exv10w38



 




Exhibit 10.38




AMENDMENT ONE TO OEM PURCHASE AND SUPPLY AGREEMENT



     This Amendment (the “Amendment”) is made as of August 10, 2004, by and between
Cardiac Science, Inc., a Delaware corporation (“Supplier” or “Cardiac Science” or “CSI”), a
medical device developer and manufacturer of automated external defibrillators having its
principal place of business at 1900 Main Street, Irvine, CA 92614 and GE Medical Systems
Information Technologies, Inc., a Wisconsin corporation (“GEMS-IT”), having its principal place
of business at 8200 W. Tower Avenue, Milwaukee, WI 53223. CSI and GEMS-IT may each be referred to
herein as a “Party” and collectively, the “Parties”.



W I T N E S S E T H:




     WHEREAS, CSI and GEMS-IT are parties to an OEM Purchase and Supply Agreement dated July 29,
2003 and “Addendum 1” to the OEM Purchase and Supply Agreement dated as of March 24, 2004
(collectively, the “OEM Purchase and Supply Agreement”).



     WHEREAS, CSI and GEMS-IT desire to supplement and amend the OEM Purchase and Supply
Agreement as set forth herein.



     NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, it is agreed as follows:



     1.   Construction. Except as provided in this Amendment, the terms and conditions set
forth in the OEM Purchase and Supply Agreement shall remain unaffected by execution of this
Amendment. To the extent any provisions or terms set forth in this Amendment conflict with the
terms set forth in the OEM Purchase and Supply Agreement, the terms set forth in this Amendment
shall govern and control. Terms not otherwise defined herein, shall have the meanings set forth in
the OEM Purchase and Supply Agreement. This Amendment amends the OEM Purchase and Supply Agreement
and not the OEM Purchase Agreement entered into by the Parties on July 29, 2003.



 









 





     2.   Section 14.5 of the OEM Purchase and Supply Agreement is deleted in its entirety and replaced with the following:




	 	14.5	 	Duty to Report Incidents. GEMS-IT and Supplier shall
inform each other in
writing, within 5 business days from knowledge of a reportable event, of all
incidents relating to the subject matter of the Agreement that must be
reported according to the FDA Medical Device Reporting regulation (21
CFR Part 803) or the European Medical Device Vigilance regulations or that
must be registered according to other national regulations such as Canadian
medical device regulations, including without limitation incidents involving
death or serious injury, malfunctions that, if recurrent, may cause or
contribute to death or serious injury or other material quality problems or
concerns. Supplier will be responsible for reporting such incidents to the
appropriate regulatory authority. GEMS-IT shall fully cooperate with
Supplier as may be necessary to comply with any reporting obligations
regarding such incidents or quality concerns.





     3.   Section 14.6 of the OEM Purchase and Supply Agreement is deleted in its entirety
and replaced with the following:




	 	14.6	 	Recalls and Field Corrections.In the event of any recall, product
withdrawal or field correction of any OEM Product that is required by a
governmental agency, by Supplier, or by GEMS-IT for safety or efficacy
reasons, the parties agree that (a) they shall promptly notify each other and
(b) they shall fully cooperate with each other concerning the necessity and
nature of such action. GEMS-IT shall be the point of contact for purchasers
of any OEM Product (whether directly or through its distributors). Supplier
shall be responsible for making any and all applicable regulatory contacts
and for coordination of any recall or field correction activities involving
such OEM Products. In the event that any OEM Product requires field
correction or is recalled as a result of (a) the supply by Supplier of a
Noncomplying Product or (b) the grossly negligent or intentionally wrongful
act or omission of Supplier or its affiliates or their representatives, then
Supplier shall bear all costs and expenses, including but not limited to the
costs and expenses related to such recall or field correction, communications
and meetings with all required regulatory agencies, replacement stock,
service labor, installation, travel, notifying customers of such recall and
any replacement product to be delivered to those same customers, including
shipping costs. To the extent that any such recall or field correction is due
in part to the negligent or intentional acts or omissions of GEMS-IT,
GEMS-IT shall be responsible for such costs and expenses equitably in
proportion to its fault.





