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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):
October 15, 1999
ZOLL MEDICAL CORPORATION
(Exact Name of Registrant as specified in its charter)
Massachusetts 000-20225 04-2711626
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
32 Second Avenue, Northwest Park, Burlington, Massachusetts 01803
(Address of principal executive offices and zip code)
(781) 229-0020
(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On October 15, 1999 (the Closing Date"), pursuant to an Agreement and Plan
of Merger dated as of the Closing Date (the "Merger Agreement") by and among
Zoll Medical Corporation ("Zoll"), Zollsub, Inc., a wholly-owned subsidiary of
Zoll ("Zollsub"), Pinpoint Technologies, Inc. ("Pinpoint") and David Brown,
David G. Cohen and Robert Durkin, Jr. (collectively, the "Stockholders"),
Zollsub was merged with and into Pinpoint (the "Merger") with Pinpoint as the
surviving corporation. Pursuant to the terms of the Merger Agreement, the
Stockholders received an aggregate of 425,000 shares of common stock of Zoll in
exchange for, among other things, all the issued and outstanding equity
interests in Pinpoint, such that Pinpoint became a wholly-owned subsidiary of
Zoll upon consummation of the Merger. Pursuant to a Registration Rights
Agreement dated as of the Closing Date by and between Zoll and the Stockholders,
Zoll has agreed to register 218,059 of the Zoll Shares on a Form S-3 and the
Stockholders have piggy-back registration rights beginning on October 15, 2003
for the remaining Zoll Shares.
Pinpoint develops computer-aided dispatch and billing software for the
emergency medical services market. Zoll intends to continue Pinpoint's current
software development.
Contemporaneously with the Merger, pursuant to a Limited Liability Company
Interest Purchase Agreement dated as of the Closing Date by and among Pinpoint,
Zoll, Pinpoint Property Management, LLC ("Management") and the Stockholders (as
the members of Management), Pinpoint acquired all the issued and outstanding
equity interests in Management from the Stockholders for aggregate consideration
of 23,769 shares of common stock of Zoll (the "Acquisition"). Management owns
commercial property in Colorado a part of which it leases to Pinpoint. The
consideration for each of these transactions was determined in arms-length
negotiations among the parties. The shares issued by Zoll pursuant to the Merger
and the Acquisition were from its authorized but unissued shares.
The press release attached hereto as Exhibit 99.1, which is incorporated by
reference herein, provides additional information regarding the transaction.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED
The financial statements of the business acquired regarding the
transaction reported in Item 2 above are not included in this report. The
required financial statements will be filed by amendment to this report not
later than 60 days after the date on which this report is required to be filed.
(b) PRO FORMA FINANCIAL INFORMATION
Pro forma financial information regarding the transaction reported in Item
2 above is not included in this report. The required pro forma financial
information will be filed by
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amendment to this report not later than 60 days after the date on which this
report is required to be filed.
(c) EXHIBITS
EXHIBIT NO. DESCRIPTION
10.1 Agreement and Plan of Merger dated October 15, 1999 by and
among Zoll Medical Corporation, Zollsub, Inc., Pinpoint
Technologies, Inc. and David Brown, David G. Cohen and Robert
Durkin, Jr.
10.2 Limited Liability Company Interest Purchase Agreement by and
among Pinpoint Technologies, Inc., Zoll Medical Corporation,
Pinpoint Property Management, LLC and David Brown, David G.
Cohen and Robert Durkin, Jr., dated October 15, 1999.
10.3 Registration Rights Agreement between Zoll Medical
Corporation, David Brown, David G. Cohen and Robert Durkin,
Jr., dated October 15, 1999.
99.1 Press Release of Zoll Medical Corporation dated as of October
17, 1999 announcing the completion of the Merger.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 29, 1999 ZOLL MEDICAL CORPORATION
By: /s/ A. Ernest Whiton
-----------------------------------
Name: A. Ernest Whiton
Title: Vice President and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.1 Agreement and Plan of Merger dated October 15, 1999 by and
among Zoll Medical Corporation, Zollsub, Inc., Pinpoint
Technologies, Inc. and David Brown, David G. Cohen and Robert
Durkin, Jr.
10.2 Limited Liability Company Interest Purchase Agreement by and
among Pinpoint Technologies, Inc., Zoll Medical Corporation,
Pinpoint Property Management, LLC and David Brown, David G.
Cohen and Robert Durkin Jr., dated October 15, 1999.
10.3 Registration Rights Agreement between Zoll Medical
Corporation, David Brown, David G. Cohen and Robert Durkin,
Jr., dated October 15, 1999.
99.1 Press Release of Zoll Medical Corporation dated as of October
17, 1999 announcing the completion of the Merger.
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EXHIBIT 10.1
AGREEMENT AND PLAN OF MERGER
by and among
ZOLL MEDICAL CORPORATION
as Buyer
ZOLLSUB, INC.
as a wholly-owned subsidiary of Zoll
PINPOINT TECHNOLOGIES, INC.
(the "Company")
and
DAVID BROWN
DAVID G. COHEN
and
ROBERT DURKIN, JR.
October 15, 1999
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AGREEMENT AND PLAN OF MERGER
INDEX
PAGE
SECTION 1. THE MERGER; EFFECTIVE TIME; CLOSING................................1
1.1 The Merger..........................................................1
1.2 Effective Time......................................................2
1.3 Closing.............................................................2
1.4 Effects of the Merger...............................................2
1.5 Further Assurances..................................................2
SECTION 2. CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE
SURVIVING CORPORATION.....................................................3
2.1 Certificate of Incorporation........................................3
2.2 The By-Laws.........................................................3
SECTION 3. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION................3
3.1 Directors...........................................................3
3.2 Officers............................................................3
SECTION 4. MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER......................................................3
4.1 Share Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger..................................................3
4.2 Exchange and Payment Procedures.....................................5
4.3 Dissenting Shares...................................................5
SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS AND THE COMPANY..............................................6
5.1 Making of Representations and Warranties............................6
5.2 Organization and Qualifications of the Company......................6
5.3 Capital Stock of the Company; Beneficial Ownership..................6
5.4 Authority of the Company; Enforceability; No Conflict...............6
5.5 Financial Statements................................................7
5.6 Taxes...............................................................8
5.7 Collectibility of Accounts Receivable...............................8
5.8 Absence of Certain Changes..........................................8
5.9 Ordinary Course....................................................10
5.10 Banking Relations..................................................10
5.11 Intellectual Property..............................................10
5.12 Contracts..........................................................14
5.13 Litigation.........................................................15
(i)
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PAGE
5.14 Compliance with Laws...............................................16
5.15 Insurance..........................................................16
5.16 Warranty or Other Claims...........................................16
5.17 Powers of Attorney.................................................16
5.18 Finder's Fee.......................................................16
5.19 Corporate Records; Copies of Documents.............................16
5.20 Employee Benefit Programs..........................................16
5.21 Transfer of Shares.................................................18
5.22 Stock Repurchase...................................................18
5.23 Year 2000..........................................................18
SECTION 6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS....................20
6.1 Company Common Shares..............................................20
6.2 Authority..........................................................20
6.3 Securities Law Matters.............................................21
SECTION 7. COVENANTS OF THE COMPANY AND THE STOCKHOLDERS.....................22
7.1 Making of Covenants and Agreements.................................22
7.2 Non-Disclosure and Non-Competition.................................22
SECTION 8. REPRESENTATIONS AND WARRANTIES OF ZOLL AND
MERGER SUB.................................................23
8.1 Making of Representations and Warranties...........................23
8.2 Organization of Zoll and Merger Sub................................23
8.3 Authority..........................................................23
8.4 Litigation.........................................................24
8.5 Finder's Fee.......................................................24
8.6 Zoll Common Shares.................................................24
SECTION 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING......................24
9.1 Survival of Warranties.............................................24
SECTION 10. INDEMNIFICATION...................................................25
10.1 Indemnification by Stockholders....................................25
10.2 Indemnification by Zoll............................................26
SECTION 11. MISCELLANEOUS.....................................................26
11.1 Fees and Expenses..................................................27
11.2 Governing Law......................................................27
11.3 Notices............................................................27
11.4 Entire Agreement...................................................28
11.5 Assignability; Binding Effect......................................28
11.6 Captions and Gender................................................28
(ii)
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PAGE
11.7 Execution in Counterparts..........................................28
11.8 Amendments.........................................................28
11.9 Publicity and Disclosures..........................................29
11.10 Specific Performance...............................................29
11.11 Dispute Resolution.................................................29
(iii)
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER entered into as of October 15, 1999 by and
among Zoll Medical Corporation, a Massachusetts corporation ("Zoll"), Zollsub,
Inc., a Delaware corporation and a wholly-owned subsidiary of Zoll ("Merger
Sub"), Pinpoint Technologies, Inc., a Delaware corporation (the "Company"), and
David Brown, David G. Cohen and Robert Durkin, Jr. (collectively referred to as
the "Stockholders" and individually as a "Stockholder").
W I T N E S S E T H
WHEREAS, Merger Sub is a wholly-owned subsidiary of Zoll;
WHEREAS, Zoll desires to acquire the Company through a merger of Merger
Sub with and into the Company;
WHEREAS, the Boards of Directors of the Company and Merger Sub each
have determined that it is in the best interests of their respective
stockholders for Merger Sub to merge with and into the Company upon the terms in
and subject to the conditions of this Agreement;
WHEREAS, the Board of Directors of Zoll has approved this Agreement and
the transactions contemplated thereby; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger (as defined in Section 1.1) shall qualify as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the
"Code").
NOW, THEREFORE, based upon the above premises and in consideration of
the mutual representations, warranties, covenants and agreements set forth
herein, the parties hereby agree as follows:
SECTION 1. THE MERGER; EFFECTIVE TIME; CLOSING
1.1 THE MERGER. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), at the Effective Time (as defined in Section 1.2
below), Merger Sub and the Company shall consummate a merger (the "Merger") in
which (a) Merger Sub shall be merged with and into the Company and the separate
corporate existence of Merger Sub shall thereupon cease, and (b) the Company
shall continue as the surviving corporation in the Merger ("Surviving
Corporation") and shall succeed to and assume all of the rights, properties,
liabilities and obligations of Merger Sub.
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1.2 EFFECTIVE TIME. Subject to the provisions of this Agreement, Merger
Sub and the Company shall cause the Merger to be consummated by filing on the
Closing Date (as defined in Section 1.3) a Certificate of Merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware,
in such form as required by, and executed in accordance with, the relevant
provisions of the DGCL. The Merger shall become effective upon such filing or at
such time thereafter as is provided in the Certificate of Merger (the "Effective
Time").
1.3 CLOSING. The closing of the Merger (the "Closing") shall take place
at 10:00 a.m. on October 15, 1999 at the offices of Goodwin, Procter & Hoar LLP,
53 State Street, Boston, Massachusetts, unless another date, time or place is
agreed to in writing by Zoll, Merger Sub and the Company (the "Closing Date").
At the Closing, this Agreement shall have been duly approved by the holders of
all of the outstanding shares of common stock of each of the Company and Merger
Sub at a stockholder meeting or by written consent in lieu thereof, in
accordance with applicable law and the respective Certificates of Incorporation
and By-laws of such entities. In addition, (a) each Stockholder shall deliver or
cause to be delivered to Zoll (i) certificates representing all of the Company
Common Shares (as defined in Section 4.1(a) below) owned by such Stockholder, as
set forth on EXHIBIT A; (ii) employment agreements in the form of EXHIBIT B,
executed by each Stockholder (collectively, the "Employment Agreements"); (iii)
option agreements in the form of EXHIBIT C, executed by each Stockholder
(collectively, the "Option Agreements"); (iv) a registration rights agreement in
the form of EXHIBIT D, executed by each Stockholder (the "Registration Rights
Agreement"); (v) resignations of each of the directors of the Company, effective
at the Effective Time; and (vi) the parties shall deliver such other
documentation as may be reasonably agreed to by Zoll and the Stockholders in
connection with the consummation of the transaction contemplated by this
Agreement; and (b) Zoll shall deliver to the Company and the Stockholders (i)
the amount of Zoll Common Shares (as defined in Section 4.1(a) below) set forth
in Section 4.1(a); (ii) the Employment Agreements executed by Zoll; (iii) the
Registration Rights Agreement executed by Zoll; (iv) the Option Agreements
executed by Zoll; and (v) such other documentation as may be reasonably agreed
to by Zoll and the Stockholders in connection with the consummation of the
transactions contemplated by this Agreement.
1.4 EFFECTS OF THE MERGER. The Merger shall have the effects set forth
in the applicable provisions of the DGCL.
1.5 FURTHER ASSURANCES. The Stockholders from time to time after the
Closing at the request of Zoll and without further consideration shall execute
and deliver further instruments of transfer and assignment and take such other
action as Zoll may reasonably require to fully implement the provisions of this
Agreement.
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SECTION 2. CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE
SURVIVING CORPORATION
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
the Company shall be the Certificate of Incorporation of the Surviving
Corporation, provided, however, that the parties shall take such steps as are
permitted under the DGCL to amend the Certificate of Incorporation of the
Surviving Corporation so that the Certificate of Incorporation of the Merger Sub
immediately prior to the Effective Time shall be and become the Certificate of
Incorporation of the Surviving Corporation.
2.2 THE BY-LAWS. The By-Laws of the Company shall be the By-Laws of the
Surviving Corporation, provided, however, that the parties shall take such steps
as are permitted under the DGCL to amend the By-Laws of the Surviving
Corporation so that the ByLaws of the Merger Sub immediately prior to the
Effective Time shall be and become the ByLaws of the Surviving Corporation.
SECTION 3. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION
3.1 DIRECTORS. From and after the Effective Time, the Board of
Directors of the Surviving Corporation shall consist of Richard Packer, A.
Ernest Whiton and David Brown, until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's Certificate of Incorporation and
By-Laws.
3.2 OFFICERS. From and after the Effective Time, the officers of the
Surviving Corporation shall be those individuals listed on SCHEDULE 3.2 attached
hereto until their successors have been duly elected or appointed and qualified
or until their earlier death, resignation or removal in accordance with the
Surviving Corporation's Certificate of Incorporation and By-Laws.
SECTION 4. MERGER CONSIDERATION; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER
4.1 SHARE CONSIDERATION FOR THE MERGER; CONVERSION OR CANCELLATION OF
SHARES IN THE MERGER. The manner of converting or canceling shares of the
Company and the Surviving Corporation in the Merger shall be as follows:
(a) MERGER CONSIDERATION. Subject to Section 4.4, at the
Effective Time, each share of common stock, no par value per share, of the
Company (the "Company Common Shares") issued and outstanding immediately prior
to the Effective Time (other than Company Common Shares owned by the Company or
any direct or indirect wholly owned subsidiary of the Company, if any), shall,
by virtue of the Merger and without any action on the part of the
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holder thereof, be converted into the right to receive 3,687.8441 shares of
common stock, par value $.02 per share, of Zoll ("Zoll Common Shares"), rounded
to the nearest whole number, such that Zoll shall issue an aggregate of not more
than 409,350 shares at Closing in connection with the Merger plus an additional
3,000 Zoll Common Shares to be issued in consideration of the Agreements set
forth in Section 7.2. The 409,350 Zoll Common Shares are hereinafter referred to
as the "Merger Consideration."
(b) SHARE CANCELLATION. Each Company Common Share that is
directly owned by the Company or any subsidiary of the Company shall be canceled
and retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefor.
(c) STATUS OF SHARES. All Company Common Shares to be
converted pursuant to this Section 4.1 shall, by virtue of the Merger and
without any action on the part of the holders thereof, cease to be outstanding,
be canceled and retired and cease to exist, and each holder of a certificate
representing any such Company Common Shares (a "Company Certificate") shall
thereafter cease to have any rights with respect to such Company Common Shares,
except the right to receive for each of the Company Common Shares upon the
surrender of such certificate in accordance with Section 4.2, a proportionate
share of the Merger Consideration. Each share of common stock of the Merger Sub
outstanding immediately prior to the Effective Time shall be converted into and
become one fully paid and nonassessable share of common stock of the Surviving
Corporation and a certificate for which shall be issued to the stockholder of
Merger Sub.
