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Exhibit 10.19    
    

***Text
Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 230.406 

 
 

COMMUNICATIONS VOICE AND DATA SERVICES PROVIDER AGREEMENT    
    

        This Communications Voice and Data Services Provider Agreement (the "Agreement") is entered into as of May 12, 2003 (the "Effective Date"), by and between  QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") with its principal place of business located at 5775 Morehouse Drive, San Diego, CA
92121-1714, and CardioNet, Inc., a California corporation ("CardioNet") with its principal place of business located at 510 Market
Street, San Diego, CA 92101, with respect to the following facts: 

        A.    QUALCOMM
is a leading provider of wireless communications products and services whose offerings include high-value wireless solutions that bring value to its
customers through several core competencies, including: (i) development of wireless communication and mobile computing systems; (ii) operation of a reliable 24/7/365 wireless data
network; (iii) superior customer service and support; and (iv) integration of wireless data platforms with legacy business systems. 

        B.    CardioNet
has developed a monitoring product and service that provides 7/24 ECG monitoring to ambulatory patients who are in need of monitoring and diagnosis. 

        C.    QUALCOMM
and CardioNet previously entered into that certain Development and License Agreement between the Parties dated May 10, 2002 (the "Development Agreement")
under which the Parties are collaboratively developing an enhanced version of CardioNet's monitoring product and service that includes QWBS Network operability and voice communications support. 

        D.    The
Parties now desire to enter into a business relationship whereby QUALCOMM will provide to CardioNet the QUALCOMM Service and Voice Service, and CardioNet will use
QUALCOMM as the value added wireless service provider for the Monitor and the CardioNet Service (each as defined below). The QUALCOMM Service and Voice Service will be primarily used at CardioNet's
monitoring center located in Philadelphia, Pennsylvania, and such other monitoring centers as CardioNet may utilize hereafter. 

        NOW,
THEREFORE, in consideration of the mutual promises set forth herein and intending to be legally bound hereby, the Parties agree as follows: 

 
 

AGREEMENT    
    

        1.    Headings and Definitions.    

        All
headings used in this Agreement are for convenience only and are not intended to affect the meaning or interpretation of this Agreement or any section or clause of this Agreement.
Reference to "third party" or "third parties" shall not mean either Party. The definitions set forth in Exhibit A shall apply to this Agreement. 

        2.    Wireless Carrier Agreement.    

        The
rights and obligations of the Parties set forth in this Agreement are subject to QUALCOMM actually entering into a suitable written agreement with a Wireless Carrier for provision of
the QUALCOMM Service and the Voice Service to CardioNet using the CDMA-2000 1xRTT network of such Wireless Carrier. QUALCOMM shall notify CardioNet in writing upon execution of such an
agreement, and either Party may terminate this Agreement upon thirty (30) days written notice to the other Party if such an agreement is not executed within one hundred eighty (180) days
after the Effective Date. CardioNet's sole and exclusive remedy in the event QUALCOMM and a Wireless Carrier are unable, for any reason, to execute such an agreement shall be: (i) QUALCOMM's
return to 

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CardioNet
of the Development Fees that have actually been paid to QUALCOMM by CardioNet as set forth in the Development Agreement; and (ii) termination of this Agreement by CardioNet in
accordance with this Section 2. 

        3.    Purchase, Sale and Provision of QUALCOMM Service.    

        3.1    Purchase and Sale.    Subject to the Monitor being Certified and the Parties completing their respective
development efforts as set forth in the Development Agreement, QUALCOMM hereby agrees to sell to CardioNet, and CardioNet hereby agrees to purchase from QUALCOMM, the QUALCOMM Service pursuant to the
terms and conditions of this Agreement and for use in conjunction with provision of the CardioNet Service to Monitored Persons. Nothing in this Agreement shall be deemed to limit the right of QUALCOMM
to offer network services of any kind to any third parties, including the QUALCOMM Service, either by itself or through other resellers, distributors or agents. 

        3.2    QUALCOMM Service.    QUALCOMM shall provide to CardioNet the QUALCOMM Service and the Voice Service in
accordance with the terms and conditions of this Agreement. QUALCOMM shall provide the QUALCOMM Service directly to CardioNet through the NMF via the Wireless Carrier, and the QUALCOMM Service shall
be available only for use with Monitors or other devices approved by QUALCOMM. All Monitors provisioned on the QUALCOMM Service that transmit wireless data via the CardioNet Service to the Center
shall be required to transmit through the NMF. Notwithstanding the foregoing, for a period of three (3) months after Commercial Release, the wireless data transmitted via
CDPD-enabled Monitors will not be required to be transmitted through the NMF. No warranty or guaranty shall apply to the QUALCOMM Service except as set forth in this Agreement, and
CardioNet shall refrain from making any warranties or guarantees to Monitored Persons with regard to the QUALCOMM Service. 

        3.3    Pricing.    The pricing and rates that CardioNet shall pay to QUALCOMM for the QUALCOMM Service and the Voice
Service shall be as set forth in Exhibit B. Such pricing may be modified only upon mutual written agreement of the Parties. Upon completion of QUALCOMM's reaching a suitable agreement with a
Wireless Carrier for provision of the QUALCOMM Service and the Voice Service to CardioNet using the CDMA 2000 1xRTT network of such Wireless Carrier, and then annually thereafter, the Parties agree to
meet, review and negotiate in good faith the pricing set forth in Exhibit B, and to incorporate into this Agreement through an amendment duly executed by both Parties any pricing changes
mutually agreed to between the Parties as a result of such pricing reviews. Upon expiration of the exclusivity period set forth in Section 9.4 below, in the event that QUALCOMM, in its sole
discretion, provides pricing or rates to any direct competitor of CardioNet for cardiac monitoring that is more favorable than the pricing or rates that QUALCOMM is providing to CardioNet under this
Agreement for the same or similar services from QUALCOMM and under the same or similar
payment terms contained in this Agreement, including QUALCOMM Services volume, then QUALCOMM shall also provide to CardioNet such more favorable pricing or rates. 

        3.4    Wireless Carrier.    QUALCOMM shall, in its sole discretion, select the Wireless Carrier(s) for the provision
of the QUALCOMM Service and Voice Service to CardioNet. QUALCOMM shall be responsible for managing the business relationship with the Wireless Carrier, including contract discussions and negotiations
for use of the Wireless Carrier network; interfacing with the Wireless Carrier regarding Wireless Carrier network performance issues, if any; interfacing with the Wireless Carrier regarding Monitor
activation; and invoicing, billing and payment issues regarding Wireless Carrier services. QUALCOMM reserves the right at any time to change the Wireless Carrier, provided, however, that such change
shall have no material adverse impact on 

2

 

CardioNet.
CardioNet shall cooperate with QUALCOMM and the Wireless Carrier to facilitate the provision of the QUALCOMM Service to CardioNet for use in conjunction with the CardioNet Service. In the
event that QUALCOMM has implemented suitable agreements with multiple Wireless Carriers, QUALCOMM will use commercially reasonable efforts to work with CardioNet, subject to the provisions of this
Agreement, to determine the optimum Wireless Carrier network for the Monitors. The Parties agree that, in the event QUALCOMM offers to CardioNet the choice of multiple Wireless Carriers and CardioNet
elects to use an alternate Wireless Carrier for some or all of its Monitors, then CardioNet shall be responsible for [...***...]. 

        3.4.1    Wireless Carrier Limitations.    CardioNet acknowledges and agrees that: (i) the QUALCOMM Service
shall be available for use only with Monitors or other equipment approved by QUALCOMM and Certified and only within the operating range of the Wireless Carrier network; and (ii) the QUALCOMM
Service may be temporarily refused, interrupted, curtailed or otherwise limited because of Wireless Carrier network transmission limitations caused by any factor, including atmospheric, environmental
or topographical conditions, Wireless Carrier facilities limitations or constraints, or Wireless Carrier facilities changes, modifications, updates, relocations, repairs, maintenance or other similar
activities necessary for the proper or improved operation of the Wireless Carrier facilities. If CardioNet or Monitored Persons create situations that cause highly concentrated usage in limited areas
on the Wireless Carrier network, such Monitored Persons may encounter temporary capacity constraint-related symptoms, such as excessive call blocking or call dropping. Subject to Section 8.2
below, in no event is QUALCOMM or the Wireless Carrier liable to CardioNet or such Monitored Persons with respect to any claim or damage related to or arising out of or in connection with:
(i) any such temporary capacity constraint; (ii) any coverage gap; or (iii) any temporary QUALCOMM Service refusal, interruption, curtailment or other limitation because of
transmission limitations caused by any factor, including atmospheric, environmental or topographical conditions, Wireless Carrier facilities limitations or constraints, or Wireless Carrier facilities
changes, modifications, updates, relocations, repairs, maintenance or other similar activities necessary for the proper or improved operation of the Wireless Carrier facilities. In the event CardioNet
anticipates highly concentrated usage by Monitored Persons in a particular area on the Wireless Carrier network, CardioNet shall notify QUALCOMM of such anticipated usage and request that QUALCOMM
notify the Wireless Carrier for possible
implementation by the Wireless Carrier of an appropriate action to alleviate the symptoms and provide minimal disruption to affected Monitored Persons regarding such usage. The Wireless Carrier may,
in its sole discretion, implement an appropriate action to minimize disruption to such Monitored Persons. 

        3.4.2    Modifications to Wireless Carrier Facilities.    CardioNet acknowledges that the Wireless Carrier may, in its
discretion, make modifications, updates or perform maintenance activities on its facilities or operations, equipment, software, procedures or services which could reasonably be expected to have a
significant impact on the QUALCOMM Service, the NMF, the CardioNet Service or Monitored Persons. When possible, and provided that the Wireless Carrier has notified QUALCOMM of such activities,
QUALCOMM shall use commercially reasonable efforts to provide CardioNet with as much advance notice as is practicable considering the specific circumstances regarding such activities. Neither QUALCOMM
nor the Wireless Carrier shall be liable to CardioNet, Monitored Persons or any third parties if such changes, updates, modifications, maintenance activities or planned outages require changes,
updates or modifications to Monitors or other products, accessories, systems or procedures. QUALCOMM shall use commercially reasonable efforts to work with the Wireless Carrier to attempt to schedule
Wireless Carrier changes, updates or maintenance 

*** Confidential
Treatment Requested 

3

 

activities
during time periods where the least amount of Monitored Persons will be adversely impacted. 

        3.5    Customer Service and Support.    QUALCOMM shall provide to CardioNet troubleshooting, maintenance, customer
care and support services on a 24/7/365 basis through CardioNet's iQConnect account or through QUALCOMM's Customer Service Center at (800)-541-7490, in accordance with
Exhibit D. CardioNet shall immediately notify QUALCOMM of any interruption in the QUALCOMM Service and/or the Voice Service. The QUALCOMM Customer Service Center shall be contacted whenever
there is a QUALCOMM Service interruption or failure, and iQConnect or the Customer Service Center shall be contacted when other services or information is required. 

        3.6    Monitored Person Data.    CardioNet acknowledges and agrees that data generated through the use of the QUALCOMM
Service in conjunction with the CardioNet Service will be retained by QUALCOMM for no more than two (2) days after receipt of such data by QUALCOMM at the NMF, after which such data will be
deleted by QUALCOMM. Notwithstanding the foregoing, QUALCOMM shall have the
right to retain process log files for a period of thirty (30) days after receipt of the data by QUALCOMM at the NMF, and QUALCOMM shall also have the right to retain isolated data files, in
QUALCOMM's discretion and for any amount of time deemed necessary by QUALCOMM, provided that such isolated data files are used to locate, diagnose and resolve system performance issues. QUALCOMM shall
use commercially reasonable efforts to maintain its systems to a high-level of security and to use industry-standard security measures to protect the security and confidentiality of
CardioNet's and the Monitored Person's data and information. Notwithstanding the foregoing, except in the case of QUALCOMM's gross negligence or willful misconduct, QUALCOMM shall not be held liable
for any security breach that leads to a compromise of such data, or for any impact which results from such security breach. 

        3.7    Roaming.    CardioNet acknowledges and agrees that the QUALCOMM Service does not support roaming across
multiple wireless carrier networks. The QUALCOMM Service is delivered for each Monitor over a single nationwide digital network operated by a single wireless carrier. CardioNet shall include in each
End User Contract and ensure that Monitored Persons and Prescribing Entities are aware of the limitations in area coverage resulting from all voice and data transactions being handled by a single
integrated digital wireless network operated by a single wireless carrier, and QUALCOMM reserves the right, upon QUALCOMM's request, to review the End User Contract for the inclusion of such
limitations. 

        3.8    Communications Links.    CardioNet is solely responsible for maintaining and operating the Center. QUALCOMM is
solely responsible for maintaining and operating the NMF and for obtaining and maintaining the necessary wireline telecommunications services for connectivity between: (i) the Center and the
NMF; and (ii) the PSTN and the NMF, when the Monitor is transmitting data to the NMF via the Monitor cradle. CardioNet shall be responsible for all charges, non-recurring and
recurring, associated with the wireline telecommunications link between: (i) the Center and the NMF; and (ii) the Monitor and the NMF. CardioNet acknowledges and agrees that QUALCOMM
shall have no warranty obligations in connection with any wireline telecommunications link, and that any interruption or break in any wireline telecommunications link shall be considered a force
majeure event pursuant to Section 4.1 and shall be excluded from the calculation of Services Availability. The applicable wireline telecommunications links are more fully set forth in Section's
3.8.1 and 3.8.2 below. 

        3.8.1    Wireline Monitor Connectivity.    QUALCOMM will host a toll-free dial-up service for
the wired portion of the connectivity for data traffic between the Monitor and the NMF. 

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Such
toll-free dial-up service will provide the necessary connectivity between the Monitor and the NMF when the Monitor is transmitting data to the NMF via the Monitor cradle.
QUALCOMM will provide to CardioNet a single toll-free number for all Monitor data usage. QUALCOMM will manage and monitor the dial-in resources for
proper operation and capacity. QUALCOMM will pass through to CardioNet the prices charged to QUALCOMM by the toll-free dial-up service provider for such toll-free
dial-up service, as further set forth in Exhibit B. 

        3.8.2    Center-to-NMF Connectivity.    QUALCOMM will provide wireline connectivity for the
transfer of data between the NMF and the Center using redundant and diverse frame relay connectivity. QUALCOMM will manage the routers on CardioNet's side of the frame relay circuitry, will monitor
the connections for proper operation and capacity, and will provide trouble notification and escalation to the frame relay service provider and to CardioNet if a problem occurs. QUALCOMM will pass
through to CardioNet the prices charged to QUALCOMM by the frame relay service provider for each of the two (2) frame relay connections, as further set forth in Exhibit B. Frame relay
circuits are specified as dual PVC (Las Vegas and San Diego) 128k Fractional T-l, with 64kbps CIR. 

        3.8.3    Internet Connectivity.    If CardioNet elects to use an Internet connection for any connectivity, including
as part of its communications link to the NMF, CardioNet shall be solely responsible for CardioNet's retention of an Internet service provider or other access to the Internet. CardioNet acknowledges
and agrees that QUALCOMM shall have no responsibility for CardioNet's Internet communications link. CardioNet shall be solely responsible for any and all Internet communications link initiation,
service provider fees, maintenance support, and all additional expenses incurred by CardioNet relating to the Internet communications link. CardioNet further acknowledges and agrees that any
interruption or break in the Internet communications link from CardioNet's facilities or the Center to the NMF, including but not limited to reasons attributable to routers and CSU/DSUs, shall be
considered a force majeure event pursuant to Section 4.1 and shall be excluded from the calculation of Services Availability. 

        3.9    Training.    QUALCOMM shall provide initial training on a one-time basis only to the appropriate
personnel of CardioNet, if necessary, in the use of the QUALCOMM Service. Such training shall be conducted at CardioNet's facilities in San Diego, California. QUALCOMM and CardioNet may mutually agree
to additional training sessions, if necessary, at CardioNet's expense. CardioNet shall have sole responsibility for providing training to Prescribing Entities and Monitored Persons regarding the use
of Monitors and the CardioNet Service. 

        3.10    HIPAA Compliance.    CardioNet acknowledges and agrees that CardioNet has not required that QUALCOMM implement
any measures to comply with the Health Insurance Portability and Accountability Act ("HIPAA"), that QUALCOMM has not implemented any such requirements, and that the pricing and provision of the
QUALCOMM Service to CardioNet does not include any amounts related to implementation by QUALCOMM of any HIPAA requirements. In the event that CardioNet requests that QUALCOMM implement any HIPAA
requirements, the Parties shall discuss in good faith such requirements and CardioNet shall reimburse QUALCOMM for any significant costs and/or expenses incurred by QUALCOMM in implementing any HIPAA
requirements. 

