-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VJRurDgpEl/YsRxKFMB4RW7ynTx059qp+bierx3LhwEpvgyOSbSOxlGcECBgKp8e 2EKaS0leqr5XE+jd7bZYyA== 0000891618-01-502643.txt : 20020413 0000891618-01-502643.hdr.sgml : 20020413 ACCESSION NUMBER: 0000891618-01-502643 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20011218 GROUP MEMBERS: ALBERT J. HENRY GROUP MEMBERS: BALFOUR LLC GROUP MEMBERS: RORY RIGGS GROUP MEMBERS: RT ACQUISITION GROUP, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RAYTEL MEDICAL CORP CENTRAL INDEX KEY: 0001002017 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 942787342 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-44873 FILM NUMBER: 1816205 BUSINESS ADDRESS: STREET 1: 2755 CAMPUS DR STREET 2: STE 200 CITY: SAN MATEO STATE: CA ZIP: 94403 BUSINESS PHONE: 6503490800 MAIL ADDRESS: STREET 1: 2755 CAMPUS DRIVE STREET 2: SUITE 200 CITY: SAN MATEO STATE: CA ZIP: 94403 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BADER RICHARD F CENTRAL INDEX KEY: 0001007912 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2755 CAMPUS DR STE 200 STREET 2: C/O RAYTELL MEDICAL CORP CITY: SAN MATEO STATE: CA ZIP: 94403 BUSINESS PHONE: 4153490800 MAIL ADDRESS: STREET 1: RAYTELL MEDICAL CORP STREET 2: 3755 CAMPUS DR STE 200 CITY: SAN MATEO STATE: CA ZIP: 94403 SC 13D/A 1 f77956a1sc13da.txt SC 13D/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)* RAYTEL MEDICAL CORPORATION (Name of Issuer) Common Stock, $0.001 par value (Title of Class of Securities) 755107-10-9 (CUSIP Number) Richard F. Bader Raytel Medical Corporation 2755 Campus Drive, Suite 200 San Mateo, CA 94403 Telephone: (650) 349-0800 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 17, 2001 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) OR 240.13d-1(g), check the following box: NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Schedule 13D CUSIP No. 755107-10-9 ________________________________________________________________________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). Richard F. Bader ________________________________________________________________________________ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a) [_] (b) [X] ________________________________________________________________________________ 3. SEC USE ONLY ________________________________________________________________________________ 4. SOURCE OF FUNDS (See Instructions) PF ________________________________________________________________________________ 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ________________________________________________________________________________ 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. ________________________________________________________________________________ 7. SOLE VOTING POWER: NUMBER OF 321,686 (1) SHARES _________________________________________________________________ 8. SHARED VOTING POWER: BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9. SOLE DISPOSITIVE POWER: REPORTING 321,686 (1) PERSON _________________________________________________________________ 10. SHARED DISPOSITIVE POWER: WITH 0 ________________________________________________________________________________ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 321,686 (1) ________________________________________________________________________________ 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ________________________________________________________________________________ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.0% (2) ________________________________________________________________________________ 14. TYPE OF REPORTING PERSON (See Instructions) IN ________________________________________________________________________________ (1) Includes 174,081 shares subject to options exercisable within 60 days after the date of this statement. (2) Based on 2,918,425 shares outstanding as of July 31, 2001. CUSIP No. 755107-10-9 ________________________________________________________________________________ 1, NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). Albert J. Henry ________________________________________________________________________________ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a) [_] (b) [X] ________________________________________________________________________________ 3. SEC USE ONLY ________________________________________________________________________________ 4 . SOURCE OF FUNDS (See Instructions) PF ________________________________________________________________________________ 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ________________________________________________________________________________ 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. ________________________________________________________________________________ 7. SOLE VOTING POWER: NUMBER OF 37,489 SHARES _________________________________________________________________ 8. SHARED VOTING POWER: BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9. SOLE DISPOSITIVE POWER: REPORTING 37,489 PERSON _________________________________________________________________ 10. SHARED DISPOSITIVE POWER: WITH 0 ________________________________________________________________________________ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 37,489 ________________________________________________________________________________ 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ________________________________________________________________________________ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 1.3% (1) ________________________________________________________________________________ 14. TYPE OF REPORTING PERSON (See Instructions) IN ________________________________________________________________________________ (1) Based on 2,918,425 shares outstanding as of July 31, 2001. CUSIP No. 755107-10-9 ________________________________________________________________________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). RT Acquisition Group, Inc. ________________________________________________________________________________ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a) [_] (b) [X] ________________________________________________________________________________ 3. SEC USE ONLY ________________________________________________________________________________ 4. SOURCE OF FUNDS (See Instructions) Not Applicable ________________________________________________________________________________ 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ________________________________________________________________________________ 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. ________________________________________________________________________________ 7. SOLE VOTING POWER: NUMBER OF 0 SHARES _________________________________________________________________ 8. SHARED VOTING POWER: BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9. SOLE DISPOSITIVE POWER: REPORTING 0 PERSON _________________________________________________________________ 10. SHARED DISPOSITIVE POWER: WITH 0 ________________________________________________________________________________ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 0 ________________________________________________________________________________ 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ________________________________________________________________________________ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 0% ________________________________________________________________________________ 14. TYPE OF REPORTING PERSON (See Instructions) CO ________________________________________________________________________________ CUSIP No. 755107-10-9 ________________________________________________________________________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). Balfour LLC ________________________________________________________________________________ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a) [_] (b) [X] ________________________________________________________________________________ 3. SEC USE ONLY ________________________________________________________________________________ 4. SOURCE OF FUNDS (See Instructions) OO ________________________________________________________________________________ 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ________________________________________________________________________________ 6. CITIZENSHIP OR PLACE OF ORGANIZATION New York ________________________________________________________________________________ 7. SOLE VOTING POWER: NUMBER OF 342,516 SHARES _________________________________________________________________ 8. SHARED VOTING POWER: BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9. SOLE DISPOSITIVE POWER: REPORTING 342,516 PERSON _________________________________________________________________ 10. SHARED DISPOSITIVE POWER: WITH 0 ________________________________________________________________________________ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 342,516 ________________________________________________________________________________ 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ________________________________________________________________________________ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 11.7% (1) ________________________________________________________________________________ 14. TYPE OF REPORTING PERSON (See Instructions) CO ________________________________________________________________________________ (1) Based on 2,918,425 shares outstanding as of July 31, 2001. CUSIP No. 755107-10-9 ________________________________________________________________________________ 1. NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). Rory Riggs ________________________________________________________________________________ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions): (a) [_] (b) [X] ________________________________________________________________________________ 