Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of May 12, 2003, by
and among Cambridge Heart, Inc., a corporation organized under the laws of the
State of Delaware (the “Company”), and the undersigned (together with their
affiliates, the “Initial Investors”).

 

WHEREAS:

 

A.                                   IN CONNECTION WITH THE SECURITIES PURCHASE
AGREEMENT OF EVEN DATE HEREWITH BY AND BETWEEN THE COMPANY AND THE INITIAL
INVESTORS (THE “SECURITIES PURCHASE AGREEMENT”), THE COMPANY HAS AGREED, UPON
THE TERMS AND SUBJECT TO THE CONDITIONS CONTAINED THEREIN, TO ISSUE AND SELL TO
THE INITIAL INVESTORS (I) SHARES OF THE COMPANY’S SERIES A CONVERTIBLE PREFERRED
STOCK, PAR VALUE $.001 PER SHARE (THE “SERIES A PREFERRED”), AND (II) WARRANTS
(THE “WARRANTS”) TO ACQUIRE SHARES OF SERIES A PREFERRED.

 

B.                                     TO INDUCE THE INITIAL INVESTORS TO
EXECUTE AND DELIVER THE SECURITIES PURCHASE AGREEMENT, THE COMPANY HAS AGREED TO
PROVIDE CERTAIN REGISTRATION RIGHTS UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND THE RULES AND REGULATIONS THEREUNDER, OR ANY SIMILAR SUCCESSOR
STATUTE (COLLECTIVELY, THE “SECURITIES ACT”), AND APPLICABLE STATE SECURITIES
LAWS.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Initial
Investors hereby agree as follows:

 

1.                                       DEFINITIONS.

 

(A)                                  AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE FOLLOWING MEANINGS:

 

(I)            “INVESTORS” MEANS THE INITIAL INVESTORS AND ANY TRANSFEREES OR
ASSIGNEES WHO AGREE TO BECOME BOUND BY THE PROVISIONS OF THIS AGREEMENT IN
ACCORDANCE WITH SECTION 9 HEREOF.

 

(II)           “REGISTER,” “REGISTERED,” AND “REGISTRATION” REFER TO A
REGISTRATION EFFECTED BY PREPARING AND FILING A REGISTRATION STATEMENT OR
STATEMENTS IN COMPLIANCE WITH THE SECURITIES ACT AND PURSUANT TO RULE 415 UNDER
THE SECURITIES ACT OR ANY SUCCESSOR RULE PROVIDING FOR OFFERING SECURITIES ON A
CONTINUOUS BASIS (“RULE 415”), AND THE DECLARATION OR ORDERING OF EFFECTIVENESS
OF SUCH REGISTRATION STATEMENT BY THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION (THE “SEC”).

 

(III)          “REGISTRABLE SECURITIES” MEANS (A) THE COMPANY’S COMMON STOCK,
PAR VALUE $.001 PER SHARE (THE “COMMON STOCK”) ISSUABLE UPON CONVERSION OF THE
SERIES A PREFERRED PURCHASED BY THE INITIAL INVESTORS OR THEIR ASSIGNEES AT THE
CLOSING (AS DEFINED IN THE SECURITIES PURCHASE AGREEMENT), (B) THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THE SERIES

 

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A Preferred issuable upon exercise of or otherwise pursuant to the Warrants, or
(C) any shares of capital stock issued or issuable, from time to time (with any
adjustments), as a distribution on or in exchange for or otherwise with respect
to any of the foregoing.

 

(IV)          “REGISTRATION STATEMENT” MEANS A REGISTRATION STATEMENT OF THE
COMPANY UNDER THE SECURITIES ACT.

 

(B)                                 CAPITALIZED TERMS USED HEREIN AND NOT
OTHERWISE DEFINED HEREIN SHALL HAVE THE RESPECTIVE MEANINGS SET FORTH IN THE
SECURITIES PURCHASE AGREEMENT.

 

2.                                       REGISTRATION.

 

(A)           MANDATORY REGISTRATION.  THE COMPANY SHALL PREPARE PROMPTLY AND
FILE WITH THE SEC AS SOON AS PRACTICABLE, BUT IN NO EVENT LATER THAN THIRTY (30)
DAYS FROM THE DATE HEREOF (THE “FILING DATE”) A REGISTRATION STATEMENT ON
FORM S-2 (OR, IF FORM S-2 IS NOT THEN AVAILABLE, ON SUCH FORM OF REGISTRATION
STATEMENT AS IS THEN AVAILABLE TO EFFECT A REGISTRATION OF ALL OF THE
REGISTRABLE SECURITIES, SUBJECT TO THE CONSENT, NOT TO BE UNREASONABLY WITHHELD,
OF THE INVESTORS) COVERING THE RESALE OF THE REGISTRABLE SECURITIES.  THE
REGISTRATION STATEMENT FILED HEREUNDER, TO THE EXTENT ALLOWABLE UNDER THE
SECURITIES ACT AND THE RULES PROMULGATED THEREUNDER (INCLUDING RULE 416), SHALL
STATE THAT SUCH REGISTRATION STATEMENT ALSO COVERS SUCH INDETERMINATE NUMBER OF
ADDITIONAL SHARES OF COMMON STOCK AS MAY BECOME ISSUABLE TO PREVENT DILUTION
RESULTING FROM STOCK SPLITS, STOCK DIVIDENDS OR SIMILAR TRANSACTIONS.  THE
REGISTRABLE SECURITIES INCLUDED IN THE REGISTRATION STATEMENT SHALL BE ALLOCATED
TO THE INVESTORS AS SET FORTH IN SECTION 11(K) HEREOF.  THE REGISTRATION
STATEMENT (AND EACH AMENDMENT OR SUPPLEMENT THERETO, AND EACH REQUEST FOR
ACCELERATION OF EFFECTIVENESS THEREOF) SHALL BE PROVIDED TO THE INVESTORS AND
THEIR COUNSEL PRIOR TO ITS FILING OR OTHER SUBMISSION.

 

(B)           UNDERWRITTEN OFFERING.  IF ANY OFFERING PURSUANT TO THE
REGISTRATION STATEMENT PURSUANT TO SECTION 2(A) HEREOF INVOLVES AN UNDERWRITTEN
OFFERING, THE INVESTORS WHO HOLD A MAJORITY IN INTEREST OF THE REGISTRABLE
SECURITIES SUBJECT TO SUCH UNDERWRITTEN OFFERING, WITH THE CONSENT OF THE
INITIAL INVESTORS IF THEY ARE STILL HOLDING REGISTRABLE SECURITIES, SHALL HAVE
THE RIGHT TO SELECT ONE LEGAL COUNSEL TO REPRESENT THE INVESTORS AND AN
INVESTMENT BANKER OR BANKERS AND MANAGER OR MANAGERS TO ADMINISTER THE OFFERING,
WHICH INVESTMENT BANKER OR BANKERS OR MANAGER OR MANAGERS SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY.  NOTWITHSTANDING THE FOREGOING, IF THE OFFERING
DOES NOT INVOLVE AN UNDERWRITTEN OFFER, THE INVESTORS SHALL NOT BE ENTITLED TO
REQUIRE THAT THE OFFERING BE UNDERWRITTEN.

 

(C)           REGISTRATION STATEMENT FILING.  THE COMPANY SHALL USE ITS BEST
EFFORTS TO CAUSE THE REGISTRATION STATEMENT REQUIRED TO BE FILED PURSUANT TO
SECTION 2(A) HEREOF TO BECOME EFFECTIVE AS SOON AS REASONABLY PRACTICABLE. AT
THE TIME OF EFFECTIVENESS, THE COMPANY SHALL ENSURE SUCH REGISTRATION STATEMENT
COVERS ALL OF THE REGISTRABLE SECURITIES.  THE COMPANY SHALL USE ITS BEST
EFFORTS (I) TO CAUSE SUCH REGISTRATION STATEMENT COVERING ALL OF THE REGISTRABLE
SECURITIES TO BE DECLARED EFFECTIVE BY THE SEC ON OR BEFORE THE ONE HUNDRED
TWENTIETH (120TH) DAY FOLLOWING THE CLOSING DATE (THE “REGISTRATION DEADLINE”),
(II) AFTER SUCH REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE BY THE SEC,
TO PREVENT THE SUSPENSION OF SALES OF ANY OF THE REGISTRABLE SECURITIES REQUIRED
TO BE COVERED BY SUCH REGISTRATION STATEMENT (BY REASON OF A STOP ORDER AND/OR
BECAUSE THE REGISTRATION STATEMENT CONTAINS MISSTATEMENTS OR OMISSIONS DUE TO

 

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THE COMPANY’S FAILURE TO UPDATE THE REGISTRATION STATEMENT OR BECAUSE OF ANY
OTHER REASON OUTSIDE THE CONTROL OF THE INVESTORS) AND (III) TO CAUSE THE COMMON
STOCK TO BE LISTED OR INCLUDED FOR QUOTATION ON THE NASDAQ NATIONAL MARKET
(“NNM”), THE NASDAQ SMALLCAP MARKET (“SMALLCAP”), THE OTC BULLETIN BOARD OR
SUCCESSOR ENTITY (E.G., BBX MARKET) (“OTCBB”), THE NEW YORK STOCK EXCHANGE (THE
“NYSE”) OR THE AMERICAN STOCK EXCHANGE (THE “AMEX”) AT ALL TIMES AFTER THE
REGISTRATION DEADLINE HEREUNDER.  IN THE EVENT THE INVESTORS FAIL TO PROVIDE,
WITHIN FIVE (5) BUSINESS DAYS FOLLOWING THE COMPANY’S REQUEST, INFORMATION
REASONABLY REQUESTED BY THE COMPANY FOR INCLUSION IN THE REGISTRATION STATEMENT
OR TO PROVIDE THEIR COMMENTS TO THE REGISTRATION STATEMENT (OR ANY AMENDMENT OR
SUPPLEMENT THERETO), THERE SHALL BE A DAY-FOR-DAY EXTENSION OF ANY PERIOD WITHIN
WHICH THE COMPANY IS REQUIRED TO ACT HEREUNDER.