        4.    QUALCOMM Service Availability.    

        4.1    Availability Warranty.    QUALCOMM warrants that it shall maintain those elements of the QUALCOMM Service that
are under the control of QUALCOMM (and specifically excluding the force majeure events set forth in this Section 4.1 below, which force majeure events include 

5

 

but
are not limited to the Wireless Carrier and its network) so as to provide Services Availability (except from 10 p.m. to 12 a.m. Pacific Time, when QUALCOMM generally performs
maintenance actions) at least: (i) ninety nine percent (99%) per month averaged over twelve (12) months, during the first year of the Term; and (ii) ninety nine point nine percent
(99.9%) per month averaged over twelve (12) months, during the second year of the Term and thereafter. As used herein, "Services Availability" shall mean: (i) provision of the QUALCOMM
Service in Covered Areas free from interruption or break and shall include, in addition to the ability of the NMF to receive Monitor-originated data, the ability to send Monitor-destined data from the
NMF to the Wireless Carrier network. Services Availability does not include interruption of the QUALCOMM Service as a result of force majeure events, and Services Availability for the QUALCOMM Service
is predicated upon normal usage for Monitors in service in the Territory. For purposes of this paragraph, "force majeure events" shall include, without limitation, elements of the QUALCOMM Service
that are not under the control of QUALCOMM, including but not limited to wireline telecommunications failure, lack of availability of the QUALCOMM Service due to coverage limitations and outages and
coverage gaps or other service interruptions attributable to the Wireless Carrier or its network, the interruption or failure of telecommunication or digital transmission links, including the Internet
and Internet Service Provider ("ISP") link failure, hostile network attacks, acts of God, acts of terrorism, natural disasters, strikes, compliance with governmental laws or other similar causes, and
any other events which are beyond the control of QUALCOMM. Services Availability is reported quarterly as a year-to-date cumulative percentage according to the formula
(1 - cumulative downtime minutes divided by cumulative minutes in the year to date) × 100. 

        4.2    Remedy for Unavailability of the QUALCOMM Service.    In any month in which QUALCOMM does not provide at least
ninety nine percent (99%) Services Availability for the QUALCOMM Service during the first year of the Term, or ninety nine point nine percent (99.9%) Services Availability for the QUALCOMM Service
during the second year of the Term and thereafter, then QUALCOMM shall accrue to CardioNet, upon the written request of CardioNet, a credit against CardioNet's account in an amount per affected
Monitor equal to: (a) [...***...] of the monthly Base Data Service Plan Fees, if Services Availability is less than ninety nine percent (99%) or ninety nine point nine
percent (99.9%), as the case may be, but more than ninety five percent (95%); (b) [...***...] of the monthly Base Data Service Plan Fees, if Services Availability is
ninety five percent (95%) or less; or (c) in the event Services Availability is less than eighty five percent (85%) in any month [...***...]. In addition to the
foregoing remedies, in the event Services Availability is less than eighty five percent (85%) in any month, then CardioNet shall have the right to terminate this Agreement for an Event of Default as
set forth in Section 11.3. The twelve (12) month average Services Availability shall be computed annually on each anniversary of the Effective Date. In the event any such annual twelve
(12) month average Services Availability computation does not meet the Services Availability warranty set forth in Section 4.1 above,
then QUALCOMM shall issue to CardioNet an amount equal to CardioNet's actual credit accruals for such preceding twelve (12) month period. The foregoing shall be the sole and exclusive remedy
for CardioNet for any breach of warranty by QUALCOMM in connection with the QUALCOMM Service. 

        5.    Invoicing and Payment.    

        5.1    Invoicing.    QUALCOMM will invoice CardioNet for Base Data Service Plan Fees for the QUALCOMM Service in
arrears, on a monthly cycle, for each Monitor. QUALCOMM will invoice CardioNet for Incremental Data Service Plan Fees, Voice Service Fees, and any other charges in arrears, as of the end of the
monthly cycle in which such fees are incurred. 

*** Confidential
Treatment Requested 

6

 

        5.2    Invoice Information.    Invoices to CardioNet for the QUALCOMM Service shall identify the Monitors for which
the QUALCOMM Service is being invoiced by the mobile directory number (MDN); the electronic serial number of the radio module installed in the Monitor (ESN) and/or other Monitor identification
information that QUALCOMM may use to identify individual Monitors; the amount of airtime or number of bytes used during the billing cycle, as applicable; the quantity and dollar value of Base Data
Service Plan and Incremental Data Service Plan usage; and the total dollar amount of the invoice. Invoices for Voice Service shall include the sum total of all Voice Service minutes used by each
Monitor to the extent such information is provided to QUALCOMM by the Wireless Carrier. The Parties agree that QUALCOMM shall only be obligated to provide to CardioNet information to the level of
detail provided to QUALCOMM by the Wireless Carrier through the ordinary course of invoicing QUALCOMM for the usage of Voice Service by the Monitors, including providing to CardioNet the call data
records relating to Voice Service ("CDRs") provided to QUALCOMM by the Wireless Carrier. CardioNet shall be responsible for any desired processing of the CDRs for the purpose of extracting information
from such CDRs. 

        5.3    Payment of Invoices.    CardioNet shall pay all invoices issued by QUALCOMM within thirty (30) days from
the date of such invoice. QUALCOMM reserves the right to change the credit terms at any time, when, in QUALCOMM's opinion, CardioNet's financial condition or previous payment record so warrants.
Should CardioNet become delinquent in the payment of any sum due, QUALCOMM, after ten (10) days from the date of written notice to CardioNet, shall not be obligated to continue performance
under this Agreement or any other agreement between QUALCOMM and CardioNet. A late charge of the lesser of [...***...] per month or the maximum amount permitted by law, will be
added to past due accounts. All reasonable costs and expenses, including but not limited to attorneys' fees, court costs and service charges incurred by QUALCOMM in collecting payment will be an
expense of and charge to CardioNet. 

        5.4    Taxes.    All prices and rates for the QUALCOMM Service, Voice Service and for any other services provided to
CardioNet under this Agreement do not include sales, use, excise or similar taxes or related charges assessed at any time to be invoiced by QUALCOMM to CardioNet as described in Section 5.1
(i.e., on a monthly basis). Except for those taxes imposed upon QUALCOMM's income by the United States government and its subdivisions, and FCC license fees, all applicable taxes and/or assessments
(including but not limited to assessments imposed by the FCC) shall be paid by CardioNet on a monthly basis as described in Section 5.1. CardioNet is responsible for the payment of sales, use,
excise or similar taxes or related charges, whether concurrently invoiced to CardioNet with the original invoiced amount or subsequently invoiced based on a later review of CardioNet's tax status or
obligations. In the event that QUALCOMM fails to timely invoice CardioNet for such taxes or related charges due to the fault of QUALCOMM, CardioNet's sole liability therefore shall be limited to the
actual taxes due (exclusive of any interest, penalties or similar charges, which shall be QUALCOMM's sole responsibility). It is CardioNet's responsibility to: (i) establish the criteria to be
used to determine the "place of primary use" and thus the applicable taxing authority; (ii) notify QUALCOMM of the place of primary use of the QUALCOMM service and Voice Service attributable to
each Monitor (and notify QUALCOMM of any changes thereto); and (iii) at QUALCOMM's request, provide any other information that is reasonably necessary to determine the applicability and amounts
of any taxes. It is QUALCOMM's responsibility to: (i) determine the correct amount and the correct application of all applicable taxes, fees, and surcharges imposed on the basis of
Section 5.4 (i) above; (ii) invoice CardioNet for such correct amounts; and (iii) report and remit such amounts to the applicable authorities. CardioNet shall not be
responsible for, and QUALCOMM shall indemnify and hold harmless CardioNet from, any amounts paid by CardioNet to QUALCOMM as required herein that QUALCOMM does not properly or timely remit to the
applicable authority, and any and all other costs, expenses, liabilities, or obligations associated with or resulting from the foregoing described matters. In the event that QUALCOMM, at its sole
discretion, pays any taxes on behalf of CardioNet that were invoiced by QUALCOMM to CardioNet as provided in Section 5.1, CardioNet shall reimburse QUALCOMM in accordance with
Section 5.3. CardioNet shall indemnify and hold harmless QUALCOMM for any failure to remit taxes and other levies required to be paid by CardioNet as specified hereinabove. 

*** Confidential
Treatment Requested 

7

   
        6.    Monitor Development, Certification, Provisioning and Activation.    

        6.1    Monitor Development and Maintenance.    CardioNet shall be solely responsible for developing the Monitors and
for ensuring that the Monitors operate properly for use with the QUALCOMM Service and the CardioNet Service. Except as set forth in the Development Agreement, QUALCOMM shall have no responsibility
regarding the development, troubleshooting, maintenance, repairs, performance or other responsibilities related to the Monitors or the CardioNet Service, or regarding registering with the Wireless
Carrier the radio modules that will be included in each Monitor. Except for the development efforts undertaken by QUALCOMM in accordance with the terms of the Development Agreement, neither QUALCOMM
nor the Wireless Carrier will be required to make any changes, modifications or additions to its equipment, operations or facilities in order to accommodate the CardioNet Service or Monitors. All
warranty, maintenance and repairs regarding Monitors shall be the sole responsibility of CardioNet. 

        6.2    Certification of Monitors.    CardioNet shall be solely responsible for ensuring that it sells and distributes
only Certified Monitors and that all Monitors used by Monitored Persons in connection with the QUALCOMM Service, and each Monitored Person's use thereof, at all times meets the regulatory requirements
of the FCC and any other applicable governmental authorities. CardioNet shall be responsible for obtaining Certification of the Monitors from the Wireless Carrier(s). QUALCOMM shall provide reasonable
assistance to CardioNet in working with the Wireless Carrier(s) until such time as the Wireless Carrier(s) have Certified the Monitors, provided, however, that CardioNet shall reimburse QUALCOMM for
any reasonable out-of-pocket costs incurred by QUALCOMM, and approved by CardioNet, in assisting CardioNet to obtain Certification of the Monitors. QUALCOMM shall have no
obligation to provide to CardioNet the QUALCOMM Service (and CardioNet shall not be entitled to order from QUALCOMM the QUALCOMM Service) prior to such time as the Monitors have been Certified or
QUALCOMM deems such Certification unnecessary due to evolving Wireless Carrier requirements. Notwithstanding the foregoing, QUALCOMM shall use commercially reasonable efforts to obtain from the
Wireless Carrier(s) the right to use on the network of such Wireless Carrier(s) Monitors for engineering-level and testing use. 

        6.3    Provisioning, Activation and De-activation of Monitors.    The procedures for provisioning,
activating and de-activating Monitors are set forth in Exhibit C. Activation and de-activation charges for Monitors are set forth in Exhibit B. CardioNet shall
confirm, prior to providing a Monitor to a Monitored Person for use in conjunction with the CardioNet Service, that such Monitor has been activated. CardioNet shall not use an ESN associated with a
Monitor on any other type of equipment used on the Wireless Carrier network, and each ESN shall be used only on the Wireless Carrier network on which it was originally provisioned. 

        7.    CardioNet Service.    

        In
addition to its other responsibilities and obligations set forth elsewhere in this Agreement, CardioNet shall also have the following responsibilities and obligations regarding the
provision of the CardioNet Service: 

        7.1    CardioNet Service; Monitoring Contracts.    CardioNet shall be solely responsible for the provision of the
CardioNet Service to Monitored Persons. CardioNet shall be solely responsible for entering into Monitoring Contracts for the CardioNet Service directly with each Monitored Person. In addition to
including in each Monitoring Contract any flow-down requirements that may be required from time to time by the Wireless Carrier or QUALCOMM, CardioNet shall ensure that each Prescribing
Entity is sufficiently informed regarding all necessary instructions and product warnings regarding Monitors, the QUALCOMM Service and the CardioNet Service, including those set forth herein below,
and that each Monitoring Contract expressly sets forth (and is initialed by the Monitored Person): (i) any applicable Wireless Carrier network coverage 

8

 

limitations,
including but not limited to the limitations and constraints set forth in Sections 3.4.1 and 7.3 of this Agreement; (ii) that the CardioNet Service is provided solely and
exclusively by CardioNet, and that neither QUALCOMM or the Wireless Carrier has any liability therefore; and (iii) that the CardioNet Service is a personal monitoring and data delivery service
and device that will be prescribed by a physician and used for the approved indications for use under the supervision of medical professionals or a physician, and is not intended for use:
(a) for detection or notification of life threatening events; or (b) to trigger any immediate reaction to protect the health and safety of the Monitored Person. CardioNet shall also
ensure that, with respect to Monitors and the CardioNet Service, it complies at all times with all FDA and state government laws and regulations regarding product warnings, and that any advertising to
potential Monitored Persons regarding Monitors or the CardioNet Service directs potential Monitored Persons to seek additional information from a Prescribing Entity. In addition, the form of
Monitoring Contract shall contain substantially the following language: 

        "Monitored
Person acknowledges that the CardioNet Service provided by CardioNet hereunder uses a digital telephone service that is furnished to CardioNet via QUALCOMM by a wireless
carrier ("Wireless Carrier") pursuant to an agreement between QUALCOMM and such Wireless Carrier and is subject to the terms, conditions and limitations therein set forth. MONITORED PERSON FURTHER
ACKNOWLEDGES THAT QUALCOMM AND THE WIRELESS CARRIER DISCLAIM ALL LIABILITY OF ANY NATURE TO MONITORED PERSON, WHETHER DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL, ARISING OUT OF MONITORED PERSON'S
USE OF THE CARDIONET SERVICE, AND MONITORED PERSON AGREES THAT MONITORED PERSON SHALL HAVE NO CLAIMS AGAINST QUALCOMM OR THE WIRELESS CARRIER OF ANY KIND WITH RESPECT THERETO." 

        By
activating and deploying Monitors, CardioNet represents and warrants to QUALCOMM that a written Monitoring Contract complying with the terms and conditions of this Agreement is in
place with each Monitored Person. CardioNet agrees to furnish to QUALCOMM a copy of the form of the Monitoring Contract upon QUALCOMM's request. 

        7.2    CardioNet Service Pricing.    CardioNet shall unilaterally establish its own pricing and terms for the sale of
the CardioNet Service to Monitored Persons. QUALCOMM and its employees shall neither have authority to instruct CardioNet as to the pricing amounts for the CardioNet Service nor to interfere with
CardioNet's independent establishment of such pricing amounts. 

        7.3    Coverage Maps.    QUALCOMM shall provide to CardioNet coverage maps, for the purpose of assisting CardioNet in
marketing the CardioNet Service to Monitored Persons and Prescribing Entities. CardioNet shall not in any way alter or modify such coverage maps and shall at all times comply with the requirements of
QUALCOMM and the Wireless Carrier regarding use of the coverage maps, including but not limited to ensuring that such coverage maps do not contain any QUALCOMM or Wireless Carrier logo or
identification information. CardioNet acknowledges and agrees that coverage map information might depict some future coverage that may or may not be identified as such, and that the QUALCOMM Service
may not be available in all areas shown on the maps due to a variety of factors including Wireless Carrier facilities constraints, topographical conditions (including building configurations), and
environmental conditions or capacity limitations. CardioNet acknowledges that the maps provided may not reflect temporary changes in coverage or coverage gaps that are limited in scope. CardioNet
shall verify or validate the applicable coverage area for Prescribing Entities and for each Monitored Person, prior to a Monitor being provided to such Monitored Person, and such Monitored Person
shall assume any coverage risks. Neither QUALCOMM nor the Wireless Carrier is liable to CardioNet, 

9

 

Monitored
Persons or Prescribing Entities for any claim or damage related to or arising out of or in connection with any map information, including the accuracy thereof. 

        7.4    Use of QUALCOMM Name.    Except as otherwise provided in, or required by, this Agreement, CardioNet shall not
use QUALCOMM's name, logo's, trademarks, or other intellectual property in the advertising, marketing or sale of Monitor's and the CardioNet Service to Monitored Person's and Prescribing Entities
without the prior written consent of QUALCOMM. 

        7.5    Interference and Network Security.    Monitors, the QUALCOMM Service, and the Wireless Carrier network may not
be used for purposes other than those contemplated in this Agreement. Upon discovery of any unauthorized usage, QUALCOMM and the Wireless Carrier shall have the right, on notice to CardioNet, to
suspend or terminate the QUALCOMM Service with respect to any offending usage, or require CardioNet to take appropriate action to eliminate any unauthorized usage. CardioNet acknowledges and agrees
that the QWBS Network is an online service that is designed to be accessible through internet service providers (the Internet and frame relay, ISDN, and POTS mediums), but is not designed to be a
conduit to the Internet. QUALCOMM shall have the right to disconnect, without
notice, unauthorized outbound Internet connections. All equipment, Monitors, Monitored Persons, other customers, networks, and their associated activities and data are subject to monitoring,
interception, logging, and disclosure to QUALCOMM personnel and designated outside and/or law enforcement agencies. Any server that QUALCOMM, in its reasonable discretion, deems compromised, is
subject to immediate shutdown, seizure, analysis, and data disclosure to QUALCOMM personnel and designated outside and/or law enforcement agencies. In the event of any security breaches, QUALCOMM
reserves the right, in its reasonable discretion, to suspend, disable or terminate services to ensure security for the balance of QUALCOMM's customers. Any actions taken by QUALCOMM pursuant to this
Section 7.5 shall be considered a force majeure event pursuant to Section 4.1 and shall be excluded from the calculation of Services Availability. 

        7.6    Fraudulent Calls.    CardioNet acknowledges that the Wireless Carrier will actively monitor its network for
detection of Fraudulent Calls. In the event that the Wireless Carrier detects any Fraudulent Calls made using Monitors, the Wireless Carrier will determine whether the incident is "suspected" or
"definitive", will notify QUALCOMM of the incident, and QUALCOMM will then notify CardioNet, without any liability to QUALCOMM or CardioNet. Neither QUALCOMM nor the Wireless Carrier makes any
guarantee that any or all Fraudulent Calls will be detected. The Wireless Carrier will track and process any credits requested by CardioNet through QUALCOMM for suspected and definitive Fraudulent
Calls, only if the Fraudulent Calls exceeds a minimum threshold of [...***...] in the aggregate during any single billing cycle. 

