SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) August 09, 1995
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COMPUMED, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-14210 95-2860434
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
Incorporation)
1230 Rosecrans Avenue, Suite 1000
Manhattan Beach, California 90266
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(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code (310) 643-5106
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ITEM 5. OTHER EVENTS
On August 11, 1995, CompuMed, Inc. (the "Registrant") closed a private
placement (the "Placement") of 1,200,000 shares of its Common Stock, $.01
par value. The Placement was to institutional investors and their
affiliates pursuant to an exemption from the registration requirements of
the Securities Act of 1933, as amended (the "Securities Act"), by reason of
Regulation D thereunder.
The gross proceeds of the placement were $5,100,000. The Registrant
will use such proceeds for the development of "second-generation"
OsteoSystems technology, for the advancement of its TeleMedicine business
plan and for general working capital purposes. Two persons received a fee
of an aggregate of 36,000 shares of the Registrant's Common Stock in
consideration for services that they rendered in assisting to effect the
Placement.
The Placement was effected pursuant to a Stock Purchase Agreement,
dated as of August 9, 1995 (the "Purchase Agreement"), among the Registrant
and the purchasers listed on the Schedule of Purchasers attached to the
Purchase Agreement (the "Purchasers"). The Purchasers received certain
rights for the registration under the Securities Act of the shares issued
in the Placement and a 180 day right of first refusal for certain issuances
by the Registrant of its Common Stock below a specified price. The
Purchase Agreement and the press release issued in conjunction with the
Placement are included as Exhibits 10 and 99, respectively.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
Exhibit
Number Page
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10. Stock Purchase Agreement, dated as of
August 9, 1995, among the Registrant
and the Purchasers.
99. Press Release, dated August 11, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: August 17, 1995 COMPUMED, INC.
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(Registrant)
/s/Rod N. Raynovich
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Rod N. Raynovich
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit Page
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10. Stock Purchase Agreement, dated as of
August 9, 1995, among the Registrant
and the Purchasers.
99. Press Release, dated August 11, 1995.
Exhibit 10
STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of August 9, 1995, by and among COMPUMED,
INC., a Delaware corporation (the "Company"), and each of the persons
severally listed on the Schedule of Purchasers attached hereto. The
persons listed on the Schedule of Purchasers are sometimes hereinafter
collectively referred to as the "Purchasers" and individually as a
"Purchaser."
WHEREAS, the Company desires to issue and sell, and the
Purchasers desire to purchase, shares of Common Stock, $.01 par value (the
"Common Stock"), of the Company, subject to the terms and conditions
herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions herein contained, the Company and each Purchaser,
severally and not jointly, hereby agree as follows:
SECTION 1. Sale and Purchase of the Shares. At the Closing (as
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defined in Section 2.1 hereof), and subject to the terms and conditions
hereof and in reliance upon the representations, warranties and
agreements contained herein, the Company is issuing and selling to
the Purchasers and each Purchaser is purchasing from the Company
the number of shares (the "Shares") of Common Stock set forth
opposite its name in the column labelled "Number of Shares" on the
Schedule of Purchasers at the purchase amount (the "Purchase Amount")
set forth opposite its name in the column labelled "Purchase Amount"
on the Schedule of Purchasers.
SECTION 2
Closing, Payment and Delivery
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2.1 Closing Date and Place of Closing. The closing of the
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purchase and sale of the Shares hereunder (the "Closing") in the amounts
and to the persons specified in the Schedule of Purchasers shall be held
simultaneously with the execution and delivery of this Agreement at the
offices of Reid & Priest LLP, 40 West 57th Street, New York, New York, at
10:00 a.m. Eastern Standard Time on the date hereof (the "Closing Date").
2.2 Payment and Delivery. At the Closing each Purchaser shall
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pay to the Company by wire transfer of immediately available funds or such
other form of payment as shall be mutually agreed upon by the Company and
that Purchaser, the Purchase Amount set forth opposite its name in the
column labelled "Purchase Amount" on the Schedule of Purchasers, and the
Company shall deliver to each Purchaser a certificate or certificates
representing the number of Shares purchased as set forth opposite such
Purchaser's name in the column labelled "Number of Shares" on the Schedule
of Purchasers.
2.3 Conditions to Closing. The several obligations of the
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Purchasers to purchase the Shares hereunder are subject to the receipt by
the Purchasers of an opinion of Reid & Priest, LLP, special counsel to the
Company, dated the date hereof, in the form attached hereto as Exhibit A.
SECTION 3
Representations and Warranties of the Company
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The Company hereby represents and warrants to each Purchaser as
follows:
3.1 Organization, Qualification, Certificate and By-laws. The
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Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Company is duly
qualified or licensed to do business as a foreign corporation in good
standing in every jurisdiction where the character of its properties, owned
or leased, or the nature of its activities make such qualification
necessary.
