agreement, repurchase, redeem or otherwise acquire any Company
Securities or any Company Subsidiary Securities;
(f) except as otherwise expressly permitted hereby, the
Company will not make any commitment or enter into any contract or
agreement material to the Company and its Subsidiaries taken as a whole
except in the ordinary course of business consistent with past
practice;
(g) the Company will not, and will not permit any of its
Subsidiaries to, (i) enter into any arrangement
<PAGE> 44
40
to provide any severance or termination pay to any director or officer
of the Company or any of its Subsidiaries, (ii) enter into any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director or officer
of the Company or any of its Subsidiaries, (iii) increase the benefits
payable under any existing severance or termination pay policies or
employment agreements, (iv) increase the compensation, bonus or other
benefits payable to directors or officers of the Company or any of its
Subsidiaries, or (v) accelerate the exercisability or vesting of any
Company Option or Company Warrant;
(h) the Company will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing; or
(i) the Company will not, and will not permit any of its
Subsidiaries to, take or agree or commit to take any action that would
make any representation and warranty of the Company hereunder
inaccurate in any material respect at, or as of any time prior to, the
Effective Time.
SECTION 5.02 Access to Information. From the date hereof until the
Effective Time, the Company will give Novametrix, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of the Company and its Subsidiaries, will
furnish to Novametrix, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
employees, counsel and financial advisors of the Company and its Subsidiaries to
cooperate with Novametrix in its investigation of the business of the Company
and its Subsidiaries; provided that no investigation pursuant to this Section
shall affect any representation or warranty given by the Company to Novametrix
hereunder. All nonpublic information provided to, or obtained by, Novametrix in
connection with the transactions contemplated hereby shall be "Proprietary
Information" of the Company for purposes of the Letter Agreement dated May 10,
1996 (the "Confidentiality Agreement") among Novametrix, Andros and Genstar
Capital LLC, the general partner of Genstar.
SECTION 5.03 Other Offers. From the date hereof until the termination
hereof, the Company and its Subsidiaries and the officers, directors, employees
or other agents of the Company and its Subsidiaries will not,
<PAGE> 45
41
directly or indirectly, (i) take any action to solicit, initiate or encourage
any Company Acquisition Proposal (as defined below) or (ii) engage in
negotiations with, or disclose any nonpublic information relating to the Company
or any of its Subsidiaries or afford access to the properties, books or records
of the Company or any of its Subsidiaries to, any Person that may be considering
making, or has made, a Company Acquisition Proposal. The Company shall
immediately cease and cause to be terminated any existing discussions or
negotiations with any parties (other than Novametrix) conducted heretofore with
respect to any of the foregoing. The Company will promptly notify Novametrix
after receipt of any Company Acquisition Proposal or any indication that any
Person is considering making a Company Acquisition Proposal or any request for
nonpublic information relating to the Company or any of its Subsidiaries or for
access to the properties, books or records of the Company or any of its
Subsidiaries by any Person that may be considering making, or has made, a
Company Acquisition Proposal. For purposes of this Agreement, "Company
Acquisition Proposal" means any offer or proposal for, or any indication of
interest in, a merger or other business combination involving the Company or any
of its Subsidiaries or the acquisition of any equity interest in, or a
substantial portion of the assets of, the Company or any of its Subsidiaries,
other than the transactions contemplated by this Agreement.
SECTION 5.04 Notices of Certain Events. The Company shall promptly
notify Novametrix of:
(i) any notice or other communication from any Person alleging
that the consent of such Person (or another Person) is or may be
required in connection with the transactions contemplated by this
Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting the Company or
any of its Subsidiaries which, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to
Section 3.12 or which relate to the consummation of the transactions
contemplated by this Agreement.
<PAGE> 46
42
SECTION 5.05 Affiliates. To ensure that the issuance of Novametrix
Common Stock in the Merger complies with the Securities Act, prior to the
Effective Time, the Company shall cause to be delivered to Novametrix a list
identifying each person who might at the time of the meeting of the Company's
stockholders be deemed to be an "affiliate" of the Company for purposes of Rule
145 under the Securities Act (each, a "Securities Act Affiliate"). The Company
shall use its best efforts to obtain from each person who is identified as a
possible Securities Act Affiliate prior to the Effective Time an agreement (a
"Securities Act Affiliate Agreement") providing that such person will not offer
to sell, sell or otherwise dispose of any Novametrix Common Stock issued to such
person in the Merger in violation of the Securities Act.
ARTICLE VI.
COVENANTS OF NOVAMETRIX
Novametrix agrees that:
SECTION 6.01 Conduct of Novametrix. Except as expressly contemplated by
this Agreement or as set forth on Exhibit 6.01 to the Novametrix Disclosure
Schedule, from the date hereof until the Effective Time, Novametrix and its
Subsidiaries shall conduct their business in the ordinary course consistent with
past practice and shall use their best efforts to preserve intact their business
organizations and relationships with third parties and to keep available the
services of their present officers and employees. Except as otherwise approved
in writing by the Company or as expressly contemplated by this Agreement, and
without limiting the generality of the foregoing, from the date hereof until the
Effective Time:
(a) Novametrix will not adopt or propose any change in its
certificate of incorporation or bylaws;
(b) Novametrix will not, and will not permit any of its
Subsidiaries to, merge or consolidate with any other Person (other than
another wholly owned Subsidiary) or acquire a substantial amount of
equity in or assets of any other Person;
(c) Novametrix will not, and will not permit any of its
Subsidiaries to, sell, lease, license or otherwise dispose of any
material assets or property except (i) pursuant to existing contracts
or commitments, (ii) in the ordinary course consistent
<PAGE> 47
43
with past practice or (iii) for transfers between Novametrix and/or its
Subsidiaries;
(d) Novametrix will not declare or pay any dividends or make
any distributions on Novametrix Common Stock; provided, however, that
the foregoing shall not prohibit any dividends being declared or paid
which are scheduled to accrue on the Novametrix Preferred Stock;
(e) Novametrix will not, and will not permit any of its
Subsidiaries to, (i) issue, deliver or sell, or authorize or propose
the issuance, delivery or sale of, any Novametrix Securities or
Novametrix Subsidiary Securities, other than the issuance of shares of
Novametrix Common Stock upon the exercise of Novametrix Options or
Novametrix Warrants outstanding on the date hereof, upon the conversion
of the Novametrix Preferred Stock or pursuant to any currently existing
stock option or employee stock purchase plans or (ii) split, combine or
reclassify any Novametrix Securities or Novametrix Subsidiary
Securities;
(f) except as otherwise expressly permitted hereby, Novametrix
will not make any commitment or enter into any contract or agreement
material to Novametrix and its Subsidiaries taken as a whole except in
the ordinary course of business consistent with past practice;
(g) Novametrix will not, and will not permit any of its
Subsidiaries to, (i) enter into any arrangement to provide any
severance or termination pay to any director or officer of Novametrix
or any of its Subsidiaries, (ii) enter into any employment, deferred
compensation or other similar agreement (or any amendment to any such
existing agreement) with any director or officer of Novametrix or any
of its Subsidiaries, (iii) increase the benefits payable under any
existing severance or termination pay policies or employment
agreements, (iv) increase the compensation, bonus or other benefits
payable to directors or officers of Novametrix or any of its
Subsidiaries, or (v) accelerate the exercisability or vesting of any
Novametrix Option;
(h) Novametrix will not, and will not permit any of its
Subsidiaries to, agree or commit to do any of the foregoing; or
<PAGE> 48
44
(i) Novametrix will not, and will not permit any of its
Subsidiaries to, take or agree or commit to take any action that would
make any representation and warranty of Novametrix hereunder inaccurate
in any material respect at, or as of any time prior to, the Effective
Time.
SECTION 6.02 Access to Information. From the date hereof until the
Effective Time, Novametrix will give the Company, its counsel, financial
advisors, auditors and other authorized representatives full access to the
offices, properties, books and records of Novametrix and its Subsidiaries, will
furnish to the Company, its counsel, financial advisors, auditors and other
authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
employees, counsel and financial advisors of Novametrix and its Subsidiaries to
cooperate with the Company in its investigation of the business of Novametrix
and its Subsidiaries; provided that no investigation pursuant to this Section
shall affect any representation or warranty given by Novametrix to the Company
hereunder. All nonpublic information provided to, or obtained by, the Company in
connection with the transactions contemplated hereby shall be "Proprietary
Information" of Novametrix for purposes of the Confidentiality Agreement.
SECTION 6.03 Other Offers. (a) From the date hereof until the
termination hereof, Novametrix and its Subsidiaries and the officers, directors,
employees or other agents of Novametrix and its Subsidiaries will not, directly
or indirectly, (i) take any action to solicit, initiate or encourage any
Novametrix Acquisition Proposal (as defined below) or (ii) engage in
negotiations with, or disclose any nonpublic information relating to Novametrix
or any of its Subsidiaries or afford access to the properties, books or records
of Novametrix or any of its Subsidiaries to, any Person that may be considering
making, or has made, a Novametrix Acquisition Proposal. Nothing contained in
this Section 6.03(a) or any other provision of this Agreement shall prevent the
Board of Directors of Novametrix, after receiving an opinion of outside counsel
to the effect that the Board is required to do so in order to discharge properly
its fiduciary duties, from considering, negotiating, approving and recommending
to the stockholders of Novametrix an unsolicited bona fide written Novametrix
Acquisition Proposal which the Board determines in good faith (after
consultation with its financial advisors) is made by a person financially
capable of consummating such Novametrix Acquisition Proposal (any such
Novametrix Acquisition Proposal being referred to herein as a "Superior
<PAGE> 49
45
Novametrix Proposal"). For purposes of this Agreement, "Novametrix Acquisition
Proposal" means any offer or proposal for, or any indication of interest in, a
merger or other business combination involving Novametrix or any of its
Subsidiaries or the acquisition of any equity interest in, or a substantial
portion of the assets of, Novametrix or any of its Subsidiaries, other than the
transactions contemplated by this Agreement.
