Document:

Filed by sedaredgar.com - Anavex Life Sciences Corp. - Exhibit 10.3

EXHIBIT A

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). 

NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN
REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO
REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED
STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND "U.S.
PERSON" ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT. 

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID 
AT 12:00
P.M. ON _______________
.

SHARE PURCHASE WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF

ANAVEX LIFE SCIENCES CORP.

                    
THIS IS TO CERTIFY THAT _________________________, (the
“Holder”) of _______________SHARE PURCHASE WARRANTS, has the right to purchase,
upon and subject to the terms and conditions hereinafter referred to, up to
10,800 fully paid and non-assessable shares of common stock (the “Shares”) in
the capital of Anavex Life Sciences Corp. (hereinafter called the “Company”) on
or before 12:00 p.m. on _______________ (the “Expiry Date”) at a price per Share
of US$_______________ (the “Exercise Price”) on the terms and conditions
attached hereto as Appendix A (the “Terms and Conditions”).

	 	1. 	
      One warrant and the exercise price are required to
      purchase one share. This certificate represents _______________
      warrants.

	 	 	 
	 	2. 	
      These Warrants are issued subject to the Terms and
      Conditions, and the Warrant Holder may exercise the right to purchase
      Shares only in accordance with those Terms and Conditions.

	 	 	 
	 	3. 	
      Nothing contained herein or in the Terms and Conditions
      will confer any right upon the Holder hereof or any other person to
      subscribe for or purchase any Shares at any time subsequent to the Expiry
      Date, and from and after such time, this Warrant and all rights hereunder
      will be void and of no value.

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IN WITNESS WHEREOF the Company has executed this Warrant Certificate
this _____day of _______________, 2009.

ANAVEX LIFE SCIENCES CORP.

	Per: 		 
	 	Authorized Signatory 	 

APPENDIX A

TERMS AND CONDITIONS dated _______________, 2009, attached to
the Warrants issued by Anavex Life Sciences Corp.

1.                       
INTERPRETATION

1.1                     
Definitions

In these Terms and Conditions, unless there is something in the
subject matter or context inconsistent therewith:

	 	(a) 	
      “Company” means Anavex Life Sciences Corp. until a
      successor corporation will have become such as a result of consolidation,
      amalgamation or merger with or into any other corporation or corporations,
      or as a result of the conveyance or transfer of all or substantially all
      of the properties and estates of the Company as an entirety to any other
      corporation and thereafter “Company” will mean such successor
      corporation;

	 	 	 
	 	(b) 	
      “Company's Auditors” means an independent firm of
      accountants duly appointed as auditors of the Company;

	 	 	 
	 	(c) 	
      “Director” means a director of the Company for the time
      being, and reference, without more, to action by the directors means
      action by the directors of the Company as a Board, or whenever duly
      empowered, action by an executive committee of the Board;

	 	 	 
	 	(d) 	
      “herein”, “hereby” and similar expressions refer to these
      Terms and Conditions as the same may be amended or modified from time to
      time; and the expression “Article” and “Section,” followed by a number
      refer to the specified Article or Section of these Terms and
      Conditions;

	 	 	 
	 	(e) 	
      “person” means an individual, corporation, partnership,
      trustee or any unincorporated organization and words importing persons
      have a similar meaning;

	 	 	 
	 	(f) 	
      “shares” means the shares of common stock in the capital
      of the Company as constituted at the date hereof and any shares resulting
      from any subdivision or consolidation of the shares;

	 	 	 
	 	(g) 	
      “Warrant Holders” or “Holders” means the holders of the
      Warrants; and

	 	 	 
	 	(h) 	
      “Warrants” means the warrants of the Company issued and
      presently authorized and for the time being
outstanding.

1.2                      
 Gender

Words importing the singular number include the plural and vice
versa and words importing the masculine gender include the feminine and neuter
genders.

1.3                       
Interpretation not affected by Headings

The division of these Terms and Conditions into Articles and
Sections, and the insertion of headings are for convenience of reference only
and will not affect the construction or interpretation thereof.

- 2 -

1.4                       
Applicable Law

The Warrant and the terms hereof are governed by the laws of
the State of Nevada and the federal laws applicable therein. The Holder, in the
Holder’s personal or corporate capacity and, if applicable, on behalf of each
beneficial purchaser for whom the Holder is acting, irrevocably attorns to the
jurisdiction of the courts of the State of Nevada.

2.                       
ISSUE OF WARRANTS

2.1                     
Additional Warrants

The Company may at any time and from time to time issue
additional warrants or grant options or similar rights to purchase shares of its
capital stock.

2.2                     
Warrants to Rank Pari Passu

All Warrants and additional warrants, options or similar rights
to purchase shares from time to time issued or granted by the Company, will rank
pari passu whatever may be the actual dates of issue or grant thereof, or
of the dates of the certificates by which they are evidenced.

