Exhibit 10.3

 

Indemnity Agreement

 

THIS INDEMNITY AGREEMENT (this “Agreement”) dated as of July 11, 2008, is made
by and between CARDIONET, INC., a Delaware corporation (the “Company”), and
RANDY H. THURMAN (“Indemnitee”).

 

RECITALS

 

A.                                    The Company desires to attract and retain
the services of highly qualified individuals as directors, officers, employees
and agents.

 

B.                                    The Company’s Amended and Restated Bylaws
(the “Bylaws”) require that the Company indemnify its directors and officers,
and empowers the Company to indemnify its employees and agents, as authorized by
the Delaware General Corporation Law, as amended (the “Code”), under which the
Company is organized and such Bylaws expressly provide that the indemnification
provided therein is not exclusive and contemplates that the Company may enter
into separate agreements with its directors, officers and other persons to set
forth specific indemnification provisions.

 

C.                                    Indemnitee does not regard the protection
currently provided by applicable law, the Company’s governing documents and
available insurance as adequate under the present circumstances, and the Company
has determined that Indemnitee and other directors, officers, employees and
agents of the Company may not be willing to serve or continue to serve in such
capacities without additional protection.

 

D.                                    The Company desires and has requested
Indemnitee to serve or continue to serve as a director, officer, employee or
agent of the Company, as the case may be, and has proferred this Agreement to
Indemnitee as an additional inducement to serve in such capacity.

 

E.                                    Indemnitee is willing to serve, or to
continue to serve, as a director, officer, employee or agent of the Company, as
the case may be, if Indemnitee is furnished the indemnity provided for herein by
the Company.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:

 

1.                                      Definitions.

 

(a)                                 Agent.  For purposes of this Agreement, the
term “agent” of the Company means any person who:  (i) is or was a director,
officer, employee or other fiduciary of the Company, a subsidiary of the Company
or an employee benefit plan of the Company or a subsidiary of the Company; or
(ii) is or was serving at the request or for the convenience of, or representing
the interests of, the Company or a subsidiary of the Company, as a director,
officer, employee or other fiduciary of a foreign or domestic corporation,
partnership,  joint venture, trust or other enterprise.

 

(b)                                 Expenses.  For purposes of this Agreement,
the term “expenses” shall be broadly construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys’, witness, or other professional
fees and related disbursements, premiums, security for and other costs relating
to any bonds and other out-of-pocket costs of whatever nature), actually and
reasonably incurred by Indemnitee in connection with the investigation, defense
or appeal of a proceeding or establishing or enforcing a right to
indemnification under this Agreement, the Code or otherwise, and amounts paid in
settlement by or on behalf of Indemnitee, but shall not include any judgments,
fines or penalties actually levied against Indemnitee for such individual’s
violations of law.  The term “expenses” shall also include reasonable
compensation for time spent by Indemnitee for which he is not compensated by the
Company or any subsidiary or third party (i) for any period during which
Indemnitee is not an agent, in the employment of, or providing services for
compensation to, the Company or any subsidiary; and (ii) if the rate of
compensation and estimated time involved is approved by the directors of the
Company who are not parties to any action with respect to which expenses are
incurred, for Indemnitee while an agent of, employed by, or providing services
for compensation to, the Company or any subsidiary.

 

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(c)                                  Proceeding.  For purposes of this
Agreement, the term “proceeding” shall be broadly construed and shall include,
without limitation, any threatened, pending, or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed proceeding,
whether brought in the right of the Company or otherwise and whether of a civil,
criminal, administrative or investigative nature, and whether formal or informal
in any case, in which Indemnitee was, is or will be involved as a party or
otherwise by reason of:  (i) the fact that Indemnitee is or was a director or
officer of the Company; (ii) the fact that any action taken by Indemnitee or of
any action on Indemnitee’s part while acting as director, officer, employee or
agent of the Company; or (iii) the fact that Indemnitee is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, and in any such case described above, whether or not serving in any
such capacity at the time any liability or expense is incurred for which
indemnification, reimbursement, or advancement of expenses may be provided under
this Agreement.