(d) OPTIONS. At the Effective Time, the outstanding option to
purchase Company Common Shares (each, an "Option") issued pursuant to an
employment offer letter, shall be assumed by the Buyer and shall constitute an
option to acquire 12,650 Zoll Common Shares (which is based on the number of
Company Common Shares covered by the Option multiplied by 3,687.8441), at an
exercise price of $.02 per Zoll Common Share (which is based on the exercise
price per share of the Option divided by 3,687.8441, and rounded up to the
nearest whole cent). Employment with the Company or any subsidiary thereof shall
be credited to holders of Options for purposes of determining the number of
vested Zoll Common Shares subject to exercise under converted Options after the
Effective Time. None of the Options that is unvested at the Effective Time shall
become vested as a result of the execution and delivery of this Agreement or the
consummation of the Merger. As soon as practicable after the Effective Time, but
no later than 30 days thereafter, the Surviving Corporation shall deliver to the
holders of Options appropriate notices informing such holders that such options
have been assumed by the Surviving Corporation and will constitute options to
purchase Zoll Common Shares as provided above on substantially the same terms
and conditions as their options (subject to the adjustments required by this
Section 4.1 after giving effect to the Merger).
4.2 EXCHANGE AND PAYMENT PROCEDURES.
(a) SHARE EXCHANGE. At or as soon as practicable after the
Effective Time, Zoll shall make available, and each holder of common stock of
the Company (each a "Company Stockholder") will be entitled to receive, upon
surrender to Zoll of one or more
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certificates representing Company Common Shares for cancellation, that number of
shares of Zoll Common Shares that such Company Stockholder is entitled to
receive pursuant to Section 4.1 hereof. The certificates representing the Zoll
Common Shares (the "Zoll Certificates") that each Company Stockholder shall be
entitled to receive pursuant to the Merger shall be deemed to have been issued
at the Effective Time.
(b) INTEREST; TAXES. No interest shall accrue on the Merger
Consideration. Neither Zoll nor any other party hereto shall be liable to a
holder of Company Common Shares for any amount delivered to a public official
pursuant to applicable abandoned property, escheat or similar law.
(c) PAYMENT. After the Effective Time, any holders of Company
Common Shares who have not theretofore complied with this Section 4 shall
thereafter look only to the Surviving Corporation for payment to which they are
entitled.
(d) WITHHOLDING RIGHTS. The Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any holder of shares of Company Common 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 provision of state,
local or foreign tax law. To the extent that amounts are so withheld by the
Surviving Corporation, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the holder of the shares of Company
Common Shares in respect of which such deduction and withholding was made by the
Surviving Corporation.
(e) STOCK TRANSFER BOOKS. After the Effective Time, there
shall be no transfers of any Company Common Shares on the stock transfer books
of the Surviving Corporation. If, after the Effective Time, Company Certificates
are presented to the Surviving Corporation, they shall be canceled and exchanged
in accordance with this Section 4.2.
4.3 DISSENTING SHARES. Notwithstanding any other provisions of this
Agreement to the contrary, Company Common Shares that are outstanding
immediately prior to the Effective Time and which are held by Stockholders who
shall have not voted in favor of the Merger or consented thereto in writing and
who shall have demanded properly in writing appraisal for such shares in
accordance with Section 262 of the DGCL (collectively, the "Dissenting Shares")
shall not be converted into or represent the right to receive the Merger
Consideration. Such Stockholders instead shall be entitled to receive payment of
the appraised value of such Company Common Shares held by them in accordance
with the provisions of such Section 262, except that all Dissenting Shares held
by stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Company Common Shares under
such Section 262 shall thereupon be deemed to have been converted into and to
have become exchangeable, as of the Effective Time, for the right to receive,
without any interest thereon, the Merger Consideration upon surrender in the
manner provided in Section 4.2, of the certificate or certificates that,
immediately prior to the Effective Time, evidenced such Company Common Shares.
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SECTION 5. GENERAL REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS AND THE COMPANY.
5.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to Zoll and Merger Sub to enter into this Agreement and consummate the
transactions contemplated hereby, each of the Company and the Stockholders
jointly and severally hereby make to Zoll and Merger Sub the representations and
warranties contained in this Section 5.
5.2 ORGANIZATION AND QUALIFICATIONS OF THE COMPANY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of Delaware.
5.3 CAPITAL STOCK OF THE COMPANY; BENEFICIAL OWNERSHIP.
(a) The authorized capital stock of the Company consists of
1,000 shares of Common Stock without par value, of which 111 shares are duly and
validly issued, outstanding, fully paid and non-assessable and of which 889
shares are authorized but unissued. Except as set forth in SCHEDULE 5.3, there
are no outstanding options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale of, or outstanding securities
convertible into, any additional shares of capital stock of any class of the
Company. None of the Company's capital stock has been issued in violation of any
federal or state law. There are no voting trusts, voting agreements, proxies or
other agreements, instruments or undertakings with respect to the voting of the
Company Common Shares to which the Company or any of the Stockholders is a
party.
(b) Each of the Stockholders owns beneficially and of record
the Company Common Shares set forth opposite such Stockholder's name on EXHIBIT
A, hereto free and clear of any liens, restrictions or encumbrances.
5.4 AUTHORITY OF THE COMPANY; ENFORCEABILITY; NO CONFLICT.
(a) The Company has full right, authority and power to enter
into this Agreement and each agreement, document and instrument to be executed
and delivered by the Company pursuant to this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance by the
Company of this Agreement and each such other agreement, document and instrument
have been duly authorized by all necessary action of the Company and no other
action on the part of the Company or the Stockholders is required in connection
therewith.
This Agreement and each agreement, document and instrument executed and
delivered by the Company pursuant to this Agreement constitutes, or when
executed and delivered will constitute, valid and binding obligations of the
Company enforceable in accordance with their terms. The execution, delivery and
performance by the Company of this Agreement and each such agreement, document
and instrument:
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(i) does not and will not violate any provision of
the Certificate of Incorporation or by-laws of the Company;
(ii) does not and will not violate any laws of the
United States, or any state or other jurisdiction applicable to the
Company or require the Company to obtain any approval, consent or
waiver of, or make any filing with, any person or entity (governmental
or otherwise) that has not been obtained or made; and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture or loan or credit
agreement or any other agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which the Company is a
party or by which the property of the Company is bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the
Company's assets or the Company Common Shares, except as specifically
identified on SCHEDULE 5.4.
5.5 FINANCIAL STATEMENTS.
(a) The Company has delivered to Zoll the Consolidated balance
sheets of the Company as of September 30, 1999 (herein the "Base Balance Sheet")
and statements of income, retained earnings and cash flows for the period then
ended, certified by the Company's president and principal accounting officer
copies of which are attached hereto as SCHEDULE 5.5.
Said financial statements have been prepared in accordance with United
States generally accepted accounting principles applied consistently during the
periods covered thereby, are complete and correct in all material respects and
present fairly in all material respects the financial condition of the Company
at the dates of said statements and the results of its operations for the
periods covered thereby.
(b) As of the date of the Base Balance Sheet and as of the
Closing, the Company does not and will not have any liabilities of any nature,
whether accrued, absolute, contingent or otherwise, asserted or unasserted,
known or unknown (including without limitation, liabilities as guarantor or
otherwise with respect to obligations of others, liabilities for taxes due or
then accrued or to become due, or contingent or potential liabilities relating
to activities of the Company or the conduct of their business prior to the date
of the Base Balance Sheet regardless of whether claims in respect thereof had
been asserted as of such date), except liabilities (i) stated or adequately
reserved against on the Base Balance Sheet, (ii) expressly set forth in
Schedules furnished to Zoll hereunder as of the date hereof, or (iii) incurred
after the date of the Base Balance Sheet in the ordinary course of business of
the Company consistent with the terms of this Agreement.
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5.6 TAXES. Except as set forth in SCHEDULE 5.6, the Company has filed
all tax returns which it is required to file under applicable laws and
regulations; all such returns are complete and correct in all material respects;
the Company has paid all taxes due and owing by it, whether or not shown on a
return, and has withheld and paid over all taxes which it is obligated to
withhold from amounts paid or owing to any employee, stockholder, creditor or
other third party (collectively "Taxes"); the Company has not waived any statute
of limitations with respect to taxes or agreed to any extension of time with
respect to a tax assessment or deficiency; the accrual for current taxes on the
Base Balance Sheet would be adequate to pay all of the Company's tax liabilities
for the year ending December 31, 1998; the assessment of any additional taxes
for periods for which returns have been filed does not exceed the related
recorded liability on the Base Balance Sheet; to the Company's knowledge, no
foreign, federal, state or local tax audits are pending or being conducted with
respect to the Company, no information related to tax matters has been requested
by any foreign, federal, state or local taxing authority and no notice
indicating an intent to open an audit or other review has been received by the
Company from any foreign, federal, state or local taxing authority; and to the
Company's knowledge, there are no material unresolved questions or claims
concerning the Company's tax liability; the Company has been a validly electing
S Corporation within the meaning of Sections 1361 and 1362 of the Code at all
times since January 1, 1994, and the Company will be an S Corporation up to and
including the Closing Date. The Company has not filed a consent under Code
Section 341(f). The Company is not a party to any Tax allocation or sharing
agreement. The unpaid Taxes of the Company (A) did not, as of the Base Balance
Sheet, exceed by any material amount the reserve for tax liability set forth on
the face of the Base Balance Sheet and (B) will not exceed by any material
amount that reserve as adjusted for operations and transactions through the
Closing Date in accordance with past custom and practice of the Company in
filing its tax returns. There are no liens on or other security interests in the
assets of the Company that arose in connection with any failure (or alleged
failure) to pay any Tax other than for current Taxes not yet due and payable.
5.7 COLLECTIBILITY OF ACCOUNTS RECEIVABLE. All of the accounts
receivable of the Company shown or reflected on the Base Balance Sheet or
existing at the date hereof (less the reserve for bad debts set forth on the
Base Balance Sheet) are valid and enforceable claims, fully collectible and
subject to no setoff or counterclaim. The Company does not have any accounts or
loans receivable from any person, firm or corporation which is affiliated with
the Company or from any director, officer or employee of the Company, except as
disclosed on SCHEDULE 5.7 hereto.
5.8 ABSENCE OF CERTAIN CHANGES. Except as disclosed in SCHEDULE 5.8
attached hereto, since the date of the Base Balance Sheet there has not been:
(a) Any change in the financial condition, properties, assets,
liabilities, business or operations of the Company, which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has been materially adverse with respect to the Company;
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(b) Any contingent liability incurred by the Company as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of, the Company;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the date hereof or will
remain on the date of the Closing;
(d) Any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for Taxes due or to become due
or contingent or potential liabilities relating to products or services provided
by the Company or the conduct of the business of the Company since the date of
the Base Balance Sheet regardless of whether claims in respect thereof have been
asserted), incurred by the Company other than obligations and liabilities
incurred in the ordinary course of business consistent with the terms of this
Agreement (it being understood that product or service liability claims shall
not be deemed to be incurred in the ordinary course of business);
(e) Any purchase, sale or other disposition, or any agreement
or other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company other than in the ordinary course of
business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(g) Any declaration, setting aside or payment of any dividend
by the Company, or the making of any other distribution in respect of the
capital stock of the Company, or any direct or indirect redemption, purchase or
other acquisition by the Company of its own capital stock;
(h) Any labor trouble or claim of unfair labor practices
involving the Company; any change in the compensation payable or to become
payable by the Company to any of its officers, employees, agents or independent
contractors other than normal merit increases in accordance with its usual
practices; or any bonus payment or arrangement made to or with any of such
officers, employees, agents or independent contractors;
(i) Any change with respect to the officers or management of
the Company;
(j) Any payment or discharge of a material lien or liability
of the Company which was not shown on the Base Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company to any
of its officers, directors, stockholders or employees, or any loans or advances
made by the Company
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to any of its officers, directors, stockholders or employees, except normal
compensation and expense allowances payable to officers or employees;
(l) Any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(m) Any other transaction entered into by the Company other
than transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above.
5.9 ORDINARY COURSE. Since the date of the Base Balance Sheet, the
Company has conducted its business only in the ordinary course and consistent
with its prior practices.
5.10 BANKING RELATIONS. All of the arrangements which the Company has
with any banking institution are completely and accurately described in SCHEDULE
5.10 attached hereto, indicating with respect to each of such arrangements the
type of arrangement maintained (such as checking account, borrowing
arrangements, safe deposit box, etc.) and the person or persons authorized in
respect thereof.
5.11 INTELLECTUAL PROPERTY.
(a) OWNERSHIP OF INTELLECTUAL PROPERTY ASSETS. The Company is
the exclusive owner of, and has good, valid and marketable title to all of the
Intellectual Property Assets (as defined below) free and clear of all mortgages,
pledges, charges, liens, equities, security interests, or other encumbrances or
agreements, and has the right to use without payment to a third party (except as
set forth in Schedule 5.11(h)) all of the Intellectual Property Assets. No claim
is pending or, to the Company's or any of the Stockholder's best knowledge,
threatened against the Company and/or its officers, employees, and consultants
to the effect that the Company's right, title and interest in and to the
Intellectual Property Assets is invalid or unenforceable by the Company. All
former and current employees, consultants and contractors of the Company have
executed written instruments with the Company that assign to the Company all
rights to any inventions, improvements, discoveries, or information relating to
the business of the Company. No employee of the Company has entered into any
agreement that restricts or limits in any way the scope or type of work in which
the employee may be engaged or requires the employee to transfer, assign, or
disclose information concerning his or her work to anyone other than the
Company.
(b) PATENTS. SCHEDULE 5.11(b) sets forth a complete and
accurate list and summary description of all Patents. All of the issued Patents
are currently in compliance with formal legal requirements (including without
limitation payment of filing, examination and maintenance fees and proofs of
working or use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety (90) days after
the date of
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the Closing. In each case where a Patent is held by the Company by assignment,
the assignment has been duly recorded with the U.S. Patent and Trademark Office
and all other jurisdictions of registration. No Patent has been or is now
involved in any interference, reissue, re-examination or opposition proceeding.
To the Company's knowledge, there is no potentially interfering patent or patent
application of any third party. All products made, used or sold under the
Patents have been marked with the proper patent notice.
(c) TRADEMARKS. SCHEDULE 5.11(c) sets forth a complete and
accurate list and summary description of all Marks. All Marks that have been
registered with the United States Patent and Trademark Office and/or any other
jurisdiction are currently in compliance with formal legal requirements
(including without limitation the timely post-registration filing of affidavits
of use and incontestability and renewal applications), are valid and
enforceable, and are not subject to any maintenance fees or taxes or actions
falling due within ninety (90) days after the date of the Closing. In each case
where a Mark is held by the Company by assignment, the assignment has been duly
recorded with the U.S. Patent and Trademark Office and all other jurisdictions
of registration. No Mark has been or is now involved in any opposition,
invalidation or cancellation proceeding and, to the Company's or any of the
Stockholder's knowledge, no such action is threatened with respect to any of the
Marks. All products and materials containing a Mark bear the proper notice where
permitted by law.
(d) COPYRIGHTS. SCHEDULE 5.11(d) sets forth a complete and
accurate list and summary description of all Copyrights. All Copyrights that
have been registered with the United States Copyright Office are identified on
such Schedule and are currently in compliance with formal legal requirements,
are valid and enforceable, and are not subject to any fees or taxes or actions
falling due within ninety (90) days after the date of the Closing. In each case
where a Copyright is held by the Company by assignment, the assignment has been
duly recorded with the U.S. Copyright Office and all other jurisdictions of
registration. None of the source or object code, algorithms, or structure
included in the Products is copied from, based upon, or derived from any other
source or object code, algorithm or structure in violation of the rights of any
third party. Any substantial similarity of the Products to any computer program
owned by any third party did not result from the Products being copied from,
based upon, or derived from any such computer software program in violation of
the rights of any third party. All copies of works encompassed by the Copyrights
have been marked with the proper copyright notice.
(e) TRADE SECRETS. The Company has taken all reasonable
security measures (including, without limitation, entering into appropriate
confidentiality and nondisclosure agreements with all officers, directors,
employees, and consultants of the Company and any other persons with access to
the Trade Secrets) to protect the secrecy, confidentiality and value of all
Trade Secrets. To the knowledge of the Company, there has not been any breach by
any party to any such confidentiality or non-disclosure agreement. The Trade
Secrets have not been disclosed by the Company to any person or entity other
than employees or contractors of the Company who had a need to know and use the
Trade Secrets in the course of their employment or contract performance. Except
as set forth on SCHEDULE 5.11(e), (i) the
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Company has not directly or indirectly granted any rights or interests in the
source code of the Products, and (ii) since the Company developed the source
code of the Products, the Company has not provided, licensed or disclosed the
source code of the Products to any person or entity. The Company has the right
to use, free and clear of claims of third parties, all Trade Secrets. To the
knowledge of the Company, no third party has asserted that the use by the
Company of any Trade Secret violates the rights of any third party.
