Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of October      , 2006, by and among MedicalCV, Inc., a Minnesota corporation
(the “Company”), and the purchasers signatory hereto (each a “Purchaser” and
collectively, the “Purchasers”).

This Agreement is made pursuant to the Securities Purchase Agreement, dated as
of the date hereof, by and among the Company and the Purchasers (the “Purchase
Agreement”).

The Company and the Purchasers hereby agree as follows:

1.             Definitions.  Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement shall have the meanings given
such terms in the Purchase Agreement.  As used in this Agreement, the following
terms shall have the following meanings:

“Advice” shall have the meaning set forth in Section 6(f).

“Common Stock” means the common stock of the Company, par value $0.01 per share.

“Commission” means the Securities and Exchange Commission.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(b).

“Event Date” shall have the meaning set forth in Section 2(b).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations of the Commission thereunder.

“Filing Date” means, with respect to the Registration Statement required
hereunder, the 45th calendar day following the Closing Date.

“Free Writing Prospectus” means a free writing prospectus as defined in Rule 405
under the Securities Act.

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Issuer Free Writing Prospectus” means an issuer free writing prospectus as
defined in Rule 433 under the Securities Act.

“Losses” shall have the meaning set forth in Section 5(a).

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“Permitted Free Writing Prospectus” shall have the meaning set forth in
Section 6(d).

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement as
supplemented by any and all prospectus supplements, and including all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.

“Registrable Securities” means all of (i) the Shares, (ii) the Warrant Shares,
and (iii) any shares of Common Stock issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the foregoing; provided, however, that a security shall cease to be a
Registrable Security when it is sold pursuant to a Registration Statement, when
it is sold pursuant to Rule 144, or when it becomes eligible for sale under Rule
144(k).

“Registration Statement” means any registration statement of the Company under
the Securities Act that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including all amendments to such registration
statement, including post-effective amendments, and all exhibits thereto.

“Required Effective Date” shall have the meaning set forth in Section 2(a).

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same purpose and effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations of the Commission thereunder.

“Selling Shareholder Questionnaire” shall have the meaning set forth in Section
3(a).

“Trading Market” means whichever of the New York Stock Exchange, the American
Stock Exchange, the NASDAQ National Market, the NASDAQ Capital Market or the OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on the
date in question.

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2.             Registration.

(a)           On or prior to the Filing Date, the Company shall prepare and file
with the Commission a Registration Statement covering the resale of all of the
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415, or if Rule 415 is not available for offers and sales of the
Registrable Securities by such other means of distribution of Registrable
Securities as the Holders may specify.  The Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case the Registration Statement
shall be on another appropriate form in accordance herewith) and shall contain
(unless otherwise directed by the Holders) the “Plan of Distribution” attached
hereto as Annex A.  Subject to the terms of this Agreement, the Company shall
use its commercially reasonable efforts to cause the Registration Statement to
be declared effective under the Securities Act on or prior to the earlier of (i)
the 90th calendar day following the Filing Date (the 120th calendar day in the
event of a review by the Commission) and (ii) the fifth business day after the
Commission advises the Company that the Registration Statement will not be
reviewed or the Commission has no further comments on the Registration Statement
(the “Required Effective Date”).  The Company shall use its commercially
reasonable efforts to keep the Registration Statement continuously effective
under the Securities Act until all Registrable Securities covered by such
Registration Statement have been sold or may be sold without volume restrictions
pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to
a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent (the “Effectiveness Period”).  The Company shall
telephonically request effectiveness of a Registration Statement as of 5:00 pm
Eastern Time on a Trading Day.  The Company shall immediately notify the Holders
via facsimile or by e-mail of the effectiveness of a Registration Statement on
the same Trading Day that the Company telephonically confirms effectiveness with
the Commission.  The Company shall, on the Trading Day after the Effective Date
(as defined in the Purchase Agreement), file a 424(b) prospectus with the
Commission.