3.2 Corporate Power. The Company has all requisite corporate
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power to enter into this Agreement, to sell the Shares and to carry out and
perform its obligations under the terms of this Agreement, and also to own
properties owned by it and to conduct business as being conducted by it.
3.3 Subsidiaries. Except for Compumed Systems and Irsco
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Development Company, Inc. (each a "Subsidiary" and collectively the
"Subsidiaries"), all of the issued and outstanding shares of capital stock
of which are held by the Company, the Company has no subsidiaries and does
not own, of record or beneficially, any capital stock or equity interest or
investment in any corporation, partnership, association or business entity.
Each of the Subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the State of California.
3.4 Capitalization. The Company's authorized capital stock, as
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of August 3, 1995, consists of 50,000,000 shares of Common Stock and
1,000,000 shares of preferred stock, $.10 par value (the "Preferred Stock")
, of which 6,883,514 shares of Common Stock and 60,733 shares of Preferred
Stock are issued and outstanding. The Company has reserved 3,200,539
shares of Common Stock for issuance upon the exercise of outstanding
options and warrants and the conversion of outstanding Preferred Stock.
All of the issued and outstanding shares of Common Stock are validly
issued, fully paid and non-assessable. All of the Shares being issued
to the Purchasers pursuant to this Agreement upon issuance will be validly
issued, fully paid and non-assessable shares of Common Stock, and the
issuance thereof is not subject to preemptive rights. Except as disclosed
in the Company's Reports (as hereinafter defined) or in Schedule 3.4
annexed hereto and made a part of this Agreement, there are no
outstanding options, warrants or other rights of any kind to acquire any
additional shares of capital stock of the Company or securities
convertible into or exchangeable for, or which otherwise confer on
the holder thereof any right to acquire, any such additional shares,
nor is the Company committed to issue any such option, warrant, right
or security.
3.5 No Restrictive Agreements. The issuance and delivery of the
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Shares to the Purchasers is not subject to any preemptive rights. Upon the
delivery of the Shares in the manner contemplated hereunder, the Purchasers
will acquire the beneficial and legal, valid and indefeasible title to such
Shares, free and clear of all pledges, liens, charges, claims or options of
any kind, except for restrictions on transfer under federal and state
securities laws. Except as set forth in the Company's Reports, there are
no agreements relating to the voting, purchase or sale of capital stock (i)
between or among the Company and any of its stockholders and (ii) to the
best of Company's knowledge, between or among any of the Company's
stockholders. Except as set forth on Schedule 3.5 annexed hereto and made
a part of this Agreement, no other person has the right to request that any
securities of the Company be included in the registration statement
relating to the Shares to be filed by the Company pursuant to Section
5.2(a) hereof.
3.6 Authorization. All corporate action on the part of the
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Company necessary for the authorization, execution, delivery and
performance by the Company of this Agreement and for the authorization,
issuance and delivery of the Shares issuable upon payment therefor has been
taken. This Agreement constitutes a valid and binding agreement of the
Company enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights generally and
general principles of equity.
3.7 Financial Information. The Company's Annual Report on Form
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10-KSB for the fiscal year ended September 30, 1994 together with the
Company's Quarterly Reports on Form 10-QSB for the fiscal quarters ended
December 31, 1994 and March 31, 1995 (collectively, the "Company's
Reports") present fairly the financial position and results of operations
of the Company at the dates and for the periods to which they relate
(subject, in the case of the unaudited financial statements, to normal
year-end adjustments). The audited financial statements and the unaudited
financial statements contained in the Company's Reports have been prepared
in accordance with generally accepted accounting principles consistently
followed throughout the periods involved (except as may be otherwise
indicated in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-QSB).
3.8 Absence of Certain Changes. At all times since March 31,
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1995, there has not been any event or condition of any character which has
adversely affected, or may be expected to adversely affect, the Company's
business or prospects, including but not limited to:
(a) any material adverse change in the condition, assets,
liabilities (existing or contingent) or business of the Company from that
shown on the Company's Reports;
(b) any damage, destruction or loss of any of the properties or
assets of the Company (whether or not covered by insurance) materially
adversely affecting the business or plans of the Company;
(c) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any
direct or indirect redemption, purchase or other acquisition of any of such
stock by the Company;
(d) any actual or threatened cancellation or adverse
modification of any licensing agreement, marketing agreement or strategic
partnering agreement to which the Company is a party; or
(e) any labor trouble, or any other event or condition of any
character, materially adversely affecting the business or plans of the
Company.
