Exhibit 4.12
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT (this "Pledge Agreement") dated as of the 20th day
of July, 2001, made by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual (the "Pledgor"), in favor
of EP MEDSYSTEMS, INC., a New Jersey corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company has agreed to make a loan (the "Loan") to the Pledgor
on the terms set forth in and subject to a Promissory Note, dated as of even
date herewith, by and between the Company and the Pledgor (as same may be
amended, supplemented or otherwise modified from time to time, the "Note"); and
WHEREAS, it is a condition precedent to the obligation of the Company to
make the Loan that the Pledgor execute and deliver this Pledge Agreement
granting to the Company as security for the Loan and the Pledgor's obligations
under the Note, a first priority security interest in certain of the Pledgor's
property.
NOW, THEREFORE, in consideration of the premises and to induce the Company
to make the Loan and for other valuable consideration, the Pledgor hereby agrees
with the Company as follows:
1. Definitions: When used herein, the terms set forth below shall be
defined as follows:
(a) "Obligations" means any and all indebtedness, obligations and
liabilities of the Pledgor to the Company of any kind or nature arising out of
or in connection with the Note and/or this Pledge Agreement.
(b) "Collateral" means the Pledgor's capital stock interests in the
Company consisting of 100,000 shares of common stock, no par value, $.001 stated
value per share, of the Company owned by Pledgor, represented by Stock
Certificate No. EP 361, together with all certificates, options, rights,
dividends or other distributions in respect thereof, and any and all proceeds of
the foregoing.
(c) "Event of Default" shall have the meaning given it in the Note.
2. Pledge of Collateral: To secure the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, the Pledgor hereby pledges, assigns, and
transfers to the Company, and grants to the Company a continuing security
interest in and to, all of the Pledgor's right, title and interest in and to the
Collateral. The Pledgor hereby delivers to the Company the certificate
evidencing the Collateral. Concurrently with the delivery to the Company of the
certificate representing the
E-15
Collateral, the Pledgor has delivered an undated stock power covering such
certificate, duly executed in blank by the Pledgor.
3. Representations, Warranties and Covenants: The Pledgor hereby
represents, warrants and covenants that (a) he shall defend, at his cost, any
action, proceeding or claim affecting the Collateral, (b) he is the sole legal,
record and beneficial owner of, and has good and valid title to, the Collateral,
and that the Collateral is and will continue to be free and clear of all
security interests, liens and encumbrances and rights and claims of others
except in favor of the Company, (c) he has the power and authority to execute,
deliver and perform the Note and this Pledge Agreement, (d) he shall promptly
pay all taxes, assessments, fees and other public or private charges when levied
or assessed against any Collateral, the Note or this Pledge Agreement, (e) he
has duly executed and delivered the Note and this Pledge Agreement, and the Note
and this Pledge Agreement constitute the legal, valid and binding obligations of
the Pledgor, enforceable against the Pledgor in accordance with their respective
terms, and (f) all of the shares of capital stock constituting a part of the
Collateral have been duly and validly issued and are fully paid and
non-assessable.
4. Limitations on Duties of the Company: The Company shall be under no
duty to (a) collect or protect the Collateral or any proceeds thereof or give
any notice with respect thereto, (b) preserve the right of the Pledgor with
respect to the Collateral against prior parties, (c) preserve rights against any
parties to any instrument or chattel paper that may be a part of the Collateral,
(d) sell or otherwise realize upon the Collateral, or (e) seek payment of the
Obligations from any particular source. Without limiting the generality of the
foregoing, the Company shall not be obligated to take any action in connection
with any conversion, call, redemption, retirement, or any other event relating
to any of the Collateral.
5. Voting Rights; Distributions: So long as no Event of Default has
occurred, the Pledgor shall be entitled to (a) exercise all voting, consensual,
managerial and other rights in connection with the Collateral, and (b) take
control of, receive and retain all distributions made by the Company in
connection with the Collateral.
6. Remedies: Upon the occurrence of an Event of Default, all Obligations
shall immediately become due and payable without demand or notice of any kind,
and the Company may, in addition to such other remedies provided herein, in the
Note or by law or otherwise (a) transfer the whole or any part of the Collateral
into the name of the Company or the name of its nominee and exercise all voting,
consensual, managerial and other rights in connection with the Collateral, (b)
take control of, receive and retain all distributions made by the Company in
connection with the Collateral, (c) bring legal action against the Pledgor
following written notice, and (d) take possession of the Collateral and sell,
assign and/or give options to purchase all or any part thereof in one or more
parcels upon any exchange or at public or private sale at the option of the
Company at any time or times, without advertisement or demand upon or notice to
the Pledgor or any other person or entity (all of which are hereby waived),
except such notice as is required by applicable statute and cannot be waived,
for cash, upon credit or for other property, for immediate or future delivery,
at such price or prices and upon such terms as the Company shall, in its sole
discretion, deem commercially reasonable, with the right on the part of the
Company or its nominee to become the purchaser thereof at any such sale (unless
prohibited by statute), free from any equity of redemption and from all other
claims, and, after deducting all
E-16
legal and other expenses for maintaining or selling the Collateral and all
reasonable attorneys' fees, legal or other expenses for collection, sale and
delivery, to apply the residue to the proceeds of such sale or sales to pay (or
hold as a reserve against) all Obligations. The Company shall have the right to
take any action it deems appropriate without the necessity of resorting to any
Collateral securing the Note. Any notice to be given to the Pledgor shall be
sufficiently served for all purposes if placed in the mail addressed to or left
upon the premises at the address noted in Section 8(h) below, and all time for
service or delivery of any notice in accordance with any statute shall be deemed
to be commercially reasonable if sent or served five (5) days before the event.