(b)           If: (i) a Registration Statement is not filed on or prior to its
Filing Date; or (ii) a Registration Statement filed or required to be filed
hereunder is not declared effective by the Commission by its Required Effective
Date or (iii) after the Required Effective Date, a Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
for which it is required to be effective, or the Holders are not permitted to
utilize the Prospectus therein to resell such Registrable Securities for more
than an aggregate of 75 calendar days during any 12-month period (which need not
be consecutive calendar days) (any such failure or breach being referred to as
an “Event”, and for purposes of clause (i) or (ii) the date on which such Event
occurs or for purposes of clause (iii) the date on which such 75 calendar day
period is exceeded being referred to as “Event Date”), then in addition to any
other rights the Holders may have hereunder or under applicable law, on each
such Event Date and on each monthly anniversary of each such Event Date until
the applicable Event is cured, the Company shall pay to each Holder an amount in
cash as partial liquidated damages and not as a penalty, equal to 1.5% of the
aggregate purchase price paid by such Holder pursuant to the Purchase Agreement
for any Registrable Securities then held by such

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Holder; provided, that such liquidated damages shall not exceed 10% of the
aggregate purchase price paid by all Holders pursuant to the Purchase
Agreement.  The partial liquidated damages pursuant to the terms hereof shall
apply on a daily pro-rata basis for any portion of a month prior to the cure of
an Event.

3.             Registration Procedures

In connection with the Company’s registration obligations hereunder, the Company
shall:

(a)           Not less than three (3) Trading Days prior to the filing of a
Registration Statement, furnish to each Holder copies of all such documents
proposed to be filed, which documents will be subject to the review of such
Holders.  The Company shall not file a Registration Statement to which the
Holders of a majority of the Registrable Securities shall reasonably object in
good faith, provided that, the Company is notified of such objection in writing
no later than two (2) Trading Days after the Holders have been so furnished
copies of such documents.  Each Holder agrees to furnish to the Company a
completed Questionnaire in the form attached to this Agreement as Annex B (a
“Selling Shareholder Questionnaire”) not less than five (5) Trading Days prior
to the Filing Date.

(b)           (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a
Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; (iii) respond as
promptly as reasonably possible to any comments received from the Commission
with respect to a Registration Statement or any amendment thereto; and (iv)
comply in all material respects with the provisions of the Securities Act and
the Exchange Act with respect to the disposition of all Registrable Securities
covered by a Registration Statement during the applicable period in accordance
(subject to the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration Statement as
so amended or in such Prospectus as so supplemented.

(c)           Notify the Holders of Registrable Securities to be sold as
promptly as reasonably possible (and, in the case of (i)(A) below, not less than
two (2) Trading Days prior to such filing): (i)(A) when a post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
thereof and all written responses thereto to each of the Holders who so requests
provided such requesting Holders agree to keep such information confidential
until it is publicly disclosed and to waive Section 4.6 of the Purchase
Agreement with respect thereto); and (C) with respect to a Registration
Statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the Commission or any other Federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus; (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the

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effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and (v) of the occurrence of any event or passage
of time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading (provided that such Holder of Registrable Securities agrees
to keep such information confidential until it is publicly disclosed and to
waive Section 4.6 of the Purchase Agreement with respect thereto).

(d)           Use its commercially reasonable efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

(e)           To the extent requested by such Holders, furnish to each Holder,
without charge, at least one conformed copy of each such Registration Statement
and each amendment thereto, including financial statements and schedules, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

(f)            Promptly deliver to each Holder, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request in
connection with resales by the Holder of Registrable Securities; provided,
however, that the Company shall have no such obligation to furnish copies of a
final prospectus if the conditions of Rule 172(c) under the Securities Act are
satisfied by the Company.  Subject to the terms of this Agreement, the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale
of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto, except after the giving of any notice pursuant to Section
3(c).

