EXHIBIT 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of March 31, 2005, by and among MedicalCV, Inc., a Minnesota corporation (the
“Company”), and the investors signatory hereto (each a “Investor” and
collectively, the “Investors”).

 

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

 

The Company and the Investors hereby agree as follows:

 

1.                                       DEFINITIONS.  CAPITALIZED TERMS USED
AND NOT OTHERWISE DEFINED HEREIN THAT ARE DEFINED IN THE PURCHASE AGREEMENT WILL
HAVE THE MEANINGS GIVEN SUCH TERMS IN THE PURCHASE AGREEMENT.  AS USED IN THIS
AGREEMENT, THE FOLLOWING TERMS HAVE THE RESPECTIVE MEANINGS SET FORTH IN THIS
SECTION 1:

 

“Effective Date” means the date that the initial Registration Statement filed
pursuant to Section 2(a) is first declared effective by the Commission.

 

“Effectiveness Date” means (a) with respect to the initial Registration
Statement required to be filed under Section 2(a), the earlier of: (a)(i) the
120th day following the Closing Date; provided, that, if the Commission reviews
and has written comments to the filed Registration Statement that would require
the filing with the Commission of a pre-effective amendment or written
supplemental response from the Company and the Company files each such
pre-effective amendment and such supplemental response responsive to the
Commission’s comments within seven days of each receipt of such comments (and
provides the Investors satisfactory evidence of such timely response without
providing any of them with material, non-public information), the Effectiveness
Date under this clause (a)(i) shall be the 150th day following the Closing Date,
and (ii) the third day following the date on which the Company is notified by
the Commission that the initial Registration Statement will not be reviewed or
is no longer subject to further review and comments; and (b) with respect to any
additional Registration Statements that may be required pursuant to
Section 2(b), the earlier of (i) the 120th day following (x) if such
Registration Statement is required because the Commission shall have notified
the Company in writing that certain Registrable Securities were not eligible for
inclusion on a previously filed Registration Statement, the date or time on
which the Commission shall indicate as being the first date or time that such
Registrable Securities may then be included in a Registration Statement, or (y)
if such Registration Statement is required for a reason other than as described
in (x) above, the date on which the Company first knows, or reasonably should
have known, that such additional Registration Statement(s) is required;
provided, that, if the Commission reviews and has written comments to the filed
Registration Statement that would require the filing with the Commission of a
pre-effective amendment or written supplemental responses from the Company and
the Company files each such pre-effective amendment and such supplemental
response responsive to the Commission’s comments within seven days of

 

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

 

each receipt of such comments (and provides the Investors satisfactory evidence
of such timely response without providing any of them with material, non-public
information), then the Effectiveness Date under this clause (b)(i) for such
Registration Statement shall be the 150th day following the date that the
Company first knows, or reasonably should have known, that such additional
Registration Statement is required under such Section, and (ii) the third day
following the date on which the Company is notified by the Commission that such
additional Registration Statement will not be reviewed or is no longer subject
to further review and comments.

 

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

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Filing Date” means (a) with respect to the initial Registration Statement
required to be filed under Section 2(a), the 30th day following the Closing and
(b) with respect to any additional Registration Statements that may be required
pursuant to Section 2(b), the 30th day following (x) if such Registration
Statement is required because the Commission shall have notified the Company in
writing that certain Registrable Securities were not eligible for inclusion on a
previously filed Registration Statement, the date or time on which the
Commission shall indicate as being the first date or time that such Registrable
Securities may then be included in a Registration Statement, or (y) the date on
which the Company first knows, or reasonably should have known, that such
additional Registration Statement(s) is required.

 

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

 

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

 

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

 

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

 

“New York Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.

 

“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
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

 

2

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

 

“Registrable Securities” means the Warrant Shares and the Underlying Shares
issued and issuable under the Warrants and the Shares (without regard to any
exercise or conversion caps thereunder), together with any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event, or any conversion or exercise price adjustments with respect
to any such securities.

 

“Registration Statement” means each of the following:  (i) the initial
registration statement required to be filed in accordance with Section 2(a) and
(ii) each additional registration statement that may be required to be filed
under Section 2(b), and including, in each case, the Prospectus, amendments and
supplements to each such registration statement or Prospectus, including pre-
and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.

 

“Rule 144” means Rule 144 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 effect as such Rule.

 

“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 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 effect as such Rule.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shares” means the shares of 5% Series A Convertible Preferred Stock issued or
issuable to the Investors pursuant to the Purchase Agreement.

 

“Underlying Shares” means the shares of Common Stock issuable upon conversion of
the Shares.

 

“Warrants” means the Common Stock purchase warrants issued or issuable to the
Investors pursuant to the Purchase Agreement.

 

“Warrant Shares” means the shares of Common Stock issued or issuable upon
exercise of the Warrants.

 

2.                                       REGISTRATION.

 

(A)                                  ON OR PRIOR TO EACH FILING DATE, THE
COMPANY SHALL PREPARE AND FILE WITH THE COMMISSION A REGISTRATION STATEMENT
COVERING THE RESALE OF ALL REGISTRABLE SECURITIES NOT ALREADY COVERED BY AN
EXISTING AND EFFECTIVE REGISTRATION STATEMENT FOR AN OFFERING TO BE MADE ON A
CONTINUOUS BASIS PURSUANT TO RULE 415, ON FORM SB-2 (EXCEPT IF THE COMPANY IS
NOT THEN ELIGIBLE TO REGISTER FOR RESALE THE REGISTRABLE SECURITIES ON
FORM SB-2, IN WHICH CASE SUCH REGISTRATION SHALL BE ON ANOTHER APPROPRIATE FORM
FOR SUCH PURPOSE).  SUCH REGISTRATION STATEMENT

 

3

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

 

