(b) Resell and sub-license the Replacement Electrodes to End-Users or to other third partiesfor sale.          (c) Use CSI Marks, if necessary, in connection with the marketing, resale and sublicensing ofProducts, pursuant to CSI’s prior written approval, such approval not to be unreasonably withheld;and          (d) Resell and sub-license the Products as provided herein under NK’s own Marks and usingNK’s own labeling and packaging; provided, however, that NK maintains all CSI Marks and otherproprietary notices contained on the Products.     1.2 Enforcement. NK shall enforce its obligations under this Agreement with respect tosublicenses granted by NK pursuant to this Agreement and, upon the request of CSI, shall enforce,at NK’s cost, the rights of CSI with respect to any such sublicense and shall cooperate with CSI,at NK’s cost, in any action by CSI to enforce its rights with respect to any such sublicense,including by providing to CSI all information and assistance that CSI considers reasonably usefulto pursue such action. NK’s sale, distribution or other transfer of Products to a distributor or athird party for resale to an End-User shall not prevent CSI from enforcing its rights pursuant tothis section.     1.3 Reservation of Rights. Except as expressly provided herein, CSI does not grant toNK any license or Intellectual Property Rights, whether by implication, estoppel or otherwise inand to the Products, CSI Marks and CSI Confidential Information. NK shall not: (a) reverseengineer, decompile, or otherwise tamper with the Products; (b) permit any third party includingdistributors or End Users to do any of the foregoing.**2. SCOPE OF THE OEM SUPPLY AND PURCHASE AGREEMENT**     2.1 For the term of this Agreement, on the terms and conditions provided herein, CSI agreesto sell and NK agrees to purchase the Products more closely specified in Appendix 1 hereto in suchquantities as NK orders from time to time pursuant to Section 3.     2.2 CSI shall supply to NK Products that conform to the technical specifications defined inAppendix 3 hereto and in accordance with the warranty in Section 9.1.     2.3 Parties shall cooperate and provide to each other in a timely fashion all informationnecessary to facilitate the OEM version of the AED 1x.     2.4 NK agrees to pay CSI for any and all non-recurring engineering (“NRE”) costs and otherexpenses associated with any modifications to the Products requested by NK including but notlimited to any modifications to the internal electronics, software or interfaces of the Products.The Parties will agree in advance as to the nature and the amount of the NRE costs and expensesassociated with the aforementioned modifications.     2.5 For convenient reference, each of the capitalized terms used in this Agreement is definedin Appendix 4.“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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**3. TERM AND TERMINATION**     3.1 Duration. This Agreement becomes effective as of the Effective Date and continuesin full force and effect, unless sooner terminated as set forth below, until December 31, 2008 (the“Term”), with an automatic one (1) year renewal (the “Renewal Term”) unless either party provides aninety (90) day prior written notice of its intent not to renew the Agreement.     3.2 Termination. Either party (the “terminating party”) may immediately terminatethis Agreement upon notice to the other in the event that the other party: (a) breaches anymaterial term of this Agreement, including the obligation to pay amounts due under this Agreementand such breach is not cured within thirty (30) days after notice from the terminating party; or(b) immediately upon written notice to the other party in the event that proceedings in bankruptcyor insolvency are instituted by or against the other party, or a receiver is appointed, or if anysubstantial part of the assets of the other party is the object of attachment, sequestration orother type of comparable proceeding, and such proceeding is not vacated or terminated withinthirty (30) days after its commencement or institution     3.3 Effect of Expiration or Termination. Upon any expiration or termination of thisAgreement, the following provisions apply:          (a) NK will promptly remit to CSI all money due as of the date of expiration or termination;and if CSI terminates this Agreement pursuant to Section 3.2(a), then NK shall reimburse CSI forits actual costs of raw materials and components used to manufacture the Products which CSI hasprocured in order to supply the Products anticipated by this Agreement, and all work-in-processrelated to such Products; provided, however, that (i) NK shall only be required to reimburse CSIfor such volume of raw materials, components and work-in-process that CSI reasonably determines isunable to utilize for any reasonable period in products other than the Products; and (ii) theamount of any such reimbursement shall be reduced by any refunds that CSI is able to obtain uponmaking reasonable efforts to return such raw materials and components to the vendors thereof. Inthe event of termination of this Agreement NK may sell and sublicense the Products existing in itsinventory at expiration or termination;          (b) NK shall have no further right to use CSI’s Marks and shall return all promotionalmaterials that contain CSI Marks to CSI;          (c) NK promptly shall return to CSI all CSI Confidential Information in NK’s possession. NKshall be entitled to retain, however, copies any data and information that NK may be obligated toretain for Quality Control and warranty purposes and/or the requirements of any government agencyor applicable law.          (d) CSI shall continue to supply Licensed Replacement Electrodes to NK for at its standardpublished dealer prices under such terms that are mutually agreeable to the parties and NK shallhave a right to keep providing sales support for the Product to end users customer afterexpiration and/or termination of the Agreement.