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Exhibit 10.62    
    

 
 

PEREGRINE SYSTEMS, INC.
  RESTRICTED STOCK GRANT NOTICE
  (2003 Equity Incentive Plan)    
    

        Peregrine
Systems, Inc. ("PSI"), pursuant to its 2003 Equity Incentive Plan (the "Plan"), hereby grants to the participant under the Plan (the "Participant") the right to purchase
the number of shares of PSI's common stock (the "Common Stock") set forth below (the "Award"). This Award is subject to all of the terms and conditions as set forth in this Restricted Stock Grant
Notice (the "Grant Notice"), the Restricted Stock Agreement attached hereto as Attachment I and the Plan attached hereto as Attachment II, all of which are incorporated herein in their entirety. 

	Participant:	 	John Mutch
	

Date of Grant:	
 	

May 25, 2004
	

Vesting Commencement Date:	
 	

May 25, 2004
	

Number of Shares Subject to Award:	
 	

40,000
	

Purchase Price per Share:	
 	

$0.0001
	

Total Purchase Price:	
 	

$4.00
	

Vesting Schedule:	
 	

The Shares subject to this Award shall be fully vested as of the Date of Grant.
	

Payment:	
 	

As described in the Restricted Stock Agreement, par value for the shares must be paid in cash, by check or as consideration for past services to PSI.

        Additional Terms/Acknowledgements:    The undersigned Participant acknowledges receipt of, and understands and agrees to the
terms and conditions of this Grant Notice, the Restricted Stock Agreement and the Plan. Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Restricted Stock Agreement
and the Plan set forth the entire understanding between Participant and PSI regarding the acquisition of stock in PSI and supersede all prior oral and written agreements relating thereto, with the
exception of other awards previously granted and delivered to Participant under the Plan. 

	 	Peregrine Systems, Inc.	 	 	Participant: John Mutch
	
By:	

 	
 	

By:	

 
	 	
 Signature            	 	 	
 Signature            
	

Title:	

 	
 	

Date:	

 
	
	 	

	

Date:	

 	
 	

 	

 
	
	 	 	 

 
 

ATTACHMENT I    
    
    PEREGRINE SYSTEMS, INC.
  2003 EQUITY INCENTIVE PLAN
  RESTRICTED STOCK AGREEMENT    
    

        THIS
RESTRICTED STOCK AGREEMENT (the "Agreement"), dated August 20, 2004, by and between John Mutch ("Participant") and Peregrine Systems, Inc., a Delaware corporation
("PSI"). 

 
 

RECITALS    
    

        WHEREAS, PSI has adopted the Peregrine Systems, Inc. 2003 Equity Incentive Plan (the "Plan"), which provides for awards of restricted stock to PSI's
Employees, Consultants and Directors; and 

        WHEREAS,
Participant is currently serving as an Employee and Director of PSI; and 

        WHEREAS,
PSI desires to issue to Participant, and Participant desires to acquire from PSI, shares of Common Stock, $0.0001 par value, of PSI ("Common Stock"), pursuant to the provisions
of the Plan. 

        NOW
THEREFORE, in consideration of the foregoing, and the mutual covenants and agreements set forth herein, the parties hereto agree as follows: 

1.    Definitions.    

        Capitalized
terms not explicitly defined in this Agreement but defined in the Plan shall have the same meanings ascribed to them in the Plan. 

2.    Grant of Award.    

        PSI
hereby grants to Participant, pursuant to the terms of the Restricted Stock Grant Notice ("Grant Notice") and this Agreement (collectively, the "Award"), the right to acquire the
number of shares of Common Stock indicated in the Grant Notice (the "Shares"). 

3.    Agreement to Purchase.    

        Participant
hereby agrees to purchase from PSI, and PSI hereby agrees to sell to Participant, the aggregate number of Shares at the specified Purchase Price per Share, each as set forth
in the Grant Notice. Participant may not purchase less than the aggregate number of Shares specified in the Grant Notice. 

4.    Payment.    

        The
Restricted Shares are being issued in consideration of past services provided by Participant. 

