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                                                                   EXHIBIT 10.46

                        QUINTON CARDIOLOGY SYSTEMS, INC.
                            STOCK OPTION GRANT NOTICE

      Quinton Cardiology Systems, Inc. (the "Company") hereby grants to
Participant an Option (the "Option") to purchase shares of the Company's Common
Stock. The Option is subject to all the terms and conditions set forth in this
Stock Option Grant Notice (this "Grant Notice") and in the Stock Option
Agreement, which is attached to and incorporated into this Grant Notice in its
entirety. The Option is granted outside the Company's 2002 Stock Incentive Plan
(the "Plan"), and any other stock option or similar plan of the Company, but,
except as expressly provided otherwise in this Grant Notice or in the Stock
Option Agreement, is subject to the terms and conditions of the Plan. A copy of
the Plan can be obtained on the web at www.wealthviews.com/quin or from the Plan
Administrator.

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<S>                                    <C>
PARTICIPANT:                           Feroze D. Motafram

GRANT DATE:                            July 23, 2003

VESTING COMMENCEMENT DATE:             July 23, 2003

NUMBER OF SHARES SUBJECT TO OPTION:    60,000

EXERCISE PRICE (PER SHARE):            $8.32

OPTION EXPIRATION DATE:                July 23, 2013 (subject to earlier termination in accordance with the
                                       terms of the Plan and the Stock Option Agreement)

TYPE OF OPTION:                        Nonqualified Stock Option

VESTING AND EXERCISABILITY SCHEDULE:   1/4th of the shares subject to the Option will vest and become
                                       exercisable one year after the Vesting Commencement Date.

                                       1/36th of the remaining shares subject to the Option will vest and
                                       become exercisable monthly thereafter over the next three
                                       years.
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ADDITIONAL TERMS/ACKNOWLEDGEMENT: The undersigned Participant acknowledges
receipt of, and understands and agrees to, this Grant Notice and the Stock
Option Agreement, and acknowledges that the Plan can be obtained on the web at
www.wealthviews.com/quin or from the Plan Administrator. Participant further
acknowledges that as of the Grant Date, this Grant Notice, the Stock Option
Agreement and the Plan set forth the entire understanding between Participant
and the Company regarding the Option and supersede all prior oral and written
agreements on the subject.

Quinton Cardiology Systems, Inc.       PARTICIPANT

                                       _________________________________________
By: ________________________________                 Signature
Its: _______________________________

                                       Date: ___________________________________
ATTACHMENTS:                           Address: ________________________________
1.  Stock Option Agreement                      ________________________________
2.  2002 Stock Incentive Plan          Taxpayer ID: ____________________________

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                        QUINTON CARDIOLOGY SYSTEMS, INC.

                             STOCK OPTION AGREEMENT

      Pursuant to your Stock Option Grant Notice (the "Grant Notice") and this
Stock Option Agreement, Quinton Cardiology Systems, Inc. has granted you an
Option outside of its 2002 Stock Incentive Plan (the "Plan"), but, except as
expressly provided otherwise in this Stock Option Agreement, subject to the
terms and conditions of the Plan, to purchase the number of shares of the
Company's Common Stock indicated in your Grant Notice (the "Shares") at the
exercise price indicated in your Grant Notice. Capitalized terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

      The details of the Option are as follows:

      1. VESTING AND EXERCISABILITY. Subject to the limitations contained
herein, the Option will vest and become exercisable as provided in your Grant
Notice, provided that vesting will cease upon the termination of your employment
or service relationship with the Company or a Related Company and the unvested
portion of the Option will terminate.

      2. SECURITIES LAW COMPLIANCE. Notwithstanding any other provision of this
Agreement, you may not exercise the Option unless the Shares issuable upon
exercise are registered under the Securities Act or, if such Shares are not then
so registered, the Company has determined that such exercise and issuance would
be exempt from the registration requirements of the Securities Act. The exercise
of the Option must also comply with other applicable laws and regulations
governing the Option, and you may not exercise the Option if the Company
determines that such exercise would not be in material compliance with such laws
and regulations.