        7.6.1    Suspected Fraudulent Calls.    In case of suspected Fraudulent Calls, QUALCOMM will continue providing the
data services-portion of the QUALCOMM Service to the affected MDN and Monitor, unless CardioNet directs QUALCOMM to terminate. If CardioNet directs QUALCOMM to terminate the QUALCOMM Service to the
affected MDN and Monitor, QUALCOMM shall absorb the costs associated with such Fraudulent Calls for up to four (4) hours from the time the Wireless Carrier notified QUALCOMM of detection of the
Fraudulent Calls, and CardioNet shall be responsible for all charges after expiration of such four (4) hour period. If CardioNet does not request termination of the QUALCOMM Service to the
affected MDN and Monitor, CardioNet shall be responsible for all charges related to such Fraudulent Calls. 

        7.6.2    Definitive Fraudulent Calls.    If the Wireless Carrier provides to QUALCOMM notice of definitive Fraudulent
Calls, then the Wireless Carrier shall have the right to terminate network services to the affected MDN and Monitor concurrently with notice of detection to QUALCOMM (and QUALCOMM shall promptly
notify CardioNet of such actions). Failure of authentication may be considered definitive Fraudulent Calls. The Wireless Carrier shall absorb the costs associated with definitive Fraudulent Calls on
its network. If CardioNet re-activates the offending Monitor or overrides de-activation by the Wireless Carrier, then CardioNet is responsible for all Fraudulent Calls and any
other fraud or similar activity on such Monitor(s). 

***Confidential
Treatment Requested 

10

 

        7.7    Forecasts.    CardioNet shall provide to QUALCOMM on a quarterly basis no later than ten (10) days
following the end of each calendar quarter, a non-binding, rolling twelve (12) month forecast of increases of Monitors to support QUALCOMM in its capacity and support planning
efforts. In addition, CardioNet shall notify QUALCOMM of potential Monitor activations of more than one hundred (100) new Monitors in a single city, town or geographic region with as much
advance notice as possible. 

        7.8    Sole Compensation.    CardioNet's sole compensation under this Agreement shall be the proceeds it may receive,
if any, on the sale of the CardioNet Service to Monitored Persons. CardioNet represents that QUALCOMM has not required CardioNet to pay, nor has CardioNet paid, any fee as a condition of or in
connection with entering into this Agreement. 

        7.9    CardioNet Servers.    The Parties will explore the possibility of QUALCOMM hosting applicable CardioNet
servers, if deemed appropriate by the Parties. The terms of such hosting services, including pricing, would be mutually agreed upon between the Parties under a separate agreement, and nothing in this
Agreement shall be deemed to obligate QUALCOMM to provide such hosting services to CardioNet or obligate CardioNet to offer such hosting services to QUALCOMM. 

        8.    Limitations of Liability.    

        8.1    Disclaimer.    EXCEPT FOR THE AVAILABILITY WARRANTY SPECIFICALLY SET FORTH IN SECTION 4.1 ABOVE, THE QUALCOMM
SERVICE IS PROVIDED "AS IS" AND QUALCOMM MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, CONCERNING THE QUALCOMM SERVICE. QUALCOMM HEREBY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF INFRINGEMENT, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE, SPECIFIC OR OTHERWISE, REGARDING THE QUALCOMM SERVICE. QUALCOMM MAKES NO REPRESENTATION
OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, TO CARDIONET AS TO THE WIRELESS CARRIER NETWORK OR THE AMOUNT OF REVENUE THAT CARDIONET WILL GENERATE AS A RESULT OF THIS AGREEMENT. 

        8.2    QUALCOMM Limitation.    Except for its indemnification obligations set forth in Section 10, QUALCOMM's
entire liability and the liability of any Wireless Carrier, and CardioNet's exclusive remedies for any damages arising out of this Agreement and for the performance of the QUALCOMM Service, regardless
of the form of action, whether in contract, breach of warranty, indemnification, or tort, including negligence, strict liability, or otherwise, shall be: (i) for breach of warranty, the
remedies set forth in Section 4.2 above; and (ii) for claims other than for breach of warranty, except for liability
resulting from QUALCOMM's gross negligence or willfull misconduct (which shall be unlimited), QUALCOMM's liability shall be limited to direct damages proven in an amount not to exceed
[...***...]. 

        8.3    CardioNet Limitation.    Except for its indemnification obligations set forth in Section 10 and its
payment obligations set forth in Section 5, and except for liability resulting from CardioNet's gross negligence or willfull misconduct (which shall be unlimited), CardioNet's entire liability
and QUALCOMM's exclusive remedies for any damages arising out of this Agreement and for the performance of the Monitor's and the CardioNet Service, regardless of the form of action, whether in
contract, breach of warranty, indemnification, or tort, including negligence, strict liability, or otherwise, shall be limited to direct damages proven in an amount not to exceed
[...***...]. 

***Confidential
Treatment Requested 

11

 

        IN
NO EVENT SHALL EITHER PARTY OR THE WIRELESS CARRIER BE LIABLE, WHETHER IN CONTRACT, WARRANTY, TORT OR OTHERWISE, TO ANY OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR
SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO ANY LOST PROFITS, LOST SAVINGS OR OTHER INCIDENTAL DAMAGES ARISING OUT OF THIS AGREEMENT, THE QUALCOMM SERVICE, THE CARDIONET SERVICE, MONITORS, OR THE
WIRELESS CARRIER NETWORK, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

        9.    Intellectual Property Rights and Confidentiality.    

        9.1    Intellectual Property Rights.    Each Party agrees that, on a worldwide basis, any patents, trademarks,
copyrights, trade secrets, ideas, concepts, and/or inventions (whether patentable or not) ("Intellectual Property"), of either Party relating to or embodied in any information, input, or comments
submitted to the other Party, shall remain the property of the submitting Party. 

        9.2    No Transfer of Rights.    Nothing in this Agreement shall be deemed to convey to either Party or to any third
party any Intellectual Property rights. No provision of this Agreement shall be construed to grant to either Party or to any third party, either expressly, by implication or by way of estoppel, any
license under any patents or other intellectual property rights covering or relating to any product, invention or trade secret of either Party. 

        9.3    Confidentiality.    The Parties acknowledge the existence of, and agree to abide by the terms of, the mutual
non-disclosure agreement between the Parties dated September 22, 1999 (the "NDA"). 

        9.4    Exclusivity.    The Parties agree that QUALCOMM shall not provide the QUALCOMM Service to any direct competitor
of CardioNet that is providing a cardiac monitoring service for a period of three (3) years from the Effective Date (the "Exclusivity Period"), as long as CardioNet meets the following minimum
number of active Monitors on the QUALCOMM Service as of the end of each calendar year identified below: 

	2003:	 	[...***...] active Monitors
	2004:	 	[...***...] active Monitors
	2005:	 	[...***...] active Monitors

        During
the Exclusivity Period, QUALCOMM shall not provide to any direct competitor of CardioNet the Specifications (as defined in the Development Agreement) for the purpose of such
competitor developing a cardiac monitoring solution competitive to CardioNet's Monitor and services. 

        In
the event that CardioNet does not meet the above minimum number of active Monitors by December 31st of the stated year, the exclusivity granted to CardioNet as
set forth above during the Exclusivity Period shall automatically terminate and QUALCOMM shall have the right to offer the QUALCOMM Service at its sole discretion, including to any organizations or
entities offering cardiac monitoring services. 

        10.    Indemnification; Insurance; Representations and Warranties.    

        10.1    General Cross-Indemnification for Third Party Claims.    A Party (the "Indemnitor") agrees to indemnify and
defend the other Party and its directors, officers, employees, agents, successors and
assigns (separately and collectively, the "Indemnitee") from and against any Losses for property damage or personal injury which may be assessed against or incurred by the Indemnitee resulting from
third party claims relating to or arising out of any negligent, grossly negligent or intentional misconduct or omission of the Indemnitor or its directors, officers, employees, agents, successors and
assigns in connection with this Agreement, except to the extent caused by the acts or misconduct or omissions of the Indemnitee. 

***Confidential
Treatment Requested 

12

 

        10.2    Indemnification by QUALCOMM.    QUALCOMM shall indemnify, defend and hold CardioNet, its officers, directors,
employees, agents, successors and assigns harmless from any and all Losses caused by the actions or inactions of QUALCOMM and its employees and/or agents (and not caused by the negligent actions or
inactions of CardioNet or its employees and/or its agents) and arising out of, relating to or incurred in connection with: (i) any misrepresentations made by QUALCOMM or its employees,
representatives or agents with respect to Monitors, CardioNet, the CardioNet Service, the Voice Service and the QUALCOMM Service; (ii) any gross negligence, willful misconduct, or unlawful acts
or omissions by QUALCOMM; (iii) any material breach of this Agreement by QUALCOMM; (iv) any third party infringement claims regarding QUALCOMM's intellectual property. 

        10.3    Indemnification by CardioNet.    CardioNet shall indemnify, defend and hold QUALCOMM, its officers, directors,
employees, agents, successors and assigns harmless from any and all Losses caused by the actions or inactions of CardioNet and its employees and/or agents (and not caused by the negligent actions or
inactions of QUALCOMM or its employees and/or its agents) and arising out of, relating to or incurred in connection with: (i) any misrepresentations made by CardioNet or its employees,
representatives or agents with respect to Monitors, QUALCOMM, the QUALCOMM Service and the CardioNet Service; (ii) any gross negligence, willful misconduct, or unlawful acts or omissions by
CardioNet; (iii) any material breach of this Agreement by CardioNet; (iv) any third party infringement claims regarding CardioNet's intellectual property; (v) any complaint
regarding the performance, quality, functionality or other claim regarding the CardioNet Service and Monitors, and/or the QUALCOMM Service and Wireless Carrier network when used in conjunction with
the CardioNet Service and Monitors; (vi) any unauthorized warranty, agreement or representation, express or implied, made by CardioNet or any of its employees or agents with respect to the
Voice Service, the QUALCOMM Service and the Wireless Carrier network and its coverage and coverage maps; (vi) any complaint related to the Monitor's failure to properly accommodate 911 or
enhanced 911 services, if applicable;. 

        10.4    Insurance Requirements.    CardioNet shall maintain during the term of this Agreement the following insurance:
(a) Workers' Compensation insurance as statutorily required in each applicable jurisdiction; (b) employer's liability insurance with limits of at least
[...***...] for each
occurrence; (c) automobile liability insurance if the use of motor vehicles is required, with limits of at least [...***...] combined single limit for bodily injury and
property damage per occurrence; (d) Commercial General Liability ("CGL") insurance, including Blanket Contractual Liability, Products/Completed Operations Liability,
Premises/Operations Liability, Personal/Advertising Injury Liability, and Broad Form Property Damage, with limits of at least [...***...] combined single limit for bodily
injury and property damage per occurrence and in the aggregate; (e) Umbrella Liability insurance with limits of at least [...***...] per occurrence and in the aggregate.
In addition, the CGL and Umbrella Liability policies shall remain in effect for at least twelve (12) months after: (i) any expiration or termination of this Agreement; or
(ii) termination of the Transition Period. All CGL and automobile liability insurance shall designate QUALCOMM Incorporated and its directors, officers, agents and employees as additional
insured. CardioNet shall furnish to QUALCOMM within thirty (30) days after the Effective Date certificates of insurance which evidence the minimum levels of insurance set forth above. Insurance
companies providing coverage under this Agreement must be rated by A-M Best with at least an A- VII rating. 

***Confidential
Treatment Requested 

13

 

        The
Parties acknowledge and agree that the insurance afforded by such insurance policies is primary with respect to QUALCOMM and its directors, officers, agents and employees, and that
any other insurance available to QUALCOMM and its directors, officers, agents and employees is excess and non-contributing. CardioNet shall notify QUALCOMM in writing at least thirty
(30) days prior to cancellation of or any change in such insurance policies. CardioNet and its agents, officers, directors and employees hereby waive all rights against QUALCOMM and its
directors, officers, agents and employees to the extent that they are covered under CGL and Workers Compensation insurance policies. 

        10.5    General Representations and Warranties.    Each Party represents and warrants to the other Party that:
(i) such Party has the legal power, right and authority and has taken all requisite corporate action necessary to enter into this Agreement and this Agreement is enforceable against such Party
in accordance with its terms; (ii) this Agreement contains the entire understanding of the Parties and, except as set forth in this Agreement, neither Party has relied upon any statements or
representations of the other Party or of any third party in entering into this Agreement; and (iii) execution of this Agreement by such Party and the consummation of the transactions
contemplated herein, shall not conflict with or result in breach of the articles of incorporation or bylaws of such Party, or constitute a default under any mortgage, lease, contract or other
instrument to which such Party is a party or by which it is bound or affected. 

        11.    Term and Termination.    

        11.1    Term.    Subject to QUALCOMM entering into a suitable agreement with a Wireless Carrier as set forth in
Section 2, this Agreement shall commence on the Effective Date and shall continue for a period of five (5) years after Commercial Release. Thereafter, this Agreement shall be
automatically renewed for successive periods of one (1) year each, unless terminated by either Party on at least ninety (90) days advance written notice to the other Party (the "Term"). 

        11.2    Termination for Convenience.    Subject to each Party's obligations during the Transition Period, if any, as
set forth in Section 11.5 below, commencing one (1) year after Commercial Release: (i) QUALCOMM may terminate this Agreement at any time on ninety (90) days advance written
notice to CardioNet if QUALCOMM determines for any reason that it is no longer in QUALCOMM's best interest to continue providing the QUALCOMM Service to CardioNet; and (ii) CardioNet may
terminate this Agreement at any time on ninety (90) days advance written notice to QUALCOMM if CardioNet determines for any reason that it is no longer in CardioNet's best interest to continue
receiving the QUALCOMM Service. The sole and exclusive remedy of CardioNet in the event of any such termination by QUALCOMM shall be the performance by QUALCOMM of its Transition Period obligations. 

        11.3    Termination for Default.    Upon the occurrence of an event of default as set forth below (each an "Event of
Default"), the Party not in default shall have the right to and may elect to: (i) declare this Agreement to be immediately terminated (subject to any applicable cure period); and/or
(ii) subject to the limitations set forth in Section 8 above, pursue each and every available remedy at law and in equity. Each of the foregoing remedies shall be cumulative and not
exclusive. Any of the following shall constitute an Event of Default: 

        (a)   A
failure to pay any undisputed amount due hereunder within ten (10) days notice by the Party to whom such payment is due; 

        (b)   The
failure of either Party to perform any material term, condition or covenant of this Agreement and such failure has not been corrected within thirty (30) days
of the date of receipt of written notice of such non-performance from the non-defaulting Party; 

        (c)   Any
unauthorized use or disclosure of material confidential information in violation of Section 9.3; 

14

  

        (d)   Either
Party is or becomes insolvent, or a party to any bankruptcy or receivership proceeding or any similar action affecting the financial condition of the Party, or
seeks to make a compromise, arrangement or assignment for the benefit of its creditors, or ceases doing business in the normal course. 

        (e)   As
set forth in Section 4.2 above, in the event Services Availability is less than eighty five percent (85%) in any month. 

        Notwithstanding
the cure period set forth above for any Event of Default, so long as the defaulting Party is diligently working in good faith to cure an Event of Default, then such Party
shall have an extended cure period of thirty (30) days. 

        11.4    Obligations After Termination.    Upon the expiration or termination of this Agreement and the Transition
Period, if applicable: (i) all amounts owing to either Party prior to such expiration or termination shall be immediately due and payable in full to such Party; (ii) CardioNet shall
desist from any conduct or representations which might lead the public to believe that CardioNet continues to be authorized to use the QUALCOMM Service in conjunction with provision of the CardioNet
Service to Monitored Persons; and (iii) each Party shall return to the other or certify destroyed any confidential information of the other Party. 

        11.5    Transition Period.    The Parties acknowledge and agree that upon the expiration or termination of this
Agreement, CardioNet will need adequate time to phase-out or transition to an alternative service provider for the provision of service similar to that provided by the QUALCOMM Service.
Accordingly, upon expiration of the term, upon early termination of this Agreement by QUALCOMM for any reason other than for an Event of Default by CardioNet, or upon early termination of this
Agreement by CardioNet for convenience, QUALCOMM shall, for a period of one (1) year from the date that either Party provides written notice to the other Party of such termination, or until
successful completion of any such phase-out or transition, whichever is earlier (the "Transition Period"), continue to provide to CardioNet the QUALCOMM Service and the Voice Service in
accordance with the terms and conditions of this Agreement, all provisions of this Agreement, including the pricing set forth in Exhibit B, shall continue to apply, and CardioNet shall continue
to pay to QUALCOMM the applicable amounts for the QUALCOMM Service and the Voice Service. In addition, during the Transition Period: (i) QUALCOMM shall work in good faith with CardioNet, at
CardioNet's expense, to phase-out the QUALCOMM Service or to transition CardioNet to another service provider-entity acceptable to CardioNet; (ii) QUALCOMM shall have the right to
reduce its support requirements to levels commensurate with declining Monitored Person volume and reduced new Monitored Person additions, if any; and (iii) CardioNet shall have the right to
continue adding new Monitored Persons throughout the term of the Transition Period. Upon
expiration or termination of the Transition Period, QUALCOMM may discontinue providing the QUALCOMM Service to CardioNet without incurring any liability. 

        12.    Primary Point of Contact; Notices.    

        12.1    Primary Points of Contact.    Each Party shall designate one (1) individual who shall serve as the
primary point of contact with respect to all matters pertaining to this Agreement. The initial primary point of contact for QUALCOMM shall be Mr. Jeff Vosburg; the initial primary point of
contact for CardioNet shall be Mr. Doug Eveland. Each Party shall be entitled to change its designated primary point of contact on written notice to the other Party. 

