Filed by Bowne Pure Compliance

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B1Yk5zXJbf7mLuHcD6mS+aW9xjr1rbkKVEn0RIgucy8fsZYqDlAQjuN16g4eNEEQ qTIdNpSzy8vmJQr+oNXxcA== 0001362310-08-000759.txt : 20080213 0001362310-08-000759.hdr.sgml : 20080213 20080213171319 ACCESSION NUMBER: 0001362310-08-000759 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20080213 DATE AS OF CHANGE: 20080213 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MICROMED CARDIOVASCULAR INC CENTRAL INDEX KEY: 0001269515 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 980228169 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-80827 FILM NUMBER: 08606079 BUSINESS ADDRESS: STREET 1: 8965 INTERCHANGE DRIVE CITY: HOUSTON STATE: TX ZIP: 77054 BUSINESS PHONE: 713-580-8236 MAIL ADDRESS: STREET 1: 8965 INTERCHANGE DRIVE CITY: HOUSTON STATE: TX ZIP: 77054 FORMER COMPANY: FORMER CONFORMED NAME: SALMON EXPRESS INC DATE OF NAME CHANGE: 20031107 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: E-Wilson, LLC CENTRAL INDEX KEY: 0001427007 IRS NUMBER: 261759505 STATE OF INCORPORATION: AZ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1600 NORTH KOLB ROAD STREET 2: SUITE 118 CITY: TUCSON STATE: AZ ZIP: 85715 BUSINESS PHONE: 5208861226 MAIL ADDRESS: STREET 1: 1600 NORTH KOLB ROAD STREET 2: SUITE 118 CITY: TUCSON STATE: AZ ZIP: 85715 SC 13D 1 c72365sc13d.htm SCHEDULE 13D Filed by Bowne Pure Compliance


	OMB APPROVAL
	OMB Number: 3235-0145
	Expires: February 28, 2009
	Estimated average burden hours per response...14.5

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. )*

MicroMed Cardiovascular, Inc.

(Name of Issuer)

Common Stock, $0.001 par value per share

(Title of Class of Securities)

59508T109

(CUSIP Number)

John W. Dorris, Esq.
Feulner Dorris plc
310 South Williams Blvd., Suite 145
Tucson, Arizona 85711

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

January 29, 2008

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		59508T109

NAMES OF REPORTING PERSONS

E-Wilson, LLC

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

(a) o

(b) o

SEC USE ONLY

SOURCE OF FUNDS (SEE INSTRUCTIONS)

OO - capital contributions of members and affiliates

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

Arizona

SOLE VOTING POWER

NUMBER OF

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

80,216,224 (See Items 4 and 5)

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER

80,216,224 (See Items 4 and 5)

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

80,216,224 (See Items 4 and 5)

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

85.9% (See Items 4 and 5)

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

OO (Limited Liability Company)


Item 1.		Security and Issuer.

This statement on Schedule 13D (the “Statement”) relates to the common stock, par value $0.001 per share (the “Common Stock”), of MicroMed Cardiovascular, Inc., a Delaware corporation (the “Company”).

The principal executive offices of the Company are located at 8965 Interchange Drive, Houston, Texas 77054.


Item 2.		Identity and Background.

(a) This statement is filed by E-Wilson, LLC (the “Reporting Person”). Additionally, information is included herein with respect to E-W Manager, LLC (“E-W Manager”), J. David Mackstaller (“Mackstaller”), Rodger Ford (“Ford”), End Point LLC (“End Point” and, together with E-W Manager, Mackstaller and Ford, the “Controlling Persons”).

Because (i) E-W Manager is the sole manager of the Reporting Person, (ii) Mackstaller and Ford are co-managers of E-W Manager and End Point, and (iii) End Point assigned its interest as “purchaser” in the Securities Transfer Agreement (as defined below) to the Reporting Person in exchange for a membership interest in the Reporting Person, the Controlling Persons may be deemed, pursuant to Rule 13d-3 of the Act, to be the beneficial owners of all of the shares of Common Stock beneficially owned by the Reporting Person. The Reporting Person and the Controlling Persons are sometimes hereinafter collectively referred to as the “Filing Parties.” The Filing Parties are making this single, joint filing because they may be deemed to constitute a “group” within the meaning of Section 13(d)(3) of the Act, although neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Filing Parties that such a group exists. A copy of the joint filing agreement of the Filing Parties is attached hereto as Exhibit 1.

(b) — (c) The address of the principal business offices of the Filing Parties is as follows: 1600 N. Kolb Road, Suite 118, Tucson, Arizona 85715.

The Reporting Person and End Point are each Arizona limited liability companies, were organized to effect the transactions described under Item 4 below and have not engaged in any activities other than those incident to their formation and such transactions. E-W Manager is an Arizona limited liability company whose principal business is to serve as the sole manager of the Reporting Person. The principal occupation of each of Mackstaller and Ford is the management of personal and family investments in business ventures, commercial real estate and other projects. No other persons control the Filing Parties.

(d) During the last five years, none of the Filing Parties has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Filing Parties has been a party to any civil proceeding as a result of which it was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect to such laws.

(f) Mackstaller and Ford are citizens of the United States of America.


Item 3.		Source and Amount of Funds or Other Consideration.

As more fully described under Item 4 below, pursuant to the terms of the Securities Transfer Agreement, the Reporting Person has the right to acquire the Absolute Securities (as defined below) for an aggregate purchase price equal to $2,500,000. In addition, the Reporting Person and the Company have entered into the Credit Agreement (as defined below), pursuant to which the Reporting Person has agreed to make advances in the principal amount of up to $10,000,000. The funds required for the purchase of the Absolute Securities and the $1,000,000 initial advance under the Credit Agreement were obtained from general funds available to the Filing Parties and their affiliates. The Reporting Person currently intends to fund future advances under the Credit Agreement with proceeds from capital contributions of its existing or future members.


Item 4.		Purpose of Transaction.

On January 29, 2008, End Point entered into a Securities Transfer Agreement (the “Securities Transfer Agreement”) with Absolute Return Europe Fund Limited, Absolute Octane Master Fund Limited, Absolute East West Master Fund Limited, Absolute European Catalyst Fund Limited, Absolute Germany Fund Limited and Absolute Large Cap Master Fund Limited (collectively, the “Absolute Funds”). Simultaneously therewith, End Point entered into an Assignment and Novation Agreement (the “Assignment and Novation Agreement”) with the Reporting Person, pursuant to which End Point assigned to the Reporting Person its rights as “purchaser” under the Securities Transfer Agreement. Pursuant to the Securities Transfer Agreement, the Reporting Person has the right to acquire from the Absolute Funds a total of 26,899,559 shares of Company Common Stock (the “Absolute Shares”) and warrants to acquire 3,316,665 shares of Common Stock (the “Absolute Warrants” and, together with the Absolute Shares, the “Absolute Securities”) for an aggregate purchase price equal to $2,500,000. The parties currently expect that the closing of the purchase of the Absolute Securities will occur on or about February 15, 2008.

On February 1, 2008, the Reporting Person entered into a Credit Agreement (the “Credit Agreement”) with the Company, under which the Reporting Person agreed to provide up to $10,000,000 in financing in a series of advances over the next two years, subject to certain conditions. Pursuant to the Credit Agreement, the Reporting Person advanced $1,000,000 to the Company upon closing. In connection with the financing, the Company issued an unsecured convertible note (the “Convertible Note”), under which the Reporting Person has the option of converting the outstanding principle and interest due thereunder (including the principal amount of any future advances) into shares of the Common Stock at a conversion rate of $0.02 per share. Under the Credit Agreement, the Company agreed to seek stockholder approval of an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of Common Stock from 100,000,000 to 750,000,000 shares (the “Charter Amendment”). Unconverted amounts of principal accrue interest at a rate of 7.5% per annum and are required to be repaid over a 24-month period beginning February 28, 2011.

Future advances under the Credit Agreement are conditioned upon (i) the absence of an event of default, (ii) the filing of the abovementioned amendment to the Company’s Certificate of Incorporation, and (iii) the reaffirmation by the Company of the representations and warranties contained in the Credit Agreement as of each future funding date. The future advance amounts and dates are (i) $1.5 million upon the filing of the Charter Amendment, (ii) $2.5 million on July 1, 2008, (iii) $2.5 million on April 1, 2009, and (iv) $2.5 million on January 4, 2010. Under the Credit Agreement, as long as the Reporting Person and its affiliates beneficially own at least a majority of the total voting power of the Company’s voting stock, the Reporting Person has the right to designate for nomination by the Board a majority of the members of the Company’s Board of Directors.

In connection with this transaction, the Company issued a warrant (the “Warrant”) to the Reporting Person, giving the Reporting Person the right to purchase 500 million shares of Common Stock, less any amounts converted or convertible under the Convertible Note, for a purchase price of $0.02 per share. The Warrant may not be exercised prior to the date that stockholder approval of the Charter Amendment has been obtained. The Company also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Reporting Person, under which the Reporting Person has the right to request that the Company file a registration statement with the SEC covering the Absolute Securities and any shares issuable under the Convertible Note and the Warrant, which request may be made any time after August 1, 2008.

The provisions of the Securities Transfer Agreement, the Assignment and Novation Agreement, the Credit Agreement, the Convertible Note, the Warrant and the Registration Rights Agreement are set forth in the documents filed as Exhibits 2 through 11 to this statement and are incorporated herein in their entirety by this reference in response to this Item 4. The foregoing description of the terms and provisions of these documents is a summary only, and is qualified in its entirety by reference to such documents.

The Reporting Person intends to participate in and influence the affairs of the Company through the exercise of its voting rights with respect to its shares of Common Stock. In addition, if the Reporting Person exercises its right to designate nominees to the Company’s Board of Directors, such designees (which may include Mackstaller and Ford) may influence the affairs of the Company in their capacity as members of the Company’s Board of Directors. From time to time, the Reporting Person intends to review the performance of its investments and consider or explore a variety of alternatives, including, without limitation: (a) the acquisition of additional securities of the Company or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) a change in the present Board of Directors or management of the Company, including a change in the number or term of directors or to fill any existing vacancies on the Board of Directors; (e) a material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company’s business or corporate structure; (g) changes in the Company’s charter, bylaws, or instruments corresponding thereto, or other actions that may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) causing a class of equity securities of the Company to become eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to any of those enumerated above. Any alternatives that the Reporting Person may pursue will depend upon a variety of factors, including, without limitation, current and anticipated future trading prices for the Common Stock, the financial condition, results of operations, and prospects of the Company, and general economic, financial market, and industry conditions. Except as set forth above, the Reporting Person has no present plans or proposals with respect to any of the matters set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D.


Item 5.		Interest in Securities of the Issuer.

(a) The Filing Parties, collectively and individually, may be deemed to beneficially to own up to 80,216,224 shares (or, following approval of the Charter Amendment, 530,216,224 shares) of Common Stock, representing in the aggregate approximately 85.9% (or, following approval of the Charter Amendment, 97.6%) of the outstanding shares of Common Stock (assuming the conversion and/or exercise in full of the Convertible Note, the Warrant and the Absolute Warrant). The foregoing percentage calculations are based on a total of 93,425,518 shares (or, following approval of the Charter Amendment, 543,425,518 shares) of Common Stock outstanding, comprised of (1) the 40,108,853 shares of Common Stock outstanding as of January 31, 2008, based on the number of shares of Common Stock represented by the Company in the Credit Agreement to be outstanding as of such date, and (2) the 53,316,665 shares (or, following approval of the Charter Amendment, 503,316,665 shares) of Common Stock issuable upon conversion and/or exercise of the Convertible Note, the Warrant and the Absolute Warrant. Pending the closing under the Securities Transfer Agreement, all shares deemed to be beneficially owned by the Filing Parties as of the date hereof are shares that the Reporting Person has the right to acquire either (i) pursuant to the Securities Transfer Agreement or (ii) upon conversion and/or exercise of the Convertible Note, the Warrant and the Absolute Warrant, as applicable.

(b) The Filing Parties, collectively and individually, may be deemed to have the following:

	(i)		sole power to vote or to direct the vote: -0-

	(ii)		shared power to vote or to direct the vote: 80,216,224 (or, following approval of the Charter Amendment, 530,216,224 shares)

	(iii)		sole power to dispose or to direct the disposition of : -0-

	(viii)		shared power to dispose or to direct the disposition of: 80,216,224 (or, following approval of the Charter Amendment, 530,216,224 shares)

(c) Other than as set forth herein, during the past sixty days, there were no purchases of the shares of Common Stock, or securities convertible into or exchangeable for shares of Common Stock, by the Reporting Person or any person or entity controlled by the Reporting Person or any person or entity for which the Reporting Person possess voting or dispositive control over the securities thereof. During such sixty day period, there were no sales of the shares of Common Stock, or securities convertible into or exchangeable for shares of Common Stock, by the Reporting Person or any person or entity controlled by the Reporting Person or any person or entity for which the Reporting Person possess voting or dispositive control over the securities thereof.

(d) Not applicable.

(e) Not applicable.


Item 6.		Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Except as described in Items 3, 4 and 5 of this Statement, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any person, with respect to any securities of the Company, including, but not limited to, transfer or voting of any of the securities of the Company, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss or the giving or withholding of proxies. The Filing Parties have entered into a joint filing agreement which is attached as Exhibit 1 hereto.


Item 7.		Material to be Filed as Exhibits.


Exhibit 1		Joint Filing Agreement, dated December 6, 2005, by and among the Filing Parties

Exhibit 2		Securities Transfer Agreement, dated as of January 29, 2008, by and among End Point and the Absolute Funds

Exhibit 3		Assignment and Novation Agreement, dated as of January 29, 2008, by and among End Point, the Reporting Person and the Absolute Funds

Exhibit 4		Credit Agreement, dated as of February 1, 2008, by and between the Reporting Person and the Company

Exhibit 5		Convertible Note, dated as of February 1, 2008

Exhibit 6		Warrant, dated as of February 1, 2008

Exhibit 7		Registration Rights Agreement, dated as of February 1, 2008, by and between the Company and the Reporting Person

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.


Date: February 12, 2008	E-WILSON, LLC

	By:	E-W Manager, LLC,
		Its manager


		By:	/s/ J. David Mackstaller

		Name:	J. David Mackstaller
		Title:	Manager

EXHIBIT INDEX


Exhibit No.		Description

Exhibit 1		Joint Filing Agreement, dated December 6, 2005, by and among the Filing Parties

Exhibit 2		Securities Transfer Agreement, dated as of January 29, 2008, by and among End Point and the Absolute Funds

Exhibit 3		Assignment and Novation Agreement, dated as of January 29, 2008, by and among End Point, the Reporting Person and the Absolute Funds

Exhibit 4		Credit Agreement, dated as of February 1, 2008, by and between the Reporting Person and the Company

Exhibit 5		Convertible Note, dated as of February 1, 2008

Exhibit 6		Warrant, dated as of February 1, 2008

Exhibit 7		Registration Rights Agreement, dated as of February 1, 2008, by and between the Company and the Reporting Person

EX-99.1 2 c72365exv99w1.htm EXHIBIT 1 Filed by Bowne Pure Compliance

Exhibit 1

JOINT FILING AGREEMENT

JOINT FILING AGREEMENT (this “Agreement”), dated as of February 12, 2008 among E-WILSON, LLC, an Arizona limited liability company (“E-Wilson”), END POINT, LLC, an Arizona limited liability company (“End Point”), J. DAVID MACKSTALLER (“Mackstaller”) and RODGER FORD (“Ford”).

W I T N E S S E T H

WHEREAS, as of the date hereof, each of E-Wilson, End Point, Mackstaller and Ford are filing a Schedule 13D Statement (the “Statement”) under the Securities Exchange Act of 1934 (the “Exchange Act”) relating to the shares of common stock, par value $0.001 per share (the “Common Stock”), of MicroMed Cardiovascular, Inc. (the “Company”);

WHEREAS, each of E-Wilson, End Point, Mackstaller and Ford is individually eligible to file the Statement;

WHEREAS, each of E-Wilson, End Point, Mackstaller and Ford wishes to file the Statement and any subsequent amendments to the Statement jointly and on behalf of each of E-Wilson, End Point, Mackstaller and Ford, pursuant to Rule 13d-1(k)(1) under the Exchange Act;

NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the parties hereto agree as follows:

1. E-Wilson, End Point, Mackstaller and Ford hereby agree that the Statement is, and any subsequent amendments thereto will be, filed on behalf of each of E-Wilson, End Point, Mackstaller and Ford pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

2. Each of E-Wilson, End Point, Mackstaller and Ford hereby acknowledges that, pursuant to Rule 13d-1(k)(1)(i) under the Exchange Act, such party is responsible for the timely filing of the Statement and any subsequent amendments thereto, and for the completeness and accuracy of the information concerning such party contained therein, and is not responsible for the completeness and accuracy of the information concerning any of the other parties contained therein, unless it knows or has reason to know that such information is inaccurate.

