**EXHIBIT 10.54**

**EXECUTIVEEMPLOYMENT AGREEMENT**

THIS EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) ismade and entered into August 18, 2005, by and between**MedicalCV, Inc.**, a corporation dulyorganized and existing under the laws of the State of Minnesota, with a placeof business at 9725 South Robert Trail, Inver Grove Heights, Minnesota 55077(hereinafter referred to as the “**Company**”), and **Dennis E. Steger**, a resident of the stateof Minnesota (hereinafter referred to as “**Executive**”).

**BACKGROUND OFAGREEMENT**

·                                          Executiveis currently the Vice President, Regulatory Affairs and Quality Assurance, ofthe Company and is employed on an at-will basis.

·                                          TheCompany and Executive desire to memorialize the terms and conditions ofExecutive’s employment, including additional terms and conditions which havebeen approved by the Company’s Board of Directors.

In consideration of the foregoing, the Company andExecutive agree as follows:

**ARTICLE 1EMPLOYMENT**

1.01  Subject to the terms of Articles 3 and 6, theCompany hereby agrees to employ Executive pursuant to the terms of thisAgreement, and Executive agrees to such employment. Executive is currentlyemployed by the Company as its Vice President, Regulatory Affairs and QualityAssurance, and shall continue to hold such title under the terms of thisAgreement.

1.02    Executive shall generally have theauthority, responsibilities, and such duties as are customarily performed bythe Vice President, Regulatory Affairs and Quality Assurance, of a publiccompany of similar size and industry, specifically including, withoutlimitation, the responsibilities set forth on Appendix A hereto. Executiveshall also render such additional services and duties within the scope ofExecutive’s experience and expertise as may be reasonably requested of him fromtime to time by the Chief Executive Officer or the Company’s Board of Directors(the “Board”).

1.03  Executive shall report to the Chief ExecutiveOfficer, and shall generally be subject to direction, orders and advice of theBoard.

**ARTICLE 2BEST EFFORTS OF EXECUTIVE**

2.01  In his capacity as Vice President, RegulatoryAffairs and Quality Assurance, Executive shall use his best energies andabilities in the performance of his duties, services and responsibilities forthe Company.

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2.02  During the term of his employment, Executiveshall devote substantially all of his business time and attention to thebusiness of the Company and its subsidiaries and affiliates and shall notengage in any substantial activity inconsistent with the foregoing, whether ornot such activity shall be engaged in for pecuniary gain, unless approved bythe Board; provided, however, that, to the extent such activities do notviolate, or substantially interfere with his performance of his duties,services and responsibilities under this Agreement, Executive shall bepermitted to serve on civic or charitable boards or committees thereof.

**ARTICLE 3NATURE OF EMPLOYMENT**

3.01  Executive’s employment pursuant to thisAgreement shall be on an at-will basis, with either Executive or the Companyhaving the right to terminate Executive’s employment with or without cause onnot less than sixty (60) days’ prior written notice, subject to the Company’sobligations to Executive pursuant to Sections 6 and 7. The terms and conditionsof this Agreement may be amended from time to time with the consent of theCompany and Executive. All such amendments shall be effective when memorializedby a written agreement between the Company and Executive or by resolutions ofthe Board or the Company’s Compensation Committee (the “Committee”).

**ARTICLE 4COMPENSATION AND BENEFITS**

4.01  During the term of employment hereunder,Executive shall be paid a base salary at the rate of One Hundred Fifty Thousand($150,000) per year (“Base Salary”), payable in bi-weekly installments inaccordance with the Company’s established pay periods, reduced by alldeductions and withholdings required by law and as otherwise specified byExecutive. The Company shall cause the Committee to review Executive’sperformance and Base Salary level each calendar year during the Term,commencing, 2006. Executive’s Base Salary may be increased (but not decreased),in the sole discretion of the Board. In the event Executive’s employment shall,for any reason, terminate during the Term, Executive’s final monthly BaseSalary payment shall be made on a pro-rated basis as of the last day of themonth in which such employment terminated.

4.02  During the term of employment, in addition topayments of Base Salary set forth above, Executive shall be eligible toparticipate in any performance-based cash bonus plan for senior executivesbased upon achievement of goals established with respect to each fiscal year bythe Board or Committee after reasonable consultation with Executive, but Executive’sparticipation and performance goals therein shall remain within the discretionof the Board or Committee.