        12.2    Notices.    All notices, requests, demands, consents, agreements and other communications required or
permitted to be given under this Agreement shall be in writing and shall be mailed to the Party to whom notice is to be given, by facsimile, and confirmed by first class mail postage prepaid or
delivery service, properly addressed as follows (in which case such notice shall be deemed to have been duly given on the earlier of (i) the date the notice is first 

15

 

received
by the Party or (ii) the date of the facsimile transmission, or one (1) Business Day or five (5) Business Days after deposit with the delivery service or postal
authority, respectively): 

	QUALCOMM Incorporated	 	CardioNet, Inc.
	5775 Morehouse Drive	 	510 Market Street
	San Diego, CA 92121	 	San Diego, CA 92101
	Facsimile No.: (858) 658-1576	 	Facsimile No.: 619-243-7707
	Attn.: President	 	Attn.: Mr. James M. Sweeney
	with a copy to:

QWBS Legal Department

Facsimile No.: (858) 658-1576	 	 

        13.    General Provisions.    

        13.1    Non-exclusivity.    The Parties acknowledge and agree that this Agreement is non-exclusive in
nature, and that nothing contained herein shall be deemed to prevent either Party from exercising all of its rights in and with respect to its own products and/or business, including without
limitation, the right to enter into similar agreements with competitors of the other Party, except as otherwise provided in Section 9.4. 

        13.2    Independent Contractors.    Each Party to this Agreement is an independent contractor and nothing contained
herein shall be construed to create a partnership, joint venture or agency relationship between QUALCOMM and CardioNet, nor shall either Party be authorized to bind the other in any way. Neither Party
is authorized to transact business, incur obligations (express or implied), bill goods or otherwise act in any manner, to make promises, warranties, contracts, or commitments or other representations
in the name of or on behalf of the other Party. 

        13.3    Publicity and Press Releases.    Neither Party shall issue any publicity or press release regarding this
Agreement without the other Party's consent. In the event the Parties mutually agree to issue any press releases or other publicity regarding, and during the term of, this Agreement, then the Parties
shall cooperate in preparing and releasing any such mutually agreed upon press releases or other publicity. 

        13.4    Survival of Obligations.    The rights and obligations of the Parties set forth in Sections 1, 5.4, 8, 9, 10
and 13 shall survive any termination, cancellation or expiration of this Agreement and the Transition Period. 

        13.5    Time Limitation for Actions.    All causes of action under this Agreement must be brought within two
(2) years following the date on which the event which first gave rise to the cause of action occurred or within two (2) years following expiration or termination of this Agreement,
whichever is earlier. 

        13.6    Severability.    If any provision in this Agreement shall be held to be invalid or unenforceable, the
remaining portions shall remain in effect. In the event such invalid or unenforceable provision is considered an essential element of this Agreement, the Parties shall promptly negotiate a replacement
provision. 

        13.7    Non-waiver.    No waiver of the terms and conditions of this Agreement, or the failure of either
Party to strictly enforce any such term or condition on one or more occasions, shall be construed as a waiver of the same or of any other term or condition of this Agreement on any other occasion. 

        13.8    Applicable Law; Venue.    This Agreement shall be interpreted, construed, governed and enforced according to
the laws of the State of California, without regard to its choice of law 

16

 

provisions.
Any action to construe or enforce this Agreement shall be brought only in the courts of competent jurisdiction in San Diego County, California. 

        13.9    Force Majeure.    If the performance of this Agreement (but specifically excluding from the operation of this
Section 13.9 the obligation to make payments) is interfered with by reason of any circumstance beyond the reasonable control of the Party affected, including without limitation, fire, act of
God or the public enemy, riots and insurrections, fire, strikes, labor unrest, embargoes, judicial action, lack of or inability to obtain export permits or approvals, necessary labor, materials,
energy, components or machinery, and acts of civil or military authorities, then the Party affected shall be excused from such performance on a day-for-day basis to the extent
of such interference (and the other Party shall likewise be excused from performance on a day-for-day basis to the extent such Party's obligations relate to the performance so
interfered with); provided that the Party so affected shall use reasonable efforts to remove such causes of nonperformance applicable to its activities under this Agreement, including but not limited
to U.S. Export Administration Regulations. 

        13.10    Assignment.    Except as provided in this Section 13.10, neither Party shall assign this Agreement or
any right or interest under this Agreement, nor delegate any work or obligation to be performed under this Agreement (an "assignment"), without the other Party's prior written consent, which consent
shall not be unreasonably withheld. Notwithstanding the above: (i) QUALCOMM shall have the right to assign this Agreement to a majority owned affiliate or to a transferee or assignee of
QUALCOMM or the Wireless Business Solutions division of QUALCOMM, or the product line in which the QUALCOMM Service is used, without the prior written consent of CardioNet; and (ii) CardioNet
shall have the right to assign this Agreement to a majority owned affiliate or to a transferee or assignee of CardioNet, without the prior written consent of QUALCOMM, in connection with a merger or
sale of all or substantially all of CardioNet's assets to such majority owned affiliate, transferee or assignee, provided, however, that CardioNet may not, without the prior written consent of
QUALCOMM, assign this Agreement to any Competitor, whether by purchase, merger, acquisition of shares, spin-off or other means. For purposes of this Section 13.10, "Competitor"
means any person, organization, or other entity that provides products and/or services to third parties in any manner that, in QUALCOMM's discretion, competes with QUALCOMM. Any attempted assignment
in contravention of this Section 13.10 shall be void and ineffective. 

        13.11    Entire Agreement.    This Agreement, the Development Agreement and the NDA, together with all exhibits
attached hereto, which are incorporated herein by this reference, constitutes the entire agreement between the Parties and supersedes all prior oral or written negotiations and agreements between the
Parties with respect to the subject matter hereof. No modification, variation or amendment of this Agreement shall be effective unless made in writing and signed by both Parties. 

        13.12    Attorneys Fees.    In any action or proceeding at law or in equity to enforce or interpret the terms of this
Agreement, the prevailing Party shall be entitled to recover, in addition to any judgment in its favor, reasonable attorneys' fees, court costs, and expenses incurred in connection with the action or
proceeding. 

        IN
WITNESS WHEREOF, the Parties have caused their authorized representatives to execute this Agreement as of the Effective Date. 

	

CardioNet, Inc.	
 	

QUALCOMM Incorporated
	

By:	

/s/ James M. Sweeney
	
 	

By:	

/s/ Chris Wolfe

	

Name:	

James M. Sweeney	
 	

Name:	

Chris Wolfe
	

Title:	

Chairman & CEO	
 	

Title:	

President QWBS

17

 
 
 

Exhibit A    
    
    Definitions    
    

        "Activation Date" has the meaning set forth in Exhibit C. 

        "Affiliate"
means an entity that controls, is controlled by or is under common control with another entity. 

        "Base
Data Service Plan" has the meaning set forth in Exhibit B. 

        "Business
Day" means any day of the year other than a Saturday, Sunday, or U.S. national public holiday. 

        "CardioNet
Service" means CardioNet's 7/24 ECG data monitoring service provided by CardioNet to Monitored Persons using a Monitor and the Center. 

        "Center"
means CardioNet's monitoring center and facilities located at CardioNet and operated by CardioNet that houses the CardioNet server(s) and that monitors Monitored Person data
received from a Monitor via the CardioNet Service. 

        "Certification"
or "Certified" means the Monitor has completed testing on the Wireless Carrier network and has been approved by the Wireless Carrier for use and operation on the network
of the Wireless Carrier selected by QUALCOMM. 

        "Commercial
Release" means all tests for the Monitors and the CardioNet Service have been completed, and the Monitors have been activated for commercial service and revenue generation by
CardioNet in conjunction with the CardioNet Service. The Commercial Release date shall be confirmed in writing by the Parties. 

        "Covered
Areas" means those geographic areas in the continental United States where the single nationwide digital network of the single Wireless Carrier is providing coverage for
commercial use that
is data-capable (for data service) and voice-capable (for Voice Service). Covered Areas does not include roaming (i.e., geographic areas that are not a part of the single nationwide
digital network coverage area of the single Wireless Carrier). 

        "Development
Fees" shall have the meaning set forth in the Development Agreement. 

        "Event
of Default" shall have the meaning set forth in Section 11.3. 

        "Fraudulent
Calls" means calls associated with the loading by an unrelated and independent third party of a MDN/ESN combination onto a Monitor or other wireless device to use the network
of the Wireless Carrier for data service or Voice Service. 

        "Incremental
Data Service Plan" has the meaning set forth in Exhibit B. 

        "iQConnect"
or "Interactive QConnect" means QUALCOMM's interactive customer service website which allows CardioNet to check account status and submit requests to QUALCOMM. 

        "Losses"
means any and all damages, losses, claims, suits, obligations, liabilities, intellectual property rights violations, and costs and expenses, including reasonable attorneys'
fees. 

        "Monitor"
means a patient-worn monitoring product and service developed and sold and/or distributed by CardioNet that provides 7/24 bio-parameter monitoring. 

        "Monitored
Person" means any person that has entered into a Monitoring Contract with CardioNet. 

18

 

        "Monitoring
Contract" means the agreement, written or otherwise, entered into between CardioNet and a Monitored Person for Monitors and the provision of the CardioNet Service to such
Monitored Persons. 

        "NMF"
or "Network Management Facility" means the data interface and handling facilities located in San Diego, California and Las Vegas, Nevada and operated by QUALCOMM that supports
receipt and delivery of data to and from the Wireless Carrier using the QUALCOMM Service. 

        "NDA"
has the meaning set forth in Paragraph 9.3. 

        "Next
Generation Services" shall have the meaning set forth in Section 3.10. 

        "PSTN"
means the public switched telephone network. 

        "Parties"
collectively means CardioNet and QUALCOMM, and "Party" individually means CardioNet or QUALCOMM. 

        "Person"
means any individual, partnership, limited partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, governmental entity
or other entity of whatever nature. 

        "Prescribing
Entity" means any duly authorized Person, including but not limited to a doctor, physician, or other member of the medical profession, that prescribes Monitors and the
CardioNet Service to Monitored Persons. 

        "QWBS
Network" means the facilities, equipment and services of QUALCOMM's Wireless Business Solutions division, including the NMF, used for the provision of wireless services to the
customers of QUALCOMM's Wireless Business Solutions division. 

        "QUALCOMM
Service" means the wireless data service provided by QUALCOMM to CardioNet using the NMF and a Wireless Carrier selected by QUALCOMM that enables the flow of data between the
Monitor and the Center. The QUALCOMM Service does not include iQ or the Voice Service. 

        "Quick
Net Connect" shall have the meaning set forth in Section 3.10. 

        "Term"
shall have the meaning set forth in Section 11.1. 

        "Territory"
means the continental United States of America. 

        "Transition
Period" shall have the meaning set forth in Section 11.5. 

        "Voice
Service" means a terrestrial-based, CDMA wireless telecommunications service provided to CardioNet via a Wireless Carrier for use by Monitored Persons in conjunction with a
Monitor and the CardioNet Service. QUALCOMM shall facilitate providing Voice Service to CardioNet only if QUALCOMM has elected to become an authorized Voice Service reseller of the Wireless Carrier. 

        "Wireless
Carrier" means a wireless network operator that operates a terrestrial, CDMA-based wireless telecommunications network for data and/or voice services. 

19

  

 
 

Exhibit B    
    
    OUALCOMM Service Pricing    
    

	(a)
	Base
Data Service Plan Fees: 

Base
Data Service Fees: [...***...] per month per Monitor (Includes unlimited use of the QUALCOMM Service for up to [...***...] megabytes per
month per Monitor). For purposes of this Agreement, each megabyte includes all protocol overhead-related data bytes in addition to the actual Monitor operations-produced data. There shall be no
carryover of unused megabytes or any portion thereof from month to month. 

	(b)
	Incremental
Data Service Plan Fees: 

Incremental
Data Service Fees: Incremental service fees per month per Monitor over and above the Base Data Service Fees for each additional megabyte or any portion thereof used exceeding
[...***...] megabytes per month per Monitor shall be as set forth below: 

Greater
than [...***...] megabytes but less than or equal to [...***...] megabytes: [...***...] per megabyte; plus Greater than
[...***...] megabytes but less than or equal to [...***...] megabytes: [...***...] per megabyte; plus Greater than
[...***...] megabytes: [...***...] per megabyte for each megabyte over [...***...] megabytes. 

        In
the event that CardioNet's data usage profile for a significant number of Monitors regularly exceeds [...***...] megabytes per Monitor per month, then the
Parties agree, within a reasonable time after CardioNet so requests, to meet, review, and negotiate in good faith the amounts of any appropriate changes, if any, to the above Incremental Data Service
Fees. 

	(c)
	Voice
Service Fees: 

Voice
Service Fees: The best rate that QUALCOMM is able to negotiate with the Wireless Carrier, plus a [...***...] per month per Monitor administration fee to cover QUALCOMM's
costs associated with administering the Voice Service. 

	(d)
	Activation,
De-Activation and Other Fees: 

	Monitor De-activation Fee:	 	[...***...] per Monitor per occurrence
	MDN Change Fee:	 	[...***...] per Monitor per occurrence
	ESN Change Fee:	 	[...***...] per Monitor per occurrence
	Data Base Query Fees:	 	[...***...] per Monitor per occurrence

	(e)
	Other
Data Service Plan Fees: 

Reduced Data Service Fee:    [...***...] per month per Monitor. A Monitor is considered eligible for the Reduced Data
Service Fee during any month in which such Monitor communicates four hundred (400) kilobytes or less. 

        Notwithstanding
the foregoing, QUALCOMM shall [...***...] CardioNet for test data sent: (i) on up to fifteen (15) Monitors used by CardioNet for
engineering-level and testing within three (3) months after Commercial Release; and (ii) on up to five (5) Monitors used by CardioNet for engineering-level and testing use
thereafter, so long as CardioNet does not place such Monitors in the field for use by CardioNet customers. 

        The
Wireless Carrier may, as part of its service, add new services and features or modify, replace or enhance any of its services or features. In such cases, the Wireless Carrier may
provide QUALCOMM with notice thereof and QUALCOMM may choose to then notify CardioNet. The price for a new, modified, replaced or enhanced service or feature will be set forth in any such notice. If
CardioNet chooses to purchase any new, modified, replaced or enhanced service or features after the date of such notice, this Exhibit B shall be deemed amended by such notice and CardioNet
shall be obligated to pay for such service or feature as set forth in such notice, unless the Parties otherwise mutually agree in writing. 

***Confidential
Treatment Requested 

20

 
	(f)
	Wireline
Communication Link Fees: 

	• Frame Relay Service Connectivity Fee (Sprint):	 	[...***...] per month*
	• Frame Relay Service Connectivity Fee (AT&T):	 	[...***...] per month*
	• Toll-free Dial-Up Service Connectivity Fee:	 	[...***...] per minute*

	*
	The
above rates are pass-through rates charged to QUALCOMM by the applicable service provider as of the Effective Date. Should such pass-through rates increase
or decrease, then QUALCOMM shall notify CardioNet in writing of such increases or decreases, and CardioNet shall be responsible for paying to QUALCOMM such increased or decreased amounts. QUALCOMM
shall monitor capacity on the frame relay circuits and shall make capacity recommendations to CardioNet based on trends and usage. In the event CardioNet, in its discretion, elects to increase frame
relay circuit capacity, then CardioNet shall be responsible for paying to QUALCOMM any additional rate charges as a result of such increased frame relay circuit capacity. In the event of any revisions
to the terms (including price) of frame relay or 800 dial-up connectivity services as a result of agreement renegotiation, renewal, modification or otherwise between QUALCOMM and any
service providers, QUALCOMM shall notify CardioNet in writing of such revisions, and such revisions shall take effect as of the date of such written notice. 

***Confidential
Treatment Requested 

21

  

 
 

Exhibit C    
    
    Monitor Provisioning, Activation and Operating Procedures    
    

        Provisioning Process.    CardioNet shall ensure that the manufacturer of the modules that will be used in each Monitor sends to
the Wireless Carrier an equipment data file ("EDF" or "flat file") identifying the ESN for such modules, and QUALCOMM shall have no responsibility regarding the sending of such EDF or flat file to the
Wireless Carrier. CardioNet shall provide to QUALCOMM (or ensure that such module manufacturer provides to QUALCOMM) such EDF or flat file. After the Wireless Carrier has received such EDF or flat
file from the module manufacturer, the provisioning process is complete. Once the Wireless Carrier has completed the provisioning process for each Monitor, CardioNet may choose to activate such
Monitors by using the activation process set forth below. 

        Activation Process.    CardioNet shall utilize the QUALCOMM iQConnect website to initiate, monitor and retrieve activation
information. The Wireless Carrier will assign a MDN to each ESN and will notify QUALCOMM at such time as the Wireless Carrier has completed such MDN assignments. The Monitors shall be considered
activated for data service and Voice Service upon receipt by CardioNet of such MDN assignment notification from QUALCOMM via the IQConnect website (the "Activation Date"). Billing to CardioNet for
such activated Monitors for Voice Service and data service will commence upon the Activation Date. The applicable fees for Monitor activation are set forth in Exhibit B. QUALCOMM shall use
commercially reasonable efforts to complete any activation and/or other maintenance requests submitted by CardioNet within two (2) Business Days of their submission to QUALCOMM. CardioNet shall
use commercially reasonable efforts to batch Monitors for which CardioNet is requesting activation into groups of not less than ten (10) Monitors at any one time. 

        Monitor De-Activation.    CardioNet may de-activate Monitors via the IQConnect website. QUALCOMM shall
promptly forward such de-activation request to the Wireless Carrier, and QUALCOMM shall use commercially reasonable efforts to ensure that the Monitors for which de-activation
has been requested are de-activated within thirty (30) days of CardioNet's request. CardioNet shall pay to QUALCOMM the Service Plan Fees for voice and data services for the
Monitors, as set forth in Exhibit B, until such time as the Wireless Carrier has actually de-activated such Monitors. The applicable fees for Monitor de-activation are
set forth in Exhibit B. 