3. SEC USE ONLY ________________________________________________________________________________ 4. SOURCE OF FUNDS (See Instructions) PF ________________________________________________________________________________ 5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ________________________________________________________________________________ 6. CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. ________________________________________________________________________________ 7. SOLE VOTING POWER: NUMBER OF 355,782 (1) SHARES _________________________________________________________________ 8. SHARED VOTING POWER: BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9. SOLE DISPOSITIVE POWER: REPORTING 355,782 (1) PERSON _________________________________________________________________ 10. SHARED DISPOSITIVE POWER: WITH 0 ________________________________________________________________________________ 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON: 355,782 (1) ________________________________________________________________________________ 12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) ________________________________________________________________________________ 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 12.2% (2) ________________________________________________________________________________ 14. TYPE OF REPORTING PERSON (See Instructions) IN ________________________________________________________________________________ (1) Includes 13,266 shares held jointly by Mr. Riggs and his sister, Robin Rhys Riggs. (2) Based on 2,918,425 shares outstanding as of July 31, 2001. Schedule 13D This Amendment No. 1 to Schedule 13D amends the Schedule 13D filed by Richard F. Bader, Albert J. Henry and RT Acquisition Group, Inc. with the Securities and Exchange Commission on October 1, 2001 to (i) add Balfour LLC and Rory Riggs (collectively, "Balfour") as Reporting Persons hereunder and (ii) disclose a non-binding proposal to acquire all of the outstanding shares of Common Stock of the Issuer not owned by the Reporting Persons which was submitted to the Issuer's financial advisor by the Reporting Persons on December 17, 2001. This Amendment No. 1 to Schedule 13D also amends the Schedule 13D filed by Balfour with the Securities and Exchange Commission on August 28, 2001. ITEM 1. SECURITY AND ISSUER. The class of equity securities to which this Amendment No.1 to Schedule 13D relates is the common stock, $0.001 par value (the "Common Stock"), of Raytel Medical Corporation, a Delaware corporation (the "Issuer"). The address of the Issuer's principal executive offices is 2755 Campus Drive, Suite 200, San Mateo, CA 94403. ITEM 2. IDENTITY AND BACKGROUND. The persons filing this Statement on Schedule 13D (the "Reporting Persons") are Richard F. Bader, Albert J. Henry, RT Acquisition Group, Inc., and Balfour. This Schedule 13D incorporates by reference the Schedule 13D filed by Mr. Bader, Mr. Henry and RT Acquisition Group on October 1, 2001 and the information provided therein under Item 2. In addition, this Schedule 13D incorporates by reference the Schedule 13D filed by Balfour on August 28, 2001, and the information provided therein under Item 2. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. This Schedule 13D incorporates by reference the Schedule 13D filed by Mr. Bader, Mr. Henry and RT Acquisition Group on October 1, 2001 and the information provided therein under Item 3. In addition, this Schedule 13D incorporates by reference the Schedule 13D filed by Balfour on August 28, 2001, and amends the information provided therein under Item 3 by adding the following paragraph at the end thereof: On December 6, 2001 and December 10, 2001, Balfour LLC purchased additional shares of Common Stock for an aggregate purchase price of $64,235. ITEM 4. PURPOSE OF TRANSACTION. This Schedule 13D incorporates by reference the Schedule 13D filed by Mr. Bader, Mr. Henry and RT Acquisition Group on October 1, 2001 and the information provided therein under Item 4. In addition, this Schedule 13D incorporates by reference the Schedule 13D filed by Balfour on August 28, 2001, and the information provided therein under Item 4. Item 4 is amended as follows: On December 6, 2001, RT Acquisition Group entered into an agreement with the Special Committee pursuant to which the Issuer agreed to (i) reimburse certain out-of-pocket expenses incurred by RT Acquisition Group in conducting due diligence and evaluating, negotiating and structuring a potential business combination transaction and in preparing a formal bid to acquire the Issuer and related financing arrangements, and (ii) provide a limited consent to the right of RT Acquisition Group to enter into agreements, arrangements or understandings with existing shareholders of the Issuer to become equity or debt participants in RT Acquisition Group for the