(f) OTHER INTANGIBLES. SCHEDULE 5.11(f) sets forth a complete
and accurate list of Other Intangibles.
(g) EXCLUSIVITY OF RIGHTS. The Company has the exclusive right
to use, license, distribute, transfer and bring infringement actions with
respect to the Intellectual Property Assets, except for the rights of any
licensor of licensed Intellectual Property Assets referred to in (h) below.
Except as set forth on SCHEDULE 5.11(g), the Company (i) has not licensed or
granted to anyone rights of any nature to use any of its Intellectual Property
Assets; and (ii) is not obligated to and does not pay royalties or other fees to
anyone for the Company's ownership, use, license or transfer of any of its
Intellectual Property Assets.
(h) LICENSES RECEIVED. All licenses or other agreements under
which the Company is granted rights by others in Intellectual Property Assets
are listed in SCHEDULE 5.11(h). All such licenses or other agreements are in
full force and effect, to the knowledge of the Company there is no material
default by any party thereto, and, all of the rights of the Company thereunder
are freely assignable. True and complete copies of all such licenses or other
agreements, and any amendments thereto, have been provided to the Zoll, and to
the knowledge of the Company, the licensors under the licenses and other
agreements under which the Company is granted rights have all requisite power
and authority to grant the rights purported to be conferred thereby.
(i) LICENSES GRANTED. All licenses or other agreements under
which the Company has granted rights to others in Intellectual Property Assets
are listed in SCHEDULE 5.11(i). Except as set forth thereon, all such licenses
or other agreements are in full force and effect, and to the knowledge of the
Company there is no material default by any party thereto. True and complete
copies of all such licenses or other agreements, and any amendments thereto,
have been provided to the Zoll.
(j) AFFIRMATIVE OBLIGATIONS. Except as set forth in SCHEDULE
5.11(j), the Company has no obligation to any other person to maintain, modify,
improve or upgrade the Products.
(k) SUFFICIENCY. The Intellectual Property Assets constitute
all of the assets of the Company used in designing, creating and developing the
Products, and are all those necessary for the operation of the Company's
business as currently conducted and planned to be conducted.
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(l) INFRINGEMENT. None of the Products manufactured and sold,
nor any process or know-how used, by the Company infringes or is alleged to
infringe any patent, trademark, service mark, trade name, copyright or other
proprietary right or is a derivative work based on the work of any other person.
(m) SOFTWARE PERFORMANCE. The Products perform in accordance
with their documented specifications and other documentation and as the Company
has warranted to its customers. Without limiting the foregoing and except as set
forth on SCHEDULE 5.11 (m), to the knowledge of the Company and the
Stockholders, the Products do not intentionally contain any "viruses",
"time-bombs", "key-locks", or any other devices intentionally created that could
disrupt or interfere with the operation of the Products or the integrity of the
data, information or signals they produce in a manner adverse to the Company or
any licensee.
(n) NONDISCLOSURE CONTRACTS. Each of the Nondisclosure
Contracts is a valid and binding obligation of the Company enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally.
(o) For purposes of this Agreement,
(i) "Intellectual Property Assets" means all of the
following, to the extent owned, licensed or used by the Company in any fashion:
(i)(A) the Products (as defined below);
(B) all patents, patent applications, patent
rights, and inventions and discoveries and invention
disclosures (whether or not patented) (collectively,
"Patents");
(C) the name "Pinpoint Technologies, Inc.",
all trade names, trade dress, logos, packaging
design, slogans, Internet domain names, registered
and unregistered trademarks and service marks and
applications (collectively, "Marks");
(D) all copyrights in both published and
unpublished works, including without limitation all
compilations, databases and computer programs, and
all copyright registrations and applications, and all
derivatives, translations, adaptations and
combinations of the above (collectively,
"Copyrights");
(E) all know-how, trade secrets,
confidential or proprietary information, research in
progress, algorithms, data, designs, processes,
formulae, drawings, schematics, blueprints, flow
charts, models, prototypes, techniques, Beta testing
procedures and Beta testing results (collectively,
"Trade Secrets");
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(F) all goodwill, franchises, licenses,
permits, consents, approvals, technical information,
telephone numbers, and claims of infringement against
third parties (the "Rights"); and
(G) all customer lists and telephone
numbers, business strategies, outside analyst's plans
and reports, outlooks, forecasts and other similar
documents (collectively, "Other Intangibles")
(ii) "Products" means those computer programs and
related documentation sold, marketed, and distributed by the Company. A
complete list of the Products owned by the Company is provided on
SCHEDULE 5.11(o)(ii) attached hereto.
(iii) "Nondisclosure Contracts" means all
nondisclosure and/or confidentiality agreements entered into between
the Company and persons in connection with disclosures by the Company
relating to the Products and the Intellectual Property Assets. A
complete list of all Nondisclosure Contracts is provided on SCHEDULE
5.11(o)(iii) attached hereto.
5.12 CONTRACTS. Except for contracts, commitments, plans, agreements
and licenses described in SCHEDULE 5.12 (true and complete copies of which have
been delivered to Zoll), the Company is not a party to nor subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the payment of more than $25,000 annually or which is not terminable
within 30 days by the Company without liability for any penalty or severance
payment;
(c) any contract or agreement for the purchase of any material
or equipment except purchase orders in the ordinary course for less than $10,000
each, such orders not exceeding $30,000 in the aggregate;
(d) any other contracts or agreements creating any obligations
of the Company of $25,000 or more with respect to any such contract or agreement
not specifically disclosed elsewhere under this Agreement;
(e) any contract or agreement providing for the purchase of
all or substantially all of its requirements of a particular product from a
supplier;
(f) any contract or agreement involving more than $25,000
which by its terms does not terminate or is not terminable without penalty by
the Company or its successor within one year after the date hereof;
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(g) any contract or agreement for the sale or lease of the
Company's Products not made in the ordinary course of business;
(h) any contract with any sales agent or distributor of
Products of the Company;
(i) any contract containing covenants limiting the freedom of
the Company to compete in any line of business or with any person or entity;
(j) any contract or agreement for the purchase of any fixed
asset for a price in excess of $10,000 whether or not such purchase is in the
ordinary course of business;
(k) any license agreement (as licensor or licensee);
(l) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money; or
(m) any contract or agreement with any officer, employee,
director or stockholder of the Company or with any persons or organizations
controlled by or affiliated with any of them.
The Company is not in default under any such contracts, commitments,
plans, agreements or licenses described in said Schedule and does not have any
knowledge of conditions or facts which with notice or passage of time, or both,
would constitute a default.
5.13 LITIGATION. SCHEDULE 5.13 hereto lists all currently pending
litigation and governmental or administrative proceedings or investigations to
which the Company is a party. Except for matters described in SCHEDULE 5.13,
there is no litigation or governmental or administrative proceeding or
investigation pending or, to the knowledge of the Company or the Stockholders,
threatened against the Company or its affiliates which may have any material
adverse effect on the properties, assets, prospects, financial condition or
business of the Company or which would prevent or hinder the consummation of the
transactions contemplated by this Agreement. With respect to each matter set
forth therein, SCHEDULE 5.13 sets forth a description of the matter, the forum
(if any) in which it is being conducted, the parties thereto and the type and
amount of relief sought.
5.14 COMPLIANCE WITH LAWS. To the Company's knowledge, the Company is
in compliance in all material respects with all applicable statutes, ordinances,
orders, judgements, decrees, rules and regulations promulgated by any federal,
state, municipal entity, agency, court or other governmental authority which
apply to the Company or to the conduct of its business, and the Company has not
received notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation.
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5.15 INSURANCE. The physical properties and assets of the Company are
insured to the extent disclosed in SCHEDULE 5.15 attached hereto and all such
insurance policies and arrangements are disclosed in said Schedule. Said
insurance policies and arrangements are in full force and effect, all premiums
with respect thereto are currently paid, and the Company is in compliance in all
material respects with the terms thereof. Said insurance is adequate and
customary for the business engaged in by the Company and is sufficient for
compliance by the Company with all requirements of law and all agreements and
leases to which the Company is a party.
5.16 WARRANTY OR OTHER CLAIMS. To the Company's knowledge, there are no
existing or threatened product liability, warranty or other similar claims, or
any facts upon which a material claim of such nature could be based, against the
Company for products or services which are defective or fail to meet any product
or service warranties except as disclosed in SCHEDULE 5.16 hereto. No claim has
been asserted against the Company for renegotiation or price redetermination of
any business transaction, and there are no facts upon which any such claim could
be based.
5.17 POWERS OF ATTORNEY. Except as set forth on SCHEDULE 5.17, neither
the Company nor any Stockholder has any outstanding power of attorney.
5.18 FINDER'S FEE. Neither the Company nor any Stockholder has incurred
or become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
5.19 CORPORATE RECORDS; COPIES OF DOCUMENTS. The corporate record books
of the Company accurately record all corporate action taken by its stockholders
and board of directors and committees. The copies of the corporate records of
the Company, as made available to Zoll for review, are true and complete copies
of the originals of such documents. The Company has made available for
inspection and copying by Zoll and its counsel true and correct copies of all
documents referred to in this Section or in the Schedules delivered to Zoll
pursuant to this Agreement.
5.20 EMPLOYEE BENEFIT PROGRAMS.
(a) SCHEDULE 5.20 lists every Employee Program (as defined
below) that has been maintained (as defined below) by the Company at any time
during the three-year period ending on the Closing Date.
(b) Each Employee Program which has ever been maintained by
the Company and which has at any time been intended to qualify under Section
401(a) or 501(c)(9) of the Code has received a favorable determination or
approval letter from the Internal Revenue Service ("IRS") regarding its
qualification under such section and has, in fact, been qualified under the
applicable section of the Code from the effective date of such Employee Program
through and including the Closing (or, if earlier, the date that all of such
Employee
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Program's assets were distributed). No event or omission has occurred which
would cause any such Employee Program to lose its qualification under the
applicable Code section.
(c) The Company does not know and has no reason to know, of
any failure of any party to comply with any laws applicable to the Employee
Programs that have been maintained by the Company. With respect to any Employee
Program ever maintained by the Company, there has occurred no "prohibited
transaction," as defined in Section 406 of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or Section 4975 of the Code, or
breach of any duty under ERISA or other applicable law (including, without
limitation, any health care continuation requirements or any other tax law
requirements, or conditions to favorable tax treatment, applicable to such
plan), which could result, directly or indirectly, in any taxes, penalties or
other liability to the Company or Zoll. No litigation, arbitration, or
governmental administrative proceeding (or investigation) or other proceeding
(other than those relating to routine claims for benefits) is pending or
threatened with respect to any such Employee Program.
(d) Neither the Company nor any Affiliate (as defined below)
(i) has ever maintained any Employee Program which has been subject to title IV
of ERISA (including, but not limited to, any Multiemployer Plan (as defined
below)) or (ii) has ever provided health care or any other non-pension benefits
to any employees after their employment is terminated (other than as required by
part 6 of subtitle B of title I of ERISA) or has ever promised to provide such
post-termination benefits.
(e) With respect to each Employee Program maintained by the
Company within the three years preceding the Closing, complete and correct
copies of the following documents (if applicable to such Employee Program) have
previously been delivered to Zoll: (i) all documents embodying or governing such
Employee Program, and any funding medium for the Employee Program (including,
without limitation, trust agreements) as they may have been amended; (ii) the
most recent IRS determination or approval letter with respect to such Employee
Program under Code Sections 401 or 501(c)(9), and any applications for
determination or approval subsequently filed with the IRS; (iii) the three most
recently filed IRS Forms 5500, with all applicable schedules and accountants'
opinions attached thereto; (iv) the summary plan description for such Employee
Program (or other descriptions of such Employee Program provided to employees)
and all modifications thereto; and (v) any insurance policy (including any
fiduciary liability insurance policy) related to such Employee Program; (vi) any
documents evidencing any loan to an Employee Program that is a leveraged
employee stock ownership plan.
(f) For purposes of this section:
(i) "Employee Program" means (A) all employee benefit
plans within the meaning of ERISA Section 3(3), including, but not
limited to, multiple employer welfare arrangements (within the meaning
of ERISA Section 3(4)), plans to which more than one unaffiliated
employer contributes and employee benefit plans
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(such as foreign or excess benefit plans) which are not subject to
ERISA; and (B) all stock option plans, bonus or incentive award plans,
severance pay policies or agreements, deferred compensation agreements,
supplemental income arrangements, vacation plans, and all other
employee benefit plans, agreements, and arrangements not described in
(A) above. In the case of an Employee Program funded through an
organization described in Code Section 501(c)(9), each reference to
such Employee Program shall include a reference to such organization.
(ii) An entity "maintains" an Employee Program if
such entity sponsors, contributes to, or provides (or has promised to
provide) benefits under such Employee Program, or has any obligation
(by agreement or under applicable law) to contribute to or provide
benefits under such Employee Program, or if such Employee Program
provides benefits to or otherwise covers employees of such entity, or
their spouses, dependents, or beneficiaries.
(iii) An entity is an "Affiliate" of the Company if
it would have ever been considered a single employer with the Company
under ERISA Section 4001(b) or part of the same "controlled group" as
the Company for purposes of ERISA Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or
non-pension) employee benefit plan to which more than one employer
contributes and which is maintained pursuant to one or more collective
bargaining agreements.
5.21 TRANSFER OF SHARES. No holder of stock of the Company has at any
time transferred any of such stock to any employee of the Company, which
transfer constituted or could be viewed as compensation for services rendered to
the Company by said employee.
5.22 STOCK REPURCHASE. The Company has not redeemed or repurchased any
of its capital stock.
5.23 YEAR 2000.
(a) COMPANY'S BUSINESS AND OPERATIONS.
(i) The Company has (A) undertaken a comprehensive
and detailed inventory, review and assessment of all areas within its
business and operations to address the "Year 2000 Problem" (i.e., the
risk that applications used by the Company or its suppliers and/or
providers may be unable to recognize and properly perform
date-sensitive functions involving certain dates prior to and any date
on or after January 1, 2000), (B) developed a detailed plan and
timeline for becoming Year 2000 Compliant on a timely basis, and (C) to
date, implemented that plan in accordance with its timetable in all
material respects;
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(ii) The Company's Year 2000 program includes
feasible contingency plans in an attempt to ensure uninterrupted and
unimpaired business operation, including liquidity needs, in the event
of its own or a third party's failure to be Year 2000 Compliant; and
(iii) The Company reasonably believes that the Year
2000 Problem will not have any material adverse effect on the business,
operations, liquidity or prospects of the Company or the Surviving
Corporation.
(b) PRODUCTS.
(i) Each of the Products is Year 2000 Compliant, is
designed to be used prior to, on and after January 1, 2000 and when so
used will operate consistently, predictably and accurately, without
interruption or manual intervention, and in accordance with all
requirements of any agreements or applicable documentation with respect
to the Products, including without limitation all specifications and/or
functionality and performance requirements, during each such time
period, and the transitions between them, in relation to dates it
encounters or processes; and
(ii) All date recognition and processing by each of
the Products will include the Four Digit Year Format and will correctly
recognize and process the date of February 29, and any related data,
during Leap Years; and that all date sorting by each of the Products
that includes a "year category" shall be done based on the Four Digit
Year Format.
(c) For purposes of this Section:
(i) "Four Digit Year Format" means a format that
allows entry or processing of a four digit date where the first two
digits will designate the century and the second two digits will
designate the year within the century;
(ii) "Leap Year" means any year during which an extra
day is added in February (the year 2000 is a Leap Year); and
(iii) "Year 2000 Compliant" means
(A) with respect to the operations of the
Company or third parties, that all computer-controlled
processes, electronic communications interfaces, software,
hardware, machinery, equipment, programs, and tools operate
for all date-sensitive functions before, on or after January
1, 2000 consistently, predictably, accurately and
unambiguously, without interruption or manual intervention;
and
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(B) with respect to the Products, that dates
before, on or after January 1, 2000, encountered and/or
processed by the Products will be correctly recognized,
calculated, sorted, stored, displayed and/or otherwise
processed in any level of computer hardware or software,
including, but not limited to, microcode, firmware,
application programs, system software, utilities, files and
databases; provided, however, that Year 2000 Compliant does
not cover the compatibility or interoperating capability of
the Products with any software or on any computer system that
is not maintained or controlled by the Company.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDERS.