(b) Novametrix will promptly notify the Company after receipt of any
Novametrix Acquisition Proposal or any indication that any Person is considering
making a Novametrix Acquisition Proposal or any request for nonpublic
information relating to Novametrix or any of its Subsidiaries or for access to
the properties, books or records of Novametrix or any of its Subsidiaries by any
Person that may be considering making, or has made, a Novametrix Acquisition
Proposal. Novametrix shall immediately cease and cause to be terminated any
existing discussions or negotiations with any parties (other than the Company)
conducted heretofore with respect to any of the foregoing.
(c) If the Board of Directors of Novametrix receives a request for
material nonpublic information by a party who makes a Superior Novametrix
Proposal, then, and only in such case, Novametrix may, subject to the execution
of a confidentiality agreement substantially similar to that then in effect
between the Company and Novametrix, provide such party with access to
information regarding Novametrix. Novametrix agrees not to release any third
party from any confidentiality or standstill agreement to which Novametrix is a
party.
SECTION 6.04 Obligations of Merger Subsidiary. Novametrix will take all
action necessary to cause the Merger Subsidiary to perform its obligations under
this Agreement and to consummate the Merger on the terms and conditions set
forth in this Agreement.
SECTION 6.05 Director and Officer Liability. From and after the
Effective Time, (a) Novametrix shall indemnify, defend and hold harmless the
present and former officers and directors of the Company and its Subsidiaries
against all losses, claims, damages and liability in respect of acts or
omissions occurring at or prior to the Effective Time and (b) the Surviving
Corporation shall indemnify, defend and hold harmless to the fullest extent
permitted by law the present and former officers and directors of the Company
and its Subsidiaries against all losses, claims, damages and liability in
respect of acts or omissions
<PAGE> 50
46
occurring at or prior to the Effective Time. Novametrix shall cause the
Surviving Corporation (and its successors) to establish and maintain provisions
in its certificate of incorporation and by-laws concerning the indemnification
and exoneration of the Company's former and present officers, directors,
employees and agents that are no less favorable to those persons than the
provisions of the Company's certificate of incorporation and by-laws in effect
on the date hereof.
SECTION 6.06 Inclusion in Nasdaq National Market. Novametrix shall use
its reasonable best efforts to cause the shares of Novametrix Common Stock to be
issued in the Merger (including the Underlying Shares) to be approved for
inclusion in the Nasdaq National Market subject to official notice of issuance,
prior to the Effective Time.
SECTION 6.07 Notice of Certain Events. Each of Novametrix and the
Merger Subsidiary shall promptly notify the Company of:
(i) any notice or other communication from any Person alleging
that the consent of such Person (or another Person) is or may be
required in connection with the transactions contemplated by this
Agreement;
(ii) any notice or other communication from any governmental
or regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(iii) any actions, suits, claims, investigations or
proceedings commenced or, to the best of its knowledge threatened
against, relating to or involving or otherwise affecting it or any of
its Subsidiaries which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 4.11 or
which relate to the consummation of the transactions contemplated by
this Agreement.
ARTICLE VII.
COVENANTS OF NOVAMETRIX AND THE COMPANY
The parties hereto agree that:
SECTION 7.01 Best Efforts. Subject to the terms and conditions of this
Agreement, each party will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
<PAGE> 51
47
advisable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement including, without limitation, obtaining all
material consents, waivers and approvals required in connection with the
authorization, execution and delivery of this Agreement by the parties and the
consummation by the parties of the Merger and the other transactions
contemplated by this Agreement and, if required, Novametrix acting as guarantor
or co-borrower under Andros' credit facilities.
SECTION 7.02 Certain Filings. The Company and Novametrix shall
cooperate with one another (a) in connection with the preparation of the Proxy
Statement, and (b) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (c) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith or with the
Proxy Statement and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.03 Public Announcements. Novametrix and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing agreement
with any national securities exchange or interdealer quotation system upon the
advice of counsel (in which case only reasonable efforts to consult with the
other party are required), will not issue any such press release or make any
such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed.
SECTION 7.04 Further Assurances. At and after the Effective Time, the
officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or the Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or the Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
<PAGE> 52
48
SECTION 7.05 Stockholder Meeting. Novametrix shall cause a meeting of
its stockholders (the "Stockholder Meeting") to be duly called and held, or
action to be taken by written consent without a Stockholder Meeting, as soon as
reasonably practicable for the purpose of voting on the approval and adoption of
this Agreement and the Merger. The Directors of Novametrix shall, unless any of
such respective Directors determines in good faith after consultation with and
based upon a written opinion of outside legal counsel that they are otherwise
required in accordance with their fiduciary duties, recommend approval and
adoption of this Agreement and the Merger by Novametrix' stockholders. In
connection with such meetings, Novametrix will use its best efforts to obtain
the necessary approvals by its stockholders of this Agreement, the transactions
contemplated hereby and such other matters as are contemplated by the terms of
this Agreement or required by Delaware Law, and will otherwise comply with all
legal requirements applicable to such meetings.
SECTION 7.06 Preparation of the Proxy Statement. Novametrix and the
Company shall promptly prepare and Novametrix shall file with the SEC a
preliminary version of the Proxy Statement and will use their best efforts to
respond to the comments of the SEC in connection therewith and to furnish all
information required to prepare the definitive Proxy Statement. Novametrix shall
also take any action (other than qualifying to do business in any jurisdiction
in which it is not now so qualified or filing a general consent to service of
process in any jurisdiction) required to be taken under any applicable state
securities laws in connection with the issuance of the Novametrix Common Stock
in the Merger and the Underlying Shares and the Company shall furnish all
information concerning the Company and the holders of Shares as may be
reasonably requested in connection with any such action. Novametrix will cause
the Proxy Statement to be mailed to its stockholders, and if necessary, after
the definitive Proxy Statement shall have been mailed, promptly circulate
amended, supplemented or supplemental proxy materials and, if required in
connection therewith, resolicit proxies.
ARTICLE VIII.
CONDITIONS TO THE MERGER
SECTION 8.01 Conditions to the Obligations of Each Party. The
obligations of the Company, Novametrix and the Merger Subsidiary to consummate
the Merger are subject to the satisfaction of the following conditions:
<PAGE> 53
49
(i) any applicable waiting period under the HSR Act relating
to the Merger shall have expired;
(ii) no provision of any applicable domestic law or regulation
shall be enacted, entered, enforced or deemed applicable to the Merger,
which makes the consummation of the Merger illegal, and no judgment,
injunction, order or decree of a court of competent jurisdiction
restraining or prohibiting the consummation of the Merger shall be in
effect;
(iii) there shall have been approved, by the requisite vote of
Novametrix' stockholders, the issuance of Novametrix Common Stock,
including the Underlying Shares, in connection with the Merger in
accordance with the rules of the Nasdaq National Market;
(iv) Novametrix and the Company shall have received an opinion
from Haythe & Curley, counsel to Novametrix, and from Shearman &
Sterling, counsel to the Company, based upon certain factual
representations of the Company, the Company's equityholders, Novametrix
and the Merger Subsidiary reasonably requested by such counsel, dated
the date of the Effective Time, to the effect that the Merger will be
treated for Federal income tax purposes as a reorganization within the
meaning of Section 368(a) of the Code, in form and substance reasonably
satisfactory to the Company and Novametrix; and
(v) The debt of Novametrix and the Company and their
respective Subsidiaries with respect to which consents of the lenders
thereunder are required to consummate the Merger shall have been
modified, amended, restructured, refinanced or repaid on terms
reasonably satisfactory to the boards of directors of both Novametrix
and the Company such that (i) there shall be available to Novametrix
and the Company an aggregate of at least $4,000,000 of unused borrowing
availability at the Effective Time in excess of any amounts necessary
to pay expenses of Novametrix and the Company incurred in connection
with the Merger and the other transactions contemplated hereby and (ii)
without the consent of Novametrix and the Company, the aggregate
non-revolving funded indebtedness of Novametrix and the Company shall
not exceed the amount thereof as of the date hereof, and such debt
shall contain such modifications to existing financial and other
covenants as shall be reasonably satisfactory to such boards of
directors, which may include Novametrix
<PAGE> 54
50
acting as guarantor or co-borrower under Andros' credit facilities.
SECTION 8.02 Conditions to the Obligations of Novametrix and Merger
Subsidiary. The obligations of Novametrix and the Merger Subsidiary to
consummate the Merger are subject to the satisfaction of the following
further conditions:
(i) the Company shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or
prior to the Effective Time, the representations and warranties of the
Company contained in this Agreement shall be true in all respects at
and as of the Effective Time as if made at and as of such time except
for (A) changes contemplated by this Agreement, (B) those
representations and warranties that address matters only as of a
particular date, provided that such representations and warranties are
true and correct as of such date, (C) changes in any law or regulation
applicable to the Company or any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries is bound,
(D) changes attributable to customers delaying orders or purchases
pending completion of the Merger, (E) changes arising out of general
economic conditions or conditions generally affecting the medical
device or automobile exhaust gas analyzer markets and (F) where the
failure to be so true and correct would not have a Company Material
Adverse Effect, and Novametrix shall have received a certificate signed
by an executive officer of the Company to the foregoing effect;
(ii) Novametrix shall have received a copy of the resolutions
of the Board of Directors of the Company authorizing the Merger, which
copy shall be certified by an executive officer of the Company;
(iii) the consents set forth on Exhibit 8.02(iii) to the
Novametrix Disclosure Schedule to the Merger and the transactions
contemplated by this Agreement shall have been obtained and be in
effect at the Effective Time;
(iv) Novametrix shall have received consolidated financial
statements of the Company as of July 28, 1996 and for the year then
ended, prepared in accordance with generally accepted accounting
principles applied on a basis consistent with the Andros SEC Filings
and in conformity with Regulation S-X of the Securities
<PAGE> 55
51
Act, audited by Coopers & Lybrand L.L.C., independent certified public
accountants for the Company; and
(v) Genstar shall have entered into a Voting Agreement in the
form of Exhibit A hereto (the "Voting Agreement").