2.3                     
Issue in substitution for Lost Warrants

	 	(a) 	
      In case a Warrant becomes mutilated, lost, destroyed or
      stolen, the Company, at its discretion, may issue and deliver a new
      Warrant of like date and tenor as the one mutilated, lost, destroyed or
      stolen, in exchange for and in place of and upon cancellation of such
      mutilated Warrant, or in lieu of, and in substitution for such lost,
      destroyed or stolen Warrant and the substituted Warrant will be entitled
      to the benefit hereof and rank equally in accordance with its terms with
      all other Warrants issued or to be issued by the Company.

	 	 	 
	 	(b) 	
      The applicant for the issue of a new Warrant pursuant
      hereto will bear the cost of the issue thereof and in case of loss,
      destruction or theft furnish to the Company such evidence of ownership and
      of loss, destruction, or theft of the Warrant so lost, destroyed or stolen
      as will be satisfactory to the Company in its discretion and such
      applicant may also be required to furnish indemnity in amount and form
      satisfactory to the Company in its discretion, and will pay the reasonable
      charges of the Company in connection therewith.

2.4                     
Warrant Holder Not a Shareholder

The holding of a Warrant will not constitute the Holder thereof
as a shareholder of the Company, nor entitle him to any right or interest in
respect thereof except as in the Warrant expressly provided.

3.                      
 NOTICE

3.1                     
Notice to Warrant Holder

Any notice required or permitted to be given to the Holder will
be in writing and may be given by prepaid registered post, electronic facsimile
transmission or other means of electronic communication capable of producing a
printed copy to the address of the Holder appearing on the Holder's Warrant or
to such other address as any Holder may specify by notice in writing to the
Company, and any such notice will be 

- 3 -

deemed to have been given and received by the Holder to whom it
was addressed if mailed, on the third day following the mailing thereof, if by
facsimile or other electronic communication, on successful transmission, or, if
delivered, on delivery; but if at the time or mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labor disturbance affecting postal service, then the notice will not be
effectively given until actually delivered.

3.2                     
Notice to the Company

Any notice required or permitted to be given to the Company
will be in writing and may be given by prepaid registered post, electronic
facsimile transmission or other means of electronic communication capable of
producing a printed copy to the address of the Company set forth below or such
other address as the Company may specify by notice in writing to the Holder, and
any such notice will be deemed to have been given and received by the Company to
whom it was addressed if mailed, on the third day following the mailing thereof,
if by facsimile or other electronic communication, on successful transmission,
or, if delivered, on delivery; but if at the time or mailing or between the time
of mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:

	 	Anavex Life Sciences Corp. 
	 	27 Marathonos Ave. 
	 	15351 Athens, Greece 
	 	  
	 	Attention: President 
	 	  
	 	Fax No. +1 250 764 9701 

4.                       
EXERCISE OF WARRANTS

4.1                     
Method of Exercise of Warrants

The right to purchase shares conferred by the Warrants may be
exercised by the Holder surrendering the Warrant Certificate representing same,
with a duly completed and executed subscription in the form attached hereto and
a bank draft or certified check payable to the Company for the purchase price
applicable at the time of surrender in respect of the shares subscribed for in
lawful money of the United States of America, to the Company at the address set
forth in, or from time to time specified by the Company pursuant to, Section
3.2.

4.2                     
Effect of Exercise of Warrants

	 	(a) 	
      Upon surrender and payment as aforesaid the shares so
      subscribed for will be deemed to have been issued and such person or
      persons will be deemed to have become the Holder or Holders of record of
      such shares on the date of such surrender and payment, and such shares
      will be issued at the subscription price in effect on the date of such
      surrender and payment.

	 	 	 
	 	(b) 	
      Within ten business days after surrender and payment as
      aforesaid, the Company will forthwith cause to be delivered to the person
      or persons in whose name or names the shares so subscribed for are to be
      issued as specified in such subscription or mailed to him, her or them at
      his, her or their respective addresses specified in such subscription, a
      certificate or certificates for the appropriate number of shares not
      exceeding those which the Warrant Holder is entitled to purchase pursuant
      to the Warrant surrendered.

- 4 -

4.3                     
Subscription for Less Than Entitlement

The Holder of any Warrant may subscribe for and purchase a
number of shares less than the number which the Holder is entitled to purchase
pursuant to the surrendered Warrant. In the event of any purchase of a number of
shares less than the number which can be purchased pursuant to a Warrant, the
Holder thereof upon exercise thereof will in addition be entitled to receive a
new Warrant in respect of the balance of the shares which the Holder is entitled
to purchase pursuant to the surrendered Warrant and which are not then
purchased.