(g)           Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any

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Holder reasonably requests in writing, to keep each registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things reasonably necessary to enable the
disposition in such jurisdictions of the Registrable Securities covered by each
Registration Statement; provided, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process
in any such jurisdiction.

(h)           If requested by the Holders, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by the Purchase Agreement, of all restrictive legends, and to enable
such Registrable Securities to be in such denominations and registered in such
names as any such Holders may request.

(i)            Upon the occurrence of any event contemplated by Section
3(c)(ii)-(v), as promptly as reasonably possible, prepare a supplement or
amendment, including a post-effective amendment, to the Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

(j)            If requested by Holders, in the event of an underwritten offering
of the Registrable Securities by the Holders, the Company shall furnish to the
Holders (i) on the date of the effectiveness of the Registration Statement, a
letter, dated such date, from the Company’s independent certified public
accountants in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public offering,
addressed to the Holders, and (ii) on the date that Registrable Securities are
delivered to the underwriters for sale in any such registration, an opinion,
dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Holders.  The Company may
require each selling Holder to furnish to the Company a certified statement as
to the number of shares of Common Stock beneficially owned by such Holder and,
if required by the Commission, the person thereof that has voting and
disposition control over the Shares.

(k)           The Company shall not permit any officer, director, underwriter,
broker or any other person acting on behalf of the Company to use any Free
Writing Prospectus in connection with the Registration Statement covering
Registrable Securities, without the prior written consent of the Holders which
consent shall not be unreasonably withheld or delayed.  Any consent to the use
of a Free Writing Prospectus included in an underwriting agreement to which the
Holders are parties shall be deemed to satisfy the requirement for such consent.

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4.             Registration Expenses.  All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement.  The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Trading Market on which the Common Stock is then
listed for trading and (B) in compliance with applicable state securities or
Blue Sky laws reasonably agreed to by the Company (including, without
limitation, fees and disbursements of counsel for the Company in connection with
Blue Sky qualifications or exemptions of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as requested by the Holders), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in a Registration Statement), (iii) messenger,
telephone and delivery expenses of the Company, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement.  In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties). In no event shall the Company be responsible for any broker
or similar commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Holders.

5.             Indemnification

(a)           Indemnification by the Company.  The Company shall, and hereby
does notwithstanding any termination of this Agreement, indemnify, defend and
hold harmless each Holder, the officers, directors, agents, members, partners,
and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents, members, partners, and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses,
(collectively, “Losses”), as incurred, to the extent arising out of or relating
to, any untrue or alleged untrue statement of a material fact contained or
incorporated by reference in a Registration Statement, any Prospectus or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or Issuer Free Writing Prospectus or arising out of or
relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, or any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement, but only to the extent, that
(i) such untrue statements or omissions were not based upon information
regarding such Holder furnished in writing to the Company by such Holder

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or (ii) in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus or Issuer Free Writing Prospectus where the Company has failed to
notify such Holder in writing that the Prospectus or Issuer Free Writing
Prospectus is outdated or defective.  The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceeding arising from
or in connection with the transactions contemplated by this Agreement of which
the Company is aware.

(b)           Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or Issuer
Free Writing Prospectus or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading (i) to the extent, but only to the extent,
that such untrue statement or omission is contained in any information so
furnished in writing by such Holder to the Company specifically for inclusion in
such Registration Statement, Prospectus or Issuer Free Writing Prospectus or
(ii) to the extent that (1) such untrue statements or omissions are based solely
upon information regarding such Holder furnished in writing to the Company by
such Holder expressly for use therein, or to the extent that such information
relates to such Holder or (2) in the case of an occurrence of an event of the
type specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or
defective Prospectus or Issuer Free Writing Prospectus after the Company has
notified such Holder in writing that the Prospectus or Issuer Free Writing
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(f).  In no event shall the liability of any
selling Holder hereunder be greater in amount than the dollar amount of the net
proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.

(c)           Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the “Indemnifying Party”) in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.