3. Each of E-Wilson, End Point, Mackstaller and Ford hereby agrees that this Agreement shall be filed as an exhibit to the Statement, pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

[signatures on following page]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed individually or by their respective managers hereunto duly authorized as of the day and year first above written.


E-WILSON, LLC

By:	E-W Manager, LLC, Manager

	By:

	Name:	David Mackstaller
	Title:	Manager

END POINT, LLC

By:

Name:	David Mackstaller
Title:	Manager



J. David Mackstaller



Rodger Ford

EX-99.2 3 c72365exv99w2.htm EXHIBIT 2 Filed by Bowne Pure Compliance

Exhibit 2

SECURITIES TRANSFER AGREEMENT

THIS SECURITIES TRANSFER AGREEMENT (the “Agreement”) is made as of January 29, 2008, by and among End Point LLC, an Arizona limited liability company (the “Purchaser”), and each of the sellers listed on Exhibit A hereto (each, a “Seller” and collectively, the “Sellers”).

BACKGROUND

A. Sellers now own, in the specific amounts set forth on Exhibit A hereto, a total of 26,899,559 shares of the common stock, $.001 par value per share (the “Company Common Stock”), of Micromed Cardiovascular, Inc., a Delaware corporation (the “Company”), and certain warrants to purchase a total of 3,317,203 shares of Company Common Stock in the aggregate (the “Warrants”). The 26,899,559 shares of Company Common Stock and 3,316,665 Warrants are referred to herein collectively as the “Specified Securities” and, together with any Other Securities, as the “Purchased Securities.” As used herein, “Section 4.9 Purchase Rights” means the anti-dilution rights under Section 4.9 of each of the Securities Purchase Agreements; “Securities Purchase Agreements” means those certain Securities Purchase Agreements, dated as of August 9, 2005, November 29, 2005 and June 13, 2006, respectively, among the Company and the purchasers named therein; and “Other Securities” means the Section 4.9 Purchase Rights and any other shares of Company Common Stock, warrants, options or rights to purchase any shares of Company Common Stock, note or debt instruments, or other securities of the Company of any kind or nature whatsoever owned by the Sellers or any of their respective affiliates (as defined below), other than the Specified Securities.

B. The Sellers now wish to sell, and the Purchaser wishes to purchase, the Purchased Securities for an aggregate purchase price of $2,500,000.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

SECTION 1
PURCHASE AND SALE OF SECURITIES

1.1 Sale of Securities. The Sellers hereby sell the Purchased Securities to the Purchaser for a total purchase price of $2,500,000 (the “Purchase Price”), such Purchase Price to be paid to the Sellers in the amounts set forth under the heading “Total Purchase Price” in Exhibit A.

1.2 Closing. The purchase and sale of the Purchased Securities hereunder shall take place at a closing (the “Closing”; the date on which the Closing occurs is hereinafter referred to as the “Closing Date”). Upon satisfaction of the conditions set forth in Section 1.3, the Closing of the purchase of the Purchased Securities shall occur at the offices of Feulner Dorris plc, counsel to the Purchaser, 310 South Williams Blvd., Suite 240, Tucson, Arizona 85711 on January 30, 2008, or such other time and location as the parties hereto shall mutually agree. At the Closing:

(a) the Purchaser shall deliver to each Seller or its designee by wire transfer, cashier’s check or certified checks from a bank acceptable to the Seller, or such other method of payment as the Seller shall approve, an amount equal to the Seller’s pro rata portion of the Purchase Price;

- 1 -

(b) each Seller shall deliver an irrevocable direction to its custodian to transfer the shares of Company Common Stock to the Purchaser or as the Purchaser may direct and the warrant agreement or certificate and any other appropriate instrument(s) representing the Warrants and, if applicable, Other Securities held by each of them, and any other documents reasonably acceptable to the Purchaser evidencing the transfer of the Purchased Securities from each Seller to Purchaser (it being understood and agreed that, to the extent any share certificates, warrant agreements or certificates, or similar instruments have been lost or destroyed, the applicable Seller shall execute and deliver to the Company appropriate affidavits of loss and cause the Company to deliver new instruments to Purchaser in connection with the Closing).

1.3 Conditions to Closing.

(a) Conditions to Purchaser’s Obligations at the Closing. Purchaser’s obligations to purchase the Purchased Securities at the Closing are subject to the satisfaction, at or prior to such Closing, of the following conditions:

(i) The representations and warranties made by the Sellers in Section 2 shall be true and correct in all material respects as of the Closing with the same force and effect as if they had been made as of the Closing, and each of the Sellers shall have performed all obligations and conditions herein required to be performed or observed by it on or prior to the Closing.

(ii) As of the Closing, the purchase and sale of the Purchased Securities shall be legally permitted by all laws and regulations to which Purchaser and/or the Sellers are subject.

(iii) Each Seller shall have obtained any and all consents, permits and waivers necessary or appropriate for consummation of the transactions contemplated by the Agreement.

(iv) There shall have been no change in the authorized capital stock of the Company since December 31, 2006.

(b) Conditions to Obligations of the Sellers. The obligation of the Sellers to sell the Purchased Securities at the Closing is subject to the satisfaction, on or prior to such Closing, of the following conditions:

(i) The representations and warranties in Section 3 made by Purchaser shall be true and correct in all material respects at the date of the Closing, with the same force and effect as if they had been made on and as of said date.

(ii) Purchaser shall have performed and complied with all agreements and conditions herein required to be performed or complied with by Purchaser on or before the Closing.

- 2 -

1.4 Termination. This Agreement may be terminated prior to the Closing as follows:

(a) by either party if the Closing has not occurred by the close of business on March 1, 2008, provided that the party electing to terminate this Agreement under this Section 1.4(a) is not in default of any of its obligations hereunder;

(b) by mutual written consent of Purchaser and the Sellers.

SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each Seller hereby severally warrants to the Purchaser, and agrees to, the following:

2.1 Formation and Status of Seller. The Seller is duly incorporated or formed and validly existing under the laws of the Cayman Islands.

2.2 Due Authorization. This Agreement has been duly and validly authorized, executed and delivered by, or on behalf of, the Seller, and, assuming the due authorization, execution and delivery by the Purchaser, constitutes a valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. All other documents to be authorized, executed and delivered by the Seller will be duly authorized, executed and delivered by the Seller and will be valid and binding obligations of the Seller enforceable in accordance with their respective terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

2.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Seller of its obligations hereunder will conflict with any agreement or commitment to which the Seller is a party, or violate any statute or law or any judgment, decree, order, regulation or rule of any court or other any governmental or regulatory authority, domestic or foreign (each a “Governmental Entity”) applicable to the Seller. There are no legal proceedings pending, or to the Seller’s knowledge, threatened, against such Seller that questions the validity of the Agreement or would prevent consummation of the transactions contemplated hereby (the “Contemplated Transactions”). The Seller is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

2.4 No Consent Needed. To Seller’s knowledge, no consent, waiver, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity or any third party is required to be made or obtained by the Seller in connection with the execution and delivery by the Seller of this Agreement or the performance by the Seller of its obligations hereunder or the consummation by the Seller of the Contemplated Transactions, except for applicable requirements, if any, of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any state securities or “blue sky” laws (“Blue Sky Laws”).

- 3 -

2.5 Tax and Legal Matters. The Seller has had an opportunity to review with its own tax and legal advisors the tax and legal consequences to the Seller of the Contemplated Transactions. The Seller understands that it must rely solely on its advisors and not on any statements or representations by the Purchaser, or any of its agents. The Seller further understands that it shall be responsible for its own tax liability that may arise as a result of the Contemplated Transactions.

2.6 Ownership of Company Shares. Seller is the sole record and beneficial owner of the number of shares of Company Common Stock, the Warrants and, if applicable, Other Securities set forth next to its name on Exhibit A, and such securities are not and will not at any time prior to or at the Closing be subject to any lien or to any rights of first refusal of any kind. Except as set forth in this Agreement or a schedule hereto, there are no options, warrants, calls, rights, commitments or agreements of any character, written or oral, to which the Seller is a party or by which it is bound obligating the Seller to issue, deliver, sell, repurchase or redeem, or cause to be issued, delivered, sold repurchased or redeemed, any shares of Company Common Stock, Warrants or, if applicable, Other Securities or obligating the Seller to grant or enter into any such option, warrant, call, right, commitment or agreement and there will be no such agreements at any time prior to or at the Closing. The Seller has or prior to the Closing will have good and valid title to, and has the sole right to transfer such shares of Company Common Stock, Warrants and, if applicable, Other Securities. Such interests, as reflected on Exhibit A hereto, constitute all of shares of Company Common Stock, Warrants or Other Securities or rights to acquire any debt or equity securities of the Company of any kind or nature whatsoever owned, beneficially or of record, by the Seller. The Purchaser will receive good and valid title to such shares of Company Common Stock, Warrants and, if applicable, Other Securities in accordance with the Contemplated Transactions, subject to no claim, or lien retained, granted or permitted by the Seller. Without limiting the foregoing, the Seller has not granted any proxy or entered into or agreed to be bound by any voting trust with respect to any Purchased Securities. Except as contemplated in this Agreement, the Seller has not engaged in any sale or other transfer of its shares of Company Common Stock, Warrants or, if applicable, Other Securities in contemplation of the Contemplated Transactions.

2.8 Change in Capitalization. No Seller has voted in favor of the approval of, nor provided any proxy, authorization or consent to approve, any increase in the authorized number of shares of Company Common Stock, Preferred Stock or any Other Securities.

2.9 Absence of Claims by the Seller. As of the Closing Date, the Seller will have no claim against the Company or the Purchaser under any contract or on any other legal basis whatsoever, except for a claim against the Purchaser for the Purchaser’s failure, if any, to pay the Purchase Price as specified in Section 1.1.

2.10 Brokers or Finders. The Seller has not engaged any brokers, finders or agents, and the Purchaser has not incurred, and will not incur, directly or indirectly, as a result of any action taken by the Sellers, any liability for brokerage or finders’ fees or agents’ commissions or any similar charges in connection with the Agreement. In the event that the preceding sentence is in any way inaccurate, the Seller hereby agrees to indemnify and hold harmless the Purchaser from any liability for any such commission or compensation in the nature of a brokerage or finder’s fee or agent’s commission (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, partners, employees or representatives is responsible.

- 4 -

2.10 Rights and Stock Ownership. The Seller agrees that, effective as of the Closing, the Seller will no longer have any of the rights in respect of the Purchased Securities and neither the Seller nor any of its affiliates (as defined below) will hold any shares of Company Common Stock, warrants or options to purchase any shares of Company Common Stock, or other securities of the Company.

2.11 Investment Experience. The Seller is experienced in evaluating the unregistered securities of companies, has such knowledge and experience in financial or business matters that the Seller is capable of evaluating the merits and risks of the sale of the Purchased Securities, and has made an informed decision to sell the Purchased Securities. The Seller is aware that the Purchaser and the Company may entertain discussions and negotiations with respect to a possible financing, business combination or other transaction now or hereafter involving the acquisition of additional Company securities by the Purchaser on such terms and conditions as the Company and the Purchaser may agree.

2.12 Agreements Valid. Each of the following agreements to which such Seller is a party (each of which is attached hereto) is a true and correct copy of the final, executed version of each such agreement, and, as to such Seller, is in full force and effect and represents a valid and binding agreement between the parties thereto as of immediately prior to the Closing: the Warrants, attached as Exhibit B, and each of the Registration Rights Agreements by and among the Company, the Sellers, Hunter World Markets, Inc. and the other purchasers signatory thereto, dated August 9, 2005, November 29, 2005 and June 13, 2006 (collectively, the “Rights Agreement”), in the form attached as Exhibit C.

SECTION 3
INVESTMENT REPRESENTATIONS OF THE PURCHASER

The Purchaser represents and warrants to the Sellers, and agrees to, the following:

3.1 Formation and Status of Purchaser. The Purchaser is a limited partnership duly formed and validly existing under the laws of the State of Arizona.

3.2 Due Authorization. This Agreement has been duly and validly authorized, executed and delivered by, or on behalf of, the Purchaser, and, assuming the due authorization, execution and delivery by the Seller, constitutes a valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies. All other documents to be authorized, executed and delivered by the Purchaser will be duly authorized, executed and delivered by the Purchaser and will be valid and binding obligations of the Purchaser enforceable in accordance with their respective terms, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.

- 5 -

3.3 No Violation. Neither the execution and delivery of this Agreement nor the performance by the Purchaser of its obligations hereunder will conflict with any agreement or commitment to which the Purchaser is a party, or violate any statute or law or any judgment, decree, order, regulation or rule of Governmental Entity applicable to the Purchaser. There are no legal proceedings pending, or to the Purchaser’s knowledge, threatened, against such Purchaser that questions the validity of the Agreement or would prevent consummation of the Contemplated Transactions. The Purchaser is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.

3.4 No Consent Needed. To Purchaser’s knowledge, no consent, waiver, approval, order or authorization of, or declaration, filing or registration with, any Governmental Entity or any third party is required to be made or obtained by the Purchaser in connection with the execution and delivery by the Purchaser of this Agreement or the performance by the Purchaser of its obligations hereunder or the consummation by the Purchaser of the Contemplated Transactions, except for applicable requirements, if any, of the Exchange Act or Blue Sky Laws.

3.5 Investment Intent. The Purchaser is acquiring the Purchased Securities for investment for its own account, not as a nominee or agent and not with a view to, or for resale in connection with, any distribution thereof, and has no present intention of selling, granting participation in, or otherwise distributing the Purchased Securities. The Purchaser further represents that the Purchaser does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer, or grant participation to such person or to any third person, with respect to any of the Purchased Securities. The Purchaser understands that the Purchased Securities have not been registered under the Securities Act, and are not required to be registered by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.

3.6 Investment Experience. The Purchaser is experienced in evaluating and investing in the unregistered securities of companies, can bear the economic risk of this investment and has such knowledge and experience in financial or business matters that the Purchaser is capable of evaluating the merits and risks of the investment in the Purchased Securities. The Purchaser understands that an investment in the Company involves substantial risks. The Purchaser further understands all of the risks related to the purchase of the Purchased Securities and that the purchase of the Purchased Securities will be a highly speculative investment. The Purchaser is able, without impairing its financial condition, to hold the Purchased Securities for an indefinite period of time and to suffer a complete loss of its investment.

3.7 Accredited Investor Status. The Purchaser is an “accredited investor” as such term is defined under Rule 501 of Regulation D, promulgated under the Securities Act.

3.8 Investigation. The Purchaser is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Purchased Securities. The Purchaser further represents and acknowledges that the Purchaser is solely responsible for its own due diligence investigation of the Company and for its own analysis of the terms, merits and risks of this investment.

- 6 -

3.9 Transfer Restrictions.

(a) The Purchaser is aware of the provisions of Rule 144, promulgated under the Securities Act which, in substance, permits limited public resale of “restricted securities” in a non-public offering subject to the satisfaction of certain conditions, including, in case the securities have been held for less than two years: (1) the resale occurring not less than one year after the party has purchased and paid for the securities to be sold; (2) the availability of certain public information about the Company; (3) the sale being made through a broker in an unsolicited “broker’s transaction” or in transactions directly with a market maker (as that term is defined under the Exchange Act); and (4) the amount of securities being sold during any three-month period not exceeding the specified limitations stated therein.

(b) The Purchaser further understands that in the event all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act or compliance with a registration exemption will be required; and that, notwithstanding the fact that Rule 144 is not exclusive, the staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sale, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

SECTION 4
CERTAIN COVENANTS; GENERAL PROVISIONS

4.1 Certain Covenants.

(a) Without the prior written approval of the Purchaser, no Seller shall vote in favor of the approval of, nor provide any proxy, authorization or consent to approve:

(i) the Company or any of its subsidiaries entering into any transaction or making or entering into any contract or agreement which by reason of its size or otherwise is not in the ordinary course of business consistent with past practice;

(ii) the Company or any of its subsidiaries entering into or agreeing to enter into any asset sale, material lease, merger or consolidation or business combination with, any corporation or other entity, or engaging in any new business or investing in, making a loan, advance or capital contribution to, or otherwise acquiring the securities of, any other person or entity; or

(iii) any increase in the authorized number of shares of Company Common Stock, Preferred Stock or any Other Securities.