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     4.   Section 9.1.1 of the OEM Purchase and Supply Agreement is deleted in its entirety
and replaced with the following:




	 	9.1.1	 	AED product: for seven (7) years from date of shipment of the
OEM Product to GEMS-IT’s end user customers. Batteries are for four (4) years
from date of installation into the AED device. Accessories and consumables for
one (1) year or until expiration date, whichever is longer.





     5.   Exhibit A of the OEM Purchase and Supply Agreement is amended to provide for
the addition of the OEM Products known as the “Powerheart AED G3” and “Powerheart AED G3
Pro”. The specifications for these OEM Products are attached hereto as Exhibit A. GEMS-IT has
the right to sell these CSI branded OEM Products on a non-exclusive basis in the United States
and Canada. GEMS-IT has no minimum purchase commitments with respect to the Powerheart AED
G3 and Powerheart AED G3 Pro. CSI shall provide sales training and support to the GEMS-IT
Sub-Acute team and shall also provide product specialists who shall be available, as
necessary, to assist the GEMS-IT representatives sell these OEM Products.




     6.   CSI Roles and Responsibilities. To further define the role of CSI, and to more
explicitly set forth CSI’s responsibilities and obligations with respect to the OEM Purchase
and Supply Agreement and the OEM products, the Parties agree that CSI shall be responsible for:




        (a) Designing and manufacturing the OEM Products.




        (b) All European Medical Device Vigilance reporting and requirements.
Notwithstanding CSI’s reporting obligations, in the event a customer reports to a
governmental authority in Europe, GEMS-IT may respond with its own report.





          (c) Providing a copy of its design hazard analysis on the OEM Products to
GEMS-IT with five (5) days of its production. The design hazard analysis will be used
to perform health risk analysis.



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          (d) Performing all complaint investigations on the OEM Products and providing
the results of such investigations to the GEMS-IT “Complaint Leader” via e-mail within
fourteen (14) days of the conclusion of the investigation. The “Complaint Leader” will be
the GEMS-IT employee who is responsible for the coordination and processing of
complaint activities on the OEM Products. The results of any investigation will include
any correction, corrective or preventive action, verification, and validation performed
and/or recommended. The investigative results shall include information obtained in
connection with any investigation performed at both the Copenhagen (Service repair) and
Minnetonka facilities.




          (e) Ensuring that a CSI representative participates in all requested or required
risk assessments. The CSI representative may be a member of CSI’s Service, Engineering,
Quality Assurance or Regulatory Affair departments.




          (f) Notifying GEMS-IT (in writing) of any recall as soon as possible and in no
event later than forty-eight (48) hours after a recall decision has been made by CSI or is
required by a governmental agency.




          (g) Notifying GEMS-IT (in a written report) of any corrective action to be taken
in connection with the OEM Products no later than fourteen (14) days after CSI determines
that such corrective action will be taken.




          (h) Returning a Product to GEMS-IT or its distributor upon conclusion of the complaint
investigation, if appropriate.




          (i) Providing its service work order number and a copy of the actual work order (including
the results of CSI’s investigation) to GEMS-IT. The results of the CSI



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	 	 	investigation shall include root cause analysis and any corrective or preventive action
initiated.






          (j) Compiling monthly complaint data (with each complaint coded for trending) and
providing such trend data to GEMS-IT upon written request from GEMS-IT.



     7.   GEMS-IT Roles and Responsibilities. To further define the role of GEMS-IT, and
to more explicitly set forth GEMS-IT’s responsibilities and obligations with respect to the
OEM Purchase and Supply Agreement, the Parties agree that GEMS-IT shall be responsible for:




          (a) Recording complaints received on the OEM Products pursuant to the
GEMS-IT Quality Procedure — Global Product Complaint Handling and providing a copy
of the Complaint to CSI within five (5) business days of its receipt.




