Document:

exv10w59

 

Execution Copy

EXHIBIT 10.59

FOURTH AMENDMENT TO OEM PURCHASE AGREEMENT

     This Fourth Amendment (this “Amendment”) is made as of October 20, 2006, by and between
Cardiac Science Corporation (f/k/a Cardiac Science, Inc.), a Delaware corporation (“Supplier” or
“Cardiac Science” or “CSC”), a medical device developer and manufacturer of automated external
defibrillators, having its principal place of business at 3303 Monte Villa Parkway, Bothell, WA
98021, 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, CSC and GEMS-IT are parties to that certain OEM Purchase Agreement dated July 29,
2003 (“Initial OEM Purchase Agreement”), as amended by (i) Amendment One thereto dated August 10,
2004 (“Amendment One”), (ii) Second Amendment thereto dated February 14, 2005 (“Amendment Two”),
and (iii) Third Amendment thereto dated June 10, 2005 (“Amendment Three”). The Initial OEM Purchase
Agreement, Amendment One, Amendment Two, and Amendment Three are collectively referred to herein as
the “OEM Purchase Agreement”.

     WHEREAS, CSC 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

 

			
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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 1.6 of the OEM Purchase Agreement [as amended by Section 3 of Amendment Three] 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
through the calendar year ending five (5) years (the “Term”) 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”), unless
terminated earlier under the terms of the this Agreement. (For example, if the First Delivery Date
is October 1, 2006, the Term will end December 31, 2011.) If the First Delivery Date has not
occurred prior to December 31, 2006, GEMS-IT may at its option terminate this Agreement.”

     3. Section 3.4 of the OEM Purchase Agreement [as amended by Section 3 of Amendment One and
Section 5 of Amendment Three] is hereby deleted in its entirety and replaced with the following:

“Forecasts and Minimum Purchases. GEMS-IT will provide a six (6) month rolling Forecast of
its projected Orders. Any quantities listed in any Forecast or other correspondence between the
parties are only estimates made as an accommodation for planning purposes and do not constitute a
commitment on GEMS-IT’s part to purchase such quantity. GEMS-IT may revise any Forecasts in its
sole discretion. During the Term, GEMS-IT shall purchase from Supplier a minimum of one thousand
seven hundred (1,700) units of OEM Products during each full twelve (12) month period (“Annual
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 force and effect in accordance with
Section 14.3. If either of the above conditions are not satisfied, then GEMS-IT shall be released
from the Annual Minimum Purchase obligations for the annual period(s) in which such conditions are
not satisfied, and the parties shall meet and discuss in good faith adjustments to the Annual
Minimum Purchase.”

     4. Section 4.1 of the OEM Purchase Agreement is hereby deleted in its entirety and replaced
with the following:

“4.1 OEM Product Prices. Supplier’s prices for the OEM Products are
listed in Exhibit C of this Agreement attached hereto in U.S. currency
unless otherwise stated, and may not be increased without GEMS-ITs written consent.
The prices for Parts will be established in accordance with Exhibit D of
this Agreement attached hereto, unless the parties mutually agree to a different
price schedule for Parts. OEM Products and Parts will also be subject to the
prompt payment discount set forth in Section 4.3 and any other prompt payment
discounts agreed to by the parties, if any.

 

			
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4.1.1 Sharing of Cost Reductions. Six months after the First Delivery
Date, and in each subsequent November during the Term, Supplier shall furnish to
GEMS-IT a schedule of its costs associated with the production and delivery of each
OEM Product as of the date of the schedule (the “Annual Cost Schedule”), the
accuracy and completion of which shall be certified by an officer of Supplier.
Supplier shall be available to meet with GEMS-IT and discuss matters related to the
Annual Cost Schedule promptly following GEMS-ITs reasonable request. The parties
agree that the price for each OEM Product or priced Part shall be reduced by [ * ]%
of the dollar value of Supplier’s reduced cost, if any, relating to each such OEM
Product or Part, as shown by comparing the then current Annual Cost Schedule with
the previous Annual Cost Schedule. Any such price reductions shall be effective as
of January 1 of the next calendar year. (For example, cost reductions reflected in
the first delivered Annual Cost Schedule and the second Annual Cost Schedule
delivered in November 2007 shall reduce the prices of OEM Products and Parts
effective January 1, 2008.) If the parties are unable to mutually agree on such
pricing adjustments, the supply of OEM Products shall continue unabated at the then
current prices and any pricing adjustment shall be resolved in accordance with the
arbitration provision contained in this Agreement. Price adjustments resulting
from arbitration will become effective retroactively to the date the arbitration
proceeding commenced.