- 7 -

(b) No Seller shall grant any proxy or enter into or agree to be bound by any voting trust with respect to any Purchased Securities nor shall any Seller enter into any shareholder agreements or arrangements of any kind with any person with respect to any Purchased Securities inconsistent with the provisions of this Agreement (whether or not such agreements and arrangements are with other Sellers or holders of securities who are not parties to this Agreement), including agreements or arrangements with respect to the acquisition, disposition or voting (if applicable) of any Purchased Securities nor shall any Shareholder act, for any reason, as a member of a group or in concert with any other persons in connection with the acquisition, disposition or voting (if applicable) of any Purchased Securities in any manner which is inconsistent with this Agreement.

4.2 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware without regard to principles of conflicts of law.

4.3 Entire Agreement; Amendment. This Agreement represents the entire agreement among the parties with respect to the purchase of Purchased Securities. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. The Sellers agree that any amendment, waiver, discharge or termination shall be binding upon and effective against all Sellers if such amendment, waiver, discharge or termination is signed by the Sellers selling a majority of the Purchased Securities.

4.4 Notices. Any notice, demand or request required or permitted to be given by the Seller or the Purchaser pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed to the parties at the following addresses or such other address as a party may request by notifying the other in writing:


If to Purchaser:		With a copy to:

End Point LLC 1600 N. Kolb Road #118 Tucson, Arizona 85715 Facsimile: (520) 844-3390 Attn: David Mackstaller		Feulner Dorris plc 310 South Williams Blvd. Tucson, Arizona 85711 Facsimile: (520) 624-7034 Attn: John W. Dorris, Esq.

If to Sellers:		With a copy to:

c/o Absolute Capital Management Governors Square Suite 4-212 23 Lime Tree Bay Avenue P.O. Box 10630 Grand Cayman KY1-1006 Cayman Islands Facsimile: (345) 943-3636		Glenn Kennedy General Counsel Absolute Capital Management Governors Square Suite 4-212 23 Lime Tree Bay Avenue P.O. Box 10630 Grand Cayman KY1-1006 Cayman Islands Facsimile: (345) 943-3636

- 8 -

4.5 Assignment. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement will create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by either the Sellers or the Purchaser (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents will be void; provided, however, that the Purchaser may assign this Agreement and any or all rights or obligations hereunder (including, without limitation, the Purchaser’s right and obligation to purchase the Shares and the Purchaser’s rights to seek indemnification hereunder) to any person that is both (i) an affiliate of the Purchaser or its manager(s) and (ii) an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act. Upon any such permitted assignment, the references in this Agreement to the Purchaser will be deemed to apply to any such assignee unless the context otherwise requires and End Point LLC shall be discharged and released from any and all obligations hereunder. For purposes of this Agreement, “Affiliate” means any person or entity directly or indirectly controlling, controlled by, or under common control with another person or entity, or as set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act, and “Control,” “controlled” and “controlling” means the power to direct or cause the direction of the management and policies of a person or entity and shall be deemed to exist if any person or entity directly or indirectly owns, controls, or holds the power to vote fifty percent (50%) or more of the voting securities of such other person or entity.

4.6 Further Assurances. The parties agree to take all such further action(s) and execute and delivery such instruments as may reasonably be necessary to carry out and consummate this Agreement and the transactions contemplated hereby. Without limiting the foregoing, each Seller hereby agrees that, if and to the extent that any of its affiliates own any other shares of Company Common Stock, warrants, options or rights to purchase any shares of Company Common Stock, note or debt instruments, or other securities of the Company of any kind or nature whatsoever, Sellers shall cause any such securities to be sold and delivered to Purchaser at the Closing without payment of any additional consideration by Purchaser, it being the express intent and agreement of the parties that Sellers and their respective affiliates sell their entire interest in the Company to Purchaser pursuant to the terms of this Agreement.

4.7 No Waiver. Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

4.8 Descriptive Headings. The descriptive headings herein have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provisions hereof.

4.9 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument, but only one of which need be produced.

[remainder of the page intentionally left blank]

- 9 -

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first set forth above.

SELLERS:

ABSOLUTE RETURN EUROPE FUND LIMITED

By:
Name:
Title:

ABSOLUTE OCTANE MASTER FUND LIMITED

By:
Name:
Title:

ABSOLUTE EAST WEST MASTER FUND LIMITED

By:
Name:
Title:

ABSOLUTE GERMANY FUND LIMITED

By:
Name:
Title:

ABSOLUTE LARGE CAP MASTER FUND LIMITED

By:
Name:
Title:

ABSOLUTE EUROPEAN CATALYST FUND LIMITED

By:
Name:
Title:

[SIGNATURE PAGE TO SECURITIES TRANSFER AGREEMENT]

- 10 -

PURCHASER:

END POINT LLC

By:
Name: David Mackstaller
Title: Manager

[SIGNATURE PAGE TO SECURITIES TRANSFER AGREEMENT]

- 11 -

EXHIBIT A
SELLERS


			NUMBER OF
	NUMBER OF		SP3 29-05-2009		TOTAL
SELLER	COMMON SHARES		WARRANTS		PURCHASE PRICE
Absolute Return Europe Fund Limited		10,029,827		1,333,333	$	932,155.34
Absolute Octane Master Fund Limited		9,252,078		833,333	$	859,872.66
Absolute East West Master Fund Limited		2,621,600		833,333	$	243,647.12
Absolute European Catalyst Fund Limited		4,734,441		zero	$	440,011.02
Absolute Germany Fund Limited		100,000				9,293.82
Absolute Large Cap Master Fund Limited		161,613		317,204		15,020.04

Total		26,899,559		3,317,203	$	2,500,000.00

- 12 -

EXHIBIT B
WARRANTS

- 13 -

EXHIBIT C
RIGHTS AGREEMENT

- 14 -

EX-99.3 4 c72365exv99w3.htm EXHIBIT 3 Filed by Bowne Pure Compliance

Exhibit 3

ASSIGNMENT AND NOVATION AGREEMENT

THIS ASSIGNMENT AND NOVATION AGREEMENT (the “Agreement”) is made as of January 29, 2008, by and among End Point LLC, an Arizona limited liability company (“Assignor”), E-Wilson LLC, an Arizona limited liability company (“Assignee”), and each of the parties to the Transfer Agreement (as defined below) designated therein as a “Seller” (each, a “Counterparty” and collectively, the “Counterparties”).

BACKGROUND

A. Assignor and Counterparties have entered into that certain Securities Transfer Agreement, dated as of the date hereof (the “Transfer Agreement”), a copy of which is attached hereto as Schedule 1.

B. Assignor has agreed to assign the Transfer Agreement to Assignee on the term and conditions set forth herein.

C. Counterparties have agreed to consent to the assignment by Assignor to Assignee of all of Assignor’s right, title and interest in and to the Transfer Agreement.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties agree as follows:

SECTION 1
ASSIGNMENT

1.1 Assignment. Assignor hereby assigns, transfers and conveys to Assignee all of the right, title and interest of Assignor in and to the Transfer Agreement as at and from the Effective Time, to have and to hold the same unto Assignee absolutely. As used herein, the term “Effective Time” means immediately prior to the closing under the Transfer Agreement.

1.2 Consent to Assignment. Counterparty hereby consents to the assignment of the Transfer Agreement to Assignee in the manner set forth in this Agreement.

1.3 Assumption of Rights and Obligations. Assignee accepts the assignment set forth in Section 1.1 hereof and hereby agrees with Assignor that it shall be bound by and observe, perform and comply with all of the terms and provisions contained in the Transfer Agreement in replacement of Assignee and to take the full benefit of all rights and be subject to all of the obligations pertaining to Assignee under the Transfer Agreement to the same extent as if Assignee had been a party thereto in the place and stead of Assignor with effect from the Effective Time.

- 1 -

1.4 Release and Discharge. As and from the Effective Time, Counterparty hereby releases and discharges Assignor of and from the observance and performance of the covenants, agreements and obligations on the part of Assignor to be observed and performed under the Transfer Agreement.

SECTION 2
REPRESENTATIONS AND WARRANTIES OF ASSIGNEE

Assignee hereby represents and warrants to Assignor and the Counterparties the following:

2.1 Formation and Status of Assignee. Assignee is a limited liability company duly formed and validly existing under the laws of the State of Delaware.

2.2 Affirmation of Representations and Warranties. Each of the representations and warranties set forth in Sections 3.2 through 3.9 (inclusive) is true and correct with respect to Assignee as though it were originally named therein as “Purchaser”.

SECTION 3
CERTAIN COVENANTS; GENERAL PROVISIONS

3.1 Further Assurances. The parties hereto shall execute, acknowledge and deliver such instruments and take such other actions as may be reasonably necessary to fulfill their respective obligations under this Agreement and to effectively carry out the intent and meaning hereof.

3.2 Governing Law. This Agreement shall be governed in all respects by the internal laws of the State of Delaware without regard to principles of conflicts of law.

3.3 Entire Agreement; Amendment. This Agreement (together with the Transfer Agreement) represents the entire agreement among the parties with respect to the matters contemplated herein. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. The Counterparties agree that any amendment, waiver, discharge or termination shall be binding upon and effective against all Counterparties if such amendment, waiver, discharge or termination is signed by the Counterparties selling a majority of the “Purchased Securities” pursuant to the Transfer Agreement.

- 2 -

3.4 Notices. Any notice, demand or request required or permitted to be given by the parties pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed to the parties at the following addresses or such other address as a party may request by notifying the other in writing:


If to Assignor or Assignee:		With a copy to:

c/o End Point LLC 1600 N Kolb Rd # 118 Tucson, AZ 85715 Attn: David Mackstaller		Feulner Dorris plc 310 South Williams Blvd. Tucson, Arizona 85711 Facsimile: (520) 624-7034 Attn: John W. Dorris, Esq.

If to any Counterparties:		With a copy to:

At the address set forth on Exhibit A		Glenn Kennedy General Counsel Absolute Capital Management Governors Square Suite 4-212 23 Lime Tree Bay Avenue P.O. Box 10630 Grand Cayman KY1-1006 Cayman Islands Facsimile: (345) 943-3636

3.5 Assignment. This Agreement will be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Nothing in this Agreement will create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement except as provided below. No assignment of this Agreement or of any rights or obligations hereunder may be made by the parties hereto (by operation of law or otherwise) without the prior written consent of the other parties hereto and any attempted assignment without the required consents will be void; provided, however, that following the closing under the Transfer Agreement, Assignee may assign this Agreement and any or all rights or obligations hereunder to any person that is both (i) an affiliate of Assignor or its manager(s) and (ii) an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act. For purposes of this Section 3.5, “Affiliate” means any person or entity directly or indirectly controlling, controlled by, or under common control with another person or entity, or as set forth in Rule 12b-2 of the regulations promulgated under the Exchange Act, and “Control,” “controlled” and “controlling” means the power to direct or cause the direction of the management and policies of a person or entity and shall be deemed to exist if any person or entity directly or indirectly owns, controls, or holds the power to vote fifty percent (50%) or more of the voting securities of such other person or entity.

- 3 -

3.6 No Waiver. Any party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent that party thereafter from enforcing each and every other provision of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

3.7 Descriptive Headings. The descriptive headings herein have been inserted for convenience only and shall not be deemed to limit or otherwise affect the construction of any provisions hereof.

3.8 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original and all of which shall constitute the same instrument, but only one of which need be produced.

[remainder of the page intentionally left blank]

- 4 -

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first set forth above.

ASSIGNOR:

END POINT LLC

By:
Name: David Mackstaller
Title: Manager

ASSIGNEE:

E-WILSON LLC

By: E-W Manager LLC,
Manager

By:
Name: David Mackstaller
Title: Manager

SELLERS:

ABSOLUTE RETURN EUROPE FUND LIMITED

By:
Name:
Title:

ABSOLUTE OCTANE MASTER FUND LIMITED

By:
Name:
Title:

[SIGNATURE PAGE TO ASSIGNMENT AND NOVATION AGREEMENT]

- 5 -

ABSOLUTE EAST WEST MASTER FUND LIMITED

By:
Name:
Title:

ABSOLUTE GERMANY FUND LIMITED

By:
Name:
Title:

ABSOLUTE LARGE CAP MASTER FUND LIMITED

By:
Name:
Title:

ABSOLUTE EUROPEAN CATALYST FUND LIMITED

By:
Name:
Title:

[SIGNATURE PAGE TO ASSIGNMENT AND NOVATION AGREEMENT]

- 6 -

SCHEDULE 1
SECURITIES TRANSFER AGREEMENT

- 7 -

EX-99.4 5 c72365exv99w4.htm EXHIBIT 4 Filed by Bowne Pure Compliance

Exhibit 4

CREDIT AGREEMENT

THIS CREDIT AGREEMENT (this “Credit Agreement”) is entered into as of February 1, 2008 between MICROMED CARDIOVASCULAR, INC., a Delaware corporation (“Borrower”), and E-WILSON LLC, an Arizona limited liability company (“Lender”).

(1) Commitment. Lender hereby agrees to make loans (each an “Advance”) to Borrower, subject to the conditions stated in Section 2 hereof, up to an aggregate principal amount of Ten Million Dollars ($10,000,000), which shall be disbursed by Lender to Borrower in five traunches on the respective “Funding Dates” as set forth in Exhibit A. The obligation of Lender to make Advances to Borrower shall terminate on April 1, 2010 (the “Funding Commitment Termination Date”); provided, however, that Lender shall have no obligation to make any further Advances following the occurrence of any Event of Default (as hereinafter defined). In consideration of Lender’s commitment to loan up to aggregate principal amount of Ten Million Dollars ($10,000,000) to Borrower, simultaneously with the funding of the initial Advance under this Credit Agreement, Borrower shall issue a warrant to purchase shares of Borrower’s common stock, $0.001 par value per share (“Common Stock”), in the form attached hereto as Exhibit B (the “Warrant”). Subject to receipt of stockholder approval of the increase in the number of authorized shares of Common Stock as contemplated by Section 10(b) below, the Warrant shall be exercisable for a total of 500,000,000 shares of Common Stock, less the total number of shares issued or issuable upon conversion of the Note (as defined below) as of the Funding Commitment Termination Date, at an exercise price of $0.02 per share of Common Stock, subject to adjustment as provided in the Warrant. The shares issuable upon exercise of the Warrant are referred to herein collectively as, the “Warrant Shares.”

(2) Conditions Precedent to Funding all Advances. The obligation of Lender to make each Advance shall be subject to the satisfaction of all of the following conditions precedent: (a) there shall not have occurred any Event of Default, (b) except in the case of the initial Advance in the principal amount of $1,000,000, Borrower shall have amended its Certificate of Incorporation to increase its authorized shares of Common Stock as contemplated by Section 10(b) of this Credit Agreement and (c) except in the case of the initial Advance in the principal amount of $1,000,000, Borrower shall have delivered to Lender the Certificate of Chief Executive Officer in the form attached hereto as Exhibit D, dated as of the respective Funding Date.

(3) Procedure for Funding an Advance. From and after the occurrence of the conditions precedent set forth in Section 2 above and prior to the Funding Commitment Termination Date, and subject to the credit limitation set forth in Section 1, Lender shall, upon each Funding Date, transfer to Borrower by wire transfer in same day funds, to the account of Borrower specified in such written notice, the amount to be loaned to Borrower on such Funding Date as set forth in Exhibit A.

(4) Principal and Interest. The outstanding principal balance of all Advances, together with all of the interest thereon and any other amounts owed, shall be due and payable in full on February 28, 2013 (the “Maturity Date”) unless earlier converted or repaid as provided herein. Commencing February 28, 2011, Borrower shall make monthly payments of principal and interest on the last business day of each month calculated based on the outstanding principal balance and interest being amortized over the remaining term of the Note. Interest shall accrue on the outstanding principal amount of each Advance from the date of funding of such Advance until payment in full, at a rate of 7.5% per annum or the maximum rate permissible by law (the laws of the State of Arizona shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less. Interest shall be calculated on the basis of a 365-day year for the actual number of days elapsed. Except as provided in Section 11 in connection with an acceleration of the Note, Borrower shall not be permitted to make any prepayments prior to February 28, 2011. After February 28, 2011, Borrower shall have the right to make prepayments at any time in reduction of the outstanding principal balance and accrued and unpaid interest of the Note, in whole or in part, without premium or penalty; such payments shall be applied to amounts outstanding under the Note as provided in Section 7.

