-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ml0RiBU57aI7kNMuCzE1PofXGgLp7wpqsAozBK8/P77ZRQ/1MuSC2EEyZhJH5CPz 0goRbbIfFgNWTv2r0zYv/w== 0000891836-04-000209.txt : 20040524 0000891836-04-000209.hdr.sgml : 20040524 20040524150412 ACCESSION NUMBER: 0000891836-04-000209 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20040524 GROUP MEMBERS: PHILIPS ELECTRONICS NORTH AMERICA CORPORATION GROUP MEMBERS: PHILIPS HOLDING USA INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: QUINTON CARDIOLOGY SYSTEMS INC CENTRAL INDEX KEY: 0001166409 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 943300396 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78261 FILM NUMBER: 04826729 BUSINESS ADDRESS: STREET 1: 3303 MONTE VILLA PKWY CITY: BOTHELL STATE: WA ZIP: 98021 BUSINESS PHONE: 4254022000 FORMER COMPANY: FORMER CONFORMED NAME: QUINTON HOLDING CORP DATE OF NAME CHANGE: 20020201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KONINKLIJKE PHILIPS ELECTRONICS NV CENTRAL INDEX KEY: 0000313216 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] IRS NUMBER: 000000000 STATE OF INCORPORATION: P7 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: BREITNER CENTER STREET 2: AMSTELPLEIN 2 CITY: AMSTERDAM STATE: P7 ZIP: 1096 BC BUSINESS PHONE: 31 20 59 77777 MAIL ADDRESS: STREET 1: BREITNER CENTER STREET 2: AMSTELPLEIN 2 CITY: AMSTERDAM STATE: P7 ZIP: 1096 BC FORMER COMPANY: FORMER CONFORMED NAME: PHILIPS ELECTRONICS N V DATE OF NAME CHANGE: 19930727 FORMER COMPANY: FORMER CONFORMED NAME: PHILIPS NV DATE OF NAME CHANGE: 19910903 SC 13D/A 1 sc0099.txt AMENDMENT NO. 4 TO SCHEDULE 13D Filing Date: May 24, 2004 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------------------------------- SCHEDULE 13D/A (Amendment No. 4)* INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) Quinton Cardiology Systems, Inc. (Name of Issuer) Common Stock, with $0.001 par value per share (Title of Class of Securities) 748773 10 8 (CUSIP Number) Sijze W. Plokker Senior Vice President Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) May 19, 2004 -------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). PERSONS WHO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. SEC 1746 (03-00) - ------------------------------ CUSIP NO. 748773 10 8 SCHEDULE 13D/A - ------------------------------ - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS. I.R.S. Identification Nos. of above persons Koninklijke Philips Electronics N.V. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS* WC - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION The Netherlands - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 1,394,024 SHARES ---------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY EACH 0 REPORTING ---------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,394,024 ---------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,394,024 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.4% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO/HC * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION. 2 - ------------------------------ CUSIP NO. 748773 10 8 SCHEDULE 13D/A - ------------------------------ - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS. I.R.S. Identification Nos. of above persons Philips Holding USA Inc. - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 1,394,024 SHARES ---------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY EACH 0 REPORTING ---------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,394,024 ---------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,394,024 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.4% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION. 3 - ------------------------------ CUSIP NO. 748773 10 8 SCHEDULE 13D/A - ------------------------------ - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSONS. I.R.S. Identification Nos. of above persons Philips Electronics North America Corporation - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b) [x] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS* AF - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF 1,394,024 SHARES ---------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY EACH 0 REPORTING ---------------------------------------------------- PERSON 9. SOLE DISPOSITIVE POWER WITH 1,394,024 ---------------------------------------------------- 10. SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,394,024 - -------------------------------------------------------------------------------- 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 11.4% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON* CO * SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION. 4 This Amendment No. 4 amends and restates in its entirety the Schedule 13D/A filed by the Reporting Persons (as defined herein) on March 28, 2003. ITEM 1. SECURITY AND ISSUER The class of equity securities to which this statement relates is the shares of common stock, with par value of $0.001 per share (the "Shares"), of Quinton Cardiology Systems, Inc., a Delaware corporation ("Quinton"). According to a report on Form 8-K filed by Quinton with the Securities and Exchange Commission on May 21, 2003, Quinton is the successor, by means of a reincorporation merger, to all of the business, properties, assets and liabilities of Quinton Cardiology Systems, Inc. (formerly QIC Holding Corp.), a California corporation ("Quinton California"), which was merged with and into Quinton. Pursuant to that merger, each outstanding share of common stock, no par value per share, of Quinton California (the "California Shares") was converted into one Share. In this statement, the terms "Quinton" and "Shares" may refer, as context requires, respectively to Quinton California and to the California Shares. The principal executive office of Quinton is located at 3303 Monte Villa Parkway, Bothell, Washington 98021. ITEM 2. IDENTITY AND BACKGROUND (a) This statement is being filed by Koninklijke Philips Electronics N.V. ("KPENV"), Philips Holding USA Inc. ("PHUSA") and Philips Electronics North America Corporation ("PENAC" and, collectively with KPENV and PHUSA, the "Reporting Persons"). PENAC is a wholly owned subsidiary of PHUSA, which, in turn, is a wholly owned subsidiary of KPENV. Certain information concerning each director and executive officer of (i) KPENV is set forth in Schedule I hereto and incorporated herein by reference, (ii) PHUSA is set forth in Schedule II hereto, and (iii) PENAC is set forth in Schedule III hereto and is, in each case, incorporated herein by reference. (b) The principal business address of KPENV is Breitner Centre, Amstelplein 2, 1096 BC Amsterdam, The Netherlands. The principal business address of PHUSA and PENAC is 1251 Avenue of the Americas, New York, New York 10020. (c) The primary business of each of the Reporting Persons is the manufacture and distribution of electronic and electrical products, systems and equipment, as well as information technology services. (d) None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedule I, II or III has, during the past five years, been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedule I, II or III has, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) KPENV is a company incorporated under the laws of the Netherlands. PHUSA and PENAC are Delaware corporations. This Item 2 is qualified in its entirety by reference to Schedules I, II and III, which are incorporated herein by reference. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Pursuant to the Asset Purchase Agreement (the "APA"), dated as of November 17, 2000, between Agilent Technologies, Inc., a Delaware corporation ("Agilent"), and KPENV and the Amendment and Supplemental 5 Agreement (together with the APA, the "Agreement"), dated as of August 1, 2001, between Agilent and KPENV, on August 1, 2001, PENAC acquired 19 shares of Class A Common Stock and 2,330,000 shares of Series A Preferred Stock of Quinton for $4,000,000, the source of which funds was working capital. Each share of Series A Preferred Stock was convertible into one share of Class A Common Stock at the option of the holder, subject to certain adjustments. In addition, pursuant to the Agreement, PENAC acquired 100% equity ownership of Zymed, Inc., a California corporation ("Zymed"). The source of the funds PENAC used to acquire Zymed was working capital. Pursuant to Article III(d)(3)(ff) of the Certificate of Amendment of Articles of Incorporation of Quinton, dated June 2, 1998 (the "Certificate of Amendment"), the holders of Series A Preferred Stock were entitled to receive certificates of adjustment regarding certain anti-dilution adjustments upon the grant of certain shares of Class A Common Stock or certain options to purchase shares of Class A Common Stock under Quinton's 1998 Equity Incentive Plan. In place of these certificates of adjustment, PENAC was granted 287,977 additional, uncertificated shares of Series A Preferred Stock, recorded on the books of Quinton as of August 1, 2001. On April 5, 2002, pursuant to a 2.2-for-1 stock split and a redesignation of the Class A Common Stock into Shares, the 19 shares of Class A Common Stock held by PENAC were redesignated into 8 Shares. As a result of a 2.2-for-1 stock split and conversion of the Series A Preferred Stock into Shares at the closing of Quinton's initial public offering referred to in the Registration Statement on Form S-1, filed on February 22, 2002 (as amended from time to time, the "Registration Statement"), the 2,617,977 shares of Series A Preferred Stock held by PENAC were converted into 1,189,989 Shares. As previously reported, Zymed was a non-control member of W.R. Hambrecht/QIC, LLC, a California limited liability company ("WRH"), which the Reporting Persons believe was the beneficial owner of approximately 5,056,215 Shares, as to which Shares the Reporting Persons disclaimed beneficial ownership. In April 2003, the Reporting Persons concluded, on the basis of their review of certain tax documentation received from WRH on or about March 28, 2003, that WRH had distributed the Shares it owned to its members and that Zymed, as a non-control member of WRH, had received 225,327 Shares on or about November 11, 2002 as part of such distribution. Zymed had been merged into PENAC as of August 31, 2002, so such Shares were acquired by PENAC. See Item 5 for a discussion of transactions by the Reporting Persons in securities of Quinton in the last 60 days. None of the persons listed on Schedule I, II or III hereto has contributed any funds or other consideration towards the purchase of the shares of Quinton reported in this statement. ITEM 4. PURPOSE OF THE TRANSACTION Pursuant to a Letter Agreement, dated February 19, 2002 (the "Agilent Letter Agreement"), by and among PENAC, KPENV and Agilent, which is attached as Exhibit 1 and is incorporated herein by reference, PENAC is a successor in interest to Hewlett-Packard Company, a Delaware corporation ("HP"), in an Investors' Rights Agreement, dated as of May 27, 1998 (the "Investors' Rights Agreement"), among Quinton, WRH and HP, which is attached as Exhibit 2 and is incorporated herein by reference. The Investors' Rights Agreement imposes certain restrictions on the transfer of shares held by PENAC, and by any successors in interest to it, including requiring any transferee to agree to be bound by the transfer restrictions in the Investors' Rights Agreement and requiring either that an effective registration statement cover the disposition or that Quinton be notified of the disposition by the transferor and that the transfer not require registration. PENAC intends to sell to certain underwriters all of the Shares beneficially owned by the Reporting Persons in connection with the public offering of securities (the "Offering") described in Amendment No. 2 to Quinton's Registration Statement on Form S-3 (No. 333-114908), which was filed on May 20, 2004. In connection with the Offering, PENAC entered into a Power of Attorney in the form attached as Exhibit 4, which is hereby incorporated herein by reference (the "Power of Attorney"), and anticipates that its attorneys-in-fact will execute and deliver on its behalf an Underwriting Agreement in the form attached as Exhibit 3, which is hereby incorporated herein by reference (the "Underwriting Agreement"). Other than as set forth herein, none of the Reporting Persons, or to the best knowledge and belief of the Reporting Persons, any of the individuals listed on Schedule I, II or III hereto has plans or proposals which relate to or would result in any of the events described by Items 4(a) through 4(j) of Schedule 13D. 6 The foregoing discussion is qualified in its entirety by reference to the Agilent Letter Agreement, the Investors' Rights Agreement, the Power of Attorney and the Underwriting Agreement. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The percentage interest held by each Reporting Person presented below is based on the number of Shares reported in Quinton's registration statement on Form S-3 (No. 333-114908), filed on April 27, 2004, and as amended on May 20, 2004. PENAC is the direct beneficial owner of 1,394,024 Shares, representing approximately 11.4% of the Outstanding Shares. PHUSA may be deemed to beneficially own 1,394,024 Shares, representing approximately 11.4% of the Outstanding Shares. KPENV may be deemed to beneficially own 1,394,024 Shares, representing approximately 11.4% of the Outstanding Shares. None of the Reporting Persons or, to the best knowledge and belief of the Reporting Persons, any of the persons listed on Schedules I, II or III hereto beneficially owns any Shares other than as set forth herein. (b) Each Reporting Person has the power to vote or direct the vote and dispose or direct the disposition of the Shares beneficially owned by such Reporting Persons as indicated in pages 2 through 4. (c) There have been no transactions in the Common Stock effected by the Reporting Persons in the last 60 days. (d) No other person has the right to receive or the power to direct the receipt of dividends from or proceeds from the sale of Shares. (e) Not applicable. 7 ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER There are no contracts, arrangements, understandings or relationships between the Reporting Persons (or their wholly owned subsidiaries), and to the best knowledge and belief of the Reporting Persons, none of the persons listed on Schedules I, II or III hereto, and other persons with respect to the Shares aside from the Investors' Rights Agreement, the Power of Attorney and the Underwriting Agreement. The Investors' Rights Agreement imposes restrictions on the transfer of shares held by WRH and PENAC, and by any successors in interest to them, including requiring any transferee to agree to be bound by Section 2 of the Investors' Rights Agreement (which section contains the restrictions on transfer) and requiring either that an effective registration statement cover the disposition or that Quinton be notified of the disposition by the transferor and that the transfer not require registration. The Power of Attorney empowers the attorneys-in-fact specified therein to take certain actions to complete the Offering on PENAC's behalf. The Underwriting Agreement will provide for the sale to the underwriters specified therein of the Shares to be sold by PENAC in connection with the Offering. The foregoing discussion is qualified in its entirety by reference to the Investors' Rights Agreement, the Power of Attorney and the Underwriting Agreement, which are incorporated herein by reference. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Exhibit No. Exhibit Description - ------------------ ------------------------------------------------------------ 1. Letter Agreement, dated as of February 19, 2002, among PENAC, KPENV and Agilent (incorporated herein by reference to Exhibit 10.2 of the Schedule 13D filed by the Reporting Persons on May 13, 2002). 2. Investors' Rights Agreement, dated as of May 27, 1998, among Quinton, WRH and HP (incorporated herein by reference to Exhibit 10.3 of the Schedule 13D filed by the Reporting Persons on May 13, 2002). 3. Form of Underwriting Agreement (incorporated by reference to Exhibit 1.1 of the Registration Statement on Form S-3 (File No. 333-114908) filed by Quinton Cardiology Systems, Inc., as filed with Amendment No. 2 thereto, filed on May 20, 2004). 4. Form of Power of Attorney. 5. Joint Filing Agreement, dated as of May 13, 2002, among the Reporting Persons (incorporated herein by reference to Exhibit 99.1 of the Schedule 13D filed by the Reporting Persons on May 13, 2002). 8 SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. Dated: May 24, 2004 KONINKLIJKE PHILIPS ELECTRONICS N.V. By: /s/ A. Westerlaken -------------------------------------- Name: A. Westerlaken Title: Secretary to the Board of Management of Koninklijke Philips Electronics N.V. PHILIPS HOLDING USA INC. By: /s/ Wilhelmus C.M. Groenhuysen -------------------------------------- Name: Wilhelmus C.M. Groenhuysen Title: Senior Vice President and CFO PHILIPS ELECTRONICS NORTH AMERICA CORPORATION By: /s/ Wilhelmus C.M. Groenhuysen -------------------------------------- Name: Wilhelmus C.M. Groenhuysen Title: Senior Vice President and CFO 9 SCHEDULE I Name, Business Address, Principal Occupation or Employment and Citizenship of: (a) Members Of The Supervisory Board of Koninklijke Philips Electronics N.V. Unless otherwise indicated, each person listed below is not employed, other than as a member of the Supervisory Board, and thus no employer, employer's address or employer's principal business is listed. Name: L.C. van Wachem Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group. Citizenship: The Netherlands Name: W. de Kleuver Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Executive Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: J.M. Hessels Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chief Executive Officer of Royal Vendex KBB. Citizenship: The Netherlands Name: Sir Richard Greenbury Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chairman and Chief Executive Office of Marks & Spencer. Citizenship: United Kingdom Name: J.M. Thompson Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Vice Chairman of the Board of Directors of IBM. Citizenship: Canada Name: C.J.A. van Lede Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Retired. Former Chairman of the Board of Management of Akzo Nobel. Citizenship: The Netherlands 10 Name: Prof. K.A.L.M. van Miert Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: President of Nyenrode University. Employer: Nyenrode University Employer's Address: Straatweg 25 3621 BG Breukelen The Netherlands Employer's Principal Business: Higher education Citizenship: Belgium Name: L. Schweitzer Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Chairman and Chief Executive Officer of la regie nationale des usines Renault. Employer: La regie nationale des usines Renault Employer's Address: 34 Quai du Point du Jour BP 103 92109 Boulogne Bilancourt Cedex, France Employer's Principal Business: Design, manufacture and sale of automobiles and related businesses Citizenship: France (b) Members Of Board Of Management And Group Management Committee Of Koninklijke Philips Electronics N.V. Unless otherwise indicated, each member of the Board of Management and Group Management Committee is employed by Koninklijke Philips Electronics N.V. at Breitner Centre, Amstelplein 2, 1096 BC Amsterdam, The Netherlands, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Gerard J. Kleisterlee Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: President and Chief Executive Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Jan H.M. Hommen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Vice-Chairman of the Board of Management and Chief Financial Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands 11 Name: Gottfried H. Dutine Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Executive Vice-President, and President and Chief Executive Officer of the Consumer Electronics Division, of Koninklijke Philips Electronics N.V. Citizenship: Germany Name: Ad Huijser Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Executive Vice-President and Chief Technology Officer of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Andrea Ragnetti Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President and Chief Marketing Officer of Koninklijke Philips Electronics N.V. Citizenship: Italy Name: Daniel Hartert Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President and Chief Information Officer of Koninklijke Philips Electronics N.V. Citizenship: Germany Name: Tjerk Hooghiemstra Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Scott McGregor Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President, and President and CEO of the Semiconductors Division, of Koninklijke Philips Electronics N.V. Citizenship: United States Name: Jouko A. Karvinen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, and President and CEO of the Medical Systems Division, of Koninklijke Philips Electronics N.V. Citizenship: Finland 12 Name: Johan van Splunter Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President, and President and CEO of the Domestic Appliances and Personal Care Division, of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Frans van Houten Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President, and CEO of the Consumer Electronics Business Groups, of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Barbara Kux Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President and Chief Procurement Officer of Koninklijke Philips Electronics N.V. Citizenship: Switzerland Name: Theo van Deursen Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President, and President and CEO of the Lighting Division, of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands Name: Rudy Provoost Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice President, and CEO of Consumer Electronics Global Sales and Services, of Koninklijke Philips Electronics N.V. Citizenship: Belgium Name: Arie Westerlaken Business Address: Koninklijke Philips Electronics N.V. Breitner Centre Amstelplein 2 1096 BC Amsterdam, The Netherlands Principal Occupation: Senior Vice-President, General Secretary, Chief Legal Officer and Secretary to the Board of Management of Koninklijke Philips Electronics N.V. Citizenship: The Netherlands 13 Schedule II Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Philips Holding USA, Inc. Unless otherwise indicated, each member of the board of directors and executive officer is employed by Philips Electronics North America Corporation at 1251 Avenue of the Americas, New York, New York 10020, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Robert M. Westerhof Business Address: Philips Holding USA, Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, President and Chief Executive Officer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Sijze W. Plokker Business Address: Philips Holding USA, Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Wilhelmus C.M. Groenhuysen Business Address: Philips Holding USA, Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President, Chief Financial Officer and Treasurer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Robert N. Smith Business Address: Philips Holding USA, Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States Name: Warren T. Oates, Jr. Business Address: Philips Holding USA, Inc. 