 

(D)           REGISTRATION DELAYS.  THE EXPIRATION DATE OF EACH OF THE WARRANTS
ISSUED TO THE INVESTORS PURSUANT TO SECTION 1(B) OF THE SECURITIES PURCHASE
AGREEMENT SHALL BE EXTENDED FOR ONE DAY FOR (I) EACH DAY AFTER THE FILING DATE
THAT A REGISTRATION STATEMENT COVERING THE RESALE OF THE REGISTRABLE SECURITIES
HAS NOT BEEN FILED WITH THE SEC, AND (II) EACH DAY AFTER THE REGISTRATION
DEADLINE THAT A REGISTRATION STATEMENT COVERING THE RESALE OF THE REGISTRABLE
SECURITIES HAS NOT BEEN DECLARED EFFECTIVE BY THE SEC.  IN ADDITION, THE
EXPIRATION DATE OF EACH OF THE WARRANTS ISSUED TO THE INVESTORS PURSUANT TO
SECTION 1(C), SECTION 1(F) AND SECTION 1(G) OF THE SECURITIES PURCHASE AGREEMENT
SHALL BE EXTENDED FOR SIXTY (60) DAYS FOR (I) EACH THIRTY (30) DAY PERIOD (OR
PORTION THEREOF) AFTER THE FILING DATE THAT A REGISTRATION STATEMENT COVERING
THE RESALE OF THE REGISTRABLE SECURITIES HAS NOT BEEN FILED WITH THE SEC, (II)
EACH THIRTY (30) DAY PERIOD (OR PORTION THEREOF) AFTER THE REGISTRATION DEADLINE
THAT A REGISTRATION STATEMENT COVERING THE RESALE OF THE REGISTRABLE SECURITIES
HAS NOT BEEN DECLARED EFFECTIVE BY THE SEC, AND (III) EACH THIRTY (30) DAY
PERIOD (OR PORTION THEREOF) DURING WHICH SALES OF REGISTRABLE SECURITIES CANNOT
BE MADE PURSUANT TO ANY SUCH REGISTRATION STATEMENT (BY REASON OF A STOP ORDER
AND/OR BECAUSE THE REGISTRATION STATEMENT CONTAINS MISSTATEMENTS OR OMISSIONS
DUE TO THE COMPANY’S FAILURE TO UPDATE THE REGISTRATION STATEMENT OR BECAUSE OF
ANY OTHER REASON OUTSIDE THE CONTROL OF THE INVESTORS) AFTER SUCH REGISTRATION
STATEMENT HAS BEEN DECLARED EFFECTIVE BY THE SEC OR THE COMMON STOCK IS NOT
LISTED OR INCLUDED FOR QUOTATION ON THE NNM, SMALLCAP, OTCBB, THE NYSE OR THE
AMEX.

 

(E)           INTENTIONALLY OMITTED.

 

(F)            RULE 416.  THE COMPANY AND THE INVESTORS EACH ACKNOWLEDGE THAT AN
INDETERMINATE NUMBER OF REGISTRABLE SECURITIES SHALL BE REGISTERED PURSUANT TO
RULE 416 UNDER THE SECURITIES ACT SO AS TO INCLUDE IN SUCH REGISTRATION
STATEMENT ANY AND ALL REGISTRABLE SECURITIES WHICH MAY BECOME ISSUABLE TO
PREVENT DILUTION RESULTING FROM STOCK SPLITS, STOCK DIVIDENDS OR SIMILAR
TRANSACTIONS (COLLECTIVELY, THE “RULE 416 SECURITIES”).  IN THIS REGARD, THE
COMPANY AGREES TO TAKE ALL STEPS NECESSARY TO ENSURE THAT ALL RULE 416
SECURITIES ARE REGISTERED PURSUANT TO RULE 416 UNDER THE SECURITIES ACT IN THE
REGISTRATION STATEMENT AND, ABSENT GUIDANCE FROM THE SEC OR OTHER DEFINITIVE
AUTHORITY TO THE CONTRARY, THE COMPANY SHALL AFFIRMATIVELY SUPPORT AND NOT TAKE
ANY ACTION ADVERSE TO THE POSITION THAT THE REGISTRATION STATEMENTS FILED
HEREUNDER COVER ALL OF THE RULE 416 SECURITIES.  IF THE COMPANY DETERMINES THAT
THE REGISTRATION STATEMENT(S) FILED HEREUNDER DO NOT COVER ALL OF THE RULE 416
SECURITIES, THE COMPANY SHALL IMMEDIATELY PROVIDE TO EACH INVESTOR WRITTEN
NOTICE (A “RULE 416 NOTICE”) SETTING FORTH THE BASIS FOR THE COMPANY’S POSITION
AND THE AUTHORITY THEREFOR.

 

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3.                                       OBLIGATIONS OF THE COMPANY.

 

In connection with the registration of the Registrable Securities, the Company
shall have the following obligations:

 

(A)           THE COMPANY SHALL PREPARE AND FILE WITH THE SEC THE REGISTRATION
STATEMENT REQUIRED BY SECTION 2(A) AS SOON AS REASONABLY PRACTICABLE (BUT IN NO
EVENT LATER THAN THE FILING DATE), AND USE ITS BEST EFFORTS TO CAUSE SUCH
REGISTRATION STATEMENT RELATING TO REGISTRABLE SECURITIES TO BECOME EFFECTIVE AS
SOON AS PRACTICABLE AFTER SUCH FILING BUT IN NO EVENT LATER THAN THE
REGISTRATION DEADLINE), AND KEEP SUCH REGISTRATION STATEMENT EFFECTIVE PURSUANT
TO RULE 415 AT ALL TIMES UNTIL SUCH DATE AS IS THE EARLIER OF (I) THE DATE ON
WHICH ALL OF THE REGISTRABLE SECURITIES HAVE BEEN SOLD AND (II) THE DATE ON
WHICH ALL OF THE REGISTRABLE SECURITIES (IN THE REASONABLE OPINION OF COUNSEL TO
THE INITIAL INVESTORS, WHICH SHALL BE SOUGHT UPON THE REASONABLE REQUEST OF THE
COMPANY) MAY BE IMMEDIATELY SOLD TO THE PUBLIC WITHOUT REGISTRATION OR
RESTRICTION PURSUANT TO RULE 144(K) UNDER THE SECURITIES ACT OR ANY SUCCESSOR
PROVISION (THE “REGISTRATION PERIOD”), WHICH REGISTRATION STATEMENT (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO AND PROSPECTUSES CONTAINED THEREIN AND ALL
DOCUMENTS INCORPORATED BY REFERENCE THEREIN) SHALL NOT CONTAIN ANY 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 NOT MISLEADING, AND
(III) SHALL COMPLY IN ALL MATERIAL RESPECTS WITH THE REQUIREMENTS OF THE
SECURITIES ACT AND THE RULES AND REGULATIONS OF THE SEC PROMULGATED THEREUNDER. 
THE FINANCIAL STATEMENTS OF THE COMPANY INCLUDED IN THE REGISTRATION STATEMENT
OR INCORPORATED BY REFERENCE THEREIN WILL COMPLY AS TO FORM IN ALL MATERIAL
RESPECTS WITH THE APPLICABLE ACCOUNTING REQUIREMENTS AND THE PUBLISHED RULES AND
REGULATIONS OF THE SEC APPLICABLE WITH RESPECT THERETO.  SUCH FINANCIAL
STATEMENTS WILL BE PREPARED IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, CONSISTENTLY APPLIED, DURING THE PERIODS INVOLVED (EXCEPT
(I) AS MAY BE OTHERWISE INDICATED IN SUCH FINANCIAL STATEMENTS OR THE NOTES
THERETO, OR (II) IN THE CASE OF UNAUDITED INTERIM STATEMENTS, TO THE EXTENT THEY
MAY NOT INCLUDE FOOTNOTES OR MAY BE CONDENSED ON SUMMARY STATEMENTS AND FAIRLY
PRESENT IN ALL MATERIAL RESPECTS THE CONSOLIDATED FINANCIAL POSITION OF THE
COMPANY AND ITS CONSOLIDATED SUBSIDIARIES AS OF THE DATES THEREOF AND THE
CONSOLIDATED RESULTS OF THEIR OPERATIONS AND CASH FLOWS FOR THE PERIODS THEN
ENDED (SUBJECT, IN THE CASE OF UNAUDITED STATEMENTS, TO IMMATERIAL YEAR-END
ADJUSTMENTS).

 

(B)           THE COMPANY SHALL PREPARE AND FILE WITH THE SEC SUCH AMENDMENTS
(INCLUDING POST-EFFECTIVE AMENDMENTS) AND SUPPLEMENTS TO THE REGISTRATION
STATEMENT AND THE PROSPECTUS USED IN CONNECTION WITH THE REGISTRATION STATEMENT
AS MAY BE NECESSARY TO KEEP THE REGISTRATION STATEMENT EFFECTIVE AT ALL TIMES
DURING THE REGISTRATION PERIOD, AND, DURING SUCH PERIOD, COMPLY WITH THE
PROVISIONS OF THE SECURITIES ACT WITH RESPECT TO THE DISPOSITION OF ALL
REGISTRABLE SECURITIES OF THE COMPANY COVERED BY THE REGISTRATION STATEMENT
UNTIL THE EARLIER OF (I) SUCH TIME AS ALL OF SUCH REGISTRABLE SECURITIES HAVE
BEEN DISPOSED OF IN ACCORDANCE WITH THE INTENDED METHODS OF DISPOSITION BY THE
SELLER OR SELLERS THEREOF AS SET FORTH IN THE REGISTRATION STATEMENT OR (II) THE
EXPIRATION OF THE REGISTRATION PERIOD.

