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HomeMy WebLinkAboutagreementr‘ P MARKETING PARTNERSHIP AGREEMENT BETWEEN THE CITY OF SAN DIEGO AND CARDIAC SCIENCE THIS AGREEMENT ("Agreement") is made, entered into, and effective as of the latest date set forth on the signature page hereto, by and between the City of San Diego (the "City"), with its principal place of business located at the City Administration Building, 202 'C' Street, San Diego, California 92101, and Cardiac Science, Inc., a Delaware corporation ("Cardiac Science") with its principal place of business located at 16931 Millikan Avenue, Irvine, California 92606 (each, a "Party," and collectively, the "Parties"), RECITALS WHEREAS, the City's Fire and Life Safety Services and San Diego Medical Services Enterprise have established a PAD program to help save lives in San Diego; and WHEREAS, the City has developed a Municipal Marketing Partnership Program ("MMPP") to generate revenue to fund existing and additional facilities, projects, programs and activities; and WHEREAS, Cardiac Science has demonstrated an interest in the City's PAD program and the MMPP by submitting a proposal to enter into a Marketing Partnership with the City; and WHEREAS, the City has determined that Cardiac Science's proposal meets the objectives of the MMPP and is otherwise in the best interests of the City; and WHEREAS, the City and Cardiac Science desire to enter into a contractual relationship which makes Cardiac Science the exclusive supplier of AEDs to City Facilities; and WHEREAS, in connection with the exclusive supplier relationship between the parties hereto, Cardiac Science shall pay the City certain marketing rights fees as set forth herein. NOW, THEREFORE, in consideration of the mutual covenants and conditions set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: Section 1, Definitions The following terms shall have the following meanings whenever used in this Agreement, unless the context requires otherwise: 1.1 "AED" means an automated external defibrillator manufactured by Cardiac Science. 1.2 "City's Audit Right" has the meaning contained in Section 8.1.1 herein. JOCUMENT r11.ED NOV ._19_.20.01_ Cii i i:E C T T. _11'( CLEPIC SAN DIEOC). CALIFOANIA D OCS OC\ 8 5 2 4 5 6 v 31 1 6761,0000 *11.3 "C emulative Sales Level" has the meaning contained in Section 4.4.1. 1.4 "Facilities" mean, unless otherwise restricted under this Agreement, City office buildings, libraries, police and fire buildings and vehicles, park and recreational facilities and all other City facilities and offices owned or controlled by the City. Facilities do not include private sector businesses operating as lessees of the City of San Diego. 1.5 "Incremental Marketing Fee" means cash paid to the City for each AED and Wall Mount sold by Cardiac Science, which meets the criteria established in this Agreement. 1.6 "Intellectual Property Rights" means all intellectual property rights throughout the world including all copyrights (including, without limitation, the exclusive right to reproduce, distribute, transmit, display, perform and create derivative works of a copyrighted work), copyright registrations and applications, trademark and service mark rights (including trade dress), trademark registrations and applications, service mark registrations and applications, patent rights (including the right to apply therefor), patent applications therefor (including the right to claim priority under applicable international conventions) and all patents issuing thereon, and inventions whether or not patentable, together with all utility and design thereof, know-how, specifications, trade names, mask -work rights, trade secrets, moral rights, author's rights, algorithms, rights in packaging, goodwill and other intellectual property rights, as may exist now or hereafter come into existence, and all renewals and extensions thereof, regardless of whether any of such rights arise under the laws of the United States or any other state, country or jurisdiction. 1.7 "Marketing Partnership" means a mutually beneficial business arrangement between the City and Cardiac Science, wherein Cardiac Science pays a marketing rights fee to the City in exchange for access to the commercial marketing potential associated with the City. 1.8 "Marketing Rights Fee" means cash paid to the City by Cardiac Science in exchange for entering into the Marketing Partnership with the City. 1.9 "Mediator" has the meaning contained in Section 10.3. 1.10 "Minimum Sales Level" has the meaning contained in Section 4.4.1. 1.11 "Municipal Marketing Partnership Program" or "MMPP" means the program approved by the San Diego City Council to seek opportunities for the City to generate revenue from partnerships with the corporate community in order to enhance municipal services and facilities in the City. 1.12 "PAD" means public access defibrillation. 1.13 "PAD Logo" has the meaning contained in Section 5.2. 1.14 "PAD Partnership" means the business arrangement between the City and Cardiac Science to implement the PAD program in the City. 1.15 "Subcontractors" has the meaning contained in Section 8.3.1 herein. 