Document:

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                                                                    EXHIBIT 10.3

                       ASSUMPTION AND AMENDMENT AGREEMENT

      This Assumption and Amendment Agreement, dated as of September 28, 2005,
is entered into between SILICON VALLEY BANK ("Silicon"), on the one side, and
CARDIAC SCIENCE CORPORATION, a Delaware corporation formerly known as CSQ
HOLDING COMPANY (the "Surviving Company"), QUINTON CARDIOLOGY, INC., a
Washington corporation ("QCI") (jointly and severally, and effective upon the
effective date of the Merger (as defined below), Surviving Company and QCI are
referred to herein as the "Existing Borrower"), and CARDIAC SCIENCE OPERATING
COMPANY, a Delaware corporation formerly known as CARDIAC SCIENCE, INC. ("CSI")
hereinafter referred to as the "New Borrower"), on the other side, with
reference to the following facts:

      A. Silicon and Quinton Cardiology Systems, Inc., a Delaware corporation
("QCS") and QCI are parties to that certain Loan and Security Agreement dated
December 30, 2002 (as amended, the "Loan Agreement"). (The Loan Agreement and
all other documents, instruments and agreements evidencing, securing or
otherwise related to the obligations of QCS and QCI to Silicon, are hereinafter
collectively referred to as "Loan Documents". Capitalized terms used but not
defined in this Assumption Agreement shall have the meanings set forth in the
Loan Agreement.)

      B. Silicon and CSI and Cadent Medical Corporation ("CMC") are parties to
that certain Loan and Security Agreement dated February 6, 2004 (as amended, the
"CSI Loan Agreement"). The CSI Loan Agreement and all other documents,
instruments and agreements evidencing, securing or otherwise related to the
obligations of CSI and CMC to Silicon, are hereinafter collectively referred to
as the "CSI Loan Documents." CMC has subsequently been dissolved.

      C. Rhythm Acquisition Corporation, a Delaware corporation and a wholly
owned subsidiary of Surviving Company, has merged with and into QCS with QCS as
the surviving corporation (the "QCS Merger") in accordance with that certain
Agreement and Plan of Merger dated as of February 28, 2005, as amended by that
certain Amendment to Agreement and Plan of Merger dated as of June 23, 2005
(collectively, the "Merger Agreement").

      D. Immediately following the QCS Merger, QCS, as the surviving corporation
of the QCS Merger, has merged with and into the Surviving Company, in accordance
with the Merger Agreement (such merger transaction is referred to herein as the
"Merger"). As a result of the Merger, the Surviving Company is the surviving
corporation.

      E. Immediately following the Merger, (i) the name of the Surviving Company
was changed to Cardiac Science Corporation; (ii) Heart Acquisition Corporation,
a Delaware corporation and a wholly owned subsidiary of the Surviving Company,
merged

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with and into CSI with CSI as the surviving corporation (the "CSI Merger"), and
(iii) CSI changed its name to Cardiac Science Operating Company, all in
accordance with the Merger Agreement. As a result of the CSI Merger, CSI has
become a wholly owned subsidiary of the Surviving Company. In conjunction with
the CSI Merger, the indebtedness of CSI to Perseus Acquisition/Recapitalization
Fund, L.L.C., Perseus Market Opportunity Fund, L.P. and Cardiac Science
Co-Investment, L.P. (collectively, the "Subordinating Creditors") shall be
converted into a combination of equity of the Surviving Company and cash, and
all liens and security interests in favor of the Subordinating Creditors and
HSBC Bank USA (as agent for the Subordinating Creditors) will be terminated.

      NOW, THEREFORE, the parties hereto agree as follows:

      1. ASSUMPTION BY SURVIVING COMPANY. Effective as of the effective time of
the Merger, the Surviving Company, without any further action, hereby assumes
and agrees to perform for the benefit of Silicon all of the "Obligations" (as
defined in the Loan Agreement) of QCS, and the Surviving Company agrees to
honor, perform and in all respects comply with all terms and provisions of all
of the Loan Documents, to the same extent as though the Surviving Company were
named therein in place of QCS. All references in the Loan Agreement to
"Collateral" and "Obligations" shall be deemed to refer to all present and
future Collateral and Obligations (as therein defined) of the Surviving Company
as well as QCS. The Surviving Company acknowledges that QCS's Accounts, General
Intangibles, Inventory, Equipment and all other Collateral have been transferred
to the Surviving Company as a result of the Merger, subject in all respects to
the continuing security interest in favor of Silicon, and, as security for all
of the Obligations, the Surviving Company hereby grants Silicon a security
interest in all of its present and future Collateral, including, without
limitation, all present and future Accounts, General Intangibles, Inventory,
Equipment and all other Collateral. The Surviving Company acknowledges that,
effective as of the effective date of the Merger, all of the Obligations are
owing to Silicon from the Surviving Company.

      2. ASSUMPTION BY NEW BORROWER. Effective as of the effective date of the
CSI Merger, New Borrower hereby assumes and agrees to pay and perform when due
all present and future indebtedness, liabilities and obligations of Existing
Borrower under, based upon, or arising out of the Loan Agreement and any and all
documents, instruments and agreements relating thereto, including without
limitation all of the "Obligations" as defined in the Loan Agreement. Existing
Borrower shall remain as an obligor with respect to all of the Obligations, and
Existing Borrower and New Borrower shall be jointly and severally liable for all
of the Obligations. All references in the Loan Agreement, and in all related
documents, to "Borrower" shall be deemed to refer, jointly and severally, to
Existing Borrower and New Borrower.

      3. GRANT OF SECURITY INTEREST BY NEW BORROWER. Without limiting the
generality of the provisions of Section 2 above, as security for all
Obligations, New Borrower hereby grants Silicon a continuing security interest
in all of New Borrower's interest in the "Collateral" (as defined in the Loan
Agreement) including, without limitation, the types of property described below,
whether now owned or hereafter acquired and wherever located:

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(a) All accounts, contract rights, chattel paper, letters of credit, documents,
securities, money, and instruments, and all other obligations now or in the
future owing to New Borrower; (b) All inventory, goods, merchandise, materials,
raw materials, work in process, finished goods, farm products, advertising,
packaging and shipping materials, supplies, and all other tangible personal
property which is held for sale or lease or furnished under contracts of service
or consumed in the New Borrower's business, and all warehouse receipts and other
documents; and (c) All equipment, including without limitation all machinery,
fixtures, trade fixtures, vehicles, furnishings, furniture, materials, tools,
machine tools, office equipment, computers and peripheral devices, appliances,
apparatus, parts, dies, and jigs; (d) All general intangibles including, but not
limited to, deposit accounts, goodwill, names, trade names, trademarks and the
goodwill of the business symbolized thereby, trade secrets, drawings,
blueprints, customer lists, patents, patent applications, copyrights, security
deposits, loan commitment fees, federal, state and local tax refunds and claims,
all rights in all litigation presently or hereafter pending for any cause or
claim (whether in contract, tort or otherwise), and all judgments now or
hereafter arising therefrom, all claims of New Borrower against Silicon, all
rights to purchase or sell real or personal property, all rights as a licensor
or licensee of any kind, all royalties, licenses, processes, telephone numbers,
proprietary information, purchase orders, and all insurance policies and claims
(including without limitation credit, liability, property and other insurance),
and all other rights, privileges and franchises of every kind; (e) All books and
records, whether stored on computers or otherwise maintained; and (f) All
substitutions, additions and accessions to any of the foregoing, and all
products, proceeds and insurance proceeds of the foregoing, and all guaranties
of and security for the foregoing; and all books and records relating to any of
the foregoing. By the execution hereof, New Borrower hereby authorizes Silicon
to prepare and file UCC-1 Financing Statements listing New Borrower as the
debtor therein and in such form as Silicon shall specify.

