Document:

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                                                                    Exhibit 10.9

                                ESCROW AGREEMENT

         THIS ESCROW AGREEMENT made and entered into this ____day of
_______________, 2001, by and between Adel A. Mikhail, Ph.D., Blair P. Mowery,
Allan R. Seck, George M. Wettstaedt, Ronald M. Bosrock, Salvador Merce Cervello,
Norman Dann, Richard A. DeWall, M.D., Paul K. Miller, Salvador Merce Vives,
Merce V. Electromedicina, S.L., Gene E. Stobbs and Shelley Johnson (individually
the "Depositor" or collectively the "Depositors");
________________________________________, a corporate fiduciary with its
principal office located at ___________________________________ (the "Escrow
Agent"); MedicalCV, Inc., a company incorporated in the State of Minnesota with
its principal office located at 9725 South Robert Trail, Inver Grove Heights,
Minnesota (the "Issuer") and the Commissioner of Commerce for the State of
Minnesota (the "Commissioner");

         WITNESSETH THAT:

         Each of the Depositors is the owner of that number of shares of common
stock of the Issuer, par value $.01 per share (the "Common Stock"), and options
and warrants to purchase that number of shares of Common Stock upon exercise
thereof as listed opposite his or her name on APPENDIX A, attached hereto and
made a part hereof.

         The Issuer has applied to the Commissioner for registration of its
units (the "Units"), each Unit consisting of one share of Common Stock and one
redeemable Class A warrant to purchase one share of Common stock (the
"Warrants"), the Warrants and the Common Stock issuable upon exercise of the
Warrants for sale to residents of Minnesota. As a condition of registration, the
Depositors, the Escrow Agent and the Issuer agree to be bound by this Escrow
Agreement and the applicable rules and regulations of the Commissioner.

         Each of the Depositors has deposited the securities listed opposite his
or her name on APPENDIX A with the Escrow Agent, and the Escrow Agent hereby
acknowledges receipt thereof. These securities are herein collectively referred
to as the "Escrowed Securities."

         THEREFORE, the parties agree as follows:

         1. The Escrow Agent agrees to hold the Escrowed Securities until such
time as the Escrow Agent shall receive a written release issued by the
Commissioner permitting the release from escrow of all or a part of the Escrowed
Securities held under this Escrow Agreement. Upon receipt of such release, the
Escrow Agent may release to each Depositor all or a part of the Escrowed
Securities in accordance with the order of the Commissioner.

         Subject to the above provision, the term of escrow under this Escrow
Agreement shall run for a period of three (3) years from the date of the Order
of Registration, unless at an earlier date the Issuer shall have demonstrated
annual net earnings, after taxes and excluding extraordinary items, determined
in accordance with generally accepted accounting principles, for any two
consecutive years after the date of the Order of Registration, of at least five
percent (5%) of an amount determined by multiplying the total number of
outstanding shares of the Issuer, including the Escrowed Securities, by the
average price per share paid by public investors. The existence of the required
annual net earnings shall be demonstrated by certification to that effect
furnished to the Commissioner by an independent certified public accountant or
an authorized officer of the Issuer. In addition, the Issuer and each Depositor
shall furnish the Commissioner a written statement that

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none of the Escrowed Securities nor any interests therein have been sold,
transferred or otherwise disposed of (except as permitted by paragraph 4) as a
condition of the release from escrow.

         2. Notwithstanding any provision of paragraph 1, the Commissioner may,
in his or her discretion, terminate the term of escrow with respect to all or
any part of the Escrowed Securities of any Depositor before the expiration of
the period of occurrence of the event specified in paragraph 1 and release such
securities if the Commissioner determines that the release of such securities to
the Depositor(s) will not be detrimental to the Issuer, the public investors or
any other party concerned. At the time of release by the Commissioner of any
securities from escrow, the application of this Escrow Agreement shall terminate
with respect to the securities so released.

         3. While an Escrowed Security is held in escrow pursuant to this Escrow
Agreement, neither it nor any interest therein, nor any right or title thereto,
may be sold or transferred, by means of transfer of the Escrowed Security
separate from the certificate representing it or otherwise, without the prior
written release of the Commissioner, except that the release of the Commissioner
need not be obtained to transfer Escrowed Securities by will or the laws of
descent and distribution or otherwise by order or process of any Court.

         4. Upon receipt of such written release from the Commissioner directing
that some or all of the Escrowed Securities of the Depositors held under this
Escrow Agreement be released for the purpose of transfer to another person
against concurrent deposit of the securities so transferred, the Escrow Agent
may release such securities but only against such deposit under this Escrow
Agreement of all the transferred securities. The Commissioner shall authorize
such transfer of the Escrowed Securities only upon receipt of a signed statement
by the proposed transferee that he or she has full knowledge of the terms of
this Escrow Agreement and that the proposed transferee accepts such securities
subject to the conditions of this Escrow Agreement.

         5. The Depositors agree that they shall be entitled to receive cash and
property dividends with respect to the Escrowed Securities while such securities
are held in escrow pursuant to this Escrow Agreement to the same extent as other
security holders of the same class of security and that said cash or property
dividends shall be placed under the terms of this Escrow Agreement.