2 DOCSOC 852456v3116761.0000 , A A 1.1 d "Wall Mount" means the wall mount storage receptacle, manufactured by Cardiac Science, used for storing an AED. g- „Lot Section 2. Contractual Relationship During J During the term of this Agreement, Cardiac Science shall be the exclusive supplier of AEDs to the Facilities and serve as the "Official AED Provider" for the City's PAD program. During the term of this Agreement, all automated external defibrillators purchased by the City shall be purchased from Cardiac Science. Section 3. Term The term of this Agreement shall be one (1) year from the effective date hereof, subject to the right of the City to renew this Agreement annually thereafter by providing Cardiac Science with at least thirty (30) days written notice prior to the expiration of such term; provided, however, that in no event shall this Agreement exceed five (5) years in duration. Section 4. Consideration 4.1 Marketing Rights Fee: Year 1. In consideration of the rights, benefits and privileges granted to Cardiac Science under this Agreement, Cardiac Science shall pay the City a Marketing Rights Fee of $ I 00,000 for the first year of the Agreement. Said fee shall be paid to the City on the following schedule: 525,000 on or before December 31, 2001 $25, 000 on or before March 31, 2002 $25, 000 on or before June 30, 2002 $25, 000 on or before September 30, 2002 4,2 Marketing Rights Fee: Year 2. If the Agreement is extended for a second year, Cardiac Science shall pay the City a Marketing Rights Fee of $50,000. Said fee shall be paid to the City on the following schedule: $12,500 on or before December 31, 2002 $12,500 on or before March 31, 2003 $12,500 on or before June 30, 2003 $12,500 on or before September 30, 2003 4.3 Marketing Rights Fee: Year 3. If the Agreement is extended for a third year, Cardiac Science shall pay the City a Marketing Rights Fee of $25,000. Said fee shall be paid to the City on the following schedule: $6,250 on or before December 31, 2003 $6,250 on or before March 31, 2004 $6, 250 on or before June 30, 2004 $6,250 on or before September 30, 2004 4.4 Incremental Marketing Fee. Cardiac Science shall pay the City an incremental marketing fee (the "Incremental Marketing Fee") for each AED and Wall Mount sold by Cardiac DOCS008 52456v3116761.0000 3 Science to certain parties as set forth in Section 4.4.2 below. The Incremental Marketing Fee shall be paid quarterly, %) r J�x,,,,,��,�' , 4.4.1 `The calculation of the Incremental Marketing Fee will be based on meeting (i) a minimum sales level on each anniversary of this Agreement (the "Minimum Sales Level") and (ii) cumulative sales throughout the full term of the Agreement (the "Cumulative Sales Level"). Schedule I of this Agreement sets forth the Minimum Sales Level and Cumulative Sales Level along with an example of how to calculate the Incremental Marketing Fee. 4.4.2 The Incremental Marketing Fee applies to all AEDs and Wall Mounts sold by Cardiac Science to any party in the zip codes listed below, as well as all AEDs sold by Cardiac Science to Rural/Metro Corporation nationally: 91901, 91902, 91905, 9I906, 91910, 91911, 91913, 91915, 91916, 91917, 91931, 91932, 91934, 91935, 91941, 91942,91945, 91948, 91950,91962, 91963, 91977, - 91978, 91980, 92003, 92004, 92007, 92008, 92009, 92014, 92019, 92020, 92021, 92024, 92025, 92026, 92027, 92028, 92029, 92036, 92037, 92040, 92054, 92055, 92056, 92059, 92060, 92061, 92064, 92065, 92066, 92067, 92068, 92069, 92070, 92071, 92075, 92082, 92083, 92086, 92101, 92102, 92103, 92104, 92105, 92106, 92107, 92108, 92109, 92110, 9211 I, 92113, 92114, 92115, 92116, 92117, 92118, 92119, 92120, 92121, 92122, 92123,92124, 92126, 92128, 92129, 92130, 92131, 92135, 92139, 92145, 92154, 92155, 92173, 92536, 92672,92916. Should zip code changes occur in San Diego County during the term of this Agreement, the revised zip codes will apply to this Agreement. 4.5 Assignment of Rights. Cardiac Science understands that the City may assign all or part of its rights to the fees set forth in this Section 4, to San Diego Medical Services Enterprise. If such assignment is made, the City will provide a copy of the assignment agreement to Cardiac Science, and Cardiac Science agrees to pay San Diego Medical Services Enterprise directly, in accordance with the terms of that assignment agreement. Section 5. Marketing Rights and Benefits In consideration of the Marketing Rights Fee and Incremental Marketing Fee paid to the. City, as described in Section 4 above, the City grants Cardiac Science the following benefits: 5.1 Official AED Partner. The right to be designated and referred to as the "Official AED Partner of the City of San Diego" and to use said designation in promotional and marketing efforts including press releases, stories, features, cable television programming, public service announcements and other communications to the public initiated by Cardiac Science or the City. 5.2 Logo Designation. Cardiac Science shall be named on all promotional materials used in connection with branding the PAD program as the "Official