QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.22    
    


         CARDIONET, INC.  




 NOTE AND WARRANT PURCHASE AGREEMENT  











 
 

CARDIONET, INC.    
    
    NOTE AND WARRANT PURCHASE AGREEMENT    
    



        This Note and Warrant Purchase Agreement (the "Agreement") is made
as of the 15th day of August, 2005 (the "Effective Date") by and among CardioNet, Inc., a
California corporation (the "Company"), and the persons and entities named on the Schedule of Purchasers attached hereto (individually, a
"Purchaser" and collectively, the "Purchasers"). 


 
 

RECITAL    
    


        To provide the Company with additional resources to conduct its business, the Purchasers are willing to lend to the Company up to an aggregate amount of
$3,000,000, subject to the conditions specified herein. 


 
 

AGREEMENT    
    


        Now, Therefore, in consideration of the foregoing, and the representations, warranties, covenants and conditions
set forth below, the Company and each Purchaser, intending to be legally bound, hereby agree as follows: 


1.     AMOUNT AND TERMS OF THE LOAN(S); ISSUANCE OF WARRANTS  


        1.1    The Loans.    Subject to the terms of this Agreement, each Purchaser agrees to lend to the Company at the
Closing (as hereinafter defined) the amount set forth opposite each such Purchaser's name on the Schedule of Purchasers attached hereto (each, a "Loan
Amount" and collectively the "Loan") against the issuance and delivery by the Company of a secured subordinated convertible
promissory note or notes for such amounts, in substantially the form attached hereto as Exhibit A (each, a
"Note" and collectively, the "Notes"). 


        1.2    Issuance of Warrants.    At the Closing, the Company shall issue and sell to each Purchaser a warrant in
substantially the form attached hereto as Exhibit B (each, a "Warrant" and collectively the
"Warrants") to purchase the number of shares of the Company's Preferred Stock set forth in the Warrant (the "Warrant
Shares"). 


        1.3    Security Interest.    The payment obligations evidenced by the Notes shall be secured by a security interests
as described in the Notes and pursuant to a Security Agreement in the form attached hereto as Exhibit C (the "Security
Agreement"). 


2.     THE CLOSING.  


        2.1    Closing Date.    The closing of the sale and issuance of the Notes and Warrants (the
"Closing") shall be held on the Effective Date, or at such other time as the Company and the Purchasers who have loaned to the Company at least 67% of
the aggregate Loan Amount (the "Majority Lenders") shall agree (the "Closing Date"). 



        2.2    Delivery.    At the Closing (i) each Purchaser shall deliver to the Company a check or wire transfer
funds in the amount of such Purchaser's Loan Amount; and (ii) the Company shall issue and deliver to each Purchaser (a) a Note in favor of such Purchaser payable in the principal amount
of such Purchaser's Loan Amount and (b) a corresponding Warrant to purchase such Purchaser's Warrant Shares. 


        2.3    Tax Allocation.    The parties acknowledge and agree that (a) the amount of consideration paid under and
in connection with this Agreement by the Purchasers in exchange for the Warrants is de minimis (and the amount of such consideration fairly reflects the
fair market value of the Warrants), and (b) there will be no "original issue discount" on the Notes, as determined pursuant to Sections 1271-1275 of the Internal Revenue Code of
1986, as amended, and the Treasury Regulations promulgated thereunder, by reason of the Purchasers' acquisition of the Warrants. The parties agree to 










file
all tax returns in a manner consistent with this Section 2.3, and the parties agree not to take any tax position inconsistent with this Section 2.3. 


3.     REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY  


        The Company hereby represents and warrants to each Purchaser as follows: 


        3.1    Organization, Good Standing and Qualification.    The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted
and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the
Company or its business. 


        3.2    Corporate Power.    The Company will have at the Closing Date all requisite corporate power to execute and
deliver this Agreement and the Security Agreement, to issue each Note, to issue each Warrant (collectively, the "Loan Documents") and to carry out and
perform its obligations under the terms of this Agreement, each Note, each Warrant and the Security Agreement. The Company's Board of Directors has approved the Loan Documents based upon a reasonable
belief that the Loan is appropriate for the Company after reasonable inquiry concerning the Company's financing objectives and financial situation. 