         6. Upon declaration of any dividend in shares of the Issuer or a
subsidiary to which the Escrowed Securities are entitled pursuant to a share
dividend or split authorized by a vote of the shareholders, the Depositors and
the Escrow Agent shall forthwith enter into a Supplemental Escrow Agreement,
covering such share dividend, which Supplemental Escrow Agreement shall
incorporate all the conditions of escrow contained in this Escrow Agreement. The
shares received as dividends shall be forthwith deposited in escrow with the
Escrow Agent pursuant to such Supplemental Escrow Agreement, and the Escrow
Agent shall deliver to the Commissioner a receipt for the shares thus escrowed.

         7. During the term of escrow, the Depositors shall not be entitled to,
and hereby waive all rights to, participate in any distribution of assets of the
Issuer in the event of liquidation, dissolution or winding up until the public
investors shall have received cash or property in an amount or value equal to
the price paid by public investors for securities purchased by such public
investors; and thereafter the Depositors shall participate without the public
investors until they shall have received cash or other property in an amount or
value equal to the price paid by the Depositors for the Escrowed Securities; and
thereafter the public investors and the Depositors shall participate equally
according to the terms of their securities. Any Depositor seeking release of all
or any part of the Escrowed Securities pursuant to this paragraph 7 shall
furnish the Commissioner a written statement that none of the Escrowed
Securities nor any interests therein have been sold, transferred

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(except as provided in paragraph 4) or otherwise disposed of, without the
consent of the Commissioner, as a condition of the release from escrow.

         8. This Escrow Agreement shall not be construed to prohibit any
Depositor from participating in any distribution of securities of any
corporation other than the Issuer resulting from the sale of assets of the
Issuer or a merger or consolidation of the Issuer with or into any other
corporation or corporations. In the event of such a transaction, the Escrow
Agent should obtain written authorization from the Commissioner prior to the
release of the Escrowed Securities, and, any such distribution payable in
securities of any corporation other than the Issuer paid with respect to the
Escrowed Securities shall be delivered to the Escrow Agent and held pursuant to
a Supplemental Escrow Agreement prepared and executed as described in paragraph
6. In the event of a merger or consolidation of the Issuer with or into any
other corporation or corporations, any securities shall be delivered to the
Escrow Agent and held pursuant to a Supplemental Escrow Agreement prepared and
executed as described in paragraph 6.

         9. The Escrow Agent may conclusively rely upon, and shall be protected
in acting upon, any statement, certificate, notice, request, consent, order or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Escrow Agent shall have no duty or liability
to verify any such statement, certificate, notice request, consent, order or
other document and its sole responsibility shall be to act only as expressly set
forth in this Escrow Agreement. The Escrow Agent shall be under no obligation to
institute or defend any action, suit or proceeding in connection with this
Escrow Agreement unless first indemnified to its satisfaction. The Escrow Agent
may consult counsel in respect of any question arising under this Escrow
Agreement and the Escrow Agent shall not be liable for any action taken or
omitted in good faith upon advice of such counsel. All securities held by the
Escrow Agent pursuant to this Escrow Agreement shall constitute trust property
for the purposes for which they are held and the Escrow Agent shall not be
liable for any interest thereon.

         10. The Escrow Agent shall be entitled to receive from the Company
reasonable compensation for its services as contemplated herein. In the event
that the Escrow Agent shall render any additional service not provided for
herein or that any controversy shall arise hereunder or that the Escrow agent
shall be made a party or shall intervene in any action, suit or proceeding
pertaining to this Escrow Agreement, it shall be entitled to receive reasonable
compensation from the Company for such additional services.

         11. This Escrow Agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, successors and assigns.

         12. This Escrow Agreement shall terminate in its entirety when all
Escrowed Securities covered hereby and by any Supplemental Escrow Agreements
have been released as provided in paragraph 1.

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

Escrow Agent:                                 Issuer: MEDICALCV, INC.

By:                                           By:
    --------------------------------              ------------------------------

Its:                                          Its:
    --------------------------------              ------------------------------

Depositors:

------------------------------------          ----------------------------------
Adel A. Mikhail, Ph.D.                        Blair P. Mowery

------------------------------------          ----------------------------------
Allan R. Seck                                 George M. Wettstaedt

------------------------------------          ----------------------------------
Ronald M. Bosrock                             Salvador Merce Cervello

------------------------------------          ----------------------------------
Norman Dann                                   Richard A. DeWall, M.D.

------------------------------------          ----------------------------------
Paul K. Miller                                Salvador Merce Vives

------------------------------------          ----------------------------------
Merce V. Electromedicina S.L.                  Gene E. Stobbs

------------------------------------
Shelley Johnson

Accepted for filing:

------------------------------------
Commissioner of Commerce

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                                                APPENDIX A

ADEL A. MIKHAIL, PH.D.:             Stock Certificate #232 for 1,000 shares
                                    Stock Certificate #235 for 15,000 shares
                                    Stock Certificate #237 for 67,500 shares
                                    Warrant to purchase 240,000 shares

BLAIR P. MOWERY:                    Stock Certificate #233 for 15,000 shares

ALLAN R. SECK:                      Stock Certificate #205 for 10,000 shares
                                    Option A-98A for 90,000 underlying shares
                                    Option E-001A for 10,000 underlying shares

GEORGE M. WETTSTAEDT:               Stock Certificate #157 for 4,000 shares
                                    Stock Certificate #219 for 4,000 shares

RONALD M. BOSROCK:                  Option C-032 for 7,000 underlying shares
                                    Option E-006 for 10,000 underlying shares

SALVADOR MERCE CERVELLO:            Stock Certificate #140 for 5,000 shares
                                    Option C-036 for 7,000 underlying shares

