Document:

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                                                                   EXHIBIT 10.31

                              EMPLOYMENT AGREEMENT

                        QUINTON CARDIOLOGY SYSTEMS, INC.

                                  DARRYL LUSTIG

                                                    DATED AS OF FEBRUARY 6, 2004

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                              EMPLOYMENT AGREEMENT

         This Amended Employment Agreement (this "Agreement"), dated as of
February 6, 2004, is between Quinton Cardiology Systems, Inc. a Delaware
corporation ("Employer"), and Darryl Lustig ("Executive");

                              W I T N E S S E T H:

         WHEREAS, Employer desires to continue to retain the services of
Executive upon the terms and conditions set forth herein; and

         WHEREAS, Executive is willing to continue to provide services to
Employer upon the terms and conditions set forth herein.

                              A G R E E M E N T S:

         NOW, THEREFORE, for and in consideration of the foregoing premises and
for other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, Employer and Executive hereby agree to enter into an
employment relationship in accordance with the terms and conditions set forth
below.

1.       EMPLOYMENT

         Employer will continue to employ Executive and Executive will continue
to accept employment by Employer as its Vice-President, Sales and Marketing -
Burdick. Executive will perform the duties of Vice-President, Sales and
Marketing - Burdick, and such other duties as may be assigned from time to time
by the Chief Executive Officer, which relate to the business of Employer and are
reasonably consistent with Executive's position.

2.       ATTENTION AND EFFORT

         Executive will devote his full-time efforts to Employer's business and
will serve its interests in good faith to the best of his ability during the
term of this Agreement.

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3.       COMPENSATION AND BENEFITS

         Employer agrees to pay or cause to be paid to Executive, and Executive
agrees to accept in exchange for the services rendered hereunder by him, the
following compensation:

         3.1      ANNUAL SALARY

         Executive's compensation shall consist of an annual base salary (the
"Annual Salary") of one hundred sixty thousand dollars ($160,000), before all
customary payroll deductions. The Annual Salary shall be reviewed, and shall be
subject to change, by the Board of Directors of Employer (or the Compensation
Committee thereof) at least annually while Executive is employed hereunder.

         3.2      BONUS/COMMISSION

         Executive shall be eligible for bonuses and/or commissions in
accordance with executive bonus and/or commission plans, which shall be adopted
and modified from time to time in the sole discretion of the Board of Directors
(or the Compensation Committee of the Board of Directors) of Employer.

         3.3      BENEFITS

         Executive will be entitled to participate, subject to and in accordance
with applicable eligibility requirements, in such benefit programs as shall be
provided from time to time by action of Employer's Board of Directors, which
shall include, at a minimum, basic health insurance.

         3.4      VACATION

         Executive shall be entitled to four (4) weeks vacation each year,
during which time Executive's compensation will continue in full. The vacation
period may not be carried over from year to year. Vacation will be scheduled by
mutual agreement.

         3.5      AUTO ALLOWANCE.

         Employee shall be entitled to an automobile allowance of $7,200 per
year.

4.       TERMINATION

         The employment of Executive pursuant to this Agreement may be
terminated as follows:

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         4.1.     AUTOMATIC TERMINATION ON DEATH OR TOTAL DISABILITY

         This Agreement and Executive's employment hereunder shall terminate
automatically upon the death or total disability of Executive. The term "total
disability" as used herein shall mean Executive's inability to perform the
duties set forth in Section 1 hereof for a period or periods aggregating ninety
(90) calendar days (or such other period as may be required by law) in any
twelve-month period as a result of physical or mental illness, loss of legal
capacity or any other cause beyond Executive's control, unless Executive is
granted a leave of absence by the Board of Directors of Employer (or the
Compensation Committee thereof). Executive and Employer hereby acknowledge that
Executive's ability to perform the duties specified in paragraph 1 hereof is of
the essence of this Agreement. Termination hereunder shall be deemed to be
effective (a) at the end of the calendar month in which Executive's death occurs
or (b) immediately upon a determination by the Board of Directors of Employer
(or the Compensation Committee thereof) of Executive's total disability, as
defined herein. In the case of termination of employment under this Section 4.1,
Executive shall not be entitled to receive any payments or benefits under this
Agreement other than any unpaid Annual Salary which has accrued as of the date
Executive's employment terminates.

