EXHIBIT 10.3

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

ZOLL MEDICAL CORPORATION,

(the “Parent”)

 

REV ACQUISITION CORPORATION,

(“MergerSub”)

 

REVIVANT CORPORATION,

(the “Company”)

 

and

 

With respect to Sections 4, 13 and 14 only

The Parties Listed on Schedule A hereto

(the “Stockholders’ Representative”)

 

August 13, 2003

 

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AGREEMENT AND PLAN OF MERGER

 

INDEX

 

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SECTION 1. THE MERGER; EFFECTIVE TIME; CLOSING

   1

1.1

  

The Merger

   1

1.2

  

Effective Time

   1

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

   2

2.1

  

Certificate of Incorporation and By-laws

   2

SECTION 3. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION

   2

3.1

  

Directors

   2

3.2

  

Officers

   2

SECTION 4. MERGER CONSIDERATION; CANCELLATION OF SHARES IN THE MERGER

   2

4.1

  

Share and Cash Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger

   2

4.2

  

Exchange and Payment Procedures

   14

4.3

  

Dissenting Stock

   15

4.4

  

Treatment of Restricted Stock

   16

4.5

  

Treatment of Stock Options

   16

4.6

  

Treatment of Warrants

   16

4.7

  

Limitation on Parent Common Stock

   16

4.8

  

Tax Treatment of Deferred Payments

   17

4.9

  

Tax Withholding

   17

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

   17

5.1

  

Making of Representations and Warranties

   17

5.2

  

Restatement of Master Agreement

   17

5.3

  

Transfer of Shares

   18

5.4

  

Required Voting Percentage

   18

 

(i)

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SECTION 6. INTENTIONALLY OMITTED

   18

SECTION 7. COVENANTS OF THE COMPANY

   18

7.1

  

Making of Covenants and Agreements

   18

7.2

  

Conduct of Business

   18

7.3

  

Preservation of Business

   19

7.4

  

Authorization from Others

   19

7.5

  

Notice of Default

   20

7.6

  

Consummation of Agreement

   20

7.7

  

Parent Access to the Company

   20

7.8

  

Cooperation of the Company

   20

7.9

  

No Solicitation of Other Offers

   20

7.10

  

Confidentiality

   20

7.11

  

Regulatory Matters

   21

7.12

  

Delivery of Financial Statements

   21

7.13

  

Supplements to Schedules

   21

7.14

  

Officers’ and Directors’ Insurance

   22

7.15

  

Intellectual Property

   22

SECTION 8. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB

   22

8.1

  

Making of Representations and Warranties

   22

8.2

  

Organization, Good Standing and Qualification

   22

8.3

  

Authorization

   22

8.4

  

Consents

   23

8.5

  

Finder’s Fee

   23

8.6

  

Filings with the Securities and Exchange Commission

   23

8.7

  

Stockholder Approvals

   23

8.8

  

Absence of Changes

   23

SECTION 9. INTENTIONALLY OMITTED

   24

SECTION 10. CONDITIONS TO CLOSING

   24

10.1

  

Conditions to Parent’s and MergerSub’s Obligations to Close

   24

10.2

  

Conditions to Company’s Obligations to Close

   25

SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING

   25

11.1

  

General Rights And Obligations

   25

11.2

  

Tax Matters

   25

11.3

  

Registration of Parent Common Stock

   25

11.4

  

Nasdaq National Market Listing

   29

 

(ii)

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11.5

  

Company Stockholder Documents

   29

11.6

  

Certain Employee Benefit Matters

   30

SECTION 12. TERMINATION OF AGREEMENT

   30

12.1

  

Termination

   30

12.2

  

Effect of Termination

   31

12.3

  

Right to Proceed

   31

SECTION 13. INDEMNIFICATION

   31

13.1

  

Indemnification by Stockholders

   31

13.2

  

Indemnification by ZOLL

   31

13.3

  

Indemnification Procedures

   32

13.4

  

Limitations on Indemnification

   32

13.5

  

Setoff

   33

13.6

  

Sole Remedy

   33

SECTION 14. MISCELLANEOUS

   33

14.1

  

Fees and Expenses

   33

14.2

  

Governing Law

   34

14.3

  

Notices

   34

14.4

  

Entire Agreement

   35

14.5

  

Assignability; Binding Effect

   35

14.6

  

Captions and Gender

   35

14.7

  

Execution in Counterparts

   35

14.8

  

Amendments

   35

14.9

  

Publicity and Disclosures

   35

14.10

  

Dispute Resolution

   36

14.11

  

Specific Performance

   37

14.12

  

Reportable Transactions

   37

 

(iii)

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AGREEMENT AND PLAN OF MERGER

 

AGREEMENT AND PLAN OF MERGER entered into as of August 13, 2003 by and among
ZOLL Medical Corporation, a Massachusetts corporation (the “Parent”), Rev
Acquisition Corporation, a Delaware corporation and a wholly-owned subsidiary of
the Parent (“MergerSub” and together with the Parent, “ZOLL”), Revivant
Corporation, a Delaware corporation (the “Company”), and with respect to
Sections 4, 13 and 14 only, the persons whose names are set forth on Schedule A
attached hereto (collectively the “Stockholders’ Representative”).

 

WHEREAS, the Parent desires to acquire the Company through a merger of MergerSub
with and into the Company;

 

WHEREAS, the respective Boards of Directors of the Company, the Parent and
MergerSub each have determined that it is in the best interests of their
respective stockholders and advisable for the MergerSub to merge with and into
the Company, on the terms and subject to the conditions of this Agreement;

 

WHEREAS, in accordance with Sections 251 and 228 of the General Corporation Law
of the State of Delaware (the “DGCL”), each of MergerSub and the Company has
received the requisite written consent of their respective stockholders to enter
into this Agreement and to consummate the transactions contemplated hereby; and

 

WHEREAS, this Agreement is binding on all the holders of the Company’s capital
stock (herein collectively referred to as the “Stockholders” and individually as
a “Stockholder”) as if each Stockholder were a signatory hereto.

 

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 DGCL, at the Effective Time (as defined in
Section 1.2), MergerSub and the Company shall consummate a merger (the “Merger”)
in which (a) MergerSub shall be merged with and into the Company and the
separate corporate existence of the Company shall thereupon cease, and (b) the
Company shall continue as the surviving corporation in the Merger (the
“Surviving Corporation”) and shall succeed to and assume all of the rights,
properties, liabilities and obligations of MergerSub in accordance with the
DGCL.

 

1.2 Effective Time. Subject to the provisions of this Agreement, ZOLL 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

 

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thereafter as is provided in the Certificate of Merger (the “Effective Time”)
which shall have been duly filed with the Secretary of State of the State of
Delaware.

 

1.3 Closing. The closing of the Merger (the “Closing”) shall take place at 11:00
a.m. on October 4, 2004 at the offices of Goodwin Procter LLP, 53 State Street,
Boston, Massachusetts, or on the third business day following the day on which
all of the conditions to each party’s obligations hereunder required to be
performed prior to Closing have been satisfied or waived (except with respect to
those conditions which by their terms are to be satisfied at Closing), or at
such other place, day or time as ZOLL, the Company and the Stockholders’
Representative may agree (the “Closing Date”).

 

1.4 Effects of the Merger. The Merger shall have the effects set forth in this
Agreement and the applicable provisions of the DGCL.

 

1.5 Further Assurances. The Company from time to time after the Closing Date and
at the request of the Parent and without further consideration shall execute and
deliver further instruments of transfer and assignment and take such other
action as the Parent may reasonably require to fully implement the provisions of
this Agreement.

 

SECTION 2. CERTIFICATE OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION

 

2.1 Certificate of Incorporation and By-laws. The Certificate of Merger shall
provide that at the Effective Time, (a) the Surviving Corporation’s Certificate
of Incorporation as in effect immediately prior to the Effective Time shall be
amended as of the Effective Time so as to contain the provisions, and only the
provisions, contained immediately prior thereto in MergerSub’s Certificate of
Incorporation, except for Article I thereof, which shall continue to read “The
name of the corporation is ‘Revivant Corporation’” and (b) MergerSub’s By-laws
in effect immediately prior to the Effective Time shall be Surviving
Corporation’s By-laws; in each case until amended in accordance with the DGCL.

 

SECTION 3. DIRECTORS AND OFFICERS OF THE SURVIVING CORPORATION

 

3.1 Directors. The Board of Directors of MergerSub immediately prior to the
Effective Time shall be the Board of Directors of the Surviving Corporation as
of the Effective Time.

 

3.2 Officers. The officers of MergerSub immediately prior to the Effective Time
shall be the officers of the Surviving Corporation as of the Effective Time.

 

SECTION 4. MERGER CONSIDERATION; CANCELLATION OF SHARES IN THE MERGER.

 

4.1 Share and Cash Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger. The manner of receiving cash in the Merger, and the manner
of converting or canceling shares of the Company in the Merger, shall be as set
forth in this Section 4. By virtue of the Merger, and without any further action
on the part of any party hereto or holder

 

2

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thereof, all issued and outstanding shares of the Company’s capital stock (other
than (i) any Company Shares (as defined below) to be cancelled pursuant to
Section 4.1(e) (including all shares of Series F Preferred Stock, par value
$0.01 per share, of the Company issued and outstanding as of the Effective Time
(the “Series F Shares”), all Series E Shares (as defined below) purchased by the
Parent or any direct or indirect wholly-owned subsidiary of the Parent, if any,
pursuant to the co-funding provisions of Section 3.6 of that certain Master
Agreement by and among the Parent, MergerSub and the Company (the “Master
Agreement”), and Company Common Shares (as defined below) issued upon conversion
of such shares (collectively, the “ZOLL Non-Converted Shares”)) and (ii) any
Dissenting Shares (as defined below) shall be cancelled and retired as of the
Effective Time and converted solely into the right to receive in the aggregate
the Initial Merger Consideration (as defined in Section 4.1(a)), the Contingent
Clinical Milestone Consideration (as defined in Section 4.1(b)), and the
Contingent Revenue Milestone Consideration (as defined in Section 4.1(c)). The
Initial Merger Consideration, the Contingent Clinical Milestone Consideration
and the Contingent Revenue Milestone Consideration, are hereinafter collectively
referred to as the “Merger Consideration.”

 

(a) Initial Merger Consideration. The aggregate initial merger consideration
shall consist of (x) Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000) in cash (the “Initial Cash Consideration”) and (y) that number of
shares of common stock, par value $0.02 per share, of the Parent (the “Parent
Common Stock”) equal to Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000) divided by the Closing Exchange Price of the Parent Common Stock
(the “Initial Parent Stock Consideration,” and together with the Initial Cash
Consideration, the “Initial Merger Consideration”). As used herein, the term
“Closing Exchange Price” shall mean the mean average of the closing prices of a
share of Parent Common Stock for the sixty (60) trading days ending on the
business day that is three (3) business days immediately prior to the Closing
Date, as reported on the Nasdaq National Market. The Initial Merger
Consideration shall be allocated among and payable to the holders of the
Preferred Shares (as defined in Section 4.1(e) below) and the holders of the
Company Common Shares (as defined in Section 4.1(a)(v) below) as follows:

 

(i) First, that portion of the Initial Merger Consideration equal to the
Stockholders’ Obligations (as defined below) then outstanding shall be paid to,
or at the direction of, the Stockholders’ Representative solely to be used to
satisfy in full said Stockholders’ Obligations. As used herein, the term
“Stockholders’ Obligations” shall mean the following liabilities, obligations
and responsibilities of the Stockholders: 1) all obligations under the Company’s
2003 Executive Retention Program (the “Executive Retention Program”), 2) all
obligations under the Company’s 2003 Employee Retention Program (the “Employee
Retention Program,” and together with the Executive Retention Program, the
“Retention Programs”), 3) all obligations accruing after the Closing with
respect to any severance obligations entered into prior to the Closing;
provided, however, that any severance obligation that becomes payable after the
Closing due to actions taken after the Closing by the Surviving Corporation
shall not be deemed part of the Stockholders’ Obligations, 4) all fees and
expenses whenever accruing, payable to SG Cowen under the engagement letters
between the Company and SG Cowen dated January 23, 2003 and February 25, 2003,
as amended from time to time, 5) all payments and expenses, including
indemnification payment, related to the bonus agreement between the Company and
Kenneth Ludlum dated July 25, 2003, other than

 

3

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the compensation expenses set forth in Section 2 thereof, and 6) all fees and
expenses payable by the Stockholders pursuant to this Agreement or the other
agreements entered into in connection herewith, including the expenses of the
Stockholders’ Representative. The payment of the amount of said Stockholders’
Obligations then outstanding (the “Initial Stockholders’ Obligations Amount”)
shall be made as follows: (x) a cash payment equal to the lesser of (A) the
Initial Stockholders’ Obligations Amount and (B) the total Initial Cash
Consideration, and (y) that number of shares of Parent Common Stock equal to any
portion of the Initial Stockholders’ Obligations Amount not paid in cash under
Section 4.1(a)(i)(x), divided by the Closing Exchange Price. Notwithstanding the
foregoing, at the sole discretion of the Stockholders’ Representative, any
portion of the cash payment provided for in Section 4.1(a)(i)(x) may, in lieu of
being paid in cash, be paid in shares of Parent Common Stock as provided in
Section 4.1(a)(i)(y). The Stockholders’ Representative shall provide Parent a
list showing each stockholder, their address, their taxpayer identification or
social security number, as applicable, and the number of shares of Parent Common
Stock to be issued to such person or entity at least 10 days prior to the
issuance of any Parent Common Stock hereunder.

 

(ii) Second, shares of Series G Preferred Stock, par value $0.001 per share, of
the Company issued and outstanding at the Effective Time (the “Series G Shares”)
(whether held by Parent or another party) shall, by virtue of the Merger, be
entitled to receive in the aggregate (x) that portion of the Initial Cash
Consideration equal to the lesser of (A) one-half of the aggregate Series G
Liquidation Amount (as defined in the Company’s Amended and Restated Certificate
of Incorporation (the “Company’s Charter”)) attributable to the Series G Shares
(the “Series G Liquidation Preference”) or (B) the total Initial Cash
Consideration less that amount of the Initial Cash Consideration payable under
Section 4.1(a)(i)(x), plus (y) that number of shares of the Initial Parent Stock
Consideration equal to the lesser of (A) the amount by which the Initial Cash
Consideration payable under Section 4.1(a)(ii)(x) is less than the amount which
is one-half of the Series G Liquidation Preference, plus one-half of the Series
G Liquidation Preference, such sum divided by the Closing Exchange Price or (B)
the total number of shares constituting the Initial Parent Stock Consideration
less that number of shares of Initial Parent Stock Consideration payable under
Section 4.1(a)(i)(y). Each Series G Share will be entitled to receive that
portion of the total Initial Cash Consideration and Initial Parent Stock
Consideration attributable to the Series G Shares in the aggregate, divided by
the number of Series G Shares outstanding at the Effective Time. The amount of
Initial Merger Consideration to be received by each holder of Series G Shares
shall be rounded up or down to the nearest cent or whole share, as the case may
be, after aggregating all of the Initial Cash Consideration and the Initial
Stock Consideration, as applicable, to be received by the holder of such Series
G Shares pursuant to this Section 4.1(a)(ii).

 

(iii) Third, shares of Series E Preferred Stock, par value $0.001 per share, of
the Company issued and outstanding at the Effective Time (the “Series E Shares”)
(other than Series E Shares purchased by the Parent or any direct or indirect
wholly-owned subsidiary of the Parent, if any, whether or not transferred) (the
“Non-ZOLL Series E Shares”) shall, by virtue of the Merger, be entitled to
receive in the aggregate (x) that portion of the Initial Cash Consideration
equal to the lesser of (A)

 

4

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one-half of the aggregate Series E Liquidation Amount (as defined in Section
2(a)(iii) of the Company’s Charter) attributable to the Non-ZOLL Series E Shares
(the “Non-ZOLL Series E Section 2(a) Liquidation Preference”) or (B) the total
Initial Cash Consideration less that amount of the Initial Cash Consideration
payable under Sections 4.1(a)(i)(x) and 4.1(a)(ii)(x), plus (y) that number of
shares of the Initial Parent Stock Consideration equal to the lesser of (A) the
amount by which the Initial Cash Consideration payable under Section
4.1(a)(iii)(x) is less than the amount which is one-half of the Non-ZOLL Series
E Liquidation Preference, plus one-half of the Non-ZOLL Series E Section 2(a)
Liquidation Preference, such sum divided by the Closing Exchange Price or (B)
the total number of shares constituting the Initial Parent Stock Consideration
less that number of shares of Initial Parent Stock Consideration payable under
Sections 4.1(a)(i)(y) and 4.1(a)(ii)(y). Each Non-ZOLL Series E Share will be
entitled to receive that portion of the total Initial Cash Consideration and
Initial Parent Stock Consideration attributable to the Non-ZOLL Series F Shares
in the aggregate, divided by the number of Non-ZOLL Series E Shares outstanding
at the Effective Time. The amount of Initial Merger Consideration to be received
by each holder of Non-ZOLL Series E Shares shall be rounded up or down to the
nearest cent or whole share, as the case may be, after aggregating all of the
Initial Cash Consideration and the Initial Stock Consideration as applicable, to
be received by the holder of such Non-ZOLL Series E Shares pursuant to this
Section 4.1(a)(iii).