5.    Vesting.    

        The
Shares purchased by Participant shall be fully vested as of the Date of Grant provided in the Grant Notice (the "Date of Grant"). 

6.    Limitations on Transfer.    

        6.1   In
addition to any other limitation on transfer created by applicable securities laws, Participant agrees not to sell, assign, hypothecate, donate, encumber or otherwise
dispose of any interest in the Shares except by will or by the laws of descent and distribution for a period of one (1) year (the "Restricted Period") following the Date of Grant.
Notwithstanding the foregoing, upon the occurrence of (i) a Sale Event, or (ii) a Termination without Cause, Termination for Good Reason or a Termination for Death or Disability (each as
defined in the Employment Agreement dated as of August 20, 2004 and effective as of May 25, 2004 between PSI and Participant) prior to the expiration of the Restricted Period, the
restrictions contained in the previous sentence shall no longer apply and, subject to applicable securities laws, the Participant may freely dispose of any interest in the Shares. 

 

        6.2   Notwithstanding
anything in Section 6.1 to the contrary, the Shares may be assigned in whole or in part during Participant's lifetime to one or more members of
Participant's family or to a trust established exclusively for one or more such family members or to an entity in which Participant is majority owner, to the extent such assignment is in connection
with Participant's estate or financial planning or pursuant to a Domestic Relations Order (as defined in the Plan); provided the assignees shall hold the Shares subject to the terms, conditions and
restrictions applicable to the Shares immediately prior to such assignment. Any assignee shall be required to execute documentation satisfactory to PSI agreeing to be bound by all such terms,
conditions and restrictions. 

7.    Restrictive Legends.    

        The
stock certificates evidencing the Shares issued under the Award shall bear appropriate legends determined by PSI. 

8.    Award not a Service Contract.    

        The
Award is not an employment or service contract, and nothing in the Award shall be deemed to create in any way whatsoever any obligation on PSI or an Affiliate to continue
Participant's employment or service. In addition, nothing in the Award shall obligate PSI or an Affiliate, their respective stockholders, Boards of Directors, officers or employees to continue any
relationship that Participant may have as an employee or Director of, or Consultant to, PSI or an Affiliate. 

9.    Withholding Obligations.    

        9.1   At
the time the Award is granted, or at any time thereafter as requested by PSI, Participant authorizes withholding from payroll and any other amounts payable to him or
her, and otherwise agrees to make adequate provision for, any sums legally required to satisfy the minimum federal, state, local and foreign tax withholding obligations of PSI or an affiliate, if any,
which arise in connection with the Award. 

        9.2   Unless
the tax withholding obligations of PSI or any affiliate are satisfied, PSI shall have no obligation to issue a certificate for any of the Shares. 

10.    Representations.    

        10.1 Participant
has reviewed with his or her own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by
this Agreement. Participant is relying solely on such advisors and not on any statements or representations of PSI or any of its agents. Participant understands that he or she (and not PSI) shall be
responsible for any tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement. 

11.    Notices.    

        Any
notices provided for in the Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by PSI to
Participant, five days after deposit in the United States mail, postage prepaid, addressed to Participant at the last address provided by Participant to PSI. 

12.    Survival of Terms.    

        This
Agreement shall apply to and bind Participant and PSI and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors. 

13.    Failure to Enforce not a Waiver.    

        The
failure of PSI or Participant to enforce at any time any provision of this Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof. 

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14.    Amendments.    

        This
Agreement may be amended or modified at any time only by an instrument in writing signed by each of the parties hereto. 

15.    Authority of the Committee.    

        The
Committee shall have full authority to interpret and construe the terms of this Agreement. The determination of the Committee as to any such matter of interpretation or construction
shall be final, binding and conclusive. 

16.    Miscellaneous.    

        16.1 The
rights and obligations of PSI under the Award shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure
to the benefit of, and be enforceable by PSI's successors and assigns. 

        16.2 Participant
agrees upon request to execute any further documents or instruments necessary or desirable in the sole determination of PSI to carry out the purposes or
intent of the Award. 

        16.3 Participant
acknowledges and agrees that he or she has reviewed the Award in its entirety, has had an opportunity to obtain the advice of counsel prior to executing and
accepting such Award and fully understands all provisions of the Award. 

