EXHIBIT 4.35
AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT (this
"AMENDMENT") is made as of April 11, 2003 by and among (i) EP MedSystems, Inc.,
a New Jersey corporation (the "COMPANY"), (ii) each purchaser of Common Stock
(as defined below) and Warrants (as defined below) pursuant to the Original
Stock Purchase Agreement (as defined below) and the Subsequent Stock Purchase
Agreement (as defined below) (collectively, the "INITIAL INVESTORS" and each
individually, an "INITIAL INVESTOR"), and (iii) each person or entity that
subsequently becomes a party to the Registration Rights Agreement (as defined
below) pursuant to, and in accordance with, the provisions of Section 12 thereof
(each an "INVESTOR PERMITTED TRANSFEREE" and collectively, the "INVESTOR
PERMITTED TRANSFEREES");
WHEREAS, the Company has issued and sold to the Initial Investors, and
the Initial Investors have purchased from the Company: an aggregate of 2,007,475
shares (the "ORIGINAL PURCHASED SHARES") of the Company's common stock, no par
value, $0.001 stated value per share (the "COMMON STOCK") and (ii) Warrants
("WARRANTS") to purchase an aggregate of 802,990 shares of Common Stock (the
"WARRANT SHARES"), all upon the terms and conditions set forth in that certain
Common Stock and Warrant Purchase Agreement, dated of January 31, 2003, between
the Company and the Initial Investors (the "ORIGINAL STOCK PURCHASE AGREEMENT");
WHEREAS, in connection with the Original Stock Purchase Agreement, the
Company and the Initial Investors entered into a Registration Rights Agreement,
dated as of January 31, 2003 (the "REGISTRATION RIGHTS AGREEMENT");
WHEREAS, the Company has agreed to issue and sell to certain of the
Initial Investors, and certain of the Initial Investors have agreed to purchase
from the Company up to an aggregate of 120,000 shares (the "SUBSEQUENT PURCHASED
SHARES", and together with the Original Purchased Shares, the "PURCHASED
SHARES") of the Company's Common Stock, upon the terms and conditions set forth
in that certain Common Stock Purchase Agreement, dated of even date herewith,
between the Company and the Initial Investors (the "SUBSEQUENT STOCK PURCHASE
AGREEMENT"); and
WHEREAS, the Company and the Initial Investors wish to amend the
Registration Rights Agreement pursuant to Section 19(a) thereof to include the
Subsequent Purchased Shares in the definition of Registrable Shares, and to make
certain other conforming changes.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
A. The definition of Registrable Shares set forth in Section 1 of the
Registration Rights Agreement shall be deleted in its entirety and replaced with
the following:
""REGISTRABLE SHARES" shall mean the Original Registrable Shares and
the Subsequent Registrable Shares, collectively."
B. The definitions set forth in the recitals to this Amendment shall be
deemed to be added to the definitions set forth in Section 1 of the Registration
Rights Agreement in the proper alphabetical order. In addition, each reference
to the Stock Purchase Agreement in the Registration Rights Agreement shall be
deemed a reference to the Original Stock Purchase Agreement.
C. The following additional definitions shall be added to Section 1 of
the Registration Rights Agreement in the proper alphabetical order:
""ORIGINAL REGISTRABLE SHARES" shall mean (i) the Original Purchased
Shares, (ii) the Warrant Shares, and (iii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security that is issued as) a dividend or other distribution (including a
stock split or reverse stock split) with respect to, or in exchange for, or in
replacement of, the shares referenced in (i) or (ii) above after the Closing and
prior to the date upon which the Registration Statement is declared effective by
the SEC; provided, however, such term shall not, after the Mandatory
Registration Termination Date, include any of the Original Purchased Shares that
become or have become eligible for resale pursuant to subsection (k) of Rule
144."
""SUBSEQUENT REGISTRABLE SHARES" shall mean (i) the Subsequent
Purchased Shares and (ii) any Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security that is
issued as) a dividend or other distribution (including a stock split or reverse
stock split) with respect to, or in exchange for, or in replacement of, the
shares referenced in (i) above after April 11, 2003 and prior to the date upon
which the Registration Statement is declared effective by the SEC; provided,
however, such term shall not, after the Mandatory Registration Termination Date,
include any of the Subsequent Purchased Shares that become or have become
eligible for resale pursuant to subsection (k) of Rule 144."
D. Section 3 of the Agreement shall be deleted in its entirety and replaced
with the following:
"3. REGISTRATION.
(a) Within thirty (30) business days after the Closing Date, the Company shall
prepare and file with the SEC a registration statement on Form S-3 for the
purpose of registering under the Securities Act all of the Original Registrable
Shares for resale by, and for the account of, the Investors as selling
stockholders thereunder (the "REGISTRATION STATEMENT"). The Registration
Statement shall permit the Investors to offer and sell, on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, any or all of
the Original Registrable Shares. The Company shall be required to keep the
Registration Statement effective until such date that is the earlier of (i) the
date when all of the Original Registrable Shares registered thereunder shall
have been sold or (ii) the date on which all of the Original Registrable Shares
may be immediately sold without restriction (including, without any limitation,
as to volume or manner of sale by each Investor) and without registration under
the Securities Act (the "MANDATORY REGISTRATION TERMINATION DATE"). Thereafter,
the Company shall be entitled to withdraw the Registration Statement and the
Investors shall have no further right to offer or sell any of the Original
Registrable Shares pursuant to the Registration Statement (or any prospectus
relating thereto).