4.1.2 Component Cost Pricing Adjustments. At the request of Supplier, the
parties agree to review and adjust, by mutual agreement and in good faith, the
pricing of the OEM Products, for calendar years commencing three (3) years after
the First Delivery Date, to take into account any material increases in the costs
of components of OEM Products based on the then current Annual Cost Schedules.
Supplier shall provide GEMS-IT with any additional objective documented proof of
any such changes if requested by GEMS-IT. The parties agree that the price for
each OEM Product or priced Part shall be increased by [ * ]% of the dollar value of
Supplier’s increased component cost, if any, relating to each such OEM Product or
Part, as shown by comparing the then current Annual Cost Schedule with the previous
Annual Cost Schedule. Any such price increases shall be effective as of January 1
of the next calendar year. If the parties are unable to mutually agree on such
pricing adjustments, the supply of OEM Products shall continue unabated at the then
current prices and any pricing adjustment shall be resolved in accordance with the
arbitration provision contained in this Agreement. Price adjustments resulting
from arbitration will become effective retroactively to the date the arbitration
proceeding commenced.

     5. Section 7.4 of the OEM Purchase Agreement is hereby deleted in its entirety and replaced
with the following:

“Safety Standard Changes. Supplier and GEMS-IT will immediately give
notice to one another if any upgrade, substitution or other change to an OEM

 

			
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Product is required to make that product meet applicable safety standards or other
governmental statutes, rules, orders or regulations, even those that are not
defined as Engineering Changes in Section 7.1 above. All affected OEM
Products already purchased by GEMS-IT may, at GEMS-IT’s election, either be
returned to Supplier for upgrade to current revisions or upgraded by Supplier or
GEMS-IT in the field pursuant to the procedures outlined in Section 14.6
below.”

     6. Section 9.1 of the OEM Purchase Agreement is deleted in its entirety and replaced with the
following:

          “All warranties set forth in Section 9.2 below will survive any inspection, delivery,
acceptance, or payment by GEMS-IT and (except for the warranty included in section 9.2(2) below)
will survive for a period of [ * ] after the date of the last new product sale shipment of the OEM
Product to GEMS-ITs end user customers. For the Powerheart ECD, the warranty included in section
9.2(2) below shall be in effect for the [ * ] period following the date of shipment of the
Powerheart ECD to GEMS-IT’s end-user customers. For the Responder 2000, the warranty included in
section 9.2(2) below shall be in effect for the one (1) year period following the date of shipment
of the Responder 2000 to GEMS-IT’s end-user customers.

     7. Section 9.4.2 of the OEM Purchase Agreement [as amended by Section 7 of Amendment Three]
and Section 9.5 of the OEM Purchase Agreement [as amended by Section 8 of Amendment Three] are
hereby deleted in their entirety, and are replaced by the provisions of the service plan set forth
in Exhibit D to the Agreement attached hereto.

     8. Section 14.3 of the OEM Purchase Agreement [as amended by Section 4 of Amendment One and
Section 9 of Amendment Three] is hereby deleted in its entirety and replaced with the following:

“14.3 Regulatory Approvals. Supplier shall be responsible for identifying,
obtaining, and maintaining at its sole cost and expense all regulatory and other
necessary and/or appropriate approvals for the development, manufacture, and/or
sale of any OEM Product (“Regulatory Approvals”) in the following countries: all
European countries, Russia, Turkey, South Africa, Egypt, Morocco, Tunisia, Algeria,
Libya, Israel, Jordan, Syria, Iraq, Iran, Saudi Arabia, Kuwait, Oman, Yemen,
U.A.E., Qatar, Bahrain, China, Taiwan, India, Pakistan, Afghanistan, South Korea,
Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Vietnam, Mexico,
Brazil, Argentina, Chile, Peru, Colombia and Bolivia. GEMS-IT will utilize its
in-country resources (at its expense) in the foregoing countries to assist Supplier
in interfacing with the appropriate regulatory bodies in connection with Supplier’s
efforts to obtain Regulatory Approvals; provided, however, the parties understand
and agree that Supplier is responsible for preparing

 

			
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and providing all materials, data, documentation, and other items necessary for
obtaining Regulatory Approvals, and is ultimately responsible for obtaining such
Regulatory Approvals. Supplier shall have obtained all such Regulatory Approvals by
not later than 30 days following the First Delivery Date. If any such approval is
not so obtained, subsequently revoked, terminated or suspended, Supplier shall
immediately notify GEMS-IT of such occurrence.