3.9 Taxes. The Company has filed or will file within the time
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prescribed by law (including extensions of time approved by the appropriate
taxing authority) all tax returns and reports required to be filed with the
United States Internal Revenue Service and with the States of Delaware and
California and (except to the extent that the failure to file would not
have a material adverse effect on the condition or operations of the
Company) with all other jurisdictions where such filing is required by law.
The Company has paid, or made adequate provision for the payment of, all
taxes, interest, penalties, assessments or deficiencies shown to be due or
claimed to be due on or in respect of such tax returns and reports. The
Company's federal income tax returns have not, to the best of the Company's
knowledge and belief, been audited by the Internal Revenue Service.
3.10 Litigation. Except as otherwise disclosed in the Company's
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Reports, there is neither pending nor, to the Company's knowledge,
threatened any action, suit, proceeding or claim to which the Company is or
may be named as a party or its property is or may be subject and in which
an unfavorable outcome, ruling or finding in any such matter or for all
such matters taken as a whole might have a material adverse effect on the
condition, financial or otherwise, and operations or prospects of the
Company. The Company has no knowledge of any unasserted claim which, if
asserted and granted might have a material adverse effect on the condition,
financial or otherwise, operations or prospects of the Company.
3.11 Consents. Except for those consents and filings
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contemplated by Section 5.2 hereof in connection with the Registration
Statement, no consent, approval, qualification, order or authorization
of, or filing with, any governmental authority is required in
connection with the Company's execution, delivery or performance of
this Agreement, or the offer, sale or issuance of the Shares by the
Company other than "Blue Sky" filings which have been made based upon
the addresses of the Purchasers as set forth on the Schedule of
Purchasers.
3.12 Compliance. The execution, delivery and performance of
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this Agreement by the Company does not conflict with or cause a breach
under any of the terms or conditions of (i) its Certificate of
Incorporation or By-Laws or (ii) any mortgage, indenture, contract,
agreement, instrument, judgment, decree, order, statute, rule or
regulation to which the Company is subject and a breach or violation of
which might have a material adverse effect on the condition, financial
or otherwise, operations or prospects of the Company. To the best
knowledge of the Company, the operations of the Company and each
Subsidiary have complied and are in compliance in all material
respects with all applicable federal, state and local laws, and
where appropriate, foreign laws, including, without limitation, (i) health,
safety and environmental statutes, regulations, orders and judgments and
(ii) rules, regulations and requirements of the U.S. Food and Drug
Administration ("FDA"), except to the extent any failure to so comply would
not have a material adverse effect on the condition, financial or
otherwise, operations or prospects of the Company. The Company possesses
all permits, licenses and approvals of governmental authorities (including
without limitation the FDA) which are required in the operation of its
business, except for those the failure of which to hold might have a
material adverse effect on the Company's business and prospects. To the
best knowledge of the Company, the Company is in compliance in all material
respects with the terms and conditions of such permits, licenses and
approvals.
3.13 Company Reports. The Company Reports, taken as a whole as
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of the date hereof, do not contain any untrue statement of material fact or
omit to state a material fact required to be stated therein, or necessary
to make the statements therein, in light of the circumstances in which they
were made, not misleading.
3.14 Intellectual Property. The Company owns or has valid,
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adequate and subsisting rights to use and exploit all patents, patent
licenses, trade secrets, copyrights, trademarks and service marks necessary
for the conduct of the business of the Company as described in the
Company's Reports (collectively, the "Intellectual Property") free and
clear of any pledge, lien, charge, claim or option. Such Intellectual
Property is valid and in full force and effect, except to the extent set
forth in Schedule 3.14 annexed hereto and made a part hereof. None of the
processes currently used by the Company or any of the properties or
products currently sold by the Company or trademarks, trade names, labels
or other marks or copyrights used by the Company, to the best knowledge of
the Company, infringes the patent, industrial property, trademark, trade
name, label, other mark, right or copyright of any other person or entity.
The Company has not received any written notice of adverse claim with
respect to any of the Intellectual Property, and, to the Company's best
knowledge, no basis exists for any such claim.
SECTION 4
Representations and Warranties of Purchasers
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Each Purchaser represents and warrants to the Company, severally
and not jointly, and only as to itself, as follows:
4.1 Experience. It is experienced in evaluating and investing
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in companies such as the Company, and has such knowledge and experience
in evaluating the merits and risks of its investment, and has the
ability to bear the economic risks of its investment. It is an
"accredited investor", as such term is defined in Regulation D under
the Securities Act.
4.2 Investment. It is acquiring the Shares for investment for
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its own account and not with the view to, or for resale in connection
with, any distribution thereof (subject to the provisions of Sections
5.2(a) and 5.2(b) hereof). It understands that the Shares have not
been registered under the Securities Act by reason of specified
exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of its
investment intent as expressed herein. It acknowledges that the
Company may place restrictive legends on, and stop transfer orders
against, the certificates representing the Shares being acquired by
it.