SHALL CONTAIN (EXCEPT IF OTHERWISE REQUIRED PURSUANT TO WRITTEN COMMENTS
RECEIVED FROM THE COMMISSION UPON A REVIEW OF SUCH REGISTRATION STATEMENT) THE
“PLAN OF DISTRIBUTION” ATTACHED HERETO AS ANNEX A.  THE COMPANY SHALL CAUSE SUCH
REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE UNDER THE SECURITIES ACT AS SOON
AS POSSIBLE BUT, IN ANY EVENT, NO LATER THAN ITS EFFECTIVENESS DATE, AND SHALL
USE ITS REASONABLE BEST EFFORTS TO KEEP THE REGISTRATION STATEMENT CONTINUOUSLY
EFFECTIVE UNDER THE SECURITIES ACT UNTIL THE DATE WHICH IS THE EARLIER OF
(I) FIVE YEARS AFTER ITS EFFECTIVE DATE, (II) SUCH TIME AS ALL OF THE
REGISTRABLE SECURITIES COVERED BY SUCH REGISTRATION STATEMENT HAVE BEEN PUBLICLY
SOLD BY THE HOLDERS, OR (III) SUCH TIME AS ALL OF THE REGISTRABLE SECURITIES
COVERED BY SUCH REGISTRATION STATEMENT MAY BE SOLD BY THE HOLDERS 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 AND THE AFFECTED HOLDERS (THE “EFFECTIVENESS PERIOD”).

 

(B)                                 IF FOR ANY REASON (I) THE COMMISSION DOES
NOT PERMIT ALL OF THE REGISTRABLE SECURITIES TO BE INCLUDED IN THE REGISTRATION
STATEMENT FILED PURSUANT TO SECTION 2(A), OR (II) ANY OUTSTANDING REGISTRABLE
SECURITIES OR REGISTRABLE SECURITIES THAT ARE NOT THEN OUTSTANDING BUT WOULD BE
ISSUABLE IF A HOLDER WERE TO EXERCISE ITS CONVERSION OR EXERCISE RIGHTS (WITHOUT
REGARD TO ANY CONVERSION OR EXERCISE CAPS CONTAINED IN SHARES OR WARRANTS) ARE
NOT THEN COVERED BY AN EFFECTIVE REGISTRATION STATEMENT, THEN IN EACH SUCH CASE
THE COMPANY SHALL PREPARE AND FILE BY THE FILING DATE FOR SUCH REGISTRATION
STATEMENT, AN ADDITIONAL REGISTRATION STATEMENT COVERING THE RESALE OF ALL SUCH
OUTSTANDING AND ISSUABLE REGISTRABLE SECURITIES NOT ALREADY COVERED BY AN
EXISTING AND EFFECTIVE REGISTRATION STATEMENT FOR AN OFFERING TO BE MADE ON A
CONTINUOUS BASIS PURSUANT TO RULE 415, ON FORM SB-2 (OR OTHER APPROPRIATE FORM
FOR SUCH PURPOSE, INCLUDING FORM S-3 IF THEN AVAILABLE).  EACH SUCH REGISTRATION
STATEMENT SHALL CONTAIN (EXCEPT IF OTHERWISE REQUIRED PURSUANT TO WRITTEN
COMMENTS RECEIVED FROM THE COMMISSION UPON A REVIEW OF SUCH REGISTRATION
STATEMENT) THE “PLAN OF DISTRIBUTION” ATTACHED HERETO AS ANNEX A.  THE COMPANY
SHALL CAUSE EACH SUCH REGISTRATION STATEMENT TO BE DECLARED EFFECTIVE UNDER THE
SECURITIES ACT AS SOON AS POSSIBLE BUT, IN ANY EVENT, BY ITS EFFECTIVENESS DATE,
AND SHALL USE ITS REASONABLE BEST EFFORTS TO KEEP SUCH REGISTRATION STATEMENT
CONTINUOUSLY EFFECTIVE UNDER THE SECURITIES ACT DURING THE ENTIRE EFFECTIVENESS
PERIOD.  PROMPTLY FOLLOWING ANY DATE ON WHICH THE COMPANY BECOMES ELIGIBLE TO
USE A REGISTRATION STATEMENT ON FORM S-3 TO REGISTER THE RESALE OF ITS
SECURITIES, BUT IN NO EVENT MORE THAN THIRTY DAYS AFTER SUCH DATE, THE COMPANY
SHALL FILE A REGISTRATION STATEMENT ON FORM S-3 COVERING ALL THEN OUTSTANDING
AND ISSUABLE REGISTRABLE SECURITIES (OR A POST-EFFECTIVE AMENDMENT ON FORM S-3
TO THE THEN EFFECTIVE REGISTRATION STATEMENT) AND SHALL CAUSE SUCH REGISTRATION
STATEMENT TO BE DECLARED EFFECTIVE AS SOON AS POSSIBLE THEREAFTER, BUT IN ANY
EVENT PRIOR TO THE EFFECTIVENESS DATE THEREFOR.  THE COMPANY SHALL TAKE SUCH
ACTION AS IS NECESSARY AND APPROPRIATE TO ENSURE THAT THE THEN EXISTING
EFFECTIVE REGISTRATION STATEMENT IS NOT SUSPENDED AND DOES NOT OTHERWISE LAPSE
DURING THE PERIOD BETWEEN THE FILING AND EFFECTIVENESS OF THE REGISTRATION
STATEMENT ON FORM S-3, WHICH EXISTING REGISTRATION STATEMENT SHALL BE MERGED
WITH AND BE SUCCEEDED BY THE REGISTRATION STATEMENT ON FORM S-3.

