COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
December 14, 2004 by and between EP MedSystems, Inc., a New Jersey corporation
with its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "COMPANY"), and each of the several purchasers named in
Exhibit A attached hereto (each, a "PURCHASER" and collectively, the
"PURCHASERS").
WHEREAS, the Company desires to issue and sell to the Purchasers an
aggregate of (i) up to 1,500,000 shares (the "SHARES") of the authorized but
unissued shares of the Company's common stock, no par value, stated value $0.001
per share (the "COMMON STOCK"); and
WHEREAS, each Purchaser, severally, wishes to purchase the number of
Shares shown next to its name on Exhibit A hereto, all upon the terms and
subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements,
representations, warranties and covenants herein contained, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall have the
following respective meanings:
"AFFILIATE" of a party means any other Person controlling, controlled
by or under common control with the specified Person. For the purposes of this
definition, "CONTROL" means the power to direct the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.
"GAAP" means United States generally accepted accounting principles.
"MAJORITY PURCHASERS" shall mean Purchasers which, at any given time,
hold greater than fifty percent (50%) of the outstanding Shares.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
prospects, condition (financial or other), business, operations, assets,
liabilities, or results of operations of the Company and its subsidiaries, taken
as a whole.
"NASD" means the National Association of Securities Dealers, Inc.
"PERSON" shall mean an individual, corporation, company, partnership,
firm, association, joint venture, trust, unincorporated organization,
government, governmental body, agency, political subdivision or other entity.
"REGISTRATION RIGHTS AGREEMENT" shall mean that certain Registration
Rights Agreement, dated as of the Closing Date, among the Company and the
Purchasers.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, and
all of the rules and regulations promulgated thereunder.
2. PURCHASE AND SALE OF SHARES.
2.1 PURCHASE AND SALE. Subject to and upon the terms and conditions set
forth in this Agreement, the Company agrees to issue, sell and deliver to
each Purchaser, and each Purchaser, severally, hereby agrees to purchase from
the Company, at the Closing, (i) the number of shares of Common Stock set forth
opposite the name of such Purchaser under the heading "NUMBER OF SHARES TO BE
PURCHASED" on Exhibit A hereto, at a purchase price of $3.00 per share. The
total purchase price payable by each Purchaser for the number of shares of
Common Stock that such Purchaser is hereby agreeing to purchase is set forth
opposite the name of such Purchaser under the heading "PURCHASE PRICE" on
Exhibit A hereto. The Company shall be obligated to register the Shares pursuant
to the terms and conditions set forth in the Registration Rights Agreement.
2.2 CLOSING. The closing of the transactions contemplated under this
Agreement (the "CLOSING") shall take place at 10:00 a.m. at the offices of
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP in New York, New York on December 14, 2004,
or at such other location, date and time as may be agreed upon between the
Majority Purchasers and the Company (the "CLOSING DATE"). At the Closing, the
Company shall authorize its transfer agent to issue to each Purchaser, against
delivery of payment for the Shares by wire transfer of immediate available funds
in accordance with the Company's instructions, one or more stock certificates
registered in the name of each Purchaser, representing the number of shares set
forth opposite the appropriate Purchaser's name on Exhibit A hereto, and bearing
the legend set forth in Section 6.2 hereof. Closing documents may be delivered
by facsimile with original signature pages sent by overnight courier.
2.3 INDEPENDENT PURCHASERS. The Company acknowledges and agrees that
each of the Purchasers is acting solely in the capacity of an arm's length
purchaser with respect to this Agreement and the transactions contemplated
hereby and that each Purchaser has separately negotiated the terms of this
Agreement. Nothing contained herein or in any agreement or document relating to
this transaction, and no action taken by any Purchaser, shall be deemed to
constitute the Purchasers as, or to create any presumption that the Purchasers
are in any way acting in concert or as, a group with respect to the obligations
or transaction hereunder. No Purchaser has relied upon any other Purchaser for
advice in entering into the transactions contemplated hereby.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to each of the Purchasers as follows:
3.1 ORGANIZATION AND GOOD STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of New Jersey and has all requisite power and authority, and all necessary
licenses and permits, to own and lease its properties and assets and to Conduct
its business as now conducted. Each subsidiary as referred to in the SEC
Documents (as hereinafter defined) is a corporation duly organized, validly
existing and in
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good standing under the laws of the jurisdiction of its incorporation and has
all requisite power and authority, and all necessary licenses and permits, to
own and lease its properties and assets and to conduct its business as now
conducted. The Company and its subsidiaries are each qualified to do business as
a foreign corporation and are in good standing in all states where the conduct
of their respective businesses or their ownership or leasing of property
requires such qualification, except where the failure to so qualify would not
have a Material Adverse Effect. The Company does not own or control, directly or
indirectly, any interest in any other corporation, partnership, limited
liability company, unincorporated business organization, association, trust or
other business entity.
3.2 CAPITALIZATION.
(a) The authorized capital stock of the Company consists of:
(i) 5,000,000 shares of preferred stock of the Company, no par value per
share, of which 373,779 shares are issued and outstanding; and (ii) 30,000,000
shares of Common Stock, no par value, $.001 stated value per share, of which,
immediately prior to the consummation of the transactions contemplated hereby,
(A) 23,705,816 shares are issued and outstanding and all such outstanding shares
are validly issued, fully paid and nonassessable; (B) 50,000 shares of Common
Stock are held in treasury; (C) 840,063 shares of Common Stock reserved for
issuance pursuant to the Company's 1995 Long Term Incentive Plan; (D) 240,000
shares of Common Stock reserved for issuance pursuant to the Company's 1995
Director Option Plan; (E) 545,000 shares of Common Stock reserved for issuance
pursuant to the Company's 2002 Stock Option Plan; (F) 916,627 shares of Common
Stock reserved for issuance upon conversion of the Company's outstanding Secured
Convertible Note issued to Laurus Master Fund, Ltd.; (G) 387,946 shares are
reserved for issuance upon the conversion of the 373,779 outstanding shares of
preferred stock of the Company; (H) 1,602,300 shares of Common Stock reserved
for issuance upon exercise of outstanding warrants; and (I) 207,000 shares of
Common Stock reserved for issuance upon the exercise of outstanding non-plan
options. With respect to the 1995 Long Term Incentive Plan, the 1995 Director
Option Plan, the 2002 Stock Option Plan and other non-plan stock options and
warrants, an aggregate of 3,420,758 options and warrants have been granted or
issued and are outstanding as of the Closing Date.