      4. AMENDMENT TO CSI LOAN DOCUMENTS. New Borrower acknowledges that the
present unpaid principal balance of the New Borrower's indebtedness, liabilities
and obligations to Silicon under the CSI Loan Documents, including interest
accrued through the date hereof is $0.00, with certain Letters of Credit
outstanding (the "Present CSI Loan Balance"), and that said sum is owing without
any defense, offset, or counterclaim of any kind. The CSI Loan Documents are
hereby amended in their entirety to read as set forth in the Loan Agreement, and
related documents. New Borrower acknowledges that the Present CSI Loan Balance
shall, for all purposes, be deemed to be Loans made by Silicon to the New
Borrower pursuant to the Loan Documents. Notwithstanding the assumption of the
Loan Documents, the following CSI Loan Documents shall continue in full force
and effect and shall continue to secure all present and future indebtedness,
liabilities, guarantees and other Obligations (as defined in the Loan
Documents): All standard documents of Silicon entered into by the New Borrower
in connection with Letters of Credit and/or Foreign Exchange Contracts; all
security agreements, collateral assignments and mortgages, including but not
limited to those relating to patents, trademarks, copyrights and other
intellectual property; all lockbox agreements and/or blocked account agreements;
and all UCC-1 financing statements and other documents filed with governmental
offices which

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perfect liens or security interests in favor of Silicon. In addition, in the
event the New Borrower has previously issued any stock options, stock purchase
warrants or securities to Silicon, the same and all documents and agreements
relating thereto shall also continue in full force and effect.

      5. AMENDMENT TO SCHEDULE. The Schedule to Loan and Security Agreement is
hereby deleted and replaced with the Amended Schedule being executed
concurrently herewith.

      6. AMENDMENT TO LOAN AGREEMENT. The following provisions of the Loan
Agreement are hereby amended as set forth below:

            a. MODIFIED AUDIT PROVISION. Section 5.4 of the Loan Agreement is
hereby amended to read as follows:

               5.4 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times,
               and on one Business Day's notice, Silicon, or its agents, shall
               have the right to inspect the Collateral, and the right to audit
               and copy Borrower's books and records. After an initial audit to
               be conducted in conjunction herewith (which Silicon acknowledges
               has been completed), the parties contemplate that such audits
               will be performed no more frequently than annually, but nothing
               herein restricts Silicon's right to conduct such audits more
               frequently if (i) Silicon believes that it is advisable to do so
               in Silicon's good faith business judgment, or (ii) Silicon
               believes in good faith that a Default or Event of Default has
               occurred. Silicon shall take reasonable steps to keep
               confidential all information obtained in any such inspection or
               audit, but Silicon shall have the right to disclose any such
               information to its auditors, regulatory agencies, and attorneys,
               and pursuant to any subpoena or other legal process. The
               foregoing inspections and audits shall be at Borrower's expense
               and the charge therefor shall be $750 per person per day (or such
               higher amount as shall represent Silicon's then current standard
               charge for the same), plus reasonable out-of-pocket expenses. In
               the event Borrower and Silicon schedule an audit more than 10
               days in advance, and Borrower seeks to reschedule the audit with
               less than 10 days written notice to Silicon, then (without
               limiting any of Silicon's rights or remedies), Borrower shall pay
               Silicon a cancellation fee of $1,000 plus any out-of-pocket
               expenses incurred by Silicon, to compensate Silicon for the
               anticipated costs and expenses of the cancellation.

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            b. MODIFIED ACQUISITION PROVISION. The single asterisk (*) insert at
the end of Section 5.5(i) is hereby amended to read as follows:

                  ; provided however, notwithstanding anything to the contrary
                  in this Section 5.5, Borrower will be permitted to merge or
                  consolidate with another corporation or entity without the
                  prior written consent of Silicon if such acquisition satisfies
                  each of the following requirements: (a) the acquired entity is
                  in the same or similar line of business as Borrower, (b) the
                  acquisition is a non-hostile acquisition (as determined by
                  Silicon in its good faith business judgment), (c) no Default
                  or Event of Default exists both before such acquisition and
                  after giving effect to such acquisition, (d) the acquired
                  entity must show a positive trailing twelve month EBITDA, (e)
                  the total cash consideration paid by Borrower in each such
                  acquisition cannot exceed $10,000,000 and (f) the Borrower
                  must be the surviving corporation of such merger or
                  consolidation.

            c. MODIFIED PREPAYMENT PROVISION. Section 6.2 of the Loan Agreement
is hereby amended to read as follows:

                  6.2 EARLY TERMINATION. This Agreement may be terminated prior
                  to the Maturity Date as follows: (i) by Borrower, effective
                  three Business Days after written notice of termination is
                  given to Silicon; or (ii) by Silicon at any time after the
                  occurrence and during the continuance of an Event of Default,
                  without notice, effective immediately. If this Agreement is
                  terminated by Borrower or by Silicon under this Section 6.2,
                  Borrower shall pay to Silicon a termination fee in an amount
                  equal to the following: (a) 1.0% of the Maximum Credit Limit
                  if terminated before December 31, 2005; (b) 0.875% of the
                  Maximum Credit Limit if terminated after December 31, 2005 but
                  before March 31, 2006; (c) 0.75% of the Maximum Credit Limit
                  if terminated after March 31, 2006 but before June 30, 2006;
                  (d) 0.625% of the Maximum Credit Limit if terminated after
                  June 30, 2006 but before September 30, 2006; (e) 0.50% of the
                  Maximum Credit Limit if terminated after September 30, 2006
                  but before December 31, 2006; (f) 0.375% of the Maximum Credit
                  Limit if terminated after December 31, 2006 but before March
                  31, 2007; (g) 0.25% of the Maximum Credit Limit if terminated
                  after March 31, 2007 but before June 30, 2007; and (h) 0.125%
                  of the Maximum Credit Limit if terminated after June 30, 2007
                  but before the Maturity Date. Notwithstanding the