 

(C)                                  IF: (I) A REGISTRATION STATEMENT IS NOT
FILED ON OR PRIOR TO ITS FILING DATE (IF THE COMPANY FILES A REGISTRATION
STATEMENT WITHOUT AFFORDING THE HOLDERS THE OPPORTUNITY TO REVIEW AND COMMENT ON
THE SAME AS REQUIRED BY SECTION 3(A) HEREOF, THE COMPANY SHALL NOT BE DEEMED TO
HAVE SATISFIED THIS CLAUSE (I)), OR (II) A REGISTRATION STATEMENT IS NOT
DECLARED EFFECTIVE BY THE COMMISSION ON OR PRIOR TO ITS REQUIRED EFFECTIVENESS
DATE, OR (III) AFTER ITS EFFECTIVE DATE,

 

4

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

 

WITHOUT REGARD FOR THE REASON THEREUNDER OR EFFORTS THEREFOR, SUCH REGISTRATION
STATEMENT CEASES FOR ANY REASON TO BE EFFECTIVE AND AVAILABLE TO THE HOLDERS AS
TO ALL REGISTRABLE SECURITIES TO WHICH IT IS REQUIRED TO COVER AT ANY TIME PRIOR
TO THE EXPIRATION OF ITS EFFECTIVENESS PERIOD FOR MORE THAN AN AGGREGATE OF 40
TRADING DAYS IN ANY CONSECUTIVE 12 MONTH PERIOD (ANY SUCH FAILURE OR BREACH
BEING REFERRED TO AS AN “EVENT,” AND FOR PURPOSES OF CLAUSES (I) OR (II) THE
DATE ON WHICH SUCH EVENT OCCURS, OR FOR PURPOSES OF CLAUSE (III) THE DATE WHICH
SUCH 40 TRADING 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: FOR EACH CALENDAR MONTH FROM THE APPLICABLE EVENT DATE 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 INVESTMENT AMOUNT
PAID BY SUCH HOLDER PURSUANT TO THE PURCHASE AGREEMENT UNTIL THE APPLICABLE
EVENT IS CURED.  THE PARTIES AGREE THAT THE COMPANY WILL NOT BE LIABLE FOR
LIQUIDATED DAMAGES UNDER THIS SECTION IN RESPECT OF THE WARRANTS.  IF THE
COMPANY FAILS TO PAY ANY PARTIAL LIQUIDATED DAMAGES PURSUANT TO THIS SECTION IN
FULL WITHIN SEVEN DAYS AFTER THE DATE PAYABLE, THE COMPANY WILL PAY INTEREST
THEREON AT A RATE OF 10% PER ANNUM (OR SUCH LESSER MAXIMUM AMOUNT THAT IS
PERMITTED TO BE PAID BY APPLICABLE LAW) TO THE HOLDER, ACCRUING DAILY FROM THE
DATE SUCH PARTIAL LIQUIDATED DAMAGES ARE DUE UNTIL SUCH AMOUNTS, PLUS ALL SUCH
INTEREST THEREON, ARE PAID IN FULL.  THE PARTIAL LIQUIDATED DAMAGES PURSUANT TO
THE TERMS HEREOF SHALL APPLY ON A DAILY PRO-RATA BASIS FOR ANY PORTION OF A
CALENDAR MONTH PRIOR TO THE CURE OF AN EVENT.

 

(D)                                 EACH HOLDER AGREES TO FURNISH TO THE COMPANY
A COMPLETED QUESTIONNAIRE IN THE FORM ATTACHED TO THIS AGREEMENT AS ANNEX B (A
“SELLING HOLDER QUESTIONNAIRE”).  THE COMPANY SHALL NOT BE REQUIRED TO INCLUDE
THE REGISTRABLE SECURITIES OF A HOLDER IN A REGISTRATION STATEMENT AND SHALL NOT
BE REQUIRED TO PAY ANY LIQUIDATED OR OTHER DAMAGES UNDER SECTION 2(C) TO ANY
HOLDER WHO FAILS TO FURNISH TO THE COMPANY A FULLY COMPLETED SELLING HOLDER
QUESTIONNAIRE AT LEAST TWO TRADING DAYS PRIOR TO THE FILING DATE (SUBJECT TO THE
REQUIREMENTS SET FORTH IN SECTION 3(A)).

 

3.                                       REGISTRATION PROCEDURES.

 

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

 

(A)                                  NOT LESS THAN FOUR TRADING DAYS PRIOR TO
THE FILING OF A REGISTRATION STATEMENT OR ANY RELATED PROSPECTUS OR ANY
AMENDMENT OR SUPPLEMENT THERETO, THE COMPANY SHALL FURNISH TO EACH HOLDER COPIES
OF THE “SELLING SHAREHOLDERS” SECTION OF SUCH DOCUMENT, THE “PLAN OF
DISTRIBUTION” AND ANY RISK FACTOR CONTAINED IN SUCH DOCUMENT THAT ADDRESSES
SPECIFICALLY THIS TRANSACTION OR THE SELLING SHAREHOLDERS, AS PROPOSED TO BE
FILED WHICH DOCUMENTS WILL BE SUBJECT TO THE REVIEW OF SUCH HOLDER.  THE COMPANY
SHALL NOT FILE A REGISTRATION STATEMENT, ANY PROSPECTUS OR ANY AMENDMENTS OR
SUPPLEMENTS THERETO IN WHICH THE “SELLING SHAREHOLDER” SECTION THEREOF DIFFERS
FROM THE DISCLOSURE RECEIVED FROM A HOLDER IN ITS SELLING HOLDER QUESTIONNAIRE
(AS AMENDED OR SUPPLEMENTED).

 

(B)                                 (I)  PREPARE AND FILE WITH THE COMMISSION
SUCH AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS, TO EACH REGISTRATION
STATEMENT AND THE PROSPECTUS USED IN CONNECTION THEREWITH AS MAY BE NECESSARY TO
KEEP SUCH REGISTRATION STATEMENT CONTINUOUSLY EFFECTIVE AS TO THE APPLICABLE
REGISTRABLE SECURITIES FOR ITS EFFECTIVENESS PERIOD AND PREPARE AND

 

5

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

 

FILE WITH THE COMMISSION SUCH ADDITIONAL REGISTRATION STATEMENTS IN ORDER TO
REGISTER FOR RESALE UNDER THE SECURITIES ACT ALL OF THE REGISTRABLE SECURITIES;
(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 EACH REGISTRATION STATEMENT OR ANY
AMENDMENT THERETO AND, AS PROMPTLY AS REASONABLY POSSIBLE PROVIDE THE HOLDERS
TRUE AND COMPLETE COPIES OF ALL CORRESPONDENCE FROM AND TO THE COMMISSION
RELATING TO SUCH REGISTRATION STATEMENT THAT WOULD NOT RESULT IN THE DISCLOSURE
TO THE HOLDERS OF MATERIAL AND NON-PUBLIC INFORMATION CONCERNING THE COMPANY;
AND (IV) COMPLY IN ALL MATERIAL RESPECTS WITH THE PROVISIONS OF THE SECURITIES
ACT AND THE EXCHANGE ACT WITH RESPECT TO THE REGISTRATION STATEMENTS AND THE
DISPOSITION OF ALL REGISTRABLE SECURITIES COVERED BY EACH REGISTRATION
STATEMENT.