4.3 Rule 144. It acknowledges that the Shares must be held
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indefinitely unless they are subsequently registered under the Securities
Act or an exemption from such registration is available. It has been
advised or is aware of the provisions of Rule 144 promulgated under the
Securities Act, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions and
that such Rule may not become available for resale of the Shares.
4.4 Authority. It has full power and authority under all
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applicable laws to enter into this Agreement and to consummate the
transactions herein and has taken all action necessary to authorize its
execution and performance of this Agreement. This Agreement when executed
and delivered will be duly executed and will constitute a legal, valid and
binding obligation of each of the Purchasers, enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement or
creditors' rights generally and general principles of equity.
4.5 Access to Data. It is fully familiar with the Company's
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business, operations and financial history as set forth in the Company
Reports. It has had an opportunity to discuss the Company's business,
operations and financial affairs with its management and has had the
opportunity to review the Company's facilities.
SECTION 5
Covenants of the Company
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5.1 Future Reports. For a period of two (2) years from the date
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hereof and so long as the Purchaser is a holder of Shares, the Company will
furnish to the Purchaser (i) all annual, quarterly and periodic reports and
proxy statements filed by the Company with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and (ii) all registration statements
filed by the Company under the Securities Act, within five (5) days after
filing such report or registration statement with the Commission. So long
as any Purchaser holds any Shares, the Company will file all reports
required to be filed by it under the Exchange Act and will take such
further action as any Purchaser may reasonably request, all to the extent
required to enable such Purchaser to sell pursuant to (i) Rule 144 adopted
by the Securities and Exchange Commission under the Securities Act or (ii)
a registration statement on Form S-3 or any similar registration form
hereafter adopted by the Securities and Exchange Commission. The Company
will also promptly furnish to the Purchasers copies of all reports or other
material information relating to the Company which it furnishes to any
other shareholder (as such) of the Company.
5.2 Registration Under the Securities Act. (a) The Company shall
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use its best efforts to effect the registration of the Shares under the
Securities Act on Form S-3 or such applicable form as properly designated
by the Company, and in connection therewith, the Company shall as
expeditiously as practicable, but in no event later than one hundred and
eighty (180) days after the date of this Agreement, prepare and file with
the Commission a registration statement (the "Registration Statement")
under the Securities Act and use its best efforts to cause such
Registration Statement to become effective. The Company shall use its best
efforts to maintain the Registration Statement current under the Securities
Act from its effective date until the date which is two (2) years from the
date of this Agreement or until all Shares included therein have been sold,
if earlier. Subject to Section 5.2(b) hereof the Company may include the
Shares in a registration statement being filed by the Company with respect
to other securities of the Company. The Company shall bear the entire cost
and expense of the Registration Statement initiated by it under this
Section. The Company shall supply prospectuses and such other documents as
the Purchaser may request and shall qualify the Shares for sale in such
jurisdictions as requested, provided, however, that the Company reserves
the right, in its sole discretion, not to qualify the Shares in any
jurisdiction where the Company would be required to qualify as a foreign
corporation and is not otherwise required to be qualified therein. The
obligation of the Company under this Section shall be limited to one
Registration Statement.
(b) If the Company at any time proposes to register any shares
of its Common Stock under the Securities Act (other than registrations (i)
solely for the registration of shares in connection with an employee
benefit plan or a merger or consolidation, (ii) pursuant to Section 5.2(a),
or (iii) for the registration of Common Stock underlying warrants or other
rights issued and outstanding as of the date hereof), whether or not for
sale of its own account, and the registration form to be used may be used
for the registration of the Shares (a "Piggyback Registration"), the
Company will at each such time give prompt written notice to the Purchasers
of its intention to do so and of such Purchasers' rights under this Section
5.2(b). Upon the written request of any such Purchaser made within 30 days
after the receipt of any such notice (which request shall specify the
Shares intended to be disposed of by such Purchaser and the intended method
of distribution thereof), the Company will use its best efforts to effect
the registration under the Securities Act of all Shares which the Company
has been so requested to register by the Purchasers thereof (such
requesting Purchasers hereinafter the "Holders"), provided that if, at any
time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall determine for
any reason not to register or to delay registration of such securities, the
Company may, at its election, give written notice of such determination to
each Holder and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Shares in
connection with such registration (but not from its obligation to pay the
expenses in connection therewith), and (ii) in the case of a determination
to delay registering or to delay the sale of the Shares thereunder, shall
be permitted to delay registering any Shares or the sale thereunder, for
the same period as the delay in registering such other securities or as
requested by any underwriter of other securities being included therein
(provided that all sellers of included securities (other than the Company)
are similarly treated). The Company shall bear the entire cost and expense
of the Piggyback Registration with respect to shares of the Holders.