AED Partner of the City of San Diego" (the "PAD Logo"). Production costs to produce the logo and collateral materials for the PAD Program including brochures, stickers, and posters will be paid by the City. The PAD Logo will also be placed on official City vehicles used to operate the PAD Program; provided that the size and location of the PAD Logo placed on the City vehicles are viewable to the traveling public, as 4 DOCS00852456v31 t 6761.0000 determined by both parties; and provided further that at all times during the term of this Agreement — a minimum of two (2) to four (4) official City vehicles shall wear the PAD Program logo. 5.3 Web Site Link. A Web site link from the San Diego Medical Services Enterprise Web page and MMPP Web page to a Web page that highlights the PAD Program. The PAD Program Web page will include a link to Cardiac Science's Web site and, in both form and content, will be consistent with all current and future City policies related to Web sites including Council Policy 000-40, Marketing Partnership policy, and the City's Web Sponsorship Guidelines. The City will produce all content for the initial Web page on the PAD Program, subject to the reasonable approval of Cardiac Science. The cost of any expansion to the Web page will be negotiated by the parties. 5.4 Trade Shows. The right to participate with San Diego Medical Services Enterprise in a maximum of three national trade shows or speaking engagements per year, as mutually agreed upon by the parties, to represent the PAD Partnership. Costs associated with participating in and attending the -trade shows and/or speaking engagements shall be borne by the Parties as mutually agreed upon, prior to attending such trade show or speaking engagement. 5.5 Health and Safety Events. The right to participate in a maximum of three City -hosted health and safety events per year. Costs for attendance and participation will be borne independently by both parties. 5.6 Advertising Rights. The right to advertise in San Diego County to promote the PAD Partnership and offer Cardiac Science products and services to businesses, municipalities, and school districts. The City agrees to pay for all costs associated with the production of direct mailing materials for the PAD program, and Cardiac Science agrees to pay the postage for any direct mailing campaign; provided, however, that any direct mailing campaign shall be mutually agreed to by the Parties. 5.7 PAD Program Promotion Cardiac Science shall have the right to provide the City with promotional materials regarding AED's and to hold informational seminars, at times to be mutually agreed upon by the City and Cardiac Science. City shall provide Cardiac Science with a quarterly report on the marketing and advertising of the PAD program in order to allow Cardiac Science to monitor the implementation and effectiveness of the promotional activities. Section 6. Citv's Reservation of Rights The City reserves the right to review and approve all logos, promotional materials, promotional campaigns, product placement and appearance and any and all other materials that represent Cardiac Science's efforts to publicize and/or promote the rights and benefits granted to it under this Agreement. Section 7. Intellectual Property The City and Cardiac Science shall each retain ownership of, and all right, title and interest in and to, their respective, intellectual property, and no license therein, whether expressed or implied, is 5 DOCSOC4524s6v3\ 16761.0000 granted by this Agreement. To the extent the parties wish to grant to the other, rights or interests in intellectual property, separate licensing agreements on mutually acceptable terms shall be executed. Section 8. Obligations 8.1 Right to Audit. Upon reasonable notice, the Contractor shall make available to the City for examination within the City/County of San Diego all of the data and records with respect to all matters covered by this agreement. The Contractor will permit the City, at its expense, to audit, examine, and make excerpts from such data or records, and to retain copies outside of the Contractor's premises, in order to ensure compliance with the agreement. The information retained will be kept by the City in the strictest confidence as permitted by law. The Contractor will maintain such data and records for a period of not less than three years following completion of this agreement. 8.1.1 Binding on Subcontractors. Cardiac Science shall include the City's Audit Right as described above, in any and all of their subcontracts, and shall ensure that these sections are binding upon all Subcontractors. 8.1.2 Compliance Required before Mediation or Litigation. A condition precedent to proceeding with mandatory mediation and further litigation provided for in Section 10 is Cardiac Science's full compliance with the provisions of this Section 8.1 within sixty (60) days of the date on which notice was mailed in connection with the City's Audit Right. 