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An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall reasonably believe
that a material conflict of interest is likely to exist if the same counsel were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the expense
of the Indemnifying Party).  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld, delayed or conditioned.  No
Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any
Indemnified Party is a party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the
subject matter of such Proceeding.  The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action shall not relieve such Indemnifying Party of any liability to the
Indemnified Party under this Section 5, except to the extent that the
Indemnifying Party is prejudiced in its ability to defend such action.

Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid promptly to the
Indemnified Party, as incurred, but no later than ten (10) Trading Days of
written notice thereof to the Indemnifying Party.

The indemnity agreements contained herein shall be in addition to  (i) any cause
of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities to which the
Indemnifying Party may be subject pursuant to law.

(d)           Contribution.  If the indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or

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omission or alleged omission of a material fact, has been taken or made by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such action, statement or omission.  The
amount paid or payable by a party as a result of any Losses shall be deemed to
include, subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. 
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder.

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties. The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 5, and are fully informed regarding said provisions. 
They further acknowledge that the provisions of this Section 5 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement as required by the Securities Act and the Exchange Act. 
The parties are advised that federal or state public policy as interpreted by
the courts in certain jurisdictions may be contrary to certain of the provisions
of this Section 5, and the parties hereto hereby expressly waive and relinquish
any right or ability to assert such public policy as a defense to a claim under
this Section 5 and further agree not to attempt to assert any such defense.

6.             Miscellaneous

(a)           Remedies.  In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.  The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

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(b)           No Piggyback on Registrations.  Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in the Registration Statement other than the
Registrable Securities and the securities listed on Schedule 6(b) attached
hereto without the consent of the Holders of a majority in interest of the
Registrable Securities.  No Person has any right to cause the Company to effect
the registration under the Securities Act of any securities of the Company prior
to filing the Registration Statement.  The Company shall not file any other
registration statements until the initial Registration Statement required
hereunder is declared effective by the Commission, provided that this Section
6(b) shall not prohibit the Company from filing amendments to registration
statements already filed.

(c)           Compliance.  Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to a Registration
Statement.

(d)           Free Writing Prospectuses.  Each Holder represents that it has not
prepared or had prepared on its behalf or used or referred to, and agrees that
it will not prepare or have prepared on its behalf or use or refer to, any Free
Writing Prospectus, and has not distributed and will not distribute any written
materials in connection with the offer or sale of Common Stock without the prior
written consent of the Company and, in connection with any underwritten
offering, the underwriters.  Any such Free Writing Prospectus consented to by
the Company and the underwriters, as the case may be, is hereinafter referred to
as a “Permitted Free Writing Prospectus.”  The Company represents and agrees
that it has treated and will treat, as the case may be, each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, including in respect of
timely filing with the SEC, legending and record keeping.

(e)           Suspension of Trading.  At any time after the Registrable
Securities are covered by an effective Registration Statement, the Company may
deliver to the Holders of such Registrable Securities a certificate (the
“Suspension Certificate”) approved by the Chief Executive Officer of the Company
and signed by an officer of the Company stating that the effectiveness of and
sales of Registrable Securities under the Registration Statement would:

(i)            materially interfere with any transaction that would require the
Company to prepare financial statements under the Securities Act that the
Company would otherwise not be required to prepare in order to comply with its
obligations under the Exchange Act, or

(ii)           require public disclosure of any transaction of the type
discussed in Section 6(e)(i) prior to the time such disclosure might otherwise
be required.

Beginning five (5) Business Days after the receipt of a Suspension Certificate
by Holders of Registrable Securities, the Company may, in its discretion,
require such Holders of Registrable Securities to refrain from selling or
otherwise transferring or disposing of any Registrable Securities or other
Company securities then held by such

11

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Holders for a specified period of time that is customary under the circumstances
(not to exceed 75 days during any 12-month period.  The Company may impose stop
transfer instructions to enforce any required agreement of the Holders under
this Section 6(e).