17.    Governing Plan Document.    

        The
Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of Participant's Award, and is further subject to all interpretations, amendments,
rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the provisions of the Award and those of the Plan, the
provisions of the Plan shall control. 

        Participant
represents that he or she has read this Agreement and is familiar with its terms and provisions. Participant hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Committee upon any questions arising under this Agreement. 

18.    Compliance With Applicable Laws.    

        Participant
will do all acts and things, execute, acknowledge and deliver all documents and instruments, and make all representations and warranties that are necessary or appropriate, in
the judgment of PSI, for the grant, vesting, holding or transfer of the Shares to comply with applicable laws. Without limiting the generality of the foregoing, the Participant hereby represents and
warrants that: 

        (a)   He
is sufficiently aware of PSI's business affairs and financial condition to reach an informed and knowledgeable decision to acquire the Shares. He is acquiring the
Shares for his own account for investment purposes only and not with a view to, or for the resale in connection with, any "distribution" thereof for purposes of the Securities Act of 1933, as amended,
and the rules promulgated thereunder (the "Securities Act"). 

        (b)   He
further understands that the Shares must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is
otherwise available (such as Rule 144 under the Securities Act). In addition, he understands that the certificate evidencing the Shares will be imprinted with a legend which prohibits the
transfer of the Shares unless they are registered or such registration is not required in the opinion of counsel for PSI. 

        (c)   He
understands that at the time he wishes to sell the Shares, there may be no public market upon which to make such a sale, and that, even if such a public market then
exists, PSI may not be 

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satisfying
the current public information requirements of Rule 144, and that, in such event, he would be precluded from selling the Shares under Rule 144 even if the minimum holding
periods had been satisfied. 

19.    Form S-8 Reoffer Prospectus.    

        Within
30 days following the later of (A) a Sale Event, Termination for Death or Disability, Termination without Cause or a Termination for Good Reason prior to
May 25, 2005, and (B) the date following the occurrence of any of the events described in clause (A) of this Subsection (b)(iv) on which PSI first satisfies all of the
requirements for the use of a registration statement on a Form S-8 (as set forth in the General Instructions to the Form S-8), including the use of a "reoffer
prospectus" contemplated by General Instruction C of Form S-8 (the "S-8 Requirements"), PSI will file a
registration statement on a Form S-8 including a reoffer prospectus with respect to the Restricted Shares and, to the extent PSI continues through May 25, 2005 to satisfy the
S-8 Requirements, will maintain the effectiveness of such registration statement and reoffer prospectus until May 25, 2005. Notwithstanding anything in this Subsection
(b)(iv) to the contrary, if the Board determines, in good faith, that because of the existence of material non-public information about PSI it would be disadvantageous to PSI to
file registration statement on a Form S-8, PSI shall be entitled to delay the filing of such registration statement until the Board determines, in good faith, that the filing of the
registration statement would no longer be disadvantageous to PSI. 

20.    Community Property.    

        Without
prejudice to the actual rights of the spouses as between each other, for all purposes of this Agreement, the Participant shall be treated as agent and
attorney-in-fact for that interest held or claimed by his or her spouse with respect to any Shares and the parties hereto shall act in all matters as if the Participant was the
sole owner of such Shares. This appointment is coupled with an interest and is irrevocable. 

21.    Governing Law.    

        This
Agreement will be governed by the internal laws of the State of Delaware without reference to its conflicts of law provisions. 

22.    Venue; Service of Process.    

        Any
legal action, arbitration or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement may be brought or otherwise commenced in any
state or federal court located in the County of San Diego, California. Each party to this Agreement: (i) expressly and irrevocably consents and submits to the jurisdiction of each state and
federal court located in the County of San Diego, California (and each appellate court located in the State of California) in connection with any such legal proceeding or arbitration;
(ii) agrees that each state and federal court
located in the County of San Diego, California shall be deemed to be a convenient forum; and (iii) agrees not to assert (by way of motion, as a defense or otherwise), in any such legal
proceeding or arbitration commenced in any state of federal court located in the County of San Diego, California, any claim that such party is not subject personally to the jurisdiction of such court,
that such legal proceeding or arbitration has been brought in an inconvenient forum, that the venue of such proceeding is improper or that this Agreement or the subject matter of this Agreement may
not be enforced in or by such court. Process in any action or proceeding referred to in this section may be served on any party anywhere in the world. 