(c) The obligations of the Company and the rights of the
Purchasers under this Section 5.2 shall be subject to the following
additional terms, conditions and limitations:
(i) Furnishing of Information. Each Purchaser shall be required
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to furnish to the Company and to its counsel all relevant information
concerning the proposed method of sale or other distribution by such
Purchaser of its Shares, and such other information as the Company and its
counsel reasonably may require to prepare and file the Registration
Statement in accordance with the applicable provisions of the Securities
Act and the rules and regulations promulgated by the Commission thereunder.
If requested by the Company, such information shall be furnished in
writing.
(ii) Sales Suspension. If, at any time when the Company is
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required to maintain the Registration Statement effective and current with
respect to the Shares any event or events shall occur which would cause the
prospectus contained therein, as then amended or supplemented, to be other
than in compliance with the requirements of Section 10 of the Securities
Act, the Company will promptly give notice thereof to each Purchaser and,
upon receipt of such notice, each Purchaser shall immediately cease and
desist from effecting any sales of its Shares until it shall have received
notice from the Company that such sales again may be effected together with
copies of a prospectus which has been amended or supplemented so as to
conform to the requirements of said Section 10. Upon the occurrence of any
such event, the Company promptly shall use its best efforts to prepare and
file with the Commission a post-effective amendment to the Registration
Statement, or a post-effective amendment or supplement to the prospectus,
so that the prospectus, as so amended or supplemented, will comply with the
requirements of Section 10 of the Securities Act.
(iii) Indemnification. (A) The Company will indemnify and hold
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harmless each Purchaser, the officers and directors, if any, of such
Purchaser, and each person, if any, who controls such Purchaser, (each, an
"Indemnified Holder"), against any losses, claims, damages, expenses
(including reasonable costs of investigation), and liabilities (joint or
several) (collectively, "Claims") to which any of them may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively, a "Violation"): (I) any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, or any post-effective amendment thereof, or
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (II) any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus if used prior to the
effective date of the Registration Statement, or contained in the final
prospectus (as amended or supplemented if the Company files any amendment
thereof or supplement thereto with the Commission) or in any document
incorporated by reference therein or the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (III) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act,
any state securities law or any rule or regulations promulgated under the
Securities Act, the Exchange Act or any state securities law. Subject to
the restrictions set forth in Part (C) below with respect to the number of
legal counsel, the Company shall reimburse the Indemnified Holders promptly
as such expenses are incurred and are due and payable for any legal fees or
other reasonable expenses incurred by them in connection with investigating
or defending any such Claim. Notwithstanding anything to the contrary
contained herein, the indemnification agreement contained in this Part (A):
(x) shall not apply to a Claim arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished
in writing to the Company by any Indemnified Holder expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (y) with respect to any
preliminary prospectus, shall not inure to the benefit of any such person
from whom the person asserting any such Claim purchased the Shares that are
the subject thereof (or to the benefit of any person controlling such
person) if the untrue statement or omission of material fact contained in
the preliminary prospectus was corrected in the prospectus, as then amended
or supplemented and such corrected prospectus was furnished by the Company
for delivery to such person as required by law; and (z) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not
be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Holder.
(B) Each Purchaser agrees to indemnify and hold harmless, to the
same extent and in the same manner set forth in Part (A) of this Subsection
(iii), the Company, each of its directors, each of its officers who sign
the Registration Statement, each person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act, the other
Purchasers selling Shares pursuant to the Registration Statement or any of
their respective directors or officers or any person who controls such
Purchaser (collectively and together with an Indemnified Holder, an
"Indemnified Party"), against any Claim to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such Claim arises out of or is based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by
such Purchaser expressly for use in connection with such Registration
Statement; and such Purchaser will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any such Claim; provided, however, that the indemnification contained in
this Part B shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such
Purchaser, which consent shall not be unreasonably withheld and provided,
further, that such Purchaser shall be liable under this Part B for only
that amount of a Claim as does not exceed the net proceeds to such
Purchaser as a result of the sale of the Shares pursuant to such
Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party.