(b) There are no preemptive or similar rights to purchase or
otherwise acquire shares of capital stock of the Company pursuant to any
provision of law or the Amended and Restated Certificate of Incorporation or
By-Laws of the Company or by agreement or otherwise. Except as set forth in this
Section 3.2 and except as set forth in the SEC Documents, there are no
outstanding subscriptions, warrants, options or other rights or commitments of
any character to subscribe for or purchase from the Company, or obligating the
Company to issue, any shares of capital stock of the Company or any securities
convertible into or exchangeable for such shares.
(c) There are no stockholder agreements, voting agreements, or
similar agreements with respect to the Common Stock to which the Company is
a party, or to the knowledge of the Company, by or between any stockholders of
the Company or any of its Affiliates.
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3.3 AUTHORIZATION. The Company has all requisite corporate power to
enter into this Agreement and the Registration Rights Agreement, to issue
the Shares and to carry out and perform its obligations under the terms of this
Agreement and the Registration Rights Agreement (including, without limitation,
the issuance of the Shares). All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein has been taken or will be taken prior to the Closing Date. When
executed and delivered by the Company, each of this Agreement and the
Registration Rights Agreement shall constitute the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
their respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles.
3.4 VALID ISSUANCE OF THE SHARES. The Shares being purchased by the
Purchasers hereunder will, upon issuance pursuant to the terms hereof, be
validly issued, fully paid and nonassessable, free from all liens, claims,
encumbrances with respect to the issuance of such Shares and will not be subject
to any preemptive or similar rights. Except for blue sky filing fees, if any,
there are no state or city taxes, fees or other charges payable in connection
with the execution or delivery of this Agreement, the Registration Rights
Agreement and the Shares.
3.5 FINANCIAL STATEMENTS. The Company has furnished to each Purchaser
its audited Statements of Income, Stockholders' Equity and Cash Flows for the
fiscal year ended December 31, 2003, its audited Balance Sheet as of
December 31, 2003, its unaudited Statements of Income, Stockholders' Equity and
Cash Flows for the period from December 31, 2003 through September 30, 2004 and
its unaudited Balance Sheet as of September 30, 2004. All such financial
statements are hereinafter referred to collectively as the "FINANCIAL
STATEMENTS." The Financial Statements have been prepared in accordance with U.S.
generally accepted accounting principles applied on a consistent basis during
the periods involved, and fairly present, in all material respects, the
financial position of the Company and the results of its operations as of the
date and for the periods indicated thereon, except that the unaudited financial
statements may not be in accordance with U.S. generally accepted accounting
principles because of the absence of footnotes and are subject to normal
year-end audit adjustments which, individually, and in the aggregate, will not
be have a Material Adverse Effect. Since September 30, 2004, to the Company's
knowledge, (i) there has been no development or change (actual or threatened),
individually or in the aggregate, having a Material Adverse Effect, (ii) except
as set forth in an SEC Document (as defined below), there does not exist any
condition reasonably likely to result in a Material Adverse Effect and (iii) the
Company has conducted its business only in the ordinary course consistent with
past practice. The Company has no indebtedness, obligations or liabilities of
any kind (whether accrued, absolute, contingent or otherwise, and whether due or
to become due) which were not fully reflected in, reserved against or otherwise
described in the Financial Statements or the notes thereto, or incurred in the
ordinary course of business consistent with the Company's past practices, all of
which individually and in the aggregate do not or would not have a Material
Adverse Effect.
3.6 SEC DOCUMENTS. The Company has made available to each Purchaser, a
true and complete copy of the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2003, the Company's Quarterly Reports on Form 10-QSB
for the three
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months ended March 31, 2004, June 30, 2004 and September 30, 2004 and any other
statement, report, registration statement (other than registration statements on
Form S-8) or definitive proxy statement filed by the Company with the SEC during
the period commencing on December 31, 2003 and ending on the date hereof. The
Company will, promptly upon the filing thereof, also make available to each
Purchaser all statements, reports (including, without limitation, Quarterly
Reports on Form 10-QSB and Current Reports on Form 8-K), registration statements
and definitive proxy statements filed by the Company with the SEC during the
period commencing on the date hereof and ending on the Closing Date (all such
materials required to be furnished to each Purchaser pursuant to this sentence
or pursuant to the next preceding sentence of this Section 3.6 being called,
collectively, including any amendments thereto, the "SEC DOCUMENTS"). Since
January 1, 2004, the Company has timely made all filings required to be made by
it under the Exchange Act and the securities laws of any state, and any rules
and regulations promulgated thereunder. The SEC Documents comply in all material
respects with the requirements of the Exchange Act or the Securities Act, as
applicable, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, as of their respective
filing dates, except to the extent corrected by a subsequently filed SEC
Document filed prior to the date hereof. The Company is eligible to use a
registration statement on Form S-3 with respect to the registration of
Registrable Securities (as such term is defined in the Registration Rights
Agreement) pursuant to the Registration Rights Agreement.
3.7 CONSENTS. Except for filings under federal and applicable state
securities laws and except for Permits (as defined below), the absence of
which either individually or in the aggregate would not have a Material Adverse
Effect, all permits, consents, approvals, orders, authorizations of, or
declarations to (collectively, "Permits") or filings with any federal, state,
local or foreign court, governmental or regulatory authority, or other person
(including third party consents) required on the part of the Company in
connection with the execution, delivery or performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein have been obtained or will be obtained prior to
the Closing Date, and will be effective as of the Closing Date.
3.8 NO CONFLICT. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Shares) will not (x) conflict with or result in any violation of
or default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any obligation
or to a loss of a material benefit under (i) any provision of the Amended and
Restated Certificate of Incorporation or bylaws of the Company or (ii) any
agreement or instrument, Permit, franchise, license, judgment, order, statute,
law, ordinance, rule or regulations, applicable to the Company, any of its
subsidiaries or their respective properties or assets or (y) result in the
creation of any lien, security interest, charge or encumbrance upon the
Company's or any of its subsidiaries' assets, properties or outstanding capital
stock.