“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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          (e) NK shall not by reason of the termination or expiration of this Agreement in accordancewith its terms be liable to CSI for compensation, reimbursement or damages on account of lostprospective profits or anticipated sales, or on account of expenditures, investments, leaves orcommitments by CSI or on any other account.**4. NK OBLIGATIONS**     4.1 Applicable Laws.          (a) NK shall comply with all applicable laws, rules and regulations in all of its activitiesrelating to this Agreement including the U.S. export laws, and to the marketing, sale, lease,license, promotion, distribution, export, import and transfer of the Products, including withoutlimitation, obtaining any and all registrations and licenses required for the operation of NK’sbusiness and the marketing, sale, lease, license, promotion, distribution, export, import andtransfer the Products.          (b) NK shall be solely responsible for and agrees to provide, in connection with the sale,offer to sell, license, lease, import, export, transfer or distribution of Products, suchlabeling, manuals, or other information as may be required by applicable Japanese Ministry ofHealth and Welfare (JMHW) approvals and laws, including but not limited to instructions, warningand preventions.     4.2 Documentation and Models. NK shall provide CSI with one copy of the operationsmanuals for each AED 1x model sold under NK’s trade name. When a manual is revised, a copy of therevised manual will be provided within 30 days after the revised manual is first issued.     4.3 Responsibility. NK shall be jointly and severally liable to CSI for the actionsand omissions of its officers, employees, agents, directors, representatives, distributors,sub-dealers, End-Users and other sublicenses with respect to performance under any license orsub-license granted or authorized hereunder or related to the subject matter thereof.**5. CSI OBLIGATIONS**     5.1 Supply. CSI shall provide Products to NK pursuant to the terms and conditionsspecified herein. Notwithstanding the foregoing, CSI shall be relieved of the obligation to supplysuch Products in the event that any of the following circumstances occurs: (i) a third partyclaims that any of the Products infringes or misappropriates its intellectual property; and (ii)any product recall involving any of the Products. CSI shall not be required to provide any directsupport to End-users unless mutually agreed upon by CSI and NK in writing.     5.2 Modifications. NK may request modifications to the Products, which would resultin a deviation from the description of the Products in the Technical Specifications which isspecified in Appendix 3; provided such a request is made at least ninety (90) days prior to thedesired effective date of such modification. The parties shall negotiate in good faith any suchrequested modification, including any related amendments to this Agreement to provide forreimbursement for any non-recurring costs that CSI will incur to effect such modifications and anyadjustments to the prices hereunder to reflect any increased costs of manufacturing the“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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Products as a result of such modification. If the parties are unable to agree upon such requestedmodification and related amendments to this Agreement within such ninety (90) day period, thisAgreement and the Document shall continue in effect without change;     5.3 Development (Software Modification). CSI shall use commercially reasonableefforts to support any mutually agreed upon modifications and deliver Products to NK no later thanthe end of the second quarter of 2005, pursuant to NK’s purchase order.     5.4 Bill of Materials and Parts. CSI agrees to provide NK with schematics and alisting of the bill of materials referred to hereafter as (“Parts”) that may be required tocomplete the manufacture and assembly of the AED 1x. For the sake of clarity and the avoidance ofdoubt, these Parts do not include the Products as defined in Appendix 1 whose specifications areoutlined in Appendix 3. CSI shall provide NK with the cost of Parts, along with the originalmanufacture’s name, address, contact name and provide authorization to CSI’s vendors to allow NK toprocure these Parts at the same transfer price offered to CSI.     5.5 CSI Product Changes. CSI shall inform NK about any material changes ofspecification or any other material changes to the Products at least 180 days prior to theirimplementation. If any proposed modification might affect the performance, quality or functioningof critical components of Products or the approvals, permissions, consents or licenses applicableto them, CSI shall not modify the Products unless NK has given its consent to the modification inwriting. If NK gives its consent to the proposed modification, the modified Products shall replacethe prior version of the Products and the terms and conditions of this Agreement shall continue toapply. If the modified Products are not acceptable to NK, CSI shall, if feasible, continue todeliver to NK unmodified Products. Concerning the Electrodes, if the modification relates to achange in the gel material, CSI shall provide NK with the modification notice and biocompatibilitydata at least 180 days prior to the proposed date of shipment of the modified Electrodes.     