SECTION 8.03 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction of the following further conditions:
(i) Novametrix and the Merger Subsidiary shall have performed
in all material respects all of their respective obligations hereunder
required to be performed by them at or prior to the Effective Time, the
representations and warranties of Novametrix and the Merger Subsidiary
contained in this Agreement shall be true in all respects at and as of
the Effective Time as if made at and as of such time except for (A)
changes contemplated by this Agreement, (B) those representations and
warranties that address matters only as of a particular date, provided
that such representations and warranties are true and correct as of
such date, (C) changes in any law or regulation applicable to
Novametrix or any of its Subsidiaries or by which any property or asset
of Novametrix or any of its Subsidiaries is bound, (D) changes
attributable to customers delaying orders or purchases pending
completion of the Merger, (E) changes arising out of general economic
conditions or conditions generally affecting the medical device market
and (F) where the failure to be so true and correct would not have a
Novametrix Material Adverse Effect, and the Company shall have received
a certificate signed by an executive officer of each of Novametrix and
the Merger Subsidiary to the foregoing effect;
(ii) the Company shall have received a copy of the resolutions
of the Board of Directors of Novametrix authorizing the Merger, which
copy shall be certified by an executive officer of Novametrix;
(iii) Novametrix shall have entered into the Voting Agreement;
(iv) Novametrix shall have entered into a Registration Rights
Agreement in the form of Exhibit B hereto (the "Registration Rights
Agreement"); and
<PAGE> 56
52
(v) the consents set forth on Exhibit 8.03(iv) to the Company
Disclosure Schedule to the Merger and the transactions contemplated by
this Agreement shall have been obtained and be in effect at the
Effective Time.
ARTICLE IX.
TERMINATION
SECTION 9.01 Termination. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company or
Novametrix);
(i) by mutual written consent of the Company and Novametrix;
(ii) by either the Company or Novametrix, if the Merger has
not been consummated by March 31, 1997 (provided that the right to
terminate this Agreement under this clause shall not be available to
any party whose failure to fulfill any of its obligations under this
Agreement has been the cause of or resulted in the failure to
consummate the Merger by such date);
(iii) by either the Company or Novametrix, if there shall be
any applicable domestic law, rule or regulation that makes consummation
of the Merger illegal or otherwise prohibited or if any judgment,
injunction, order or decree of a court of competent jurisdiction shall
restrain or prohibit the consummation of the Merger, and such judgment,
injunction, order or decree shall become final and nonappealable;
(iv) by either the Company or Novametrix, if the stockholder
approval referred to in Section 8.01(iii) shall not have been obtained
by reason of the failure to obtain the requisite vote upon a vote at a
duly held meeting of stockholders or at any adjournment thereof;
(v) by the Company if the Board of Directors of Novametrix or
any committee thereof with the power to do so shall have withdrawn or
modified in a manner adverse to the Company its approval or
recommendation of this Agreement, the Merger or any other transaction
contemplated hereby or shall have recommended, taken a neutral position
with respect to, been unable to take a position with respect to or
failed to reject another
<PAGE> 57
53
merger, consolidation or business combination with, or acquisition of,
Novametrix or its assets or another tender or exchange offer for shares
of Novametrix Common Stock, or shall have resolved to do any of the
foregoing;
(vi) by either the Company or Novametrix (the "Terminating
Party") if (x) there has been a breach by the other party of any
representation or warranty contained in this Agreement which would have
or would be reasonably likely to have a Novametrix Material Adverse
Effect or Company Material Adverse Effect, as the case may be, or (y)
there has been a material breach of any of the covenants or agreements
set forth in this Agreement on the part of the other party, which
breach is not curable or, if curable, is not cured within 30 days after
written notice of such breach is given by the Terminating Party to the
other party; or
(vii) by the Company if it shall have been disclosed or the
Company shall have otherwise learned that ownership of an aggregate of
50% or more of the then outstanding shares of Novametrix Common Stock
has been acquired by any person and such person's affiliates, other
than Genstar or its affiliates.
SECTION 9.02 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.01, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that (a) the agreements
contained in Section 9.03, the last sentence of Section 5.02 and the last
sentence of Section 6.02 shall survive the termination hereof, and (b) nothing
herein shall relieve any party hereto from liability for any willful breaches
hereof.
SECTION 9.03 Fees and Expenses. (a) The Company shall pay Novametrix a
fee of $3,000,000 (the "Novametrix Fee"), plus actual, documented out-of-pocket
expenses of Novametrix and its affiliates relating to the transactions
contemplated by this Agreement (including, but not limited to, reasonable fees
and expenses payable to Novametrix' counsel, accountants, financial advisors,
consultants, banks, other financial institutions and other persons and their
respective agents and counsel) (the "Novametrix Expenses"), upon termination of
this Agreement by Novametrix pursuant to Section 9.01(vi) due to a breach by the
Company of any of its covenants or agreements set forth in Section 5.03.
<PAGE> 58
54
(b) Novametrix shall pay the Company a fee of $3,000,000 (the "Company
Fee" and, together with the Novametrix Fee, the "Fees" ), plus actual,
documented out-of-pocket expenses of the Company and its affiliates relating to
the transactions contemplated by this Agreement (including, but not limited to,
reasonable fees and expenses payable to the Company's counsel, accountants,
financial advisors, consultants, banks, other financial institutions and other
persons and their respective agents and counsel) (the "Company Expenses" and,
together with the Novametrix Expenses, the "Expenses"), upon the earlier to
occur of the following events:
(i) this Agreement is terminated by the Company pursuant to Section
9.01(v) or Section 9.01(vii);
(ii) this Agreement is terminated by the Company pursuant to Section
9.01(vi) due to a breach by Novametrix of any of its covenants or agreements set
forth in Section 6.03; or
(iii) this Agreement is terminated by Novametrix or the Company
pursuant to Section 9.01(iv) as a result of a failure to obtain the requisite
Novametrix stockholder approval if, at the time of the taking of the vote for
such approval, or any adjournment thereof, there shall have been publicly
announced, and not withdrawn, a proxy contest, tender offer, exchange offer,
merger or other Novametrix Acquisition Proposal (the "Pre-Termination
Transaction"), and, within 12 months of such vote, Novametrix shall enter into,
or be the subject of, a transaction which would qualify as a transaction under
the definition of "Novametrix Acquisition Proposal" or any transaction wherein a
person or group of persons acquires 50% or more of the outstanding voting
securities of the Company (inclusive of voting rights contingent on conversion),
in any such case with the same persons, or affiliates of the persons, who shall
have proposed the Pre-Termination Transaction (any such transaction being a
"Post-Termination Transaction").
(c) The Fees shall be paid within one business day after the first to
occur of the events described in Section 9.03(a), (b)(i) or (b)(ii), or
Novametrix' entering into or becoming the subject of a Post-Termination
Transaction.
(d) In the event that a party shall fail to pay a Fee or any Expenses
when due, the term Expenses shall be deemed to include the costs and expenses
actually incurred by the other party and its respective stockholders and
<PAGE> 59
55
affiliates (including, without limitation, reasonable fees and expenses of
counsel) in connection with the collection under and enforcement of this
Section 9.03.
(e) Except as set forth in this Section 9.03, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not any
such transaction is consummated.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopy, telex or similar
writing) and shall be given,
if to Novametrix or the Merger Subsidiary, to:
One Barnes Industrial Park Road
Wallingford, Connecticut 06482
Telephone: (203) 265-7701
Telecopy: (203) 269-0189
Attention: President
with a copy to:
Haythe & Curley
237 Park Avenue
New York, New York 10017
Telephone: (212) 880-6000
Telecopy: (212) 682-0200
Attention: Andrew J. Beck, Esq.
if to the Company to:
Metro Tower, Suite 1170
950 Tower Lane
Foster City, California 94404
Telephone: (415) 280-2350
Telecopy: (415) 286-2383
Attention: President
<PAGE> 60
56
with a copy to:
Shearman & Sterling
555 California Street
San Francisco, California 94104
Telephone: (415) 616-1100
Telecopy: (415) 616-1199
Attention: Michael J. Kennedy, Esq.
or such other address or telex or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective when delivered at the address
specified in this Section .
SECTION 10.02 Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only if,
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Company, Novametrix and the Merger Subsidiary or, in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
(i) any waiver or amendment shall be effective against a party only if the Board
of Directors of such party approves such waiver or amendment and only such Board
of Directors can take actions on behalf of that party and (ii) after the
adoption of this Agreement by the stockholders of the Company, no such amendment
or waiver shall, without the further approval of such stockholders and each
party's Board of Directors, alter or change (x) the amount or kind of
consideration to be received in exchange for any shares of capital stock of the
Company, (y) any term of the certificate of incorporation of the Surviving
Corporation or (z) any of the terms or conditions of this Agreement if such
alteration or change would adversely affect the holders of any shares of capital
stock of the Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 10.03 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign,
<PAGE> 61
57
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto.
SECTION 10.04 Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of Delaware applicable in
the case of agreements made and to be performed entirely within such State.
