Document:

Exhibit 10.20

EXHIBIT 10.20

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE COMPANY TO SUCH EFFECT.

COMMON STOCK PURCHASE WARRANT

To Purchase 16,000,000 Shares of Common Stock of

CompuMed, Inc.

Date: February 15, 2008

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, including without limitation a purchase price of Five Thousand Dollars ($5,000) (the “Warrant Purchase Price”), BOSTON AVENUE CAPITAL, LLC, an Oklahoma limited liability company (together with its permitted successors and assigns, the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth in this Warrant, to purchase from COMPUMED, INC., a Delaware corporation (the “Company”), up to 16,000,000 shares, subject to adjustment as set forth herein, of the Company’s Common Stock, par value $0.01 per share (the “Warrant Shares”), for the “Exercise Price” per share  determined pursuant to Section 1(b) of the Warrant and subject to adjustment as set forth herein, if and only if the Company’s stockholders approve an increase in the Company’s authorized Common Stock sufficient to permit that number of shares to be reserved for issuance, and issued, upon exercise of this Warrant.  

Section 1.

Exercise

(a)

General.  This Warrant represents the right of the Holder to purchase up to 16,000,000 Warrant Shares (subject to adjustment as set forth herein), which may be purchased through one or more exercises of this Warrant, at any time and from time to time, from and after the “Exercise Price Determination Date” as defined in Section (b) of this Section 1 until the earlier of (y) the twentieth anniversary of the date of issuance of this Warrant (the “Issue Date”) and (z) the tenth anniversary of the date the Company shall have irrevocably reserved a sufficient number of duly authorized shares of Common Stock for issuance upon full exercise of the Warrant (such date being hereinafter called the “Termination Date”). If duly authorized and reserved shares of Common Stock are not available for issuance upon exercise of the Warrant by the fifth anniversary of the Issue Date, the Holder may put the Warrant to the Company, in whole but not in part, for a price equal to the sum of (i) the Warrant Purchase Price and (ii) 8% per annum times the Warrant Purchase Price, compounded annually from the Issue Date.

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(b)

Exercise Price.

  The exercise price per share of Common Stock purchased upon any exercise of the Warrant (the “Exercise Price”) shall be equal to the average of the closing price of the Common Stock as reported on the OTC Bulletin Board on each trading day during the period commencing on the date of this Agreement and ending one hundred eighty (180) trading days following but not including the date of issuance of the Warrant, calculated as of the close of trading on such one hundred eightieth trading day (the “Exercise Price Determination Date”).

(c)

Mechanics of Exercise. 

(1)

Exercise of Warrant.  This Warrant shall be exercisable by the Holder, for all or any portion of the Warrant Shares, by delivery to the Company of a duly executed Notice of Exercise (in the form annexed hereto) at the address set forth in Section 4(j) of the Warrant (or at such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company).

(2)

Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the Company to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise Form within seven (7) Calendar Days from the receipt by the Company of the Notice of Exercise Form, and upon surrender of this Warrant and payment of the Warrant Shares purchased. This Warrant shall be deemed to have been exercised on the date the payment of the Warrant Shares purchased is received by the Company. The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment to the Company of the Warrant Shares purchased and all taxes required to be paid by the Holder, if any, prior to the issuance of such shares, have been paid.

(3)

Delivery of New Warrant Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing Warrant Shares purchased upon such exercise, deliver to Holder a new Warrant evidencing the rights of Holder to exercise the Warrant for the number of unexercised Warrant Shares, which new Warrant shall in all other respects be identical with this Warrant. 

(4)

No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall, in its sole discretion, either (i) pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price, or (ii) round up the fractional share to one whole share.

(5)

Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which reasonable and usual taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder.

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(6)

Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

Section 2.

Transfer of Warrant

(a)

Transferability. Upon notice duly given to the Company, this Warrant may be transferred, in whole or in part, by the Holder, only to investment funds managed by Value Fund Advisors, LLC.

(b)

Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose, in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual written notice to the contrary.

Section 3.

Certain Adjustments

(a)

Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (A) subdivides outstanding shares of Common Stock into a larger number of shares, (B) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (C) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted. The Exercise Price of this Warrant shall also be adjusted to reflect any transaction described in this section. 

(b)

Consolidation and Merger. In case of any consolidation or merger to which the Company is a party other than a merger or consolidation in which the Company is the continuing entity, or in case of any sale or conveyance to another entity of all or substantially all of the property of the Company as an entirety, or in the case of any statutory exchange of securities with another corporation or entity (including any exchange effected in connection with a merger of a third corporation or entity with the Company), the Holder shall be obligated to convert this Warrant after payment for the Warrant Shares purchased, into the kind and amount of securities, cash or other property which he would have owned or have been entitled to receive immediately after such consolidation, merger, statutory exchange, sale or conveyance had such Warrant been converted immediately prior to the effective date of such consolidation, merger, statutory exchange, sale or conveyance and in such case, if necessary, appropriate adjustment shall be made in the application of the provisions set forth in this Section 3 and shall thereafter correspondingly be made applicable, as nearly as may reasonably be, in relation to any Warrant Shares or other securities or property thereafter deliverable on the conversion of this Warrant. The immediately preceding provisions of this subsection (b) shall similarly apply to successive consolidations, merger, statutory exchanges, sales or conveyance. Notice of any such consolidation, merger, statutory exchange, sale or conveyance and of said provisions so proposed 

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to be made, shall be mailed to the Holder not less than 30 days prior to such event. A sale of all or substantially all of the assets of the Company for a consolidation consisting primarily of securities shall be deemed a consolidation or merger for the foregoing purposes.