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                  foregoing, no termination fee shall be charged if the credit
                  facility hereunder is replaced with a new facility from
                  another division of Silicon Valley Bank. The termination fee
                  shall be due and payable on the effective date of termination
                  and thereafter shall bear interest at a rate equal to the
                  highest rate applicable to any of the Obligations.

            d. ADDING DEFINITION OF FOREIGN ACCOUNTS. Subclause (viii) of the
Minimum Eligibility Requirements set forth in the definition of "Eligible
Accounts" set forth in Section 8 of the Loan Agreement is hereby amended to read
as follows:

                  (viii) the Account must not be owing from an Account Debtor
                  located outside the United States or Canada (each a "Foreign
                  Account") (unless pre-approved by Silicon in its discretion in
                  writing, or backed by a letter of credit satisfactory to
                  Silicon, or FCIA insured satisfactory to Silicon),

            e. MODIFIED DEFINITION OF ELIGIBLE ACCOUNTS REGARDING DEFERRED
REVENUE. The following sentences at the end of the definition of "Eligible
Accounts" set forth in Section 8 of the Loan Agreement that read as follows:

                  Without limiting the generality of the foregoing, deferred
                  revenue shall be reviewed by Silicon monthly and associated
                  potential offsets by Account Debtors will be deducted from the
                  Accounts owing from such Account Debtors; provided, however,
                  the foregoing clause will not be applicable once Borrower
                  achieves, and as long as Borrower maintains, an Adjusted Quick
                  Ratio of not less than 0.60 to 1.0 (provided, further, that
                  the foregoing will not limit Silicon's rights to establish
                  reserves with respect to such deferred revenue offsets in the
                  amounts deemed necessary by Silicon in its discretion). For
                  the purposes hereof, the term "Adjusted Quick Ratio" shall
                  mean, as of any applicable date, the ratio of (i) Borrower's
                  cash and Accounts to (ii) Borrower's current liabilities less
                  deferred revenues; provided, however, any accrued warranty
                  shall be included in Borrower's current liabilities.

are hereby amended to read as follows:

                  Without limiting the generality of the foregoing, deferred
                  revenue shall be reviewed by Silicon monthly (provided, that
                  the foregoing will not limit Silicon's rights to establish
                  reserves with respect to such deferred revenue offsets in the

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                  amounts deemed necessary by Silicon in its discretion nor will
                  it limit Silicon's rights, in its discretion, to deduct such
                  associated potential offsets by Account Debtors from the
                  Accounts owing from such Account Debtors).

      7. AMENDED AND RESTATED GUARANTY. Reference is made to that certain Cross-
Corporate Continuing Guaranty dated December 30, 2002, executed by each of QCS
and QCI (fka Quinton, Inc.) in favor of Silicon (the "Guaranty"). The Guaranty
is hereby amended and restated in accordance with the Cross-Corporate Continuing
Guaranty of even date herewith to be executed by each of the Borrowers in favor
of Silicon.

      8. CONTROL AGREEMENTS. As to any U.S. Deposit Accounts and investment
accounts maintained with another institution, Borrower shall cause such
institution, within 30 days after the date of this Agreement, to enter into a
control agreement in form acceptable to Silicon in its good faith business
judgment in order to perfect Silicon's security interest in said Deposit
Accounts and investment accounts.

      9. FEE. In consideration for Silicon entering into this Assumption and
Amendment Agreement, Borrower shall pay Silicon a fee in the following amounts:

            (a) $100,000 (the "Year 1 Fee"), which is fully earned on a monthly
basis going forward and which shall be non-refundable and in addition to all
interest and other fees payable to Silicon under the Loan Documents (including,
without limitation, $10,000 of the remaining $30,000 owed from the $60,000 fee
under that certain Amendment to Loan Documents dated December 30, 2004; the
remaining $20,000 of such $30,000 shall be included within the Year 1 Fee). The
Year 1 Fee shall accrue at the rate of $8,333.33 per month for each month (or
partial month) ending after the date hereof and shall be payable at the end of
each quarter. Silicon is authorized to charge said Year 1 Fee, as provided for
above, to Borrower's loan account.

            (b) $75,000 (the "Year 2 Fee"), which will be fully earned on a
monthly basis going forward, commencing with the first anniversary date of this
Agreement and which shall be non-refundable and in addition to all interest and
other fees payable to Silicon under the Loan Documents. The Year 2 Fee shall
accrue at the rate of $6,250 per month for each month (or partial month) ending
after the first anniversary date of this Agreement and shall be payable at the
end of each quarter. Silicon is authorized to charge said Year 2 Fee, as
provided for above, to Borrower's loan account.

      10. REPRESENTATIONS TRUE. Borrower represents and warrants to Silicon that
all representations and warranties set forth in the Loan Agreement, as amended
hereby, are true and correct. Without limiting the generality of the foregoing,
the Surviving Company hereby represents and warrants to Silicon that all
representations and warranties in the Loan Documents made on the part of QCS are
true and correct on the date hereof with respect to the Surviving Company, with
the same force and effect as if the Surviving Company were named as the borrower
in the Loan Documents in place of QCS.

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      11. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. This Agreement and the
other Loan Documents shall be governed by, and construed in accordance with, the
internal laws of the State of California, without regard to principles of
conflicts of law. Each of Borrower and Silicon hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
Clara, State of California. BORROWER AND SILICON EACH HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE
FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
AGREEMENT. EACH PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

      12. INTEGRATION. This will confirm that this Agreement, the Loan Agreement
and the other Loan Documents represent the final agreement between the parties
and may not be contradicted by evidence of prior, contemporaneous, or subsequent
oral agreements of the parties. There are no unwritten oral agreements between
the parties.

      13. GENERAL PROVISIONS. This Agreement and the Loan Documents set forth in
full all of the representations and agreements of the parties with respect to
the subject matter hereof. All agreements, covenants, representations and
warranties, express or implied, oral and written, of the parties with regard to
the subject matter hereof are contained herein and in the Loan Documents. No
other agreements, covenants, representations or warranties, express or implied,
oral or written, have been made by either party to the other with respect to the
subject matter of this Agreement. This Agreement may not be modified or amended,
nor may any rights hereunder be waived, except in a writing signed by the
parties hereto. Without limiting the terms of the Loan Documents, Borrower shall
reimburse Silicon for all costs, fees and expenses incurred by Silicon in
connection with the negotiation, preparation and conclusion of, and the
enforcement of Silicon's rights and remedies under, this Agreement, any
amendment hereof, and any agreements and documents relating hereto, including,
but not limited to, reasonable attorneys' fees, and all other costs, fees and
expenses. Borrower agrees to cooperate fully with Silicon and take all further
actions and execute all further documents from time to time as Silicon may deem
necessary or advisable to carry out the purposes of this Agreement.

