Document:

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.

 

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“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

 

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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,

 

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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

 

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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.

 

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(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.

 

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(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.

 

21Exhibit 10.5

 

	
  

  	
   

  	
  

  

  

  1234 SUMMER STREET, STAMFORD, CT. 06905

  JGIORDANO.COM / TEL 203 975 1330 / FAX 203 541
  8917

  

 

December 21, 2004

 

Marc
P. Flores

MedicalCV, Inc.

9725
South Robert Trail

Inver
Grove Heights, MN  55077

 

Dear
Mr. Flores:

 

This
letter confirms the terms upon which MedicalCV, a Minnesota Corporation
(the “Company”) engages J Giordano Securities
Group (“JGSG”) to act
as placement agent in connection with the private placement (the “Private
Placement”) defined herein.  Giordano is
a validly registered or licensed broker-dealer, duly authorized to act as an
agent in the sales of securities issued under federal and a state securities
laws and regulations and it is a member in good standing of the NASD.

 

1.                                      Scope
of engagement.

 

The Company hereby engages JGSG as its
nonexclusive agent in the private placements of securities of the Company in
one or more related transactions to one or more investors in the form of
convertible preferred stock, convertible debt securities, equity-linked
securities or other equity or equity-linked arrangements, including debt
securities with warrants.

 

2.                                      Offering
Process. 

 

In connection with the Private Placements:

 

•                  JGSG will familiarize itself to the extent it deems
appropriate with the business, operations, financial condition and prospects of the Company;

 

•                  The
Company, with JGSG’s assistance, will prepare a Confidential Offering Memorandum
(the “Confidential Memorandum”), which will contain (a) a description of
the Company, its business, assets, prospects and management; (b) the terms
and conditions of the Private Placements and of the securities offered; and (c) certain
financial information.  The Confidential
Memorandum will incorporate or include the Company’s filings with the
Securities and Exchange Commission (“SEC”) including the Company’s reports on
Forms 10-KSB, 10-QSB, 8-K and the 2004 Proxy Statement.  If necessary, the Company will update the
Confidential Memorandum prior to completion of the Private Placements;

 

•                  JGSG will identify possible accredited investors, which
might have an interest in receiving the Confidential Memorandum and evaluating
participation in the Private Placements.

 

1

 

•                  Upon
authorization from the Company, JGSG will
contact one or more of such possible accredited investors and distribute the
Confidential Memorandum;

 

•                  JGSG will assist the Company and its Board of Directors in
evaluating proposals received from possible investors;

 

•                  JGSG will assist the Company and its counsel in negotiations
relating to the Private Placements; and

 

•                  If
requested, JGSG will participate in meetings
of the Board of Directors of the Company (either in person or by telephone, as
appropriate) at which time the Private Placements are to be considered and will
report to the Board on the Private Placements.

 

•                  The
securities offered in the Private Placements will be sold pursuant to forms of
purchase agreements that are reasonably satisfactory to JGSG and
the Company containing terms and conditions customary for private placement
transactions.

 

•                  JGSG will be registered as a broker-dealer in all states in
which the Company offers its securities.

 

3.                                      Company
Responsibilities, Representations and Warranties.

 

In connection
with the Private Placements:

 

•                  The
Company agrees to cooperate with JGSG and will
furnish to JGSG all information and data
concerning the Company (“the “Information”) which JGSG
reasonably deems appropriate for purposes of the Confidential Memorandum or the
Private Placements, and will provide JGSG access to
its officers, directors, employees and advisors.

 

•                  The
Company represents and warrants to JGSG that all
Information included or incorporated by reference in the Confidential
Memorandum or otherwise made available to JGSG by the
Company to be communicated to possible investors in connection with the Private
Placement: (a) will be complete and correct and does not and will not
knowingly contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and (b) any
projected financial information or other forward-looking information which the
Company provides to JGSG will be
made by the Company in good faith, based on management’s best estimates at the
time and based on facts and assumptions which the Company believes are
reasonable;

 

•                  The
Company agrees to promptly notify JGSG if the
Company believes that any Information that was previously provided to JGSG has become materially misleading; and

 

•                  The
Company acknowledges and agrees that, in rendering its services hereunder, JGSG will be using and relying on the Information (and
information available from public sources and other sources deemed reliable by JGSG) without independent

 

2

 

investigation
or verification thereof or independent appraisal or evaluation of the Company
or its business or assets, or any other party to the transaction.  JGSG does not
assume responsibility for the accuracy or completeness of the Information, the
Confidential Memorandum or any other information regarding the Company.

 

The references in this Section to the
Company will, when appropriate, be deemed also to include its subsidiaries or
other affiliates.

