**Exhibit 10.6**

 

**IndemnityAgreement**

 

**THISINDEMNITY AGREEMENT**(this“**Agreement**”) dated as of August 19,2008, is made by and between **CARDIONET, INC.,**aDelaware corporation (the “**Company**”), and **KIRK E. GORMAN**(“**Indemnitee**”).

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**RECITALS**

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**A.**                                    The Company desires to attract and retainthe services of highly qualified individuals as directors, officers, employeesand agents.

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

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**C.**                                    Indemnitee does not regard the protectioncurrently provided by applicable law, the Company’s governing documents andavailable insurance as adequate under the present circumstances, and theCompany has determined that Indemnitee and other directors, officers, employeesand agents of the Company may not be willing to serve or continue to serve insuch capacities without additional protection.

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

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**E.**                                      Indemnitee is willing to serve, or tocontinue to serve, as a director, officer, employee or agent of the Company, asthe case may be, if Indemnitee is furnished the indemnity provided for hereinby the Company.

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**AGREEMENT**

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**NOWTHEREFORE**, inconsideration of the mutual covenants and agreements set forth herein, theparties hereto, intending to be legally bound, hereby agree as follows:

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**1.****                                     ****Definitions**.

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

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**(b)****                                 ****Expenses**. For purposes of this Agreement, the term “expenses” shall be broadlyconstrued and shall include, without limitation, all direct and indirect costsof 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-pocketcosts of whatever nature), actually and reasonably incurred by Indemnitee inconnection with the investigation, defense or appeal of a proceeding orestablishing or enforcing a right to indemnification under this Agreement, theCode or otherwise, and amounts paid in settlement by or on behalf ofIndemnitee, but shall not include any judgments, fines or penalties actuallylevied against Indemnitee for such individual’s violations of law.  The term “expenses” shall also includereasonable compensation for time spent by Indemnitee for which he is notcompensated by the Company or any subsidiary or third party (i) for anyperiod during which Indemnitee is not an agent, in the employment of, orproviding services for compensation to, the Company or any subsidiary; and (ii) ifthe rate of compensation and estimated time involved is approved by thedirectors of the Company who are not parties to any action with respect towhich expenses are incurred, for Indemnitee while an agent of, employed by, orproviding 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 broadlyconstrued and shall include, without limitation, any threatened, pending, orcompleted action, suit, arbitration, alternate dispute resolution mechanism,investigation, inquiry, administrative hearing or any other actual, threatenedor completed proceeding, whether brought in the right of the Company orotherwise and whether of a civil, criminal, administrative or investigativenature, and whether formal or informal in any case, in which Indemnitee was, isor will be involved as a party or otherwise by reason of:  (i) the fact that Indemnitee is or was adirector or officer of the Company; (ii) the fact that any action taken byIndemnitee or of any action on Indemnitee’s part while acting as director,officer, employee or agent of the Company; or (iii) the fact thatIndemnitee 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 casedescribed above, whether or not serving in any such capacity at the time anyliability or expense is incurred for which indemnification, reimbursement, oradvancement of expenses may be provided under this Agreement.

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

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

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

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**3.****                                     ****Indemnification**.

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**(a)****                                 ****Indemnification in Third PartyProceedings**.  Subject to Section 10 below, the Companyshall indemnify Indemnitee, if Indemnitee is a party to or threatened to bemade a party to or otherwise involved in any proceeding, for any and allexpenses, actually and reasonably incurred by Indemnitee in connection with theinvestigation, defense, settlement or appeal of such proceeding.

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

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**4.****                                     ****Indemnification of Expenses ofSuccessful Party**.  Notwithstanding any other provision of thisAgreement, to the extent that Indemnitee has been successful on the merits orotherwise in defense of any proceeding or in defense of any claim, issue ormatter therein, including the dismissal of any action without prejudice, the Companyshall indemnify Indemnitee against all expenses actually and reasonablyincurred in connection with the investigation, defense or appeal of suchproceeding.