sole purpose of assisting RT Acquisition Group in evaluating, preparing, negotiating and financing a potential business combination transaction, in each case subject to the terms and conditions provided therein. A copy of this agreement is filed as Exhibit 2 hereto. On December 17, 2001, after preliminary exploratory discussions, Mr. Bader, Mr. Henry and RT Acquisition Group, acting in concert with Balfour, submitted to the Issuer's financial advisor a non-binding proposal to acquire all of the outstanding shares of Common Stock of the Issuer not owned by the Reporting Persons for a price between $7.50 and $9.50 per share. A copy of this proposal is filed as Exhibit 3 hereto. At the present time, the Reporting Persons intend to engage in discussions with the Special Committee, with each other, and with other potential participants in any such potential business combination transaction. Except as described in this Item 4, there is no present contract, arrangement or understanding with the Issuer with respect to any such -2- Schedule 13D acquisition and there can be no assurance that the Special Committee will agree with any of the Reporting Persons or any entity controlled by any of them regarding any such acquisition proposal. By reason of these activities, Mr. Bader, Mr. Henry, RT Acquisition Group, and Balfour may be deemed to constitute a "group" (as such term is used in Section 13(d)(3) of the rules and regulations under the Securities Exchange Act of 1943, as amended). In the event that the Reporting Persons' non-binding proposal is not accepted by the Issuer, the Reporting Persons may cease to constitute a "group". Except for the matters described in this Item 4 and in Item 6 below, none of the Reporting Persons has any contract, arrangement or understanding with respect to the Issuer or the Common Stock. Each of the Reporting Persons intend to monitor their respective ownership interests, if any, in the Issuer on an ongoing basis and to take such measures as any of them deems appropriate from time to time in furtherance of such interest. Any of the Reporting Persons may, from time to time, acquire additional shares of Common Stock or dispose of some or all of the shares of Common Stock then owned by any of them, if any (although none of them have any present intention to do so), discuss the Issuer's business, operators or other affairs with the Issuer's management, Board of Directors or the Special Committee, shareholders or others or take such other actions as any Reporting Person may deem appropriate. There can be no assurance that any of the Reporting Persons will proceed with any acquisition proposal, or that any such proposal could be financed on acceptable terms. Notwithstanding the foregoing, except as described in this Item 4, no Reporting Person has any present plan or proposal which would relate to or would result in any of the actions referred to in items (a) through (j) of Item 4 of Schedule 13D of the Securities and Exchange Commission. Each of the Reporting Persons do, however, reserve the right in the future to adopt such plans or proposals subject to compliance with applicable regulatory requirements. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER. This Schedule 13D incorporates by reference the Schedule 13D filed by Mr. Bader, Mr. Henry and RT Acquisition Group on October 1, 2001 and the information provided therein under Item 5. In addition, this Schedule 13D incorporates by reference the Schedule 13D filed by Balfour on August 28, 2001, and amends the information provided therein under Item 5, paragraphs (a), (b) and (c), to read as follows: (a) As of December 17, 2001, Balfour LLC beneficially owned 342,516 shares (11.7%) of the Issuer's Common Stock. As of December 17, 2001, Rory Riggs beneficially owned 355,782 shares (12.2%) of the Issuer's Common Stock, which amount includes 13,266 shares held jointly by Mr. Riggs and his sister, Robin Rhys Riggs. (b) As of December 17, 2001, Balfour LLC had the sole power to vote and dispose of 342,516 shares (11.7%) of the Issuer's Common Stock. As of December 17, 2001, the Rory Riggs had the sole power to vote and dispose of 355,782 shares (12.2%) of the Issuer's Common Stock, which amount includes 13,266 shares held jointly by Mr. Riggs and his sister, Robin Rhys Riggs. (c) During the last 60 days Balfour LLC has engaged in the following open market transactions:
Transaction Quantity Trade Date Price Purchase 6,000 12/06/01 $5.30 Purchase 3,900 12/06/01 $5.40 Purchase 3,500 12/10/01 $5.25
-3- Schedule 13D ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Other than the Joint Filing Agreement filed as Exhibit 1 to this filing and as described in Item 4, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among any Reporting Person and between any Reporting Person and any other person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finders fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
