**Exhibit 10.28**

 

**WARRANT**

 

**To Purchase 136,000 SharesofCommon StockofMEDICALCV, INC.**

 

*ThisWarrant and the securities issuable upon exercise of this Warrant have not beenregistered under the Securities Act of 1933 (the “Securities Act”) or under anystate securities or “Blue Sky” laws (“Blue Sky Laws”).  No transfer, sale, assignment, pledge,hypothecation or other disposition of this Warrant or the securities issuableupon exercise of this Warrant or any interest therein may be made except (a)pursuant to an effective registration statement under the Securities Act andany applicable Blue Sky Laws or (b) if the Company has been furnished with anopinion of counsel for the holder, which opinion and counsel shall bereasonably satisfactory to the Company, to the effect that no registration isrequired because of the availability of an exemption from registration underthe Securities Act and applicable Blue Sky Laws.*

 

THIS CERTIFIES THAT, for good and valuable consideration, PETER LUDWIGHAUSER or his registered assigns, is entitled to subscribe for and purchasefrom MedicalCV, Inc., a Minnesota corporation (the “Company”), at anytime to and including the date that is ten (10) years after the date hereof,One Hundred Thirty-Six Thousand (136,000) fully paid and nonassessable sharesof the Common Stock of the Company at the price of Two Dollars ($2.00) pershare (the “Warrant Exercise Price”), subject to the antidilutionprovisions of this Warrant.  The shareswhich may be acquired upon exercise of this Warrant are referred to herein asthe “Warrant Shares.”  As used herein,the term “Holder” means Hauser, any party who acquires all or a part of thisWarrant as a registered transferee of Hauser, or any record holder or holdersof the Warrant Shares issued upon exercise, whether in whole or in part, of theWarrant; the term “Common Stock” means the Company’s Common Stock, $.01 parvalue.

 

This Warrant is subject to the following provisions, terms andconditions:

 

1.                                       Exercise; Conversion Right; Transferability.

 

(a)                                  The rights represented by this Warrant may beexercised by the Holder hereof at any time, for a period of ten (10) yearscommencing on the date hereof, in whole or in part (but not as to a fractionalshare of Common Stock), by written notice of exercise (in the form attachedhereto) delivered to the Company at the principal office of the Company priorto the expiration of this Warrant and accompanied or preceded by the surrenderof this Warrant along with a check in payment of the Warrant Exercise Price forsuch shares.

 

(b)                                 Subjectto the restrictions on transfer of this Warrant or the Warrant Shares set forthherein, the Holder of this Warrant shall have the right to require the Companyto convert this Warrant (the “Conversion Right”) at any time after thedate hereof and prior to its expiration into shares of Common Stock as providedfor in Sections 1(b) through 1(d) hereof. Upon exercise of the Conversion Right, the Company shall deliver to theHolder (without payment by the Holder of any Warrant Exercise Price) thatnumber of shares of Company Common Stock equal to the quotient obtained bydividing (i) the value of the Warrant at the time the Conversion Right isexercised (determined by subtracting the aggregate Warrant Exercise Price forthe Warrant Shares in effect immediately prior to the exercise of theConversion Right from the aggregate Fair Market Value (as defined in Section 10hereof) for the Warrant

 

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Shares immediately prior to the exercise of theConversion Right) by (ii) the Fair Market Value of one share of Common Stockimmediately prior to the exercise of the Conversion Right.

 

(c)                                  The Conversion Right may be exercised by theHolder, at any time or from time to time, after the date hereof and prior toits expiration, on any business day by delivering a written notice in the formattached hereto (the “Conversion Notice”) to the Company at the officesof the Company exercising the Conversion Right and specifying (i) the totalnumber of shares of Common Stock the Holder will purchase pursuant to suchconversion and (ii) a place and date not less than one or more than 20 businessdays from the date of the Conversion Notice for the closing of such purchase.

 

(d)                                 At any closing under Section 1(c) hereof, (i)the Holder will surrender the Warrant, (ii) the Company will deliver to theHolder a certificate or certificates for the number of shares of Common Stockissuable upon such conversion, together with cash, in lieu of any fraction of ashare, and (iii) the Company will deliver to the Holder a new warrantrepresenting the number of shares, if any, with respect to which the Warrantshall not have been exercised.