(c)

Whenever the Exercise Price is adjusted as provided in this Section 3 and upon modification of the rights of the Holder of this Warrant in accordance with this Section 3, the Company shall promptly prepare a certificate of an officer of the Company, setting forth (1) the Exercise Price and the number of Warrant Shares after such adjustment or modification, (2) a brief statement of the facts requiring such adjustment or modification, and (3) the manner of computing the same, and shall cause a copy of such certificate to be mailed to the Holder.

Section 4.

Miscellaneous

(a)

Compliance with Securities Laws. The Holder represents and warrants to the Company that it (a) is acquiring this Warrant (including the underlying Warrant Shares into which this Warrant may be exercised) for its own account for investment purposes only and not with a view to a distribution thereof, (b) is an “accredited investor” as such term is defined in Rule 501(a) under the Securities Act, and (c) understands that this Warrant and the underlying Warrant Shares will, upon purchase, be characterized as “restricted securities” under state and federal securities laws and that under such laws and applicable regulations this Warrant and the underlying Warrant Shares may be resold without registration under such laws only in certain limited circumstances. The Holder agrees that it will not sell, convey, transfer or dispose of this Warrant or the underlying Warrant Shares which the Holder may acquire upon the exercise of this Warrant, unless such transaction is made pursuant to Section 4(a) hereof. This Warrant and all Warrant Shares (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

“THIS SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED FOR SALE, SOLD OR TRANSFERRED UNLESS A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO, OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER, SALE OR TRANSFER.”

(b)

Access to Information. The Holder has had the opportunity to ask questions of, and to receive answers from, appropriate executive officers of the Company with respect to the terms and conditions of the transactions contemplated hereby and with respect to the business, affairs, financial condition and results of operations of the Company.  The Holder has had access to such financial and other information as is necessary in order for the Holder to make a fully informed decision as to any investment in the Company, and has had the opportunity to obtain any additional information necessary to verify any of such information to which the Holder has had access. 

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(c)

Pre-Existing Relationship or Business Expertise.  The Holder further represents and warrants that the Holder has either (i) a pre-existing relationship with the Company or one or more of its officers or directors consisting of personal or business contacts of a nature and duration that enable the Holder to be aware of the character, business acumen and general business and financial circumstances of the Company and the officer or director with whom such relationship exists, or (ii) such business or financial expertise as to be able to protect the Holder’s own interests in connection with the purchase of this Warrant, and, if exercised, the Warrant Shares.

(d)

No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the Warrant Shares purchased, the Warrant Shares so purchased shall be deemed to be issued to such Holder as the record owner of such shares as of the close of business on the later of the date of such surrender or such payment.

(e)

Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

(f)

Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday, Sunday, or a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a Saturday, Sunday or legal holiday.

(g)

Reservation of Shares; Shares to be Fully Paid.  This Warrant may be exercised if and only if the Company’s stockholders approve an increase in the Company’s authorized Common Stock sufficient to permit the Warrant Shares to be reserved for issuance, and issued, upon exercise of this Warrant. Subject to the immediately preceding sentence, the Company covenants and agrees that all Warrant Shares, will, upon issuance and, if applicable, payment of the applicable Warrant Price, be duly authorized, validly issued, fully paid and nonassessable, and free of all preemptive rights, liens and encumbrances, except for restrictions on transfer provided for herein or under applicable federal and state securities laws. Subject to the first sentence of this Section, the Company shall at all times reserve and keep available, solely for issuance and delivery upon the exercise of this Warrant, the number of unexercised Warrant Shares.

(h)

Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the State of California.

(i)

Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or 

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otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any losses, damages, costs and expenses including, but not limited to, reasonable attorney’s fees, expert fees, and litigation costs, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, power or remedies hereunder.

(j)

Notices. Any notice, request or other document required or permitted to be given or delivered to the Company shall be delivered to CompuMed, Inc., 5777 West Century Blvd., Suite 1285, Los Angeles, CA 90045, telecopier: (310) 645-5880. 

(k)

Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

(l)

Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

(m)

Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

(n)

Entire Agreement.  This Warrant constitutes the entire agreement among the Company and the Holder with respect to the subject matter hereof, and there are no agreements between them except as expressly set forth herein.

[Remainder of Page Intentionally Left Blank; Execution Signatures Follow on Next Page.]

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(o)

Counterparts.  This Warrant may be executed in any number of Counterparts, each of which will be an original with the same effect as if the signatures on each counterpart were upon the same instrument.

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its officer, thereunto duly authorized as of this [   ] day of [            ], 2008.

COMPUMED, INC.,

a Delaware corporation

By:

___________________________________

___________________, President and CEO

AGREED TO AND ACCEPTED:

BOSTON AVENUE CAPITAL, LLC

an Oklahoma limited liability company

By: ___________________________

Name:_________________________

Title:__________________________

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ANNEX

NOTICE OF EXERCISE

PURCHASE FORM

 Dated_________________

The undersigned thereby irrevocably elects to exercise this warrant to the extent of purchasing ________ Shares of common stock and hereby tenders payment of the exercise price thereof.

INSTRUCTIONS FOR REGISTRATION OF STOCK

Name _______________________________________________________

(Please type or print in block letters)

Address  ______________________________________________________

-----------------------------------------------------------------------------------------------------------

ASSIGNMENT FORM

FOR VALUE RECEIVED, ______________________, hereby sells, assigns, and transfers unto

Name _______________________________________________________

(Please type or print in block letters)

Address  ______________________________________________________

the right to purchase Shares of common stock of CompuMed Inc., represented by this warrant to the extent of  ________ Shares as to which such right is exercisable and does hereby irrevocably constitute and appoint ________  attorney, to transfer the same on the books of the Company with full power of substitution in the premises.

