Exhibit 4.10
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (this "Agreement") is dated as of
the 20th day of July, 2001, by and between EP MedSystems, Inc., a New Jersey
Company (the "Company"), and Xxxxxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, contemporaneously herewith the Executive and the Company have
entered into an Employment Agreement, dated even date herewith (the "Employment
Agreement"), pursuant to which the Executive will serve as Chief Operating
Officer of the Company; and
WHEREAS, the Executive wishes to purchase, and the Company wishes to sell
to the Executive, 100,000 shares of the Company's common stock, without par
value per share ("Common Stock") at a price of $2.20 per share (the "Original
Cost Per Share") and a warrant to purchase an additional 100,000 at a price of
$2.75 per share for a period of five (5) years from the date of issuance (the
"Warrant"); and
WHEREAS, such shares of Common Stock and the Warrant will be issued and
sold to the Executive in order to provide an incentive to the Executive to
exercise his best efforts on behalf of, and to remain as Chief Operating Officer
of the Company, subject to the terms and provisions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
SECTION 1. Definitions.
As used in this Agreement, the following terms shall have the following
respective meanings:
"Cause" shall mean cause as defined in the Employment Agreement, dated
even date herewith, entered into by the Executive and the Company.
"Common Shares" shall mean the issued and outstanding shares of the
Company's Common Stock, at the applicable time.
"Family" shall include any spouse, lineal ancestor or descendant or
sibling, any trust for the exclusive benefit of any of the foregoing or any
Company, limited partnership, limited liability company or other entity majority
controlled by any of the foregoing individuals or trusts.
"Person" shall mean and include a natural person, a Company, a limited
liability company, a partnership, a trust, an unincorporated organization and a
government or any department, agency or political subdivision thereof.
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"Public Offering" shall mean a distribution of new securities in an
underwritten public offering to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange
Commission pursuant to the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
any successor statute and the rules and regulations of the Securities and
Exchange Commission thereunder, as shall be in effect at the applicable time.
"Shares" shall mean the shares of Common Stock purchased by the Executive
hereunder.
"Termination of Employment" shall mean the termination of the employment
relationship between the Company and the Executive for any reason (with or
without cause), except for involuntary termination without cause.
"Transfer" shall include any direct or indirect sale, assignment,
transfer, pledge (but not including a pledge in favor of the Company),
hypothecation or other disposition of any Shares or of any legal or beneficial
interest therein.
SECTION 2. Sale to the Executive of Common Stock and Warrant. Subject to
the terms and conditions contained herein, the Company hereby sells, transfers
and assigns to the Executive, and the Executive hereby purchases from the
Company, the Shares and the Warrant for a purchase price equal to the Original
Cost Per Share (US$220,000.00 in the aggregate). The Executive covenants and
agrees to forward to the Company, if, as and when filed, a copy of any forms
filed by the Executive with the Internal Revenue Service with respect to the
Shares pursuant to Section 83(b) of the Internal Revenue Code of 1986, as
amended.
SECTION 3. Termination of Employment.
(a) (i) In the event of the Termination of Employment of the
Executive, the Company shall have the right to purchase from the Executive, and
if the Company exercises its option pursuant to this Section (a)(i), the
Executive shall sell to the Company upon the exercise of such right, up to 100%
of his Shares (rounded up to the nearest whole Share) at the Original Cost Per
Share determined in accordance with the following table:
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If the Termination of Employment Occurs Percentage of Shares Subject to
on or Prior to the Following Dates Repurchase at Original Cost Per Share
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End of 1st quarter year 1 from Date of 100%
Employment
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End of 2nd quarter year 1 from Date of 87.5%
Employment
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End of 3rd quarter year 1 from Date of 75%
Employment
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End of 4th quarter year 1 from Date of 62.5%
Employment
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End of 1st quarter year 2 from Date of 50%
Employment
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End of 2nd quarter year 2 from Date of 37.5%
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Employment
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End of 3rd quarter year 2 from Date of 25%
Employment
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End of 4th quarter year 2 from Date of 12.5%
Employment
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After 4th quarter year 2 from Date of 0%
Employment
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For purposes hereof, the term "Date of Employment" shall mean August 20,
2001.