As a material inducement to Zoll and Merger Sub to enter into this
Agreement and consummate the transactions contemplated hereby, each Stockholder
hereby severally makes to Zoll and Merger Sub each of the representations and
warranties set forth in this Section 6 with respect to such Stockholder. No
Stockholder shall have any right of indemnity or contribution from the Company
with respect to the breach of any representation or warranty hereunder.
6.1 COMPANY COMMON SHARES. Such Stockholder owns of record and
beneficially the number of the Company Common Shares set forth opposite such
Stockholder's name in EXHIBIT A. Such Company Common Shares are, and when
delivered by such Stockholder to Zoll pursuant to this Agreement will be, duly
authorized, validly issued, fully paid, non-assessable and free and clear of any
and all liens, encumbrances, charges or claims under Article 8 of the
Massachusetts Uniform Commercial Code or otherwise.
6.2 AUTHORITY. Such Stockholder has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Stockholder
pursuant to this Agreement and to carry out the transactions contemplated hereby
and thereby. This Agreement and each agreement, document and instrument executed
and delivered by such Stockholder pursuant to this Agreement constitutes a valid
and binding obligation of such Stockholder, enforceable in accordance with their
respective terms, and such Stockholder has full power and authority to transfer
and deliver the Company Common Shares to Zoll pursuant to this Agreement. The
execution, delivery and performance of this Agreement and each such agreement,
document and instrument:
(i) does not and will not violate any laws of the
United States or any state or other jurisdiction applicable to such
Stockholder, or require such Stockholder to obtain any approval,
consent or waiver from, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(ii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of, any indenture or loan or credit
agreement or any other agreement, contract, instrument,
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<PAGE> 25
mortgage, lien, lease, permit, authorization, order, writ, judgment,
injunction, decree, determination or arbitration award to which such
Stockholder is a party or by which the property of such Stockholder is
bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or
encumbrance on any assets of the Company or on the Company Common
Shares owned by such Stockholder.
6.3 SECURITIES LAW MATTERS. Each Stockholder hereby represents and
warrants to Zoll that with respect to such Stockholder's receipt of Zoll Common
Shares hereunder:
(a) Each Stockholder is acquiring the Zoll Common Shares for
its own account, for investment, and not with a view to any
"distribution" thereof within the meaning of the Securities Act of
1933, as amended (the "Securities Act"). Each Stockholder is
knowledgeable and experienced in the making of investments of the type
involved in the acquisition of the Zoll Common Shares pursuant to the
Agreement, is able to bear the economic risk of loss of its investment
in Zoll, has been granted the opportunity to investigate the affairs of
the Zoll and to ask questions of their officers and employees regarding
the business, assets, liabilities, financial condition, cash flow and
operations of Zoll, and has availed himself of such opportunity either
directly or through his authorized representative; each Stockholder
acknowledges that he has made his own independent examination,
investigation, analysis and evaluation of Zoll, including his own
estimation of Zoll's business; each Stockholder acknowledges that he
has undertaken such due diligence as he has deemed adequate. Each
Stockholder is an "accredited investor" as defined in the Securities
Act; and
(b) Each Stockholder understands that because the shares of
Zoll Common Shares have not been registered under the Securities Act
nor under securities or "blue sky" laws of any jurisdiction, he cannot
dispose of any or all of the shares of the Zoll Common Shares unless
such Zoll Common Shares is subsequently registered under the Securities
Act or exemptions from such registration are available. Each
Stockholder acknowledges and understands it has no right to require
Zoll to register the Zoll Common Shares, except as set forth in the
Registration Rights Agreement. Each Stockholder further understands
that the Zoll may, as a condition to the transfer of any of the Zoll
Common Shares, require that the request for transfer be accompanied by
an opinion of counsel as described below. Each Stockholder understands
that each certificate representing the Zoll Common Shares will bear a
legend in substantially the form provided below (in addition to any
legend required under applicable state securities laws).
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER
NAMED HEREON FOR THE HOLDER'S OWN ACCOUNT FOR INVESTMENT; AND
SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER WAY
TRANSFERRED IN THE ABSENCE OF
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<PAGE> 26
AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS IN EFFECT AT THAT TIME, OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
6.4 REPRESENTATION DISCLAIMER. Each Stockholder agrees that Zoll and
Merger Sub shall not be deemed to have made to any Stockholder any
representation or warranty other than those expressly made by Zoll or Merger Sub
pursuant to Section 8 hereof. Without limiting the generality of the foregoing,
neither Zoll nor Merger Sub has made any representation or warranty to any
Stockholder with respect to (i) any projections, estimates or budgets heretofore
delivered to or made available to any Stockholder of future revenues, expenses
or expenditures or future results of operations; or (ii) any other information
or documents (financial or otherwise) made available to any Stockholder, their
counsel, accountants or advisors with respect to Zoll and Merger Sub.
SECTION 7. COVENANTS OF THE COMPANY AND THE STOCKHOLDERS.
7.1 MAKING OF COVENANTS AND AGREEMENTS. The Company and the
Stockholders jointly and severally hereby make the covenants and agreements set
forth in this Section 7 and the Stockholders agree to cause the Company to
comply with such agreements and covenants. No Stockholder shall have any right
of indemnity or contribution from the Company or the Surviving Corporation with
respect to the breach of any covenant or agreement hereunder.
7.2 NON-DISCLOSURE AND NON-COMPETITION. In consideration of the
agreements set forth in this Section 7.2, Zoll agrees to issue 1,000 Zoll Common
Shares to each of David Brown, David G. Cohen and Robert Durkin, Jr. Each
Stockholder, in consideration of such Zoll Common Shares and the other
provisions of this Agreement, expressly covenants and agrees that such
Stockholder, will not, directly or indirectly, (a) at any time following the
Closing Date, disclose or furnish to any person, other than Zoll or the
Surviving Corporation, any proprietary information of, or confidential
information concerning, the Company, the Surviving Corporation or Zoll or any
affiliate of Zoll except as required by law; and (b) for a period of three (3)
years following the Closing Date, without the express written consent of the
Zoll, directly or indirectly, anywhere in the world, engage in any activity
which is, or participate or invest in, or provide or facilitate the provision of
financing to, or assist (whether as owner, part-owner, shareholder, partner,
director, officer, trustee, employee, agent or consultant, or in any other
capacity), any business, organization or person other than Zoll whose business,
activities, products or services are competitive with any business, activities,
products or services conducted or offered by Zoll or the Surviving Corporation
or any of their subsidiaries during any period in which the Stockholder serves
as an officer or employee of Zoll or any of its subsidiaries, which business,
activities, products and services shall include in any event the provision of
information systems in the emergency medical systems or services, fire or rescue
industries or the provision of other services currently provided by the Company
22
<PAGE> 27
or Zoll or currently contemplated to be provided by the Surviving Corporation or
Zoll in such general areas of service. Notwithstanding the foregoing, the
business of Integrated Management Solutions, LLC as conducted as of the date
hereof shall not be deemed to violate the terms of the preceding sentence. In
addition, no Stockholder will disparage Zoll, the Surviving Corporation, or the
products or services conducted or offered by Zoll or the Surviving Corporation
during any period in which the Stockholder served as an officer or employee of
Zoll or any of its subsidiaries. Further, no Stockholder will, for a period of
three (3) years following the Closing Date, (x) induce or attempt to induce any
employee of the Company, the Surviving Corporation, Zoll or any of their
subsidiaries to leave the employ of such entity, (y) hire directly or through
another entity any person who was an employee of the Company at any time during
the three (3) year period after the Closing Date, or (z) induce or attempt to
induce any customer, supplier, licensee or other business relation of the
Company, the Surviving Corporation, Zoll or any of their subsidiaries to cease
doing business with any such entity, or in any way interfere with the
relationship between such customer, supplier, licensee or business relation and
such entity.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF ZOLL AND
MERGER SUB.
8.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to the Company and the Stockholders to enter into this Agreement and consummate
the transactions contemplated hereby, Zoll and Merger Sub hereby jointly and
severally make the representations and warranties to the Company and the
Stockholders contained in this Section 8.
8.2 ORGANIZATION OF ZOLL AND MERGER SUB. Zoll and Merger Sub are
corporations duly organized, validly existing and in good standing under the
laws of Massachusetts and Delaware, respectively, with full corporate power to
own or lease their properties and to conduct their business in the manner and in
the places where such properties are owned or leased or such business is
conducted by them.
8.3 AUTHORITY. Each of Zoll and Merger Sub have full right, authority
and power to enter into this Agreement, and each agreement, document and
instrument to be executed and delivered by them pursuant to this Agreement and
to carry out the transactions contemplated hereby. The execution, delivery and
performance by Zoll and Merger Sub of this Agreement, and each such other
agreement, document and instrument have been duly authorized by all necessary
corporate action of Zoll and Merger Sub, respectively and no other action on the
part of Zoll or Merger Sub is required in connection therewith. This Agreement
and each other agreement, document and instrument executed and delivered by Zoll
or Merger Sub pursuant to this Agreement constitute, or when executed and
delivered will constitute, valid and binding obligations of Zoll and Merger Sub
respectively enforceable in accordance with their terms against the applicable
party. The execution, delivery and performance by Zoll and
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<PAGE> 28
Merger Sub, respectively of this Agreement, and each such other agreement,
document and instrument:
(i) does not and will not violate any provision of
the Articles of Organization or by-laws of Zoll or the Certificate of
Incorporation or By-laws of Merger Sub;
(ii) does not and will not violate any laws of the
United States or of any state or any other jurisdiction applicable to
Zoll and Merger Sub, respectively or require Zoll or Merger Sub to
obtain any approval, consent or waiver of, or make any filing with, any
person or entity (governmental or otherwise) which has not been
obtained or made; and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture, loan or credit
agreement, or other agreement mortgage, lease, permit, order, judgment
or decree to which Zoll or Merger Sub is a party and which is material
to the business and financial condition of Zoll and its parent and
affiliated organizations on a consolidated basis.
8.4 LITIGATION. There is no litigation pending or, to its knowledge,
threatened against Zoll or Merger Sub which would prevent or materially hinder
the consummation of the transactions contemplated by this Agreement.
8.5 FINDER'S FEE. Neither Zoll nor Merger Sub has incurred or become
liable for any broker's commission or finder's fee relating to or in connection
with the transactions contemplated by this Agreement.
8.6 ZOLL COMMON SHARES. The Zoll Common Shares, when issued pursuant to
this Agreement, will be duly authorized, fully paid and non-assessable.
SECTION 9. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
9.1 SURVIVAL OF WARRANTIES. Each of the representations, warranties,
agreements, covenants and obligations herein or in any schedule, exhibit,
certificate or financial statement delivered by any party to the other party
incident to the transactions contemplated hereby are material, shall be deemed
to have been relied upon by the other party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either party hereto.
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SECTION 10. INDEMNIFICATION.
10.1 INDEMNIFICATION BY STOCKHOLDERS. Each Stockholder severally agrees
to indemnify and hold harmless Zoll and Merger Sub and their respective
directors, officers, agents, affiliates and employees (each a "Zoll Indemnified
Party") from and against any and all claims, actions, suits, liabilities,
losses, damages, and expenses of every nature and character whether accrued,
absolute, contingent or otherwise (including, but not by way of limitation, all
reasonable attorneys' fees incurred by Zoll or Merger Sub and all amounts paid
by it in settlement of any claim, action, suit or liability) (collectively, a
"Claim"), which arise or result directly or indirectly by reason of:
(i) Any error, misstatement or omission in any
representation or warranty made by the Company or any Stockholder in
this Agreement, any Schedule or exhibit hereto, or in any document or
instrument provided for herein or furnished or to be furnished to Zoll
or Merger Sub in connection with this Agreement;
(ii) Any breach of or default in performance of any
of the covenants, agreements or other undertakings of the Company or
any Stockholder;
(iii) Inadequate reserves on the Base Balance Sheet
for any Product or service of the Company produced or furnished by the
Company on or prior to the Closing; and
(iv) Any action or inaction by the Company or any
event, circumstance or condition occurring or existing with respect to
the Company on or prior to the Closing;
provided, however, that (A) the indemnification obligation of the Stockholders
hereunder shall be limited to the lessor of (A) $12,000,000 less any amounts
paid to the Zoll Indemnified Parties pursuant to the indemnification provisions
of the LLC Purchase Agreement executed by the parties hereto and Pinpoint
Properties Management, LLC of even date herewith (the "LLC Purchase Agreement")
(the "Indemnity Cap") and (B), if the Stockholders unanimously determine in
their discretion, the Indemnity Cap shall be fully satisfied by the remittance
to Zoll of 425,000 Zoll Common Shares in the aggregate, provided, however, that
such limitations shall not apply to indemnification claims relating to or
arising from a breach of any representation or warranty set forth in Sections
5.3, 5.4, 5.6, 6.1 and 6.2; (B) each Stockholder shall only be liable for his
pro rata share of the total indemnification obligation (such pro rata share
constituting the equivalent of each Stockholder's ownership percentage in the
Company just prior to the Closing); (C) the obligation to pay any amounts due
hereunder shall not commence until Buyer has registered one-half of the Zoll
Common Shares pursuant to the terms of this Agreement and the Registration
Rights Agreement, though the obligation to pay such amounts shall accrue
irrespective of such registration or lack thereof; and (D) the indemnification
obligation hereunder shall terminate twelve (12) months after the date such
obligation commences, except that Claims relating to or involving tax matters
shall expire on
25
<PAGE> 30
the date three months after the applicable statute of limitations relating
thereto. In the event the Stockholders determine to satisfy their
indemnification obligations with Zoll Common Shares, such stock shall be valued
at the closing price of the Zoll Common Shares on the date Zoll notifies the
Stockholders of the existence of the relevant Claim.
10.2 INDEMNIFICATION BY ZOLL. Zoll and Merger Sub shall indemnify and
hold harmless the Stockholders (each a "Seller Indemnified Party"), from and
against any and all Claims which arise or result directly or indirectly by
reason of:
(i) Any error, misstatement or omission in any
representation or warranty made by Zoll or Merger Sub in this
Agreement, any Schedule or exhibit hereto, or in any document or
instrument provided for herein or furnished or to be furnished to the
Stockholders in connection with this Agreement;
(ii) Any breach of or default in performance of any
of the covenants, agreements or other undertakings of Zoll or Merger
Sub;
(iii) Any Product or service of the Surviving
Corporation produced or furnished after the Closing;
(iv) Any action or inaction by Zoll or Merger Sub or
any event, circumstance or condition occurring or existing with respect
to the Company after the Closing (except to the extent any Stockholder
is, under the terms hereof or of any agreement contemplated hereby,
liable or responsible therefor or obligated to indemnify Zoll or Merger
Sub with respect thereto).
Notwithstanding anything in this Section 10.2 to the contrary, Zoll and
Merger Sub shall not be required to indemnify Seller Indemnified Parties with
respect to any Claims in an aggregate amount in excess of $12,000,000 less any
amounts paid to a Seller Indemnified Party pursuant to the LLC Purchase
Agreement and the indemnification obligation hereunder shall terminate twelve
(12) months after the date such obligation commences.
SECTION 11. MISCELLANEOUS.
11.1 FEES AND EXPENSES.
(a) Each of the parties will bear its own expenses in
connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, and no expenses of the Company or the
Stockholders relating in any way to the purchase and sale of the Company Common
Shares hereunder and the transactions contemplated hereby, including without
limitation legal, accounting or other professional expenses of the Company or
any Stockholder shall be charged to or paid by the Company, the Surviving
Corporation, or Zoll.
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(b) The Stockholders will pay all costs incurred, whether at
or subsequent to the Closing, in connection with the transfer of the Company
Common Shares to Zoll as contemplated by this Agreement, including without
limitation, all transfer taxes and charges applicable to such transfer, and all
costs of obtaining permits, waivers, registrations or consents with respect to
any assets, rights or contracts of the Company.
11.2 GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws of the State of Delaware without regard to its
conflict of laws provisions; provided, however, that the parties hereby agree
that the venue for this agreement shall be in Denver, Colorado.
11.3 NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail, upon the sooner of the date on which
receipt is acknowledged or the expiration of three days after deposit in United
States post office facilities properly addressed with postage prepaid. All
notices to a party will be sent to the addresses set forth below or to such
other address or person as such party may designate by notice to each other
party hereunder:
TO ZOLL: Zoll Medical Corporation
32 Second Avenue
Burlington, MA 01603-4420
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Raymond C. Zemlin, P.C.
