**EXHIBIT 10.7**

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**CHANGE IN TERMS AGREEMENT**

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| **Principal $2,500,000.00**                                                                                                                                                                                                                            | **Loan Date   11-23-2002** | **Maturity   02-23-2003** | **Loan No.   9001** | **Call/Coll** | **Account   5297745** | **Officer   M3Y** | **Initials** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|---------------------------|---------------------|---------------|-----------------------|-------------------|--------------|
| References  in the shaded area are for Lender’s use only and do not limit the applicability  of this document to any particular loan or item.  Any item above containing “* * *” has been omitted due to text  length limitations. |

 
| **Borrower:** | **MEDICAL  CV, INC.   9724 S ROBERT TRL   INVER GROVE HEIGHTS, MN 55077** |   | **Lender:** | **ASSOCIATED  BANK MINNESOTA,   NATIONAL ASSOCIATION   1801 RIVERSIDE AVENUE   MINNEAPOLIS, MN 55454** | ** ** |
|---------------|---------------------------------------------------------------------------|--------|-------------|--------------------------------------------------------------------------------------------------------|------------|

 

 

 

**PrincipalAmount:  $2,500,000.00       InterestRate:  6.500%       Date ofAgreement:  November 23, 2002**

**DESCRIPTION OF EXISTING INDEBTEDNESS.  PROMISSORY NOTE DATED NOVEMBER 23, 1999IN THE ORIGINAL AMOUNT OF $2,500,000.00.**

**DESCRIPTION OF CHANGE INTERMS.  EXTEND MATURITY DATE.**

**PROMISE TO PAY, MEDICAL CV, INC.**(“Borrower”)promises to pay to ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION (“Lender”),or order, in lawful money of the United States of America, the principal amountof Two Million Five Hundred Thousand & 00/100 Dollars ($2,500,000.00) or somuch as may be outstanding, together with interest at the rate of 6.500% perannum on the unpaid outstanding principal balance of each advance.  Interest shall be calculated from the dateof each advance until repayment of each advance.

**PAYMENT**.  Borrower will pay this loan in one paymentof all outstanding principal plus all accrued unpaid interest onFebruary 23, 2003.  In addition, Borrowerwill pay regular monthly payments of all accrued unpaid interest due as of eachpayment date, beginning December 23, 2002, with all subsequent interestpayments to be due on the same day of each month after that.  Interest on this Agreement is computed on a365/360 simple interest basis; that is, by applying the ratio of the annualinterest rate over a year of 360 days, multiplied by the outstandingprincipal balance, multiplied by the actual number of days the principalbalance is outstanding.  Borrower willpay Lender at Lender’s address shown above or at such other place as Lender maydesignate in writing.

**PREPAYMENT**.  Borrower agrees that all loan fees and otherprepaid finance charges are earned fully as of the date of the loan and willnot be subject to refund upon early payment (whether voluntary or as a resultof default), except as otherwise required by law.  Except for the foregoing, Borrower may pay without penalty all ora portion of the amount owed earlier than it is due.  Earlier payments will not, unless agreed to by Lender in writing,relieve Borrower or Borrower’s obligation to continue to make payments ofaccrued unpaid interest.  Rather, earlypayments will reduce the principal balance due.  Borrower agrees not to send Lender payments marked “paid infull,” “without recourse,” or similar language.  If Borrower sends such a payment, Lender may accept it withoutlosing any of Lender’s rights under this Agreement, and Borrower will remainobligated to pay any further amount owed to Lender.  All written communications concerning disputed amount, includingBorrower will remain obligated to pay any further amount owed to Lender.  All written communications concerningdisputed amounts, including any check or other payment instrument that indicatesthat the payment constitutes “payment in full” of the amount owed or that istendered with other conditions or limitations or as full satisfaction of adisputed amount must be mailed or delivered to:  ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION,1801 RIVERSIDE AVENUE, MINNEAPOLIS, MN 55454.

 

 

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**LATE CHARGE**.  If a payment is 10 days or more late,Borrower will be charged 5.000% of the unpaid portion of the regularlyscheduled payment.

**INTEREST AFTER DEFAULT**.  Upon default, including failure to pay uponfinal maturity, Lender, at its option, may, if permitted under applicable law,increase the interest rate on this Agreement 5.000 percentage points.  The interest rate will not exceed themaximum rate permitted by applicable law.