4.03  During the term of employment, Executiveshall be entitled to participate in employee benefit plans, policies, programs,perquisites and arrangements, as the same may be provided and amended from timeto time, that are provided generally to similarly situated 

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executive employees of the Company, to the extentExecutive meets the eligibility requirements for any such plan, policy, program,perquisite or arrangement.

4.04  The Company shall reimburse Executive for allreasonable business expenses incurred by Executive in carrying out Executive’sduties, services, and responsibilities under this Agreement. Executive shallcomply with generally applicable policies, practices and procedures of theCompany with respect to reimbursement for, and submission of expense reports,receipts or similar documentation of, such expenses.

4.05  If the Company, based upon an opinion oflegal counsel or a judicial determination, determines that Section 304 ofthe Sarbanes-Oxley Act of 2002 is applicable to Executive, to the extent thatthe Company is required to prepare an accounting restatement due to thematerial noncompliance of the Company, as a result of misconduct, with anyfinancial reporting requirement under the securities laws, Executive shallreimburse the Company for any bonus or other incentive or equity-basedcompensation received from the Company during the 12-month periodfollowing the first public issuance or filing with the Securities and ExchangeCommission (whichever first occurs) of the financial document embodying suchfinancial reporting requirement and any profits received from the sale of theCompany’s securities during that 12-month period. In the event Executivefails to make prompt reimbursement of any such amount, the Company may, to theextent permitted by applicable law, deduct the amount required to be reimbursedfrom Executive’s compensation otherwise due under this Agreement.

**ARTICLE 5VACATION AND LEAVE OF ABSENCE**

5.01  Executive shall be entitled to four (4) weeksof paid vacation per year, in addition to the Company’s normal holidays. Vacationtime will be scheduled taking into account the Executive’s duties andobligations at the Company. Unused paid vacation time shall not accumulate fromyear to year, unless otherwise approved in writing by the Board or Committee. Sickleave and all other leaves of absence will be in accordance with the Company’sstated personnel policies.

**ARTICLE 6TERMINATION**

6.01  The Company may terminate Executive’semployment without Cause by giving Executive at least sixty (60) days writtennotice thereof. In the event of such termination, Executive shall receive onlythe severance compensation set forth in Article 7.01 and Executive shallalso be entitled to all or a portion of any bonus due Executive pursuant to anybonus plan or arrangement established or mutually agreed-upon prior totermination, to the extent earned or performed through the date of termination,based upon the requirements or criteria of such bonus plan or arrangement, asthe Board shall in good faith determine. Such pro-rated bonus, shall be payableat the time and in the manner payable to other executives of the Company whoparticipate in such plan or arrangement.

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6.02  Executive’s employment will be deemedterminated as of the date of the death of the Executive. In the event of suchtermination, there shall be payable to Executive’s estate compensation earnedthrough the date of death together with a pro-rata portion of any bonus dueExecutive pursuant to any bonus plan or arrangement established or mutuallyagreed-upon prior to termination, to the extent earned or performed based uponthe requirements or criteria of such plan or arrangement, as the Board shall ingood faith determine. Such pro-rated bonus, shall be payable at the time and inthe manner payable to other executives of the Company who participate in suchplan or arrangement.

6.03  Any other provision of this Agreementnotwithstanding, the Company may terminate Executive’s employment upon writtennotice specifying a termination date based on any of the following events thatconstitute Cause:

(a)                                  Anycommission or nolo contendere plea by Executive to a felony, gross misdemeanoror misdemeanor involving moral turpitude, or any public conduct by Executivethat has or can reasonably be expected to have a detrimental effect on theCompany;

(b)                                 Anyact of material misconduct, willful and gross negligence, or breach of duty tothe Company, including, but not limited to, embezzlement, fraud, dishonesty,nonpayment of an obligation owed to the Company, or willful breach of fiduciaryduty to the Company which results in a material loss, damage, or injury to theCompany;

(c)                                  Anymaterial breach of any material provision of this Agreement or of the Company’sannounced rules, codes or polices, which remains uncured or uncorrected for aperiod of thirty (30) days following written notice thereof to Executivespecifying such breach;

(d)                                 Anyact of insubordination by Executive; however, an act of insubordination byExecutive shall not constitute Cause if Executive cures or remedies suchinsubordination within thirty (30) days after written notice to Executive,without material harm or loss to the Company, unless such insubordination is apart of a pattern of chronic insubordination, which may be evidenced by reportsor warning letters given by the Company to Executive, in which case suchinsubordination is deemed not curable.