SECTION 10.05 Counterparts; Effectiveness. This Agreement may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 10.06 Entire Agreement. This Agreement, the Registration Rights
Agreement and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior agreements, understandings and negotiations, both written and oral,
between the parties with respect to the subject matter of this Agreement. No
representation, inducement, promise, understanding, condition or warranty not
set forth herein has been made or relied upon by either party hereto. Neither
this Agreement nor any provision hereof is intended to confer upon any Person
other than the parties hereto any rights or remedies hereunder except for the
provisions of Section 6.05, which are intended for the benefit of the Company's
former and present officers, directors, employees and agents and the provisions
of Article I, which are intended for the benefit of the Company's stockholders,
including holders of Equity Units, Company Options, and Company Warrants.
<PAGE> 62
58
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ANDROS HOLDINGS INC.
/s/ Jean-Pierre L. Conte
By:---------------------------
Title: Vice President & Treasurer
/s/ Daniel J. Boverman
By:---------------------------
Title: Vice President and Secretary
NOVAMETRIX MEDICAL SYSTEMS
INC.
/s/ William J. Lacourciere
By:---------------------------
Title: President
NOVAMETRIX ACQUISITION CORP.
/s/ William J. Lacourciere
By:---------------------------
Title: President
<PAGE> 63
EXHIBIT A
VOTING AGREEMENT dated as of ________, 1996 (this "Agreement")
between Novametrix Medical Systems Inc., a Delaware corporation (the
"Corporation"), and Genstar Capital Partners II, L.P., a Delaware limited
partnership ("Genstar").
W I T N E S S E T H:
WHEREAS, the Corporation, Novametrix Acquisition Corp., a
Delaware corporation (the "Merger Subsidiary"), and Andros Holdings Inc., a
Delaware corporation ("Andros"), have entered into an Agreement and Plan of
Merger dated as of July 29, 1996 (the "Merger Agreement") pursuant to which the
Merger Subsidiary is to be merged (the "Merger") with and into Andros, Andros is
to become a wholly owned subsidiary of the Corporation and the Corporation is to
issue shares (the "Genstar Shares") of its common stock, par value $.01 per
share ("Common Stock"), to Genstar; and
WHEREAS, a condition to consummation of the Merger is that
Genstar and the Corporation enter into a voting agreement on the terms set forth
herein.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived and the conditions and promises herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Voting Agreement. In any written consent or meeting of the
stockholders of the Corporation prior to January 1, 1999, Genstar agrees to vote
all its Genstar Shares in favor of a Board of Directors of the Corporation, at
least one-half of whose members shall be nominated by a majority of the current
directors of the Corporation who continue to be directors of the Corporation on
(i) the date such consent is executed, (ii) the date that notice of such meeting
is mailed to the stockholders of the Corporation or (iii) if no such notice is
mailed, the date of such meeting; provided, however, that no more than two of
such nominees may be members of the management of the Corporation; and provided,
further, that nothing in this Agreement shall require Genstar to vote in favor
of a Board of Directors less than half of whose members are nominees of Genstar.
2. Purchasers or Transferees of Genstar Shares. Any person or
entity who shall acquire prior to January 1, 1999 (either voluntarily or
involuntarily, by operation of law or otherwise) any Genstar Shares other than
pursuant to an offering registered under the Securities Act of 1933, as amended
(the "Act"), or pursuant to Rule 144 under the Act
<PAGE> 64
2
or as otherwise required by applicable law (upon the consummation of (x) the
sale of Genstar Shares to the public pursuant to an offering registered under
the Act or pursuant to Rule 144 under the Act, or (y) the transfer of Genstar
Shares where it is required by applicable law that the transferee(s) take such
securities free from the restrictions imposed by this Agreement, such securities
shall cease to be Genstar Shares for all purposes of this Agreement) shall be
bound by all of the provisions of this Agreement and, prior to registration of,
and as a condition to, the issuance or transfer of any such Genstar Shares on
the books of the Corporation, any purchaser, acquiror or other transferee shall
execute an agreement in favor of the parties hereto agreeing to be bound by such
provisions.
3. Legend. The stock certificates evidencing the Genstar
Shares shall bear a legend reading substantially as follows:
"Until January 1, 1999 (at which time this legend shall
automatically become null and void), these shares shall be subject to
the provisions of the Voting Agreement dated as of __________, 1996
between the Corporation and Genstar Capital Partners II, L.P., a copy
of which is on file at the principal place of business of the
Corporation, including provisions regarding the voting and transfer
hereof."
4. Reorganization, Etc. The provisions of this Agreement shall
apply mutatis mutandi to any shares of capital stock resulting from any stock
split or reverse split, stock dividend, reclassification of the capital stock of
the Corporation, consolidation, merger or reorganization of the Corporation.
5. Termination. This Agreement shall terminate on January 1,
1999.
6. Notices. Any notice or other communication under this
Agreement shall be in writing and sufficient if delivered personally, by
telecopy or sent by registered or certified mail, postage prepaid, addressed as
follows:
If to the Corporation:
One Barnes Industrial Park Road
Wallingford, Connecticut 06482
Telephone: (203) 265-7701
Telecopy: (203) 269-0189
Attention: President
<PAGE> 65
3
with a copy to:
Haythe & Curley
237 Park Avenue
New York, New York 10017
Telephone: (212) 880-6000
Telecopy: (212) 682-0200
Attention: Andrew J. Beck, Esq.
If to Genstar:
Metro Tower, Suite 1170
950 Tower Lane
Foster City, California 94404-2121
Telephone: (415) 286-2350
Telecopy: (415) 286-2383
Attention: President
with a copy to:
Shearman & Sterling
555 California Street
San Francisco, California 94104
Telephone: (415) 616-1100
Telecopy: (415) 616-1199
Attention: Michael J. Kennedy, Esq.
All such notices and communications shall be deemed to have been duly given at
the time delivered by hand, if personally delivered, upon confirmation of
receipt, if sent by telecopy, or three (3) business days after being deposited
in the mail, if sent by registered or certified mail. Any party may, upon
written notice to the other parties hereto, change the address to which notices
or other communications to such party are to be delivered or mailed.
7. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
8. Entire Agreement. This Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof.
All of the parties hereto agree that this Agreement may be amended or modified
or any provision hereof may be waived by a written agreement between Genstar and
the Corporation. This Agreement supersedes all prior understandings,
negotiations and agreements relating to the subject matter hereof.
<PAGE> 66
4
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State, without regard
to any conflict of laws principles of such State which would apply the laws of
any other jurisdiction.
10. Jurisdiction; Waiver of Trial by Jury. THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE PARTIES AGREE THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE PARTIES FURTHER WAIVE TRIAL BY JURY, ANY OBJECTION TO VENUE
IN SUCH STATE AND ANY OBJECTION TO ANY ACTION OR PROCEEDING IN SUCH STATE ON THE
BASIS OF FORUM NON CONVENIENS. THE PARTIES FURTHER AGREE THAT ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE BROUGHT ONLY IN
A NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY.
11. Headings. The headings in this Agreement are solely for
convenience of reference and shall not affect the interpretation of any of the
provisions hereof.
12. Severability. If any provision herein contained shall be
held to be illegal or unenforceable, such holding shall not affect the validity
or enforceability of the other provisions of this Agreement.
13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Corporation, Genstar, each of their respective
successors, permitted assigns, executors, administrators, legal representatives
and heirs, as applicable.
14. Construction. The parties hereto agree that this Agreement
is the product of negotiations between sophisticated parties, each of whom were
represented by counsel, and each of whom had an opportunity to participate in,
and did participate in, the drafting of each provision hereof.
<PAGE> 67
5
IN WITNESS WHEREOF, each of the parties hereto has executed
this Voting Agreement on the date first above written.
NOVAMETRIX MEDICAL SYSTEMS INC.
By:___________________________
Name:
Title:
GENSTAR CAPITAL PARTNERS II, L.P.
By:___________________________
Name:
Title:
<PAGE> 68
EXHIBIT B
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
among
NOVAMETRIX MEDICAL SYSTEMS INC.
and
certain of its stockholders
Dated as of _______, 1996
- --------------------------------------------------------------------------------
<PAGE> 69
TABLE OF CONTENTS
SECTION PAGE
Recitals..................................................... 1
1. Registration of Common Stock................................. 1
2. Legend and Compliance with Securities Laws................... 14
3. Appointment of Stockholder Representative.................... 15
4. Investment in the Corporation................................ 16
5. Reorganization, Etc.......................................... 17
6. Notices...................................................... 17
7. Counterparts................................................. 19
8. Entire Agreement............................................. 19
9. Governing Law................................................ 19
10. Jurisdiction; Waiver of Trial by Jury........................ 19
11. Headings..................................................... 19
12. Severability................................................. 19
13. Binding Effect............................................... 20
14. Construction................................................. 20
<PAGE> 70
REGISTRATION RIGHTS AGREEMENT dated as of _______, 1996 (this
"Agreement") among Novametrix Medical Systems Inc., a Delaware corporation (the
"Corporation"), Genstar Capital Partners II, L.P., a Delaware limited
partnership ("Genstar"), and the other persons listed on Exhibit A hereto
(collectively, including Genstar, the "Stockholders").
W I T N E S S E T H:
WHEREAS, the Corporation, Novametrix Acquisition Corp., a
Delaware corporation (the "Merger Subsidiary"), and Andros Holdings Inc., a
Delaware corporation ("Andros"), are entering into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement") pursuant to which
the Merger Subsidiary is to be merged (the "Merger") with and into Andros,
Andros is to become a wholly owned subsidiary of the Corporation and the
Corporation is to issue shares of its common stock, par value $.01 per share
("Common Stock"), to the Stockholders; and
WHEREAS, a condition to consummation of the Merger is that the
Corporation provides the Stockholders with certain registration rights and the
parties wish to make the representations and enter into the covenants set forth
herein.