 

(iv) Fourth, shares of the Series A Preferred Stock, par value $0.001 per share,
of the Company issued and outstanding at the Effective Time (the “Series A
Shares”), the Series B Preferred Stock, par value $0.001 per share, of the
Company issued and outstanding at the Effective Time (the “Series B Shares”),
the Series C Preferred Stock, par value $0.001 per share, of the Company issued
and outstanding at the Effective Time (the “Series C Shares”) and the Series D
Preferred Stock, par value $0.001 per share, of the Company issued and
outstanding at the Effective Time (the “Series D Shares,” and together with the
Series A Shares, the Series B Shares and the Series C Shares, the “Series A-D
Shares”) shall, by virtue of the Merger, be entitled to receive in the aggregate
(x) that portion of the Initial Cash Consideration equal to the lesser of (A)
one-half of the sum of the aggregate Series A liquidation amount plus the
aggregate Series B liquidation amount plus the aggregate Series C liquidation
amount plus the aggregate Series D liquidation amount (in each case, as
specified in Section 2(a) of the Company’s Charter) attributable to the Series
A-D Shares (the “Series A-D Section 2(a) Liquidation Preference”) or (B) the
total Initial Cash Consideration less that amount of the Initial Cash
Consideration payable under Sections 4.1(a)(i)(x), 4.1(a)(ii)(x) and
4.1(a)(iii)(x), plus (y) that number of shares of the Initial Parent Stock
Consideration equal to the lesser of (A) the amount by which the Initial Cash
Consideration payable under Section 4.1(a)(iv)(x) is less than the amount which
is one-half of the Series A-D Section 2(a) Liquidation Preference, plus one-half
of the Series A-D Section 2(a) Liquidation Preference, such sum divided by the
Closing Exchange Price or (B) the total number of shares constituting the
Initial Parent Stock Consideration less that number of shares of Initial Parent
Stock Consideration payable under Sections 4.1(a)(i)(y), 4.1(a)(ii)(y) and
4.1(a)(iii)(y). The aggregate amount of the Initial Cash Consideration and
Initial Parent Stock Consideration payable pursuant to this Section 4.1(a)(iv)
shall be distributed ratably among the holders of the Series A Shares, the
Series

 

5

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B Shares, the Series C Shares and the Series D Shares in proportion to the
aggregate preferential amounts owed such holders in accordance with Section 2(a)
of the Company’s Charter. Each Series A-D Share will be entitled to receive that
portion of the total Initial Cash Consideration and Initial Parent Stock
Consideration attributable to its respective series of Preferred Shares in the
aggregate, divided by the number of shares of its respective series of Preferred
Shares outstanding at the Effective Time. The amount of Initial Merger
Consideration to be received by each holder of Series A-D Shares shall be
rounded up or down to the nearest cent or whole share, as the case may be, after
aggregating all of the Initial Cash Consideration and the Initial Stock
Consideration as applicable, to be received by the holder of such Series A-D
Shares pursuant to this Section 4.1(a)(iv).

 

(v) Fifth, the Series D Shares, the Non-ZOLL Series E Shares and the shares of
Common Stock, par value $0.001 per share, of the Company issued and outstanding
at the Effective Time (the “Company Common Shares”) other than Company Common
Shares purchased by the Parent or any direct or indirect wholly-owned subsidiary
of the Parent, if any, whether or not transferred, as a result of conversion of
Series E Shares or Series F Shares (the “Non-ZOLL Common Shares”) shall, by
virtue of the Merger, be entitled to receive in the aggregate all remaining
portions of the Initial Merger Consideration; provided, however, that the amount
of the Initial Cash Consideration and the Initial Parent Stock Consideration
payable pursuant to this Section 4.1(a)(v) shall be distributed among the
holders of Series D Shares, Non-ZOLL Series E Shares and Non-ZOLL Common Shares
pro rata based on the number of Non-ZOLL Common Shares held by each (assuming
conversion of all such Series D Shares and Non-ZOLL Series E Shares into
Non-ZOLL Common Shares in accordance with the Company’s Charter); provided,
further, however, that the holders of Series D Shares or Non-ZOLL Series E
Shares shall cease receiving any payments pursuant to this Section 4.1(a)(v)
once each Series D Share and Non-ZOLL Series E Share has received aggregate
Merger Consideration (whether pursuant to Sections 4.1(a)(iii), 4.1(a)(iv),
4.1(a)(v), 4.1(b), 4.1(c) or 4.1(d)) equal to Two Dollars and 70/100 ($2.70)
(which shall be determined by valuing any Parent Common Stock received as Merger
Consideration at the Closing Exchange Price, regardless of its market value when
actually issued or delivered) (the “Series D-E Additional Preference”), and
thereafter, the holders of the Non-ZOLL Common Shares shall receive all
remaining portions of the Initial Merger Consideration (which shall be
distributed among the holders of Non-ZOLL Common Shares pro rata based on the
number of Non-ZOLL Common Shares held by each). Each Series D Share, Non-ZOLL
Series E Share and Non-ZOLL Common Share will be entitled to receive that
portion of the Initial Cash Consideration and Initial Parent Stock Consideration
attributable to its respective series of Preferred Shares or Non-ZOLL Common
Shares, as applicable, in the aggregate, divided by the number of shares of its
respective series of Preferred Shares or Non-ZOLL Common Shares outstanding at
the Effective Time. The amount of Initial Merger Consideration to be received by
each holder of Preferred Shares or Non-ZOLL Common Shares shall be rounded up or
down to the nearest cent or whole share, as the case may be, after aggregating
all of the Initial Cash Consideration and the Initial Stock Consideration as
applicable, to be received by the holder of such Preferred Shares or Non-ZOLL
Common Shares pursuant to this Section 4.1(a)(v). Notwithstanding the foregoing,
any holder of Non-ZOLL Common

 

6

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Shares who received under Section 4.1(a)(i) any amount of the Initial Merger
Consideration pursuant to either of the Retention Programs (the amount so
received by any such holder being hereinafter referred to as the “Retention
Program Amount”) shall not be entitled to receive any portion of the Initial
Merger Consideration pursuant to this Section 4.1(a)(v) unless and to the extent
set forth in the respective Award Agreement issued pursuant to the Retention
Programs.

 

(b) Contingent Clinical Milestone Consideration.

 

(i) If and to the extent the AHA Abstract Milestone, the Major Medical Journal
Milestone, Additional Major Medical Journal Milestone, or the 2004 Abstracts
Milestone (each as defined below) is achieved, then the Parent will pay in the
aggregate to the holders of the Company’s capital stock outstanding as of the
Effective Time (other than (i) Company Shares to be cancelled pursuant to
Section 4.1(e) (including, without limitation, all ZOLL Non-Converted Shares))
additional Merger Consideration as described in Section 4.1(b)(ii) (the “AHA
Abstract Consideration”), Section 4.1(b)(iii) (the “Major Medical Journal
Consideration”), Section 4.1(b)(iv) (the “Additional Major Medical Journal
Consideration”), or Section 4.1(b)(v) (the “2004 Abstracts Consideration,” and
together with the AHA Abstract Consideration, the Major Medical Journal
Consideration and the Additional Major Medical Journal Consideration, the
“Contingent Clinical Milestone Consideration”), as the case may be. If any such
Contingent Clinical Milestone Consideration is payable by the Parent, it will be
paid in accordance with Section 4.2 within fifteen (15) days following the
achievement of the respective Milestones. The AHA Abstract Milestone, the Major
Medical Journal Milestone, the Additional Major Medical Journal Milestone, and
the 2004 Abstracts Milestone shall collectively be referred to as the
“Milestones.”

 

(ii) In the event the AHA Abstract Milestone is achieved on or before the 2005
Annual Meeting of the American Heart Association, then the Parent will pay in
the aggregate as additional Merger Consideration (x) One Million and 00/100
Dollars ($1,000,000) in cash (the “AHA Abstract Cash Consideration”) plus (y)
that number of shares of Parent Common Stock equal to One Million and 00/100
Dollars ($1,000,000) divided by the Closing Exchange Price of Parent Common
Stock (the “AHA Abstract Stock Consideration,” and together with the AHA
Abstract Cash Consideration, the “AHA Abstract Consideration”). As used herein,
the term “AHA Abstract Milestone” shall have the meaning set forth on Schedule B
attached hereto.

 

(iii) In the event that the Major Medical Journal Milestone is achieved on or
before February 28, 2007, then the Parent will pay in the aggregate as
additional Merger Consideration (x) the Adjusted Major Medical Journal Amount
(as defined below) in cash (the “Major Medical Journal Cash Consideration”) plus
(y) that number of shares of Parent Common Stock equal to the Adjusted Major
Medical Journal Amount divided by the Closing Exchange Price of Parent Common
Stock (the “Major Medical Journal Stock Consideration,” and together with the
Major Medical Journal Cash Consideration, the “Major Medical Journal
Consideration”). As used herein, the term “Adjusted Major Medical Journal
Amount” means (A) Four Million Five Hundred Thousand and 00/100 Dollars
($4,500,000) if the Major Medical Journal

 

7

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Milestone is achieved at any time during June 2006, (B) the sum of Four Million
Five Hundred Thousand and 00/100 Dollars ($4,500,000) plus the product of Five
Hundred Thousand Dollars ($500,000) multiplied by the number of months prior to
June 2006 that the Major Medical Journal Milestone is achieved or (C) the
difference between Four Million Five Hundred Thousand and 00/100 Dollars
($4,500,000) less the product of Five Hundred Thousand and 00/100 Dollars
($500,000) multiplied by the number of months after June 2006 that the Major
Medical Journal Milestone is achieved. As used herein, the term “Major Medical
Journal Milestone” shall have the meaning set forth on Schedule B attached
hereto.

 

(iv) In the event that the Additional Major Medical Journal Milestone is
achieved, then the Parent will pay in the aggregate as additional Merger
Consideration (x) One Million Five Hundred Thousand and 00/100 Dollars
($1,500,000) in cash (the “Additional Major Medical Journal Cash Consideration”)
plus (y) that number of shares of Parent Common Stock equal to One Million Five
Hundred Thousand and 00/100 Dollars ($1,500,000) divided by the Closing Exchange
Price of Parent Common Stock (the “Additional Major Medical Journal Stock
Consideration,” and together with the Additional Major Medical Journal Cash
Consideration, the “Additional Major Medical Journal Consideration”). As used
herein, the term “Additional Major Medical Journal Milestone” shall have the
meaning set forth on Schedule B attached hereto.

 

(v) In the event that the 2004 Abstracts Milestone is achieved on or before
November 30, 2004, then the Parent will pay in the aggregate as additional
Merger Consideration (x) Five Hundred Thousand and 00/100 Dollars ($500,000) in
cash (the “2004 Abstracts Cash Consideration”) plus (y) that number of shares of
Parent Common Stock equal to Five Hundred Thousand and 00/100 Dollars ($500,000)
divided by the Closing Exchange Price of Parent Common Stock (the “2004
Abstracts Stock Consideration,” and together with the 2004 Abstracts Cash
Consideration, the “2004 Abstracts Consideration”). As used herein, the term
“2004 Abstracts Milestone” shall have the meaning set forth on Schedule B
attached hereto.

 

(c) Contingent Revenue Milestone Consideration.

 

(i) If and to the extent the FY 2005 Revenue Milestone, the FY 2006 Revenue
Milestone and the FY 2007 Revenue Milestone, as applicable (each as defined
below and together the “FY Revenue Milestones”)) are achieved, then the Parent
will pay (in accordance with Sections 4.1(c)(v) and 4.2 hereof) to the holders
of the Company’s capital stock outstanding as of the Effective Time (other than
Company Shares to be cancelled pursuant to Section 4.1(e)) (including, without
limitation, all ZOLL Non-Converted Shares) the additional Merger Consideration
as described in Section 4.1(c)(ii) (the “Contingent FY 2005 Revenue
Consideration”), Section 4.1(c)(iii) (the “Contingent FY 2006 Revenue
Consideration”) or Section 4.1(c)(iv) (the “Contingent FY 2007 Revenue
Consideration,” and together with the Contingent FY 2005 Revenue Consideration
and the Contingent FY 2006 Revenue Consideration, the “Contingent Revenue
Milestone Consideration”), as the case may be.

 

8

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(ii) In the event the Parent achieves Consolidated Qualifying Revenues (as
defined below) of over Six Million and 00/100 Dollars ($6,000,000) from the sale
of Company Products (as defined below) during the Parent’s fiscal year ending
October 2, 2005 (the “FY 2005 Revenue Milestone”), then the Parent will pay in
the aggregate as additional Merger Consideration (x) one-half of the Excess FY
2005 Revenues (as defined below) in cash (the “FY 2005 Revenue Milestone Cash
Consideration”) plus (y) that number of shares of Parent Common Stock equal to
one-half of the Excess FY 2005 Revenues divided by the Closing Exchange Price of
Parent Common Stock (the “FY 2005 Revenue Milestone Stock Consideration,” and
together with the FY 2005 Revenue Milestone Cash Consideration, the “Contingent
FY 2005 Revenue Consideration”). As used herein, the term “Consolidated
Qualifying Revenues” shall mean consolidated revenue (as determined on the same
basis as revenue is otherwise recognized by the Parent) from the sale of Company
Products, exclusive of all bad debt, returns and allowances, sales tax, freight
and shipping costs, distributor commissions, or other customary and ordinary
direct sales costs (but not employee sales commissions). As used herein, the
term “Company Products” shall mean (A) those products listed on Schedule 4.1(c)
hereto and (B) any products that are substantially similar to and incorporate
substantially the same technology as those products that are listed on Schedule
4.1(c); provided, however, that Company Products shall not include any other
resuscitation products sold by the Parent (including without limitation
defibrillators and ResQPOD products; provided, further, however, that in the
event the Parent incorporates an external defibrillator into one or more Company
Products (a “Combined Product”), then such Combined Product shall constitute a
Company Product, but Consolidated Qualifying Revenues from any sale of a
Combined Product shall be reduced by an amount equal to the average sales price
(calculated on the same basis as used in determining Consolidated Qualifying
Revenues) over the previous one year period of the Parent’s AED Plus
defibrillator (or a successor product, if applicable) so incorporated into the
Combined Product. As used herein, the term “Excess FY 2005 Revenues” shall mean
the amount by which the Parent’s Consolidated Qualifying Revenues from the sale
of Company Products during the Parent’s fiscal year ending October 2, 2005 (such
amount being referred to as the “FY 2005 Revenues”) exceeds Six Million and
00/100 Dollars ($6,000,000).

 

(iii) In the event the amount of the Parent’s Consolidated Qualifying Revenues
from the sale of Company Products during the fiscal year ending October 1, 2006
are greater then the FY 2005 Revenues (the “FY 2006 Revenue Milestone”), then
the Parent will pay in the aggregate as additional Merger Consideration (x)
one-half of the Excess FY 2006 Revenues (as defined below) in cash (the “FY 2006
Revenue Milestone Cash Consideration”) plus (y) that number of shares of Parent
Common Stock equal to one-half of the Excess FY 2006 Revenues divided by the
Closing Exchange Price of Parent Common Stock (the “FY 2006 Revenue Milestone
Stock Consideration,” and together with the FY 2006 Revenue Milestone Cash
Consideration, the “Contingent FY 2006 Revenue Consideration”). As used herein,
the term “Excess FY 2006 Revenues” shall mean the amount by which the Parent’s
Consolidated Qualifying Revenues from the sale of Company Products during the
Parent’s fiscal year ending October 1, 2006 (such amount being referred to as
the “FY 2006 Revenues”) exceeds the FY 2005 Revenues.

 

9

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(iv) In the event the amount of the Parent’s Consolidated Qualifying Revenues
from the sale of Company Products during the fiscal year ending September 30,
2007 are greater than the FY 2006 Revenues (the “FY 2007 Revenue Milestone”),
then the Parent will pay in the aggregate as additional Merger Consideration (x)
one-half of the Excess FY 2007 Revenues (as defined below) in cash (the “FY 2007
Revenue Milestone Cash Consideration”) plus (y) that number of shares of Parent
Common Stock equal to one-half of the Excess FY 2007 Revenues divided by the
Closing Exchange Price of Parent Common Stock (the “FY 2007 Revenue Milestone
Stock Consideration,” and together with the FY 2007 Revenue Milestone Cash
Consideration, the “Contingent FY 2007 Revenue Consideration”). As used herein,
the term “Excess FY 2007 Revenues” shall mean the product of one and one-half
(1.5) multiplied by the amount by which the Parent’s Consolidated Qualifying
Revenues from the sale of Company Products during the Parent’s fiscal year
ending September 30, 2007 exceeds the FY 2006 Revenues.