(e)                                  Anyunauthorized disclosure of any Company trade secret or confidentialinformation, or conduct constituting unfair competition with respect to theCompany, including inducing a party to breach a contract with the Company; or

(f)                                    Awillful violation of federal or state securities laws or regulations.

In making such determination, the Board shall act ingood faith and give Executive a reasonably detailed written notice and areasonable opportunity to be heard on the issues at a Board or Committeemeeting. For purposes of this Agreement, no act or failure by the Executiveshall be considered “willful” if such act is done by Executive in good faith inthe belief that such act is or was lawful and in the best interest of theCompany or one or more of its businesses. Nothing in 

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this paragraph 6.03 shall be construed to preventExecutive from contesting the Board or Committee’s determination that Causeexists. In the event of such termination, and not withstanding any contraryprovision otherwise stated, Executive shall receive only his Base Salary earnedthrough the date of termination.

6.04  The employment of the Executive shall in noevent be considered to have been terminated for Cause if the termination of hisemployment took place:

(a)                                  asa result of an act or omission which occurred more than 360 days prior to theExecutive’s having been given notice of the termination of his employment forsuch act or omission, unless the commission of such act or such omission couldnot at the time of such commission or omission have been known to a member ofthe Board (other than the Executive, if he is then a member of the Board), inwhich case there shall not be termination for Cause if notice of terminationtook place more than 360 days from the date that the commission of such act orsuch omission was or could reasonably have been so known; or

(b)                                 asa result of a continuing course of action which commenced and was or reasonablycould have been known to a member of the Board (other than the Executive) morethan 360 days prior to notice having been given to the Executive of thetermination of his employment.

6.05  Executive may terminate his employment uponsixty (60) days prior written notice to the Company for “Good Reason.”  For purposes of this Agreement, “Good Reason”means any of the following actions taken by the Company without Cause:

(a)                                  theCompany or any of its subsidiaries reduces Executive’s Base Salary or currentequity compensation plan opportunities (participation in any such plans orprograms remaining in the discretion of the Board or Committee), or benefitplans (other than company-wide changes to benefit plans covering all full-timeeligible employees);

(b)                                 withoutExecutive’s express written consent, the Company or any of its subsidiariessignificantly reduces Executive’s job authority and responsibility over qualityassurance at the Company as contemplated by Article 1;

(c)                                  withoutExecutive’s express written consent, the Company or any of its subsidiariesrequires Executive to change the location of Executive’s job or office, so thatExecutive will be based at a location more than fifty (50) miles from thelocation of Executive’s job or office immediately preceding notice of suchrequirement.

(d)                                 asuccessor company fails or refuses to assume the Company’s obligations underthis Agreement; or

(e)                                  theCompany or any successor company breaches any of the material provisions ofthis Agreement; provided, however, that Executive shall provide detailedinformation to the Company in such written notice and such grounds for Good 

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Reason are not remediedor continue for a period of thirty (30) days or more following receipt of suchnotice.

6.06  During the term of his employment and for 24months after the date of Executive’s termination of employment, (i) Executiveshall not, directly or indirectly, make or publish any disparaging statements(whether written or oral) regarding the Company or any of its affiliatedcompanies or businesses, or the affiliates, directors, officers, agents,principal shareholders or customers of any of them and (ii) neither theCompany or any of its affiliated companies or businesses or their affiliates,directors, or officers shall directly or indirectly, make or publish anydisparaging statements (whether written or oral) regarding Executive. Information  which the Company or Executive is required tomake or disclose regarding the other to comply with laws or regulations, ormakes in a pleading on the advice of litigation counsel, shall not constitute adisparaging statement.

6.07  Upon any termination of Executive’semployment with the Company, Executive shall be deemed to have resigned fromall other positions he then holds as an officer, employee or director or otherindependent contactor of the Company or any of its subsidiaries or affiliates,unless otherwise agreed by the Company and Executive.

**ARTICLE 7SEVERANCE PAYMENTS**

7.01  The Company, its successors or assigns, willpay Executive as severance pay a lump sum amount equal to six (6) monthsof the Executive’s monthly Base Salary for full-time employment at the time ofExecutive’s termination (the “Severance Payment”) if the employment ofExecutive is terminated by the Company without cause or by Executive for GoodReason.

(a)                                  IfExecutive becomes entitled to a Severance Payment under this Agreement, andExecutive is eligible to and elects to continue medical coverage as provided bylaw (commonly referred to as the COBRA continuation period), then the Companywill pay the cost of premiums for COBRA coverage for Executive and his eligibledependents for a period of six months following termination, or if sooner,until Executive is no longer eligible for COBRA coverage. Executive must beeligible for COBRA coverage, elect COBRA during the COBRA election period, andcomply with all requirements to obtain such coverage, to be eligible forcoverage and for this benefit.