4.4                     
Warrants for Fractions of Shares

To the extent that the Holder of any Warrant is entitled to
receive on the exercise or partial exercise thereof a fraction of a share, such
right may be exercised in respect of such fraction only in combination with
another Warrant or other Warrants which in the aggregate entitle the Holder to
receive a whole number of such shares.

4.5                     
Expiration of Warrants

After the expiration of the period within which a Warrant is
exercisable, all rights thereunder will wholly cease and terminate and such
Warrant will be void and of no effect.

4.6                     
Time of Essence

Time will be of the essence hereof.

4.7                     
Subscription Price

Each Warrant is exercisable at a price per share (the “Exercise
Price”) of US$_____. One Warrant and the Exercise Price are required to
subscribe for each share during the term of the Warrants.

4.8                     
Adjustment of Exercise Price

	 	(a) 	
      The Exercise Price and the number of shares deliverable
      upon the exercise of the Warrants will be subject to adjustment in the
      event and in the manner following:

	 	 	 	 
	 		(i) 	
      If and whenever the shares at any time outstanding are
      subdivided into a greater or consolidated into a lesser number of shares
      the Exercise Price will be decreased or increased proportionately as the
      case may be; upon any such subdivision or consolidation the number of
      shares deliverable upon the exercise of the Warrants will be increased or
      decreased proportionately as the case may be.

	 	 	 	 
	 		(ii) 	
      In case of any capital reorganization or of any
      reclassification of the capital of the Company or in the case of the
      consolidation, merger or amalgamation of the Company with or into any
      other Company (hereinafter collectively referred to as a
      “Reorganization”), each Warrant will after such Reorganization confer the
      right to purchase the number of shares or other securities of the Company
      (or of the Company's resulting from such Reorganization) which the Warrant
      Holder would have been entitled to upon Reorganization if the Warrant
      Holder had been a shareholder at the time of such
  Reorganization.

- 5 -

In any such case, if necessary,
appropriate adjustments will be made in the application of the provisions of
this Article Four relating to the rights and interest thereafter of the Holders
of the Warrants so that the provisions of this Article Four will be made
applicable as nearly as reasonably possible to any shares or other securities
deliverable after the Reorganization on the exercise of the Warrants.

The subdivision or consolidation of
shares at any time outstanding into a greater or lesser number of shares
(whether with or without par value) will not be deemed to be a Reorganization
for the purposes of this clause 4.8(a)(ii) .

	 	(b) 	
      The adjustments provided for in this Section 4.8 are
      cumulative and will become effective immediately after the record date or,
      if no record date is fixed, the effective date of the event which results
      in such adjustments.

4.9                     
Determination of Adjustments

If any questions will at any time arise with respect to the
Exercise Price or any adjustment provided for in Section 4.8, such questions
will be conclusively determined by the Company's Auditors, or, if they decline
to so act any other firm of certified public accountants in the United States of
America that the Company may designate and who will have access to all
appropriate records and such determination will be binding upon the Company and
the Holders of the Warrants.

5.                       
WAIVER OF CERTAIN RIGHTS AND IMMUNITY OF SHAREHOLDERS, ETC.

The Warrant Holder, as part of the consideration for the issue
of the Warrants, waives and will not have any right, cause of action or remedy
now or hereafter existing in any jurisdiction against any past, present or
future incorporator, shareholder, director or officer (as such) of the Company
for the issue of shares pursuant to any Warrant or on any covenant, agreement,
representation or warranty by the Company herein contained or in the
Warrant.

6.                       
MODIFICATION OF TERMS, ETC.

6.1                     
Modification of Terms and Conditions for Certain Purposes

From time to time the Company may, subject to the provisions of
these presents, modify the Terms and Conditions hereof, for the purpose of
correction or rectification of any ambiguities, defective provisions, errors or
omissions herein.

6.2                     
Warrants Not Transferable

The Warrant and all rights attached to it are not
transferable.

- 6 -

DATED as of the date first above written in these Terms and
Conditions.

	ANAVEX LIFE SCIENCES CORP. 
	  
	  
	Per: 	 	 
		 Authorized
      Signatory  	

WARRANT EXERCISE FORM

	To: 	Anavex Life Sciences Corp. 
		 27 Marathonos
    Ave.  
		 15351 Athens,
    Greece  

The undersigned Holder of the within Warrants hereby subscribes
for ____________ shares of common stock (the “Shares”) of Anavex Life Sciences
Corp. (the “Company”) pursuant to the within Warrants at US$_____ per Share on
the terms specified in the said Warrants. This subscription is accompanied by a
certified check or bank draft payable to or to the order of the Company for the
whole amount of the purchase price of the Shares.

The undersigned represents that, at the time of the exercise of
these Warrants, all of the representations and warranties contained in Section 6
of the Subscription Agreement between the Company and the undersigned pursuant
to which these Warrants were issued are true and accurate.