[signature
page follows] 

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        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written. 

	 Peregrine Systems, Inc.	 	John Mutch
	
 By:	

 	
 	

By:	

 
	 	
 Signature            	 	 	
 Signature            
	

Name:	

 	
 	

 	

 
	 	
	 	 	 
	

Title:	

 	
 	

 	

 
	 	
	 	 	 

 
 

CONSENT OF SPOUSE    
    

        The undersigned spouse of the Participant hereby acknowledges that: I have read the foregoing Restricted Stock Agreement and that I understand its contents. I am
aware that the Agreement imposes restrictions on the transfer of such Shares. I agree that my spouse's interest in the Shares is subject to this Agreement and any interest I may have in such Shares
shall be irrevocably bound by this Agreement and further that my community property interest, if any, shall be similarly bound by this Agreement. 

        I
am aware that the legal, financial and other matters contained in this Agreement are complex and I am free to seek advice with respect thereto from independent counsel. I have either
sought such advice or determined after carefully reviewing this Agreement that I will waive such right. 

	Dated: As of	 	 	 	, 2004	 	 
	 	 	
	 	 	 	

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Exhibit 10.62

PEREGRINE SYSTEMS, INC. RESTRICTED STOCK GRANT NOTICE (2003 Equity Incentive Plan)

ATTACHMENT I PEREGRINE SYSTEMS, INC. 2003 EQUITY INCENTIVE PLAN RESTRICTED STOCK AGREEMENT

RECITALS

CONSENT OF SPOUSEQuickLinks
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EXHIBIT 10.46    
    

 
  SEVERANCE AND RELEASE AGREEMENT    
    

        This Severance and Release Agreement ("Agreement") is made by and between Blair Mowery ("Employee") on the one hand, and MedicalCV, Inc. ("Company") on the
other hand. Employee and Company are jointly called the "Parties" in this Agreement. 

Recitals  

        A.    Employee
is currently the President of Heart Valve Division. 

        B.    The
Company has agreed to provide Employee with certain benefits by means of and under the terms and conditions of this Agreement in lieu of and not in addition to the
MedicalCV, Inc. Severance Plan and Summary Plan Description ("Severance Plan"). 

        Based
on these recitals, the Parties agree as follows: 

Terms  

        1.     Employee's
employment with the Company shall terminate effective at the end of business on Wednesday, July 21, 2004 ("Termination Date"). 

        2.     Employee
has forty-five (45) days from the date he receives it to consider whether to sign this Agreement (not including the day he receives it), and
is advised in writing by this paragraph to consult an attorney as part of the consideration process. The 45-day consideration period thus expires at the end of the day on Saturday,
September 4, 2004. If Employee signs this Agreement before the expiration of the 45-day period, he does so because he does not need additional time beyond the signature date to
decide whether to enter into this Agreement. Employee acknowledges that once he executes this Agreement, he may, if he chooses, revoke the Agreement within fifteen (15) days after the date on
which he signed. (The Parties agree that this 15-day revocation period includes, and is not in addition to, the seven-day consideration period required by the Age
Discrimination in Employment Act.) If Employee chooses to revoke, written notice of revocation must be delivered either in person, or mailed by certified mail, return receipt requested, and properly
addressed to: 

John
H. Jungbauer,

Vice President-Finance/Chief Financial Officer

MedicalCV, Inc.

9725 South Robert Trail

Inver Grove Heights, MN 55077 

If
mailed, the Agreement must be postmarked within the 15-day period. If Employee does not timely revoke his execution of this Agreement, then the sixteenth day following the date of his
execution will be the "Effective Date" of this Agreement. 

        3.     By
executing this Agreement, Employee represents that he understands the terms and effect of this Agreement and enters into it willingly, knowingly, and voluntarily. 