NOW, THEREFORE, in consideration of the mutual benefits to be
derived and the conditions and promises herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Registration of Common Stock. (a) At any time after the end
of the nine-month period beginning on the date of the Effective Time (as defined
in the Merger Agreement), the Stockholder Representative (as defined in Section
3(a)) shall have the right to request that the Corporation effect the
registration under the Securities Act of 1933, as amended (the "Securities
Act"), of any or all shares of Common Stock issued in the Merger or constituting
Underlying Shares (as defined in the Merger Agreement) and beneficially owned by
the Stockholders (the shares of Common Stock requested to be registered under
this subsection (a) are hereinafter collectively referred to as the "Demand
Registration Shares"); provided that each request by the Stockholder
Representative hereunder shall (x) specify the intended method of disposition
thereof by the Stockholders and (y) shall cover in the aggregate at least a
number of shares of Common Stock equal to 20% of the number of shares of Common
Stock (as such number shall be appropriately
<PAGE> 71
2
adjusted for stock dividends, stock splits and similar events) issued in the
Merger and beneficially owned by the Stockholders immediately after the
Effective Time (the "Original Shares"). The Corporation shall not be obligated
to file and cause to become effective more than two registration statements in
which Demand Registration Shares are registered pursuant to this subsection (a)
and there shall be at least a six-month period between such filings under this
subsection (a). The Stockholders' rights under this subsection (a) shall
terminate upon the earlier to occur of (1) the tenth anniversary of the date
hereof and (2) the date on which at least 80% of the aggregate number of
Original Shares and Underlying Shares shall have been registered under the
Securities Act.
(b) In the event that any of the Stockholders, if they have
the right to do so, exercises its rights under subsection (a) of this Section 1,
the Corporation shall use its reasonable best efforts to cause the sale of the
Demand Registration Shares to be registered under the Securities Act and to
effect and to comply with all such regulatory qualifications, compliances and
requirements as may be necessary to permit the sale or other transfer of such
Demand Registration Shares, in the manner described in such request, including,
without limitation, qualifications under applicable blue sky or other state
securities laws (provided that the Corporation shall not be required in
connection therewith to qualify as a foreign corporation or to execute a general
consent to service of process in any state); provided, however, that (i) if the
legend set forth in Section 2(a) is or has been removed from the certificates
evidencing any of the Demand Registration Shares pursuant to Section 2(b), then
the Corporation shall not be required to take any action with respect to the
registration of such Demand Registration Shares or other steps contemplated
hereby in connection therewith and such Demand Registration Shares shall not be
deemed included in a registration request for purposes of the requirement set
forth in clause (y) of Section 1(a) and (ii) the Corporation shall have the
right to delay such registration for one period of 90 days in any twelve-month
period by written notice to the Stockholder Representative in the event that the
Board of Directors of the Corporation determines in good faith that such delay
is in the best interests of the Corporation, provided that the Stockholder
Representative shall be entitled to withdraw such request within 30 days of
receipt of such notice and if such request is withdrawn, such registration shall
not constitute a registration to which the Stockholders are entitled pursuant to
this Section 1.
<PAGE> 72
3
(c) In the event that, at any time or from time to time, the
Corporation proposes to register the sale of any shares of Common Stock to be
issued by the Corporation or sold by any holder of shares of Common Stock (the
"Registration Shares") under the Securities Act pursuant to a registration
statement to be filed after the end of the nine-month period beginning after the
date of the Effective Time, including, without limitation, pursuant to Section
1(a) above but other than pursuant to a registration statement on Forms S-4 or
S-8, or any successor to such Forms, for the purpose of the issuance, sale or
other transfer of the Registration Shares by the Corporation or such holder, the
Corporation shall mail or deliver to each of the Stockholders at least 15 days
prior to the filing of the registration statement covering such Registration
Shares, a written notice (a "Registration Notice") of its intention so to
register the Registration Shares, and specifying the date by which the
Supplemental Notice referred to in Section 1(d) below must be returned to the
Corporation.
(d) In the event that a Registration Notice shall have been so
mailed or delivered, each of the Stockholders, at such person's election, may
mail or deliver to the Corporation a written notice or notices (a "Supplemental
Notice") (i) specifying the number of shares of Common Stock issued in the
Merger and Underlying Shares (collectively "Supplemental Registration Shares")
proposed to be sold or otherwise transferred by such Stockholder, (ii)
describing the proposed manner of sale or other transfer thereof and (iii)
requesting the registration thereof under the Securities Act; provided, however,
that such Supplemental Notice shall be so mailed or delivered by any Stockholder
not more than 10 days after the date of the Registration Notice.
(e) From and after receipt of a Supplemental Notice, the
Corporation shall, subject to the prior sale or other transfer of some or all of
such Registration Shares and subject to the provisions of subsection (a) above,
use its reasonable best efforts to cause the Supplemental Registration Shares
specified in such Supplemental Notice to be registered under the Securities Act
and to effect and to comply with all such regulatory qualifications and
requirements as may be necessary to permit the sale or other transfer of such
Supplemental Registration Shares in the manner described in such Supplemental
Notice, including, without limitation, qualifications under applicable blue sky
or other state securities laws (provided that the Corporation shall not be
required in connection therewith to qualify as a foreign corporation or to
execute a general
<PAGE> 73
4
consent to service of process in any state); provided, however, that (i) if in
the case of an underwritten public offering of the Registration Shares the
managing underwriter shall advise the Corporation that the inclusion of some or
all of such Supplemental Registration Shares would, in such managing
underwriter's judgment, materially interfere with the proposed distribution of
the Registration Shares, then the Corporation may, upon written notice to the
Stockholders holding Supplemental Registration Shares, allocate or eliminate (x)
first, shares of Common Stock held by officers or directors of the Corporation
otherwise to be included in the registration statement, and (y) second, the
Supplemental Registration Shares otherwise to be included in the registration
statement (if and to the extent such allocation or elimination is indicated by
such managing underwriter as necessary to eliminate such interference after
giving effect to clause (x) above) pro rata among the holders of the
Supplemental Registration Shares on the basis of the number of Supplemental
Registration Shares held by the holders thereof, (ii) if the legend set forth in
Section 2(a) is or has been removed from the certificates evidencing any of the
Supplemental Registration Shares pursuant to Section 2(b), then the Corporation
shall not be required to take any action with respect to the registration of
such Supplemental Registration Shares or other steps contemplated hereby in
connection therewith and (iii) the Corporation shall have the right to delay or
abandon such registration at any time in the event that the Board of Directors
of the Corporation determines in good faith that such delay is in the best
interest of the Corporation.
(f) If and whenever the Corporation is required by the
provisions of this Section 1 to use its reasonable best efforts to effect the
registration under the Securities Act of any securities requested to be so
registered by any Stockholder, the Corporation will, as promptly as practicable:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with respect to
such securities and use its reasonable best efforts to cause such
registration statement to become effective;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period from the date of the effectiveness
thereof through the earlier of (1) the date which is nine (9) months
after the date of
<PAGE> 74
5
effectiveness thereof and (2) the date on which all Demand Registration
Shares and/or Supplemental Registration Shares included in such
registration statement shall have been sold or otherwise disposed of by
Stockholders pursuant to such registration statement, and to comply
with the provisions of the Securities Act with respect to the sale or
other disposition of all shares of Common Stock covered by such
registration statement whenever such Stockholder(s), shall desire to
sell or otherwise dispose of the same within such period;
(iii) furnish to such Stockholder(s), as applicable, such
number of copies of a prospectus, including a preliminary prospectus
and final prospectus, in conformity with the requirements of the
Securities Act, and such other documents as may reasonably be requested
thereby in order to facilitate the public sale or other disposition of
such shares of Common Stock owned thereby;
(iv) notify the Stockholder Representative promptly of any
request by the Commission for the amendment or supplement of such
registration statement or prospectus or for additional information, and
notify such stockholder promptly of the filing of each amendment or
supplement to such registration statement or prospectus;
(v) advise the Stockholder Representative, promptly after it
shall receive notice, of the issuance of any stop order by the
Commission suspending the effectiveness of such registration statement
or the initiation or threatening of any proceeding for that purpose and
promptly use its reasonable best efforts to prevent the issuance of any
stop order or to obtain its withdrawal if such stop order should be
issued;
(vi) with respect to any registration statement relating to
an underwritten offering which includes Demand Registration Shares
and/or Supplemental Registration Shares, upon the request of the
Stockholder Representative, the Corporation shall cooperate with the
Stockholder Representative to obtain and furnish at the closing
provided for in the underwriting agreement (1) an opinion of counsel to
the Corporation, dated such date, addressed to the underwriters and to
the Stockholder(s) registering the sale of shares of Common Stock, and
(2) a "cold comfort" letter from the independent certified public
accountants of the Corporation, dated such date,
<PAGE> 75
6
addressed to the underwriters and to such Stockholder(s), in each case,
covering substantially the same matters with respect to the issuer,
such registration statement (and the prospectus included therein) and
with respect to the events subsequent to the date of the financial
statements included in such registration statement, as are customarily
covered in opinions of issuer's counsel and in accountants' letters
delivered to the underwriters in underwritten public offerings of
securities;
(vii) notify such Stockholder(s), in writing, at any time when
a prospectus relating to such shares of Common Stock is required to be
delivered under the Securities Act within the appropriate period
mentioned in clause (ii) immediately preceding, of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing, and promptly prepare (and
file with the Commission) and furnish to the Stockholder(s) whose
shares of Common Stock are offered in such prospectus a reasonable
number of copies of a supplement to or an amendment of such prospectus
as may be necessary so that, as thereafter delivered to the purchasers
of such shares of Common Stock, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(g) The Stockholders agree to furnish the Corporation such
information regarding themselves and the proposed distribution of Demand
Registration Shares or Supplemental Registration Shares, as the case may be, by
such Stockholder(s) as the Corporation may from time to time reasonably request
in writing in order to prepare a registration statement and prospectus or any
supplement or amendment thereto pursuant to the Securities Act and the rules and
regulations promulgated thereunder.