 

(e)                                  Subject to the provisions of Section 7hereof, this Warrant shall be fully transferable, in whole or in part; providedthat this Warrant shall be transferable only on the books of the Company by theHolder in person, or by duly authorized attorney, on surrender of the Warrant,properly assigned.

 

2.                                       Exchange and Replacement. Subject to Sections 1 and 7 hereof, this Warrant is exchangeable uponthe surrender hereof by the Holder to the Company at its office for newWarrants of like tenor and date representing in the aggregate the right topurchase the number of Warrant Shares purchasable hereunder, each of such newWarrants to represent the right to purchase such number of Warrant Shares (notto exceed the aggregate total number purchasable hereunder) as shall bedesignated by the Holder at the time of such surrender.  Upon receipt by the Company of evidencereasonably satisfactory to it of the loss, theft, destruction, or mutilation ofthis Warrant, and, in case of loss, theft or destruction, of indemnityreasonably satisfactory to it, and upon surrender and cancellation of thisWarrant, if mutilated, the Company will make and deliver a new Warrant of liketenor, in lieu of this Warrant.  ThisWarrant shall be promptly canceled by the Company upon the surrender hereof inconnection with any exchange or replacement. The Company shall pay all expenses, taxes (other than stock transfer taxes),and other charges incurred by it in connection with the preparation, execution,and delivery of Warrants pursuant to this Section 2.

 

3.                                       Issuance of the Warrant Shares.

 

(a)                                  The Company agrees that the shares of CommonStock purchased upon exercise of this Warrant shall be and are deemed to beissued to the Holder as of the close of business on the date on which thisWarrant shall have been surrendered and the payment made for such WarrantShares as aforesaid.  Subject to theprovisions of paragraph (b) of this Section 3, certificates for the WarrantShares so purchased shall be delivered to the Holder within a reasonable time,not exceeding fifteen (15) days after the rights represented by this Warrantshall have been so exercised, and, unless this Warrant has expired, a newWarrant representing the right to purchase the number of Warrant Shares, ifany, with respect to which this Warrant shall not then have been exercisedshall also be delivered to the Holder within such time.

 

(b)                                 Notwithstanding the foregoing, the Companyshall not be required to deliver any certificate for Warrant Shares uponexercise of this Warrant except in accordance with exemptions from theapplicable securities registration requirements or registrations underapplicable securities laws.  Nothingherein, however, shall obligate the Company to effect registrations underfederal or state securities laws, except as provided in Section 9.  If registrations are not in effect and ifexemptions are not

 

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available when the Holder seeks to exercise theWarrant, the Warrant exercise period will be extended, if need be, to preventthe Warrant from expiring, until such time as either registrations becomeeffective or exemptions are available, and the Warrant shall then remainexercisable for a period of at least 30 calendar days from the date the Companydelivers to the Holder written notice of the availability of such registrationsor exemptions.  The Holder agrees toexecute such documents and make such representations, warranties, and agreementsas may be required solely to comply with the exemptions relied upon by theCompany, or the registrations made, for the issuance of the Warrant Shares.

 

4.                                       Covenants of the Company.  TheCompany covenants and agrees that all Warrant Shares will, upon issuance, beduly authorized and issued, fully paid, nonassessable, and free from all taxes,liens, and charges with respect to the issuance thereof.  The Company further covenants and agreesthat during the period within which the rights represented by this Warrant maybe exercised, the Company will at all times have authorized and reserved forthe purpose of issue or transfer upon exercise of the subscription rightsevidenced by this Warrant a sufficient number of shares of Common Stock toprovide for the exercise of the rights represented by this Warrant.

 

5.                                       Antidilution Adjustments.  Theprovisions of this Warrant are subject to adjustment as provided in thisSection 5; provided that no adjustment shall be made pursuant to thisSection 5 which has the effect of duplicating any adjustment made pursuantto the Articles of Incorporation of the Company or any certificate ofdesignation thereto, if any.

 

(a)                                  The Warrant Exercise Price shall be subjectto adjustment from time to time as hereinafter provided.  Upon each adjustment of the Warrant ExercisePrice the holder of this Warrant shall thereafter be entitled to purchase thenumber of shares of Common Stock of the Company obtained by multiplying theWarrant Exercise Price in effect immediately prior to such adjustment by thenumber of shares issuable pursuant to exercise immediately prior to suchadjustment and dividing the product thereof by the Warrant Exercise Priceresulting from such adjustment.