(5) Note and Schedule of Advances. Borrower’s obligation to repay the Advances shall be evidenced by, among other things, that certain unsecured convertible promissory note, dated as of even date herewith, executed and delivered by Borrower and payable to the order of Lender (the “Note”). The Note shall be convertible into shares of Common Stock of Borrower (as converted, the “Conversion Shares”) upon the terms provided therein. Upon the funding of the initial Advance under this Credit Agreement, Borrower shall prepare and deliver to Lender the Schedule of Advances attached hereto as Exhibit C, setting forth the information to be provided thereon. Upon any additional funding of an Advance, any repayment of an Advance (in part or in full) by Borrower, any reduction in amounts owed hereunder by conversion of the Note, and on each anniversary of the funding of an Advance until such Advance is paid in full and all funding commitments of Lender hereunder have been terminated, Borrower shall amend the Schedule of Advances to reflect such event and deliver to Lender the Schedule of Advances as so amended.

(6) Place of Payment. All amounts payable hereunder shall be payable at 1600 North Kolb Road, Suite 118, Tucson, Arizona 85715, unless another place of payment shall be specified in writing by Lender.

(7) Application of Payments. Any payment made by Borrower on any Advance hereunder shall be applied first to accrued interest, and thereafter to principal.

(8) Warranties And Representations. Borrower hereby represents and warrants to Lender that as of the date hereof:

(a) Organization and Qualification. Borrower and its “Material Subsidiaries” (which for purposes of this Credit Agreement means any significant subsidiary as defined in Rule 1-02(w) of Regulation S-X under the Securities Act of 1933 Act, as amended (the “1933 Act”) are corporations duly organized and validly existing in good standing under the laws of the jurisdiction in which they are incorporated, and have the requisite corporate power and authorization to own their properties and to carry on their business as now being conducted. Each of Borrower and its Material Subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Credit Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations or financial condition of Borrower and its Material Subsidiaries taken as a whole, or on the transactions contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or on the authority or ability of Borrower to perform its obligations under the Transaction Documents (as defined below). A complete list of Borrower’s subsidiaries (including appropriate designation of those subsidiaries that constitute Material Subsidiaries) as of the date of this Credit Agreement is set forth on Schedule 8(a).

(b) Authorization; Enforcement; Validity. Borrower has the requisite corporate power and authority to enter into and perform its obligations under this Agreement, the Registration Rights Agreement, the Note, the Warrant and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”), and to issue the Note, the Warrant, the Conversion Shares and the Warrant Shares (collectively, the “Securities”) in accordance with the terms hereof and thereof. The execution and delivery of the Transaction Documents by Borrower and the consummation by it of the transactions contemplated hereby and thereby, including without limitation the issuance of the Note and the Warrant and the reservation for issuance and the issuance of the Conversion Shares and Warrant Shares issuable upon conversion or exercise thereof, have been duly authorized by Borrower’s Board of Directors and no further consent or authorization is required by Borrower, its Board of Directors or its stockholders (except to the extent that stockholder approval is required in respect of the Charter Amendment). The Transaction Documents have been duly executed and delivered by Borrower. The Transaction Documents constitute the valid and binding obligations of Borrower enforceable against Borrower in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

(c) Capitalization. As of the date hereof, the authorized capital stock of Borrower consists of (i) 100,000,000 shares of common stock, of which as of January 31, 2008, 40,108,853 shares were issued and outstanding and 3,513,764 shares were reserved for issuance pursuant to Borrower’s stock option and purchase plans, 4,816,244 shares were reserved for issuance pursuant to conversion of Borrower’s existing warrants (the “Existing Warrants”) and no shares were issuable and reserved for issuance pursuant to securities (other than the Note, the Warrant, stock option and purchase plans and the Existing Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock, and (ii) 50,000,000 shares of undesignated preferred stock, none of which is outstanding as of the date hereof. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 8(c), (A) no shares of Borrower’s capital stock are subject to preemptive rights or any other similar rights (arising under Delaware law, Borrower’s Certificate of Incorporation or By-laws or any agreement or instrument to which Borrower is a party) or any liens or encumbrances granted or created by Borrower; (B) there are no outstanding securities or instruments of Borrower or any of its Material Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which Borrower or any of its Material Subsidiaries is or may become bound to redeem a security of Borrower or any of its Material Subsidiaries; (C) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this Credit Agreement; and (D) Borrower does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. Except as disclosed in Schedule 8(c), or in the SEC Documents which were filed with the SEC at least five (5) days prior to the date hereof, (I) there are no outstanding debt securities issued by Borrower; (II) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of Borrower or any of its Material Subsidiaries, or contracts, commitments, understandings or arrangements by which Borrower or any of its Material Subsidiaries is or may become bound to issue additional shares of capital stock of Borrower or any of its Material Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of Borrower or any of its Material Subsidiaries; and (III) there are no agreements or arrangements under which Borrower or any of its Material Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement).

(d) Issuance of Securities. The Note and Warrant are duly authorized and, upon issuance in accordance with the terms hereof, shall be free from all taxes, liens and charges with respect to the issuance thereof and entitled to the rights set forth in the Note and the Warrant, respectively. As of the initial Funding Date, such number of shares of Common Stock as are issuable upon exercise of the Note and the Warrant as of the initial Funding Date will have been duly authorized and reserved for issuance upon conversion of the Note and exercise of the Warrant. Upon conversion or exercise in accordance with the Note and the Warrant, the Conversion Shares and Warrant Shares will be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The issuance by Borrower of the Securities is exempt from registration under the 1933 Act.

(e) No Conflicts. The execution, delivery and performance of the Transaction Documents by Borrower and the consummation by Borrower of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the Conversion Shares and Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation or the By-laws; (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture or instrument to which Borrower or any of its Material Subsidiaries is a party; (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to Borrower or any of its Material Subsidiaries or by which any property or asset of Borrower or any of its Material Subsidiaries is bound or affected. Except as specifically contemplated by this Credit Agreement and as required under the 1933 Act, and except for the Stockholder Approval in respect of the Charter Amendment, Borrower is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with the terms hereof or thereof. Except as disclosed in Schedule 8(e), all consents, authorizations, orders, filings and registrations which Borrower is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.

(f) SEC Documents; Financial Statements. Borrower has provided Lender with access to all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof (including all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein) being hereinafter referred to as the “SEC Documents”).

(g) Absence of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of Borrower or any of its Material Subsidiaries, threatened against or affecting Borrower, the Common Stock or any of Borrower’s Material Subsidiaries or any of Borrower’s or Borrower’s Material Subsidiaries’ officers or directors in their capacities as such, except where the same would not result, either individually or in the aggregate, in a Material Adverse Effect, and except as expressly set forth in the SEC Documents which were filed with the SEC at least five (5) days prior to the date hereof. To the knowledge of Borrower, none of the directors or officers of Borrower have been involved in securities related litigation during the past five years which was required to be disclosed in any SEC Documents other than as disclosed in any SEC Documents which was filed at least five (5) days prior to the date hereof.

(h) Employee Relations. Neither Borrower nor any of its Material Subsidiaries is involved in any union labor dispute nor, to the knowledge of Borrower or any of its Material Subsidiaries, is any such dispute threatened. No material number of employees of Borrower or its Material Subsidiaries is a member of a union which relates to such employee’s relationship with Borrower, neither Borrower nor any of its Material Subsidiaries is a party to a material collective bargaining agreement, and Borrower and its Material Subsidiaries believe that their relations with their employees are generally good. Neither Borrower’s current chairperson and chief executive officer nor its current chief financial officer has notified Borrower that such officer intends to leave Borrower or otherwise terminate such officer’s employment with Borrower.

(i) Intellectual Property Rights. Borrower and its Material Subsidiaries own or possess or can acquire on reasonable terms adequate rights or licenses to use all trademarks, trade names, service marks, patents, copyrights, trade secrets and other intellectual property rights necessary to conduct their respective businesses as now conducted, except where the absence to own or possess the same would not result, either individually or in the aggregate, in a Material Adverse Effect. Borrower and its Material Subsidiaries do not have any knowledge of any infringement by Borrower or its Material Subsidiaries of trademarks, trade names, service marks, patents, copyrights, trade secrets or other intellectual property rights of others, except where such infringement would not result, either individually or in the aggregate, in a Material Adverse Effect. To Borrower’s knowledge there is no claim, action or proceeding being overtly threatened against, but which has not been made or brought against, Borrower or its Material Subsidiaries regarding its trademarks, trade names, service marks, patents, copyrights, trade secrets, or infringement of other intellectual property rights which could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(j) Insurance. Borrower and each of its Material Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of Borrower believes to be prudent and customary in the businesses in which Borrower and its Material Subsidiaries are engaged.

(k) Regulatory Permits. Except for Permits (as defined below) the absence of which would not result, either individually or in the aggregate, in a Material Adverse Effect, Borrower and its Material Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses (the “Permits”), and neither Borrower nor any such Material Subsidiary has received any notice of proceedings relating to the revocation or modification of any such Permit.

(l) Application of Takeover Protections. Borrower and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate of Incorporation or the laws of the state of its incorporation which is or could become applicable to Lender as a result of the transactions contemplated by this Agreement, including, without limitation, Borrower’s issuance of the Securities and Lender’s ownership of the Securities.

(m) Rights Agreement. Borrower has not adopted a shareholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change in control of Borrower.

(n) Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by Borrower to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other person with respect to the transactions contemplated by this Credit Agreement. Lender shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this Section 8(n) that may be due in connection with transactions contemplated by this Credit Agreement.

(o) Dilutive Effect. Borrower acknowledges that its obligation to issue Conversion Shares upon conversion of the Notes in accordance with this Agreement and the Notes and its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants is, in each case, absolute and unconditional, following the Stockholder Approval (as defined in Section 10(b)) and the filing of the amended and restated Articles of Incorporation (which Borrower shall file with the Secretary of State of the State of Nevada immediately following Stockholder Approval), regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of Borrower.

(p) Ranking of Notes. Except as set forth on Schedule 8(p), no indebtedness of Borrower is senior to or ranks pari passu with the Note in right of payment, whether with respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise.

(9) Negative Covenants of Borrower. Until the later of the Expiration Date (as defined in the Warrant) and payment in full of the Advances, Borrower will not and will cause its subsidiaries not to, without the prior written consent of Lender:

(a) Liens. Except in the ordinary course of business, subject to any lien or encumbrance (except for leases that do not materially impair the use of the property subject thereto in their respective businesses as presently conducted), any of the properties or assets (whether tangible or intangible) of Borrower or any of its subsidiaries;

(b) Disposition of Assets. Except for sales of inventory and the like in the ordinary course of business, sell, license, lease, transfer or abandon or otherwise dispose of any material assets;

(c) Consolidation, Merger, etc. Consolidate with, merge into or with or sell (whether in one transaction or in a series of transactions) all or substantially all of its assets to any Person;

(d) Loans, Guarantees, Acquisitions. Except in the ordinary course of Borrower’s business, advance funds to any person (other than Lender) (whether by way of loan, stock purchase, capital contribution, or otherwise), or incur any indebtedness or enter into a guarantee with respect to the obligations of any person (other than Lender). In addition, Borrower may not acquire by purchase of stock or by purchase of assets in exchange for cash, shares of capital stock, or other securities of Borrower, any other person or all or any substantial division or portion of the assets and business of any other person;

(e) Dividends and Redemptions. Declare, set aside, make or pay any dividend or other distribution in respect of the capital stock of Borrower or any of its subsidiaries or repurchase, redeem or otherwise acquire any outstanding shares of the capital stock or other securities of, or other ownership interests in, Borrower or any of its subsidiaries;

(f) Issuances. Transfer, issue, sell or dispose of any shares of capital stock or other securities of Borrower or any of its subsidiaries or grant options, warrants, calls or other rights to purchase or otherwise acquire shares of the capital stock or other securities of Borrower or any of its subsidiaries, except for shares issuable pursuant to the Note, the Warrant, Borrower’s stock option and purchase plans or the Existing Warrants;

(g) Changes in Capitalization, etc. Effect any recapitalization, reclassification, stock split or like change in the capitalization of Borrower or any of its subsidiaries;

(h) Debt. Except for trade payables and for indebtedness for borrowed money incurred in the ordinary course of business and consistent with past practice, borrow monies for any reason or draw down on any line of credit or debt obligation, or become the guarantor, surety, endorser or otherwise liable for any debt, obligation or liability (contingent or otherwise) of any other person or entity; or

(i) Other Material Transactions. Permit Borrower or any of its subsidiaries to enter into any transaction or to make or enter into any contract or agreement that would be required to be disclosed by Borrower on a Current Report on Form 8-K filed with the SEC.

(10) Affirmative Covenants of Borrower.

(a) Registration Rights. Pursuant to the terms and conditions of the Registration Rights Agreement entered into between Lender and Borrower of even date herewith, Borrower agrees to register on behalf of Lender the issuance or resale of all of the Conversion Shares, the Warrant Shares or any other shares of Common Stock acquired or acquirable by Lender.

(b) Stockholder Approval. The Board of Directors of Borrower, pursuant to a unanimous written consent adopted on February 1, 2008, has unanimously (i) determined that it is advisable and in the best interests of Borrower and its stockholders to adopt an amendment to Borrower’s Certificate of Incorporation to increase the authorized Common Stock from 100,000,000 shares to 750,000,000 shares (the “Charter Amendment”), and (ii) recommended that the holders of Borrower’s Common Stock affirmatively approve the Charter Amendment and directed that such matter be submitted, if required, to Borrower’s stockholders for approval (such affirmative approval being referred to herein as the “Stockholder Approval” and the date such approval is obtained, the “Stockholder Approval Date”). Lender hereby agrees to approve by written consent the Charter Amendment as Borrower’s majority stockholder in accordance with the Delaware General Corporation Law. As soon as practicable, but no later than 30 days after the initial Funding Date, Borrower shall file with the SEC an information statement informing the remaining stockholders of Borrower of such approval of the Charter Amendment in accordance with Schedule 14C under the Exchange Act (the “Information Statement”). The Stockholder Approval shall be deemed given after 20 days has elapsed following the date that Borrower mails the Information Statement to stockholders pursuant to Regulation 14C under the Exchange Act. Within two (2) business days after stockholder approval of the matters set forth in the Information Statement is effective, Borrower will send written notification to Lender of such Stockholder Approval and that Lender may exercise its conversion and purchase rights in accordance with the Note and Warrant.

(c) Board Representation. For so long as Lender and its affiliates, as a group (collectively, the “Lender Group”), beneficially own shares of Borrower’s Common Stock representing a majority of the total voting power of all of the outstanding voting stock of Borrower:

(i) Lender shall have the right to designate for nomination by Borrower’s board of directors (the “Board”) (or any nominating committee thereof) for election to the Board (each person so designated, a “Lender Designee”) a majority of the members of the Board, including the Chairman of the Board. The initial Lender Designees shall be nominated by the Board or its nominating committee to fill newly created vacancies created by the Board promptly following the written request of Lender and shall thereupon be appointed to the Board by written consent of Lender, as majority stockholder. Notwithstanding anything to the contrary set forth herein, Borrower’s obligations with respect to the election or appointment of Lender Designees shall be limited by Borrower’s compliance with applicable law and any applicable SEC or stock exchange director independence requirements.

(ii) Commencing with the annual meeting of stockholders of Borrower to be held in 2008 and prior to each annual meeting of stockholders of Borrower thereafter, Lender shall be entitled to present to the Board or any nominating committee thereof for nomination thereby such number of Lender Designees for election to the Board (or if there is a classified board, the class of directors up for election) at such annual meeting as would result in Lender having the appropriate number of Lender Designees on the Board as determined pursuant to this Section 10(c). Borrower shall at all such times exercise all authority under applicable law and use reasonable best efforts to cause all such Lender Designees to be nominated for election as Board members by the Board (or any nominating committee thereof). Borrower shall cause each Lender Designee for election to the Board to be included in the slate of nominees recommended by the Board to holders of Common Stock (including at any special meeting of stockholders held for the election of directors) and shall use reasonable best efforts to cause the election of each such Lender Designee, including soliciting proxies in favor of the election of such persons. In the event that any Lender Designee elected to the Board shall cease to serve as a director for any reason, the vacancy resulting therefrom shall be filled by the Board with a substitute Lender Designee. In the event that as a result of any increase in the size of the Board, Lender is entitled to have one or more additional Lender Designees elected to the Board pursuant to this Section 10(c), the Board shall appoint the appropriate number of such additional Lender Designees.