3.9 BROKERS OR FINDERS. Except for ▇.▇. ▇▇▇▇▇▇▇▇▇, Towbin LLC, a
Delaware limited liability company (the "PLACEMENT AGENT"), the Company has not
dealt with any broker or finder in connection with the transactions contemplated
by
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this Agreement, and, except for certain fees and expenses payable by the Company
to the Placement Agent, the Company has not incurred, and shall not incur,
directly or indirectly, any liability for any brokerage or finders' fees or
agents commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
3.10 NASDAQ SMALLCAP MARKET. The Common Stock is listed on The Nasdaq
SmallCap Market, and there are no proceedings to revoke or suspend such
listing. The issuance of the Shares will not contravene any NASDAQ Marketplace
Rule. The Common Stock is registered pursuant to Section 12(g) of the Exchange
Act. The Company has taken no action designed to, or which to its knowledge is
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act, delisting the Common Stock from The Nasdaq SmallCap
Market. The Company has not received any notification that, and has no knowledge
that, the SEC or the NASD is contemplating terminating such listing or
registration. The issuance of the Shares does not require stockholder approval,
including, without limitation, as may be required pursuant to the Nasdaq
Marketplace Rules.
3.11 ABSENCE OF LITIGATION. Except as set forth in the SEC Documents,
there is no action, suit or proceeding or, to the Company's knowledge, any
investigation, pending, or to the Company's knowledge, threatened by or before
any governmental body against the Company, its subsidiaries, its activities,
properties or assets or any officer, director, or employee of the Company in
connection with such officer's, director's or employee's relationship with, or
actions taken on behalf of the Company and in which an unfavorable outcome,
ruling or finding in any said matter, or for all matters taken as a whole, might
have a Material Adverse Effect. The foregoing includes, without limitation, any
such action, suit, proceeding or investigation that questions this Agreement or
the Registration Rights Agreement or the right of the Company to execute,
deliver and perform under same. The Company is not a party to, or subject to the
provisions of any order, writ or injunction, judgment or decree of any court or
government agency or instrumentality.
3.12 FIDUCIARY DUTIES. The Company represents and warrants that, to the
best of its knowledge, none of its directors or officers is or has been the
subject of, or a defendant in: (i) an enforcement action or prosecution (or
settlement in lieu thereof) brought by a governmental authority relating to a
violation of securities, fiduciary or criminal laws, or (ii) a civil action (or
settlement in lieu thereof) brought by stockholders or investors for violation
of duties owed to the stockholders or investors.
3.13 TITLE TO PROPERTY AND ASSETS. Except as disclosed in the SEC
Documents, each of the Company and its subsidiaries owns its property and
assets free and clear of all mortgages, liens, loans, claims, charges and
encumbrances, and except such encumbrances and liens that arise in the ordinary
course of business and do not materially impair their respective ownership or
use of such property or assets. With respect to property and assets it leases,
the Company is in material compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest free of any liens, charges, claims
or encumbrances, except to the extent any such lien, charge, claim or
encumbrance would not have a Material Adverse Effect.
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3.14 PATENTS. TRADEMARKS. PROPRIETARY RIGHTS.
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(a) To the Company's knowledge, each of the Company and its
subsidiaries owns or has the right to use all of the Intellectual Property
Rights (as defined below), except where such failure would not have a Material
Adverse Effect on the business, properties or assets of the Company and its
subsidiaries, taken as a whole. For purposes of this Agreement, "INTELLECTUAL
PROPERTY RIGHTS" means all patents, copyrights, trademarks, service marks, trade
names, permits, trade secrets, computer programs, software designs and related
materials and other intellectual property that are used by the Company or a
subsidiary and are material to the conduct of the Company's or a subsidiary's
business.
(b) To the Company's knowledge, the Company's and each
subsidiary's use and enjoyment of the Intellectual Property Rights do not
violate any license or conflict with or infringe the intellectual property
rights of others in a manner which would materially and adversely affect the
business, assets, properties, operations or condition (financial or otherwise)
of the Company and its subsidiaries, taken as a whole.
3.15 ENVIRONMENTAL MATTERS. Except as set forth in the SEC Documents, to
the Company's knowledge, neither the Company nor any of its subsidiaries is
in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, which violation could reasonably
be expected to result in a Material Adverse Effect, and to the best of its
knowledge, no expenditures are required in order to comply with any such
existing statute, law or regulation, which expenditures could reasonably be
expected to result in a Material Adverse Effect.
3.16 PERMITS. Each of the Company and its subsidiaries possesses all
Permits or similar authority necessary to conduct its business as described
in the SEC Documents, except where the failure to possess such Permits would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company or its subsidiaries ("MATERIAL PERMITS"), and neither the Company nor
any such subsidiary has received any notice of proceedings relating to the
revocation or modification of any Material Permit.
3.17 EMPLOYEES. To the Company's knowledge, no strike, labor dispute or
union organizing activities are pending or threatened against the Company
or any of its subsidiaries by its employees. No employees belong to a union or
collective bargaining unit. To the Company's knowledge, neither the Company nor
any of its subsidiaries has any workers' compensation liabilities.
3.18 TAX MATTERS. The Company has filed all tax returns and reports as
required by federal, state, local, and foreign law and has paid all taxes
shown thereon that have become due and payable. Such returns and reports were
materially accurate and complete when filed and reflect all taxes and other
assessments due thereunder to be paid by the Company, except those contested by
it in good faith. The provision for taxes of the Company included in the
provision for accrued liabilities in the Company's Financial Statements is
adequate for taxes due or accrued as of the dates thereof. The Company has never
had any material tax deficiency proposed or assessed against it.
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3.19 COMPLIANCE WITH CERTIFICATE OF INCORPORATION AND BY-LAWS;
COMPLIANCE WITH LAWS. The Company is not in violation or default of any
provisions of its Amended and Restated Certificate of Incorporation or Bylaws.