         4.2.     OTHER TERMINATION EXCLUDING CHANGE OF CONTROL

         Either Employer or Executive may terminate this agreement at any time
for any reason, with or without notice. Except as provided in Section 4.3.1
below, upon such termination, Executive shall not be entitled to receive any
payments or benefits under this Agreement other than any unpaid Annual Salary
and vacation time which has accrued as of the date Executive's employment
terminates.

         Executive acknowledges and understands that his employment with the
Company is at-will and can be terminated by either party for no reason or for
any reason not otherwise specifically prohibited by law or provided for in this
Agreement. Nothing in this Agreement is intended to alter Executive's at-will
employment status or obligate the Company to continue to employ Executive for
any specific period of time, or in any specific role or geographic location.

         4.3.     TERMINATION AS A RESULT OF CHANGE OF CONTROL

                  4.3.1.   TERMINATION BY SUCCESSOR EMPLOYER

         If (a) during the period commencing on the date Employer enters into a
definitive agreement with respect to a transaction that would constitute a
Change of

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Control (as defined below) and ending on the date the definitive agreement
therefor is terminated or the Change of Control is consummated, Employer
terminates Executive's employment without cause (as defined below), (b) during
the period commencing upon the consummation of the Change of Control and ending
twenty-four months thereafter, Employer or, if applicable, the surviving or
successor employer ("Successor Employer") terminates Executive's employment
without Cause (as defined below), or (c) during the period commencing upon the
consummation of the Change of Control and ending twenty-four (24) months
thereafter, Executive resigns for Good Reason (as defined below), then Executive
shall be entitled to receive the following termination payments and benefits:

                  (1) severance payments equal to six (6) months salary, to be
         paid out over six (6) months in the course of Employer's or the
         Surviving Employer's regularly scheduled payroll;

                  (2) continuation of health and other benefits, substantially
         equivalent to those in place as of the termination date, for six (6)
         months;

                  (3) any unpaid Annual Salary and unused vacation time which
         has accrued as of the date Executive's employment terminates; and

                  (4) accelerated vesting of 100% of Executive's then unvested
         options to purchase shares of Employer common stock or the options to
         purchase common stock of the Successor Employer issued in substitution
         therefor in connection with the Change of Control.

         The severance payments and benefits described in this paragraph are
expressly contingent upon Executive's signing upon termination a full release in
a form acceptable to Successor Employer, and are further contingent upon
Executive's full compliance with the terms of the Confidentiality Agreement (as
defined in paragraph 5 below) with Employer.

                  4.3.2.   TERMINATION FOR CAUSE

         If, during either of the periods set forth in clauses (a) or (b) of
Section 4.3.1, Executive is terminated by Employer or the Successor Employer for
Cause, Executive shall not be entitled to receive any payments or benefits
hereunder other than any unpaid Annual Salary which has accrued as of the date
Executive's employment terminates.

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                  4.3.3.   TERMINATION BY EXECUTIVE

         If, during either of the periods set forth in clauses (a) or (b) of
Section 4.3.1, Executive voluntarily terminates his employment other than for
Good Reason, Executive shall not be entitled to receive any payments or benefits
hereunder other than any unpaid Annual Salary which has accrued as of the date
Executive's employment terminates.

                  4.3.4.   CAUSE

         Wherever reference is made in this Agreement to termination being with
or without Cause, "Cause" shall be limited to the occurrence of one or more of
the following events:

                  (a) willful misconduct, insubordination, or dishonesty in the
         performance of Executive's duties or other knowing and material
         violation of Employer's or the Successor Employer's policies and
         procedures in effect from time to time which results in a material
         adverse effect on Employer or the Successor Employer;

                  (b) the continued failure of Executive to satisfactorily
         perform his duties after receipt of written notice that identifies the
         areas in which Executive's performance is deficient;

                  (c) willful actions (or intentional failures to act) in bad
         faith by Executive with respect to Employer or the Successor Employer
         that materially impair Employer's or the Successor Employer's business,
         goodwill or reputation;

                  (d) conviction of Executive of a felony involving an act of
         dishonesty, moral turpitude, deceit or fraud, or the commission of acts
         that could reasonably be expected to result in such a conviction;

                  (e) current use by the Executive of illegal substances; or

                  (f) any material violation by Executive of Executive's
         Confidentiality Agreement.

