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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