Signature  _________________________

Dated    ___________________

Notice: the signature on this assignment must correspond with the name as it appears upon the face of this warrant in every particular, without alteration or enlargement or any change whatever.

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EXHIBIT 10.21

AGREEMENT

THIS AGREEMENT (the “Agreement”) is entered into as of February 15, 2008 (the “Effective Date”), by and between CompuMed, Inc., a Delaware corporation (the “Company”); Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company; and Robert Stuckelman, John Romm, M.D., and Stuart Silverman, M.D., each a resident of California and John Minnick, a resident of Kansas, and each a member of the Board of Directors of the Company and each unaffiliated with BAC (collectively, the “Board Members”).

WHEREAS, the Company has conducted a search for funds needed for its business, seeking either debt or equity funding, and has determined that BAC’s offer of a $4 Million Revolving Line of Credit and a Warrant to purchase up to 16 Million shares of common stock, exercisable only if the Company’s stockholders approve an increase in the Company’s authorized stock sufficient to permit that number of shares to be reserved for issuance and issued upon exercise of the Warrant, is the best choice available to the Company;

WHEREAS, the Company and BAC have negotiated at length and reached an agreement on the terms and conditions of the Revolving Line of Credit Agreement, the associated Promissory Note and Escrow Agreement, and the Warrant to Purchase Common Shares (collectively, the “Financing Documents”);

WHEREAS, BAC has made the resignation of the Board Members a condition precedent to entering into the Financing Documents;

WHEREAS, the Company and BAC entered into an agreement dated May 17, 2007, and a Side Letter Agreement dated March 17, 2007 (collectively, the “Other Agreements”), regarding certain rights and obligations concerning the election of members of the Board of Directors of the Company;

WHEREAS, the Board Members are willing to resign, as BAC requires, in order to facilitate the BAC financing, if, and only if, BAC releases them individually from all present and future claims, which BAC is willing to do if, and only if, each of the Board Members, acting individually, also releases BAC from all present and future claims;

WHEREAS, this Agreement is being entered into simultaneously with the Financing Documents and the funding of the Escrow Account with the funds made available to the Company by BAC pursuant to the line of credit; and

WHEREAS, the Company and BAC acknowledge and agree that the Other Agreements have been fully performed to this date to the satisfaction of BAC and the Company, that the purposes of the Other Agreements have been fulfilled, and that the Other Agreements should be terminated in order for the BAC financing to be provided through the Financing Documents;

NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, and in consideration of the recitals and mutual promises set forth herein, and intending to be fully bound hereby, the parties hereto hereby agree as follows:

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1.

The Company and BAC terminate the Other Agreements, effective as of the Effective Date.

2.

Each of the Board Members agrees to submit his resignation to the Company concurrently with the execution and delivery of this Agreement.

3.

As a matter not involving the Company, BAC and each of the Board Members, acting individually, shall, concurrently with the execution and delivery of this Agreement, execute and deliver a Mutual Release substantially in the form of Annex A hereto.

4.

Each of BAC and the Board Members represents and warrants to each other and the Company that in all matters related to this Agreement and each parties’ respective Mutual Release (collectively, the “Agreement Documents”), they (i) have read and understand the Agreement Documents; (ii) understand that the Company has been represented in the preparation, negotiation and execution of this Agreement and a draft of the Mutual Releases by Jones Day, counsel to the Company, and that Jones Day has not advised or represented either BAC or any of the Board Members in the preparation, negotiation and execution of the Agreement Documents; (iii) have been represented in the preparation, negotiation and execution of the Agreement Documents by legal counsel of the their own choice or have voluntarily declined to seek such counsel after being advised to do so; and (iv) understand the terms and legal consequences of the Agreement Documents and are fully aware of the legal and binding effect of the Agreement Documents.

5.

The Agreement Documents constitute and contain the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and thereof, and supersede any and all prior negotiations, correspondence, agreements, understandings, duties or obligations between the parties respecting such subject matter.

6.

Each party that is an entity represents and warrants that it has authorized the execution and performance of this Agreement through the signatory below and each party who is an individual has authorized the execution and performance of this Agreement through his own signature below.

7.

This Agreement shall be governed by and construed exclusively in accordance with the internal laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.

8.

Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

9.

No party shall have any right or power to assign this Agreement or such party's rights and obligations herein provided without the prior written consent of all the other parties.  Subject to the immediately preceding sentence, the provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties.

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10.

Any notice, request or other document required or permitted to be given or delivered, shall be delivered to:

		
	If, to the Company:

CompuMed, Inc., 

5777 West Century Blvd.

Suite 1285

Los Angeles, CA 90045

Fax:  (310) 645-5880

	If, to Boston Avenue Capital, LLC:

_______________________________

_______________________________

_______________________________

_______________________________

Fax: ___________________________

	If, to Robert Stuckelman:

_______________________________

_______________________________

_______________________________

_______________________________

Fax: ___________________________

	If, to John Minnick:

_______________________________

_______________________________

_______________________________

_______________________________

Fax: ___________________________

	If, to John Romm, M.D.:

_______________________________

_______________________________

_______________________________

_______________________________

Fax: ___________________________

	If, to Stuart Silverman, M.D.:

_______________________________

_______________________________

_______________________________

_______________________________

Fax: ___________________________

11.