5.6 Out of warranty service. With respect to out-of-warranty product returns, CSIshall agree to repair the out of warranty Product for a period of at least seven (7) years fromthe date of delivery by CSI of the Product. NK shall contact CSI and inform CSI of the relevantinformation and request a returned goods authorization and upon approval by CSI, CSI shall give areturn authorization number within two (2) days from receiving request from NK. As promptly aspossible, but not later than ten (10) working days after CSI’s receipt of the defective Products,CSI shall to the extent possible, repair the defective Product. CSI shall provide a reporttogether with any product being returned. Each Party shall bear own shipping costs. Title and riskof loss or damage to the product shall pass to the other party upon delivery to the other party’scarrier. CSI shall apply it standard service rate to out of warranty repairs, unless the cost ofrepair is estimated to exceed $200. In such cases, NK shall have the right to approve in advancethe nature and the amount of the repair costs and expenses associated with the out of warrantyProduct requiring repairs     5.7 Product Discontinuation. If CSI plans to discontinue manufacturing of any of theProduct from its product line, it shall notify NK about the intended removal in writing at least“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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240 days in advance. CS will make its best commercial effort to provide substitute product ifProduct, as defined in Appendix 1, is discontinued.     5.8 Spare Parts. CSI will make best effort to make compatible spare parts availableon reasonable commercial terms for a period of at least [*] from the delivery by CSIof the Product in question. NK understands that there may be no spare parts for the Products otherthan the Products themselves or their replacements. Accordingly, in such cases where spare partsare reasonably required for necessary repair of such Products, CSI shall replace the Product inquestion with replacements that are reasonably acceptable to NK and on reasonable commercialterms.     5.9 Applicable Laws and Regulations. CSI shall manufacture the Products in compliancewith FDA, ISO 9001, the MDD (the Counsel Directive 93/42/EEC concerning medical devices promulgatedby the Counsel of the European Communities as amended) and all other applicable laws andregulations. CSI support and assist NK by providing relevant documentation necessary to seekregulatory clearances and approval for the Products including JMHW, and will assist NK’s efforts tothe extent reasonably necessary, in obtaining any regulatory approvals necessary for the use of theProducts.     5.10 CSI Notification. Notification of quality control and assurance from CSI to NKshall be as set forth in Appendix 5. CSI will indemnify and hold NK harmless from and against anyand all direct damages sustained as the result of CSI’s failure to provide timely notice of Productfailure or defect as detailed in the Appendix 5.**6. ORDERS**Unless expressly otherwise agreed, all sales under this Agreement shall be between CSI as sellerand NK as purchaser.     6.1 NK shall submit to CSI periodic forecasts every month of its anticipated requirement ofthe Products for the subsequent five (5) month period. The purchase forecasts are not binding onNK. The forecasts shall be provided in good faith. CSI shall notify NK of any inability as a resultof causes beyond CSI’s control (i.e. Force Majeure) to supply according to NK’s forecasts no laterthan four (4) weeks prior to the forecast date of shipment and in such case shall inform NK of themaximum amount it is able to supply and its shipment schedule     6.2 NK shall order Products from CSI by issuing written purchase orders. Purchase orders (a)for the Products as defined herein High Voltage Boards and User Interface Circuit Boards containingthe CSI proprietary technology together shall be issued at least thirty (30) days in advance of therequested shipment date. Purchase orders for Electrodes shall be issued at least fifteen (15) daysin advance of requested shipment date.     6.3 In order to initiate the Agreement, NK shall order the following Circuit Board andquantities from CSI:“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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   Item to be ordered Minimum Opening Order QuantityProducts  — High Voltage Boards and UserInterface Circuit Boards containing the CSIproprietary technology together 250 (two hundred and fifty)     6.4 Unless otherwise agreed between the Parties, NK may reschedule in writing, deliveryof any Product on purchase orders with CSI within the following guidelines:   Days from Scheduled Shipment Date Allowed ChangesProducts — Circuit Boards [*] days No changesProducts — Circuit Boards [*] days [*] percent (plus or minus)Products — Circuit Boards [*] days [*] percent (plus or minus)   Days from Scheduled Shipment Date Allowed ChangesElectrodes [*] days No changesElectrodes [*] days [*] percent (plus or minus)Electrodes [*] days [*] percent (plus or minus)     6.5 Every purchase order given by NK will be deemed to be a separate purchase contractunder the terms of this Agreement. Cardiac Science may at its sole discretion refuse to acceptor may cancel any outstanding purchase order in the event that any of the followingcircumstances occurs: (i) CSI determines or a third party claims that any of the Productsinfringes or misappropriates its intellectual property; and (ii) any product recall or similarcorrective action involving any of the Products which is required to be reported under the FDA’sMedical Device Reporting requirements such as 21 CFF Part 803.**7. DELIVERIES**     7.1 Delivery and Shipping. Unless expressly otherwise agreed in writing, all ordersshall be delivered by CSI EXW Minnetonka. MN, or some other location of CSI’s choosing,interpreted in accordance with INCOTERMS (2000 Edition). CSI shall use its commerciallyreasonable efforts to ship the Products with test reports in time for them to arrive by deliverydates agreed upon in compliance with the ordering procedure described herein. CSI shall notify“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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NK of any anticipated delivery problems in advance, but CSI shall not be responsible for any lossor liability suffered by NK as a result of delay in delivery or replacement of any order. NKagrees, however, that for shipments destined to locations outside the U.S., where transit time isexpected to take more than one week, the minimum lead time for orders may be appropriatelyincreased by CSI to reasonably account for such additional transit time. Title and risk of loss toProducts purchased under this Agreement shall pass to NK upon delivery thereof to the carrier.     