Exhibit
      10.1


    


    THIRD
      AMENDMENT TO OEM PURCHASE AGREEMENT 

     

    This
      Third Amendment (the “Amendment”) is made as of June 10, 2005, 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 d/b/a GE Healthcare (“GEMS-IT”), having its principal
      place of business at 8200 W. Tower Avenue, Milwaukee, WI 53223. 

     

    W
      I T N E
      S S E T H:

    


    WHEREAS,
      CSI
      and
      GEMS-IT are
      parties to that certain OEM Purchase Agreement dated July 29, 2003, Amendment
      One to OEM Purchase Agreement dated August 10, 2004 (“Amendment One”) and Second
      Amendment to OEM Purchase Agreement dated February 14, 2005 (collectively,
      the
“OEM Purchase Agreement”).

     

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

     

    NOW
      THEREFORE, in consideration of the premises and other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties hereto agree as follows: 

     

    1.  Construction.
      Except
      as provided in this Amendment, the terms and conditions set forth in the
OEM
      Purchase Agreement shall
      remain unaffected by the 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 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 Agreement.
      This
      Amendment amends the OEM Purchase Agreement and not that certain OEM Purchase
      and Supply Agreement entered into by the parties on July 29, 2003.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.  Section
      1.5 is hereby amended by inserting the following sentence at the end of such
      section:

     

    “For
      the
      purposes of this Agreement, “GEMS-IT” shall include GEMS-IT and any GEMS-IT
      Affiliate or GEMS-IT Subcontractor (including distributors) involved in the
      marketing, sale, distribution or servicing of the OEM Products.”

    


    3.  Section
      1.6 is hereby deleted in its entirety and replaced with the
      following:

     

    “Term
      of Agreement.
      This
      Agreement will commence as of the Effective Date and continue until the latter
      to occur of: (a) three (3) years after the date of the first delivery to GEMS-IT
      by Cardiac Science of the OEM Products capable of commercial resale by GEMS-IT
      in the United States and European countries accepting the CE Mark (the “First
      Delivery Date) or (b) December 31, 2008 (the “Term”), unless terminated earlier
      under the terms of this Agreement. If the First Delivery Date has not occurred
      prior to December 31, 2005, GEMS-IT may at its option terminate this Agreement.
      

    


    Renewal
      Option.
      After
      the initial Term, this Agreement may be extended for up to two (2) additional
      one-year periods at the option of GEMS-IT, provided that at least two thousand
      one hundred and twenty five (2,125) units of OEM Products were purchased in
      the
      twelve- (12) month period immediately preceding each such additional
      period.  The parties agree to review and adjust, by mutual agreement
      and in
      good faith, the pricing of the OEM Products for any such additional periods,
      to
      take into account any material changes in the component or assembly costs of
      the
      OEM Products. If the parties are unable to mutually agree on such pricing
      adjustment, the supply of OEM Products shall continue unabated, and the pricing
      adjustment shall be resolved in accordance with the arbitration provision
      contained in this Agreement, which pricing adjustment shall apply to all OEM
      Products purchased during the extension.”

    


    4.  Section
      2.16 is hereby deleted in its entirety and replaced with the
      following:

     

    ““Parts”
      means
      the Service Parts and the Supplies and Accessories, collectively. “Service
      Parts” means the replacement parts and components used to service, maintain and
      repair the OEM Products. “Supplies and Accessories” means the accessories,
      consumables and other products that may be supplied in conjunction with, used
      with, or used as additions to the OEM Products.”

    


    
      
         

      

      
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    5.  The
      third
      sentence of Section 3.4 is hereby deleted in its entirety and replaced with
      the
      following:

     

    “During
      the initial Term, GEMS-IT shall purchase from Supplier a minimum of four hundred
      and twenty five (425) units of the OEM Products per calendar quarter (“Quarterly
      Minimum Purchase”), commencing with the first full calendar quarter after the
      First Delivery Date; provided, that (i) the OEM Products perform in accordance,
      and fully comply, with the Specifications and (ii) all regulatory approvals
      remain in full effect in accordance with Section 14.3. If any of the above
      conditions are not satisfied, then GEMS-IT shall be released from the Quarterly
      Minimum Purchase obligations for the quarter(s) in which such conditions are
      not
      satisfied. Any purchases in excess of one quarter’s Quarterly Minimum Purchase
      will count toward the next Quarterly Minimum Purchase obligation that is not
      released; therefore, GEMS-IT’s aggregate Quarterly Minimum Purchase requirement
      over the initial Term will not exceed five thousand nine hundred and fifty
      (5,950) units. If a Quarterly Minimum Purchase obligation is waived or released,
      GEMS-IT shall still be entitled to carry forward any purchases in excess of
      the
      Quarterly Minimum Purchase obligation that would otherwise have been in
      effect.”