(ii) The number of Shares subject to purchase pursuant to this
Section 3(a) shall be adjusted to give effect to any stock dividend, or other
distribution of stock made on or in respect of such Shares, or any subdivision,
combination or reclassification of the outstanding capital stock of the Company
or received in exchange for the Shares.
(b) In order to exercise the option to purchase the Executive's
Shares under this Section 3, the Company shall deliver a written notice to the
Executive (the "Repurchase Notice"), indicating its election to purchase the
Shares and specifying the number of Shares which the Company elects to purchase
and the purchase price therefor, within ninety (90) days after the Executive's
Termination of Employment.
(c) The repurchase of Shares hereunder shall be made on a date
within thirty (30) days of the delivery of the Repurchase Notice, by delivery of
payment to the Executive, by check or wire transfer, against receipt of one or
more certificates, properly endorsed, evidencing the Executive's Shares to be so
purchased. If the repurchase is not consummated by such date, the Company may
deliver to the Executive by check or wire transfer the applicable repurchase
price for the Shares to be repurchased and may cancel the certificates
evidencing such Shares on the books and records of the Company.
SECTION 4. Legend on Shares and Notice of Transfer.
4.1 Restrictive Legends.
(a) Each certificate evidencing Shares, and each certificate
evidencing Shares held by subsequent transferees of any such certificate, shall
(unless otherwise permitted by the provisions of Section 4.2 hereof) be stamped
or otherwise imprinted with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR ANY EXEMPTION
THEREFROM UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE
STATE SECURITIES LAW.
(b) Each certificate evidencing Shares, and each certificate
evidencing Shares held by subsequent transferees of any such certificate, shall
(unless otherwise permitted by the
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provisions of Section 4.2 hereof) also be stamped or otherwise imprinted with a
legend in substantially the following form:
ADDITIONALLY, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE TERMS AND
CONDITIONS OF A RESTRICTED STOCK PURCHASE AGREEMENT, DATED AS OF JULY 20,
2001, BETWEEN EP MEDSYSTEMS, INC. AND THE HOLDER OF RECORD OF THIS
CERTIFICATE AND NO SALE, ASSIGNMENT, TRANSFER, PLEDGE, HYPOTHECATION OR
OTHER DISPOSITION OF SUCH SECURITIES SHALL BE VALID OR EFFECTIVE EXCEPT IN
ACCORDANCE WITH SUCH AGREEMENT AND UNTIL SUCH TERMS AND CONDITIONS HAVE
BEEN FULFILLED. COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY
WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF EP MEDSYSTEMS, INC.
4.2 Notice of Transfer.
(a) The Executive, and any other holder of any Shares by acceptance
thereof, agrees that, prior to any Transfer of any Shares, such holder will give
written notice to the Company of such holder's intention to effect such Transfer
and to comply in all other respects with the provisions of this Section 4.2.
Each such notice shall contain (i) a statement setting forth the intention of
said holder's prospective transferee with respect to its retention or
disposition of said Shares; and (ii) unless waived by the Company, a written
opinion of counsel for such holder, in form and substance reasonably
satisfactory to the Company, as to the necessity or non-necessity for
registration under the Securities Act and applicable state securities laws in
connection with such Transfer and stating the factual and statutory basis relied
upon by counsel. The following provisions shall then apply:
(i) If the proposed Transfer of Shares may be effected without
registration or qualification under the Securities Act and any applicable state
securities laws, then the registered holder of such Shares shall be entitled to
Transfer such Shares in accordance with Section 5 hereof and the intended method
of disposition specified in the statement delivered by such holder to the
Company.
(ii) If the proposed Transfer of such Shares may not be
effected without registration under the Securities Act or registration or
qualification under any applicable state securities laws, the registered holder
of such Shares shall not be entitled to Transfer such Shares pursuant to Section
5 hereof until the requisite registration or qualification is effective.
(b) Notwithstanding the provisions of Section 4.2(a), in the case of
a Transfer by a holder to a member of such holder's Family, no such opinion of
counsel shall be necessary; provided, that the transferee agrees in writing to
be subject to this Agreement to the same extent as if such transferee were
originally a signatory to this Agreement.
