FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO COMMON STOCK PURCHASE AGREEMENT (the "Amendment"),
dated as of June 27, 2002, by and between EP MEDSYSTEMS, INC., a New Jersey
corporation (the "Company"), and FUSION CAPITAL FUND II, LLC (the "Buyer").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given them in the Common Stock Purchase Agreement.
WHEREAS, the parties hereto are parties to a Common Stock Purchase
Agreement dated as of June 11, 2001 (the "Common Stock Purchase Agreement");
WHEREAS, pursuant to the Common Stock Purchase Agreement, the Buyer has
agreed to purchase, and the Company has agreed to sell up to $10,000,000 of the
Common Stock all in accordance with the terms and conditions of the Common Stock
Purchase Agreement;
WHEREAS, the parties desire to increase the term, and amend certain other
provisions, of such Common Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the agreements, covenants and
considerations contained herein, the parties hereto agree as follows:
1. Amendments.
a. Section 1(c) the Common Stock Purchase Agreement is hereby
amended and restated in its entirety as follows:
"(c) The Daily Base Amount; Company's Right to Decrease or Increase
the Daily Base Amount.
(i) The Daily Base Amount. As used herein the term "Original Daily
Base Amount" shall mean Twenty Five Thousand Dollars ($25,000) per
Trading Day. As used herein, the term "Daily Base Amount" shall mean
initially Twenty Five Thousand Dollars ($25,000) per Trading Day,
which amount may be increased or decreased from time to time pursuant
to this Section 1(c).
(ii) Company's Right to Decrease the Daily Base Amount. The Company
shall always have the right at any time to decrease the amount of the
Daily Base Amount by delivering written notice (a "Daily Base Amount
Decrease Notice") to the Buyer which notice shall specify the new
Daily Base Amount. The decrease in the Daily Base Amount shall become
effective one Trading Day after receipt by the Buyer of the Daily Base
Amount Decrease Notice. Any purchases by the Buyer which have a
Purchase Date on or prior to the first (1st) Trading Day after receipt
by the Buyer of a Daily Base Amount Decrease Notice must be honored by
the Company as otherwise provided herein. The decrease in the Daily
Base Amount shall remain in effect until the Company delivers to the
Buyer a Daily Base Amount Increase Notice (as defined below).
(iii) Company's Right to Increase the Daily Base Amount. The Company
shall have the right (but not the obligation) to increase the amount
of the Daily Base Amount in accordance with the terms and conditions
set forth in this Section 1(c)(iii) by delivering
written notice to the Buyer stating the new amount of the Daily Base
Amount (a "Daily Base Amount Increase Notice"). A Daily Base Amount
Increase Notice shall be effective five (5) Trading Days after receipt
by the Buyer. The Company shall always have the right at any time to
increase the amount of the Daily Base Amount up to the Original Daily
Base Amount. With respect to increases in the Daily Base Amount above
the Original Daily Base Amount, as the market price for the Common
Stock increases the Company shall have the right from time to time to
increase the Daily Base Amount as follows. For every $0.50 increase in
Threshold Price above $2.50 (subject to equitable adjustment for any
reorganization, recapitalization, non-cash dividend, stock split or
other similar transaction), the Company shall have the right to
increase the Daily Base Amount by up to an additional $5,000 in excess
of the Original Daily Base Amount. "Threshold Price" for purposes
hereof means the lowest Sale Price of the Common Stock during the five
(5) consecutive Trading Days immediately prior to the submission to
the Buyer of a Daily Base Amount Increase Notice (subject to equitable
adjustment for any reorganization, recapitalization, non-cash
dividend, stock split or other similar transaction). For example, if
the Threshold Price is $3.00, the Company shall have the right to
increase the Daily Base Amount to up to $30,000 in the aggregate. If
the Threshold Price is $3.50, the Company shall have the right to
increase the Daily Base Amount to up to $35,000 in the aggregate. Any
increase in the amount of the Daily Base Amount shall continue in
effect until the delivery to the Buyer of a Daily Base Amount Decrease
Notice. However, if at any time during any Trading Day the Sale Price
of the Common Stock is below the applicable Threshold Price, such
increase in the Daily Base Amount shall be void and the Buyer's
obligations to buy Purchase Shares hereunder in excess of the
applicable maximum Daily Base Amount shall be terminated. Thereafter,
the Company shall again have the right to increase the amount of the
Daily Base Amount as set forth herein by delivery of a new Daily Base
Amount Increase Notice only if the Sale Price of the Common Stock is
above the applicable Threshold Price on each of five (5) consecutive
Trading Days immediately prior to such new Daily Base Amount Increase
Notice."