(C) Promptly after receipt by a person seeking indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any
action (including any governmental action), such Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party
(an "Indemnifying Party") under this Subsection (iii), deliver to the
Indemnifying Party a written notice of the commencement thereof and the
Indemnifying Party shall have the right to participate in, and, to the
extent the Indemnifying Party so desires, jointly with any other
Indemnifying Party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the Indemnifying Parties;
provided, however, that an Indemnified Party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the Indemnifying
Party, if, in the reasonable opinion of counsel for the Indemnified Party,
representation of such Indemnified Party by the counsel retained by the
Indemnifying Party would be inappropriate due to actual or potential
differing interests between such Indemnified Party and any other party
represented by counsel to the Indemnifying Party in such proceeding. The
Company shall pay for only one legal counsel (in addition to any local
counsel) for the Purchasers; such legal counsel shall be selected by
Purchasers holding a majority in interest of the Shares. The failure to
deliver written notice to the Indemnifying Party within a reasonable time
of the commencement of any such action shall not relieve such Indemnifying
Party of any liability to the Indemnified Party under this Subsection
(iii), except to the extent that the Indemnifying Party is substantially
prejudiced in its ability to defend such action as a result of such
failure.
(D) In connection with any registration of the Shares effected
pursuant to this Section 5, the Company shall cause to be delivered to the
Purchasers, at the Company's sole expense, officers' certificates, opinions
of its counsel and "comfort" letters of its independent public accountants
in customary scope and form for secondary registrations and otherwise as
may be reasonably requested by the Purchasers or their counsel. If the
Purchasers elect to retain underwriters in connection with any sale of the
Shares, the Company also agrees that it will cooperate, and will cause its
counsel and accountants to cooperate, with the reasonable requirements of
such underwriters, including without limitation entering into customary
underwriting agreements.
5.3 First Refusal Rights for Certain Common Stock To Be Issued
-----------------------------------------------------------
by the Company.
--------------
(a) If at any time within one hundred and eighty (180) days from
the date of this Agreement, the Company proposes to effect the issuance to
any other person of any shares of Common Stock or any warrants, options or
other securities convertible into, exercisable for or containing rights to
acquire any shares of Common Stock (the "First Refusal Securities") at a
purchase, conversion, exercise or acquisition price equal to or less than
$4.25 per share of Common Stock (as may be adjusted for any stock splits,
stock dividends or any other similar events), the Company will not effect
such issuance until it has first offered to sell to such Purchaser a
portion of the First Refusal Securities proposed to be issued in an amount
equal to such Purchaser's respective percentage interest of the Common
Stock outstanding prior to such issuance (the "First Refusal Amount").
Each Purchaser will be entitled to purchase the First Refusal Securities at
the same price per share and on the same terms as the First Refusal
Securities are to be offered to such other person.
(b) Each Purchaser must exercise its purchase rights hereunder
within ten (10) days after receipt of written notice from the Company
describing in reasonable detail the First Refusal Securities being offered,
the purchase price per share thereof, the payment terms and such
Purchaser's respective percentage interest and First Refusal Amount. If
all of the First Refusal Securities offered to the Purchaser are not fully
subscribed by such Purchaser, the remaining First Refusal Securities will
be reoffered to the other Purchasers purchasing all or a portion of their
First Refusal Amount upon the terms set forth in this subsection until all
such First Refusal Securities are fully subscribed or until all such
Purchasers have subscribed for all such First Refusal Securities which they
desire to purchase, except that such Purchasers must exercise their
purchase rights within five (5) days after receipt of all such reoffers.
Any Purchaser which fails to exercise its right to purchase First Refusal
Securities will lose all rights to participate as to subsequent First
Refusal Securities.
(c) Upon the expiration of the offering periods described above,
the Company will be free to sell such First Refusal Securities which such
Purchasers have not elected to purchase during the sixty (60) days
following such expiration on terms and conditions no more favorable to the
buyers thereof than those offered to such Purchasers. Any First Refusal
Securities offered or sold by the Company after such 60-day period must be
reoffered to the Purchasers pursuant to the terms of this Section 5.3.
(d) Any First Refusal Securities acquired by the Purchasers
shall have the benefit of the registration rights set forth in Section
5.2(a) (if such First Refusal Securities are purchased prior to the
effectiveness of the Registration Statement referred to therein) and
Section 5.2(b).
SECTION 6
Miscellaneous
-------------
6.1 Governing Law. This Agreement shall be governed by and
-------------
construed with the laws of the State of Delaware, without giving effect to
conflicts of law.
6.2 Survival. The representations and warranties made in
--------
Sections 3 and 4 herein shall survive the Closing for a period of one year.
6.3 Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of, and be binding upon, the parties hereto and their respective
successors, assigns, heirs, executors and administrators.
6.4 Entire Agreement; Amendment. This Agreement and the
-----------------------------
documents delivered pursuant hereto constitute the full and entire
understanding and agreement among the parties with regard to the
subjects hereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated except by a written
instrument signed by the Company and the Purchasers; provided,
however, that Purchasers of at least eighty (80%) percent of the
Shares together with the Company, may by written instrument amend the
provisions of Section 5.2 hereof.
