Exhibit 10.17
ASSIGNMENT OF
EXCLUSIVE MARKETING RIGHTS
Effective as of the 9th day of February, 1995, CompuMed Inc.
("Compumed"), a Delaware corporation having offices in Manhattan Beach,
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California, and ▇▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇"), a non United States resident,
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hereby agree as follows:
1. Background Information.
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1.1 ▇▇▇▇▇▇. ▇▇▇▇▇▇ is the owner of the exclusive marketing
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rights in the United States of America for the products identified in
Exhibit 1 hereto of Israeli Aerotel Inc., a corporation organized under the
laws of Israel ("Aerotel"). A copy of the entire agreement (the "Exclusive
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Marketing Agreement") with Aerotel including all its additions and
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amendments granting such rights to ▇▇▇▇▇▇ is attached hereto as Exhibit 1.
The Exclusive Marketing Agreement gives ▇▇▇▇▇▇ the exclusive right through
the end of 1999 to market Aerotel products in the United States, provided
that yearly sales increase by 20% per year.
1.2 Compumed. CompuMed is a NASDAQ-listed company that has
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approximately 5,200,000 outstanding shares of common stock, $.01 par value
per share (the "Common Stock"). CompuMed currently has a business line
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involving [telephonic interpretation of EKG data] (the "EKG Business"). As
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part of that business, CompuMed manufactures devices that it designates its
107 and 307 series.
1.3 Regulation S Offering. CompuMed has recently received an
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equity investment of $350,000 as part of a planned Regulation S offering
(the "Offering") of $1,000,000 through Israel-Trading Co.
2. Assignment.
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▇▇▇▇▇▇ hereby assigns to CompuMed all of his right, title and interest in
and to the Exclusive Marketing Agreement between ▇▇▇▇▇▇ and Aerotel for
sales within the United States of America. CompuMed hereby agrees to
perform all of the obligations of ▇▇▇▇▇▇ set forth therein with respect to
such sales except that ▇▇▇▇▇▇ shall remain solely responsible for
liabilities and penalties arising under the Exclusive Marketing Agreement
arising out of any failure to meet minimum sales figures, which liabilities
and penalties ▇▇▇▇▇▇ agrees to pay, unless ▇▇▇▇▇▇▇ enters into a separate
and superseding agreement directly with CompuMed, in which case CompuMed
shall be responsible for such liabilities and penalties.
3. Consideration.
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3.1 Shares. As consideration to ▇▇▇▇▇▇ for the assignment set
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forth herein, CompuMed is issuing Four Hundred Thousand (400,000) shares of
its Common Stock (the "▇▇▇▇▇▇ Shares") simultaneously with the execution of
this agreement. The ▇▇▇▇▇▇ Shares are being issued in ▇▇▇▇▇▇'▇ name and
being delivered to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇, Esq.
(collectively, the "Escrow Agent"), as co-escrow agents, pursuant to the
escrow agreement attached hereto as Exhibit 2 (the "Escrow Agreement"),
with irrevocable instructions to release them to ▇▇▇▇▇▇ as follows: (a) One
Hundred Thousand (100,000) of the ▇▇▇▇▇▇ Shares shall be released and
delivered to ▇▇▇▇▇▇ at his address set forth in section 9.5 below 41 days
after the date of this Agreement, provided that ▇▇▇▇▇▇ confirms that he is
then at a non-U.S. address for bona fide business or personal reasons; (b)
Two Hundred Thousand (200,000) ▇▇▇▇▇▇ Shares shall be released and
delivered to ▇▇▇▇▇▇ at his address set forth in section 9.5 below provided
that ▇▇▇▇▇▇ confirms that he is then at a non-U.S. address for bona fide
business or personal reasons upon the last to occur of (i) completion of a
Two Hundred and Fifty Thousand U.S. Dollars ($250,000.00) investment in the
Offering through Israel Trading Company, (ii) a demonstration that the
TeleCor telemetry station is operational, with all necessary FDA approvals,
so that medical doctors can prescribe cardiac event monitors in reliance
upon it, all as set forth in greater detail in the Escrow Agreement (but in
no event sooner than 41 days after the date of this Agreement) and (iii) in
the case of 100,000 of such 200,000 shares, the date one year from the date
of this agreement; and (c) One Hundred Thousand (100,000) shares are being
delivered to the Escrow Agent pursuant to the Escrow Agreement with
irrevocable instructions to release and deliver the shares to ▇▇▇▇▇▇ at his
address set forth in section 9.5 as ▇▇▇▇▇▇ may direct, provided that ▇▇▇▇▇▇
confirms that he is then at a non-U.S. address for bona fide business or
personal reasons upon the last to occur of (i) sales revenue of the TeleCor
division (as defined hereinafter) having reached Forty Thousand U.S.