        3.3    Authorization.    All corporate action on the part of the Company, its directors and its shareholders necessary
for the authorization, execution, delivery and performance of this Agreement and the Security Agreement by the Company and the performance of the Company's obligations hereunder and thereunder,
including the issuance and delivery of the Notes and Warrants and the reservation of the equity securities issuable upon conversion of the Notes and exercise of the Warrants (collectively, the
"Conversion Shares" and, together with the Notes and Warrants, the "Securities") has been taken or will
be taken prior to the issuance of such Conversion Shares. This Agreement, the Notes, the Warrants and the Security Agreement, when executed and delivered by the Company, shall constitute valid and
binding obligations of the Company enforceable in accordance with their terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors and, with respect to
rights to indemnity, subject to federal and state securities laws. The Conversion Shares, when issued in compliance with the provisions of this Agreement and the Notes or the Warrants will be validly
issued, fully paid and nonassessable and free of any liens or encumbrances and issued in compliance with all applicable federal and state securities laws. 


        3.4    Governmental Consents.    All consents, approvals, orders, or authorizations of, or registrations,
qualifications, designations, declarations, or filings with, any governmental authority, required on the part of the Company in connection with the valid execution and delivery of this Agreement and
the Security Agreement, the offer, sale or issuance of the Notes, the Warrants and the Conversion Shares issuable upon conversion of the Notes, the exercise of the Warrants or the consummation of any
other transaction contemplated hereby shall have been obtained and will be effective at the Closing. 


        3.5    Offering.    Assuming the accuracy of the representations and warranties of the Purchasers contained in
Section 4 hereof, the offer, issue, and sale of the Securities are and will be exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Act"), and have been registered or qualified (or are exempt from registration and qualification) under the registration, permit, or qualification
requirements of all applicable state securities laws. 


        3.6    Board and Shareholder Consent.    The Company will have obtained as of the Closing Date approval from its Board
of Directors and a sufficient number of the holders of the Company's capital stock such that, as of the Closing Date, the Company could (i) cause its Articles of Incorporation to be amended in
order to authorize the Series D-1 Preferred (as defined in the Warrants) and (ii) reserve a 










sufficient
number of shares of Series D-1 Preferred for issuance upon exercise of all Warrants and conversion of all Notes. 


4.    REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.    Each Purchaser, severally
and not jointly, makes the following representations and warranties in favor of the Company: 



        4.1    Purchase for Own Account.    Each Purchaser represents that it is acquiring the Securities solely for its own
account and beneficial interest for investment and not for sale or with a view to distribution of the Securities or any part thereof, has no present intention of selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise distributing the same, and does not presently have reason to anticipate a change in such intention. 


        4.2    Information and Sophistication.    Each Purchaser hereby: (i) acknowledges that it has received all the
information it has requested from the Company and it considers necessary or appropriate for deciding whether to acquire the Securities, (ii) represents that it has had an opportunity to ask
questions and receive answers from the Company regarding the terms and conditions of the offering of the Securities and to obtain any additional information necessary to verify the accuracy of the
information given the Purchaser and (iii) further represents that it has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risk of
this investment. 


        4.3    Ability to Bear Economic Risk.    Each Purchaser acknowledges that investment in the Securities involves a high
degree of risk, and represents that it is able, without materially impairing its financial condition, to hold the Securities for an indefinite period of time and to suffer a complete loss of its
investment. 


        4.4    Further Limitations on Disposition.    Without in any way limiting the representations set forth above, each
Purchaser further agrees not to make any disposition of all or any portion of the Securities unless and until: 



        (a)   There is then in effect a registration statement under the Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or 


        (b)   The Purchaser shall have notified the Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition, and if reasonably requested by the Company, such Purchaser shall have furnished the Company with an opinion of counsel,
reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Act. It is agreed that the Company will not require opinions of counsel for
transactions made pursuant to Rule 144 except in unusual circumstances. 