The business and operations of the Company and each of its subsidiaries have
been conducted in accordance with all applicable laws, rules and regulations of
all governmental agencies, authorities and instrumentalities (including, without
limitation, under the Employee Retirement Income Security Act of 1974, as
amended, laws and regulations administered by the Food and Drug Administration,
and all laws relating to the employment of labor), except for such violations
which would not, individually or in the aggregate, have a Material Adverse
Effect.
3.20 INSURANCE. The Company and each of its subsidiaries maintains
insurance of the type and in the amount reasonably adequate for its
business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism, and all other risks customarily insured against
by similarly situated companies, all of which insurance is in full force and
effect.
3.21 INVESTMENT COMPANY ACT. The Company is not an "INVESTMENT COMPANY"
within the meaning of the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT"), and the Company is not directly or indirectly
controlled by or acting on behalf of any person that is an "INVESTMENT COMPANY"
within the meaning of the Investment Company Act.
3.22 COMPLIANCE WITH SECURITIES LAWS. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Section 4 hereof,
the offer and sale by the Company of the Shares are exempt from the registration
and prospectus delivery requirements of the Securities Act. Other than pursuant
to an effective registration statement under the Securities Act, the Company has
not issued, offered or sold any shares of Common Stock (including for this
purpose any securities of the same or a similar class as the Common Stock)
within the six (6) month period preceding the date hereof or taken any other
action, or failed to take any action, that, in any such case, would (i)
eliminate the availability of the exemption from registration under Regulation D
under the Securities Act in connection with the offer and sale of the Shares as
contemplated hereby or (ii) cause the offering of the Shares pursuant to this
Agreement to be integrated with prior offerings by the Company for purposes of
the Securities Act or any applicable stockholder approval provisions, including,
without limitation, under the rules and regulations of the NASD, as applicable.
The Company shall not directly or indirectly take, and shall not permit any of
its directors, officers or Affiliates directly or indirectly to take, any action
(including, without limitation, any offering or sale to any Person of the Shares
or any Common Stock) that will make unavailable the exemption from registration
under the Securities Act being relied upon by the Company for the offer and sale
to the Purchasers of the Shares as contemplated by this Agreement, including,
without limitation, the filing of a registration statement under the Securities
Act. No form of general solicitation or advertising within the meaning of Rule
502(c) under the Securities Act has been used or authorized by the Company or
any of its officers, directors or Affiliates in connection with the offer or
sale of the Shares as contemplated by this Agreement or any other agreement to
which the Company is a party.
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3.23 REGISTRATION RIGHTS. Except as set forth in the SEC Documents,
there are no
Persons (except the Purchasers and their permitted transferors hereunder) with
registration or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under the
Securities Act which have not been satisfied.
3.24 RELATED PARTY TRANSACTIONS. Except as set forth in the SEC
Documents, neither the Company nor any of its officers, directors or
Affiliates nor any family member of any officer, director or Affiliate of the
Company has borrowed any moneys from or has outstanding any indebtedness or
other similar obligations to the Company. Except as set forth in the SEC
Documents, no director or Affiliate nor any family member of any officer,
director or Affiliate of the Company (i) owns any direct or indirect interest
constituting more than a 1% equity (or similar profit participation) interest
in, or controls or is a director, officer, partner, member or employee of, or
consultant or lender to or borrower from, or has the right to participate in the
profits of, any person or entity which is a participant in any transaction to
which the Company or any subsidiary is a party or (ii) is a party to any
contract, agreement, commitment or other arrangement with the Company or any
subsidiary or (iii) has entered into any transaction with the Company or any
subsidiary that would be required to be disclosed under Item 404 of Regulation
S-K.
3.25 CONTRACTS. All contracts and agreements filed or required to be
filed as exhibits to the SEC Documents filed prior to the date hereof,
except such contracts and agreements that have expired by their own terms
(collectively, "CONTRACTS") are in full force and effect and constitute legal,
valid and binding obligations of the Company and, to the best knowledge of the
Company, the other parties thereto; the Company and, to the best knowledge of
the Company, each other party thereto, have performed in all material respects
all obligations required to be performed by them under the Contracts, and no
material violation or default exists in respect thereof, nor any event that with
notice or lapse of time, or both, would constitute a default thereof, on the
part of the Company or, to the best knowledge of the Company, any other party
thereto; none of the Contracts is currently being renegotiated; and the
validity, effectiveness and continuation of all Contracts will not be materially
adversely affected by the transactions contemplated by this Agreement.
3.26 DISCLOSURE. Neither this Agreement nor the SEC Documents taken
together contain any untrue statement of a material fact nor omit to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. To the Company's knowledge, neither it nor, any Person on its
behalf, has provided any of the Purchasers or their agents or counsel with any
information that constitutes, or might reasonably be expected to constitute,
material, non-public information. The Company understands and confirms that each
of such Purchasers will rely on the foregoing representations in effecting
transactions in securities of the Company.
3.27 ▇▇▇▇▇▇▇▇-▇▇▇▇▇. The Chief Executive Officer and the Chief Financial
Officer of the Company have signed, and the Company has furnished to the
SEC, all certifications required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002. Such certifications contain no qualifications or exceptions to the
matters certified therein and have not been modified or withdrawn; and neither
the Company nor any of its officers has received notice from any governmental
entity questioning or challenging the accuracy, completeness, form or manner of
filing or submission of such certifications.
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3.28 DISCLOSURE CONTROLS AND PROCEDURES. The Company and its
subsidiaries maintain a system of disclosure controls and procedures (as
defined in Rules 13a-15 and 15d-15 of the Exchange Act) . To the Company's
knowledge, the Company's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Company in reports that
it files or submits under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC rules and forms.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PURCHASERS. Each Purchaser
severally for itself, and not jointly with the other Purchasers, represents and
warrants to, and agrees with, the Company as follows:
4.1 AUTHORIZATION. Such Purchaser has all requisite power under its
constituent documents to enter into each of this Agreement and the
Registration Rights Agreement and to carry out and perform its obligations under
the terms of this Agreement and the Registration Rights Agreement. All action on
the part of such Purchaser and, if applicable, its officers, directors,
stockholders, managers, members and equityholders necessary for the
authorization, execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. When executed and delivered,
each of this Agreement and the Registration Rights Agreement will constitute the
legal, valid and binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except as such may be limited by
bankruptcy, insolvency, reorganization or other laws affecting creditors' rights
generally and by general equitable principles.