(b) The Company shall use its commercially reasonable efforts to file an
amendment to the Registration Statement to include the registration of the
Subsequent Registrable Shares on or before April 18, 2003; provided that the
Company's legal counsel advises it that such amendment may be filed without
violating the Securities Act. If the Company is advised by its legal counsel
that such an amendment would violate the Securities Act, then (i) the Company
shall prepare and file a new registration statement on Form S-3 (the "ADDITIONAL
REGISTRATION STATEMENT") for the purposes of registering under the Securities
Act all of the Subsequent Registrable Shares for resale by, and for the account,
of the Investors as selling stockholders thereunder within 30 days after the
Registration Statement is declared effective and the terms and (ii) conditions
of Sections 3, 5, 7, 9 and 11 of the Registration Rights Agreement applicable to
the filing of the Registration Statement shall apply to the filing of the
Additional Registration Statement, except that the Filing Date Deadline for the
Additional Registration Statement shall be deemed to be 30 days after the
Registration Statement is declared effective.
(c) Unless otherwise agreed to by the Company, the offer and sale of the
Registrable Shares pursuant to the Registration Statement, and, if applicable,
the Additional Registration Statement, shall not be underwritten.
(d) The Company represents and warrants that, as of the date of this Agreement,
it meets the requirements for the use of Form S-3 for registration of the resale
by the Investors of the Registrable Shares, and it will use its commercially
reasonable efforts to continue to meet such requirements during the period in
which it takes to have the Registration Statement, and, if applicable, the
Additional Registration Statement, declared effective.
(e) The Company shall use its commercially reasonable efforts to cause all of
the Registrable Shares to be listed on The Nasdaq SmallCap Market.
(f) This Section 3(f) shall apply to the Company's obligation under Section 3(a)
hereof to file the Registration Statement with the SEC and to cause such
Registration Statement to become effective. The Company and Initial Investors
agree that the Investors will suffer damages if the Registration Statement is
not filed on or prior to the Filing Date Deadline and not declared effective by
the SEC on or prior to the Effectiveness Deadline. The Company and the Initial
Investors further agree that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, if (i) the Registration Statement is
not filed on or prior to the Filing Date Deadline; or (ii) the Registration
Statement is not declared effective prior to the Effectiveness Deadline (unless,
in each case, an Event results, directly or indirectly, from any act of war or
terrorism) (each of the events listed in (i)-(ii) above being referred to as an
"EVENT"), then the Company shall pay to each Initial Investor as liquidated
damages for any such failure and not as a penalty (the "LIQUIDATED DAMAGES") an
amount equal to 2.0% of the Purchase Price for the Shares paid by such Initial
Investor pursuant to the Stock Purchase Agreement (the "LIQUIDATED DAMAGES
AMOUNT") for each full thirty (30) day period following the Event until the
applicable Event has been cured. In any event, no Liquidated Damages shall
accrue after the six (6) month anniversary of the Closing Date. Payments to be
made pursuant to this Section 3(f) shall be due and payable in immediately
available funds or in the form of Common Stock within three days of such payment
becoming payable hereunder. The parties agree that the Liquidated Damages
represent a reasonable estimate on the part of the parties, as of the date of
this Agreement, of the amount of damages that may be incurred by the Investors
if the Registration Statement is not filed on or prior to the Filing Date
Deadline or has not been declared effective by the SEC on or prior to the
Effectiveness Deadline."
E. This Amendment shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York and without regard to
any conflicts of laws concepts that would apply the laws of another
jurisdiction.
F. Other than as set forth in this Amendment, all of the terms and
conditions of the Registration Rights Agreement shall continue in full force and
effect.
G. This Amendment may be executed 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)
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to the Registration Rights Agreement as of the date and year first above
written.
EP MEDSYSTEMS, INC.
By: /s/ Xxxxxxxx Xxxxxxx
---------------------------------
XXXXXXXX XXXXXXX
President and Chief Executive Officer
INVESTORS: HEIMDALL INVESTMENTS LTD.
By: N/A
-----------------------------------------
Name:
Title:
MEDCAP PARTNERS L.P.
By:/s/ C. Xxxx Xxxxx
-----------------------------------------
Name: C. XXXX XXXXX
Title: Managing Member
BONANZA CAPITAL MASTERFUND LTD.
By:/s/ Xxxxx Xxxxx
-------------------------------------------
Name: XXXXX XXXXX
Title: Managing Director
EGS PRIVATE HEALTHCARE PARTNERSHIP, L.P.
By:/s/ Xxxxxxxx Xxxx
------------------------------------------
Name: XXXXXXXX XXXX
Title: Managing Member
EGS PRIVATE HEALTHCARE COUNTERPART, L.P.
By:/s/ Xxxxxxxx Xxxx
---------------------------------------
Name: XXXXXXXX XXXX
Title: Managing Member
XXXXX, XXXXXXXX & XXXX, INC.
By:/s/ Xxxxxxx Xxx
--------------------------------------
Name: XXXXXXX XXX
Title: Chief Financial Officer
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
XXXXXXX X. XXXXXXXX