(d) Filing of Form 8-K. Before 9:00 am Eastern Time, on February 6, 2008, but in no event later than the first time Borrower issues a press release disclosing the transactions contemplated by this Credit Agreement, Borrower shall file a Current Report on Form 8-K with the SEC describing the terms of the transactions contemplated by the Transaction Documents and including as exhibits to such Current Report on Form 8-K a form of each of this Credit Agreement (including the disclosure schedules to this Credit Agreement), the Note, the Warrant and the Registration Rights Agreement, in the form required by the 1934 Act.

(e) Use of Proceeds. Borrower will use the proceeds from the Advances and/or the exercise of the Warrant for working capital and capital expenditures. Borrower shall not use such proceeds in violation of any applicable law.

(f) Reservation of Shares. Borrower shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the number of shares of Common Stock needed to provide for the issuance of the shares of Common Stock upon conversion or exercise of the Note and Warrant.

(11) Default. Each of the following events shall be an “Event of Default” hereunder:

(a) Borrower fails to pay timely any amount due under this Credit Agreement within ten (10) business days after such payment becomes due;

(b) Any representation or warranty by, made or deemed made herein, or which is contained in any certificate, document or financial or other statement by Borrower, furnished at any time under this Credit Agreement, is incorrect in any material respect on or as of the date made or deemed made;

(c) The Borrower fails to perform or observe any other term or covenant contained in this Credit Agreement, and such default shall continue unremedied for a period of 20 days after the earlier of (i) the date upon which an executive officer of Borrower knew or reasonably should have known of such failure, or (ii) the date upon which written notice thereof is given to Borrower by Lender;

(d) Borrower files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing; or

(e) An involuntary petition is filed against Borrower (unless such petition is dismissed or discharged within sixty (60) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of Borrower.

Upon the occurrence and the continuance of an Event of Default hereunder, all unpaid principal, accrued interest and other amounts owing hereunder shall, at the option of Lender, and, in the case of an Event of Default pursuant to (d) or (e) above, automatically, be immediately due, payable and collectible by Lender pursuant to applicable law.

(12) Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand, telecopier or by messenger, addressed (a) if to Lender, at Lender’s address set forth on the signature page hereof, or at such other address as Lender shall have furnished to Borrower in writing, or (b) if to Borrower, one copy should be sent to its address set forth on the signature page hereof and addressed to the attention of the Corporate Secretary, or at such other address as Borrower shall have furnished to Lender. Each such notice or other communication shall for all purposes of this Credit Agreement be treated as effective or having been given when delivered if delivered personally or by messenger, courier service, telex, telegram or telecopier, or, if sent by mail, at the earlier of its receipt or seventy-two (72) hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid.

(13) Governing Law. This Credit Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Arizona, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

[signatures on following page]

IN WITNESS WHEREOF, the parties have duly executed this Credit Agreement as of the day and year first set forth above.

BORROWER:

MICROMED CARDIOVASCULAR, INC.

Address:

8965 Interchange Drive

By:

Houston, Texas 77054

Name: Robert Benkowski
Title: Chief Executive Officer

LENDER:

E-WILSON LLC

Address:

By: E-W Manager LLC,
Manager

1600 North Kolb Rd.
Suite 118
Tucson, Arizona 85715

By:
Name: David Mackstaller
Title: Manager

EXHIBIT A

DISBURSEMENT SCHEDULE


Funding Date	Amount of Advance
Upon execution of Credit Agreement		$	1,000,000
Filing Date of Charter Amendment		$	1,500,000
July 1, 2008		$	2,500,000
April 1, 2009		$	2,500,000
January 4, 2010		$	2,500,000

EXHIBIT B

FORM OF WARRANT

EXHIBIT C

SCHEDULE OF ADVANCES


Advance			Repayment	Principal	Interest
Number	Date	Amount	Date	Repaid	Repaid

EXHIBIT D
FORM OF FUNDING CERTIFICATE

Schedule 8(a)

MicroMed Technology, Inc., Material Subsidiary
MicroMed Cardiovascular Europe GmbH, Material Subsidiary

Schedule 8(c)

Pursuant to Section 4.9 of that certain Securities Purchase Agreement dated as of June 13, 2006, between Borrower and the purchasers named therein, such purchasers have the right purchase additional shares of Common Stock at par value in the event Borrower issues shares of Common Stock, or the right to purchase shares of Common Stock, at a price less than $1.55 per share.

Pursuant to certain Registration Rights Agreements between Borrower and the purchasers named therein, Borrower is obligated to maintain that certain registration statement on Form SB-2 (SEC file no. 333-136457).

Schedule 8(p)

Pursuant to that certain Amendment to Loan and Security Agreement, dated January 8, 2007, between Borrower and Silicon Valley Bank, Borrower has an outstanding loan with Silicon Valley Bank, which is secured by the following equipment:


Description	Manufacturer	Model No.
Robodrill	Fanuc Ltd.	a-T14iE

Schedule 8(s)

None

EX-99.5 6 c72365exv99w5.htm EXHIBIT 5 Filed by Bowne Pure Compliance

Exhibit 5

Issued: Feburary 1, 2008

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR OTHER FINANCING ARRANGEMENT SECURED BY THIS NOTE. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF.

MicroMed Cardiovascular, Inc.

Due February 28, 2013

MICROMED CARDIOVASCULAR, INC., a Delaware corporation (the “Company”), for value received, hereby promises to pay to E-WILSON LLC, an Arizona limited liability company (the “holder”), with an address at 1600 North Kolb Road, Suite 118, Tucson, Arizona 85715, on February 28, 2013 (the “Maturity Date”), the principal sum of Ten Million and no/100 dollars ($10,000,000.00), or so much thereof as shall be advanced by holder pursuant to the Credit Agreement (as defined below) and which remains outstanding and unconverted, and to pay interest, without compounding, on the outstanding balance of the principal amount, outstanding from time to time, at a fixed rate of 7.5% per annum.

All outstanding principal and all interest then accrued and unpaid shall be payable on the Maturity Date. Commencing February 28, 2011, the Company shall make monthly payments of principal and interest on the last business day of each month calculated based on the outstanding principal balance and interest being amortized over the remaining term of the Note. Such principal and interest shall be paid in lawful money of the United States of America by check mailed to the holder hereof at the address of such holder set forth above, or such other address of which the holder shall give the

Company prior written notice of at least 30 days. Any amount of principal or other amounts due hereunder that is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of twelve percent (12%) per annum from the date such amount was due until the same is paid in full. Other than as specifically permitted by this Promissory Note, the Company may not prepay any portion of the outstanding principal, accrued and unpaid interest or accrued and unpaid late charges, if any, on principal and interest.

In addition to the terms and provisions set forth hereinabove, this Promissory Note is subject to the following terms and provisions:

1. Credit Agreement. This Promissory Note is made subject to, and in accordance with, the terms and provisions contained in the Credit Agreement, dated as of February 1, 2008 (the “Credit Agreement”), by and between the Company and E-Wilson LLC. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in the Credit Agreement.

2. Conversion Rights.

(a) As used herein:

(i) “Acquisition” shall mean any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred.

(ii) “Applicable Commencement Date” shall mean (i) in connection with the exercise of the conversion option in respect of the first 50,000,000 shares of Common Stock issuable upon conversion of this Promissory Note, the date hereof and (ii) in connection with the exercise of the conversion option in respect of any additional shares of Common Stock thereafter, the Stockholder Approval Date.

(iii) “Asset Transfer” shall mean a sale, lease or other disposition of all or substantially all of the assets of the Company.

(iv) “Common Stock” means the common stock, $.001 par value per share, of the Company.

(v) “Conversion Amount” means the sum of the amount of Converted Principal and the amount of Converted Interest.

(vi) “Conversion Price” means $0.02, subject to adjustment as set forth in Section 2(f).

(vii) “Converted Interest” means any accrued and unpaid interest on this Promissory Note converted into Common Stock in accordance with Section 2.

(viii) “Converted Principal” means any outstanding principal converted on this Promissory Note converted into Common Stock in accordance with Section 2.

(b) Subject to and in compliance with the provisions of this Section 2, the holder of this Promissory Note may, at its option, by surrender of this Promissory Note as hereinafter provided, convert all or any portion of the outstanding principal amount of this Promissory Note, and all or any portion of the accrued and unpaid interest on this Promissory Note, into such number of shares of Common Stock as is determined by dividing the Conversion Amount by the Conversion Price.

(c) Subject to the other provisions of this Promissory Note, the option of the holder of this Promissory Note or the Company for conversion of this Promissory Note may be exercised at any time during the period beginning on the Applicable Commencement Date and ending upon the later of the Funding Commitment Termination Date and the repayment in full of the principal of this Promissory Note.

(d) The surrender of this Promissory Note for conversion shall be made by the holder hereof to the Company at its office in Houston, Texas, accompanied by written notice to the Company in the form of the Conversion Request attached as Annex 1 to this Promissory Note (the “Conversion Request”) that such holder elects to convert the Converted Principal of this Promissory Note, and the Converted Interest on this Promissory Note, in accordance with the provisions hereof.

(i) If (A) the Conversion Request is made after the Funding Commitment Termination Date and (B) the Conversion Amount is equal to all principal outstanding on this Promissory Note plus all accrued and unpaid interest on this Promissory Note on the date the Conversion Request is made, then upon surrender of this Promissory Note for conversion, it shall be marked “Paid in Full”. Any such notice of election to convert shall constitute a contract between the holder of this Promissory Note and the Company, whereby such holder shall be deemed to subscribe for the number of shares of Common Stock which it shall be entitled to receive upon such conversion, and in payment and satisfaction of such subscription, to surrender this Promissory Note and to release the Company from all liability hereon, including interest accruing, after the date of the receipt of the Conversion Request, and whereby the Company shall be deemed to agree that the surrender of such Promissory Note and the extinguishment of liability hereon shall constitute full payment for the shares of Common Stock so subscribed for and to be issued upon such conversion.

(ii) If either (A) the Conversion Request is made prior to the Funding Commitment Termination Date or (B) the Conversion Amount is less than the sum of all outstanding principal on this Promissory Note and all accrued and unpaid interest on this Promissory Note on the date the Conversion Request is made, then upon surrender of this Promissory Note for conversion, (X) the principal amount of this Promissory Note as shown on Schedule 1 hereto shall be reduced by the amount of Converted Principal and (Y) the unpaid interest then accrued shall be reduced by the amount of Converted Interest. Any such notice of election to convert shall constitute a contract between the holder of this Promissory Note and the Company, whereby such holder shall be deemed to subscribe for the number of shares of Common Stock which it shall be entitled to receive upon such conversion, and in payment and satisfaction of such subscription, to release the Company from all liability with respect to (I) the Converted Principal, (II) interest accruing on the Converted Principal after the date of the receipt of the Conversion Request and (III) Converted Interest, from the and including the date on which the Conversion Request is received. The Company shall be deemed to agree that the Conversion Amount shall constitute full payment for the shares of Common Stock so subscribed for and to be issued upon such conversion. The Company’s liability for any principal which is not Converted Principal and any accrued and unpaid interest which is not Converted Interest (including, without limitation, in respect of advances made pursuant to the Credit Agreement after the date the Conversion Request is made), shall continue in accordance with the terms hereof.

(iii) Subject to the further provisions of this Section 2, as soon as practicable after the receipt of such Conversion Request, and this Promissory Note, if applicable, the Company shall issue and shall deliver at said office to such holder (A) a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of this Promissory Note in accordance with the provisions hereof and (B) a check or cash in respect of any fraction of a share as provided in Section 2(e). Such conversion shall be deemed to have been effected immediately prior to the close of business on the date on which the Company shall have received such Conversion Request and this Promissory Note. Any and all interest on the Converted Principal shall cease to accrue pursuant to this Promissory Note from the date of receipt of the Conversion Request. The holder of this Promissory Note shall be deemed to have become on said date the holder of record of the shares of Common Stock issuable to such holder upon such conversion; provided, however, that any such surrender on any date when the securities transfer books of the Company shall be closed shall not be deemed to constitute the holder of this Promissory Note as the record holder thereof for any purpose until the close of business on the next succeeding day on which such securities transfer books shall be open.

(e) The Company shall not be required to issue fractions of shares upon conversion of this Promissory Note (or portion thereof). If any fractional interest in a share shall be deliverable upon the conversion of this Promissory Note (or portion thereof), the Company shall purchase such fractional interest for an amount in cash equal to the Conversion Price times the amount of such fractional interest.

(f) The Conversion Price shall be subject to adjustment as follows:

(i) If the Company shall at any time or from time to time after the date hereof (the “Original Issue Date”) effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately before such subdivision shall be proportionately decreased. Conversely, if the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately before such combination shall be proportionately increased. Any adjustment under this Section 2(f)(i) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(ii) If the Company at any time or from time to time after the Original Issue Date makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Conversion Price that is then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction (i) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date, and thereafter the Conversion Price shall be adjusted pursuant to this Section 2(f)(ii), to reflect the actual payment of such dividend or distribution.

(iii) If at any time or from time to time after the Original Issue Date, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than through an Acquisition, Asset Transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 2(f)), in any such event the holder hereof shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(iii) If at any time or from time to time after the Original Issue Date, there is a capital reorganization of the Common Stock (other than a recapitalization or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 2(f)), as a part of such capital reorganization, provision shall be made so that the holder hereof shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of Common Stock deliverable upon exercise immediately prior to such event would have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 2(f) with respect to the rights of the holder hereof after the capital reorganization to the end that the provisions of this Section 2(f) (including adjustment of the Conversion Price then in effect and the number of shares issuable upon exercise) shall be applicable after that event and be as nearly equivalent as practicable.

(iv) Anything in this Section 2 to the contrary notwithstanding, all calculations under this Section 2(f) shall be made to the nearest cent or to the nearest whole share (as provided in Section 2(e)), as the case may be. Any provision of this Section 2(f) to the contrary notwithstanding, no adjustment in the Conversion Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate one percent or more.

(v) In the event the Company shall propose to take any action of the types described in Section 2(f), the Company shall give notice to the holder of this Promissory Note, which notice shall specify the record date, if any, with respect to any such action and the date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of this Promissory Note. In the case of any action that would require the fixing of a record date, such notice shall be given at least ten days prior to the date so fixed, and in case of all other action, such notice shall be given at least ten days prior to the taking of such proposed action.

(vi) All shares of Common Stock issued in connection with the conversion provisions set forth herein shall be, upon issuance by the Company, validly issued, fully paid and nonassessable and free from all taxes, liens or charges with respect thereto created or imposed by the Company.

(vii) The Company shall reserve and keep available out of its authorized but unissued shares of Common Stock such number of shares of Common Stock as shall from time to time be sufficient to effect conversion of this Promissory Note.

(g) Whenever the Conversion Price shall be adjusted as required by the provisions of Section 2(f) hereof, the Company shall forthwith mail a certificate setting forth the adjusted Conversion Price and showing in reasonable detail the facts upon which such adjustment or readjustment is based to the holder of this Promissory Note at such holder’s address as it appears herein or at the last address of which the holder has given the Company written notice, but failure to receive such notice, or any defects therein, or in the mailing thereof, shall not affect such adjustment in Conversion Price. The Company shall, upon the written request at any time of the holder of this Promissory Note, furnish or cause to be furnished to such holder a like certificate setting forth (a) such adjustments and readjustments, (b) the Conversion Price at that time in effect, and (c) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of this Promissory Note.

3. Reservation of Authorized Shares.

(a) Following the Stockholder Approval Date, so long as this Promissory Note is outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of effecting the conversion of this Promissory Note, 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of this Promissory Note (the “Required Reserve Amount”).

(b) If at any time following the Stockholder Approval Date the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion of this Promissory Note at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount.