(b)                                 If,on the six (6) month anniversary of the Severance Payment pursuant to Section 7.01,Executive is unemployed and is not rendering services as an independentcontractor, Executive shall be entitled to continue to receive monthly paymentsof Base Salary and COBRA coverage for the period ending on the earlier of (a) thedate Executive is reemployed; (b) commences rendering services as anindependent contractor; or (c) is covered by another medical plan;provided, however, that such payments shall in no event continue for more thanan additional six (6) months. Executive shall report to the Company inwriting his 

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reemploymentor engagement as a consultant.

(c)                                  Nothingin this Subsection 7.01 shall limit the authority of the Committee or Board toterminate Executive’s employment in accordance with Section 6.03. Paymentof severance payments pursuant to Section 7.01, less customarywithholdings, shall be made in one lump sum within thirty (30) days of theExecutive’s termination or resignation.

7.02  In addition to the Severance Payment pursuantto Section 7.01, the Company will pay Executive a pro-rata portion of anybonus earned by Executive as of the date of termination, as provided bySections 6.01 and 6.02. The payments to Executive pursuant to Sections 6.01,6.02 or 7.01 are not intended to be cumulative or duplicative and an amountpayable as a payment of Base Salary or pro-rata bonus under any one of suchsections shall be reduced to the extent of similar payments made under anotherof such sections. In addition, the severance payment of Base Salary shall bereduced by the amount of cash severance-type benefits to which Executive may beentitled pursuant to any other cash severance plan, agreement, policy orprogram of the Company or any of its subsidiaries; including any payment forpost-employment restrictions, provided that if the amount of cashseverance benefits payable under such other severance plan, agreement, policyor program is greater than the amount payable pursuant to this Agreement,Executive will be entitled to receive the amounts payable under such otherplan, agreement, policy or program which exceeds the Base Salary severancepayment. Without limiting other payments which would not constitute “cashseverance-type benefits” hereunder, any cash settlement of stock options,accelerated vesting of stock options and retirement, pension and other similarbenefits shall not constitute “cash severance-type benefits” for purposes ofthis Section 7.02.

7.03  Notwithstanding any other provision of thisAgreement, the Company and Executive intend that any payments, benefits orother provisions applicable to this Agreement comply with the payout and otherlimitations and restrictions imposed under Section 409A of the Code (“Section 409A”),as clarified or modified by guidance from the U.S. Department of Treasury orthe Internal Revenue Service — in each case if and to the extent Section 409Ais otherwise applicable to this Agreement and such compliance is necessary toavoid the penalties otherwise imposed under Section 409A. In thisconnection, the Company and Executive agree that the payments, benefits andother provisions applicable to this Agreement, and the terms of any deferraland other rights regarding this Agreement, shall be deemed modified if and tothe extent necessary to comply with the payout and other limitations andrestrictions imposed under Section 409A, as clarified or supplemented byguidance from the U.S. Department of Treasury or the Internal Revenue Service —in each case if and to the extent Section 409A is otherwise applicable tothis Agreement and such compliance is necessary to avoid the penaltiesotherwise imposed under Section 409A.

7.04  The Company may withhold from any amountspayable under this Agreement all federal, state, city or other taxes requiredby applicable law to be withheld by the Company.

7.05  The provisions of this Article 7 will bedeemed to survive the termination of this Agreement for the purposes ofsatisfying the obligations of the Company and Executive thereunder.

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**ARTICLE 8NONDISCLOSURE AND INVENTIONS**

8.01  Except as permitted or directed by theCompany or as may be required in the proper discharge of Executive’s employmenthereunder, Executive shall not, during his employment or at any timethereafter, divulge, furnish or make accessible to anyone or use in any way anyConfidential Information of the Company. “Confidential Information” means anyinformation or compilation of information that the Executive learns or developsduring the course of his employment that is not generally known, that isproprietary to or within the unique knowledge of the Company, from which itderives economic value (whether or not conceived, originated, discovered, ordeveloped in whole or in part by Executive). Confidential Information includesbut is not limited to, the following types of information and other informationof a similar nature (whether or not reduced to writing), all of which Executiveagrees constitutes the valuable trade secrets of the Company: research,designs, development, know how, computer programs and processes, marketingplans and techniques, existing and contemplated products and services, customerand product names and related information, prices sales, inventory, personnel,computer programs and related documentation, technical and strategic plans, andfinances. Confidential Information also includes any information of theforegoing nature that the Company treats as proprietary or designates asConfidential Information, whether or not owned or developed by the Company. “ConfidentialInformation” does not include information that (a) is or becomes generallyavailable to the public through no fault of Executive, (b) was known toExecutive prior to its disclosure by the Company, as demonstrated by files inexistence at the time of the disclosure, (c) becomes known to Executive,without restriction, from a source other than the Company, without breach ofthis Agreement by Executive and otherwise not in violation of the Company’srights, or (d) is explicitly approved for release by written authorizationof the Company.