NORMAN DANN:                        Stock Certificate #136 for 2,000 shares
                                    Option C-034 for 7,000 underlying shares

RICHARD A. DEWALL, M.D.:            Stock Certificate #162 for 1,780 shares
                                    Stock Certificate #167 for 10,000 shares
                                    Stock Certificate #168 for 5,000 shares
                                    Stock Certificate #169 for 5,000 shares
                                    Stock Certificate #170 for 5,000 shares
                                    Stock Certificate #201 for 7,500 shares
                                    Option C-035 for 7,000 underlying shares
                                    Option E-003 for 7,500 underlying shares

PAUL K. MILLER:                     Stock Certificate #141 for 5,000 shares
                                    Stock Certificate #142 for 5,000 shares
                                    Stock Certificate #143 for 5,000 shares
                                    Stock Certificate #165 for 35,360 shares
                                    Stock Certificate #166 for 18,470 shares
                                    Stock Certificate #241 for 850,000 shares
                                    Option C-033 for 7,000 underlying shares
                                    Warrants to purchase 100,000 shares

SALVADOR MERCE VIVES:               Stock Certificate #160 for 3,020 shares

MERCE V. ELECTROMEDICINA S.L.:      Stock Certificate #161 for 6,215 shares

GENE E. STOBBS:                     Stock Certificate #234 for 37,500 shares

SHELLEY JOHNSON:                    Stock Certificate #172 for 24,000 shares
                                    Stock Certificate #208 for 7,000 shares<Page>

                                                                   EXHIBIT 10.10

                             O.E.M. SUPPLY CONTRACT

         THIS AGREEMENT, effective as of July 24,1998 by and between SULZER
CARBOMEDICS INC., a corporation organized and existing under the laws of the
State of Delaware, with its principal office located at 1300 East Anderson Lane,
Austin, Texas 78752 ("Sulzer Carbomedics") and CV DYNAMICS DBA MEDICAL
INCORPORATED, a corporation organized and existing under the laws of the State
of Minnesota, with its principal office located at 9605 West Jefferson Trail,
Inver Grove Heights, Minnesota 55077 (hereafter "Manufacturer").

         1. RECITALS AND DEFINITIONS.

                  (a) MANUFACTURER'S BUSINESS. Manufacturer is engaged in the
         business of designing, manufacturing and selling medical devices,
         including Manufacturer's proprietary cardiac valve prostheses.

                  (b) SULZER CARBOMEDICS' BUSINESS. Sulzer Carbomedics is
         engaged in the business of manufacturing mechanical components for
         cardiac valve prostheses, particularly such components coated with its
         proprietary Pyrolite(R)and Biolite(R)pyrocarbon.

                  (c) MECHANICAL HEART VALVE COMPONENTS. The term "Mechanical
         Heart Valve Components" (hereafter "Components") means and includes
         mechanical Components for use in cardiac valve prostheses manufactured
         by Sulzer Carbomedics according to the written specifications and
         drawings of the Manufacturer furnished to Sulzer Carbomedics (the
         "Specifications") which Components are coated with Pyrolite(R) and
         Biolite(R). A Component may be either a disc or an orifice. The
         Specifications have been agreed to between Sulzer Carbomedics and
         Manufacturer and are identified in Exhibit A, attached to and made part
         of this Agreement.

                  (d) VALVE SET EQUIVALENT. The term "Valve Set Equivalent" as
         used herein means any combination of Components whose individual base
         prices, when summed, result in a total price equal to a multiple of the
         base price of one disc and one orifice.

         2. PURCHASE OF GOODS. Manufacturer is required to purchase its
carbon-coated Components exclusively from Sulzer Carbomedics during the term of
this Agreement. However, Manufacturer may purchase from another company
carbon-coated items used in cardiac valve prostheses if those items have
specifications other than those identified in Exhibit A. In that event,
Manufacturer is required to offer Sulzer Carbomedics an opportunity to bid on
those items. This opportunity will include providing Sulzer Carbomedics with a
copy of the product specifications and will last for a period of at least 45
days.

         3. PRICE.

                  (a) Effective as of the date first written above, Sulzer
         Carbomedics agrees to supply such Components at the prices set forth in
         Exhibit B. As defined in Exhibit B, these prices are a combination of a
         base price for each component and a factor based on the lead time
         provided for a purchase order.

                  (b) Such prices will be adjusted for inflation, effective
         January 1 of each calendar year beginning January 1, 1999. The adjusted
         prices for each calendar year will be the prices for the prior calendar
         year plus such prices times an inflation factor equal to the 12-month
         average

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         percentage change in employment costs for private industry workers
         (excluding farmers) for the 12 months ending September 30 as
         indicated on Table 3 of the Employment Cost Index published by the
         Bureau of Labor Statistics of the United States Department of Labor or,
         if the Employment Cost Index should cease to be published, any
         comparable category in a comparable index to be agreed to in good faith
         by the parties. Prices will not be adjusted in the event that the
         inflation factor calculated under this section is negative. If the
         Employment Cost Index is not available when the first purchase order(s)
         in any calendar year is issued, the prices for Components purchased
         under such purchase order(s) will be the prices for the prior calendar
         year times the 12-month average percentage change in employment costs
         as of the end of the second calendar quarter. Such prices will be
         retroactively adjusted to reflect the 12-month average set out in
         Paragraph 3(b) of this Agreement.