 

(d)                                 Subsidiary.  For purposes of this Agreement,
the term “subsidiary” means any corporation or limited liability company of
which more than 20% of the outstanding voting securities or equity interests are
owned, directly or indirectly, by the Company and one or more of its
subsidiaries, and any other corporation, limited liability company, partnership,
joint venture, trust, employee benefit plan or other enterprise of which
Indemnitee is or was serving at the request of the Company as a director,
officer, employee, agent or fiduciary.

 

(e)                                  Independent Counsel.  For purposes of this
Agreement, the term “independent counsel” means a law firm, or a partner (or, if
applicable, member) of such a law firm, that is experienced in matters of
corporation law and neither presently is, nor in the past five (5) years has
been, retained to represent: (i) the Company or Indemnitee in any matter
material to either such party, or (ii) any other party to the proceeding giving
rise to a claim for indemnification hereunder.  Notwithstanding the foregoing,
the term “independent counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee’s rights under this Agreement.

 

2.                                      Consideration. The Company acknowledges
that it has entered into this Agreement and assumes the obligations imposed on
it hereby, in addition to and separate from its obligations to Indemnitee under
the Bylaws, to induce Indemnitee to serve, or continue to serve, as a director,
officer, employee or agent of the Company, and the Company acknowledges that
Indemnitee is relying upon this Agreement in serving as a director, officer,
employee or agent of the Company.

 

3.                                    Indemnification.

 

(a)                                 Indemnification in Third Party Proceedings. 
Subject to Section 10 below, the Company shall indemnify Indemnitee, if
Indemnitee is a party to or threatened to be made a party to or otherwise
involved in any proceeding, for any and all expenses, actually and reasonably
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of such proceeding.

 

(b)                                 Indemnification in Derivative Actions and
Direct Actions by the Company.  Subject to Section 10 below, the Company shall
indemnify Indemnitee, if Indemnitee is a party to or threatened to be made a
party to or otherwise involved in any proceeding by or in the right of the
Company to procure a judgment in its favor, against any and all expenses
actually and reasonably incurred by Indemnitee in connection with the
investigation, defense, settlement, or appeal of such proceedings.

 

4.                                      Indemnification of Expenses of
Successful Party.  Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee has been successful on the merits or otherwise in defense
of any proceeding or in defense of any claim, issue or matter therein, including
the dismissal of any action without prejudice, the Company shall indemnify
Indemnitee against all expenses actually and reasonably incurred in connection
with the investigation, defense or appeal of such proceeding.

 

5.                                      Partial Indemnification.  If Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any expenses actually and reasonably incurred
by

 

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Indemnitee in the investigation, defense, settlement or appeal of a proceeding,
but is precluded by applicable law or the specific terms of this Agreement to
indemnification for the total amount thereof, the Company shall nevertheless
indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

6.                                      Advancement of Expenses.  To the extent
not prohibited by law, the Company shall advance  the expenses incurred by
Indemnitee in connection with any proceeding, and such advancement shall be made
within twenty (20) days after the receipt by the Company of a statement or
statements requesting such advances (which shall include invoices received by
Indemnitee in connection with such expenses but, in the case of invoices in
connection with legal services, any references to legal work performed or to
expenditures made that would cause Indemnitee to waive any privilege accorded by
applicable law shall not be included with the invoice) and upon request of the
Company, an undertaking to repay the advancement of expenses if and to the
extent that it is ultimately determined by a court of competent jurisdiction in
a final judgment, not subject to appeal, that Indemnitee is not entitled to be
indemnified by the Company.  Advances shall be unsecured, interest free and
without regard to Indemnitee’s ability to repay the expenses. Advances shall
include any and all expenses actually and reasonably incurred by Indemnitee
pursuing an action to enforce Indemnitee’s right to indemnification under this
Agreement, or otherwise and this right of advancement, including expenses
incurred preparing and forwarding statements to the Company to support the
advances claimed.  Indemnitee acknowledges that the execution and delivery of
this Agreement shall constitute an undertaking providing that Indemnitee shall,
to the fullest extent required by law, repay the advance if and to the extent
that it is ultimately determined by a court of competent jurisdiction in a final
judgment, not subject to appeal, that Indemnitee is not entitled to be
indemnified by the Company.  The right to advances under this Section shall
continue until final disposition of any proceeding, including any appeal
therein.  This Section 6 shall not apply to any claim made by Indemnitee for
which indemnity is excluded pursuant to Section 10(b).

