EXHIBIT
10.4


 


AMENDMENT NO. 4 TO


FIRST AMENDED AND RESTATED


SUBORDINATION AND INTERCREDITOR AGREEMENT


 


THIS AMENDMENT
NO. 4 TO FIRST AMENDED AND RESTATED SUBORDINATION AND INTERCREDITOR AGREEMENT,
dated as of February 16, 2005, is by and between PETER L. HAUSER, a resident of
the State of Minnesota, and his successors heirs and permitted assigns (“Hauser”)
and PKM PROPERTIES, LLC, a Minnesota limited liability company, and its
endorsees, successors and assigns (“PKM”).


 


RECITALS:


 


(i)            Hauser,
PKM and Draft Co. are parties to that certain First Amended and Restated
Subordination and Intercreditor Agreement dated as of November 24, 2003;
Amendment No. 1 to First Amended and Restated Subordination and
Intercreditor Agreement dated as of January 29, 2004; Amendment No. 2 to
Amended and Restated Subordination and Intercreditor Agreement dated
April 16, 2004; and Amendment No. 3 to Amended and Restated Subordination
and Intercreditor Agreement (collectively, the “Amended Agreement”); and


 


(ii)           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 February 2005 Credit
Agreement dated as of February 16, 2005 (as the same may have been or may be
amended, restated or otherwise modified from time to time hereafter, the “February
2005 Credit Agreement”); and


 


(iii)          Hauser
and PKM have agreed to amend the Amended Agreement as provided herein, and on
the terms and conditions of this Agreement; and


 


(iv)          Borrower
agrees to accept and acknowledge the terms and conditions of this Agreement and
agrees to be bound by and comply with the provisions hereof.


 


AGREEMENTS:


 


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


 


Section
2.              Definitions,
Rules of Construction.


 


(a)           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.


 


(b)           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, the
October 2004 Credit Agreement, and the Discretionary Credit and Term Loan
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, (2) for purposes hereof, Senior Debt shall include
no more than $943,666 of principal under the January Discretionary Credit
Agreement, no more than $250,000 of principal under the April 2004
Discretionary Credit Agreement, no more than $500,000 under the October 2004
Credit Agreement, and no more than $500,000 of principal under the February
2005 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.


 


IN WITNESS
WHEREOF, this Amendment No. 4 to First
Amended and Restated Subordination and Intercreditor Agreement has been signed
as of the date first set forth above.


 


(The signature page follows.)


 


2





















 


	
   

  	
   /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

  
						



 


3





















 


ACCEPTANCE AND ACKNOWLEDGMENT


 


Borrower
hereby accepts and acknowledges receipt of a copy of, the foregoing Amendment
No. 4 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/ John H.
  Jungbauer

  	
   

  
	
   

  	
  Name:

  	
  John H.
  Jungbauer

  
	
   

  	
  Its:

  	
  Chief
  Financial Officer

  
					



 


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