4. Prepayment. At any time after February 28, 2011, the Company may prepay, upon 10 business days’ prior written notice, its obligations pursuant to this Promissory Note, in whole or in part, by tendering to the holder hereof the outstanding principal balance to be prepaid, together with accrued but unpaid interest on such principal being prepaid. The foregoing notwithstanding, it is acknowledged and agreed to by the Company that the holder hereof may exercise its conversion rights pursuant to Section 2 hereof at any time prior to the second business day immediately preceding the proposed date of such prepayment, whether before or after receipt of such prepayment notice from the Company. Except as provided in Section 11 of the Credit Agreement in connection with an acceleration of the Note, Borrower shall not be permitted to make any prepayments prior to February 28, 2011. Any such prepayments shall be applied to amounts outstanding under the Note as provided in Section 7 of the Credit Agreement.

5. Events of Default. Upon the occurrence and continuance of an Event of Default as set forth in Section 11 of the Credit Agreement, the holder hereof shall have the remedies set forth in Section 11 of the Credit Agreement.

6. Miscellaneous.

(a) The Company covenants and agrees that this Promissory Note shall be binding upon any corporation succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets.

(b) This Promissory Note shall be governed by, construed and enforced in accordance with the laws of the State of Arizona.

(c) The captions or headings in this Promissory Note are for reference only and neither form a part hereof nor are they to be relied upon to interpret any provision of this Promissory Note.

(d) Any notices required to be given or which are otherwise given under this Promissory Note shall be given in accordance with the terms of Section 12 of the Credit Agreement.

[signatures on following page]

IN WITNESS WHEREOF, the Company has caused this Promissory Note to be duly executed and delivered on the date set forth below.

DATED: February 1, 2008

MICROMED CARDIOVASCULAR, INC.

By:
Name: Robert Benkowski
Title: Chief Executive Officer

Annex 1

CONVERSION REQUEST

TO: MICROMED CARDIOVASCULAR, INC.

The undersigned holder of this Promissory Note hereby irrevocably exercises the option to convert this Promissory Note into shares of Common Stock in accordance with the terms of the Promissory Note, and directs that the securities issuable and deliverable upon the conversion, together with any check in payment for fractional amounts or accrued, unpaid interest on the amount converted, be issued and delivered to the holder hereof at the address specified below.

The Conversion Amount pursuant to this Conversion Request is a total of $ , comprising $ as Converted Principal and $ as Converted Interest.


				NOTEHOLDER:

Dated:
				Please print name and address

				Please insert Social Security Number or
				other Taxpayer Identification Number

SCHEDULE 1

This Note evidences Advances made by the Lender under the within-described Credit Agreement to the Company, in the principal amounts set forth below, subject to the payments of principal set forth below:



		Date of
	Principal	Conversion	Amount	Balance
Date	Amount	or	Converted	Out-
Made	of Loan	Prepayment	or Prepaid	Standing

EX-99.6 7 c72365exv99w6.htm EXHIBIT 6 Filed by Bowne Pure Compliance

Exhibit 6

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND QUALIFICATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR OTHER FINANCING ARRANGEMENT SECURED BY THIS WARRANT. ANY TRANSFEREE OF THIS WARRANT SHOULD CAREFULLY REVIEW THE TERMS OF THIS WARRANT.

WARRANT

to Purchase Common Stock of

MICROMED CARDIOVASCULAR, INC.

THIS IS TO CERTIFY THAT, for value received, E-WILSON LLC, an Arizona limited liability company or its permitted assignees (the “Holder”), is entitled to purchase from MICROMED CARDIOVASCULAR, INC., a Delaware corporation (the “Company”), at the place where the Warrant Office designated pursuant to Section 2.1 is located, at a purchase price per share of $0.02 (“Exercise Price”), of 500,000,000 duly authorized, validly issued, fully paid and nonassessable shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), less the Warrant Reduction Amount, and is entitled also to exercise the other appurtenant rights, powers and privileges hereinafter set forth. The number of shares of the Common Stock purchasable hereunder and the Exercise Price are subject to adjustment in accordance with Article III hereof. This Warrant shall expire at 5:00 p.m., Arizona time, on the date eighty-four (84) months after the date the Stockholder Approval (as defined in the Credit Agreement) is obtained (the “Expiration Date”).

Certain initially capitalized terms used in this Warrant are defined in Article IV.

ARTICLE I
Exercise of Warrant

1.1 Method of Exercise. Subject to Section 1.2, this Warrant may be exercised in whole or in part from time to time until the Expiration Date, at which time this Warrant shall expire and be of no further force or effect. To exercise this Warrant, Holder shall deliver to the Company, at the Warrant Office designated in Section 2.1, (a) a written notice in the form of the Subscription Notice attached as an exhibit hereto (the “Notice”), stating therein the election of such Holder to exercise this Warrant in the manner provided in the Notice, (b) payment in full of the Exercise Price (in the manner described below) for all Warrant Shares to be purchased hereunder, and (c) this Warrant. This Warrant shall be deemed to be exercised on the date of receipt by the Company of the Notice, accompanied by payment for the Warrant shares to be purchased and surrender of this Warrant, as aforesaid, and such date is referred to herein as the “Exercise Date.” Upon such exercise, the Company shall issue and deliver to such Holder a certificate for the full number of the Warrant Shares purchased by such Holder hereunder and pursuant to the Notice, against the receipt by the Company of the total Exercise Price payable hereunder for all such Warrant Shares, in cash or by certified or cashier’s check. The Person in whose name the certificate(s) for Common Stock is to be issued shall be deemed to have become a holder of record of such Common Stock on the Exercise Date.

1.2 Stockholder Approval. NOTWITHSTANDING ANY PROVISION OF THIS WARRANT TO THE CONTRARY, UNTIL THE STOCKHOLDER APPROVAL DATE (AS DEFINED IN THE CREDIT AGREEMENT), THIS WARRANT SHALL NOT BE EXERCISABLE.

1.3 Fractional Shares. In lieu of any fractional shares of Common Stock which would otherwise be issuable upon exercise of this Warrant, the Company shall in lieu thereof pay to the Person entitled thereto an amount in cash equal to the Current Market Price of such fraction of a share.

ARTICLE II
Warrant Office; Transfer

2.1 Warrant Office. The Company shall maintain an office for certain purposes specified herein (the “Warrant Office”), which office shall initially be the Company’s office at 8965 Interchange Drive, Houston, Texas 77054, and may subsequently be such other office of the Company or of any transfer agent of the Common Stock in the continental United States of which written notice has previously been given to the Holder. The Company shall maintain, at the Warrant Office, a register for the Warrant in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each permitted assignee of the rights of the registered owner hereof.

2.2 Ownership of Warrant. The Company may deem and treat the person in whose name this Warrant is registered as the holder and owner hereof (notwithstanding any notations of ownership or writing hereon made by anyone other than the Company) for all purposes and shall not be affected by any notice to the contrary, until presentation of this Warrant for registration of transfer as provided in this Article II.

2.3 Transfer of Warrants. The Company agrees to maintain at the Warrant Office books for the registration and transfer of this Warrant. This Warrant may be freely transferred, in whole or in part, by the Holder pursuant to the form of Assignment attached as an exhibit hereto, so long as any such transfer is in compliance with the Acts and any other applicable law. The Company, from time to time, shall register the transfer of this Warrant in such books upon surrender of this Warrant at the Warrant Office, properly endorsed or accompanied by appropriate instruments of transfer and written instructions for transfer satisfactory to the Company. Upon any such transfer, a new Warrant shall be issued to the transferee, and the surrendered Warrant shall be canceled by the Company. The Holder of this Warrant shall pay all taxes and all other expenses and charges payable in connection with the transfer of Warrants pursuant to this Section 2.3.

2.4 Registration Rights. The Company agrees to register on behalf of Holder the issuance or resale of all of the Warrant Shares by Holder or any of its affiliates pursuant to the terms and conditions of the Registration Rights Agreement entered into between the Holder and the Company of even date herewith concerning the Warrant Shares.

2.5 Acknowledgment of Rights. The Company will, at the time of the exercise of this Warrant in accordance with the terms hereof, upon the request of the Holder, acknowledge in writing its continuing obligation to afford to such Holder any rights (including, without limitation, any right to registration of the Warrant Shares) to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant, provided that if the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

2.6 Expenses of Delivery of Warrants. Except as provided in Section 2.3 above, the Company shall pay all reasonable expenses, taxes (other than transfer taxes) and other charges payable in connection with the preparation, issuance and delivery of Warrants and related Warrant Shares hereunder.

2.7 Compliance with Securities Laws. The Holder understands and agrees that the following restrictions and limitations shall be applicable to all Warrant Shares and resales or other transfers thereof pursuant to the Securities Act:

(a) The Holder agrees that the Warrant Shares shall not be sold or otherwise transferred unless the Warrant Shares are registered under the Securities Act and state securities laws or are exempt therefrom.

(b) A legend in substantially the following form has been or will be placed on the certificate(s) evidencing the Warrant Shares:

“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state (collectively, the “Acts”). Neither the shares nor any interest therein may be offered, sold, transferred, pledged, or otherwise disposed of in the absence of an effective registration statement with respect to the shares under all of the applicable Acts, or an opinion of counsel satisfactory to MicroMed Cardiovascular, Inc. to the effect that such registrations are not required.”

(c) Stop transfer instructions have been or will be imposed with respect to the Warrant Shares so as to restrict resale or other transfer thereof, subject to this Section 2.7.

ARTICLE III
Anti-Dilution Provisions

3.1 Adjustment of Exercise Price and Number of Warrant Shares. The Exercise Price shall be subject to adjustment from time to time as hereinafter provided in this Article III. Upon each adjustment of the Exercise Price, except pursuant to Sections 3.1(a)(iii), (iv) and (v), the Holder shall thereafter be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of shares of the Common Stock (calculated to the nearest whole share pursuant to Section 1.3) obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of shares of the Common Stock purchasable pursuant hereto immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

(a) Exercise Price Adjustments. The Exercise Price shall be subject to adjustment from time to time as follows:

(i) Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the date hereof (the “Original Issue Date”) effect a subdivision of the outstanding Common Stock, the Exercise Price in effect immediately before such subdivision shall be proportionately decreased. Conversely, if the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in effect immediately before such combination shall be proportionately increased. Any adjustment under this Section 3.1(a)(i) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(ii) Adjustment for Common Stock Dividends and Distributions. If the Company at any time or from time to time after the Original Issue Date makes, or fixes a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, in each such event the Exercise Price that is then in effect shall be decreased as of the time of such issuance or, in the event such record date is fixed, as of the close of business on such record date, by multiplying the Exercise Price then in effect by a fraction (i) the numerator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, that if such record date is fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Exercise Price shall be recomputed accordingly as of the close of business on such record date, and thereafter the Exercise Price shall be adjusted pursuant to this Section 3.1(a)(ii), to reflect the actual payment of such dividend or distribution.

(iii) Adjustment for Reclassification, Exchange and Substitution. If at any time or from time to time after the Original Issue Date, the Common Stock is changed into the same or a different number of shares of any class or classes of stock, whether by recapitalization, reclassification or otherwise (other than an Acquisition, Asset Transfer, subdivision or combination of shares, stock dividend, reorganization, merger, consolidation, or sale of assets provided for elsewhere in this Section 3.1(a)), in any such event the Holder shall have the right thereafter to convert such stock into the kind and amount of stock and other securities and property receivable upon such recapitalization, reclassification or other change by holders of the maximum number of shares of Common Stock into which such shares of Common Stock could have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof.

(iv) Reorganizations, Mergers, Consolidations or Sales of Assets. If at any time or from time to time after the Original Issue Date, there is a capital reorganization of the Common Stock (other than a recapitalization or subdivision, combination, reclassification, exchange, or substitution of shares provided for elsewhere in this Section 3.1(a), as a part of such capital reorganization, provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise hereof the number of shares of stock or other securities or property of the Company to which a holder of the number of shares of Common Stock deliverable upon exercise immediately prior to such event would have been entitled as a result of such capital reorganization, subject to adjustment in respect of such stock or securities by the terms thereof. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 3.1(a) with respect to the rights of the Holder after the capital reorganization to the end that the provisions of this Section 3.1(a) (including adjustment of the Exercise Price then in effect and the number of shares issuable upon exercise) shall be applicable after that event and be as nearly equivalent as practicable.

(v) Rounding of Calculations; Minimum Adjustment. All calculations under this Section 3.1(a) and under the definition of Current Market Price shall be made to the nearest cent or to the nearest whole share (as provided in Section 1.2), as the case may be. Any provision of this Section 3.1 to the contrary notwithstanding, no adjustment in the Exercise Price shall be made if the amount of such adjustment would be less than one percent, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate one percent or more.

(b) Adjustment by Board of Directors. If any event occurs as to which, in the opinion of the Board of Directors, the provisions of this Section 3.1 are not strictly applicable or if strictly applicable would not fairly protect the rights of the Holder in accordance with the essential intent and principles of such provisions, then the Board of Directors shall make an adjustment in the application of such provisions, in accordance with such essential intent and principles, so as to protect such rights as aforesaid, but in no event shall any adjustment have the effect of increasing the Exercise Price as otherwise determined pursuant to any of the provisions of this Section 3.1, except in the case of a combination of shares of a type contemplated in Section 3.1(a)(i), and then in no event to an amount larger than the Exercise Price as adjusted pursuant to Section 3.1(a)(i).

(c) Statement Regarding Adjustments. Whenever the Exercise Price shall be adjusted as provided in Section 3.1(a), and upon each change in the number of shares of the Common Stock issuable upon exercise of this Warrant, the Company shall forthwith file, at the office of any transfer agent for this Warrant and at the principal office of the Company, a statement showing in detail the facts requiring such adjustment and the Exercise Price and new number of shares issuable that shall be in effect after such adjustment, and the Company shall also cause a copy of such statement to be given to the Holder. Each such statement shall be signed by the Company’s chief financial or accounting officer. Where appropriate, such copy may be given in advance and may be included as part of a notice required to be mailed under the provisions of Section 3.1(d).

(d) Notice to Holders. In the event the Company shall propose to take any action of the type described in clause (i) through (v) of Section 3.1(a), the Company shall give notice to the Holder, in the manner set forth in Section 6.6, which notice shall specify the record date, if any, with respect to any such action and the approximate date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Exercise Price and the number, kind or class of shares or other securities or property which shall be deliverable upon exercise of this Warrant. In the case of any action which would require the fixing of a record date, such notice shall be given at least ten days prior to the date so fixed, and in case of all other action, such notice shall be given at least 15 days prior to the taking of such proposed action. Failure to give such notice, or any defect therein, shall not affect the legality or validity of any such action.

(e) Treasury Stock. For the purposes of this Section 3.1, the sale or other disposition of any Common Stock of the Company theretofore held in its treasury shall be deemed to be an issuance thereof.

3.2 Costs. The Holder shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of shares of Common Stock of the Company upon exercise of this Warrant. Additionally, the Company shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares. The Holder shall reimburse the Company for any such taxes assessed against the Company.

3.3 Reservations of Shares. The Company shall reserve at all times so long as this Warrant remains outstanding, free from preemptive rights, out of its treasury Common Stock or its authorized but unissued shares of Common Stock, or both, solely for the purpose of effecting the exercise of this Warrant, sufficient shares of Common Stock to provide for the exercise hereof.

3.4 Insufficient Authorized Shares. If at any time from and after the Stockholder Approval Date and while any of the Warrants remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of the Warrants no less than 100% of the number of shares of Common Stock as shall from time to time be necessary to effect the exercise of all of the Warrants then outstanding (the “Required Reserve Amount”) (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for the Warrants then outstanding.

3.5 Valid Issuance. All shares of Common Stock which may be issued upon exercise of this Warrant will upon issuance by the Company be duly and validly issued, fully paid and nonassessable, and free from all taxes, liens and charges with respect to the issuance thereof attributable to any act or omission by the Company, and the Company shall take no action which will cause a contrary result (including, without limitation, any action which would cause the Exercise Price to be less than the par value, if any, of the Common Stock).

ARTICLE IV
Terms Defined

As used in this Warrant, unless the context otherwise requires, the following terms have the respective meanings set forth below or in the Section indicated:

“Acquisition” shall mean any consolidation or merger of the Company with or into any other corporation or other entity or Person, or any other corporate reorganization, in which the stockholders of the Company immediately prior to such consolidation, merger or reorganization, own less than 50% of the Company’s voting power immediately after such consolidation, merger or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Company’s voting power is transferred.