                  4.3.5.   GOOD REASON

                  For the purposes of this Agreement, "Good Reason" shall mean
         that Executive, without his/her consent, has either:

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                  (a) incurred a material reduction in his title, status,
         authority or responsibility at Employer or the Successor Employer; or

                  (b) incurred a reduction in Executive's Annual Salary or bonus
         opportunity;

                  (c) suffered a material breach of this Agreement by Employer
         or the Successor Employer which Employer or the Successor Employer does
         not cure within 20 days following written notice from Executive; or

                  (d) been required to relocate or travel more than 50 miles
         from his/her then current place of employment in order to continue to
         perform the duties and responsibilities of his/her position (not
         including customary travel as may be required by the nature of his/her
         position).

                  4.3.6.   CHANGE OF CONTROL

         For purposes of this Agreement, "Change of Control" means:

                  (a) a merger or consolidation of the Company with or into any
         other company, entity or person or

                  (b) a sale, lease, exchange or other transfer in one
         transaction or a series of transactions undertaken with a common
         purpose of all or substantially all of Employer's then outstanding
         securities or all or substantially all of Employer's assets; provided,
         however, that a Change of Control shall not include a Related Party
         Transaction.

         A "Related Party Transaction" means:

                  (a) a merger or consolidation of Employer in which the holders
         of the outstanding voting securities of Employer outstanding
         immediately prior to the merger or consolidation hold at least a
         majority of the outstanding voting securities of the surviving or
         successor entity immediately after the merger or consolidation,

                  (b) a sale, lease, exchange or other transfer of Employer's
         assets to a majority-owned subsidiary company,

                  (c) a transaction undertaken for the principal purpose of
         restructuring the capital of Employer, including but not limited to
         reincorporating Employer in a different jurisdiction, or

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                  (d) a corporate dissolution or liquidation.

5.       CONFIDENTIALTY AGREEMENT

         Executive is subject to, and this Employment Agreement is conditioned
on agreement to, the terms of the Non-Disclosure Agreement (the "Confidentiality
Agreement") entered into by Executive and the terms of the Confidentiality
Agreement shall survive the termination of Executive's employment with Employer
or Successor Employer.

6.       ASSIGNMENT

         This Agreement is personal to Executive and shall not be assignable by
Executive. Employer may assign its rights hereunder to (a) any Successor
Employer; (b) any other corporation resulting from any merger, consolidation or
other reorganization to which Employer is a party or (c) any other corporation,
partnership, association or other person to which Employer may transfer all or
substantially all of the assets and business of Employer existing at such time.
All of the terms and provisions of this Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.

7.       ARBITRATION

         Any controversies or claims arising out of or relating to this
Agreement shall be fully and finally settled by arbitration in accordance with
the Employment Arbitration Rules of the American Arbitration Association then in
effect (the "AAA Rules"), conducted by one arbitrator either mutually agreed
upon by Employer and Executive or chosen in accordance with the AAA Rules,
except that the parties thereto shall have any right to discovery as would be
permitted by the Federal Rules of Civil Procedure for a period of 90 days
following the commencement of such arbitration and the arbitrator thereof shall
resolve any dispute which arises in connection with such discovery. The
prevailing party shall be entitled to costs, expenses and reasonable attorneys'
fees, and judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. It is further agreed by the parties that
the venue for any arbitration proceedings shall be within the state of
Washington.

8.       AMENDMENTS IN WRITING

         No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party

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hereto, shall in any event be effective unless the same shall be in writing,
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by Employer and
Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by Employer and Executive.

9.       APPLICABLE LAW

         This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the State of Washington, without regard
to any rules governing conflicts of laws.

10.      ENTIRE AGREEMENT

         This Agreement, on and as of the date hereof, constitutes the entire
agreement between Employer and Executive with respect to the subject matter
hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between Employer and Executive with respect to such
subject matter are hereby superseded.

11.      GOVERNING LAW

         This Agreement shall be interpreted in accordance with and governed by
the laws of the State of Washington.

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         IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.

                                EXECUTIVE:

                                /s/ Darryl Lustig
                                ------------------------------------------------
                                QUINTON CARDIOLOGY SYSTEMS, INC.