        (c)   Notwithstanding the provisions of paragraphs (a) and (b) above, no such registration statement or opinion
of counsel shall be necessary for a transfer by a Purchaser which is (A) a partnership to its partners or former partners in accordance with partnership interests, (B) a corporation to
its shareholders in accordance with their interest in the corporation, (C) a limited liability company to its members or former members in accordance with their interest in the limited
liability company, or (D) to the Purchaser's family member or trust for the benefit of an individual Purchaser; provided that in each case the
transferee will be subject to the terms of this Agreement to the same extent as if he were an original Purchaser hereunder. 




        4.5    Accredited Investor Status.    Each Purchaser is an "accredited investor" as such term is defined in
Rule 501 under the Act. 


5.     MISCELLANEOUS  


        5.1    Binding Agreement.    The terms and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this Agreement, expressed or implied, is intended to confer upon any third party any rights, remedies, obligations, or liabilities
under or by reason of this Agreement, except as expressly provided in this Agreement. 








        5.2    Governing Law.    This Agreement shall be governed by and construed under the laws of the State of California
as applied to agreements among California residents, made and to be performed entirely within the State of California, without giving effect to conflicts of laws principles. 



        5.3    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. Facsimile signatures shall be as effective as original signatures. 


        5.4    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 



        5.5    Notices.    All notices required or permitted hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex, electronic mail or facsimile if sent during normal business hours of the recipient, if
not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at 1010 Second Avenue, Suite 700, San
Diego, California, 92101, and to a Purchaser at the address(es) set forth on the Schedule of Purchasers attached hereto or at such other address(es) as the Company or a Purchaser may designate by
10 days advance written notice to the other parties hereto. 


        5.6    Modification; Waiver.    No modification or waiver of any provision of this Agreement or consent to departure
therefrom shall be effective unless in writing and approved by the Company and the Majority Lenders. Any provision of the Notes may be amended or waived by the written consent of the Company and the
Majority Lenders. 


        5.7    Expenses.    The Company and each Purchaser shall each bear its respective expenses and legal fees incurred
with respect to this Agreement and the transactions contemplated herein.


        5.8    Delays or Omissions.    It is agreed that no delay or omission to exercise any right, power or remedy accruing
to each Purchaser, upon any breach or default of the Company under this Agreement or any Note or Warrant shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any
such breach or default, or any acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character by Purchaser of any breach or default under this
Agreement, or any waiver by any Purchaser of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in writing and that all
remedies, either under this Agreement, or by law or otherwise afforded to the Purchaser, shall be cumulative and not alternative. 


        5.9    Entire Agreement.    This Agreement and the Exhibits hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein. 


[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]










        IN WITNESS WHEREOF, the parties have executed this NOTE AND WARRANT PURCHASE AGREEMENT as
of the date first written above. 



	COMPANY:	 	PURCHASERS:
	

CARDIONET, INC.	
 	
SANDERLING VENTURE PARTNERS V

    CO-INVESTMENT FUND, L.P.
	

By:	

/s/  JAMES M. SWEENEY      
	
 	

 	

 	

 
	Name:	James M. Sweeney
	 	 	 	 
	Title:	Chairman and CEO
	 	By:	Middleton, McNeil & Mills Associates V, LLC
	

 	

 	
 	

 	

By:	

/s/  FRED A. MIDDLETON      
 Fred A. Middleton

Managing Director
	

 	

 	
 	
SANDERLING V BIOMEDICAL CO-INVESTMENT

    FUND, L.P.
	

 	

 	
 	

By:	

Middleton, McNeil & Mills Associates V, LLC
	

 	

 	
 	

 	

By:	

/s/  FRED A. MIDDLETON      
 Fred A. Middleton

Managing Director
	

 	

 	
 	
SANDERLING V LIMITED PARTNERSHIP
	

 	

 	
 	

By:	

Middleton, McNeil & Mills Associates V, LLC
	

 	

 	
 	

 	

By:	

/s/  FRED A. MIDDLETON      
 Fred A. Middleton

Managing Director
	

 	

 	
 	
SANDERLING V BETEILIGUNGS GMBH & CO. KG
	

 	

 	
 	

By:	

Middleton, McNeil & Mills Associates V, LLC
	

 	

 	
 	

 	

By:	