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**5.****                                     ****Partial Indemnification**. If Indemnitee is entitled under any provision of this Agreement toindemnification by the Company for some or a portion of any expenses actuallyand reasonably incurred by 

 

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Indemnitee in theinvestigation, defense, settlement or appeal of a proceeding, but is precludedby applicable law or the specific terms of this Agreement to indemnificationfor the total amount thereof, the Company shall nevertheless indemnifyIndemnitee for the portion thereof to which Indemnitee is entitled.

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**6.****                                     ****Advancement of Expenses**. To the extent not prohibited by law, the Company shall advance  the expenses incurred by Indemnitee inconnection with any proceeding, and such advancement shall be made withintwenty (20) days after the receipt by the Company of a statement or statementsrequesting such advances (which shall include invoices received by Indemniteein connection with such expenses but, in the case of invoices in connectionwith legal services, any references to legal work performed or to expendituresmade that would cause Indemnitee to waive any privilege accorded by applicablelaw shall not be included with the invoice) and upon request of the Company, anundertaking to repay the advancement of expenses if and to the extent that itis ultimately determined by a court of competent jurisdiction in a finaljudgment, not subject to appeal, that Indemnitee is not entitled to beindemnified by the Company.  Advancesshall be unsecured, interest free and without regard to Indemnitee’s ability torepay the expenses. Advances shall include any and all expenses actually andreasonably incurred by Indemnitee pursuing an action to enforce Indemnitee’sright to indemnification under this Agreement, or otherwise and this right ofadvancement, including expenses incurred preparing and forwarding statements tothe Company to support the advances claimed. Indemnitee acknowledges that the execution and delivery of thisAgreement shall constitute an undertaking providing that Indemnitee shall, tothe fullest extent required by law, repay the advance if and to the extent thatit is ultimately determined by a court of competent jurisdiction in a finaljudgment, not subject to appeal, that Indemnitee is not entitled to beindemnified by the Company.  The right toadvances under this Section shall continue until final disposition of anyproceeding, including any appeal therein. This Section 6 shall not apply to any claim made by Indemnitee forwhich indemnity is excluded pursuant to Section 10(b).

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**7.****                                     ****Notice and Other IndemnificationProcedures**.

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

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**(b)****                                 ****Request for Indemnification andIndemnification Payments**.  Indemnitee shall notify theCompany promptly in writing upon receiving notice of any demand, judgment orother requirement for payment that Indemnitee reasonably believes to be subjectto indemnification under the terms of this Agreement, and shall request paymentthereof by the Company.  Indemnificationpayments requested by Indemnitee under Section 3 hereof shall be made bythe Company no later than sixty (60) days after receipt of the written requestof Indemnitee.  Claims for advancement ofexpenses shall be made under the provisions of Section 6 herein.

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**(c)****                                 ****Application for Enforcement**. In the event the Company fails to make timely payments as set forth inSections 6 or 7(b) above, Indemnitee shall have the right to apply to anycourt of competent jurisdiction for the purpose of enforcing Indemnitee’s rightto 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 oradvancement of expenses to Indemnitee is not required under this Agreement orpermitted by applicable law.  Anydetermination by the Company (including its Board of Directors, stockholders orindependent counsel) that Indemnitee is not entitled to indemnificationhereunder, shall not be a defense by the Company to the action nor create anypresumption that Indemnitee is not entitled to indemnification or advancementof expenses hereunder.

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

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**8.****                                     ****Assumption of Defense**. In the event the Company shall be requested by Indemnitee to pay theexpenses of any proceeding, the Company, if appropriate, shall be entitled toassume the defense of such proceeding, or to participate to the extentpermissible in such proceeding, with counsel reasonably acceptable toIndemnitee.

 

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Upon assumption of thedefense by the Company and the retention of such counsel by the Company, theCompany shall not be liable to Indemnitee under this Agreement for any fees ofcounsel subsequently incurred by Indemnitee with respect to the sameproceeding, provided that Indemnitee shall have the right to employ separatecounsel in such proceeding at Indemnitee’s sole cost and expense.  Notwithstanding the foregoing, if Indemnitee’scounsel delivers a written notice to the Company stating that such counsel hasreasonably concluded that there is an actual or potential conflict of interestbetween the Company and Indemnitee in the conduct of any such defense or theCompany shall not, in fact, have employed counsel or otherwise actively pursuedthe defense of such proceeding within a reasonable time, then in any such eventthe fees and expenses of Indemnitee’s counsel to defend such proceeding shallbe subject to the indemnification and advancement of expenses provisions ofthis Agreement.