                                /s/ John R. Hinson
                                ------------------------------------------------
                                By John R. Hinson
                                Its President and Chief Executive Officer

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                                                                   EXHIBIT 10.32

February 17, 2004

Mr. John R. Serino
7910 224th Street SE
Woodinville, Washington  98072

Dear Jack,

This letter sets forth the substance of the Transition Agreement ("Agreement")
to aid in your employment transition. If you execute this agreement, the Company
agrees to provide you with the following transition benefits, after the
expiration of the seven-day revocation period described in Paragraph 18 below
upon which the Agreement becomes effective (hereinafter "Effective Date"),
provided that you have not revoked this Agreement as described in Paragraphs 15,
18 and 19; and have not resigned from employment on or before the Separation
Date. We refer to you in certain places in this letter as "Employee".

1)       Your last day as an employee of Quinton Cardiology Inc. ("the Company")
         will be Friday, February 27, 2004 ("Separation Date"), pursuant to your
         letter of resignation (Exhibit A hereto).

2)       It is agreed that you will remain employed during a nine-month
         transition period on a substantially reduced work schedule commencing
         March 1, 2004 and ending November 30, 2004 ("Transition Period").
         During the Transition Period you will continue to receive your current
         bi-weekly rate of $5,769.23, less standard withholding taxes and any
         amounts owed by you to the Company, in accordance with the Company's
         regular payroll practices. You agree that said payment will be mailed
         to your home or direct deposited on regularly scheduled payroll date(s)
         through the Transition Period;

3)       The Company will subsidize COBRA continuation coverage under the
         Company's medical and dental insurance plans (collectively "Health
         Plan") for the nine-months beginning March 1, 2004 and ending November
         30, 2004 but coverage subsidy will cease with you and your dependents
         eligibility under a new employers' benefit plan. Information regarding
         your rights and obligations under COBRA will be mailed to you
         separately within 14 days following your separation date. Quinton
         reserves the right to change the monthly amount should the Company
         experience a rate increase during the subsidy period.

         To the extent permitted under terms of the basic and voluntary Life
         Insurance policies, you may be eligible for continued coverage under
         the Company's Life Insurance program for the duration of your
         Transition Period, and if provided under such policies you may elect to
         convert to an individual policy on the coverage cancellation date;

4)       The Company will pay you all accrued and unused vacation earned and
         unused on the customary payroll date following February 27, 2004. You
         will not accrue additional vacation days or sick leave after your
         separation date.

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5)       During the Transition Period you will continue to be eligible to
         participate in the Employee Stock Purchase Plan and the 401k Savings
         Plan.

6)       During the Transition Period of March 1, 2004 through November 30,
         2004:

         a)       You agree to provide from time to time general support
                  services to the Company in the area of your expertise upon the
                  request of the Chief Executive Officer, and will report
                  directly to the Chief Executive Officer, or as otherwise
                  specified by the Chief Executive Officer. You agree to
                  exercise the highest degree of professionalism and utilize
                  your expertise and creative talents in performing these
                  services.

         b)       You will have no responsibility or authority and agree not to
                  represent or purport to represent the Company in any manner
                  whatsoever to any third party unless authorized by the Chief
                  Executive Officer, in writing, to do so.

         c)       Pursuant to regular business practice, the Company will
                  reimburse you for documented business expenses incurred during
                  an authorized engagement, provided that these expenses have
                  been pre-approved by the Chief Executive Officer, in writing,
                  or are expenses which the Company would reasonably expect you
                  to incur in a manner otherwise customary for employees under
                  the Company's standard travel and expense policy.

7)       You acknowledge and agree that through this continued payment, Quinton
         will have satisfied all of its obligations as set forth in your
         employment offer-letter dated February 7, 2000 from the Company to you
         ("Offer Letter") but also as deemed expired on February 7, 2001 as
         agreed and signed by you on February 12, 2002; or any subsequent
         agreements related to your duties as a Vice President, and you have no
         other rights to salary, bonuses, stock options, benefits, or other
         compensation after the Separation Date, except as otherwise noted
         elsewhere in this Agreement. Further, if you engage in any activity
         that is competitive with the Company during the Transition Period, the
         Company shall have no further payment obligations under this Agreement;
         provided however that your engagement as a consultant to a person or
         entity that does not compete or seek to compete with the Company is
         permissible under this Agreement. You agree to notify the Company, in
         writing, upon your acceptance of full time employment or engagement in
         any consultative activity that may be deemed a competitive activity.