Dollars ($40,000.00) for two successive months, and (ii) the date one year
from the date of this agreement, all as set forth in greater detail in the
Escrow Agreement. (All 400,000 shares being delivered herewith are
referred to herein collectively as the "Shares").
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Nothing in the foregoing timetable or in the Escrow Agreement shall be
construed as requiring that ▇▇▇▇▇▇ provide additional consideration for the
issuance of any of the Shares. It is expressly understood that the parties
are relying upon the availability of Regulation S promulgated by the U.S.
Securities Exchange Commission ("Reg S") as the basis for not registering
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the issuance of the Shares, the Warrant (as defined hereinafter) and the
Common Stock that is subject to the Warrant (collectively, the "▇▇▇▇▇▇
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Securities"). It is the belief of the parties that all of the Shares and
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the Warrant shall, for purposes of Regulation S, be deemed to have been
issued to ▇▇▇▇▇▇ in Israel at the time of the execution of this Agreement,
and that the escrow conditions will serve as a condition subsequent which
may defeat ▇▇▇▇▇▇'▇ entitlement to a portion of the Shares.
3.2 ▇▇▇▇▇▇ Warrant. As consideration to ▇▇▇▇▇▇ for the assignment
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set forth herein, CompuMed will also issue a warrant (the "▇▇▇▇▇▇ Warrant")
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in the same form as is being issued to Israel Trading Company in connection
with the Offering, subject only to such differences as may be legally
required because of differing circumstances applicable to ▇▇▇▇▇▇. The
▇▇▇▇▇▇ Warrant will be issued when the warrant to Israel Trading is issued.
When issued, the ▇▇▇▇▇▇ Warrant will give ▇▇▇▇▇▇ the right to purchase up
to One Hundred Fifty Thousand (150,000) shares of additional Common Stock
at $0.50 per share when the gross revenues of the TeleCor division have
reached $2.5 million during a 12-month period on at least a break-even
operational basis. The Common Stock subject to the ▇▇▇▇▇▇ Warrant (the
"▇▇▇▇▇▇ Warrant Shares") shall, when issued, be fully paid and non-
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assessable and of the same par value as the shares of Common Stock that are
publicly traded. The ▇▇▇▇▇▇ Warrant will be delivered to the Escrow Agent
pursuant to the Escrow Agreement with irrevocable instructions to release
and deliver the Warrant to ▇▇▇▇▇▇ 41 days after the date of this Agreement
at his address set forth in section 9.5 below, provided that ▇▇▇▇▇▇
confirms that he is then at a non-U.S. address for bona fide business or
personal reasons.
4. Restrictions on Transfer of Securities.
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▇▇▇▇▇▇ ▇▇▇▇▇▇ represents to CompuMed that (i) he is not a U.S.
Person, as that term is defined in Reg S, (ii) he is not, at the time of
execution of this Agreement, physically present in the United States; (iii)
he is acquiring the ▇▇▇▇▇▇ Shares and the ▇▇▇▇▇▇ Warrant (collectively, the
"▇▇▇▇▇▇ Securities") for his own account, an not on behalf of any U.S.
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Person, as that term is defined in Reg S, (iv) he is the sole beneficial
owner of the ▇▇▇▇▇▇ Securities, and has not pre-arranged any sale to any
purchaser within the U.S.; (v) Any transfer of the certificates
representing any ▇▇▇▇▇▇ Securities that he may transfer into street name
will be solely to enable ▇▇▇▇▇▇ to comply with the requirements of certain
offshore portfolio management regulations and the security requirements of
offshore lenders for margin loans; (vi) ▇▇▇▇▇▇ is not an underwriter of, or
dealer in, the ▇▇▇▇▇▇ Securities, and is not purchasing pursuant to a
contractual arrangement for the distribution of such securities; and (vii)
he is not acquiring any of the ▇▇▇▇▇▇ Securities as part of a plan to evade
the registration provisions of the Securities Act of 1933 (the "1933 Act").
