EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of October
31, 1997 (this "Agreement"), is made by and between CompuMed,
Inc., a Delaware corporation (the "Company"), and the entities
named on the signature page hereto (the "Initial Investor").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions
of the Securities Purchase Agreements, dated as of October 31,
1997, between the Initial Investors and the Company (the
"Securities Purchase Agreement"), (i) the Company has agreed to
issue and sell to the Initial Investors in one or more tranches
175 shares of Class C 7% Convertible Preferred Stock, $.10 par
value, of the Company (the "Preferred Stock"), at an aggregate
purchase price of $1,750,000, which Preferred Stock (as that term
is defined in the Securities Purchase Agreement) is convertible
into shares of Common Stock , $.01 par value, of the Company (the
"Common Stock") and (ii) the Initial Investor has made a
commitment to purchase an additional ___ shares of Preferred
Stock on the terms set forth in the Securities Purchase Agreement
(said aggregate ___ shares of Preferred Stock referred to herein
as the "Preferred Shares"), and the Company has agreed to issue
to the Investor Warrants to purchase shares of Common Stock
("Warrant Shares"); and
WHEREAS, the shares of Preferred Stock, and at the
election of the Company, dividends thereon are convertible into
shares of Common Stock (the "Conversion Shares") upon the terms
and subject to the conditions of the Certificate of Designations
(as defined in the Securities Purchase Agreement); and
WHEREAS, to induce the Initial Investor to execute and
deliver the Securities Purchase Agreement, the Company has agreed
to provide certain registration rights under the Securities Act
of 1933, as amended, and the rules and regulations thereunder, or
any similar successor statute (collectively, the "Securities
Act"), with respect to the Conversion Shares;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Initial Investor hereby agree
as follows:
1. DEFINITIONS.
(a) As used in this Agreement, the following terms
shall have the following meanings:
(i) "Investor" means the Initial Investor and any
permitted transferee or assignee who agrees to become bound by
the provisions of this Agreement in accordance with Section 9
hereof.
(ii) "Potential Material Event" means any of the
following: (a) the possession by the Company of material
information not ripe for disclosure in a registration statement,
which shall be evidenced by determination in good faith by the
Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to
the business and affairs of the Company; or (b) any material
engagement or activity by the Company which would, in the good
faith determination of the Board of Directors of the Company, be
adversely affected by disclosure in a registration statement at
such time, which determination shall be accompanied by a good
faith determination by the Board of Directors of the Company that
the registration statement would be materially misleading absent
the inclusion of such information.
(iii) "Register," "Registered," and "Registration"
refer to a registration effected by preparing and filing a
Registration Statement or Statements in compliance with the
Securities Act and pursuant to Rule 415 under the Securities Act
or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of
effectiveness of such Registration Statement by the United States
Securities and Exchange Commission (the "SEC").
(iv) "Registrable Securities" means the Conversion
Shares and the Warrant Shares.
(v) "Registration Statement" means a registration
statement of the Company under the Securities Act.
(b) Capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in
the Securities Purchase Agreement.
2. REGISTRATION.
(A) MANDATORY REGISTRATION. The Company shall prepare
and file with the SEC, on the later of December 19, 1997 or
thirty (30) days from the Closing Date, either a Registration
Statement on Form S-3 or an amendment to any pending Company
Registration Statement on Form S-3 registering for resale by the
Investor all of the Registrable Securities (or such lesser
number as may be required by the SEC, but in no event less than
the number of shares into which the Preferred Shares would be
convertible at the time of filing of the Form S-3), and such
Registration Statement or amended Registration Statement shall
state that, in accordance with Rule 416 and 457 under the
Securities Act, it also covers such indeterminate number of
additional shares of Common Stock as may become issuable upon
conversion of the Preferred Shares resulting from adjustment in
the Conversion Price, or to prevent dilution resulting from stock
splits, or stock dividends. The Company shall use its best
efforts to cause the Registration Statement to be declared
effective no later than ninety (90) days after the Closing Date.