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CARDIAC SCIENCE CORPORATION,                SILICON VALLEY BANK
a Delaware corporation

By /s/ Michael Matysik                      By /s/ Jennifer Bentley
   ------------------------------              ---------------------------------
Title  SVP/CFO                              Title  RM

QUINTON CARDIOLOGY, INC.,                   CARDIAC SCIENCE OPERATING COMPANY,
a Washington corporation                    a Delaware corporation

By /s/Michael Matysik                       By /s/ Michael Matysik
   ------------------------------              ---------------------------------
Title  CFO                                  Title  CFO

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SILICON VALLEY BANK

                               AMENDED SCHEDULE TO

                           LOAN AND SECURITY AGREEMENT

BORROWER:  CARDIAC SCIENCE CORPORATION (SUCCESSOR BY MERGER TO QUINTON
           CARDIOLOGY SYSTEMS, INC.)
           QUINTON CARDIOLOGY, INC.
           CARDIAC SCIENCE OPERATING COMPANY

ADDRESS:   3303 MONTE VILLA PARKWAY
           BOTHELL, WA  98021

DATE:      SEPTEMBER 28, 2005

This Amended Schedule is executed and delivered pursuant to an Assumption and
Amendment Agreement of even date between Silicon Valley Bank ("Silicon") and the
above-borrower (the "Borrower"), forms an integral part of the Loan and Security
Agreement between Silicon and Quinton Cardiology Systems, Inc. and Quinton
Cardiology, Inc. (fka Quinton, Inc.) dated as of December 30, 2002 (the "Loan
Agreement") and amends and restates the Schedule to the Loan Agreement (the
"Original Schedule"). All reference to the "Loan Agreement" and to "this
Agreement" shall be deemed to refer to the Loan Agreement and the Schedule to
the Loan Agreement (including this Amended Schedule).

1. CREDIT LIMIT
   (Section 1.1): An amount not to exceed the following:

                  (A)   The lesser of:

                        (i)   $20,000,000 at any one time outstanding (the
                              "Maximum Credit Limit"), or

                        (ii)  (a) or (b) below, whichever is applicable:

                              (a)   the sum of (I), (II), (III) and (IV) below
                                    (the "Borrowing Base"):

                                    (I)   85% (an "Advance Rate") of the amount
                                          of Borrower's Eligible Accounts (as
                                          defined in Section 8 above),

                                          plus

<PAGE>

                                    (II)  50% (an "Advance Rate") of the amount
                                          of Borrower's unrestricted cash in
                                          accounts maintained at Silicon,

                                          plus

                                    (III) an amount not to exceed the lesser of:

                                          (1)   30% (an "Advance Rate") of the
                                                value of Borrower's Eligible
                                                Inventory (as defined in Section
                                                8 above), calculated at the
                                                lower of cost or market value
                                                and determined on a weighted
                                                average basis; or

                                          (2)   an amount equal to 35% (an
                                                "Advance Rate") of the
                                                Borrower's Eligible Receivables
                                                (as defined in Section 8 above);
                                                or

                                          (3)   $5,000,000,

                                          plus

                                    (IV)  85% of Borrower's Foreign Accounts
                                          (that are otherwise Eligible Accounts
                                          except for the Account Debtor being
                                          located outside the United States or
                                          Canada and which have not been
                                          pre-approved by Silicon in writing,
                                          are not backed by a letter of credit
                                          satisfactory to Silicon or are not
                                          FCIA insured satisfactory to Silicon)
                                          that are billed and collected within
                                          the United States, up to a maximum of
                                          $2,500,000.

                              OR

                              (b)   Loans in the aggregate principal amount
                                    outstanding of not more than $7,500,000 (the
                                    "Non-Formula Loan").

                              Loans will be made pursuant to subclause
                              (A)(ii)(b) above only if, and as long as, Borrower
                              maintains, as of the end of each month, an
                              Adjusted Quick Ratio (as defined herein) of not
                              less than 1.10 to 1.0. At all other times, or if
                              Borrower desires Loans to exceed $7,500,000
                              (regardless of whether or not Borrower's Adjusted
                              Quick Ratio is 1.10 to 1.0 or greater), Loans will
                              be made pursuant to subclause (A)(ii)(a) above.

                        minus

                        (B) the amount of all outstanding Letters of Credit
                        (including drawn but unreimbursed Letters of Credit),
                        and minus the FX Reserve, and

<PAGE>

                        minus all amounts for Cash Management Services utilized
                        under the Cash Management Services Sublimit.

                        Silicon may, from time to time, modify the Advance
                        Rates, in its good faith business judgment, upon notice
                        to the Borrower, based on changes in collection
                        experience with respect to Accounts, its evaluation of
                        the Inventory or other issues or factors relating to the
                        Accounts, Inventory or other Collateral. Silicon shall
                        have the right, in its good faith business judgment to
                        have appraisals of the orderly liquidation value of the
                        Eligible Inventory done periodically by an appraiser
                        acceptable to Silicon, in order to assist it in
                        determining Advance Rates.

                        Loans will be made to each Borrower based on the
                        Eligible Receivables and Eligible Inventory of each
                        Borrower, subject to the Maximum Credit Limit set forth
                        above for all Loans to all Borrowers combined.

LETTER OF CREDIT
SUBLIMIT
(Section 1.6):          An amount equal to (A) the lesser of the Maximum Credit
                        Limit or the Borrowing Base or the Non-Formula Loan
                        (whichever is applicable), minus (B) the FX Reserve, and
                        minus (C) all amounts for Cash Management Services
                        utilized under the Cash Management Services Sublimit,
                        and minus (D) all outstanding Loans; provided that the
                        total of all outstanding Letters of Credit (including
                        drawn but unreimbursed Letters of Credit), and the FX
                        Reserve, and all amounts for Cash Management Services
                        utilized under the Cash Management Services Sublimit may
                        not exceed $10,000,000.

CASH MANAGEMENT
SUBLIMIT:               An amount equal to (A) the lesser of the Maximum Credit
                        Limit or the Borrowing Base or the Non-Formula Loan
                        (whichever is applicable), minus (B) the amount of all
                        outstanding Letters of Credit (including drawn but
                        unreimbursed Letters of Credit), and minus (C) the FX
                        Reserve, and minus (D) all outstanding Loans; provided
                        that the total of all outstanding Letters of Credit
                        (including drawn but unreimbursed Letters of Credit),
                        and the FX Reserve, and all amounts for Cash Management
                        Services utilized under the Cash Management Services
                        Sublimit may not exceed $10,000,000.

CASH MANAGEMENT
SERVICES:               Borrower may use up to the Cash Management Sublimit
                        above, for Silicon's Cash Management Services (as
                        defined below), including, merchant services, business
                        credit card, ACH and other services identified in the
                        cash management services agreement related to such
                        service (the "Cash Management Services"). Silicon may
                        charge to Borrower's Loan account, any amounts that may
                        become due or owing

<PAGE>

                        to Silicon in connection with the Cash Management
                        Services. Borrower agrees to execute and deliver to
                        Silicon all standard form applications and agreements of
                        Silicon in connection with the Cash Management Services,
                        and, without limiting any of the terms of such
                        applications and agreements, Borrower will pay all
                        standard fees and charges of Silicon in connection with
                        the Cash Management Services. The Cash Management
                        Services shall terminate on the Maturity Date.

