EXHIBIT 10.35 SENIOR MANAGEMENT INCENTIVE AGREEMENT

EXHIBIT 10.35

SENIOR MANAGEMENT INCENTIVE AGREEMENT

SENIOR MANAGEMENT INCENTIVE AGREEMENT, dated as of the 26 day of February, 2008, between EP MEDSYSTEMS, INC., a New Jersey corporation (the “ Company ”), and David I. Bruce (“ Executive ”).

RECITALS

AGREEMENTS

NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the Company and Executive agree as follows:

1. DEFINITIONS.

Terms capitalized in this Agreement which are not otherwise defined shall have the meanings assigned to such terms on Schedule A attached hereto.

2. TERM.

Unless earlier terminated as provided herein, the initial term of this Agreement shall be from the date hereof until the second anniversary date of this Agreement; provided, however, that, unless terminated as provided herein or there shall have occurred a Change in Control, on each annual anniversary date of this Agreement commencing on the second anniversary date of this Agreement, this Agreement shall automatically be renewed for a successive one-year term.

3. PAYMENTS AND BENEFITS UPON CHANGE IN CONTROL.

Subject to Section 4 hereof, Executive shall be entitled to the following payments and benefits (the “ Incentive Benefits and Payments ”), which Incentive Benefits and Payments shall vest immediately prior to a Change in Control:

(a) CHANGE IN CONTROL PAYMENT. Subject to the Sections 4 and 8 herein, in recognition of continued services to the Company by Executive, the Company shall make a lump sum payment in cash to Executive as incentive compensation within ten (10) business days following the date of consummation and closing of a Change in Control (the “ Change in Control Closing Date ”) equal to two (2) times Executive’s annual Base Salary in effect immediately prior

to the date that a Change in Control shall occur. Such payment shall be paid within ten (10) business days following the Change in Control Closing Date.

(b) OPTIONS. Pursuant to existing Company policy, which policy has been unanimously approved by the Company’s Board of Directors and the Compensation Committee of the Company’s Board of Directors, options to acquire common stock of the Company granted to Executive prior to the Change in Control Closing Date (“ Executive’s Options ”), which have not vested as of the Change in Control Closing Date, shall vest immediately prior to the effective time of a Change in Control on the Change in Control Closing Date. All other terms, conditions, and limitations applicable to Executive’s Options will remain in full force and effect pursuant to the applicable stock options agreements between Executive and the Company, the applicable stock option plan documents, and any other documents applicable to Executive’s Options. Executive is advised by the Company to seek independent advice with respect to any financial, tax and/or securities law issues regarding Executive’s Options and any sale by Executive of Company stock.

(c) PARACHUTE EXCISE TAX. In the event that the payments or benefits provided to Executive by this Agreement (the “ Payment ”), when combined with any and all other payment(s) to which Executive is entitled, constitute “parachute payments” within the meaning of Section 280G(b)(1) of the Internal Revenue Code of 1986, as amended (the “ Code ”), or any comparable successor provisions and are subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (such excise tax, together with any interest and penalties payable with respect to such excise tax, the “ Excise Tax ”), then Executive shall be entitled to receive from the Company an additional payment (the “ Gross-Up Payment ,” and any iterative payments pursuant to this paragraph also shall be “ Gross-Up Payments ”) in an amount that shall fund the payment by Executive of any Excise Tax on the Payment, as well as all income and employment taxes on the Gross-Up Payment, any Excise Tax imposed on the Gross-Up Payment and any interest or penalties imposed with respect to income and employment taxes imposed on the Gross-Up Payment. For this purpose, all income taxes will be assumed to apply to Executive at the highest marginal rate. Notwithstanding the foregoing, the total amount paid as Gross-Up Payments will not exceed 20% of aggregate value of the payments or benefits provided to Executive pursuant to Sections 3(a) and (b) hereof determined in accordance with the applicable tax regulations issued under Section 280G. All determinations made under this subsection 3(c) shall be made by an independent public accounting firm chosen by the Company (the “ Accounting Firm ”). Any Gross-Up Payment shall be paid to Executive, or for his benefit, within fifteen (15) days following receipt by the Company of the report of the Accounting Firm. Notwithstanding any provision of this subsection 3(c) to the contrary, in accordance with the requirements of section 409A of the Code, any Gross-Up Payment payable hereunder shall be not later than the end of the calendar year next following the calendar year in which the Executive or Company, as applicable, remits the taxes for which the Gross-Up Payment is being paid.