	Please register the share certificates as follows: 	 	  
	Registration Instructions 	 	Delivery Instructions 
	 	 	 
	 	 	 
	Name 	 	Name 
	 	 	 
	 	 	 
	Address 	 	Address 
	 	 	 
	 	 	 
	City 	 	City 
	 	 	 
	 	 	 
	Province or State & Postal Code or Zip 	 	Province or State & Postal Code or Zip
  
	 	 	 
	 	 	 
	  	 	Phone No. 

(Please print full name in which share certificates are to
be issued, stating whether Mr., Mrs. or Miss is applicable).

REPRESENTATIONS AND WARRANTIES

The undersigned is not a “U.S. person”, as such term is defined
in Regulation S as promulgated under the United States Securities Act of 1933,
at the time of the exercise of the Warrants.

LEGENDS

The certificates representing the shares acquired on the
exercise of the Warrants will bear a U.S. legend in substantially the following
form:

	 	
      THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
      OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED
      HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF
      1933, AS AMENDED (THE "1933 ACT"). 
	 

- 2 -

	 	
      NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN
      REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND,
      UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
      IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S. PERSONS EXCEPT IN
      ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT,
      PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
      PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
      TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN
      ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING
      TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE 1933 ACT. "UNITED STATES" AND "U.S. PERSON" ARE AS
      DEFINED BY REGULATION S UNDER THE 1933 ACT. 
	 

DATED this ________day of __________________, ______.

	WITNESSED BY 	 	WARRANT HOLDER 
	 	 	 
	X 	 	X
  
	Signature 	 	Signature 
	 	 	 
	 	 	 
	Name (Please Print) 	 	Name (Please Print) 
	 	 	 
	 	 	 
	Address 	 	Address 
	 	 	 
	 	 	 
	City 	 	City 
	 	 	 
	 	 	 
	Province or State & Postal Code or Zip 	 	Province or State & Postal Code or Zip
  

INSTRUCTIONS FOR SUBSCRIPTION

The signature to the subscription must correspond in every
particular with the name written upon the face of the Warrant without alteration
or enlargement or any change whatever. If there is more than one subscriber, all
must sign. In the case of persons signing by agent or attorney or by personal
representative(s), the authority of such agent, attorney or representative(s) to
sign must be proven to the satisfaction of the Company. If the Warrant
certificate and the form of subscription are being forwarded by mail, registered
mail must be employed.WWW.EXFILE.COM, INC. -- 888-775-4789 -- CAS MEDICAL SYSTEMS, INC. -- EXHIBIT 10.1 TO FORM 10-Q

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT, entered into August 10, 2009, by and between CAS Medical Systems, Inc., a Delaware corporation (the “Company”, which term includes any successor to CAS Medical Systems, Inc., by merger or otherwise), and Andrew E. Kersey (the “Employee”).

 

WITNESSETH:

 

WHEREAS, the Company desires that the Employee continue to serve as President and Chief Executive Officer of the Company and the Employee is willing to continue to serve the Company in such capacity.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the parties hereto agree as follows:

 

	
Section 1.  
	
Employment

 

The Company will employ the Employee, and the Employee will perform services for the Company and its subsidiaries, on the terms and conditions set forth in this Agreement and for the period specified in Section 3 hereof (“Term of Employment”).

 

	
Section 2.  
	
Duties

 

The Employee, during the Term of Employment, will serve the Company as its President and Chief Executive Officer.  The Employee will have such duties and responsibilities as are assigned to him by the Board of Directors of the Company commensurate with the Employee’s position.  The Employee will perform his duties
hereunder faithfully and to the best of his abilities and in furtherance of the business of the Company and its subsidiaries, and will devote his full business time, energy, attention and skill to the business of the Company and its subsidiaries and to the promotion of its interests, except as otherwise agreed by the Company.

 

	
Section 3.  
	
Term of Employment

 

The Employee’s employment hereunder shall be “at will” and is terminable at any time by either party, subject to the provisions of Sections 9 and 10 hereof.

 

	
Section 4.  
	
Salary

 

The Employee will receive, as compensation for his duties and obligations to the Company pursuant to this Agreement, a base salary at the annual rate of Two Hundred and Fifty Thousand Dollars, payable in substantially equal installments in accordance with the Company’s payroll practice.  It is agreed between the parties that
the Company will review the base annual salary annually and in light of such review may (but will not be obligated to), in the discretion of the Compensation Committee of the Board of Directors of the Company, increase such annual base salary taking into account any change in the Employee’s responsibilities, increases in the cost of living, performance by the Employee, and other pertinent factors.  It is also agreed that during such annual review the annual base salary can be reduced.

 

	
Section 5.  
	