No. Description --- ----------- 1. Joint Filing Agreement dated December 17, 2001 by and among Richard F. Bader, Albert J. Henry, RT Acquisition Group, Inc., Balfour LLC, and Rory Riggs. 2. Letter Agreement dated December 6, 2001 between RT Acquisition Group, Inc. and the Issuer. 3. Letter to Issuer's Financial Advisors dated December 17, 2001.
-4- Schedule 13D SIGNATURE After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: December 17, 2001 ------------------------ /s/ Richard F. Bader ---------------------------- Richard F. Bader /s/ Albert J. Henry ---------------------------- Albert J. Henry RT Acquisition Group, Inc. By: /s/ Albert J. Henry ------------------------- Name: Albert J. Henry Title: Chairman /s/ Rory Riggs ---------------------------- Rory Riggs Balfour LLC By: /s/ Rory Riggs ------------------------- Name: Rory Riggs Title: Managing Member -5- EXHIBIT INDEX
No. Description --- ----------- 1. Joint Filing Agreement dated December 17, 2001 by and among Richard F. Bader, Albert J. Henry, RT Acquisition Group, Inc., Balfour LLC, and Rory Riggs. 2. Letter Agreement dated December 6, 2001 between RT Acquisition Group, Inc. and the Issuer. 3. Letter to Issuer's Financial Advisors dated December 17, 2001.
EX-1 3 f77956a1ex1.txt EXHIBIT 1 Schedule 13D Exhibit 1 JOINT FILING AGREEMENT The undersigned agree that this Schedule 13D dated December 17, 2001 relating to the Common Stock of Raytel Medical Corporation shall be filed on behalf of the undersigned. /s/ Richard F. Bader ---------------------------- Richard F. Bader /s/ Albert J. Henry ---------------------------- Albert J. Henry RT Acquisition Group, Inc. By: /s/ Albert J. Henry ---------------------- Name: Albert J. Henry Title: Chairman /s/ Rory Riggs ---------------------------- Rory Riggs Balfour LLC By: /s/ Rory Riggs ------------------------- Name: Rory Riggs Title: Managing Member EX-2 4 f77956a1ex2.txt EXHIBIT 2 Exhibit 2 RT ACQUISITION GROUP, INC. P.O. Box 148 Lake Forest, IL 60045 December 6, 2001 CONFIDENTIAL Raytel Medical Corporation 2755 Campus Dr., Ste. 200 San Mateo, CA 94403-2515 Attn: Special Committee of Board of Directors Gentlemen: We propose to explore with you the feasibility of Raytel Medical Corporation, a Delaware corporation ("Company"), entering into discussions with RT Acquisition Group ("Acquiror"), regarding a potential business combination transaction (a "Transaction"). As you are aware, Richard F. Bader ("Bader") is a principal stockholder, officer and director of Acquiror and Acquiror's current intention is to evaluate the possibility of submitting a bid with respect to a potential Transaction. In the event that the Company and Acquiror determine that it is advisable to enter into such discussions, Acquiror will expend substantial amounts of resources in evaluating and negotiating the terms of a Transaction and in arranging financing and preparing a bid in connection therewith. In consideration of the foregoing and of the mutual covenants set forth below, Acquiror and Company hereby agree as follows: 1. Expenses. (a) Upon execution and delivery of this letter and the form of confidentiality agreement attached hereto as Exhibit A (the "Confidentiality Agreement"), Company agrees to pay $75,000 to Acquiror to reimburse Acquiror for certain of its out-of-pocket expenses that it incurs in conducting due diligence and evaluating, negotiating and structuring a Transaction (including securities law compliance) and preparing a formal bid to acquire Company and related financing arrangements, including the reasonable fees and expenses of RBC Dain Rauscher Wessels ("DRW"), Acquiror's financial advisors, and Wilson Sonsini Goodrich & Rosati, Acquiror's legal advisors. Of the $75,000 amount, $25,000 will be paid immediately and the remaining $50,000 will be paid by the Company to DRW as Acquiror's nonrefundable retainer upon the written direction of Acquiror. (b) Acquiror shall promptly refund the entire payment to Company if Acquiror (or any affiliate (as defined below) of Acquiror), directly or indirectly, acts in concert in any manner (other than by participating in preliminary discussions) with a Strategic Buyer (as defined below) in making a written bid to acquire Company. As used herein, (i) a "Strategic Buyer" means (a) any person or entity engaged (other than to an insubstantial extent) in the industry in which Company is engaged or (b) any affiliate of any person or entity described in clause (a), and (ii) an "affiliate" of a person or entity means a person or entity who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified person or entity. 