If at any time the number of shares of Common Stock into which
the Preferred Shares may be converted exceeds the aggregate
number of shares of Common Stock then registered, the Company
shall, within ten (10) business days after receipt of a written
notice from any Investor, either (i) amend the Registration
Statement filed by the Company pursuant to the preceding
sentence, if such Registration Statement has not been declared
effective by the SEC at that time, to register all shares of
Common Stock into which the Preferred Stock may be converted, or
(ii) if such Registration Statement has been declared effective
by the SEC at that time, file with the SEC an additional
Registration Statement on Form S-3 to register the shares of
Common Stock into which the Preferred Shares may be converted
that exceed the aggregate number of shares of Common Stock
already registered.
(B) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the
Registrable Securities is not filed in proper form with the SEC
on the later of December 19, 1997 or thirty (30) days from the
Closing Date (the "Required Filing Date"), the Company will make
payment to the Initial Investor in such amounts and at such times
as shall be determined pursuant to this Section 2(b).
(ii) If the Registration Statement covering the
Registrable Securities is not effective within the earlier of (a)
five (5) days after notice by the SEC that it may be declared
effective or (b) ninety (90) days following the Closing Date
(the "Required Effective Date"), or after a Suspension Period
(as defined below), then the Company will make payments to the
Initial Investor in such amounts and at such times as shall be
determined pursuant to this Section 2(b), unless the delay in the
Effective Date is caused by extensive requests for additional
information or questions regarding the structure of the offering.
(iii) The amount (the "Periodic Amount") to be
paid by the Company to the Initial Investor shall be determined
as of each Computation Date (as defined below) and such amount
shall be equal to (A) one-half of one percent (0.5%) of the
purchase price paid by the Initial Investor (the "Purchase
Price") for all Preferred Shares then purchased and outstanding
pursuant to the Securities Purchase Agreement for each seven
calendar day period (or part thereof) from the date following the
Required Filing Date or the Required Effective Date, as the case
may be, to the date on which the Registration Statement is filed
(with respect to payments due as contemplated by Section 2(b)(i)
hereof) or declared effective (with respect to payments due as
contemplated by Section 2(b)(ii) hereof), or after a Suspension
Period (as contemplated by Section 3(g) hereof), as the case may
be. By way of illustration and not in limitation of the
foregoing, if the Registration Statement is timely filed but is
not declared effective until one hundred fifteen (115) days after
the Closing Date, the Periodic Amount will aggregate two percent
(2%) of the purchase price of the Preferred Shares (0.5% for each
of days 91-97, 98-104, 105-111 and 112-115).
(iv) Each Periodic Amount will be payable by the
Company in cash or other immediately available funds to the
Investor upon demand of the Investor.
(v) The parties acknowledge that the damages
which may be incurred by the Investor if the Registration
Statement is not filed by the Required Filing Date or if the
Registration Statement has not been declared effective by the
Required Registration Date may be difficult to ascertain. The
parties agree that the Periodic Amount represent a reasonable
estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages.
(vi) Notwithstanding the foregoing, the amounts
payable by the Company pursuant to this provision shall not be
payable to the extent any delay in the effectiveness of the
Registration Statement occurs because of an act of, or a failure
to act or to act timely by an Investor or its counsel, or any
other person whose securities are included therein, or in the
event all of the Registrable Securities may be sold pursuant to
Rule 144 or another available exemption under the Act.