 

(C)                                  NOTIFY THE HOLDERS AS PROMPTLY AS
REASONABLY POSSIBLE (AND, IN THE CASE OF (I)(A) BELOW, NOT LESS THAN THREE
TRADING DAYS PRIOR TO SUCH FILING) AND (IF REQUESTED BY ANY SUCH PERSON) CONFIRM
SUCH NOTICE IN WRITING NO LATER THAN ONE TRADING DAY FOLLOWING THE DAY (I)(A)
WHEN A PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT OR 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 THAT PERTAIN TO THE HOLDERS AS A SELLING
SHAREHOLDER OR TO THE PLAN OF DISTRIBUTION, BUT NOT INFORMATION WHICH THE
COMPANY BELIEVES WOULD CONSTITUTE MATERIAL AND NON-PUBLIC INFORMATION); AND (C)
WITH RESPECT TO EACH 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 OR FOR ADDITIONAL INFORMATION; (III) OF THE
ISSUANCE BY THE COMMISSION OF ANY STOP ORDER SUSPENDING THE 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 SUCH 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 SUCH
REGISTRATION STATEMENT, PROSPECTUS OR OTHER DOCUMENTS SO THAT, IN THE CASE OF
SUCH 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.

 

(D)                                 USE ITS REASONABLE BEST 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.

 

6

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

 

(E)                                  FURNISH TO EACH HOLDER, WITHOUT CHARGE, AT
LEAST ONE CONFORMED COPY OF EACH REGISTRATION STATEMENT AND EACH AMENDMENT
THERETO AND ALL EXHIBITS TO THE EXTENT REQUESTED BY SUCH PERSON (INCLUDING THOSE
PREVIOUSLY FURNISHED) PROMPTLY AFTER THE FILING OF SUCH DOCUMENTS WITH THE
COMMISSION.

 

(F)                                    UPON NOTIFICATION BY THE COMMISSION THAT
A REGISTRATION STATEMENT WILL NOT BE REVIEWED OR IS NO LONGER SUBJECT TO FURTHER
REVIEW AND COMMENTS, THE COMPANY SHALL REQUEST ACCELERATION OF SUCH REGISTRATION
STATEMENT SUCH THAT IT BECOMES EFFECTIVE AT 5:00 P.M. (NEW YORK CITY TIME) ON
SUCH EFFECTIVE DATE.

 

(G)                                 DELIVER TO EACH HOLDER, BY 9:00 A.M. (NEW
YORK CITY TIME) ON THE DAY FOLLOWING THE EFFECTIVE DATE, WITHOUT CHARGE, AN
ELECTRONIC COPY OF EACH PROSPECTUS OR PROSPECTUSES (INCLUDING EACH FORM OF
PROSPECTUS) AND EACH AMENDMENT OR SUPPLEMENT THERETO.  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.

 

(H)                                 PRIOR TO ANY PUBLIC OFFERING OF REGISTRABLE
SECURITIES, TO REGISTER OR QUALIFY OR COOPERATE WITH THE SELLING HOLDERS IN
CONNECTION WITH THE REGISTRATION OR QUALIFICATION (OR EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION) OF SUCH REGISTRABLE SECURITIES FOR OFFER AND SALE
UNDER THE SECURITIES OR BLUE SKY LAWS OF THE JURISDICTIONS WITHIN THE UNITED
STATES REASONABLY REQUESTED BY SUCH HOLDERS, INCLUDING, BUT NOT LIMITED TO, NEW
YORK, CALIFORNIA AND WISCONSIN, TO KEEP EACH SUCH REGISTRATION OR QUALIFICATION
(OR EXEMPTION THEREFROM) EFFECTIVE DURING THE EFFECTIVENESS PERIOD AND TO DO ANY
AND ALL OTHER ACTS OR THINGS NECESSARY OR ADVISABLE TO ENABLE THE DISPOSITION IN
SUCH JURISDICTIONS OF THE REGISTRABLE SECURITIES COVERED BY THE REGISTRATION
STATEMENTS.

 

(I)                                     COOPERATE WITH THE HOLDERS TO FACILITATE
THE TIMELY PREPARATION AND DELIVERY OF CERTIFICATES REPRESENTING REGISTRABLE
SECURITIES TO BE DELIVERED TO A TRANSFEREE PURSUANT TO THE REGISTRATION
STATEMENTS, 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.

 

(J)                                     UPON THE OCCURRENCE OF ANY EVENT
CONTEMPLATED BY SECTION 3(C)(V), AS PROMPTLY AS REASONABLY POSSIBLE, PREPARE A
SUPPLEMENT OR AMENDMENT, INCLUDING A POST-EFFECTIVE AMENDMENT, TO THE AFFECTED
REGISTRATION STATEMENTS 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, NO
REGISTRATION STATEMENT NOR ANY 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.

 

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

 

7

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

 

be made with any Trading Market on which the Common Stock is then listed for
trading, and (B) in compliance with applicable state securities or Blue Sky
laws), (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 the Registration Statement),
(iii) messenger, telephone and delivery expenses, (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), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

 

5.                                       INDEMNIFICATION.

 