          (b) Scheduling a Risk Assessment when required per GEMS-IT Risk

Management Guidelines.




          (c) Providing CSI with any adverse event and malfunction report via the

MedWatch 3500A form.




          (d) Returning a “repaired” OEM Product to GEMS-IT or its distributors,
regardless of whether GEMS-IT or CSI repaired said Product.




          (e) Notifying its customers of any recall, corrective action initiated by CSI per
the GEMS-IT Global Customer Notification Procedure.




          (f) Sending GEMS-IT or its distributors a replacement OEM Product, even if
CSI is responsible for replacing said product due to non-conformance, defects or
otherwise.



     8.   Governing Law. The validity, construction, performance and enforceability of this
Amendment shall be governed in all respects by the laws of the State of New York, without
reference to the choice-of-law provisions thereof.



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     9.   Counterparts; Facsimile. This Amendment may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Execution and delivery of this Amendment by
exchange of facsimile copies bearing the facsimile signature of a party hereto shall
constitute a valid and binding execution and delivery of this Amendment by such party. Such facsimile
copies shall constitute enforceable original documents.



     5.   Severability. In the event any provision of this Amendment shall be determined to
be invalid or unenforceable under applicable law, all other provisions of this Amendment shall
continue in full force and effect unless such invalidity or unenforceability causes substantial
deviation from the underlying intent of the parties expressed in this Amendment or unless the
invalid or unenforceable provisions comprise an integral part of, or in inseparable from, the
remainder of this Amendment. If this Amendment continues in full force and effect as provided
above, the parties shall replace the invalid provision with a valid provision which corresponds as
far as possible to the spirit and purpose of the invalid provision.



     10.   Interpretation. This Amendment has been negotiated at arm’s length and between
persons sophisticated and knowledgeable in the matters dealt with in this Amendment. Each
party has been represented by experienced and knowledgeable legal counsel. Accordingly, any rule of
law or legal decision that would require interpretation of any ambiguities in this Amendment
against the party that has drafted it is not applicable and is waived. The provisions of
this Amendment shall be interpreted in a reasonable manner to effect the purposes of the parties
and this Amendment.



     11.   Entire Agreement. The terms of this Amendment are intended by the parties to be
the final expression of their agreement with respect to the subject matter hereof and may not be



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contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that
this Amendment constitute the complete and exclusive statement of its terms and shall supersede any
prior agreement with respect to the subject matter hereof




     12.   Headings. The article and section headings contained in this Amendment are for
reference purposes only and will not affect in any way the meaning or interpretation of this
Amendment.



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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by their thereunto duly
authorized representatives as of the date first above written.




	 	 	 	 	 	 	 
	Cardiac Science, Inc.	 	GE Medical Systems 

Information Technologies, Inc.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Raymond W. Cohen
	 	By:
	 	/s/ Matthias Weber
	 

	 	 
	 	 	 	 
	Name:

	 	Raymond W. Cohen
	 	Name:
	 	Matthias Weber
	Title:

	 	Chairman and CEO
	 	Title:
	 	 Vice President & General Manager

Cardiology Systems
	Dated:

	 	11-4-04	 	 	 	 






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EXHIBIT A




SPECIFICATIONS FOR POWERHEART AED G3 AND POWERHEART AED G3 PRO



POWERHEART AED G3



DEFIBRILLATOR



Operation: Semi-automatic

Waveform: Biphasic truncated exponential

Energy (J) range available: Escalating Variable Energy (VE) 105J to 360J

Protocols: 5 energy protocols available

Factory default (Nominal): 200VE, 300VE, 300VE

Shock time cycle (Typical): Less than 55 seconds for three shock series

Controls: One-button operation

Voice prompts: Comprehensive voice instructions guide user through rescue process

Text screen: Displays written instructions to guide user through rescue process

Visible indicators: RescueReady Status Indicator, SmartGauge Battery Status Indicator, Service