 

(v) As promptly as practicable following the applicable fiscal year end, and in
any event within sixty (60) days thereafter, the Parent shall prepare and
deliver to the Stockholders’ Representative a schedule of the Consolidated
Qualifying Revenues for such fiscal year, based on the Parent’s audited
financial statements, and setting forth, as of the applicable fiscal year end,
the number and type of Company Products sold during such year, the average
selling price for such Company Products so sold, the total Consolidated
Qualifying Revenues from such sales and the aggregate amount of such applicable
Contingent Revenue Milestone Consideration (each a “Contingent Revenue Milestone
Consideration Schedule”). The Stockholders’ Representative shall have thirty
(30) days from receipt thereof to review and dispute such Contingent Revenue
Milestone Consideration Schedule. The Stockholders’ Representative and its
accounting and/or financial advisors shall have the right to review the Parent’s
books and records with respect to sales of the Company’s Products. The failure
by the Stockholders’ Representative to express its disagreement within such
thirty (30) day period will constitute acceptance of such Contingent Revenue
Milestone Consideration Schedule, such Contingent Revenue Milestone
Consideration Schedule shall become final and binding on all parties and the
Parent shall pay the applicable Contingent Revenue Milestone Consideration as
set forth above within fifteen (15) days following acceptance (or deemed
acceptance) of such Contingent Revenue Milestone Consideration Schedule. If the
Stockholders’ Representative has any objection to such Contingent Revenue
Milestone Consideration Schedule, the Stockholders’ Representative shall give
written notice to the Parent within such thirty (30) day period, (A) setting
forth the Stockholders’ Representative objection to such Contingent Revenue
Milestone Consideration Schedule and (B) specifying in reasonable detail its
basis for its disagreement with the Parent’s computation. The Parent and the
Stockholders’ Representative shall each submit any disputes regarding the
Contingent Revenue Milestone Consideration Schedule to (x) the Parent’s current
independent accountants, (y) a nationally recognized accounting firm chosen by
the Stockholders’ Representative and (z) a third independent accountant selected
by the accountants appointed pursuant to clauses (x) and (y) above (together,
the “Resolution Accountants”) for resolution. The determination of the
Resolution Accountants with respect to each of the items in dispute shall be
final and binding upon both parties. Within fifteen (15) days following the

 

10

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Resolution Accountants’ determination of the applicable Contingent Revenue
Milestone Consideration, the Parent shall pay the applicable Contingent Revenue
Milestone Consideration as set forth above. The fees and expenses of the
Resolution Accountants shall be shared equally by the Parent, on the one hand,
and the Stockholders, on the other hand.

 

(d) Allocation of Contingent Merger Consideration. Each payment of Contingent
Clinical Milestone Consideration and Contingent Revenue Milestone Consideration
(the cash payment of which is refereed to as the “Cash Contingent Consideration
Payment” and the Parent Common Stock payment of which is referred to as the
“Stock Contingent Consideration Payment” and each together a “Contingent
Consideration Payment”) shall be allocated among and payable to the Preferred
Shares and Company Common Shares as follows:

 

(i) First, that portion of the Contingent Consideration Payment equal to the
Stockholders’ Obligations then outstanding shall be paid to, or at the direction
of, the Stockholders’ Representative solely to be used to satisfy in full said
Stockholders’ Obligations. The payment of the amount of said Stockholders’
Obligations then outstanding (in the case of each Contingent Consideration
Payment, a “Subsequent Stockholders’ Obligations Amount”) shall be made as
follows: (x) a payment equal to the lesser of (A) the Subsequent Stockholders’
Obligations Amount and (B) the total Cash Contingent Consideration Payment, and
(y) that number of shares of Parent Common Stock equal to the Subsequent
Stockholders’ Obligations Amount not paid in cash under Section 4.1(d)(i)(x),
divided by the Closing Exchange Price.

 

(ii) Second, until each of the Series G Shares (whether held by Parent or
another party) has received total Merger Consideration (which shall be
determined by valuing any Parent Common Stock received as Merger Consideration
at the Closing Exchange Price, regardless of its market value when actually
issued or delivered) equal to the Series G Liquidation Preference, then the
Series G Shares will, by virtue of the Merger, be entitled to receive in the
aggregate (x) that portion of each Cash Contingent Consideration Payment equal
to the lesser of (A) the difference between one-half of the aggregate Series G
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
Series G Shares or (B) the total Cash Contingent Consideration Payment in
question less the portion thereof payable pursuant to Section 4.1(d)(i)(x), plus
(y) that number of shares of the Stock Contingent Consideration Payment equal to
the lesser of (A) the amount by which the Cash Contingent Consideration Payment
payable under Section 4.1(d)(ii)(x) is less than the amount which is one-half of
the Series G Liquidation Preference, plus the difference determined pursuant to
Section 4.1(d)(ii)(x)(A), such sum divided by the Closing Exchange Price or (B)
the total Stock Contingent Consideration Payment in question less that number of
such shares payable pursuant to Section 4.1(d)(i)(y). Each Series G Share will
be entitled to receive that portion of the Cash Contingent Consideration Payment
and Stock Contingent Consideration Payment in question attributable to the
Series G Shares in the aggregate, divided by the number of Series G Shares
outstanding at the Effective Time. The amount of each Contingent Consideration
Payment to be received by each holder of Series G Shares shall be rounded up or
down to the nearest cent or whole share, as the case may be, after aggregating
the

 

11

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portions of the Cash Consideration Payment and Stock Consideration Payment, as
applicable, to be received by the holder of such Series G Shares pursuant to
this Section 4.1(d)(ii).

 

(iii) Third, until each of the Non-ZOLL Series E Shares has received total
Merger Consideration (which shall be determined by valuing any Parent Common
Stock received as Merger Consideration at the Closing Exchange Price, regardless
of its market value when actually issued or delivered) equal to the Non-ZOLL
Series E Liquidation Preference, then the Non-ZOLL Series E Shares will, by
virtue of the Merger, be entitled to receive in the aggregate (x) that portion
of each Cash Contingent Consideration Payment equal to the lesser of (A) the
difference between one-half of the aggregate Non-ZOLL Series E Section 2(a)
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
Non-ZOLL Series E Shares or (B) the total Cash Contingent Consideration Payment
in question less the portion thereof payable pursuant to Sections 4.1(d)(i)(x)
and 4.1(d)(ii)(x), plus (y) that number of shares of the Stock Contingent
Consideration Payment equal to the lesser of (A) the amount by which the Cash
Contingent Consideration Payment payable under Section 4.1(d)(iii)(x) is less
than the amount which is one-half the Non-ZOLL Series E Section 2(a) Liquidation
Preference, plus the difference determined pursuant to Section
4.1(d)(iii)(x)(A), such sum divided by the Closing Exchange Price or (B) the
total Stock Contingent Consideration Payment in question less that number of
such shares payable pursuant to Sections 4.1(d)(i)(y) and 4.1(d)(ii)(y). Each
Non-ZOLL Series E Share will be entitled to receive that portion of the Cash
Contingent Consideration Payment and Stock Contingent Consideration Payment in
question attributable to the Non-ZOLL Series E Shares in the aggregate, divided
by the number of Non-ZOLL Series E Shares outstanding at the Effective Time. The
amount of each Contingent Consideration Payment to be received by each holder of
Non-ZOLL Series E Shares shall be rounded up or down to the nearest cent or
whole share, as the case may be, after aggregating the portions of the Cash
Consideration Payment and Stock Consideration Payment, as applicable, to be
received by the holder of such Non-ZOLL Series E Shares pursuant to this Section
4.1(d)(iii).

 

(iv) Fourth, until each of the Series A-D Shares has received total Merger
Consideration (which shall be determined by valuing any Parent Common Stock
received as Merger Consideration at the Closing Exchange Price, regardless of
its market value when actually issued or delivered) equal to the applicable
Series A-D Section 2(a) Liquidation Preference, then the Series A-D Shares will,
by virtue of the Merger, be entitled to receive in the aggregate (x) that
portion of each Cash Contingent Consideration Payment equal to the lesser of (A)
the difference between one-half of the aggregate Series A-D Section 2(a)
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
the Series A-D Shares or (B) the total Cash Contingent Consideration Payment in
question less the portion thereof payable pursuant to Sections 4.1(d)(i)(x),
4.1(d)(ii)(x) and 4.1(d)(iii)(x), plus (y) that number of shares of the Stock
Contingent Consideration Payment equal to the lesser of (A) the amount by which
the Cash Contingent Consideration Payment payable under Section 4.1(d)(iv)(x) is
less than the amount which is one-half the Series A-D Section 2(a) Liquidation
Preference, plus the

 

12

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difference determined pursuant to Section 4.1(d)(iv)(x)(A), such sum divided by
the Closing Exchange Price or (B) the total Stock Contingent Consideration
Payment in question less that number of such shares payable pursuant to Sections
4.1(d)(i)(y), 4.1(d)(ii)(y) and 4.1(d)(iii)(y). The aggregate amount of the Cash
Contingent Consideration Payment and the Stock Contingent Consideration Payment
payable pursuant to this Section 4.1(d)(iv) shall be distributed ratably among
the holders of the Series A Shares, the Series B Shares, the Series C Shares and
the Series D Shares in proportion to the aggregate preferential amounts owed
such holders in accordance with Section 2(a) of the Company’s Charter. Each
Series A-D Share will be entitled to receive that portion of the Cash Contingent
Consideration Payment and Stock Contingent Consideration Payment in question
attributable to its respective series of Preferred Shares in the aggregate,
divided by the number of shares of its respective series of Preferred Shares
outstanding at the Effective Time. The amount of each Contingent Consideration
Payment to be received by each holder of Series A-D Shares shall be rounded up
or down to the nearest cent or whole share, as the case may be, after
aggregating the portions of the Cash Consideration Payment and Stock
Consideration Payment, as applicable, to be received by the holder of such
Series A-D Shares pursuant to this Section 4.1(d)(iv).

 

(v) Fifth, the Series D Shares, the Non-ZOLL Series E Shares and the Non-ZOLL
Common Shares issued and outstanding at the Effective Time shall, by virtue of
the Merger, be entitled to receive in the aggregate all remaining portions of
the Contingent Consideration Payment; provided, however, that the aggregate
amount of the Cash Contingent Consideration Payment and the Stock Contingent
Consideration Payment payable pursuant to this Section 4.1(d)(v) shall be
distributed among the holders of the Series D Shares, the Non-ZOLL Series E
Shares and the Non-ZOLL Common Shares pro rata based on the number of Non-ZOLL
Common Shares held by each (assuming conversion of all such Series D Shares and
Non-ZOLL Series E Shares into Non-ZOLL Common Shares in accordance with the
Company’s Charter); provided, further, however, that the holders of the Series D
Shares or Non-ZOLL Series E Shares shall cease receiving any payments pursuant
to this Section 4.1(d)(v) once each Series D Share and Non-ZOLL Series E Share
has received total Merger Consideration (which shall be determined by valuing
any Parent Common Stock received as Merger Consideration at the Closing Exchange
Price, regardless of its market value when actually issued or delivered) equal
to the Series D-E Additional Preference, and thereafter, the holders of the
Non-ZOLL Common Shares shall receive all remaining portions of the Contingent
Consideration Payment (which shall be distributed among the holders of the
Non-ZOLL Common Shares pro rata based on the number of Non-ZOLL Common Shares
held by each). Each Series D Share, Non-ZOLL Series E Share and Non-ZOLL Common
Share will be entitled to receive that portion of the Cash Contingent
Consideration Payment and Stock Contingent Consideration Payment in question
attributable to its respective series of Preferred Shares and Non-ZOLL Common
Shares, as applicable, in the aggregate, divided by the number of shares of its
respective series of Preferred Shares and Non-ZOLL Common Shares, as applicable,
outstanding at the Effective Time. The amount of each Contingent Consideration
Payment to be received by each holder of Preferred Shares or Non-ZOLL Common
Shares shall be rounded up or down to the nearest cent or whole share, as the
case may be, after aggregating the portions of the Cash Consideration Payment
and Stock Consideration Payment, as

 

13

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applicable, to be received by the holder of such Preferred Shares or Non-ZOLL
Common Shares pursuant to this Section 4.1(d)(v). Notwithstanding the foregoing,
any holder of Non-ZOLL Common Shares who received under Section 4.1(a)(i) or
4.1(d)(i) any Retention Program Amount shall not be entitled to receive any
portion of the applicable Contingent Merger Consideration pursuant to this
Section 4.1(d)(v) unless and to the extent set forth in the respective Award
Agreement issued pursuant to the Retention Programs.

 

(e) Company Share Cancellation and Conversion. The Series G Shares, Series F
Shares, Series E Shares, Series D Shares, Series C Shares, Series B Shares and
Series A Shares, are hereinafter collectively referred to as the “Preferred
Shares,” and together with the Company Common Shares are hereinafter
collectively referred to as the “Company Shares.” Each Company Share that is
directly owned by the Parent or the Company or any direct or indirect
wholly-owned subsidiary of the Parent or the Company, if any, or held in the
treasury of the Company shall by virtue of the Merger be automatically canceled
and retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefore; provided, however, that any Series G Share
that is owned by the Parent or any direct or indirect wholly-owned subsidiary of
the Parent will be converted into the right to receive a portion of the Merger
Consideration pursuant to this Section 4.1. Neither the Parent nor any direct or
indirect wholly-owned subsidiary of the Parent owns any Company Shares other
than (i) the Series F Shares and (ii) the Series E Shares and Series G Shares
which may be purchased after the date of this Agreement pursuant to the
co-funding provisions of the Master Agreement.

 

(f) Conversion of Company Shares. Each issued and outstanding Company Share
(other than (i) any Company Shares to be canceled in accordance with Section
4.1(e), and (ii) any Company Shares that are held by stockholders exercising
dissenters’ rights pursuant to Section 262 of the DGCL or Section 1300 of the
California General Corporation Law (“Dissenting Stockholders,” and such Company
Shares, the “Dissenting Shares”)) will be converted into the right to receive a
portion of the Merger Consideration pursuant to this Section 4.1. All Company
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, except as
otherwise set forth herein, cease to be outstanding, be canceled and retired and
cease to exist, and each holder of a certificate representing any such Company
Shares (a “Company Certificate”) shall thereafter cease to have any rights with
respect to such Company Shares, except its right to receive the respective
portion of the Merger Consideration for such Company Shares upon the surrender
of such certificate in accordance with Section 4.2.

 

(g) Solely for purposes of illustration, and without any expectation or
intention that the assumed facts are or will bear any relation to the actual
facts, included on Schedule 4.1(g) are example determinations of the payments of
Merger Consideration under certain assumed fact patterns set forth therein.

 

4.2 Exchange and Payment Procedures.

 

(a) Share Exchange. As soon as practicable after the Closing, each holder of
Company Shares shall surrender all Company Certificates held by such party. At
or as soon as practicable after the Effective Time, the Parent shall make
available, and each holder of

 

14

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Company Shares (other than the ZOLL Non-Converted Shares (each, a “Company
Stockholder”) will be entitled to receive, upon surrender to the Parent of one
or more certificates representing Company Shares for cancellation, the Initial
Merger Consideration that such Company Stockholder is entitled to receive
pursuant to Section 4.1 hereof. The certificates representing the Parent Common
Stock (the “Parent Certificates”) that each Company Stockholder may be entitled
to receive pursuant to the Merger as Initial Parent Stock Consideration shall be
deemed to have been issued at the Effective Time. The Parent shall make
available, and each Company Stockholder will be entitled to receive, payments of
Contingent Merger Consideration in accordance with Section 4.1 hereof. If
payment of the Merger Consideration is to be made to a person or entity other
than the person or entity in whose name the certificate so surrendered is
registered (the “Payment Representative”), it shall be a condition of payment
that (i) either the certificate so surrendered be properly endorsed or otherwise
in proper form for transfer, or (ii) the Payment Representative shall deliver to
the Parent such other documentation of such transfer in form satisfactory to the
Parent, and (iii) that the Payment Representative requesting such payment shall
have paid any transfer or other taxes required by reason of the payment of the
Merger Consideration to a person or entity other than the registered holder of
such certificate surrendered or shall have established to the satisfaction of
the Parent that such Taxes have been paid or are not applicable.

 

(b) Interest. No interest shall accrue on the Merger Consideration. Neither ZOLL
nor any other party hereto shall be liable to any Company Stockholder for any
amount delivered to a public official pursuant to applicable abandoned property,
escheat or similar law.

 

(c) Payment. After the Effective Time, any Company Stockholder who has not
theretofore complied with this Section 4 shall thereafter look only to the
Surviving Corporation for payment to which it is otherwise entitled.

 

(d) Stock Transfer Books. After the Effective Time, there shall be no transfers
of any Company Shares on the stock transfer books of the Company. If, after the
Effective Time, Company Certificates are presented to the Surviving Corporation,
they shall be canceled in accordance with this Section 4.

 

(e) Lost Certificates. If any certificate representing Company Shares is lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Company
Stockholder or the Payment Representative claiming such certificate to be lost,
stolen or destroyed, upon the execution of an indemnity agreement reasonably
satisfactory to the Parent as indemnity against any claim made against the
Parent, the Parent shall issue in exchange for such lost, stolen or destroyed
certificate, the Merger Consideration pursuant to this Agreement.

 

4.3 Dissenting Stock. Notwithstanding anything in this Agreement to the
contrary, any Company Stockholder that is entitled to demand, and properly
demands appraisal of its Company Shares pursuant to, and complies in all
respects with Section 262 of the DGCL or Section 1300 of the California General
Corporation Law shall not be converted into the right to receive the Merger
Consideration, but instead shall be entitled to such rights (but only such
rights) as are granted by the applicable Section. If any Dissenting Stockholder
shall fail to perfect or shall have effectively waived, withdrawn or lost the
right to dissent, the Company

 

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Shares held by such Dissenting Stockholder shall thereupon be treated as though
such Company Shares had been converted into the Merger Consideration pursuant to
Section 4.1.

 

4.4 Treatment of Restricted Stock. As of the Effective Time, all outstanding
Preferred Shares or Company Common Shares subject to restricted stock awards
granted by the Company pursuant to its stock option plans or otherwise (the
“Restricted Stock”), which are unvested or not exercisable, shall, prior to the
Effective Time, immediately vest and the restrictions associated therewith shall
automatically be waived by virtue of the Merger. The Board of Directors of the
Company (or, if appropriate, a committee thereof) shall adopt such resolutions
and take such actions as may be required to cause each share of Restricted Stock
outstanding prior to the Effective Time to immediately vest and the restrictions
associated therewith to automatically be waived by virtue of the Merger in
accordance with this Section 4.4.