This Agreement may be modified or amended or the provisions hereof waived only by a written document signed by the parties hereto.

12.

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

13.

Nothing in this Agreement, express or implied, is intended to confer upon any person, other than the parties and their successors and assigns, any rights or remedies under or by reason of this Agreement.

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14.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

		
	Boston Avenue Capital, LLC

By: Value Fund Advisors, LLC, Manager

By: ______________________________

Name: Charles M. Gillman

Title: Manager

	CompuMed, Inc. 

By: ______________________________

Name: Maurizio Vecchione

Title: Interim Chief Executive Officer

	__________________________________

Robert Stuckelman

	__________________________________

John Minnick

	__________________________________

John Romm, M.D.

	__________________________________

Stuart Silverman, M.D.

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ANNEX A

MUTUAL RELEASE AND WAIVER

THIS MUTUAL RELEASE AND WAIVER (this “Release”) is entered into as of February 15, 2008, by and between Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company, and [Name of resigning director], an individual resident in California and a member of the Board of Directors of CompuMed, Inc. (the “Company”), a Delaware corporation, and unaffiliated with BAC (the “Board Member”).

WHEREAS, the Board Member is willing to resign, as BAC requires, in order to facilitate the Company’s financing agreement with BAC, if and only if, BAC releases him individually from all present and future claims, which BAC is willing to do if, and only if, the Board Member, acting individually, also releases BAC from all present and future claims;

WHEREAS, BAC, the Company and the Board Member are parties to that certain Agreement, dated as of February 15, 2008, pursuant to which the Board Member has agreed to submit his resignation to the Company concurrently with the execution and delivery of that Agreement;

NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements set forth herein, and for other valuable and adequate consideration received, the parties hereto hereby agree as follows:

1.

Mutual General Release.

(a)

BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “BAC Releasing Parties”), knowingly and voluntarily, release, waive and forever discharge (collectively, the “BAC Release”) [Resigning Director] and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “BAC Released Parties”)) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this BAC Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, BAC covenants on behalf of itself and the BAC Releasing Parties not to sue or prosecute any action against any of the BAC Released Parties with respect to any of the matters within the scope of this Release and agree to hold each of the BAC Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

(b)

 [Resigning Director], for himself and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “[Resigning Director] 

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Releasing Parties”), knowingly and voluntarily, releases, waives and forever discharges (collectively, the “[Resigning Director] Release”) BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “[Resigning Director] Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,  trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this [Resigning Director] Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, [Resigning Director] covenants on behalf of himself and the [Resigning Director] Releasing Parties not to sue or prosecute any action against any of the Resigning Director Released Parties with respect to any of the matters within the scope of this Release and agrees to hold each of the Resigning Director Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

2.

Waiver of Certain Matters.  Each of the parties of this Agreement expressly waives and relinquishes any and all rights or benefits such party might have or acquire pursuant to California Civil Code Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each party acknowledges that such party may have sustained damages and losses which presently are unknown and unsuspected, and such losses as were sustained may give rise to additional losses and expenses in the future which are not now anticipated.  Nevertheless, each party acknowledges that the BAC Release and the [Resigning Director] Release, as applicable, has been negotiated and agreed upon in light of this realization and, being fully aware of this situation,  each party hereby expressly waives any rights that it may have under California Civil Code Section 1542, as well as any other state or federal statutes or common law principles of similar effect.  Further, each party fully understands that, if the facts with respect to the BAC Release and the [Resigning Director] Release, as applicable, are found hereafter to be other than or different from the facts now believed by it to be true, such party expressly accepts and assumes the risk of such possible differences in fact regardless of any possible reason for such possible differences in fact, and agrees that the BAC Release and the [Resigning Director] Release, as applicable, shall remain in effect notwithstanding any such differences in fact.

3.

No Assignment of Claims.

(a)

 BAC, on its behalf and on behalf of the BAC Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of 

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any claim, right, or interest released by the BAC Release.  BAC, on its behalf and on behalf of the BAC Releasing Parties, agrees to indemnify, defend and hold harmless the BAC Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right, or interest by any person by reason of any such assignment, sale, or transfer.

(b)

[Resigning Director], on behalf of himself and [Resigning Director] Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by [Resigning Director] Release.  [Resigning Director], on behalf of himself and [Resigning Director] Releasing Parties, agree to indemnify defend and hold harmless [Resigning Director] Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right or, interest by any person by reason of any such assignment, sale, or transfer.

4.

Authority; Enforceability.

(a)

BAC represents and warrants to [Resigning Director] that it has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that the person executing this Release on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

(b)

[Resigning Director] represents and warrants to BAC that he/she has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that in executing this Release the [Resigning Director] on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

5.

Governing Law.  This Release shall be governed by and construed exclusively in accordance with the laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.  

6.

Amendments; Waivers.  This Release may be amended only by a writing executed by all of the parties hereto.  A party may waive in writing compliance by the other party hereto with any of the terms, covenants or conditions contained in this Release (except such as may be imposed by law).  Any waiver by a party of any violation of, breach of, or default under, any provision of this Release, by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Release.

- 3 -

7.

Complete Agreement.  This Release sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior letters of intent, term sheets, agreements, arrangements and communications (and all drafts thereof).

8.

Severability.  If one or more of the provisions of this Release are held to be unenforceable under applicable law, then such provision or provisions shall be excluded from this Release and the balance of this Release shall be interpreted as if such provision or provisions were so excluded and shall be enforceable in accordance with its terms.  

9.

Counterparts.  This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

IN WITNESS WHEREOF, the parties hereto have executed this Mutual Release and Waiver as of the day and year first above written.