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▇▇▇▇▇▇ agrees that these representations will be deemed to be re-made at
the time of the issuance of any ▇▇▇▇▇▇ Warrant Shares. CompuMed is issuing
the ▇▇▇▇▇▇ Securities without registering their issuance under the 1933 Act
in reliance upon these representations and in reliance upon the exemption
from such registration requirements set forth in Reg S. Therefore no ▇▇▇▇▇▇
Securities can be transferred within the United States or to a U.S.
resident unless the transfer has been registered under the 1933 Act or is
exempt from the registration requirements set forth therein; and CompuMed
may issue stop transfer orders to its transfer agent restricting transfer
or sale of the ▇▇▇▇▇▇ Securities until 41 days after issuance. ▇▇▇▇▇▇
acknowledges that he has received copies of CompuMed's most recent Annual
Report of form 10-KSB filed with the SEC, and the Forms 10-QSB and 8-K
filed thereafter, and other publicly-available documents.
Notwithstanding the foregoing, the parties acknowledge that ▇▇▇▇▇▇ may
have to travel to the United States to ascertain that certain operational
aspects of the Aerotel technology are operating successfully. He is not
obligated hereunder to remain outside the United States while the Warrant
is outstanding; and he is not making any representation that he will do so.
5. Representations and Warranties.
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5.1 Representations and Warranties of ▇▇▇▇▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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represents and warrants to CompuMed that:
(a) The background information set forth in sections 1.1 and 1.3
is true and not misleading;
(b) No separate consideration will be owed to Aerotel as a
result of the consummation of the transactions contemplated
herein;
(c) His execution, delivery and performance of this Agreement,
and the consummation of the transactions contemplated hereby
(i.e., the assignment of the Aerotel Agreement), will not
result in a breach of any of the terms, conditions or
provisions of any law, order, writ, injunction, judgment or
decree of any court or governmental authority or any
arbitration award applicable to him;
(d) Except as otherwise disclosed in this Agreement, he has good
title (whether in absolute form or in the form of license
rights) to all computer software programs necessary for him
to carry out the provisions of this Agreement;
(e) All Aerotel products to be sold in the United States have or
shall have all necessary approvals and clearances from the
U. S. Food and Drug Administration;
(f) A Heartline Center Aerotel Model, including lay-out, and
software, and but excluding hardware, shall be installed and
set up at CompuMed's headquarters after CompuMed has
provided the hardware needed and the location of the
Center);
(g) Attached as Exhibit 3 hereto is a valid and binding written
agreement of Aerotel confirming that the Exclusive Marketing
Agreement set forth on Exhibit 1 hereto is a true, correct
and complete copy of agreement between it and ▇▇▇▇▇▇
concerning the subject matter addressed therein;
(i) confirming that the agreement remains in full force and
effect, and does not conflict with any other agreement,
judgment or court order binding upon it or its assets;
(ii) confirming that Aerotel has the right to grant the
marketing rights granted therein to ▇▇▇▇▇▇; and
(iii) consenting in writing to the assignment of ▇▇▇▇▇▇'▇
rights therein to CompuMed.
5.2 Representations and Warranties of CompuMed. CompuMed hereby
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represents and warrants to ▇▇▇▇▇▇ that:
(a) The background information set forth in section 1.2 and 1.3
is true and not misleading;
(b) All shares of Common Stock to be issued hereunder or
pursuant to the ▇▇▇▇▇▇ Warrant have been duly authorized
and, when issued in accordance with this Agreement and all
the exhibits attached hereto, will be and are validly
issued, fully paid and non-assessable; and
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will
result in a breach of any of the terms, conditions or
provisions of (a) its Certificate of Incorporation or
by-laws, or (b) any law, order, writ, injunction, judgment
or decree of any court or governmental authority or any
arbitration award applicable to it. No consent, approval,
order or authorization of any governmental authority is
required to be obtained by CompuMed in order to consummate
the transactions contemplated herein.
(d) Its Common Stock is registered pursuant to section 12 of the
Securities Exchange Act of 1934 (the "Exchange Act").
(e) It has made all filings required to be made under the
Exchange Act for a period of twelve months preceding the
date hereof (the "SEC Filings"). The Company will continue
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to make such filings on a timely basis.
(f) It agrees, pursuant to the sale of its securities under Reg
S, to make all necessary filings in connection with the sale
of its securities as required by the laws and regulations of
all appropriate jurisdictions.
(g) If ▇▇▇▇▇▇ decides to engage in a sale of any Shares or
Warrant Shares that is registered under the 1933 Act,
CompuMed will provide reasonable cooperation, at CompuMed's
expense, such as causing its counsel to issue an opinion
that the Shares or Warrant Shares have been duly authorized
and are validly issued, fully-paid and non-assessable.