Indicator, Pad Indicator, Text Display

Audible alerts: Voice Prompt, System Alert

Synchronized shock: Built-in automatic synchronization feature

Pacemaker pulse detection: Yes

Programmable: Yes, via ServiceLink®

Pediatric capability: Yes




PADS



Minimum combined surface area: 228 cm2

Extended length of lead wire: 1.3m

Supplied: Self-checking, pre-connected to the AED

Type: Adult, pre-gelled, self-adhesive, disposable, non-polarized (identical pads can be placed
in either position) defibrillation pads

Shelf life: 2 years




BATTERY



Type: IntelliSense® lithium battery 

Warranty: 4 year, full operational replacement




AUTOMATED SELF-TESTS



Daily: Battery, pads (presence and function), internal electronics, no energy charge,
SHOCK/CONTINUE button, and software

Weekly: Battery, pads (presence and function), internal electronics, partial energy charge,
SHOCK/CONTINUE button, and software




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Monthly: Battery, pads (presence and function), internal electronics, full energy charge cycle,
SHOCK/CONTINUE burton, and software




EVENT DOCUMENTATION



Type: Internal memory

Internal memory: 34 minutes ECG data with event annotation

Playback: Viewable via RescueLink® software via PC

Communications: Serial port or USB (via adapter) for PC with Windows

Clock synchronization: Precise synchronization of AED time to dispatch time




PHYSICAL DIMENSIONS



Height: 8 cm (3.3 in)

Width: 27 cm (10.6 in)

Depth: 31 cm (12.4 in)

Weight: 3.10 kg (6.6 lb)



POWERHEART AED G3 PRO



DEFIBRILLATOR



Operation: Semi-automatic and manual

Waveform: Biphasic truncated exponential

Energy (J) range available: Escalating Variable Energy (VE) 105J to 360J

Protocols: 5 energy protocols available

Factory default (Nominal): 200VE, 300VE, 300VE

Shock time cycle: Approximately 1 minute for three shock series

Control buttons: Automated (Shock) and manual

Voice prompts: Comprehensive voice instructions guide user through rescue process

Display content: Displays written instructions to guide user through rescue process, SmartGauge

Battery Status Indicator, Service Indicator, Pads Indicator, Text Display, ECG Display

Display specifications: Sharp “LO035O70H01.” 8.9 cm (3.5") diagonal transreflective TFT

display with 320 x 240 pixels (quarter VGA). Resolution is 4.47 dots/mm (113.5 dots/in.)

Visible indicators: RescueReady Status Indicator

Audible alerts: Voice Prompt, System Alert

Synchronized shock: Built-in automatic synchronization feature

Pacemaker pulse detection: Yes

Programmable: Yes, via ServiceLink®

Pediatric capability: Yes




PADS



Minimum combined surface area 228 cm2




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Extended length of lead wire: 1.3 m

Supplied: Pre-connected to the AED

Type: Adult, pre-gelled, self-adhesive, disposable, non-polarized (identical pads can be placed
in either position) defibrillation pads

Shelf life: 2 years




BATTERY



Type IntelliSense® lithium battery

Warranty: 1 year or 12 hours of use, whichever occurs first




OPTIONS



3-Lead ECG Cable Kit

Rechargeable Battery




AUTOMATED SELF-TESTS



Daily: Battery, pads (presence and function), internal electronics, no energy charge, SHOCK
button, and software

Weekly: Battery, pads (presence and function), internal electronics, partial energy charge,
SHOCK button, and software

Monthly: Battery, pads (presence and function), internal electronics, full energy charge cycle,
SHOCK button, and software




EVENT DOCUMENTATION



Internal memory: 60 minutes ECG data with event annotation

Multiple rescue: Yes

Playback: Viewable via RescueLink® software via PC

Communications: Infrared Data Transfer for PC with Windows

Clock synchronization: Precise synchronization of AED time to dispatch time




PHYSICAL DIMENSIONS



Height: 8 cm (3.3 in)

Width: 27 cm (10.6 in)

Depth: 31 cm (12.4 in)

Weight: 3.1kg (6.9 lb)





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