BOSTON AVENUE CAPITAL, LLC

_____________________________________

  Name: 

  Title: 

[ROBERT STUCKELMAN/JOHN 

MINNICK/JOHN ROMM, M.D./STUART 

SILVERMAN, M.D.], AN INDIVIDUAL

_____________________________________

  [Name]

  

- 4 -

ANNEX A

MUTUAL RELEASE AND WAIVER

THIS MUTUAL RELEASE AND WAIVER (this “Release”) is entered into as of February 15, 2008, by and between Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company, and Robert Stuckelman, an individual resident in California and a member of the Board of Directors of CompuMed, Inc. (the “Company”), a Delaware corporation, and unaffiliated with BAC (the “Board Member”).

WHEREAS, the Board Member is willing to resign, as BAC requires, in order to facilitate the Company’s financing agreement with BAC, if and only if, BAC releases him individually from all present and future claims, which BAC is willing to do if, and only if, the Board Member, acting individually, also releases BAC from all present and future claims;

WHEREAS, BAC, the Company and the Board Member are parties to that certain Agreement, dated as of February 15, 2008, pursuant to which the Board Member has agreed to submit his resignation to the Company concurrently with the execution and delivery of that Agreement;

NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements set forth herein, and for other valuable and adequate consideration received, the parties hereto hereby agree as follows:

1.

Mutual General Release.

(a)

BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “BAC Releasing Parties”), knowingly and voluntarily, release, waive and forever discharge (collectively, the “BAC Release”) Robert Stuckelman and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “BAC Released Parties”)) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this BAC Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, BAC covenants on behalf of itself and the BAC Releasing Parties not to sue or prosecute any action against any of the BAC Released Parties with respect to any of the matters within the scope of this Release and agree to hold each of the BAC Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

(b)

 Robert Stuckelman, for himself and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “Robert Stuckelman 

- 1 -

Releasing Parties”), knowingly and voluntarily, releases, waives and forever discharges (collectively, the “Robert Stuckelman Release”) BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “Robert Stuckelman Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,  trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this Robert Stuckelman Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, Robert Stuckelman covenants on behalf of himself and the Robert Stuckelman Releasing Parties not to sue or prosecute any action against any of the Resigning Director Released Parties with respect to any of the matters within the scope of this Release and agrees to hold each of the Resigning Director Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

2.

Waiver of Certain Matters.  Each of the parties of this Agreement expressly waives and relinquishes any and all rights or benefits such party might have or acquire pursuant to California Civil Code Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each party acknowledges that such party may have sustained damages and losses which presently are unknown and unsuspected, and such losses as were sustained may give rise to additional losses and expenses in the future which are not now anticipated.  Nevertheless, each party acknowledges that the BAC Release and the Robert Stuckelman Release, as applicable, has been negotiated and agreed upon in light of this realization and, being fully aware of this situation,  each party hereby expressly waives any rights that it may have under California Civil Code Section 1542, as well as any other state or federal statutes or common law principles of similar effect.  Further, each party fully understands that, if the facts with respect to the BAC Release and the Robert Stuckelman Release, as applicable, are found hereafter to be other than or different from the facts now believed by it to be true, such party expressly accepts and assumes the risk of such possible differences in fact regardless of any possible reason for such possible differences in fact, and agrees that the BAC Release and the Robert Stuckelman Release, as applicable, shall remain in effect notwithstanding any such differences in fact.

3.

No Assignment of Claims.

(a)

 BAC, on its behalf and on behalf of the BAC Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of 

- 2 -

any claim, right, or interest released by the BAC Release.  BAC, on its behalf and on behalf of the BAC Releasing Parties, agrees to indemnify, defend and hold harmless the BAC Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right, or interest by any person by reason of any such assignment, sale, or transfer.

(b)

Robert Stuckelman, on behalf of himself and Robert Stuckelman Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by Robert Stuckelman Release.  Robert Stuckelman, on behalf of himself and Robert Stuckelman Releasing Parties, agree to indemnify defend and hold harmless Robert Stuckelman Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right or, interest by any person by reason of any such assignment, sale, or transfer.

4.

Authority; Enforceability.

(a)

BAC represents and warrants to Robert Stuckelman that it has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that the person executing this Release on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

(b)

Robert Stuckelman represents and warrants to BAC that he/she has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that in executing this Release, Robert Stuckelman on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

5.

Governing Law.  This Release shall be governed by and construed exclusively in accordance with the laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.  

6.

Amendments; Waivers.  This Release may be amended only by a writing executed by all of the parties hereto.  A party may waive in writing compliance by the other party hereto with any of the terms, covenants or conditions contained in this Release (except such as may be imposed by law).  Any waiver by a party of any violation of, breach of, or default under, any provision of this Release, by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Release.

- 3 -

7.

Complete Agreement.  This Release sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior letters of intent, term sheets, agreements, arrangements and communications (and all drafts thereof).

8.

Severability.  If one or more of the provisions of this Release are held to be unenforceable under applicable law, then such provision or provisions shall be excluded from this Release and the balance of this Release shall be interpreted as if such provision or provisions were so excluded and shall be enforceable in accordance with its terms.  

9.

Counterparts.  This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

IN WITNESS WHEREOF, the parties hereto have executed this Mutual Release and Waiver as of the day and year first above written.