Supplier shall be solely responsible for obtaining Regulatory Approvals in the
United States and Canada. In Japan, GEMS-IT will utilize its in-country resources
to interface with the appropriate regulatory body and GEMS-IT will be responsible
for the filings necessary to obtain Regulatory Approvals.

Supplier shall be responsible for providing, upon reasonable request of GEMS-IT,
all necessary objective evidence and other documentation to GEMS-IT to support
Supplier’s filings pursuant to this section 14.3. 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.

     9. Section 14.6 of the OEM Purchase Agreement [as amended by Section 6 of Amendment One] 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.
Supplier shall be the point of contact for end-user purchasers of the Powerheart
ECD version of the OEM Product in the United States and Canada and GEMS-IT shall be
the point of contact for end-user purchasers of the GE Responder 2000 version of
the OEM Product (whether directly or through its distributors) in markets outside
of the United States and Canada. Supplier shall be responsible for making any and
all applicable regulatory authority contacts and for coordination of any recall or
field correction activities involving OEM Products. In the event that any OEM
Product requires field correction or is recalled as a result of (a) Supplier’s or
an OEM Product’s failure to comply with applicable laws or regulations, (b)
Supplier’s reasonable determination to effectuate such correction or recall for
business, safety, or efficacy reasons, (c) the supply by Supplier of Noncomplying
Product, or (d) Supplier’s failure to provide OEM Products that (i) conform in all
material respects to applicable industry standards or (ii) are free from defect in
material and workmanship (under

 

			
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customary, proper, and intended usage), 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, or the non-performance of the GEMS-IT Products, GEMS-IT shall
be responsible for such costs and expenses equitably in proportion to its fault.”

     10. The parties agree that Exhibit A of the OEM Purchase Agreement [as amended by
Section 7 of Amendment One] is hereby deleted in its entirety and replaced with new Exhibit
A attached hereto.

     11. The parties agree that Exhibit B of the OEM Purchase Agreement and Exhibit
A of Amendment One are hereby deleted in their entirety and replaced with new Exhibit B
attached hereto.

     12. The parties agree that Exhibit C of the OEM Purchase Agreement [as amended by
Exhibit C of Amendment One and Sections 10, 11, and 12 of Amendment Three] is hereby
deleted in its entirety and replaced with new Exhibit C attached hereto.

     13. The parties agree that Exhibit D of the OEM Purchase Agreement is hereby deleted
in its entirety.

     14. The parties agree that Section 7 of Amendment One is deleted in its entirety and replaced
with the following provisions:

The OEM Product is a manual defibrillator being developed and manufactured by CSC,
exclusively for sale by CSC to GEMS-IT. GEMS-IT shall market and sell the Cardiac
Science Powerheart ECD version of the OEM Product to its customers in the United
States and Canada and the GE Responder 2000 version of the OEM Product to its
customers in markets outside of the United States and Canada.

Supplier will support GEMS-IT’s sales efforts in the United States and Canada by
providing:

	 	(i)	 	unlimited access to Supplier’s Web Site “Library” page,
including access to all of Supplier’s distributor marketing material such as
competitive analyses and white papers;
	 
	 	(ii)	 	telephone support as necessary;

 

			
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	 	(iii)	 	in person (including customer presentations) and/or
telephone support on large OEM Product opportunities; and
	 
	 	(iv)	 	an annual “train the trainer session” for a GEMS-IT clinical
educator (at a mutually agreed upon location and date) with additional phone
support as requested by the GEMS-IT clinical educator.

CSC will not market, distribute, promote, manufacture or sell the OEM Product
directly or indirectly to any third party, via its dealer network or otherwise.
CSC is prohibited from manufacturing for any third party, or selling the OEM
Product, or any upgrades, adaptations, modifications, improvements and substitutes
thereof to any third party.