 

4.5 Treatment of Stock Options. As of the Effective Time, all outstanding
options to purchase Company Common Shares granted by the Company pursuant to its
stock option plans or otherwise (the “Options”), whether vested or unvested,
whether or not exercisable, shall by virtue of the Merger be automatically
canceled and retired and shall cease to exist and no consideration shall be
delivered or deliverable in exchange therefore, as provided by the terms of such
Options. The Board of Directors of the Company (or, if appropriate, a committee
thereof) shall adopt such resolutions and take such actions as may be required
to cause each Option outstanding at the Effective Time to be terminated in
accordance with this Section 4.5.

 

4.6 Treatment of Warrants. As of the Effective Time, all outstanding warrants to
purchase Preferred Shares or Company Common Shares (the “Warrants”), whether
vested or unvested, whether or not exercisable, shall by virtue of the Merger be
automatically canceled and retired and shall cease to exist and no consideration
shall be delivered or deliverable in exchange therefore. The Board of Directors
of the Company (or, if appropriate, a committee thereof) shall adopt such
resolutions and take such actions as may be required to cause each Warrant
outstanding at the Effective Time to be terminated in accordance with this
Section 4.6.

 

4.7 Limitation on Parent Common Stock. Notwithstanding anything to the contrary
in this Section 4, in no event shall the Parent deliver Merger Consideration to
the Stockholders in the form of Parent Common Stock if the number of shares of
Parent Common Stock to be issued to the Stockholders is or will be equal to or
in excess of 20% of the total number of shares of Parent Common Stock
outstanding before such issuance. In such event, the Parent shall deliver, in
lieu of such excess shares of Parent Common Stock, cash in an amount equal to
the cash payment obligation that otherwise would have been satisfied through the
payment of such excess shares. The parties acknowledge that at the time of the
execution of this Agreement and Plan of Merger, there are fewer than 35
non-accredited (as such term is understood under Regulation D promulgated under
the Securities Act of 1933, as amended) shareholders of the Company. In the
period between the execution of this Agreement and Plan of Merger and the
Effective Time, holders of Company Options may exercise such Options and become
stockholders of the Company. In the event that at the Effective Time there are
more than 35 non-accredited stockholders of the Company, any non-accredited
stockholder in excess of 35 will not be entitled to receive any Merger
Consideration in the form of Parent Common Stock unless such shares are
registered under the Securities Act of 1933, as amended or issuance is otherwise
permitted under

 

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Regulation D. The non-accredited stockholders who will not be entitled to
receive the Parent Common Stock will be those parties selected by the
Stockholders’ Representative, or if the Stockholders’ Representative has not
identified a sufficient number of non-accredited stockholders, those who have
become stockholders after there are existing 35 non-accredited stockholders. In
lieu of the Parent Common Stock that would otherwise have been issued to such
non-accredited stockholders except for the prohibition in the preceding two
sentences, such stockholders will be given an amount of cash equal to the fair
market value of the shares of Parent Common Stock that would otherwise have been
issued, with such value measured as of the date which is three days prior to the
date on which the shares of Parent Common Stock issuable under the provisions of
Section 4.1 are mailed to the other stockholders of the Company.

 

4.8 Tax Treatment of Deferred Payments. Notwithstanding Section 4.2(b), any
payment of Contingent Clinical Milestone Consideration under Section 4.1(b) or
Contingent Revenue Milestone Consideration under Section 4.1(c) shall be subject
to the provisions of Section 483 and/or Section 1271 et. seq. of the Internal
Revenue Code of 1986, as amended (the “Code”), including but not limited to Code
Section 1274, as appropriate. The parties will cooperate with each other and
make whatever elections are permitted under applicable income tax law so that
any imputed interest is the smallest amount permitted under the Code. For these
purposes, and in accordance with Treasury Regulations Section 1.1274-4(a)(1), if
Section 1274 applies, the parties will determine the amount of such imputed
interest by selecting the lowest applicable federal rate in effect during (i)
the three-month period ending with the month in which this Agreement is
executed, or (ii) the three-month period ending with the month in which the
Closing occurs. The parties agree to file such Tax Returns (as defined in
Section 7.2(j)) as they may file in respect of the transactions contemplated by
this Agreement consistent with the characterization of such transactions as set
forth herein.

 

4.9 Tax Withholding. Notwithstanding the provisions of Section 4.8, any payments
to directors, officers, employees or Stockholders of the Company properly
treated as compensation for Tax purposes shall be so treated and the Company
shall make all required withholdings of Taxes as required by law out of any such
payments.

 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

5.1 Making of Representations and Warranties. As a material inducement to each
of the Parent and MergerSub to enter into this Agreement and consummate the
transactions contemplated hereby, the Company hereby makes to the Parent and
MergerSub the representations and warranties contained in this Section 5. The
Parent and the Surviving Corporation shall have a right of indemnity from the
Stockholders (other than the Parent and/or MergerSub), as expressly set forth in
Section 13, with respect to any breach by the Company of the Company’s
representations or warranties set forth in this Section 5. The Stockholders
shall not have any right of indemnity or contribution from the Company, the
Parent or the Surviving Corporation with respect to the breach of any
representation or warranty hereunder.

 

5.2 Restatement of Master Agreement. Each of the representations and warranties
made by the Company in Section 2 of the Master Agreement of which this Agreement
is an exhibit is, subject to the disclosures set forth in the Disclosure
Schedule attached as Schedule A to the Master Agreement (as defined in the
Master Agreement), hereby incorporated by reference

 

17

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into this Section 5 and shall be treated for all purposes as if set forth in
their entirety herein, and each representation or warranty made by the Company
to the Investor therein is hereby deemed to be made by the Company to the Parent
and MergerSub herein.

 

5.3 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.

 

5.4 Required Voting Percentage. The stockholders of the Company who have
executed that certain Shareholder Master Agreement by and among the Parent,
MergerSub and the stockholders of the Company (the “Shareholder Master
Agreement”) and who have approved this Agreement represent one hundred percent
(100%) of the Series E Preferred Stock, Series D Preferred Stock and Series B
Preferred Stock, ninety five percent (95%) of the Series A Preferred Stock of
the Company, at least a majority of the Series C Preferred Stock of the Company,
and at least eighty percent (80%) of the Common Stock of the Company.

 

SECTION 6. INTENTIONALLY OMITTED

 

SECTION 7. COVENANTS OF THE COMPANY

 

7.1 Making of Covenants and Agreements. The Company hereby makes the covenants
and agreements set forth in this Section 7. The Parent and the Surviving
Corporation shall have a right of indemnity from the Stockholders (other than
the Parent and/or MergerSub), as expressly set forth in Section 13, with respect
to any breach by the Company of the Company’s covenants and agreements set forth
in this Section 7. The Stockholders shall not have any right of indemnity or
contribution from the Company, the Parent or the Surviving Corporation with
respect to the breach of any covenant or agreement hereunder.

 

7.2 Conduct of Business. During the period between the date of this Agreement
and the date which is the earlier to occur of (i) the Effective Time and (ii)
the date on which this Agreement is terminated pursuant to Section 12 (the
“Interim Period”), the Company will not, unless it has received unanimous
authorization from its Board of Directors:

 

(a) Enter into, or permit any subsidiary to enter into, any transaction with any
stockholder, officer or director, or any relative or affiliate of the foregoing,
other than any transaction in accordance with Section 3.6 of the Master
Agreement or as allowed pursuant to Section 7.2(i) hereof;

 

(b) Create, incur or assume any indebtedness for borrowed money;

 

(c) Conduct its business outside the ordinary course;

 

(d) Make any purchase, sale or disposition of any asset or property other than
in the ordinary course of business, or mortgage, pledge, subject to a lien or
otherwise encumber any of its properties or assets other than in the ordinary
course of business;

 

(e) Incur any contingent liability as a guarantor or otherwise with respect to
the obligations of others;

 

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(f) Declare, set aside or pay any dividend, make any other distribution in
respect of its capital stock or make any direct or indirect redemption, purchase
or other acquisition of its stock other than for the repurchase of Common Stock
of the Company issued to employees, directors or consultants pursuant to
agreements with such persons that permit the Company to repurchase such shares
at cost, provided that the aggregate repurchase price of all such stock does not
exceed $10,000;

 

(g) Prepay any loans (if any) from its stockholders, officers or directors or
make any changes in its borrowing arrangements;

 

(h) Amend, alter or repeal the Certificate of Incorporation or the Company’s
Bylaws or waive any provision thereof;

 

(i) Engage in any transaction with any affiliate, including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such affiliate or, to the knowledge of the
Company, any corporation, partnership, limited liability company, trust or other
entity in which any such affiliate has a substantial interest or is an officer,
director, partner, member or trustee, except for transactions involving less
than $50,000 that are on terms no less favorable to the Company then would exist
in negotiated arms’ length transaction with third parties and except for
commercial transactions with Dr. Thomas Fogarty or his Affiliates (as defined in
Section 7.9) that are on terms not less favorable than could be obtained from
third parties; or

 

(j) Make or change any election relating to Taxes, adopt or change any Tax
accounting method or period (except as required under the Code), enter into any
closing agreement, settle any Tax claim or assessment relating to the Company,
surrender any right to claim a refund of Taxes, consent to any extension or
waiver of the limitation period applicable to any Tax claim or assessment
relating to the Company, if such election, adoption, change, agreement,
settlement, surrender, consent or other action would have a material impact on
the Company or the Parent, provided that the member of the Board of Directors
elected by the holder of Series F Preferred Stock of the Company shall not
unreasonably withhold or delay approval of matters arising under this Section
7.2(j). For purposes of this Agreement, “Tax,” “Taxes” or “Tax Return” shall
have the meanings given those terms under Section 2.17 of the Master Agreement.

 

7.3 Preservation of Business. The Company shall use its commercially reasonable
efforts to keep intact its business organization, to keep available its present
officers and employees and to preserve the goodwill of all suppliers, customers,
independent contractors and others having business relations with it.

 

7.4 Authorization from Others. Prior to the Closing Date, the Company will use
its commercially reasonable efforts to obtain all consents, approvals, and
authorizations necessary or advisable to consummate the transactions
contemplated by this Agreement or required by the terms of any lease, license,
contract or other agreement by which the Company is bound.

 

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7.5 Notice of Default. Promptly upon the occurrence of, or promptly upon the
Company becoming aware of the impending or threatened occurrence of, any event
which would cause or constitute a breach or default, or would have caused or
constituted a breach or default had such event occurred or been known to the
Company prior to the date hereof, of any of the representations, warranties or
covenants of the Company contained in or referred to in this Agreement or in any
Schedule or Exhibit referred to in this Agreement, the Company shall give
detailed written notice thereof to the Parent and the Company shall use its
commercially reasonable efforts to prevent or promptly remedy the same.

 

7.6 Consummation of Agreement. The Company shall use its commercially reasonable
efforts to perform and fulfill all conditions and obligations on its part to be
performed and fulfilled by the Company under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out. To this
end, the Company will obtain prior to the Closing all necessary authorizations
or approvals of its stockholders and Board of Directors.

 

7.7 Parent Access to the Company. Prior to the Closing, the Parent and its
authorized representatives shall have reasonable access to all the Company’s
properties, assets, records, licenses, Tax Returns, contracts and documents.

 

7.8 Cooperation of the Company. The Company shall cooperate with all reasonable
requests of ZOLL and ZOLL’s counsel in connection with the consummation of the
transactions contemplated hereby.

 

7.9 No Solicitation of Other Offers. From the date hereof and continuing until
(and including) June 30, 2004 (such period, the “Exclusivity Period”), neither
the Company, nor anyone (including without limitation financial advisors or
other agents) acting, directly or indirectly on behalf of the Company, shall,
directly or indirectly, continue, initiate, solicit, encourage, respond to
(other than to decline interest) or participate in discussions or negotiations
with, or the submission of bids, offers or proposals by, or provide any
assistance to, or enter into any agreement with, any third party (other than
ZOLL, or its Affiliates) concerning any acquisition of stock or assets (other
than in the ordinary course of business), merger, consolidation or other
transaction that would result in the transfer to any such person of any material
assets of the Company (any such transaction, a “Transaction”). The Company
agrees to notify ZOLL immediately if any bids, offers or proposal for a
Transaction are received, or if any negotiations for a Transaction are sought.
Further, the Company will not, except as required by law, disclose any
information not customarily disclosed to any person or entity (other than ZOLL
and its representatives) concerning the Company or afford any other person or
entity (other than ZOLL and its representatives) access to any of the tangible
or intangible assets or goodwill of the Company, including without limitation,
personnel, properties, books or records. As used herein the term “Affiliate”
shall mean with respect to any person, any other person that directly or
indirectly controls or is controlled by or is under common control with such
first person and shall include, without limitation, officers, directors,
employees, agents, partners, advisors, parent entities and subsidiary entities.

 

7.10 Confidentiality. Each party to this Agreement agrees that each of them and
their respective officers, directors, agents and representatives will hold in
strict confidence, and will

 

20

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not use, any confidential or proprietary data or information obtained from the
other parties to this Agreement with respect to its business or financial
condition except for the purpose of evaluating, negotiating and completing the
transaction contemplated hereby. Information generally known in the Parent’s and
the Company’s industry or which has been disclosed to a party to this Agreement
by third parties which have a right to do so shall not be deemed confidential or
proprietary information for purposes of this Agreement. If the transaction
contemplated by this Agreement is not consummated, each party to this Agreement
will return to the party that supplied or disclosed the data and information (or
certify that they have destroyed) all copies of such data and information,
including but not limited to financial information, customer lists, business and
corporate records, worksheets, test reports, Tax Returns, lists, memoranda, and
other documents prepared by or made available in connection with the
transaction. This Section 7.10 shall be subject to the provisions of Section
14.12.

 

7.11 Regulatory Matters. If required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the “HSR Act”), and if the appropriate
filing of a Pre-Merger Notification and Report Form pursuant to the HSR Act has
not been filed prior to the date hereof, each party hereto agrees to make an
appropriate filing of a Pre-Merger Notification and Report Form with respect to
the transactions contemplated by this Agreement within five (5) business days
after the date hereof and to supply promptly any additional information and
documentary material that may be requested pursuant to the HSR Act. The parties
hereto will not take any action that will have the effect of delaying, impairing
or impeding the receipt of any required approvals and shall promptly respond to
any requests for additional information from any governmental authority or
filings in respect thereof. The Parent and the Stockholders shall each share
equally the payment of all filing and related fees in connection with any such
filings which must be made by any of the parties under the HSR Act.

 

7.12 Delivery of Financial Statements. The Company shall deliver to the Parent,
no later than December 31, 2003, audited financial statements as at, and for the
twelve (12) month period ended, December 31, 2001. The Company shall deliver to
the Parent, no later than December 31, 2003, audited financial statements as at,
and for the twelve (12) month period ended, December 31, 2002. The Company shall
deliver to the Parent, no later than April 30, 2004, audited financial
statements as at, and for the twelve (12) month period ended, December 31, 2003.
The Company shall deliver to the Parent, no later than forty-five (45) days
after the end of each fiscal quarter, unaudited financial statements as at, and
for the three (3) month period then ended. The Company shall promptly deliver to
the Parent any financial statements or financial or other information required
to be included in any Current Report on Form 8-K that the Parent intends to file
with the Securities and Exchange Commission (the “SEC”) in connection with the
transactions contemplated by this Agreement.

 

7.13 Supplements to Schedules. Prior to the Closing Date, the Company may
supplement or amend the Disclosure Schedule required by Article V with respect
to any matter hereafter arising which, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in such
schedule. No supplement or amendment of the Schedule made pursuant to this
Section 7.13 shall be deemed to cure any breach of any representation or
warranty made in this Agreement or to satisfy any Closing condition unless
Parent and MergerSub agree thereto in writing.

 

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7.14 Officers’ and Directors’ Insurance. Prior to the Effective Time, the
Company shall purchase an extended reporting period endorsement (“Reporting Tail
Coverage”) under the Company’s existing directors’ and officers’ liability
insurance coverage for the Company’s directors and officers in a form acceptable
to the Company which shall provide such directors and officers with coverage for
the standard term following the Effective Time of not less than the existing
coverage under, and have other terms not materially less favorable to, the
insured persons than the directors’ and officers’ liability insurance coverage
presently maintained by the Company; provided, however, than in any event the
total aggregate cost of such Reporting Tail Coverage shall not exceed $40,000
(the “Maximum Amount”); and provided, further, that if such coverage cannot be
obtained for such cost, the Company will maintain, for such standard term, the
maximum amount of comparable coverage as shall be available for the Maximum
Amount on such terms.

 

7.15 Intellectual Property. During the Interim Period, the Company shall
cooperate in good faith with the Parent in the prosecution, filing and
maintenance of all Company Patents (as defined in Section 2.9 of the Master
Agreement and incorporated herein by reference) and patent applications,
including, but not limited to, allowing Parent to review and comment on each
patent application and other material filing within a reasonable amount of time
prior to the filing of any such items with the United States Patent and
Trademark Office or any similar office or agency anywhere in the world and
considering in good faith the Parent’s comments.

 

SECTION 8. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGERSUB

 

8.1 Making of Representations and Warranties. As a material inducement to the
Company to enter into this Agreement and to the Company and the Stockholders to
consummate the transactions contemplated hereby, the Parent and MergerSub hereby
make the representations and warranties to the Company and the Stockholders
contained in this Section 8.