                  (c) Components purchased pursuant to any purchase order placed
         by the Manufacturer and accepted by Sulzer Carbomedics within one week
         of the date first written above will be purchased at the base prices
         set forth in Exhibit B.

         4. MINIMUM QUANTITY AND SCHEDULE. Manufacturer will purchase the
minimum number of Valve Set Equivalents during the term of this Agreement as set
forth in Exhibit B in approximate equal increments. In the event that
Manufacturer purchases less than the minimum required quantity in any calendar
year, Manufacturer will, within 90 days of the end of that calendar year, pay
Sulzer Carbomedics [*] per Valve Set Equivalent not ordered up to the minimum
commitment.

         5. ORDERING PROCEDURE.

                  (a) PURCHASE ORDERS. Sales of Components will be made pursuant
         to purchase orders issued by Manufacturer to Sulzer Carbomedics,
         specifying weekly or monthly delivery schedules by size and quantity,
         price extension (based on Exhibit B pricing) and method of shipment.
         Manufacturer will use its best efforts to maintain a uniform weekly or
         monthly delivery schedule in terms of size and quantity of Components
         ordered. Contemporaneously with the execution of this Agreement,
         Manufacturer will issue purchase orders for the first 4 months of the
         term of this Agreement. Thereafter, beginning one month after the
         commencement of the term of this Agreement, subsequent purchase orders
         will be issued by Manufacturer to Sulzer Carbomedics for periods of one
         month or more, and at least three months in advance of the first
         requested delivery. Each purchase order will be accompanied by a
         nonbinding forecast of purchases, by size and quantity, planned for
         each of the two months following the period of the purchase order, up
         to six months from the date the purchase order is issued.

                  (b) LIMITATIONS ON QUANTITIES ORDERED. In order to enable
         Sulzer Carbomedics to plan production and in order to assure
         Manufacturer a steady and predictable supply of Components,
         Manufacturer agrees that each new thirteen-week order for Components
         will not increase or decrease by more than 15 percent from the
         immediately preceding thirteen week order. The 15 percent variation
         will be calculated by comparing each new order(s) for Components to the
         immediately preceding order(s) for Components. Notwithstanding the
         foregoing, Sulzer Carbomedics will use its reasonable best efforts to
         manufacture Components sufficient to fill Manufacturer's orders which
         exceed the 15 percent maximum variation limitation.

*Confidential portion omitted and filed separately with the SEC.

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                  (c) RAW MATERIALS. Manufacturer acknowledges that certain raw
         materials ("Raw Materials") which are identified on Exhibit C, attached
         to and made part of this Agreement, are unique to the Component and are
         sold in minimum quantities which may exceed a 13-week supply.
         Manufacturer hereby authorizes Sulzer Carbomedics to maintain a
         sufficient supply of Raw Materials to ensure a steady production
         schedule.

         6. CHANGES.

                  (a) SPECIFICATION CHANGES REQUESTED BY MANUFACTURER.
         Manufacturer will have the right, from time to time, to make such
         changes in the Specifications as it deems necessary or desirable. All
         such changes, however, will be made by written notice. If any change
         increases Sulzer Carbomedics' costs, Sulzer Carbomedics' price to
         Manufacturer will be increased proportionately. The effective date for
         all such changes will be negotiated in good faith between Manufacturer
         and Sulzer Carbomedics. If any inventory of Raw Materials,
         work-in-process or finished goods should become obsolete as a result of
         such a change, Manufacturer will reimburse Sulzer Carbomedics for the
         cost of such obsolete inventory on a percentage-of-completion basis. In
         addition, if any such change requires Sulzer Carbomedics to incur
         additional engineering expenses, Sulzer Carbomedics and Manufacturer
         will negotiate and agree to the expenses prior to the change being
         implemented.

                  (b) SPECIFICATION CHANGES REQUESTED BY SULZER CARBOMEDICS.
         Sulzer Carbomedics will have the right, from time to time, to request
         but not require that the Manufacturer make changes in the
         Specifications as it deems necessary or desirable. All such requests,
         however, will be made by written notice. Prior to the change in the
         Specifications being implemented, Sulzer Carbomedics and Manufacturer
         will negotiate and agree to the effective date of the change, to any
         change in the purchase price or quantity, and to any reimbursement for
         obsolete inventory or for additional expenses incurred by Sulzer
         Carbomedics.

                  (c) MANUFACTURING PROCESS CHANGES. Sulzer Carbomedics will
         have the right to change any of the processes by which it manufactures
         Components furnished to the Specifications, as it deems necessary or
         desirable. Sulzer Carbomedics will notify Manufacturer in writing, and
         obtain the written approval of Manufacturer before implementing any
         change which affects the biocompatibility or mechanical properties of
         the Pyrolite(R) coating on the Components. However, Sulzer Carbomedics
         may implement a change to any of its manufacturing and inspection
         processes without notifying or obtaining the consent of Manufacturer if
         that change does not affect the biocompatibility or mechanical
         properties of the Pyrolite(R) coating on the Components.

         7. TRANSPORTATION COSTS. Sulzer Carbomedics will ship Components to
Manufacturer f.o.b. Sulzer Carbomedics' facility (point of origin). Sulzer
Carbomedics will invoice Manufacturer for each shipment the total purchase price
and the cost of shipping or will charge the cost of shipment to Manufacturer's
account with the carrier, at Manufacturer's option.