CSC further grants GEMS-IT the exclusive right to purchase any future device,
upgrade, adaptation, modification, add-on, substitute, or improvement manufactured
by CSC utilizing the OEM Product platform (i.e., such as a more feature rich
defibrillator; for example a device built with the OEM Product platform with an
additional feature such as Non-Invasive Blood Pressure, End-Tidal CO2, 12 lead ECG,
etc.). Any software patches or updates developed for the OEM Product by the
Supplier shall also be incorporated free of charge into any OEM Product produced
afterwards, and shall be made available by Supplier at no charge to customers
having purchased the OEM Product.

CSC further grants GEMS-IT the exclusive right to sell the OEM Product on a world
wide basis.

     15. 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.

     16. 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.

     17. 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

 

			
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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.

     18. 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. Notwithstanding the foregoing the
provisions of this Amendment shall be interpreted in a reasonable manner to affect the purposes of
the parties and this Amendment.

     19. 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.

     20. 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.

[Signature Page Follows]

 

			
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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 Corporation	 	 	 	GE Medical Systems

Information Technologies, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ John R. Hinson
	 	 	 	By:
	 	/s/ Matthias Weber
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name:

	 	John R. Hinson
	 	 	 	Name:
	 	Matthias Weber	 	 
	Title:

	 	President and CEO
	 	 	 	Title:
	 	Vice President & General Manager

Cardiology Systems	 	 

 

			
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Exhibit A

OEM Product List

	1.	 	Responder 2000 / Powerheart ECD Basic version

	 	•	 	Includes biphasic defibrillator, rechargeable battery, external paddles, user
manual, roll of paper and power cord

	2.	 	Responder 2000 / Powerheart ECD Pacing version

	 	•	 	Includes biphasic defibrillator with external-packing functionality, rechargeable
battery, external paddles, user manual, roll of paper and power cord

	3.	 	Responder 2000 / Powerheart ECD Pacing and Sp02 version

	 	•	 	Includes biphasic defibrillator with external-pacing and pulse oximetry-monitoring
functionality, rechargeable battery, external paddles, user manual, roll of paper and
power cord

 

			
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Exhibit B

OEM Product Specifications

[ * ]

 

			
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Exhibit C

Supplier’s Prices

GEMS-IT OEM Products

	 	 	 	 	 	 	 	 	 
	 	 	Responder 2000	 	Powerheart ECD
	 	 	Price	 	Price
	 	 	   
	OEM Product basic version package
	 	$	[ * ]	 	 	$	[ * ]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	OEM Product pacing version package
	 	$	[ * ]	 	 	$	[ * ]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	OEM Product pacing & SpO2 version package
	 	$	[ * ]	 	 	$	[ * ]	 

Each OEM Product package includes one (1) each of:

	 	•	 	OEM Product defibrillator
	 
	 	•	 	Pair of external defibrillation paddles
	 
	 	•	 	Power Cord
	 
	 	•	 	Rechargeable battery
	 
	 	•	 	Roll of Thermal Paper
	 
	 	•	 	User Manual

Powerheart ECD pricing includes provision of a [ * ] warranty, while Responder 2000 pricing
includes provision of a [ * ] warranty.

Powerheart ECD pricing includes a $[ * ] Kitting Fee for Supplier stocking and kitting of optional
accessories to be bundled with the OEM Product package. This Kitting Fee is included in the
Powerheart ECD price regardless of whether a specific purchase order requires optional accessories.
Optional accessories are to be purchased from the GEMS-IT approved suppliers at GEMS-IT pricing and
inventoried at the Supplier. These accessories will be listed on the Purchase Order from GEMS-IT at
the time of customer order and Supplier will be reimbursed for the cost of the items, without
additional mark-up, according to the terms and conditions of the agreement. At its sole discretion,
GEMS-IT may choose to take over this kitting responsibility from Supplier after first giving
Supplier (90) days

 

			
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notice of its intent, at which time the Kitting Fee would be removed from the Powerheart ECD
product price. Kitting of optional accessories is not provided by Supplier for the Responder 2000.

 

			
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Exhibit D

Service Plan

1. WARRANTY AND OUT-OF-WARRANTY SERVICE

1.1 WITHIN THE UNITED STATES AND CANADA

Customer calls for warranty and out-of-warranty product service for the Powerheart ECD will be
handled by CSC. CSC will perform all product repairs or product replacements for the Powerheart
ECD. If a customer calls GEMS-IT with a product issue, GEMS-IT will direct the call to the correct
location. GEMS-IT will also inform CSC of any customer complaints it receives. If a customer
returns any OEM Product to GEMS-IT for any reason, GEMS-IT will inform CSC of the return and
arrange to return the product to the designated CSC facility. Repaired or replaced product must be
delivered within two (2) weeks of CSC’s receipt of returned product. The parties agree that a list
of out-of-warranty services, including prices, will be created as an addendum to the OEM Purchase
Agreement.