7.2 Packaging. Unless NK specifies otherwise, deliveries of the Products shall bemade in CSI’s standard delivery containers, which are reasonably designed to avoid damage duringdelivery and inventory phases. Delivery shall be made to such address as NK specifies in apurchase order. NK shall pay reasonable costs of any special packaging that it requires.     7.3 Taxes. Except as expressly stated otherwise, prices set forth herein do notinclude any existing or future taxes, tariffs, fees, duties, assessments or other charges (otherthan income taxes assessed on CSI) that may be applicable to the Products supplied to NK pursuantto this Agreement. If such additional sums are required to be withheld, collected, or paid, thenCSI shall add them to the price payable by NK.     7.4 Acceptance upon Shipment. All sales of Products to NK shall be deemed acceptedupon shipment by CSI and title to the Products shall pass to NK upon delivery to NK’s carrier.     7.5 Non-conforming Products. NK shall inspect Products, based on the criteria forincoming inspection which shall be separately and mutually agreed to by CSI and NK, promptlydetermine if any of the Products are non-conforming. Upon reasonable request, CSI shall providereasonable assistance to NK in order to determine whether any of the Products are nonconforming.Non-conforming Products may be returned freight prepaid to CSI after receipt of a returnauthorization number from CSI. Return authorization number shall be issued by CSI within two (2)days from receiving the request from NK. No returns will be accepted without a returnauthorization number. As promptly as possible, but not later than ten(10) working days after CSI’sreceipt of non-conforming Products, CSI shall, at its option and expense, either repair or replacenon-conforming Products. CSI shall provide a repair/replacement report together with any goodsbeing returned. Title and risk of loss or damage to the products shall pass to the other partyupon delivery to the other party’s carrier. CSI will prepay transportation charges back to NK andshall reimburse NK for any costs of transportation incurred by NK in connection with the return toCSI of properly rejected goods. Other than as permitted in this Section or under the terms of thewarranty stated herein, goods may not be returned to CSI.     7.6 Failure to Pay Duties. NK shall bear all applicable taxes (such as sales, use orsimilar taxes); all customs, duties, and similar charges; and all personal property taxesassessable on Products after delivery to the carrier at CSI’s plant. In the event of NK’s failure topay any amounts due CSI within the time herein provided, CSI may, in addition to other remediesavailable to it, cease acceptance and/or delivery of orders for Products from NK until such time asNK’s payments are current and may thereafter condition acceptance and delivery of future orders onsuch other or additional payment terms as it shall, in its discretion, determine.“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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     7.7 Inspection. NK may, by itself or through its appointed representative, duringregular business hours and following reasonable notice to CSI,inspect CSI’s physical facilitiesand CSI’s quality control procedures in order to assure compliance with the specifications, qualityrequirements and other applicable standards. In the event that NK determines that the qualityprocedures applied by CSI are insufficient as to ensure consistent acceptable quality, NK shallspecifically inform CSI thereof and of its recommended corrective measures to be undertaken byCSI. CSI agrees to evaluate such recommendation in good faith. CSI agrees to take all appropriatemeasures in order to ensure compliance of its sub-suppliers with the foregoing. Any circumstancewhich might lead to modification or cancellation of CSI’s quality certificate(s) or status as anFDA registered manufacturer in good standing, shall be immediately informed to NK in writing.**8. PRICES AND TERMS OF PAYMENT**     8.1 Prices. The prices for the Products shall be as set forth in Appendix 2 andunless expressly otherwise agreed by the Parties CSI shall sell and NK shall purchase the Productsat those prices.     8.2 Credit. Any credit terms set forth for NK hereunder shall be subject to thecondition that open account credit is established and maintained toCSI’s satisfaction and thatshipment of any delivery will not cause NK to exceed such credit limit as CSI may from time totime establish. Unless expressly otherwise agreed in writing, payment for all Products shall bemade by NK in US dollars by wire transfer within thirty (30) days from the date of arrival of theProducts at NK’s premises or such other destination as may have been specified in the purchaseorder. In addition to all of the other rights and remedies to which CSI shall be entitled, CSIshall be entitled to interest on overdue payments at the rate of twelve (12) per cent per annum orhighest rate permitted by the applicable law, whichever is lower. In the event of NK’s failure topay any amounts due CSI within the time herein provided, CSI may, in addition to other remediesavailable to it, cease acceptance and/or delivery of orders for Products from NK until such timeas NK’s payments are current.