 

8.2 Organization, Good Standing and Qualification. The Parent and MergerSub are
each corporations duly organized, validly existing and in good standing under
the laws of the State of Massachusetts and Delaware, respectively, and have all
requisite corporate power and authority to carry on its respective business as
now conducted and as proposed to be conducted. The Parent and MergerSub are duly
qualified to transact business and are in good standing in each jurisdiction in
which the failure so to qualify would have a material adverse effect on the
assets, properties, financial condition, operating results, or business of the
Parent and MergerSub (as such business is presently conducted and as it is
proposed to be conducted) (a “ZOLL Material Adverse Effect”). MergerSub is a
newly formed entity and has no, and has never had any, operations or employees.

 

8.3 Authorization. All corporate action on the part of the Parent and MergerSub,
their respective officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, and each agreement,
document and instrument to be executed and delivered by ZOLL pursuant to this
Agreement (the “ZOLL Related Agreements”), and to carry out the transactions
contemplated hereby, has been taken or will be taken prior to the Closing, and
this Agreement and the ZOLL Related Agreements constitute valid and legally
binding obligations of ZOLL, enforceable in accordance with their terms.

 

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8.4 Consents. No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any person, entity or
federal, state or local governmental authority on the part of the Parent or
MergerSub is required in connection with the consummation of the transactions
contemplated by this Agreement, except for (i) notice filings under Regulation D
of the Securities Act and state “blue sky” laws, if applicable and (ii) the
notification requirements under the HSR Act, if applicable.

 

8.5 Finder’s Fee. Except as set forth on the disclosure schedules attached
hereto as Schedule C (the “Parent Disclosure Schedule”), ZOLL has not 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 Filings with the Securities and Exchange Commission.

 

(a) The Parent has made available to the Company a true, correct and complete
copy of its Annual Report on Form 10-K for the year ended September 30, 2002 and
Quarterly Report on Form 10-Q for the quarters ended December 31, 2002 and March
31, 2003 (collectively, the “Parent SEC Reports”). The Parent SEC Reports have
been timely filed pursuant to the Exchange Act of 1934, as amended (the
“Exchange Act”).

 

(b) The Parent SEC Reports complied as to form in all material respects with the
requirements of the Exchange Act in effect on the date thereof. The Parent SEC
Reports, when filed pursuant to the Exchange Act, did not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

 

(c) Each of the Parent’s financial statements (including the related notes)
included in the Parent SEC Reports presents fairly, in all material respects,
the consolidated financial position and consolidated results of operations and
cash flows of the Parent as of the respective dates or for the respective
periods set forth therein, all in conformity with United States generally
accepted accounting principles consistently applied during the periods involved
except as otherwise noted therein, and subject, in the case of any unaudited
interim financial statements included therein, to normal year-end adjustments
which were not or are not expected to be material in amount and to absence of
complete footnotes.

 

8.7 Stockholder Approvals. No consent or approval of the stockholders of the
Parent is required or necessary for the Parent to enter into this Agreement or
the ZOLL Related Agreements or to consummate the transactions contemplated
hereby or thereby.

 

8.8 Absence of Changes. From the date of the Parent’s most-recently filed annual
or quarterly report on Form 10-K or Form 10-Q, respectively, neither the Parent
nor MergerSub has suffered any change (other than a change reported in a
publicly-issued press release or in a current report on Form 8-K) that has
resulted, or could reasonably be expected to result, in a ZOLL Material Adverse
Effect.

 

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SECTION 9. INTENTIONALLY OMITTED.

 

SECTION 10. CONDITIONS TO CLOSING.

 

10.1 Conditions to Parent’s and MergerSub’s Obligations to Close. The
obligations of the Parent and MergerSub to consummate the transactions
contemplated by this Agreement are subject to the fulfillment or waiver prior to
the Closing of the following conditions precedent and the delivery by the
Company, to the Parent of the following duly executed agreements, documents,
certificates, instruments and other items:

 

(a) Each of the representations and warranties of the Company contained in
Section 5 shall be true and correct in all material respects (except for such
representations and warranties that are qualified by their terms as to knowledge
or materiality, which representations and warranties as so qualified shall be
true in all respects) as of the date of this Agreement and as of the Closing
Date (except for any representation or warranty which speaks as of a specific
date, which shall be measured as of such specific date in lieu of such other
dates) as though made on and as of the Closing; and the Company shall, on or
before the Closing, have performed in all material respects all of its
obligations hereunder which by the terms hereof are to be performed on or before
the Closing.

 

(b) There shall have been no material adverse change in the financial condition,
properties, assets, liabilities, business or operations of the Company since the
date hereof, whether or not in the ordinary course of business.

 

(c) The Company shall have delivered copies of all third party consents, waivers
or approvals required with respect to the transactions contemplated hereby.

 

(d) The Company shall have delivered to the Parent a certificate of the an
officer of the Company dated as of the Closing to the effect that the statements
set forth in paragraph (a), (b) and (c) above in this Section 10.1 are true and
correct.

 

(e) Any waiting period (and any extension thereof) under the HSR Act applicable
to the transactions to be consummated at the Closing shall have expired or been
terminated;

 

(f) The Parent shall have exercised its option to purchase the Company pursuant
to the Merger in accordance with Section 6 of the Master Agreement;

 

(g) If pursuant to Section 11.3(j) below, the Parent shall have elected upon the
advice of counsel to file a Form S-4 (as defined below), such Form S-4 shall
have been declared effective by the SEC and shall remain effective; and

 

(h) The Certificate of Merger shall have been filed with the Secretary of State
of the State of Delaware and the Merger shall be effective.

 

The Parent and MergerSub may waive any condition specified in this Section 10.1
if they execute a writing so stating on or prior to the Closing and such waiver
shall not be considered a waiver of any other provision in this Agreement unless
the writing specifically so states.

 

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10.2 Conditions to Company’s Obligations to Close. If pursuant to Section
11.3(j) below, the Parent shall have elected upon the advice of counsel to file
a Form S-4, the obligation of the Company to consummate the transactions
contemplated by this Agreement are subject to such Form S-4 being declared
effective by the SEC and remaining effective, or the waiver prior to the Closing
of such condition precedent. The Company may waive any condition specified in
this Section 10.2 if it executes a writing so stating on or prior to the Closing
and such waiver shall not be considered a waiver of any other provision in this
Agreement unless the writing specifically so states.

 

SECTION 11. RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING.

 

11.1 General Rights And Obligations. 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 for a period
ending on the earlier of (i) one year following the Merger Closing (or two years
following the Merger Closing in the case of the representation in Section 2.9)
and (ii) six months following the termination of this Agreement, regardless of
any investigation and shall not merge into the performance of any obligation by
any party hereto. Notwithstanding the foregoing, and only in the event the
Merger Closing has occurred, claims based on fraud or intentional
misrepresentation, and claims based on the representations in Sections 2.2(c),
2.4, 2.15 and 2.17 of the Master Agreement incorporated by reference herein
shall survive the Closing until the expiration of the applicable statute of
limitations and shall not merge in the performance of any obligation by any
party hereto.

 

11.2 Tax Matters. ZOLL, the Company and the Stockholders agree, upon request, to
use their commercially reasonable efforts to obtain any certificate (including
under Section 897 and 1445 of the Code) or other document from any governmental
authority or any other person as may be reasonably necessary to mitigate, reduce
or eliminate any Tax that could be imposed with respect to, or as a result of,
the transactions contemplated hereby.

 

11.3 Registration of Parent Common Stock.

 

(a) Within thirty (30) calendar days after the Closing Date, the Parent shall
file with the SEC, a registration statement on Form S-3 (or any successor short
form registration involving a similar amount of disclosure; or if then
ineligible to use any such form, then any other available form of registration
statement, the “Initial Registration Statement”) for a public offering of all
the Parent Common Stock comprising the Initial Parent Stock Consideration then
outstanding and held by the former Company Stockholders to be made on a
continuous basis pursuant to Rule 415 of the Securities Act; and which may also
include any contingent shares of Parent Common Stock which may be issued to the
former Company Stockholders in connection with the payment of Contingent
Clinical Milestone Consideration or Contingent Revenue Milestone Consideration.
Within thirty (30) calendar days after the date of each issuance of shares of
Parent Common Stock comprising the AHA Abstract Stock Consideration, the Major
Medical Journal Stock Consideration, the Additional Major Medical Journal Stock
Consideration, the 2004 Abstracts Stock Consideration, the FY 2005 Revenue
Milestone Stock Consideration, the FY 2006 Revenue Milestone Stock
Consideration, or the FY 2007 Revenue

 

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Milestone Stock Consideration, the Parent shall file with the SEC, a
registration statement on Form S-3 (or any successor short form registration
involving a similar amount of disclosure; or if then ineligible to use any such
form, then any other available form of registration statement (each, an
“Additional Registration Statement” and together with the Initial Registration
Statement, the “Registration Statements”) for a public offering of all such
shares of Parent Common Stock then outstanding and held by the former Company
Stockholders to be made on a continuous basis pursuant to Rule 415 of the
Securities Act, except to the extent that such contingent shares of Parent
Common Stock have previously been registered under the Initial Registration
Statement. The Parent will use its commercially reasonable efforts to: (i) cause
the Initial Registration Statement and any Additional Registration Statement to
become effective (subject to review of such Registration Statements by the SEC)
within ninety (90) calendar days after its date of filing, and to remain
continuously effective until the earlier of (A) two years after the Closing
Date, in the case of the Initial Registration Statement, or two years after the
applicable date of issuance, in the case of an Additional Registration
Statement, or (B) such time as all of the Parent Common Stock held by the former
Company Stockholders may be sold pursuant to Rule 144 promulgated under the
Securities Act on a single day; (ii) file such amendments or supplements as may
be necessary so that the prospectus contained in the Initial Registration
Statement or any Additional Registration Statement may be delivered by any
selling shareholder to purchasers of the Parent Common Stock in accordance with
applicable law; and (iii) effect all such registrations, qualifications and
compliances (including, without limitation, obtaining appropriate qualification
under applicable state securities or “blue sky” laws and compliance with any
other applicable governmental requirements or regulations) as any selling
stockholder may reasonably request and that would permit or facilitate the sale
of his, her or its shares of Parent Common Stock; provided, however, that the
Parent will not be required to (i) qualify as a foreign corporation or as a
dealer in securities in any jurisdiction where it is not otherwise qualified but
for this Agreement or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject. Upon written notice to the selling stockholders listed
therein, the Parent may, not more often than two (2) times during any fiscal
year, suspend use of the Registration Statement for a period of up to thirty
(30) calendar days (the “Suspension Right”); provided, that the Parent shall not
be entitled to invoke the Suspension Right unless such right or an equivalent
restriction has been imposed on, and is then applicable to, all of the Parent’s
executive officers, directors and other holders of Parent Common Stock that are
registered for resale under the Securities Act.

 

(b) As soon as practicable following the effectiveness of the Initial
Registration Statement and each Additional Registration Statement, the Parent
will furnish to each former Company Stockholder such number of copies of the
prospectus contained in the applicable Registration Statement and any amendment
or supplement thereto as such holder may reasonably request in order to
facilitate the offering and sale of his, her or its shares of Parent Common
Stock.

 

(c) Following the date on which the Initial Registration Statement or an
Additional Registration Statement is first declared effective, the holder of the
shares of Parent Common Stock subject to such Registration Statement will be
permitted to offer and sell such shares in the manner described in such
Registration Statement, provided that such Registration Statement remains
effective and has not been suspended.

 

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(d) The Company and the former Company Stockholders covenant and agree that they
shall provide to the Parent on a timely basis such consents, representations and
information and execute such documents as may reasonably be required by the
Parent in connection with the Initial Registration Statement and any Additional
Registration Statement.

 

(e) The Parent shall pay all expenses of registration of the Parent Common Stock
pursuant to this Section including, without limitation, printing expenses
(including a reasonable number of prospectuses for circulation by the selling
stockholders), legal fees and disbursements of counsel for the Parent, “blue
sky” expenses, accounting fees and filing fees, but shall not include
underwriting or brokerage commissions or similar charges, or any legal fees and
disbursements of counsel for the selling stockholders.

 

(f) To the extent permitted by law, the Parent will indemnify and hold harmless
each former Company Stockholder, any underwriter (as defined in the Securities
Act) for such stockholder, its officers, directors, stockholders or partners and
each person, if any, who controls such stockholder within the meaning of the
Securities Act or Exchange Act, against any costs or expenses (including
attorney’s fees), judgments, fines, losses, claims, damages, liabilities or
amounts paid in settlement, joint or several, to which any of them may become
subject under the Securities Act, the Exchange Act, other federal or state law
or otherwise, insofar as such costs or expenses (including attorney’s fees),
judgments, fines, losses, claims, damages liabilities or amounts paid in
settlement (or actions in respect thereof) arise out of or are based upon any of
the following statements, omissions or violations (collectively, a “Violation”):
(i) any untrue or alleged untrue statement of any material fact contained or
expressly incorporated by reference in any Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendment or
supplement thereto; (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and (iii) any violation or alleged violation by the
Parent of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law; and the Parent will reimburse each such former Company
Stockholder (and its officers, directors, stockholders or partners), underwriter
and controlling person for any legal or other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this Section 11.3(f) shall not apply to amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Parent (which consent shall not be
unreasonably withheld) nor shall the Parent be liable in any such case for any
such loss, claim, damage, liability or action to the extent that it arises out
of or is based upon a Violation which occurs in reliance upon and in conformity
with written information furnished expressly for use in connection with the
Registration Statement by any such former Company Stockholder or any person
controlling such stockholder.

 

(g) To the extent permitted by law, each selling stockholder will, severally and
not jointly, indemnify and hold harmless the Parent, its directors, its officers
who have signed the applicable Registration Statement and each person, if any,
who controls the Parent within the meaning of the Securities Act, any other
former Company Stockholder selling securities pursuant to the applicable
Registration Statement and any controlling person of such other stockholder,
against any losses, claims, damages or liabilities (joint or several) to which

 

27

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any of the foregoing persons may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
Violation, in each case to the extent, but only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished by such stockholder expressly for use in the applicable Registration
Statement; and each such stockholder will reimburse any legal or other expenses
reasonably incurred by the Parent or any such director, officer and controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action. It is agreed that the indemnity agreement contained
in this Section 11.3(g) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the indemnifying party (which consent shall not be
unreasonably withheld). The aggregate indemnification liability of each selling
stockholder under this Section 11.3(g) shall not exceed the net proceeds
received by such stockholder in connection with his, her or its sale of shares
of Parent Common Stock pursuant to the applicable Registration Statement.

 

(h) If the indemnification provided for in Sections 11.3(f) and 11.3(g) hereof
is unavailable to a person entitled to indemnification hereunder, then each
person that would have been an indemnifying party hereunder will, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified person for which indemnification is provided herein in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and such indemnified party, respectively, in connection with the
statements or omissions which resulted in the costs or expenses (including
attorney’s fees), judgments, fines, losses, claims, damages, liabilities or
amounts paid in settlement underlying such indemnification obligations, as well
as any other relevant equitable considerations. Relative fault will be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the indemnifying party or
such indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Parent and the former Company Stockholders agree that it would not be just
and equitable if contribution pursuant to this Section 11.3(h) were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section
11.3(h). No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.

 

(i) Promptly after receipt by a party indemnified under this Section 11.3 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 11.3, notify the indemnifying party in writing of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however that if the defendants
in any such action include both the indemnified party and the indemnifying party
and, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of the indemnified party and the
indemnifying party exists, the indemnified party or parties shall have the right
to select one separate law firm, at the indemnifying party’s or parties’
expense, to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such

 

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indemnified party or parties. The failure to notify any indemnifying party
promptly of the commencement of any such action, shall not relieve such
indemnifying party of any liability to the indemnified party under this Section
11.3, except to the extent that such indemnifying party is actually prejudiced
thereby. No indemnifying party, in the defense of any such claim or litigation,
shall (except with the consent of each indemnified party) consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation. Each indemnified party shall furnish such information regarding
itself or the claim in question as an indemnifying party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim or litigation resulting therefrom.

 

(j) Upon the advice of counsel of the Parent that the offer and sale of Parent
Common Stock to the Stockholders in connection with the Initial Merger
Consideration, the Contingent Clinical Milestone Consideration, or the
Contingent Revenue Milestone Consideration, will not qualify for a private
placement exemption from the Securities Act, the Parent may elect to file with
the SEC, a registration statement on Form S-4 (such registration statement,
together with any amendments or supplements thereto, the “Form S-4”), and such
Form S-4 shall be declared effective prior to the applicable issuance and
distribution of Parent Common Stock to the Stockholders. The Parent agrees to
use its commercially reasonable efforts to cause such Form S-4 registration
statement to be declared effective at the time the Parent Common Stock
registered thereby is otherwise payable to the Stockholders under this
Agreement.

 

11.4 Nasdaq National Market Listing. The Parent agrees to authorize for listing
on the Nasdaq National Market, (i) as of the Effective Time, the Parent Common
Stock issued on the Closing Date, and (ii) such additional shares of Parent
Common Stock as of the issuance of such Parent Common Stock in connection with
the occurrence of certain events described in this Agreement.