 

(b)                                 Except for (i) options, warrants or otherrights to purchase securities outstanding on the date of the issuance of thisWarrant (provided there is no adjustment to the terms of such options, warrantsor other securities on or after the date of issuance of this Warrant); (ii)options to purchase shares of Common Stock and the issuance of awards of CommonStock pursuant to stock option or employee stock purchase plans adopted by theCompany and shares of Common Stock issued upon the exercise of such optionsgranted pursuant to such plans (provided there is no adjustment to the terms ofsuch options, awards or other securities on or after the date of issuance ofthis Warrant) (appropriately adjusted to reflect stock splits, combinations,stock dividends, reorganizations, consolidations and similar changes); (iii) upto four separate issues or sales by the Company during any twelve month period,none of which shall exceed 25,000 shares of Common Stock or securitiesconvertible into or exercisable for the purchase of Common Stock; (iv) CommonStock or securities convertible into or exercisable for the purchase of CommonStock issued in connection with any merger or acquisition of any business ortangible or intangible assets which is approved by the Company’s Board ofDirectors; and (v) warrants to purchase shares of Common Stock and shares ofCommon Stock issued upon exercise of such warrants granted to TowerFinance, Ltd. (“Tower”) pursuant to that certain consulting agreementby and between the Company and Tower; if and whenever the Company shall issueor sell any additional securities, warrants or rights or any securityconvertible or exchangeable into equity, securities, warrants or rights(collectively, “Convertible Securities”) for a consideration per share lessthan the Warrant Exercise Price in effect immediately prior to the time of suchissue or sale, then, forthwith upon such issue or sale, the Warrant ExercisePrice shall be adjusted to a price determined by multiplying such WarrantExercise Price by a fraction, the numerator of which shall be the number ofshares of Common Stock outstanding immediately prior to such issuance plus thenumber of shares of Common Stock that the aggregate consideration received bythe Company for such issuance would purchase at such Warrant Exercise Price;

 

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and the denominator of which shall be the number ofshares of such additional Common Stock and the number of shares of Common Stockoutstanding prior to such issuance.  Forthe purpose of the above calculation, the number of shares of Common Stockimmediately prior to such issuance shall be calculated on a fully-dilutedbasis, as if this Warrant and any other outstanding warrants, options or otherrights for the purchase of shares of stock or Convertible Securities had beenfully exercised as of such date.  Exceptas provided in Section 5(e) below, no further adjustments of the WarrantExercise Price shall be made upon the actual issuance of Common Stock or of anyConvertible Securities upon the exercise of such rights or options or upon theactual issue of such Common Stock upon conversion or exchange of suchConvertible Securities.

 

(c)                                  For purposes of this Section 5, in caseany shares of Common Stock or Convertible Securities or any rights or optionsto purchase any such Common Stock or Convertible Securities shall be issued orsold for cash, the consideration received therefor shall be deemed to be theamount received by the Company therefor, without deducting therefrom anyexpenses incurred or any underwriting commissions, discounts or concessionspaid or allowed by the Company in connection therewith.  In case any shares of Common Stock orConvertible Securities or any rights or options to purchase any such CommonStock or Convertible Securities shall be issued or sold for a considerationother than cash, the amount of the consideration other than cash received bythe Company shall be deemed to be the fair value of such consideration asdetermined by the Board of Directors of the Company, without deductingtherefrom any expenses incurred or any underwriting commissions, discounts orconcessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock orConvertible Securities or any rights or options to purchase such Common Stockor Convertible Securities shall be issued in connection with any merger orconsolidation in which the Company is the surviving corporation, the amount ofconsideration therefor shall be deemed to be the fair value as determined bythe Board of Directors of the Company of such portion of the assets and businessof the non-surviving corporation or corporations as such Board shall determineto be attributable to such Common Stock, Convertible Securities, rights oroptions, as the case may be.  In theevent of any consolidation or merger of the Company in which the Company is notthe surviving corporation or in the event of any sale of all or substantiallyall of the assets of the Company for stock or other securities of any othercorporation, the Company shall be deemed to have issued a number of shares ofits Common Stock for stock or securities of the other corporation computed onthe basis of the actual exchange ratio on which the transaction was predicatedand for a consideration equal to the fair market value on the date of suchtransaction of such stock or securities of the other corporation, and if anysuch calculation results in adjustment of the Warrant Exercise Price, thedetermination of the number of shares of Common Stock issuable upon exerciseimmediately prior to such merger, conversion or sale, for purposes ofSection 5(f) below, shall be made after giving effect to such adjustmentof the Warrant Exercise Price.