 

(C)           THE COMPANY SHALL FURNISH TO EACH INVESTOR WHOSE REGISTRABLE
SECURITIES ARE INCLUDED IN THE REGISTRATION STATEMENT AND ITS LEGAL COUNSEL (I)
PROMPTLY AFTER THE SAME IS PREPARED AND PUBLICLY DISTRIBUTED, FILED WITH THE
SEC, OR RECEIVED BY THE COMPANY, ONE COPY OF THE REGISTRATION STATEMENT AND ANY
AMENDMENT THERETO, EACH PRELIMINARY PROSPECTUS AND PROSPECTUS AND EACH AMENDMENT
OR SUPPLEMENT THERETO, AND, IN THE CASE OF THE REGISTRATION

 

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STATEMENT REFERRED TO IN SECTION 2(A), EACH LETTER WRITTEN BY OR ON BEHALF OF
THE COMPANY TO THE SEC OR THE STAFF OF THE SEC (INCLUDING, WITHOUT LIMITATION,
ANY REQUEST TO ACCELERATE THE EFFECTIVENESS OF THE REGISTRATION STATEMENT OR
AMENDMENT THERETO), AND EACH ITEM OF CORRESPONDENCE FROM THE SEC OR THE STAFF OF
THE SEC, IN EACH CASE RELATING TO THE REGISTRATION STATEMENT (OTHER THAN ANY
PORTION, IF ANY, THEREOF WHICH CONTAINS INFORMATION FOR WHICH THE COMPANY HAS
SOUGHT CONFIDENTIAL TREATMENT), (II) ON THE DATE OF EFFECTIVENESS OF THE
REGISTRATION STATEMENT OR ANY AMENDMENT THERETO, A NOTICE STATING THAT THE
REGISTRATION STATEMENT OR AMENDMENT HAS BEEN DECLARED EFFECTIVE, AND (III) SUCH
NUMBER OF COPIES OF A PROSPECTUS, INCLUDING A PRELIMINARY PROSPECTUS, AND ALL
AMENDMENTS AND SUPPLEMENTS THERETO AND SUCH OTHER DOCUMENTS AS SUCH INVESTOR MAY
REASONABLY REQUEST IN ORDER TO FACILITATE THE DISPOSITION OF THE REGISTRABLE
SECURITIES OWNED BY SUCH INVESTOR.

 

(D)           THE COMPANY SHALL USE BEST EFFORTS TO (I) REGISTER AND QUALIFY THE
REGISTRABLE SECURITIES COVERED BY THE REGISTRATION STATEMENT UNDER SUCH OTHER
SECURITIES OR “BLUE SKY” LAWS OF SUCH JURISDICTIONS IN THE UNITED STATES AS EACH
INVESTOR WHO HOLDS REGISTRABLE SECURITIES BEING OFFERED REASONABLY REQUESTS,
(II) PREPARE AND FILE IN THOSE JURISDICTIONS SUCH AMENDMENTS (INCLUDING
POST-EFFECTIVE AMENDMENTS) AND SUPPLEMENTS TO SUCH REGISTRATIONS AND
QUALIFICATIONS AS MAY BE NECESSARY TO MAINTAIN THE EFFECTIVENESS THEREOF DURING
THE REGISTRATION PERIOD, (III) TAKE SUCH OTHER ACTIONS AS MAY BE NECESSARY TO
MAINTAIN SUCH REGISTRATIONS AND QUALIFICATIONS IN EFFECT AT ALL TIMES DURING THE
REGISTRATION PERIOD, AND (IV) TAKE ALL OTHER ACTIONS REASONABLY NECESSARY OR
ADVISABLE TO QUALIFY THE REGISTRABLE SECURITIES FOR SALE IN SUCH JURISDICTIONS;
PROVIDED, HOWEVER, THAT THE COMPANY SHALL NOT BE REQUIRED IN CONNECTION
THEREWITH OR AS A CONDITION THERETO TO (A) QUALIFY TO DO BUSINESS IN ANY
JURISDICTION WHERE IT WOULD NOT OTHERWISE BE REQUIRED TO QUALIFY BUT FOR THIS
SECTION 3(D), (B) SUBJECT ITSELF TO GENERAL TAXATION IN ANY SUCH JURISDICTION,
(C) FILE A GENERAL CONSENT TO SERVICE OF PROCESS IN ANY SUCH JURISDICTION, (D)
PROVIDE ANY UNDERTAKINGS THAT CAUSE THE COMPANY UNDUE EXPENSE OR BURDEN, OR (E)
MAKE ANY CHANGE IN ITS CHARTER OR BYLAWS, WHICH IN EACH CASE THE BOARD OF
DIRECTORS OF THE COMPANY DETERMINES TO BE CONTRARY TO THE BEST INTERESTS OF THE
COMPANY AND ITS STOCKHOLDERS.

 

(E)           INTENTIONALLY OMITTED.

 

(F)            SUBJECT TO SECTION 4(F) HEREOF, AS PROMPTLY AS PRACTICABLE AFTER
BECOMING AWARE OF SUCH EVENT, THE COMPANY SHALL NOTIFY EACH INVESTOR BY
TELEPHONE AND FACSIMILE OF THE HAPPENING OF ANY EVENT, OF WHICH THE COMPANY HAS
KNOWLEDGE, AS A RESULT OF WHICH THE PROSPECTUS INCLUDED IN THE REGISTRATION
STATEMENT, AS THEN IN EFFECT, INCLUDES AN UNTRUE STATEMENT OF A MATERIAL FACT OR
OMISSION TO STATE A MATERIAL FACT REQUIRED TO BE STATED THEREIN OR NECESSARY TO
MAKE THE STATEMENTS THEREIN NOT MISLEADING, AND, USE BEST EFFORTS PROMPTLY TO
PREPARE A SUPPLEMENT OR AMENDMENT TO THE REGISTRATION STATEMENT TO CORRECT SUCH
UNTRUE STATEMENT OR OMISSION, AND DELIVER SUCH NUMBER OF COPIES OF SUCH
SUPPLEMENT OR AMENDMENT TO EACH INVESTOR AS SUCH INVESTOR MAY REASONABLY
REQUEST.

 

(G)           THE COMPANY SHALL USE BEST EFFORTS (I) TO PREVENT THE ISSUANCE OF
ANY STOP ORDER OR OTHER SUSPENSION OF EFFECTIVENESS OF A REGISTRATION STATEMENT,
AND, IF SUCH AN ORDER IS ISSUED, TO OBTAIN THE WITHDRAWAL OF SUCH ORDER AT THE
EARLIEST PRACTICABLE MOMENT (INCLUDING IN EACH CASE BY AMENDING OR SUPPLEMENTING
SUCH REGISTRATION STATEMENT) AND (II) TO NOTIFY EACH INVESTOR WHO HOLDS
REGISTRABLE SECURITIES BEING SOLD (OR, IN THE EVENT OF AN UNDERWRITTEN OFFERING,
THE MANAGING UNDERWRITERS) OF THE ISSUANCE OF SUCH ORDER AND THE RESOLUTION
THEREOF (AND IF SUCH

 

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REGISTRATION STATEMENT IS SUPPLEMENTED OR AMENDED, DELIVER SUCH NUMBER OF COPIES
OF SUCH SUPPLEMENT OR AMENDMENT TO EACH INVESTOR AS SUCH INVESTOR MAY REASONABLY
REQUEST).

 

(H)           THE COMPANY SHALL PERMIT A SINGLE FIRM OF COUNSEL DESIGNATED BY
MEDTRONIC, INC. AND A SINGLE FIRM OF COUNSEL DESIGNATED BY THE REST OF THE
INITIAL INVESTORS TO REVIEW THE REGISTRATION STATEMENT AND ALL AMENDMENTS AND
SUPPLEMENTS THERETO A REASONABLE PERIOD OF TIME PRIOR TO ITS FILING WITH THE
SEC, AND NOT FILE ANY DOCUMENT IN A FORM TO WHICH SUCH COUNSEL REASONABLY
OBJECTS.

 

(I)            THE COMPANY SHALL MAKE GENERALLY AVAILABLE TO ITS SECURITY
HOLDERS AS SOON AS PRACTICAL, BUT NOT LATER THAN NINETY (90) DAYS AFTER THE
CLOSE OF THE PERIOD COVERED THEREBY, AN EARNINGS STATEMENT (IN FORM COMPLYING
WITH THE PROVISIONS OF RULE 158 UNDER THE SECURITIES ACT) COVERING A
TWELVE-MONTH PERIOD BEGINNING NOT LATER THAN THE FIRST DAY OF THE COMPANY’S
FISCAL QUARTER NEXT FOLLOWING THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.

 

(J)            AT THE REQUEST OF ANY INVESTOR IN THE CASE OF AN UNDERWRITTEN
PUBLIC OFFERING, THE COMPANY SHALL FURNISH, ON THE DATE OF EFFECTIVENESS OF THE
REGISTRATION STATEMENT (I) AN OPINION, DATED AS OF SUCH DATE, FROM COUNSEL
REPRESENTING THE COMPANY ADDRESSED TO THE INVESTORS AND IN FORM, SCOPE AND
SUBSTANCE AS IS CUSTOMARILY GIVEN IN AN UNDERWRITTEN PUBLIC OFFERING AND (II) 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 UNDERWRITERS, IF ANY, AND THE INVESTORS.

 

(K)           INTENTIONALLY OMITTED.