Otherwise, ▇▇▇▇▇▇ shall be generally responsible for the
costs of such a registered offering.
6. Future Obligations.
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6.1 CompuMed. CompuMed shall:
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(a) The Telecor Division. Establish a TeleCor division as a
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vehicle for marketing products that combine the Aerotel and
CompuMed technologies for computer interpretation of
transtelephonic EKG data, cardiac monitoring and emergency
response of cardiac patients in the home. The TeleCor
Division will market CompuMed's 107 and 307 product series
and the Aerotel products. CompuMed will fund the TeleCor
division with the net proceeds of the next $500,000 portion
of the Offering raised hereafter (it being understood that
Compumed may use the last $150,000 of the Offering for its
general corporate purposes). Both parties acknowledge
(without thereby modifying their rights and obligations
hereunder) that execution of the TeleCor business plan will
require more funds than will be available through the
Regulation S Offering, and that there is no assurance that
such capital will be available to CompuMed;
(b) Technology Sharing. Cooperate as required in making its
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technology available to the TeleCor division and assisting
in the conversion of the Heartline system described below.
(c) ▇▇▇▇▇▇ Warrant. As an incentive to the TeleCor sales force,
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CompuMed will issue a warrant (the "▇▇▇▇▇▇ Warrant")
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pursuant to which ▇▇▇▇▇ ▇▇▇▇▇▇ and his associates ("▇▇▇▇▇▇")
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will have the right, upon the achievement of certain sales
revenue and profitability milestones, to purchase up to Six
Hundred Fifty Thousand (650,000) shares of additional Common
Stock at $0.50 per share (such shares being referred to
herein collectively as the "▇▇▇▇▇▇ Warrant Shares").
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6.2 ▇▇▇▇▇▇. As part of the assignment of the Exclusive
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Marketing Agreement, and to demonstrate that the Aerotel
product is functioning and operative, ▇▇▇▇▇▇ shall cause
Aerotel to:
(a) Training. Set up the operation and provide the technical
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skills necessary to run the TeleCor operations. This will
involve locating and obtaining operating experts in the
local (U. S. labor) market and if necessary bring over from
Israel (at no expense to CompuMed) such experts to run the
application of the operations. This will also involve
training employees of TeleCor (as a division of CompuMed) as
needed to provide an efficient and proficient operation; and
having representatives participate in, and cause Aerotel to
participate in, the semi-annual trade shows presently
conducted in Dallas, Texas, and New Orleans, Louisiana, in
the same manner and to the same extent that they have done
so in the recent past, with no charge to CompuMed;
(b) Heartline Conversion. Use best efforts to achieve
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conversion of the algorithm of the Heartline system to
operate on common PC computers (it being understood by the
parties that such conversion may require the use of software
copyrighted by third parties).
7. Arbitration.
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Any controversy or claim arising out of or relating to this Agreement, or
the breach hereof, which the parties are unable to resolve themselves shall
be finally settled by arbitration ("Arbitration") in accordance with this
Section and (except to the extent inconsistent with the express provisions
of this Section) the Commercial Arbitration Rules of the American
Arbitration Association ("AAA"), by a three-person arbitration panel,
except that no controversy or claim, the manner of resolution of which is
expressly provided for herein otherwise than under this Section, or is
expressly excluded from Arbitration, shall be arbitrable hereunder.
The party seeking arbitration shall give notice thereof and of the
issues it wishes arbitrated, and shall designate an arbitrator in such
notice. The other party shall designate its arbitrator, and any additional
issues it wishes arbitrated in the same proceeding, within thirty (30) days
after receipt of such notice. The two arbitrators so selected shall agree
upon a third arbitrator within fifteen (15) days thereafter. If a second
arbitrator has not been designated within the thirty (30) day period
provided therefore, the first arbitrator may unilaterally designate a
second arbitrator and such two arbitrators shall constitute the arbitration
panel. If the arbitrators selected by each of the parties cannot agree upon
a third arbitrator, they shall request the Regional Director of the AAA to
designate the third arbitrator. The arbitration panel may, with the consent
of the parties, agree on such modifications to or exceptions from the
Arbitration Rules of the AAA as the panel may deem appropriate. The award
of the arbitrators shall be in writing and shall include written findings
of fact to the extent the arbitration required the resolution of factual
disputes.