Facsimile: (617) 523-1231
TO COMPANY: Pinpoint Technologies, Inc.
1800 38th Street, Suite 200
Boulder, CO 80301
With a copy to: Holland & Hart LLP
Suite 500
1050 Walnut
Boulder, CO 80302
Attn: Robert W. Planchard, Esq.
Facsimile (303) 473-2720
TO STOCKHOLDER: at the address set forth on EXHIBIT A.
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Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
11.4 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to its subject matter, and supersedes all previous written
or oral negotiations, commitments and writings, including without limitation,
the Letter of Intent among the Company, Zoll and the Stockholders, dated
September 1, 1999. No promises, representations, understandings, warranties and
agreements have been made by any of the parties hereto except as referred to
herein or in such Schedules and Exhibits or in such other writings; and all
inducements to the making of this Agreement relied upon by either party hereto
have been expressed herein or in such Schedules or Exhibits or in such other
writings.
11.5 ASSIGNABILITY; BINDING EFFECT. This Agreement shall only be
assignable by Zoll to an affiliate of Zoll upon written notice to the Company
and the Stockholders, and such assignment shall not relieve Zoll of any
liability hereunder. This Agreement may not be assigned by the Stockholders or
the Company without the prior written consent of Zoll. This Agreement shall be
binding upon and enforceable by, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
11.6 CAPTIONS AND GENDER. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
11.7 EXECUTION IN COUNTERPARTS. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
11.8 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
11.9 PUBLICITY AND DISCLOSURES. No press releases or public disclosure,
either written or oral, of the transactions contemplated by this Agreement,
shall be made by a party to this Agreement without the prior knowledge and
written consent of Zoll and the Company.
11.10 SPECIFIC PERFORMANCE. The parties agree that it would be
difficult to measure damages which might result from a breach of this Agreement
by the Company, the Stockholders or Zoll and that money damages would be an
inadequate remedy for such a breach. Accordingly, if there is a breach or
proposed breach of any provision of this
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Agreement by the Company, the Stockholders or Zoll, the other party shall be
entitled, in addition to any other remedies which it may have, to an injunction,
specific performance or other appropriate equitable relief to restrain or remedy
such breach without having to show or prove actual damage to Zoll, Merger Sub or
the Stockholders, as the case may be.
11.11 DISPUTE RESOLUTION. Except with respect to matters as to which
injunctive relief is being sought, in the event of a dispute between the parties
concerning their respective rights and obligations under this Agreement, or the
breach, termination, negotiation, or validity hereof and/or the rights or
obligations of the parties arising out of or relating to this Agreement or the
breach, termination, negotiation or validity thereof, in any case that the
parties are unable to resolve amicably between themselves within sixty (60) days
of proper notice from one party to another, such dispute shall be settled by
arbitration in Denver, Colorado in an expedited manner in accordance with the
Commercial Rules of the American Arbitration Association by a panel of three
arbitrators. Zoll shall select one arbitrator, the other party to the dispute
shall select one arbitrator, and the two arbitrators shall in good faith jointly
select a third arbitrator. All arbitrators so selected shall be commercially
sophisticated parties with knowledge of the software industry. The decision of
the arbitrators shall be final and binding upon the parties. Each of the parties
consents to the jurisdiction and venue of the courts of Denver, Colorado for the
purposes of enforcing the dispute resolution provisions of this Section 11.11.
Each party further irrevocably waives any objection to proceeding before the
American Arbitration Association based upon lack of personal jurisdiction or to
the laying of venue and further irrevocably and unconditionally waives and
agrees not to make a claim in any court that dispute resolution before the
American Arbitration Association has been brought in an inconvenient forum. Each
of the parties hereto agrees that its or his submission to jurisdiction is made
for the express benefit of the other parties hereto.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives. By their signatures below, each person signing this Agreement
affirms or acknowledges, under penalty of perjury, that this Agreement is such
person's act and deed or such corporations act and deed, as the case may be, and
that the facts stated herein are true.
ZOLL:
By: /s/ A. Ernest Whiton
---------------------------------------
Title: Vice President and Chief Financial
---------------------------------------
Officer
---------------------------------------
MERGER SUB
By: /s/ A. Ernest Whiton
---------------------------------------
Title:
---------------------------------------
COMPANY:
By: /s/ David Brown
---------------------------------------
Title: President
---------------------------------------
STOCKHOLDERS:
/s/ David Brown
----------------------------------------------
David Brown
/s/ David G. Cohen
----------------------------------------------
David G. Cohen
/s/ Robert Durkin, Jr.
----------------------------------------------
Robert Durkin, Jr.
30
<PAGE> 35
CERTIFICATIONS
It is hereby certified that the holders of a majority of the
outstanding shares of each class of Pinpoint Technologies, Inc. entitled to vote
on this Agreement and Plan of Merger have approved adoption of such Agreement by
means of a written consent dated October 15, 1999, as permitted by Section 228
of the Delaware General Corporation Law.
/s/ Robert Durkin, Jr.
----------------------------------------------
Name: Robert Durkin, Jr.
Secretary
Pinpoint Technologies, Inc.
It is hereby certified that all of the outstanding shares of each class
of Zollsub, Inc. entitled to vote on this Agreement and Plan of Merger have
voted approved adoption of Agreement by means of a written consent dated October
15, 1999, as permitted by Section 228 of the Delaware General Corporation Law.
/s/ A. Ernest Whiton
----------------------------------------------
Name: A. Ernest Whiton
Secretary
Zollsub, Inc.
31
<PAGE> 36
LIST OF EXHIBITS AND SCHEDULES
Exhibit A: List of Stockholders, Stockholdings and Consideration to be Paid
B: Form of Option Agreement
C: Form of Employment Agreement
D: Form of Registration Rights Agreement
Schedule 3.2 Officers of the Surviving Corporation
5.5 Financial Statements
5.6 Tax Disclosures
5.7 Affiliated Accounts Receivable
5.8 Absence of Changes
5.10 Banking Arrangements
5.11 Intellectual Property
5.12 Contracts, etc.
5.13 Litigation
5.15 Insurance
5.16 Warranty Claims
5.17 Power of Attorney
5.20 Employee Benefit Programs
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<PAGE> 37
Exhibit A
LIST OF STOCKHOLDERS, STOCKHOLDINGS AND CONSIDERATION TO BE PAID
SHARES OF ZOLL SHARES ISSUED FOR
PAYABLE BY ZOLL NONCOMPETE
OWNERSHIP OF
NAME AND ADDRESS COMPANY PURSUANT TO
OF STOCKHOLDER COMMON SHARES MERGER
DAVID BROWN 50 184,392 1,000
DAVID G. COHEN 50 184,392 1,000
ROBERT DURKIN, JR. 11 40,566 1,000
33
<PAGE> 1
EXHIBIT 10.2
LIMITED LIABILITY COMPANY INTEREST
PURCHASE AGREEMENT
by and among
PINPOINT TECHNOLOGIES, INC.
as Buyer and a wholly-owned subsidiary of
ZOLL MEDICAL CORPORATION
PINPOINT PROPERTY MANAGEMENT, LLC
(the "Company")
and
The Members of the Company
listed on Exhibit A hereto
October 15, 1999
<PAGE> 2
LIMITED LIABILITY COMPANY INTEREST
PURCHASE AGREEMENT
INDEX
PAGE
SECTION 1. SALE OF LLC INTERESTS AND PURCHASE PRICE.........................1
1.1 Sale and Transfer of LLC Interests...............................1
1.2 Purchase Price and Payment.......................................2
1.3 Time and Place of Closing........................................2
1.4 Further Assurances...............................................2
1.5 Transfer Taxes...................................................2
SECTION 2. GENERAL REPRESENTATIONS AND WARRANTIES OF THE MEMBERS
AND THE COMPANY..................................................2
2.1 Making of Representations and Warranties.........................2
2.2 Organization and Qualifications of the Company...................2
2.3 Interests of the Company; Beneficial Ownership...................3
2.4 Authority of the Company; Enforceability; No Conflict............3
2.5 Liabilities......................................................4
2.6 Taxes............................................................4
2.7 Absence of Certain Changes.......................................5
2.8 Banking Relations................................................6
2.9 Contracts........................................................6
2.10 Litigation.......................................................6
2.11 Compliance with Laws.............................................6
2.12 Insurance........................................................6
2.13 Powers of Attorney...............................................7
2.14 Finder's Fee.....................................................7
2.15 Corporate Records; Copies of Documents...........................7
2.16 Unit Repurchase..................................................7
2.17 Property.........................................................7
SECTION 3. REPRESENTATIONS AND WARRANTIES OF MEMBERS........................8
3.1 Authority........................................................9
3.2 Securities Laws Matters..........................................9
3.3 Representation Disclaimer.......................................10
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER AND ZOLL................10
4.1 Making of Representations and Warranties........................10
4.2 Organization....................................................10
4.3 Authority.......................................................11
(i)
<PAGE> 3
PAGE
4.4 Litigation......................................................11
4.5 Finder's Fee....................................................11
4.6 Zoll Common Stock...............................................11
SECTION 5. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING....................12
5.1 Survival of Warranties..........................................12
SECTION 6. INDEMNIFICATION.................................................12
6.1 Indemnification by Members......................................12
6.2 Indemnification by Zoll.........................................13
SECTION 7. MISCELLANEOUS...................................................13
7.1 Fees and Expenses...............................................13
7.2 Governing Law...................................................14
7.3 Notices.........................................................14
7.4 Entire Agreement................................................15
7.5 Assignability; Binding Effect...................................15
7.6 Captions and Gender.............................................15
7.7 Execution in Counterparts.......................................15
7.8 Amendments......................................................15
7.9 Publicity and Disclosures.......................................15
7.10 Specific Performance............................................15
7.11 Dispute Resolution..............................................16
(ii)
<PAGE> 4
LIMITED LIABILITY COMPANY INTEREST
PURCHASE AGREEMENT
AGREEMENT (the "Agreement") entered into as of October 15, 1999 by and
among Pinpoint Technologies, Inc., a Delaware corporation (the "Buyer"), Zoll
Medical Corporation, a Massachusetts corporation and the owner of all the issued
and outstanding equity interests of Buyer ("Zoll"), and the members of Pinpoint
Property Management, LLC, a Colorado limited liability company (the "Company")
listed on EXHIBIT A hereto, (collectively referred to as the "Members" and
individually as a "Member").
W I T N E S S E T H
WHEREAS, the Buyer and a wholly-owned subsidiary of Zoll have
consummated a merger under Delaware law so that Buyer is a wholly-owned
subsidiary of Zoll (the "Merger");
WHEREAS, the Members own of record and beneficially one hundred percent
(100%) of the outstanding interests of the Company which interests are
represented by capital accounts as set forth on EXHIBIT A hereto ("LLC
Interests");
WHEREAS, the Members desire to sell all of the LLC Interests to Buyer,
and Buyer desires to acquire all of the LLC Interests; and
WHEREAS, the Company owns title to a parcel of land and improvements
thereon as more fully set forth on EXHIBIT B hereto (the "Property").
NOW, THEREFORE, in order to consummate aforesaid purchase and sale and
in consideration of the mutual agreements set forth herein, the parties hereto
agree as follows:
SECTION 12. SALE OF LLC INTERESTS AND PURCHASE PRICE.
12.1 SALE AND TRANSFER OF LLC INTERESTS. In consideration of and in
reliance upon the representations, warranties and covenants contained herein and
subject to the terms and conditions of this Agreement, the Members agree to
sell, and Buyer agrees to purchase, at the Closing (as defined below), the LLC
Interests. At the Closing, (a) each Member shall deliver or cause to be
delivered to Buyer all of the LLC Interests owned by such Member, as set forth
on EXHIBIT A, and such LLC Interests shall be duly endorsed in blank for
transfer or shall be presented with membership interest powers duly executed in
blank, with such signature guarantees and such other documents as may be
reasonably required by Buyer to effect a valid transfer of such LLC Interests by
such Member, free and clear of any and all liens,
<PAGE> 5
encumbrances, charges or claims of any kind (collectively "Claims") and such
other documentation as may be reasonably agreed to by Buyer and the Members in
connection with the consummation of the transaction contemplated by this
Agreement; and (b) Buyer shall deliver to the Members certificates for Zoll
Common Stock, as set forth in Section 1.2 and such other documentation as may be
reasonably agreed to by Buyer and the Members in connection with the
consummation of the transactions contemplated by this Agreement.
12.2 PURCHASE PRICE AND PAYMENT. In consideration of the sale by the
Members to Buyer of the LLC Interests and in reliance upon the representations
and warranties of the Company and the Members herein contained and made at the
Closing and subject to the satisfaction of all of the conditions contained
herein, Buyer agrees that at the Closing it will deliver an aggregate of 23,769
shares of Common Stock of Zoll, par value $.02 per share ("Zoll Common Stock")
to the Members, with such aggregate amount to be registered in the names of the
Members as set forth on EXHIBIT A.
12.3 TIME AND PLACE OF CLOSING. The closing of the purchase and sale
provided for in this Agreement (the "Closing") shall be held at the offices of
Goodwin, Procter & Hoar LLP, Boston, Massachusetts immediately following the
Merger on October 15, 1999 or at such other place or an earlier or later date or
time as may be mutually agreed upon by the parties (the "Closing Date").
12.4 FURTHER ASSURANCES. The Members from time to time after the
Closing at the request of Buyer and without further consideration shall execute
and deliver further instruments of transfer and assignment and take such other
action as Buyer may reasonably require to more effectively transfer and assign
to, and vest in, Buyer the LLC Interests and all rights thereto, and to fully
implement the provisions of this Agreement.
12.5 TRANSFER TAXES. All transfer taxes, fees and duties under
applicable law incurred in connection with the sale and transfer of the LLC
Interests under this Agreement will be borne and paid by the Members, and the
Members shall promptly reimburse the Company and Buyer for any such tax, fee or
duty which any of them is required to pay under applicable law.
SECTION 13. GENERAL REPRESENTATIONS AND WARRANTIES OF THE
MEMBERS AND THE COMPANY.
13.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to Buyer and Zoll to enter into this Agreement and consummate the transactions
contemplated hereby, each of the Members and the Company jointly and severally
hereby make to Buyer and Zoll the representations and warranties contained in
this Section 2.
13.2 ORGANIZATION AND QUALIFICATIONS OF THE COMPANY. The Company is a
limited liability company duly organized, validly existing and in good standing
under the laws of the
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State of Colorado. The Company is not required to be registered as a foreign
limited liability company in any other jurisdiction.
13.3 INTERESTS OF THE COMPANY; BENEFICIAL OWNERSHIP.
(a) Immediately prior to giving effect to this transaction,
the Members own 100% of the LLC Interests. EXHIBIT A sets forth (i) the names of
each member of the Company and the sharing ratio percentage of such LLC
Interests owned of record and beneficially by such Member and such LLC Interests
are owned by such Member free and clear of any liens, restrictions or
encumbrance, and (ii) the names and positions of each manager and officer, if
any, of the Company. There are no outstanding subscriptions, options, warrants,
commitments, preemptive rights, agreements, arrangements or commitments of any
kind for or relating to the issuance, or sale of, or outstanding securities
convertible into or exercisable or exchangeable for any LLC Interests or other
equity interests of the Company. There are no voting trusts, voting agreements,
proxies or other agreements, instruments or undertakings with respect to the
voting of the LLC Interests to which the Company or any of the Members is a
party. The Company has no obligation to purchase, redeem or otherwise acquire
any of its LLC Interests or any interests therein, and has never redeemed any
LLC Interests. All of the LLC Interests of the Company will have been duly and
validly authorized and issued and will be fully paid and non-assessable and will
have been offered, issued, sold and delivered in compliance with applicable
federal and state securities laws and not subject to any preemptive rights which
have not been otherwise expressly waived. The Company is managed solely by the
Members.
13.4 AUTHORITY OF THE COMPANY; ENFORCEABILITY; NO CONFLICT.
(a) The Company has full right, authority and power to enter
into this Agreement and each agreement, document and instrument to be executed
and delivered by the Company pursuant to this Agreement and to carry out the
transactions contemplated hereby. The execution, delivery and performance by the
Company of this Agreement and each such other agreement, document and instrument
have been duly authorized by all necessary action of the Company and no other
action on the part of the Company or the Members is required in connection
therewith.