“Asset Transfer” shall mean a sale, lease or other disposition of all or substantially all of the assets of the Company.

“Board of Directors” shall mean the Board of Directors of the Company.

“Common Stock” shall mean the Company’s authorized common stock, par value $.001 per share.

“Company” shall mean MicroMed Cardiovascular, Inc., a Delaware corporation, and any other Person assuming or required to assume the obligations undertaken in connection with this Warrant.

“Credit Agreement” means that certain Credit Agreement, dated as of February 1, 2008, by and between the Company and E-Wilson LLC.

“Current Market Price” shall mean, as of any date, 5% of the sum of the average, for each of the 20 consecutive Trading Days immediately prior to such date, of either: (i) the high and low sales prices of the Common Stock on such Trading Day as reported on the composite tape for the principal national securities exchange on which the Common Stock may then be listed, or (ii) if the Common Stock shall not be so listed on any such Trading Day, the high and low sales prices of Common Stock in the over-the-counter market as reported by the Nasdaq Stock Market or (iii) if there be no such representative prices reported by the Nasdaq Stock Market, the lowest bid and highest asked prices at the end of such Trading Day in the over-the-counter market or “pink sheets” as reported by the OTC Electronic Bulletin Board or National Quotation Bureau, Inc., or any successor organization.

“Note” means that certain 7.5% Unsecured Convertible Promissory Note issued to the Holder by the Company pursuant to the Credit Agreement.

“Outstanding,” when used with reference to Common Stock at any date, shall mean all issued shares of Common Stock (including, but without duplication, shares deemed issued pursuant to Article III) at such date, except shares then held in the treasury of the Company.

“Person” shall mean any individual, corporation, partnership, trust, organization, association or other entity.

“Remaining Conversion Shares” means, as of any date of determination, the total number of remaining shares that would be issued upon conversion in full of the Note as of such date, without taking into account any possible increase in the number of conversion shares resulting from future advances under the Credit Agreement to the extent the same have not been funded on or prior to the relevant date of determination.

“Securities Act” shall mean the Securities Act of 1933 and the rules and regulations promulgated thereunder, all as the same shall be in effect at the time.

The term “Trading Day,” for purposes of determining Current Market Price, shall mean a day on which an amount greater than zero can be calculated with respect to the Common Stock under any one or more of the foregoing categories (i), (ii), and (iii), and the “end” thereof, for the purposes of category (iii), shall mean the exact time at which trading shall end on the New York Stock Exchange. If the Current Market Price cannot be determined under any of the foregoing methods, Current Market Price shall mean the fair value per share of Common Stock on such date as determined by the Board of Directors in good faith, irrespective of any accounting treatment.

“Warrant” shall mean this Warrant and any successor or replacement Warrant delivered in accordance with Section 2.3 or Section 6.8.

“Warrant Office” is defined in Section 2.1.

“Warrant Reduction Amount” means, as of any date of determination, the number of shares previously issued upon conversion, in whole or in part, of the Note, plus the number of Remaining Conversion Shares as of such date.

“Warrant Shares” shall mean the shares of Common Stock purchased or purchasable by the Holder upon exercise of this Warrant pursuant to Article I hereof.

ARTICLE V
Covenant of the Company

The Company covenants and agrees that this Warrant shall be binding upon any corporation succeeding to the Company by merger, consolidation, or acquisition of all or substantially all of the Company’s assets.

ARTICLE VI
Miscellaneous

6.1 Entire Agreement. This Warrant contains the entire agreement between the Holder and the Company with respect to the Warrant Shares that it can purchase upon exercise hereof and the related transactions and supersedes all prior arrangements or understanding with respect thereto.

6.2 Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Arizona, without regard to its conflict of law provisions.

6.3 Waiver and Amendment. Any term or provision of this Warrant may be waived at any time by the party which is entitled to the benefits thereof, and any term or provision of this Warrant may be amended or supplemented at any time by agreement of the Holder and the Company, except that any waiver of any term or condition, or any amendment or supplementation, of this Warrant must be in writing. A waiver of any breach or failure to enforce any of the terms or conditions of this Warrant shall not in any way affect, limit or waive a party’s rights hereunder at any time to enforce strict compliance thereafter with every term or condition of this Warrant.

6.4 Illegality. In the event that any one or more of the provisions contained in this Warrant shall be determined to be invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in any other respect and the remaining provisions of this Warrant shall not, at the election of the party for whom the benefit of the provision exists, be in any way impaired.

6.5 Copy of Warrant. A copy of this Warrant shall be filed among the records of the Company.

6.6 Notice. Any notice or other document required or permitted to be given or delivered to the Holder shall be delivered at, or sent by certified or registered mail to such Holder at, the last address shown on the books of the Company maintained at the Warrant Office for the registration of this Warrant or at any more recent address of which the Holder shall have notified the Company in writing. Any notice or other document required or permitted to be given or delivered to the Company, other than such notice or documents required to be delivered to the Warrant Office, shall be delivered at, or sent by certified or registered mail to, the office of the Company or any other address within the continental United States of America as shall have been furnished by the Company to the Holder.

6.7 Limitation of Liability; Not Stockholders. No provision of this Warrant shall be construed as conferring upon the Holder the right to vote, consent, receive dividends or receive notices other than as herein expressly provided in respect of meetings of stockholders for the election of directors of the Company or any other matter whatsoever as a stockholder of the Company. No provision hereof, in the absence of affirmative action by the Holder to purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of such Holder for the purchase price of any shares of Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

6.8 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of evidence satisfactory to the Company of the loss, theft, mutilation or destruction of this Warrant, and in the case of any such loss, theft or destruction upon delivery of a bond of indemnity in such form and amount as shall be reasonably satisfactory to the Company, or in the event of such mutilation upon surrender and cancellation of this Warrant, the Company will make and deliver a new Warrant of like tenor, in lieu of such lost, stolen, destroyed or mutilated Warrant; provided, however, that the original recipient of this Warrant shall not be required to provide any such bond of indemnity and may in lieu thereof provide his agreement of indemnity. Any Warrant issued under the provisions of this Section 6.8 in lieu of any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated Warrant, shall constitute an original contractual obligation on the part of the Company. This Warrant shall be promptly canceled by the Company upon the surrender hereof in connection with any exchange or replacement. The Holder shall pay all taxes (including securities transfer taxes) and all other expenses and charges payable in connection with the preparation, execution and delivery of Warrants pursuant to this Section 6.8.

6.9 Headings. The Article and Section and other headings herein are for convenience only and are not a part of this Warrant and shall not affect the interpretation thereof.

[signatures on following page]

IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its name.

Dated: February 1, 2008

MICROMED CARDIOVASCULAR, INC.

By:
Name: Robert Benkowski
Title: Chief Executive Officer

SUBSCRIPTION NOTICE

The undersigned, the holder of the foregoing Warrant, hereby elects to exercise purchase rights represented by said Warrant for, and to purchase thereunder shares of the Common Stock covered by said Warrant and herewith makes payment in full therefor pursuant to Section 1.1 of such Warrant, and requests (a) that certificates for such shares (and any securities or other property issuable upon such exercise) be issued in the name of, and delivered to, , and (b) if such shares shall not include all of the shares issuable as provided in said Warrant, that a new Warrant of like tenor and date for the balance of the shares issuable thereunder be delivered to the undersigned.

The undersigned represents that (1) the aforesaid shares of Common Stock are being acquired for the account of the undersigned for investment not with view to, or for resale in connection with, the distribution thereof and that the undersigned has no present intention of distributing or reselling such shares; (2) the undersigned is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision regarding its investment in the Company; (3) the undersigned is experienced in making investments of this type and has such knowledge and background in financial and business matters that the undersigned is capable of evaluating the merits and risks of this investment and protecting the undersigned’s own interests; (4) the undersigned understands that the shares of Common Stock issuable upon exercise of this Warrant have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a specific exemption from the registration provisions of the Securities Act, which exemption depends upon, among other things, the bona fide nature of the investment intent as expressed herein, and, because such securities have not been registered under the Securities Act, they must be held indefinitely unless subsequently registered under the Securities Act or an exemption from such registration is available; (5) the undersigned is aware that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144 adopted under the Securities Act unless certain conditions are met and until the undersigned has held the shares for the number of years prescribed by Rule 144, that among the conditions for use of the Rule is the availability of current information to the public about the Company, and the Company has not made such information available and has no present plans to do so; and (6) the undersigned agrees not to make any disposition of all or any part of the aforesaid shares of Common Stock unless and until there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with said registration statement, or the undersigned has provided the Company with an opinion of counsel satisfactory to the Company, stating that such registration is not required.

Dated: , 20

ASSIGNMENT

For value received, (“Assignor”), hereby sells, assigns and transfers unto right, title and interest therein, and does hereby irrevocably constitute and appoint attorney to transfer said Warrant on the books of the Company, with full power of substitution.

Dated: , 200

EX-99.7 8 c72365exv99w7.htm EXHIBIT 7 Filed by Bowne Pure Compliance

Exhibit 7

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of February 1, 2008, by and among MicroMed Cardiovascular, Inc., a Delaware corporation (the “Company”), and E-Wilson LLC, an Arizona limited liability company (“Buyer”).

WHEREAS:

A. In connection with the Credit Agreement by and between the parties hereto of even date herewith (the “Credit Agreement”), the Company has agreed, upon the terms and subject to the conditions set forth in the Credit Agreement, to issue to Buyer (i) an unsecured convertible promissory note of the Company (the “Note”) which will, among other things, be convertible into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) (as converted, the “Conversion Shares”) in accordance with the terms of the Notes, and (ii) a warrant (the “Warrant”) which will be exercisable to purchase shares of Common Stock (as exercised collectively, the “Warrant Shares”).

B. To induce Buyer to execute and deliver the Credit Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “1933 Act”), and applicable state securities laws.

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

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Credit Agreement. As used in this Agreement, the following terms shall have the following meanings:

(a) “Additional Effectiveness Date” means the date the Additional Registration Statement is declared effective by the SEC.

(b) “Additional Effectiveness Deadline” means the earlier to occur of (i) the date which is five (5) days after the Company learns that no review of the Additional Registration Statement will be made by the staff of the SEC or that the staff has no further comments on the Additional Registration Statement, and (ii) the date which is one hundred and twenty (120) days after the Additional Filing Date (as defined below), or if there is a full review of the Additional Registration Statement by the SEC, one hundred and fifty (150) days after the Additional Filing Date.

(c) “Additional Filing Date” means the date on which the Additional Registration Statement (as defined below) is filed with the SEC.

(d) “Additional Filing Deadline” means (i) if the Stockholder Approval (as defined in the Credit Agreement) is not obtained by the Initial Filing Deadline and no Cutback Shares are required to be included in the Additional Registration Statement, the date five (5) days after the Stockholder Approval is obtained or (ii) if Cutback Shares are required to be included in the Additional Registration Statement, the date six (6) months from the Initial Filing Date.

(e) “Additional Registrable Securities” means, (i) if the Stockholder Approval is not obtained by the Initial Filing Deadline, (x) the Conversion Shares issuable upon conversion of the Notes and (y) any Warrant Shares issued or issuable upon exercise of the Warrants not previously included on a Registration Statement, (ii) any Cutback Shares not previously included on a Registration Statement and (iii) any share capital of the Company issued or issuable with respect to the Notes, the Conversion Shares, the Warrants, the Warrant Shares or Cutback Shares, as applicable, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of Notes or exercises of the Warrants.

(f) “Additional Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering any Additional Registrable Securities.

(g) “Additional Required Registration Amount” means the sum of 100% of (i) if the Stockholder Approval is not obtained by the Initial Filing Deadline, (x) the number of Conversion Shares issuable pursuant to the Notes as of the trading day immediately preceding the applicable date of determination, and (y) the number of Warrant Shares issued and issuable pursuant to the Warrants as of the trading day immediately preceding the applicable date of determination not previously included on a Registration Statement and (ii) any Cutback Shares not previously included on a Registration Statement, all subject to adjustment as provided in Section 2(e), without regard to any limitations on conversions of the Notes or exercises of the Warrants.

(h) “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York or the City of Tucson are authorized or required by law to remain closed.

(i) “Closing Date” shall mean the initial Funding Date, as set forth in the Credit Agreement.

(j) “Common Shares” means any shares of Common Stock, other than the Conversion Shares and Warrant Shares, now owned or hereafter acquired by Buyer.

(k) “Effective Date” means the Initial Effective Date and the Additional Effective Date, as applicable.

(l) “Effectiveness Deadline” means the Initial Effectiveness Deadline (as defined below) and the Additional Effectiveness Deadline (as defined below), as applicable.

(m) “Filing Deadline” means the Initial Filing Deadline (as defined below) and the Additional Filing Deadline, as applicable.

(n) “Initial Effective Date” means the date the Initial Registration Statement is declared effective by the SEC.

(o) “Initial Effectiveness Deadline” means the earlier to occur of (i) the date which is five (5) days after the Company learns that no review of the Initial Registration Statement will be made by the staff of the SEC or that the staff has no further comments on the Initial Registration Statement, (ii) the date which is one hundred and twenty (120) days after the Initial Request Date, or if there is a full review of the Initial Registration Statement by the SEC, one hundred and fifty (150) days after the Initial Request Date.

(p) “Initial Filing Date” means the date on which the Initial Registration Statement (as defined below) is filed with the SEC.

(q) “Initial Filing Deadline” means the date seventy-five (75) days after the Initial Request Date.

(r) “Initial Registrable Securities” means (A) if the Stockholder Approval is obtained by the Initial Filing Deadline, (i) the Conversion Shares issued or issuable upon conversion or redemption of the Notes, (ii) the Common Shares, (iii) the Warrant Shares issued or issuable upon exercise of the Warrants and (iv) any share capital of the Company issued or issuable with respect to the Common Shares, the Warrant Shares or the Warrants, the Conversion Shares and the Notes, as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Notes or exercises of the Warrants and (B) if the Stockholder Approval is not obtained by the Initial Filing Deadline, the Common Shares and 50,000,000 Conversion Shares.

(s) “Initial Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Initial Registrable Securities.

(t) “Initial Request Date” means the later of (i) August 1, 2008 and (ii) the date that Buyer sends to the Company a written request that the Initial Registration Statement by filed pursuant hereto. .

(u) “Initial Required Registration Amount” means (I) (A) if the Stockholder Approval is obtained by the Initial Filing Deadline, 100% of the sum of (i) the number of Conversion Shares issued or issuable pursuant to the Notes as of the trading day immediately preceding the applicable date of determination, (ii) the number of Common Shares and (iii) the number of Warrant Shares issued and issuable pursuant to the Warrants as of the trading day immediately preceding the applicable date of determination, all subject to adjustment as provided in Section 2(e), without regard to any limitations on conversions of the Notes or exercises of the Warrants, and (B) if the Stockholder Approval is not obtained by the Initial Filing Deadline, (x) the number of Common Shares and (y) 50,000,000 Conversion Shares or (II) such other amount as may be required by the staff of the SEC. Any shares included under clause (I) of the immediately preceding sentence but excluded from the definition of Initial Required Registration Amount because of clause (II), are referred to herein as the “Cutback Shares”.

(v) “Investor” means Buyer or any transferee or assignee thereof to whom Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.

(w) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof.

(x) “register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements (as defined below) in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

(y) “Registrable Securities” means the Initial Registrable Securities and the Additional Registrable Securities.

(z) “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering the Registrable Securities.

(aa) “Required Holders” means the holders of at least a majority of the Registrable Securities.

(bb) “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

(cc) “SEC” means the United States Securities and Exchange Commission.