22

 
 
 

Exhibit D    
    
    Customer Service and Support Requirements    
    

        QUALCOMM Customer Service and Support Requirements.    QUALCOMM shall provide to CardioNet 7/24/365 technical support through
iQConnect and/or QUALCOMM's Customer Service Center Hotline at (800) 541-7490, or such as other number as may be designated by QUALCOMM. For calls placed to QUALCOMM's Customer
Service Center Hotline, QUALCOMM shall provide an initial response to any problem or inquiry reported by CardioNet and which QUALCOMM has determined, in its reasonable discretion, is reasonably
related to the QUALCOMM Service, within thirty (30) minutes of CardioNet's inquiry. Such initial response shall serve as an acknowledgment to CardioNet that QUALCOMM has received the inquiry,
and shall include QUALCOMM's estimate as to when CardioNet can expect additional information or resolution of the problem. In the event the reported problem is within QUALCOMM's control, QUALCOMM
shall use commercially reasonable efforts to promptly identify and resolve the problem. In the event the reported problem is identified by QUALCOMM as being related to the Wireless Carrier or its
facilities or network or is otherwise out of the control of QUALCOMM, QUALCOMM shall work with the Wireless Carrier to monitor, escalate, and coordinate the resolution of the problem, and QUALCOMM
shall provide periodic updates to CardioNet as to the status of the problem resolution efforts. 

        Problem Escalation Process.    CardioNet shall be solely responsible for providing any customer service and support regarding
the CardioNet Service directly to the Monitored Person and Prescribing Entities, and QUALCOMM shall have no obligation to any Monitored Person, Prescribing Entity or any third party for any such
customer service and support. No calls shall initiate from a Monitored Person, Prescribing Entity or other third party directly to QUALCOMM, and CardioNet shall instruct all Monitored Persons and
Prescribing Entities to contact CardioNet directly for all administrative and technical services. If after providing support to the best of its abilities CardioNet determines it is unable to resolve
an issue related to the QUALCOMM Service, CardioNet may call QUALCOMM's Customer Service Center Hotline for assistance on supporting the QUALCOMM Service or send email to
qc-support@qualcomm.com. CardioNet shall provide to QUALCOMM the following information when contacting QUALCOMM for technical support: (i) the nature of the problem;
(ii) document specific symptoms of the problem; (iii) timeline of the symptoms (when did the problem occur, what is affected); (iv) if necessary and applicable, specific Monitor
information, module ESN and/or MDN information. 

        Notification for Scheduled Maintenance.    QUALCOMM shall provide to CardioNet a minimum of twenty four (24) hours
advance notice of any scheduled downtime planned by QUALCOMM. QUALCOMM scheduled down times for the QUALCOMM Service will only occur within a specific maintenance window of 10 p.m. to
12 a.m. Pacific Time, as set forth in Section 4.1. QUALCOMM shall use commercially reasonable efforts to limit scheduled downtime to a cumulative one (1) hour per calendar week.
QUALCOMM shall use commercially reasonable efforts to coordinate maintenance activities with any required CardioNet maintenance activities. QUALCOMM shall use commercially reasonable efforts to pass
through to CardioNet within twenty-four (24) hours of receipt by QUALCOMM any downtime notifications that QUALCOMM receives from the Wireless Carrier. 

        Notification for Unscheduled Maintenance.    CardioNet acknowledges and agrees that, from time to time, QUALCOMM may need to
perform maintenance and/or other activities regarding the QUALCOMM Service and the NMF in a manner that requires unscheduled downtime. In the event of any unscheduled downtime for the QUALCOMM Service
and/or the NMF, QUALCOMM shall use commercially reasonable efforts to provide to CardioNet initial notification of such unscheduled downtime to a designated CardioNet phone number and/or pager within
fifteen (15) minutes of such downtime event. In the event that the CardioNet contact does not respond within fifteen (15) minutes of QUALCOMM's initial notification, QUALCOMM shall
activate further escalation to a 

23

 

CardioNet-supplied
list of phone numbers. QUALCOMM's initial notification shall include the scope of the downtime activity and the possible impact to the CardioNet Service (to the extent
they are each understood at the time), and an estimated time of resolution. In the event the downtime activity is not completed within thirty (30) minutes, QUALCOMM shall provide to CardioNet
regular and periodic updates until completion of the downtime activity. 

24

 
 

AMENDMENT NO. 1 TO COMMUNICATIONS VOICE AND DATA SERVICES PROVIDER AGREEMENT    
    

        THIS AMENDMENT NO. 1 is made and entered into as of February 2, 2004 (the "Amendment Date") by and between  CardioNet, Inc., a
California corporation (CardioNet) with its principal business located at 510 Market Street, San Diego, CA 92101, and  QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") with its principal
business located at 5775 Morehouse Drive, San Diego, California 92121,
with respect to the following facts: 

 
 

RECITALS    
    

A.    QUALCOMM
and CardioNet entered into that certain Communications Voice and Data Services Provider Agreement dated as of May 12, 2003 (the "Agreement"), pursuant to which QUALCOMM
provides to CardioNet the QUALCOMM Service and Voice Service and CardioNet uses QUALCOMM as the value added wireless service provider for the Monitor and the CardioNet Service (each as defined in the
Agreement). 

B.    By
this Amendment, QUALCOMM and CardioNet wish to amend the Agreement as specified herein. 

C.    Capitalized
terms not defined herein shall have the meanings set forth in the Agreement. 

 
 

TERMS    
    

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.    Amendment to Section 3.8.2.    Section 3.8.2 of the Agreement, entitled
"Center-to-NMF-Connectivity", is hereby amended by deleting Section 3.8.2 in its entirety and replacing it with the following: 

        "QUALCOMM
will provide wireline connectivity for the transfer of data between the NMF and the Center using redundant and diverse frame relay connectivity. QUALCOMM will manage the
routers on CardioNet's side of the frame relay circuitry, will monitor the connections for proper operation and capacity, and will provide trouble notification and escalation to the frame relay
service provider and to CardioNet if a problem occurs. QUALCOMM will pass through to CardioNet the prices charged to QUALCOMM by the frame relay service provider for each of the frame relay
connections set forth in Exhibit B. Frame relay circuits are specified as dual PVC (Las Vegas and San Diego) 128k Fractional T-1, with 64kbps CIR." 

        2.    Amendment to Exhibit B.    Exhibit B of the Agreement, entitled "QUALCOMM Services Pricing", is
hereby amended by deleting item (f) of Exhibit B in its entirety and replacing it with the following: 

	(f)
	Wireline
Communication Link Fees to CardioNet monitoring center, San Diego, CA: 

	 	 	• Frame Relay Service Connectivity Fee (Sprint):	 	[...***...] per month*
	 	 	• Frame Relay Service Connectivity Fee (AT&T):	 	[...***...] per month*

	

	Wireline
Communication Link Fees to CardioNet, Conshohocken, PA: 

	 	 	• Frame Relay Service Connectivity Fee (Sprint):	 	[...***...] per month*
	 	 	• Frame Relay Service Connectivity Fee (AT&T):	 	[...***...] per month*

	

	Dial-in
Communication Fees: 

	 	 	• Toll-free Dial-Up Service Connectivity Fee:	 	[...***...] per minute*

***Confidential Treatment Requested 

 

*The
above rates are pass-through rates charged to QUALCOMM by the applicable service provider as of the Effective Date and/or the Amendment Date, as applicable. Should such
pass-through rates increase or decrease, then QUALCOMM shall notify CardioNet in writing of such increases or decreases, and CardioNet shall be responsible for paying to QUALCOMM such
increased or decreased amounts. QUALCOMM shall monitor capacity on the frame relay circuits and shall make capacity recommendations to CardioNet based on trends and usage. In the event CardioNet, in
its discretion, elects to increase frame relay circuit capacity, then CardioNet shall be
responsible for paying to QUALCOMM any additional rate charges as a result of such increased frame relay circuit capacity. In the event of any revisions to the terms (including price) of frame relay
or 800 dial-up connectivity services as a result of agreement renegotiation, renewal, modification or otherwise between QUALCOMM and any service providers, QUALCOMM shall notify CardioNet
in writing of such revisions, and such revisions shall take effect as of the date of such written notice. 

        3.    Counterparts and Facsimile Delivery.    This Amendment may be executed in two or more identical counterpoints,
each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute this Amendment when a duly authorized representative of each party has signed a
counterpart. The parties may sign and deliver this Amendment by facsimile transmission. Each party agrees that the delivery of this Amendment by facsimile shall have the same force and effect as
delivery of original signatures and that each party may use such facsimile signatures of the execution and delivery of this Amendment by all parties to the same extent that an original signature could
be used. 

        4.    Effectiveness of Contract.    Except as expressly provided herein, nothing set forth in this Amendment shall be
deemed to waive or modify any of the provisions of the Contract, or any amendment or addendum thereto. In the event of any conflict between the Contract, this Amendment or any other amendment thereto,
the document later in time shall prevail. 

IN
WITNESS WHEREOF, the Parties hereto have executed this Amendment through their duly authorized representatives on the date and year first above written. 

	QUALCOMM Incorporated	 	CardioNet, Inc.
	

By:	
 	

/s/ John Gilbert	
 	

By:	
 	

/s/ John Sheridan
	 	 	
	 	 	 	

	Name:	 	John Gilbert	 	 	 	John Sheridan
	 	 	
	 	 	 	 
	Title:	 	Vice President, Finance	 	 	 	Executive Vice President
	 	 	
	 	 	 	 

2

Amendment No. 2 to Service Provider Agreement  

        THIS AMENDMENT No. 2 is made and entered into as of June 11, 2004 (the "Amendment Date") by and between CardioNet, Inc., a California
Corporation, ("CardioNet") with its principal place of business located at 510 Market Street, San Diego, CA 92101, and QUALCOMM Incorporated, a Delaware Corporation ("QUALCOMM"), with its principal
place of business at 5775 Morehouse Drive, San Diego, CA 92121. 

Recitals  

        A.    QUALCOMM
and CardioNet entered into a Communications Voice and Data Services Provider Agreement effective May 12, 2003, as amended (the "Agreement"), pursuant to
which CardioNet purchases voice and data communications services from QUALCOMM for use in the CardioNet Service (as such terms are defined in the Agreement). 

        B.    By
this Amendment, QUALCOMM and CardioNet wish to amend the Agreement as specified herein. 

        C.    Capitalized
terms not defined herein shall have the meaning set forth in the Agreement. 

Terms  

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.    Amendment to Exhibit B.    Exhibit B of the Agreement, entitled "QUALCOMM Service Pricing" is
hereby amended as follows: 

        a.     Delete
Paragraph (b) in its entirety and replace it with the following: 

        "(b) Incremental
Data Service Plan Fees: 

Incremental
Data Service Fees: Incremental service fees per month per Monitor over and above the Base Data Service Fees for each additional megabyte or any portion thereof used exceeding
[...***...] megabytes per month per Monitor shall be [...***...] per megabyte. 

In
the event that CardioNet's data usage profile for more than fifty percent (50%) of its Monitors regularly exceeds [...***...] megabytes per Monitor per month, then the
Parties agree, within a reasonable time after CardioNet so requests, to meet, review, and negotiate in good faith the amounts of any appropriate changes, if any, to the above Incremental Data Service
Fees." 

        b.     Modify
the Reduced Data Service Fee in Paragraph (e) to be [...***...] per month per Monitor, not [...***...] per
month per Monitor. 

        2.    Effectiveness of New Pricing.    The Parties agree that the above pricing set forth in this Amendment shall
become effective and apply to the entire population of Monitors, only after a minimum of seventy percent (70%) of all Monitors provisioned on the QUALCOMM Service are provisioned and operating on the
"Sprint PCS 3G Data Service Usage Price Plan" as defined in the "Private Label PCS Services Agreement" between QUALCOMM and Sprint PCS (the "70% Condition"). QUALCOMM shall promptly notify CardioNet
in writing regarding the date that CardioNet has met the 70% Condition, and the new pricing set forth in this Amendment above shall become effective on the first day of the month following the date
that QUALCOMM provides notice to CardioNet. Thereafter, CardioNet will use its best efforts to promptly migrate any remaining Monitors to the "Sprint PCS 3G Data Service Usage Plan". 

***Confidential
Treatment Requested 

        3.    Amendment to paragraph 9.4.    Paragraph 9.4 of the Agreement, entitled "Exclusivity" is hereby
amended by deleting paragraph 9.4 in its entirety and replacing it with the following: 

"9.4
Exclusivity. The Parties agree that QUALCOMM shall not provide the QUALCOMM Service to any direct competitor of CardioNet that provides ECG-based, diagnostic heart rhythm
cardiac monitoring service(s) (excluding wireless communications enabled acute care or therapeutic devices such as, but not limited to, implantable defibrillators or pacemakers) for a period of five
(5) years from the Effective Date (the "Exclusivity Period"), as long as CardioNet meets the following minimum number of active Monitors on the QUALCOMM Service as of the end of each calendar
year identified below: 

	2003:	 	[...***...] active Monitors
	2004:	 	[...***...] active Monitors
	2005:	 	[...***...] active Monitors
	2006:	 	[...***...] active Monitors
	2007:	 	[...***...] active Monitors

        An
"active Monitor" is defined as a Monitor that is provisioned on the QUALCOMM Service and QUALCOMM is able to bill CardioNet for such Monitor on a recurring basis during such calendar
year. 

        During
the Exclusivity Period, QUALCOMM shall not provide to any competitor of CardioNet the Specifications (as defined in the Development Agreement) for the purpose of such competitor
developing, a cardiac monitoring device(s) or service(s) competitive to CardioNet's cardiac monitoring device(s) or service(s). 

        In
the event that CardioNet does not meet the above minimum number of active Monitors by December 31st of the stated year, the exclusivity granted to CardioNet as
set forth above during the Exclusivity Period shall automatically terminate and QUALCOMM shall have the right to offer the QUALCOMM Service at its sole discretion, including to any organizations or
entities offering cardiac diagnostic monitoring services. 

        The
Parties agree that QUALCOMM may, at any time after December 31, 2006, request in writing to CardioNet that the Exclusivity Period be terminated. Upon QUALCOMM's written
request, the Parties shall meet and negotiate in good faith regarding the termination of the Exclusivity Period; provided,
however, that the Exclusivity Period may be terminated early only if the parties are able to agree on the amount of a payment in respect of the termination ("Exclusivity Termination Payment"). Upon
such agreement, the parties shall incorporate into the Agreement through an amendment duly executed by both Parties any changes required as a result of such negotiations. In the event the parties are
unable to agree upon the amount of the Exclusivity Termination Payment, then the matter will be submitted for mediation in San Diego, California by a single mediator whom the Parties shall mutually
agree upon, and the cost for the mediation shall be shared equally between the Parties." 

        4.    Effect of Amendment.    Except as expressly provided herein, nothing set forth in this Amendment shall be deemed
to waive or modify any of the provisions of the Agreement. In the event of any conflict between the Agreement, this Amendment or any other amendment thereto, the document later in time shall prevail. 

***Confidential
Treatment Requested 

        IN
WITNESS HEREOF, the parties hereto have executed this Amendment through their duly authorized representatives on the Amendment Date. 

	CardioNet, Inc.	 	QUALCOMM Incorporated
	

By:	
 	

/s/  MARK J. GERGEN      
	
 	

By:	
 	

/s/  JOHN GILBERT      

	

Name:	
 	

Mark J. Gergen
	
 	

Name:	
 	

John Gilbert

	

Title:	
 	

Executive Vice President
	
 	

Title:	
 	

VP, Finance

AMENDMENT NO. 3 TO COMMUNICATIONS VOICE AND DATA SERVICES PROVIDER AGREEMENT  

        THIS AMENDMENT NO. 3 is made and entered into as of June 16, 2004 (the "Amendment Date") by and between  CardioNet, Inc., a
California corporation (CardioNet) with its principal business located at 510 Market Street, San Diego, CA 92101, and  QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") with its principal
business located at 5775 Morehouse Drive, San Diego, California 92121,
with respect to the following facts: 

RECITALS  

        A.    QUALCOMM
and CardioNet entered into that certain Communications Voice and Data Services Provider Agreement dated as of May 12, 2003 (the "Agreement"), pursuant to
which QUALCOMM provides to CardioNet the QUALCOMM Service and Voice Service and CardioNet uses QUALCOMM as the value added wireless service provider for the Monitor and the CardioNet Service (each as
defined in the Agreement). 

        B.    By
this Amendment, QUALCOMM and CardioNet wish to amend the Agreement as specified herein. 

        C.    Capitalized
terms not defined herein shall have the meanings set forth in the Agreement. 

TERMS  

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.    Amendment to Section 3.8.2.    Section 3.8.2 of the Agreement, entitled
"Center-to-NMF-Connectivity", is hereby amended by deleting Section 3.8.2 in its entirety and replacing it with the following: 

        "QUALCOMM
will provide wireline connectivity for the transfer of data between the NMF and the Center using redundant and diverse frame relay connectivity. QUALCOMM will manage the
routers on CardioNet's side of the frame relay circuitry, will monitor the connections for proper operation and capacity, and will provide trouble notification and escalation to the frame relay
service provider and to CardioNet if a problem occurs. QUALCOMM will pass through to CardioNet the prices charged to QUALCOMM by the frame relay service provider for each of the frame relay
connections set forth in Exhibit B. Frame relay circuits are specified as dual PVC (Las Vegas and San Diego) 256k Fractional T-1, with 128kbps CIR." 