Bonus

 

During the Term of Employment, the Employee will be eligible for an annual bonus in the form of cash or Company common stock as determined at the sole discretion of the Compensation Committee of the Board of Directors.  Any bonus payable hereunder
shall be calculated after the close of the end of the calendar year, and thereafter paid in a lump sum by no later than the 15th day of the third month following the end of the calendar year in which the right to the bonus is no longer subject to a substantial risk of forfeiture (as defined for purposes of Internal Revenue Code Section 409A, including Treasury Regulations Section 1.409A-1(d)).

 

 

 

 

	
Section 6.  
	
Employee Benefits

 

Subject to any applicable probationary or similar periods, during the Term of Employment, the Employee will be entitled to participate in all employee benefit programs of the Company applicable to senior officers of the Company, as such programs may be in effect from time to time.  Subject to any applicable probationary or similar
periods, during the Term of Employment, the Employee will also be entitled to participate in all retirement programs of the Company for which current employees are eligible, as such programs may be in effect from time to time (including the Company’s 401(k) plan).

 

	
Section 7.  
	
Business Expenses

 

All reasonable travel and other out-of-pocket expenses incidental to the rendering of services by the Employee hereunder will be paid by the Company and if expenses are paid in the first instance by the Employee, the Company will reimburse him therefor upon presentation of proper invoices; subject in each case to compliance with the Company’s
reimbursement policies and procedures.  All reimbursements will be paid in the same taxable year in which the expense is incurred; provided that expenses incurred toward the end of the calendar year that cannot administratively be reimbursed before the year end shall be reimbursed by no later than March 15th of the following calendar year.

 

	
Section 8.  
	
Vacations and Sick Leave

 

The Employee will be entitled to holidays, reasonable vacation and reasonable sick leave each year, in accordance with policies of the Company, as determined by the Board of Directors, provided, however, that the Employee will be entitled to a minimum of four (4) weeks vacation per year.

 

	
Section 9.  
	
Termination

 

(a) Termination of Agreement by the Company for Convenience.  The Company may terminate the Employee’s employment and the Term of Employment for convenience
at any time upon written notice to the Employee, which termination shall be effective upon delivery of such notice unless such notice specifically provides for termination to be effective at a later date.

 

(b) Termination of Employment by the Company for Serious Cause.  In the event of Serious Cause (as defined below), the Company may terminate the Employee’s
employment and the Term of Employment upon written notice of such termination stating the Serious Cause upon which the Company relies for its termination.  The Employee’s employment and the Term of Employment will be terminated effective as of the date specified in such notice, which will in no event be earlier than the effective date of such notice as provided in Section 18.

 

“Serious Cause” means (i) the willful and continued failure by the Employee to perform substantially his duties hereunder, other than by reasons of health, after demand for substantial performance is delivered by the Company that identifies the manner in which the Company believes the Employee has not substantially performed his
duties; (ii) the Employee will have been indicted by any federal, state or local authority in any jurisdiction for, or will have pleaded guilty or nolo contendere to, an act constituting a felony, (iii) the Employee will have habitually abused any controlled substance (such as narcotics or alcohol), or (iv) the Employee will have (A) engaged in acts of fraud, material dishonesty or gross misconduct in connection with the business of the Company, or (B) committed a material breach of this Agreement.

 

 

 

 

(c) Termination of Employment by Employee for Good Reason. The Employee may terminate his employment and the Term of Employment in the event of “Good Reason.”  Termination
for Good Reason means a resignation of employment and Separation from Service (as such term is defined for purposes of Internal Revenue Code Section 409A) within six (6) months following the initial existence of one or more of the following conditions arising without the Employee’s written consent:

 

	
(i)  
	
a reduction greater than five (5) percent in the aggregate in the Employee’s base salary or benefits, other than an across-the-board reduction affecting substantially all members of senior management;

 

	
(ii)  
	
a material reduction in the Employee’s duties and significant responsibilities hereunder following the occurrence of a Change of Control, as defined in Section 10(b) hereof (not including reasonable changes in title or in corporate structure); or

 

	
(iii)  
	
a material breach of this Agreement by the Company (which shall include a failure to make payments due hereunder);

 

provided, in any such case, that (1) the Employee shall provide, pursuant to Section 18 hereof, a prior written notice specifying the reasons for his termination to the Company’s Board of Directors within sixty (60) days after the initial existence of the condition, and give Company an opportunity to cure such condition (if curable),
and (2) “Good Reason” shall exist only if the Company shall fail to cure such condition within thirty-one (31) days after its receipt of such prior written notice.  In addition, until the actual Separation from Service, the Employee must remain willing and able to continue to perform services in accordance with the terms of this Agreement and the Employee must not be in breach of any of the Employee’s obligations hereunder.

 

(d) Effect of Termination for Serious Cause or Without Good Reason.  In the event of termination of the Employee’s employment and the Term of Employment
by the Company for Serious Cause or by the Employee without Good Reason, the Employee will forfeit all bonus amounts accruing for the then current fiscal year, and the Company will be liable to the Employee only for (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred prior to the date of termination.