2. Limited Consent Pursuant to Rights Agreement. This letter agreement, the Confidentiality Agreement and the Company's obligation to pay $75,000 to Acquiror (as set forth in paragraph 1 herein) is subject to and conditioned upon the adoption by the Board of Directors of the Company of a consent to the right of Acquiror to enter into agreements, arrangements or understandings with existing shareholders of the Company to become equity or debt participants in Acquiror for the sole purpose of assisting Acquiror in evaluating, preparing, negotiating and financing a Transaction, provided however, that Acquiror, its shareholders, any existing shareholders of the Company that enter into any such agreements, arrangements or understandings with Acquiror and any of their affiliates or associates (collectively, the "Group") do not hold in the aggregate in excess of 25% of the beneficial ownership of the outstanding common stock of the Company. Such consent shall extend only to the participation by such Group in the evaluation, preparation, negotiation and financing of a bid by Acquiror, and if accepted, to participate in a Transaction, and not to any other action by the Group or any of its members, including but not limited to the acquisition of additional Company securities. If such bid is not accepted by the Special Committee of the Board of Directors (the "Special Committee"), then such Group shall be disbanded and the consent shall be revoked as to any further transaction proposed by such Group or any further action proposed to be taken which involves the Acquiror and any member of the Group. Acquiror hereby agrees that so long as the Group exists, none of its members shall enter into any arrangement to act in concert to oppose or block a Transaction approved by the Special Committee or the Board of Directors. The Special Committee agrees to promptly recommend to the Board of Directors of the Company to take such steps to accomplish the foregoing, including a limited waiver to the Rights Agreement dated as of August 14, 1998 between the Company and BankBoston, N.A. In addition, the Special Committee agrees to promptly recommend to the Board of Directors to take such action as shall be necessary (including approving the right of Acquiror to enter into agreements, arrangements or understandings with existing shareholders of the Company to become equity or debt participants in Acquiror for the sole purpose of assisting Acquiror in evaluating, preparing, negotiating and financing a Transaction, subject to the limitations provided herein) to render the restrictions on business combinations imposed by Section 203 of the Delaware General Corporation Law inapplicable to a Transaction with Acquiror so long as the Transaction is approved by the Special Committee or Board of Directors and that the limitations set forth above on the formation and activities of the Group are adhered to. 3. Governing Law. This letter agreement shall be governed by the internal laws of the State of California applicable to contracts wholly executed and performed therein. 4. General. This letter agreement contains the entire agreement between Acquiror and Company with respect to the subject matter hereof, and supersedes all prior agreements with respect thereto. This letter agreement may be executed by the parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Signatures may be exchanged by facsimile. Each of the parties agrees that it will be bound by its own facsimile signature and that it accepts the facsimile signature of the other party. This letter agreement may be amended, and its terms may be waived, only by a written instrument signed by Acquiror and Company (and approved by the Special Committee of the Board of Directors so long as it exists) or, in the case of a waiver, by the party waiving compliance. Acquiror acknowledges and agrees that Company reserves the right, in its sole and absolute discretion, (i) to reject any or all proposals regarding a Transaction, and (ii) to negotiate with one or more prospective purchasers at any time and to enter into agreements with respect to the acquisition of Company without prior notice to Acquiror. Each party acknowledges and agrees that either party reserves the right, in its sole and absolute discretion, to terminate at any time discussions and negotiations with the other party regarding a Transaction, and that Company and Acquiror shall have no obligation to consummate a Transaction unless and until a definitive agreement is reached, and in such case shall be subject in all respects to the satisfaction of the conditions contained therein, and neither party hereto shall have any liability to the other if the party fails for any reason to execute such a definitive agreement. [balance of page intentionally left blank] Please contact our counsel, Michael Dorf of Wilson Sonsini Goodrich & Rosati, at (415) 947-2005 if you have any questions regarding the content of this letter agreement. Upon each of Company and Acquiror determining that it is advisable to enter into discussions regarding a Transaction, each of Company and Acquiror shall enter into this letter agreement by executing it in the space provided below and returning the execution page to the other party at its earliest convenience. We look forward to the entry into and successful