(f)            Discontinued Disposition.  Each Holder agrees by its acquisition
of such Registrable Securities that, upon receipt of a notice from the Company
of the occurrence of any event of the kind described in Section 3(c)(ii)-(v),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until such Holder’s receipt of the
copies of the supplemented Prospectus and/or amended Registration Statement or
until it is advised in writing (the “Advice”) by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement.  The
Company will use its best efforts to ensure that the use of the Prospectus may
be resumed as promptly as it practicable.  The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the
disposition of the Registrable Securities hereunder shall be subject to the
provisions of Section 2(b).

(g)           Piggy-Back Registrations.  If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the stock option or other employee
benefit plans, then the Company shall send to each Holder a written notice of
such determination and, if within fifteen days after the date of such notice,
any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that, the Company shall not
be required to register any Registrable Securities pursuant to this Section 6(g)
that are eligible for resale pursuant to Rule 144(k) promulgated under the
Securities Act or that are the subject of a then effective Registration
Statement.

(h)           Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of a majority in interest of the then outstanding Registrable
Securities.  Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of Holders and that does not directly or indirectly affect the rights of
other Holders may be given by Holders of all of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.

12

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(i)            Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be delivered as
set forth in the Purchase Agreement.

(j)            Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
all of the Holders of the then-outstanding Registrable Securities. Each Holder
may assign their respective rights hereunder in the manner and to the Persons as
permitted under the Purchase Agreement.

(k)           No Inconsistent Agreements. Neither the Company nor any of its
subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities, that would have the effect of
impairing the rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof.

(l)            Execution and Counterparts.  This Agreement may be executed in
any number of counterparts, each of which when so executed shall be deemed to be
an original and, all of which taken together shall constitute one and the same
Agreement.  In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if
such facsimile or “.pdf” signature page were the original thereof.

(m)          Governing Law.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
with the provisions of the Purchase Agreement.

(n)           Cumulative Remedies.  The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.

(o)           Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction.  It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(p)           Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

(q)           Independent Nature of Holders’ Obligations and Rights.  The
obligations of each Holder hereunder are several and not joint with the
obligations of any other

13

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Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder.  Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement.  Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.

*************************

14

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.

 

MEDICALCV, INC.

 

 

 

By:

/s/ Eapen Chacko

 

 

 

Name:

Eapen Chacko

 

 

Title:

Vice President, Finance and

 

 

 

Chief Financial Officer

 

 

 

 

 

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

15

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[SIGNATURE PAGE OF HOLDERS TO MEDICALCV, INC.
REGISTRATION RIGHTS AGREEMENT]

Name of Holder:

Potomac Capital Partners LP

 

 

Signature of Authorized Signatory of Holder:

/s/ Kenneth Berkow

 

 

Name of Authorized Signatory:

Kenneth Berkow

 

 

Title of Authorized Signatory:

CFO

 

 

[SIGNATURE PAGES CONTINUE]

16

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[SIGNATURE PAGE OF HOLDERS TO MEDICALCV, INC.
REGISTRATION RIGHTS AGREEMENT]

Name of Holder:

Potomac Capital International Ltd

 

 

Signature of Authorized Signatory of Holder:

/s/ Kenneth Berkow

 

 

Name of Authorized Signatory:

Kenneth Berkow

 

 

Title of Authorized Signatory:

CFO

 

 

[SIGNATURE PAGES CONTINUE]

17

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[SIGNATURE PAGE OF HOLDERS TO MEDICALCV, INC.
REGISTRATION RIGHTS AGREEMENT]

Name of Holder:

Pleiades Investment Partners - R LP

 

 

Signature of Authorized Signatory of Holder:

/s/ Kenneth Berkow

 

 

Name of Authorized Signatory:

Kenneth Berkow

 

 

Title of Authorized Signatory:

CFO

 

 

[SIGNATURE PAGES CONTINUE]

 

18

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ANNEX A

Plan of Distribution

The selling shareholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling shareholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions.  These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.