**DEFAULT**.  Each of the following shall constitute anEvent of Default under this Agreement:

**Payment Default**.  Borrower fails to make any payment when dueunder the Indebtedness.

**Other Defaults**.  Borrower fails to comply with or to performany other term, obligation, covenant or condition contained in this Agreementor in any of the Related Documents or to comply with or to perform any term,obligation, covenant or condition contained in any other agreement betweenLender and Borrower.

**Default in Favor of Third Parties**.  Borrower defaults under any loan, extensionof credit, security agreement, purchase or sales agreement, or any otheragreement, in favor of any other creditor or person that may materially affectany of Borrower’s property or Borrower’s ability to perform Borrower’sobligations under this Agreement or any of the Related Documents.

**False Statements**.  Any warranty, representation or statementmade or furnished to Lender by Borrower or on Borrower’s behalf under thisAgreement or the Related Documents is false or misleading in any materialrespect, either now or at the time made or furnished or becomes false ormisleading at any time thereafter.

**Insolvency**.  The dissolution or termination of Borrower’sexistence as a going business, the insolvency of Borrower, the appointment of areceiver for any part of Borrower’s property, any assignment for the benefit ofcreditors, any type of creditor workout, or the commencement of any proceedingunder any bankruptcy or insolvency laws by or against Borrower.

**Creditor or Forfeiture Proceedings**.  Commencement of foreclosure or forfeitureproceedings, whether by judicial proceeding, self-help, repossession or anyother method, by any creditor of Borrower or by any governmental agency againstany collateral securing the Indebtedness. This includes a garnishment of any of Borrower’s accounts, includingdeposit accounts, with Lender.  However,this Event of Default shall not apply if there is a good faith dispute byBorrower as to the validity or reasonableness of the claim which is the basisof the creditor or forfeiture proceeding and if Borrower gives Lender writtennotice of the creditor or forfeiture proceeding and deposits with Lender moniesor a surety bond for the creditor or forfeiture proceeding, in an amountdetermined by Lender, in its sole discretion, as being an adequate reserve orbond for the dispute.

**Events Affecting Guarantor**.  Any of the preceding events occurs withrespect to any Guarantor of any of the Indebtedness or any Guarantor dies orbecomes incompetent, or revokes or disputes the validity of, or liabilityunder, any Guaranty of the Indebtedness evidenced by this Note.  In the event of a death, Lender, at itsoption, may, but shall not be required to, permit the Guarantor’s estate toassume unconditionally the obligations arising under the guaranty in a mannersatisfactory to Lender, and, in doing so, cure any Event of Default.

 

 

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**Change in Ownership**.  Any change in ownership of twenty-fivepercent (25%) or more of the common stock of Borrower.

**Adverse Change**.  A material adverse change occurs inBorrower’s financial condition, or Lender believes the prospect of payment orperformance of the Indebtedness is impaired.

**Cure Provisions**.  If any default, other than a default inpayment is curable and if Borrower has not been given a notice of a breach ofthe same provision of this Agreement within the preceding twelve (12) months,it may be cured (and no event of default will have occurred) if Borrower, afterreceiving written notice from Lender demanding cure of such default:  (1) cures the default within thirty(30) days; or (2) if the cure requires more than thirty (30) days,immediately initiates steps which Lender deems in Lender’s sole discretion tobe sufficient to cure the default and thereafter continues and completes allreasonable and necessary steps sufficient to produce compliance as soon asreasonably practical.

**LENDER’S RIGHTS**.  Upon default, Lender may declare the entireunpaid principal balance on this Agreement and all accrued unpaid interest immediatelydue, and then Borrower will pay that amount.

**ATTORNEYS’ FEES; EXPENSES**.  Lender may hire or pay someone else to helpcollect this Agreement if Borrower does not pay.  Borrower will pay Lender that amount.  This includes, subject to any limits under applicable law,Lender’s reasonable attorneys’ fees and Lender’s legal expenses, whether or notthere is a lawsuit, including reasonable attorneys’ fees, expenses forbankruptcy proceedings (including efforts to modify or vacate any automaticstay or injunction), and appeals.  Ifnot prohibited by applicable law, Borrower also will pay any court costs, inaddition to all other sums provided by law.

**GOVERNING LAW**.  This agreement will be governed by,construed and enforced in accordance with federal law and the laws of the Stateof Minnesota.  This Agreement has beenaccepted by Lender in the State of Minnesota.

**RIGHT OF SETOFF**.  To the extent permitted by applicable law,Lender reserves a right of setoff in all Borrower’s accounts with Lender(whether checking, savings, or some other account).  This includes all accounts Borrower holds jointly with someoneelse and all accounts Borrower may open in the future.  However, this does not include any IRA orKeogh accounts, or any trust accounts for which setoff would be prohibited bylaw.  Borrower authorizes Lender, to theextent permitted by applicable law, to charge or setoff all sums owing on theIndebtedness against any and all such accounts, and, at Lender’s option, toadministratively freeze all such accounts to allow Lender to protect Lender’scharge and setoff rights provided in this paragraph.