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Secretary of Philips Electronics North America Corporation. Citizenship: United States 14 Schedule III Name, Business Address, Principal Occupation or Employment and Citizenship of all Directors and Executive Officers of Philips Electronics North America Corporation. Unless otherwise indicated, each member of the board of directors and executive officer is employed by Philips Electronics North America Corporation at 1251 Avenue of the Americas, New York, New York 10020, whose principal business is set forth in this Statement, and thus no employer, employer's address or employer's principal business is listed. Name: Robert M. Westerhof Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, President and Chief Executive Officer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Sijze W. Plokker Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Wilhelmus C.M. Groenhuysen Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Director, Senior Vice President, Chief Financial Officer and Treasurer of Philips Electronics North America Corporation. Citizenship: The Netherlands Name: Thomas B. Patton Business Address: Philips Electronics North America Corporation 1300 I Street N.W., Suite 1070-E Washington, D.C. 20005 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States Name: Robert N. Smith Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Vice President of Philips Electronics North America Corporation. Citizenship: United States 15 Name: Raymond C. Fleming Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Controller of Philips Electronics North America Corporation. Citizenship: United States Name: Warren T. Oates, Jr. Business Address: Philips Electronics North America Corporation 1251 Avenue of the Americas New York, New York 10020 Principal Occupation: Secretary of Philips Electronics North America Corporation. Citizenship: United States 16 EX-99 2 sc0099a.txt EXHIBIT 4 -- IRREVOCABLE POWER OF ATTORNEY EXHIBIT 4 IRREVOCABLE POWER OF ATTORNEY AND CUSTODY AGREEMENT for Sale of Shares of Common Stock, Par Value $.001 Per Share of QUINTON CARDIOLOGY SYSTEMS, INC. To: John R. Hinson Quinton Cardiology Systems, Inc. 3303 Monte Villa Parkway Bothell, Washington 98021 acting as attorney-in-fact, for the undersigned Michael K. Matysik Quinton Cardiology Systems, Inc. 3303 Monte Villa Parkway Bothell, Washington 98021 acting as attorney-in-fact, for the undersigned To: Quinton Cardiology Systems, Inc. 3303 Monte Villa Parkway Bothell, Washington 98021 as Custodian Dear Sirs: The undersigned, as a holder of shares of common stock, par value $.001 per share (the "Common Stock"), of Quinton Cardiology Systems, Inc., a Delaware corporation (the "Company"), wishes to enter into this Irrevocable Power of Attorney and Custody Agreement in connection with the proposed sale of shares of Common Stock, par value $.001 per share (the "Common Stock") to a group of underwriters (the "Underwriters") represented by Needham & Company, Inc.; SunTrust Robinson Humphries; Adams, Harkness & Hill; and Delafield Hambrecht (the "Representatives") for distribution to the public (the "Public Offering") in the United States, under a Registration Statement on Form S-3, Commission File No. 333-114908 (the "Registration Statement") at a price and on terms to be hereafter determined (the "Initial Offering"). The offering of shares of Common Stock to the public by the Underwriters pursuant to the Underwriting Agreement (as defined below) is referred to herein as the "Offering." The Underwriters shall only be purchasing shares of Common Stock pursuant to the Underwriting Agreement. The maximum number or percentage of shares of Common Stock to be sold by the undersigned to the Underwriters in the Offering are indicated on the signature page hereto and are referred to herein as the "Shares." The undersigned is hereinafter referred to herein as the "Selling Shareholder" and, together with the other selling shareholders, if any, in connection with the Offering, the "Selling Shareholders." Except as herein provided, all capitalized terms used herein which are defined in the Underwriting Agreement have the respective meanings specified therein. The undersigned acknowledges receipt of (i) a draft of the Underwriting Agreement and (ii) a copy of the Registration Statement. The undersigned understands that, subject to the terms of this Irrevocable Power of Attorney and Custody Agreement, the draft of the Underwriting Agreement is subject to revision before execution and that the Registration Statement is subject to revision before it is declared effective and to amendment thereafter. (1) Appointment of Attorney-in-Fact; Grant of Authority. For purposes of effecting the sale of the Shares to the Underwriters, the undersigned hereby irrevocably makes, constitutes, and appoints the persons named as attorneys-in-fact on the first page hereof the true and lawful agents and attorneys-in-fact of the undersigned (each, an "Attorney-in-Fact") with full power and authority to act hereunder (either singly or jointly, or through any additional Attorney-in-Fact (a "Proxy") duly appointed as such by either Attorney-in-Fact), in any of their sole discretion, as hereinafter provided, in the name of and for and on behalf of the undersigned, as fully as the undersigned could if present and acting in person, with respect to all matters in connection with the Public Offering and sale of the Shares to the Underwriters to be sold by the undersigned under the Underwriting Agreement, including but not limited to the power and authority to: (a) For the purpose of offering and selling the Shares to the Underwriters and consummating the other transactions referred to therein, execute and deliver the Underwriting Agreement by and among the Company, the Selling Shareholder and the several Underwriters (in substantially the form attached as Annex B hereto, as the same may be amended from time to time as provided in and subject to the limitations set forth in clause (h) below, the "Underwriting Agreement") (the undersigned's approval of such execution and delivery of such agreement on its behalf and any such changes, additions, or other form or provisions shall be evidenced conclusively by the execution and delivery of such Underwriting Agreement by any Attorney-in-Fact); carry out and comply with each and all of the provisions of the Underwriting Agreement, including the making of all representations, agreements, covenants and indemnities provided in the Underwriting Agreement to be made by the undersigned; and exercise all authority given to the undersigned under the Underwriting Agreement; (b) Arrange for, prepare, or cause to be prepared the Registration Statement and any amendment or amendments to the Registration Statement and include in the Registration Statement information regarding the undersigned delivered to the Company or Company legal counsel by the undersigned explicitly for use in the Registration Statement and Prospectus, and execute, acknowledge and deliver any and all certificates, assurances, reports, documents, letters and consents to appropriate authorities of states or territories of the United States, the Underwriters or legal counsel to the Company or the Underwriters, which may reasonably be required or deemed to be appropriate by either 2 Attorney-in-Fact in connection with the sale of the Shares and the registration of the Shares under the securities or blue sky laws of such states or territories to facilitate offers and sales of the Shares; provided, however, that no such action shall require the undersigned to qualify to do business or consent to service of process in any jurisdiction in which it is