    


    6.  Section
      3.5 is hereby deleted in its entirety and replaced with the
      following:

     

    “The
      Lead
      Time for the OEM Products is two (2) weeks for
      Order(s) of units of OEM Products that are within one hundred and ten percent
      (110%) of the respective Quarterly Minimum Purchase obligation; provided,
      however, that for the last four (4) weeks of the quarter, the Lead Time will
      be
      one (1) week for the remaining amount of the Quarterly Minimum Purchase
      obligation.
      Supplier will fully support GEMS-IT’s desire to deliver goods to its customers
      within seven (7) days of order placement and agrees that it is in the mutual
      business interest of the parties to ship the OEM Products on the next day or
      as
      soon as practicable after receipt of an Order. 

    


    If,
      during any calendar quarter, Supplier fails to meet three (3) or more Delivery
      Dates it has confirmed or that has been deemed accepted in accordance with
      Section 3.2, GEMS-IT will be released from the Quarterly Minimum Purchase for
      such quarter.”

     

    
      
         

      

      
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    7.  Section
      9.4.2 is hereby deleted in its entirety and replaced with the
      following:

     

    “Customer
      and Warranty Service. Outside
      the United States and Canada, customer service calls will be handled by GEMS-IT.
      If a customer calls GEMS-IT with a Product Warranty issue (GEMS-IT fields the
      warranty call), GEMS-IT will inform Supplier of the warranty call and will
      receive a RMA from Supplier. GEMS-IT or its customer will return the OEM Product
      for repair or replacement to Supplier’s facility in Minnetonka, MN or the then
      current repair facility location, unless however, the repair is determined
      by
      the parties to be minor in nature, whereby based on the mutual agreement of
      the
      parties, qualified GEMS-IT service personnel may affect the minor repair on
      behalf of Supplier. In such instances, Supplier shall provide the replacement
      parts at no cost to GEMS-IT and GEMS-IT shall not charge Supplier any fee for
      facilitating the repair. The parties agree to work together subsequent to the
      launch of the OEM Product to define which minor repairs may be facilitated
      by
      GEMS-IT and to more precisely determine the parameters of the collaboration.
      In
      all other instances, Supplier will repair or replace the OEM Product and deliver
      the OEM Product to a location requested by GEMS-IT within two (2) weeks of
      Supplier’s receipt of a returned OEM Product. Within the United States and
      Canada, customer service calls will be handled directly by Cardiac Science,
      and
      all repaired or replaced OEM Products must be delivered within two (2) weeks
      of
      Supplier’s receipt of a returned OEM Product. Supplier and GEMS-IT shall work
      together to ensure prompt communication to the other party of all customer
      communication.

    


    Loaner
      Inventory.
      Within
      thirty (30) days of receipt of FDA clearance of the OEM Product, Cardiac Science
      shall provide, at no cost to GEMS-IT, eighteen (18) OEM Products to be used
      by
      GEMS-IT as loaner inventory and to facilitate warranty exchanges for end users.
      These units shall be suitably configured with local languages as per GEMS-IT
      instructions. In all cases, freight charges to and from Supplier’s facility for
      warranty service and loaner inventory will be paid by Supplier. 

    


    Out
      of
      Warranty Service.
      Outside
      the United States and Canada, if
      GEMS-IT requires out of warranty service from Cardiac Science, GEMS-IT will
      bill
      the customer as appropriate per GEMS-IT policies. GEMS-IT will inform Supplier
      of the customer issue and will receive a RMA from Supplier. GEMS-IT or its
      customer will return the product to Supplier’s facility as outlined above.
      Supplier will repair and deliver the product to a location requested by GEMS-IT
      within two (2) weeks of Supplier’s receipt of a returned OEM Product. Supplier
      will bill GEMS-IT at a discount to Supplier’s then current service fee schedule,
      which service fee schedule shall not exceed the amount Supplier charges (after
      discounts) for providing similar services to its own customers. GEMS-IT will
      bill the customer for the service provided. Within the United States and Canada,
      out of warranty customer service calls will be handled directly by Cardiac
      Science, and all repaired OEM Products shall be delivered within two (2) weeks
      of Supplier’s receipt of a returned OEM Product. The parties agree that a list
      of out of warranty services, including prices and the discount rate described
      above, will be added to this Agreement within sixty (60) days of the effective
      date of the third amendment to this Agreement, or such later date as is mutually
      agreed upon by the parties. 