completion of the discussions contemplated by this letter agreement. Very truly yours, RT ACQUISITION GROUP ------------------------------------- Albert Henry AGREED TO AND ACCEPTED: RAYTEL MEDICAL CORPORATION By: ------------------------------------- Name: Title: Dated: EX-3 5 f77956a1ex3.txt EXHIBIT 3 Exhibit 3 RT ACQUISITION GROUP, INC. P.O. Box 148 Lake Forest, IL 60045 December 17, 2001 PRIVATE AND CONFIDENTIAL Jonathan S. Howe Senior Vice President Houlihan Lokey Howard & Zukin Capital 1930 Century Park West Los Angeles, California 90087 Dear Mr. Howe: We write in response to your letter dated December 12, 2001 inviting a non-binding offer to purchase Raytel Medical Corporation ("Raytel" or the "Company"). RT Acquisition Group, Inc. ("RTA"), acting in concert with Balfour LLC (collectively, the "Offer Group"), is pleased to submit this non-binding proposal to outline the basis upon which the Offer Group would be willing to proceed towards the acquisition of all of the outstanding equity securities of the Company not already held by the Offer Group. The Offer Group currently represents an approximately 22.5% equity ownership interest in the Company and includes Richard Bader, the Chairman of the Board of Directors and Chief Executive Officer of the Company. The Offer Group also has the support of several key members of the Company's management team, including Swapan Sen and Jason Sholder, and we anticipate that a transaction led by the Offer Group would have the strong support of the Company's employees, customers, suppliers and partners. While the Offer Group has been provided with very limited time to conduct its due diligence and limited access to senior management to date, we are submitting a proposal that is not subject to any financing contingency and are prepared to move expeditiously to facilitate a successful transaction. PROPOSED TRANSACTION STRUCTURE - Purchase Price: Based on the limited information available to the Offer Group as of the date of this letter and the limited time with which we have been provided to validate our valuation of the Company with potential outside investors, the Offer Group would be willing to pay between $7.50 and $9.50 per share in cash for 100% of the fully diluted outstanding shares of the Company not already held by the Offer Group and assume all outstanding indebtedness of the Company as described in the Confidential Information Memorandum dated November 2001. The purchase price will be fully-financed by the Offer Group. A final cash purchase price will be provided after we have been provided with the opportunity to conduct limited additional due diligence and additional management access. Jonathan S. Howe December 17, 2001 Page 2 - Transaction Structure; Closing Conditions: The transaction would be structured either (i) as a first-step cash tender offer followed by a second-step cash merger or (ii) as a single-step cash merger. As requested by the Special Committee, representations and warranties would not survive closing and there will be no indemnity after closing. The transaction would not be subject to financing. Closing conditions to the transaction would be customary for a transaction of this nature and would include the following: - Majority of fully diluted shares tendered (in the case of a tender offer) or voted in favor of the merger (in the case of a single-step merger); - Governmental and regulatory clearance, if required; - Accuracy of representations and warranties; and - Compliance with covenants. - Due Diligence: Prior to execution of any definitive agreement, the Company would make available to the Offer Group and its financing sources all information related to the Company's business as the Offer Group may reasonably request. The Offer Group and its financing sources would be entitled to conduct and complete appropriate business, operational, financial, legal and any other appropriate due diligence. Additionally, the Company would make key employees available to the Offer Group and its financing sources while they complete due diligence. The Company and the Offer Group will use their respective good faith efforts to complete due diligence and execute a definitive agreement as contemplated in this letter. - Anticipated Timing: The Offer Group is prepared to move forward immediately and expeditiously to conduct due diligence and complete negotiations of a mutually acceptable transaction. We expect due diligence to continue throughout the month of December and early January and we would be prepared to begin negotiating the definitive agreement in parallel on the expectation that a definitive agreement could be signed on or before January 31, 2002, with a closing to occur as soon thereafter as possible, assuming regulatory approvals and the satisfaction of all other typical closing conditions. - Exclusivity: We request that the Company negotiate with the Offer Group in good faith on an exclusive basis with respect to the transaction