(h) The Stockholders agree that, upon receipt of a written
notice from the Corporation of the happening of any event of the kind described
in clause (vii) of Section 1(f) above, they will forthwith discontinue their
disposition of Demand Registration Shares or Supplemental Registration Shares,
as the case may be, pursuant to the
<PAGE> 76
7
registration statement relating to such Demand Registration Shares or
Supplemental Registration Shares, as the case may be, until their receipt of the
copies of the supplemented or amended prospectus contemplated by clause (vii) of
Section 1(f) above and, if so requested by the Corporation in writing, will
deliver to the Corporation (at the Corporation's expense) all copies then in
their possession, other than permanent file copies, of the prospectus relating
to such Demand Registration Shares or Supplemental Registration Shares, as the
case may be.
(i) The Corporation shall pay all expenses (the "Registration
Expenses") necessary to effect under the Securities Act any registration
statements, amendments or supplements filed pursuant to this Section 1 (other
than any underwriters' discounts and commissions and any brokerage commissions
and fees payable with respect to shares of Common Stock sold by any Stockholder
and legal fees and expenses of counsel to the Stockholders other than, in
connection with a registration statement prepared pursuant to Section 1(a) and
the first two registration statements which include Supplemental Registration
Shares, reasonable fees and expenses of one counsel to the Stockholders selected
by the Stockholder Representative), including, without limitation, printing
expenses, fees of the Commission and the National Association of Securities
Dealers, Inc., expenses of compliance with blue sky and other state securities
laws, and accounting and legal fees and expenses of counsel to the Corporation
and, in connection with a registration statement prepared pursuant to Section
1(a) and the first two registration statements which include Supplemental
Registration Shares, reasonable fees and expenses of one counsel to the
Stockholders selected by the Stockholder Representative; provided, however, that
in the event that the registration statement is not declared effective as a
result of the withdrawal by one or more Stockholders of the Demand Registration
Shares from the registration (a "Withdrawn Registration"; provided, that a
Withdrawn Registration shall not include a registration statement withdrawn by
the applicable person(s) as a result of a delay imposed by the Corporation
pursuant to Section 1(b)(ii) hereof), such Withdrawn Registration shall count as
one of the two registration statements prepared pursuant to Section 1(a) with
respect to which the Corporation is obligated to pay the Registration Expenses
unless such Stockholder(s) shall pay all Registration Expenses incurred by the
Corporation in the Withdrawn Registration (but in any event such Withdrawn
Registration shall not count as one of the two registration statements that the
Corporation is obligated to file and cause to become effective pursuant to
Section 1(a)). Nothing herein
<PAGE> 77
8
shall be deemed to prohibit the same counsel from representing both the
Corporation and the Stockholders in connection with any such registration,
subject to obtaining required consents.
(j) It is understood and agreed that the Corporation shall not
be obligated to provide or effect an underwritten offering of shares of Common
Stock in the event that a registration is effected pursuant to Section 1(a)
hereof. Whenever a registration statement requested pursuant to Section 1(a)
hereof covers an underwritten public offering (as determined by the Corporation)
the Stockholder Representative shall have, subject to the reasonable prior
approval of the Corporation (including based on recognized standing and pricing
factors), the right to select the managing underwriter(s) to administer the
offering. In the event of an underwritten public offering as aforesaid, the
Corporation agrees reasonably to cooperate (and to cause its officers reasonably
to cooperate) with the managing underwriter(s) in a manner customary for issuers
of securities in an underwritten secondary public offering. If the Corporation
at any time proposes to register any of its securities under the Securities Act
for sale for its own account and such securities are to be distributed by or
through one or more underwriter(s), the Corporation will have the right to
select the managing underwriter(s) to administer the offering, provided that if
the number of Supplemental Registration Shares is greater than the number of
shares to be sold by the Corporation in connection therewith, the Corporation
shall give due consideration to any reasonable request by the Stockholder
Representative that a particular investment banking firm of recognized standing
be included in the underwriting syndicate.
(k) Each Stockholder agrees that, in the event the Corporation
files a registration statement under the Securities Act with respect to an
underwritten public offering of any securities of the Corporation in which such
Stockholder was permitted to participate (whether or not such Stockholder does
in fact participate), if required by the underwriters thereof, such Stockholder
will not effect any public sale or distribution, including any sale pursuant to
Rule 144 promulgated under the Securities Act, of any equity securities of the
Corporation or any securities convertible into or exchangeable or exercisable
for any equity security of the Corporation (other than as part of such
underwritten public offering) during the seven days prior to or 90 days after,
or such longer period as may be required by the underwriters thereof (not to
exceed in any event 180 days), the effectiveness of such registration statement.
<PAGE> 78
9
(l) The Corporation agrees that, in the event the Corporation
files a registration statement under the Securities Act with respect to an
underwritten public offering of any Demand Registration Shares, if required by
the underwriters thereof, the Corporation will not effect any public sale or
distribution of any equity securities of the Corporation or any securities
convertible into or exchangeable or exercisable for any equity security of the
Corporation (other than as part of such underwritten public offering) during the
seven days prior to or 90 days after, or such longer period as may be required
by the underwriters thereof (not to exceed in any event 180 days), the
effectiveness of such registration statement, other than (i) pursuant to
employee stock option plans in existence on the effective date of the
registration statement, (ii) upon the conversion of convertible securities or
the exercise of warrants outstanding on such effective date, or (iii) in
connection with an acquisition by the Corporation, whether in the form of an
asset purchase, stock exchange, merger or otherwise.
(m) In the event of any registration pursuant to this Section
1 covering shares of Common Stock beneficially owned by any Stockholder, the
Corporation will indemnify and hold harmless each such Stockholder (if shares of
Common Stock of that person are included in the subject registration statement),
each such Stockholder's directors, officers and general partners, if any, the
directors and officers of any such general partner, each underwriter (as defined
in the Securities Act), if any, of Demand Registration Shares and each other
person or entity, if any, who controls such Stockholder or underwriter within
the meaning of the Securities Act (collectively, the "Indemnitees") against any
losses, claims, damages, costs, expenses (including reasonable attorneys' fees),
or liabilities (or actions in respect thereof) to which such Stockholder or
controlling person or entity becomes subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages, costs, expenses or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the related registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances in which they were made;
provided, however, that the Corporation will not be liable in any such case to
an Indemnitee to the extent that any such loss, claim, damage, cost, expense or
<PAGE> 79
10
liability arises out of or is based upon (x) an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, preliminary prospectus, prospectus or amendment or supplement in
reliance upon and in conformity with written information furnished by any
Indemnitee, specifically for use in the preparation thereof or (y) such
Indemnitee's failure to deliver a copy of the prospectus or any amendments or
supplements thereto (if required by applicable law) to the person asserting any
loss, claim, damage or liability after the Corporation has furnished such
Indemnitee with the same and the loss, claim, damage or liability of such
Indemnitee results from an untrue statement or omission of a material fact which
was corrected therein. The Corporation also agrees to reimburse each Indemnitee
for any legal or other expenses reasonably incurred by such Indemnitee in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(n) In the event of any registration pursuant to this Section
1 covering shares of Common Stock beneficially owned by any Stockholder, each
such Stockholder (if shares of Common Stock of that person are included in the
subject registration statement) shall severally (and not jointly) indemnify and
hold harmless the Corporation, each of its directors and officers, and each
other person or entity, if any, who controls the Corporation within the meaning
of the Securities Act, against any losses, claims, damages, costs, expenses
(including reasonable attorneys' fees) or liabilities (or actions in respect
thereof) to which the Corporation or any such director, officer, or controlling
person becomes subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages, costs, expenses or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained in the related registration statement, and any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances in which they were made, in each case to the extent, but only to
the extent, that such loss, claim, damage, cost, expense or liability arises out
of or is based upon (x) an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, preliminary
prospectus, prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished by such Stockholder specifically
for use in the preparation thereof or (y) such Stockholder's
<PAGE> 80
11
failure to deliver a copy of the prospectus or any amendments or supplements
thereto (if required by applicable law) to the person asserting any loss, claim,
damage or liability after the Corporation has furnished such Stockholder with
the same and the loss, claim, damage or liability of such Indemnitee results
from an untrue statement or omission of a material fact which was corrected
therein. Each such Stockholder shall severally (and not jointly) reimburse any
legal or other expenses reasonably incurred by the Corporation or any such
director, officer, or controlling person or entity in connection with
investigating or defending any such loss, claim, damage, liability or action.
(o) Promptly after receipt by an indemnified party under this
Section 1 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 1, notify the indemnifying party of the commencement
thereof; provided, however, that failure to so notify the indemnifying party
shall not affect an indemnifying party's obligations hereunder, except to the
extent that the indemnifying party is materially prejudiced by such failure. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of the institution of such action or
(iv) the indemnifying party shall authorize the
<PAGE> 81
12
indemnified party to employ separate counsel at the expense of the indemnifying
party. It is understood, however, that the indemnifying party shall, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) at any
time.
(p) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.