2. Registration.

(a) Initial Mandatory Registration. The Company shall prepare, and, as soon as practicable following the Initial Request Date, but in no event later than the Initial Filing Deadline, file with the SEC the Initial Registration Statement on Form S-3 covering the resale of all of the Initial Registrable Securities. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(e). The Initial Registration Statement prepared pursuant hereto shall register for resale at least the number of shares of Common Stock equal to the Initial Required Registration Amount determined as of date the Registration Statement is initially filed with the SEC. The Initial Registration Statement shall contain (except if otherwise directed by the Required Holders) the “Selling Stockholders” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use its best efforts to have the Initial Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Initial Effectiveness Deadline. By 9:30 am on the date following the Initial Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

(b) Additional Mandatory Registrations. The Company shall prepare, and, as soon as practicable following the Initial Request Date, but in no event later than the Additional Filing Deadline, file with the SEC an Additional Registration Statement on Form S-3 covering the resale of all of the Additional Registrable Securities not previously registered on an Additional Registration Statement hereunder. To the extent the staff of the SEC does not permit the Additional Required Registration Amount to be registered on the Additional Registration Statement, which are Cutback Shares hereunder, the Company shall file Additional Registration Statements successively trying to register on each such Additional Registration Statement the maximum number of remaining Additional Registrable Securities until the Additional Required Registration Amount has been registered with the SEC. In the event that Form S-3 is unavailable for such a registration, the Company shall use such other form as is available for such a registration on another appropriate form reasonably acceptable to the Required Holders, subject to the provisions of Section 2(e). Each Additional Registration Statement prepared pursuant hereto shall register for resale at least that number of shares of Common Stock equal to the Additional Required Registration Amount as of date the Registration Statement is initially filed with the SEC. Each Additional Registration Statement shall contain (except if otherwise directed by the Required Holders) the “Selling Stockholders” and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall use its best efforts to have each Additional Registration Statement declared effective by the SEC as soon as practicable, but in no event later than the Additional Effectiveness Deadline. By 9:30 am on the date following the Additional Effective Date, the Company shall file with the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to be used in connection with sales pursuant to such Registration Statement.

(c) Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities held by each Investor at the time the Registration Statement covering such initial number of Registrable Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee shall be allocated a pro rata portion of the then remaining number of Registrable Securities included in such Registration Statement for such transferor. Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement filed with the SEC during the 12-month period following the Closing Date without the prior written consent of the Required Holders except for those shares of Common Stock and warrants to purchase shares of Common Stock identified on Schedule 2(c)(i) attached hereto. In no event shall the Company include any securities other than Registrable Securities on any Registration Statement filed with the SEC after the 12-month period following the Closing Date without the prior written consent of the Required Holders except for those shares of Common Stock and warrants to purchase shares of Common Stock identified on Schedule 2(c)(ii) attached hereto. If the SEC requires that the Company register less than the amount of shares of Common Stock originally included on any Registration Statement at the time it was filed, the Registrable Securities on such registration statement and any other securities allowed to be registered on such Registration Statement (as set forth below) shall be decreased on a pro rata basis.

(d) Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“Legal Counsel”), which shall be Feulner Dorris plc or such other counsel as thereafter designated by the Required Holders. The Company and Legal Counsel shall reasonably cooperate with each other in performing the Company’s obligations under this Agreement.

(e) Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form reasonably acceptable to the Required Holders and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

(f) Sufficient Number of Shares Registered. In the event the number of shares available under a Registration Statement filed pursuant to Section 2(a) is insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the Registrable Securities pursuant to Section 2(b), the Company shall amend the applicable Registration Statement, or file a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as of the trading day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises. The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under the Registration Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to any limitations on the conversion of the Notes or the exercise of the Warrants and such calculation shall assume that the Notes are then convertible into shares of Common Stock at the then prevailing Conversion Rate (as defined in the Notes) and that the Warrants are then exercisable for shares of Common Stock at the then prevailing Exercise Price (as defined in the Warrants).

3. Related Obligations. At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

(a) The Company shall submit to the SEC, within two (2) Business Days after the Company learns that no review of a particular Registration Statement will be made by the staff of the SEC or that the staff has no further comments on a particular Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request. The Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) (or any successor thereto) promulgated under the 1933 Act or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”). The Company shall ensure that each Registration Statement (including any amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading.

(b) The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-QSB, Form 10-KSB or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934 Act”), the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a Registration Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to all Registration Statements (except for Annual Reports on Form 10-KSB, and Reports on Form 10-QSB and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without the prior approval of Legal Counsel, which consent shall not be unreasonably withheld. The Company shall furnish to Legal Counsel, without charge, (i) copies of any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to any Registration Statement, (ii) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section 3.

(d) If requested by an Investor, the Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such Investor may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

(e) The Company shall use its best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

(f) The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and, subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver ten (10) copies of such supplement or amendment to Legal Counsel and each Investor (or such other number of copies as Legal Counsel or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

(g) The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding for such purpose.

(h) If any Investor is required under applicable securities laws to be described in the Registration Statement as an underwriter, at the reasonable request of such Investor, the Company shall furnish to such Investor, on the date of the effectiveness of the Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.

(i) Upon the request of any Investor in connection with such Investor’s due diligence requirements, if any, the Company shall make available for inspection by (i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or other agents retained by the Investors (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to an Investor) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (a) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (b) the release of such Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (c) the information in such Records has been made generally available to the public other than by disclosure in violation of this or any other agreement of which the Inspector has knowledge. Each Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company and any Investor) shall be deemed to limit the Investors’ ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.

(j) The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

(k) The Company shall use its best efforts either to (i) cause all of the Registrable Securities covered by a Registration Statement to be listed on the Principal Market or each securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange. The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section 3(k).

(l) The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the Investors may reasonably request and registered in such names as the Investors may request.

(m) If requested by an Investor, the Company shall (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement if reasonably requested by an Investor holding any Registrable Securities.

(n) The Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.

(o) Within two (2) Business Days after a Registration Statement which covers Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.

(p) Notwithstanding anything to the contrary herein, at any time after the Effective Date, the Company may delay the disclosure of material, non-public information concerning the Company the disclosure of which at the time is not, in the good faith opinion of the Board of Directors of the Company and its counsel, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company shall promptly (i) notify the Investors in writing of the existence of material, non-public information giving rise to a Grace Period (provided that in each notice the Company will not disclose the content of such material, non-public information to the Investors) and the date on which the Grace Period will begin, and (ii) notify the Investors in writing of the date on which the Grace Period ends; and, provided further, that no Grace Period shall exceed fifteen (15) consecutive days and during any three hundred sixty five (365) day period such Grace Periods shall not exceed an aggregate of forty (40) days and the first day of any Grace Period must be at least five (5) trading days after the last day of any prior Grace Period (each, an “Allowable Grace Period”). For purposes of determining the length of a Grace Period above, the Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) and shall end on and include the later of the date the Investors receive the notice referred to in clause (ii) and the date referred to in such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration of the Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information is no longer applicable.

(q) The Company shall make any filing as may be required by NASD Rule 2710 in connection with the offering under any Registration Statement of the applicable Registrable Securities and shall make any such filing concurrently with its initial filing of such Registration Statement with the SEC.

(r) From the date hereof until the date that is ninety (90) days following the later to occur of (i) the Initial Effective Date and (ii) the Additional Effective Date, the Company will not, directly or indirectly, file any registration statement (other than on Form S-8 or the filing of any post-effective amendments filed solely for the purpose of updating financial or other information in any registration statement of the Company that has been declared effective by the SEC prior to the date of this Agreement) with the SEC other than the Registration Statement.

4. Obligations of the Investors.

(a) At least five (5) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each Investor in writing of the information the Company requires from each such Investor if such Investor elects to have any of such Investor’s Registrable Securities included in such Registration Statement. It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably request.

(b) Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of any Registration Statement hereunder, unless such Investor has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.

(c) Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required.

(d) Each Investor covenants and agrees that it will comply with the prospectus delivery requirements of the 1933 Act as applicable to it or an exemption therefrom in connection with sales of Registrable Securities pursuant to the Registration Statement.

5. Expenses of Registration. All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company shall be paid by the Company.

6. Indemnification. In the event any Registrable Securities are included in a Registration Statement under this Agreement:

(a) To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor, the directors, officers, members, partners, employees, agents, representatives of, and each Person, if any, who controls any Investor within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(d) and (ii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered the prospectus made available by the Company, including a corrected prospectus, if such prospectus or corrected prospectus was timely made available by the Company pursuant to Section 3(d); and (iii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

(b) In connection with any Registration Statement in which an Investor is participating, each such Investor agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c), such Investor will reimburse any legal or other expenses reasonably incurred by an Indemnified Party in connection with investigating or defending any such Claim; provided, however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be unreasonably withheld or delayed; provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investors pursuant to Section 9.

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnified Person or Indemnified Party to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. In the case of an Indemnified Person, legal counsel referred to in the immediately preceding sentence shall be selected by the Investors holding at least a majority in interest of the Registrable Securities included in the Registration Statement to which the Claim relates. The Indemnified Party or Indemnified Person shall cooperate fully with the indemnifying

party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.

(d) The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.

(e) The indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.

7. Contribution. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that: (i) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities pursuant to such Registration Statement.

8. Reports Under the 1934 Act. With a view to making available to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any other similar rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in Rule 144;

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and

(c) furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has complied with the reporting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration.

9. Assignment of Registration Rights. The rights under this Agreement shall be automatically assignable by the Investors to any transferee of all or any portion of such Investor’s Registrable Securities if: (i) the Investor agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment; (ii) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned; (iii) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the 1933 Act and applicable state securities laws; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein; and (v) such transfer shall have been made in accordance with the applicable requirements of the Credit Agreement.

10. Amendment of Registration Rights. Provisions of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Required Holders. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

11. Miscellaneous.

(a) A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the record owner of such Registrable Securities.

(b) Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

MicroMed Cardiovascular, Inc.
8965 Interchange
Houston, Texas 77054
Telephone: (713) 838-9210
Facsimile: (713) 838-9214
Attention: Robert Benkowski, Chief Executive Officer

With a copy to:

Bettison, Doyle, Apffel & Guarino, P.C.
6710 Stewart Road, Suite 300
Galveston, Texas 77551
Telephone: (409) 744-9783
Facsimile: (409) 744-9786
Attention: Jeff Adams, Esq.

If to Legal Counsel:

Feulner Dorris plc
310 South Williams Blvd., Suite 240
Tucson, Arizona 85711
Telephone: (520) 622-4866
Facsimile: (520) 624-7034
Attention: John W. Dorris, Esq.

If to Buyer, to its address and facsimile number set forth on the Schedule of Buyers attached hereto, with copies to Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

(c) Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.

(d) All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Arizona, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Arizona or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Arizona. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of Tucson, Pima County, 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such 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. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(e) This Agreement, the other Transaction Documents (as defined in the Credit Agreement) and the instruments referenced herein and therein constitute the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction Documents and the instruments referenced herein and therein supersede all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof.

(f) Subject to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each of the parties hereto.

(g) The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) This Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

(i) Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(j) All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required Holders.

(k) The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will be applied against any party.

(l) This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

(m) The obligations of each Investor hereunder are several and not joint with the obligations of any other Investor, and no provision of this Agreement is intended to confer any obligations on any Investor vis-à-vis any other Investor. Nothing contained herein, and no action taken by any Investor pursuant hereto, 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 herein.

* * * * * *

[signatures on following page]

IN WITNESS WHEREOF, Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.

COMPANY:

MICROMED CARDIOVASCULAR, INC.

By:
Name: Robert Benkowski
Title: Chief Executive Officer

BUYER:

E-WILSON LLC

By: E-W Manager LLC,
Its manager

By:
Name: David Mackstaller
Title: Manager

SCHEDULE OF BUYER(S)


	Buyer’s Address	Buyer’s Representative’s Address
Buyer	and Facsimile Number	and Facsimile Number

E-Wilson LLC		Feulner Dorris plc 310 South Williams Blvd. Suite 240 Attn: John W. Dorris, Esq. Facsimile: (520) 624-7034 Telephone: (520) 622-4866
[Other Buyers]

EXHIBIT A

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

[Transfer Agent]
[Address]
Attention:

Re: MicroMed Cardiovascular, Inc.

Ladies and Gentlemen:

[We are][I am] counsel to MicroMed Cardiovascular, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain Credit Agreement (the “Credit Agreement”) entered into by and among the Company and the lender named therein (the “Holder”) pursuant to which the Company issued to the Holder (i) a senior unsecured convertible note (the “Note”) convertible into the Company’s common stock, par value $0.001 per share (the “Common Stock”), and (ii) warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant to the Credit Agreement, the Company also has entered into a Registration Rights Agreement with the Holder (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including certain existing shares of Common Stock owned by Holder (the “Common Shares”), the shares of Common Stock issuable upon conversion of the Notes and the shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on , 200_, the Company filed a Registration Statement on Form SB-2 (File No. 333- ) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.

In connection with the foregoing, [we][I] advise you that a member of the SEC’s staff has advised [us][me] by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement.

This letter shall serve as our standing instruction to you that the shares of Common Stock are freely transferable by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of shares of Common Stock to the Holder as contemplated by the Company’s Transfer Agent Instructions dated , 2008.

Very truly yours,

[ISSUER’S COUNSEL]

By:

CC: [LIST NAMES OF HOLDERS]

EXHIBIT B

SELLING STOCKHOLDERS

The shares of Common Stock being offered by the selling stockholders are common stock previously issued and shares of common stock issuable upon conversion of the convertible note and upon exercise of the warrant. For additional information regarding the issuance of those convertible notes and warrants, see “Issuance of Convertible Notes and Warrants” above. We are registering the shares of Common Stock in order to permit the selling stockholders to offer the shares for resale from time to time. Except for the ownership of the Common Shares, the convertible note and the warrant issued pursuant to the Credit Agreement, the selling stockholders have not had any material relationship with us within the past three years.

The table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of Common Stock by each of the selling stockholders. The second column lists the number of shares of Common Stock beneficially owned by each selling stockholder, based on its ownership of the shares of common stock previously, the convertible note and the warrant, as of , 200_, assuming conversion of all convertible notes and exercise of the warrants held by the selling stockholders on that date, without regard to any limitations on conversions or exercise.

The third column lists the shares of Common Stock being offered by this prospectus by each selling stockholder.

In accordance with the terms of a registration rights agreement among the Company and the selling stockholders, this prospectus covers the resale of the sum of (i) the number of shares of Common Stock issuable upon conversion of the convertible note as of the trading day immediately preceding the date the registration statement is initially filed with the SEC, (ii) the shares of common stock previously issued and (iii) the number of shares of Common Stock issuable upon exercise of the related warrant as of the trading day immediately preceding the date the registration statement is initially filed with the SEC. Because the conversion price of the convertible notes and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.

The selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”

Maximum

Number of

Shares to be Sold

Number of

Name of Selling

Shares Owned

Pursuant to this

Shares Owned

Stockholder

Prior to Offering

Prospectus

After Offering

[ ] (1)

(1)

PLAN OF DISTRIBUTION

We are registering the shares of Common Stock previously issued and the shares of common stock issuable upon conversion of the convertible note and upon exercise of the warrant to permit the resale of these shares of Common Stock by the holders of the shares of common stock, the convertible note and the warrant from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation to register the shares of Common Stock.

The selling stockholders may sell all or a portion of the shares of Common Stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of Common Stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of Common Stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions,

• on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;

• in the over-the-counter market;

• in transactions otherwise than on these exchanges or systems or in the over-the-counter market;

• through the writing of options, whether such options are listed on an options exchange or otherwise;

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

• 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;

• short sales;

• sales pursuant to Rule 144;

• broker-dealers may agree with the selling stockholders 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.

If the selling stockholders effect such transactions by selling shares of Common Stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of Common Stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of Common Stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of Common Stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of Common Stock short and deliver shares of Common Stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of Common Stock to broker-dealers that in turn may sell such shares.

The selling stockholders may pledge or grant a security interest in some or all of the shares of common stock, convertible notes or warrants or shares of Common Stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of Common Stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee

or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of Common Stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The selling stockholders and any broker-dealer participating in the distribution of the shares of Common Stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under the Securities Act. At the time a particular offering of the shares of Common Stock is made, a prospectus supplement, if required, will be distributed which will set forth the aggregate amount of shares of Common Stock being offered and the terms of the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling stockholders and any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.

Under the securities laws of some states, the shares of Common Stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of Common Stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that any selling stockholder will sell any or all of the shares of Common Stock registered pursuant to the registration statement, of which this prospectus forms a part.

The selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of Common Stock by the selling stockholders and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of Common Stock to engage in market-making activities with respect to the shares of Common Stock. All of the foregoing may affect the marketability of the shares of Common Stock and the ability of any person or entity to engage in market-making activities with respect to the shares of Common Stock.

We will pay all expenses of the registration of the shares of Common Stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act, in accordance with the registration rights agreements, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreement, or we may be entitled to contribution.

Once sold under the registration statement, of which this prospectus forms a part, the shares of Common Stock will be freely tradable in the hands of persons other than our affiliates.

-----END PRIVACY-ENHANCED MESSAGE-----