 

(e) Death, Retirement, Disability.  In the event of the death, Retirement or Disability of the Employee, the Employee’s employment and Term of Employment
will be terminated as of the date of such death, Retirement or Disability and the Company will pay the Employee, or the Employee’s estate or legal representative, as appropriate, (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (iii) reimbursement of business expenses incurred, but unpaid, prior to the date of termination.

 

“Disability” means the Employee’s inability, for reasons of health, to carry out the functions of his position for a total of one hundred eighty (180) days during any twelve (12) month period.  “Retirement” will mean retirement from employment upon or
after attaining age sixty-five (65) or such earlier age agreed to by the Company.

 

(f) Effect of Termination Without Serious Cause or With Good Reason.  If (i) the Company terminates the Employee’s employment without Serious Cause, or (ii)
the Employee terminates his employment for Good Reason (other than, in the case of each of clause (i) and (ii) above, within the period beginning on the date that a Change in Control is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs), the Company shall pay the Employee a separation pay benefit (the “Severance Payment”) equal to six (6) months of the Employee’s annual rate of base salary (as of
the Employee’s Separation from Service date) and will make available a subsidized healthcare benefit, as described below.

 

 

 

 

	
(1)  
	
Payment of the Severance Payments shall commence as of the Employee’s Separation from Service date, and shall continue thereafter in equal fixed installments over a six month period in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect.

 

	
(2)  
	
In the event the value of the Severance Payments shall exceed two times the lesser of the Employee’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided
in (1), above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the Employee’s Separation from Service date, without adjustment for the delay in payment.

 

	
(3)  
	
In no event shall Severance Payments be accelerated, nor shall the Employee be eligible to defer payment of Severance Payments to a later date.

 

	
(4)  
	
If COBRA continuation coverage under any Company healthcare plan is elected by the Employee, the Company shall provide such coverage on the same terms with respect to employee cost and employer subsidy as was being made available to the Employee immediately prior to his Separation from Service for the period of the COBRA coverage or six months, whichever
is shorter.

 

In addition, the Employee will be entitled to prompt payment of (A) any accrued but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (C) reimbursement of business expenses incurred prior to the date of termination, and
all of the Employee’s equity-linked grants (e.g., stock options, restricted stock) shall immediately accelerate and vest in full.

 

All payments under Section 9 or Section 10 of (i) any accrued but unpaid base salary and vacation, (ii) any earned but unpaid bonus from a prior fiscal year, and (iii) reimbursement of business expenses incurred prior to the date of termination shall be paid in a single sum on the first regularly scheduled payroll date immediately following
the Employee’s separation from service.

 

For purposes of this Agreement, “termination of employment”, “retirement” and words of similar import shall means the Employee’s Separation from Service as defined in Section 409A of the Code and final regulations issued thereunder.

 

(g) No Other Obligations.  In the event of the termination of the Employee’s employment and the Term of Employment pursuant to Sections 9 or 10 herein, the
Company will have no obligations to the Employee other than those set forth in Sections 9 and 10 herein.

 

	
Section 10.  
	
Change of Control

 

(a) Effect of Termination.  If (i) the Company terminates the Employee’s employment without Serious Cause, or (ii) the Employee terminates employment with
the Company for Good Reason, and, in the case of either (i) or (ii) above, the Employee’s employment is terminated (A) under circumstances constituting an Involuntary Separation from Service within the meaning of Treasury Regulations Section 1.409A-1(n) and (B) within the period beginning on the date that a Change of Control is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs, the Company shall pay the Employee
a separation pay benefit (the “Change of Control Severance Payment”) equal to the Employee’s annual base salary (as of the Employee’s Separation from Service date) and will make available a subsidized healthcare benefit, as described below.

 

 

 

 

	
(1)  
	
Payment of the Change of Control Severance Payments shall commence as of the Employee’s Separation from Service date, and shall continue thereafter in equal fixed installments over a one year period in accordance with the Company’s standard payroll procedures and normal payroll dates then in effect.

 

	
(2)  
	
In the event the value of the Severance Payments shall exceed two times the lesser of the Employee’s annualized compensation or the maximum amount that may be taken into account for qualified plan purposes (in each case, as determined in accordance with Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as provided
in (1), above, but instead shall be withheld and paid on the first regularly scheduled payroll date immediately following the date that is six months after the Employee’s Separation from Service date, without adjustment for the delay in payment.

 

	
(3)  
	
In no event shall Change of Control Severance Payments be accelerated, nor shall the Employee be eligible to defer payment of Change of Control Severance Payments to a later date.