(A)                                  INDEMNIFICATION BY THE COMPANY.  THE
COMPANY SHALL, NOTWITHSTANDING ANY TERMINATION OF THIS AGREEMENT, INDEMNIFY AND
HOLD HARMLESS EACH HOLDER, THE OFFICERS, DIRECTORS, AGENTS, INVESTMENT ADVISORS,
PARTNERS, MEMBERS 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 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 COSTS OF
PREPARATION AND REASONABLE ATTORNEYS’ FEES) AND EXPENSES (COLLECTIVELY,
“LOSSES”), AS INCURRED, ARISING OUT OF OR RELATING TO 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 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, EXCEPT TO THE EXTENT, BUT ONLY 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 SUCH HOLDER’S PROPOSED METHOD OF DISTRIBUTION OF REGISTRABLE
SECURITIES AND WAS REVIEWED AND EXPRESSLY APPROVED IN WRITING BY SUCH HOLDER
EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT, SUCH PROSPECTUS OR SUCH FORM OF
PROSPECTUS OR IN ANY AMENDMENT OR SUPPLEMENT THERETO (IT BEING UNDERSTOOD THAT
THE HOLDER HAS APPROVED ANNEX A HERETO FOR THIS PURPOSE) 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 AFTER THE COMPANY HAS
NOTIFIED SUCH HOLDER IN WRITING THAT THE PROSPECTUS IS OUTDATED OR DEFECTIVE AND
PRIOR TO THE RECEIPT BY SUCH HOLDER OF AN ADVICE OR AN AMENDED OR SUPPLEMENTED
PROSPECTUS, BUT ONLY IF AND TO THE EXTENT THAT FOLLOWING THE RECEIPT OF THE
ADVICE OR THE AMENDED OR SUPPLEMENTED PROSPECTUS THE MISSTATEMENT OR OMISSION
GIVING RISE TO SUCH LOSS WOULD HAVE BEEN CORRECTED.  THE COMPANY SHALL NOTIFY
THE HOLDERS PROMPTLY OF THE INSTITUTION, THREAT OR ASSERTION OF ANY PROCEEDING
OF WHICH THE COMPANY IS AWARE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.

 

8

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

 

(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, ARISING SOLELY 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 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 ARISING SOLELY OUT OF OR BASED SOLELY UPON
ANY OMISSION OF A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING TO THE EXTENT, BUT ONLY 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 SUCH HOLDER’S PROPOSED METHOD OF DISTRIBUTION OF REGISTRABLE
SECURITIES AND WAS REVIEWED AND EXPRESSLY APPROVED IN WRITING BY SUCH HOLDER
EXPRESSLY FOR USE IN THE REGISTRATION STATEMENT (IT BEING UNDERSTOOD THAT THE
HOLDER HAS APPROVED ANNEX A HERETO FOR THIS PURPOSE), SUCH PROSPECTUS OR SUCH
FORM OF PROSPECTUS OR IN ANY AMENDMENT OR SUPPLEMENT THERETO 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 AFTER THE COMPANY HAS
NOTIFIED SUCH HOLDER IN WRITING THAT THE PROSPECTUS IS OUTDATED OR  DEFECTIVE
AND PRIOR TO THE RECEIPT BY SUCH HOLDER OF AN ADVICE OR AN AMENDED OR
SUPPLEMENTED PROSPECTUS, BUT ONLY IF AND TO THE EXTENT THAT FOLLOWING THE
RECEIPT OF THE ADVICE OR THE AMENDED OR SUPPLEMENTED PROSPECTUS THE MISSTATEMENT
OR OMISSION GIVING RISE TO SUCH LOSS WOULD HAVE BEEN CORRECTED.  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 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 PROXIMATELY AND MATERIALLY ADVERSELY PREJUDICED THE INDEMNIFYING
PARTY.

 

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 have been advised
by counsel that a

 

9

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

 

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
such counsel shall be at the expense of the Indemnifying Party).  It being
understood, however, that the Indemnifying Party shall not, in connection with
any one such Proceeding be liable for the fees and expenses of more than one
separate firm of attorneys at any time for all Indemnified Parties, which firm
shall be appointed by the Indemnified Parties that hold a majority of the Shares
then outstanding.  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.  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.

 

All fees and expenses of the Indemnified Party payable by an Indemnifying 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 to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

 

(D)                                 CONTRIBUTION.  IF A CLAIM FOR
INDEMNIFICATION UNDER SECTION 5(A) OR 5(B) IS UNAVAILABLE TO AN INDEMNIFIED
PARTY (BY REASON OF PUBLIC POLICY OR OTHERWISE), 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 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 SECTION 5(C), 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

 

10

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

 

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.

 

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.

 

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.

 

(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 A REGISTRATION
STATEMENT OTHER THAN THE REGISTRABLE SECURITIES, AND THE COMPANY SHALL NOT
DURING THE REGISTRATION PERIOD ENTER INTO ANY AGREEMENT PROVIDING ANY SUCH RIGHT
TO ANY OF ITS SECURITY HOLDERS.

 

(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 THE REGISTRATION STATEMENT.

 

(D)                                 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), SUCH HOLDER WILL FORTHWITH DISCONTINUE DISPOSITION OF SUCH
REGISTRABLE SECURITIES UNDER THE 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 MAY PROVIDE APPROPRIATE STOP ORDERS TO ENFORCE THE
PROVISIONS OF THIS PARAGRAPH.

 

(E)                                  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

 

11

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

 

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 STOCK OPTION OR OTHER EMPLOYEE
BENEFIT PLANS, THEN THE COMPANY SHALL SEND TO EACH HOLDER WRITTEN NOTICE OF SUCH
DETERMINATION AND, IF WITHIN FIFTEEN DAYS AFTER RECEIPT 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, SUBJECT TO CUSTOMARY UNDERWRITER CUTBACKS
APPLICABLE TO ALL HOLDERS OF REGISTRATION RIGHTS.

 

(F)                                    AMENDMENTS AND WAIVERS.  THE PROVISIONS
OF THIS AGREEMENT, INCLUDING THE PROVISIONS OF THIS SECTION 6(F), 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 NO LESS THAN 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 CERTAIN HOLDERS AND THAT DOES NOT
DIRECTLY OR INDIRECTLY AFFECT THE RIGHTS OF OTHER HOLDERS MAY BE GIVEN BY
HOLDERS OF AT LEAST A MAJORITY OF THE REGISTRABLE SECURITIES TO WHICH SUCH
WAIVER OR CONSENT RELATES.