 

(L)            THE COMPANY SHALL HOLD IN CONFIDENCE AND NOT MAKE ANY DISCLOSURE
OF INFORMATION CONCERNING AN INVESTOR PROVIDED TO THE COMPANY UNLESS (I)
DISCLOSURE OF SUCH INFORMATION IS NECESSARY TO COMPLY WITH FEDERAL OR STATE
SECURITIES LAWS, (II) THE DISCLOSURE OF SUCH INFORMATION IS NECESSARY TO AVOID
OR CORRECT A MISSTATEMENT OR OMISSION IN ANY REGISTRATION STATEMENT, (III) THE
RELEASE OF SUCH INFORMATION IS ORDERED PURSUANT TO A SUBPOENA OR OTHER ORDER
FROM A COURT OR GOVERNMENTAL BODY OF COMPETENT JURISDICTION, (IV) SUCH
INFORMATION HAS BEEN MADE GENERALLY AVAILABLE TO THE PUBLIC OTHER THAN BY
DISCLOSURE IN VIOLATION OF THIS OR ANY OTHER AGREEMENT, OR (V) SUCH INVESTOR
CONSENTS TO THE FORM AND CONTENT OF ANY SUCH DISCLOSURE.  THE COMPANY AGREES
THAT IT SHALL, UPON LEARNING THAT DISCLOSURE OF SUCH INFORMATION CONCERNING AN
INVESTOR IS SOUGHT IN OR BY A COURT OR GOVERNMENTAL BODY OF COMPETENT
JURISDICTION OR THROUGH OTHER MEANS, GIVE PROMPT NOTICE TO SUCH INVESTOR PRIOR
TO MAKING SUCH DISCLOSURE, AND ALLOW THE INVESTOR, AT ITS EXPENSE, TO UNDERTAKE
APPROPRIATE ACTION TO PREVENT DISCLOSURE OF, OR TO OBTAIN A PROTECTIVE ORDER
FOR, SUCH INFORMATION.

 

(M)          THE COMPANY SHALL USE BEST EFFORTS TO PROMPTLY CAUSE ALL OF THE
REGISTRABLE SECURITIES COVERED BY THE REGISTRATION STATEMENT TO BE LISTED ON THE
NNM, THE SMALLCAP, THE OTCBB, THE NYSE OR THE AMEX OR ANOTHER NATIONAL
SECURITIES EXCHANGE AND ON EACH ADDITIONAL NATIONAL SECURITIES EXCHANGE ON WHICH
SECURITIES OF THE SAME CLASS OR SERIES ISSUED BY THE COMPANY ARE THEN LISTED, IF
ANY, IF THE LISTING OF SUCH REGISTRABLE SECURITIES IS THEN PERMITTED UNDER THE
RULES OF SUCH EXCHANGE, AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,

 

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TO ARRANGE FOR OR MAINTAIN AT LEAST TWO MARKET MAKERS TO REGISTER WITH THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. AS SUCH WITH RESPECT TO SUCH
REGISTRABLE SECURITIES.

 

(N)           THE COMPANY SHALL PROVIDE A TRANSFER AGENT AND REGISTRAR, WHICH
MAY BE A SINGLE ENTITY, FOR THE REGISTRABLE SECURITIES NOT LATER THAN THE
EFFECTIVE DATE OF THE REGISTRATION STATEMENT.

 

(O)           THE COMPANY SHALL COOPERATE WITH THE INVESTORS WHO HOLD
REGISTRABLE SECURITIES BEING OFFERED AND THE MANAGING UNDERWRITER OR
UNDERWRITERS, IF ANY, TO FACILITATE THE TIMELY PREPARATION AND DELIVERY OF
CERTIFICATES REPRESENTING REGISTRABLE SECURITIES TO BE OFFERED PURSUANT TO THE
REGISTRATION STATEMENT AND ENABLE SUCH CERTIFICATES TO BE IN SUCH DENOMINATIONS
OR AMOUNTS, AS THE CASE MAY BE, AS THE MANAGING UNDERWRITER OR UNDERWRITERS, IF
ANY, OR THE INVESTORS MAY REASONABLY REQUEST AND REGISTERED IN SUCH NAMES AS THE
MANAGING UNDERWRITER OR UNDERWRITERS, IF ANY, OR THE INVESTORS MAY REQUEST, AND,
WITHIN THREE (3) BUSINESS DAYS AFTER THE REGISTRATION STATEMENT WHICH INCLUDES
REGISTRABLE SECURITIES IS ORDERED EFFECTIVE BY THE SEC, THE COMPANY SHALL
DELIVER, AND SHALL CAUSE LEGAL COUNSEL SELECTED BY THE COMPANY TO DELIVER, TO
THE TRANSFER AGENT FOR THE REGISTRABLE SECURITIES (WITH COPIES TO THE INVESTORS
WHOSE REGISTRABLE SECURITIES ARE INCLUDED IN SUCH REGISTRATION STATEMENT), AN
OPINION OF SUCH COUNSEL IN THE FORM ATTACHED HERETO AS EXHIBIT 1.

 

(P)           AT THE REQUEST OF ANY INVESTOR, THE COMPANY SHALL PREPARE AND FILE
WITH THE SEC SUCH AMENDMENTS (INCLUDING POST-EFFECTIVE AMENDMENTS) AND
SUPPLEMENTS TO A REGISTRATION STATEMENT AND THE PROSPECTUS USED IN CONNECTION
WITH SUCH REGISTRATION STATEMENT AS MAY BE NECESSARY IN ORDER TO CHANGE THE PLAN
OF DISTRIBUTION SET FORTH IN SUCH REGISTRATION STATEMENT.

 

(Q)           THE COMPANY SHALL COMPLY WITH ALL APPLICABLE LAWS RELATED TO A
REGISTRATION STATEMENT AND OFFERING AND SALE OF SECURITIES AND ALL APPLICABLE
RULES AND REGULATIONS OF GOVERNMENTAL AUTHORITIES IN CONNECTION THEREWITH
(INCLUDING, WITHOUT LIMITATION, THE SECURITIES ACT AND THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED (THE “EXCHANGE ACT”), AND THE RULES AND REGULATIONS
PROMULGATED BY THE SEC.)

 

(R)            FROM AND AFTER THE DATE OF THIS AGREEMENT, THE COMPANY SHALL NOT,
AND SHALL NOT AGREE TO, ALLOW THE HOLDERS OF ANY SECURITIES OF THE COMPANY TO
INCLUDE ANY OF THEIR SECURITIES WHICH ARE NOT REGISTRABLE SECURITIES IN THE
REGISTRATION STATEMENT UNDER SECTION 2(A) HEREOF OR ANY AMENDMENT OR SUPPLEMENT
THERETO UNDER SECTION 3(B) HEREOF WITHOUT THE CONSENT OF THE HOLDERS OF A
MAJORITY IN INTEREST OF THE REGISTRABLE SECURITIES OTHER THAN AS IDENTIFIED ON
SCHEDULE 3(R) HERETO.

 

4.             OBLIGATIONS OF THE INVESTORS.

 

In connection with the registration of the Registrable Securities, the Investors
shall have the following obligations:

 

(A)           IT SHALL BE A CONDITION PRECEDENT TO THE OBLIGATIONS OF THE
COMPANY TO COMPLETE THE REGISTRATION PURSUANT TO THIS AGREEMENT WITH RESPECT TO
THE REGISTRABLE SECURITIES OF A PARTICULAR INVESTOR THAT SUCH INVESTOR SHALL
FURNISH TO THE COMPANY SUCH INFORMATION REGARDING ITSELF, THE REGISTRABLE
SECURITIES HELD BY IT AND THE INTENDED METHOD OF DISPOSITION OF THE REGISTRABLE
SECURITIES HELD BY IT AS SHALL BE REASONABLY REQUIRED TO EFFECT THE REGISTRATION
OF SUCH

 

7

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REGISTRABLE SECURITIES AND SHALL EXECUTE SUCH DOCUMENTS IN CONNECTION WITH SUCH
REGISTRATION AS THE COMPANY MAY REASONABLY REQUEST.  AT LEAST FIVE (5) TRADING
DAYS PRIOR TO THE FIRST ANTICIPATED FILING DATE OF THE REGISTRATION STATEMENT,
THE COMPANY SHALL NOTIFY EACH INVESTOR OF THE INFORMATION THE COMPANY REASONABLY
REQUIRES FROM EACH SUCH INVESTOR.

 

(B)           EACH INVESTOR, BY SUCH INVESTOR’S ACCEPTANCE OF THE REGISTRABLE
SECURITIES, AGREES TO COOPERATE WITH THE COMPANY AS REASONABLY REQUESTED BY THE
COMPANY IN CONNECTION WITH THE PREPARATION AND FILING OF THE REGISTRATION
STATEMENT HEREUNDER, UNLESS SUCH INVESTOR HAS NOTIFIED THE COMPANY IN WRITING OF
SUCH INVESTOR’S ELECTION TO EXCLUDE ALL OF SUCH INVESTOR’S REGISTRABLE
SECURITIES FROM SUCH REGISTRATION STATEMENT.  THE COMPANY SHALL NOT BE REQUIRED
TO INCLUDE IN ANY REGISTRATION STATEMENT THE REGISTRABLE SECURITIES OF ANY
INVESTOR WHO FAILS TO COOPERATE WITH THE COMPANY AS REASONABLY REQUESTED IN
CONNECTION WITH THE PREPARATION AND FILING OF THE REGISTRATION STATEMENT.

 

(C)           INTENTIONALLY OMITTED.