FOREIGN EXCHANGE
CONTRACT SUBLIMIT:      An amount equal to (A) the lesser of the Maximum Credit
                        Limit or the Borrowing Base or the Non-Formula Loan
                        (whichever is applicable), minus (B) the amount of all
                        outstanding Letters of Credit (including drawn but
                        unreimbursed Letters of Credit), and minus (C) all
                        amounts for Cash Management Services utilized under the
                        Cash Management Services Sublimit, and minus (D) all
                        outstanding Loans; provided that the total of all
                        outstanding Letters of Credit (including drawn but
                        unreimbursed Letters of Credit), and the FX Reserve, and
                        all amounts for Cash Management Services utilized under
                        the Cash Management Services Sublimit may not exceed
                        $10,000,000.

FX RESERVE:             Borrower may enter into foreign exchange forward
                        contracts with Silicon, on its standard forms, under
                        which Borrower commits to purchase from or sell to
                        Silicon a set amount of foreign currency more than one
                        business day after the contract date (the "FX Forward
                        Contracts"); provided that (1) at the time the FX
                        Forward Contract is entered into Borrower has Loans
                        available to it under this Agreement in an amount at
                        least equal to 10% of the amount of the FX Forward
                        Contract; and (2) the total FX Forward Contracts at any
                        one time outstanding may not exceed 10 times the amount
                        of the FX Sublimit set forth above. The "FX Reserve"
                        shall be a reserve (which shall be in addition to all
                        other reserves) in an amount equal to 10% of the total
                        FX Forward Contracts from time to time outstanding.
                        Silicon may, in its discretion, terminate the FX Forward
                        Contracts at any time that an Event of Default occurs
                        and is continuing. Borrower shall execute all standard
                        form applications and agreements of Silicon in
                        connection with the FX Forward Contracts, and without
                        limiting any of the terms of such applications and
                        agreements, Borrower shall pay all standard fees and
                        charges of Silicon in connection with the FX Forward
                        Contracts.

<PAGE>

2. INTEREST.

      INTEREST RATE (Section 1.2):

                              A rate equal to the "Prime Rate" in effect from
                              time to time, plus 0.0% per annum, provided that
                              the interest rate in effect on any day shall not
                              be less than 6.25% per annum. Interest shall be
                              calculated on the basis of a 360-day year for the
                              actual number of days elapsed. "Prime Rate" means
                              the rate announced from time to time by Silicon as
                              its "prime rate;" it is a base rate upon which
                              other rates charged by Silicon are based, and it
                              is not necessarily the best rate available at
                              Silicon. The interest rate applicable to the
                              Obligations shall change on each date there is a
                              change in the Prime Rate.

      MINIMUM MONTHLY
      INTEREST (Section 1.2): Not Applicable.

3. FEES (Section 1.4):

      Loan Fee:               See Assumption and Amendment Agreement of even
                              date herewith.

      Unused Line Fee:        In the event, in any calendar month (or portion
                              thereof at the beginning and end of the term
                              hereof), the sum of (i) the average daily
                              principal balance of the Loans outstanding during
                              the month and (ii) the face amount of any
                              outstanding Letters of Credit is less than the
                              amount of the Maximum Credit Limit, Borrower shall
                              pay Silicon an unused line fee in an amount equal
                              to 0.25% per annum on the difference between the
                              amount of the Maximum Credit Limit and the sum of
                              (i) the average daily principal balance of the
                              Loans outstanding during the month and (ii) the
                              face amount of any Letters of Credit, computed on
                              the basis of a 360-day year, which unused line fee
                              shall be computed and paid monthly, in arrears, on
                              the first day of the following month.

4. MATURITY DATE
   (Section 6.1):             September 28, 2007 [Two years from the date of
                              this Agreement].

5. FINANCIAL COVENANTS
   (Section 5.1):             Borrower shall, on a consolidated basis, comply
                              with each of the following covenants. Compliance
                              shall be determined as of the end of each month,
                              except as otherwise specifically provided below:

      MINIMUM TANGIBLE
      NET WORTH:              Borrower shall maintain a Tangible Net Worth of
                              not less than $39,000,000 plus (i) 100% of all
                              consideration received after the date hereof for
                              equity securities and subordinated debt of the
                              Borrower, plus (ii) 50% of the Borrower's net
                              income in each fiscal quarter

<PAGE>

                              ending after the date hereof. Increases in the
                              Minimum Tangible Net Worth Covenant based on
                              consideration received for equity securities and
                              subordinated debt of the Borrower shall be
                              effective as of the end of the month in which such
                              consideration is received, and shall continue
                              effective thereafter. Increases in the Minimum
                              Tangible Net Worth Covenant based on net income
                              shall be effective on the last day of the fiscal
                              quarter in which said net income is realized, and
                              shall continue effective thereafter. In no event
                              shall the Minimum Tangible Net Worth Covenant be
                              decreased, except in circumstances described in
                              the next paragraph.

                              If any change in Borrower's consolidated Tangible
                              Net Worth is shown in its consolidated financial
                              statements as a result of the Merger, Silicon will
                              reset the Minimum Tangible Net Worth Financial
                              Covenant to be $5,000,000 less than the
                              consolidated Tangible Net Worth of the Borrower
                              (as shown on the Borrower's consolidated financial
                              statements).

      MINIMUM ADJUSTED
      QUICK RATIO:            Borrower shall maintain an Adjusted Quick Ratio of
                              not less than 0.75 TO 1.0.

DEFINITIONS.                  For purposes of the foregoing financial covenants,
                              the following term shall have the following
                              meaning:

                              "Adjusted Quick Ratio" shall mean, as of any
                              applicable date, the ratio of (i) Borrower's
                              unrestricted cash and net Accounts to (ii)
                              Borrower's current liabilities less deferred
                              revenues less warranty reserves.

                              "Current assets", "current liabilities" and
                              "liabilities" shall have the meaning ascribed
                              thereto by GAAP.

                              "Tangible Net Worth" shall mean the excess of
                              total assets over total liabilities, determined in
                              accordance with GAAP, with the following
                              adjustments:

                                 (A) there shall be excluded from assets: (i)
                                 notes, accounts receivable and other
                                 obligations owing to Borrower from its officers
                                 or other Affiliates, and (ii) all assets which
                                 would be classified as intangible assets under
                                 GAAP, including without limitation goodwill,
                                 licenses, patents, trademarks, trade names,
                                 copyrights, capitalized software and
                                 organizational costs, licenses and franchises
                                 and Borrower's shareholder's interest in
                                 ScImage;

                                 (B) there shall be excluded from liabilities:
                                 all indebtedness which is subordinated to the
                                 Obligations under a subordination agreement in
                                 form specified by Silicon or by language in the
                                 instrument evidencing the indebtedness which
                                 Silicon agrees in writing is acceptable to
                                 Silicon in its good faith business judgment.