Notwithstanding the foregoing, the Pledgor recognizes that the Company may be
unable to effect a public sale of all or a part of the Collateral and may be
compelled to resort to one or more private sales to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. The Pledgor acknowledges that any such private
sales may be at prices and on terms less favorable to the Company than those of
public sales, and agrees that such private sales shall be deemed to have been
made in a commercially reasonable manner and that the Company has no obligation
to delay the sale of any Collateral to permit the Company to register it for
public sale under the Securities Act of 1933, as amended. Notwithstanding
anything contained herein to the contrary, the Company shall only be entitled to
proceed against the Collateral and enforce its rights therein upon the
occurrence of an Event of Default and, in such case, only to the extent of the
outstanding Obligations.
7. Attorney-in-Fact: The Pledgor hereby appoints the Company, with full
power of substitution, as his true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Pledgor and in the
name of the Pledgor or in its own name, from time to time in the Company's
discretion, for the purpose of carrying out the terms of this Pledge Agreement,
after the occurrence of an Event of Default, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Pledge Agreement.
8. Miscellaneous: This Pledge Agreement is subject to the following
additional provisions:
(a) The Pledgor hereby forever waives presentment, demand, protest,
notice of protest and notice of dishonor of the Note and the indebtedness
evidenced thereby and this Pledge Agreement. No delay or failure by the Company
in the exercise of any right or remedy under the Note or this Pledge Agreement
shall constitute a waiver thereof, and no single or partial exercise by the
Company of any right or remedy under the Note or this Pledge Agreement shall
preclude other or further exercise thereof or the exercise of any other right or
remedy. No modification or waiver of the provisions hereof shall be effective
unless in writing and signed by the Company, nor shall any waiver be applicable
except in the specific instance or matter for which given.
(b) If any provision of this Pledge Agreement is invalid or
unenforceable in any jurisdiction such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability, but the
foregoing shall not render invalid or unenforceable in such jurisdiction the
remainder of this Pledge Agreement or the remainder of such provision or affect
E-17
the validity or unenforceability of any provision of this Pledge Agreement in
any other jurisdiction.
(c) The Pledgor hereby agrees, out of the proceeds of the Collateral
to pay, indemnify and hold the Company harmless from and against all expenses,
liabilities and costs, including, without limitation, reasonable attorneys' fees
and expenses, incurred by the Company in the protection, exercise or enforcement
of its interests, rights, powers or remedies under the Note and hereunder.
(d) This Pledge Agreement shall be binding upon and inure to the
benefit of the Company and the Pledgor, and their respective heirs, executors,
personal representatives, successors and permitted assigns, provided the Pledgor
may not assign any of his rights or obligations hereunder without the prior
written consent of the Company.
(e) This Pledge Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
the principles of choice of law thereof. The Pledgor hereby submits himself for
the sole purpose of this Pledge Agreement and any controversy arising hereunder
to the exclusive jurisdiction of the courts in the State of New Jersey, and
waives any objection (on the grounds of lack of jurisdiction or forum non
conveniens, or otherwise) to the exercise of such jurisdiction over him by any
court in the State of New Jersey.
(f) At any time and from time to time, upon the request of the
Company, and at the sole expense of the Pledgor, the Pledgor will promptly and
duly execute and deliver such further instruments and documents and take such
further action as the Company may reasonably request for the purpose of
obtaining and preserving the full benefits of the Note and this Pledge Agreement
and of the rights and powers therein and herein granted, including, without
limitation, for the purpose of perfecting the Company's security interest in the
Collateral.
(g) This Pledge Agreement and the grant of the security interest
contained herein is for collateral purposes only and the Company shall not, by
virtue of this Pledge Agreement, by its receipt of distributions on account of
the Collateral, or by its exercise of any rights hereunder, be deemed to have
any liability for the debts, obligations or liabilities of the Pledgor on
account of the Collateral.
(h) All notices, requests and demands to or upon the Pledgor or the
Company under or in connection with this Pledge Agreement or the Note to be
effective shall be in writing and shall be sent by reputable overnight courier
service or certified mail, return receipt requested, to the following addresses
(or such other address as shall be designated in writing to the other party by
written notice):
If to the Pledgor: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
E-18
If to the Company: EP MedSystems, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Executive Officer
IN WITNESS WHEREOF, the Pledgor has duly executed and delivered this
Pledge Agreement the day and year first above written.
WITNESS: PLEDGOR:
s/ s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
E-19