 

(D)           EACH INVESTOR AGREES THAT, UPON RECEIPT OF ANY NOTICE FROM THE
COMPANY OF THE HAPPENING OF ANY EVENT OF THE KIND DESCRIBED IN SECTIONS 3(F) OR
3(G), SUCH INVESTOR WILL IMMEDIATELY DISCONTINUE DISPOSITION OF REGISTRABLE
SECURITIES PURSUANT TO THE REGISTRATION STATEMENT COVERING SUCH REGISTRABLE
SECURITIES UNTIL SUCH INVESTOR’S RECEIPT OF THE COPIES OF THE SUPPLEMENTED OR
AMENDED PROSPECTUS CONTEMPLATED BY SECTIONS 3(F) OR 3(G) AND, IF SO DIRECTED BY
THE COMPANY, SUCH INVESTOR SHALL DELIVER TO THE COMPANY (AT THE EXPENSE OF THE
COMPANY) OR DESTROY (AND DELIVER TO THE COMPANY A CERTIFICATE OF DESTRUCTION)
ALL COPIES IN SUCH INVESTOR’S POSSESSION, OF THE PROSPECTUS COVERING SUCH
REGISTRABLE SECURITIES CURRENT AT THE TIME OF RECEIPT OF SUCH NOTICE.

 

(E)           NO INVESTOR MAY PARTICIPATE IN ANY UNDERWRITTEN DISTRIBUTION
HEREUNDER UNLESS SUCH INVESTOR (I) AGREES TO SELL SUCH INVESTOR’S REGISTRABLE
SECURITIES ON THE BASIS PROVIDED IN ANY UNDERWRITING ARRANGEMENTS IN USUAL AND
CUSTOMARY FORM ENTERED INTO BY THE COMPANY, (II) COMPLETES AND EXECUTES ALL
QUESTIONNAIRES, POWERS OF ATTORNEY, INDEMNITIES, UNDERWRITING AGREEMENTS AND
OTHER DOCUMENTS REASONABLY REQUIRED UNDER THE TERMS OF SUCH UNDERWRITING
ARRANGEMENTS, (III) AGREES TO PAY ITS PRO RATA SHARE OF ALL UNDERWRITING
DISCOUNTS AND COMMISSIONS AND ANY EXPENSES IN EXCESS OF THOSE PAYABLE BY THE
COMPANY PURSUANT TO SECTION 5 BELOW, AND (IV) COMPLIES WITH ALL APPLICABLE LAWS
IN CONNECTION THEREWITH.  NOTWITHSTANDING ANYTHING IN THIS SECTION 4(E) TO THE
CONTRARY, THIS SECTION 4(E) IS NOT INTENDED TO LIMIT AN INVESTOR’S RIGHTS UNDER
SECTIONS 2(A) OR 3(B) HEREOF.

 

(F)            IN THE EVENT THAT IN THE REASONABLE JUDGMENT OF THE COMPANY, IT
IS ADVISABLE TO SUSPEND THE USE OF A PROSPECTUS INCLUDED IN THE REGISTRATION
STATEMENT DUE TO PENDING MATERIAL DEVELOPMENTS OR OTHER EVENTS WHICH HAVE NOT
YET BEEN PUBLICLY DISCLOSED AND AS TO WHICH THE COMPANY REASONABLY BELIEVES
PUBLIC DISCLOSURE WOULD BE DETRIMENTAL TO THE COMPANY, THE COMPANY SHALL NOTIFY
EACH INVESTOR TO SUCH EFFECT, AND, UPON RECEIPT OF SUCH NOTICE, EACH INVESTOR
SHALL IMMEDIATELY DISCONTINUE ANY SALES OF REGISTERABLE SECURITIES PURSUANT TO
THE REGISTRATION STATEMENT UNTIL THE INVESTORS RECEIVE COPIES OF A SUPPLEMENTAL
OR AMENDED PROSPECTUS OR UNTIL SUCH INVESTORS ARE ADVISED IN WRITING BY THE
COMPANY THAT THE THEN CURRENT PROSPECTUS MAY BE USED AND HAVE RECEIVED COPIES OF
ANY ADDITIONAL OR SUPPLEMENTAL FILINGS THAT ARE INCORPORATED OR DEEMED
INCORPORATED BY REFERENCE IN SUCH PROSPECTUS.  IN THE EVENT THAT ANY

 

8

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SUCH BLACK-OUT OCCURS DURING THE PERIOD WHICH THE COMPANY IS REQUIRED TO CAUSE A
REGISTRATION STATEMENT TO REMAIN EFFECTIVE UNDER SECTION 3 ABOVE, SUCH A PERIOD
SHALL BE EXTENDED FOR THE NUMBER OF DAYS EQUAL TO THE DURATION OF SUCH
BLACK-OUT.  NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THE COMPANY SHALL
NOT EXERCISE ITS RIGHTS UNDER THIS SECTION 4(F) TO SUSPEND SALES OF REGISTERABLE
SECURITIES FOR MORE THAN A TOTAL OF 60 DAYS IN ANY 365-DAY PERIOD OR FOR MORE
THAN 15 CONSECUTIVE DAYS.

 

5.             EXPENSES OF REGISTRATION.  ALL REASONABLE EXPENSES INCURRED BY
THE COMPANY OR THE INVESTORS IN CONNECTION WITH REGISTRATIONS, FILINGS OR
QUALIFICATIONS PURSUANT TO SECTIONS 2 AND 3 ABOVE, INCLUDING, WITHOUT
LIMITATION, ALL REGISTRATION, LISTING AND QUALIFICATIONS FEES, PRINTERS AND
ACCOUNTING FEES, THE FEES AND DISBURSEMENTS OF COUNSEL FOR THE COMPANY AND THE
REASONABLY INCURRED FEES AND DISBURSEMENTS OF ONE COUNSEL SELECTED BY THE
INVESTORS (NOT TO EXCEED $5,000) BUT EXCLUDING ANY UNDERWRITING DISCOUNTS AND
SELLING COMMISSIONS, SHALL BE BORNE BY THE COMPANY.  THE COMPANY’S OBLIGATIONS
PURSUANT TO THIS SECTION 5 SHALL BE IN ADDITION TO THE COMPANY’S OBLIGATIONS
PURSUANT TO SECTION 4(F) OF THE SECURITIES PURCHASE AGREEMENT.  IN ADDITION, THE
COMPANY SHALL PAY THE REASONABLE COSTS AND EXPENSES (INCLUDING LEGAL FEES) OF
THE INVESTORS INCURRED IN CONNECTION WITH THE ENFORCEMENT OF THE INVESTORS’
RIGHTS UNDER SECTION 2 AND SECTION 3 OF THIS AGREEMENT.

 

6.             INDEMNIFICATION.  IN THE EVENT ANY REGISTRABLE SECURITIES ARE
INCLUDED IN A REGISTRATION STATEMENT UNDER THIS AGREEMENT:

 

(A)           TO THE EXTENT PERMITTED BY LAW, THE COMPANY WILL INDEMNIFY, HOLD
HARMLESS AND DEFEND (I) EACH INVESTOR WHO HOLDS SUCH REGISTRABLE SECURITIES, AND
(II) THE DIRECTORS, OFFICERS, PARTNERS, MEMBERS, EMPLOYEES AND AGENTS OF SUCH
INVESTOR AND EACH PERSON WHO CONTROLS ANY INVESTOR WITHIN THE MEANING OF SECTION
15 OF THE SECURITIES ACT OR SECTION 20 OF THE EXCHANGE ACT, IF ANY, (EACH, AN
“INDEMNIFIED PERSON”), AGAINST ANY JOINT OR SEVERAL LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES  (COLLECTIVELY, TOGETHER WITH ACTIONS, PROCEEDINGS OR
INQUIRIES BY ANY REGULATORY OR SELF-REGULATORY ORGANIZATION, WHETHER COMMENCED
OR THREATENED, IN RESPECT THEREOF, “CLAIMS”) TO WHICH ANY OF THEM MAY BECOME
SUBJECT INSOFAR AS SUCH CLAIMS ARISE OUT OF OR ARE BASED UPON: (I) ANY UNTRUE
STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL FACT IN A REGISTRATION
STATEMENT UNDER WHICH REGISTRABLE SECURITIES WERE REGISTERED UNDER THE
SECURITIES ACT OR THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN A MATERIAL
FACT REQUIRED TO BE STATED OR NECESSARY TO MAKE THE STATEMENTS THEREIN NOT
MISLEADING, (II) ANY UNTRUE STATEMENT OR ALLEGED UNTRUE STATEMENT OF A MATERIAL
FACT CONTAINED IN ANY PRELIMINARY PROSPECTUS IF USED PRIOR TO THE EFFECTIVE DATE
OF SUCH REGISTRATION STATEMENT, OR CONTAINED IN THE FINAL PROSPECTUS (AS AMENDED
OR SUPPLEMENTED, IF THE COMPANY FILES ANY AMENDMENT THEREOF OR SUPPLEMENT
THERETO WITH THE SEC) OR THE OMISSION OR ALLEGED OMISSION TO STATE THEREIN ANY
MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE THEREIN, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THE STATEMENTS THEREIN WERE MADE, NOT MISLEADING, OR
(III) ANY VIOLATION OR ALLEGED VIOLATION BY THE COMPANY OF THE SECURITIES ACT,
THE EXCHANGE ACT, ANY STATE SECURITIES LAW, OR ANY RULE OR REGULATION THEREUNDER
RELATING TO THE OFFER OR SALE OF THE REGISTRABLE SECURITIES (THE MATTERS IN THE
FOREGOING CLAUSES (I) THROUGH (III) BEING, COLLECTIVELY, “VIOLATIONS”).  THE
COMPANY SHALL REIMBURSE THE INVESTORS AND EACH OTHER INDEMNIFIED PERSON,
PROMPTLY AS SUCH EXPENSES ARE INCURRED AND ARE DUE AND PAYABLE, FOR ANY
REASONABLE LEGAL FEES OR OTHER REASONABLE EXPENSES INCURRED BY THEM IN
CONNECTION WITH INVESTIGATING OR DEFENDING ANY SUCH CLAIM.  NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE INDEMNIFICATION AGREEMENT
CONTAINED IN THIS SECTION 6(A) SHALL NOT

 

9

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APPLY TO A CLAIM ARISING OUT OF OR BASED UPON A VIOLATION WHICH OCCURS IN
RELIANCE UPON AND IN CONFORMITY WITH INFORMATION FURNISHED IN WRITING TO THE
COMPANY BY SUCH INDEMNIFIED PERSON EXPRESSLY FOR USE IN THE REGISTRATION
STATEMENT OR ANY SUCH AMENDMENT THEREOF OR SUPPLEMENT THERETO.  SUCH INDEMNITY
SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF ANY INVESTIGATION MADE BY OR
ON BEHALF OF THE INDEMNIFIED PERSON AND SHALL SURVIVE THE TRANSFER OF THE
REGISTRABLE SECURITIES BY THE INVESTORS PURSUANT TO SECTION 9 HEREOF.