8.2 Insurance. Cardiac Science shall not begin services under this Agreement until it has: a) obtained insurance certificates reflecting evidence of all insurance required in Section 8.2.1; however, the City reserves the right to request, and Cardiac Science shall submit, copies of any policy upon reasonable request by the City; b) obtained City approval of each company or companies as required by Section 8.2.2; c) confirmed that all policies contain the specific provisions required in Section 8.2.4. Further, Cardiac Science shall not modify any policy or endorsement thereto which increases the City's exposure to loss for the duration of this Agreement. Cardiac Science retains the right to modify or change existing insurance if it does not fall below the minimum requirements required under this agreement. 8.2.1 Types of Insurance. At all times during the term of this Agreement, Cardiac Science shall maintain insurance coverages as follows: 8.2.1.1 Commercial General Liability. For all of Cardiac Science's operations, including contractual, property damage, completed operations, and independent liability, Cardiac Science shall keep in full force and effect, during any and all work in connection with this Agreement all applicable insurance to cover personal injury, bodily injury and property damage, providing coverage to a combined single limit of S 1,000,000 per occurrence. Contractual liability shall include coverage of tort Iiability of another party to pay for bodily injury or property damage to a third person or organization. The City, its officers and employees shall be named as additional insureds on this policy. 8.2.1.2 Commercial Automobile Liability. For all of Cardiac Science's automobiles used in connection with this Agreement including owned, hired and non -owned 6 DOCS0085 24 56 v 31 16761.0000 automobiles, Cardiac Science shall keep in full force and effect, automobile insurance for bodily injury and property damage providing coverage to a combined single limit of $1 million per occurrence, as reflected on the applicable insurance certificate for each automobile. The City shall be named as an additional insured, but only for liability arising out of use of Cardiac Science's automobiles and only arising out of services performed under this Agreement. 8.2.1.3 Workers' Compensation. For all of Cardiac Science's employees who are subject to this Agreement and to the extent required by the State of California, Cardiac Science shall keep in full force and effect, a workers' compensation policy. That policy shall provide a minimum of $1 million of employers liability coverage. 8.2.2 Rating Requirements. All insurance required by express provision of this Agreement shall be carried only by insurance companies that have been given at least an "A" or "A-" and "V" rating by AM BEST, that are licensed to do business in the State of California, and that have been approved by the City. 8.2.3 Deductibles. All deductibles on any policy shall be the responsibility of the Cardiac Science. 8.2.4 Soecific Provisions Required. Each policy required under Sections 8.2.1.1 through 8.2.1.3 shall expressly provide, and an endorsement shall be submitted to the City, that: 8.2.4.1 The City of San Diego and its respective elected officials, officers, employees, agents, and representatives shall be named as additional injured. The City's Additional Insured status must be reflected on additional insured endorsement form CG 20 10, or equivalent, which shall be submitted to the City. 8.2.4.2 The policies are primary and non-contributing to any insurance that may be carried by the City, as reflected in an endorsement which shall be submitted to the City. 8.2.4.3 The policies cannot be canceled, non renewed or materially changed except after thirty calendar days prior written notice by Cardiac Science to the City by certified mail, as reflected in an endorsement which shall be submitted to the City except for non-payment of premium, in which case ten days notice will be provided. 8.2.4.4 Before performing any services, Cardiac Science shall provide the City with all Certificates of Insurance accompanied with all endorsements. 8.2.4.5 Cardiac Science may obtain additional insurance not required by this Agreement. 8.3 Subcontractors. Cardiac Science's hiring of or retaining any third parties ("Subcontractors") to perform services related to the Marketing Partnership ("Subcontractor Services") is subject to the prior approval by the City, which approval shall not be unreasonably withheld. Cardiac Science shall list on Exhibit A all Subcontractors known to Cardiac Science at the time this Agreement is entered. If at any time after this Agreement is entered into Cardiac Science identifies a need for additional Subcontractor Services, Cardiac Science shall give written notice to the City of such need, at least twenty (20) days before entering into a contract for such Subcontractor Services. Cardiac Science's 7 DOCSOC185 2456 v3116761.0000 notice shall include a description of the scope of work, and an estimate of all costs for the Subcontractor Services and the reason for hiring such Subcontractor. The City agrees to consider such requests in good faith. 