4.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. Such Purchaser is acquiring the
Shares being purchased by it hereunder for investment, for its own account,
and not for resale or with a view to distribution thereof in violation of the
Securities Act.
4.3 INVESTOR STATUS; ETC. Such Purchaser certifies and represents to the
Company that at the time such Purchaser acquires any of the Shares, such
Purchaser will be an "ACCREDITED INVESTOR" as defined in Rule 501 of Regulation
D promulgated under the Securities Act and was not organized for the purpose of
acquiring the Shares. Such Purchaser's financial condition is such that it is
able to bear the risk of holding the Shares for an indefinite period of time and
the risk of loss of its entire investment. Such Purchaser has sufficient
knowledge and experience in investing in companies similar to the Company in
terms of the Company's stage of development so as to be able to evaluate the
risks and merits of its investment in the Company. Such Purchaser has received
and carefully reviewed descriptive materials relating to the Company and any
other materials relating thereto that such Purchaser has requested. Such
Purchaser has had an opportunity to ask questions of and receive answers from
the authorized representatives of the Company, and to review any relevant
documents and records concerning the
10
business of the Company and the terms and conditions of this investment, and
that any such questions have been answered to such Purchaser's full
satisfaction. No Person other than the Company or its authorized
representatives, has offered the securities to the Purchaser. Such Purchaser is
acquiring the Shares in the ordinary course of business for such Purchaser's own
account as principal (and not as a nominee or agent), for investment purposes
only, and not with a view to, or for, resale, distribution or fractionalization
thereof, in whole or in part, in any manner in violation of applicable United
States federal or state securities laws or the rules or regulations promulgated
thereunder. Such Purchaser has made no agreement, direct or indirect, with any
other Person regarding any sale, transfer, assignment or other disposition of
any interest in the Shares. Such Purchaser is aware that, in the view of the SEC
and certain state securities commissions, a purchase of the Shares now with an
intent to resell by reason of any foreseeable specific contingency or
anticipated change in market values or any change in the condition of the
Company, or in connection with a contemplated liquidation or settlement of any
loan obtained for the acquisition of the Shares and for which the Shares were
pledged as security, would represent an intent inconsistent with this
representation. Such Purchaser further represents and agrees that if, contrary
to the foregoing intentions, such Purchaser should later desire to dispose of or
transfer any of the Shares in any manner, such Purchaser shall not do so without
first complying with the provisions of Section 6.1. Such Purchaser understands
that no federal or state agency has passed upon or made any recommendation or
endorsement of an investment in the Shares. The foregoing shall in no way limit
or modify the representations of the Company set forth in Section 3 hereof.
4.4 SHARES NOT REGISTERED. Such Purchaser understands that the Shares
have not been registered under the Securities Act, by reason of their
issuance by the Company in a transaction exempt from the registration
requirements of the Securities Act, and that the Shares must continue to be held
by such Purchaser unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration. The Purchaser
understands that the exemptions from registration afforded by Rule 144 (the
provisions of which are known to it) promulgated under the Securities Act depend
on the satisfaction of various conditions, and that, if applicable, Rule 144 may
afford the basis for sales only in limited amounts.
4.5 NO CONFLICT. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation by it of
the transactions contemplated hereby and thereby will not conflict with or
result in any violation of or default by such Purchaser (with or without notice
or lapse of time, or both) under (i) any provision of the organizational
documents of such Purchaser or (ii) any judgment, Order, statute, law,
ordinance, rule or regulations, applicable to such Purchaser or its respective
properties or assets.
4.6 BROKERS. Such Purchaser has not retained, utilized or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.
4.7 CONSENTS. All consents, approvals, orders and authorizations
required on the part of such Purchaser in connection with the execution,
delivery or performance of this Agreement and the Registration Rights Agreement
and the consummation of the transactions contemplated herein have been obtained
and are effective as of the Closing Date.
4.8 AGREEMENT WITH RESPECT TO SHORT SALES. Neither the Purchasers nor
any of their respective Affiliates nor any person acting on their behalf
will have entered into for a period of 5 days prior to the Closing Date, any
"short sale" (as such term is defined in Rule 3b-3 under the Securities Exchange
Act of 1934, as amended).
11
5. CONDITIONS PRECEDENT.
5.1 CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CONSUMMATE THE
CLOSING. The obligation of each Purchaser to consummate the Closing and to
purchase and pay for the Shares being purchased by it pursuant to this Agreement
is subject to the satisfaction of the following conditions precedent (or waiver
by such Purchaser):
(a) The representations and warranties contained herein of the
Company that are qualified as to "materiality" shall be true and correct,
and the representations and warranties contained herein of the Company that are
not so qualified shall be true and correct in all material respects, in each
case, as of the date of this Agreement and as of the Closing Date (except for
such representations and warranties which are made expressly as of a specified
date or period, which shall be true and correct or true and correct in all
material respects, as herein above required, as of such specified date or
period).
(b) The Company shall have performed all covenants, agreements,
obligations and conditions herein required to be performed or observed by
the Company on or prior to the Closing Date.
(c) Prior to the Closing Date, no event shall have occurred
which has had a Material Adverse Effect shall have occurred.
(d) No suit, action, or other proceeding challenging this
Agreement or the transactions contemplated hereby, or seeking to prohibit,
alter, prevent or materially delay the Closing, shall have been instituted
before any court, arbitrator or governmental body, agency or official and shall
be pending.
(e) The purchase of and payment for the Shares by such
Purchasers shall not be prohibited by any law or governmental order or
regulation. All necessary consents, approvals, licenses, Permits, orders and
authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or of any other person with respect to any
of the transactions contemplated hereby (including, without limitation, the
issuance of the Shares) shall have been duly obtained or made and shall be in
full force and effect.
(f) The Company shall have complied with all applicable
requirements of federal and state securities or "BLUE SKY" laws with
respect to the issuance of the Shares, and each Purchaser, at such Purchaser's
request, shall have been provided reasonable evidence thereof.