         8. PAYMENT. Sulzer Carbomedics will invoice Manufacturer on shipment or
completion of services, as applicable, for all amounts due under this Agreement,
including without limitation amounts due under Sections 10(b) and 14. Each
invoice is due and payable in full at Sulzer Carbomedics' offices, within 90
days after the date of invoice. If Manufacturer is delinquent in payment of any
invoice, Sulzer Carbomedics may refuse to ship, require cash in advance, letters
of credit or other terms, without limiting Sulzer Carbomedics' remedies.
Manufacturer will pay a service charge of 1.5 percent per month or the maximum
rate allowed by law, whichever is lower, on all invoiced amounts due but not
paid from and after the date due.

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         9. EXCUSABLE DELAY OR FAILURE TO PERFORM. Neither party will be liable
for a delay in performance of or failure to perform an obligation under this
Agreement (except an obligation to make payment promptly when due), if and to
the extent such delay or failure is attributable to any cause beyond the
reasonable control of such party (the "affected party"). Such causes may include
but are not limited to act of God, act of government, war or related actions,
civil insurrection, riot, sabotage, strike or other labor difficulties,
epidemic, fire, flood, windstorm, failure of suppliers, subcontractors or
carriers, inability to obtain required materials or qualified labor. The
affected party will give prompt notice of the cause to the other party, and will
resume performance with reasonable diligence upon cessation of the cause of the
delay or failure. If the affected party's performance is suspended or delayed
because of the operation of this paragraph, the term of this agreement will be
correspondingly extended. Six months after suspension or delay begins, whether
excused or not, Manufacturer will pay Sulzer Carbomedics for all unused Raw
Materials, work in process and finished goods on a percentage-of-completion
basis. Upon receipt of payment, Sulzer Carbomedics will ship the finished goods
and Raw Materials to Manufacturer. Sulzer Carbomedics may, however, hold all
work in process in trust for Manufacturer for a period of time not to exceed 12
months after the beginning of suspension or delay. Sulzer Carbomedics and
Manufacturer will each have the right to count the work in process. At the end
of the 12-month period and provided Manufacturer has paid for it, Sulzer
Carbomedics will destroy the work in process under the observation of
representatives of Manufacturer.

         10. INSPECTION OF SHIPMENT AND APPROVAL BY MANUFACTURER.

                  (a) MANUFACTURER'S INSPECTION PROCEDURES. Upon receipt by
         Manufacturer of any particular shipment of Components, Manufacturer
         will have the right to inspect each Component shipped and to submit
         such Components to Manufacturer's reasonable quality control procedures
         to determine that the Components conform to the agreed Specifications.
         Manufacturer has the responsibility prior to commencement of
         manufacture of Components by Sulzer Carbomedics to describe to Sulzer
         Carbomedics the reasonable quality control procedures which will be
         adopted by Manufacturer in order that Sulzer Carbomedics, at its
         option, may integrate these quality control procedures of Manufacturer
         with those adopted by Sulzer Carbomedics to ensure that the Components
         supplied by Sulzer Carbomedics conform to the Specifications of the
         Manufacturer. Manufacturer reserves the right to make any reasonable
         change or modification in Manufacturer's quality control procedure,
         provided that the precision must remain within the limits of the Sulzer
         Carbomedics capability to produce the Components at the agreed upon
         contract price and terms. If any such change or modification increases
         Sulzer Carbomedics cost, Sulzer Carbomedics' price to Manufacturer will
         be increased. Manufacturer will notify Sulzer Carbomedics, in writing,
         of any such change or modification in the quality control procedure,
         and Sulzer Carbomedics will be allowed a reasonable time subsequent to
         receipt by manufacturer of such notice within which to modify Sulzer
         Carbomedics' quality control procedures.

                  (b) MANUFACTURER'S RIGHT TO REJECT. Manufacturer will have the
         right to reject Components which fail to conform to the agreed
         Specifications and return same to Sulzer Carbomedics at Manufacturer's
         expense. However, in conjunction with the rejection of such Components,
         Manufacturer has the affirmative responsibility of providing Sulzer
         Carbomedics with a written, comprehensive description of the basis of
         the rejection by Manufacturer of the Components being returned and/or a
         description of the mode in which the Components being returned fail to
         meet Manufacturer's Specification. If Sulzer Carbomedics, in its
         reasonable opinion and confirmed by actual test, finds that the parts
         rejected by the Manufacturer do not meet Specifications, Sulzer
         Carbomedics will at its option repair or replace the rejected Component
         or issue a credit memo to Manufacturer for the cost of the Components
         returned as well as all shipment costs to and from Manufacturer. For
         purposes of this Agreement, Manufacturer is deemed to have accepted all
         Components shipped which are not affirmatively

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         rejected by Manufacturer within 60 days of receipt. If, during any
         3-month period, the total number of Components returned by Manufacturer
         as non-conforming and subsequently determined to be in fact conforming
         to Specifications exceeds 5 percent of the total number of Components
         delivered to Manufacturer during the same period, Manufacturer will pay
         Sulzer Carbomedics an additional handling charge of $50.00 per
         Component for each in-specification Component in excess of that 5
         percent.