This Agreement and each agreement, document and instrument executed and
delivered by the Company pursuant to this Agreement constitutes, or when
executed and delivered will constitute, valid and binding obligations of the
Company enforceable in accordance with their terms. The execution, delivery and
performance by the Company of this Agreement and each such agreement, document
and instrument:
(i) does not and will not violate any provision of
the Articles of Organization or Operating Agreement of the Company;
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(ii) does not and will not violate any laws of the
United States, or any state or other jurisdiction applicable to the
Company or require the Company to obtain any approval, consent or
waiver of, or make any filing with, any person or entity (governmental
or otherwise) that has not been obtained or made; and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture or loan or credit
agreement or any other agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which the Company is a
party or by which the property of the Company is bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any of the
Company's assets or the LLC Interests, except as specifically
identified on SCHEDULE 2.4.
13.5 LIABILITIES.
(a) As of the Closing, the Company does not and will not have
any liabilities of any nature, whether accrued, absolute, contingent or
otherwise, asserted or unasserted, known or unknown (including without
limitation, liabilities as guarantor or otherwise with respect to obligations of
others, liabilities for taxes due or then accrued or to become due, or
contingent or potential liabilities relating to activities of the Company or the
conduct of their business prior to the Closing Date regardless of whether claims
in respect thereof had been asserted as of such date), except (i) liabilities
represented by the Mortgage dated March 15, 1999 between Bank One, Colorado,
N.A. and Pinpoint Properties Management LLC (the "Mortgage"), (ii) executory
obligations under a lease to Green Mountain Geophysics, Inc. (the "Tenant
Lease"), and (iii) executory obligations under a lease to Buyer (the "Pinpoint
Lease").
13.6 TAXES. The Company has filed all tax returns which it is required
to file under applicable laws and regulations; all such returns are complete and
correct in all material respects; the Company has paid all taxes due and owing
by it, whether or not shown on a return, and has withheld and paid over all
taxes which it is obligated to withhold from amounts paid or owing to any
employee, Member, creditor or other third party (collectively "Taxes"); the
Company has not waived any statute of limitations with respect to Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency;
to the Company's knowledge, no foreign, federal, state or local Tax audits are
pending or being conducted with respect to the Company, no information related
to Tax matters has been requested by any foreign, federal, state or local taxing
authority and no notice indicating an intent to open an audit or other review
has been received by the Company from any foreign, federal, state or local
taxing authority; and to the Company's knowledge, there are no material
unresolved questions or claims concerning the Company's Tax liability; the
Company qualifies (and has qualified since the date of its formation) to be
treated as a partnership for Federal, state and local income tax purposes. The
Company is not a party to any Tax allocation or sharing agreement. The Company
does not have any liability for the Taxes of any person as a transferee or
successor, by
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contract, or otherwise. The unpaid Taxes of the Company will not exceed
_____________ as of the Closing Date. There are no liens on or other security
interests in the assets of the Company that arose in connection with any failure
(or alleged failure) to pay any Tax other than for current Taxes not yet due and
payable.
13.7 ABSENCE OF CERTAIN CHANGES. Except as disclosed in SCHEDULE 2.7
attached hereto, since September 30, 1999, there has not been:
(a) any change in the financial condition, properties, assets,
liabilities, business or operations of the Company, which change by itself or in
conjunction with all other such changes, whether or not arising in the ordinary
course of business, has been materially adverse with respect to the Company;
(b) any contingent liability incurred by the Company as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of, the Company;
(c) any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the date hereof or will
remain on the date of the Closing;
(d) any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for Taxes due or to become due
or contingent or potential liabilities relating to products or services provided
by the Company or the conduct of the business of the Company since September 30,
1999 regardless of whether claims in respect thereof have been asserted),
incurred by the Company other than obligations and liabilities incurred in the
ordinary course of business consistent with the terms of this Agreement (it
being understood that product or service liability claims shall not be deemed to
be incurred in the ordinary course of business);
(e) any purchase, sale or other disposition, or any agreement
or other arrangement for the purchase, sale or other disposition, of any of the
properties or assets of the Company other than in the ordinary course of
business;
(f) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(g) any declaration, setting aside or payment of any dividend
by the Company, or the making of any other distribution in respect of the LLC
Interests, or any direct or indirect redemption, purchase or other acquisition
by the Company of its own securities;
(h) any obligation or liability incurred by the Company to any
of its officers, Members or employees, or any loans or advances made by the
Company to any of its officers,
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Members or employees, except normal compensation and expense allowances payable
to officers or employees;
(i) any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(j) any other transaction entered into by the Company other
than transactions in the ordinary course of business; or
(k) any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (j) above.
13.8 BANKING RELATIONS. All of the arrangements which the Company has
with any banking institution are completely and accurately described in SCHEDULE
2.8 attached hereto, indicating with respect to each of such arrangements the
type of arrangement maintained (such as checking account, borrowing
arrangements, safe deposit box, etc.) and the person or persons authorized in
respect thereof.
13.9 CONTRACTS. Except for the Mortgage, the Tenant Lease and the
Pinpoint Lease, and as set forth on SCHEDULE 2.9, the Company is not subject to
any contracts, commitments, leases or subleases, plans and agreements.
The Company is not in default under any of its contracts, commitments,
leases or subleases, plans or agreements and does not have any knowledge of
conditions or facts which with notice or passage of time, or both, would
constitute a default.
13.10 LITIGATION. There is no currently pending litigation and
governmental or administrative proceedings or investigations to which the
Company is a party.
13.11 COMPLIANCE WITH LAWS. To the Company's knowledge, the Company is
in compliance in all material respects with all applicable statutes, ordinances,
orders, judgements, decrees, rules and regulations promulgated by any federal,
state, municipal entity, agency, court or other governmental authority which
apply to the Company or to the conduct of its business, and the Company has not
received notice of a violation or alleged violation of any such statute,
ordinance, order, rule or regulation.
13.12 INSURANCE. The physical properties and assets of the Company are
insured to the extent disclosed in SCHEDULE 2.12 attached hereto and all such
insurance policies and arrangements are disclosed in said Schedule. Said
insurance policies and arrangements are in full force and effect, all premiums
with respect thereto are currently paid, and the Company is in compliance in all
material respects with the terms thereof. Said insurance is adequate and
customary for the business engaged in by the Company and is sufficient for
compliance by the Company with all requirements of law and all agreements and
leases to which the Company is a party.
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13.13 POWERS OF ATTORNEY. Except as set forth on SCHEDULE 2.13, neither
the Company nor any Member has any outstanding power of attorney.
13.14 FINDER'S FEE. Neither the Company nor any Member has incurred or
become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement.
13.15 CORPORATE RECORDS; COPIES OF DOCUMENTS. The corporate record
books of the Company accurately record all corporate action taken by the Members
in their own capacities and on behalf of the Company. The copies of the
corporate records of the Company, as made available to Buyer for review, are
true and complete copies of the originals of such documents. The Company has
made available for inspection and copying by Buyer and its counsel true and
correct copies of all documents referred to in this Section or in the Schedules
delivered to Buyer pursuant to this Agreement.
13.16 UNIT REPURCHASE. The Company has not redeemed or repurchased any
of its Units.
13.17 PROPERTY. Neither the Company nor any Member has received notice
or is otherwise aware that all or any part of the Property is in violation of
(1) any zoning, subdivision, building, health, traffic, environmental, flood
control or other applicable rules, regulations, ordinances or statutes of any
local, state or federal authorities or any other governmental entity having
jurisdiction over the Property or (2) any outstanding covenants or any
instruments affecting the Property;
(a) No licenses, permits and/or other approvals required for
the ownership of the existing use and operation of the Property or any portion
thereof, have been terminated, suspended or otherwise are not in full force and
effect.
(b) There are no suits, actions, orders, decrees, claims,
writs, injunctions or proceedings pending or, to the best knowledge of the
Company, the Manager or any Member, threatened against the Company or any
Member, or affecting all or any part of the Property or the operation thereof
before any court or administrative agency or officer which, if adversely
determined, would have a material adverse effect upon the operation or
condition, financial or otherwise, of all or any part of the Property.
(c) There are no condemnation proceedings pending, or, to the
best knowledge of the Company or any Member, proposed or threatened against all
or any part of the Property.
(d) Except for the Tenant Lease and the Pinpoint Lease, there
are no leases, agreements or contracts affecting all or any part of the Property
or the use thereof to which the Company or any Member is a party which would not
be terminable at will without penalty from and after the Closing.
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(e) All bills and claims for labor performed and materials
furnished to or for the benefit of the Company or the Members with respect to
the Property will either be paid in full by the Company at or before the Closing
or shall be bonded over by the Company.
(f) The Company has good and marketable fee simple title to
the Property and the Company's title to the Property is not directly or
indirectly derived from any foreclosure proceeding or any proceeding for the
sale of land for the nonpayment of taxes or assessments.
(g) Municipal water and sanitary sewer service are available
on the Property or in the public way abutting the Property.
(h) The Company has not generated, manufactured, refined,
transported, treated, stored, handled, disposed, transferred, produced, or
processed any Hazardous Material or any solid waste at the Property, except in
compliance with all applicable Environmental Laws, has not transported or
arranged for the transport of any Hazardous Material from the Property to
another property, and has no knowledge of the Release or Threat of Release or
any presence of any Hazardous Material on, in, under, or in the vicinity of the
Property. No lien has been imposed on the Property by any governmental agency at
the federal, state, or local level in connection with the presence on or off the
Property of any Hazardous Material. "Environmental Laws" shall mean any
environmental or health and safety-related law, regulation, rule, ordinance, or
by-law at the federal, state, or local level, whether existing as of the date
hereof, previously enforced, or subsequently enacted. "Hazardous Material" shall
mean any pollutant, contaminant, toxic substance, hazardous waste, hazardous
material, or hazardous substance, or any oil, petroleum, or petroleum product,
as defined in or pursuant to the Resource Conservation and Recovery Act, as
amended, the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended, the Federal Clean Water Act, as amended, or any other federal,
state, or local environmental law, regulation, ordinance, rule, or by-law,
whether existing as of the date hereof or previously enforced. "Release" shall
mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing, or dumping into the
environment. "Threat of Release" shall mean a substantial likelihood of a
Release which requires action to prevent or mitigate damage to the environment
which may result from such Release.
(i) The Company is not a foreign corporation, foreign
partnership or foreign estate (as such terms are defined in Section 1445 of the
Internal Revenue Code). The Company shall provide Buyer with an affidavit to
this effect at Closing.
SECTION 14. REPRESENTATIONS AND WARRANTIES OF MEMBERS.
As a material inducement to Buyer and Zoll to enter into this Agreement
and consummate the transactions contemplated hereby, each Member hereby
severally makes to Buyer and Zoll each of the representations and warranties set
forth in this Section 3 with
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respect to such Member. No Member shall have any right of indemnity or
contribution from the Company with respect to the breach of any representation
or warranty hereunder.
14.1 AUTHORITY. Such Member has full right, authority, power and
capacity to enter into this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of such Member pursuant
to this Agreement and to carry out the transactions contemplated hereby and
thereby. This Agreement and each agreement, document and instrument executed and
delivered by such Member pursuant to this Agreement constitutes a valid and
binding obligation of such Member, enforceable in accordance with their
respective terms, and such Member has full power and authority to transfer and
deliver the LLC Interests to Buyer pursuant to this Agreement. The execution,
delivery and performance of this Agreement and each such agreement, document and
instrument:
(i) does not and will not violate any laws of the
United States or any state or other jurisdiction applicable to such
Member, or require such Member to obtain any approval, consent or
waiver from, or make any filing with, any person or entity
(governmental or otherwise) that has not been obtained or made; and
(ii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of, any indenture or loan or credit
agreement or any other agreement, contract, instrument, mortgage, lien,
lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award to which such Member is a
party or by which the property of such Member is bound or affected, or
result in the creation or imposition of any mortgage, pledge, lien,
security interest or other charge or encumbrance on any assets of the
Company or on the LLC Interests owned by such Member.
14.2 SECURITIES LAWS MATTERS. Each Member hereby represents and
warrants to Zoll that with respect to such Member's receipt of Zoll Common Stock
hereunder:
(a) Each Member is acquiring the Zoll Common Stock for his own
account, for investment, and not with a view to any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act"). Each Member is knowledgeable and experienced in the making of investments
of the type involved in the acquisition of the Zoll Common Stock pursuant to the
Agreement, is able to bear the economic risk of loss of its investment in Zoll,
has been granted the opportunity to investigate the affairs of the Zoll and to
ask questions of their officers and employees regarding the business, assets,
liabilities, financial condition, cash flow and operations of Zoll, and has
availed himself of such opportunity either directly or through his authorized
representative; each Member acknowledges that he has made his own independent
examination, investigation, analysis and evaluation of Zoll, including his own
estimation of Zoll's business; each Member acknowledges that he has undertaken
such due diligence as he has deemed adequate. Except as set forth on SCHEDULE
3.2, each Member is an "accredited investor" as defined in the Securities Act;
and
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(b) Each Member understands that because the shares of Zoll
Common Stock have not been registered under the Securities Act nor under
securities or "blue sky" laws of any jurisdiction, he cannot dispose of any or
all of the shares of the Zoll Common Stock unless such Zoll Common Stock is
subsequently registered under the Securities Act or exemption from such
registration is available. Each Member acknowledges and understands he has no
right to require Zoll to register the Zoll Common Stock, except as set forth in
the Registration Rights Agreement among Zoll and the Members of even date
herewith. Each Member further understands that Zoll may, as a condition to the
transfer of any shares of Zoll Common Stock, require that the request for
transfer be accompanied by an opinion of counsel as described below. Each Member
understands that each certificate representing the Zoll Common Stock will bear a
legend in substantially the form provided below (in addition to any legend
required under applicable state securities laws).
THE SHARES REPRESENTED HEREBY HAVE BEEN ACQUIRED BY THE HOLDER
NAMED HEREON FOR THE HOLDER'S OWN ACCOUNT FOR INVESTMENT; AND
SUCH SECURITIES MAY NOT BE PLEDGED, SOLD OR IN ANY OTHER WAY
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF
1933, AS IN EFFECT AT THAT TIME, OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT.
14.3 REPRESENTATION DISCLAIMER. Each Member agrees that neither Buyer
nor Zoll shall be deemed to have made to any Member any representation or
warranty other than those expressly made by Buyer pursuant to Section 4 hereof.
Without limiting the generality of the foregoing, neither Buyer nor Zoll has
made any representation or warranty to any Member with respect to (i) any
projections, estimates or budgets heretofore delivered to or made available to
any Member of future revenues, expenses or expenditures or future results of
operations; or (ii) any other information or documents (financial or otherwise)
made available to any Member, his counsel or accountants or advisors with
respect to Buyer.
SECTION 15. REPRESENTATIONS AND WARRANTIES OF BUYER AND ZOLL.
15.1 MAKING OF REPRESENTATIONS AND WARRANTIES. As a material inducement
to the Company and the Members to enter into this Agreement and consummate the
transactions contemplated hereby, Zoll and the Buyer hereby jointly and
severally make the representations and warranties to the Company and the Members
contained in this Section 4.
15.2 ORGANIZATION. Zoll and Buyer are corporations duly organized,
validly existing and in good standing under the laws of Massachusetts and
Delaware, respectively, with full
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corporate power to own or lease their properties and to conduct their business
in the manner and in the places where such properties are owned or leased or
such business is conducted by them.
15.3 AUTHORITY. Each of Zoll and Buyer have full right, authority and
power to enter into this Agreement, and each agreement, document and instrument
to be executed and delivered by them pursuant to this Agreement and to carry out
the transactions contemplated hereby. The execution, delivery and performance by
Zoll and Buyer of this Agreement, and each such other agreement, document and
instrument have been duly authorized by all necessary corporate action of Zoll
and Buyer, respectively, and no other action on the part of Zoll or Buyer is
required in connection therewith. This Agreement and each other agreement,
document and instrument executed and delivered by Zoll or Buyer pursuant to this
Agreement constitute, or when executed and delivered will constitute, valid and
binding obligations of Zoll and Buyer, respectively, enforceable in accordance
with their terms against the applicable party. The execution, delivery and
performance by Zoll and Buyer, respectively of this Agreement, and each such
other agreement, document and instrument:
(i) does not and will not violate any provision of
the Articles of Organization or By-laws of Zoll or the Certificate of
Incorporation or By-laws of Buyer;
(ii) does not and will not violate any laws of the
United States or of any state or any other jurisdiction applicable to
Zoll and Buyer, respectively, or require Zoll or Buyer to obtain any
approval, consent or waiver of, or make any filing with, any person or
entity (governmental or otherwise) which has not been obtained or made;
and
(iii) does not and will not result in a breach of,
constitute a default under, accelerate any obligation under, or give
rise to a right of termination of any indenture, loan or credit
agreement, or other agreement mortgage, lease, permit, order, judgment
or decree to which Zoll or Buyer is a party and which is material to
the business and financial condition of Zoll and its parent and
affiliated organization, on a consolidated basis.