 

	
(4)  
	
If COBRA continuation coverage under any Company healthcare plan is elected by the Employee, the Company shall provide such coverage on the same terms with respect to employee cost and employer subsidy as was being made available to the Employee immediately prior to his Separation from Service for the period of the COBRA coverage or one year, whichever
is shorter.

 

In addition, the Employee will be entitled to prompt payment of (A) any accrued but unpaid salary and vacation, (B) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (C) reimbursement of business expenses incurred prior to the date of termination.

 

If any portion of the payments which the Employee has the right to receive from the Company, or any affiliated entity or successor, hereunder would constitute “excess parachute payments” (as defined in Section 280G of the Internal Revenue Code) subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, such
excess parachute payments shall be reduced to the largest amount that will result in no portion of such excess parachute payments being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.  In the event a reduction must be in accordance with this paragraph, Change in Control Severance Payments shall be reduced to the extent necessary.

 

The Employee will not be entitled to any benefits or other entitlements under this section unless a Change of Control actually occurs.  Any amounts payable pursuant to this Section 10 shall not duplicate amounts payable under Section 9 and vice versa.

 

(b) Change of Control.  A “Change of Control” of the Company will be deemed to have occurred if (i) any “person” (as such term is defined
in Section 3(a)(9) and as used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”), excluding the Company or any of its subsidiaries, a trustee or any fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries, an underwriter temporarily holding securities pursuant to an offering of such securities or a corporation owned, directly or indirectly, by shareholders of the Company in substantially the same proportion as their
ownership of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing an increase from less than Twenty Percent (20%) to Fifty Percent (50%) or more of the combined voting power of the Company’s then outstanding securities (“Voting Securities”); (ii) during any period of not more than two (2) years, individuals who constitute the Board of Directors of the Company (the “Board”)
as of the beginning of the period and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i) or (iii) of this sentence) whose election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at
such time or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof; (iii) the stockholders of the Company approve a merger, consolidation or reorganization or a court of competent jurisdiction approves a scheme or arrangement of the Company, other than a merger, consolidation, reorganization or scheme which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of the surviving entity) at least Fifty Percent (50%) of the combined voting power of the Voting Securities of the Company or such surviving entity outstanding immediately after such merger, consolidation, reorganization or scheme or arrangement, and such transaction is completed; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or any agreement for the sale of substantially all of the Company’s assets,
and such transaction is completed. 

 

 

 

 

	
Section 11.  
	
Agreement Not to Compete or Solicit

 

(a) Covenant Not to Compete.  The Employee hereby covenants and agrees that at no time during the Term of Employment, nor for a period of six (6) months (such
period to be one (1) year in the case of a termination resulting in payments pursuant to Section 10) immediately following the termination of the Employee’s employment, will he for himself or on behalf of any other person, partnership, company or corporation, directly or indirectly, acquire any financial or beneficial interest in (except as provided in the next sentence), provide consulting or other services to, be employed by, or own, manage, operate or control any entity engaged in the medical device
business substantially similar to the business engaged in by the Company or its subsidiaries at the time of such termination of employment.  Notwithstanding the preceding sentence, the Employee will not be prohibited from owning less than one percent (1%) of any publicly traded corporation, whether or not such corporation is in competition with the Company.

 

(b) Non-Solicitation.  The Employee hereby covenants and agrees that, at all times during the Term of Employment and for a period of six (6) months (such period
to be one (1) year in the case of a termination resulting in payments pursuant to Section 10) immediately following the termination thereof, the Employee will not directly or indirectly employ or seek to employ any person or entity employed at that time by the Company or any of its subsidiaries, or otherwise encourage or entice such person or entity to leave such employment.

 

	
Section 12.  
	
Confidential Information

 

	
  
	
The Employee agrees to keep secret and retain in the strictest confidence all confidential matters which relate to the Company or any affiliate of the Company, including, without limitation, customer lists, client lists, trade secrets, pricing policies and other business affairs of the Company and any affiliate of the Company learned by him from the Company or any such affiliate or otherwise before or after the date
of this Agreement, and not to disclose any such confidential matter to anyone outside the Company, or any of its affiliates, whether during or after his period of service with the Company, except as may be required in the course of a legal or governmental proceeding.  Upon request by the Company, the Employee agrees to deliver promptly to the Company upon termination of his services for the Company, or at any time thereafter as the Company may request, all Company or affiliate memoranda, notes, records,
reports, manuals, drawings, designs, computer files in any media and other documents (and all copies thereof) relating to the Company’s or any affiliate’s business and all property of the Company or any affiliate associated therewith, which he may then possess or have under his control.

 

	
Section 13.  
	
