Exhibit 10.7

 

Tower Finance, Ltd.

 

Stephen-R.-Barker, Consultant

49169 Lake Avenue, McGregor, MN 55760

 

MN-218-426-3799

PO Box 1078, Bristol, RI 02809

 

Fax-MN-218-426-0029

towerfin@frontiernet.net

 

Nationwide-Cell-612-599-5871

 

December 8, 2004

 

Marc P. Flores

President and C.E.O.

MedicalCV, Inc.

9725 South Robert Trail

Inver Grove Heights, MN 55077

 

Re:                               Finder Agreement

 

This letter is to formalize the introducing agreement between MedicalCV, Inc.
(“the Company”) and Tower Finance, Ltd. (“Tower”) with respect to both a Bridge
Loan (“Bridge”) and a private placement of equity (the “Placement”).  The
Placement will involve the sale of the Company’s common stock and or common
stock units to be sold to accredited investors.  Registration rights for the
common stock or common stock units will be in the form of a SB-2.  It is Tower’s
intention to assist the Company to identify and introduce potential purchasers
of a $2.5 to $4 million Bridge before the end of the year.  Tower will be the
exclusive Finder to assist the Company with the Bridge.  The Company may engage
one or more broker-dealers to sell the Placement.

 

The principal elements of the consulting project are as follows:

 

•                                          The Company will pay Tower’s
reasonable expenses associated with the deal.  Expenses will include travel and
may include airline tickets, cab fair, hotel, car rental, gas, parking, meals,
etc, while traveling.  Tower will furnish receipts or will have the Company pay
for the expense directly.  No expenses in excess of $1,000 per month will be
incurred without the prior written authorization of the Company.

 

•                                          The principal responsibility of Tower
shall be to introduce to the Company prospective investors with whom Tower has
an existing business relationship for the Bridge and Placement.  Tower will make
no general solicitation or endorsement of the Company’s securities, nor will it
produce or distribute sales materials.  The Company will conduct all
negotiations with the investors and reserves the right to approve the terms of
the Placement and, in its sole discretion, to accept or reject offers to
purchase its securities.  The Company will deliver any informational or offering
materials to Tower’s contacts.  Tower will forward to the Company all

 

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questions from investors.  Tower will not discuss with prospective investors the
advantages of investing in the Company or take part in negotiations.  All
subscription agreements and funds shall be delivered by investors directly to
the Company.  The Company reserves the right to accept or reject any offer
presented to the Company.

 

•                                          The Company agrees to pay Tower a
finder’s fee of $200,000 to $320,000 when the Company has successfully completed
the Bridge of $2.5 to $4 million of the Company’s securities with institutional
investors introduced to the Company by Tower.  If the Bridge is a convertible
debt obligation or includes warrants, the conversion of debt or exercise of
warrants will not obligate the Company to pay additional fees or warrants to
Tower.  The Company will pay Tower 8% of funds raised for the successful
completion of the Placement with investors introduced to the Company by Tower. 
In the event that the Company and Tower decide to more or less than the amount,
the finder’s fee will be renegotiated to be of similar value to the equity
raised.  In the event brokerage firms are engaged by the Company to complete a
portion of the Placement, the finder’s fee will be proportionately lowered by
the amount completed by the other firms.  Any non-accountable expenses charged
by the other firms will not lower Tower’s fee.

 

•                                          Upon closing the Bridge or the
Placement with investors introduced by Tower, the Company agrees to issue Tower
a five-year warrant to purchase the Company’s common stock.  The exercise price
will be 125% of the Bridge conversion price for common stock and 125% of the
Placement price for common stock purchased by accredited investors Tower
introduces to the Placement.  The warrant will be for the purchase of a number
of shares equal 8% of the total possible shares issuable to Tower-introduced
purchasers.  The warrant will not have anti-dilution provisions, but will have a
cashless exercise provision.  The underlying shares will have the registration
rights receive by the participants in the Placement.

 

•                                          The Company represents that no person
or entity other that Tower is entitled to any compensation or other payments
from the Company as a finder in connection with the Bridge.  The Company agrees
to promptly notify Tower if any broker or dealer is engaged by the Company in
connection with the Placement.  Further, the Company agrees to promptly notify
Tower of any changes, developments or possible events, which it reasonably
believes, have or could be perceived to have a material adverse impact on the
Company.  Both parties agree to exercise good faith and their best efforts in
dealing with each other and in attempting to complete the Placement.

 

•                                          Either Tower or the Company may
terminate this agreement upon 10 days prior written notice to the other;
provided, however, that neither party may terminate this Agreement prior to
December 31, 2003.  This letter supercedes all prior agreements with Tower.

 

•                                          Notwithstanding such termination, the
Company shall pay Tower 50% of the finder’s fees contemplated by the terms of
the agreement if, within six months following termination, it sells its
securities to investors introduced to the Company by Tower.  The list of
investors to be covered by this paragraph will be named on Schedule A

 

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and supplied to the Company when the notice of termination is given.  Schedule A
shall be subject to review and approval by the Company.  The list may only
include investors to whom Tower has made a substantive contact and with whom the
Company has had discussions and may not, without your consent, include current
investors, officers or directors of the Company.

 

•                                          Tower will comply with all applicable
federal and state laws pertaining to its business.  Tower is not an agent or
employee of the Company and shall have no authority to bind the Company.

 

Very truly yours,

 

 

 

/s/ Stephen R. Barker

 

 

Stephen R. Barker

 

 

Tower Finance, Ltd.

Agreed to and accepted on December 10, 2004 *

 

 

 

MedicalCV, Inc.

 

For the Company by:

 

 

 

 

 

/s/ Lawrence L. Horsch

 

 

By:

Lawrence L. Horsch,

 

 

Chairman of the Board

 

 

 

 

 

 

 

/s/ Marc P. Flores

 

 

By:

Marc P. Flores,

 

 

President and CEO

 

 

 

 

 

/s/ John H. Jungbauer

 

 

By:

John H. Jungbauer,

 

 

Vice President, Finance and CFO

 

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* Subject to MedicalCV, Inc. Board of Directors’ approval.

 

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