8.3.1 Subcontractor Contract. All contracts entered into between Cardiac Science and a Subcontractor shall contain the information as described in Sections 8.6 and 8.7, and shall provide as follows: 8.3.2 Each Subcontractor shall obtain insurance policies which shall be kept in full force and effect during any and all work performed by such Subcontractor. Each Subcontractor shall obtain, and Cardiac Science shall require the Subcontractor to obtain, all policies described in Section 8.2.1. 8.3.2.1 In the case of a deficiency in the performance of Subcontractor Services, Cardiac Science shall notify the City in writing of any withholding of payment to the Subcontractor, specifying: (a) the amount withheld; (b) the specific cause under the terms of the subcontract for withholding payment; (c) the connection between the cause for withholding payment and the amount withheld; and (d) the remedial action the Subcontractor must take in order to receive the amount withheld. Once the Subcontractor corrects the deficiency, Cardiac Science shall pay the Subcontractor the amount withheld within fourteen working days of Cardiac Science's receipt of the City's next payment. 8.3.2.2 In any dispute between Cardiac Science and the Subcontractor, the City shall not be made a party to any judicial or administrative proceedings to resolve the dispute. Cardiac Science agrees to defend and indemnify the City as described in Section 10 of this Agreement in any dispute between Cardiac Science and Subcontractor should the City be made a party to any judicial or administrative proceedings to resolve the dispute in violation of this position. 8.3.2.3 The Subcontractor is bound to the City's Equal Opportunity Contracting Program covenants set forth in Section 8,5 and Exhibit B of this Agreement. 8.3.2.4 Each Subcontractor hired by Cardiac Science in connection with this Agreement shall obtain insurance policies which shall be kept in full force and effect during any and all work on the PAD Partnership and for the duration of this Agreement. Each Subcontractor shall obtain, and Cardiac Science shall require the Subcontractor to obtain, all policies described in Section 8.2.1. 8 DOCS0085 2456v31I 6'761.0000 8.4 Contract Activity Report Cardiac Science shall submit statistical information to the City as requested in the City's Contract Activity Report Exhibit E (6). The statistical information shall include the amount of subcontracting provided by firms during the period covered by the Contract Activity Report. With the Contract Activity Report, Cardiac Science shall provide an invoice from each Subcontractor listed in the report. Cardiac Science agrees to issue payment to each firm listed in the Report within fourteen working days of receiving payment from the City for Subcontractor Services as described in Section 8.3.1. 8.5 Non -Discrimination Requirements. 8.5.1 Compliance with the City's Equal Opportunity Contracting Program. Cardiac Science and each of its Subcontractors shall comply with the City's Equal Opportunity Contracting Program Requirements which is attached hereto as Exhibit B and incorporated herein by this reference. - 8.5.2 Non -Discrimination Ordinance. Cardiac Science shall not discriminate on the basis of race, gender, religion, national origin, ethnicity, sexual orientation, age, or disability in the solicitation, selection, hiring or treatment of Subcontractors, vendors or suppliers. Cardiac Science shall provide equal opportunity for Subcontractors to participate in subcontracting opportunities. Cardiac Science understands and agrees that violation of this clause shall be considered a material breach of the contract and may result in contract termination, debarment, or other sanctions. This language shall be in contracts between Cardiac Science and any Subcontractors, vendors and suppliers. 8.5,3 Compliance Investigations. Upon the City's request, Cardiac Science agrees to provide to the City, within sixty calendar days, a truthful and complete list of the names of all Subcontractors, vendors, and suppliers that Cardiac Science has used in the past five years on any of its contracts that were undertaken within San Diego County, including the total dollar amount paid by Cardiac Science for each subcontract or supply contract. Cardiac Science further agrees to fully cooperate in any investigation conducted by the City pursuant to the City's Nondiscrimination in Contracting Ordinance (Municipal Code sections 22.3501-22.3517.) Cardiac Science understands and agrees that violation of this clause shall be considered a material breach of the contract and may result in remedies being ordered against Cardiac Science up to and including contract termination, debarment, and other sanctions for violation of the provisions of the Nondiscrimination in Contracting Ordinance. Cardiac Science further understands and agrees that the procedures, remedies and sanctions provided for in the Nondiscrimination Ordinance apply only to violations of said Nondiscrimination Ordinance. 