 

7.                                    Notice and Other Indemnification
Procedures.

 

(a)                                 Notification of Proceeding.  Indemnitee will
notify the Company in writing promptly upon being served with any summons,
citation, subpoena, complaint, indictment, information or other document
relating to any proceeding or matter which may be subject to indemnification or
advancement of expenses covered hereunder.  The failure of Indemnitee to so
notify the Company shall not relieve the Company of any obligation which it may
have to Indemnitee under this Agreement or otherwise.

 

(b)                                 Request for Indemnification and
Indemnification Payments.  Indemnitee shall notify the Company promptly in
writing upon receiving notice of any demand, judgment or other requirement for
payment that Indemnitee reasonably believes to be subject to indemnification
under the terms of this Agreement, and shall request payment thereof by the
Company.  Indemnification payments requested by Indemnitee under Section 3
hereof shall be made by the Company no later than sixty (60) days after receipt
of the written request of Indemnitee.  Claims for advancement of expenses shall
be made under the provisions of Section 6 herein.

 

(c)                                  Application for Enforcement.  In the event
the Company fails to make timely payments as set forth in Sections 6 or
7(b) above, Indemnitee shall have the right to apply to any court of competent
jurisdiction for the purpose of enforcing Indemnitee’s right to indemnification
or advancement of expenses pursuant to this Agreement.  In such an enforcement
hearing or proceeding, the burden of proof shall be on the Company to prove that
indemnification or advancement of expenses to Indemnitee is not required under
this Agreement or permitted by applicable law.  Any determination by the Company
(including its Board of Directors, stockholders or independent counsel) that
Indemnitee is not entitled to indemnification hereunder, shall not be a defense
by the Company to the action nor create any presumption that Indemnitee is not
entitled to indemnification or advancement of expenses hereunder.

 

(d)                                 Indemnification of Certain Expenses.  The
Company shall indemnify Indemnitee against all expenses incurred in connection
with any hearing or proceeding under this Section 7 unless the Company prevails
in such hearing or proceeding on the merits in all material respects.

 

8.                                    Assumption of Defense.  In the event the
Company shall be requested by Indemnitee to pay the expenses of any proceeding,
the Company, if appropriate, shall be entitled to assume the defense of such
proceeding, or to participate to the extent permissible in such proceeding, with
counsel reasonably acceptable to Indemnitee.

 

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Upon assumption of the defense by the Company and the retention of such counsel
by the Company, the Company shall not be liable to Indemnitee under this
Agreement for any fees of counsel subsequently incurred by Indemnitee with
respect to the same proceeding, provided that Indemnitee shall have the right to
employ separate counsel in such proceeding at Indemnitee’s sole cost and
expense.  Notwithstanding the foregoing, if Indemnitee’s counsel delivers a
written notice to the Company stating that such counsel has reasonably concluded
that there is an actual or potential conflict of interest between the Company
and Indemnitee in the conduct of any such defense or the Company shall not, in
fact, have employed counsel or otherwise actively pursued the defense of such
proceeding within a reasonable time, then in any such event the fees and
expenses of Indemnitee’s counsel to defend such proceeding shall be subject to
the indemnification and advancement of expenses provisions of this Agreement.

 

9.                                    Insurance. To the extent that the Company
maintains an insurance policy or policies providing liability insurance for
directors, officers, employees, or agents of the Company or of any subsidiary
(“D&O Insurance”), Indemnitee shall be covered by such policy or policies in
accordance with its or their terms to the maximum extent of the coverage
available for any such director, officer, employee or agent under such policy or
policies.  If, at the time of the receipt of a notice of a claim pursuant to the
terms hereof, the Company has D&O Insurance in effect, the Company shall give
prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies.  The
Company shall thereafter take all necessary or desirable action to cause such
insurers to pay, on behalf of Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such policies.