 

(G)                                 NOTICES.  ANY AND ALL NOTICES OR OTHER
COMMUNICATIONS OR DELIVERIES REQUIRED OR PERMITTED TO BE PROVIDED HEREUNDER
SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN AND EFFECTIVE ON THE EARLIEST OF
(A) THE DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA
FACSIMILE (PROVIDED THE SENDER RECEIVES A MACHINE-GENERATED CONFIRMATION OF
SUCCESSFUL TRANSMISSION) AT THE FACSIMILE NUMBER SPECIFIED IN THIS SECTION PRIOR
TO 5:30 P.M. (NEW YORK CITY TIME) ON A TRADING DAY, (B) THE NEXT TRADING DAY
AFTER THE DATE OF TRANSMISSION, IF SUCH NOTICE OR COMMUNICATION IS DELIVERED VIA
FACSIMILE AT THE FACSIMILE NUMBER SPECIFIED IN THIS SECTION ON A DAY THAT IS NOT
A TRADING DAY OR LATER THAN 5:30 P.M. (NEW YORK CITY TIME) ON ANY TRADING DAY,
(C) THE TRADING DAY FOLLOWING THE DATE OF MAILING, IF SENT BY U.S. NATIONALLY
RECOGNIZED OVERNIGHT COURIER SERVICE, OR (D) UPON ACTUAL RECEIPT BY THE PARTY TO
WHOM SUCH NOTICE IS REQUIRED TO BE GIVEN.  THE ADDRESS FOR SUCH NOTICES AND
COMMUNICATIONS SHALL BE AS FOLLOWS:

 

If to the Company:

 

MedicalCV, Inc.

 

 

9725 South Robert Trail

 

 

Inver Grove Heights, Minnesota 55077

 

 

Facsimile: (651) 452-4948

 

 

Attention: Chief Financial Officer

 

 

 

With a copy to:

 

Briggs and Morgan, P.A.

 

 

2200 IDS Center

 

 

80 South Eighth Street

 

 

Minneapolis, Minnesota 55402

 

 

Facsimile: (612) 977-8650

 

 

Attention: Avron L. Gordon, Esq.

 

 

 

If to an Investor:

 

To the address set forth under such Investor’s name on the signature pages
hereof;

 

 

 

12

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

 

If to any other Person who is then the registered Holder:

 

 

To the address of such Holder as it appears in the stock transfer books of the
Company

 

or such other address as may be designated in writing hereafter, in the same
manner, by such Person.

 

(H)                                 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 EACH HOLDER.  EACH HOLDER MAY ASSIGN THEIR RESPECTIVE RIGHTS
HEREUNDER IN THE MANNER AND TO THE PERSONS AS PERMITTED UNDER THE PURCHASE
AGREEMENT.

 

(I)                                     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, 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 SIGNATURE
WERE THE ORIGINAL THEREOF.

 

(J)                                     GOVERNING LAW.  ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF
LAW THEREOF.  EACH PARTY AGREES THAT ALL PROCEEDINGS CONCERNING THE
INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT (WHETHER BROUGHT AGAINST A PARTY HERETO OR ITS RESPECTIVE
AFFILIATES, EMPLOYEES OR AGENTS) WILL BE COMMENCED IN THE NEW YORK COURTS.  EACH
PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE NEW
YORK COURTS FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND
HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY PROCEEDING, ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY NEW YORK COURT, OR
THAT SUCH PROCEEDING HAS BEEN COMMENCED IN AN IMPROPER OR INCONVENIENT FORUM. 
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND
CONSENTS TO PROCESS BEING SERVED IN ANY SUCH PROCEEDING BY MAILING A COPY
THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. 
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.  IF
EITHER PARTY SHALL COMMENCE A PROCEEDING TO ENFORCE ANY PROVISIONS OF THIS
AGREEMENT, THEN THE PREVAILING PARTY IN SUCH PROCEEDING SHALL BE REIMBURSED BY
THE OTHER PARTY FOR ITS ATTORNEY’S FEES AND OTHER COSTS AND EXPENSES INCURRED
WITH THE INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH PROCEEDING.  EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY

 

13

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

 

DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

 

(K)                                  CUMULATIVE REMEDIES.  THE REMEDIES PROVIDED
HEREIN ARE CUMULATIVE AND NOT EXCLUSIVE OF ANY REMEDIES PROVIDED BY LAW.

 

(L)                                     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 REASONABLE 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.

 

(M)                               HEADINGS.  THE HEADINGS IN THIS AGREEMENT ARE
FOR CONVENIENCE OF REFERENCE ONLY AND SHALL NOT LIMIT OR OTHERWISE AFFECT THE
MEANING HEREOF.

 

(N)                                 INDEPENDENT NATURE OF INVESTORS’ OBLIGATIONS
AND RIGHTS.  THE OBLIGATIONS OF EACH INVESTOR UNDER THIS AGREEMENT ARE SEVERAL
AND NOT JOINT WITH THE OBLIGATIONS OF EACH OTHER INVESTOR, AND NO INVESTOR SHALL
BE RESPONSIBLE IN ANY WAY FOR THE PERFORMANCE OF THE OBLIGATIONS OF ANY OTHER
INVESTOR UNDER THIS AGREEMENT.  NOTHING CONTAINED HEREIN OR IN ANY TRANSACTION
DOCUMENT, AND NO ACTION TAKEN BY ANY INVESTOR PURSUANT THERETO, SHALL BE DEEMED
TO CONSTITUTE THE INVESTORS AS A PARTNERSHIP, AN ASSOCIATION, A JOINT VENTURE OR
ANY OTHER KIND OF ENTITY, OR CREATE A PRESUMPTION THAT THE INVESTORS ARE IN ANY
WAY ACTING IN CONCERT OR AS A GROUP WITH RESPECT TO SUCH OBLIGATIONS OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT. 
EACH INVESTOR ACKNOWLEDGES THAT NO OTHER INVESTOR WILL BE ACTING AS AGENT OF
SUCH INVESTOR IN ENFORCING ITS RIGHTS UNDER THIS AGREEMENT.  EACH INVESTOR SHALL
BE ENTITLED TO INDEPENDENTLY PROTECT AND ENFORCE ITS RIGHTS, INCLUDING WITHOUT
LIMITATION THE RIGHTS ARISING OUT OF THIS AGREEMENT, AND IT SHALL NOT BE
NECESSARY FOR ANY OTHER INVESTOR TO BE JOINED AS AN ADDITIONAL PARTY IN ANY
PROCEEDING FOR SUCH PURPOSE.  THE COMPANY ACKNOWLEDGES THAT EACH OF THE
INVESTORS HAS BEEN PROVIDED WITH THE SAME REGISTRATION RIGHTS AGREEMENT FOR THE
PURPOSE OF CLOSING A TRANSACTION WITH MULTIPLE INVESTORS AND NOT BECAUSE IT WAS
REQUIRED OR REQUESTED TO DO SO BY ANY INVESTOR.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]

 

14

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

 

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

 

 

 

MEDICALCV, INC.