through January 31, 2002. We would further request that the Company advise the Offer Group of its receipt of any unsolicited acquisition or similar proposals or inquiries Jonathan S. Howe December 17, 2001 Page 3 received during such period and provide to the Offer Group a copy of such proposals or inquiries. - Confidentiality: The terms of this proposal, any subsequent negotiations and any related matters will be maintained in confidence and not be disclosed to outside parties (with the exception of your financial and legal advisors, who shall be subject hereto) without our prior written consent except as required by law. - No Obligation; Definitive Agreement: The proposal outlined in this letter constitutes a statement of our intentions with respect to a possible transaction. It does not contain all matters upon which agreement must be reached in order for a transaction to be consummated, and therefore does not constitute a binding commitment with respect to a transaction. A binding commitment with respect to a transaction will only result from execution of a definitive agreement and any related agreements, receipts of appropriate consents and approvals and satisfaction of all other closing conditions. It is the expressed understanding of the parties that neither party shall be obligated to proceed with any type of transaction unless and until a definitive agreement is signed by both parties and any action or inaction on the part of either party shall be at the sole risk and responsibility of the party taking or omitting to take any such action. The definitive agreement will be in a form customary for transactions of this type and will include, in addition to those matters specifically set forth in this letter, customary representations, warranties, indemnities, covenants and agreements of the Offer Group and the Company, customary conditions of closing and other customary matters. This letter and our proposal will be automatically withdrawn and be of no further force or effect unless the Company designates the Offer Group as the sole party with which it will negotiate an acquisition of the Company and enters into an appropriate exclusivity agreement with the Offer Group for the period described above, on or before 5:00 pm PDT on Wednesday December 19, 2001. If the Company so designates the Offer Group and enters into the exclusivity agreement by such time, our proposal shall remain firm and binding for the period ending January 31, 2002, unless sooner rejected. Balfour LLC is acting in concert with RTA for the sole purpose of assisting RTA in evaluating, preparing, negotiating and financing the transaction proposed herein. As of the date hereof, Balfour LLC has not agreed to be bound by the Confidentiality Agreement to which RTA is a party, and accordingly Balfour LLC has not been provided with "Evaluation Material" (as defined in such Confidentiality Agreement) regarding the Company. Upon the acceptance by the Company of this proposal and the entry by the Company into an exclusivity agreement with the Offer Group as provided herein, Balfour LLC would be prepared to negotiate an acceptable form Jonathan S. Howe December 17, 2001 Page 4 of confidentiality agreement with the Company and thereafter to commence due diligence as contemplated above. The Offer Group's willingness to proceed with the transaction proposed herein is also conditioned on the Company agreeing to (i) reimburse RTA up to $225,000 for its out-of-pocket expenses incurred in connection with completing due diligence investigation and negotiating a definitive merger agreement with the Company (in addition to amounts reimbursed pursuant to that letter agreement between RTA and the Company dated December 6, 2001 (the "Fee Letter")), and (ii) amend the Fee Letter to provide that the $50,000 to be paid by the Company as a retainer to RTA's financial advisors may, at the direction of RTA, be paid instead to professional advisors retained by Balfour LLC in connection with its due diligence investigation. We believe that the Offer Group is well positioned to complete a successful transaction and look forward to working with the Company toward this end. We believe that having the anticipated support of management, employees, customer, suppliers and the partners of the Company is a significant advantage of our offer, and should increase the likelihood of completing a successful transaction. Please address any questions regarding our proposal to Rory Riggs, Balfour LLC, 595 Madison Avenue, New York, New York, 10022, (phone: (212) 713-5065; fax: (212) 713-5046). We look forward to hearing from you soon. Sincerely, By: /s/ Albert J. Henry ----------------------------------- Albert J. Henry RT Acquisition Group, Inc. By: /s/ Richard F. Bader ----------------------------------- Richard F. Bader RT Acquisition Group, Inc. By: /s/ Rory Riggs ----------------------------------- Rory Riggs Balfour LLC -----END PRIVACY-ENHANCED MESSAGE-----