3. OBLIGATIONS OF THE COMPANY. In connection with
the registration of the Registrable Securities, the Company shall
do each of the following:
(a) Prepare promptly, and file with the SEC by the
later of December 19, 1997 or thirty (30) days after the Closing
Date, a Registration Statement with respect to not less than the
number of Registrable Securities provided in Section 2(a), above,
and thereafter use its reasonable best efforts to cause each
Registration Statement relating to Registrable Securities to
become effective the earlier of (a) five (5) days after notice
by the SEC that it may be declared effective or (b) ninety (90)
days following the initial Closing Date, and keep the
Registration Statement effective at all times until the earliest
(the "Registration Period") of (i) the date that is two (2) years
after the Additional Closing Date, (ii) the date when the
Investors may sell all Registrable Securities under Rule 144 or
(iii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained
therein) shall not contain any untrue statement of a 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;
(b) Prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to the
Registration Statement and the prospectus used in connection with
the Registration Statement as may be necessary to keep the
Registration effective at all times during the Registration
Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition
of all Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement;
(c) The Company shall permit a single firm of counsel
designated by the Initial Investor to review the Registration
Statement and all amendments and supplements thereto a reasonable
period of time (but not less than three (3) business days) prior
to their filing with the SEC, and not file any document in a form
to which such counsel reasonably objects;
(d) Furnish to each Investor whose Registrable
Securities are included in the Registration Statement and its
legal counsel identified to the Company, (i) promptly after the
same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration
Statement, each preliminary prospectus and prospectus, and each
amendment or supplement thereto, and (ii) such number of copies
of a prospectus, and all amendments and supplements thereto and
such other documents, as such Investor may reasonably request in
order to facilitate the disposition of the Registrable Securities
owned by such Investor;
(e) As promptly as practicable after becoming aware of
such event, notify each Investor of the happening of any event of
which the Company has knowledge, as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and use
its best efforts promptly to prepare a supplement or amendment to
the Registration Statement or other appropriate filing with the
SEC to correct such untrue statement or omission, and deliver a
number of copies of such supplement or amendment to each Investor
as such Investor may reasonably request;
(f) As promptly as practicable after becoming aware of
such event, notify each Investor who holds Registrable Securities
being sold (or, in the event of an underwritten offering, the
managing underwriters) of the issuance by the SEC of a Notice of
Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration
Statement at the earliest possible time;
(g) Notwithstanding the foregoing, if at any time or
from time to time after the date of effectiveness of the
Registration Statement, the Company notifies the Investors in
writing of the existence of a Potential Material Event, the
Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the
Registrable Securities, from the time of the giving of notice
with respect to a Potential Material Event until such Investor
receives written notice from the Company that such Potential
Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event; provided, however,
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that the Company may not so suspend the right to such holders of
Registrable Securities for more than two twenty (20) day periods
in the aggregate during any 12-month period ("Suspension Period")
with at least a ten (10) business day interval between such
periods, during the periods the Registration Statement is
required to be in effect unless such greater time may be required
by law;
(h) Use its reasonable efforts to secure designation
of all the Registrable Securities covered by the Registration
Statement on the "Small Capitalization Market" of the National
Association of Securities Dealers Automated Quotations System
("NASDAQ") within the meaning of Rule 11Aa2-1 of the SEC under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the quotation of the Registrable Securities on The
NASDAQ SmallCap Market; or if, despite the Company's reasonable
efforts to satisfy the preceding clause, the Company is
unsuccessful in doing so, to secure OTC Bulletin Board
authorization and quotation for such Registrable Securities and,
without limiting the generality of the foregoing, to arrange for
at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with
respect to such Registrable Securities;
(i) Provide a transfer agent, which may be a single
entity, for the Registrable Securities not later than the
effective date of the Registration Statement;
(j) Cooperate with the Investors who hold Registrable
Securities being offered to facilitate the timely preparation and
delivery of certificates for the Registrable Securities to be
offered pursuant to the Registration Statement and enable such
certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may
reasonably request, and, within three (3) business days after a
Registration Statement which includes Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and
shall cause legal counsel selected by the Company to deliver, to
the transfer agent for the Registrable Securities (with copies to
the Investors whose Registrable Securities are included in such
Registration Statement) an appropriate instruction and opinion of
such counsel; and
(k) Take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of the
Registrable Securities pursuant to the Registration Statement.
4. OBLIGATIONS OF THE INVESTORS. In connection with
the registration of the Registrable Securities, the Investors
shall have the following obligations:
(a) It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant
to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of
the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable
Securities and shall execute such documents in connection with
such registration as the Company may reasonably request. At
least five (5) days prior to the first anticipated filing date of
the Registration Statement, the Company shall notify each
Investor of the information the Company requires from each such
Investor (the "Requested Information") if such Investor elects to
have any of such Investor's Registrable Securities included in
the Registration Statement. If at least two (2) business days
prior to the filing date the Company has not received the
Requested Information from an Investor (a "Non-Responsive
Investor"), then the Company may file the Registration Statement
without including Registrable Securities of such Non-Responsive
Investor;
(b) Each Investor by such Investor's acceptance of the
Registrable Securities agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of the Registration Statement hereunder,
unless such Investor has notified the Company in writing of such
Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and
(c) Each Investor agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind
described in Section 3(e) or 3(f), above, such Investor will
immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable
Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(e)
or 3(f) and, if so directed by the Company, such Investor shall
deliver to the Company (at the expense of the Company) or destroy
(and deliver to the Company a certificate of destruction) all
copies in such Investor's possession, of the prospectus covering
such Registrable Securities current at the time of receipt of
such notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses
(other than underwriting discounts and commissions of the
Investor) incurred in connection with registrations, filings or
qualifications pursuant to Section 3, but including, without
limitation, all registration, listing, and qualifications fees,
printers and accounting fees, the fees and disbursements of
counsel for the Company.