(c) Each certificate evidencing the Shares issued upon such Transfer
(and each certificate evidencing any untransferred balance of such Shares) shall
bear the legend set forth in Section 4.1(a) hereof unless (i) in the written
opinion of counsel addressed and
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delivered and in form and substance reasonably satisfactory to the Company, the
registration of future Transfers is not required by the applicable provisions of
the Securities Act or applicable state securities laws; (ii) the Company shall
have waived the requirement of such legend; or (iii) in the opinion of counsel
to the Company, such Transfer shall have been made in connection with an
effective registration statement filed pursuant to the Securities Act or in
compliance with the requirements of Rule 144 or Rule 144A (or any similar or
successor rule) promulgated under the Securities Act, and in compliance with
applicable state securities laws.
(d) Each certificate evidencing the Shares issued upon such Transfer
(and each certificate evidencing any untransferred balance of such Shares) shall
bear the legend set forth in Section 4.1(b) hereof, for so long as this
Agreement remains in effect. In the event of the termination of this Agreement,
the holder of Shares may request that the Company issue a new certificate not
bearing the legend set forth in Section 4.1(b) hereof.
SECTION 5. Prohibited Transfers.
(a) The Executive agrees that he shall not Transfer any of his
Shares which are subject to repurchase pursuant to Section 3 above at any time.
The Executive further agrees that he shall not Transfer any of his Shares which
are no longer subject to repurchase pursuant to Section 3 above without the
prior written consent of the Board of Directors of the Company.
(b) Notwithstanding anything to the contrary contained herein, the
Executive (and any permitted transferee of the Executive) may Transfer all of
his Shares: (i) to any member of the Family of the Executive (or such permitted
transferee); provided, that such transferee shall agree in writing with the
Company, prior to and as a condition precedent to such Transfer, to be bound by
all of the provisions of this Agreement and, provided, further, that the
interests in any Family trusts shall be non-transferable or, if such interests
are transferable, the Board of Directors of the Company shall have granted its
consent to such Transfer in its sole discretion and (ii) by will or the laws of
descent and distribution, in which event each such transferee shall be bound by
all of the provisions of this Agreement to the same extent as if such transferee
were the deceased the Executive (or permitted transferee).
5.2 If requested in writing by the managing underwriters, if any, of
any Public Offering, the Executive agrees not to offer, sell, contract to sell
or otherwise dispose of any Shares except as part of such Public Offering within
thirty (30) days before or one hundred and eighty (180) days after the effective
date of the registration statement filed with respect to such Public Offering,
and the Company hereby also so agrees; provided, however, that this restriction
will not apply to Transfers permitted under Section 5.1(b), provided such
transferee agrees in writing with the Company, prior to and as a condition
precedent to such Transfer, to be bound by the restrictions contained in this
Section 5.1(c) (and the other provisions of this Agreement).
SECTION 6. Representations.
6.1 Representations of the Executive. In connection with the
Executive's acquisition of the Shares and the Warrant, the Executive hereby
represents and warrants to the Company as follows:
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(a) Investment Intent; Capacity to Protect Interests. The Executive
is acquiring the Shares and the Warrant solely for his own account for
investment and not with a view to or for sale in connection with any
distribution of the Shares or the shares subject to the Warrant or any portion
thereof, respectively, and not with any present intention of selling, offering
to sell or otherwise disposing of or distributing the Shares or the shares
subject to the Warrant or any portion thereof in any transaction other than a
transaction exempt from registration under the Securities Act. The Executive
also represents that the entire legal and beneficial interest of the Shares and
the Warrant are being acquired, and will be held, for his account only, and
neither in whole or in part for any other person.
(b) Restricted Securities. The Executive understands and
acknowledges that the sale and issuance of the Shares and the Warrant have not
been registered under the Securities Act; that the Shares, the Warrant and the
shares subject to the Warrant must be held indefinitely unless subsequently
registered under the Securities Act or an exemption from such registration is
available; and that the Company is under no obligation to register the Shares or
the shares subject to the Warrant.