 

10.                             Exceptions.

 

(a)                                 Certain Matters.  Any provision herein to
the contrary notwithstanding, the Company shall not be obligated pursuant to the
terms of this Agreement to indemnify Indemnitee on account of any proceeding
with respect to (i) remuneration paid to Indemnitee if it is determined by final
judgment or other final adjudication that such remuneration was in violation of
law (and, in this respect, both the Company and Indemnitee have been advised
that the Securities and Exchange Commission believes that indemnification for
liabilities arising under the federal securities laws is against public policy
and is, therefore, unenforceable and that claims for indemnification should be
submitted to appropriate courts for adjudication, as indicated in
Section 10(d) below); (ii) a final judgment rendered against Indemnitee for an
accounting, disgorgement or repayment of profits made from the purchase or sale
by Indemnitee of securities of the Company against Indemnitee or in connection
with a settlement by or on behalf of Indemnitee to the extent it is acknowledged
by Indemnitee and the Company that such amount paid in settlement resulted from
Indemnitee’s conduct from which Indemnitee received monetary personal profit,
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934, as amended, or other provisions of any federal, state or local statute or
rules and regulations thereunder; (iii) a final judgment or other final
adjudication that Indemnitee’s conduct was in bad faith, knowingly fraudulent or
deliberately dishonest or constituted willful misconduct (but only to the extent
of such specific determination); or (iv) on account of conduct that is
established by a final judgment as constituting a breach of Indemnitee’s duty of
loyalty to the Company or resulting in any personal profit or advantage to which
Indemnitee is not legally entitled.  For purposes of the foregoing sentence, a
final judgment or other adjudication may be reached in either the underlying
proceeding or action in connection with which indemnification is sought or a
separate proceeding or action to establish rights and liabilities under this
Agreement.

 

(b)                                 Claims Initiated by Indemnitee.  Any
provision herein to the contrary notwithstanding, the Company shall not be
obligated to indemnify or advance expenses to Indemnitee with respect to
proceedings or claims initiated or brought by Indemnitee against the Company or
its directors, officers, employees or other agents and not by way of defense,
except (i) with respect to proceedings brought to establish or enforce a right
to indemnification under this Agreement or under any other agreement, provision
in the Bylaws or Amended and Restated Certificate of Incorporation (the
“Certificate of Incorporation”) or applicable law, or (ii) with respect to any
other proceeding initiated by Indemnitee that is either approved by the Board of
Directors or Indemnitee’s participation is required by applicable law.  However,
indemnification or advancement of expenses may be provided by the Company in
specific cases if the Board of Directors determines it to be appropriate.

 

(c)                                  Unauthorized Settlements.  Any provision
herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of a proceeding effected without
the Company’s written consent.

 

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Neither the Company nor Indemnitee shall unreasonably withhold consent to any
proposed settlement; provided, however, that the Company may in any event
decline to consent to (or to otherwise admit or agree to any liability for
indemnification hereunder in respect of) any proposed settlement if the Company
is also a party in such proceeding and determines in good faith that such
settlement is not in the best interests of the Company and its stockholders.

 

(d)                                 Securities Act Liabilities.  Any provision
herein to the contrary notwithstanding, the Company shall not be obligated
pursuant to the terms of this Agreement to indemnify Indemnitee or otherwise act
in violation of any undertaking appearing in and required by the rules and
regulations promulgated under the Securities Act of 1933, as amended (the
“Act”), or in any registration statement filed with the SEC under the Act. 
Indemnitee acknowledges that paragraph (h) of Item 512 of Regulation S-K
currently generally requires the Company to undertake in connection with any
registration statement filed under the Act to submit the issue of the
enforceability of Indemnitee’s rights under this Agreement in connection with
any liability under the Act on public policy grounds to a court of appropriate
jurisdiction and to be governed by any final adjudication of such issue. 
Indemnitee specifically agrees that any such undertaking shall supersede the
provisions of this Agreement and to be bound by any such undertaking.