<PAGE>

6. REPORTING.
   (Section 5.3):

                              Borrower shall provide Silicon with the following:

                              1. For any month in which any Loans are
                                 outstanding, monthly transaction reports and
                                 borrowing base and schedules of collections, on
                                 Silicon's standard form within fifteen days
                                 after the end of such month. However, no
                                 monthly transaction report will be required if
                                 the only Loans that were or are outstanding is
                                 the Non-Formula Loan and if Borrower maintains
                                 an Adjusted Quick Ratio equal to or greater
                                 than 1.10 to 1.0.

                              2. For any month in which any Loans are
                                 outstanding, monthly accounts receivable
                                 agings, aged by invoice date, within fifteen
                                 days after the end of each month.

                              3. For any month in which any Loans are
                                 outstanding, monthly accounts payable agings,
                                 aged by invoice date, and outstanding or held
                                 check registers, if any, within fifteen days
                                 after the end of each month.

                              4. For any month in which any Loans are
                                 outstanding, monthly reconciliations of
                                 accounts receivable agings (aged by invoice
                                 date), transaction reports, and general ledger,
                                 within fifteen days after the end of each
                                 month.

                              5. For any month in which any Loans are
                                 outstanding, monthly perpetual inventory
                                 reports for the Inventory valued on a first-in,
                                 first-out basis at the lower of cost or market
                                 (in accordance with GAAP) or such other
                                 inventory reports as are requested by Silicon
                                 in its good faith business judgment, all within
                                 fifteen days after the end of each month.

                              6. Monthly unaudited financial statements, as soon
                                 as available, and in any event within thirty
                                 days after the end of each month.

                              7. Monthly Compliance Certificates, within thirty
                                 days after the end of each month, in such form
                                 as Silicon shall reasonably specify, signed by
                                 the Chief Financial Officer of Borrower,
                                 certifying that as of the end of such month
                                 Borrower was in full compliance with all of the
                                 terms and conditions of this Agreement, and
                                 setting forth calculations showing compliance
                                 with the financial covenants set forth in this
                                 Agreement and such other information as Silicon
                                 shall reasonably request, including, without
                                 limitation, a statement that at the end of such
                                 month there were no held checks.

                              8. Quarterly unaudited financial statements, as
                                 soon as available, and in any event within
                                 forty-five days after the end of each fiscal
                                 quarter of Borrower.

<PAGE>

                             9.  Annual operating budgets (including income
                                 statements, balance sheets and cash flow
                                 statements, by month) for the upcoming fiscal
                                 year of Borrower within thirty days after the
                                 end of each fiscal year of Borrower.

                             10. Annual financial statements, as soon as
                                 available, and in any event within 120 days
                                 following the end of Borrower's fiscal year,
                                 certified by, and with an unqualified opinion
                                 of, independent certified public accountants
                                 acceptable to Silicon.

7. BORROWER INFORMATION:

                              Borrower represents and warrants that other than
                              as disclosed in publicly available financial
                              statements and securities filings, since December
                              12, 2002, there have been no material adverse
                              changes in its business or operations. Borrower
                              covenants that it will complete, execute and
                              deliver to Silicon an updated Representations and
                              Warranties, on Silicon's standard form, within 30
                              days of the date of this Agreement.

8. ADDITIONAL PROVISIONS

                             (1) BANKING RELATIONSHIP. Borrower shall at all
                                 times maintain its primary banking relationship
                                 with Silicon, including, without limitation,
                                 its primary operating and investment accounts.
                                 As to any Deposit Accounts and investment
                                 accounts maintained with another institution,
                                 Borrower shall cause such institution, within
                                 30 days after the date of this Agreement, to
                                 enter into a control agreement in form
                                 acceptable to Silicon in its good faith
                                 business judgment in order to perfect Silicon's
                                 first-priority security interest in said
                                 Deposit Accounts and investment accounts.

                             (2) SUBORDINATION OF INSIDE DEBT. All present and
                                 future indebtedness of Borrower to its
                                 officers, directors and shareholders exclusive
                                 of expense reimbursements and advances made in
                                 the ordinary course of business ("Inside Debt")
                                 shall, at all times, be subordinated to the
                                 Obligations pursuant to a subordination
                                 agreement on Silicon's standard form. Borrower
                                 represents and warrants that there is no Inside
                                 Debt presently outstanding, except for the
                                 following: NONE. Prior to incurring any Inside
                                 Debt in the future, Borrower shall cause the
                                 person to whom such Inside Debt will be owed to
                                 execute and deliver to Silicon a subordination
                                 agreement on Silicon's standard form.

<PAGE>

Borrower:                                             Silicon:

   CARDIAC SCIENCE CORPORATION                        SILICON VALLEY BANK

   By /s/ Michael Matysik                             By /s/ Jennifer Bentley
      ----------------------------------                 -----------------------
         President or Vice President                  Title  RM

   By
      ----------------------------------
         Secretary or Ass't Secretary

Borrower:

   QUINTON CARDIOLOGY, INC.

   By /s/ Michael Matysik
      ----------------------------------
         President or Vice President

   By
      ----------------------------------
         Secretary or Ass't Secretary

Borrower:

   CARDIAC SCIENCE OPERATING COMPANY

   By /s/ Michael Matysik
      ----------------------------------
         President or Vice President

   By
      ----------------------------------
         Secretary or Ass't SecretaryDeferred Compensation Agreement between Lafayette Savings Bank and Randolph
      F. Williams

    Exhibit
      10.1

    
 

    Deferred
      Compensation

     

    Agreement
      Between

     

    Lafayette
      Savings Bank, FSB

     

    And

     

    Randolph
      F. Williams

     

    THIS
      AGREEMENT, executed and delivered on the date set forth immediately following
      Article V hereof, by and between Lafayette Savings Bank, FSB (the “Bank”) and
      Randolph F. Williams (the “Employee”),

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      the Employee is now serving as President and Chief Executive Officer of the
      Bank; and

     

    WHEREAS,
      the Bank desires to have the benefit of the Employee’s continued loyalty,
      service and leadership until his retirement; and

     

    WHEREAS,
      the Bank desires to provide the Employee with the supplemental retirement
      benefit, to be paid upon his retirement in order to induce the Employee to
      remain with the Bank and to devote his highest skill and energy to the discharge
      of his employment duties; and

     

    WHEREAS,
      the parties desire to incorporate their entire agreement in this
      writing;

     

    NOW,
      THEREFORE, in consideration of the premises, the mutual covenants herein
      contained and in further consideration of each act done pursuant hereto by
      either of the parties, the parties enter into the following Articles of
      Agreement:

     

     

    
      ARTICLE
        I
DEFINITIONS

       

    

     

    Section
      1.01  Account. 
      The
      term
“Account” means the account maintained for the Employee under this Agreement,
      which is credited in each calendar year with amounts determined pursuant to
      Article II of this Agreement.

