Document:

Exhibit 10.28

 

WARRANT

 

To Purchase 136,000 Shares
of

Common Stock

of

MEDICALCV, INC.

 

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

 

THIS CERTIFIES THAT, for good and valuable consideration, PETER LUDWIG
HAUSER or his registered assigns, is entitled to subscribe for and purchase
from MedicalCV, Inc., a Minnesota corporation (the “Company”), at any
time to and including the date that is ten (10) years after the date hereof,
One Hundred Thirty-Six Thousand (136,000) fully paid and nonassessable shares
of the Common Stock of the Company at the price of Two Dollars ($2.00) per
share (the “Warrant Exercise Price”), subject to the antidilution
provisions of this Warrant.  The shares
which may be acquired upon exercise of this Warrant are referred to herein as
the “Warrant Shares.”  As used herein,
the term “Holder” means Hauser, any party who acquires all or a part of this
Warrant as a registered transferee of Hauser, or any record holder or holders
of the Warrant Shares issued upon exercise, whether in whole or in part, of the
Warrant; the term “Common Stock” means the Company’s Common Stock, $.01 par
value.

 

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

 

1.                                       Exercise; Conversion Right; Transferability.

 

(a)                                  The rights represented by this Warrant may be
exercised by the Holder hereof at any time, for a period of ten (10) years
commencing on the date hereof, in whole or in part (but not as to a fractional
share of Common Stock), by written notice of exercise (in the form attached
hereto) delivered to the Company at the principal office of the Company prior
to the expiration of this Warrant and accompanied or preceded by the surrender
of this Warrant along with a check in payment of the Warrant Exercise Price for
such shares.

 

(b)                                 Subject
to the restrictions on transfer of this Warrant or the Warrant Shares set forth
herein, the Holder of this Warrant shall have the right to require the Company
to convert this Warrant (the “Conversion Right”) at any time after the
date hereof and prior to its expiration into shares of Common Stock as provided
for in Sections 1(b) through 1(d) hereof. 
Upon exercise of the Conversion Right, the Company shall deliver to the
Holder (without payment by the Holder of any Warrant Exercise Price) that
number of shares of Company Common Stock equal to the quotient obtained by
dividing (i) the value of the Warrant at the time the Conversion Right is
exercised (determined by subtracting the aggregate Warrant Exercise Price for
the Warrant Shares in effect immediately prior to the exercise of the
Conversion Right from the aggregate Fair Market Value (as defined in Section 10
hereof) for the Warrant

 

 

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

 

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

 

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

 

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

 

2.                                       Exchange and Replacement. 
Subject to Sections 1 and 7 hereof, this Warrant is exchangeable upon
the surrender hereof by the Holder to the Company at its office for new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of Warrant Shares purchasable hereunder, each of such new
Warrants to represent the right to purchase such number of Warrant Shares (not
to exceed the aggregate total number purchasable hereunder) as shall be
designated by the Holder at the time of such surrender.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of
this Warrant, and, in case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant.  This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange or replacement. 
The Company shall pay all expenses, taxes (other than stock transfer taxes),
and other charges incurred by it in connection with the preparation, execution,
and delivery of Warrants pursuant to this Section 2.

 

3.                                       Issuance of the Warrant Shares.

 

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

 

(b)                                 Notwithstanding the foregoing, the Company
shall not be required to deliver any certificate for Warrant Shares upon
exercise of this Warrant except in accordance with exemptions from the
applicable securities registration requirements or registrations under
applicable securities laws.  Nothing
herein, however, shall obligate the Company to effect registrations under
federal or state securities laws, except as provided in Section 9.  If registrations are not in effect and if
exemptions are not

 

 

available when the Holder seeks to exercise the
Warrant, the Warrant exercise period will be extended, if need be, to prevent
the Warrant from expiring, until such time as either registrations become
effective or exemptions are available, and the Warrant shall then remain
exercisable for a period of at least 30 calendar days from the date the Company
delivers to the Holder written notice of the availability of such registrations
or exemptions.  The Holder agrees to
execute such documents and make such representations, warranties, and agreements
as may be required solely to comply with the exemptions relied upon by the
Company, or the registrations made, for the issuance of the Warrant Shares.