 

11.5 Company Stockholder Documents. The Company shall use its commercially
reasonable efforts to obtain and deliver the following to the Parent promptly
following the date of this Agreement and in any event prior to the date of any
distribution of the Initial Merger Consideration, the Contingent Clinical
Milestone Consideration, or the Contingent Revenue Milestone Consideration (each
in form and substance satisfactory to the Parent in its reasonable discretion):

 

(a) a questionnaire executed by each Stockholder as to personal wealth and
financial sophistication (each a “Company Stockholder Questionnaire”); and

 

(b) with respect to each Stockholder reasonably deemed by the Parent not to be
an “Accredited Investor” as defined in Rule 501 of Regulation D promulgated
pursuant to the Securities Act (“Regulation D”), either (i) a written
certification that such Stockholder has such knowledge and experience in
financial and business matters that such Stockholder is capable of evaluating
the merits and risks of a prospective investment in Parent Common Stock (within
the meaning of Rule 506 of Regulation D (each a “Sophistication Certification”)
or (ii) a written agreement (each a “Purchaser Representative Agreement”)
between such Stockholder and a

 

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purchaser representative (who shall make written certifications reasonably
satisfactory to the Parent that he or it is a purchaser representative within
the meaning of Regulation D) regarding the representation of such Stockholder in
connection with this Agreement and the transactions contemplated hereby,
together with such other representations and agreements pursuant to the
provisions of Regulation D as the Parent shall reasonably request.

 

The Company Stockholder Questionnaires, Sophistication Certifications and
Purchaser Representative Agreements are referred to herein together as the
“Company Stockholder Documents.”

 

11.6 Certain Employee Benefit Matters. In the event the First Merger is
consummated, employees of the Company at the Merger Closing will be provided
with employee benefits by the Merger Sub or the Parent which in the aggregate
are no less favorable to such employees than those provided from time to time by
the Parent to its similarly situated employees. If any employee of the Company
becomes a participant in any employee benefit plan, program, policy or
arrangement of the Parent, such employee shall be given credit for all service
prior to the Merger Closing with the Company to the extent permissible under
such plan, program, policy or arrangement.

 

SECTION 12. TERMINATION OF AGREEMENT

 

12.1 Termination. This Agreement may be terminated any time prior to the Closing
Date as follows:

 

(a) by mutual written consent of all of the Parent and the Company;

 

(b) by the Parent, at any time prior to the giving of the “Exercise Notice” as
provided in Section 6.1 of the Master Agreement, pursuant to written notice by
the Parent to the Company and the Stockholders’ Representative;

 

(c) by the Parent, at any time after the conclusion of the 60 day period
following receipt by the Company and the Stockholders’ Representative of the
Exercise Notice, if the Company has failed to satisfy all of the conditions to
closing in this Agreement (other than the conditions in Sections 10.1(g) or
10.1(e)) in such 60 day period (as the same may be extended by the Parent
following receipt of the Exercise Notice);

 

(d) by the Company, if the Parent has not provided written notice to the Company
or the Stockholders’ Representative prior to October 5, 2004 of its intention to
consummate the Merger;

 

(e) by the Company if the Parent has determined to register the Common Stock to
be delivered as Merger Consideration under this Agreement on Form S-4 and the
Parent has failed to use its commercially reasonable efforts to have such
registration statement declared effective within 120 days of delivery of the
Exercise Notice.

 

Notwithstanding anything herein to the contrary, the right to terminate this
Agreement under Section 12.1 shall not be available to any party to the extent
the failure of such party, respectively, to fulfill any of its obligations under
this Agreement has been the cause of, or

 

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resulted in, the failure of the Closing to occur on or before such date (as a
result, for example, of an action or failure to act causing a failure of a
condition precedent).

 

12.2 Effect of Termination. All obligations of the parties hereunder shall cease
upon any termination pursuant to Section 12.1; provided, however, that: (a) the
provisions of Section 11.1, this Section 12 and Sections 14.1, 14.9 and 14.10
shall survive any termination of this Agreement in any event; (b) nothing herein
shall relieve any party from any liability for a material error or omission in
any of its representations or warranties contained herein or a material failure
to comply with any of its covenants, conditions or agreements contained herein;
provided, however, that no party shall have any liability for any such material
error or omission or failure to comply other than for willful errors or
omissions or failure to comply; and (c) any party may proceed as further set
forth in Section 12.3 below.

 

12.3 Right to Proceed. Anything in this Agreement to the contrary
notwithstanding, if any of the conditions specified in Section 10.1 hereof have
not been satisfied, the Parent shall have the right to proceed with the
transactions contemplated hereby without waiving any of its rights hereunder,
and if any of the conditions specified in Section 10.2 hereof have not been
satisfied, the Company shall have the right to proceed with the transactions
contemplated hereby without waiving any of its or the Stockholders’ rights
hereunder.

 

SECTION 13. INDEMNIFICATION

 

13.1 Indemnification by Stockholders. In the event the Merger is consummated,
the Stockholders (other than the Parent and/or MergerSub), severally and not
jointly, agree to indemnify and hold harmless Parent and MergerSub and their
respective directors, officers, agents, affiliates and employees (each a “ZOLL
Indemnitee”) 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 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 in this Agreement, any Schedule (without giving effect to any
supplement or amendment to the Schedules) or Exhibit hereto, or in any
certificate delivered to satisfy a closing condition; and

 

(ii) Any breach of or default in performance of any of the covenants, agreements
or other undertakings of the Company;

 

13.2 Indemnification by ZOLL. ZOLL shall indemnify and hold harmless the
Stockholders (the “Company Indemnitee”) 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 in this Agreement, any Schedule or Exhibit hereto, or in any certificate
delivered to satisfy a closing condition; and

 

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(ii) Any breach of or default in performance of any of the covenants, agreements
or other undertakings of ZOLL.

 

13.3 Indemnification Procedures. An indemnified party may make claims for
indemnification hereunder by giving written notice thereof to the indemnifying
party within the period in which indemnification claims can be made hereunder.
If indemnification is sought for a claim or liability asserted by a third party,
the indemnified party shall also give written notice thereof to the indemnifying
party promptly after it receives notice of the claim or liability being
asserted, but the failure to do so shall not relieve the indemnifying party from
any liability except to the extent that it is prejudiced by the failure or delay
in giving such notice. In any case, such notice shall summarize the bases for
the claim for indemnification and any claim or liability being asserted by a
third party. Within twenty (20) days after receiving such notice the
indemnifying party shall give written notice to the indemnified party stating
whether it disputes the claim for indemnification and whether it will defend
against any third party claim or liability at its own cost and expense. If the
indemnifying party fails to give notice that it disputes an indemnification
claim within twenty (20) days after receipt of notice thereof, it shall be
deemed to have accepted and agreed to the claim, which shall become immediately
due and payable. The indemnifying party shall be entitled to direct the defense
against a third party claim or liability with counsel selected by it (subject to
the consent of the indemnified party, which consent shall not be unreasonably
withheld) as long as the indemnifying party is conducting a good faith and
diligent defense. The indemnified party shall at all times have the right to
fully participate in the defense of a third party claim or liability at its own
expense directly or through counsel; provided, however, that if the named
parties to the action or proceeding include both the indemnifying party and the
indemnified party and the indemnified party is advised that representation of
both parties by the same counsel would be inappropriate under applicable
standards of professional conduct, the indemnified party may engage separate
counsel at the expense of the indemnifying party. If no such notice of intent to
dispute and defend a third party claim or liability is given by the indemnifying
party, or if such good faith and diligent defense is not being or ceases to be
conducted by the indemnifying party, the indemnified party shall have the right,
at the expense of the indemnifying party, to undertake the defense of such claim
or liability (with counsel selected by the indemnified party), but shall not
compromise or settle it without the consent of the indemnifying party, which
consent will not be unreasonably withheld or delayed. If the third party claim
or liability is one that by its nature cannot be defended solely by the
indemnifying party, then the indemnified party shall make available such
information and assistance as the indemnifying party may reasonably request and
shall cooperate with the indemnifying party in such defense, at the expense of
the indemnifying party.

 

13.4 Limitations on Indemnification. No indemnification pursuant to Section 13.1
or Section 13.2 shall be payable unless the total of all claims for
indemnification pursuant to Section 13.1 or Section 13.2, as applicable, shall
exceed One Hundred Fifty Thousand Dollars ($150,000) in the aggregate, whereupon
the full amount of such claims shall be recoverable in accordance with the terms
hereof. The maximum amount that may be paid under Section 13.1 or Section 13.2
shall be limited to $15,000,000. All claims for indemnification pursuant to
rights under Section 13.1 or Section 13.2 must be made prior to the close of
business on the first anniversary of the Effective Time, other than claims for
indemnification arising under Section 2.9 of the Master Agreement and
incorporated herein, which claims must be made prior to the close of business on
the second anniversary of the Effective Time; provided, however, that these

 

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time limitations shall not apply with respect to claims involving fraud or
intentional misrepresentation, or claims arising under Sections 2.2(c), 2.4,
2.15 or 2.17 of the Master Agreement, which claims may be made until the
expiration of the applicable statute of limitations. Notwithstanding the
preceding sentence, if on or prior to the first anniversary of the Effective
Time (or second anniversary in the case of a claim arising under Section 2.9 of
the Master Agreement) a specific state of facts shall have become known which
may give rise to a claim for indemnification under Section 13.1 or Section 13.2
and an indemnified party shall have given written notice of such facts known by
such indemnified party at such time to the indemnifying party, then the right to
indemnification with respect thereto shall remain in effect without regard to
when such matter shall be finally determined and disposed of.

 

13.5 Setoff. In order to satisfy the indemnification obligations set forth in
Section 13.1 above, the Parent and MergerSub shall have the right to notify the
Stockholders of its intention to set off indemnification claims against amounts
relating to the payment of Contingent Clinical Milestone Consideration or
Contingent Revenue Milestone Consideration (whether or not then due and payable)
or amounts that may be paid by the Parent or MergerSub under this Section 13 to
any Stockholders, and such set off shall be considered a reduction in Merger
Consideration. Any indemnification payable pursuant to Section 13 (other then
claims involving fraud or intentional misrepresentation) shall be paid solely
from this right of set off.

 

13.6 Sole Remedy. Subject to the provisions of Section 14.11, following the
Closing, the parties agree that the rights to indemnification under this Section
13 shall be exclusive of all rights of indemnification or other remedies that
Parent may have against the Stockholders or that the Stockholders or Company may
have against Parent and MergerSub in connection with any error, misstatement or
omission in any representation or warranty in this Agreement, any Schedule or
Exhibit (other than any claim relating to the Stockholder Master Agreement)
hereto, or in any certificate delivered to satisfy a closing condition, except
for claims relating to or involving fraud or intentional misrepresentation, or
claims for indemnification covered by Section 11.3 of this Agreement. Nothing
herein shall be deemed to limit any remedy the Parent or MergerSub may have
against the Company hereunder.

 

SECTION 14. MISCELLANEOUS

 

14.1 Fees and Expenses.

 

(a) Except as provided elsewhere in this Agreement, the Company, ZOLL and the
Stockholders will each bear their own expenses in connection with the
negotiation and the consummation of the transactions contemplated by this
Agreement, provided, however, that any fees or expenses payable to SG Cowen by
the Company shall be paid by the Stockholders out of the proceeds of this
transaction, as provided in Section 4.1 hereof.

 

(b) The Stockholders will pay all costs incurred, whether at or subsequent to
the Closing, in connection with the transfer of the Company 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.

 

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14.2 Governing Law. Except when the law of another jurisdiction is specifically
specified, 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.

 

14.3 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 PARENT:   

ZOLL Medical Corporation

269 Mill Road

Chelmsford, MA 01824

Fax: (978) 421-0026

Attn: Chief Executive Officer

     With a copy to:   

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Fax: (617) 523-1231

Attn: Raymond C. Zemlin, P.C.

     TO MERGERSUB:   

Rev Acquisition Corporation

c/o ZOLL Medical Corporation

269 Mill Road

Chelmsford, MA 01824

Fax: (978) 421-0026

Attn: Chief Executive Officer

     With a copy to:   

Goodwin Procter LLP

Exchange Place

Boston, MA 02109

Fax: (617) 523-1231

Attn: Raymond C. Zemlin, P.C.

     TO COMPANY:   

Revivant Corporation

775 Palomar Avenue

Sunnyvale, CA 94085

Attn: Chief Executive Officer

     With a copy to:   

Venture Law Group

2775 Sand Hill Road

Menlo Park, CA 94025

Fax: (650) 233-8386

Attn: Mark B. Weeks, Esq.

    

 

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TO THE STOCKHOLDER’S REPRESENTATIVE:

 

Any notice given hereunder may be given on behalf of any party by his counsel or
other authorized representatives.

 

14.4 Entire Agreement. This Agreement, including the Schedules and Exhibits
referred to herein, the Related Agreements, 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. 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.

 

14.5 Assignability; Binding Effect. This Agreement shall only be assignable by
the Parent to a corporation or partnership controlling, controlled by or under
common control with the Parent upon written notice to the Company and the
Stockholders’ Representative. This Agreement may not be assigned by the
Stockholders or the Company without the prior written consent of the Parent.
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, including any purchaser of stock from any Stockholder.

 

14.6 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.

 

14.7 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.

 

14.8 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 the Company, the Parent and MergerSub
and, to the extent the rights and obligations of the Stockholders are affected
by such amendment, a majority in interest of the persons serving as
Stockholders’ Representative, or in the case of a waiver, the party waiving
compliance.

 

14.9 Publicity and Disclosures. Except as may be required by law, or the rules
and regulations of the SEC or any Nasdaq listing requirement, 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 the Parent and the Company.

 

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14.10 Dispute Resolution.

 

(a) Except as set forth in Section 4.1(c)(v) and Section 11.3, all disputes,
claims, or controversies arising out of or relating to this Agreement or any
other agreement executed and delivered pursuant to this Agreement or the
negotiation, validity or performance hereof and thereof or the transactions
contemplated hereby and thereby that are not resolved by mutual agreement shall
be resolved by J.A.M.S./Endispute, Inc. before a single arbitrator in Chicago,
Illinois. Such arbitration shall be conducted in accordance with the rules and
regulations promulgated by J.A.M.S./Endispute, Inc. unless specifically modified
herein. In the event J.A.M.S./Endispute, Inc. is unavailable, the arbitration
shall be conducted before an arbitrator that is mutually agreeable to the
parties and, in such event, all references to J.A.M.S./Endispute herein shall
apply to the arbitrator chosen by the parties. The arbitrator hearing any
dispute under this Section 14.10 shall be selected within 20 business days of
written notice of the intent to arbitrate a dispute.

 

The parties shall have the right to discovery in accordance with California Code
of Civil Procedure Section 1283.05. The parties covenant and agree that they
will participate in the arbitration in good faith and that they will share
equally its costs, except as otherwise provided herein. Any party refusing to
comply with an order of the arbitrators shall be liable for costs and expenses,
including attorneys’ fees, incurred by the other party in enforcing the award.
This Section 14.10 applies equally to requests for temporary, preliminary or
permanent injunctive relief, except that in the case of temporary or preliminary
injunctive relief any party may proceed in court without prior arbitration for
the limited purpose of avoiding immediate and irreparable harm. The provisions
of this Section 14.10 shall be enforceable in any court of competent
jurisdiction.

 

The parties shall bear their own attorneys’ fees, costs and expenses in
connection with the arbitration; provided, however, that the prevailing party
shall be entitled to, and the arbitrator shall award to the prevailing party,
its attorneys fees, costs and expenses in the event such party completely
prevails or prevails in all material respects in the arbitration.

 

(b) Each of the parties hereto irrevocably and unconditionally consents to the
exclusive jurisdiction of J.A.M.S./Endispute, Inc. to resolve all disputes,
claims or controversies arising out of or relating to this Agreement or any
other agreement executed and delivered pursuant to this Agreement or the
negotiation, validity or performance hereof and thereof or the transactions
contemplated hereby and thereby and further consents to the jurisdiction of the
courts of Illinois for the purposes of enforcing the arbitration provisions of
Section 14.10(a) of this Agreement. Each party further irrevocably waives any
objection to proceeding before J.A.M.S./Endispute, Inc. 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
arbitration before J.A.M.S./Endispute, Inc. has been brought in an inconvenient
forum. Each of the parties hereto hereby consents to service of process by
registered mail at the address to which notices are to be given. Each of the
parties hereto agrees that its or his submission to jurisdiction and its or his
consent to service of process by mail is made for the express benefit of the
other parties hereto.

 

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14.11 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 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 Parent shall be entitled, in addition to any other
remedies which it may have, to an injunction or other appropriate equitable
relief to restrain such breach without having to show or prove actual damage to
the Parent.

 

14.12 Reportable Transactions. Notwithstanding anything herein or any other
express or implied agreement, arrangement or understanding to the contrary, the
parties acknowledge and agree that (i) any obligations of confidentiality
contained herein and therein do not apply and have not applied from the
commencement of discussions between the parties to the tax treatment and tax
structure of the transactions contemplated by this Agreement (and any related
transactions or agreements) and (ii) each party to this Agreement (and each of
its employees, representatives or other agents) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure. This authorization to disclose the tax
treatment and tax structure is limited to the extent that confidentiality is
required to comply with any applicable securities laws.

 

*remainder of page has intentionally been left blank*

 

37

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[MERGER AGREEMENT SIGNATURE PAGE]

 

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 corporation’s act and deed, as the case may be, and that the
facts stated herein are true.