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**9.****                                     ****Insurance.**To the extent that the Company maintainsan insurance policy or policies providing liability insurance for directors,officers, employees, or agents of the Company or of any subsidiary (“D&OInsurance”), Indemnitee shall be covered by such policy or policies inaccordance with its or their terms to the maximum extent of the coverageavailable for any such director, officer, employee or agent under such policyor policies.  If, at the time of thereceipt of a notice of a claim pursuant to the terms hereof, the Company hasD&O Insurance in effect, the Company shall give prompt notice of thecommencement of such proceeding to the insurers in accordance with the proceduresset forth in the respective policies. The Company shall thereafter take all necessary or desirable action tocause such insurers to pay, on behalf of Indemnitee, all amounts payable as aresult of such proceeding in accordance with the terms of such policies.

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**10.****                              ****Exceptions**.

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**(a)****                                 ****Certain Matters**. Any provision herein to the contrary notwithstanding, the Company shallnot be obligated pursuant to the terms of this Agreement to indemnifyIndemnitee on account of any proceeding with respect to (i) remunerationpaid to Indemnitee if it is determined by final judgment or other finaladjudication that such remuneration was in violation of law (and, in thisrespect, both the Company and Indemnitee have been advised that the Securitiesand Exchange Commission believes that indemnification for liabilities arisingunder the federal securities laws is against public policy and is, therefore,unenforceable and that claims for indemnification should be submitted toappropriate 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 byIndemnitee of securities of the Company against Indemnitee or in connectionwith a settlement by or on behalf of Indemnitee to the extent it isacknowledged by Indemnitee and the Company that such amount paid in settlementresulted from Indemnitee’s conduct from which Indemnitee received monetarypersonal profit, pursuant to the provisions of Section 16(b) of theSecurities Exchange Act of 1934, as amended, or other provisions of anyfederal, state or local statute or rules and regulations thereunder; (iii) afinal judgment or other final adjudication that Indemnitee’s conduct was in badfaith, knowingly fraudulent or deliberately dishonest or constituted willfulmisconduct (but only to the extent of such specific determination); or (iv) onaccount of conduct that is established by a final judgment as constituting abreach of Indemnitee’s duty of loyalty to the Company or resulting in anypersonal profit or advantage to which Indemnitee is not legally entitled.  For purposes of the foregoing sentence, afinal judgment or other adjudication may be reached in either the underlyingproceeding or action in connection with which indemnification is sought or aseparate proceeding or action to establish rights and liabilities under thisAgreement.

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

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**(c)****                                 ****Unauthorized Settlements**. Any provision herein to the contrary notwithstanding, the Company shallnot be obligated pursuant to the terms of this Agreement to indemnifyIndemnitee under this Agreement for any amounts paid in settlement of aproceeding effected without the Company’s written consent.

 

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Neither the Company norIndemnitee shall unreasonably withhold consent to any proposed settlement;provided, however, that the Company may in any event decline to consent to (orto otherwise admit or agree to any liability for indemnification hereunder inrespect of) any proposed settlement if the Company is also a party in suchproceeding and determines in good faith that such settlement is not in the bestinterests of the Company and its stockholders.

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**(d)****                                 ****Securities Act Liabilities**. Any provision herein to the contrary notwithstanding, the Company shallnot be obligated pursuant to the terms of this Agreement to indemnifyIndemnitee or otherwise act in violation of any undertaking appearing in andrequired by the rules and regulations promulgated under the Securities Actof 1933, as amended (the “**Act**”), or inany registration statement filed with the SEC under the Act.  Indemnitee acknowledges that paragraph (h) ofItem 512 of Regulation S-K currently generally requires the Company toundertake in connection with any registration statement filed under the Act tosubmit the issue of the enforceability of Indemnitee’s rights under thisAgreement in connection with any liability under the Act on public policygrounds to a court of appropriate jurisdiction and to be governed by any finaladjudication of such issue.  Indemniteespecifically agrees that any such undertaking shall supersede the provisions ofthis Agreement and to be bound by any such undertaking.

