Exhibit
10.1


 


AMENDMENT NO. 2 TO

FIRST AMENDED AND RESTATED

SUBORDINATION AND INTERCREDITOR AGREEMENT


 


 


 


THIS AMENDMENT NO. 2 TO
SUBORDINATION AND INTERCREDITOR AGREEMENT, dated as of April 16, 2004, is by
and between PETER L. HAUSER, a resident of the State of Minnesota, and his
successors heirs and permitted assigns (“Hauser”), PKM PROPERTIES, LLC,
a Minnesota limited liability company, and its endorsees, successors and
assigns (“PKM”), and DRAFT CO., a Minnesota limited liability
partnership, and its endorsees, successors and assigns (“Draft”).


 


RECITALS:


 


A.            Hauser, PKM and Draft are parties to that certain First
Amended and Restated Subordination and Intercreditor Agreement dated as of
November 24, 2003, as amended by that certain Amendment No. 1 to First Amended
and Restated Subordination and Intercreditor Agreement dated as of January 29,
2004 (the “Amended Agreement”); and


 


B.  Medical CV, Inc., a Minnesota corporation
(the “Borrower”) is, or may hereafter become, indebted to PKM as a
result of the advance of monies and other extensions of credit by PKM to the
Borrower under a Discretionary Credit Agreement dated as of April 16, 2004 (as
the same may have been or may be amended, restated or otherwise modified from
time to time hereafter, the “April 2004 Discretionary Credit Agreement”).


 


C.            Hauser, PKM and Draft desire to amend the Amended
Agreement as provided herein, and on the terms and conditions of this
Agreement; and


 


AGREEMENTS:


 


NOW, THEREFORE, for good and
valuable consideration, receipt of which is acknowledged by the parties, the
parties agree as follows:


 


Section 1.  Definitions, Rules of Construction.


 


Except as otherwise defined
in this Agreement, all capitalized terms used herein shall have the definitions
and be subject to the rules of construction provided in the Amended Agreement.


 


Section
2.  The following definition
contained in Section 1(a) of the Amended Agreement is hereby amended in its
entirety to read as follows:


 


“Senior Debt” shall mean all liabilities and obligations of the
Borrower to PKM howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising or incurred, including, without limitation, all of the
Borrower’s obligations to PKM under the January Credit Agreement, the May
Credit Agreement, the November Credit Agreement, the Lease, the April 2004
Discretionary Credit Agreement, and any note or notes executed by the Borrower
thereunder, and all other obligations under any other agreement between the
Borrower and PKM now or hereafter in effect, and also including, without
limitation, any and all interest accruing on any of the Senior Debt after the
commencement of any 


 





















 


proceedings referred to in Section 5
below, notwithstanding any provision or rule of law which might restrict the
rights of PKM, as against the Borrower or anyone else, to collect such
interest; provided, however, that (1) Senior Debt shall not include any
obligations arising solely under the May Discretionary Credit Note, the
November Discretionary Credit Note, or any other instrument given by the
Borrower in favor of PKM after the date hereof to the extent it is not an
amendment, modification, supplement, restatement or replacement of another
instrument evidencing then currently existing Senior Debt, (2) for purposes
hereof, Senior Debt shall include no more than $943,666 of principal under the
January Discretionary Credit Agreement and no more than $250,000 of principal
under the April 2004 Discretionary Credit Agreement, and (3) in order to be
considered Senior Debt hereunder as of any particular time, obligations with
respect to the Lease must be due and payable at such time (without
acceleration).


 


Section 3.  Effect of
Amendment.


 


 


Except as provided in this Agreement, the Amended Agreement shall
remain in full force and effect.


 


 


(The signature page follows.)


 


 


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IN WITNESS WHEREOF, this Amendment No. 2 to First Amended and Restated
Subordination and Intercreditor Agreement has been signed as of the date first
set forth above.


 


 


 


 


 


	
   

  	
  /s/
  Peter L. Hauser

  
	
   

  	
  PETER
  L. HAUSER

  
	
   

  	
   

  
	
   

  	
  Address
  for Notice:

  
	
   

  	
  16913
  Kings Court

  
	
   

  	
  Lakeville,
  MN 55044

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PKM
  PROPERTIES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Paul K. Miller

  
	
   

  	
  Name:
  

  	
  Paul
  K. Miller

  
	
   

  	
  Its:

  	
  Chief
  Manager

  
	
   

  	
   

  
	
   

  	
  Address
  for Notice:

  
	
   

  	
  PKM
  Properties, LLC

  
	
   

  	
  c/o
  Gracon Contracting, Inc.

  
	
   

  	
  606
  24th Avenue South, Suite B12

  
	
   

  	
  Minneapolis,
  MN 55454

  
	
   

  	
  Attention:
  Paul K. Miller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DRAFT
  CO.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Ford J. Nicholson

  
	
   

  	
  Name:
  

  	
  Ford
  J. Nicholson

  
	
   

  	
  Its:

  	
  President

  
	
   

  	
   

  
	
   

  	
  Address
  for Notice:

  
	
   

  	
  Draft
  Co.

  
	
   

  	
  336
  Robert Street North, Suite 1220

  
	
   

  	
  St.
  Paul, MN 55101

  
					



 


 


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ACCEPTANCE AND ACKNOWLEDGMENT


 


 


Borrower hereby accepts and
acknowledges receipt of a copy of, the foregoing Amendment No. 2 to First
Amended and Restated Subordination and Intercreditor Agreement and agrees to be
bound by and comply with the provisions thereof, and reaffirms its Acceptance
and Acknowledgement of the terms and conditions of the First Amended and
Restated Subordination and Intercreditor Agreement.


 


 


 


	
   

  	
  MEDICALCV,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/
  Blair P. Mowery

  
	
   

  	
  Name:

  	
  Blair
  P. Mowery

  
	
   

  	
  Title:

  	
  President

  
					



 


 


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