 

 

 

 

 

 

 

 

By:

/s/ Marc P. Flores

 

 

 

 

Name: Marc P. Flores

 

 

 

Title: President and Chief Executive Officer

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF INVESTORS TO FOLLOW]

 

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

 

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

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

SF Capital Partners Ltd.

 

 

 

 

 

By:

/s/ Brian H. Davidson

 

 

 

 

Name: Brian H. Davidson

 

 

 

Title: Authorized Signatory

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

MedCap Partners, L.P.

 

 

 

 

 

By:

/s/ C. Fred Toney

 

 

 

 

Name: C. Fred Toney

 

 

 

Title: Managing Member

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

MedCap Master Fund, L.P.

 

 

 

 

 

By:

/s/ C. Fred Toney

 

 

 

 

Name: C. Fred Toney

 

 

 

Title: Managing Member

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Millennium Partners, L.P.

 

 

By: Millennium Management, L.L.C.

 

 

By:

/s/ Terry Feemey

 

 

 

 

Name: Terry Feemey

 

 

 

Title: Chief Operating Officer

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Whitebox Hedged High Yield Partners, LP

 

 

 

 

 

By:

/s/ Jonathan Wood

 

 

 

 

Name: Jonathan Wood

 

 

 

Title: Chief Financial Officer/Director

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Whitebox Intermarket Partners, LP

 

 

 

 

 

By:

/s/ Jonathan Wood

 

 

 

 

Name: Jonathan Wood

 

 

 

Title: Chief Financial Officer/Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Whitebox Convertible Arbitrage Partners, LP

 

 

 

 

 

By:

/s/ Jonathan Wood

 

 

 

 

Name: Jonathan Wood

 

 

 

Title: Chief Financial Officer/Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Pandora Select Partners, LP

 

 

 

 

 

By:

/s/ Jonathan Wood

 

 

 

 

Name: Jonathan Wood

 

 

 

Title: Chief Financial Officer/Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

ASA Opportunity Fund, L.P.

 

 

 

 

 

By:

/s/ Robert D. Furst Jr.

 

 

 

 

Name: Robert D. Furst Jr.

 

 

 

Title: Managing Member of General Partner

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Furst Capital Partners LLC

 

 

 

 

 

By:

/s/ Robert D. Furst Jr.

 

 

 

 

Name: Robert D. Furst Jr.

 

 

 

Title: Managing Member

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

The Larry Haimovitch 2000 Separate Property

 

 

Revocable Trust

 

 

 

 

 

By:

/s/ Larry Haimovitch

 

 

 

 

Name: Larry Haimovitch

 

 

 

Title: Trustee

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

ProMed Partners, L.P.

 

 

 

 

 

By:

/s/ Barry Kurokawa

 

 

 

 

Name: Barry Kurokawa

 

 

 

Title: Managing Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

ProMed Partners II, L.P.

 

 

 

 

 

By:

/s /Barry Kurokawa

 

 

 

 

Name: Barry Kurokawa

 

 

 

Title: Managing Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

ProMed Offshore Fund, Ltd.

 

 

 

 

 

By:

/s/ Barry Kurokawa

 

 

 

 

Name: Barry Kurokawa

 

 

 

Title: Managing Director

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

ProMed Offshore Fund II, Ltd.

 

 

 

 

 

By:

/s/ Barry Kurokawa

 

 

 

 

Name: Barry Kurokawa

 

 

 

Title: Managing Director

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Alice Ann Corporation

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Robert G. Allison

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

William H. Baxter Revocable Trust

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Gary A. Bergren

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Craig L. Campbell

 

 

IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Bradley A.

 

 

Erickson IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Anne S. Chudnofsky

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Dorothy J. Hoel

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Robert H.

 

 

Clayburgh IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Elizabeth J. Kuehne

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Raymond R. Johnson

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Charles W.

 

 

Pappas IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Richard C. Perkins

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

John T. Potter

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Paul C. Seel and Nancy S. Seel JTWROS

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

E. Terry Skone

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Donald O. and Janet M. Voight TTEE’s FBO Janet

 

 

M. Voight Trust U/A dtd 8/29/96

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO James B. Wallace

 

 

SPN/PRO

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Michael R.

 

 

Wilcox IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Daniel S. and Patrice M. Perkins JTWROS

 

 

 

 

 

By:

/s/ Daniel S. Perkins & /s/ Patrice M. Perkins

 

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Mark L. Beese

 

 

IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Daniel S. Perkins

 

 

 

 

Name: Daniel S. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

David H. and Lise B. Potter JTWROS

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Daniel S. Perkins

 

 

 

 

Name: Daniel S. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Pyramid Partners, L.P.

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Daniel S. Perkins

 

 

 

 

Name: Daniel S. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

PKM Properties, LLC

 

 

 

 

 

By:

/s/ Paul K. Miller

 

 

 

 

Name: Paul K. Miller

 

 

 

Title: Chief Executive Officer

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

 

 

 

By:

/s/ Peter L. Hauser

 

 

 

 

Name: Peter L. Hauser

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Robert D. Furst Jr. Money Purchase Pension Plan

 

 

and Trust

 

 

 

 

 

By:

/s/ Robert D. Furst Jr.

 

 

 

 

Name: Robert D. Furst Jr.

 

 

 

Title: Trustee

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Bradley A.