6.5 Notices, etc. All notices and other communications required
------------
or permitted hereunder shall be in writing and shall be mailed by
first-class mail, postage prepaid, or by express courier, or delivered
either by hand or by messenger, addressed (a) if to a Purchaser, as
indicated on the Schedule of Purchasers attached hereto, or at such other
address as such Purchaser shall have furnished to the Company in writing,
or (b) if to the Company, at 1230 Rosecrans Avenue, Suite 1000, P.O. Box
10037, Manhattan Beach, California 90266, attn: President, or at such
other address as the Company shall have furnished to the Purchasers in
writing.
6.6 Rights; Separability. Unless otherwise expressly provided
--------------------
herein, the rights of the Purchasers hereunder are several rights, not
rights jointly held with any of the other Purchasers. In case any provision
of the Agreement shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any
way be affected or impaired thereby.
6.7 Broker. The Company and each Purchaser represent to the
------
other that it has not retained any person who might be entitled to a
commission or finder's fee in connection with the negotiation and
execution of this Agreement other than Lance Willsey, M.D. and Douglas
D. Lind, M.D., for which the Company shall be responsible. Each
party hereto agrees to indemnify the other from any liability for
commissions or finder's fees by reason of such party's breach of the
foregoing representation. This Section 6.7 shall survive the Closing.
6.8 Information Confidential. Each Purchaser acknowledges that
------------------------
the information received by it pursuant to this Agreement may be
confidential and is for the Purchaser's use only. It will not use such
confidential information in violation of the Exchange Act or otherwise, or
reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of
such information, and its attorneys and financial advisors), except in
connection with the exercise of rights under this Agreement, unless the
Company has made such information available to the public generally or such
Purchaser is required to disclose such information by a governmental body.
6.9 Expenses. The Company and the Purchasers shall bear their
--------
own expenses and legal fees incurred on their behalf with respect to this
Agreement and the transactions contemplated hereby, except as otherwise
provided herein.
6.10 Titles and Gender. The titles of the Sections and
-----------------
Subsections of this Agreement are for convenience of reference only and are
not to be considered in construing this Agreement. Whenever used herein,
the singular member includes the plural, the plural includes the singular,
and the use of any gender shall include all genders.
6.11 Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
COMPUMED, INC.
By: /s/ Rod Raynovich
_________________________________
Rod Raynovich, President
PURCHASERS:
SPINNAKER TECHNOLOGY FUND, L.P.
By: /s/ Lawrence A. Bowman
__________________________________
Lawrence A. Bowman
General Partner
SEXTANT GROUP, INC.
/s/ Archibald Cox, Jr.
By:__________________________________
Archibald Cox, Jr., President
PEQUOT SCOUT FUND, L.P.
By: /s/ Mark Broach
__________________________________
Mark Broach, General Partner
/s/ David M. Gong
_____________________________________
DAVID M. GONG
/s/ Sanford B. Prater
_____________________________________
SANFORD B. PRATER
/s/ Douglas C. Floren
_____________________________________
DOUGLAS C. FLOREN
/s/ Jeffrey Edwards
_____________________________________
JEFFREY EDWARDS
/s/ Timothy R. McCollum
_____________________________________
TIMOTHY R. MCCOLLUM
/s/ Philip Hempleman
_____________________________________
PHILIP HEMPLEMAN
/s/ Colleen Hempleman
_____________________________________
COLLEEN HEMPLEMAN
CARTER G. HEMPLEMAN TRUST
(U/A/D December 29, 1992)
/s/ Colleen Hempleman
By:_________________________________
COLLEEN HEMPLEMEN, Trustee
SPENCER J. HEMPLEMAN TRUST
(U/A/D December 29, 1992)
/s/ Colleen Hempleman
By:_________________________________
COLLEEN HEMPLEMEN, Trustee
/s/ Lawrence A. Bowman
_____________________________________
LAWRENCE A. BOWMAN
SOUND VIEW FINANCIAL GROUP, INC.
By: /s/ James B. Townsend
__________________________________
JAMES B. TOWNSEND, President
SCHEDULE OF PURCHASERS
NAME OF NUMBER PRICE PURCHASE
PURCHASER OF SHARES PER SHARE AMOUNT
--------- --------- --------- --------
SPINNAKER TECHNOLOGY FUND, L.P. 550,000 $4.25 $2,337,500
c/o Sound View Asset Management
22 Gatehouse Road
P.O. Box 110236
Stamford, CT 06911-0238
Attn: Lawrence A. Bowman
General Partner
SEXTANT GROUP, INC. 250,000 4.25 1,062,500
630 Fifth Avenue
Suite 3240
New York, NY 10020
Attn: Archibald Cox, Jr.