8.02  Executive acknowledges that new and valuableproprietary concepts, methods, processes, discoveries, trade secrets (asdefined in the Minnesota Uniform Trade Secrets Act), improvements, adaptations,or ideas (herein individually and collectively referred to as “Inventions”) maybe developed, originated, authorized, conceived, invented, or made byExecutive, either alone or jointly with others, in the course of Executive’semployment by the Company. All such Inventions shall be the exclusive propertyof the Company, whether or not be patentable or copyrightable, and they may ormay not be shown or described in writing or reduced to practice. With respectto all such Inventions developed, originated, authored, conceived, or invented,or made by Executive (whether in whole or in part) during Executive’semployment by the Company, Executive shall:

(i)            keep accurate, complete and timelyrecords all such Inventions, which records shall be the Company’s property andbe retained on the Company’s premises;

(ii)           promptly and fully disclose anddescribe all such Inventions to the Company;

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(iii)          assign (and Executive hereby doesassign) to the Company all of Executive’s rights to such Inventions and toapplications for letters patent or copyrights in all countries and to letterspatent or copyrights granted with respect to such Inventions in all countries;and

(iv)          acknowledge and deliver promptly tothe Company (without charge to the Company but at the expense of the Company)such written instruments and cooperate and do such other acts as may benecessary in the opinion of the Company to preserve property rights to such Inventionsagainst forfeiture, abandonment, or loss and to obtain and maintain letterspatent or copyrights and to vest the entire right and title thereto exclusivelyin the Company.

(a)                                  IfExecutive is needed, at any time, to give testimony, evidence, or opinions inany litigation or proceeding involving any patents or copyrights orapplications for patents or copyrights, both domestic and foreign, relating toinventions, improvements discoveries, software, writings or other works ofauthorship conceived, developed or reduced to practice by Executive, Executiveagrees to do so. With respect to any obligations performed by the Executiveunder this Section following termination of Executive’s employment, theCompany will pay or reimburse all reasonable out-of-pocket expenses.

(b)                                 Theobligations of this paragraph shall continue beyond the termination ofemployment with respect to Inventions conceived or made by Executive during theperiod of his employment and shall be binding upon assigns, executors,administrators and other legal representatives. For purposes of this Agreement,any Invention relating to the business of the Company on which Executive filesor claims a copyright, or files a patent application, within one (1) yearafter termination of employment with the Company, shall be presumed to coverInventions conceived by Executive during the term of his employment with theCompany, subject to proof to the contrary by good faith, written and dulycorroborated records establishing that such Invention was conceived and madefollowing termination of employment.

**NOTICE:**  The Company hereby notifies Executive thatthe foregoing does not apply to inventions or ideas for which no equipment,supplies, facility, or trade secret information of the Company was used and thatwas developed entirely on Executive’s own time, and (1) which does notrelate (a) directly to the business of the Company and (b) to theCompany’s actual or demonstrably anticipated research or development, or (2) whichdoes not result from any work performed by Executive for the Company.

8.03  In the event of a breach or threatened breachby Executive of the provisions of this Article 8, the Company shall beentitled to an injunction restraining Executive from directly or indirectlydisclosing, disseminating, lecturing upon, publishing or using suchconfidential, trade secret or proprietary information (whether in whole or inpart) and restraining Executive from rendering any services or participatingwith any person, firm, corporation, association or other entity to whom suchknowledge or information (whether in whole or in part) has been disclosed, 

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without the posting of a bond or other security. Nothingherein shall be construed as prohibiting the Company from pursuing any otherequitable or legal remedies available to it for such breach or threatenedbreach, including the recovery of damages from Executive.