 

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

 

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

 

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

 

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

 

 

and the denominator of which shall be the number of
shares of such additional Common Stock and the number of shares of Common Stock
outstanding prior to such issuance.  For
the purpose of the above calculation, the number of shares of Common Stock
immediately prior to such issuance shall be calculated on a fully-diluted
basis, as if this Warrant and any other outstanding warrants, options or other
rights for the purchase of shares of stock or Convertible Securities had been
fully exercised as of such date.  Except
as provided in Section 5(e) below, no further adjustments of the Warrant
Exercise Price shall be made upon the actual issuance of Common Stock or of any
Convertible Securities upon the exercise of such rights or options or upon the
actual issue of such Common Stock upon conversion or exchange of such
Convertible Securities.

 

(c)                                  For purposes of this Section 5, in case
any shares of Common Stock or Convertible Securities or any rights or options
to purchase any such Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, without deducting therefrom any
expenses incurred or any underwriting commissions, discounts or concessions
paid or allowed by the Company in connection therewith.  In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such Common
Stock or Convertible Securities shall be issued or sold for a consideration
other than cash, the amount of the consideration other than cash received by
the Company shall be deemed to be the fair value of such consideration as
determined by the Board of Directors of the Company, without deducting
therefrom any expenses incurred or any underwriting commissions, discounts or
concessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase such Common Stock
or Convertible Securities shall be issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value as determined by
the Board of Directors of the Company of such portion of the assets and business
of the non-surviving corporation or corporations as such Board shall determine
to be attributable to such Common Stock, Convertible Securities, rights or
options, as the case may be.  In the
event of any consolidation or merger of the Company in which the Company is not
the surviving corporation or in the event of any sale of all or substantially
all of the assets of the Company for stock or other securities of any other
corporation, the Company shall be deemed to have issued a number of shares of
its Common Stock for stock or securities of the other corporation computed on
the basis of the actual exchange ratio on which the transaction was predicated
and for a consideration equal to the fair market value on the date of such
transaction of such stock or securities of the other corporation, and if any
such calculation results in adjustment of the Warrant Exercise Price, the
determination of the number of shares of Common Stock issuable upon exercise
immediately prior to such merger, conversion or sale, for purposes of
Section 5(f) below, shall be made after giving effect to such adjustment
of the Warrant Exercise Price.

 

(d)                                 In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Warrant Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Warrant Exercise Price in effect immediately
prior to such combination shall be proportionately increased.

 

(e)                                  If (i) the purchase price provided for in any
right or option referred to in Section 5(b), or (ii) the additional
consideration, if any, payable upon the conversion or exchange of Convertible
Securities, or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock, shall change at any time
(other than under or by reason of provisions designed to protect against
dilution), or any Convertible Securities shall terminate, expire or cease to be
outstanding without exercise thereof, the Warrant Exercise Price then in effect
hereunder shall forthwith be increased or decreased to such Warrant Exercise
Price as would have applied had the adjustments made upon the issuance of such
rights, options or Convertible Securities been made upon the basis of
(a) the issuance of

 

 

the number of shares of Common Stock theretofore
actually delivered upon the exercise of such options or rights or upon the
conversion or exchange of such Convertible Securities, and the total
consideration received therefor, and (b) the issuance at the time of such
change of any such options, rights, or Convertible Securities then still
outstanding for the consideration, if any, received by the Company therefor and
to be received on the basis of such changed price; and on the expiration of any
such option or right or the termination of any such right to convert or
exchange such Convertible Securities, the Warrant Exercise Price then in effect
hereunder shall forthwith be increased to such Warrant Exercise Price as would
have been obtained had the adjustments made upon the issuance of such rights or
options or Convertible Securities been made upon the basis of the issuance of
the shares of Common Stock theretofore actually delivered (and the total
consideration received therefor) upon the exercise of such rights or options or
upon the conversion or exchange of such Convertible Securities.  If the purchase price provided for in any
right or option referred to in Section 5(b), or the rate at which any
Convertible Securities referred to in Section 5(b) are convertible into or
exchangeable for Common Stock, shall decrease at any time under or by reason of
provisions with respect thereto designed to protect against dilution, then in
case of the delivery of Common Stock upon the exercise of any such right or
option or upon conversion or exchange of any such Convertible Security, the
Warrant Exercise Price then in effect hereunder shall forthwith be decreased to
such Warrant Exercise Price as would have applied had the adjustments made upon
the issuance of such right, option or Convertible Security been made upon the
basis of the issuance of (and the total consideration received for) the shares
of Common Stock delivered as aforesaid.