BOSTON AVENUE CAPITAL, LLC

_____________________________________

  Name: 

  Title: 

ROBERT STUCKELMAN, AN INDIVIDUAL

_____________________________________

  Robert Stuckelman

  

- 4 -

ANNEX A

MUTUAL RELEASE AND WAIVER

THIS MUTUAL RELEASE AND WAIVER (this “Release”) is entered into as of February 15, 2008, by and between Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company, and John Romm, M.D., an individual resident in California and a member of the Board of Directors of CompuMed, Inc. (the “Company”), a Delaware corporation, and unaffiliated with BAC (the “Board Member”).

WHEREAS, the Board Member is willing to resign, as BAC requires, in order to facilitate the Company’s financing agreement with BAC, if and only if, BAC releases him individually from all present and future claims, which BAC is willing to do if, and only if, the Board Member, acting individually, also releases BAC from all present and future claims;

WHEREAS, BAC, the Company and the Board Member are parties to that certain Agreement, dated as of February 15, 2008, pursuant to which the Board Member has agreed to submit his resignation to the Company concurrently with the execution and delivery of that Agreement;

NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements set forth herein, and for other valuable and adequate consideration received, the parties hereto hereby agree as follows:

1.

Mutual General Release.

(a)

BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “BAC Releasing Parties”), knowingly and voluntarily, release, waive and forever discharge (collectively, the “BAC Release”) John Romm and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “BAC Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this BAC Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, BAC covenants on behalf of itself and the BAC Releasing Parties not to sue or prosecute any action against any of the BAC Released Parties with respect to any of the matters within the scope of this Release and agree to hold each of the BAC Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

(b)

 John Romm, for himself and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “John Romm Releasing Parties”), knowingly and voluntarily, releases, waives and forever discharges (collectively, the “John 

- 1 -

Romm Release”) BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “John Romm Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,  trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this John Romm Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, John Romm covenants on behalf of himself and the John Romm Releasing Parties not to sue or prosecute any action against any of the Resigning Director Released Parties with respect to any of the matters within the scope of this Release and agrees to hold each of the Resigning Director Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

2.

Waiver of Certain Matters.  Each of the parties of this Agreement expressly waives and relinquishes any and all rights or benefits such party might have or acquire pursuant to California Civil Code Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each party acknowledges that such party may have sustained damages and losses which presently are unknown and unsuspected, and such losses as were sustained may give rise to additional losses and expenses in the future which are not now anticipated.  Nevertheless, each party acknowledges that the BAC Release and the John Romm Release, as applicable, has been negotiated and agreed upon in light of this realization and, being fully aware of this situation,  each party hereby expressly waives any rights that it may have under California Civil Code Section 1542, as well as any other state or federal statutes or common law principles of similar effect.  Further, each party fully understands that, if the facts with respect to the BAC Release and the John Romm Release, as applicable, are found hereafter to be other than or different from the facts now believed by it to be true, such party expressly accepts and assumes the risk of such possible differences in fact regardless of any possible reason for such possible differences in fact, and agrees that the BAC Release and the John Romm Release, as applicable, shall remain in effect notwithstanding any such differences in fact.

3.

No Assignment of Claims.

(a)

 BAC, on its behalf and on behalf of the BAC Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by the BAC Release.  BAC, on its behalf and on behalf of the BAC Releasing Parties, agrees to indemnify, defend and hold harmless the BAC Released 

- 2 -

Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right, or interest by any person by reason of any such assignment, sale, or transfer.

(b)

John Romm, on behalf of himself and John Romm Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by John Romm Release.  John Romm, on behalf of himself and John Romm Releasing Parties, agree to indemnify defend and hold harmless John Romm Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right or, interest by any person by reason of any such assignment, sale, or transfer.

4.

Authority; Enforceability.

(a)

BAC represents and warrants to John Romm that it has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that the person executing this Release on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

(b)

John Romm represents and warrants to BAC that he/she has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that in executing this Release the John Romm on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

5.

Governing Law.  This Release shall be governed by and construed exclusively in accordance with the laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.  

6.

Amendments; Waivers.  This Release may be amended only by a writing executed by all of the parties hereto.  A party may waive in writing compliance by the other party hereto with any of the terms, covenants or conditions contained in this Release (except such as may be imposed by law).  Any waiver by a party of any violation of, breach of, or default under, any provision of this Release, by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Release.

7.

Complete Agreement.  This Release sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior letters of intent, term sheets, agreements, arrangements and communications (and all drafts thereof).

8.

Severability.  If one or more of the provisions of this Release are held to be unenforceable under applicable law, then such provision or provisions shall be excluded from 

- 3 -

this Release and the balance of this Release shall be interpreted as if such provision or provisions were so excluded and shall be enforceable in accordance with its terms.  

9.

Counterparts.  This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

IN WITNESS WHEREOF, the parties hereto have executed this Mutual Release and Waiver as of the day and year first above written.

BOSTON AVENUE CAPITAL, LLC

_____________________________________

  Name: 

  Title: 

JOHN ROMM, M.D., AN INDIVIDUAL

_____________________________________

  John Romm, M.D.

  

- 4 -

ANNEX A

MUTUAL RELEASE AND WAIVER

THIS MUTUAL RELEASE AND WAIVER (this “Release”) is entered into as of February 15, 2008, by and between Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company, and Stuart Silverman, M.D., an individual resident in California and a member of the Board of Directors of CompuMed, Inc. (the “Company”), a Delaware corporation, and unaffiliated with BAC (the “Board Member”).