15.4 LITIGATION. There is no litigation pending or, to its knowledge,
threatened against Zoll or Buyer which would prevent or materially hinder the
consummation of the transactions contemplated by this Agreement.
15.5 FINDER'S FEE. Neither Zoll nor Buyer has incurred or become liable
for any broker's commission or finder's fee relating to or in connection with
the transactions contemplated by this Agreement.
15.6 ZOLL COMMON STOCK. The Zoll Common Stock, when issued pursuant to
this Agreement, will be duly authorized, fully paid and non-assessable.
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SECTION 16. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.
16.1 SURVIVAL OF WARRANTIES. Each of the representations, warranties,
agreements, covenants and obligations herein or in any schedule, exhibit,
certificate or financial statement delivered by any party to the other party
incident to the transactions contemplated hereby are material, shall be deemed
to have been relied upon by the other party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either party hereto.
SECTION 17. INDEMNIFICATION.
17.1 INDEMNIFICATION BY MEMBERS. Each Member severally agrees to
indemnify and hold harmless Zoll and Buyer and their respective directors,
officers, agents, affiliates and employees (each a "Zoll Indemnified Party")
from and against any and all claims, actions, suits, liabilities, losses,
damages, and expenses of every nature and character whether accrued, absolute,
contingent or otherwise (including, but not by way of limitation, all reasonable
attorneys' fees incurred by Zoll or Buyer and all amounts paid by it in
settlement of any claim, action, suit or liability) (collectively, a "Claim"),
which arise or result directly or indirectly by reason of:
(i) any error, misstatement or omission in any
representation or warranty made by the Company or any Member in this
Agreement, any Schedule or exhibit hereto, or in any document or
instrument provided for herein or furnished or to be furnished to Zoll
or Buyer in connection with this Agreement;
(ii) any breach of or default in performance of any
of the covenants, agreements or other undertakings of the Company or
any Member;
(iii) any action or inaction by the Company or any
event, circumstance or condition occurring or existing with respect to
the Company on or prior to the Closing;
provided, however, that (A) the indemnification obligation of the Members
hereunder shall be limited to $12,000,000, less any amounts paid to the Zoll
Indemnified Parties pursuant to the indemnification provisions of the Agreement
and Plan of Merger by and among Zoll, Zollsub, Inc., Pinpoint Technologies, Inc.
and the stockholders named therein, dated October 15, 1999 (the "Merger
Agreement") (the "Indemnity Cap"), provided, however, that such limitations
shall not apply to indemnification claims relating to or arising from a breach
of any representation or warranty set forth in Sections 2.3, 2.4, 2.6 and 3.1;
(B) each Member shall only be liable for his pro rata share of the total
indemnification obligation (such pro rata share constituting the equivalent of
each Member's ownership percentage in the Company just prior to the Closing);
and (C) the indemnification obligation hereunder shall terminate twelve (12)
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months after the date such obligation commences, except that Claims relating to
or involving tax matters shall expire on the date three (3) months after the
applicable statute of limitations relating thereto.
17.2 INDEMNIFICATION BY ZOLL. Zoll and Buyer shall indemnify and hold
harmless the Members (each a "Seller Indemnified Party"), from and against any
and all Claims which arise or result directly or indirectly by reason of:
(i) any error, misstatement or omission in any
representation or warranty made by Zoll or Buyer in this Agreement, any
Schedule or Exhibit hereto, or in any document or instrument provided
for herein or furnished or to be furnished to the Members in connection
with this Agreement;
(ii) any breach of or default in performance of any
of the covenants, agreements or other undertakings of Zoll or Buyer; or
(iii) any action or inaction by Zoll or Buyer or any
event, circumstance or condition occurring or existing with respect to
the Company after the Closing (except to the extent any Member is,
under the terms hereof or of any agreement contemplated hereby, liable
or responsible therefor or obligated to indemnify Zoll or Buyer with
respect thereto).
Notwithstanding anything in this Section 6.2 to the contrary, Zoll and
Buyer shall not be required to indemnify Seller Indemnified Parties with respect
to any Claims in an aggregate amount in excess of $12,000,000 less any amounts
paid to a Seller Indemnified Party pursuant to the indemnification provisions of
the Merger Agreement and the indemnification obligation hereunder shall
terminate twelve (12) months after the date such obligation commences.
SECTION 18. MISCELLANEOUS.
18.1 FEES AND EXPENSES.
(a) Each of the parties will bear its own expenses in
connection with the negotiation and the consummation of the transactions
contemplated by this Agreement, and no expenses of the Company or the Members
relating in any way to the purchase and sale of the LLC Interests hereunder and
the transactions contemplated hereby, including without limitation legal,
accounting or other professional expenses of the Company or any Member shall be
charged to or paid by the Company or Buyer.
(b) The Members will pay all costs incurred, whether at or
subsequent to the Closing, in connection with the transfer of the LLC Interests
to Buyer as contemplated by this Agreement, including without limitation, all
transfer taxes and charges applicable to such
13
<PAGE> 17
transfer, and all costs of obtaining permits, waivers, registrations or consents
with respect to any assets, rights or contracts of the Company.
18.2 GOVERNING LAW. This Agreement shall be construed under and
governed by the internal laws of the State of Delaware without regard to its
conflict of laws provisions, provided, however, that the parties hereby agree
that the venue for this Agreement shall be in Denver, Colorado.
18.3 NOTICES. Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given if delivered or sent by facsimile transmission, upon receipt, or if
sent by registered or certified mail, upon the sooner of the date on which
receipt is acknowledged or the expiration of three (3) days after deposit in
United States post office facilities properly addressed with postage prepaid.
All notices to a party will be sent to the addresses set forth below or to such
other address or person as such party may designate by notice to each other
party hereunder:
TO BUYER: Zoll Medical Corporation
32 Second Avenue
Burlington, MA 01603-4420
With a copy to: Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attn: Raymond C. Zemlin, P.C.
Facsimile: (617) 523-1231
TO COMPANY: Pinpoint Properties Management, LLC
1800 38th Street, Suite 200
Boulder, CO 80301
With a copy to: Holland & Hart LLP
Suite 500
1050 Walnut
Boulder, CO 80302
Attn: Robert W. Planchard, Esq.
Facsimile: (303) 473-2720
Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.
18.4 ENTIRE AGREEMENT. This Agreement, including the Schedules and
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of the
parties with respect to the purchase and sale of
14
<PAGE> 18
the LLC Interests, and supersedes all previous written or oral negotiations,
commitments and writings, including without limitation, the Letter of Intent
among Pinpoint Technologies, Inc., the Buyer and the Members, dated September 1,
1999. No promises, representations, understandings, warranties and agreements
have been made by any of the parties hereto except as referred to herein or in
such Schedules and Exhibits or in such other writings; and all inducements to
the making of this Agreement relied upon by either party hereto have been
expressed herein or in such Schedules or Exhibits or in such other writings.
18.5 ASSIGNABILITY; BINDING EFFECT. This Agreement shall only be
assignable by Buyer to an affiliate of Buyer upon written notice to the Company
and the Members, and such assignment shall not relieve Buyer of any liability
hereunder. This Agreement may not be assigned by the Members or the Company
without the prior written consent of Buyer. This Agreement shall be binding upon
and enforceable by, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns.
18.6 CAPTIONS AND GENDER. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision hereof. The use in this Agreement of the masculine pronoun in
reference to a party hereto shall be deemed to include the feminine or neuter,
as the context may require.
18.7 EXECUTION IN COUNTERPARTS. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
18.8 AMENDMENTS. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant set forth herein be waived, except by
a writing duly and validly executed by each party hereto, or in the case of a
waiver, the party waiving compliance.
18.9 PUBLICITY AND DISCLOSURES. No press releases or public disclosure,
either written or oral, of the transactions contemplated by this Agreement,
shall be made by a party to this Agreement without the prior knowledge and
written consent of Buyer and the Company.
18.10 SPECIFIC PERFORMANCE. The parties agree that it would be
difficult to measure damages which might result from a breach of this Agreement
by the Company, the Members, Buyer or Zoll and that money damages would be an
inadequate remedy for such a breach. Accordingly, if there is a breach or
proposed breach of any provision of this Agreement by the Company, the Members,
Buyer or Zoll, the other party shall be entitled, in addition to any other
remedies which it may have, to an injunction, specific performance, or other
appropriate equitable relief to restrain or remedy such breach without having to
show or prove actual damage to the Company, the Members, Buyer or Zoll.
18.11 DISPUTE RESOLUTION. Except with respect to matters as to which
injunctive relief is being sought, in the event of a dispute between the parties
concerning their respective rights
15
<PAGE> 19
and obligations under this Agreement, or the breach, termination, negotiation,
or validity hereof and/or the rights or obligations of the parties arising out
of or relating to this Agreement or the breach, termination, negotiation or
validity thereof, in any case that the parties are unable to resolve amicably
between themselves within sixty (60) days of proper notice from one party to
another, such dispute shall be settled by arbitration in Denver, Colorado in an
expedited manner in accordance with the Commercial Rules of the American
Arbitration Association by a panel of three arbitrators. Zoll shall select one
arbitrator, the other party to the dispute shall select one arbitrator, and the
two arbitrators shall in good faith jointly select a third arbitrator. All
arbitrators so selected shall be commercially sophisticated parties with
knowledge of the software industry. The decision of the arbitrators shall be
final and binding upon the parties. Each of the parties consents to the
jurisdiction and venue of the courts of Colorado for the purposes of enforcing
the dispute resolution provisions of this Section 7.11. Each party further
irrevocably waives any objection to proceeding before the American Arbitration
Association based upon lack of personal jurisdiction or to the laying of venue
and further irrevocably and unconditionally waives and agrees not to make a
claim in any court that dispute resolution before the American Arbitration
Association has been brought in an inconvenient forum. Each of the parties
hereto agrees that its or his submission to jurisdiction is made for the express
benefit of the other parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
<PAGE> 20
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed as of the date set forth above by their duly authorized
representatives.
BUYER:
By: /s/ David Brown
--------------------------------
Title: President
--------------------------------
ZOLL MEDICAL CORPORATION
By: /s/ A. Ernest Whiton
--------------------------------
Title: Vice President and Chief
--------------------------------
Financial Officer
--------------------------------
COMPANY:
By: /s/ David Brown
--------------------------------
Title: Member
--------------------------------
MEMBERS:
/s/ David Brown
---------------------------------------
David Brown
/s/ David G. Cohen
---------------------------------------
David G. Cohen
/s/ Robert Durkin, Jr.
---------------------------------------
Robert Durkin, Jr.
17
<PAGE> 21
LIST OF EXHIBITS AND SCHEDULES
Exhibit A: List of Members, Stockholdings and Consideration to be Paid
B: Description of the Property
Schedule 2.4 Conflicts
2.7 Absence of Changes
2.8 Banking Arrangements
2.9 Contracts, etc.
2.12 Insurance
2.13 Power of Attorney
3.2 Accredited Investors
18
<PAGE> 22
Exhibit A
LIST OF MEMBERS, CAPITAL ACCOUNTS AND CONSIDERATION TO BE PAID
OWNERSHIP OF CAPITAL
NAME AND ADDRESS OF MEMBERSHIP ACCOUNT SHARES OF ZOLL PAYABLE BY
MEMBER INTERESTS BALANCE BUYER
DAVID BROWN 45 $247,500 10,696
DAVID G. COHEN 45 $247,500 10,696
ROBERT DURKIN, JR. 10 $ 55,000 2,377
19
<PAGE> 23
Exhibit B
Lot 10, Block 2, Eastpark II, County of Boulder, State of Colorado, also known
by street number 1800 38th Street, Boulder, Colorado 80301.
20
<PAGE> 1
EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is entered into
as of October 15, 1999 by and between Zoll Medical Corporation, a Massachusetts
corporation (the "Company") and each of the parties executing a signature page
hereto (each a "Holder" and collectively the "Holders").
WHEREAS, the Holders are to receive an aggregate of 412,350 shares of
common stock of the Company par value $.02 per share (the "Common Stock")
pursuant to an Agreement and Plan of Merger by and among the Company, Zollsub,
Inc., a wholly-owned subsidiary of the Company, Pinpoint Technologies, Inc. and
the Stockholders of the Company listed on Exhibit A thereto, dated October 15,
1999 (the "Merger Agreement");
WHEREAS, the Holders are to receive an aggregate of 23,769 shares of
Common Stock pursuant to an LLC Interest Purchase Agreement by and among
Pinpoint Technologies, Inc. and Pinpoint Properties Management, LLC of even date
herewith; and
WHEREAS, the Company has agreed to enter into this Agreement pursuant
to the Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and other valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. REGISTRATION.
(a) REQUIRED REGISTRATION.
The Company will use its best efforts to file, on or before October 29,
1999, but in no event later than November 15, 1999, a registration statement on
Form S-3 (or any comparable successor form) (a "Required Registration
Statement") for sale by the Holders on a delayed or continuous basis, of 218,059
shares of the Registerable Shares (as defined below) as set forth on EXHIBIT A
hereto, under Rule 415 under the Securities Act of 1933 (the "Securities Act")
in accordance with and subject to the terms hereof. As used in this Agreement,
the term "Registrable Shares" means shares of Common Stock of the Company
received by the Holders pursuant to the Merger Agreement, as adjusted by way of
a stock dividend or stock split or in
<PAGE> 2
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization; PROVIDED, HOWEVER, that any of the foregoing that are
sold in a registered sale pursuant to an effective registration statement under
the Securities Act or that may be sold without restriction pursuant to Rule 144
under the Securities Act shall not be deemed Registrable Shares. The Company
agrees to use reasonable efforts to keep the Required Registration Statement
continuously effective until the earliest of (a) the date on which the Holders
no longer hold any Registrable Shares registered under the Required Registration
Statement, (b) the date on which the Registrable Shares may be sold by the
Holders pursuant to Rule 144 promulgated under the Securities Act or (c) the
date which is one year from the effective date of such Required Registration
Statement.
(b) PIGGYBACK REGISTRATION. If at any time after October 15, 2003 while
any Registrable Shares are outstanding the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock solely for cash (other than a registration statement (i) on Form
S-8 or any successor form or in connection with any employee or director
welfare, benefit or compensation plan, (ii) on Form S-4 or any successor form or
in connection with an exchange offer, (iii) in connection with a rights offering
or a dividend reinvestment and share purchase plan offered exclusively to
existing holders of Common Stock, (iv) in connection with an offering solely to
employees of the Company or its affiliates, (v) relating to a transaction
pursuant to Rule 145 of the Securities Act, or (vi) a shelf registration,
whether or not for its own account (a "Piggyback Registration Statement" and
together with the Required Registration Statement, a "Registration Statement"),
the Company shall give to the Holders of Registrable Shares written notice of
such proposed filing at least ten (10) days before filing. The notice referred
to in the preceding sentence shall offer Holders the opportunity to register
such amount of Registrable Shares as each Holder may request (a "Piggyback
Registration"). Subject to the provisions of Section 2 below, the Company shall
include in such Piggyback Registration all Registrable Shares requested to be
included in the registration for which the Company has received written requests
for inclusion therein within five (5) days after the notice referred to above
has been given by the Company to the Holders. Holders of Registrable Shares
shall be permitted to withdraw all or part of the Registrable Shares from a
Piggyback Registration at any time prior to the effective date of such Piggyback
Registration Statement. If a Piggyback Registration is an underwritten offering,
the Company shall not be required to include any Registrable Shares in such
underwriting unless the Holders thereof accept the terms of the underwriting
agreement as agreed upon between the Company and the underwriter or underwriters
selected by it. If a Piggyback Registration is an underwritten registration on
behalf of the Company and the managing underwriter advises the Company that the
total number of shares of Common Stock requested to be included in such
registration exceeds the number of shares of Common Stock which can be sold in
such offering, the Company will include in such registration in the following
priority: (i) first, all shares of Common Stock the Company proposes to sell and
(ii) second, up to the full number of applicable Registrable Shares requested to
be included in such registration which, in the
22
<PAGE> 3
opinion of such managing underwriter, can be sold without adversely affecting
the price range or probability of success of such offering, which shall be
allocated among the Holders requesting registration and all other stockholders
requesting registration on a pro rata basis.