**9. CSI REPRESENTATIONS AND WARRANTIES**     9.1 General. CSI’s warranty obligations for the Products supplied by CSI shall be setforth in subsection (a) — (e) below:          (a) CSI represents and warrants that the Products supplied by CSI shall be in accordance withthe specifications and quality requirements specified in this Agreement and for a period of fiveyears (5) after delivery by CSI of each Product to NK, such Product, (i) will function inaccordance with the applicable specifications; and (ii) will be free from defects or faults indesign workmanship and materials;          (b) Products as provided by CSI, and as of the Effective Date, are in compliance with allapplicable requirements of U.S. and Japanese law or regulation. As stated in Section 13.2 herein,CSI will make its best effort to be in compliance with applicable regulatory requirements of otherforeign countries in which the Products may be marketed;“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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          (c) CSI shall maintain quality control procedures in compliance with the requirements of thefollowing quality systems ISO 9001, EN 46001 or ISO 13485, US GMP 21 CFR 820 (“the US GMP”) andthe Council Directive 93/42/EEC concerning medical devices promulgated by the Council of theEuropean Communities as amended (“the MDD”). If requested by NK, CSI shall provide NK withappropriate documents evidencing that the Products comply with the essential requirements of theMDD and US GMP product standards. CSI grants NK the right, by itself or through its appointedrepresentative, during regular business hours and following reasonable notice to CSI, to inspectCSI’s physical facilities and CSI’s quality control procedures in order to assure compliance withthe specifications, quality requirements and other applicable standards as required by JMHWordinances. In the event that NK determines that the quality procedures applied by CSI areinsufficient as to ensure consistent acceptable quality, NK shall specifically inform CSI thereofand of the reasonable corrective measures recommended to be undertaken by CSI. CSI agrees toconsider in good faith any such recommended corrective measures without delay. CSI agrees to takeall appropriate measures in order to ensure compliance of its sub-suppliers with the foregoing;          (d) CSI has good and marketable title, and the right to license or sell the Products free andclear of all liens, security interests and encumbrances;          (e) CSI has the legal capacity to execute this Agreement and to perform its obligationshereunder; and execution and delivery of this Agreement by CSI and performance of its obligationshereunder shall not violate any applicable U.S. laws.     9.2 Remedies, (a) If CSI breaches any of its warranties described in Section 9.1, CSIwill, in its sole discretion, either: (i) repair or replace the Product under the applicablewarranty, or (ii) refund any fees already paid for the non-conforming goods. If CSI decides torepair or replace a Product, NK shall contact CSI and inform CSI of the relevant information andrequest a returned goods authorization. If CSI gives a returned goods authorization, CSI will bearshipping costs in transit in both directions; provided, however, CSI will only bear CSI’s shippingcosts to CSI if NK ships via a carrier designated by NK and directs the carrier bill to CSI. Titleand risk of loss or damage to the Product shall pass to the other party upon delivery to the otherparty’s carrier. CSI shall ship the repaired or replacement Product to NK with repair/replacementreport as promptly as possible, but not later than ten (10) working days after CSI’s receipt ofthe non-confirming Products.     9.3 Limitations.          (a) THE EXPRESS WARRANTY PROVIDED IN THIS ARTICLE 9 IS THE SOLE AND EXCLUSIVE WARRANTY GIVENBY CSI WITH RESPECT TO THE PRODUCTS, AND CSI GIVES AND MAKES NO REPRESENTATIONS OR WARRANTIES OFANY KIND, EXPRESS OR IMPLIED, OTHER THAN THE FOREGOING. WITHOUT LIMITING THE GENERALITY OF THEFOREGOING, NO IMPLIED WARRANTY OF MERCHANTABILITY, NO IMPLIED WARRANTY OF FITNESS FOR A PARTICULARPURPOSE, AND NO IMPLIED WARRANTY ARISING BY USAGE OF TRADE, COURSE OF DEALING OR COURSE OFPERFORMANCE IS GIVEN OR MADE BY CSI OR SHALL ARISE BY OR IN CONNECTION WITH ANY SALE OR PROVISIONOF THE PRODUCTS BY CSI OR NK’S USE OR SALE OF THE PRODUCTS OR NK’s AND CSI’s CONDUCT IN“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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RELATION THERETO OR TO EACH OTHER. NO REPRESENTATIVE OF CSI IS AUTHORIZED TO GIVE OR MAKE ANYOTHER REPRESENTATION OR WARRANTY OR TO MODIFY THE FOREGOING WARRANTY IN ANY WAY. THE REMEDIES SETFORTH IN SUCH EXPRESS WARRANTY ARE THE ONLY REMEDIES AVAILABLE TO ANY PERSON FOR BREACH OFWARRANTY.          (b) The warranties described in Article 9 do not extend to any Products that have beensubject to misuse, neglect or accident; that have been damaged by causes external to the Products,including but not limited to failure of or faulty electrical power; that have been used inviolation of CSI’s instructions, inconsistent with the Documentation or outside the scope of thelicense granted herein; on which the serial number has been removed or made illegible; or thathave been modified, disassembled, serviced or reassembled by anyone other than CSI or itsauthorized agents.          (c) NK agrees that the warranty, remedies and limitations on liability provided in thisAgreement (subject to the limitations thereon) reflect a bargained-for compromise between CSI andNK as to the allocation of risk in this Agreement.**10. NK REPRESENTATION AND WARRANTY**     10.1 General. NK represents and warrants:          (a) As to Products subject to sublicenses granted by NK, NK shall not provide anyrepresentations and warranties to its sublicenses, which exceed in scope the representations andwarranties provided by CSI to NK herein.          (b) NK has the legal capacity to execute this Agreement and perform its obligationshereunder;          (c) Execution and delivery of this Agreement by NK and performance of its obligationshereunder shall not violate any applicable Japan laws.