 

11.                               Nonexclusivity and Survival of Rights.  The
provisions for indemnification and advancement of expenses set forth in this
Agreement shall not be deemed exclusive of any other rights which Indemnitee may
at any time be entitled under any provision of applicable law, the Company’s
Certificate of Incorporation, Bylaws or other agreements, both as to action in
Indemnitee’s official capacity and Indemnitee’s action as an agent of the
Company, in any court in which a proceeding is brought, and Indemnitee’s rights
hereunder shall continue after Indemnitee has ceased acting as an agent of the
Company and shall inure to the benefit of the heirs, executors, administrators
and assigns of Indemnitee.  The obligations and duties of the Company to
Indemnitee under this Agreement shall be binding on the Company and its
successors and assigns until terminated in accordance with its terms.  The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of the Company, expressly to assume and agree in writing to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.

 

No amendment, alteration or repeal of this Agreement or of any provision hereof
shall limit or restrict any right of Indemnitee under this Agreement in respect
of any action taken or omitted by such Indemnitee in his or her corporate status
prior to such amendment, alteration or repeal.  To the extent that a change in
the Code, whether by statute or judicial decision, permits greater
indemnification or advancement of expenses than would be afforded currently
under the Company’s Certificate of Incorporation, Bylaws and this Agreement, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change.  No right or remedy
herein conferred is intended to be exclusive of any other right or remedy, and
every other right and remedy shall be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise.  The assertion or employment of any right or remedy
hereunder, or otherwise, by Indemnitee shall not prevent the concurrent
assertion or employment of any other right or remedy by Indemnitee.

 

12.                               Subrogation.  In the event of payment under
this Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee, who, at the request and expense of
the Company, shall execute all papers required and shall do everything that may
be reasonably necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

 

13.                               Interpretation of Agreement.  It is understood
that the parties hereto intend this Agreement to be interpreted and enforced so
as to provide indemnification to Indemnitee to the fullest extent now or
hereafter permitted by law.

 

14.                               Severability.  If any provision of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever, (a) the validity, legality and enforceability of the remaining
provisions of the Agreement (including without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such

 

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provision held to be invalid, illegal or unenforceable, that are not themselves
invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested by the provision held invalid, illegal or unenforceable
and to give effect to Section 13 hereof.

 

15.                               Amendment and Waiver.  No supplement,
modification, amendment, termination, or cancellation of this Agreement shall be
binding unless executed in writing by the parties hereto.  No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

16.                               Notice.  Except as otherwise provided herein,
any notice or demand which, by the provisions hereof, is required or which may
be given to or served upon the parties hereto shall be in writing and, if by
telegram, telecopy or telex, shall be deemed to have been validly served, given
or delivered when sent, if by overnight delivery, courier or personal delivery,
shall be deemed to have been validly served, given or delivered upon actual
delivery and, if mailed, shall be deemed to have been validly served, given or
delivered three (3) business days after deposit in the United States mail, as
registered or certified mail, with proper postage prepaid and addressed to the
party or parties to be notified at the addresses set forth on the signature
page of this Agreement (or such other address(es) as a party may designate for
itself by like notice).  If to the Company, notices and demands shall be
delivered to the attention of the Secretary of the Company.

 

17.                               Governing Law.  This Agreement shall be
governed exclusively by and construed according to the laws of the State of
Delaware, as applied to contracts between Delaware residents entered into and to
be performed entirely within Delaware.

 

18.                               Counterparts.  This Agreement may be executed
in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute but one and the same
Agreement.  Only one such counterpart need be produced to evidence the existence
of this Agreement.

 

19.                               Headings.  The headings of the sections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.

 

20.                               Entire Agreement.  This Agreement constitutes
the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements, understandings and negotiations,
written and oral, between the parties with respect to the subject matter of this
Agreement; provided, however, that this Agreement is a supplement to and in
furtherance of the Company’s Certificate of Incorporation, Bylaws, the Code and
any other applicable law, and shall not be deemed a substitute therefor, and
does not diminish or abrogate any rights of Indemnitee thereunder.

 

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IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the date first above written.

 

 

CARDIONET, INC.

 

 

 

 

 

By:

/s/ Arie Cohen

 

 

Name:

Arie Cohen

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

 

INDEMNITEE

 

 

 

 

 

/s/ Randy T. Thurman

 

Signature of Indemnitee

 

 

 

 

 

Randy T. Thurman

 

Print or Type Name of Indemnitee

 

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