b. Section 1(d) of the Common Stock Purchase Agreement is hereby
amended as follows:
"(iii) Purchase Price Floor. The Buyer shall not have the right or the
obligation to purchase any Purchase Shares under this Agreement in the
event that the Purchase Price for any purchases of Purchase Shares
would be less than the Floor Price. The Company may at any time give
written notice (a "Floor Price Notice") to the Buyer increasing or
decreasing the Floor Price. The Floor Price Notice shall be effective
only for purchases that have a Purchase Date later than one (1)
Trading Day after receipt of the Floor Price Notice by the Buyer.
"Floor Price" means initially $2.00, which amount may be increased or
decreased from time to time pursuant to Section 1(d)(iii) hereof,
except that in no case shall the Floor Price be less than $1.00
without the prior written consent of the Buyer. The Floor Price shall
be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split or other similar transaction. Any
purchase by the Buyer that has a Purchase Date on or prior to the
first Trading Day after receipt of a Floor Price Notice from the
Company must be honored by the Company as otherwise provided herein."
c. Sections 9(b) and 9(c) of the Common Stock Purchase Agreement are
hereby amended and restated in their entirety as follows:
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"(b) the suspension from trading or failure of the Common Stock to be
listed on the Principal Market for a period of three (3) consecutive
Trading Days;
(c) the delisting of the Company's Common Stock from the Principal
Market, provided, however, that the Common Stock is not immediately
thereafter trading on New York Stock Exchange, the Nasdaq SmallCap
Market, the American Stock Exchange or the Nasdaq Over-the-Counter
Bulletin Board;"
d. Sections 10(g), 10(i) and 10(k) of the Common Stock Purchase
Agreement are hereby deleted in their entirety.
e. Sections 10(h) and 10(m) of the Common Stock Purchase Agreement
are hereby amended and restated in their entirety as follows:
"(h) "Maturity Date" means the date that is 620 Trading Days (31
Monthly Periods) from the Commencement Date which such date may be
extended by up to an additional six (6) Monthly Periods by the
Company, in its sole discretion, by written notice to the Buyer."
"(m) "Principal Market" means The Nasdaq National Market, provided,
however, that in the event the Company's Common Stock is ever listed
or traded on the Nasdaq SmallCap Market, New York Stock Exchange, the
American Stock Exchange, or the Nasdaq OTC/ Bulletin Board Market than
the "Principal Market" shall mean such other market or exchange on
which the Company's Common Stock is then listed or traded."
f. The term "Transaction Documents" shall be deemed to include this
Amendment for all purposes under the Common Stock Purchase
Agreement.
2. Effect of Amendment/Incorporation of Certain Provisions. Except as
amended as set forth above, the Common Stock Purchase Agreement shall
continue in full force and effect. The provisions set forth in Section
11 of the Common Stock Purchase Agreement are hereby incorporated by
reference into this Amendment.
* * * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this First
Amendment to Common Stock Purchase Agreement to be duly executed as of the date
first written above.
THE COMPANY:
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EP MEDSYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President and Chief Operating Officer
BUYER:
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FUSION CAPITAL FUND II, LLC
BY: FUSION CAPITAL PARTNERS, LLC
BY: SGM HOLDINGS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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