 

ZOLL MEDICAL CORPORATION: By:   /s/    RICHARD A. PACKER    

Name:

  Richard A. Packer     Title:   Chief Executive Officer and President

 

REV ACQUISITION CORPORATION:

By:   /s/    RICHARD A. PACKER    

Name:

  Richard A. Packer    

Title:

  President

 

REVIVANT CORPORATION: By:   /s/    KENNETH LUDLUM    

Name:

  Kenneth E. Ludlum    

Title:

  President and Chief Executive Officer

 

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[MERGER AGREEMENT SIGNATURE PAGE]

 

STOCKHOLDERS’ REPRESENTATIVE:

By:   /s/    BRENT AHERNS             Brent Aherns

 

By:   /s/    TIM HOWE             Tim Howe

 

By:   /s/    WILF JAEGER             Wilf Jaeger

 

By:   /s/    KENNETH LUDLUM             Kenneth Ludlum

 

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AMENDMENT TO AGREEMENT AND PLAN OF MERGER

 

This Amendment to Agreement and Plan of Merger is entered into as of June 29,
2004 by and among ZOLL Medical Corporation, a Massachusetts corporation (the
“Parent”), Rev Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of the Parent (“MergerSub” and together with the Parent,
“ZOLL”), Revivant Corporation, a Delaware corporation (the “Company”), and Brent
Ahrens, Tim Howe, Wilf Jaeger and Kenneth Ludlum (collectively the
“Stockholders’ Representatives”).

 

WHEREAS, the Parent, MergerSub, Company and Stockholders’ Representatives are
parties to that certain Agreement and Plan of Merger dated August 13, 2003 (the
“Merger Agreement”);

 

WHEREAS, the Merger Agreement provides for the payment of consideration to
holders of the Company’s Series G, Series F, Series E, Series D, Series C,
Series B and Series A Preferred Stock, in amounts and upon the terms and
conditions set forth therein;

 

WHEREAS, the Company has created a new class of Preferred Stock named Series E-2
Preferred Stock, which ranks junior to the Company’s Series G Preferred Stock
and Series F Preferred Stock, but senior to the Company’s Series E Preferred
Stock, with respect to liquidation preferences, including payments pursuant to
the Merger Agreement; and

 

WHEREAS, Zoll, the Company and the Stockholders’ Representatives desire to amend
the Merger Agreement to accommodate the Series E-2 Preferred Stock.

 

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:

 

1. The first paragraph of Section 4.1 and Section 4.1(a) of the Merger Agreement
are amended and restated in their entirety as follows:

 

“4.1 Share and Cash Consideration for the Merger; Conversion or Cancellation of
Shares in the Merger. The manner of receiving cash in the Merger, and the manner
of converting or canceling shares of the Company in the Merger, shall be as set
forth in this Section 4. By virtue of the Merger, and without any further action
on the part of any party hereto or holder thereof, all issued and outstanding
shares of the Company’s capital stock (other than (i) any Company Shares (as
defined below) to be cancelled pursuant to Section 4.1(e) (including all shares
of Series F Preferred Stock, par value $0.001 per share, of the Company issued
and outstanding as of the Effective Time (the “Series F Shares”), all Series E
Shares or Series E-2 Shares (as defined below) purchased by the Parent or any
direct or indirect wholly-owned subsidiary of the Parent, if any, pursuant to
the co-funding provisions of Section 3.6 of that certain Master Agreement by and
among the Parent, MergerSub and the Company (the “Master Agreement”), and
Company Common Shares (as defined below) issued upon conversion of such shares
(collectively, the “ZOLL Non-Converted Shares”)) and (ii) any Dissenting Shares
(as defined below) shall be cancelled and retired as of the Effective Time and
converted solely into the right to receive in the aggregate the Initial Merger
Consideration (as defined in Section 4.1(a)), the

 

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Contingent Clinical Milestone Consideration (as defined in Section 4.1(b)), and
the Contingent Revenue Milestone Consideration (as defined in Section 4.1(c)).
The Initial Merger Consideration, the Contingent Clinical Milestone
Consideration and the Contingent Revenue Milestone Consideration, are
hereinafter collectively referred to as the “Merger Consideration.”

 

(a) Initial Merger Consideration. The aggregate initial merger consideration
shall consist of (x) Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000) in cash (the “Initial Cash Consideration”) and (y) that number of
shares of common stock, par value $0.02 per share, of the Parent (the “Parent
Common Stock”) equal to Seven Million Five Hundred Thousand and 00/100 Dollars
($7,500,000) divided by the Closing Exchange Price of the Parent Common Stock
(the “Initial Parent Stock Consideration,” and together with the Initial Cash
Consideration, the “Initial Merger Consideration”). As used herein, the term
“Closing Exchange Price” shall mean the mean average of the closing prices of a
share of Parent Common Stock for the sixty (60) trading days ending on the
business day that is three (3) business days immediately prior to the Closing
Date, as reported on the Nasdaq National Market. The Initial Merger
Consideration shall be allocated among and payable to the holders of the
Preferred Shares (as defined in Section 4.1(e) below) and the holders of the
Company Common Shares (as defined in Section 4.1(a)(v) below) as follows:

 

(i) First, that portion of the Initial Merger Consideration equal to the
Stockholders’ Obligations (as defined below) then outstanding shall be paid to,
or at the direction of, the Stockholders’ Representative solely to be used to
satisfy in full said Stockholders’ Obligations. As used herein, the term
“Stockholders’ Obligations” shall mean the following liabilities, obligations
and responsibilities of the Stockholders: 1) all obligations under the Company’s
2003 Executive Retention Program (the “Executive Retention Program”), 2) all
obligations under the Company’s 2003 Employee Retention Program (the “Employee
Retention Program,” and together with the Executive Retention Program, the
“Retention Programs”), 3) all obligations accruing after the Closing with
respect to any severance obligations entered into prior to the Closing;
provided, however, that any severance obligation that becomes payable after the
Closing due to actions taken after the Closing by the Surviving Corporation
shall not be deemed part of the Stockholders’ Obligations, 4) all fees and
expenses whenever accruing, payable to SG Cowen under the engagement letters
between the Company and SG Cowen dated January 23, 2003 and February 25, 2003,
as amended from time to time, 5) all payments and expenses, including
indemnification payment, related to the bonus agreement between the Company and
Kenneth Ludlum dated July 25, 2003, other than the compensation expenses set
forth in Section 2 thereof, 6) all fees and expenses payable by the Stockholders
pursuant to this Agreement or the other agreements entered into in connection
herewith, including the expenses of the Stockholders’ Representative and 7) all
legal fees and expenses of the Company or ZOLL in connection with the
preparation and execution of this Amendment, the Amended and Restated
Certificate of Incorporation of the Company and the related documents or
agreements and the consummation of the transactions contemplated thereby. The
payment of the amount of said Stockholders’ Obligations then outstanding (the
“Initial Stockholders’ Obligations Amount”) shall be made as follows: (x) a cash
payment equal to the lesser of (A) the Initial Stockholders’ Obligations Amount
and (B) the total Initial Cash Consideration,

 

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and (y) that number of shares of Parent Common Stock equal to any portion of the
Initial Stockholders’ Obligations Amount not paid in cash under Section
4.1(a)(i)(x), divided by the Closing Exchange Price. Notwithstanding the
foregoing, at the sole discretion of the Stockholders’ Representative, any
portion of the cash payment provided for in Section 4.1(a)(i)(x) may, in lieu of
being paid in cash, be paid in shares of Parent Common Stock as provided in
Section 4.1(a)(i)(y). The Stockholders’ Representative shall provide Parent a
list showing each stockholder, their address, their taxpayer identification or
social security number, as applicable, and the number of shares of Parent Common
Stock to be issued to such person or entity at least 10 days prior to the
issuance of any Parent Common Stock hereunder.

 

(ii) Second, shares of Series G Preferred Stock, par value $0.001 per share, of
the Company issued and outstanding at the Effective Time (the “Series G Shares”)
(whether held by Parent or another party) shall, by virtue of the Merger, be
entitled to receive in the aggregate (x) that portion of the Initial Cash
Consideration equal to the lesser of (A) one-half of the aggregate Series G
Liquidation Amount (as defined in the Company’s Amended and Restated Certificate
of Incorporation (the “Company’s Charter”)) attributable to the Series G Shares
(the “Series G Liquidation Preference”) or (B) the total Initial Cash
Consideration less that amount of the Initial Cash Consideration payable under
Section 4.1(a)(i)(x), plus (y) that number of shares of the Initial Parent Stock
Consideration equal to the lesser of (A) the amount by which the Initial Cash
Consideration payable under Section 4.1(a)(ii)(x) is less than the amount which
is one-half of the Series G Liquidation Preference, plus one-half of the Series
G Liquidation Preference, such sum divided by the Closing Exchange Price or (B)
the total number of shares constituting the Initial Parent Stock Consideration
less that number of shares of Initial Parent Stock Consideration payable under
Section 4.1(a)(i)(y). Each Series G Share will be entitled to receive that
portion of the total Initial Cash Consideration and Initial Parent Stock
Consideration attributable to the Series G Shares in the aggregate, divided by
the number of Series G Shares outstanding at the Effective Time. The amount of
Initial Merger Consideration to be received by each holder of Series G Shares
shall be rounded up or down to the nearest cent or whole share, as the case may
be, after aggregating all of the Initial Cash Consideration and the Initial
Stock Consideration, as applicable, to be received by the holder of such Series
G Shares pursuant to this Section 4.1(a)(ii).

 

(iii) Third, shares of Series E-2 Preferred Stock, par value $0.001 per share,
of the Company issued and outstanding at the Effective Time (the “Series E-2
Shares”) (other than Series E-2 Shares purchased by the Parent or any direct or
indirect wholly-owned subsidiary of the Parent, if any, whether or not
transferred) (the “Non-ZOLL Series E-2 Shares”) shall, by virtue of the Merger,
be entitled to receive in the aggregate (x) that portion of the Initial Cash
Consideration equal to the lesser of (A) one-half of the aggregate Series E-2
Liquidation Amount (as defined in the Company’s Charter) attributable to the
Non-ZOLL Series E-2 Shares (the “Non-ZOLL Series E-2 Section 2(a) Liquidation
Preference”) or (B) the total Initial Cash Consideration less that amount of the
Initial Cash Consideration payable under Sections 4.1(a)(i)(x) and
4.1(a)(ii)(x), plus (y) that number of shares of the Initial Parent Stock
Consideration equal to the lesser of (A) the amount by which the Initial Cash
Consideration payable

 

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under Section 4.1(a)(iii)(x) is less than the amount which is one-half of the
Non-ZOLL Series E-2 Liquidation Preference, plus one-half of the Non-ZOLL Series
E-2 Section 2(a) Liquidation Preference, such sum divided by the Closing
Exchange Price or (B) the total number of shares constituting the Initial Parent
Stock Consideration less that number of shares of Initial Parent Stock
Consideration payable under Sections 4.1(a)(i)(y) and 4.1(a)(ii)(y). Each
Non-ZOLL Series E-2 Share will be entitled to receive that portion of the total
Initial Cash Consideration and Initial Parent Stock Consideration attributable
to the Non-ZOLL Series E-2 Shares in the aggregate, divided by the number of
Non-ZOLL Series E-2 Shares outstanding at the Effective Time. The amount of
Initial Merger Consideration to be received by each holder of Non-ZOLL Series
E-2 Shares shall be rounded up or down to the nearest cent or whole share, as
the case may be, after aggregating all of the Initial Cash Consideration and the
Initial Stock Consideration as applicable, to be received by the holder of such
Non-ZOLL Series E-2 Shares pursuant to this Section 4.1(a)(iii).

 

(iv) Fourth, shares of Series E Preferred Stock, par value $0.001 per share, of
the Company issued and outstanding at the Effective Time (the “Series E Shares”)
(other than Series E Shares purchased by the Parent or any direct or indirect
wholly-owned subsidiary of the Parent, if any, whether or not transferred) (the
“Non-ZOLL Series E Shares”) shall, by virtue of the Merger, be entitled to
receive in the aggregate (x) that portion of the Initial Cash Consideration
equal to the lesser of (A) one-half of the aggregate Series E Liquidation Amount
(as defined in the Company’s Charter) attributable to the Non-ZOLL Series E
Shares (the “Non-ZOLL Series E Section 2(a) Liquidation Preference”) or (B) the
total Initial Cash Consideration less that amount of the Initial Cash
Consideration payable under Sections 4.1(a)(i)(x), 4.1(a)(ii)(x) and
4.1(a)(iii)(x), plus (y) that number of shares of the Initial Parent Stock
Consideration equal to the lesser of (A) the amount by which the Initial Cash
Consideration payable under Section 4.1(a)(iv)(x) is less than the amount which
is one-half of the Non-ZOLL Series E Liquidation Preference, plus one-half of
the Non-ZOLL Series E Section 2(a) Liquidation Preference, such sum divided by
the Closing Exchange Price or (B) the total number of shares constituting the
Initial Parent Stock Consideration less that number of shares of Initial Parent
Stock Consideration payable under Sections 4.1(a)(i)(y), 4.1(a)(ii)(y) and
4.1(a)(iii)(y). Each Non-ZOLL Series E Share will be entitled to receive that
portion of the total Initial Cash Consideration and Initial Parent Stock
Consideration attributable to the Non-ZOLL Series E Shares in the aggregate,
divided by the number of Non-ZOLL Series E Shares outstanding at the Effective
Time. The amount of Initial Merger Consideration to be received by each holder
of Non-ZOLL Series E Shares shall be rounded up or down to the nearest cent or
whole share, as the case may be, after aggregating all of the Initial Cash
Consideration and the Initial Stock Consideration as applicable, to be received
by the holder of such Non-ZOLL Series E Shares pursuant to this Section
4.1(a)(iv).

 

(v) Fifth, shares of the Series A Preferred Stock, par value $0.001 per share,
of the Company issued and outstanding at the Effective Time (the “Series A
Shares”), the Series B Preferred Stock, par value $0.001 per share, of the
Company issued and outstanding at the Effective Time (the “Series B Shares”),
the Series C Preferred Stock, par value $0.001 per share, of the Company issued
and outstanding at the Effective Time

 

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(the “Series C Shares”) and the Series D Preferred Stock, par value $0.001 per
share, of the Company issued and outstanding at the Effective Time (the “Series
D Shares,” and together with the Series A Shares, the Series B Shares and the
Series C Shares, the “Series A-D Shares”) shall, by virtue of the Merger, be
entitled to receive in the aggregate (x) that portion of the Initial Cash
Consideration equal to the lesser of (A) one-half of the sum of the aggregate
Series A liquidation amount plus the aggregate Series B liquidation amount plus
the aggregate Series C liquidation amount plus the aggregate Series D
liquidation amount (in each case, as specified in Section 2(a) of the Company’s
Charter) attributable to the Series A-D Shares (the “Series A-D Section 2(a)
Liquidation Preference”) or (B) the total Initial Cash Consideration less that
amount of the Initial Cash Consideration payable under Sections 4.1(a)(i)(x),
4.1(a)(ii)(x), 4.1(a)(iii) and 4.1(a)(iv)(x), plus (y) that number of shares of
the Initial Parent Stock Consideration equal to the lesser of (A) the amount by
which the Initial Cash Consideration payable under Section 4.1(a)(v)(x) is less
than the amount which is one-half of the Series A-D Section 2(a) Liquidation
Preference, plus one-half of the Series A-D Section 2(a) Liquidation Preference,
such sum divided by the Closing Exchange Price or (B) the total number of shares
constituting the Initial Parent Stock Consideration less that number of shares
of Initial Parent Stock Consideration payable under Sections 4.1(a)(i)(y),
4.1(a)(ii)(y), 4.1(a)(iii)(y) and 4.1(a)(iv)(y). The aggregate amount of the
Initial Cash Consideration and Initial Parent Stock Consideration payable
pursuant to this Section 4.1(a)(v) shall be distributed ratably among the
holders of the Series A Shares, the Series B Shares, the Series C Shares and the
Series D Shares in proportion to the aggregate preferential amounts owed such
holders in accordance with Section 2(a) of the Company’s Charter. Each Series
A-D Share will be entitled to receive that portion of the total Initial Cash
Consideration and Initial Parent Stock Consideration attributable to its
respective series of Preferred Shares in the aggregate, divided by the number of
shares of its respective series of Preferred Shares outstanding at the Effective
Time. The amount of Initial Merger Consideration to be received by each holder
of Series A-D Shares shall be rounded up or down to the nearest cent or whole
share, as the case may be, after aggregating all of the Initial Cash
Consideration and the Initial Stock Consideration as applicable, to be received
by the holder of such Series A-D Shares pursuant to this Section 4.1(a)(v).