        4.     Provided
that Employee complies with his obligations and with the conditions under this Agreement (including but not limited to the performance of those duties set forth
in sections 6 through 14 below), and does not revoke this Agreement pursuant to section 2 above, Employee will be entitled to receive the payments and benefits set forth in section 5
below. 

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        5.     The
Company will provide the following compensation and benefits to Employee as consideration for his promises in this Agreement and his performance on those promises: 

        (a)   Employee
will continue to receive his base salary for the next 52 weeks ("Severance Period"), less appropriate deductions and withholding, mailed to Employee's last
known address of record at the Company (hereinafter "Severance Pay"). Severance Pay shall be mailed out in the usual amounts on the Company's standard paydays, and shall begin on the first payday that
occurs at least six days after the Effective Date. This Severance Pay is pay to which Employee is not otherwise entitled. 

        (b)   Employee
will also receive through February 28, 2005, an additional payment of $550 per month, less appropriate deductions and withholdings, as "Special
Consideration" for which Employee is not otherwise entitled. This Special Consideration shall be paid concurrently with and in the same manner as the Severance Pay described in paragraph 5(a)
above. 

        (c)   The
Company shall further continue for the entire Severance Period or until Employee qualifies for such benefits with a new employer, whichever event occurs sooner, to
reimburse the employer's portion of Employee's group medical insurance, as Employee has elected to receive such coverage prior to the Termination Date, if Employee chooses to continue such coverage
under COBRA (hereinafter, "COBRA Payments"). The Employee must elect COBRA during the COBRA election period to be eligible for coverage and agree to the deduction of the Employee's share of the
premiums from his Severance Pay. The Employee agrees to notify Company promptly if he qualifies for medical insurance through another employer. If Employee wishes to continue to receive medical
insurance after the Severance Period for any remaining portion of the COBRA period, Employee will pay the full premiums for the remaining COBRA period. 

        (d)   Employee
will also receive a stock option for the purchase of 25,000 shares of the Company's common stock, subject to the conditions set forth in this paragraph. This
grant is a grant of a stock option to which Employee is not otherwise entitled. The grant of such stock option is subject to the Company's Board's approval. The option will be a
non-qualified stock option granted outside the Company's stock option plans. The stock option will be granted on the Effective Date of this Agreement. The exercise price of the stock
option will be the average closing representative bid and asked prices of one of the Company's publicly traded units on the OTC Bulletin Board on the date of grant. Employee will have five years from
the date of the grant to exercise the stock option. The option is fully vested as of the date of the grant, and the termination of Employee's employment will not effect the exercisability of the
option. The Company agrees that any other stock options Employee may have will be subject to the terms of the respective plans under which they were issued and are not affected by this new grant. 

        (e)   All
federal, state or other taxes that are required by law to be paid by Employee in connection with this Agreement will be his sole responsibility and Employee agrees
that the Company will have no responsibility whatsoever with respect to these taxes, except as to fulfilling legally-required reporting and withholding obligations as to Severance Pay and Special
Consideration. Employee agrees that the Company has made no statements or representations to him regarding the taxability of COBRA Payments. Employee agrees to indemnify and hold the Company harmless
for a tax liability, interest, or
penalties for any federal, state, or local taxes on any amount paid to him under section 5 of this Agreement and further agrees to reimburse the Company for reasonable costs and attorney fees
incurred in enforcing this provision. 

        6.     Employee,
on behalf of himself, his heirs, successors, agents, assigns, and all other persons who could assert a claim based on a relationship with Employee and/or
dealings with the Company, waives and releases and promises never to assert any or all claims that exist or might exist against the Company, its related business entities, and their current and
former: partners (whether general or limited), shareholders, Board members, directors, officers, employees, agents, attorneys, insurers, and 