    


    
      
         

      

      
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    Service
      Training.
      Within
      the first year after the launch of the OEM Product, Supplier agrees conduct,
      at
      no cost to GEMS-IT, two (2) service training sessions at mutually agreed upon
      date(s) in order to train qualified GEMS-IT service personnel to provide
      post-warranty repair of OEM Products. Said training shall be conducted at
      Supplier’s premises and the parties shall each bear its own travel costs. After
      the initial year, Supplier agrees to conduct an annual service training session
      at a mutually agreed upon location and date.

    


    Service
      Parts.
      Outside
      the United States and Canada, if Parts are required by either GEMS-IT or its
      customers, GEMS-IT will inform Supplier and request direct shipment of such
      Parts to GEMS-IT or its customer. Supplier will bill GEMS-IT at a discount
      to
      Supplier’s then current service parts schedule, which service parts schedule
      shall not exceed the amount Supplier charges (after discounts) for providing
      similar parts to its own customers. The parties agree that a list of Parts,
      including prices and the discount rate described above, will be added to this
      Agreement within sixty (60) days of the effective date of the third amendment
      to
      this Agreement, or such later date as is mutually agreed upon by the parties.
      Within the United States and Canada, if Service Parts are requested by a GEMS-IT
      customer, Supplier may sell such Service Parts directly to such customer.


    


    Quality
      Reports.
      Supplier
      will provide, on a monthly basis, a quality assurance report, which will include
      a listing of all product related corrective and preventative action reports
      (CAPAs) issued globally for OEM Products (regardless of brand), and a detailed
      description of the root cause analysis of the reason for the report. Upon
      request, Supplier will provide GEMS-IT with additional information on any item
      that appears in the quality assurance report and participate in phone calls
      with
      GEMS-IT regarding the same.
      Supplier
      will provide, on a monthly basis, a report listing all RMAs issued globally
      for
      OEM Products, and a detailed description of the root cause analysis of the
      reason for the return. Supplier shall promptly respond to GEMS-IT’s reasonable
      inquiries regarding such RMAs and, if they involve GEMS-IT’s customers, the
      resolution of such RMAs.

     

    
      
         

      

      
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    Confidentiality
      of Customer Information.
      Supplier
      agrees that any customer-related information obtained by Supplier as a result
      of
      its interaction with GEMS-IT customers will be deemed to be GEMS-IT’s
“Confidential Information”, and will not be used by Supplier for any commercial
      reason other than to fulfill its obligations under this Agreement. For clarity,
      this provision shall not restrict Supplier in any way from doing business with,
      from transmitting information, or otherwise soliciting entities or organizations
      that happen to be GEMS-IT customers provided that Supplier has not obtained
      the
      names, addresses and contact information for such entities or organizations
      by
      reviewing the GEMS-IT Confidential Information.”

    


    8.  Section
      9.5 is hereby amended by inserting the following sentence at the end of such
      section:

     

    “The
      prices for such replacement parts, technical support, repair services and
      exchange units shall be calculated by adding a reasonable margin to Supplier’s
      cost of procuring or producing such parts, support, services and units, and
      shall not exceed the amount Supplier charges (after discounts) for providing
      similar parts, support, services and units to its own customers. The parties
      agree that a list of such items, including prices, will be added to this
      Agreement within sixty (60) days of the effective date of the third amendment
      to
      this Agreement, or such later date as shall be mutually agreed upon by the
      parties.”