     

    Section
      1.02  Administrator. 
      The
      term
“Administrator” means the Board, which shall have the sole authority to manage
      and control the operation and administration of this Agreement.

     

    Section
      1.03  Bank. 
      The
      term
“Bank” means Lafayette Savings Bank, FSB.

     

    Section
      1.04  Board. 
      The
      term
“Board” means the Board of Directors of the Bank. Whenever the provisions of
      this Agreement require action by the Board, it may be taken by the Compensation
      Committee of the Board with the same force and effect as though taken by the
      entire Board.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      1.05  Change
      in Control.  The
      term
“Change in Control” shall mean a change in the ownership or effective control of
      the Bank, or in the ownership of a substantial portion of the assets of the
      Bank, as shall be prescribed by regulations adopted by the Internal Revenue
      Service under Section 409A(a)(2)(v) of the Code.

     

    Section
      1.06  Code. 
      The
      term
      Code means the Internal Revenue Code of 1986, as amended.

     

    Section
      1.07  Compensation. 
      The
      term
“compensation” shall include Employee’s base salary and bonus paid by the
      Bank.

     

    Section
      1.08  Effective
      Date.  The
      term
“Effective Date” means October 1, 2005.

     

    Section
      1.09  Employee. 
      The
      term
“Employee” means Randolph F. Williams.

     

    Section
      1.10  Plan
      Year.  The
      Term
“Plan Year” means the consecutive twelve (12) month period beginning each
      January 1 and ending on the following December 31.

     

    Section
      1.11  Retirement
      Date. 
      The
      date
      Employee retires from employment at the Bank after attaining age sixty-five
      (65).

     

    Section
      1.12  Termination
      of Employment.  The
      term
“Termination of Employment” means the date on which the Employee, prior to the
      attainment of his Retirement Date, retires, resigns or otherwise, voluntarily
      or
      involuntarily, terminates his full-time employment with the Bank. The Employee
      shall be deemed to have terminated his full-time employment with the Bank if
      he
      incurs a Total Disability. With respect to any benefit payable as a result
      of
      Termination of Employment, Termination of Employment shall be determined by
      reference to the Bank and all members of any controlled group (determined under
      Section 414(b) of the Internal Revenue Code of 1986, as amended (the “Code”)) or
      trades or businesses under common control (determined under Section 414(c)
      of
      the Code) that includes the Bank.

     

    Section
      1.13  Total
      Disability.  The
      term
“Total Disability” means any medically determinable physical or mental
      impairment which can be expected to result in death or to last for a continuous
      period of not less than 12 months and which (1) renders the Employee unable
      to
      engage in any substantial gainful activity or (2) entitles Employee to income
      replacement benefits for a period of not less than three months under an
      accident and health plan covering employees of the Bank.

     

    
      ARTICLE
        II
THE ALLOCATION

       

    

    Section
      2.01  Allocations
      to
      the
      Employee’s Account.  On
      the
      Effective Date and on the last business day of the month thereafter occurring
      on
      or before the first to occur of (1) the Employee’s attainment of his Retirement
      Date, (2) his death or (3) his Termination of Employment, the Employer shall
      credit to the Employee’s Account 10% of the amount of Employee’s compensation,
      or such other percentage of Employee’s compensation not to exceed 20% as he
      shall elect to have withheld from his compensation from time to time; provided,
      however, excepting any initial election, a change in the amount elected by
      the
      Employee shall become effective no earlier than the first day of the calendar
      year following the Employee’s change of election. Amounts elected to be deferred
      by the Employee shall be withheld from the Employee’s compensation for the pay
      periods for which such compensation is paid. Each allocation under this Section
      2.01 shall be deemed to have been made for purposes of computing interest under
      Section 2.03 of this Agreement as of the required allocation date.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Section
      2.02  Amount
      of Employer Allocations.  As
      of the
      Effective Date, the Employer shall allocate additional amounts to the Employee’s
      Account at the end of each quarter (beginning with the quarter ending December
      31, 2005) as matching contributions based on the amount of salary the Employee
      has elected to defer and have withheld under Section 2.01 during that quarter,
      as follows:

     

     

    
      
        	
                 

              	
                 

                Date

              	
                 

              	
                 

                Amount

              
	
                 

              	
                 

                December
                  31, 2005

              	
                 

              	
                 

                Twenty
                  cents ($.20) for each one dollar ($1.00) of salary deferred by
                  the
                  Employee, subject to a maximum of 4% of Employee’s salary for those
                  periods.

              
	
                 

              	
                 

                As
                  of the last day of each quarter thereafter during the term of this
                  Agreement

              	
                 

              	
                 

                Such
                  amounts as Employer shall determine for a calendar year which shall
                  be
                  approved by the Board before the end of the preceding calendar
                  year

              

      

       

    

     

     

    Section
      2.03  Allocation
      of Interest.  As
      of the
      end of each Plan Year, and as of the date of termination of this Agreement
      or
      payment in full of the benefits provided for hereunder, Bank shall credit the
      Employee’s Account, with interest, compounded annually, on the undistributed
      balance then held in his Account. The annual rate of interest for each Plan
      Year
      shall be equal to the highest certificate of deposit rates offered by the Bank
      during the year preceding the year in which the interest is to be allocated.
      Interest with respect to any allocations made during a Plan Year shall accrue
      from the date of allocation.

     

    Section
      2.04  Optional
      Account Investments.  In
      lieu
      of the interest credits described in Section 2.03, the Administrator, in its
      complete and sole discretion, may elect to invest the amounts credited to the
      Employee’s Account in specific investments in the name of the Employer. To the
      extent the Administrator makes such investments, the actual amounts credited
      to
      the Employee’s Account shall reflect the actual investment results for such
      investments rather than the deemed interest described in Section 2.03, and
      the
      Bank will not be obligated to pay Employee any difference between the deemed
      interest rate in Section 2.03 and those investment results. In making these
      investment decisions, the Administrator may, but is not required to, seek
      recommendations from the Employee as to the manner in which the Employee’s
      Account should be invested.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Section
      2.05  Termination
      of this Agreement.  Either
      Employee or the Bank may terminate this agreement with respect to any calendar
      year by providing written notice to the other party hereto on or before December
      1st of the preceding calendar year.

     

    
      ARTICLE
        III
BENEFITS

       

    

    Section
      3.01  Death
      Benefits.  Upon
      the
      death of the Employee prior to the attainment of his Retirement Date or prior
      to
      his Termination of Employment, his beneficiary, if living, or his contingent
      beneficiaries, if not, as determined pursuant to Section 4.03 of this Agreement,
      shall receive in a single lump sum cash payment the balance held in the deceased
      Employee’s Account on the date of Employee’s death. In the absence of any such
      designation or if the designated or contingent beneficiary is not living at
      the
      death of the Employee, the Account balance shall be paid in a lump sum to the
      Employee’s spouse, if any, or, if none, to his estate. The lump sum payment
      shall be paid within sixty (60) calendar days after the Employee’s
      death.