         11. WARRANTIES. Although Sulzer Carbomedics agrees to carry out this
Agreement in accordance with its standard operating practices, Sulzer
Carbomedics makes no warranties of any kind, express or implied, concerning the
performance of the Components or of the accuracy or completeness of any
information Sulzer Carbomedics furnishes pursuant to this Agreement.
Specifically, Sulzer Carbomedics MAKES NO WARRANTY OF FITNESS FOR THE PURPOSE
INTENDED AND NO WARRANTY OF MERCHANTABILITY. Sulzer Carbomedics' sole
responsibility will be, at Sulzer Carbomedics' option, to repair, replace or
issue credit respecting any Components having defects in material workmanship at
the time of shipment by Sulzer Carbomedics, provided any such Component is
returned by Manufacturer to Sulzer Carbomedics f.o.b. destination within 60 days
after receipt of such Component(s). This paragraph concerning warranties states
Sulzer Carbomedics' entire obligation and the sole and exclusive remedy of
Manufacturer and any third party claiming under Manufacturer respecting the
components or any defects therein.

         12. LIMITATION OF LIABILITY AND INDEMNITY.

                  (a) LIMITATION ON SULZER CARBOMEDICS' RESPONSIBILITY. Under no
         circumstances will Sulzer Carbomedics be liable or responsible for
         direct, incidental, consequential and/or special damages arising out of
         use or implantation of prostheses employing Components supplied
         hereunder including, but not limited to, damage to property of
         Manufacturer or of other persons, or for injury to or death of any
         person.

                  (b) MANUFACTURER'S RESPONSIBILITY. Sulzer Carbomedics will
         have no control over the uses to which the Components will be devoted,
         or over the circumstances of their use, storage, handling, distribution
         or application. Manufacturer will assume full responsibility with
         respect to the use of any Component or information furnished by Sulzer
         Carbomedics hereunder, and it is mutually agreed that Sulzer
         Carbomedics assumes no liabilities of any kind with respect to the use
         by Manufacturer or any third party of such Components or information.

                  (c) HOLD HARMLESS. If Manufacturer undertakes to supply the
         Components to others, it does so in its own discretion and upon its own
         judgment as to risk. Manufacturer agrees, at its own expense, to
         defend, indemnify, and hold harmless Sulzer Carbomedics, its officers,
         agents, and employees from and against any and all claims, losses,
         damages, causes of action, suits and liability of every kind, including
         all expenses of litigation, court costs, and attorney's fees, for
         injury to or death of any person, or for damage to any property,
         arising from or out of or in connection with the design, manufacture,
         marketing, sale, implantation, or use of any Component supplied under
         this Agreement or the failure by Sulzer Carbomedics to warn
         Manufacturer or any person of any defect in or risk associated with a
         Component supplied under this Agreement, regardless of whether such
         injury, death, or damages are caused in whole or in part by the
         negligence of Sulzer Carbomedics, its officers, agents, or employees or
         whether Sulzer Carbomedics is determined to be strictly liable for such
         injury, death, or damage. It is the express intention of the parties,
         both Sulzer Carbomedics and Manufacturer, that the indemnity
         obligations and liabilities assumed by Manufacturer in this paragraph
         be without monetary limit and without regard to causes thereof
         including but not limited to any failure to warn, strict

                                       5
<Page>

         liability, or the negligence of Sulzer Carbomedics, its officers,
         agents or employees, whether the negligence be sole, joint, or
         concurrent, active or passive.

         Manufacturer further agrees, at its own expense, to defend, indemnify,
         and hold harmless Sulzer Carbomedics from and against any and all
         claims, losses, damages, causes of action, suits, and liability of
         every kind, including all expenses of litigation, court costs, and
         attorney's fees, based on a claim alleging that the Components or any
         of the Components infringe a patent of any third party.

         Sulzer Carbomedics agrees, at its own expense, to defend, indemnify,
         and hold harmless Manufacturer from and against any and all claims,
         losses, damages, causes of action, suits, and liability of every kind,
         including all expenses of litigation, court costs, and attorney's fees,
         based on a claim that Sulzer Carbomedics' manufacturing processes or
         the materials used in the fabrication or coating of the Components
         infringe the patent of any third party.

                  (d) GENERAL LIABILITY/PRODUCT LIABILITY INSURANCE.
         Manufacturer will maintain liability insurance, including coverage for
         products liability and completed operations, during the term of this
         Agreement with minimum annual limits of $5 million per claim/aggregate.
         Manufacturer's annual product liability insurance self-insured
         retention shall not exceed $50,000 per claim, $150,000 aggregate unless
         written consent is first provided in writing by Sulzer Carbomedics.
         Claims falling within Manufacturer's self-insured retention shall be
         the responsibility of Manufacturer. If coverage is written on a
         claims-made basis, Manufacturer will maintain a seven year tail
         (extended reporting period) from the date of cancellation or nonrenewal
         and the policy shall contain an endorsement which specifically provides
         that in the event Manufacturer fails to purchase the tail coverage,
         Sulzer Carbomedics has the right, but not the obligation, to purchase
         the tail coverage. The policy will also contain a provision stating
         that it is primary regardless of any other insurance which may be in
         force. The liability insurance so maintained will be written by an
         insurance carrier acceptable to Sulzer Carbomedics, include Sulzer
         Carbomedics as an additional insured, and contain an endorsement to
         provide Sulzer Carbomedics with at least 30 days prior written notice
         of any cancellation, nonrenewal, or coverage reduction. Manufacturer
         will purchase and maintain insurance after the termination of this
         Agreement which will provide the coverage and limits described above
         with Sulzer Carbomedics as an additional insured during the period any
         Components supplied by Sulzer Carbomedics during the term of this
         Agreement remain implanted in any living patient. Sulzer Carbomedics
         may demand evidence of coverage, including a certified copy of the
         policy, at any time during the term of this Agreement and during the
         period Manufacturer is required to maintain coverage thereafter. In the
         event Manufacturer fails to provide Sulzer Carbomedics with evidence of
         the liability insurance required to be maintained pursuant to the
         provisions of this paragraph and the failure continues for 10 days
         following Manufacturer's receipt of a notice advising Manufacturer of
         its failure to provide such evidence, then at any time thereafter
         during the pendency of such failure, Sulzer Carbomedics will have the
         option in its sole discretion to terminate this Agreement or to
         purchase the insurance at Manufacturer's expense.