8)       Stock Options: Stock Vesting, Cancellations

         a)       You hereby agree, as of the commencement of your Transition
                  Period, that you are vested in 45,454 shares of your initial
                  stock option grant dated August 14, 2000, 2,982 shares of your
                  stock option grant dated May 10, 2001, 2,708 shares of your
                  stock option grant dated June 27, 2002, and 1,875 shares of
                  your stock option grant dated February 10, 2003, for a total
                  vested stock option grant holding of 53,019 (split adjusted)
                  shares.

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         b)       In addition, provided that you continue to comply with the
                  terms of this Agreement through the Transition Period, your
                  existing stock option grants will continue vesting through the
                  completion of the Transition Period in accordance with the
                  normal vesting schedule.

         c)       Based upon (a) and (b), above, and unless you exercise some or
                  all of your vested stock options between now and November 30,
                  2004, as of November 30, 2004 you will be vested in 45,454
                  shares, 3,409 shares, 3,645 shares and 3,281 shares of your
                  respective August 14, 2000, May 10, 2001, June 27, 2002 and
                  February 10, 2003 option grants, respectively. All remaining
                  unvested options at November 30, 2004 will be cancelled.

         d)       In accordance with the terms of the related stock option
                  plans, the vested options must be exercised within 90 days of
                  the end of your Transition Period, or the options will
                  automatically cancel.

9)       Employee specifically acknowledges and agrees that this consideration
         exceeds the amount he would otherwise be entitled to receive upon
         termination of his employment, and that these payments and other
         benefits are in exchange for entering into this Agreement. Employee
         agrees that he will not at any time seek consideration from the Company
         other than what is set forth in this Agreement. Employee specifically
         acknowledges and agrees that the Company has made no representations to
         him regarding the tax consequences of any amounts received by him or
         for his benefit pursuant to this Agreement. In consideration for the
         mutual promises and agreements contained herein, and for other valuable
         consideration, Employee agrees to pay all federal or state taxes, if
         any, which are required by law to be paid with respect to this
         Agreement, save and except those amounts withheld by the Company in
         satisfaction of such taxes as provided in customary payroll deductions,
         including supplement income tax if applicable. Employee further agrees
         to indemnify and hold the Company, its predecessors, officers,
         directors, employees, attorneys, representatives, successors and
         assigns harmless from any claims, demands, deficiencies, levies,
         assessments, executions, judgments or recoveries by any governmental
         entity against the Company, or any of the foregoing persons or
         entities, for any amounts claimed due on account of this Agreement or
         pursuant to claims made under any federal or state tax laws, and any
         costs, expenses or damages sustained by them by reason of any such
         claims, including any amounts paid by the Company, its predecessors,
         officers, directors, employees, attorneys, representatives, successors
         and assigns as taxes, attorneys' fees, deficiencies, levies,
         assessments, fines, penalties, interest or otherwise.

10)      Employee represents that he has not filed, and will not file, any
         complaints, lawsuits, administrative complaints or charges arising from
         or relating to his employment with, or termination of employment from,
         the Company. Notwithstanding the provisions of any law stating that a
         general release does not extend to claims which the creditor does not
         know of or suspect to exist in his favor at the time of executing the
         release, Employee agrees to release the Company, its Board of
         Directors, officers, employees, agents and assigns, from any and all
         claims, charges, complaints, causes of action or demands of whatever
         kind or nature that Employee now has or has ever had against the
         Company, whether known or unknown, arising from or relating to
         Employee's employment with or discharge from the Company, including but
         not limited to: wrongful or tortious termination, specifically
         including actual or constructive termination in violation of public
         policy; implied or express employment contracts and/or estoppel;
         discrimination and/or retaliation under any federal, state or local
         statute or regulation, specifically including any claims Employee may
         have

                                                                              3.
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         under the Fair Labor Standards Act, Age Discrimination in Employment
         Act, the Older Workers Benefit Protection Act, the Americans with
         Disabilities Act, Title VII of the Civil Rights Act of 1964 as amended,
         the Family and Medical Leave Act, the Washington Minimum Wage Act, and
         the Washington Law Against Discrimination; any and all claims brought
         under any applicable state employment discrimination or other statutes;
         any claims brought under any federal or state statute or regulation for
         non-payment of wages or other compensation (including bonuses due after
         the Separation Date), and libel, slander, or breach of contract other
         than the breach of this Agreement. This release specifically excludes
         claims, charges, complaints, causes of action or demands of whatever
         kind or nature that post-date the Separation Date or the Effective
         Date, whichever is later, and that are based on factual allegations
         that do not arise from or relate to Employee's present employment with
         or discharge from the Company