WHEREAS, the Board Member is willing to resign, as BAC requires, in order to facilitate the Company’s financing agreement with BAC, if and only if, BAC releases him individually from all present and future claims, which BAC is willing to do if, and only if, the Board Member, acting individually, also releases BAC from all present and future claims;

WHEREAS, BAC, the Company and the Board Member are parties to that certain Agreement, dated as of February 15, 2008, pursuant to which the Board Member has agreed to submit his resignation to the Company concurrently with the execution and delivery of that Agreement;

NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements set forth herein, and for other valuable and adequate consideration received, the parties hereto hereby agree as follows:

1.

Mutual General Release.

(a)

BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “BAC Releasing Parties”), knowingly and voluntarily, release, waive and forever discharge (collectively, the “BAC Release”) Stuart Silverman and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “BAC Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this BAC Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, BAC covenants on behalf of itself and the BAC Releasing Parties not to sue or prosecute any action against any of the BAC Released Parties with respect to any of the matters within the scope of this Release and agree to hold each of the BAC Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

(b)

 Stuart Silverman, for himself and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “Stuart Silverman Releasing 

- 1 -

Parties”), knowingly and voluntarily, releases, waives and forever discharges (collectively, the “Stuart Silverman Release”) BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “Stuart Silverman Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,  trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this Stuart Silverman Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, Stuart Silverman covenants on behalf of himself and the Stuart Silverman Releasing Parties not to sue or prosecute any action against any of the Resigning Director Released Parties with respect to any of the matters within the scope of this Release and agrees to hold each of the Resigning Director Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

2.

Waiver of Certain Matters.  Each of the parties of this Agreement expressly waives and relinquishes any and all rights or benefits such party might have or acquire pursuant to California Civil Code Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each party acknowledges that such party may have sustained damages and losses which presently are unknown and unsuspected, and such losses as were sustained may give rise to additional losses and expenses in the future which are not now anticipated.  Nevertheless, each party acknowledges that the BAC Release and the Stuart Silverman Release, as applicable, has been negotiated and agreed upon in light of this realization and, being fully aware of this situation,  each party hereby expressly waives any rights that it may have under California Civil Code Section 1542, as well as any other state or federal statutes or common law principles of similar effect.  Further, each party fully understands that, if the facts with respect to the BAC Release and the Stuart Silverman Release, as applicable, are found hereafter to be other than or different from the facts now believed by it to be true, such party expressly accepts and assumes the risk of such possible differences in fact regardless of any possible reason for such possible differences in fact, and agrees that the BAC Release and the Stuart Silverman Release, as applicable, shall remain in effect notwithstanding any such differences in fact.

3.

No Assignment of Claims.

(a)

 BAC, on its behalf and on behalf of the BAC Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by the BAC Release.  BAC, on its behalf and on behalf of 

- 2 -

the BAC Releasing Parties, agrees to indemnify, defend and hold harmless the BAC Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right, or interest by any person by reason of any such assignment, sale, or transfer.

(b)

Stuart Silverman, on behalf of himself and Stuart Silverman Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by Stuart Silverman Release.  Stuart Silverman, on behalf of himself and Stuart Silverman Releasing Parties, agree to indemnify defend and hold harmless Stuart Silverman Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right or, interest by any person by reason of any such assignment, sale, or transfer.

4.

Authority; Enforceability.

(a)

BAC represents and warrants to Stuart Silverman that it has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that the person executing this Release on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

(b)

Stuart Silverman represents and warrants to BAC that he/she has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that in executing this Release the Stuart Silverman on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

5.

Governing Law.  This Release shall be governed by and construed exclusively in accordance with the laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.  

6.

Amendments; Waivers.  This Release may be amended only by a writing executed by all of the parties hereto.  A party may waive in writing compliance by the other party hereto with any of the terms, covenants or conditions contained in this Release (except such as may be imposed by law).  Any waiver by a party of any violation of, breach of, or default under, any provision of this Release, by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Release.

7.

Complete Agreement.  This Release sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior letters of intent, term sheets, agreements, arrangements and communications (and all drafts thereof).

- 3 -

8.

Severability.  If one or more of the provisions of this Release are held to be unenforceable under applicable law, then such provision or provisions shall be excluded from this Release and the balance of this Release shall be interpreted as if such provision or provisions were so excluded and shall be enforceable in accordance with its terms.  

9.

Counterparts.  This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

IN WITNESS WHEREOF, the parties hereto have executed this Mutual Release and Waiver as of the day and year first above written.

BOSTON AVENUE CAPITAL, LLC

_____________________________________

  Name: 

  Title: 

STUART SILVERMAN, M.D., AN INDIVIDUAL

_____________________________________

  Stuart Silverman, M.D.

  

- 4 -

ANNEX A

MUTUAL RELEASE AND WAIVER

THIS MUTUAL RELEASE AND WAIVER (this “Release”) is entered into as of February 15, 2008, by and between Boston Avenue Capital, LLC (“BAC”), an Oklahoma limited liability company, and John Minnick, an individual resident in Kansas and a member of the Board of Directors of CompuMed, Inc. (the “Company”), a Delaware corporation, and unaffiliated with BAC (the “Board Member”).

WHEREAS, the Board Member is willing to resign, as BAC requires, in order to facilitate the Company’s financing agreement with BAC, if and only if, BAC releases him individually from all present and future claims, which BAC is willing to do if, and only if, the Board Member, acting individually, also releases BAC from all present and future claims;

WHEREAS, BAC, the Company and the Board Member are parties to that certain Agreement, dated as of February 15, 2008, pursuant to which the Board Member has agreed to submit his resignation to the Company concurrently with the execution and delivery of that Agreement;

NOW, THEREFORE, in consideration of the Parties’ mutual covenants and agreements set forth herein, and for other valuable and adequate consideration received, the parties hereto hereby agree as follows:

1.