 

 

Erickson IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Piper Jaffray as Custodian FBO Robert G. Allison

 

 

IRA

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Dennis D. Gonyea

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

John T. Potter

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

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

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Carolyn Salon

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Alan R. Reckner

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Joel Salon

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Brust Limited Partnership

 

 

Perkins Capital Management Inc., Attorney-in-fact

 

 

By:

/s/ Richard C. Perkins

 

 

 

 

Name: Richard C. Perkins

 

 

 

Title: Vice President

 

 

 

NAME OF INVESTING ENTITY

 

 

 

 

 

Goben Enterprises LP

 

 

 

 

 

By:

/s/ Gary Benson

 

 

 

 

Name: Gary Benson

 

 

 

Title: General Partner

 

 

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

 

Annex A

 

Plan of Distribution

 

The Selling Shareholders and any of their pledgees, donees, transferees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of Common Stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions.  These sales may be
at fixed or negotiated prices.  The Selling Shareholders may use any one or more
of the following methods when selling shares:

 

•                  ordinary brokerage transactions and transactions in which the
broker-dealer solicits Investors;

 

•                  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;

 

•                  to cover short sales made after the date that this
Registration Statement is declared effective by the Commission;

 

•                  broker-dealers may agree with the Selling Shareholders to
sell a specified number of such shares at a stipulated price per share;

 

•                  a combination of any such methods of sale; and

 

•                  any other method permitted pursuant to applicable law.

 

The Selling Shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

 

Broker-dealers engaged by the Selling Shareholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling Shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated.  The Selling Shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

 

The Selling Shareholders may from time to time pledge or grant a security
interest in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act of 1933 amending the list of selling
shareholders to include the pledgee, transferee or other successors in interest
as selling shareholders under this prospectus.

 

17

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

 

Upon the Company being notified in writing by a Selling Shareholder that any
material arrangement has been entered into with a broker-dealer for the sale of
Common Stock through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b) under the
Securities Act, disclosing (i) the name of each such Selling Shareholder and of
the participating broker-dealer(s), (ii) the number of shares involved, (iii)
the price at which such the shares of Common Stock were sold, (iv)the
commissions paid or discounts or concessions allowed to such broker-dealer(s),
where applicable, (v) that such broker-dealer(s) did not conduct any
investigation to verify the information set out or incorporated by reference in
this prospectus, and (vi) other facts material to the transaction.  In addition,
upon the Company being notified in writing by a Selling Shareholder that a donee
or pledgee intends to sell more than 500 shares of Common Stock, a supplement to
this prospectus will be filed if then required in accordance with applicable
securities law.

 

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.

 

The Selling Shareholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.  Discounts, concessions, commissions and
similar selling expenses, if any, that can be attributed to the sale of
Securities will be paid by the Selling Shareholder and/or the purchasers.  Each
Selling Shareholder has represented and warranted to the Company that it
acquired the securities subject to this registration statement in the ordinary
course of such Selling Shareholder’s business and, at the time of its purchase
of such securities such Selling Shareholder had no agreements or understandings,
directly or indirectly, with any person to distribute any such securities.

 

The Company has advised each Selling Shareholder that it may not use shares
registered on this Registration Statement to cover short sales of Common Stock
made prior to the date on which this Registration Statement shall have been
declared effective by the Commission.  If a Selling Shareholder uses this
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act.  The Selling
Shareholders will be responsible to comply with the applicable provisions of the
Securities Act and Exchange Act, and the rules and regulations thereunder
promulgated, including, without limitation, Regulation M, as applicable to such
Selling Shareholders in connection with resales of their respective shares under
this Registration Statement.

 

The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock.  The Company and the Selling Shareholders have
agreed to indemnify each other against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.  If the Selling
Shareholders use this prospectus for any sale of the Common Stock, they will be
subject to the prospectus delivery requirements of the Securities Act.

 

18

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

 

Annex B

 

MEDICALCV, INC.

Selling Securityholder Notice and Questionnaire

 

The undersigned beneficial owner of common stock (the “Common Stock”), of
MedicalCV, Inc. (the “Company”) understands that the Company has filed or
intends to file with the Securities and Exchange Commission (the “Commission”) a
Registration Statement for the registration and resale of the Registrable
Securities, in accordance with the terms of the Registration Rights Agreement,
dated as of March 31, 2005 (the “Registration Rights Agreement”), among the
Company and the Investors named therein.  A copy of the Registration Rights
Agreement is available from the Company upon request at the address set forth
below.  All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.

 

The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:

 

QUESTIONNAIRE

 

1.  Name.

 

(a)

 

Full Legal Name of Selling Securityholder

 

 

 

 

 

 

(b)

 

Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are held:

 

 

 

 

 

 

(c)

 

Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by the questionnaire):

 

 

 

 

 

 

 

2.  Address for Notices to Selling Securityholder:

 

 

 

  Telephone:

 

 

19

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

 

Fax:

 

Contact Person:

 

 

3.  Beneficial Ownership of Registrable Securities:

 

 

Type and Number of Registrable Securities beneficially owned:

 

 

 

 

 

4.  Broker-Dealer Status:

 

(a)

 

Are you a broker-dealer?

 

 

 

Yes  o          No  o

 

 

 

Note:

 

If yes, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 

 

 

(b)

 

Are you an affiliate of a broker-dealer?

 

 

 

Yes  o          No  o

 

 

 

(c)

 

If you are an affiliate of a broker-dealer, do you certify that you bought the
Registrable Securities in the ordinary course of business, and at the time of
the purchase of the Registrable Securities to be resold, you had no agreements
or understandings, directly or indirectly, with any person to distribute the
Registrable Securities?

 

 

 

Yes  o          No  o

 

 

 

Note:

 

If no, the Commission’s staff has indicated that you should be identified as an
underwriter in the Registration Statement.

 

5.  Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.

 

Except as set forth below in this Item 5, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.

 

 

 

Type and Amount of Other Securities beneficially owned by the Selling
Securityholder:

 

 

 

 

 

20

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

 

6.  Relationships with the Company:

 

Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.

 

 

State any exceptions here:

 

 

 

 

 

The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.

 

By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus.  The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

 

Dated:

 

 

 

Beneficial Owner:

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

Title:

 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

Briggs and Morgan, P.A.
2200 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402
Facsimile:  (612) 977-8650
Attention:  Avron L. Gordon, Esq.

 

21

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