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assigns,
prior to the Employee's signing of this Agreement. These claims include, but are not limited to, claims arising under federal, state or local statutes, ordinances, regulations, rules, or
common law, including but not limited to the following (as amended): Title VII of the Civil Rights Act of 1964; the Civil Rights Act of 1991; the Americans with Disabilities Act; the Age
Discrimination in Employment Act; the Family Medical Leave Act; the Employee Retirement Income Security Act; any state statute or law governing employment, discrimination, or harassment in employment
or governing termination of employment, including but not limited to the Minnesota Human Rights Act, or similar state statutes or local ordinances; the law of contract and tort including but not
limited to claims for defamation, fraud or misrepresentation, breach of privacy, assault, battery, intentional or negligent infliction of emotional distress, promissory estoppel, or any
quasi-contractual theory or any other theory arising under the common law; and any claims for attorney's fees, costs, or disbursements, or any action in equity, all to the fullest extent permitted by
law. Employee represents and warrants that he has not assigned any such claims to anyone else. 

        Employee
acknowledges and agrees that he waives and releases any and all claims which he might have as to any form of separation pay, compensation, or stock or equity interest in the
Company, except as to stock in the Company already owned. Employee hereby acknowledges receipt of all vacation pay and compensation for work performed through the date of this Agreement. 

        Employee
further agrees to the extent permitted by law not to sue or commence any legal or equitable actions against the Company, except to enforce this Agreement. Employee acknowledges
and agrees that the Severance Pay, Special Consideration, COBRA Payment, and stock option that he is receiving constitutes a fair, sufficient, and adequate consideration for promises in this
Agreement. 

        7.     Within
the Severance Period and for forty-eight (48) months after the end of the Severance Period as measured by the mailing of the last Severance Pay check,
Employee will comply with any reasonable request by the Company or its attorneys to assist in connection with pending or future litigation or charges involving the Company, including but not limited
to matters involving any past or present agent or employee of the Company, involving another business entity, or involving any other Company-affiliated entity, parent, or successor. The Company will
reimburse Employee for all reasonable, out-of-pocket expenses incurred in providing such assistance. 

        8.     During
a period of twelve (12) months from and after the Termination Date of Employee's employment, Employee shall not, anywhere within the geographic area in
which Company is conducting its businesses as of such date (the "Restricted Area"), directly or indirectly: 

        (a)   have
more than 5% equity ownership interest in, or become employed by any competitor of the Company in the Restricted Area. Competitor is defined as a company engaged in
the design, manufacturing, distribution or sales of mechanical heart valves and/or products for the elimination of atrial fibrillation; 

        (b)   call
upon, solicit, or attempt to take away any current or prospective customers or accounts of the Company, with whom the Employee became acquainted and/or had contact
with as a result of employment by the Company; 

        (c)   solicit,
induce or encourage any employee of the Company to violate any term of their employment contract with the Company, or to assist any other person or entity to do
so; or 

        (d)   solicit,
induce or encourage any employee of the Company to leave their employment with the Company while such person is employed by the Company, or to assist any other
person or entity to do so. 

The
foregoing competitive restrictions shall survive the termination of Employee's employment and shall be effective and enforceable for twelve (12) months following termination of Employee's
employment with the Company. 

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        9.     During
the Severance Period, Employee will fully comply with any reasonable request by the Company to provide information or guidance on any matter reasonably deemed by
the Company to fall within Employee's prior duties or knowledge or experience while at the Company. Such consultation shall not exceed four (4) hours in any calendar week, which shall be
scheduled in a manner promptly to fulfill the Company's needs, immediately before or after normal business hours or during normal business hours, on or off Company property, at the reasonable
discretion of the Company taking into account Employee's personal or business schedule. Employee agrees he is not entitled to any compensation for such consultations beyond what is set forth in
section 5 above. 

        10.   Employee
shall promptly transfer all of Employee's knowledge concerning all items which Employee was involved in administering and/or developing and any information
which he has sole knowledge or possession, and any unique or special information that would otherwise be difficult for the Company to access or re-create. Such information shall include,
but are not limited to, production and quality information and accounting and computer systems information. Employee shall make himself available for and provide further support regarding such items
pursuant to section 9 above. 