Mutual General Release.

(a)

BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “BAC Releasing Parties”), knowingly and voluntarily, release, waive and forever discharge (collectively, the “BAC Release”) John Minnick and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “BAC Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills, trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this BAC Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, BAC covenants on behalf of itself and the BAC Releasing Parties not to sue or prosecute any action against any of the BAC Released Parties with respect to any of the matters within the scope of this Release and agree to hold each of the BAC Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

(b)

 John Minnick, for himself and his heirs, executors, beneficiaries, successors, agents, assigns and personal representatives (collectively, the “John Minnick Releasing Parties”), 

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knowingly and voluntarily, releases, waives and forever discharges (collectively, the “John Minnick Release”) BAC and each of its respective affiliates (which term excludes the Company under this Release), successors, assigns, directors, officers, employees, agents and their respective heirs, executors, beneficiaries and personal representatives (collectively, the “John Minnick Released Parties”) from any and all claims, demands, damages, liabilities, obligations, manner of actions, causes, causes of action, suits, debts, sums of money, accounts, reckonings, bonds, bills,  trespasses, judgments and executions, whatever, whether at law or in equity (collectively, “Claims”) of any kind, nature or description whatever, whether known or unknown (and if unknown, regardless of whether knowledge of the same may have affected the decision to make this John Minnick Release), which now exist or which may hereafter arise based on any fact or circumstance arising or occurring on or at any time prior to the date hereof related to the Agreement.  In furtherance of the foregoing, John Minnick covenants on behalf of himself and the John Minnick Releasing Parties not to sue or prosecute any action against any of the Resigning Director Released Parties with respect to any of the matters within the scope of this Release and agrees to hold each of the Resigning Director Released Parties harmless with respect to any such suit or prosecution in contravention of this Section 1.

2.

Waiver of Certain Matters.  Each of the parties of this Agreement expressly waives and relinquishes any and all rights or benefits such party might have or acquire pursuant to California Civil Code Section 1542, which reads as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

Each party acknowledges that such party may have sustained damages and losses which presently are unknown and unsuspected, and such losses as were sustained may give rise to additional losses and expenses in the future which are not now anticipated.  Nevertheless, each party acknowledges that the BAC Release and the John Minnick Release, as applicable, has been negotiated and agreed upon in light of this realization and, being fully aware of this situation,  each party hereby expressly waives any rights that it may have under California Civil Code Section 1542, as well as any other state or federal statutes or common law principles of similar effect.  Further, each party fully understands that, if the facts with respect to the BAC Release and the John Minnick Release, as applicable, are found hereafter to be other than or different from the facts now believed by it to be true, such party expressly accepts and assumes the risk of such possible differences in fact regardless of any possible reason for such possible differences in fact, and agrees that the BAC Release and the John Minnick Release, as applicable, shall remain in effect notwithstanding any such differences in fact.

3.

No Assignment of Claims.

(a)

 BAC, on its behalf and on behalf of the BAC Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by the BAC Release.  BAC, on its behalf and on behalf of 

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the BAC Releasing Parties, agrees to indemnify, defend and hold harmless the BAC Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right, or interest by any person by reason of any such assignment, sale, or transfer.

(b)

John Minnick, on behalf of himself and John Minnick Releasing Parties, represents and warrants that there has been no assignment, sale or transfer, by operation of law or otherwise, of any claim, right, or interest released by the John Minnick Release.  John Minnick, on behalf of himself and the John Minnick Releasing Parties, agree to indemnify defend and hold harmless the John Minnick Released Parties from any claim, liability, or expense which may be incurred as a result of the assertion of any such claim, right or, interest by any person by reason of any such assignment, sale, or transfer.

4.

Authority; Enforceability.

(a)

BAC represents and warrants to John Minnick that it has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that the person executing this Release on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

(b)

John Minnick represents and warrants to BAC that he/she has the requisite power and authority to enter into and perform the terms of this Release, that no further authority or approval is necessary, that in executing this Release John Minnick on its behalf has the full right and authority to fully commit and bind each such party and that this Release constitutes the valid and binding obligation of each such party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and to general principles of equity.

5.

Governing Law.  This Release shall be governed by and construed exclusively in accordance with the laws of the State of California, excluding that body of law relating to conflict of laws and choice of law.  

6.

Amendments; Waivers.  This Release may be amended only by a writing executed by all of the parties hereto.  A party may waive in writing compliance by the other party hereto with any of the terms, covenants or conditions contained in this Release (except such as may be imposed by law).  Any waiver by a party of any violation of, breach of, or default under, any provision of this Release, by the other party shall not be construed as, or constitute, a continuing waiver of such provision, or waiver of any other violation of, breach of or default under any other provision of this Release.

7.

Complete Agreement.  This Release sets forth the entire understanding of the Parties with respect to the subject matter hereof, and supersedes all prior letters of intent, term sheets, agreements, arrangements and communications (and all drafts thereof).

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8.

Severability.  If one or more of the provisions of this Release are held to be unenforceable under applicable law, then such provision or provisions shall be excluded from this Release and the balance of this Release shall be interpreted as if such provision or provisions were so excluded and shall be enforceable in accordance with its terms.  

9.

Counterparts.  This Release may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  

IN WITNESS WHEREOF, the parties hereto have executed this Mutual Release and Waiver as of the day and year first above written.

BOSTON AVENUE CAPITAL, LLC

_____________________________________

  Name: 

  Title: 

JOHN MINNICK, AN INDIVIDUAL

_____________________________________

  John Minnick

  

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