 

(B)           IN CONNECTION WITH ANY REGISTRATION STATEMENT IN WHICH AN INVESTOR
IS PARTICIPATING, EACH SUCH INVESTOR AGREES SEVERALLY AND NOT JOINTLY TO
INDEMNIFY, HOLD HARMLESS AND DEFEND, TO THE SAME EXTENT AND IN THE SAME MANNER
SET FORTH IN SECTION 6(A), THE COMPANY, EACH OF ITS DIRECTORS, EACH OF ITS
OFFICERS WHO SIGNS THE REGISTRATION STATEMENT, ITS EMPLOYEES, AGENTS AND EACH
PERSON, IF ANY, WHO CONTROLS THE COMPANY WITHIN THE MEANING OF SECTION 15 OF THE
SECURITIES ACT OR SECTION 20 OF THE EXCHANGE ACT, EACH UNDERWRITER (IF ANY) AND
ANY OTHER STOCKHOLDER SELLING SECURITIES PURSUANT TO THE REGISTRATION STATEMENT
OR ANY OF ITS DIRECTORS OR OFFICERS OR ANY PERSON WHO CONTROLS SUCH STOCKHOLDER
WITHIN THE MEANING OF THE SECURITIES ACT OR THE EXCHANGE ACT (COLLECTIVELY AND
TOGETHER WITH AN INDEMNIFIED PERSON, AN “INDEMNIFIED PARTY”), AGAINST ANY CLAIM
TO WHICH ANY OF THEM MAY BECOME SUBJECT, UNDER THE SECURITIES ACT, THE EXCHANGE
ACT OR OTHERWISE, INSOFAR AS SUCH CLAIM ARISES OUT OF OR IS BASED UPON ANY
VIOLATION, IN EACH CASE TO THE EXTENT (AND ONLY TO THE EXTENT) THAT SUCH
VIOLATION OCCURS SOLELY IN RELIANCE UPON AND IN CONFORMITY WITH WRITTEN
INFORMATION FURNISHED TO THE COMPANY BY SUCH INVESTOR EXPRESSLY FOR USE IN
CONNECTION WITH SUCH REGISTRATION STATEMENT; AND SUBJECT TO SECTION 6(C) SUCH
INVESTOR WILL REIMBURSE ANY LEGAL OR OTHER EXPENSES (PROMPTLY AS SUCH EXPENSES
ARE INCURRED AND ARE DUE AND PAYABLE) REASONABLY INCURRED BY THEM IN CONNECTION
WITH INVESTIGATING OR DEFENDING ANY SUCH CLAIM; PROVIDED, HOWEVER, THAT THE
INDEMNITY AGREEMENT CONTAINED IN THIS SECTION 6(B) SHALL NOT APPLY TO AMOUNTS
PAID IN SETTLEMENT OF ANY CLAIM IF SUCH SETTLEMENT IS EFFECTED WITHOUT THE PRIOR
WRITTEN CONSENT OF SUCH INVESTOR, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD; PROVIDED, FURTHER, HOWEVER, THAT THE INVESTOR SHALL BE LIABLE UNDER
THIS AGREEMENT (INCLUDING THIS SECTION 6(B) AND SECTION 7) FOR ONLY THAT AMOUNT
AS DOES NOT EXCEED THE NET PROCEEDS ACTUALLY RECEIVED BY SUCH INVESTOR AS A
RESULT OF THE SALE OF REGISTRABLE SECURITIES PURSUANT TO SUCH REGISTRATION
STATEMENT.  SUCH INDEMNITY SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF
ANY INVESTIGATION MADE BY OR ON BEHALF OF SUCH INDEMNIFIED PARTY AND SHALL
SURVIVE THE TRANSFER OF THE REGISTRABLE SECURITIES BY THE INVESTORS PURSUANT TO
SECTION 9 HEREOF.  NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN,
THE INDEMNIFICATION AGREEMENT CONTAINED IN THIS SECTION 6(B) WITH RESPECT TO ANY
PRELIMINARY PROSPECTUS SHALL NOT INURE TO THE BENEFIT OF ANY INDEMNIFIED PARTY
IF SUCH INVESTOR TIMELY NOTIFIES THE COMPANY OF THE UNTRUE STATEMENT OR OMISSION
OF MATERIAL FACT CONTAINED IN THE PRELIMINARY PROSPECTUS.

 

(C)           PROMPTLY AFTER RECEIPT BY AN INDEMNIFIED PERSON OR INDEMNIFIED
PARTY UNDER THIS SECTION 6 OF NOTICE OF THE COMMENCEMENT OF ANY ACTION
(INCLUDING ANY GOVERNMENTAL ACTION), SUCH INDEMNIFIED PERSON OR INDEMNIFIED
PARTY SHALL, IF A CLAIM IN RESPECT THEREOF IS TO MADE AGAINST ANY INDEMNIFYING
PARTY UNDER THIS SECTION 6, DELIVER TO THE INDEMNIFYING PARTY A WRITTEN NOTICE
OF THE COMMENCEMENT THEREOF, AND THE INDEMNIFYING PARTY SHALL HAVE THE RIGHT TO
PARTICIPATE IN, AND, TO THE EXTENT THE INDEMNIFYING PARTY SO DESIRES, JOINTLY
WITH ANY OTHER INDEMNIFYING PARTY SIMILARLY NOTICED, TO ASSUME CONTROL OF THE
DEFENSE THEREOF WITH COUNSEL MUTUALLY SATISFACTORY TO THE INDEMNIFYING PARTY AND
THE INDEMNIFIED PERSON OR THE INDEMNIFIED PARTY, AS THE CASE MAY BE; PROVIDED,
HOWEVER, THAT SUCH INDEMNIFYING PARTY SHALL NOT BE ENTITLED TO ASSUME SUCH
DEFENSE AND AN INDEMNIFIED PERSON OR INDEMNIFIED PARTY SHALL HAVE THE RIGHT TO

 

10

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RETAIN ITS OWN COUNSEL WITH THE FEES AND EXPENSES TO BE PAID BY THE INDEMNIFYING
PARTY, IF, IN THE REASONABLE OPINION OF COUNSEL RETAINED BY THE INDEMNIFYING
PARTY, THE REPRESENTATION BY SUCH COUNSEL OF THE INDEMNIFIED PERSON OR
INDEMNIFIED PARTY AND THE INDEMNIFYING PARTY WOULD BE INAPPROPRIATE DUE TO
ACTUAL OR POTENTIAL CONFLICTS OF INTEREST BETWEEN SUCH INDEMNIFIED PERSON OR
INDEMNIFIED PARTY AND ANY OTHER PARTY REPRESENTED BY SUCH COUNSEL IN SUCH
PROCEEDING OR THE ACTUAL OR POTENTIAL DEFENDANTS IN, OR TARGETS OF, ANY SUCH
ACTION INCLUDE BOTH THE INDEMNIFIED PERSON OR THE INDEMNIFIED PARTY AND THE
INDEMNIFYING PARTY AND ANY SUCH INDEMNIFIED PERSON OR INDEMNIFIED PARTY
REASONABLY DETERMINES THAT THERE MAY BE LEGAL DEFENSES AVAILABLE TO SUCH
INDEMNIFIED PERSON OR INDEMNIFIED PARTY WHICH ARE IN CONFLICT WITH THOSE
AVAILABLE TO SUCH INDEMNIFYING PARTY.  THE INDEMNIFYING PARTY SHALL PAY FOR ONLY
ONE SEPARATE LEGAL COUNSEL FOR THE INDEMNIFIED PERSON OR THE INDEMNIFIED
PARTIES, AS APPLICABLE, AND SUCH LEGAL COUNSEL SHALL BE SELECTED BY INVESTORS
HOLDING A MAJORITY-IN-INTEREST OF THE  REGISTRABLE SECURITIES INCLUDED IN THE
REGISTRATION STATEMENT TO WHICH THE CLAIM RELATES (WITH THE APPROVAL OF THE
INITIAL INVESTOR IF IT HOLDS REGISTRABLE SECURITIES INCLUDED IN SUCH
REGISTRATION STATEMENT), IF THE INVESTORS ARE ENTITLED TO INDEMNIFICATION
HEREUNDER, OR BY THE COMPANY, IF THE COMPANY IS ENTITLED TO INDEMNIFICATION
HEREUNDER, AS APPLICABLE.  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 PERSON OR INDEMNIFIED PARTY UNDER THIS SECTION 6, EXCEPT TO THE
EXTENT THAT THE INDEMNIFYING PARTY IS ACTUALLY PREJUDICED IN ITS ABILITY TO
DEFEND SUCH ACTION.  THE INDEMNIFICATION REQUIRED BY THIS SECTION 6 SHALL BE
MADE BY PERIODIC PAYMENTS OF THE AMOUNT THEREOF DURING THE COURSE OF THE
INVESTIGATION OR DEFENSE, AS SUCH EXPENSE, LOSS, DAMAGE OR LIABILITY IS INCURRED
AND IS DUE AND PAYABLE.