8.04  Executive agrees not to directly orindirectly use or disclose Confidential Information for the benefit of anyoneother than the Company, either during or after employment with the Company andduring the term of his employment and at all times thereafter, agrees:

(a)                                  toreceive, maintain, and use Confidential Information in the strictest confidenceand, except with the consent of the Company, not to directly or indirectlyreveal, report, publish, disclose, or transfer, any Confidential Information toany person, firm, corporation, or other entity or utilize any ConfidentialInformation for Executive’s own benefit or intended benefit or for the benefitor intended benefit of any other person, firm, corporation or other entity; and

(b)                                 notto put into issue the confidentiality of any of the Confidential Information,Company’s ownership thereof, or its status as valuable trade secrets ofCompany.

Executive acknowledges that all notes, data, referencematerials, documents, business plans, the Company business and financialrecords, computer programs, and other materials that in any way incorporate,embody, or reflect any of the Confidential Information, whether prepared byExecutive or others, are the exclusive property of the Company, and Executiveagrees to forthwith deliver to the Company all such materials, including allcopies or memorializations thereof, in Executive’s possession or control, wheneverrequested to do so by the Company, and in any event, upon termination ofExecutive’s employment with the Company.

8.05  The Executive understands and agrees that anyviolation of this Article 8 while employed by the Company may result inimmediate disciplinary action by the Company, including termination ofemployment for Cause.

8.06  The provisions of this Article 8 shallsurvive termination of this Agreement indefinitely.

**ARTICLE 9NONCOMPETITION AND NON-RECRUITMENT**

9.01  Executive agrees that during the term of hisemployment and for a period of one (1) year after termination ofemployment (the “Restricted Period”) he will not directly or indirectly renderservice (including services in research) to any person or entity in connectionwith the design, development, manufacture, marketing, or sale of a CompetitiveProduct that is sold or intended for use or sale in any geographic area inwhich the Company actively markets a Company Product or has planned to activelymarket a Company Product of the same general type or function. This territorycurrently includes North America, Europe and Japan.

(a)                                  Withoutlimiting the generality of the above, Executive expressly agrees that duringthe Restriction Period discussed above, he will not directly or indirectly (onhis own behalf or on behalf of another person or entity) sell competitive 

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Products to, attempt tosell such products to, or otherwise solicit purchases of such services orproducts from, the following:

(i)            any customer with whom Executive (orany other Executive or representative under Executive’s supervision) has haddirect or indirect contact or to whom Executive (or any other Executive orrepresentative under Executive’s supervision) has directly or indirectly soldsuch services or products during the period of Executive’s employment; or

(ii)           any prospective customer who has beendirectly or indirectly solicited by Company, or who has approached Company, andwith whom Executive (or any other Executive or representative under theExecutive’s supervision) has had direct or indirect contact or to whomExecutive (or any other Executive or representative under Executive’ssupervision) has directly or indirectly attempted to sell such services orproducts during the term of Executive’s employment.

(b)                                 Executivefurther agrees that during the Restriction Period he will not directly orindirectly (i) in any way interfere or attempt to interfere with theCompany’s relationships with any of its current or potential customers, or (ii) employor attempt to employ any of the Company’s then Executives on behalf of anyother entity, whether or not such entity competes with the Company.

(c)                                  Forthe purposes of this Section 9.01,

(i)            “Competitive Product” means anysurgical product or research to develop information useful in connection with aproduct or service that is being designed, developed, manufactured, marketed orsold by anyone other than the Company and is of the same general type, performssimilar functions, or is used for the same purposes as a Company Product onwhich the Employee worked, dealt with, or marketed during the preceding twoyears of employment or about which he received or had knowledge of ConfidentialInformation; provided, however, that the term “surgical product” shall notinclude non-invasive or percutaneous products; and

(ii)           “Company Product” means any product,product line or service (including any component thereof or research to developinformation useful in connection with a product or service) that is beingdesigned, developed, manufactured, marketed or sold by the Company or withrespect to which the Company has acquired Confidential Information which itintends to use in the design, development, manufacture, marketing or sale of aproduct or service.

9.02  At its sole option, the Company may, byexpress written notice to Executive, waive or limit the time and/or geographicarea in which Executive cannot engage in competitive activity or the scope ofsuch competitive activity.

9.03  Executive agrees that breach by him of theprovisions of this Article 9 will cause the Company irreparable harm thatis not fully remedied by monetary damages. In the event of a 

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breach or threatened breach by Executive of theprovisions of this Article 9, the Company shall be entitled to aninjunction restraining Executive from directly or indirectly competing orrecruiting as prohibited herein, without posting a bond or other security. Nothingherein shall be construed as prohibiting the Company from pursuing any otherequitable or legal remedies available to it for such breach or threatenedbreach, including the recovery of damages from Executive.