not currently so qualified or has so consented. The undersigned hereby authorizes the Company and its counsel to make a request for acceleration of the Registration Statement on its behalf; (c) Sell, assign and transfer to the Underwriters pursuant to the Underwriting Agreement up to and including the number of Shares identified on the signature page of this Irrevocable Power of Attorney and Custody Agreement and deposited by the undersigned hereunder, and determine the allocation of the Shares sold in the Initial Offering. The Attorneys-in-Fact agree that they will sell to the Underwriters all of the Shares received by the undersigned's Zymed subsidiary prior to including in the Offering or selling to the Underwriters any other shares held by the undersigned; (d) Agree upon the price (including any discounts or commissions) at which the Shares will be sold to the Underwriters pursuant to the Underwriting Agreement; provided that (i) the net proceeds per share (after the deduction of any discounts or commissions) to be received by the undersigned shall not be less than the net proceeds per share (after such deductions) to be received by the Company in respect of Shares sold by the Company, and (ii) the net proceeds per share (after such deductions) to be received by the undersigned shall not in any event be less than $___ per share; (e) Endorse (in blank, undated) on behalf of the undersigned a certificate or certificates representing the Shares, or stock powers attached to the certificates, and transfer and deliver such certificates representing such Shares to or upon the order of the Underwriters, or, if the Shares are registered in book-entry form by the Company's transfer agent or other authorized stock registrar, authorize by appropriate and necessary action the transfer of the Shares to the accounts of the Underwriters; (f) Give such written orders and instructions to the Custodian (as hereinafter defined) or the Company's registrar and transfer agent as any Attorney-in-Fact may in his discretion determine, with respect to (i) the transfer on the books of the Company of the Shares in order to effect such sale (including the names in which new certificates for such Shares are to be issued and the denominations thereof), (ii) the delivery to or for the account of the Underwriters of the certificates for such Shares against receipt by the Custodian (for the account of the undersigned) of a wire transfer for the purchase price to be paid therefor as set forth in Section 3 below, (iii) the remittance to the undersigned of such wire transfers, and (iv) the return to the undersigned of a new certificate or certificates representing the number of shares (if any) of Common Stock represented by a certificate or certificates deposited with the Custodian, which are in excess of the number of Shares to be sold by the undersigned to the Underwriters; 3 (g) Retain legal counsel in connection with any and all matters referred to herein (which counsel fees shall be borne by the Company); and (h) Take, or cause to be taken, any and all further actions, and execute and deliver, or cause to be executed and delivered, the Underwriting Agreement and any and all agreements, documents, instruments and certificates specified in the draft of the Underwriting Agreement attached to this instrument as may be necessary or deemed to be desirable by either Attorney-in-Fact to effectuate, implement, or otherwise carry out the transactions contemplated by the Underwriting Agreement and this Irrevocable Power of Attorney and Custody Agreement and generally to act for and in the name and on behalf of the undersigned, with respect to the sale of Shares to the Underwriters and the offering of Shares by the Underwriters and the registration of Shares by the Company pursuant to the Securities Act of 1933 (the "Securities Act") as fully as the undersigned could if personally present and acting; provided, however, that (1) the provisions in the Underwriting Agreement relating to the Selling Shareholder or its representations, warranties, covenants, rights or obligations may not be modified without the consent of such Selling Shareholder and (2) no such action shall increase the maximum number of shares to be sold by the undersigned above the number of Shares set forth on such Selling Shareholder's signature page hereto. (2) Irrevocability. The undersigned has conferred and granted the power of attorney and all other authority contained herein in consideration of the Company's and the Underwriters' proceeding with, and for the purpose of completing, the transactions contemplated by the Underwriting Agreement. Subject to Section 9 hereof, the undersigned hereby agrees that all power and authority hereby conferred is coupled with an interest and is irrevocable; and to the extent not prohibited by law shall not be terminated by any act of the undersigned or by operation of law whether by the death or incapacity of the undersigned or by the occurrence of any other event. If, after the execution of this Irrevocable Power of Attorney and Custody Agreement, any such act, death or other event shall occur before the completion of the transactions contemplated by the Underwriting Agreement and this Irrevocable Power of Attorney and Custody Agreement, each Attorney-in-Fact, the Custodian and the Company are nevertheless authorized and directed to complete all of such transactions, as if such act, death or other event had not occurred and regardless of whether or not the Attorney-in-Fact, the Custodian or the Company shall have received notice of such act, death or other event. (3) Deposit and Delivery of Shares. The undersigned hereby deposits with the Company, as custodian (in such capacity, the "Custodian") one or more certificates representing shares of Common Stock, which represent not less than the aggregate number of Shares that the undersigned may become obligated to sell to the Underwriters as set forth on the signature page of this Irrevocable Power of Attorney and Custody Agreement. The undersigned hereby represents and warrants to each Attorney-in-Fact and the Custodian that each certificate delivered (i) has been duly executed and is in negotiable form or (ii) is accompanied by a duly executed stock power or powers in blank. In the event any of the shares of Common Stock deposited with the Custodian by the undersigned with are registered in book-entry form, the undersigned hereby designates the Custodian as the sole authority to hold such shares for the 4 benefit of the Underwriters for purposes of performance of the obligations of the undersigned pursuant to this Agreement and the Underwriting Agreement. The Custodian shall hold the shares of Common Stock, and shall dispose of them in accordance with the written instructions of the Attorney-in-Fact and as set forth herein, with full power in the name of, and for and on behalf of, the undersigned. The Custodian is hereby authorized and directed by the undersigned, subject to the written instructions of any Attorney-in-Fact, (i) to hold the shares of Common Stock in custody, (ii) to make such other appropriate arrangements as may be necessary for the safekeeping of the certificates, (iii) to cause certificates representing the Shares to be sold to the Underwriters to be issued, or, if in book entry form, to effect the transfer of the Shares to the account of the underwriter, (iv) to deliver the certificates for the Shares to be sold by the undersigned, or replacement certificates evidencing the Shares, to the Representatives for the accounts of the Underwriters at the date (or dates) of delivery in accordance with the Underwriting Agreement and this Irrevocable Power of Attorney and Custody Agreement and (v) to return to the undersigned certificates representing the unsold balance, if