6. INDEMNIFICATION. In the event any Registrable
Securities are included in a Registration Statement under this
Agreement:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless each Investor who holds such
Registrable Securities, the directors, if any, of such Investor,
the officers, if any, of such Investor, each person, if any, who
controls any Investor within the meaning of the Securities Act or
the Exchange Act (each, an "Indemnified Person" or "Indemnified
Party"), against any losses, claims, damages, liabilities or
expenses (joint or several) incurred (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 in the Registration
Statement, or any post-effective amendment thereof, or any
prospectus included therein: (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 the final prospectus (as amended
or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged
omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under
which the statements therein 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 regulation under the Securities Act, the Exchange Act or
any state securities law (the matters in the foregoing clauses
(i) through (iii) being, collectively, "Violations"). Subject to
clause (b) of this Section 6, the Company shall reimburse the
Investors, 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 Section
6(a) shall not (I) 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 or on behalf
of such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement or any such
amendment thereof or supplement thereto, if such prospectus was
timely made available by the Company pursuant to Section 3(c)
hereof; (II) be available to the extent such Claim is based on a
failure of the Investor to deliver or cause to be delivered the
prospectus made available by the Company; or (III) 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. Each Investor will
indemnify the Company and its officers, directors and agents
against any claims 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 or on behalf of such
Investor, expressly for use in connection with the preparation of
the Registration Statement, subject to such limitations and
conditions as are applicable to the Indemnification provided by
the Company to this Section 6. Such indemnity shall remain in
full force and effect regardless of any investigation made by or
on behalf of the Indemnified Person and shall survive the
transfer of the Registrable Securities by the Investors pursuant
to Section 9.
(b) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the
commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party
under this Section 6, 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 party and the Indemnified Person or the Indemnified
Party, as the case may be; provided, however, that an Indemnified
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Person or Indemnified Party shall have the right to retain its
own counsel, with the reasonable fees and expenses to be paid by
the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such
counsel of the Indemnified Person or Indemnified Party and the
indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other person represented by such
counsel in such proceeding. In such event, the indemnifying party
shall pay for only one separate legal counsel for the Indemnified
Party or Indemnified Person; such legal counsel to be selected by
the Indemnified Person or Indemnified Party, (I) subject to the
consent of the indemnifying party (which consent shall not be
unreasonably withheld or delayed), and (II) if the Indemnified
Parties or Indemnified Persons are Investors, by the Investors
holding a majority in interests of the Registrable Securities
included in the Registration Statement to which the Claim
relates. Except as provided in the immediately preceding
sentences, in case any such action is brought against any
Indemnified Person or Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, after notice from
the indemnifying party to such Indemnified Person or Indemnified
Party of the indemnifying person s election so to assume (alone
or with other indemnifying persons) the defense thereof, the
indemnifying party will not be liable to such Indemnified Person
or Indemnified Party under this Section 6 for any legal or other
reasonable out-of-pocket expenses subsequently incurred by such
Indemnified Person or Indemnified Party in connection with the
defense thereof other than reasonable costs of investigation,
unless the indemnifying party shall not defend such action to its
final conclusion. The Indemnified Person or Indemnified Party
shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but, except as
provided above, the fees and reasonable out-of-pocket expenses
subsequently incurred by such Indemnified Person or Indemnified
Party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party
shall not pursue the action of its final conclusion. The
Indemnified Person or Indemnified Party shall have the right to
employ separate counsel in any such action and to participate in
the defense thereof, but the fees and reasonable out-of-pocket
expenses of such counsel shall not be at the expense of the
indemnifying party if the indemnifying party has assumed the
defense of the action with counsel reasonably satisfactory to the
Indemnified Person or Indemnified Party. 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 Person or
Indemnified Party under this Section 6, except to the extent that
the indemnifying party is prejudiced in its ability to defend
such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as such expense,
loss, damage or liability is incurred and is due and payable.