         13. CONFIDENTIALITY. Any information to be disclosed by either party to
the other pursuant to this Agreement, and which is deemed by the disclosing
party to constitute confidential or proprietary information must be disclosed in
writing and conspicuously labeled as confidential information of the disclosing
party, or with words of similar impact. Subject to Paragraph 14(d) below, any
such confidential information which is initially disclosed orally must be noted
at the outset by the disclosing party as confidential information, and must be
reduced to writing and submitted by the disclosing party to the receiving party
within 15 business days after the original oral disclosure.

                                       6
<Page>

         All information, inventions and improvements relating to pyrocarbon or
         coatings developed by the Sulzer Carbomedics will be the property of
         Sulzer Carbomedics.

         The receiving party will hold all such information in strict confidence
         and will use it solely for the purposes for which it is supplied under
         this Agreement. The receiving party will not disclose such information
         to any third party or use same for the benefit of any third party. The
         foregoing restrictions will not apply to any information which

                           (i) is not disclosed and labeled as provided in the
                  first paragraph of this Section (except orally disclosed
                  information for the first 15 business days thereafter, pending
                  the submission of same in writing) or

                           (ii) known to the receiving party prior to receipt
                  thereof from the disclosing party or

                           (iii) of public knowledge without breach by the
                  receiving party of its obligations hereunder or

                           (iv) rightfully received by the receiving party from
                  a third party without restriction on disclosure or use or

                           (v) disclosed by the disclosing party to a third
                  party without restriction on disclosure or use or

                           (vi) independently developed by personnel of the
                  receiving party who have not had access to or knowledge of the
                  contents of the disclosing party's disclosure or

                           (vii) disclosed after receiving the written consent
                  therefor of an authorized officer of the disclosing party;

provided that in the events (ii) (iii) , (iv), (v) , (vi) and (vii), the
receiving party can demonstrate same to the reasonable satisfaction of the
disclosing party.

         The restrictions on use and disclosure of information under this
         Section will survive the expiration or termination of this Agreement.

         14. TERMINATION. This Agreement will become effective on the date first
above written and, unless earlier terminated as provided in this Agreement, will
continue in effect until December 31, 2000.

                  (a) Sulzer Carbomedics may terminate this Agreement if
         Manufacturer fails to make any payment promptly when due, or if
         Manufacturer infringes any patent of Sulzer Carbomedics by making or
         having made any product or using any method covered by such patent in
         or in preparation for commercial sale of cardiac valve prostheses, or
         if Manufacturer is in default of any of its material obligations under
         this Agreement. Sulzer Carbomedics must notify the Manufacturer in
         writing of any such default and allow the Manufacturer 30 days in which
         to cure such default, and if such default is not cured within that
         period, or such default is so cured but is subsequently repeated,
         Sulzer Carbomedics may, by giving notice of default, terminate this
         agreement in writing at anytime thereafter. Sulzer Carbomedics'
         remedies will not be deemed exclusive, but are in addition to any and
         all other remedies available at law or under this Agreement.

                                       7
<Page>

                  (b) Manufacturer may terminate this Agreement upon 90 days
         written notice to Sulzer Carbomedics if Sulzer Carbomedics defaults on
         any of its material obligations hereunder and such default is not cured
         within 30 days after Sulzer Carbomedics receives notice.

                  (c) If Manufacturer terminates this Agreement for any reason
         other than the default of Sulzer Carbomedics (whether or not such
         termination is permitted under this Agreement) or decides not to renew
         or extend this Agreement, Manufacturer will pay for all completed
         Components conforming to Manufacturer's Specifications and pay the cost
         of all work in process on a percentage-of-completion basis, the cost of
         all expendable tooling, and the cost of any unused Raw Materials.
         Inventories will be disposed of as provided in Section 9. The
         obligations of this paragraph 14(c) will be in addition to and not in
         lieu of Sulzer Carbomedics' other legal, contractual and equitable
         remedies, if any.

                  (d) Sections 8. 10, 11, 12, and 13 will survive termination or
         expiration of this Agreement and remain in effect for the respective
         periods specified therein, or, if no period is specified, for a period
         which is reasonable in the circumstances.

         15. QUALITY ASSURANCE. Sulzer Carbomedics' Quality Assurance Manual
establishes the quality control system to be employed throughout the performance
of this Agreement. A copy of this manual--with Sulzer Carbomedics' proprietary
information, if any, deleted--will be made available to Manufacturer.

         16. ASSIGNMENT. Neither party will have the right to assign this
Agreement, in whole or in part, to any third party without the prior written
consent of a duly authorized officer of the other party, which consent will not
be unreasonably withheld. An attempted assignment without consent will be
grounds for termination of this Agreement by such other party, without thereby
affecting any rights or remedies it may have under this Agreement or at law.
Notwithstanding the foregoing, Sulzer Carbomedics may freely assign this
Agreement to any company controlling, controlled by or under common control with
Sulzer Carbomedics or succeeding to the entire business of Sulzer Carbomedics.
This Agreement will be binding upon and inure to the benefit of the parties and
their successors and assigns to which such consent, if necessary, is given.