8.6 Drug -Free Workplace. Cardiac Science agrees to comply with the City's-Drug-Free Workplace requirements set forth in Council Policy 100-17, adopted by Council Resolution No. R-277952 and incorporated into this Agreement by this reference. Cardiac Science shall certify to the City that it will provide a drug - free workplace by submitting a Certification for a Drug -Free Workplace form set forth on Exhibit C. 8.6.1 Cardiac Science's Notice to Employees. Cardiac Science shall publish a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, 9 OOCS OC18524 56v 31I 6761.0000 programs. violations. or use of a controlled substance is prohibited in the work place, and specifying the actions that will be taken against employees for violations of the prohibition. 8.6.2 Drug -Free Awareness Program. Cardiac Science shall establish a drug -free awareness program to inform employees about all of the following: 8.6.2.1 The dangers of drug abuse in the work place. 8.6.2.2 The policy of maintaining a drug -free work place. 8.6.2.3 Available drug counseling, rehabilitation, and employee assistance 8.6.2.4 The penalties that may be imposed upon employees for drug abuse 8.6.3 Posting the Statement. In addition to Section 8.6.2 above, Cardiac Science shall post the drug -free policy referenced in Section 8.6.2.2 in a prominent place in its office. 8.6.4 Subcontractor's Agreements. Cardiac Science further certifies that each contract for Subcontractor Services for the PAD Partnership shall contain language that binds the Subcontractor to comply with the provisions of Section 8.6 of this Agreement, as required by Sections 2.A.(1) through (3) of Council Policy 100-17. Cardiac Science and Subcontractors shall each be responsible for their own drug -free work place program. 8.7 Mandatory Assistance. If a third party dispute or litigation, or both, arises out of, or relates in any way to the Marketing Partnership established under this Agreement, upon the reasonable request by one Party (the "Affected Party"), such other Party (the "Non -Affected Party"), its agents, officers, and employees, agree to reasonably assist in resolving the dispute or litigation. A Non -Affected Parry's reasonable assistance includes, but is not limited to, providing professional consultations, attending mediations, arbitrations, depositions, trials or any event related to the dispute resolution and/or Iitigation. 8.8 Compensation for Mandatory Assistance. The Affected Party will compensate the Non -Affected Party for fees incurred for providing the assistance set forth in Section 8.7. If, however, the fees incurred by the Affected Party in connection with Section 8.7 are determined, through resolution of the third party dispute or litigation, or both, to be attributable in whole, or in part, to the acts or omissions of the Non -Affected Party, its agents, officers, and employees, the Non -Affected Party shall reimburse the Affected Party, and its agents, officers and employees in accordance with Section 10. 8.9 Employment of City Staff. This Agreement may be unilaterally and immediately terminated by the City, at its sole discretion, if Cardiac Science employs an individual who, within twelve months from the date of this Agreement, in the individual's capacity as an officer or employee of the City, participated in, 10 DOCS008524560116 761.0000 negotiated with, or otherwise influenced the recommendation made to the City Council or City Manager in connection with entering into this Agreement with Cardiac Science. Section 9. Indemnification 9.1 Indemnification and Hold Harmless Agreement. Cardiac Science agrees to defend, indemnify, protect and hold City and its agents, officers and employees harmless from and against any and all claims asserted or liability established for damages or injuries to any person or property, including injury to Cardiac Science's employees, agents or officers, which arise from or are connected with or are caused or claimed to be caused by the acts or omissions of Cardiac Science and its agents, officers or employees in performing the work or services or supplying the materials or equipment herein, and all expenses of investigating and or services or supplying the materials or equipment herein, and all expenses of investigating and defending against same; provided, however, that Cardiac Science's duty to indemnify and hold harmless shad not include any claims or liability arising from the established sole negligence or willful misconduct of the City, its agents, officers or employees. This shall not prejudice the right of the City to appear in such suit, participate in the defense and take such actions as may be necessary to protect the interest of the City. Section 10. Mediation 10.1 Mandatory Non -binding Mediation. If a dispute arises out of, or relates to this Agreement, or the breach thereof, and if said dispute cannot be settled through normal contract negotiations, the Parties agree to first endeavor to settle the dispute in an amicable manner, using mandatory mediation under the [Commercial Business] Mediation Rules of the American Arbitration Association (the "AAA"). 