 

7.                                       CONTRIBUTION.  TO THE EXTENT ANY
INDEMNIFICATION BY AN INDEMNIFYING PARTY IS PROHIBITED OR LIMITED BY LAW, THE
INDEMNIFYING PARTY AGREES TO MAKE THE MAXIMUM CONTRIBUTION WITH RESPECT TO ANY
AMOUNTS FOR WHICH IT WOULD OTHERWISE BE LIABLE UNDER SECTION 6 TO THE FULLEST
EXTENT PERMITTED BY LAW AS IS APPROPRIATE TO REFLECT THE RELATIVE FAULT OF THE
INDEMNIFYING PARTY, ON THE ONE HAND, AND THE INDEMNIFIED PERSON OR INDEMNIFIED
PARTY, AS THE CASE MAY BE, ON THE OTHER HAND, WITH RESPECT TO THE VIOLATION
GIVING RISE TO THE APPLICABLE CLAIM; PROVIDED, HOWEVER, THAT (I) NO CONTRIBUTION
SHALL BE MADE UNDER CIRCUMSTANCES WHERE THE PARTY WOULD NOT HAVE BEEN LIABLE FOR
INDEMNIFICATION UNDER THE FAULT STANDARDS SET FORTH IN SECTION 6, (II) NO PERSON
GUILTY OF FRAUDULENT MISREPRESENTATION (WITHIN THE MEANING OF SECTION 11(F) OF
THE SECURITIES ACT) SHALL BE ENTITLED TO CONTRIBUTION FROM ANY SELLER OF
REGISTRABLE SECURITIES WHO WAS NOT GUILTY OF SUCH FRAUDULENT MISREPRESENTATION,
AND (III) CONTRIBUTION (TOGETHER WITH ANY INDEMNIFICATION OR OTHER OBLIGATIONS
UNDER THIS AGREEMENT) BY ANY SELLER OF REGISTRABLE SECURITIES SHALL BE LIMITED
IN AMOUNT TO THE NET AMOUNT OF PROCEEDS RECEIVED BY SUCH SELLER FROM THE SALE OF
SUCH REGISTRABLE SECURITIES.

 

8.                                       REPORTS UNDER THE EXCHANGE ACT.  WITH A
VIEW TO MAKING AVAILABLE TO THE INVESTORS THE BENEFITS OF RULE 144 PROMULGATED
UNDER THE SECURITIES ACT OR ANY OTHER SIMILAR RULE OR REGULATION OF THE SEC THAT
MAY AT ANY TIME PERMIT THE INVESTORS TO SELL SECURITIES OF THE COMPANY TO THE
PUBLIC WITHOUT REGISTRATION (“RULE 144”), THE COMPANY AGREES TO:

 

(A)           FILE WITH THE SEC IN A TIMELY MANNER AND MAKE AND KEEP AVAILABLE
ALL REPORTS AND OTHER DOCUMENTS REQUIRED OF THE COMPANY UNDER THE SECURITIES ACT
AND THE EXCHANGE ACT SO LONG AS THE COMPANY REMAINS SUBJECT TO SUCH REQUIREMENTS
(IT BEING UNDERSTOOD THAT NOTHING HEREIN SHALL LIMIT THE COMPANY’S OBLIGATIONS
UNDER SECTION 4(C) OF THE SECURITIES

 

11

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PURCHASE AGREEMENT) AND THE FILING AND AVAILABILITY OF SUCH REPORTS AND OTHER
DOCUMENTS IS REQUIRED FOR THE APPLICABLE PROVISIONS OF RULE 144; AND

 

(B)           FURNISH TO EACH INVESTOR SO LONG AS SUCH INVESTOR OWNS REGISTRABLE
SECURITIES, PROMPTLY UPON REQUEST, (I) A WRITTEN STATEMENT BY THE COMPANY THAT
IT HAS COMPLIED WITH THE REPORTING REQUIREMENTS OF RULE 144, THE SECURITIES ACT
AND THE EXCHANGE ACT, (II) A COPY OF THE MOST RECENT ANNUAL OR QUARTERLY REPORT
OF THE COMPANY AND SUCH OTHER REPORTS AND DOCUMENTS SO FILED BY THE COMPANY, AND
(III) SUCH OTHER INFORMATION AS MAY BE REASONABLY REQUESTED TO PERMIT THE
INVESTORS TO SELL SUCH SECURITIES UNDER RULE 144 WITHOUT REGISTRATION.

 

9.                                       ASSIGNMENT OF REGISTRATION RIGHTS.  THE
RIGHTS OF THE INVESTORS HEREUNDER, INCLUDING THE RIGHT TO HAVE THE COMPANY
REGISTER REGISTRABLE SECURITIES PURSUANT TO THIS AGREEMENT, SHALL BE
AUTOMATICALLY ASSIGNABLE BY EACH INVESTOR TO ANY TRANSFEREE OF AT LEAST 10,000
SHARES OF REGISTRABLE SECURITIES OR ANY ASSIGNEE OF THE SECURITIES PURCHASE
AGREEMENT IF: (I) THE INVESTOR AGREES IN WRITING WITH THE TRANSFEREE OR ASSIGNEE
TO ASSIGN SUCH RIGHTS, AND A COPY OF SUCH AGREEMENT IS FURNISHED TO THE COMPANY
AFTER SUCH ASSIGNMENT, (II) THE COMPANY IS FURNISHED WITH WRITTEN NOTICE OF (A)
THE NAME AND ADDRESS OF SUCH TRANSFEREE OR ASSIGNEE, AND (B) THE SECURITIES WITH
RESPECT TO WHICH SUCH REGISTRATION RIGHTS ARE BEING TRANSFERRED OR ASSIGNED, AND
(III) THE TRANSFEREE OR ASSIGNEE AGREES IN WRITING FOR THE BENEFIT OF THE
COMPANY TO BE BOUND BY ALL OF THE PROVISIONS CONTAINED HEREIN.  IN ADDITION, AND
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, THE
REGISTRABLE SECURITIES MAY BE PLEDGED, AND ALL RIGHTS OF THE INVESTORS UNDER
THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT RELATED TO THE TRANSACTIONS
CONTEMPLATED HEREBY MAY BE ASSIGNED, WITHOUT FURTHER CONSENT OF THE COMPANY, TO
A BONA FIDE PLEDGEE IN CONNECTION WITH AN INVESTOR’S MARGIN OR BROKERAGE
ACCOUNT, SUBJECT TO COMPLIANCE WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS
INCLUDING ALL APPLICABLE SECURITIES LAWS.

 

10.                                 AMENDMENT OF REGISTRATION RIGHTS. 
PROVISIONS OF THIS AGREEMENT MAY BE AMENDED AND THE OBSERVANCE THEREOF MAY BE
WAIVED (EITHER GENERALLY OR IN A PARTICULAR INSTANCE AND EITHER RETROACTIVELY OR
PROSPECTIVELY), ONLY WITH WRITTEN CONSENT OF THE COMPANY AND INVESTORS WHO HOLD
A MAJORITY IN INTEREST OF THE REGISTRABLE SECURITIES OR, IN THE CASE OF A
WAIVER, WITH THE WRITTEN CONSENT OF THE PARTY CHARGED WITH THE ENFORCEMENT OF
ANY SUCH PROVISION; PROVIDED, HOWEVER, THAT NO CONSIDERATION SHALL BE PAID TO AN
INVESTOR BY THE COMPANY IN CONNECTION WITH AN AMENDMENT HERETO UNLESS EACH
INVESTOR SIMILARLY AFFECTED BY SUCH AMENDMENT RECEIVES A PRO-RATA AMOUNT OF
CONSIDERATION FROM THE COMPANY.  UNLESS AN INVESTOR OTHERWISE AGREES, EACH
AMENDMENT HERETO MUST SIMILARLY AFFECT EACH INVESTOR.  ANY AMENDMENT OR WAIVER
EFFECTED IN ACCORDANCE WITH THIS SECTION 10 SHALL BE BINDING UPON EACH INVESTOR
AND THE COMPANY.

 

11.                                 MISCELLANEOUS.

 

(A)           A PERSON OR ENTITY IS DEEMED TO BE A HOLDER OF REGISTRABLE
SECURITIES WHENEVER SUCH PERSON OR ENTITY OWNS OF RECORD SUCH REGISTRABLE
SECURITIES.  IF THE COMPANY RECEIVES CONFLICTING INSTRUCTIONS, NOTICES OR
ELECTIONS FROM TWO OR MORE PERSONS OR ENTITIES WITH RESPECT TO THE SAME
REGISTRABLE SECURITIES, THE COMPANY SHALL ACT UPON THE BASIS OF INSTRUCTIONS,
NOTICE OR ELECTION RECEIVED FROM THE REGISTERED OWNER OF SUCH REGISTRABLE
SECURITIES.

 

12

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(B)           ANY NOTICES REQUIRED OR PERMITTED TO BE GIVEN UNDER THE TERMS OF
THIS AGREEMENT SHALL BE SENT BY CERTIFIED OR REGISTERED MAIL (RETURN RECEIPT
REQUESTED) OR DELIVERED PERSONALLY OR BY COURIER OR BY CONFIRMED TELECOPY, AND
SHALL BE EFFECTIVE FIVE (5) DAYS AFTER BEING PLACED IN THE MAIL, IF MAILED, OR
UPON RECEIPT OR REFUSAL OF RECEIPT, IF DELIVERED PERSONALLY OR BY COURIER OR
CONFIRMED TELECOPY, IN EACH CASE ADDRESSED TO A PARTY.  THE ADDRESSES FOR SUCH
COMMUNICATIONS SHALL BE:

 

If to the Company:

 

Cambridge Heart, Inc.
1 Oak Park Drive
Bedford, Massachusetts  01730
Telephone:  (781) 271-1200
Facsimile:  (781) 276-7924
Attn:  President

 

with a copy simultaneously transmitted by like means to:

 

Hale and Dorr LLP
60 State Street
Boston, Massachusetts  02109
Telephone:  (617) 526-6000
Facsimile:  (617) 526-5000
Attn:  John A. Burgess, Esquire

 

and if to any Investor, at such address as such Investor shall have provided in
writing to the Company, or at such other address as each such party furnishes by
notice given in accordance with this Section 11(b).