1.2 OUTSIDE THE UNITED STATES AND CANADA

Customer calls for warranty and out-of warranty product service for the Responder 2000 will be
handled by GEMS-IT. Technical reporting regarding the Responder 2000 product failures, repair
findings and complaints will be provided to CSC by GEMS-IT.

1.2.1 Service Training

CSC agrees to conduct an annual service training session to a commercially reasonable number of
GEMS-IT service staff at its premises, with all participants responsible for their own travel
expenses. CSC will provide additional training sessions to GE Service personnel should there be any
major design change.

1.2.2 GEMS-IT will perform service repair or provide replacement products to its customers. GEMS-IT
will select the type of repair level as deemed appropriate for each

 

			
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country and the customer’s needs, in compliance with the repair processes defined in the OEM
Product Service Manual.

1.2.3 GEMS-IT will purchase Field Replaceable Unit (“I-RU”) stock from CSC to support its field
operations plans. For warranty repairs, CSC shall provide GEMS-IT replacement parts at no charge
upon I) receipt of an in-warranty FRU for repair, or 2) Acceptable notification of GEMS-1T
consumption of an 1-RU for repair of an in-warranty product. Likewise, GEMS-IT agrees to provide
labor to affect in-warranty repairs at no charge to CSC. In instances that GEMS-IT does not perform
the repair, the product may be returned to CSC for repair or replacement. The returned product or
replacement product must be delivered after repair to the location requested by GEMS-IT within two
(2) weeks of its receipt by CSC.

GEMS-IT and CSC will define and maintain a list of FRU parts that supports the capability to
perform full repair of the product per the Service Manual. The FRU list is to indicate which parts
(if any) are to be returned for repair and reuse. Pricing of FRU parts shall not exceed the amount
Supplier charges for similar parts to any of its other customers.

CSC must notify GEMS-IT of any FRU changes, as from parts obsolescence, within forty-five (45) days
of its learning of such change. The parties agree that a list of out-of-warranty services, and FRU
parts, including prices will be created as an addendum to the OEM Purchase Agreement. CSC will
notify GEMS-IT in writing of any updates to the parts lists, services, and pricing.

1.2.4 CSC 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.

2.0 SERVICE MANUAL

 

			
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The Service Manual produced by CSC will address information needed by GEMS-IT to maintain full
repair capability on the device (to the PCB replacement level). The Service Manual shall include,
at a minimum, the following topics:

Introduction

Software upgrade

Troubleshooting

Assembly/Disassembly Maintenance and Service Parts &

Accessories

Theory of Operation

Specifications and Safety

Index

3.0 SERVICE PROCESSES

To facilitate accurate and timely communication of service-related information, a table of contacts
at both GEMS-IT and CSC will be developed and maintained to assure that information is delivered to
the correct persons and locations.

GEMS-IT will provide sample field-reporting forms, repair-report forms, and a
customer-complaint-process chart to CSC. GEMS-IT will amend these forms and processes to meet CSC’s
quality system requirements as needed.

CSC will provide complete quality reports to GEMS-IT for the products distributed in the United
States and Canada. GEMS-IT will provide complete quality reports to CSC for products distributed
outside of the United States and Canada. These reports will be provided on a monthly basis, with
sufficient detail to support the needs of the CSC and

GEMS-IT quality systems for tracking, trending, proactive product field support and other quality
monitoring activities.

4.0 Long-Term Service Support

For a period of [ * ] following the last shipment of OEM Product ordered by GEMS-IT for new sales
to its end-customers, CSC shall make available to GEMS-IT necessary

 

			
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replacement parts, technical support, and repair service, or at Supplier’s sole discretion, it may
exchange units for the OEM Products. 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 procurement or production, and shall not exceed the amount Supplier
charges any of its other customers for similar parts, support, services, and products to its own
customers.