(d) DEATH OF EXECUTIVE FOLLOWING A CHANGE IN CONTROL. In the event of Executive’s death subsequent to a Change in Control, but prior to receiving all Incentive Benefits and Payments to which Executive is entitled hereunder, such Incentive Benefits and Payments shall be paid to the personal representative of his or her estate at the same time they would otherwise be paid hereunder, unless Executive has otherwise directed the Company in writing prior to his or her death.

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(e) NON-EXCLUSIVE PAYMENTS. Benefits provided hereunder are in addition to any amount of severance pay to which Executive may be entitled under any agreement, severance plan or policy between the Company and Executive or generally available to employees of the Company.

(f) NON-SEGREGATION. No assets of the Company need to be segregated or earmarked to represent the liability for benefits payable hereunder. The rights of any person to receive benefits hereunder shall be only those of a general unsecured creditor.

(g) WITHHOLDING. Except as described above, all payments under this Section 3 are subject to applicable federal and state payroll withholding or other applicable taxes, and Executive shall be responsible for the payment of such taxes.

4. CONDITION. Executive will not be eligible to receive any Incentive Benefits and Payments if Executive is not employed by the Company immediately prior to closing of the Change in Control transaction on the Change in Control Closing Date.

5. AT-WILL EMPLOYMENT. This Agreement shall not alter the status of Executive’s at-will employment relationship with the Company and shall not in any way interfere with Executive’s right or the Company’s right to terminate Executive’s employment at any time, with or without cause or advance notice, except as may be provided in an employment agreement between the Company and the Executive, if any.

6. PROPRIETARY INFORMATION OBLIGATIONS. Executive acknowledges his or her continuing obligations during Executive’s employment with the Company and thereafter, under his or her Proprietary Information and Inventions Agreement, not to use or disclose any confidential or proprietary information of the Company without prior written authorization from the Company. If Executive has not previously executed the Company’s Proprietary Information and Inventions Agreement, he or she must do so in order to be eligible for any of the benefits described in this Agreement.

7. INITIAL RELEASE. As consideration for continued employment, and as a condition of Executive’s eligibility for the Incentive Benefits and Payments, Executive agrees to sign a general waiver and release and non-competition/non-solicitation agreement in favor of the Company, a form of which is attached hereto as ATTACHMENT 1, no later than                   , 200      .

8. CHANGE IN CONTROL DATE RELEASE. If applicable, as a condition of receiving the Incentive Benefits and Payments, Executive must sign and return to the Company a general release, a form of which is attached hereto as ATTACHMENT 2, immediately prior to a Change in Control. Executive will not be eligible for the Incentive Benefits and Payments if Executive does not sign this release and return it to the Company within the time stated.

9. MISCELLANEOUS.

(a) ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, New York, in accordance

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with the Rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any jurisdiction.

(b) CONFLICT IN BENEFITS. This Agreement is not intended to and shall not adversely affect, limit or terminate any other agreement or arrangement between Executive and the Company presently in effect, or hereafter entered into, including any employee benefit plan under which Executive is entitled to benefits.

(c) AMENDMENT. This Agreement may not be amended, except by written agreement between Executive and the Company.

(d) NO MITIGATION. All payments and benefits to which Executive is entitled under this Agreement shall be made and provided without offset, deduction or mitigation on account of income Executive could or may receive from other employment or otherwise.

(e) NOTICES. Any notices required under the terms of this Agreement shall be effective when mailed, postage prepaid, by certified mail and addressed to, in the case of the Company:

and to, in the case of Executive:

Either party may designate a different address by giving written notice of change of address in the manner provided above.

(f) WAIVER; CURE. No waiver or modification in whole or in part of this Agreement, or any term or condition hereof, shall be effective against any party unless in writing and duly signed by the party sought to be bound. Any waiver of any breach of any provision hereof or any right or power by any party on one occasion shall not be construed as a waiver of, or a bar to, the exercise of such right or power on any other occasion or as a waiver of any subsequent breach. Any breach of this Agreement may be cured by the breaching party within ten (10) days of the date that such breaching party shall have received written notice of such breach from the party asserting such breach.

(g) BINDING EFFECT; SUCCESSORS. Subject to the provisions hereof, nothing in this Agreement shall prevent the consolidation of the Company with, or its merger into, any other corporation, or the sale by the Company of all or substantially all of its properties and assets, or the assignment of this Agreement by the Company in connection with any of the foregoing actions. This Agreement shall be binding upon, inure to the benefit of, and be

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enforceable by the Company and Executive and their respective heirs, legal representatives, successors, and a