 

Any advice rendered by JGSG
during the Private Placement process or in meetings of the Board of Directors
of the Company, as well as any written materials provided by JGSG, are intended solely for the benefit and confidential
use of the Board of Directors and will not be reproduced, summarized, described
or referred to or given to any other person for any purpose without JGSG’s prior
written consent.

 

The Company represents to JGSG that to the knowledge of the Company, it has not engaged
in any public or private offering of securities or taken or failed to take any
action that would cause the Private Placements not to qualify for an applicable
exemption from registration under the Securities Act of 1933, as amended (the “Act”).  Further the Company agrees not to solicit any
offerees or take any action, which might jeopardize the availability of
exemption under the Act.  JGSG will conduct all sales and solicitation efforts in a
manner requested by the Company consistent with the Company’s intent that the
Private Placements be an exempt transaction pursuant to the Act.

 

The Company has disclosed to JGSG the existence of a finder, Tower Finance, Ltd., whose
exclusive agreement expires December 31, 2004.  Tower Finance, Ltd. has not completed any
transactions for the bridge loan financing as of December 20, 2004.

 

4.                                      Fees.

 

a. Retainer
Fee. The Company agrees to pay JGSG
an advisory retainer fee equal to US$30,000 (the “Retainer Fee”) to cover the
term of this engagement, in the form of $15,000 nonrefundable cash and 15,000
shares of the Company’s tradeable Common stock priced at $1.00 per share, upon
the execution of this agreement. It is understood that the Company shall be
entitled to a credit of the retainer against the placement fees, which is
described below.

 

b. Placement
Fee. Upon the consummation of any sale of debt or equity
securities of the Company in connection with the Private Placements the Company
will pay JGSG a fee (the “Placement Fee”) equal
to 6.0% of the total equity and debt consideration received by the Company in
connection with the Private Placements (the “Transaction Consideration”).  

 

As used above, the term “Transaction
Consideration” will mean the total amount of cash and the fair market value of
the other property paid or payable directly or indirectly to the Company, any
of its security holders or any of its directors or executive officers in
connection with the Private Placements.

 

The Placement Fee will be payable in full
upon the closing of any Private Placement individually; provided,
however, that if the Transaction Consideration includes
consideration the receipt of which is contingent upon the passage of time or
the occurrence of some future event or circumstance (“Contingent Value”), the
portion of the

 

3

 

Placement Fee attributable to such Contingent
Value will be paid to JGSG at the
earlier of the date on which payment of such Contingent Value is due or the
time that such Contingent Value can be determined or reasonably estimated, but
in no event will the Placement Fee be due until the Company receives the
contingent Transaction Consideration in connection with the Private Placements.

 

b. Warrants.
In addition to the Placement Fee, upon the closing of the sale of securities in
connection with the Private Placements, the Company shall issue to JGSG warrants to purchase shares of common stock of the
Company (the “Warrants”) in an amount equal to 6% of the Total Consideration to
be priced on the same terms as the Investors in the Private Placements.  The Warrants shall expire five years from the
date of issuance.  The Warrants shall
carry the same registration rights and anti-dilution provisions as the
securities sold in the Private Placements.

 

c. Follow-on
Transaction. If sales of securities in connection with the
Private Placements has been consummated, and one or more additional securities
issuance transactions are consummated by the Company with investors introduced
by JGSG within 12 months after the closing
date of the initial transaction, with any party (i) which JGSG has identified, (ii) with which, due to JGSG efforts, the Company has directly or indirectly held
discussions or furnished information regarding the Company (each a “JGSG-Identified Party”), including investors in the original
transaction, JGSG shall be entitled to receive
fees and warrants as set forth in Section 4.a. and 4.b. above with respect
to such transaction.

 

5.                                      Expenses.  The Company will reimburse JGSG for out-of-pocket expenses including fees and expenses
of its due diligence team and counsel reasonably incurred by it in connection
with its engagement hereunder, whether or not the Private Placements are
consummated, up to US$5,000.  It will be
the obligation of the Company to create any legal documentation relating to the
contemplated financing, which will be subject to review by JGSG counsel.  Any expenses in excess of US$100.00 will be
submitted to the Company for pre-approval, which shall not be unreasonably
withheld. Such reimbursement will be payable promptly upon submission by JGSG of statements to the Company.

 

6.                                      Indemnification.  JGSG and the
Company have entered into a separate indemnity agreement, dated the date hereof
(the “Indemnity Agreement”), providing among other things for the
indemnification of JGSG by the
Company in connection with Losses and Expenses (as defined in the Indemnity
Agreement) in connection with JGSG’s engagement hereunder.  The terms of the Indemnity Agreement are
incorporated by reference into this letter agreement.