**11. LIMITATION OF LIABILITY EXCEPT PRODUCT LIABILITY**     IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES OR LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY OFSUCH DAMAGES. THE LIABILITY OF CSI FOR ANY CLAIM CONCERNING PERFORMANCE OR NONPERFORMANCE BY CSIPURSUANT TO, OR IN ANY WAY RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT, REGARDLESS OF THE FORMOF ACTION, WHETHER IN CONTRACT OR IN TORT, EXCEPT PRODUCT LIABILITY DESCRIBED IN SECTION 12, SHALLBE LIMITED TO THE AMOUNT PAID TO CSI BY NK FOR THE LICENSED CIRCUIT BOARDS OR REPLACEMENTELECTRODES, AS APPLICABLE, IN ACCORDANCE WITH THIS AGREEMENT AND WITH RESPECT TO WHICH LICENSEDCIRCUIT BOARDS OR REPLACEMENT ELECTRODES, AS APPLICABLE, SUCH CLAIM SPECIFICALLY RELATES. IN NOEVENT SHALL CSI BE LIABLE FOR DAMAGES CAUSED BY NK’s OR ANY END-USER’S ACT OR OMISSION.“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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**12. PRODUCT LIABILITY**     CSI agrees to indemnify and hold NK harmless from and against any and all losses, claims,damages, costs and expenses, including reasonable attorney’s fees, arising out of or relating topersonal injury, illness and/or death if it is established that such damage and/or personal injuryresulted from i) defect with respect to design, manufacturer, workmanship or materials of theProduct; or ii) failure of the Product, at the time of shipment to NK, to comply with theTechnical Specifications which is specified in Appendix 3.**13. REGULATORY REQUIREMENTS, RECALLS**     13.1 The Parties confirm that in relation to the JMHW regulatory approvals or submission thatNK shall be regarded as the manufacturer of the Products. The Parties agree to cooperate in orderto gain JMHW regulatory approval for the Products.     13.2 Each Party shall make its best efforts to comply with all applicable laws andregulations of the competent jurisdiction in which NK sells its Products. In particular, eachParty shall ensure that the Products as well as their respective activities in relation theretoconform to all legislation, rules, regulations and statutory requirements existing from time totime.     13.3 If either Party becomes aware of an event where there is reasonable suspicion that theProduct contributed to or caused a death or serious injury or an event where a Product hasmalfunctioned and, if that malfunction occurred again, it could cause death or serious injury. Asused herein, “Serious injury” means: Any injury or illness that i) is life threatening, or ii)result in permanent impairment of a body function or permanent damage to a body structure, or iii)necessities medical or surgical intervention to preclude permanent impairment of a body functionor permanent damage to a body structure. To be reported a direct link with the Product and itspossible short -comings should be clearly established. Party shall use its best efforts to givesuch notice to the other Party orally within 24 hours from the receipt of such complaint orbecoming aware of such event and shall use its best efforts to confirm such notice by telefaxwithin 24 hours after giving oral notice.     13.4 The Parties shall be responsible for reporting under United States reporting requirementssuch as 21 CFR Part 803, the Japanese Ministry of Health and Welfare and the European Unionreporting requirements and under the reporting requirements of any other country as may beapplicable. Before submitting a report involving a Product either Party shall use its best effortsto notify the other Party and to obtain any information it may have relating to any incidentinvolving a Product. Copies of such reports shall be sent to the other Party without delay. If JMHWor any governmental authorities require to take any product corrective action (includingnotification, recall, removal and correction) involving a Product in Japan and NK decides tovoluntarily take any product corrective action and in Japan and overseas, NK shall use its bestefforts to notify CSI immediately. In case that CSI decides to take any corrective action for anyproduct in overseas which is substantially the same as the Products specified herein and the causeof such corrective action affects the Products sold or distributed by NK, CS shall use its bestefforts to notify NK immediately with such cause and NK shall have a right to take correctiveaction of the Products. If FDA or other authorities contact either Party to inquire about orinvestigate the Products sold under this Agreement, the contacted Party, unless required to“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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maintain confidentiality by such authorities, shall inform the other Party immediately thereof.The Parties shall co-operate closely to clear any regulatory issues or potential regulatory issuespromptly.     13.5 In the event NK decides to take any product corrective action (including notification,recall, removal and correction) with respect to the Product sold or distributed by NK, regardlessof whether such action is initiated to comply with applicable laws or regulations or for otherreasons, the Parties agrees that: a) NK shall be the point of contact for purchasers of itsProducts (whether directly of through its distributors); b) after discussion between the parties,NK will “define the action to be taken” and c)during the course of recall of the Product, CSI shallwork with NK to provide replacement Product if required by end users customers to minimize anydowntime of replacement Product. In such cases, CSI shall provide NK with efficient quantity ofreplacement Product as soon as possible for NK’s immediate action to end users customers and d) CSIshall reimburse NK for direct costs of the type set forth below which are in incurred by NK toimplement such actions,     As used herein, “define action to be taken” means; i) In the event of any recall of any Product, CSI shall work with NK to provideinvestigation of scope and root cause of the Product failure, and provide a correctiveaction plan for any found cause of the Product failure.  ii) Defining theeffectiveness check procedure (to establish the corrective action hasbeen completed).  iii) CSI shall make every effort to pursue any necessary actionsagainst the Vendor orSupplier responsible for the Product.  