(g) The Common Stock of the Company (i) shall be designated for
quotation or listed on The Nasdaq SmallCap Market and (ii) shall not have
been suspended from trading on The Nasdaq SmallCap Market.
(h) The Registration Rights Agreement shall have been executed
and delivered by the Company.
(i) A certificate shall have been delivered by the Company,
signed by its President, Chief Executive Officer or Chief Financial
Officer, dated as of the Closing Date, certifying as to the fulfillment of the
conditions specified in Sections 5.1(a) and (b).
12
(j) The Company shall have delivered to each Purchaser an
opinion of counsel for the Company, dated the Closing Date, in
substantially the form of Exhibit B attached hereto.
(k) A stock certificate shall have been delivered by the
Company, registered in the name of such Purchaser or nominee as designated
by such Purchaser in writing, representing the number of shares of Common Stock
purchased by such Purchaser, free of all restrictive and other legends (except
as provided in Section 6.2 hereof), against payment of the purchase price
therefor by wire transfer of immediately available funds to such account or
accounts as the Company shall designate in writing.
(l) All instruments and corporate proceedings in connection with
the transactions contemplated by this Agreement to be consummated at the
Closing shall be satisfactory in form and substance to such Purchaser, and such
Purchaser shall have received copies (executed or certified, as may be
appropriate) of all documents which such Purchaser may have reasonably requested
in connection with such transactions.
(m) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(n) The Company shall have delivered to the Purchasers a
certificate of the Company executed by the Company's Secretary attaching
and certifying to the truth and correctness of (i) the Company's Amended and
Restated Certificate of Incorporation, (ii) the Company's Bylaws and (iii) the
resolutions adopted by the Company's Board of Directors in connection with the
transactions contemplated by this Agreement.
5.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CONSUMMATE THE
CLOSING. The obligation of the Company to consummate the Closing, to issue
and sell to each Purchaser the Shares to be purchased by it at the Closing is
subject to the satisfaction of the following conditions precedent (or waiver by
the Company):
(a) The representations and warranties contained herein of such
Purchaser shall be true and correct on and as of the Closing Date with the
same force and effect as though made on and as of the Closing Date (it being
understood and agreed by the Company that, in the case of any representation and
warranty of each Purchaser contained herein which is not hereinabove qualified
by application thereto of a materiality standard, such representation and
warranty need be true and correct only in all material respects in order to
satisfy as to such representation or warranty the condition precedent set forth
in the foregoing provisions of this Section 5.2(a)).
(b) The Registration Rights Agreement shall have been executed
and delivered by each Purchaser.
(c) Such Purchaser shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
Closing Date.
13
(d) No proceeding challenging this Agreement or the transactions
contemplated hereby, or seeking to prohibit, alter, prevent or materially
delay the Closing, shall have been instituted before any court, arbitrator or
governmental body, agency or official and shall be pending.
(e) The sale of the Shares by the Company shall not be
prohibited by any law or governmental order or regulation. All necessary
consents, approvals, licenses, Permits, orders and authorizations of, or
registrations, declarations and filings with, any governmental or administrative
agency or of any other person with respect to any of the transactions
contemplated hereby shall have been duly obtained or made and shall be in full
force and effect.
(f) Such Purchaser shall have executed and delivered to the
Company an executed Investor Questionnaire, in substantially the form
attached hereto as Exhibit C, pursuant to which each such Purchaser shall
provide information necessary to confirm each such Purchaser's status as an
"ACCREDITED INVESTOR" (as such term is defined in Rule 501 promulgated under the
Securities Act).
(g) The Company shall have received executed agreements (which
may be a counterpart signature to this Agreement) from each of the
Purchasers to purchase, in accordance with this Agreement, the number of shares
of Common Stock set forth on Exhibit A opposite its name under the heading
"NUMBER OF SHARES TO BE PURCHASED."
(h) All instruments and corporate proceedings in connection with
the transactions contemplated by this Agreement to be consummated at the
Closing shall be satisfactory in form and substance to the Company, and the
Company shall have received counterpart originals, or certified or other copies
of all documents, including, without limitation, records of corporate or other
proceedings, which it may have reasonably requested in connection therewith.
(i) No Purchaser nor any of its Affiliates nor any person acting
on behalf of such Persons will have entered into for a period of five (5)
days prior to the Closing Date, any "short sale" (as such term is defined in
Rule 3b-3 under the Securities Exchange Act of 1934, as amended).
(j) Purchasers shall have committed, pursuant to the terms
hereof, to purchase an aggregate of at least 1,000,000 Shares.
6. TRANSFER; LEGENDS.
6.1 SECURITIES LAW TRANSFER RESTRICTIONS. No Purchaser shall sell,
assign, pledge, transfer or otherwise dispose or encumber any of the Shares
being purchased by it hereunder, except: (i) pursuant to an effective
registration statement under the Securities Act or (ii) pursuant to an available
exemption from registration under the Securities Act and applicable state
securities laws and, if reasonably requested by the Company, upon delivery by
such Purchaser of an opinion of counsel reasonably satisfactory to the Company
to the effect that the proposed transfer is exempt from registration under the
Securities Act and applicable state securities laws. Any transfer or purported
transfer of the Shares in violation of this Section 6.1 shall be voidable by the
Company; PROVIDED, HOWEVER, that no opinion will be required in connection with
(1) a
14
public sale or transfer of Shares pursuant to an effective registration
statement in connection with which such Purchaser represents in writing to the
Company that such Shares have been or are being sold pursuant to such
registration statement; (2) a public sale of Shares pursuant to Rule 144 under
the Securities Act if such Purchaser has delivered to the Company a customary
and accurate Rule 144 broker's and seller's representation letter; or (3) a sale
of shares pursuant to Rule 144(k) under the Securities Act if such Purchaser has
delivered to the Company a customary and accurate Rule 144 seller's
representation letter. The Company shall not register any transfer of the Shares
in violation of this Section 6.1. The Company may, and may instruct any transfer
agent for the Company, to place such stop transfer orders as may be required on
the transfer books of the Company in order to ensure compliance with the
provisions of this Section 6.1.