any, of the shares of Common Stock covered by the enclosed certificates. The Custodian shall be fully entitled to act and rely upon any statement, request, notice or instruction respecting this Irrevocable Power of Attorney and Custody Agreement given to it by either Attorney-in-Fact or any Proxy thereof. (4) The Custodian. The Custodian's execution of this Irrevocable Power of Attorney and Custody Agreement shall constitute the acceptance by the Custodian of the agency herein conferred, and shall evidence its agreement to carry out and perform only those duties set forth in this Irrevocable Power of Attorney and Custody Agreement in accordance with the provisions hereof. The Custodian shall exercise the same degree of care toward the certificates of Common Stock deposited herewith as it exercises toward its own similar property and shall not be held to any higher standard of care under this Irrevocable Power of Attorney and Custody Agreement. No implied covenants or obligations shall be inferred from this Irrevocable Power of Attorney and Custody Agreement against the Custodian, nor shall the Custodian be bound by the provisions of any agreement among the undersigned, the Selling Shareholders or any Attorney-in-Fact or Proxy beyond the specific terms hereof. The Custodian shall be entitled to rely upon any order, judgment, certification, instruction, notice or other writing delivered to it in compliance with the provisions of this Irrevocable Power of Attorney and Custody Agreement without being required to determine the authenticity or the correctness of any fact stated therein or the proprietary or validity or service thereof. The Custodian may act in reliance upon any instrument comporting with the provisions of this Irrevocable Power of Attorney and Custody Agreement or signature believed by it to be genuine and may assume that any person purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. 5 At any time the Custodian may request in writing an instruction in writing from the Attorneys-in-Fact, or either of them, or the undersigned, and may at its own option include in such request the course of action it proposes to take and the date on which it proposes to act, regarding any matter arising in connection with its duties and obligations hereunder. The Custodian shall not be liable for acting without the consent of any such party in accordance with such a proposal on or after the date specified therein, provided that the specified date shall be at least two business days after such parties receive the Custodian's request for instructions and its proposed course of action, and provided further, that, prior to so acting, the Custodian has not received the written instructions requested. (5) Sale of Shares; Remitting Net Proceeds. Each Attorney-in-Fact is hereby authorized to, and any of them shall, direct the Custodian or its registrar and transfer agent in writing to deliver certificates for, or effect book-entry transfer of, the Shares to be sold by the undersigned to the Representatives as provided in the Underwriting Agreement, against delivery by the Representatives to the Custodian of a wire transfer, in same day funds payable to the order of the Custodian, for the account of the undersigned and in the amount set forth in the Underwriting Agreement. The Custodian is authorized, on behalf of the undersigned, to accept and acknowledge receipt of the payment of the purchase price for the Shares to be sold by the undersigned and shall, as soon as practicable but in any event within one business day after the day it receives such payment, remit to the undersigned, by wire transfer of immediately available funds to a bank account specified by the undersigned on the signature page hereof, or, if no such account is specified, by certified, bank or cashier's check payable to the undersigned and mailed to the undersigned at the address specified on the signature page hereof (or such other account or address or may be specified pursuant to notice delivered timely in accordance with Section (10) below), its proportionate share of the proceeds of such sales. (6) Representations, Warranties and Agreements. The undersigned represents and warrants to, and agrees with, the Company, the Underwriters, each Attorney-in-Fact, each other Selling Shareholder and the Custodian that: (a) Authorization of Agreements. All consents, approvals, authorizations and orders necessary for the execution and delivery by the Selling Shareholder of this Power of Attorney and Custody Agreement and the Underwriting Agreement, and for the sale and delivery of the Selling Shareholder Firm Shares to be sold by the Selling Shareholder under the Underwriting Agreement, have been obtained; and the Selling Shareholder has full corporate power and authority to enter into this Irrevocable Power of Attorney and Custody Agreement and the Underwriting Agreement, to make the representations, warranties and agreements hereunder and thereunder, and to sell, assign, transfer and deliver the Shares to be sold by the Selling Shareholder under the Underwriting Agreement. The sale of the Selling Shareholder Firm Shares to be sold by the Selling Shareholder Underwriting Agreement and the performance by the Selling Shareholder of this Irrevocable Power of Attorney and Custody Agreement and the Underwriting Agreement and the consummation of the transactions contemplated hereby and thereby will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Selling Shareholder pursuant to the terms or provisions of, or result in 6 a breach or violation of any of the terms or provisions of, or constitute a default under, or give any party a right to terminate any of its obligations under, or result in the acceleration of any obligation under, any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement or instrument to which the Selling Shareholder is a party or by which the Selling Shareholder or any of its properties is bound or affected, or violate or conflict with any judgment, ruling, decree, order, statute, rule or regulation of any court or other governmental agency or body applicable to the Selling Shareholder or the organizational documents of the Selling Shareholder. (b) Good and Marketable Title. Assuming that the Selling Shareholder Firm Shares are indorsed to DTC or in blank, upon payment for the Selling Shareholder Firm Shares and the delivery to DTC or its agent of the Selling Shareholder Firm Shares registered in the name of Cede & Co. or such other nominee designated by DTC, and DTC's crediting the Selling Shareholder Firm Shares to an Underwriter's account with DTC, Cede & Co., or such other nominee designated by DTC, will be a "protected purchaser" of the Selling Shareholder Firm Shares (as defined in Section 8-303 of the Uniform Commercial Code as adopted in the State of New York (the "Code")), such Underwriter will acquire a valid "security entitlement" (within the meaning of Section 8-501 of the Code) with respect to the Common Stock to the extent that DTC credits the Selling Shareholder Firm Shares to such Underwriter's account, and no action based on an "adverse claim" (as defined in section 8-102 of the Code) may be asserted against such Underwriter with respect to such security entitlement (assuming that such Underwriter is without notice of any such adverse claim). (c) Due Execution of Agreements. This Irrevocable Power of Attorney and Custody Agreement has been duly executed and delivered by or on behalf of the Selling Shareholder, and constitutes a valid and binding agreement of the Selling Shareholder in accordance with its terms, except as enforceability may be limited by the application of bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally or by general principles of equity; and the Attorneys-in-Fact and the Custodian have been duly authorized by the Selling Shareholder to deliver the Selling Shareholder Firm Shares on behalf of the Selling Shareholder in accordance with the terms of this Agreement. At the Closing Time, the Underwriting Agreement will have been duly executed and delivered by or on behalf of the Selling Shareholder (d) Absence of Manipulation. The Selling Shareholder has not taken and will not at any time take, directly or indirectly, any action (other than entering into the lock-up agreement contemplated by Section 5(n) of the Underwriting Agreement) designed, or that might reasonably be expected, to cause or result in, or that will constitute, stabilization of the price of shares of Common Stock to facilitate the sale or resale of any of the Shares; provided that the Selling Shareholder and its affiliates are not prohibited from making or amending any filings with the Commission required to be made or amended in connection with the execution of this Agreement and consummation of the transactions contemplated hereby. 