The agreement to arbitrate disputes as provided in this Agreement
shall be specifically enforceable in any court having jurisdiction.
No individual who is, or has at any time been, an officer, employee or
consultant of either party shall be an arbitrator without the express
written consent of both parties.
All arbitration proceedings shall be held in Los Angeles, California.
Each of the parties shall produce such records and witnesses as the
arbitrators may request and as are available to them.
The arbitrators shall determine a fair and equitable allocation of the
reasonable fees and expenses of each party incurred in connection with any
Arbitration hereunder, and such allocation shall be binding upon the
parties.
Each party submits to the jurisdiction of the arbitrators appointed in
accordance herewith. The determination of the arbitrators shall be final
and binding upon the parties and may be entered in any court having
jurisdiction.
8. Indemnification.
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8.1 Indemnification Covenants.
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Each party shall defend, indemnify, save and keep the other harmless
against and from all liabilities, demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses,
including, without limitation, those asserted by any Federal, state or
local governmental entity or third party, including reasonable attorneys'
and expert witness fees, sustained or incurred as a result of or arising
out of or by virtue of:
(a) the inaccuracy of any representation or warranty made by the
indemnifying party herein or in any document delivered
herewith;
(b) the unexcused failure of the indemnifying party to comply
with any of the covenants of this Agreement to be performed
by it or him (including, without limitation, this Section);
and
(c) the invalidity, unenforceability or lack of authorization of
this Agreement, or any document delivered in connection
herewith.
9. General
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9.1 Applicable Law.
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The law of the State of California (excluding conflict of law rules
thereof) shall govern the validity, interpretation, construction and
performance of this Agreement.
9.2 Compliance with Laws.
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In the performance of this Agreement, each party shall comply with all
federal, state and local laws, rules, ordinances, regulations and all
administrative and judicial positions known to it, except for such period
as it may in good faith be contesting the validity or application thereof.
9.3 Severability.
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If any provision of this Agreement is held invalid by any court or body of
competent jurisdiction, the remainder of this Agreement shall remain in
full force and effect.
9.4 Headings.
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The section headings in this Agreement are for convenience and reference
only and in no way define or limit the scope or content of this Agreement
or in any way affect its provisions.
9.5 Notices.
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All Notices hereunder shall be in writing, and may be delivered by U.S.
Mail (certified or registered mail), FedEx, DHL or confirmed telecopier
transmission, thereto, within accordance of the Notice provisions of this
paragraph. Notices shall be deemed given upon receipt if sent by
telecopier, FedEx or DHL, and three days after having been deposited in the
U.S. mails, postage prepaid, if sent by U.S. mail. All notices shall be
addressed as follows:
If to CompuMed: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
CompuMed, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & Sunstein
▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ▇▇▇▇▇▇: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Changes in the respective addresses to which such notices shall
be sent may be made from time to time by either party by notice to the
other party(s).
9.6 Entire Agreement.
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This Agreement contains the entire understanding of the parties with
respect to the subject matter hereof, and supersedes all prior agreements,
representations and understandings of the parties with respect to the
subject matter hereof. This Agreement may be amended or modified only by
written instrument duly executed by the parties hereto.
9.7 No Third Party Beneficiaries.
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This Agreement is intended to be an Agreement between CompuMed and ▇▇▇▇▇▇,
and it is not the intent of the parties that any individual or company be a
third party beneficiary of this Agreement.
9.8 Waiver.
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Failure of either party to provide notice to the other of a breach of this
Agreement shall not act as a waiver of any prior or subsequent breach nor
of any other legal or equitable remedy which it may have.
9.9 Cooperation.
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Each party will cooperate with all reasonable requests of the other for
information regarding the other party or the transactions contemplated
hereby.
9.10 Expenses.
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Each party shall pay its own expenses incident to preparing for, entering
and formulating this Agreement.
9.11 Miscellaneous Agreements and Consents.
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Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to be taken,
all action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement.
9.12 Press Releases.
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The parties shall consult with each other as to the form, substance and
timing of any press release or other public disclosure of matters related
to this Agreement or any of the transactions contemplated hereby; provided,
however, that either party may make such disclosures as are required by
law.
* * * * * * *
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Agreement to be executed as a sealed instrument as of the day
and year first above written.
COMPUMED, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
___________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
______________________________
▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE OF EXHIBITS
1. Exclusive Marketing Agreements and all its Amendments
2. Escrow Agreement
3. Aerotel Consent