 

        2.    Amendment to Exhibit B.    Exhibit B of the Agreement, entitled "QUALCOMM Services Pricing", is
hereby amended by deleting item (f) of Exhibit B in its entirety and replacing it with the following: 

        (f)    Wireline
Communication Link Fees to CardioNet monitoring center, San Diego, CA: 

	• Frame Relay Service Connectivity Fee (Sprint):	 	[. . . *** . . .] per month*
	• Frame Relay Service Connectivity Fee (AT&T):	 	[. . . *** . . .] per month*
	

Wireline Communication Link Fees to CardioNet, Conshohocken, PA:
	

• Frame Relay Service Connectivity Fee (Sprint):	
 	

[. . . *** . . .] per month*
	• Frame Relay Service Connectivity Fee (AT&T):	 	[. . . *** . . .] per month*
	

Dial-in Communication Fees:
	

• Toll-free Dial-Up Service Connectivity Fee:	
 	

[. . . *** . . .] per minute*

	*
	The
above rates are pass-through rates charged to QUALCOMM by the applicable service provider as of the Effective Date and/or the Amendment Date, as applicable. These rates
include applicable Taxes. Should such pass-through rates increase or decrease, then QUALCOMM shall notify CardioNet in writing of such increases or decreases, and CardioNet shall be
responsible for paying to QUALCOMM such increased or decreased amounts. QUALCOMM shall monitor capacity on the frame relay circuits and shall make capacity recommendations to CardioNet based on trends
and usage. In the event CardioNet, in its discretion, elects to increase frame relay circuit capacity, then CardioNet shall be responsible for paying to QUALCOMM any additional rate charges as a
result of such increased frame relay circuit capacity. In the event of any revisions to the terms (including price) of frame relay or 800 dial-up connectivity services as a result of
agreement renegotiation, renewal, modification or otherwise between QUALCOMM and any service providers, QUALCOMM shall notify CardioNet in writing of such revisions, and such revisions shall take
effect as of the date of such written notice. 

        ***
Confidential Treatment Requested 

2

 

        3.    Counterparts and Facsimile Delivery.    This Amendment may be executed in two or more identical counterpoints,
each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute this Amendment when a duly authorized representative of each party has signed a
counterpart. The parties may sign and deliver this Amendment by facsimile transmission. Each party agrees that the delivery of this Amendment by facsimile shall have the same force and effect as
delivery of original signatures and that each party may use such facsimile signatures of the execution and delivery of this Amendment by all parties to the same extent that an original signature could
be used. 

        4.    Effectiveness of Contract.    Except as expressly provided herein, nothing set forth in this Amendment shall be
deemed to waive or modify any of the provisions of the Contract, or any amendment or addendum thereto. In the event of any conflict between the Contract, this Amendment or any other amendment thereto,
the document later in time shall prevail. 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Amendment through their duly authorized representatives on the date and year first above written. 

	QUALCOMM Incorporated	 	CardioNet, Inc.
	

By:	
 	

/s/  JOHN GILBERT      
	
 	

By:	
 	

/s/  MARK J. GERGEN      

	

Name:	
 	

John Gilbert
	
 	

Name:	
 	

Mark J. Gergen

	

Title:	
 	

Vice President, Finance
	
 	

Title:	
 	

Executive Vice President

3

 
 

Amendment No. 4 to Communications Voice and Data Services
  Provider Agreement    
    

        THIS AMENDMENT No. 4 is made and entered into as of September 17, 2004 (the "Amendment Date") by and between  CardioNet, Inc., a California Corporation, ("CardioNet") with its principal place of business located at 1010 2ndAvenue, #700, San
Diego, CA 92101, and QUALCOMM Incorporated, a Delaware Corporation ("QUALCOMM"), with its principal place of business at 5775 Morehouse Drive, San
Diego, CA 92121. 

 
 

Recitals    
    

        A.    QUALCOMM
and CardioNet entered into a Communications Voice and Data Services Provider Agreement effective May 12, 2003, as amended (the "Agreement"), pursuant to
which CardioNet purchases voice and data communications services from QUALCOMM for use in the CardioNet Service (as such terms are defined in the Agreement). 

        B.    By
this Amendment, QUALCOMM and CardioNet wish to amend the Agreement as specified herein. 

        C.    Capitalized
terms not defined herein shall have the meaning set forth in the Agreement. 

 
 

Terms    
    

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.    Amendment to Section 3.2.    Section 3.2 of the Agreement, entitled "QUALCOMM Service" is hereby
amended by adding the following sentence to the end of Section 3.2: 

        "QUALCOMM
agrees to notify CardioNet in writing of any changes in the QUALCOMM Service prior to any implementation of the change, so that CardioNet may determine whether such changes may
affect the quality of the Monitors." 

        2.    Counterparts and Facsimile Delivery.    This Amendment may be executed in two or more identical counterparts,
each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute this Amendment when a duly authorized representative of each party has signed a
counterpart. The parties may sign and deliver this Amendment by facsimile transmission. Each party agrees that the delivery of this Amendment by facsimile shall have the same force and effect as
delivery of original signatures and that each party may use such facsimile signatures of the execution and delivery of this Amendment by all parties to the same extent that an original signature could
be used. 

        3.    Effectiveness of Amendment.    Except as expressly provided herein, nothing set forth in this Amendment shall be
deemed to waive or modify any of the provisions of the Agreement. In the event of any conflict between the Agreement, this Amendment or any other amendment thereto, the document later in time shall
prevail. 

        IN
WITNESS HEREOF, the parties hereto have executed this Amendment through their duly authorized representatives on the Amendment Date. 

	CardioNet, Inc.	 	QUALCOMM Incorporated
	

By:	

/s/  MARK J. GERGEN      
	
 	

By:	

/s/  JOHN GILBERT      

	

Name:	

Mark J. Gergen
	
 	

Name:	

John Gilbert

	

Title:	

Executive Vice President
	
 	

Title:	

Vice President, Finance

EXECUTION COPY  

 
 

Amendment No. 5 to Service Provider Agreement    
    

        THIS AMENDMENT No. 5 (this "Amendment") is made and entered into as of September 1, 2005 (the "Amendment Date") by and between
CardioNet, Inc., a California corporation ("CardioNet"), with its principal place of business located at 1010 2ndAvenue, Suite No. 700, San Diego, CA 92101, and QUALCOMM
Incorporated, a Delaware corporation ("QUALCOMM"), with its principal place of business at 5775 Morehouse Drive, San Diego, CA 92121. 

 
 

Recitals    
    

A.    QUALCOMM
and CardioNet entered into that certain Communications Voice and Data Services Provider Agreement as of May 12, 2003, as amended (the "Agreement"), pursuant to which
CardioNet purchases wireless voice and data communications services from QUALCOMM for use in the CardioNet Service (as such terms are defined in the Agreement). 

B.    By
this Amendment, QUALCOMM and CardioNet wish to amend the Agreement as specified herein. 

C.    Unless
otherwise stated in this Amendment, all capitalized terms used herein but not defined herein shall have the meaning set forth in the Agreement. 

 
 

Agreement    
    

        NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.    Amendment to Paragraph (a) of Exhibit B.    Paragraph (a) of Exhibit B (QUALCOMM
Service Pricing) of the Agreement is amended and restated in its entirety as follows: 

        "(a)    Base Data Service Plan Fees:    The following volume-tiered Base Data Service Fees are applicable to the
Revenue Monitors: 

	No. Monitors
 
	 	Base Data Service Fee

Per Month Per Revenue Monitor

	1 – [...***...]	 	[. . . *** . . .]
	[...***...] and above	 	[. . . *** . . .]

For
the purposes of this Agreement, the "Revenue Monitors" shall mean those Monitors other than those Monitors that qualify for the Reduced Data Service Fee set forth in Paragraph (e). 

        2.    Amendment to Paragraph (b) of Exhibit B.    Paragraph (b) of Exhibit B (QUALCOMM
Service Pricing) of the Agreement shall be amended and restated in its entirety as follows: 

"(b)
Incremental Data Service Plan Fees and Adjustment to Base Data Service Plan Fees. 

	(i)
	The
Parties acknowledge and agree that the Incremental Data Service Plan Fees will no longer be applicable as of September 1, 2005.

	(ii)
	In
the event that the "Average Use Per Revenue Monitor" of the QConnect Service exceeds
[. . . *** . . .] wireless megabytes per calendar month for two (2) months,
consecutive or otherwise, during any three (3) calendar month period, then QUALCOMM may, in its sole discretion, initiate a discussion with CardioNet to discuss CardioNet's messaging profile
and business needs. The "Average Use Per Revenue Monitor" shall be calculated each month as follows: The sum of all wireless megabytes used by all Revenue Monitors for one calendar month divided by
the number of Revenue Monitors for such month. For example, if the total number of wireless megabytes used by all Revenue Monitors during September 1, 2005 through September 30, 2005 is
[. . . *** . . .] 

        ***
Confidental Treatment Requested 

 

megabytes
and the number of Revenue Monitors during that period is [. . . *** . . .], then, the
Average Use Per Revenue Monitor is equal to [. . . *** . . .] megabytes such period." 

        3.    Amendment to Section 3.3.    Section 3.3 (Pricing) of the Agreement is amended and restated in its
entirety as follows: 

"3.3
Pricing. The pricing and rates that CardioNet shall pay to QUALCOMM for the QUALCOMM Service and the Voice Service shall be as set forth in
Exhibit B. Such pricing may be modified only upon mutual written agreement of the Parties. If QUALCOMM, in its sole discretion, provides pricing or rates to any direct competitor of CardioNet
for ECG-based, diagnostic heart rhythm cardiac monitoring services(s) that is more favorable than the pricing or rates that QUALCOMM is providing to CardioNet under this Agreement for the
same or similar services from QUALCOMM and under the same or similar terms and conditions contained in this Agreement, including QUALCOMM Services volume, then QUALCOMM shall also provide to CardioNet
such more favorable pricing or rates." 

        4.    Amendment to Section 3.    Section 3 of the Agreement shall be amended by inserting the following
Section 3.11 immediately after the entire clause set forth in Section 3.10: 

"3.11
OUALCOMM's [. . . *** . . .]. During the
Term of this Agreement, if at any time CardioNet (or any of its affiliates) determines to develop, offer, sell or provide devices and/or services similar to or related to the Monitors (including any
future and new module devices or services similar to or related to the Monitors or the CardioNet Service)
[. . . *** . . .] pursuant to terms and conditions to be mutually agreed to by CardioNet and
QUALCOMM. In the event that the Parties are unable to reach a mutually satisfactory agreement regarding
[. . . *** . . .]." 

        5.    Amendment to Section 7.    Section 7 of the Agreement shall be amended by inserting the following
Section 7.10 immediately after the entire clause set forth in Section 7.9: 

"Section 7.10
Compliance with Certain Wireless Provider Requirements. During the Term and the Transition Period, CardioNet agrees that it will
comply with the following requirement of the Wireless Provider: 

CardioNet
intends that the CardioNet Service will be accompanied by a land-line or terrestrial circuit-device, which allows the Monitored Person to download data collected throughout the
day and sends it back to the Center." 

        6.    Amendment to Section 9.4.    Section 9.4 (Exclusivity) of the Agreement shall be deleted in its
entirety. 

        7.    Amendment to Section 11.1.    Section 11.1 (Term) of the Agreement shall be amended and restated
in its entirety as follows: 

"Section 11.1
Term. This Agreement shall commence on the Effective Date and shall continue in effect through September 1, 2010 (the
"Original Term"). Thereafter, this Agreement shall be automatically renewed for successive periods of one (1) year each, unless terminated by either Party on at least ninety (90) days
advance written notice to the other Party (the "Renewal Term"). The Original Term and the Renewal Term shall collectively be referred to as the "Term." Notwithstanding the foregoing, QUALCOMM may
terminate this Agreement as set forth in Section 11.2 below." 

        ***
Confidential Treatment Requested 

2

 

        8.    Amendment to Section 11.2.    Section 11.2 (Termination for Convenience) of the Agreement shall be
amended and restated in its entirety as follows: 

"Section 11.2
Termination for Convenience.    Neither Party may terminate this Agreement for convenience prior to expiration of the
Original Term. Notwithstanding the foregoing, QUALCOMM may terminate this Agreement at any time during the Original Term and during any Renewal Term, (i) if the aggregate number of Revenue
Monitors for any one (1) calendar month—period is less than [. . . *** . . .]
units or (ii) if an agreement between QUALCOMM and the Wireless Provider expires or terminates during the Original Term or during any Renewal Term. In such event, QUALCOMM shall provide to
CardioNet as much advance written notice of termination of this Agreement as is reasonably practicable under the circumstances." 

        9.    Amendment to Section 11.5.    Section 11.5 (Transition Period) of the Agreement shall be amended
and restated in its entirety as follows: 

"Section 11.5  Transition Period.    The Parties acknowledge and agree that upon the expiration or termination of this Agreement,
CardioNet will need adequate time to phase-out or transition to an alternative service provider for the provision of service similar to that provided by the QUALCOMM Service. Accordingly,
upon expiration of the Term, or upon earlier termination of this Agreement by QUALCOMM for any reason other than for an Event of Default by CardioNet or as a result of the termination or expiration of
an agreement between QUALCOMM and the Wireless Provider, QUALCOMM shall, for (i) a period of one (1) year from the date of expiration of the Term or
the date that either Party provides written notice to the other Party of any earlier termination, or (ii) until successful completion of any such phase-out or transition, whichever
is earlier (the "Transition Period"), continue to provide to CardioNet the QUALCOMM Service and the Voice Service in accordance with the terms and conditions of this Agreement. All provisions of this
Agreement, including the pricing set forth in Exhibit B, shall continue to apply, and CardioNet shall continue to pay to QUALCOMM the applicable amounts for the QUALCOMM Service and the Voice
Service. In addition, during the Transition Period: (i) QUALCOMM shall work in good faith with CardioNet, at CardioNet's expense, to phase-out the QUALCOMM Service or to transition
CardioNet to another service provider acceptable to CardioNet and CardioNet shall cooperate fully regarding such phase-out or transition; (ii) QUALCOMM shall have the right to
reduce its support requirements to levels commensurate with declining Monitored Person volume and reduced new Monitored Person additions, if any; and (iii) CardioNet shall have the right to
continue adding new Monitored Persons throughout the term of the Transition Period. Upon expiration of the Transition Period, QUALCOMM may discontinue providing the QUALCOMM Service to CardioNet
without incurring any liability." 

        10.    Amendment to Section 13.    Section 13 of the Agreement shall be amended by inserting the
following Section 13.13 immediately after the entire clause set forth in Section 13.12. 

"Section 13.13
Territory.    Unless context requires otherwise, this Agreement contemplates that each Party's obligations are to be
performed within the United States. Therefore, the provision of the QUALCOMM Service, the provision of the CardioNet Service, any grant of intellectual license by one Party to the other Party set
forth in this Agreement and the Development Agreement, if applicable, are limited to the United States." 

        11.    Effect of Amendment.    Except as expressly provided herein, nothing set forth in this Amendment shall be
deemed to waive or modify any of the provisions of the Agreement. In the event of any conflict between the Development Agreement, the Agreement, this Amendment or any other amendment thereto, the
document later in time shall prevail. 

        12.    Counterparts and Facsimile Delivery.    This Agreement may be signed in any number of counterparts, each of
which will be an original, with the same effect as if the signatures hereto were 

        ***
Confidental Treatment Requested 

3

 

upon
the same instrument. The Parties may sign and deliver this Agreement by facsimile transmission. Each Party agrees that the delivery of the Agreement by facsimile shall have the same force and
effect as delivery of original signatures and that each Party may use such facsimile signatures as evidence of the execution and delivery of this Agreement by all Parties to the same extent that an
original signature could be used. 

[The remainder of this page intentionally left blank]

4

 

IN
WITNESS HEREOF, the parties hereto have executed this Amendment through their duly authorized representatives on the Amendment Date. 

	CardioNet, Inc.	 	QUALCOMM Incorporated
	

By:	
 	

/s/ James M. Sweeney	
 	

By:	
 	

/s/ John Gilbert
	 	 	
	 	 	 	

	Name:	 	James M. Sweeney	 	 	 	John Gilbert
	 	 	
	 	 	 	

	Title:	 	Chairman & CEO	 	 	 	VP, Finance
	 	 	
	 	 	 	

5

QuickLinks

Exhibit 10.19

COMMUNICATIONS VOICE AND DATA SERVICES PROVIDER AGREEMENT

AGREEMENT

Exhibit A Definitions

Exhibit B OUALCOMM Service Pricing

Exhibit C Monitor Provisioning, Activation and Operating Procedures

Exhibit D Customer Service and Support Requirements

AMENDMENT NO. 1 TO COMMUNICATIONS VOICE AND DATA SERVICES PROVIDER AGREEMENT

RECITALS

TERMS

Amendment No. 4 to Communications Voice and Data Services Provider Agreement

Recitals

Terms

Amendment No. 5 to Service Provider Agreement

Recitals

AgreementQuickLinks
 -- Click here to rapidly navigate through this document
  

 
 

Exhibit 10.20    
    

***Text
Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 230.406 

PURCHASE AGREEMENT 

by
and between 

VARIAN, INC.
ELECTRONICS MANUFACTURING

("VEM") 

and 

CARDIONET,
INCORPORATED

("CARDIONET") 

1

 
 
 

PURCHASE AGREEMENT    
    

1.     GENERAL  

	1.1.
	Parties.
This Purchase Agreement ("AGREEMENT") is entered into this fourteenth day of September, 2001 ("Effective Date") by Varian, Inc., a Delaware corporation, Electronics
Manufacturing, 615 South River Drive, Tempe, Arizona 85281 ("VEM"), and Cardionet, Incorporated, a California corporation, whose principal place of business is 510 Market Street, San Diego, California
92101 ("CARDIONET").