     

    Section
      3.02  Retirement,
      Prior
      Termination of Employment, or Change in Control.  Upon
      the
      Employee’s retirement after he attains his Retirement Date or upon his earlier
      Termination of Employment or at the Bank’s direction upon a Change in Control,
      he shall receive a cash payment of the balance in his Account at the time of
      his
      retirement or his earlier Termination of Employment, or an earlier Change in
      Control. The Account balance shall be paid in substantially equal monthly
      installments over a term of five (5) years commencing no later than sixty (60)
      calendar days after he retires after attaining his Retirement Date or after
      his
      earlier Termination of Employment, or after an earlier Change in Control;
      provided, however, that if Employee is a “key employee” (within the meaning of
      Section 416(i) of the Code without regard to paragraph (5) thereof) of a
      corporation whose stock is publicly traded on an established securities market
      or otherwise, within the meaning of Section 409A(a)(2)(B)(i) of the Code, such
      payments may not commence any earlier than the earlier of a date which is six
      months after the Employee’s separation from service or the date of Employee’s
      death.

     

    Section
      3.03  Death
      After Payments
      Commence.  If
      Employee dies prior to receiving any or all of the monthly installments
      contemplated by Section 3.02 of this Article III, the Account balance not yet
      paid to Employee shall be paid in a lump sum within sixty (60) calendar days
      after the Employee’s death to his designated beneficiaries, if living, or to his
      contingent beneficiaries, if not living. In the absence of any such designation
      or if the designated or contingent beneficiary is not living at the death of
      the
      Employee, the Account balance shall be paid in a lump sum to the Employee’s
      spouse, if any, or, if none, to his estate. Such payment shall be made within
      sixty (60) calendar days after the Employee’s death.

     

    Section
      3.04  Continued
      Interest or
      Earnings Accrual.  Amounts
      appropriated under this Agreement pending distribution shall continue to accrue
      interest or earnings at the rate and in the manner prescribed by Section 2.03
      or
      2.04 of Article II hereof.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      ARTICLE
        IV
ADMINISTRATION

       

      
      

    

    Section
      4.01  Delegation
      of Responsibility.  The
      Administrator may delegate duties involved in the administration of this
      Agreement to the Compensation Committee of the Board. However, the ultimate
      responsibility for the administration of this Agreement shall remain with the
      Administrator.

     

    Section
      4.02  Payment
      of Benefits.  The
      amounts allocated to the Employee’s Account and payable as benefits under this
      Agreement shall be paid solely from the general assets of the Bank. The Employee
      shall not have any interest in any specific assets of the Bank under the terms
      of this Agreement. This Agreement shall not be considered to create an escrow
      account, trust fund or other funding arrangement of any kind or a fiduciary
      relationship between the Employee and the Bank.

     

    Section
      4.03  Designation
      of Beneficiaries.  The
      Employee shall designate in a writing filed with the Secretary of the Bank
      a
      beneficiary and a contingent beneficiary to whom death benefits or any unpaid
      benefits due hereunder at the date of the Employee’s death shall be
      paid.

     

    
      ARTICLE
        V
MISCELLANEOUS

       
     Section
      5.01  Amendment
      of Agreement.  This
      Agreement cannot be amended, modified or supplemented in any respect except
      by a
      subsequent written agreement entered into by the parties.

     

    Section
      5.02  Successors
      and Assigns.  This
      Agreement shall be binding upon, and shall inure to the benefit of, the Bank,
      its successors and assigns, and the Employee, his heirs, legatees and personal
      representatives.

     

    Section
      5.03  Non-Alienation. 
      The
      Employee and his beneficiary, as determined pursuant to Section 4.03 of this
      Agreement, shall not have any right to anticipate, alienate or assign any rights
      under this Agreement, and any effort to do so shall be null and void. The
      monthly benefits payable under this Agreement shall be exempt from the claims
      of
      creditors or other claimants and from all orders, decrees, levies and executions
      and any other legal process to the fullest extent permitted by law.

     

    Section
      5.04  Choice
      of Law.  This
      Agreement shall be construed and interpreted pursuant to, and in accordance
      with, the laws of the State of Indiana.

     

    Section
      5.05  Waiver. 
      Failure
      of any party hereto to insist upon strict compliance with any of the terms,
      covenants and conditions hereof shall not be deemed a waiver or relinquishment
      of any similar right or power hereunder at any subsequent time.

     

    Section
      5.06  Notices. 
      Any
      notice required or permitted to be given under this Agreement shall be
      sufficient if in writing and if personally delivered to the party to whom notice
      should be given at the addresses set forth below (or at such other address
      for a
      party as shall be specified by notice given pursuant hereto):

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    

      
        	 	
                Bank:

              	
                Lafayette
                  Savings Bank, FSB

              
	 	 	
                101
                  Main Street

              
	 	 	
                P.O.
                  Box 1628

              
	 	 	
                Lafayette,
                  IN 47902

              
	 	 	 
	 	
                Employee:

              	
                Randolph
                  F. Williams

              
	 	 	
                3611
                  Chancellor Way

              
	 	 	
                West
                  Lafayette, IN 47906

              

      

       

    

    Section
      5.07  Unenforceability. 
      If
      any
      provision of this Agreement is deemed invalid or unenforceable, the remaining
      provisions shall remain in effect, unless modified by the administrator with
      the
      consent of Employee.

     

    Section
      5.08  Headings. 
      The
      headings in this Agreement are solely for convenience of reference and shall
      not
      affect its interpretation.

     

    Section
      5.09  Duration
      of this Agreement.  This
      Agreement shall automatically terminate at the date on which the balance of
      the
      Employee’s Account has been distributed pursuant to the terms of this
      Agreement.

     

    Section
      5.10  No
      Employment Contract.  This
      Agreement shall not be construed as an agreement, consideration or inducement
      of
      employment or as affecting in any manner the rights or obligations of the Bank
      or of the Employee to continue or to terminate the employment relationship
      at
      any time.

     

    IN
      WITNESS WHEREOF, the Bank and Employee have caused this Agreement to be executed
      as of this 29th day of September, 2005.

     

     

      
        	
                 

              	
                LAFAYETTE
                  SAVINGS BANK, FSB

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                By:

              	
                /s/
                  Mariellen M. Neudeck

              
	
                 

              	
                 

              	
                “Bank”

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                /s/
                  Randolph F. Williams

              
	
                 

              	
                Randolph
                  F. Williams, Employee

              
	
                 

              	
                 

              
	
                 

              	
                “Employee”

              

      

       

6

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