        11.   Employee
agrees to return promptly all files, documents, manuals or property of any kind, tangible or intangible, in Employee's possession or control relating to, or
constituting the property of the Company, its affiliates or customers including, but not limited to, all production and quality records, all accounting and computer systems records, all office keys,
keys to Company vehicles, credit cards, security cards, office equipment, software, database information, cellular phones, computer hardware, software products, agreements or Company products, models,
samples, mock-ups, or prototypes. Employee will provide the Company with all passwords, codes, access cards, or like articles or information necessary to access secured Company
information. Employee also specifically agrees that he will not retain copies of any property returned to the Company. Employee further agrees promptly to make his home computer available to the
Company, upon reasonable request, for review of information, data, records and files stored therein, to retrieve or destroy, at the Company's discretion, any and all such information, data, records or
files constituting the property of the Company. Employee acknowledges that this obligation is continuing and agrees to promptly return to the Company any subsequently discovered property as described
above. Employee agrees to repay to the Company the amount, if any, of any loans or temporary compensation advances paid to Employee and the balance, if any, owing by Employee on any credit cards for
which the Company is a guarantor. 

        12.   Neither
party to this Agreement will at any time disparage the other in any manner, fashion, or way, or in any place, forum or medium. Employee specifically agrees that
he will not at any time, or in any forum or fashion, disparage or otherwise make any comment that casts in a negative light the Company's directors, officers, agents, employees, business, operations,
or products. 

        13.   The
terms of this Agreement are highly confidential. Employee will not at any time disclose to any third party, except his wife, attorney, accountant, or other
professional advisers, the fact or terms of this Agreement except as otherwise required by applicable law or by a valid subpoena. He will require that each person to whom he communicates such
information agree to be similarly bound to confidentiality. Employee agrees that if he is queried regarding the circumstances of his former employment or the termination of that employment, he will
state only that he and the Company came to a mutually agreeable arrangement regarding the ending of his employment. 

        14.   Employee
agrees that for the Severance Period and indefinitely thereafter to the fullest extent permitted by applicable law, he shall retain all "Confidential
Information" and "Trade Secrets" of the Company (as defined below) in strictest confidence, and shall not reveal Confidential Information or Trade Secrets to any third party, directly, or indirectly,
except with written permission of a Company executive or pursuant to a valid subpoena. Trade Secrets shall be defined by Minnesota Statutes Chapter 325C and shall include information that derives
independent, economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, 

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other
persons who could obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, or that is proprietary to
or in the unique knowledge of the Company (including information discovered or developed in whole or in part by Employee). Confidential Information shall include all information not a Trade Secret
that is financial data or accounting information of the Company; payroll and personal information; business plans, quality control information, manufacturing information, or R & D information;
all processes, plans, designs, strategies, evaluations, know-how, formulae, patterns, devices, and inventions; customer lists; compilations and summaries of confidential information,
files, records, or documents; written or pictorial drafts; drawings and product specifications (all to be broadly interpreted), that are otherwise the subject of reasonable efforts by the Company to
protect dissemination outside of the Company or that are not otherwise known or easily obtainable outside of the Company. 

        15.   A
breach of any provision of paragraphs 7 through 14 by Employee, or by any of the persons listed in paragraph 13, will be deemed a material breach ("Material
Breach") of this Agreement. Such a Material Breach or any wrongdoing by Employee that harms or has the reasonable potential to harm the Company and that arises from Employee's misfeasance,
malfeasance, ill-will, or bad faith after the Termination Date ("Wrongdoing"), shall permit the Company to cease Severance Pay and to recover immediately from Employee all Severance Pay
previously paid to him. Employee agrees to indemnify and reimburse the Company for reasonable attorney fees and costs incurred in recovering Severance Pay already paid out to him. Such Material Breach
or Wrongdoing and the consequential cessation and recovery of (or attempts to recover) Severance Pay by the Company shall not release Employee from his duty to comply with, or to continue to comply
with, all other promises in this Agreement, including the provisions and promises of Employee in sections 6-14. Employee specifically agrees that this section 15 does not nullify,
obviate, or render unenforceable his release of claims set forth in section 6 or any other promise in sections 7-14 and that the Company's COBRA Payments alone are sufficient
consideration to support his release of claims, his covenant not to sue, and any and all other promises made in this Agreement. This provision and cessation or recovery of Severance Pay shall not
prevent the Company from pursuing any and all other remedies in equity or at law. 