(q) If the indemnification provided for in this Section 1 is
applicable in accordance with its terms but for any reason is held to be
unavailable to or insufficient to hold harmless an indemnified party under
paragraphs (m) or (n) of this Section 1 in respect of any losses, claims,
damages, costs, expenses or liabilities referred to therein, then each
applicable indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable (including any investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted, but
after deducting any contribution received by the indemnifying party from persons
other than the indemnified parties, such as persons who control the indemnifying
party within the meaning of the Securities Act, officers of the Corporation who
signed the registration statement and directors of the Corporation, who also may
be liable for contribution) by such indemnified party as a result of such
losses, claims, liabilities, expenses and damages in such proportion as shall be
appropriate to reflect the relative benefits received by the indemnifying party,
on the one hand, and the indemnified parties, on the other hand. The relative
benefits received by the indemnifying party, on the one hand, and the
indemnified parties, on the other hand, shall be deemed to be in the same
proportion as the total net proceeds from the offering registered pursuant to
the registration statement (after deducting expenses) received by the
indemnifying party bear to the total net proceeds from the offering (after
deducting expenses) received by the indemnified parties, in each case as set
forth in the table on the cover page of the prospectus. If, but only if, the
allocation
<PAGE> 82
13
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing sentence but
also the relative fault of the indemnifying party, on the one hand, and the
indemnified parties, on the other hand, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the indemnifying party, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Corporation and the Stockholders agree
that it would not be just and equitable if contributions pursuant to this
Section 1(q) were to be determined by pro rata allocation or by any other method
of allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage, or action in respect
thereof, referred to above in this Section 1(q) shall be deemed to include, for
purposes of this Section 1(q), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 1(q), no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) will be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Stockholders'
obligations to contribute as provided in this Section 1(q) are several in
proportion to their respective Demand Registration Shares and/or Supplemental
Registration Shares included in the registration statement, and not joint. For
purposes of this Section 1(q), any person who controls a party to this Agreement
within the meaning of the Securities Act will have the same rights to
contribution as that party, and each officer and director of the Corporation who
signed the registration statement will have the same rights to contribution as
the Corporation, subject in each case to the provisions hereof. Any party
entitled to contribution, promptly after receipt of notice of commencement of
any action against any such party in respect of which a claim for contribution
may be made under this Section 1(q), will notify any such party or parties from
whom contribution may be sought, but the omission so to notify will not relieve
the party or parties from whom contribution may be sought
<PAGE> 83
14
from any other obligation it or they may have under this Section 1(q). No party
will be liable for contribution with respect to any action or claim settled
without its written consent (which consent will not be unreasonably withheld).
(r) With respect to any underwritten offering, each
Stockholder (if shares of Common Stock of that person are included in the
subject registration statement) and the Corporation shall, in addition to the
foregoing, provide the underwriters of such offering with customary
representations and warranties, and indemnification, in each instance as shall
be reasonably requested by the underwriters thereof, provided, however, that (i)
any such agreement to indemnify an underwriter with respect to any preliminary
prospectus shall not inure to the benefit of any such underwriter to the extent
that any loss, claim, damage, cost, expense or liability of any such underwriter
results solely from an untrue statement of material fact contained in, or the
omission of a material fact from, such preliminary prospectus which untrue
statement or omission was corrected in the final prospectus, if such underwriter
failed to send or give a copy of the final prospectus to the person asserting
such loss, claim, damage, cost, expense or liability at or prior to the written
confirmation of the sale of such securities to such person, and (ii) no
Stockholder will be liable to the extent that such loss, claim, liability,
expense or damage is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with information
relating to any underwriter furnished in writing to the Corporation by or on
behalf of any underwriter, expressly for inclusion in the registration
statement, a preliminary prospectus or the prospectus, and provided further that
any such agreement by any Stockholder to indemnify an underwriter shall be on a
several (and not joint) basis in proportion to the number of securities sold by
such Stockholder in such underwritten offering and shall be limited in amount to
the net proceeds received by such Stockholder in such underwritten offering.
2. Legend and Compliance with Securities Laws. (a) The stock
certificates evidencing the shares of Common Stock of the Stockholders subject
to this Agreement shall bear a legend reading substantially as follows:
"These securities have not been registered under the
Securities Act of 1933, as amended, or qualified under state securities
laws and may not be sold, pledged or otherwise transferred unless (a)
covered by an effective registration statement under the Securities Act
of 1933, as amended, and
<PAGE> 84
15
qualified under applicable state securities laws, or (b) the
Corporation shall have been furnished with an opinion of counsel
reasonably acceptable to the Corporation to the effect that no
registration or qualification is legally required for such transfer."
(b) In the event that a registration statement covering the
shares of Common Stock of the Corporation owned by the Stockholders which are
subject to this Agreement shall become effective under the Securities Act and
under any applicable state securities laws or in the event that the Corporation
shall receive an opinion of counsel to the holder of such shares of Common Stock
or counsel to the Corporation in form and substance reasonably satisfactory to
the Corporation that, in the opinion of such counsel, the above stated legend is
not, or is no longer, necessary or required under applicable law (including,
without limitation, because of the availability of the exemption afforded by
Rule 144(k) promulgated under the Securities Act), the Corporation shall, or
shall instruct its transfer agents and registrars to, remove the above stated
legend from the stock certificates evidencing such shares of Common Stock or
issue new certificates without such legend in lieu thereof.
(c) Each Stockholder consents to the Corporation making a
notation on its records and giving instructions to any transfer agent for the
Common Stock in order to implement the restrictions on transfer established in
this Section 2.
3. Appointment of Stockholder Representative.
(a) Each Stockholder hereby makes, constitutes and appoints
Genstar to be such Stockholder's true and lawful attorney in fact and agent (the
"Stockholder Representative"), for such Stockholder and in such Stockholder's
name, as effectively as such Stockholder could act for himself, herself or
itself, with full power of substitution in the premises, to take all actions
which under this Agreement are to be or may be taken by such Stockholder,
including, without limitation, to give and receive all consents, waivers,
amendments, notices and other communications to be given or which may be given
or received or may be received under this Agreement. The death or incapacity of
any Stockholder shall not terminate the agency and power of attorney granted
hereby to the Stockholder Representative. Such agency and power of attorney is
irrevocable and coupled with an interest, and the provisions of this Section 3
are independent and severable and shall be
<PAGE> 85
16
enforceable notwithstanding any rights or remedies that any Stockholder may have
in connection with, or in any way arising out of, the transactions contemplated
by this Agreement. The obligations hereunder of Genstar, as representative,
shall not be terminated by operation of law, whether by its liquidation,
dissolution or by the occurrence of any other event. In the event Genstar should
liquidate or dissolve, or for any other reason become unable to perform its
responsibilities hereunder, or resign such position, the Stockholders holding a
majority of the shares of Common Stock held by all Stockholders shall select
another representative by written notice executed by such Stockholders and
delivered to the Corporation to fill such vacancy and such substituted
representative shall be deemed the Stockholder Representative for all purposes
of this Agreement.
(b) The Corporation shall be entitled to rely conclusively on
the actions, communications, instructions, decisions and agreements of the
Stockholder Representative as being the actions, communications, instructions,
decisions and agreements of each of the Stockholders (without the need to
communicate or otherwise confirm such with any Stockholder), and no Stockholder
shall have any claim or cause of action against the Corporation for any action
taken or not taken by the Corporation in reliance upon the actions,
communications, instructions, decisions or agreements of the Stockholder
Representative.
(c) All actions, communications, instructions, decisions and
agreements of the Stockholder Representative shall be conclusive and binding
upon all of the Stockholders and no Stockholder shall have any claim or cause of
action against the Stockholder Representative for any action taken or not taken
by the Stockholder Representative in its role as such, except for any action or
omission taken or made fraudulently or in bad faith with respect to such
Stockholder.
4. Investment in the Corporation.
(a) Each of the Stockholders understands that the Corporation
proposes to issue and deliver to the Stockholders the shares of Common Stock
pursuant to the Merger Agreement without compliance with the registration
requirements of the Securities Act; and that for such purpose the Corporation
will rely upon the Stockholders' representations and warranties contained
herein.
(b) Each of the Stockholders understands that, under the
existing rules of the Commission, the Stockholders
<PAGE> 86
17
may be unable to sell their shares of Common Stock except to the extent that
such shares may be sold, (i) pursuant to an effective registration statement
covering such sale pursuant to the Securities Act and applicable state
securities laws or an applicable exemption therefrom or (ii) in a bona fide
private placement to a purchaser who shall be subject to the same restrictions
on any resale or (iii) subject to the restrictions contained in Rule 144.
(c) None of the Stockholders is relying on the Corporation
respecting the financial, tax and other economic considerations of an investment
in the Common Stock, and each of the Stockholders has relied on the advice of,
or has consulted with, only its own advisors.
(d) Each of the Stockholders is familiar with the provisions
of Rule 144 and the limitations upon the availability and applicability of such
rule.
(e) Each of the Stockholders is a sophisticated investor
familiar with the type of risks inherent in the acquisition of restricted
securities such as the shares of Common Stock to be issued to it and its
financial position is such that it can afford to retain such shares for an
indefinite period of time without realizing any direct or indirect cash return
on its investment.
(f) Each of the Stockholders has such knowledge and experience
in financial, tax and business matters so as to evaluate the merits and risks of
an investment in the Common Stock and to make an informed investment decision
with respect thereto.
(g) Each of the Stockholders is acquiring its shares of Common
Stock as an investment for its sole account, and without any present view
towards the resale or other distribution thereof.
5. Reorganization, Etc. The provisions of this Agreement shall
apply mutatis mutandi to any shares of capital stock resulting from any stock
split or reverse split, stock dividend, reclassification of the capital stock of
the Corporation, consolidation, merger or reorganization of the Corporation.