**LINE OF CREDIT**.  This Agreement evidences a revolving line ofcredit.  Advances under this Agreement,as well as directors for payment from Borrower’s accounts, may be requestedorally or in writing by Borrower or by a authorized person.  Lender may, but need not, require that alloral requests be confirmed in writing. Borrower agrees to be liable for all sums either:  (A) advanced in accordance with theinstructions of an authorized person or (B) credited to any of Borrower’saccounts with Lender.  The unpaidprincipal balance owing on this Agreement at any time may be evidenced byendorsements on this Agreement or by Lender’s internal records, including dailycomputer print-outs.  Lender will haveno obligation to advance funds under this Agreement if:  (A) Borrower or any guarantor is indefault under the terms of this Agreement or any agreement  that Borrower or any guarantor has withLender, including any agreement made in connection with the signing of thisAgreement; (B) Borrower or any guarantor ceased doing business or isinsolvent; (C) any guarantor seeks, claims or otherwise attempts to limit,modify or revoke such guarantor’s guarantee of this Agreement or any other loanwith Lender; (D) Borrower has applied funds provided pursuant to thisAgreement for purposes other than those authorized by Lender; or(E) Lender in good faith believes itself insecure.

 

 

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**CONTINUING VALIDITY**.  Except as expressly changed by thisAgreement, the terms of the original obligation or obligations, including allagreements evidenced or securing the obligation(s), remain unchanged and infull force and effect.  Consent byLender to this Agreement does not waive Lender’s right to strict performance ofthe obligation(s) as changed, nor obligate Lender to make any future change interms.  Nothing in this Agreement willconstitute a satisfaction of the obligation(s).  It is the intention of Lender to retain as liable parties allmakers and endorsers of the original obligation(s), including accommodateparties, unless a party is expressly released by Lender in writing.  Any maker or endorser, includingaccommodation makers, will not be released by virtue of this Agreement.  If any person who signed the originalobligation does not sign this Agreement below, then all persons signing belowacknowledge that this Agreement is given conditionally, based on therepresentation to Lender that the non-signing party consents to the changes andprovisions of this Agreement or otherwise will not be released by it.  This waiver applies not only to any initialextension, modification or release, but also to all such subsequent actions.

**LOAN AGREEMENT**.  An exhibit, titled “Loan Agreement,” isattached to this note and by this reference is made a part of this note just asif all the provisions, terms and conditions of the Loan Agreement had beenfully set forth in this note.

**SUCCESSORS AND ASSIGNS**.  Subject to any limitations stated in thisAgreement on transfer of Borrower’s interest, this Agreement shall be bindingupon and inure to the benefit of the parties, their successors andassigns.  If ownership of the Collateralbecomes vested in a person other than Borrower, Lender, without notice toBorrower, may deal with Borrower’s successors with reference to this Agreementand the Indebtedness by way of forbearance or extension without releasingBorrower form the obligations of this Agreement or liability under theIndebtedness.

**MISCELLANEOUS PROVISIONS**.  Lender may delay or forgo enforcing any ofits rights or remedies under this Agreement without losing them.  Borrower and any other person who signs,guarantees or endorses this Agreement, to the extent allowed by law, waivepresentment, demand for payment, and notice of dishonor.  Upon any change in the terms of thisAgreement, and unless otherwise expressly stated in writing, no party who signsthis Agreement whether as maker, guarantor, accommodation maker or endorser,shall be released from liability.  Allsuch parties agree that Lender may renew or extend (repeatedly and for anylength of time) this loan or release any party or guarantor or collateral; orimpair, fail to realize upon or perfect Lender’s security interest in thecollateral; and take any other action deemed necessary by Lender without theconsent of or notice to anyone.  Allsuch parties also agree that Lender may modify this loan without the consent ofor notice to anyone other than the party with whom the modification ismade.  The obligations under thisAgreement are joint and several.

**SECTION DISCLOSURE**.  This loan is made under Minnesota Statutes,Section 47.59.

 

 

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**PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOODALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THIS AGREEMENT.**

**BORROWER:**

 
| **By** |   /s/  Jules Fisher              |
|--------|--------------------------------------------|
|   | **JULES FISHER, CFO of MEDICAL CV,  INC.** |

 

 

 

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