/s/  FRED A. MIDDLETON      
 Fred A. Middleton

Managing Director











	

 	

 	
 	
FOUNDATION MEDICAL PARTNERS, L.P.,

    a Delaware limited partnership
	

 	

 	
 	

By:	

Foundation Medical Managers, LLC
	

 	

 	
 	

By:	

/s/  LEE WRUBEL      

	 	 	 	Name:	Lee Wrubel

	 	 	 	Title:	Managing Member












	H&Q HEALTHCARE INVESTORS, a

    Massachusetts business trust	 	H&Q LIFE SCIENCES INVESTORS, a

    Massachusetts business trust
	

By:	

/s/  DAN OMSTEAD      
 Dan Omstead, President	
 	

By:	

/s/  DAN OMSTEAD      
 Dan Omstead, President
	
 Limitation of Liability	
 	

Limitation of Liability
	

The name H&Q Healthcare Investors is the designation of the Trustees for the time being under an Amended and Restated Declaration of Trust dated April 21, 1987, as amended, and all persons dealing with H&Q Healthcare Investors, must look
solely to the trust property for the enforcement of any claims against H&Q Healthcare Investors, as neither the Trustees, officers nor shareholders assume any personal liability for the obligations entered into on behalf of H&Q Healthcare
Investors.	
 	

The name H&Q Life Sciences Investors is the designation of the Trustees for the time being under a Declaration of Trust dated February 20, 1992, as amended, and all persons dealing with H&Q Life Sciences Investors, must look solely to the
trust property for the enforcement of any claims against H&Q Life Sciences Investors, as neither the Trustees, officers nor shareholders assume any personal liability for the obligations entered into on behalf of H&Q Life Sciences
Investors.










  



 
 

SCHEDULE OF PURCHASERS    
    



	NAME AND ADDRESS
 
	 	LOAN AMOUNT

	SANDERLING V LIMITED PARTNERSHIP

2730 Sand Hill Road, Suite 200

Menlo Park, California 94025

Attention: Fred A. Middleton

Telephone: (650) 854-9855

Facsimile: (650) 854-3648

E-Mail: Fmiddleton@sanderling.com	 	$	170,755.20
	
SANDERLING V BETEILINGUNGS GMBH & CO KG

2730 Sand Hill Road, Suite 200

Menlo Park, California 94025

Attention: Fred A. Middleton

Telephone: (650) 854-9855

Facsimile: (650) 854-3648

E-Mail: Fmiddleton@sanderling.com	
 	
$	

151,938.80
	
SANDERLING V BIOMEDICAL CO-INVESTMENT FUND, L.P.

2730 Sand Hill Road, Suite 200

Menlo Park, California 94025

Attention: Fred A. Middleton

Telephone: (650) 854-9855

Facsimile: (650) 854-3648

E-Mail: Fmiddleton@sanderling.com	
 	
$	

633,078.40
	
SANDERLING VENTURE PARTNERS V CO-INVESTMENT FUND, L.P.

2730 Sand Hill Road, Suite 200

Menlo Park, CA 94025

Attention: Fred A. Middleton

Telephone: (650) 854-9855

Facsimile: (650) 854-3648

E-Mail: Fmiddleton@sanderling.com	
 	
$	

1,044,227.60
	
FOUNDATION MEDICAL PARTNERS, L.P.

105 Rowayton Avenue

Rowayton, CT 06853

Attention: Jonathan M.D. Cool

Telephone: (203) 851-3902

Facsimile: (203) 831-8289	
 	
$	

500,000.00
	
H&Q HEALTHCARE INVESTORS

30 Rowes Wharf, Suite 430

Boston, MA 02110

Telephone:

Facsimile:	
 	
$	

300,000.00
	
H&Q LIFE SCIENCE INVESTORS

30 Rowes Wharf, Suite 430

Boston, MA 02110

Telephone:

Facsimile:	
 	
$	

200,000.00
	

TOTAL:	
 	
$	

3,000,000.00




C-1











QuickLinks



Exhibit 10.22



CARDIONET, INC. NOTE AND WARRANT PURCHASE AGREEMENT

RECITAL

AGREEMENT


SCHEDULE OF PURCHASERS