Remedy

 

(a) Should the Employee engage in or perform, either directly or indirectly, any of the acts prohibited by Sections 11 or 12 hereof, it is agreed that any and all severance payments and related benefits hereunder shall immediately terminate
and the Company will also be entitled to full injunctive relief, to be issued by any competent court of equity, enjoining and restraining the Employee and each and every other person, firm, organization, association, or corporation concerned therein, from the continuance of such violative acts. The foregoing remedies available to the Company will not be deemed to limit or prevent the exercise by the Company of any or all further rights
and remedies which may be available to the Company hereunder or at law or in equity.

 

 

 

 

(b) The Employee acknowledges and agrees that the covenants contained in this Agreement are fair and reasonable in light of the consideration paid hereunder, and the invalidity or unenforceability of any particular provision, or part
of any provision, of this Agreement will not affect the other provisions or parts hereof.  If any provision hereof is determined to be invalid or unenforceable and if any such provision will be so determined to be invalid or unenforceable by reason of the duration or geographical scope of the covenants contained therein, such duration or geographical scope, or both, will be reduced to a duration or geographical scope solely to the extent necessary to cure such invalidity.

 

	
Section 14.  
	
Successors and Assigns

 

This Agreement will be binding upon and inure to the benefit of the Employee, his heirs, executors, administrators and beneficiaries, and the Company and its successors and assigns.

 

	
Section 15.  
	
Governing Law

 

This Agreement will be governed by and construed and enforced in accordance with the laws of the State of Connecticut, without reference to rules relating to conflicts of law.

 

	
Section 16.  
	
Entire Agreement

 

This Agreement constitutes the full and complete understanding and agreement of the parties and supersedes all prior understandings and agreements as to employment of the Employee, including, without limitation, the Employment Agreement dated March 16, 2007 by and between the Company and the Employee, as amended.  This Agreement
cannot be amended, changed, modified or terminated without the written consent of the parties hereto.

 

	
Section 17.  
	
Waiver of Breach

 

The waiver of either party of a breach of any term of this Agreement will not operate nor be construed as a waiver of any subsequent breach thereof.

 

	
Section 18.  
	
Notices

 

Any notice, report, request or other communication given under this Agreement will be written and will be effective upon delivery when delivered personally, by overnight courier or by fax.  Unless otherwise notified by any of the parties, notices will be sent to the parties as follows: (i) if to the Employee, at the address set
forth in the Company’s records, and (ii) if to the Company, to CAS Medical Systems, Inc., 44 East Industrial Road, Branford, CT 06405, Attention: Board of Directors.

 

	
Section 19.  
	
Severability

 

If any one or more of the provisions contained in this Agreement will be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions contained herein will not in any way be affected or impaired thereby.

 

	
Section 20.  
	
Counterparts

 

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.  Delivery of signatures by facsimile or electronic image shall be valid for all purposes hereunder.

 

 

 

 

	
Section 21.  
	
Internal Revenue Code Section 409A Compliance.

 

(a) The parties hereto recognize that certain provisions of this Agreement may be affected by Section 409A of the Internal Revenue Code and guidance issued thereunder, and agree to amend this Agreement, or take such other action as may
be necessary or advisable, to comply with Section 409A.

 

(b) Notwithstanding anything herein to the contrary, it is expressly understood that at any time the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) is
publicly traded on an established securities market (as defined for purposes of Internal Revenue Code Section 409A), if a payment or provision of an amount or benefit constituting a deferral of compensation is to be made pursuant to the terms of this Agreement to the Employee on account of a Separation from Service at a time when the Employee is a Specified Employee (as defined for purposes of Internal Revenue Code Section 409A(a)(2)(B)(i)), such deferred compensation shall not be paid to the Employee prior to
the date that is six (6) months after the Separation from Service or as otherwise permitted under Treasury Regulations Section 1.409A-3(i)(2).

 

(c) For purposes of this Agreement, the following definitions shall apply:

 

	
(i)  
	
“Separation from Service” means, generally, a termination of employment with the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A), and shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation
Section 1.409A-1(h)).

 

	
(ii)  
	
“Involuntary Separation from Service” means a Separation from Service due to the independent exercise of the unilateral authority of the Company (or any successor or related employer treated as the service recipient for purposes of Internal Revenue Code Section 409A) to terminate the Employee’s employment, other than due to the Employee’s
implicit or explicit request, where the Employee was willing and able to continue employment with the Company.  Notwithstanding the foregoing, a termination for Good Reason may constitute an Involuntary Separation from Service.  Involuntary Separation from Service shall have the same meaning as such term has for purposes of Internal Revenue Code Section 409A (including Treasury Regulation Section 1.409A-1(n)).

 

[signature page follows]

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

	
The Company:

	
 

 

CAS MEDICAL SYSTEMS, INC.

 

By: /s/  Jeffery A. Baird

Name:  Jeffery A. Baird

Title:  Chief Financial Officer

	
  

 

 

	
Employee:

	
 

/s/ Andrew E. Kersey

	
Andrew E. Kersey

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