 

(C)           FAILURE OF ANY PARTY TO EXERCISE ANY RIGHT OR REMEDY UNDER THIS
AGREEMENT OR OTHERWISE, OR DELAY BY A PARTY IN EXERCISING SUCH RIGHT OR REMEDY,
SHALL NOT OPERATE AS A WAIVER THEREOF.

 

(D)           THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF DELAWARE.  THE COMPANY AND EACH INVESTOR IRREVOCABLY
CONSENTS TO THE JURISDICTION OF THE UNITED STATES FEDERAL COURTS AND THE STATE
COURTS LOCATED IN THE STATE OF DELAWARE IN ANY SUIT OR PROCEEDING BASED ON OR
ARISING UNDER THIS AGREEMENT AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH SUIT OR PROCEEDING MAY BE DETERMINED IN SUCH COURTS. THE COMPANY AND
EACH INVESTOR IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH SUIT OR PROCEEDING.  THE PARTIES FURTHER AGREE THAT SERVICE
OF PROCESS UPON THE OTHER PARTY, MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH PARTY IN ANY SUCH SUIT OR
PROCEEDING.  NOTHING HEREIN SHALL AFFECT THE PARTIES’ RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW.  EACH PARTY AGREES THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER.

 

13

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(E)           THIS AGREEMENT AND THE SECURITIES PURCHASE AGREEMENT (INCLUDING
ALL SCHEDULES AND EXHIBITS THERETO) CONSTITUTE THE ENTIRE AGREEMENT AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF.  THERE ARE
NO RESTRICTIONS, PROMISES, WARRANTIES OR UNDERTAKINGS, OTHER THAN THOSE SET
FORTH OR REFERRED TO HEREIN AND THEREIN.  THIS AGREEMENT AND THE SECURITIES
PURCHASE AGREEMENT SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF.

 

(F)            SUBJECT TO THE REQUIREMENTS OF SECTION 9 HEREOF, THIS AGREEMENT
SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON THE SUCCESSORS AND ASSIGNS OF
EACH OF THE PARTIES HERETO.

 

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

 

(H)           THIS AGREEMENT MAY BE EXECUTED IN TWO OR MORE COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL BUT ALL OF WHICH SHALL CONSTITUTE ONE AND
THE SAME AGREEMENT.  THIS AGREEMENT, ONCE EXECUTED BY A PARTY, MAY BE DELIVERED
TO THE OTHER PARTY HERETO BY FACSIMILE TRANSMISSION OF A COPY OF THIS AGREEMENT
BEARING THE SIGNATURE OF THE PARTY SO DELIVERING THIS AGREEMENT.

 

(I)            EACH PARTY SHALL DO AND PERFORM, OR CAUSE TO BE DONE AND
PERFORMED, ALL SUCH FURTHER ACTS AND THINGS, AND SHALL EXECUTE AND DELIVER ALL
SUCH OTHER AGREEMENTS, CERTIFICATES, INSTRUMENTS AND DOCUMENTS, AS THE OTHER
PARTY MAY REASONABLY REQUEST IN ORDER TO CARRY OUT THE INTENT AND ACCOMPLISH THE
PURPOSES OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

(J)            ALL CONSENTS, APPROVALS AND OTHER DETERMINATIONS TO BE MADE BY
THE INVESTORS PURSUANT TO THIS AGREEMENT SHALL BE MADE BY THE INVESTORS HOLDING
A MAJORITY IN INTEREST OF THE REGISTRABLE SECURITIES HELD BY ALL INVESTORS.

 

(K)           THE INITIAL NUMBER OF REGISTRABLE SECURITIES INCLUDED ON ANY
REGISTRATION STATEMENT AND EACH INCREASE TO THE NUMBER OF REGISTRABLE SECURITIES
INCLUDED THEREON SHALL BE ALLOCATED PRO RATA AMONG THE INVESTORS BASED ON THE
NUMBER OF REGISTRABLE SECURITIES HELD BY EACH INVESTOR AT THE TIME OF SUCH
ESTABLISHMENT OR INCREASE, AS THE CASE MAY BE.  IN THE EVENT AN INVESTOR SHALL
SELL OR OTHERWISE TRANSFER ANY OF SUCH HOLDER’S REGISTRABLE SECURITIES, EACH
TRANSFEREE SHALL BE ALLOCATED A PRO RATA PORTION OF THE NUMBER OF REGISTRABLE
SECURITIES INCLUDED ON A REGISTRATION STATEMENT FOR SUCH TRANSFEROR.  ANY SHARES
OF COMMON STOCK INCLUDED ON A REGISTRATION STATEMENT AND WHICH REMAIN ALLOCATED
TO ANY PERSON OR ENTITY WHICH DOES NOT HOLD ANY REGISTRABLE SECURITIES SHALL BE
ALLOCATED TO THE REMAINING INVESTORS PRO RATA BASED ON THE NUMBER OF SHARES OF
REGISTRABLE SECURITIES THEN HELD BY SUCH INVESTORS.

 

(L)            EACH PARTY TO THIS AGREEMENT HAS PARTICIPATED IN THE NEGOTIATION
AND DRAFTING OF THIS AGREEMENT.  AS SUCH, THE LANGUAGE USED HEREIN SHALL BE
DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES HERETO TO EXPRESS THEIR MUTUAL
INTENT, AND NO RULE OF STRICT CONSTRUCTION WILL BE APPLIED AGAINST ANY PARTY TO
THIS AGREEMENT.

 

(M)          FOR PURPOSES OF THIS AGREEMENT, THE TERM “BUSINESS DAY” MEANS ANY
DAY OTHER THAN A SATURDAY OR SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN
THE STATE OF NEW YORK ARE AUTHORIZED OR OBLIGATED BY LAW, REGULATION OR
EXECUTIVE ORDER TO CLOSE, AND THE TERM “TRADING

 

14

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DAY” MEANS ANY DAY ON WHICH NNM OR, IF THE COMMON STOCK IS NOT THEN TRADED ON
NNM, THE PRINCIPAL SECURITIES EXCHANGE OR TRADING MARKET WHERE THE COMMON STOCK
IS THEN LISTED OR TRADED, IS OPEN FOR TRADING.

 

[SIGNATURE PAGES FOLLOW]

 

15

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

CAMBRIDGE HEART, INC.

 

 

By:

  /s/ David A. Chazanovitz

 

 

Name: David A. Chazanovitz

 

Title: President and Chief Executive Officer

 

 

 

PURCHASERS:

 

 

 

 

AFB FUND LLC

 

 

 

 

 

 

 

By:

  /s/ Louis Blumberg

 

 

Name: Louis Blumberg

 

Title: Manager

 

 

 

 

 

 

BLUMBERG LIFE SCIENCES FUND LTD.

 

 

 

By:

  /s/ Laurence Blumberg

 

 

Name: Lawrence Blumberg

 

Title: President

 

 

 

 

 

 

BLUMBERG LIFE SCIENCES FUND L.P.

 

 

 

 

 

 

By:

  /s/ Laurence Blumberg

 

 

Name: Laurence Blumberg

 

Title: President

 

 

 

 

 

 

 /s/ Eric Hecht

 

Eric Hecht

 

 

 

 

 

 

 /s/ J. Leighton Read, M.D.

 

J. Leighton Read, M.D.

 

 

 /s/ David C. Poole

 

David C. Poole

 

 

[Signature page to Registration Rights Agreement]

 

16

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

PURCHASERS:

 

 

 

 

 

 /s/ Brian Trumbore

 

 

Brian Trumbore

 

 

 

T-WAVE INVESTORS, L.P.

 

 

 

 

 

 

By:

  /s/ Mark Shapiro

 

 

 

Name: Mark Shapiro

 

 

 

Title: General Partner

 

 

 

LEAF OFFSHORE INVESTMENT FUND LTD

 

 

 

 

 

 

By:

  /s/ Seymour L. Goldblatt

 

 

 

Name: Seymour L. Goldblatt

 

 

 

Title: President, S Squared Technology

 

 

PROMED PARTNERS, L.P.

 

 

 

 

 

 

By:

  /s/ David B. Musket

 

 

 

Name: David B. Musket

 

 

 

Title: Managing Member

 

 

 

PROMED OFFSHORE FUND, LTD.

 

 

 

 

 

 

By:

 /s/ David B. Musket

 

 

 

Name: David B. Musket

 

 

 

Title: Managing Member

 

 

 

 

 

 /s/ David B. Musket

 

 

David B. Musket

 

 

[Signature page to Registration Rights Agreement]

 

17

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first above written.

 

PURCHASERS:

 

 

 /s/ Robert P. Khederian

 

Robert P. Khederian

 

 

MEDTRONIC, INC.

 

 

 

By:

  /s/ Michael D. Ellwein

 

 

 

Name: Michael D. Ellwein

 

 

 

Title: Vice President and Chief Development Officer

 

 

THE TAIL WIND FUND LTD.

 

 

 

 

By:

TAIL WIND ADVISORY AND

 

MANAGEMENT LTD.,

 

as investment manager

 

 

 

 

 

By:

  /s/ David Crook

 

 

Name: David Crook

 

Title:

 

[Signature page to Registration Rights Agreement]

 

18

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