2. REGISTRATION PROCEDURES.
(a) The Company shall notify each Holder of the effectiveness of the
Required Registration Statement and shall notify each Holder requesting
registration of the effectiveness of any Piggyback Registration Statement filed
pursuant to such request and shall furnish to each such Holder such number of
copies of such Registration Statement (including any amendments, supplements and
exhibits), the prospectus contained therein (including each preliminary
prospectus), any documents incorporated by reference in a Registration Statement
and such other documents as such Holder may reasonably request in order to
facilitate its sale of the Registrable Shares in the manner described in the
relevant Registration Statement.
(b) The Company shall prepare and file with the Securities and Exchange
Commission (the "SEC") from time to time such amendments and supplements to the
Registration Statement and prospectus used in connection therewith as may be
necessary to keep the Registration Statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all the
Registrable Shares until the earlier of (i) such time as all of the Registrable
Shares have been issued or disposed of in accordance with the intended methods
of disposition by the Holders as set forth in the Registration Statement or (ii)
the date on which the Registration Statement ceases to be effective in
accordance with the terms of Section 1. Upon ten (10) business days' notice, the
Company shall file any supplement or post-effective amendment to the
Registration Statement with respect to such Holder's interests in or plan of
distribution of Registrable Shares that is reasonably necessary to permit the
sale of the Holder's Registrable Shares pursuant to the Registration Statement
and the Company shall file any necessary listing applications or amendments to
the existing applications to cause the shares to be then listed or quoted on the
primary exchange or quotation system on which the Common Stock is then listed or
quoted.
3. STATE SECURITIES LAWS. Subject to the conditions set forth in this
Agreement, the Company shall, promptly upon the filing of a Registration
Statement including Registrable Shares, file such documents as may be necessary
to register or qualify the Registrable Shares under the securities or "Blue Sky"
laws of such states as any Holder requesting registration may reasonably
request, and the Company shall use reasonable efforts to cause such filings to
become qualified; PROVIDED, HOWEVER, that the Company shall not be obligated to
qualify as a foreign corporation to do business under the laws of any such state
in which it is not then qualified or to file any general consent to service of
process in any such state. Once qualified, the Company shall use reasonable
efforts to keep such filings qualified until the earlier of (a) such time as all
of the Registrable Shares have been disposed of in accordance with the
23
<PAGE> 4
intended methods of disposition by the Holder as set forth in the Registration
Statement, (b) in the case of a particular state, a Holder has notified the
Company that it no longer requires qualified filing in such state in accordance
with its original request for filing or (c) the date on which the Registration
Statement ceases to be effective with the SEC. The Company shall promptly notify
each Holder requesting registration of, and confirm in writing, the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Registrable Shares for sale under the securities or "Blue
Sky" laws of any jurisdiction or the initiation or threat of any proceeding for
such purpose.
4. EXPENSES. The Company shall bear all expenses incurred in connection
with the registration of the Registrable Shares pursuant to Section 1 of this
Agreement. Such expenses shall include, without limitation, all printing, legal
and accounting expenses incurred by the Company and all registration and filing
fees imposed by the SEC, any state securities commission or the Nasdaq National
Market or, if the Common Stock is not then listed on the Nasdaq National Market,
the principal national securities exchange or national market system on which
the Common Stock is then traded or quoted. Notwithstanding the foregoing, the
Holders shall be responsible for any brokerage or underwriting commissions and
taxes of any kind (including, without limitation, transfer taxes) with respect
to any disposition, sale or transfer of Registrable Shares and for any legal,
accounting and other expenses incurred by them in connection with any
Registration Statement.
5. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify each
of the Holders and any underwriter and any person who controls the underwriter
within the meaning of the Securities Act (an "Indemnitee") against any and all
losses, claims, damages, actions, liabilities, costs and expenses (including
without limitation reasonable attorneys' fees, expenses and disbursements
documented in writing), joint or several, arising out of or based upon any
untrue or alleged untrue statement of material fact contained in the
Registration Statement or any prospectus contained therein, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as and to the extent that
such statement or omission arose out of or was based upon information regarding
the Indemnitee or its plan of distribution which was furnished to the Company by
the Indemnitee for use therein, provided, further that the Company shall not be
liable to any person who participates as an underwriter in the offering or sale
of Registrable Shares or any other person, if any, who controls such underwriter
within the meaning of the Securities Act, in any such case to the extent that
any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in such
Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with information furnished to the Company for use in connection with the
Registration Statement or the prospectus contained
24
<PAGE> 5
therein by such Indemnitee or (ii) such Indemnitee's failure to send or give a
copy of the final prospectus furnished to it by the Company at or prior to the
time such action is required by the Securities Act to the person claiming an
untrue statement or alleged untrue statement or omission or alleged omission if
such statement or omission was corrected in such final prospectus. The
obligations of the Company under this Section 5 shall survive the completion of
any offering of Registrable Shares pursuant to a Registration Statement under
this Agreement or otherwise and shall survive the termination of this Agreement.
6. COVENANTS OF HOLDERS. Each of the Holders hereby agrees (a) to
cooperate with the Company and to furnish within three days to the Company all
such information in connection with the preparation of the Registration
Statement and any filings with any state securities commissions as the Company
may reasonably request, (b) to the extent required by the Securities Act, to
deliver or cause delivery of the prospectus contained in the Registration
Statement to any purchaser of the shares covered by the Registration Statement
from the Holder, (c) to notify the Company of any sale of Registrable Shares by
such Holder at least one business day prior to such sale to ensure that no
Suspension Event (as defined in Section 7) has occurred or is continuing and (d)
to indemnify the Company, its officers, directors, employees, agents,
representatives and affiliates, and each person, if any, who controls the
Company within the meaning of the Securities Act, and each other person, if any,
subject to liability because of his connection with the Company, against any and
all losses, claims, damages, actions, liabilities, costs and expenses arising
out of or based upon (i) any untrue statement or alleged untrue statement of
material fact contained in either the Registration Statement or the prospectus
contained therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, if and to the extent that such statement or omission arose out of or
was based upon information regarding the Holder or its plan of distribution
which was furnished to the Company by the Holder for use therein, or (ii) the
failure by the Holder to deliver or cause to be delivered the prospectus
contained in the Registration Statement (as amended or supplemented, if
applicable) furnished by the Company to the Holder to any purchaser of the
shares covered by the Registration Statement from the Holder. The obligations of
the Holders under this Section 6 shall survive the completion of any offering of
Registrable Shares pursuant to a Registration Statement under this Agreement or
otherwise and shall survive the termination of this Agreement.
7. SUSPENSION OF REGISTRATION REQUIREMENT.
(a) The Company shall promptly notify each Holder requesting
registration of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company shall use reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement as soon as practicable.
25
<PAGE> 6
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to use reasonable
efforts to cause the Registration Statement and any filings with any state
securities commission to be made or to become effective or to amend or
supplement the Registration Statement shall be suspended in the event and during
such period pending negotiations relating to, or consummation of, a transaction
or the occurrence of an event that would require additional disclosure of
material information by the Company in the Registration Statement or such filing
(such circumstances being hereinafter referred to as a "Suspension Event") that
would make it impractical or unadvisable to cause the Registration Statement or
such filings to be made or to become effective or to amend or supplement the
Registration Statement, but such suspension shall continue only for so long as
such event or its effect is continuing but in no event will that suspension
exceed ninety (90) days. Following the effectiveness of the Registration
Statement, the Holders agree that they will not effect any sales of the
Registrable Shares pursuant to a Registration Statement at any time after they
have received notice from the Company to suspend sales (i) as a result of the
occurrence or existence of any Suspension Event.
(c) Each holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement filed pursuant to Section 1 hereof agrees,
if requested by the Company in the case of a nonunderwritten offering (a
"Nonunderwritten Offering") or if requested by the managing underwriter or
underwriters in an underwritten offering (an "Underwritten Offering,"
collectively with Nonunderwritten Offering, an "Offering"), not to effect any
public sale or distribution of any of the securities of the Company of any class
included in such Offering, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Offering), during the 15-day
period prior to, and during the 90-day period (or such longer period as may be
required by the managing underwriter or underwriters) beginning on, the date of
pricing of each Offering, to the extent timely notified in writing by the
Company or the managing underwriters. Furthermore, notwithstanding anything to
the contrary set forth in this Agreement, the Company's obligation under this
Agreement to use reasonable efforts to cause the Registration Statement and any
filings with any state securities commission to be made or to become effective
or to amend or supplement the Registration Statement shall be suspended in the
event and during such period as the Company is proceeding with an Underwritten
Offering if the Company is advised by the underwriters that the sale of
Registrable Shares under a Registration Statement would have a material adverse
effect on the Underwritten Offering.
8. ADDITIONAL SHARES. The Company, at its option, may register, under
any registration statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued shares of Common Stock
or any shares of Common Stock owned by any other shareholder or shareholders of
the Company.
26
<PAGE> 7
9. CONTRIBUTION. If the indemnification provided for in Sections 5 and
6 is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Holder, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
actions, liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Holder, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, HOWEVER, that in no event shall the obligation of any indemnifying
party to contribute under this Section 9 exceed the amount that such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Sections 5 or 6 hereof had been available
under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 10 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph.
No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any indemnifying party who was not guilty of such fraudulent
misrepresentation.
10. NO OTHER OBLIGATION TO REGISTER. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the Holders
to register the Registrable Shares under the Securities Act.
11. AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified or supplemented without the prior written consent of the
Company and Holders holding in excess of 50% of the then outstanding Registrable
Shares.
12. NOTICES. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid, courier or overnight delivery service to the Company at the following
address and to the Holder at the address set forth on his signature page to this
27
<PAGE> 8
Agreement (or at such other address for any party as shall be specified by like
notice, provided that notices of a change of address shall be effective only
upon receipt thereof), and further provided that in case of directions to amend
the Registration Statement pursuant to Section 2(b) or Section 6, a Holder must
confirm such notice in writing by overnight express delivery with confirmation
of receipt:
If to the Company: Zoll Medical Corporation
Attn: Chief Financial Officer
32 Second Avenue
Burlington, MA 01603
With a copy to: Raymond C. Zemlin, P.C.
Goodwin, Procter & Hoar LLP
Exchange Place
Boston, MA 02109
In addition to the manner of notice permitted above, notices given pursuant to
Sections 1, 7 and 8 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company. This
Agreement may not be assigned by any Holder and any attempted assignment hereof
by any Holder will be void and of no effect and shall terminate all obligations
of the Company hereunder with respect to such Holder.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to the
conflicts of law provisions thereof; provided, however, that the venue for this
Agreement shall be Denver, Colorado.
16. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.
28
<PAGE> 9
17. ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
18. DISPUTE RESOLUTION. Except with respect to matters as to which
injunctive relief is being sought, in the event of a dispute between the parties
concerning their respective rights and obligations under this Agreement, or the
breach, termination, negotiation, or validity hereof and/or the rights or
obligations of the parties arising out of or relating to this Agreement or the
breach, termination, negotiation or validity thereof, in any case that the
parties are unable to resolve amicably between themselves within sixty (60) days
of proper notice from one party to another, such dispute shall be settled by
arbitration in Denver, Colorado in an expedited manner in accordance with the
Commercial Rules of the American Arbitration Association by a panel of three
arbitrators. The Company shall select one arbitrator, the other party to the
dispute shall select one arbitrator and the two arbitrators shall in good faith
jointly select a third arbitrator. All arbitrators so selected shall be
commercially sophisticated parties with knowledge of the software industry. The
decision of the arbitrators shall be final and binding upon the parties. Each of
the parties consents to the jurisdiction and venue of the courts of Denver,
Colorado for the purposes of enforcing the dispute resolution provisions of this
Section 18. Each party further irrevocably waives any objection to proceeding
before the American Arbitration Association based upon lack of personal
jurisdiction or to the laying of venue and further irrevocably and
unconditionally waives and agrees not to make a claim in any court that dispute
resolution before the American Arbitration Association has been brought in an
inconvenient forum. Each of the parties hereto agrees that its or his submission
to jurisdiction is made for the express benefit of the other parties hereto.
[Remainder of Page Intentionally Left Blank]
29
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
ZOLL MEDICAL CORPORATION
/s/ A. Ernest Whiton
-----------------------------------------
Name: A. Ernest Whiton
Title: Vice President and Chief Financial
Officer
30
<PAGE> 11
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
HOLDER
/s/ David Brown
----------------------------------------
Name: David Brown
Address for Notice:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
31
<PAGE> 12
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
HOLDER
/s/ David G. Cohen
----------------------------------------
Name: David G. Cohen
Address for Notice:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
32
<PAGE> 13
REGISTRATION RIGHTS AGREEMENT
HOLDER SIGNATURE PAGE
HOLDER
/s/ Robert Durkin, Jr.
----------------------------------------
Name: Robert Durkin, Jr.
Address for Notice:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
33
<PAGE> 14
Number of
Holder Shares
------ ---------
David Brown 98,044
David Cohen 98,044
Robert Durkin 21,971
-------
Total 218,059
34
<PAGE> 1
EXHIBIT 99.1
ZOLL ANNOUNCES ACQUISITION OF PINPOINT TECHNOLOGIES
~ EXPANDS INFORMATION MANAGEMENT BUSINESS FOR EMS MARKET ~
BURLINGTON, Mass. -- (BUSINESS WIRE) -- Oct. 17, 1999 -- ZOLL Medical
Corporation (NASDAQ: ZOLL) today announced that it has completed a merger with
Pinpoint Technologies of Boulder, Colorado in exchange for approximately 450,000
shares of ZOLL Common Stock. The transaction is being accounted for as a
pooling-of-interests and includes the acquisition of the building Pinpoint
currently occupies. Pinpoint revenues for the 12 months ended September 30, 1999
were approximately $4 million.
Pinpoint, founded in 1993, is headquartered in Boulder, CO and develops
computer-aided dispatch and billing software for the emergency medical services
(EMS) market. Pinpoint's products are sold to the same market to which ZOLL
targets its Westech data collection system. The EMS market is also a primary
market for ZOLL's cardiac resuscitation equipment and disposable electrode
products.
Richard A. Packer, President and Chief Operating Officer of ZOLL, commenting on
the transaction noted that "there is an excellent strategic and technology fit
between the two companies. By combining our Westech technology with Pinpoint, we
have the opportunity to market a more complete information management solution
to the EMS market. This is a major step in realizing the vision of
Rescue-Net(TM), the total integration of clinical and non-clinical data within
an EMS provider. We are also extremely pleased to have the management team of
Pinpoint joining ZOLL. Their entrepreneurial spirit and software focus will
provide the leadership necessary to move ZOLL's EMS data management business
forward." Mr. Packer added, "The historical performance of Pinpoint has an
accretive impact on the comparable ZOLL results, and we look forward to further
strengthening of the business due to the application of ZOLL's resources and
greater critical mass."
David Brown, President of Pinpoint, stated "We are very excited about the
strength and depth that our combined organization will bring to the EMS
marketplace. In ZOLL, we have found a partner with significant experience in
this market, whose products are complementary to those developed by Pinpoint.
The integration of Pinpoint, Westech and ZOLL products is a natural fit and
desired by our customers."
<PAGE> 2
ZOLL Medical Corporation designs, manufactures and markets an integrated line of
proprietary non-invasive resuscitation devices and disposable electrodes. Used
by healthcare professionals to provide both types of cardiac resuscitation -
pacing and defibrillation - these products are essential in the emergency
treatment of cardiac arrest victims both inside and outside the hospital. ZOLL
also designs and markets software which automates collection and management of
both clinical and non-clinical data for emergency medical service providers.
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Reliance should not be placed on
forward-looking statements because they involve unknown risks, uncertainties and
other factors, which are, in some cases, beyond the control of ZOLL Medical
Corporation. Actual events, performance and results could differ materially from
the anticipated events, performance or results expressed or implied by such
forward-looking statements. The factors which may cause such differences
include, among other things, ZOLL's ability to successfully integrate the
personnel, products and operations of Pinpoint, the ability to successfully
develop and market any products produced by Pinpoint, and those factors
discussed in the section entitled "Certain Factors Affecting Future Operating
Results" in the Company's most recent reports filed with the Securities and
Exchange Commission.
Contact:
A. Ernest Whiton
ZOLL Medical Corporation
(781) 229-0020