    


    9.  Section
      14.3 is hereby amended by inserting the following sentence after the sentence
      “Supplier shall be responsible for providing all necessary objective evidence
      and other documentation to GEMS-IT to support these filings.”:

     

    “Supplier
      shall provide GEMS-IT Regulatory Affairs with any proposed submission to the
      US
      Food & Drug Administration, no less than five (5) working days prior to the
      proposed submission date, in order for GEMS-IT Regulatory Affairs to review
      and
      revise any such proposed submission with the intention of uncovering any errors
      or omissions which might cause a delay in approval. Supplier shall consider
      revising its proposed submissions to include any reasonable revisions that
      GEMS-IT Regulatory Affairs shall make to any such submissions, but shall have
      no
      obligation to do so.”

     

    10.  Exhibit
      C
      is hereby amended by replacing “Responder 2000” with “OEM Products” each time
“Responder 2000” appears. The parties agree that the Exhibit C attached to
      Amendment One is the Exhibit C in effect at the time of this
      Amendment.

     

    
      
         

      

      
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    11.  The
      portion of Exhibit C that begins “Each Responder 2000 defibrillator package
      includes:” is hereby deleted in its entirety and replaced with the
      following:

     

    “Each
      OEM
      Product package includes: 

     

    
      	·  	One OEM Product, one pair of defibrillation paddles,
              one
              rechargeable battery, one power cord and one user
              manual.


      	 	 


      	·  	
              Upon
                request of GEMS-IT, Supplier agrees that certain additional items,
                including without limitation patient cables, electrodes and Sp02
                sensors,
                will be kitted together with the OEM Product for an additional charge
                of
                two hundred and fifty dollars ($250) per package kitted. For example,
                Supplier’s kitting an order for one Powerheart ECD package (which includes
                one defibrillator, one user manual, one battery, & one power cord)
                shall entitle Supplier to a fee of $250—regardless of the value of the
                additional accessories to be shipped along with this one ECD package.
                Supplier may purchase such additional items from GEMS-IT’s accessory
                suppliers at the same prices at which GEMS-IT is entitled to purchase.
                Supplier will transfer these accessories to GEMS-IT with no mark-up.
                At
                its sole discretion, GEMS-IT may choose to take over this kitting
                responsibility from Supplier after first giving Supplier ninety (90)
                days
                notice of its intent.”

            


    

    


    12.  Exhibit
      C
      is hereby amended by inserting the following immediately below the Quantity
      Purchase Volume schedule: 

     

    “Volume
      discounts shall be determined by aggregating all purchases made by or through
      GEMS-IT, its Affiliates or distributors, regardless of how such OEM Products
      are
      branded. The parties agree that the charges on all invoices for OEM Products,
      regardless of the volume actually purchased, will remain at the pricing for
      the
      initial 1,000 units of an OEM Product, and within thirty (30) days following
      the
      end of any calendar year (including the year following the expiration of the
      Term), Supplier will provide Purchaser with a written accounting of the
      purchasing volume for all OEM Products as well as immediate payment to GEMS-IT
      for any discounts earned during the previous year. GEMS-IT will then have the
      opportunity to provide a written response to Supplier of whether it agrees
      or
      disagrees with such accounting; acceptance of the immediate payment shall not
      be
      construed as agreement with Supplier’s conclusions.”

    


    13.  Section
      7
      of Amendment One is hereby amended by deleting the following words from the
      fourth sentence of the first paragraph: “in the United States and
      Canada”.

     

    
      
         

      

      
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    14.  Section
      7
      of Amendment One is hereby amended by inserting a new subsection (d) to read
      as
      follows:

     

    “(d) If
      CSI
      receives a request for OEM Products or Parts (provided, however, that this
      shall
      only be read as Supplies and Accessories in the United States and Canada),
      CSI
      will refer the request to GEMS-IT to provide such OEM Products or Parts.”

     

    15.   Branding.
      Supplier agrees that the branding on all of Supplier’s non-OEM defibrillator
      products that are sold into the hospital market in the United States and Canada,
      including without limitation, the Powerheart ECD, shall remain branded as
“Powerheart”, with the Cardiac Science name or logo. Supplier has the right
to
      change
      the brand name, provide however, that Supplier receives prior written consent
      from GEMS-IT, which shall not be unreasonably withheld. 

     

    16.  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.

     

    17.  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.

     

    18.  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.

     

    
      
         

      

      
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    19.  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.

     

    20.  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
      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.

     

    21.  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 Amendment 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

              Title:
                Chairman and CEO

            	 	 	
              Name:
                Matthias Weber

              Title:
                Vice President & General Manager

              Cardiology
                Systems

            




    
      
         

      

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