9.04  The Executive understands and agrees that anyviolation of this Article 9 while employed by the Company may result inimmediate disciplinary action by the Company, including termination ofemployment for Cause.

9.05  The obligations contained in this Article 9shall survive the termination of this Agreement indefinitely.

**ARTICLE 10MISCELLANEOUS**

10.01  Governing Law. This Agreement shall begoverned and construed according to the laws of the State of Minnesota withoutregard to conflicts of law provisions. The Company and Executive agree that ifany action is brought pursuant to this Agreement that is not otherwise resolvedby arbitration pursuant to Section 10.06, such dispute shall be resolvedonly in the District Court of Hennepin County, Minnesota, or the United StatesDistrict Court for Minnesota, and each party hereto unconditionally (a) submitsfor itself in any proceeding relating to this Agreement, or for recognition andenforcement of any judgment in respect thereof, to the exclusive jurisdictionof the Hennepin County, Minnesota District Courts or the United States FederalDistrict Court for Minnesota, and agrees that all claims in respect to any suchproceeding shall be heard and determined in Hennepin County, Minnesota,Minnesota District Court or, to the extent permitted by law, in such federalcourt, (b) consents that any such proceeding may and shall be brought insuch courts and waives any objection that it may now or thereafter have to thevenue or jurisdiction of any such proceeding in any such court or that suchproceeding was brought in an inconvenient court and agrees not to plead orclaim the same; waives all right to trial by jury in any proceeding (whetherbased on contract, tort or otherwise) arising out of or relating to thisAgreement, or its performance under or the enforcement of this Agreement; (d) agreesthat service of process in any such proceeding may be effected by mailing acopy of such process by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to such party at its address asprovided in Section 10.06; and (e) agrees that nothing in thisAgreement shall affect the right to effect service of process in any othermanner permitted by the laws of the State of Minnesota.

10.02  Successors. This Agreement is personalto Executive and Executive may not assign or transfer any part of his rights orduties hereunder, or any compensation due to him hereunder, to any other personor entity. This Agreement may be assigned by the Company and the Company. TheCompany shall require any successor or assignee, whether direct or indirect, bypurchase, merger, consolidation or otherwise, to all or substantially all thebusiness or assets of the Company, expressly and unconditionally to assume andagree to perform the Company’s obligations under this Agreement, in the samemanner and to the same extent that the Company 

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would be required to perform if no such succession orassignment had taken place. In such event, the term “Company,” as used in thisAgreement, shall mean the Company as defined above and any successor orassignee to the business or assets which by reason hereof becomes bound by theterms and provisions of this Agreement.

10.03  Waiver. The waiver by the Company ofthe breach or nonperformance of any provision of this Agreement by Executivewill not operate or be construed as a waiver of any future breach ornonperformance under any such provision of this Agreement or any similaragreement with any other Executive.

10.04  Entire Agreement; Modification. ThisAgreement supersedes, revokes and replaces any and all prior oral or writtenunderstandings, if any, between the parties relating to the subject matter ofthis Agreement. The parties agree that this Agreement: (a) is the entireunderstanding and agreement between the parties; and (b) is the completeand exclusive statement of the terms and conditions thereof, and there are noother written or oral agreements in regard to the subject matter of thisAgreement. Except for modifications described in Article 3, this Agreementshall not be changed or modified except by a written document signed by theparties hereto.

10.05  Severability and Blue Penciling. Tothe extent that any provision of this Agreement shall be determined to beinvalid or unenforceable as written, the validity and enforceability of theremainder of such provision and of this Agreement shall be unaffected. If anyparticular provision of this Agreement shall be adjudicated to be invalid orunenforceable, the Company and Executive specifically authorize the tribunalmaking such determination to edit the invalid or unenforceable provision toallow this Agreement, and the provisions thereof, to be valid and enforceableto the fullest extent allowed by law or public policy.

10.06  Arbitration. Any dispute, claim orcontroversy arising under this Agreement shall, at the request of any partyhereto be resolved by binding arbitration by a single arbitrator selected byemployer and Executive, with arbitration governed by The United StatesArbitration Act (Title 9, U.S. Code); provided, however, that a dispute, claimor controversy shall be subject to adjudication by a court in any proceedingagainst the Company or Executive involving third parties (in addition to theCompany or Executive). Such arbitrator shall be a disinterested person who iseither an attorney, retired judge or labor relations arbitrator. In the eventemployer and Executive are unable to agree upon such arbitrator, the arbitratorshall, upon petition by either the Company or Executive, be designated by ajudge of the Hennepin County District Court. The arbitrator shall have theauthority to make awards of damages as would any court in Minnesota havingjurisdiction over a dispute between employer and Executive, except that thearbitrator may not make an award of exemplary damages or consequential damages.In addition, the Company and Executive agree that all other matters arising outof Executive’s employment relationship with the Company shall be arbitrable,unless otherwise restricted by law.