The selling shareholders may use any one or more of the following methods when
disposing of shares or interests therein:

·             ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

·    block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

·    purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

·    an exchange distribution in accordance with the rules of the applicable
exchange;

·    privately negotiated transactions;

·    short sales effected after the date the registration statement of which
this prospectus is a part is declared effective by the SEC;

·    through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

·    broker-dealers may agree with the selling shareholders to sell a specified
number of such shares at a stipulated price per share; and

·    a combination of any such methods of sale.

The selling shareholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of common stock, from time to time, under
this prospectus, or under an amendment or supplement to this prospectus under
Rule 424(b)(3) or other applicable provision of the Securities Act amending the
list of selling shareholders to include the pledgee, transferee or other
successors in interest as selling shareholders under this prospectus.  The
selling shareholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

A-1

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In connection with the sale of our common stock or interests therein, the
selling shareholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume.  The selling
shareholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities.  The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

The aggregate proceeds to the selling shareholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any.  Each of the selling shareholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents.  We will not receive any of the proceeds from this offering.
Upon any exercise of any warrants by payment of cash, however, we will receive
the exercise price of the warrants.

The selling shareholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act, provided
that they meet the criteria and conform to the requirements of that rule.

The selling shareholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be
“underwriters” within the meaning of Section 2(11) of the Securities Act.  Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act. 
Selling shareholders who are “underwriters” within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.

To the extent required, the shares of our common stock to be sold, the names of
the selling shareholders, the respective purchase prices and public offering
prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

In order to comply with the securities laws of some states, if applicable, the
common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers.  In addition, in some states the common stock may
not be sold unless it has been registered or qualified for sale or an exemption
from registration or qualification requirements is available and is complied
with.

We have advised the selling shareholders that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of shares in the market
and to the activities of the selling shareholders and their affiliates.  In
addition, we will make copies of this prospectus (as it may be supplemented or
amended from time to time) available to the selling shareholders for the

A-2

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purpose of satisfying the prospectus delivery requirements of the Securities
Act.  The selling shareholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.

We have agreed to indemnify the selling shareholders against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.

We have agreed with the selling shareholders to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of (1)
such time as all of the shares covered by this prospectus have been disposed of
pursuant to and in accordance with the registration statement or Rule 144 under
the Securities Act, or (2) the date on which the shares may be sold pursuant to
Rule 144(k) of the Securities Act.

A-3

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ANNEX B

 

Name of Selling Shareholder

 

MEDICALCV, INC.

QUESTIONNAIRE FOR SELLING SHAREHOLDERS

PLEASE RETURN BY:  October 20, 2006

This Questionnaire is being furnished to all selling shareholders of MedicalCV,
Inc., a Minnesota corporation (the “Company”), and relates to certain
information required to be disclosed in the registration statement (the
“Registration Statement”) being prepared on behalf of you and the Company for
filing with the United States Securities and Exchange Commission (the “SEC”).

Selling shareholders of the Company may be personally liable under the federal
securities laws of the United States if the Registration Statement contains any
statement which is false or misleading as to any material fact or omits to state
any material fact necessary in order to make the statements therein not false or
misleading.

Your careful completion of this Questionnaire will help ensure that the
Registration Statement will be complete and accurate.  Careful consideration of
the instructions and definitions contained in the endnotes to various items is
essential to an understanding of the questions.

PLEASE PROVIDE A RESPONSE TO EVERY QUESTION, indicating “None” or “Not
Applicable” where appropriate.  Please complete, sign, and fax one copy of this
Questionnaire NO LATER THAN OCTOBER 20, 2006 to:

Melissa S. Tveit
Briggs and Morgan, P.A.
2200 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
(612) 977-8628 (phone)
(612) 977-8650 (fax)
mtveit@briggs.com (email)

B-1

--------------------------------------------------------------------------------

Unless stated otherwise, answers should be given as of the date you complete
this Questionnaire.  However, it is your responsibility to inform us of any
changes that may occur to your situation between the date you complete the
Questionnaire and the effective date of the Registration Statement.  If there is
any situation about which you have any doubt, please give relevant facts so that
the information may be reviewed.