10.2 Mandatory Mediation Costs. The expenses of witnesses for either side shall be paid by the Party producing such witnesses. All other expenses of the mediation, including required traveling and other expenses of the mediator, and the cost of any proofs or expert advice produced at the direct request of such mediator, shall be borne equally by the Parties, unless they agree otherwise. 10.3 Selection of Mediator. A single mediator that is mutually acceptable to both Parties shall be used to mediate the dispute (the "Mediator") within 45 days of a Request for Mediation (as defined below). The Mediator will be knowledgeable in public/private partnerships and may be selected from lists furnished by either or both Parties. To initiate mediation, the initiating Party shall serve a "Request for Mediation" on the opposing Party. 11 DOCS00852456v3116761.0000 10.4 Conduct of Mediation Sessions. Mediation hearings will be conducted in an informal manner and discovery will not be allowed. All discussions, statements, or admissions will be confidential to the Party's legal position. The Parties may agree to exchange any information they deem necessary. 10.4.1 Both Parties must have an authorized representative attend the mediation. Each representative must have the authority to recommend entering into a settlement. Either Party may have attorney(s) or expert(s) present. Upon reasonable demand, either Party may request and receive a list of witnesses and notification whether attorneys) will be present. 10.4.2 Any agreements resulting from mediation shall be documented in writing. All mediation results and documentation, by themselves, shall be "non -binding" and inadmissible for any purpose in any legal proceeding, unless such admission is otherwise agreed upon, in writing, by both Parties. The Mediator shall not be subject to any subpoena or liability and their actions shall not be subject to -discovery. Section 11. Miscellaneous 11.1 Termination in the event of Bankruptcy. The City may, at its option and in its sole discretion, terminate this Agreement by written notice, without the consent of Cardiac Science if Cardiac Science files a voluntary petition under the United States Bankruptcy Code or, or if Cardiac Science hasfiled against it an involuntary petition under the United States Bankruptcy Code, and such petition is not dismissed within ninety (90) days 11.2 Notices In all cases where written notice is required under this Agreement, service shall be deemed sufficient if the notice is deposited in the United States first-class mail, postage paid. Proper notice shall be effective on the date it is mailed, unless provided otherwise in this Agreement. For the purpose of this Agreement, unless otherwise agreed in writing, notice to the City shall be addressed to: Office of the City Manager, 202 C Street, 9th Floor, San Diego, CA 9210I and notice to Cardiac Science shall be addressed to: I6931 hiillikan Avenue, Irvine, CA 92606. 11.3 Headings. All article headings are for convenience only and shall not affect the interpretation of this Agreement. 11.4 Non -Assignment. Cardiac Science shall not assign the obligations under this Agreement, whether by express assignment or by sale of the company, nor any monies due or to become due, without the City's prior written approval, which approval shall not be unreasonably withheld. Any assignment in violation of this paragraph shall constitute a default and is grounds for immediate termination of this Agreement, at the sole discretion of the City. In no event shall any putative assignment create a contractual relationship between the City and any putative assignee. 12 DOCSOC185245 6v3116761,0000 11.5 Independent Contractors. Cardiac Science and any Subcontractors employed by Cardiac Science shall be deemed to be independent contractors and not agents of the City. Any provisions of this Agreement that may appear to give the City any right to direct Cardiac Science concerning the details of operating the Marketing Partnership, or to exercise any control over such performance, shall mean only that Cardiac Science shall follow the direction of the City concerning the end results of the performance. 11.6 Covenants and Conditions. All provisions of this Agreement expressed as either covenants or conditions on the part of the City or Cardiac Science, shall be deemed to be both covenants and conditions. 11.7 Compliance with Controlling Law. Cardiac Science shall comply with all laws, ordinances, regulations, and policies of the federal, state, and local governments applicable to this Agreement. In addition, Cardiac Science shall comply immediately with all directives issued by the City or its authorized representatives under authority of any laws, statutes, ordinances, rules, or regulations. The laws of the State of California shall govern and control the terms and conditions of this Agreement. 11.8 Jurisdiction. Venue. and Attorney's Fees. The venue for any suit or proceeding concerning this Agreement, the interpretation or application of any of its terms, or any related disputes shall be in the County of San Diego, State of California. The prevailing Party in any such suit or proceeding shall be entitled to recover its reasonable attorneys' fees in addition to any other award made in such suit or proceeding. 