	1.2.
	Purpose
and Agreement. The purpose of this AGREEMENT is to establish the terms and conditions under which VEM agrees to assemble for CARDIONET a line of products identified on
Schedule A of APPENDIX A (herein "Product(s) or "Unit(s)"). VEM agrees to assemble for CARDIONET and CARDIONET agrees to purchase from VEM the Products according to the drawings, specifications
and bills of material supplied by CARDIONET and accepted by VEM. CARDIONET desires to purchase such Products from VEM in accordance with the mutual covenants, agreements, representations and other
terms and conditions of this AGREEMENT ("Terms and Conditions").

	1.3.
	Applicability.
All VEM Products and services are furnished only on the Terms and Conditions stated herein to the exclusion of any CARDIONET terms and conditions in any specific order
documentation, or on the face of any VEM Quotation, preprinted or otherwise, except as to identification and quantity of Products. Both parties agree that the Terms and Conditions herein will govern
with respect to all sales and orders hereunder, unless in a particular case they mutually agree to the contrary. This AGREEMENT shall be part of each Quotation issued by VEM to CARDIONET and each
Purchase Order issued by CARDIONET to VEM, whether or not referenced on such Quotation or Purchase Order, and this AGREEMENT shall apply automatically to any purchase or sale transaction between
CARDIONET and VEM whether or not such legend appears on the relevant documents.

	1.4.
	Effective
Date. This AGREEMENT shall commence on the Effective Date.

	1.5.
	Definitions.
As used herein: See Schedule A 

2.     PRICES  

	2.1
	Per
Unit Prices. On or around the date hereof, VEM will provide CARDIONET a quotation for the price per unit for the Products. The price quoted shall be firm for all purchase orders
issued to VEM by CARDIONET within 45 days of the date of the quotation (the "Expiration Date"). VEM reviews the prices of the labor, parts, and material no less often than monthly and reserves
the right to re-quote the price per Unit for all purchase orders issued after the expiration date of the prior quotation (the "Revised Quotation"). At least one week prior to the
Expiration Date of each quotation, VEM agrees to provide to CARDIONET either confirmation that the expiring quotation is firm for the next 45-day period or to issue a Revised Quotation.
VEM will only notify CARDIONET of price changes, if pricing does not change no notification will be sent to CARDIONET. 

VEM
agrees that each Revised Quotation shall provide sufficient detail to allow CARDIONET to understand the changes in labor, parts and material over the prior quotation. 

In
addition, the parties agree to meet no less often than quarterly, as long as this agreement is in effect, to review in detail the product specifications, bill of materials, approved supplier list,
prices for the Products, delivery, quality and other business issues as necessary. 

2

 

The
original and each successive quotation will be incorporated in this agreement as Schedule B. 

	2.2
	Per
Unit Price Changes. In the event of unanticipated cost changes of
[. . . *** . . .] of the original total cost, for reasons outside VEM's control, VEM may change
firm or agreed prices on future purchase orders so long as the price change is not due to negligence on the part of VEM as follows: VEM will present the cost change information to CARDIONET for review
and consideration. Any changes to previously agreed pricing will be negotiated with CARDIONET. It will be the responsibility of VEM to show just cause for any price change, and it will be the
responsibility of CARDIONET to show just cause for refusal of VEM submitted price change. If VEM and CARDIONET are not able to reach agreement on new pricing, VEM will perform according to the
original purchase orders and original prices on existing purchase Orders and a plan will be developed by VEM and CARDIONET for an orderly transition, terminating this agreement.

	2.3
	In
addition, VEM may change prices if CARDIONET requests changes to the drawings, specifications or bills of material, thereby resulting in an Engineering Change Order (ECO).
CARDIONET authentication of VEM generated ECO implementation documentation will constitute CARDIONET acceptance of new pricing. CARDIONET will issue Change Orders to affected Purchase Orders for new
agreed upon pricing.

	2.4
	NRE
Charges. In addition to Per Unit Prices, VEM will charge and CARDIONET will pay for the previously quoted costs of reimbursable non-recurring engineering (NRE) charges
related to assembly of Units for CARDIONET. Issuance of Purchase Orders by CARDIONET for such Products will confirm acceptance of NRE Charges.

	2.5
	VEM
Cost Information. VEM will provide cost breakdown information with its Quotations for Products; provided, however, it shall be used only as CARDIONET's internal company
information. Any such information supplied by VEM shall be considered the "Confidential Information" of VEM subject to the obligations not to use or disclose the same as provided in the nondisclosure
agreement between the parties.

	2.6
	Taxes.
All taxes or charges, other than those based upon net income, imposed by any taxing authority upon the manufacture, sale, shipment, or use of the Units which VEM is obligated
to pay or collect, including customs and duties, shall be the responsibility of CARDIONET and if not paid directly by CARDIONET shall be added to the purchase price paid by CARDIONET to VEM unless
CARDIONET provides VEM with tax exemption certificates acceptable to the appropriate taxing authorities. CARDIONET will notify VEM in writing via Purchase Order or advise VEM of any Units that are not
intended for resale; so that applicable sales and/or use taxes may be applied. If CARDIONET does not provide such notice, CARDIONET will accrue and pay appropriate authorities directly. 

3      DELIVERY  

	3.1.
	Forecasts.
The forecasting, scheduling and delivery of Products will be handled in the following manner in order to enhance the ability of CARDIONET and VEM to optimize asset flow.
In order to provide this flexibility in VEM's normal mode of operation, commitment to material flow in the VEM "pipeline" will be governed by the lead time of the materials, and based on purchase
order requirements for materials whose lead times fall within the purchase order window and by forecasts for those materials whose lead times fall outside the purchase order window. VEM will provide
in writing, a list of all materials falling outside the purchase order lead time window prior to VEM's procurement of those materials. The actual implementation of Purchase Order activity may change
from time to time as the 

        ***
Confidential Treatment Requested 

3

 

parties
may agree, including but not limited to the possible use of "blanket" purchase orders, use of Electronic Data Interchange (EDI), etc. 

	3.2.
	Forecast
and Purchase Order Commitment. CARDIONET will be responsible for providing VEM with current month plus 3 months rolling purchase orders and a monthly rolling forecast
for the next six (6) months in monthly buckets (one month periods) by Product, subject to the flexibility parameters specified in Section 3.5 below. Changes to purchase orders will be
limited to the changes permitted by the flexibility parameters listed in Section 3.5 of this AGREEMENT. CARDIONET will be liable for the material commitments made by VEM for the first one
hundred twenty (120) days as specified in section 3.5 below, in cases of Product cancellation and/or ECO changes to individual parts. VEM commits to make every reasonable effort to
utilize such Material elsewhere, return it to suppliers, or limit cancellation charges on all Material in this one hundred twenty (120) day period. A few CARDIONET specific parts may require a
longer time frame, and CARDIONET will be liable for them for a longer period. VEM will provide CARDIONET with a written list of these parts no less than quarterly.

	3.3.
	Delivery
Schedules. CARDIONET will deliver to VEM Purchase Orders consistent with forecasts furnished according to Section 3.2. The vehicle for releases may change from time
to time as technology changes occur. Terms and conditions of sale for all such releases will be controlled by the Terms and Conditions of this AGREEMENT. CARDIONET commits to providing the delivery
instructions no later than thirty (30) days prior to the scheduled delivery date. All Purchase Orders are subject to written acceptance by VEM.

	3.4.
	Schedules
for delivery must remain consistent with the purchase orders provided and the flexibility parameters detailed in Section 3.5 below. Any requests for delivery outside
these parameters must be agreed to by VEM in writing, In the event of engineering Product holds, delivery will be rescheduled per agreement of the parties. Unless otherwise specifically agreed by VEM
in writing, CARDIONET's liability for the flow of Material for Products on hold will continue to accrue per Section 3.2.

	3.5.
	Schedule
Flexibility Change Guidelines. To compensate for changes in demand, VEM and CARDIONET agree to the following flexibility guidelines (3.5.4) within which VEM will maintain
resource commitments for which CARDIONET will remain liable.

	3.5.1.
	In
order to accommodate CARDIONET's delivery schedule and the following flexibility guidelines, (3.5.4) VEM will load CARDIONET's firm purchase orders and forecast in order to
establish a pipeline of material. VEM will issue purchase orders to it's venders for the material requirements based on each component's lead-time through VEM's ERP system, SAP.

	3.5.1.1.
	DOWNSIDE
(Re-schedule): CARDIONET understands that inorder to accommodate the downside changes in the flexibility guideline table (3.5.4) that CARDIONET will remain
liable for any excess material that VEM can not return to venders, re-id for use on other CARDIONET active assemblies or any other active assembly of other customers of VEM's that there is
current demand. All reasonable efforts will be utilized to minimize CARDIONET's liability but consideration must be given for the minimum buy and form factor requirements that will cause excessive
levels of some Materials, parts and Components. CARDIONET shall have the right 

4

 

to
[. . . *** . . .] in this regard during business hours upon at least seven (7) days'
advance notice. 

	 	3.5.1.1.1.	For Cardionet directed events that create excess material that cannot be consumed within the following [. . . *** . . .] period, CARDIONET agrees to pay
[. . . *** . . .] per month material holding fee. If that same material is not consumed in the next [. . . *** . . .] period CARDIONET agrees to purchase the excess material at VEM standard
[. . . *** . . .]. CARDIONET has the option of taking physical possession of this material or to have VEM hold that material in bond at a VEM location. When new demand for this bonded material is submitted to VEM in the
form of a purchase order, VEM will issue new purchase orders to CARDIONET for this bonded material as demand will consume.

	3.5.1.2.
	DOWNSIDE
(Cancellation): CARDIONET also understands and will remain liable for any obsolete material that is caused by any purchase order cancellation, whole or partial, that VEM
can not return or re-id for use on other CARDIONET active assemblies or any other active VEM customer assembly that there is current demand. On an occurrence by occurrence basis, VEM will
evaluate excess and obsolete Material, parts and Components attributable to CARDIONET and all Material declared by VEM to be excess or obsolete, which was purchased within designated
lead-times and is non-returnable, will be billed to CARDIONET
[. . . *** . . .]. All reasonable efforts will be utilized to minimize this liability but
consideration must be given for the minimum buy and form factor requirements that will cause excessive levels of some Materials, parts and Components. CARDIONET shall have the right to
[. . . *** . . .] in this regard during business hours upon at least seven (7) days'
advance notice. 

	 	3.5.1.2.1.	Upon receipt of canellation, whole or partial, VEM will notify CARDIONET promptly of cancellation acceptance and of the total excess and obsolete material affected by the cancellation.
	

 	

3.5.1.2.2.	

Upon receipt of the notice of excess and obsolete material CARDIONET may request that VEM take action to return and re-id material or accept total liabilty.
	

 	

3.5.1.2.3.	

If CARDIONET requests that VEM take action to return and re-id excess and obsolete material VEM will work for 30 working days to accommodate the return and re-id effort. At the end of the 30 working days VEM will submit a revised material liability
to CARDIONET and request CARDIONET to issue a purchase order for that amount with in 15 working days.

	3.5.1.3.
	VEM's
LIABILITY: CARDIONET will not be liable for purchasing errors made by VEM or VEM's venders. VEM will make it's best effort to limit CARDIONET's liability on all excess and
obsolete material.

	3.5.1.4.
	UPSIDE:
CARDIONET understands that in order to accommodate the upside changes in the flexibility guideline table (3.5.4) that material must be available either at the venders
site or within lead-time to meet the new requirement or at VEM, therefore CARDIONET assumes all liability to that material, VEM will make it's best effort to limit CARDIONET's liability.

	3.5.2.
	Changes
may be made to CARDIONET Purchase Orders as follows 

        ***
Confidential Treatment Requested 

5

 

	3.5.3.
	Schedule
Flexibility Guideline CARDIONET is limited to 1 re-schedule per line item per purchase order, except for new release program delays covered in
section 3.8. The table below will apply to all other scheduling issues.   

	Days before required

Purchase Order date
 
	 	Maximum

Allowable

Increase
	 	Maximum

Allowable

Reschedule
	 	Maximum

Re-schedule

Period (Days)
	 	Maximum

Allowable

Cancellation
	 
	0-30 Days	 	0	%	0	%	0	 	0	%
	31-60 Days	 	25	%	35	%	90	 	35	%
	61-90 Days	 	50	%	50	%	90	 	50	%
	91 + Days	 	100	%	100	%	90	 	100	%

	3.6
	This
Schedule provides minimum performance guidelines. All requests for change will be reviewed when requested and VEM will make every effort to accommodate these changes.

	3.7
	Program Delay. CARDIONET may delay production on new release programs for up to
[. . . *** . . .] days from original schedule date with no penalty except any and all
expended direct labor. Inventory carrying charges of [. . . *** . . .] per month will apply from
[. . . *** . . .] days through
[. . . *** . . .] days from the originally scheduled date. CARDIONET agrees to buy all
materials purchased by VEM with proper lead-time for this project for delays beyond
[. . . *** . . .] days.

	3.8
	Production Back-up. In the event VEM is unable to build CARDIONET PRODUCT at its Poway, California facility for any reason,
VEM will build CARDIONET PRODUCT at its Tempe, Arizona facility. 

4      FDA REGISTRATION  

        Varian Poway will apply for FDA registration by October 1, 2001. 

5      TEST  

As
a condition of VEM performing testing of Products hereunder, CARDIONET will provide VEM with both applicable and required board-level and completed unit-test hardware, software and
procedures, and associated training of VEM personnel. VEM shall conduct testing at its factory in accordance with final test requirements as set forth in the appropriate test plans and requirements as
specified by CARDIONET and accepted by VEM. If CARDIONET wants VEM to develop the test fixtures, then the parties will agree upon a development budget, and CARDIONET agrees to reimburse VEM for the
budgeted amount upon completion of the text fixtures by VEM and acceptance by CARDIONET. VEM holds such tooling, fixtures and programs in trust for CARDIONET and shall reimburse CARDIONET for loss or
damage other than normal wear and tear. All such property of CARDIONET shall be returned within five (5) business days after the termination of the AGREEMENT or upon the request of CARDIONET. 

6      TITLE AND INSPECTION  

Title
of the Products shall pass to CARDIONET upon [. . . *** . . .]. Notwithstanding the passing
of title, VEM shall retain a purchase money security interest in the Products until paid in full. Buyer shall have ten (10) days following receipt of the Products to inspect the Products and
provide VEM with written notice of any defective or nonconforming Products, in which case Buyer's sole and exclusive remedies shall be as set forth in Section 9 (Warranty). The warranty period
for each unit shall commence on the date it is delivered to CARDIONET. 

        ***
Confidential Treatment Requested 

6

 

In
this regard, to facilitate inspection, VEM agrees that CARDIONET shall have the option to move its technical employees into VEM's facility at any time prior to July 1, 2002; and thereafter,
CARDIONET shall have the right to a designated space within that facility [. . . *** . . .] (so
long as CARDIONET'S requirements are for less than 1,000 square feet) in order to perform final testing of the devices, storage of the devices and reprocessing/refurbishment processes. CARDIONET shall
also have the right at no extra charge to use VEM's shipping dock to ship units and to receive units for reprocessing and refurbishing. 

7      CHANGES  

Either
CARDIONET or VEM may, by mutual written agreement, make changes within the scope of this AGREEMENT. If any such change shall cause either increase or decrease in VEM's cost or period of
performance, VEM may suspend performance hereunder without being in default until a mutually acceptable adjustment in price is agreed to in writing. CARDIONET shall be responsible for all Material
cost due to Engineering Change Orders that create obsolete parts or components procured by VEM for CARDIONET for which there was at one time a supporting Purchase Order or forecast by CARDIONET
requiring those parts or components. 

8      TERMS OF PAYMENT and CREDIT  

TERMS
of PAYMENT. VEM will invoice CARDIONET for Units of Products as shipped. VEM will invoice CARDIONET for all non-recurring costs as incurred. All payments shall be due in full thirty
(30) days from date of delivery., provided they have been invoiced. Partial shipments will be billed as made and payments are subject to the above terms. VEM may delay delivery of products if
CARDIONET fails to make prompt payments. 

CREDIT.
CARDIONET must maintain credit worthiness over the life of this contract. VEM must obtain from CARDIONET and retain on file ample documentation that reflects such credit worthiness sufficient
to support delivery schedule as set forth in Section 3. Such documentation shall include but not be limited to; credit references, and audited financials. CARDIONET must inform VEM and provide
documentation to VEM that reflects any changes in credit worthiness positive or negative. If credit worthiness is in jeopardy and / or CARDIONET's payment history is unfavorable VEM and CARDIONET will
negotiate credit and payment term alternatives not limited to; progress payments, irrevocable Letter of Credit, or parental guarantee. The amount of credit granted must cover four (4) months of
planned production at the sales price for every four (4) months. This credit will secure accounts receivable (AR), work in process (WIP), and raw material (RM). 

9      PURCHASE OF SELECTED COMPONENTS  

Except
for [. . . *** . . .] shall bear all cost of loss, damage, shrinkage, warehousing,
Obsolescence, excess and similar costs for all Materials and Components purchased by VEM. If a supplier's minimum order quantity or lead time requirements for a Material or Component requires VEM to
purchase Materials and Components in volumes beyond the quantities in the binding forecast period, the parties shall negotiate in good faith how best to purchase such Materials and Components to
minimize (i) the price paid for the Materials and Components and (ii) the risk of such Materials or Components becoming Excess and Obsolete Inventory. Any agreement regarding such
purchases shall be set forth in writing and shall specify the applicable Material or Component, the price reduction for the applicable Product(s) and which party will bear the risk of Obsolescence or
excess. VEM and CARDIONET agree, during the Quarterly Review, to review requirements imposed on VEM by its suppliers with regard to minimum order quantities, lead times and prices for Materials and
Components. 