B-2

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QUESTIONNAIRE

STOCK OWNERSHIP

Item 1.  Beneficial Ownership.

a.  Deemed Beneficial Ownership.  Please state the amount of securities of the
Company you own as of October 1, 2006, assuming, if applicable, the conversion
of your shares of Preferred Stock into, and exercise of warrants for, shares of
Common Stock.  (If none, please so state in each case.)

Amount Beneficially Owned(1)

 

Number of Shares of Common Stock Owned
(on an as-converted basis, as applicable)

 

 

 

Total Shares:

 

 

 

 

 

Of such shares:

 

 

Shares as to which you have sole voting power:

 

 

 

 

 

Shares as to which you have shared voting power:

 

 

 

 

 

Shares as to which you have sole investment power:

 

 

 

 

 

Shares as to which you have shared investment power:

 

 

 

 

 

Please state the number of shares owned by family members, trusts and other
organizations with which you have a relationship, and any other shares of which
you may be deemed to be the “beneficial owner”(1)

 

 

 

 

 

Total Shares:

 

 

 

 

 

Of such shares:

 

 

Shares as to which you have sole voting power:

 

 

 

 

 

Shares as to which you have shared voting power:

 

 

 

 

 

Shares as to which you have sole investment power:

 

 

 

B-3

--------------------------------------------------------------------------------

 

Shares as to which you have shared investment power:

 

 

 

 

 

Shares which you will have a right to acquire before November 30, 2006, through
the exercise of options, warrants or otherwise:

 

 

 

 

 

Shares of Common Stock you intend to offer for sale pursuant to the Registration
Statement:

 

 

 

 

 

Shares of Common Stock that you will hold after the offering for sale of Common
Stock that is the subject of the Registration Statement:

 

 

 

 

 

Do you have any present plans to exercise options or otherwise acquire, dispose
of or transfer shares of Common Stock (on an as-converted basis) of the Company
between the date you complete this Questionnaire and November 30, 2006?

 

 

 

 

 

Answer:

 

 

 

 

 

If so, please describe.

 

 

 

 

b.             Pledged Securities.  If any of such securities have been pledged
or otherwise deposited as collateral or are the subject matter of any voting
trust or other similar agreement or of any contract providing for the sale or
other disposition of such securities, please give the details thereof.

Answer:

 

c.             Disclaimer of Beneficial Ownership.  Do you wish to disclaim
beneficial ownership(1) of any of the shares reported in response to Item 1(a)?

Answer:

 

B-4

--------------------------------------------------------------------------------

If the answer is “Yes”, please furnish the following information with respect to
the person or persons who should be shown as the beneficial owner(s)1 of the
shares in question.

Name and Address of
Actual Beneficial Owner

 

Relationship of
Such Person To You

 

Number of Shares
Beneficially Owned

   

 

 

 

 

  

 

 

 

 

   

 

 

 

 

 

Item 2.  Major Shareholders.  Please state below the names of persons or groups
known by you to own beneficially(1) more than 5% of the Company’s Common Stock.

Answer:

 

Item 3.  Change of Control.  Do you know of any contractual arrangements,
including any pledge of securities of the Company, the operation of which may at
a subsequent date result in a change of control of the Company?

Answer:

 

Item 4.  Relationship with the Company.  Please state the nature of any
position, office or other material relationship you have, or have had within the
past three years, with the Company or its affiliates.