(c) Disposition under Rule 144. The Executive understands that the
Shares, the Warrant and the shares subject to the Warrant are restricted
securities within the meaning of Rule 144 promulgated under the Securities Act,
and even then will not be available unless (i) a public trading market then
exists for the Shares, (ii) adequate information concerning the Company is then
available to the public, and (iii) other terms and conditions of Rule 144 are
complied with; and that any sale of the Shares or the shares subject to the
Warrant may be made only in limited amounts in accordance with such terms and
conditions.
(d) Authorization. The execution, delivery and performance by the
Executive of this Agreement and all transactions contemplated by this Agreement
have been duly authorized by all action required by law, its Certificate of
Incorporation, its By-laws or otherwise.
(e) Enforceability. This Agreement has been duly executed and
delivered by the Executive and constitutes the legal, valid and binding
obligation of the Executive enforceable against him in accordance with its
terms.
6.2 Representations of the Company. The Company represents to the
Executive that:
(a) The execution, delivery and performance by the Company of this
Agreement and all transactions contemplated by this Agreement have been duly
authorized by all action required by law, its Certificate of Incorporation, its
By-laws or otherwise.
(b) This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company
enforceable against it in accordance with its terms.
SECTION 7. Withholding. Upon the request of the Company, the Executive
shall promptly pay to the Company, or make arrangements satisfactory to the
Company regarding payment of, any Federal, state or local taxes of any kind
required by law to be withheld with
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respect to the Shares (or any distributions of other securities or property
(including cash) thereon or issued in replacement thereof).
SECTION 8. Remedies. In case any one or more of the covenants and/or
agreements set forth in this Agreement shall have been breached by any party
hereto, the party entitled to the benefit of such covenants or agreements may
proceed to protect and enforce its rights either by suit in equity and/or by
action at law, including, but not limited to, (a) an action for damages as a
result of any such breach, (b) an action for specific performance of any such
covenant or agreement contained in this Agreement, and/or (c) a temporary or
permanent injunction, in any case without showing any actual damage. The rights,
power and remedies of the parties under this Agreement are cumulative and not
exclusive of any other agreement or law. No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude any
other or further assertion or exercise thereof. Any purported Transfer in
violation of the provisions of this Agreement shall be null and void ab initio.
SECTION 9. Successors and Assigns. Except as otherwise expressly provided
herein, this Agreement shall bind and inure to the benefit of the Company, the
Executive, the respective successors or heirs, distributees and personal
representatives and permitted assigns of the Company and the Executive, and each
other person who shall properly become a registered holder of any Shares or any
shares subject to the Warrant that have not theretofore been sold to the public
pursuant to a registration statement under the Securities Act or Rule 144 or
Rule 144A (or any similar or successor rule).
SECTION 10. Notices. All notices, consents and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
(a) when delivered by hand, (b) one (1) business day after the business day of
transmission, if sent by telex or telecopier (with receipt confirmed), provided
that a copy is mailed by registered mail, return receipt requested, or (c) one
(1) business day after the business day of deposit with the carrier, if sent by
Express Mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addresses, telex numbers and
telecopier numbers set forth below (or to such other addresses or telecopy
numbers as a party may designate as to itself by notice to the other parties):
(a) If to the Executive:
Xxxxxxxx Xxxxxxx
00 Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
(b) If to the Company:
EP MedSystems, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief The Executive Officer
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SECTION 11. Counterparts; Facsimile Execution. This Agreement may be
executed in one or more counterparts, each of which shall be deemed to be an
original, but all of which together will constitute one and the same instrument.
Facsimile execution and delivery of this Agreement is legal, valid and binding
execution and delivery for all purposes.
SECTION 12. Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of New Jersey, without
giving effect to the choice of law principles thereof.
SECTION 13. Entire Agreement. This Agreement constitutes the entire
agreement by the Company and the Executive with respect to the subject matter
hereof and except as specifically provided herein, supersedes any and all prior
agreements or understandings between the Executive and the Company with respect
to the subject matter hereof, whether written or oral. This Agreement may be
amended or modified only by a written instrument executed by the Executive and
the Company.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first written above.
EP MEDSYSTEMS, INC.
By: s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President and Chief The Executive Officer
s/ Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxx
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