7 (e) Absence of Further Requirements. No consent, approval, authorization or order of, or any filing or declaration with, any court or governmental agency or body is required in connection with the sale of the Selling Shareholder Firm Shares by the Selling Shareholder or the consummation by the Selling Shareholder of the transactions on its part contemplated by this Irrevocable Power of Attorney and Custody Agreement and the Underwriting Agreement, except such as may be required under the Act or the Rules and Regulations and such as may be required under state securities or Blue Sky laws or the by-laws and rules of the NASD in connection with the purchase and distribution by the Underwriters of the Shares to be sold by the Selling Shareholder. (f) Restriction on Sale of Securities. The Selling Shareholder has duly executed and delivered to the Custodian a lock-up agreement in the form of Schedule III attached to the Underwriting Agreement. (g) Certificates Suitable for Transfer. Certificates for all of the Shares to be sold by such Selling Shareholder pursuant to the Underwriting Agreement, in suitable form for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank with signatures guaranteed, have been placed in custody with the Custodian to the Underwriters pursuant to the Underwriting Agreement. (h) No Association with NASD. Neither such Selling Shareholder nor any of his/her/its affiliates (within the meaning of NASD Conduct Rule 2720(b)(1)(a)) directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, or is an associated person (within the meaning of Article I, Section 1(q) of the By-laws of the National Association of Securities Dealers, Inc.) of, any member firm of the National Association of Securities Dealers, Inc., other than as set forth on Annex A hereto or the shareholder questionnaire provided to the Company. (i) Form W-9/W-8. The undersigned has delivered to the Custodian a true and complete copy of United States Treasury Department Form W-9/W-8 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof). (j) Opinion. The undersigned shall provide to the Custodian, for delivery to the Underwriters, the opinion of the undersigned's internal counsel contemplated by Section 6(f) of the Underwriting Agreement. The foregoing representations, warranties and agreements are for the benefit of and may be relied upon by each Attorney-in-Fact, the Company, the Underwriters, the Custodian, and their respective legal counsel. The undersigned will notify the Company in writing immediately of any changes in the foregoing information and representations, warranties and agreements which should be made as a result of developments occurring after the date hereof and prior to the Closing Date or any Date of Delivery under the Underwriting Agreement, and the Company and Attorneys-in-Fact may consider that there has not been any such development unless advised to the contrary. 8 (7) Ownership of Shares. Subject to the terms hereof, until payment in full of the purchase price for such Shares being sold by the undersigned pursuant to the Underwriting Agreement has been made by or for the account of the Underwriters, the undersigned shall remain the owner of the Shares and shall have all rights thereto which are not inconsistent with this Irrevocable Power of Attorney and Custody Agreement. However, until such payment in full has been made or until the Underwriting Agreement has been terminated, the undersigned agrees that the undersigned will not give, sell, pledge, hypothecate, grant any lien or security interest in, transfer, deal with or contract with respect to the Shares or any interest therein, except to the Underwriters pursuant to the Underwriting Agreement (and, other than with respect to the Shares to be sold to the Underwriters pursuant to the Underwriting Agreement, in accordance with the lockup letter signed by the undersigned in the form of Schedule III to the Underwriting Agreement). (8) Liability and Indemnification. (a) Each Attorney-in-Fact and the Custodian are authorized to accept this Irrevocable Power of Attorney and Custody Agreement and take any and all actions under this Irrevocable Power of Attorney and Custody Agreement as they shall, in their own discretion, determine, except as explicitly limited herein. Each Attorney-in-Fact and the Custodian assume hereunder no responsibility or liability to the undersigned or to any other person or entity, other than to deal with the Shares held and received by either Attorney-in-Fact or deposited with the Custodian in accordance with the provisions of this Irrevocable Power of Attorney and Custody Agreement and to deal with the proceeds from the sale of the undersigned's Shares in accordance with the provisions hereof. Neither Attorney-in-Fact (in such capacity) nor the Custodian (in such capacity) make any representations with respect to and shall have no responsibility for the Registration Statement or Prospectus and shall not be liable to the undersigned or any other person or entity pursuant to this Irrevocable Power of Attorney and Custody Agreement for any error of judgment or for any act done or omitted to be done or for any mistake of fact or law except for the gross negligence, bad faith or willful misconduct of each Attorney-in-Fact or Custodian, as the case may be. The undersigned agrees that each Attorney-in-Fact and the Custodian may consult with counsel experienced in such matters of their own choice (which counsel shall be paid by the Company and may, but need not, be counsel retained on behalf of the Company or any Selling Shareholder) and each Attorney-in-Fact and the Custodian shall have full and complete authorization and protection for any action taken or suffered by each Attorney-in-Fact or the Custodian hereunder in good faith and in accordance with the advice of such counsel. (b) Neither Attorney-in-Fact nor the Custodian, as such, shall or will have any interest in the Shares deposited hereunder. The undersigned agrees to pay all stock and other transfer taxes relating to such Selling Shareholder's Common Stock resulting from the sale of such Shares and agrees to reimburse, indemnify and hold harmless each Attorney-in-Fact and the Custodian from any amounts that either of them is obligated to pay in the way of such stock and other transfer taxes. (c) Neither any Attorney-in-Fact nor the Custodian makes any representation as to the validity, value, genuineness or collectability of any security, document or instrument held by or delivered to either of them. 9 (d) Neither any Attorney-in-Fact nor the Custodian will be called upon to advise or has advised the undersigned as to the merits of selling or retaining the Shares. (e) This Irrevocable Power of Attorney and Custody Agreement sets forth exclusively the respective