6. Notices. Any notice or other communication under this
Agreement shall be in writing and sufficient if delivered personally, by
telecopy or sent by registered or certified mail, postage prepaid, addressed as
follows:
<PAGE> 87
18
If to the Corporation:
One Barnes Industrial Park Road
Wallingford, Connecticut 06482
Telephone: (203) 265-7701
Telecopy: (203) 269-0189
Attention: President
with a copy to:
Haythe & Curley
237 Park Avenue
New York, New York 10017
Telephone: (212) 880-6000
Telecopy: (212) 682-0200
Attention: Andrew J. Beck, Esq.
If to Genstar:
Genstar Capital
Metro Tower, Suite 1170
950 Tower Lane
Foster City, California 94404-2121
Telephone: (415) 286-2350
Telecopy: (415) 286-2383
Attention:
with a copy to:
Shearman & Sterling
555 California Street
San Francisco, California 94104
Telephone: (415) 616-1100
Telecopy: (415) 616-1199
Attention: Michael J. Kennedy, Esq.
If to any other Stockholder:
To the address as set forth opposite such
Stockholder's name on Exhibit A hereto.
All such notices and communications shall be deemed to have been duly given at
the time delivered by hand, if personally delivered, upon confirmation of
receipt, if sent by telecopy, or three (3) business days after being deposited
in the mail, if sent by registered or certified mail. Any party may, upon
written notice to the other parties hereto, change the address to which notices
or other communications to such party are to be delivered or mailed.
<PAGE> 88
19
7. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
8. Entire Agreement. This Agreement contains the entire
agreement among the parties hereto with respect to the subject matter hereof.
All of the parties hereto agree that this Agreement may be amended or modified
or any provision hereof may be waived by a written agreement between the
Stockholder Representative and the Corporation. This Agreement supersedes all
prior understandings, negotiations and agreements relating to the subject matter
hereof.
9. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
agreements made and to be performed entirely within such State, without regard
to any conflict of laws principles of such State which would apply the laws of
any other jurisdiction.
10. Jurisdiction; Waiver of Trial by Jury. THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED
STATES FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND HEREBY IRREVOCABLY
AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE PARTIES AGREE THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE PARTIES FURTHER WAIVE TRIAL BY JURY, ANY OBJECTION TO VENUE
IN SUCH STATE AND ANY OBJECTION TO ANY ACTION OR PROCEEDING IN SUCH STATE ON THE
BASIS OF FORUM NON CONVENIENS. THE PARTIES FURTHER AGREE THAT ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE BROUGHT ONLY
IN A NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK COUNTY.
11. Headings. The headings in this Agreement are solely for
convenience of reference and shall not affect the interpretation of any of the
provisions hereof.
12. Severability. If any provision herein contained shall be
held to be illegal or unenforceable, such holding shall not affect the validity
or enforceability of the other provisions of this Agreement.
<PAGE> 89
20
13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Corporation, each of the Stockholders, each of their
respective successors, permitted assigns, executors, administrators, legal
representatives and heirs, as applicable.
14. Construction. The parties hereto agree that this Agreement
is the product of negotiations between sophisticated parties and individuals,
all of whom were represented by counsel, and each of whom had an opportunity to
participate in, and did participate in, the drafting of each provision hereof.
* * *
<PAGE> 90
IN WITNESS WHEREOF, each of the parties hereto has executed
this Registration Rights Agreement on the date first above written.
NOVAMETRIX MEDICAL SYSTEMS INC.
By:___________________________
Name:
Title:
GENSTAR CAPITAL PARTNERS II, L.P.
By:___________________________
Name:
Title:
------------------------------
[ ]
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[ ]
<PAGE> 91
Exhibit A to
Registration Rights Agreement
Stockholders
Name Address
Genstar Capital Metro Tower, Suite 1170
Partners II, L.P. 950 Tower Lane
Foster City, CA 94404-2121
(415) 286-2350
(415) 286-2383
<PAGE> 1
NOVAMETRIX Medical Systems And ANDROS To Merge; Merger Will Create A
Leader In Medical Instrumentation
WALLINGFORD, Conn., and BERKELEY, Calif. -- (BUSINESS WIRE) -- JULY 30, 1996
- -- NOVAMETRIX MEDICAL SYSTEMS INC. (NASDAQ: NMTX) and ANDROS INC. jointly
announced today that they have executed a definitive merger agreement pursuant
to which Novametrix will acquire all of the outstanding common stock of Andros,
a subsidiary of Genstar Capital Partners II, L.P.
Under the merger agreement, which has been unanimously approved by the Boards
of Directors of both companies, Novametrix will issue to the stockholders of
Andros and reserve for issuance to option and warrant holders of Andros, the
following: (i) shares of Novametrix Common Stock constituting 45 percent of the
combined company at closing, and (ii) anti-dilution rights enabling the holders
to maintain, without additional payment, such 45 percent ownership level as
Novametrix options and warrants outstanding at closing are exercised.
The transaction will create a world leader in the field of gas monitoring
products and sensor technology for medical applications. The combined company,
which will retain the Novametrix name, would have sales of $67.0 million for
the fiscal year ended April 28, 1996, on a pro forma basis, as compared to
Novametrix' stand-alone sales of $25.3 million for the same period.
Approximately two-thirds of the combined company's revenues are expected to
come from the sale of medical related products.
Both Novametrix and Andros specialize in non-dispersive infrared gas analysis
technology, Novametrix having historically applied its technology to medical
instrumentation and Andros having applied its technology to both medical
instrumentation and environmental/automotive diagnostic products. The combined
company will have significant technological synergies and will expand the
market for each company's products and technologies to the combined customer
base. Andros' technology for monitoring anesthetic agents complements
Novametrix' technology for monitoring oxygen and carbon dioxide and respiratory
mechanics. In addition, there are significant opportunities to apply
Novametrix' technologies to Andros' automotive and environmental
instrumentation businesses.
William J. Lacourciere, president and CEO of Novametrix, will continue as the
president and chief executive officer of the combined company, and Richard D.
Paterson, a managing director of Genstar and chairman of Andros, will be the
chairman of the Board of Directors.
Lacourciere stated that "the merger will nearly triple the revenues of
Novametrix and should result in substantial earnings accretion for the
Novametrix stockholders, even before taking into account efficiencies and cost
savings which we believe can be achieved after the merger. In addition, the
merger will broaden and strengthen our technology base, providing additional
leverage with national accounts, and will result in diversification of our
markets." Lacourciere continued, "Andros is a natural fit with Novametrix, with
the combination providing many complementary technologies and a world-class
customer base, including the world's major manufacturers of medical monitoring
equipment. Novametrix will become the world's largest OEM supplier of gas
monitoring products for medical applications. Also, we welcome Genstar as a
partner in our ongoing effort to maximize shareholder value."
Paterson stated that "the merger of Novametrix and Andros will create a
larger and more efficient manufacturer and marketer of medical patient
monitoring equipment. The merger broadens and further enhances the already
close relationships each company has with a customer base composed of some of
the most respected OEMs in the medical products industry. Moreover, we
<PAGE> 2
believe there are significant synergies between the two companies' infrared
technology development groups that will accelerate the combined company's
development of leading edge products for their respective markets. Bill
Lacourciere is a strong manager and motivator of people and is uniquely
qualified to lead the combined technology company. Novametrix' reputation for
the quality of its products and services and the excellence of its technologies
should enhance the ability of the combined company to compete in the medical,
automotive and environmental instrumentation markets. Genstar is enthusiastic
about its proposed investment in the combined company and looks forward to
working with management to enhance the value of the combined company."
The merger, which is subject to customary closing conditions, including
the approval of the shareholders of Novametrix, lenders' consents, and the
expiration of the Hart-Scott-Rodino waiting period, is expected to close during
Novametrix' fiscal quarter ending October 27, 1996. The merger agreement
provides for each party to pay a termination fee of $3 million under certain
circumstances. Tucker Anthony Inc. has served as financial advisor to
Novametrix and has delivered an opinion that the transaction consideration is
fair to Novametrix from a financial point of view.
This press release contains forward looking information about the
combined company's projected operating results for fiscal 1996 and the combined
company's plans for achieving such results. The combined company's ability to
achieve its projected results is dependent on a variety of factors, many of
which are outside management's control. Some of the most significant factors,
alone or in combination, would be the failure to integrate the businesses of
Novametrix and Andros successfully, an unanticipated slowdown in the health
care, automotive or environmental industries (as a result of cost containment
measures, changes in government regulation or other factors), unanticipated
technological developments which affect the competitiveness of the combined
company's products, or the unanticipated loss of business. Accordingly there
can be no assurance that the combined company will achieve its projected
operating results.
Novametrix is a designer, developer, manufacturer and marketer of
medical electronic instruments and sensors which non-invasively and
continuously assess a critically ill patient's oxygen, carbon dioxide and
respiratory mechanics. Novametrix' products are used in operating rooms,
intensive care units, respiratory care departments, emergency rooms and inter-
and intra-hospital patient transport.
Andros is a supplier of instrumentation and a leading worldwide designer
and supplier to original equipment manufacturers of non-dispersive infrared gas
analyzers. Andros sells its products to manufacturers of medical monitoring
equipment, automobile and environmental diagnostic equipment, and end users of
its spectrum analysis instruments.
Genstar Capital Partners II, L.P. is a private investment fund that
concentrates on acquisitions of manufacturing and services businesses.
CONTACT: Novametrix Medical Systems Inc., Wallingford
William J. Lacourciere, 800/243-3444
or
Genstar Capital Partners II, L.P./Andros Inc., Berkeley
Richard D. Paterson, Jean-Pierre L. Conte, 415/286-2350