President
PEQUOT SCOUT FUND, L.P. 125,000 4.25 531,250
354 Pequot Avenue
Southport, CT 06490
Attn: Mark Broach
General Partner
DAVID M. GONG 25,000 4.25 106,250
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
SANFORD B. PRATER 10,000 4.25 42,500
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
DOUGLAS C. FLOREN 40,000 4.25 170,000
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
JEFFREY EDWARDS 10,000 4.25 42,500
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
TIMOTHY R. MCCOLLUM 10,000 4.25 42,500
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
PHILIP AND COLLEEN HEMPLEMAN 90,000 4.25 382,500
(Joint Trust with Right of
Survivorship)
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
CARTER G. HEMPLEMAN TRUST 7,500 4.25 31,875
(U/A/D December 29, 1992)
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
SPENCER J. HEMPLEMAN TRUST 7,500 4.25 31,875
(U/A/D December 29, 1992)
c/o Ardsley Partners
646 Steamboat Road
Greenwich, CT 06830
LAWRENCE A. BOWMAN 45,000 4.25 191,250
c/o Sound View Asset Management
22 Gatehouse Road
P.O. Box 110236
Stamford, CT 06911-0238
SOUND VIEW FINANCIAL GROUP, INC. 30,000 4.25 127,500
c/o Sound View Asset Management
22 Gatehouse Road
P.O. Box 110236
Stamford, CT 06911-0238
_________ _________
1,200,000 5,100,000
Exhibit 99
COMPUMED 1230 Rosecrans Avenue,Suite 1000
________ Manhattan Beach, CA 90266
Tel: (310) 643-5106 Fax: (310) 536-6128
FOR IMMEDIATE RELEASE: Contact: Rod N. Raynovich
President and Chief Executive Officer
CompuMed, Inc.
(310) 643-5106 ext. 299
Noonan/Russo Communications, Inc.
(212) 696-4455
Jonathan Fassberg (Investor) ext. 248
Richard Tammero ext. 222
COMPUMED ANNOUNCES RESULTS FOR THIRD FISCAL QUARTER
AND $5 MILLION FUNDING
Manhattan Beach, CA- August 11, 1995-CompuMed, Inc. (NASDAQ: CMPD) today
announced revenue and earnings results for the third quarter of the 1995
fiscal year ended June 30, 1995.
Total service and product revenues for the third quarter ended June 30,
1995 were $832,000, up 37 percent from the revenues of $605,000 in the same
period last year. The cardiac telemetry (ECG) revenues are up 11 percent
over the same period last year. A large portion of the OsteoGram
(registered trademark) revenue increase are the results of milestone
installations of the OsteoSystem beta units to three international sites.
Net loss for the third quarter was $296,000 or $(0.05) per share compared
to $609,000 or $(0.12) per share in the same period of last year.
The Company also announced that it has completed a 1.2 million share
private placement of common stock with gross proceeds of $5.1 million. The
President and CEO Rod N. Raynovich said, "This financing will be used to
develop `second-generation' OsteoSystems technology and to further advance
the TeleMedicine business plan. The financing was led by Lawrence A.
Bowman, President of SoundView Asset Management with participation by the
Sextant Group and other affiliates". The securities offered in such
placement were not registered under the Securities Act of 1933, as amended
and may not be offered or sold in the United States absent registration or
an applicable exemption from the registration requirements of such Act.
Mr. Raynovich also added that, "The Company is currently in the final stage
of negotiation for licensing of the OsteoGram (registered trademark).
This was previously announced on June 27, 1995."
CompuMed, based in Manhattan Beach, California, is focused on providing
solutions to important medical problems through the use of computer
technology. In addition to its cardiac telemedicine business, the
Company currently markets the OsteoGram (registered trademark) a test
that utilizes computer image analysis of simple hand x-rays to assess
bone mineral density. CompuMed is also developing Detoxahol (trademark)
, a substance and delivery technology to facilitate the rapid reduction
of blood alcohol levels in people who have been drinking.
COMPUMED, INC.
Selected Financial Data
for Three and Nine Months Ended June 30
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1994 1995 1994
---- ---- ---- ----
Revenues:
ECG $500,000 $450,000 $1,430,000 $1,277,000
OsteoGram 332,000 155,000 601,000 414,000
(registered
trademark)
Real estate
Leases 117,000 - 355,000 -
Other (5,000) 1,000 (2,000) 3,000
-------- ------ ----- -----
944,000 606,000 2,384,000 1,694,000
======== ======= ========== =========
Net loss $(296,000) $(609,000) $(1,080,000) $(3,460,000)
========= ========= =========== ==========
Net Loss per share $ (.05) $ (.12) $ (.19) $ (.82)
========= ======== ========== =========
Average shares
outstanding 6,430,200 5,146,600 5,613,000 4,206,600
---------- --------- ---------- ---------