 

(f)                                    If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, as
a condition of such reorganization, reclassification, consolidation, merger or
sale, and except as otherwise provided herein, lawful and adequate provision
shall be made whereby the holder of this Warrant shall thereafter have the
right to receive upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of the Common Stock of the Company immediately
theretofore receivable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Common Stock equal to the number of
shares of such stock immediately theretofore receivable upon the exercise of
this Warrant had such reorganization, reclassification, consolidation, merger
or sale not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of the holder of this Warrant to
the end that the provisions hereof (including without limitation provisions for
adjustments of the Warrant Exercise Price and of the number of shares
receivable upon the exercise hereof) shall thereafter be applicable, as nearly
as may be in relation to any shares of stock, securities or assets thereafter
receivable upon the exercise of this Warrant. 
The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument executed and
mailed to the registered holder of this Warrant, at the last address of such
holder appearing on the books of the Company, the obligation to deliver to such
holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to receive.

 

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

 

 

unless such adjustment would require an increase or
decrease of at least five cents ($0.05); provided, however, that any
adjustments which by reason of this Section 5(g) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment; and, provided further, that adjustment shall be required and made
in accordance with the provisions of this Section 5 (other than this
Section 5(g)) not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Common Stock.  All calculations under
this Section 5 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be. 
Anything in this Section 5 to the contrary notwithstanding, the Company
shall be entitled to make such increases in the conversion rate in addition to
those required by this Section 5 as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivisions of shares,
distribution of rights to purchase stock or securities, or distribution of
securities convertible into or exchangeable for stock hereafter made by the
Company to its stockholders shall not be taxable.

 

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

 

(i)                                     If any event occurs as to which in the
opinion of the Board of Directors of the Company the other provisions of this
Section 5 are not strictly applicable or if strictly applicable would not
fairly protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid.

 

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

 

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

 

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

 

(a)                                  The Holder, by acceptance hereof, agrees to
give written notice to the Company before transferring this Warrant or
transferring any Warrant Shares of such Holder’s intention to do so, describing
briefly the manner of any proposed transfer. 
Promptly upon receiving such written notice, the Company shall present
copies thereof to the Company’s counsel and to counsel to the original
purchaser of this Warrant.  If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities

 

 

laws), the Company, as promptly as practicable, shall notify the Holder
of such opinion, whereupon the Holder shall be entitled to transfer this
Warrant or to dispose of Warrant Shares received upon the previous exercise of
this Warrant, all in accordance with the terms of the notice delivered by the
Holder to the Company; provided that an appropriate legend may be endorsed on
this Warrant or the certificates for such Warrant Shares respecting
restrictions upon transfer thereof necessary or advisable in the opinion of
counsel and satisfactory to the Company to prevent further transfers which
would be in violation of Section 5 of the Securities Act of 1933, as amended
(the “Securities Act”) and applicable state securities laws; and provided
further that the prospective transferee or purchaser shall execute such
documents and make such representations, warranties, and agreements as may be
required solely to comply with the exemptions relied upon by the Company for
the transfer or disposition of the Warrant or Warrant Shares.