 

(d)                                 In case the Company shall at any timesubdivide its outstanding shares of Common Stock into a greater number ofshares, the Warrant Exercise Price in effect immediately prior to suchsubdivision shall be proportionately reduced, and conversely, in case theoutstanding shares of Common Stock of the Company shall be combined into asmaller number of shares, the Warrant Exercise Price in effect immediatelyprior to such combination shall be proportionately increased.

 

(e)                                  If (i) the purchase price provided for in anyright or option referred to in Section 5(b), or (ii) the additionalconsideration, if any, payable upon the conversion or exchange of ConvertibleSecurities, or (iii) the rate at which any Convertible Securities areconvertible into or exchangeable for Common Stock, shall change at any time(other than under or by reason of provisions designed to protect againstdilution), or any Convertible Securities shall terminate, expire or cease to beoutstanding without exercise thereof, the Warrant Exercise Price then in effecthereunder shall forthwith be increased or decreased to such Warrant ExercisePrice as would have applied had the adjustments made upon the issuance of suchrights, options or Convertible Securities been made upon the basis of(a) the issuance of

 

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the number of shares of Common Stock theretoforeactually delivered upon the exercise of such options or rights or upon theconversion or exchange of such Convertible Securities, and the totalconsideration received therefor, and (b) the issuance at the time of suchchange of any such options, rights, or Convertible Securities then stilloutstanding for the consideration, if any, received by the Company therefor andto be received on the basis of such changed price; and on the expiration of anysuch option or right or the termination of any such right to convert orexchange such Convertible Securities, the Warrant Exercise Price then in effecthereunder shall forthwith be increased to such Warrant Exercise Price as wouldhave been obtained had the adjustments made upon the issuance of such rights oroptions or Convertible Securities been made upon the basis of the issuance ofthe shares of Common Stock theretofore actually delivered (and the totalconsideration received therefor) upon the exercise of such rights or options orupon the conversion or exchange of such Convertible Securities.  If the purchase price provided for in anyright or option referred to in Section 5(b), or the rate at which anyConvertible Securities referred to in Section 5(b) are convertible into orexchangeable for Common Stock, shall decrease at any time under or by reason ofprovisions with respect thereto designed to protect against dilution, then incase of the delivery of Common Stock upon the exercise of any such right oroption or upon conversion or exchange of any such Convertible Security, theWarrant Exercise Price then in effect hereunder shall forthwith be decreased tosuch Warrant Exercise Price as would have applied had the adjustments made uponthe issuance of such right, option or Convertible Security been made upon thebasis of the issuance of (and the total consideration received for) the sharesof Common Stock delivered as aforesaid.

 

(f)                                    If any capital reorganization orreclassification of the capital stock of the Company, or consolidation ormerger of the Company with another corporation, or the sale of all orsubstantially all of its assets to another corporation shall be effected insuch a way that holders of Common Stock shall be entitled to receive stock,securities or assets with respect to or in exchange for Common Stock, then, asa condition of such reorganization, reclassification, consolidation, merger orsale, and except as otherwise provided herein, lawful and adequate provisionshall be made whereby the holder of this Warrant shall thereafter have theright to receive upon the basis and upon the terms and conditions specifiedherein and in lieu of the shares of the Common Stock of the Company immediatelytheretofore receivable upon the exercise of this Warrant, such shares of stock,securities or assets as may be issued or payable with respect to or in exchangefor a number of outstanding shares of such Common Stock equal to the number ofshares of such stock immediately theretofore receivable upon the exercise ofthis Warrant had such reorganization, reclassification, consolidation, mergeror sale not taken place, and in any such case appropriate provision shall bemade with respect to the rights and interests of the holder of this Warrant tothe end that the provisions hereof (including without limitation provisions foradjustments of the Warrant Exercise Price and of the number of sharesreceivable upon the exercise hereof) shall thereafter be applicable, as nearlyas may be in relation to any shares of stock, securities or assets thereafterreceivable upon the exercise of this Warrant. The Company shall not effect any such consolidation, merger or sale,unless prior to the consummation thereof the successor corporation (if otherthan the Company) resulting from such consolidation or merger or thecorporation purchasing such assets shall assume by written instrument executed andmailed to the registered holder of this Warrant, at the last address of suchholder appearing on the books of the Company, the obligation to deliver to suchholder such shares of stock, securities or assets as, in accordance with theforegoing provisions, such holder may be entitled to receive.

 

(g)                                 Upon any adjustment of the Warrant ExercisePrice, the Company shall give written notice thereof, by first-class mail,postage prepaid, addressed to the registered holder of this Warrant, as shownon the books of the Company, which notice shall state the Warrant ExercisePrice resulting from such adjustment and the increase or decrease, if any, inthe number of shares purchasable at such price upon the exercise of thisWarrant, setting forth in reasonable detail the method of calculation and thefacts upon which such calculation is based. No adjustment to the Warrant Exercise Price shall be required

 

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unless such adjustment would require an increase ordecrease of at least five cents ($0.05); provided, however, that anyadjustments which by reason of this Section 5(g) are not required to bemade shall be carried forward and taken into account in any subsequentadjustment; and, provided further, that adjustment shall be required and madein accordance with the provisions of this Section 5 (other than thisSection 5(g)) not later than such time as may be required in order topreserve the tax-free nature of a distribution to the holders of shares ofCommon Stock.  All calculations underthis Section 5 shall be made to the nearest cent or to the nearestone-hundredth of a share, as the case may be. Anything in this Section 5 to the contrary notwithstanding, the Companyshall be entitled to make such increases in the conversion rate in addition tothose required by this Section 5 as it in its discretion shall determine to beadvisable in order that any stock dividends, subdivisions of shares,distribution of rights to purchase stock or securities, or distribution ofsecurities convertible into or exchangeable for stock hereafter made by theCompany to its stockholders shall not be taxable.

 

(h)                                 In case at any time: (i) there shall be anycapital reorganization, or reclassification of the capital stock of theCompany, or consolidation or merger of the Company with, or sale of all orsubstantially all of its assets to, another corporation; or (ii) there shall bea voluntary or involuntary dissolution, liquidation or winding up of theCompany; then, in any one or more of said cases, the Company shall give writtennotice, by first-class mail, postage prepaid, addressed to the registeredholder of this Warrant at the address of such holder as shown on the books ofthe Company, of the date on which (a) the books of the Company shall closeor a record shall be taken for such dividend, distribution or subscriptionrights, or (b) such reorganization, reclassification, consolidation, merger,sale, dissolution, liquidation or winding up shall take place, as the case maybe.  Such notice shall also specify thedate as of which the holders of Common Stock of record shall participate insuch dividend, distribution or subscription rights, or shall be entitled toexchange their Common Stock for securities or other property deliverable uponsuch reorganization, reclassification, consolidation, merger, sale,dissolution, liquidation, or winding up, as the case may be.  Such written notice shall be given at leasttwenty (20) days prior to the action in question and not less than twenty (20)days prior to the record date or the date on which the Company’s transfer booksare closed in respect thereto.

 

(i)                                     If any event occurs as to which in theopinion of the Board of Directors of the Company the other provisions of thisSection 5 are not strictly applicable or if strictly applicable would notfairly protect the rights of the holder of this Warrant in accordance with theessential intent and principles of such provisions, then the Board of Directorsshall make an adjustment in the application of such provisions, in accordancewith such essential intent and principles, so as to protect such rights asaforesaid.

 

(j)                                     As used in this Section 5 the term “CommonStock” shall mean and include the Company’s presently authorized Common Stockand any additional Common Stock that may be authorized by due action of theCompany’s Board of Directors and shareholders entitled to vote thereon.

 

6.                                       No Voting Rights. This Warrant shall not entitle the Holder to any voting rights or otherrights as a shareholder of the Company.

 

7.                                       Notice of Transfer of Warrant or Resale ofthe Warrant Shares.

 

(a)                                  The Holder, by acceptance hereof, agrees togive written notice to the Company before transferring this Warrant ortransferring any Warrant Shares of such Holder’s intention to do so, describingbriefly the manner of any proposed transfer. Promptly upon receiving such written notice, the Company shall presentcopies thereof to the Company’s counsel and to counsel to the originalpurchaser of this Warrant.  If in theopinion of each such counsel the proposed transfer may be effected withoutregistration or qualification (under any federal or state securities

 

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laws), the Company, as promptly as practicable, shall notify the Holderof such opinion, whereupon the Holder shall be entitled to transfer thisWarrant or to dispose of Warrant Shares received upon the previous exercise ofthis Warrant, all in accordance with the terms of the notice delivered by theHolder to the Company; provided that an appropriate legend may be endorsed onthis Warrant or the certificates for such Warrant Shares respectingrestrictions upon transfer thereof necessary or advisable in the opinion ofcounsel and satisfactory to the Company to prevent further transfers whichwould be in violation of Section 5 of the Securities Act of 1933, as amended(the “Securities Act”) and applicable state securities laws; and providedfurther that the prospective transferee or purchaser shall execute suchdocuments and make such representations, warranties, and agreements as may berequired solely to comply with the exemptions relied upon by the Company forthe transfer or disposition of the Warrant or Warrant Shares.

 

(b)                                 If in the opinion of either of the counselreferred to in this Section 7, the proposed transfer or disposition of thisWarrant or such Warrant Shares described in the written notice given pursuantto this Section 7 may not be effected without registration or qualification ofthis Warrant or such Warrant Shares the Company shall promptly give writtennotice thereof to the Holder, and the Holder will limit its activities inrespect to such transfer or disposition as, in the opinion of both suchcounsel, are permitted by law.

 

8.                                       Fractional Shares. Fractional shares shall not be issued upon the exercise of this Warrant,but in any case where the Holder would, except for the provisions of thisSection 8, be entitled under the terms hereof to receive a fractional share,the Company shall, upon the exercise of this Warrant for the largest number ofwhole shares then called for, pay a sum in cash equal to the sum of (a) theexcess, if any, of the Fair Market Value of such fractional share over theproportional part of the Warrant Exercise Price represented by such fractionalshare, plus (b) the proportional part of the Warrant Exercise Price, if paid bythe Holder, represented by such fractional share.

 

9.                                       Registration Rights.

 

(a)                                  If the Company at any time until two (2)years after complete exercise or expiration of this Warrant proposes toregister under the Securities Act (except by a Form S-4 or Form S-8Registration Statement or any successor forms thereto) any of its equitysecurities, it will give written notice to all Holders of this Warrant, anyWarrants issued pursuant to Section 2 and/or Section 3(a) hereof, and anyWarrant Shares of its intention to do so and, on the written request of anysuch Holder given within twenty (20) days after receipt of any such notice(which request shall specify the Warrant Shares intended to be sold or disposedof by such Holder and describe the nature of any proposed sale or otherdisposition thereof), the Company will use its best efforts to cause all suchWarrant Shares, the Holders of which shall have requested the registration orqualification thereof, to be included in such registration statement proposed tobe filed by the Company; provided that:

 

(i)                                     if a greater number of Warrant Shares isoffered for participation in the proposed offering than in the reasonableopinion of the managing underwriter of the proposed offering can beaccommodated without adversely affecting the proposed offering, then the amountof Warrant Shares proposed to be offered by such Holders for registration, aswell as the number of securities of any other selling shareholdersparticipating in the registration, shall be proportionately reduced to a numberdeemed satisfactory by the managing underwriter

 

(ii)                                  the Company may, at its sole discretion andwithout the consent of any holder of the Warrant Shares, withdraw suchregistration statement and abandon the proposed offering in which any suchholder had requested to participate;

 

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(iii)                               if the offering to which the registration statement relates is to bedistributed by or through an underwriter, each holder of the Warrant Sharesshall agree, as a condition to the inclusion of such holder’s securities insuch registration, to sell securities held by such holder through suchunderwriter on the same terms and conditions as the underwriter agrees to sellsecurities on behalf of the Company and not to sell, transfer, pledge, assign orotherwise dispose of the Warrant Shares of the Company not sold by such holderin such offering for such period (up to 180 days after the effective date ofthe registration statement) as may be required by the underwriter;

 

(iv)                              the Company shall not be obligated to include any Warrant Shares in anysuch registration for any Holder who is able to sell all of the Warrant Sharesin a single transaction pursuant to Rule 144 under the Securities Act (or anyother similar rule or regulation) during the three-month period beginning onthe date such notice is received by such holder, calculated as of the date ofsuch receipt.

 

(b)                                 Further, on a one-time basis only, at anytime until two (2) years after complete exercise or expiration of this Warrant,upon request by the Holder or Holders of a majority in interest of thisWarrant, of any Warrants issued pursuant to Section 2 and/or Section 3(a)hereof, and of any Warrant Shares, the Company will promptly take all necessarysteps to register or qualify, under the Securities Act and the securities lawsof such states as the Holders may reasonably request, such number of WarrantShares issued and to be issued upon conversion of the Warrants requested bysuch Holders in their request to the Company; provided that the Company shallnot be obligated to include any Warrant Shares in any such registration for anyHolder who is able to sell all of the Warrant Shares in a single transactionpursuant to Rule 144 under the Securities Act (or any other similar rule orregulation) during the three-month period beginning on the date such notice isreceived by such holder, calculated as of the date of such receipt.  The Company shall keep effective andmaintain any registration, qualification, notification, or approval specifiedin this Paragraph (b) for such period as may be reasonably necessary for suchHolder or Holders of such Warrant Shares to dispose thereof and from time totime shall amend or supplement the prospectus used in connection therewith tothe extent necessary in order to comply with applicable law.

 

(c)                                  Upon the exercise of registration rightspursuant to this Section 9, Holder agrees to supply the Company with suchinformation as may be required by the Company to register or qualify the sharesto be registered.

 

(d)                                 With respect to each inclusion of securitiesin a registration statement pursuant to this Section 9, the Company shall bearthe following fees, costs, and expenses: all registration, filing and NASDfees, printing expenses, fees and disbursements of counsel and accountants forthe Company, fees and disbursements of counsel for the underwriter orunderwriters of such securities (if the Company is required to bear such feesand disbursements), all internal expenses, and legal fees and disbursements andother expenses of complying with state securities laws of any jurisdictions inwhich the securities to be offered are to be registered or qualified.  Fees and disbursements of special counseland accountants for the selling Holders, underwriting discounts and commissions,and transfer taxes for selling Holders and any other expenses relating to thesale of securities by the selling Holders not expressly included above shall beborne by the selling Holders.

 

(e)                                  The Company hereby indemnifies each of theHolders of this Warrant and of any Warrant Shares, and the officers anddirectors, if any, who control such Holders, within the meaning of Section 15of the Securities Act, against all losses, claims, damages, and liabilitiescaused by (i) any untrue statement or alleged untrue statement of a materialfact contained in any Registration Statement or Prospectus (and as amended orsupplemented if the Company shall have furnished any amendments thereof or

 

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supplements thereto), any Preliminary Prospectus orany state securities law filings; (ii) any omission or alleged omission tostate therein a material fact required to be stated therein or necessary tomake the statements therein not misleading except insofar as such losses,claims, damages, or liabilities are caused by any untrue statement or omissioncontained in information furnished in writing to the Company by such Holderexpressly for use therein; and each such Holder by its acceptance hereofseverally agrees that it will indemnify and hold harmless the Company, each ofits officers who signs such Registration Statement, each underwriter of theCommon Stock so registered, and each person, if any, who controls the Companyor such underwriter, within the meaning of Section 15 of the Securities Act,with respect to losses, claims, damages, or liabilities which are caused by anyuntrue statement or omission contained in information furnished in writing tothe Company by such Holder expressly for use therein.

 

10.                                 Fair Market Value. Fair Market Value of a share of Common Stock as of a particular date(the “Determination Date”) shall mean:

 

(a)                                  If the Company’s Common Stock is traded on anexchange or is listed on the Nasdaq National Market or the Nasdaq SmallCapMarket, then the average closing or last sale prices, respectively, reportedfor the ten (10) business days immediately preceding the Determination Date; or

 

(b)                                 If the Company’s Common Stock is not tradedon an exchange or listed on the Nasdaq National Market or the Nasdaq SmallCapMarket but is listed on the OTC Bulletin Board, the National Quotation Bureau,or any comparable reporting service, then the average of the closing bid andask prices reported for the ten (10) business days immediately preceding theDetermination Date; or

 

(c)                                  If the Company’s Common Stock is not listedon an exchange, on the Nasdaq National Market, the Nasdaq SmallCap Market, theOTC Bulletin Board, the National Quotation Bureau, or any comparable reportingservice, then the fair market value as determined in good faith by the Board ofDirectors of the Company.

 

*[signaturepage follows]*

 

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IN WITNESS WHEREOF, MedicalCV, Inc. has caused this Warrant to besigned by its duly authorized officer and this Warrant to be dated February 3,2004.

 

 
|   | MEDICALCV,  INC. |
|--------|------------------|
|   |             |
|   |             |
|   | By               | /s/  Jules L. Fisher |   |
|   |             |  Jules  L. Fisher |
|   |             |  Chief  Financial Officer |

 

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NOTICE OF EXERCISE OF WARRANT

 

(To be signed upon the exercise of theWarrant)

 

The undersigned hereby irrevocably elects to exercise the attachedWarrant to purchase, for cash,                                of the shares of Common Stock issuable upon the exercise of such Warrant, andrequests that certificates for the shares of Common Stock (together with a newWarrant to purchase the number of shares, if any, with respect to which thisWarrant is not exercised) be issued in the name and address set forth below.

 

 
| Dated: |                                 |   |   |
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|   | (Signature)                          |
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|   | (Name)                               |
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|   | (Address)                            |
|   |                                 |
|   |                                 |   |
|   | (Social  Security or Tax Ident. No.) |

 

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*                                         The signature on the Notice of Exercise ofWarrant must correspond to the name as written upon the face of the Warrant inevery particular without alteration or enlargement or any changewhatsoever.  When signing on behalf of acorporation, partnership, trust or other entity, PLEASE indicate yourposition(s) and title(s) with such entity.

 

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CONVERSION NOTICE

 

(To be signed upon exercise of Warrantpursuant to Sections 1(b) through 1(d))

 

The undersigned hereby irrevocably elects to exercise the ConversionRight provided in Sections 1(b) through 1(d) of the within Warrant for, and toacquire thereunder,                  shares of Common Stock.  If said numberof shares shall not be all the shares purchasable under the within Warrant, anew Warrant is to be issued in the name of said undersigned for the balanceremaining of the shares purchasable thereunder rounded up to the next highernumber of shares.

 

Please issue a certificate or certificates for the shares of CommonStock in the name set forth below.

 

 
| Dated: |                                 |   |   |
|--------|--------------------------------------|--------|--------|
|   |                                 |
|   |                                 |   |
|   | (Signature)                          |
|   |                                 |
|   |                                 |   |
|   | (Name)                               |
|   |                                 |
|   |                                 |   |
|   | (Address)                            |
|   |                                 |
|   |                                 |   |
|   | (Social  Security or Tax Ident. No.) |

 

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*                                         The signature on the Conversion Notice mustcorrespond to the name as written upon the face of the Warrant in everyparticular without alteration or enlargement or any change whatsoever.  When signing on behalf of a corporation,partnership, trust or other entity, PLEASE indicate your position(s) andtitle(s) with such entity.

 

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ASSIGNMENT OF WARRANT

 

(To be signed only upon authorized transferof the Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns, andtransfers unto                           the right to purchase                  shares of Common Stock of MedicalCV, Inc., to which the within Warrant relatesand appoints                                  ,as attorney-in-fact, to transfer said right on the books of MedicalCV, Inc.with full power of substitution in the premises.  By accepting such transfer, the transferee has agreed to be boundin all respects by the terms and conditions of the within Warrant.

 
| Dated: |                                 |   |   |
|--------|--------------------------------------|--------|--------|
|   |                                 |
|   |                                 |   |
|   | (Signature)                          |
|   |                                 |
|   |                                 |   |
|   | (Name)                               |
|   |                                 |
|   |                                 |   |
|   | (Address)                            |
|   |                                 |
|   |                                 |   |
|   | (Social  Security or Tax Ident. No.) |

 

 

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*                                         The signature on the Assignment of Warrantmust correspond to the name as written upon the face of the Warrant in everyparticular without alteration or enlargement or any change whatsoever.  When signing on behalf of a corporation,partnership, trust or other entity, PLEASE indicate your positions) andtitle(s) with such entity.

 

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