        ***
Confidential Treatment Requested 

7

 

10    TRANSPORTATION AND RISK OF LOSS  

All
transportation shall be at the expense of [. . . *** . . .], and all shipments are FOB
[. . . *** . . .]. Risk of loss and/or damage shall pass from VEM to CARDIONET upon
[. . . *** . . .]. Notwithstanding any defect or nonconformity or any other matter, such risk of
loss shall remain with CARDIONET until the Units are returned at CARDIONET's expense to such place as VEM may designate in writing. CARDIONET shall inspect all Units upon receipt and shall notify VEM
of the need to file claims with the transportation company when there is evidence of shipping damage, either concealed or external. 

11    WARRANTY  

	11.1
	VEM
warrants that at the time of delivery Products manufactured by VEM shall be free from defects in
[. . . *** . . .] workmanship and shall be in compliance with
[. . . *** . . .] specifications including those contained in CARDIONET Acceptance Criteria,
Schedule C, The standard of workmanship shall be IPC-610B, Class 2. VEM's warranty on each unit shall begin when it is received by CARDIONET, and shall continue for a period
of fifteen (15) months, subject to the conditions below.

	11.2
	Repair
or rework, or at VEM's option, replacement of defective Products, parts or accessories shall be the sole and exclusive remedy under warranty. If in VEM's opinion such repair
or replacement is not feasible, or if such remedy fails of its essential purpose, VEM may refund or credit the replacement cost of the product.

	11.3
	All
warranty repair, rework, or replacement of Units under warranty shall be limited to Unit malfunctions which are determined by VEM to be due and traceable to defects in
[. . . *** . . .] workmanship furnished by VEM. The standard of workmanship shall be
IPC-610B, Class 2. VEM's warranties shall not apply to the extent that the malfunction occurred after delivery from VEM to CARDIONET and such malfunction is caused by
(1) accident, abuse, alteration, misuse or neglect, (2) failure to use Products under operating conditions that are in accordance with the Product Specification, (3) lack of
routine care or maintenance, (4) failure to use or take any proper precautions under the circumstances, (5) user modification of any Product, or (6) latent defects discovered
after expiration of the applicable warranty period.

	11.4
	Units
being returned to VEM for warranty service shall be shipped by mutually agreeable means. Freight costs shall be
[. . . *** . . .] for valid warranty returns. Shipment costs for return to CARDIONET of such Units
repaired by VEM under provisions of this Warranty shall be borne by [. . . *** . . .]. CARDIONET
shall contact VEM prior to any warranty return and VEM shall issue a Return Authorization to CARDIONET authorizing all such warranty returns. VEM shall not accept any return of Units for warranty
service without having issued such Return Authorization to CARDIONET. VEM will return repaired items within fourteen (14) days of receipt.

	11.5
	THIS
LIMITED WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER EXPRESS OR IMPLIED WARRANTIES INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A
PARTICULAR PURPOSE, USE, OR APPLICATION.

	11.6
	VEM
shall perform out of warranty repair of field returned Units for Engineering Change updating if so requested by CARDIONET. The charge for such updating shall be based on the same
material cost and labor rate charged to CARDIONET for standard production. 

        ***
Confidential Treatment Requested 

8

 

12    DAMAGES AND LIABILITY  

VEM'S
TOTAL LIABILITY IN DAMAGES OR OTHERWISE SHALL NOT EXCEED THE PAYMENT, IF ANY, RECEIVED BY VEM FOR THE UNIT OF PRODUCT OR SERVICE FURNISHED OR TO BE FURNISHED, AS THE CASE MAY BE, RESULTING IN
THE LOSS OR DAMAGE CLAIMED. IN NO EVENT SHALL VEM BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE OR SPECIAL LOSS OR DAMAGES OF ANY KIND, SUCH AS BUT NOT LIMITED TO LOST BUSINESS REVENUE,
LOST PROFITS OR COSTS OF DOWNTIME RESULTING FROM VEM'S PRODUCTS OR SERVICES, HOWEVER CAUSED, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL THEORY. This limitation applies
whether the damages or other relief are sought based on breach of warranty, breach of contract, negligence, strict liability in tort, or otherwise of anyone, under this AGREEMENT or any nondisclosure
or confidentiality agreement, or any other legal or equitable theory of applicable law. This limitation does not apply to direct damages caused by breach of a material obligation under this AGREEMENT
or claims for personal injury by a third party. 

13    PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS  

CARDIONET
shall indemnify, defend and hold VEM harmless from and against any expense, loss, costs, damages or liability resulting from claimed infringement of patents, trademarks, copyrights, or other
intellectual property rights with respect to Units, including, but not limited to, claims: 

	a.
	arising
from a use of or a combination of Units with other equipment, processes, programming applications, or materials not furnished by VEM hereunder;

	b.
	based
on items made with the Units furnished by VEM hereunder; and/or

	c.
	arising
out of compliance by VEM with CARDIONET's designs, specifications or instructions. 

VEM
shall notify CARDIONET in writing of any such claim immediately. 

THE
FOREGOING STATES VEM's ENTIRE LIABILITY FOR ANY CLAIM BASED UPON OR RELATED TO ANY ALLEGED INFRINGEMENT OF ANY PATENT OR OTHER INTELLECTUAL PROPERTY RIGHTS. 

14    TERMINATION FOR CONVENIENCE  

Either
CARDIONET or VEM may terminate this AGREEMENT at any time, for any reason of its own choosing, provided that the party initiating termination gives at least one hundred and twenty
(120) days advance written notice to the other party specifying the effective date of termination, after which date neither party shall have any further liability or obligation to the other,
except as expressly provided herein, subject to any limitations state herein. 

15    TERMINATION BY CARDIONET  

In
the event of termination by CARDIONET under Section 13, CARDIONET shall reimburse VEM for any un-recovered costs incurred by VEM in the discharge of its obligations under this
AGREEMENT, which shall consist of the following specific items: 

	a.
	Any
unpaid balance due for conforming Units ordered by CARDIONET and delivered to CARDIONET prior to VEM receipt of CARDIONET's termination notice; and 

9

 

	b.
	The
full purchase price for Units scheduled on purchase orders by CARDIONET for delivery within one hundred twenty (120) days after the date on which VEM received CARDIONET's
termination notice, subject to Section 3.5 above.

	c.
	For
Units forecasted by CARDIONET and/or orders accepted by VEM, should CARDIONET wish to waive their manufacture and payment of the full purchase price under b. above, CARDIONET shall
purchase the Material for which VEM has made commitments (and for which CARDIONET is liable) for Products scheduled for delivery in this one hundred twenty (120) day period. CARDIONET's
purchase obligations under this option will include:

	(1)
	Any
Material, which VEM has received for manufacture of the Units that is not returnable or useable elsewhere by VEM. Such Material purchased by CARDIONET shall be at supplier
invoiced cost plus [. . . *** . . .] and

	(2)
	Any
unique Material not returnable by VEM bought for CARDIONET Products per non-cancelable, non-returnable contractual terms. The usage period of this Material
may exceed ninety (90) days. This category will contain programmed parts, and special devices etc., with minimum lot buys. Such Material purchased by CARDIONET shall be at supplier invoiced
cost plus [. . . *** . . .]; and

	(3)
	Any
cancellation charges incurred by VEM for Material not yet received, but committed to by VEM for Products previously scheduled for delivery to CARDIONET in this ninety
(90) day period. 

Payment
for all Material held and not returned to VEM's Vendors to be N30 days from delivery and inspection by CARDIONET. 

16    TERMINATION BY VEM  

In
the event of termination by VEM under Section 13, CARDIONET shall have no obligation to purchase any Product or inventory, except Products ordered on purchase orders and subject to
Section 3.5 above. CARDIONET shall, however, have the option to purchase at
[. . . *** . . .] any partial or completed inventory held by VEM, but not Material or parts
ordered and not yet shipped to VEM for the production of Units. 

17    TERMINATION FOR CAUSE  

Either
VEM or CARDIONET may terminate this AGREEMENT at any time if the other party is in material breach of any of the provisions herein. In the event of termination under this provision, the
defaulting party shall have thirty (30) days from the date of receipt of written notice from the party initiating termination in which to remedy the default. Should the defaulting party fail to
remedy the breach, termination shall become effective without further notice at the end of said thirty (30) day period. Either VEM or CARDIONET may initiate termination under this provision for
any one or more of the following: 

	a.
	the
other party petitions for reorganization under the Bankruptcy Act,

	b.
	the
other party is adjudicated as bankrupt,

	c.
	a
receiver is appointed for the other party's business,

	d.
	the
other party makes an assignment for the benefit of its creditors, or

	e.
	the
other party fails to perform or observe any material obligation under this AGREEMENT. 

        ***
Confidential Treatment Requested 

10

 

Termination
by either party under this provision shall be without prejudice to any other remedy either party may have under applicable law, subject to the limitations stated in this AGREEMENT. 

18    PERFORMANCE  

Neither
party to this AGREEMENT shall be liable for any delay in delivery or other performance hereunder which is due to unforeseen circumstances, or to causes beyond its control, including, without
limitation, strike, lockout, riot, war, fire, act of God, or compliance with any governmental law, regulation, or order, including but not limited to U.S. Export Administration Regulations. Provided
any such delay is neither material nor indefinite, performance shall be deemed suspended during and extended for such time as it is so delayed, and thereafter the other party shall accept performance
hereunder. In the event such contingencies last more than one hundred and twenty (120) days after either party provides written notice of such inability to perform, either party may immediately
terminate this AGREEMENT upon a written notice subject to the terms of Section 13, TERMINATION FOR CONVENIENCE. 

19    LIMITATION OF CLAIMS  

Except
as otherwise required by the procedural rules of applicable law, no claims, regardless of form, arising out of, or in any way connected with this contract, the Products or services furnished by
VEM, may be brought by CARDIONET more than one (1) year after the cause of action has accrued or performance under this contract has been completed or terminated, whichever is earlier. 

20    DISPUTES/ARBITRATION AND APPLICABLE LAW  

Any
dispute, controversy or claim of any kind against VEM arising out of or relating to this contract, or its breach, termination or invalidity, or the Products, including the jurisdiction of the
arbitration panel, shall be settled by final and binding arbitration. For sales to U.S. CARDIONETs, arbitration shall be in San Diego, California under the rules and procedures of the American
Arbitration
Association ("AAA"). If the sale is international or between entities outside the U.S., arbitration shall be in the place of VEM's corporate domicile under the UNCITRAL Arbitration Rules in effect on
the date of this contract, and the appointing authority shall be the AAA. The governing law of the substance of this contract shall be the commercial law of the state or country of VEM's corporate
domicile or the place from which the Products are shipped, and the United Nations Convention on contracts for the International Sale of Goods shall not apply. The procedural law shall be the law of
the place where arbitration is conducted. Arbitral proceedings shall be conducted in the English language. The arbitration tribunal shall not award punitive damages. The arbitration award shall be
final and binding, shall be the sole and exclusive remedy regarding any and all claims and counterclaims presented, and may not be reviewed by or appealed to any court except for enforcement. Nothing
in this contract shall prohibit VEM from seeking to prevent any unauthorized copying, disclosure, use, retention or distribution of its intellectual or other property by injunctive relief or otherwise
in a court of law. VEM shall have the exclusive right to bring legal action for failure to pay for products or services furnished in the courts of VEM's corporate domicile. 

21    NOTICE  

All
notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt requested), or sent by facsimile transmission, (confirmation received) to the parties at the following addresses and facsimile
transmission numbers (or at such other address or number for a party as shall be 

11

 

specified
by like notice), except that notices after the giving of which there is a designated period within which to perform an act and notices of changes of address or number shall be effective only
upon receipt: 

If
to VEM: 

Mr. C.
W. Rudd

Vice President and General Manager

Varian, Inc. Electronics Manufacturing

615 S. River Drive

Tempe, Arizona 85281 

If
to CARDIONET: 

Mr. Don
Canal

V.P. RAQA

CARDIONET

510 Market Street

San Diego, CA 92101 

22    CONFIDENTIAL INFORMATION  

The
confidential information of either party shall be governed by the nondisclosure or confidentiality agreement attached hereto, if any, applicable solely to this AGREEMENT. In this regard, VEM
acknowledges that the bill of materials and supplier list for the Products is the exclusive property of CARDIONET. Additionally, should CARDIONET choose to use VEM for Box Build services, VEM agrees
to build CARDIONET PRODUCTS in a secure area with access restricted to those employees of VEM who have a business need for access and under no circumstances will access be allowed by VEM to any other
customers or potential customers or suppliers of VEM without prior written consent of CARDIONET. 

23    ASSIGNMENT  

Neither
VEM nor CARDIONET shall have the right to assign its rights or obligations under this AGREEMENT without the written consent of the other party. Neither party shall unreasonably withhold such
consent. Any prohibited assignment shall automatically be null and void. 

24    RIGHTS OF SUCCESSOR  

A
successor in interest by merger, operation of law, assignment, purchase or otherwise of the entire business of either party shall acquire all interests and obligations of such party thereunder. 

25    ENTIRE AGREEMENT  

This
AGREEMENT, including only modifications or additions agreed to in writing and incorporated herein by reference and including Appendices attached hereto, are the entire and sole understanding of
the parties with respect to the subject matter hereof, and supersede all prior understandings, representations and warranties, written and oral. No representations or agreements modifying or
supplementing the terms of the AGREEMENT shall be valid unless expressed in writing and signed by person authorized to sign agreements on behalf of both parties. If any part 

12

 

of
these terms and conditions are held void or unenforceable, such part will be treated as severable, leaving valid the remainder of the terms and conditions. 

	AGREED AS ABOVE PROVIDED:	 	 
	

Signed:

/s/ C. W. Rudd
 Mr. C. W. Rudd	
 	

Signed:

/s/ Don Canal
 Mr. Don Canal
	

VP & General Manager

Varian, Inc. Electronics Manufacturing

615 S. River Drive

Tempe, Arizona 85281	
 	

V.P. RAQA

CARDIONET, INC.

510 Market Street

San Diego, CA 92101

13

 
Schedule A

DEFINITIONS  

Free on Board (FOB) means the place at which VEM fulfills its obligation to transfer the goods to the possession of
[. . . *** . . .]. For example, FOB
[. . . *** . . .] means that VEM shall deliver Products
[. . . *** . . .]. 

Engineering Change Order (ECO) refers to the documentation package required to institute a modification to an existing Product. The change can be as
simple as a Component change or as complex as the complete redesign of a Product. 

Purchase Order or Change Purchase Order means a CARDIONET purchase order which specifies (i) the delivery of a specific quantity of specific
Products, (ii) the delivery date (s), (iii) the specified ship-to location, (iv) the agreed upon pricing, and (v) any special shipping instructions issued by
any means of transmission or output of an electronic paperless process, issued by CARDIONET, in respect of the Products, NRE charges, or other materials and/or services, and, as applicable, that is
accepted by VEM pursuant to Section 3. 

VEM Quotation or Quotation shall refer to the document produced by VEM on which VEM states its pricing for Products based on current labor rate for
assembly and test, current material standard cost plus material yield as provided by VEM's suppliers, non-recurring engineering and tooling costs, cost associated with the packaging and
shipping to CARDIONET of the Products being quoted, and a fair mark-up based on product volume and technology. 

Excess and Obsolete (E&O) Inventory means all material ("Material") and components ("Components") procured by VEM for a forecast or Purchase Order of
CARDIONET which: (1) meet one or more of the following criteria: (i) were intended to be used by VEM to deliver the quantity of Products requested by CARDIONET in Purchase Orders
delivered to VEM, or (ii) were purchased by VEM in quantities in excess of the quantity requested by CARDIONET in Purchase Orders delivered to VEM as mutually agreed by the parties as provided
in Section 8 ("Purchase of Selected Components"), and
(2) meet all of the following requirements: (i) such Materials and Components could not be used by VEM to manufacture Product volumes in the then-current CARDIONET forecast,
(ii) such Materials and Components can not be used in similar volume(s) elsewhere by VEM in the manufacture of other products, and (iii) such Materials and Components cannot be returned
to the supplier without charge or penalty. Except for Materials and Components approved for purchase in excess of the then-current CARDIONET Purchase Orders delivered to VEM as provided in
Section 8 ("Purchase of Selected Components"), Excess and Obsolete Inventory shall not include Materials or Components purchased by VEM in excess of the quantity necessary to manufacturing the
quantity of Products ordered by CARDIONET in its then current Purchase Orders. Reasonable efforts will be utilized to minimize this Obsolescence but consideration must be given for the minimum buy and
form factor requirements that will cause excessive levels of some Material. 

Request for Quote Package (RFQ) means a package of information for a Product which includes the following: the Bill of Material, the circuit board bill
of material, assembly drawings, list of Unique Components by part number and relevant drawings, Specifications, printed circuit board fabrication drawings, schematic diagram file, gerber data file,
PADS file, mechanical constraints drawing, manufacturing plan, Test Plan, the forecasted/build plan and the quantity and date on which CARDIONET would like the first quantity of the proposed product
delivered to CARDIONET. The Request for Quote Package may include additional information as deemed necessary or desirable by CARDIONET. 

        ***
Confidential Treatment Requested 

14

QuickLinks

Exhibit 10.20

PURCHASE AGREEMENT

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