 

7.                                      Termination.  JGSG’s engagement hereunder may be
terminated by either the Company or JGSG at any
time, with or without cause, upon written notice to the other party; provided,
however, that (a) no such termination will affect JGSG’s right to expense reimbursement
under Section 5, the payment of any accrued and unpaid fees pursuant to Section 4
or the indemnification contemplated by Section 6 or the Indemnity
Agreement referred to therein and (b) if the Company, directly or
indirectly, consummates an issuance of its securities within twelve months
following such termination with a JGSG-Identified Party, then JGSG will be entitled to the full amount of the fees and
warrants contemplated by Sections 4.a. and 4.b.

 

4

 

8.                                      Additional
Services, Fees and Expenses.  In
the event that, within 24 months of the closing of a Private Placement, the
Company shall file a registration statement with the Securities and Exchange
Commission for a secondary offering of common stock or debt of the Company, the
Company will use its best efforts to engage JGSG
as a co-managing underwriter or member of the under writing group of the
offering of the Company, on terms which are reasonable and customary for an
offerings of such nature and JGSG shall
participate in such offering on terms equivalent to the other managing
underwriters or underwriters, as the case may be (unless JGSG,
in its discretion, declines such engagement). 
If the managing underwriter is a firm other that JGSG,
such managing underwriters must agree to JGSG acting as
a co-managing underwriter.

 

9.                                      Governing
Law; Jurisdiction; Waiver of Jury Trial.   This letter agreement and the Indemnity
Agreement will be governed by the laws of the State of Connecticut.  The Company and JGSG
agree that except with respect to actions brought by third parties, they
irrevocably submit to the jurisdiction of any court of the State of Connecticut
or the United States District Court of Connecticut Second Circuit the purpose
of any suit, action or other proceeding arising out of this letter agreement or
the Indemnity Agreement, or any of the agreements or transactions contemplated
hereby, which is brought by or against the Company.  Each of the Company (and, to the extent
permitted by law, on behalf of the Company’s equity holders and creditors) and JGSG hereby knowingly, voluntarily and irrevocably waives
any right it may have to a trial by jury in respect of any claim based upon,
arising out of or in connection with the Indemnity Agreement, this letter
agreement and the transactions contemplated hereby (including, without
limitation, any Private Placement).

 

10.                               No
Rights in Equityholders, Creditors. 
This letter agreement does not create, and will not be construed as
creating, rights enforceable by any person or entity not a party hereto, except
those entitled thereto by virtue of the Indemnity Agreement.  The Company acknowledges and agrees that (a) JGSG will act as an independent contractor and is being
retained solely to assist the Company in its efforts to effect a Private
Placement and that, JGSG is not
being retained to advise the Company on, or to express any opinion as to, the
wisdom, desirability or prudence of consummating the Private Placements, (b) JGSG is not and will not be construed as a fiduciary of the
Company or any affiliate thereof and will have no duties or liabilities to the
equityholders or creditors of the Company, any affiliate of the Company or any
other person by virtue of this letter agreement and the retention of JGSG hereunder, all of which duties and liabilities are
hereby expressly waived and (c) nothing contained herein shall be
construed to obligate JGSG to
purchase, as principal, any of the securities offered by the Company in the
Private Placements.  Neither equity
holders nor creditors of the Company are intended beneficiaries hereunder.  The Company confirms that it will rely on its
own counsel, accountants and other similar expert advisors for legal,
accounting, tax and other similar advice.

 

11.                               JGSG;
Other activities.  It is
understood and agreed that JGSG may, from
time to time, make a market in, have a long or short position, buy and sell or
otherwise affect transactions for customer accounts and for their own accounts
in the securities of, or perform investment banking or other services for, the
Company and other entities which are or may be the subject of the engagement
contemplated by this letter agreement. 
This is to confirm that possible investors identified or contacted by JGSG could include entities in respect of which JGSG may have rendered or may in the future render services.

 

12.                               Other.  This letter agreement may not be modified or
amended except in writing executed in counterparts, each of which will be
deemed an original and all of which will constitute one and the same
instrument.

 

5

 

If the foregoing correctly sets forth our agreement, please so indicate
by signing below and returning an executed copy to the J Giordano Securities
Group, Attention:  James Giordano.  We look forward to working with you.

 

ACCEPTED AND AGREED AS OF:

THE DATE FIRST ABOVE WRITTEN

 

 

	
  By:

  	
  /s/ Marc P. Flores

  	
   

  
	
  Name: Marc
  P. Flores

  
	
  Title:
  Chief Executive Officer

  
	
  MedicalCV, Inc.

  
	
   

  
	
   

  
	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  J Giordano Securities Group

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Jordan

  	
   

  
	
   

  	
  Name: Chris
  Jordan

  
	
   

  	
  Title: Managing
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James R. Giordano

  	
   

  
	
   

  	
  Name: James
  R. Giordano

  
	
   

  	
  Title: Chief
  Executive Officer

  
							

 

6

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