        Employee
also agrees that irreparable harm would result to the Company from a violation of the covenants in sections 7, 8, 9, 10, 11, 12, 13, or 14 and that such harm would be difficult
to measure in monetary terms. Employee therefore agrees that, in addition to any relief afforded by law, an injunction against such violation or violations may be issued against him. The parties
understand that both monetary damages and an injunction shall be proper modes of relief and are not to be considered mutually exclusive remedies. 

        16.   Employee
understands and agrees that his departure from the Company is part of a restructuring of the Company's management. 

        17.   This
Agreement and the documents it references constitute the entire agreement between the Parties with respect to the matters covered and supersede all prior and
contemporaneous agreements, representations, and understandings of the parties with respect to the subject matter of this Agreement, including but not limited to any previously-existing contract,
agreement, understanding, practice, or policy (oral or written) relating to separation or severance pay in the event of termination of employment, except that the benefit plans that Employee
participates in shall remain in full force and effect for as long as Employee participates in any such benefit plan. This Agreement may be amended only by written agreement, signed by the Party or
Parties to be bound by the amendment. Parole evidence will be inadmissible to show agreement by and between the parties to any term or condition contrary to or in addition to the terms and conditions
contained in this Agreement. 

        18.   Employee
acknowledges that he has received from the Company Attachment A to this Agreement, which includes among other things the following information regarding certain
employees, 

5

 

as
required by law: job titles, ages, and status with regard to selection for this employment termination program. 

        19.   This
Agreement is made, and will be construed, under Minnesota law. 

        20.   If
any provision of this Agreement is held to be void, voidable, unlawful, or unenforceable, the remaining portions of this Agreement will continue in full force and
effect. Further, a Material Breach by or any Wrongdoing of Employee shall not obviate, void, or render unenforceable any other provision or promise of Employee contained in this Agreement, regardless
of whether the Company pursues the remedies available to it under this Agreement or otherwise. Notwithstanding the foregoing, if Employee's release of claims set forth in section 6 is held to
be invalid or unenforceable, then at its option the Company may declare the Agreement null and void and recover from Employee the payments and benefits provided to him under section 5 above. 

        21.   This
Agreement may be executed in counterpart originals with each counterpart to be treated the same as a single original. 

        22.   Employee,
by his signature below, states that he has read this Agreement in its entirety, fully understands its terms and its binding effect on him, and signs this
Agreement voluntarily and of his own free will. 

6

 
Execution by Parties  

        The parties hereby agree to and execute this Agreement. 

	        Dated: August 11, 2004.	 	 	 
	

 	
 	

/s/ BLAIR MOWERY
 Blair Mowery
	

        Dated: August 11, 2004	
 	

 	

 
	

 	
 	

MedicalCV, Inc.
	

 	
 	

By:	

/s/ LAWRENCE L. HORSCH
 Lawrence L. Horsch

Chairman of the Board/Acting CEO

7

 
 
 

ATTACHMENT A*    

	Decisional Unit:	 	Fulltime Vice Presidents and Division Presidents**

	Positions Being Terminated and

Thus Eligible for Severance and Release Agreement
 
	 	Age

	Vice President of Business Development	 	55
	President of Heart Valve Division	 	57

	Positions Not Being Terminated and Thus Not

Offered Severance Agreement and Release
 
	 	Age

	President of New Technologies Division	 	59
	Vice President-Finance/Chief Financial Officer	 	55
	Vice President of Regulatory Affairs	 	57
	Vice President of Medical Affairs	 	48

	*
	This
Attachment was prepared as of July 21, 2004, but it is subject to change and may be affected by future employment decisions. If you have any questions regarding this
information please contact John H. Jungbauer, Vice President-Finance/Chief Financial Officer, or his designee, at (651) 234-6699.

	**
	Vice
President of Clinical Product Development has resigned effective July 31, 2004 and thus is not included on this chart. 

8

QuickLinks

EXHIBIT 10.46

SEVERANCE AND RELEASE AGREEMENT

ATTACHMENT A

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