iv) If NK submits a corrective action requestthat accompanies an end users customerreturned Product that requires immediate response, then Seller shall respond withscope of problem evidence of registration and initial plan for root cause analysiswithin 72 hours of the request.The type of costs reimbursable under d) above are: mailing, telephone, telefax and printingcharges for shipment of the Product to NK back to CSI; and direct labor costs to receiveand handle returned Product and to replace the Product to end users customer. In case thatit is necessary for NK to confirm that Product is manufactured under appropriatemanufacturing and quality control, NK has a right to audit such system.**14. INTELLECTUAL PROPERTY RIGHTS**     14.1 Ownership. Except as expressly provided herein, neither Party grants to theother Party any license or intellectual property right, other by implication, estoppel orotherwise in and to its Products, patents, trademarks, documentation and confidential information.Except in the case of NK’s need to provide authorized service to said Products, NK shall not: (a)reverse engineer, decompile, disassemble or otherwise tamper with the Products; and (b) permit anythird party including any of NK’s distributors or end users customers to do any of the foregoing.     14.2 CSI Trademarks. Subject to NK’s compliance with the terms of this Agreement, CSIgrants to NK the non-transferable and non-assignable right to use the trademarks, service“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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marks, trade names, logos or other words or symbols of CSI identifying the Products (theTrademarks”) on NK’s advertising and promotional materials, stationery, signs, labels andpackaging in order to convey that NK is manufacturing Products, equipment or devices whichincorporate the Products. The Trademarks are and shall remain the exclusive property of CSI,whether or not such ownership is specifically recognized or protected under the laws of theTerritory. NK shall acquire no rights to the Trademarks other than those set forth in thisArticle, and NK hereby assigns and transfers to CSI all rights other than those granted pursuantto this Section that it may acquire in and to the Trademarks, whether by operation of law orotherwise. NK shall comply with CSI’s guidelines for the use of the Trademarks, and shall allowCSI an opportunity to inspect the Products to confirm NK’s compliance herewith.     14.3 NK Trademarks. CSI shall not use or refer to NK’s name or trademarks in anyother form or manner or for any other purpose than what is expressly allowed in this Agreement.All artwork, packages and labels (if any) prepared by CSI in connection with the NK name shall besent to NK for approval.     14.4 Infringement. CSI warrants that it is the sole and exclusive owner of, or hasvalid licenses, with the right to sublicense, the Products, in each case free and clear of any andall liens, claims or encumbrances. CSI represents that (i) it has not been determined to beinfringing any patents or other rights with respect to the Products and (ii) no person hasasserted that CSI’s manufacture or sale of the Products anywhere in the world infringes any patentor other proprietary right of such person.     14.5 Notification. NK shall promptly notify CSI of (a) any claims, allegations ornotification that NK’s sale, offer to sell, license, lease, importation, export, transfer ordistribution of any Product may or will infringe the Intellectual Property Rights of a third party;and (b) any determination, discovery, or notification that any person or entity is infringing ormay be infringing the Intellectual Property Rights of CSI.     14.6 Alteration and Use. NK may not remove or alter any proprietary designs notices orMarks contained in or on the Products, Documentation or related materials. NK may not make anyreference or claim about CSI or the Products or use any of CSI marks, which have not been approvedor provided by CSI.**15. CONFIDENTIALITY**     15.1 This Agreement and all documents, drawings, manuals and other materials related theretoand transmitted between the Parties, provided that only if it is designated as “Confidential” inwriting when communicated, or within thirty (30) days of disclose, if disclosed orally, shall betreated as confidential by the Parties and their employees and such information shall not bedisclosed to any third party. Without the other Party’s prior written consent, this Agreement andany other materials treated as confidential hereunder may be disclosed by either parties incompliance with governmental regulations and other corporate reporting requirements; provided thatsuch Party has notified the other Party and cooperated in good faith to take such steps as may bereasonably available to protect the confidentiality of the information contained therein to theextent requested by the other Party and as may be allowable by the applicable law. ConfidentialInformation does not include information that: a)at the time of disclosure is already“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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known to the public, b) becomes generally available to the public after disclosure through no faulton the party, c) Recipient can demonstrate it had rightfully, prior to disclosure to Recipient bythe other party, d) Recipient rightfully obtains from a third party having the right to discloseit, or e) is independently developed by recipient without the use of Confidential Information;Each Party shall arrange proper filing for specifications and drawings given by the other Party.Each Party shall nominate a person who shall be in charge of the filing and shall inform thisperson of the confidentiality requirements of this Agreement. The parties agree to hold allConfidential Information confidential for a period of two (2) years after the expiration and/ortermination of the Agreement.