 

			
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EXHIBIT 10.60

CARDIAC SCIENCE CORPORATION

STOCK OPTION GRANT NOTICE

2002 STOCK INCENTIVE PLAN

     Cardiac Science Corporation (the “Company”) hereby grants to Participant an Option (the “Option”)
to purchase shares of the Company’s Common Stock. The Option is subject to all the terms and
conditions set forth in this Stock Option Grant Notice (this “Grant Notice”), in the Stock Option
Agreement, the Plan Summary and the Company’s 2002 Stock Incentive Plan (the “Plan”), which are
available on the web at www.wealthviews.com/CSC or from the current administrator of the Plan and
are incorporated into this Grant Notice in their entirety.

	 	 	 
	Participant:

	 	                                        
	 
	 	 
	Grant Date:

	 	                                        
	 
	 	 
	Vesting Commencement Date:

	 	                                        
	 
	 	 
	Number of Shares Subject to Option:

	 	                                        
	 
	 	 
	Exercise Price (per Share):

	 	                                        
	 
	 	 
	Option Expiration Date:

	 	                                         (subject to earlier
termination in accordance with
the terms of the Plan and the
Stock Option Agreement)__________
	 
	 	 
	Type of Option:

	 	Nonqualified Stock Option
	 
	 	 
	Vesting and Exercisability Schedule:

	 	1/4th of the
shares subject to the Option
will vest and become exercisable
one year after the Vesting
Commencement Date.
	 
	 	 
	 

	 	1/36th of the
remaining shares subject to the
Option will vest and become
exercisable monthly thereafter
over the next three years.

Additional Terms/Acknowledgement: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Grant Notice, the Stock Option Agreement, the Plan Summary and the
Plan. The Stock Option Agreement, Plan Summary, and Plan are available on the Web at
www.wealthviews.com/CSC or from the current administrator of the Plan. Participant further
acknowledges that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan
set forth the entire understanding between Participant and the Company regarding the Option and
supersede all prior oral and written agreements on the subject.

	 	 	 	 	 	 	 	 	 	 	 
	Cardiac Science Corporation	 	 	 	PARTICIPANT	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	Signature	 	 
	Its:

	 	 

	 	 
	 	 	 	 
	 

	 	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	Attachments:	 	 	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	1. Stock Option Agreement	 	 	 	 	 	 

	 	 
	2. 2002 Stock Incentive Plan	 	 	 	Taxpayer ID:	 	 

	 	 
	3. Plan Summary	 	 	 	 	 	 
	 	 

 

 

CARDIAC SCIENCE CORPORATION

2002 STOCK INCENTIVE PLAN

STOCK OPTION AGREEMENT

Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement,
Cardiac Science Corporation has granted you an Option under its 2002 Stock Incentive Plan
(the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant
Notice (the “Shares”) at the exercise price indicated in your Grant Notice. Capitalized terms not
explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.

The details of the Option are as follows:

1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest
and become exercisable as provided in your Grant Notice.

2. Securities Law Compliance. Notwithstanding any other provision of this Agreement, you may not
exercise the Option unless the Shares issuable upon exercise are registered under the Securities
Act or, if such Shares are not then so registered, the Company has determined that such exercise
and issuance would be exempt from the registration requirements of the Securities Act. The
exercise of the Option must also comply with other applicable laws and regulations governing the
Option, and you may not exercise the Option if the Company determines that such exercise would not
be in material compliance with such laws and regulations.

3. Method of Exercise. You may exercise the Option by giving written notice to the Company, in
form and substance satisfactory to the Company, which will state your election to exercise the
Option and the number of Shares for which you are exercising the Option. The written notice must
be accompanied by full payment of the exercise price for the number of Shares you are purchasing.
At the discretion of the Plan Administrator, you may make this payment in any combination of the
following: (a) by cash; (b) by check acceptable to the Company; (c) by tendering shares of Common
Stock you have owned for at least six months; (d) if and so long as the Common Stock is registered
under the Exchange Act, by delivery of a properly executed exercise notice, together with
irrevocable instructions to a broker, to promptly deliver to the Company the amount of sale or loan
proceeds to pay the exercise price, all in accordance with the regulation of the Federal Reserve
Board; or (e) by any other method permitted by the Plan Administrator.