11)      Subject to certain exceptions noted below and elsewhere within this
         Agreement, on the Separation Date, you agree to return to the Company
         all Company documents (and copies thereof) and other Company property
         that you have in your possession or control, including, but not limited
         to, Company files, notes, drawings, records, business plans and
         forecasts, financial information, specifications, training materials,
         computer-recorded information, tangible property including, but not
         limited to, entry cards, identification badges and keys, and any
         materials of any kind that contain or embody any proprietary or
         confidential information of the Company (and all reproductions
         thereof).

         a.       You may retain the use of certain property, including office
                  computer, software, e-mail access, cell phone, and documents
                  or materials necessary to supporting your Transition Period.
                  You agree to return the aforementioned property immediately
                  upon the conclusion of your Transition Period or upon written
                  request from the Company, whichever occurs first.

12)      Employee acknowledges and affirms that he has previously executed a
         Non-Disclosure Agreement (confidentiality agreement) on February 9,
         2000, that his obligations not to use or disclose the Company's
         confidential information are ongoing, and that the terms and conditions
         of said confidentiality agreement are not affected by this Agreement.
         Employee represents that he will return all property belonging to the
         Company prior to the Separation Date.

13)      Communications

         a)       You and the Company shall draft and agree upon the content of
                  any announcement regarding your separation.

         b)       Both you and the Company agree not to disparage the other
                  party, and the other party's officers, directors, employees,
                  shareholders, affiliates and agents, in any manner likely to
                  be harmful to them and their business reputation or personal
                  reputation; provided that both you and the Company shall
                  respond accurately and fully to any question, inquiry or
                  request for information when required by law or legal process.

14)      The provisions of this Agreement will be held in strictest confidence
         by you and the Company and will not be publicized or disclosed in any
         manner whatsoever, provided, however, that: (a) you may disclose this
         Agreement to your immediate family, attorney, accountant and financial
         advisor, and as necessary in seeking consulting work or employment; (b)
         the Company may disclose this Agreement as may be necessary in the

                                                                              4.
<PAGE>

         conduct of its business, including but not limited to, required filings
         with the Securities and Exchange Commission, and other public
         announcements required as a publicly-traded company; and (c) the
         parties may disclose this Agreement as may be necessary to enforce its
         terms or as otherwise required by law. In particular, and without
         limitation, you will not disclose the provisions of this Agreement to
         any current or former employee of the Company, except as required by
         law.

15)      Employee warrants that no promise or inducement has been offered for
         this Agreement other than as set forth herein and that this Agreement
         is executed without reliance upon any other promises or
         representations, oral or written. Any modification of this Agreement
         must be made in writing and be signed by Employee and the Company. This
         Agreement supersedes all prior understandings between the Parties and
         represents the entire Agreement between the Parties with respect to all
         matters involving Employee's employment with or termination from the
         Company, except as stated herein.

16)      If any provision of this Agreement or compliance by Employee or the
         Company with any provision of this Agreement constitutes a violation of
         any law, or is or becomes unenforceable or void, then such provision,
         to the extent only that it is in violation of law, unenforceable or
         void, will be deemed modified to the extent necessary so that it is no
         longer in violation of law, unenforceable or void, and such provision
         will be enforced to the fullest extent permitted by law. If such
         modification is not possible, said provision, to the extent that it is
         in violation of law, unenforceable or void, will be deemed severable
         from the remaining provisions of this Agreement, which provisions will
         remain binding on both Employee and the Company. This Agreement is
         governed by the laws of the State of Washington.