duties of each Attorney-in-Fact and the Custodian with respect to any and all matters pertinent hereto and no implied duties or obligations shall be read into this Irrevocable Power of Attorney and Custody Agreement against either Attorney-in-Fact or the Custodian. (9) Withdrawal, Termination and Release of Shares. (a) If the Underwriting Agreement is entered into on behalf of the undersigned, this Irrevocable Power of Attorney and Custody Agreement, other than Section (8) hereof, shall terminate automatically on the 36th day following the date of the Underwriting Agreement, and shall thereafter be of no further effect. (b) If the Underwriting Agreement shall not be entered into on behalf of the undersigned, or it shall not become effective pursuant to its terms, or if the Underwriting Agreement shall be terminated pursuant to its terms, or if the shares agreed to be sold as contemplated by the Underwriting Agreement are not purchased and paid for by the Underwriters on or before June 30, 2004, then after such date the Attorney-in-Fact shall, unless the undersigned has agreed in writing to extend the term of this Irrevocable Power of Attorney and Custody Agreement, instruct promptly in writing the Custodian to return to the undersigned the Shares or the shares of Common Stock held for its account, together with any applicable stock powers. (c) In the event shares of Common Stock are sold pursuant to the Underwriting Agreement, the Custodian shall return any shares of Common Stock (with applicable stock powers) not purchased by the Underwriters. (d) Except as provided in this Section (9), and subject to Section (1), the undersigned shall have no right to revoke its request to include the Shares in the Registration Statement or to decline to sell the Shares as contemplated by the Underwriting Agreement. (e) Termination of this Irrevocable Power of Attorney and Custody Agreement shall not affect any lawful action done or performed by the Custodian, the Attorney-in-Fact or the Company pursuant to this Irrevocable Power of Attorney and Custody Agreement prior to the termination of this Irrevocable Power of Attorney and Custody Agreement. The provisions of Section (8), other than the first sentence of paragraph (a) thereof, shall survive termination of this Irrevocable Power of Attorney and Custody Agreement. (10) Notices. Any notices required to be given pursuant to this Irrevocable Power of Attorney and Custody Agreement shall be deemed given if in writing and delivered in person, by overnight courier or by telecopy subsequently confirmed by letter delivered by certified U.S. Mail, (i) if to the Company, to Quinton Cardiology Systems, Inc., 3303 Monte Villa Parkway, Bothell, Washington 98021, Attention: Chief Executive Officer; (ii) if to either 10 Attorney-in-Fact, to the persons named as attorneys-in-fact on the first page hereof; and (iii) if to the undersigned at the address set forth on the signature page hereof, or at such other address and fax number as any party shall communicate to the other parties by notice delivered as aforesaid. (11) APPLICABLE LAW. THE VALIDITY, ENFORCEABILITY, INTERPRETATION, AND CONSTRUCTION OF THIS IRREVOCABLE POWER OF ATTORNEY AND CUSTODY AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF). (12) Miscellaneous. (a) This Irrevocable Power of Attorney and Custody Agreement may be signed in any number of counterparts, each executed counterpart constituting an original but all together constituting only one instrument. (b) This Irrevocable Power of Attorney and Custody Agreement shall inure to the benefit of, and shall be binding upon, the undersigned and the undersigned's heirs, executors, administrators, successors and assigns, as the case may be. (c) If any provision of this Irrevocable Power of Attorney and Custody Agreement is found to be unenforceable as applied in any particular case or circumstance in any applicable jurisdiction because it conflicts with any other provision of this Irrevocable Power of Attorney and Custody Agreement, or any constitution, statute or rule of public policy, or for any other reason, such finding shall not render the provision unenforceable in any other case or circumstance, or render any other provision of this Irrevocable Power of Attorney and Custody Agreement unenforceable to any extent whatsoever. (d) The undersigned hereby irrevocably submits in any suit, action or proceeding arising out of or relating to this Irrevocable Power of Attorney and Custody Agreement, or any of the transactions contemplated hereby, to the jurisdiction and venue of any federal or state court in the County of New York, State of New York. (e) The Underwriters and the Company are hereby deemed third-party beneficiaries of this Irrevocable Power of Attorney and Custody Agreement and are entitled to rely on the provisions hereof as if signatories hereto. (f) No party may assign any of its rights or obligations under this Irrevocable Power of Attorney and Custody Agreement without the written consent of all other parties, which consent may be withheld in the reasonable discretion of the party when consent is sought. Notwithstanding the foregoing, the Company may engage, consult with or assign any of its rights, duties or obligations as Custodian to its transfer agent or any other party who normally serves in such capacity, who shall be deemed the Custodian for all purposes hereunder in addition to the Company. 11 (g) This Irrevocable Power of Attorney and Custody Agreement may be modified only by a written amendment signed by all the parties hereto, and no waiver of any provision hereof shall be effective unless expressed in a writing signed by the party to be charged. 12 This Irrevocable Power of Attorney and Custody Agreement shall be effective as of the date hereof. Very truly yours, ------------------------------------ PHILIPS ELECTRONICS NORTH AMERICA CORPORATION Dated: ________________ By ---------------------------------- Name: Title: Address, Telephone Number Philips Electronics North America and Fax Number: Corporation 1251 Avenue of the Americas New York, NY 10020 Attention: Anthony Eltvedt (212) 536-0702 (T) (212) 536-0712 (F) Wire Instructions: Bank: ABA No.: Account Name: Account No.: Total Number of Shares of Common Stock Deposited for Sale to the Underwriters in the form of Common Stock (Represents the maximum number of shares that you could sell in the Initial Offering): 1,394,024 13 ACCEPTANCE BY THE ATTORNEY-IN-FACT John R. Hinson hereby accepts his appointment as Attorney-in-Fact pursuant to the foregoing Irrevocable Power of Attorney and Custody Agreement, and agrees to act in accordance with the terms of said agreement. Dated: ---------------- By --------------------------- Attorney-in-Fact ACCEPTANCE BY THE ATTORNEY-IN-FACT Michael K. Matysik hereby accepts his appointment as Attorney-in-Fact pursuant to the foregoing Irrevocable Power of Attorney and Custody Agreement, and agrees to act in accordance with the terms of said agreement. Dated: ---------------- By --------------------------- Attorney-in-Fact 14 ACCEPTANCE BY THE CUSTODIAN Quinton Cardiology Systems, Inc., as Custodian, hereby acknowledges receipt of the securities described in this Irrevocable Power of Attorney and Custody Agreement (and in the form described herein) and agrees to act in accordance with this Irrevocable Power of Attorney and Custody Agreement. Dated: QUINTON CARDIOLOGY SYSTEMS, INC., ---------------- as Custodian By ------------------------------ Authorized Signatory 15 ACCEPTANCE BY THE COMPANY Quinton Cardiology Systems, Inc. hereby accepts the terms of this Irrevocable Power of Attorney and Custody Agreement. Dated: QUINTON CARDIOLOGY SYSTEMS, INC. ---------------- By --------------------------------- Name: Title: 16 -----END PRIVACY-ENHANCED MESSAGE-----