11.9 Successors in Interest. This Agreement and all rights and obligations created by this Agreement shall be in force and effect whether or not any Parties to the Agreement have been succeeded by another entity, and all rights and obligations created by this Agreement shall be vested and binding on any Party's successor in interest. 11.10 Integration. This Agreement and the exhibits and references incorporated into this Agreement fully express all understandings of the Parties concerning the matters covered in this Agreement. No change, alteration, or modification of the terms or conditions of this Agreement, and no verbal understanding of the Parties, their officers, agents, or employees shall be valid unless made in the form of a written change agreed to in writing by both Parties or an amendment to this Agreement agreed to by both Parties. All prior negotiations and agreements concerning the subject matter hereof are merged into this Agreement. 11.11 Counterparts. This Agreement may be executed in counterparts, which when taken together shall constitute a single signed original as though all Parties had executed the same page. 13 D005OC18 5245 6v3116761.0000 11.12 No Waiver. No failure of either the City or Cardiac Science to insist upon the strict performance by the other of any covenant, term or condition of this Agreement, nor any failure to exercise any right or remedy upon a breach of any covenant, term, or condition of this Agreement, shall constitute a waiver of any such breach or of such covenant, term or condition. No waiver of any breach shall affect or alter this Agreement, and each and every covenant, condition, and term hereof shall continue in full force and effect to any existing or subsequent breach. 11.13 Severability. The unenforceability, invalidity, or illegality of any provision of this Agreement shall not render any other provision of this Agreement unenforceable, invalid, or illegal. 11.14 Municipal Powers. Nothing contained in this Agreement shall be construed as a limitation upon the powers of the City as a chartered city of the State of California. 11.15 Drafting Ambiguities. The Parties agree that they are aware that they have the right to be advised by counsel with respect to the negotiations; terms and conditions of this Agreement, and the decision of whether or not to seek advice of counsel with respect to this Agreement is a decision which is the sole responsibility of each Party. This Agreement shall not be construed in favor of or against either Party by reason of the extent to which each Party participated in the drafting of the Agreement. 11.16 Signing Authority, The representative for each Party signing on behalf of a corporation, partnership, joint venture or governmental entity hereby declares that authority has been obtained to sign on behalf of the corporation, partnership, joint venture, or entity and agrees to hold the other Party or Parties hereto harmless if it is later determined that such authority does not exist. 14 DOCSOC1852456v3116761.000a IN WITNESS WHEREOF, this Agreement is executed by the City of San Diego, acting by and through t Co orate Sponsorship and Development Director, pursuant to the City Council Resolution' 49 749 , and by Cardiac Science, THE CITY OF SAN DIEGO By. 1' \& i 1 k Mary Braunwart �i opment Director Corporate Sponsor • and Development Program Date: It l U 1 CARD ,• SCIENCE, INC. / • By: , Name:/4 (C Z-- C7ro Pf /e VJ Title: V(G(— p/LES'/D ENi 5 ' LE S F / o4eX Eri /6 Date: /6 -- /_ e / 15 DOCSOC18 5 24 56 v3116761.0000 lA FYI HEREBY APPROVE the form and legality of the foregoing Agreement this c."ct day of , 2001. CASEY 9W N, City(Atto By Kglly Salt, !eputy City Attorney DO CSOC18 5 2 4 5 6 v 3116761.0000 SCHEDULE I Calculation of Incremental Marketine Fee Cumulative Sales Level Up to 500 units 501-1000 units 1001 units+ Incremental Price Per Unit $100 per AED and $10 per Wall Mount $125 per AED and $15 per Wall Mount $150 per AED and $25 per Wall Mount Minimum Sales Level Year 1 2 3 4 and 5 Minimum Sales Level 226 AEDs 113 AEDs 57 AEDs None The Incremental Price Per Unit will be triggered upon meeting the Minimum Sales Level for a particular year. After meeting the Minimum Sales Level, the Incremental Price Per Unit shall be determined by the Cumulative Sales Level. In calculating the Cumulative Sales Level, all sales under the Agreement of AEDs or Wall Mounts, as applicable, shall be considered. The Incremental Marketing Fee is calculated by multiplying the Incremental Price Per Unit by the number of units sold in a particular year less the number of units sold to reach the Minimum Sales Level. Example, If 500 AEDs are sold in Year 1, the Incremental Marketing Fee will be $22,500 (225 x $100). In Year 2, if 100 Units are sold, the Incremental Marketing Fee will be $0 (since the Minimum Sales Level was not reached). In Year 3, if 1,000 AEDs are sold, the Incremental Marketing Fee will be $141,450 ((1000-57) x $150). In Year 4, if 2 AEDs are sold the Incremental Marketing Fee will be $300 (2 x $150). 17` D00500852456v3116761,0000