 

(vi) Sixth, the Series D Shares, the Non-Zoll Series E-2 Shares, Non-ZOLL Series
E Shares and the shares of Common Stock, par value $0.001 per share, of the
Company issued and outstanding at the Effective Time (the “Company Common
Shares”) other than Company Common Shares purchased by the Parent or any direct
or indirect wholly-owned subsidiary of the Parent, if any, whether or not
transferred, as a result of conversion of Series E Shares, Series E-2 Shares or
Series F Shares (the “Non-ZOLL Common Shares”) shall, by virtue of the Merger,
be entitled to receive in the aggregate all remaining portions of the Initial
Merger Consideration; provided, however, that the amount of the Initial Cash
Consideration and the Initial Parent Stock Consideration payable pursuant to
this Section 4.1(a)(vi) shall be distributed among the holders of Series D
Shares, Non-ZOLL Series E Shares, Non-ZOLL Series E-2 Shares and Non-ZOLL Common
Shares pro rata based on the number of Non-ZOLL Common Shares held by each
(assuming conversion of all such Series D Shares, Non-ZOLL Series E Shares and
Non-ZOLL Series E-2 Shares into Non-ZOLL Common Shares in accordance

 

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with the Company’s Charter); provided, further, however, that the holders of
Series D Shares, Non-ZOLL Series E Shares or Non-ZOLL Series E-2 Shares shall
cease receiving any payments pursuant to this Section 4.1(a)(vi) once each
Series D Share, Non-ZOLL Series E Share and Non-ZOLL Series E-2 Share has
received aggregate Merger Consideration (whether pursuant to Sections
4.1(a)(iii), 4.1(a)(iv), 4.1(a)(v), 4.1(a)(vi), 4.1(b), 4.1(c) or 4.1(d)) equal
to Two Dollars and 70/100 ($2.70) (which shall be determined by valuing any
Parent Common Stock received as Merger Consideration at the Closing Exchange
Price, regardless of its market value when actually issued or delivered) (the
“Series D-E Additional Preference”), and thereafter, the holders of the Non-ZOLL
Common Shares shall receive all remaining portions of the Initial Merger
Consideration (which shall be distributed among the holders of Non-ZOLL Common
Shares pro rata based on the number of Non-ZOLL Common Shares held by each).
Each Series D Share, Non-ZOLL Series E Share, Non-ZOLL Series E-2 Share and
Non-ZOLL Common Share will be entitled to receive that portion of the Initial
Cash Consideration and Initial Parent Stock Consideration attributable to its
respective series of Preferred Shares or Non-ZOLL Common Shares, as applicable,
in the aggregate, divided by the number of shares of its respective series of
Preferred Shares or Non-ZOLL Common Shares outstanding at the Effective Time.
The amount of Initial Merger Consideration to be received by each holder of
Preferred Shares or Non-ZOLL Common Shares shall be rounded up or down to the
nearest cent or whole share, as the case may be, after aggregating all of the
Initial Cash Consideration and the Initial Stock Consideration as applicable, to
be received by the holder of such Preferred Shares or Non-ZOLL Common Shares
pursuant to this Section 4.1(a)(vi). Notwithstanding the foregoing, any holder
of Non-ZOLL Common Shares who received under Section 4.1(a)(i) any amount of the
Initial Merger Consideration pursuant to either of the Retention Programs (the
amount so received by any such holder being hereinafter referred to as the
“Retention Program Amount”) shall not be entitled to receive any portion of the
Initial Merger Consideration pursuant to this Section 4.1(a)(vi) unless and to
the extent set forth in the respective Award Agreement issued pursuant to the
Retention Programs.”

 

2. Section 4.1(d) of the Merger Agreement is amended and restated in its
entirety as follows:

 

“(d) Allocation of Contingent Merger Consideration. Each payment of Contingent
Clinical Milestone Consideration and Contingent Revenue Milestone Consideration
(the cash payment of which is refereed to as the “Cash Contingent Consideration
Payment” and the Parent Common Stock payment of which is referred to as the
“Stock Contingent Consideration Payment” and each together a “Contingent
Consideration Payment”) shall be allocated among and payable to the Preferred
Shares and Company Common Shares as follows:

 

(i) First, that portion of the Contingent Consideration Payment equal to the
Stockholders’ Obligations then outstanding shall be paid to, or at the direction
of, the Stockholders’ Representative solely to be used to satisfy in full said
Stockholders’ Obligations. The payment of the amount of said Stockholders’
Obligations then outstanding (in the case of each Contingent Consideration
Payment, a “Subsequent Stockholders’ Obligations Amount”) shall be made as
follows: (x) a payment equal to the lesser of (A) the Subsequent Stockholders’
Obligations Amount and (B) the total

 

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Cash Contingent Consideration Payment, and (y) that number of shares of Parent
Common Stock equal to the Subsequent Stockholders’ Obligations Amount not paid
in cash under Section 4.1(d)(i)(x), divided by the Closing Exchange Price.

 

(ii) Second, until each of the Series G Shares (whether held by Parent or
another party) has received total Merger Consideration (which shall be
determined by valuing any Parent Common Stock received as Merger Consideration
at the Closing Exchange Price, regardless of its market value when actually
issued or delivered) equal to the Series G Liquidation Preference, then the
Series G Shares will, by virtue of the Merger, be entitled to receive in the
aggregate (x) that portion of each Cash Contingent Consideration Payment equal
to the lesser of (A) the difference between one-half of the aggregate Series G
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
Series G Shares or (B) the total Cash Contingent Consideration Payment in
question less the portion thereof payable pursuant to Section 4.1(d)(i)(x), plus
(y) that number of shares of the Stock Contingent Consideration Payment equal to
the lesser of (A) the amount by which the Cash Contingent Consideration Payment
payable under Section 4.1(d)(ii)(x) is less than the amount which is one-half of
the Series G Liquidation Preference, plus the difference determined pursuant to
Section 4.1(d)(ii)(x)(A), such sum divided by the Closing Exchange Price or (B)
the total Stock Contingent Consideration Payment in question less that number of
such shares payable pursuant to Section 4.1(d)(i)(y). Each Series G Share will
be entitled to receive that portion of the Cash Contingent Consideration Payment
and Stock Contingent Consideration Payment in question attributable to the
Series G Shares in the aggregate, divided by the number of Series G Shares
outstanding at the Effective Time. The amount of each Contingent Consideration
Payment to be received by each holder of Series G Shares shall be rounded up or
down to the nearest cent or whole share, as the case may be, after aggregating
the portions of the Cash Consideration Payment and Stock Consideration Payment,
as applicable, to be received by the holder of such Series G Shares pursuant to
this Section 4.1(d)(ii).

 

(iii) Third, until each of the Non-ZOLL Series E-2 Shares has received total
Merger Consideration (which shall be determined by valuing any Parent Common
Stock received as Merger Consideration at the Closing Exchange Price, regardless
of its market value when actually issued or delivered) equal to the Non-ZOLL
Series E-2 Liquidation Preference, then the Non-ZOLL Series E-2 Shares will, by
virtue of the Merger, be entitled to receive in the aggregate (x) that portion
of each Cash Contingent Consideration Payment equal to the lesser of (A) the
difference between one-half of the aggregate Non-ZOLL Series E-2 Section 2(a)
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
Non-ZOLL Series E-2 Shares or (B) the total Cash Contingent Consideration
Payment in question less the portion thereof payable pursuant to Sections
4.1(d)(i)(x) and 4.1(d)(ii)(x), plus (y) that number of shares of the Stock
Contingent Consideration Payment equal to the lesser of (A) the amount by which
the Cash Contingent Consideration Payment payable under Section 4.1(d)(iii)(x)
is less than the amount which is one-half the Non-ZOLL Series E-2 Section 2(a)
Liquidation Preference, plus the difference determined pursuant to Section
4.1(d)(iii)(x)(A), such sum divided by the Closing Exchange Price or (B) the
total Stock Contingent Consideration

 

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Payment in question less that number of such shares payable pursuant to Sections
4.1(d)(i)(y) and 4.1(d)(ii)(y). Each Non-ZOLL Series E-2 Share will be entitled
to receive that portion of the Cash Contingent Consideration Payment and Stock
Contingent Consideration Payment in question attributable to the Non-ZOLL Series
E-2 Shares in the aggregate, divided by the number of Non-ZOLL Series E-2 Shares
outstanding at the Effective Time. The amount of each Contingent Consideration
Payment to be received by each holder of Non-ZOLL Series E-2 Shares shall be
rounded up or down to the nearest cent or whole share, as the case may be, after
aggregating the portions of the Cash Consideration Payment and Stock
Consideration Payment, as applicable, to be received by the holder of such
Non-ZOLL Series E-2 Shares pursuant to this Section 4.1(d)(iii).

 

(iv) Fourth, until each of the Non-ZOLL Series E Shares has received total
Merger Consideration (which shall be determined by valuing any Parent Common
Stock received as Merger Consideration at the Closing Exchange Price, regardless
of its market value when actually issued or delivered) equal to the Non-ZOLL
Series E Liquidation Preference, then the Non-ZOLL Series E Shares will, by
virtue of the Merger, be entitled to receive in the aggregate (x) that portion
of each Cash Contingent Consideration Payment equal to the lesser of (A) the
difference between one-half of the aggregate Non-ZOLL Series E Section 2(a)
Liquidation Preference less the total amount of Initial Cash Consideration and
Cash Contingent Consideration Payments theretofore received by the holders of
Non-ZOLL Series E Shares or (B) the total Cash Contingent Consideration Payment
in question less the portion thereof payable pursuant to Sections 4.1(d)(i)(x),
4.1(d)(ii)(x) and 4.1(d)(iii)(x), plus (y) that number of shares of the Stock
Contingent Consideration Payment equal to the lesser of (A) the amount by which
the Cash Contingent Consideration Payment payable under Section 4.1(d)(iv)(x) is
less than the amount which is one-half the Non-ZOLL Series E Section 2(a)
Liquidation Preference, plus the difference determined pursuant to Section
4.1(d)(iv)(x)(A), such sum divided by the Closing Exchange Price or (B) the
total Stock Contingent Consideration Payment in question less that number of
such shares payable pursuant to Sections 4.1(d)(i)(y), 4.1(d)(ii)(y) and
4.1(d)(iii)(y). Each Non-ZOLL Series E Share will be entitled to receive that
portion of the Cash Contingent Consideration Payment and Stock Contingent
Consideration Payment in question attributable to the Non-ZOLL Series E Shares
in the aggregate, divided by the number of Non-ZOLL Series E Shares outstanding
at the Effective Time. The amount of each Contingent Consideration Payment to be
received by each holder of Non-ZOLL Series E Shares shall be rounded up or down
to the nearest cent or whole share, as the case may be, after aggregating the
portions of the Cash Consideration Payment and Stock Consideration Payment, as
applicable, to be received by the holder of such Non-ZOLL Series E Shares
pursuant to this Section 4.1(d)(iv).

 

(v) Fifth, until each of the Series A-D Shares has received total Merger
Consideration (which shall be determined by valuing any Parent Common Stock
received as Merger Consideration at the Closing Exchange Price, regardless of
its market value when actually issued or delivered) equal to the applicable
Series A-D Section 2(a) Liquidation Preference, then the Series A-D Shares will,
by virtue of the Merger, be entitled to receive in the aggregate (x) that
portion of each Cash Contingent Consideration Payment equal to the lesser of (A)
the difference between one-half of the aggregate Series A-D Section 2(a)
Liquidation Preference less the total amount of Initial Cash Consideration

 

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and Cash Contingent Consideration Payments theretofore received by the holders
of the Series A-D Shares or (B) the total Cash Contingent Consideration Payment
in question less the portion thereof payable pursuant to Sections 4.1(d)(i)(x),
4.1(d)(ii)(x), 4.1(d)(iii) and 4.1(d)(iv)(x), plus (y) that number of shares of
the Stock Contingent Consideration Payment equal to the lesser of (A) the amount
by which the Cash Contingent Consideration Payment payable under Section
4.1(d)(v)(x) is less than the amount which is one-half the Series A-D Section
2(a) Liquidation Preference, plus the difference determined pursuant to Section
4.1(d)(v)(x)(A), such sum divided by the Closing Exchange Price or (B) the total
Stock Contingent Consideration Payment in question less that number of such
shares payable pursuant to Sections 4.1(d)(i)(y), 4.1(d)(ii)(y), 4.1(d)(iii)(y)
and 4.1(d)(iv)(y). The aggregate amount of the Cash Contingent Consideration
Payment and the Stock Contingent Consideration Payment payable pursuant to this
Section 4.1(d)(v) shall be distributed ratably among the holders of the Series A
Shares, the Series B Shares, the Series C Shares and the Series D Shares in
proportion to the aggregate preferential amounts owed such holders in accordance
with Section 2(a) of the Company’s Charter. Each Series A-D Share will be
entitled to receive that portion of the Cash Contingent Consideration Payment
and Stock Contingent Consideration Payment in question attributable to its
respective series of Preferred Shares in the aggregate, divided by the number of
shares of its respective series of Preferred Shares outstanding at the Effective
Time. The amount of each Contingent Consideration Payment to be received by each
holder of Series A-D Shares shall be rounded up or down to the nearest cent or
whole share, as the case may be, after aggregating the portions of the Cash
Consideration Payment and Stock Consideration Payment, as applicable, to be
received by the holder of such Series A-D Shares pursuant to this Section
4.1(d)(v).

 

(vi) Sixth, the Series D Shares, the Non-ZOLL Series E Shares, the Non-ZOLL
Series E-2 Shares and the Non-ZOLL Common Shares issued and outstanding at the
Effective Time shall, by virtue of the Merger, be entitled to receive in the
aggregate all remaining portions of the Contingent Consideration Payment;
provided, however, that the aggregate amount of the Cash Contingent
Consideration Payment and the Stock Contingent Consideration Payment payable
pursuant to this Section 4.1(d)(vi) shall be distributed among the holders of
the Series D Shares, the Non-ZOLL Series E Shares, the Non-ZOLL Series E-2
Shares and the Non-ZOLL Common Shares pro rata based on the number of Non-ZOLL
Common Shares held by each (assuming conversion of all such Series D Shares,
Non-ZOLL Series E Shares and Non-ZOLL Series E-2 Shares into Non-ZOLL Common
Shares in accordance with the Company’s Charter); provided, further, however,
that the holders of the Series D Shares, Non-ZOLL Series E Shares or Non-ZOLL
Series E-2 Shares shall cease receiving any payments pursuant to this Section
4.1(d)(vi) once each Series D Share, Non-ZOLL Series E Share and Non-ZOLL Series
E-2 Share has received total Merger Consideration (which shall be determined by
valuing any Parent Common Stock received as Merger Consideration at the Closing
Exchange Price, regardless of its market value when actually issued or
delivered) equal to the Series D-E Additional Preference, and thereafter, the
holders of the Non-ZOLL Common Shares shall receive all remaining portions of
the Contingent Consideration Payment (which shall be distributed among the
holders of the Non-ZOLL Common Shares pro rata based on the number of Non-ZOLL
Common Shares held by each). Each Series D Share, Non-ZOLL Series E Share,
Non-Zoll Series E-2 Share and Non-ZOLL Common Share will be

 

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entitled to receive that portion of the Cash Contingent Consideration Payment
and Stock Contingent Consideration Payment in question attributable to its
respective series of Preferred Shares and Non-ZOLL Common Shares, as applicable,
in the aggregate, divided by the number of shares of its respective series of
Preferred Shares and Non-ZOLL Common Shares, as applicable, outstanding at the
Effective Time. The amount of each Contingent Consideration Payment to be
received by each holder of Preferred Shares or Non-ZOLL Common Shares shall be
rounded up or down to the nearest cent or whole share, as the case may be, after
aggregating the portions of the Cash Consideration Payment and Stock
Consideration Payment, as applicable, to be received by the holder of such
Preferred Shares or Non-ZOLL Common Shares pursuant to this Section 4.1(d)(vi).
Notwithstanding the foregoing, any holder of Non-ZOLL Common Shares who received
under Section 4.1(a)(i) or 4.1(d)(i) any Retention Program Amount shall not be
entitled to receive any portion of the applicable Contingent Merger
Consideration pursuant to this Section 4.1(d)(vi) unless and to the extent set
forth in the respective Award Agreement issued pursuant to the Retention
Programs.”

 

3. Section 4.1(e) of the Merger Agreement is amended and restated in its
entirety as follows:

 

“Company Share Cancellation and Conversion. The Series G Shares, Series F
Shares, Series E-2 Shares, Series E Shares, Series D Shares, Series C Shares,
Series B Shares and Series A Shares, are hereinafter collectively referred to as
the “Preferred Shares,” and together with the Company Common Shares are
hereinafter collectively referred to as the “Company Shares.” Each Company Share
that is directly owned by the Parent or the Company or any direct or indirect
wholly-owned subsidiary of the Parent or the Company, if any, or held in the
treasury of the Company shall by virtue of the Merger be automatically canceled
and retired and shall cease to exist and no consideration shall be delivered or
deliverable in exchange therefore; provided, however, that any Series G Share
that is owned by the Parent or any direct or indirect wholly-owned subsidiary of
the Parent will be converted into the right to receive a portion of the Merger
Consideration pursuant to this Section 4.1. Neither the Parent nor any direct or
indirect wholly-owned subsidiary of the Parent owns any Company Shares other
than (i) the Series F Shares and (ii) the Series E Shares, Series E-2 Shares and
Series G Shares which may be purchased pursuant to the co-funding provisions of
the Master Agreement.”

 

4. The parties acknowledge that Schedule 4.1(g) has not been updated to reflect
the changes set forth in this Amendment.

 

5. The provisions of Section 14 of the Merger Agreement are incorporated herein.
Except as expressly set forth herein, the Merger Agreement remains in full force
and effect.

 

*remainder of page has intentionally been left blank*

 

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[MERGER AGREEMENT AMENDMENT SIGNATURE PAGE]

 

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be executed
as of the date set forth above by their duly authorized representatives. By
their signatures below, each person signing this Amendment affirms or
acknowledges, under penalty of perjury, that this Amendment is such person’s act
and deed or such corporation’s act and deed, as the case may be, and that the
facts stated herein are true.

 

ZOLL MEDICAL CORPORATION:

By:   /S/    JOHN P. BERGERON    

Name:

  John P. Bergeron    

Title:

  Vice President and Treasurer

REV ACQUISITION CORPORATION:

By:   /S/    RICHARD A. PACKER    

Name:

  Richard A. Packer    

Title:

  President

REVIVANT CORPORATION:

By:   /S/    KENNETH LUDLUM    

Name:

  Kenneth E. Ludlum    

Title:

 

Chairman, President and

Chief Executive Officer

 

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[MERGER AGREEMENT AMENDMENT SIGNATURE PAGE]

 

STOCKHOLDERS’ REPRESENTATIVES:

By:   /s/    BRENT AHERNS             Brent Aherns By:   /s/    TIM HOWE        
    Tim Howe By:   /s/    WILF JAEGER             Wilf Jaeger By:  
/s/    KENNETH LUDLUM             Kenneth Ludlum