6.2 LEGENDS. Each certificate representing any of the Shares shall be
endorsed with a legend in substantially the form set forth below, and each
Purchaser covenants that, except to the extent such restrictions are waived by
the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY ONLY BE
OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE
DISPOSED OF PURSUANT TO (I) AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND SUCH LAWS OR (II) AN EXEMPTION
FROM REGISTRATION UNDER SAID ACT, AND TO THE EXTENT PERMITTED
BY SECTION 6.1 OF THE COMMON STOCK PURCHASE AGREEMENT PURSUANT
TO WHICH THE SHARES REPRESENTED HEREBY WERE ACQUIRED, UPON
DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT
AND SUCH LAWS.
6.3 REMOVAL OF LEGENDS. Any legend endorsed on a certificate evidencing
the Shares shall be removed, and the Company shall issue a certificate
without such legend to the holder of such Shares, if such Shares are being sold
pursuant to an effective registration statement under the Securities Act or
pursuant to Rule 144 promulgated thereunder, and the purchaser thereof may
immediately resell such Shares without restriction and without registration;
PROVIDED, HOWEVER, that in the case of a sale pursuant to Rule 144, such holder
of Shares shall provide such information as is reasonably requested by the
Company to ensure that such Shares may be sold in reliance on Rule 144.
7. TERMINATION; LIABILITIES CONSEQUENT THEREON. This Agreement may be terminated
and the transactions contemplated hereunder abandoned at any time prior to the
Closing only as follows:
15
(a) with respect to a Purchaser, by such Purchaser, upon notice
to the Company if the conditions set forth in Section 5.1 shall not have been
satisfied on or prior to December 20, 2004; or
(b) with respect to a Purchaser, by the Company, upon notice to
such Purchaser if the conditions set forth in Section 5.2 to be satisfied by
such Purchaser shall not have been satisfied on or prior to December 20, 2004;
or
(c) at any time by mutual agreement of the Company and
Purchasers who represent at least fifty percent (50%) of the Shares being sold
hereunder; or
(d) with respect to a Purchaser, by such Purchaser, if there has
been any breach of any representation or warranty or any material breach of
any covenant of the Company contained herein and the same has not been cured
within 15 days after notice thereof (it being understood and agreed by each
Purchaser that, in the case of any representation or warranty of the Company
contained herein which is not hereinabove qualified by application thereto of a
materiality standard, such representation or warranty will be deemed to have
been breached for purposes of this Section 7.1(d) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by the Company); or
(e) by the Company with respect to a Purchaser, if there has
been any breach of any representation, warranty or any material breach of
any covenant of such Purchaser contained herein and the same has not been cured
within 15 days after notice thereof (it being understood and agreed by the
Company that, in the case of any representation and warranty of the Purchaser
contained herein which is not hereinabove qualified by application thereto of a
materiality standard, such representation or warranty will be deemed to have
been breached for purposes of this Section 7.1(e) only if such representation or
warranty was not true and correct in all material respects at the time such
representation or warranty was made by such Purchaser).
Any termination pursuant to this Section 7 shall be without
liability on the part of any party, unless such termination is the result of a
material breach of this Agreement by a party to this Agreement in which case
such breaching party shall remain liable for such breach notwithstanding any
termination of this Agreement.
8. MISCELLANEOUS PROVISIONS.
8.1 USE OF PROCEEDS. The Company shall use the net proceeds from the
sale of the Shares for general corporate and working capital purposes and
may use a portion of such proceeds to retire certain debt obligations of the
Company.
8.2 FILINGS. The Company shall make all necessary filings with the SEC
and "BLUE SKY" filings required to be made by the Company in connection
with the sale of the Shares to the Purchasers as required by all applicable
laws, and shall provide a copy thereof to the Purchasers promptly after such
filing.
8.3 PUBLIC STATEMENTS OR RELEASES. Each of the parties to this Agreement
agrees that it shall not make, issue, or release any announcement, whether to
the
16
public generally, or to any of its suppliers or customers, with respect to this
Agreement or the transactions provided for herein, or make any statement or
acknowledgment of the existence of, or reveal the status of, this Agreement or
the transactions provided for herein, without the prior consent of the other
parties, which shall not be unreasonably withheld or delayed. Notwithstanding
the foregoing, nothing in this Section 8.3 shall prevent any party hereto from
making such public announcements or filings as it may consider necessary in
order to satisfy its legal obligations, or from releasing a public statement
acceptable to each of the parties hereto upon the completion of the offering
contemplated hereby. As soon as possible but not later than the first business
day following the Closing Date, the Company will issue a press release
acceptable to each of the parties hereto describing the transactions
contemplated by this Agreement, and promptly thereafter file a Current Report on
Form 8-K with the SEC, attaching such press release.
8.4 FURTHER ASSURANCES. The parties agree to cooperate fully to execute
such further instruments, documents and agreements and to give such further
written assurances, as may be reasonably requested by any party to better
evidence and reflect the transactions described herein and contemplated hereby,
and to carry into effect the intents and purposes of this Agreement.
8.5 NOTIFICATION OF EFFECTIVENESS OF REGISTRATION STATEMENT. The Company
covenants that it will provide written notice to each Purchaser (which notice
may be in electronic form) that the Company's registration statement on Form S-3
registering the Shares sold hereunder to the Purchasers has been declared
effective by the SEC, which notice shall be given promptly after the Company has
received notice of such effectiveness from the SEC.
8.6 RIGHTS CUMULATIVE. Each and all of the various rights, powers and
remedies of the parties hereto shall be considered to be cumulative with
and in addition to any other rights, powers and remedies which such parties may
have at law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
8.7 PRONOUNS. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person, persons, entity or entities may require.
8.8 NOTICES.
-------
(a) Any notices, reports or other correspondence (hereinafter
collectively referred to as "CORRESPONDENCE") required or permitted to be
given hereunder shall be sent by postage prepaid first class mail, courier or
facsimile or delivered by hand to the party to whom such correspondence is
required
or permitted to be given hereunder. The date of giving any notice shall be the
date of its actual receipt.