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**11.****                              ****Nonexclusivity and Survival ofRights**.  The provisions for indemnification andadvancement of expenses set forth in this Agreement shall not be deemedexclusive of any other rights which Indemnitee may at any time be entitledunder any provision of applicable law, the Company’s Certificate ofIncorporation, Bylaws or other agreements, both as to action in Indemnitee’sofficial capacity and Indemnitee’s action as an agent of the Company, in anycourt in which a proceeding is brought, and Indemnitee’s rights hereunder shallcontinue after Indemnitee has ceased acting as an agent of the Company andshall inure to the benefit of the heirs, executors, administrators and assignsof Indemnitee.  The obligations andduties of the Company to Indemnitee under this Agreement shall be binding onthe Company and its successors and assigns until terminated in accordance withits terms.  The Company shall require anysuccessor (whether direct or indirect, by purchase, merger, consolidation orotherwise) to all or substantially all of the business or assets of theCompany, expressly to assume and agree in writing to perform this Agreement inthe same manner and to the same extent that the Company would be required toperform if no such succession had taken place.

 

Noamendment, alteration or repeal of this Agreement or of any provision hereofshall limit or restrict any right of Indemnitee under this Agreement in respectof any action taken or omitted by such Indemnitee in his or her corporatestatus 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 oradvancement of expenses than would be afforded currently under the Company’sCertificate of Incorporation, Bylaws and this Agreement, it is the intent ofthe parties hereto that Indemnitee shall enjoy by this Agreement the greaterbenefits so afforded by such change.  Noright or remedy herein conferred is intended to be exclusive of any other rightor remedy, and every other right and remedy shall be cumulative and in additionto every other right and remedy given hereunder or now or hereafter existing atlaw or in equity or otherwise.  Theassertion or employment of any right or remedy hereunder, or otherwise, byIndemnitee shall not prevent the concurrent assertion or employment of anyother right or remedy by Indemnitee.

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**12.****                              ****Subrogation**. In the event of payment under this Agreement, the Company shall besubrogated to the extent of such payment to all of the rights of recovery ofIndemnitee, who, at the request and expense of the Company, shall execute allpapers required and shall do everything that may be reasonably necessary tosecure such rights, including the execution of such documents necessary toenable the Company effectively to bring suit to enforce such rights.

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

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

 

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

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

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**16.****                              ****Notice**. Except as otherwise provided herein, any notice or demand which, by theprovisions hereof, is required or which may be given to or served upon theparties 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, ifby overnight delivery, courier or personal delivery, shall be deemed to havebeen validly served, given or delivered upon actual delivery and, if mailed, shallbe deemed to have been validly served, given or delivered three (3) businessdays after deposit in the United States mail, as registered or certified mail,with proper postage prepaid and addressed to the party or parties to benotified at the addresses set forth on the signature page of thisAgreement (or such other address(es) as a party may designate for itself bylike notice).  If to the Company, noticesand demands shall be delivered to the attention of the Secretary of theCompany.

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

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

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

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

 

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**INWITNESS WHEREOF**,the parties hereto have entered into this Agreement effective as of the datefirst above written.

 
| ** ** | **CARDIONET, INC.**              |
|------------|----------------------------------|
| ** ** | ** **                       |
| ** ** | ** **                       |
| ** ** | By:                              | /s/ Randy T. Thurman |
| ** ** |                             | Name: | Randy T. Thurman |
| ** ** |                             | Title: | Chairman of the Board of Directors |
| ** ** |                             | ** ** |
| ** ** | ** **                       |
| ** ** | **INDEMNITEE**                   |
| ** ** | ** **                       |
| ** ** | ** **                       |
| ** ** | /s/ Kirk E. Gorman               |
| ** ** | Signature of Indemnitee          |
| ** ** |                             |
| ** ** |                             |
| ** ** | Kirk E. Gorman                   |
| ** ** | Print or Type Name of Indemnitee |
|            |                                  |  |  |  |

 

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