4. Treatment Upon Termination of Service Relationship. You may exercise the vested portion of the
Option as follows:

(a) General Rule. The unvested portion of the Option shall continue to vest in accordance with the
vesting schedule set forth in the Grant Notice irrespective of termination of your service
relationship with the Company or a Related Company for any reason other than death. If your
service relationship terminates for any reason other than death, you must exercise the vested
portion of the Option on or before the earlier of (i) six months after the date on which the
unvested portion of the Option is fully vested and exercisable and (ii) the Option Expiration Date;

(b) Death. If your service relationship terminates due to your death, the unvested portion of the
Option shall immediately vest and become exercisable, and the Option must be exercised on

 

 

or before the earlier of (i) one year after the date of your death and (ii) the Option Expiration
Date. If you die after termination of your service relationship with the Company or a Related
Company but while the Option is still exercisable, the unvested portion of the Option shall
immediately vest and become exercisable, and the Option may be exercised until the earlier of (x)
one year after the date of your death and (y) the Option Expiration Date; and

(c) Company Transaction. In the event of any Company Transaction, except as provided below, the
Option shall be assumed or an equivalent option or right substituted by the Successor Company. If
in connection with a Company Transaction the Successor Company refuses to assume or substitute for
the Option, upon consummation of a Company Transaction, the Option shall become fully vested and
exercisable with respect to 100% of the unvested portion of the Option. In such case, the Plan
Administrator shall notify you in writing or electronically that the unvested portion of the Option
shall be fully vested and exercisable for a specified time period, and the Option may be exercised
until the earlier of (i) the expiration of the time period specified by the Plan Administrator and
(ii) the Option Expiration Date. If the Option has not otherwise expired by its terms, the Option
shall terminate and cease to remain outstanding upon consummation the Company Transaction, except
to the extent assumed by the Successor Company.

It is your responsibility to be aware of the date the Option terminates.

5. Limited Transferability. During your lifetime only you can exercise the Option. Nonqualified
Stock Options may be transferred to the extent permitted by the Plan Administrator. The Plan
provides for exercise of the Option by a beneficiary designated on a Company-approved form or the
personal representative of your estate.

6. Withholding Taxes. As a condition to the exercise of any portion of an Option, you must make
such arrangements as the Company may require for the satisfaction of any federal, state, local or
foreign withholding tax obligations that may arise in connection with such exercise.

7. Option Not an Employment or Service Contract. Nothing in the Plan or any Award granted under
the Plan will be deemed to constitute an employment contract or confer or be deemed to confer any
right for you to continue in the employ of, or to continue any other relationship with, the Company
or any Related Company or limit in any way the right of the Company or any Related Company to
terminate your relationship at any time.

8. No Right to Damages. You will have no right to bring a claim or to receive damages if you are
required to exercise the vested portion of the Option within a specified time period or if any
portion of the Option is cancelled or expires unexercised. The loss of existing or potential
profit in Awards will not constitute an element of damages in the event of your Termination of
Service for any reason even if the termination is in violation of an obligation of the Company or a
Related Company to you.

9. Binding Effect. This Agreement will inure to the benefit of the successors and assigns of the
Company and be binding upon you and your heirs, executors, administrators, successors and assigns.

 

 

[Include Sections 10 and 11 for non-U.S. resident option grants only: 10. Limitation on
Rights; No Right to Future Grants; Extraordinary Item of Compensation. By entering into this
Agreement and accepting the grant of the Option evidenced hereby, you acknowledge: (a) that the
Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b)
that the grant of the Option is a one-time benefit which does not create any contractual or other
right to receive future grants of options, or benefits in lieu of options; (c) that all
determinations with respect to any such future grants, including, but not limited to, the times
when options will be granted, the number of shares subject to each option, the option price, and
the time or times when each option will be exercisable, will be at the sole discretion of the
Company; (d) that your participation in the Plan is voluntary; (e) that the value of the Option is
an extraordinary item of compensation which is outside the scope of your employment contract, if
any; (f) that the Option is not part of normal or expected compensation for purposes of calculating
any severance, resignation, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or similar payments; (g) that the vesting of the Option ceases upon
your Termination of Service for any reason except as may otherwise be explicitly provided in the
Plan or this Agreement or otherwise permitted by the Plan Administrator; (h) that the future value
of the Shares underlying the Option is unknown and cannot be predicted with certainty; and (i) that
if the Shares underlying the Option do not increase in value, the Option will have no value.

11. Employee Data Privacy. By entering this Agreement, you (a) authorize the Company and your
employer, if different, and any agent of the Company administering the Plan or providing Plan
recordkeeping services, to disclose to the Company or any of its affiliates any information and
data the Company requests in order to facilitate the grant of the Option and the administration of
the Plan; (b) waive any data privacy rights you may have with respect to such information; and (c)
authorize the Company and its agents to store and transmit such information in electronic form.]

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