17)      The King County Superior Court of Washington shall have exclusive
         jurisdiction of any lawsuit arising from or relating to Employee's
         employment with, or termination from, the Company, or arising from or
         relating to this Agreement. Employee consents to such venue and
         personal jurisdiction. The prevailing party in any such lawsuit will be
         entitled to an award of attorneys' fees and reasonable litigation
         costs. Employee agrees that he will indemnify and hold the Company
         harmless from any breach of this Agreement by Employee. EMPLOYEE
         FURTHER AGREES THAT IF HE CHALLENGES THIS AGREEMENT OR FILES ANY CLAIMS
         AGAINST THE COMPANY ARISING FROM OR RELATING TO HIS EMPLOYMENT WITH, OR
         TERMINATION FROM, THE COMPANY, EXCLUDING ANY CLAIM CHALLENGING THE
         VALIDITY OF HIS WAIVER OF RIGHTS UNDER THE AGE DISCRIMINATION IN
         EMPLOYMENT ACT, HE WILL RETURN ALL MONIES AND BENEFITS RECEIVED BY HIM
         FROM THE COMPANY PURSUANT TO THIS AGREEMENT. In the event Employee
         challenges the validity of his waiver of rights under the Age
         Discrimination in Employment Act, he agrees that the Company may
         recover money and benefits paid under this Agreement if Employee's
         challenge and subsequent Age Discrimination in Employment Act claim are
         successful and he obtains a monetary award.

18)      Employee specifically agrees and acknowledges: (A) that his waiver of
         rights under this Agreement is knowing and voluntary as required under
         the Older Workers Benefit Protection Act; (B) that he understands the
         terms of this Agreement; (C) that he has been advised in writing by the
         Company to consult with an attorney prior to executing this Agreement;
         (D) that the Company has given him a period of up to twenty-one (21)
         days within which to consider this Agreement; (E) that, following his
         execution of this Agreement he has seven (7) days in which to revoke
         his agreement to this Agreement and that, if he chooses not to so

                                                                              5.
<PAGE>

         revoke, the Agreement shall then become effective and enforceable and
         the payment and extension of benefits listed above shall then be made
         to him in accordance with the terms of this Agreement; and (F) nothing
         in this Agreement shall be construed to prohibit Employee from filing a
         charge or complaint, including a challenge to the validity of the
         waiver provision of this Agreement, with the Equal Employment
         Opportunity Commission or participating in any investigation conducted
         by the Equal Employment Opportunity Commission. However, he has waived
         any right to monetary relief. To cancel this Agreement, Employee
         understands that he must give a written revocation to Company
         headquarters either by hand delivery or certified mail within the
         seven-day period. If he revokes the Agreement, it will not become
         effective or enforceable and he will not be entitled to any of the
         benefits set forth above.

19)      Employee further specifically agrees that modifications to this
         Agreement, whether material or immaterial, do not restart the running
         of the twenty-one (21) day period referenced in Paragraph 18.

20)      This Agreement shall be binding upon the parties hereto and upon their
         heirs, administrators, representatives, executors, successors,
         employees, agents and assigns, and shall inure to the benefit of said
         parties and each of them and to their heirs, administrators,
         representatives, executors, successors, employees, agents and assigns.
         Employee expressly warrants that he has not transferred to any person
         or entity any rights, causes of action, or claims released in this
         Agreement.

21)      This Agreement in no way alters the at-will nature of Employee's
         employment with the Company through and including the Separation Date.

22)      EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE HAS CAREFULLY READ AND
         VOLUNTARILY SIGNED THIS AGREEMENT, THAT HE HAS HAD AN OPPORTUNITY TO
         CONSULT WITH AN ATTORNEY OF HIS CHOICE, AND THAT HE SIGNS THIS
         AGREEMENT WITH THE INTENT OF RELEASING THE COMPANY AND ITS OFFICERS,
         DIRECTORS, EMPLOYEES AND AGENTS FROM ANY AND ALL CLAIMS.

ACCEPTED AND AGREED TO:

/s/ John R. Hinson                          /s/ John R. Serino
----------------------------------------    ------------------------------------
John Hinson, Chief Executive Officer        John R. Serino
Quinton Cardiology, Inc.                    Employee's Signature

Dated:  February 17, 2004                   Dated:  February 19, 2004

                                                                              6.
<PAGE>

                                                                  [QUINTON LOGO]

                                    EXHIBIT A

To       Chief Executive Officer
         Quinton Cardiology, Inc.

         I, John R. Serino, hereby tender my resignation as a full-time officer
         and employee of Quinton Cardiology Inc., and its subsidiaries,
         effective February 27, 2004, and agree to accept a modified work
         schedule through November 30, 2004 subject to the terms set forth in
         the Severance and Transition Agreement.

         /s/ John R. Serino                              February 19, 2004
         -----------------------------------         ---------------------------
         John R. Serino                                        Date

                                                                              7.

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