**16. CSI INDEMNIFICATION**     16.1 Indemnity. Subject to NK satisfying the conditions of Section 14, CSI shallindemnify and hold NK, its affiliates and their respective directors, officers, employees andrepresentatives harmless from and against any suits, actions, losses, damages and other expensessolely arising out of or in connection with any claim (a) that any authorized use of a Productinfringes or violates any Intellectual Property Right or copyright of a third party.     16.2 Remedies. If NK’s or any End-User’s use of the Products is prevented by aninjunction or court order because of any claim of infringement, CSI will, at its expense, and inits sole discretion, use reasonable commercial efforts to: (a) replace or modify the Product, insuch a manner so as to maintain its functionality and compatibility, but nonetheless make theProducts, as applicable, no longer subject to a claim of infringement; or (b) procure for NK’s orany End-User’s benefit the right to use and resell the Products, as applicable, as provided inthis Agreement. If (a) and (b) above are not commercially viable, CSI shall refund to NK allamounts paid therefore by NK and shall terminate the rights granted herein.     16.3 Exclusion. CSI will have no liability for any claim of indemnity if such claimis based upon: (a) Products that have been modified, disassembled, reassembled, serviced, alteredor changed without the express written authorization of CSI; or (b) the combination, operation, oruse of the Products with software and/or hardware not supplied by CSI, if such liability wouldhave been avoided in the absence of such combination, operation or use.     16.4 Entire Liability. This Article 16 states CSI’s entire liability for infringementof any patent or other intellectual rights with respect to the Products     16.5 Conditions. NK shall promptly notify CSI of (i) any matter for which NK mayclaim indemnification, (ii) any claim against NK that any Products misappropriate any trade secretor infringe any patent, copyright or other Intellectual Property Right of a third party and (iii)any suit, action or proceeding brought against NK on the basis of any such claims. CSI shall, inits sole discretion, defend or settle any such claim, suit, action or proceeding in any manner andon any terms it shall deem appropriate, and the costs thereof (including any final award ofdamages) shall be borne entirely by CSI. If CSI elects to defend any such suit, action orproceeding, NK shall provide CSI, at CSI’s expense, with all the needed information, assistanceand authority necessary to enable CSI to defend such claim. NK shall not without CSI’s priorwritten approval itself defend or settle any such suit, action or proceeding.“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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**17. NK INDEMNITY**     17.1 General. NK shall indemnify and hold harmless CSI, its affiliates and theirrespective directors, officers, employees and representatives harmless from any claims, demands,actions, suits, proceedings, judgments, damages, expenses and costs (including reasonableattorneys fees) related to:          (a) Any of its activities under this Agreement, including any third party assertion that theProducts or any component thereof, to the extent they have been modified, disassembled,reassembled, serviced, altered or changed by NK, infringe or misappropriate any patents orcopyrights of such third parties;          (b) Death, injury or damage (including death) to any person or property caused by theProducts that have been subject to modification, alteration or change that NK instructed and/orrequired to CSI.     17.2 Conditions. CSI shall promptly notify NK of (i) any claim against CSI thatProducts, which have been modified, disassembled, reassembled, serviced, altered or changed by NKor CSI in accordance to NK’s instruction or requirement, misappropriate any trade secret orinfringe any patent, copyright or other intellectual property right of a third party and (ii) anysuit, action or proceeding brought against CSI on the basis of any such claims. NK shall, in itssole discretion, defend or settle any such claim, suit, action or proceeding in any manner and onany terms it shall deem appropriate, and the costs thereof (including any final award of damages)shall be borne entirely by NK. If NK elects to defend any such suit, action or proceeding, CSIshall provide NK, at NK’s expense, with all the needed information, assistance and authoritynecessary to enable NK to defend such claim. CSI shall not without NK’s prior written approvalitself defend or settle any such suit, action or proceeding.**18. INSURANCE**     Throughout the term of this Agreement, and for a period of at least three (3) yearsthereafter, CSI and NK shall each carry a reasonable amount of commercial general liabilityinsurance. Insurance is to be maintained by parties pursuant to the provisions of this Articleshall provide for written notice to the other party thirty (30) days in advance of any terminationor cancellation of such insurance. Upon the request of either party from time to time during theterm hereof, each party shall provide the other with a certificate evidencing such insurancecoverage.**19. GENERAL**     19.1 Notices. All notices, requests, demands, waivers and other communicationsrequired or permitted to be given under this Agreement are to be in writing and are deemed to beduly given (a) upon being delivered either personally or by overnight courier with delivery chargesprepaid, (b) upon the fifth (5th) day from the date such notice was mailed by certifiedor registered mail, postage prepaid, receipt requested, or (c) upon being sent by email ortelecopy, to the people and addresses set forth below or to such other person or address as eitherparty may“[*] Designates portions of this document that have been omitted pursuant to a request forconfidential treatment filed separately with the Commission.”
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specify by notice in writing to the other party. All notices, requests, demands, waivers andcommunications are received on the date of delivery.If to CSI:Cardiac Science, Inc.