(b) All correspondence to the Company shall be addressed as
follows:
EP MedSystems, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President and Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
17
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(c) All correspondence to any Purchaser shall be sent to such
Purchaser at the address set forth in Exhibit A.
(d) Any Person may change the address to which correspondence to
it is to be addressed by notification as provided for herein.
8.9 CAPTIONS. The captions and paragraph headings of this Agreement are
solely for the convenience of reference and shall not affect its interpretation.
8.10 SEVERABILITY. Should any part or provision of this Agreement be
held unenforceable or in conflict with the applicable laws or regulations
of any jurisdiction, the invalid or unenforceable part or provisions shall be
replaced with a provision which accomplishes, to the extent possible, the
original business purpose of such part or provision in a valid and enforceable
manner, and the remainder of this Agreement shall remain binding upon the
parties hereto.
8.11 GOVERNING LAW; INJUNCTIVE RELIEF.
(a) This Agreement shall be governed by and construed and
enforced in accordance with the internal and substantive laws of the State
of New York and without regard to any conflicts of laws concepts that would
apply the substantive law of any other jurisdiction.
(b) Each of the parties hereto acknowledges and agrees that
damages will not be an adequate remedy for any material breach or violation
of this Agreement if such material breach or violation would cause immediate and
irreparable harm (an "IRREPARABLE BREACH"). Accordingly, in the event of a
threatened or ongoing Irreparable Breach, each party hereto shall be entitled to
seek, in any state or federal court in the State of New York, equitable relief
of a kind appropriate in light of the nature of the ongoing or threatened
Irreparable Breach, which relief may include, without limitation, specific
performance or injunctive relief; provided, however, that if the party bringing
such action is unsuccessful in obtaining the relief sought, the moving party
shall pay the non-moving party's costs, including actual attorney's fees,
incurred in connection with defending such action. Such remedies shall not be
the parties' exclusive remedies, but shall be in addition to all other remedies
provided in this Agreement.
8.12 WAIVER. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or be construed as, a further or continuing waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
18
8.13 FEES, COSTS AND EXPENSES. All fees, costs and expenses (including
attorneys' fees and expenses) incurred by any party hereto in connection with
the preparation, negotiation and execution of this Agreement and the exhibits
hereto and the consummation of the transactions contemplated hereby and thereby
(including the costs associated with any filings with, or compliance with any of
the requirements of, any governmental authorities), shall be the sole and
exclusive responsibility of such party.
8.14 ASSIGNMENT. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors
and permitted assigns of each party. The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Majority Purchasers. Any Purchaser may assign its rights under this Agreement to
any person to whom the Purchaser assigns or transfers any Shares, provided that
such transferee agrees in writing to be bound by the terms and provisions of
this Agreement, and such transfer is in compliance with the terms and provisions
of this Agreement and permitted, with the approval of counsel to the Company, by
federal and state securities laws.
8.15 SURVIVAL. The respective representations and warranties given by
the parties hereto, and the other covenants and agreements contained
herein, shall survive the Closing Date and the consummation of the transactions
contemplated herein for a period of two years, without regard to any
investigation made by any party.
8.16 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto and
incorporated herewith constitute the entire agreement between the parties hereto
respecting the subject matter hereof and supersedes all prior agreements,
negotiations, understandings, representations and statements respecting the
subject matter hereof, whether written or oral.
8.17 AMENDMENTS. No modification, alteration, waiver or change in any of
the terms of this Agreement shall be valid or binding upon the parties
hereto unless made in writing and duly executed by the Company and (a) prior to
Closing, Purchasers who represent at least 66 2/3% of the Shares being sold
hereunder or (b) following Closing, Purchasers holding at least 66 2/3% of the
Shares; PROVIDED, HOWEVER, that, in each case, no such amendment shall increase
the obligations of any Purchaser without such Purchaser's written consent.
8.18 CONFIDENTIAL INFORMATION. Each of the Company and each Purchaser
agrees to keep confidential, and not to disclose to or use for the benefit
of any third party, the terms of this Agreement or any other information which
at any time is communicated by the other party as being confidential, without
the prior written approval of the other party; PROVIDED, HOWEVER, that this
provision shall not apply to information which, at the time of disclosure, is
already part of the public domain (except by breach of this Agreement) and
information which is required to be disclosed by law (including, without
limitation, pursuant to Item
19
601(b)(10) of Regulation S-K under the Securities Act and the Exchange Act) and
provided further the Company will not furnish confidential information to a
Purchaser without (i) informing such Purchaser regarding the nature of such
information and (ii) receiving the prior express written agreement of such
Purchaser. Notwithstanding anything herein to the contrary, any party to this
Agreement (and any employee, representative, or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the transactions contemplated by this
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to it relating to such tax treatment and tax
structure. However, any such information relating to the tax treatment or tax
structure is required to be kept confidential to the extent necessary to comply
with any applicable federal or state securities laws.
8.19 STOCK SPLITS, DIVIDENDS AND OTHER SIMILAR EVENTS. The provisions of
this Agreement shall be appropriately adjusted to reflect any stock split,
stock dividend, reorganization or other similar event that may occur with
respect to the Company after the date hereof.
8.19 COUNTERPARTS. This Agreement may be executed simultaneously 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.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties hereto have executed this Common Stock
Purchase Agreement as of the day and year first above written.
EP MEDSYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President and Chief Executive Officer
THE PURCHASER'S SIGNATURE TO THE INVESTOR QUESTIONNAIRE DATED EVEN
DATE HEREWITH SHALL CONSTITUTE THE PURCHASER'S SIGNATURE TO THIS
COMMON STOCK PURCHASE AGREEMENT.
EXHIBIT A
AGGREGATE PURCHASE
NUMBER OF SHARES PRICE
PURCHASER ADDRESS TO BE PURCHASED ($)
--------- ------- --------------- -------------------
Crestview Capital Master LLC ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ 750,000 $2,250,000
Suite A
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SF Capital Partners Ltd. c/▇ ▇▇▇▇▇ Offshore Management, LLC 750,000 $2,250,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
EXHIBIT B
FORM OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ WHITE & ▇▇▇▇▇▇▇▇▇ LLP OPINION
See attached.
EXHIBIT C
FORM OF INVESTOR QUESTIONNAIRE