         17. GENERAL.

                  (a) WAIVERS. No waiver of any right or remedy hereunder will
         be effective unless based upon a writing signed by the party against
         whom it is sought to be enforced.

                  (b) NOTICES. All notices required or permitted under this
         Agreement must be made in writing and delivered in person or by
         certified or registered mail, postage prepaid, addressed to the
         attention of the President of the other party at the respective address
         first written above, or such other address as may be given by notice.

                  (c) SEVERABILITY. if any provision of this Agreement is
         declared invalid or unenforceable by a court of competent jurisdiction,
         such provision will be severed from this Agreement and the remaining
         provisions will be unaffected thereby. The parties will promptly meet
         and negotiate a substitute provision meeting as closely as possible the
         intent of the invalid or unenforceable provision and, with reasonable
         precision, avoiding the defects of the original provision.

                  (d) ENTIRE AGREEMENT. This Agreement constitutes the entire
         agreement and understanding between the parties in respect of the
         subject matter of this Agreement and

                                       8
<Page>

         supersedes all prior agreements, understanding, discussions and
         communications between the parties respecting such subject matter. No
         modification of this Agreement will be effective unless made in
         writing signed by a duly authorized officer of each party, except as
         otherwise expressly permitted herein. Nothing in this Agreement will
         limit the scope of subsequent, written agreements, signed by both
         parties, related to nondisclosure of confidential information. In the
         event of a conflict between this Agreement and the terms and
         conditions contained in the Specifications or in Manufacturers
         purchase orders, the terms of this Agreement will control.

                  (e) GOVERNING LAW. This Agreement has been entered into under
         the laws of the State of Texas and will be governed by and construed in
         accordance with those laws.

         Executed by the parties as of the day and year first written above.

                                     CV DYNAMICS DBA MEDICAL INCORPORATED

                                     By: /s/ Gene Stobbs
                                       -----------------------------------------

                                     Typed Name: Gene Stobbs
                                                 -------------------------------

                                     Title: Vice President
                                            ------------------------------------

                                     SULZER CARBOMEDICS. INC.

                                     By: /s/ Charles D. Griffen
                                         ---------------------------------------

                                     Typed Name: Charles D. Griffen
                                                 -------------------------------

                                     Title: V.P., General Manager - Operations
                                            ------------------------------------

                                       9
<Page>

                                    EXHIBIT A

                                 SPECIFICATIONS

Medical Incorporated Specification 100043-TAB, Rev. D., Pyrolitic Carbon-Coated
Graphite, Silicon Alloyed

Medical Incorporated Drawing C-200049-TAB, Rev. V., Disc-Omni Series

Medical Incorporated Drawing D-200183-TAB, Rev. P., Omnicarbon Prosthetic Heart
Valve, Critical Dimensions

                                       10
<Page>

                                    EXHIBIT B

                          PRICE AND QUANTITY SCHEDULES

PRICES

         The price charged for each component will be determined by both a base
         price for each component and a factor based on the lead time provided
         for each shipment. During 1998, the base prices will be [*] for each
         disc and [*] for each orifice. The price charged for each component
         will be the base price multiplied by a factor based on the lead time
         for each shipment. If the lead time provided is 13 weeks or more, the
         factor will be 100%. If the lead time provided is between 8 and 12
         weeks, then the factor will be 115%. If the lead time provided is less
         than 8 weeks, then the factor will be 125%. Given these base prices and
         lead-time factors, the prices to be charged for each component shipped
         during 1998 are listed in the table below.

                           PRICES CHARGED DURING 1998
<Table>
<Caption>
                                           Lead Time        Price          Price Per     Valve Set
              Lead Time Provided            Factor         Per Disc         Orifice      Equivalent
              ------------------            ------         --------         -------      ----------
          <S>                             <C>              <C>             <C>           <C>
          13 weeks or more                   100%             [*]              [*]           [*]
          8 to 12 weeks                      115%             [*]              [*]           [*]
          Less Than 8 weeks                  125%             [*]              [*]           [*]
</Table>

         The "lead time provided" is the time between receipt by Sulzer
         Carbomedics, either by fax or by another method of delivery, of a
         valid, signed purchase order and the later of the dates when the first
         shipment on that purchase order is requested or when it is shipped. If
         multiple shipments are requested on a single purchase order, the same
         component prices will be charged for all components on that purchase
         order, and the lead-time factor will be determined on the basis of the
         first shipment on the purchase order.

         The prices charged will be adjusted for inflation each calendar year in
         accordance with Section 3(b) of this Agreement.

MINIMUM PURCHASE QUANTITIES

         The minimum purchase quantities described in Section 4 of this
Agreement are listed in the table below.

<Table>
<Caption>
                           Calendar           Valve Set
                             Year            Equivalents
                             ----            -----------
                           <S>               <C>
                             1998                 [*]
                             1999                 [*]
                             2000                 [*]
</Table>

         * Confidential portion omitted and filed separately with the SEC.

                                       11
<Page>

                                       12
                                    EXHIBIT C

                                  RAW MATERIALS

Graphite Substrate, AXF-5Q with tungsten loading per the TAB, or equivalent

                                       12

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