(a)                                  Inany arbitration proceeding, each party shall pay the fees and expenses of itsor his own legal counsel.

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(b)                                 Thearbitrator, in his or her discretion, shall award legal fees and expenses andcosts of the arbitration, including the arbitrator’s fee, to a party whosubstantially prevails in its claims in such proceeding.

(c)                                  Notwithstandingthis Section 10.06, in the event of noncompliance or violation, as thecase may be, of Sections 8 or 9 of this Agreement, the Company mayalternatively apply to a court of competent jurisdiction for a temporaryrestraining order, injunctive and/or such other legal and equitable remedies asmay be appropriate, if it and such court reasonably determines that the Companywould have no adequate remedy at law for such violation or noncompliance.

10.07  Legal Fees. If any contest or disputeshall arise between the Company and Executive regarding any provision of thisAgreement, and such dispute results in court proceedings or arbitration, aparty that prevails to a substantial extent with respect to a claim brought andpursued in connection with such dispute, shall be entitled to recover its legalfees and expenses reasonably incurred in connection with such dispute. Suchreimbursement shall be made as soon as practicable following the resolution ofthe dispute (whether or not appealed) to the extent a party receives documentedevidence of such fees and expenses.

10.08  Notices. For purposes of thisAgreement, notices and all other communications provided for herein shall be inwriting and shall be deemed to have been duly given when personally deliveredor may send by certified mail, return receipt requested, postage prepaid,addressed to Executive at his residence address appearing on the records of theCompany and to the Company at its then current executive offices to theattention of the Board. All notices and communications shall be deemed to havebeen received on the date of delivery thereof or on the third business dayafter the mailing thereof, except that notice of change of address shall beeffective only upon actual receipt. No objection to the method of delivery maybe made if the written notice or other communication is actually received.

10.09  Survival. The provisions of this Article 10shall survive the termination of this Agreement, indefinitely.

IN WITNESS WHEREOF the following parties have executedthe above instrument the day and year first above written.
|        | MEDICALCV, INC. |
|--------|-----------------|
|   |            |   |
|   | By              | /s/ Marc P. Flores |
|   |            | Marc P. Flores |
|   |            |   |
|   | EXECUTIVE       |
|   |            |   |
|   | By              | /s/ Dennis E. Steger |
|   |            | Dennis E. Steger |

 

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**APPENDIX A**

MEDICALCV, INC.

VICE PRESIDENT REGULATORYAFFAIRS/QUALITY ASSURANCE

JOB RESPONSIBILITIES
| 1.     |   | Responsible for the definition of and coordination  of Company compliance to all applicable Local, State, Federal and  International regulations relative to the manufacture and distribution of  medical devices.                      |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                    |
| 2.     |   | Responsible for development of appropriate  regulatory strategies in support of Company goals and objectives.                                                                                                                           |
|   |   |                                                                                                                                                                                                                                    |
| 3.     |   | Directs and coordinates the activities of Quality  Control, Quality Assurance, Documentation Control and Risk Management in  support of Company goals.                                                                                  |
|   |   |                                                                                                                                                                                                                                    |
| 4.     |   | Provides input into the design of research and  development programs and marketing positions that result in the submission of  appropriate PreMarket Approval Applications.                                                             |
|   |   |                                                                                                                                                                                                                                    |
| 5.     |   | Serves as primary Company contact with FDA and other  regulatory agencies both Domestic and Foreign. Assumes overall responsibility  for product and Company compliance with the FDA and International agencies in  their full context. |
|   |   |                                                                                                                                                                                                                                    |
| 6.     |   | Maintains and up-to-date knowledge of existing and  proposed regulations and assess adherence to these regulations for both  Domestic and International markets.                                                                        |
|   |   |                                                                                                                                                                                                                                    |
| 7.     |   | Provides input to the preparation and administration  of Company operating policies and procedures.                                                                                                                                     |
|   |   |                                                                                                                                                                                                                                    |
| 8.     |   | Responsible for the preparation and administration  of departmental budgets.                                                                                                                                                            |

 

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