      3. METHOD OF EXERCISE. You may exercise the Option by giving written
notice to the Company, in form and substance satisfactory to the Company, which
will state your election to exercise the Option and the number of Shares for
which you are exercising the Option. The written notice must be accompanied by
full payment of the exercise price for the number of Shares you are purchasing.
At the discretion of the Plan Administrator, you may make this payment in any
combination of the following: (a) by cash; (b) by check acceptable to the
Company; (c) by using shares of Common Stock you have owned for at least six
months; (d) if the Common Stock is registered under the Exchange Act, by
instructing a broker to deliver to the Company the total payment required; or
(e) by any other method permitted by the Plan Administrator.

      4. MARKET STANDOFF. By exercising the Option you agree that the Shares
will be subject to the market standoff restrictions on transfer set forth in the
Plan.

      5. TREATMENT UPON TERMINATION OF EMPLOYMENT OR SERVICE RELATIONSHIP. The
unvested portion of the Option will terminate automatically and without further
notice immediately upon termination of your employment or service relationship
with the Company or a Related Company for any reason ("Termination of Service").
You may exercise the vested portion of the Option as follows:

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            (a) General Rule. You must exercise the vested portion of the Option
on or before the earlier of (i) three months after your Termination of Service
and (ii) the Option Expiration Date;

            (b) Disability. If your employment or service relationship
terminates due to Disability, you must exercise the vested portion of the Option
on or before the earlier of (i) one year after your Termination of Service and
(ii) the Option Expiration Date.

            (c) Death. If your employment or service relationship terminates due
to your death, the vested portion of the Option must be exercised on or before
the earlier of (i) one year after your Termination of Service and (ii) the
Option Expiration Date. If you die after your Termination of Service but while
the Option is still exercisable, the vested portion of the Option may be
exercised until the earlier of (x) one year after the date of death and (y) the
Option Expiration Date; and

            (d) Cause. The vested portion of the Option will automatically
expire at the time the Company first notifies you of your Termination of Service
for Cause, unless the Plan Administrator determines otherwise. If your
employment or service relationship is suspended pending an investigation of
whether you will be terminated for Cause, all your rights under the Option
likewise will be suspended during the period of investigation. If any facts that
would constitute termination for Cause are discovered after your Termination of
Service, any Option you then hold may be immediately terminated by the Plan
Administrator.

      IT IS YOUR RESPONSIBILITY TO BE AWARE OF THE DATE THE OPTION TERMINATES.

      6. LIMITED TRANSFERABILITY. During your lifetime only you can exercise the
Option. The Option is not transferable except by will or by the applicable laws
of descent and distribution, except that Nonqualified Stock Options may be
transferred to the extent permitted by the Plan Administrator. The Plan provides
for exercise of the Option by a beneficiary designated on a Company-approved
form or the personal representative of your estate.

      7. WITHHOLDING TAXES. As a condition to the exercise of any portion of an
Option, you must make such arrangements as the Company may require for the
satisfaction of any federal, state, local or foreign withholding tax obligations
that may arise in connection with such exercise.

      8. OPTION NOT AN EMPLOYMENT OR SERVICE CONTRACT. Nothing in the Plan or
any Award granted under the Plan will be deemed to constitute an employment
contract or confer or be deemed to confer any right for you to continue in the
employ of, or to continue any other relationship with, the Company or any
Related Company or limit in any way the right of the Company or any Related
Company to terminate your employment or other relationship at any time, with or
without Cause.

      9. NO RIGHT TO DAMAGES. You will have no right to bring a claim or to
receive damages if you are required to exercise the vested portion of the Option
within three months (one year in the case of Disability or death) of the
Termination of Service or if any portion of the Option is cancelled or expires
unexercised. The loss of existing or

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potential profit in Awards will not constitute an element of damages in the
event of your Termination of Service for any reason even if the termination is
in violation of an obligation of the Company or a Related Company to you.

      10. BINDING EFFECT. This Agreement will inure to the benefit of the
successors and assigns of the Company and be binding upon you and your heirs,
executors, administrators, successors and assigns.

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