7. CONTRIBUTION. To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the
indemnifying party agrees to make the maximum contribution with
respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided,
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however, that (a) no contribution shall be made under
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circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6;
(b) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller
of Registrable Securities who was not guilty of such fraudulent
misrepresentation; and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net
amount of proceeds received by such seller from the sale of such
Registrable Securities.
8. REPORTS UNDER EXCHANGE ACT. With a view to making
available to the Investors the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation
of the SEC that may at any time permit the Investors to sell
securities of the Company to the public without registration
("Rule 144"), the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports
and other documents required of the Company under the Securities
Act and the Exchange Act; and
(c) furnish to each Investor so long as such Investor
owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting
requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the
Company and (iii) such other information as may be reasonably
requested to permit the Investors to sell such securities
pursuant to Rule 144 without registration.
9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights
to have the Company register Registrable Securities pursuant to
this Agreement shall be automatically assigned by the Investors
to any transferee of the Registrable Securities (or all or any
portion of any Warrants of the Company which is convertible into
such securities) only if: (a) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy
of such agreement is furnished to the Company within a reasonable
time after such assignment, (b) the Company is, within a
reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c)
immediately following such transfer or assignment the further
disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state
securities laws, and (d) at or before the time the Company
received the written notice contemplated by clause (b) of this
sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein.
In the event of any delay in filing or effectiveness of the
Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such
delay to any investor, or the payments set forth in Section 2(c)
hereof.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision
of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written
consent of the Company and Investors who hold an eighty (80%)
percent interest of the Registrable Securities then outstanding
and held by the Investors. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each
Investor and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of
Registrable Securities whenever such person or entity owns of
record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more
persons or entities with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such
Registrable Securities.
(b) Notices required or permitted to be given
hereunder shall be in writing and shall be deemed to be
sufficiently given when personally delivered (by hand, by
courier, by telephone line facsimile transmission, receipt
confirmed, or other means) or sent by certified mail, return
receipt requested, properly addressed and with proper postage
pre-paid (i) if to the Company, CompuMed, Inc., Suite 1000, 0000
Xxxxxxxxx Xxxxxx, Xxxxxxxxx Xxxxx, XX 00000, ATTN:Xxxxx Xxxxxxx,
President, Telecopier No.: (000) 000-0000; (ii) if to the Initial
Investor, at the address set forth under its name in the
Securities Purchase Agreement, with a copy to Xxxxxx Xxxxxxx,
Esq., Xxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxx,
XX 00000, Telecopier No.: (000) 000-0000; and (iii) if to any
other Investor, at such address as such Investor shall have
provided in writing to the Company, or at such other address as
each such party furnishes by notice given in accordance with this
Section 11(b), and shall be effective, when personally delivered,
upon receipt and, when so sent by registered or certified mail,
four (4) calendar days after deposit with the United States
Postal Service.
(c) Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in
exercising such right or remedy, shall not operate as a waiver
thereof.
(d) This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York
for contracts to be wholly performed in such state and without
giving effect to the principles thereof regarding the conflict of
laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of
New York or the state courts of the State of New York sitting in
the City of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non
coveniens, to the bringing of any such proceeding in such
jurisdictions.
(e) If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement or the validity or
enforceability of this Agreement in any other jurisdiction.
(f) Subject to the requirements of Section 9 hereof,
this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties hereto.
(g) All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the
context may require.
(h) The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning thereof.
(i) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all
of which shall constitute one and the same agreement. This
Agreement, once executed by a party, may be delivered to the
other party hereto by telephone line facsimile transmission of a
copy of this Agreement bearing the signature of the party so
delivering this Agreement.
(j) The Company acknowledges that any failure by the
Company to perform its obligations under Section 3(a) hereof, or
any delay in such performance could result in loss to the
Investors, and the Company agrees that, in addition to any other
liability the Company may have by reason of such failure or
delay, the Company shall be liable for all direct damages caused
by any such failure or delay, unless the same is the result of
force majeure. Neither party shall be liable for consequential
damages.
(k) This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject
matter hereof. There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and
understandings among the parties hereto with respect to the
subject matter hereof. This Agreement may be amended only by an
instrument in writing signed by the party to be charged with
enforcement thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above
written.
CompuMed, Inc.
By:_____________________________________
Name:
Title:
_______________________________________
By:____________________________________
Name:
Title:
