**Exhibit 10.35**

** **

**WARRANT**

** **

**To Purchase25,000 Shares of**

**CommonStock**

**of**

**MEDICALCV,INC.**

 

No. LW001

 

*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) pursuantto an effective registration statement under the Securities Act and anyapplicable 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 valuableconsideration, LIGHTWAVE ABLATION SYSTEMS, INC., a North Carolina corporation(“LightWave”) or its registered assigns, is entitled to subscribe forand purchase from MedicalCV, Inc., a Minnesota corporation (the “Company”),at any time to and including the date that is seven (7) years after the datehereof.  Twenty-five thousand (25,000)fully paid and nonassessable shares of the Common Stock of the Company at theprice of $1.46 per share (the “Warrant Exercise Price”), subject to theantidilution provisions of this Warrant. The shares which may be acquired upon exercise of this Warrant arereferred to herein as the “Warrant Shares.” As used herein, the term “Holder” means LightWave, any party whoacquires all or a part of this Warrant as a registered transferee of LightWave,or any record holder or holders of the Warrant Shares issued upon exercise,whether in whole or in part, of the Warrant; the term “Common Stock” means theCompany’s Common Stock, $.01 par value.

 

This Warrant is subject to the following provisions,terms and conditions:

 

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 seven (7) 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)                                 Subject to the restrictions on transfer ofthis Warrant or the Warrant Shares set forth herein, the Holder of this Warrantshall have the right to require the Company to convert this Warrant (the “ConversionRight’) at any time after the date hereof and prior to its expiration intoshares of Common Stock as provided for in Sections 1(b) through 1(d)hereof.  Upon exercise of the ConversionRight, the Company shall deliver to the Holder (without payment by the Holderof any Warrant Exercise Price) that number of shares of Company Common Stockequal to the quotient obtained by dividing (i) the value of

 

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the Warrant at the time the Conversion Right is exercised (determinedby subtracting the aggregate Warrant Exercise Price for the Warrant Shares ineffect immediately prior to the exercise of the Conversion Right from theaggregate Fair Market Value (as defined in Section 10 hereof) for theWarrant Shares immediately prior to the exercise of the Conversion Right) by(ii) the Fair Market Value of one share of Common Stock immediately prior tothe 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 willdeliver to the Holder a certificate or certificates for the number of shares ofCommon Stock issuable upon such conversion, together with cash, in lieu of anyfraction of a share, and (iii) the Company will deliver to the Holder a newwarrant representing the number of shares, if any, with respect to which theWarrant shall 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 transfertaxes), 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 theWarrant Shares so purchased shall be delivered to the Holder within areasonable time, not exceeding fifteen (15) days after the rights representedby this Warrant shall have been so exercised, and, unless this Warrant hasexpired, a new Warrant representing the right to purchase the number of WarrantShares, if any, with respect to which this Warrant shall not then have beenexercised shall 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

 

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the applicable securities registration requirements or registrationsunder applicable securities laws. Nothing herein, however, shall obligate the Company to effectregistrations under federal or state securities laws, except as provided inSection 9.  If registrations arenot in effect and if exemptions are not available when the Holder seeks toexercise the Warrant, the Warrant exercise period will be extended, if need be,to prevent the Warrant from expiring, until such time as either registrationsbecome effective 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, andagreements as may be required solely to comply with the exemptions relied uponby the Company, or the registrations made, for the issuance of the WarrantShares.

 

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 adjustedfrom time to time such that in case the Company shall hereafter:

 

(i)                                     pay any dividends on any class of stock ofthe Company payable in Common Stock or securities convertible into CommonStock;

 

(ii)                                  subdivide its then outstanding shares ofCommon Stock into a greater number of shares; or

 

(iii)                               combine outstanding shares of Common Stock,by reclassification or otherwise;

 

then, in any such event, the Warrant Exercise Price in effectimmediately prior to such event shall (until adjusted again pursuant hereto) beadjusted immediately after such event to a price (calculated to the nearestfull cent) determined by dividing (A) the number of shares of Common Stockoutstanding immediately prior to such event, multiplied by the then existingWarrant Exercise Price, by (B) the total number of shares of Common Stockoutstanding immediately after such event (including in each case the maximumnumber of shares of Common Stock issuable in respect of any securitiesconvertible into Common Stock), and the resulting quotient shall be theadjusted Warrant Exercise Price per share. An adjustment made pursuant to this subsection shall becomeeffective immediately after the record date in the case of a dividend ordistribution and shall become effective immediately after the effective date inthe case of a subdivision, combination or reclassification.  If, in connection with an adjustment madepursuant to this subsection or otherwise, the Holder of any Warrantthereafter surrendered for exercise shall become entitled to receive shares oftwo or more classes of capital stock or shares of Common Stock and othercapital stock of the Company, the Board of Directors (whose determination shallbe conclusive) shall determine the allocation of the adjusted Warrant ExercisePrice between or among shares of such classes of capital stock or shares ofCommon Stock and other capital stock. All calculations under this subsection shall be made to the nearestcent or to the nearest 1/100 of a share, as the case may be.  In the

 

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event that at any time, in connection with an adjustment made pursuantto this subsection or otherwise, the Holder of any Warrant thereaftersurrendered for exercise shall become entitled to receive any shares of theCompany other than shares of Common Stock, thereafter the Warrant ExercisePrice of such other shares so receivable upon exercise of any Warrant shall besubject to adjustment from time to time in a manner and on terms as nearlyequivalent as practicable to the provisions with respect to Common Stock containedin this Section.

 

(b)                                 Upon each adjustment of the Warrant ExercisePrice pursuant to Section 5(a) above, the Holder of each Warrant shallthereafter (until another such adjustment) be entitled to purchase at theadjusted Warrant Exercise Price the number of shares, calculated to the nearestfull share, obtained by multiplying the number of shares specified in suchWarrant (as adjusted as a result of all adjustments in the Warrant ExercisePrice in effect prior to such adjustment) by the Warrant Exercise Price ineffect prior to such adjustment and dividing the product so obtained by theadjusted Warrant Exercise Price.

 

(c)                                  In case of any consolidation or merger towhich the Company is a party other than a merger or consolidation in which theCompany is the continuing corporation, or in case of any sale or conveyance toanother corporation of all or substantially all of the assets of the Company,as an entirety, or in the case of any statutory exchange of securities withanother corporation (including any exchange effected in connection with amerger of a third corporation into the Company), there shall be no adjustmentunder subsection (a) of this Section above but the Holder of eachWarrant then outstanding shall have the right thereafter to convert such Warrantinto the kind and amount of shares of stock and other securities and propertywhich the Holder would have owned or have been entitled to receive immediatelyafter such consolidation, merger, statutory exchange, sale, or conveyance hadsuch Warrant been converted immediately prior to the effective date of suchconsolidation, merger, statutory exchange, sale, or conveyance.  The Company shall give written notice, byfirst-class mail, postage prepaid, addressed to the Holder as shown on thebooks of the Company, of the date on which such consolidation, merger, sale,conveyance or statutory exchange shall take place.  Such notice shall also specify the date as of which the Holdershall be entitled to exchange such Holder’s Warrant Shares (if any) for securitiesor other property deliverable upon such consolidation, merger, sale, conveyanceor statutory exchange, as the case may be. Such written notice shall be at least 20 days prior to the action inquestion.  In any such case, if deemednecessary by the Company’s Board of Directors to fairly protect the rights ofthe Holders stated herein, appropriate adjustment shall be made in theapplication of the provisions set forth in this Section with respect tothe rights and interests thereafter of any Holders of the Warrant, to the endthat the provisions set forth in this Section shall thereaftercorrespondingly be made applicable, as nearly as may reasonably be, in relationto any shares of stock and other securities and property thereafter deliverableon the exercise of the Warrant.  Theprovisions of this subsection shall similarly apply to successiveconsolidations, mergers, statutory exchanges, sales or conveyances.

 

(d)                                 Upon any adjustment of the Warrant ExercisePrice, then and in each such case, the Company shall give written noticethereof, by first-class mail, postage prepaid, addressed to the Holder 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 of Common Stock purchasable at such price upon theexercise of this Warrant, setting forth in reasonable detail the method ofcalculation and the facts upon which such calculation is based.

 

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.

 

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(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 laws), theCompany, as promptly as practicable, shall notify the Holder of such opinion,whereupon the Holder shall be entitled to transfer this Warrant or to disposeof Warrant Shares received upon the previous exercise of this Warrant, all inaccordance with the terms of the notice delivered by the Holder to the Company;provided that an appropriate legend may be endorsed on this Warrant or thecertificates for such Warrant Shares respecting restrictions upon transferthereof necessary or advisable in the opinion of counsel and satisfactory tothe Company to prevent further transfers which would be in violation ofSection 5 of the Securities Act of 1933, as amended (the “Securities Act”)and applicable state securities laws; and provided further that the prospectivetransferee or purchaser shall execute such documents and make suchrepresentations, warranties, and agreements as may be required solely to complywith the exemptions relied upon by the Company for the transfer or dispositionof 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 ofthis Warrant or such Warrant Shares described in the written notice givenpursuant to this Section 7 may not be effected without registration orqualification of this Warrant or such Warrant Shares, the Company shallpromptly give written notice thereof to the Holder, and the Holder will limitits activities in respect to such transfer or disposition as, in the opinion ofboth such counsel, are permitted by law. Notwithstanding the foregoing, the Company shall not be obligated topermit a transfer of this Warrant or the Warrant Shares to any transferee thatis not an accredited investor within the meaning of Rule 501 of Regulation Dunder the Securities Act.

 

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, be entitled under the terms hereof to receive a fractional share, theCompany 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, andany Warrant 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 proposedto be 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

 

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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;

 

(iii)                               if the offering to which the registrationstatement relates is to be distributed by or through an underwriter, eachholder of the Warrant Shares shall agree, as a condition to the inclusion ofsuch holder’s securities in such registration, to sell securities held by suchholder through such underwriter on the same terms and conditions as theunderwriter agrees to sell securities on behalf of the Company and not to sell,transfer, pledge, assign or otherwise dispose of the Warrant Shares of theCompany not sold by such holder in such offering for such period (up to 180days after the effective date of the registration statement) as may be requiredby the underwriter;

 

(iv)                              the Company shall not be obligated to includeany Warrant Shares in any such registration for any Holder who is able to sellall of the Warrant Shares in a single transaction pursuant to Rule 144 underthe Securities Act (or any other similar rule or regulation) during thethree-month period beginning on the date such notice is received by suchholder, calculated as of the date of such 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 shallbear the 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 andcommissions, and transfer taxes for selling Holders and

 

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any other expenses relating to the sale of securities by the sellingHolders not expressly included above shall be borne 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 ofSection 15 of the Securities Act, against all losses, claims, damages, andliabilities caused by (i) any untrue statement or alleged untrue statement of amaterial fact contained in any Registration Statement or Prospectus (and asamended or supplemented if the Company shall have furnished any amendmentsthereof or supplements thereto), any Preliminary Prospectus or any statesecurities law filings; (ii) any omission or alleged omission to state thereina material fact required to be stated therein or necessary to make thestatements 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 SecuritiesAct, with respect to losses, claims, damages, or liabilities which are causedby any untrue statement or omission contained in information furnished inwriting to the Company by such Holder expressly for use therein.

 

(f)                                    The Company will furnish the Warrantholderwith a reasonable number of copies of any prospectus or offering circular andone copy of the registration statement included in such filings and will amendor supplement the same as required during the nine (9) month period followingthe effective date of the registration statement, provided, that the expensesof any amendment or supplement made or filed more than three (3) months afterthe effective date of the registration statement, at the request of theWarrantholder, shall be borne by the Warrantholder.

 

(g)                                 It shall be a condition of the Company’sobligation to register the Warrant Shares hereunder that the Warrantholderagrees to cooperate with the Company in the preparation and filing of any suchregistration statement, or in its efforts to establish that the proposed saleis exempt under the Securities Act, as to any proposed distribution.  It shall also be a condition of theCompany’s obligations under this Agreement that, in the case of the filing ofany registration statement, and to the extent permissible under the SecuritiesAct, and controlling precedent thereunder, the Company and the Warrantholderprovide cross-indemnification agreements to each other in customary scopecovering the accuracy and completeness of the information furnished byeach.  The Company shall not beobligated to register any Warrant Shares which are eligible for sale under Rule144(k) under the Securities Act, or any successor or similar rule under theSecurities Act which permits the exempt sale of the Warrant Shares.

 

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,the BBX, or any comparable reporting service, then the average of the closingbid and ask prices reported for the ten (10) business days immediatelypreceding the Determination Date; or

 

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(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, the BBX, or any comparablereporting service, then the fair market value as determined in good faith bythe Board of Directors of the Company.

 

11.                                 Miscellaneous.

 

(a)                                  The Company may deem and treat the registeredHolder as the holder and owner hereof (notwithstanding any notations ofownership or writing made hereon by anyone other than the Company) for allpurposes and shall not be affected by any notice to the contrary, untilpresentation of this Warrant for transfer as provided herein and then only ifsuch transfer meets the requirements of Section 7.

 

(b)                                 The Holder understands that the Company at afuture date may file a registration or offering statement (the “RegistrationStatement”) with the Commission to facilitate a public offering of itssecurities.  The Holder agrees, for thebenefit of the Company, that should such a public offering be made and shouldthe managing underwriter of such offering require, the Holder will not, withoutthe prior written consent on the Company and such underwriter, during the “LockUp Period,” as defined herein:

 

(i)                                     sell, transfer or otherwise dispose of, oragree to sell, transfer or otherwise dispose of any of the Shares beneficiallyheld by the Holder during the Lock Up Period;

 

(ii)                                  sell, transfer or otherwise dispose of, oragree to sell, transfer or otherwise dispose of any options, rights or warrantsto purchase any of the Shares beneficially held by the Holder during the LockUp Period; or

 

(iii)                               sell or grant, or agree to sell or grant,options, rights or warrants with respect to any of the Shares.

 

The foregoing does not prohibit gifts to donees or transfers by will orthe laws of descent or distribution to heirs or beneficiaries provided thatsuch donees, heirs and beneficiaries shall be bound by the restrictions setforth herein.  The term “Lock Up Period”shall mean the lesser of (x) 180 days or (y) the period during which Companyofficers and directors are restricted by the managing underwriter in connectionwith such public offering from effecting any sales or transfers of theCompany’s Common Stock.  The Lock UpPeriod shall commence on the effective date of the Registration Statement.

 

*[signaturepage follows]*

 

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IN WITNESS WHEREOF, MedicalCV, Inc. has caused thisWarrant to be signed by its duly authorized officer and this Warrant to bedated August 27, 2003.

 

 
|   | MEDICALCV,  INC. |
|--------|------------------|
|   |             |
|   |             |
|   | By               | /s/  Blair P. Mowery |   |
|   |             | President  and Chief Executive Officer |

 

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NOTICE OF EXERCISE OF WARRANT

 

(To be signed upon the exercise of the Warrant)

 

The undersigned hereby irrevocably elects toexercise the attached Warrant 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.

 

 
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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 Warrant pursuant to Sections 1(b)through 1(d))

 

The undersigned hereby irrevocably elects toexercise the Conversion Right provided in Sections 1(b) through 1(d) of thewithin Warrant for, and to acquire 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 higher numberof shares.

 

Please issue a certificate or certificates for theshares of Common Stock in the name set forth below.

 

 
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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 transfer of the Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells,assigns, and transfers 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.

 

 
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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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