 

Nature of

Name

 

Relationship

  

 

 

  

 

 

  

 

 

 

Item 5.  Correct Name.  Please confirm that your name or your organization’s
name, as it appears on the signature page to this Questionnaire, is exactly as
it should appear in the “Principal and Selling Shareholder” section of the
Registration Statement:

o Yes, this name is correct.

o No, the correct name should be:  
                                              

B-5

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SIGNATURE

If at any time any of the information set forth in my responses to this
Questionnaire has changed due to passage of time, or any development occurs
which requires a change in any of my answers, or has for any other reason become
incorrect, I agree immediately to furnish to the individual to whom a copy of
this Questionnaire is to be sent, as indicated and at the address shown on the
first page hereof, any necessary or appropriate correcting information. 
Otherwise, the Company is to understand that the above information continues to
be, to the best of my knowledge, information and belief, complete and correct.

I understand that the information that I am furnishing to you herein will be
used by the Company in the preparation of its Registration Statement and hereby
consent to the inclusion of such information in the Registration Statement.

 

 

Name of Shareholder:

 

 

 

 

 

 

Date:                            , 2006

 

Signature:

 

 

 

 

 

 

 

Print Name:

 

 

 

 

 

 

 

 

Title (if applicable):

 

 

 

 

 

 

 

 

Address:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Street

 

 

 

 

 

 

 

 

 

 

 

 

 

 

City

State

Zip Code

 

 

 

 

 

 

 

 

 

 

 

 

Telephone Number

 

 

 

 

 

 

 

 

 

 

 

 

Facsimile Number

 

B-6

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ENDNOTE

1.                                       Beneficial Ownership.  You are the
beneficial owner of a security, as defined in Rule 13d-3 under the Securities
Exchange Act of 1934 (the “Exchange Act”), if you, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise have
or share: (1) voting power, which includes the power to vote, or to direct the
voting of, such security, and/or (2) investment power, which includes the power
to dispose, or to direct the disposition of, such security.  You are also the
beneficial owner of a security if you, directly or indirectly, create or use a
trust, proxy, power of attorney, pooling arrangement or any other contract,
arrangement, or device with the purpose or effect of divesting yourself of
beneficial ownership of a security or preventing the vesting of such beneficial
ownership.

You are deemed to be the beneficial owner of a security if you have the right to
acquire beneficial ownership of such security at any time within sixty days
including, but not limited to, any right to acquire such security (a) through
the exercise of any option, warrant or right, (b) through the conversion of a
security, or (c) pursuant to the automatic termination of, or the power to
revoke a trust, discretionary account, or similar arrangement.

Ordinarily, shares held in the name of your spouse or minor child should be
considered as beneficially owned by you absent special circumstances to indicate
that you do not have, as a practical matter, voting power or investment power
over such shares.  Similarly, absent countervailing facts, securities held in
the name of relatives who share your home are to be reported as being
beneficially owned by you.  In addition, securities held for your benefit in the
name of others, such as nominees, trustees and other fiduciaries, securities
held by a partnership of which you are a partner, and securities held by a
corporation controlled by you should be regarded as beneficially owned by you.

This definition of beneficial ownership is very broad; therefore, even through
you may not actually have or share voting or investment power with respect to
securities owned by persons in your family or living in your home, you should
include such shares in your beneficial ownership disclosure and may then
disclaim beneficial ownership of such securities. Please note, however, that
shares in which you have an economic interest but over which you have no voting
or investment control (for example, shares in a trust of which you are the
beneficiary but not the trustee) are not deemed beneficially owned by you for
the purposes of this questionnaire.

B-7

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Schedule 6(b)
(Registration Rights)

The following securities, which have not been previously registered, have
piggyback registration rights:

Warrants issued on November 20, 2001, to the underwriter of the Company’s
initial public offering for the purchase of an aggregate of 11,250 shares,
exercisable at $67.50 per share, expiring November 20, 2006.

The following securities, which have been previously registered, have piggyback
registration rights:

The securities registered for resale on the Company’s Registration Statements on
Form SB-2 (File Nos. 333-131147 and 333-131148).

 

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