 

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

 

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

 

9.                                       Registration Rights.

 

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

 

(i)                                     if a greater number of Warrant Shares is
offered for participation in the proposed offering than in the reasonable
opinion of the managing underwriter of the proposed offering can be
accommodated without adversely affecting the proposed offering, then the amount
of Warrant Shares proposed to be offered by such Holders for registration, as
well as the number of securities of any other selling shareholders
participating in the registration, shall be proportionately reduced to a number
deemed satisfactory by the managing underwriter

 

(ii)                                  the Company may, at its sole discretion and
without the consent of any holder of the Warrant Shares, withdraw such
registration statement and abandon the proposed offering in which any such
holder had requested to participate;

 

 

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

 

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

 

(b)                                 Further, on a one-time basis only, at any
time until two (2) years after complete exercise or expiration of this Warrant,
upon request by the Holder or Holders of a majority in interest of this
Warrant, of any Warrants issued pursuant to Section 2 and/or Section 3(a)
hereof, and of any Warrant Shares, the Company will promptly take all necessary
steps to register or qualify, under the Securities Act and the securities laws
of such states as the Holders may reasonably request, such number of Warrant
Shares issued and to be issued upon conversion of the Warrants requested by
such Holders in their request to the Company; provided that the Company shall
not be obligated to include any Warrant Shares in any such registration for any
Holder who is able to sell all of the Warrant Shares in a single transaction
pursuant to Rule 144 under the Securities Act (or any other similar rule or
regulation) during the three-month period beginning on the date such notice is
received by such holder, calculated as of the date of such receipt.  The Company shall keep effective and
maintain any registration, qualification, notification, or approval specified
in this Paragraph (b) for such period as may be reasonably necessary for such
Holder or Holders of such Warrant Shares to dispose thereof and from time to
time shall amend or supplement the prospectus used in connection therewith to
the extent necessary in order to comply with applicable law.

 

(c)                                  Upon the exercise of registration rights
pursuant to this Section 9, Holder agrees to supply the Company with such
information as may be required by the Company to register or qualify the shares
to be registered.

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

[signature
page follows]

 

 

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

 

 

	
   

  	
  MEDICALCV,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/
  Jules L. Fisher

  	
   

  
	
   

  	
   

  	
   Jules
  L. Fisher

  
	
   

  	
   

  	
   Chief
  Financial Officer

  

 

 

NOTICE OF EXERCISE OF WARRANT

 

(To be signed upon the exercise of the
Warrant)

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

*                                         The signature on the Notice of Exercise of
Warrant must correspond to the name as written upon the face of the Warrant in
every particular without alteration or enlargement or any change
whatsoever.  When signing on behalf of a
corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.

 

 

CONVERSION NOTICE

 

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

 

The undersigned hereby irrevocably elects to exercise the Conversion
Right provided in Sections 1(b) through 1(d) of the within Warrant for, and to
acquire thereunder,
                  
shares of Common Stock.  If said number
of shares shall not be all the shares purchasable under the within Warrant, a
new Warrant is to be issued in the name of said undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the next higher
number of shares.

 

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

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

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

 

 

ASSIGNMENT OF WARRANT

 

(To be signed only upon authorized transfer
of the Warrant)

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

 

*                                         The signature on the Assignment of Warrant
must correspond to the name as written upon the face of the Warrant in every
particular without alteration or enlargement or any change whatsoever.  When signing on behalf of a corporation,
partnership, trust or other entity, PLEASE indicate your positions) and
title(s) with such entity.Exhibit 10.29

 

WARRANT

 

To Purchase 330,933 Shares of

Common Stock

of

MEDICALCV, INC.

 

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

 

THIS CERTIFIES THAT, for
good and valuable consideration, PKM PROPERTIES, LLC a Minnesota limited
liability company (“PKM Properties”) or its registered assigns, is
entitled to subscribe for and purchase from MedicalCV, Inc., a Minnesota
corporation (the “Company”), at any time to and including the date that
is ten (10) years after the date hereof. 
Three Hundred Thirty Thousand Nine Hundred Thirty-Three (330,933) fully
paid and nonassessable shares of the Common Stock of the Company at the price
of $2.00 per share (the “Warrant Exercise Price”), subject to the
antidilution provisions of this Warrant. 
The shares which may be acquired upon exercise of this Warrant are
referred to herein as the “Warrant Shares.” As used herein, the term “Holder”
means PKM Properties, any party who acquires all or a part of this Warrant as a
registered transferee of PKM Properties, or any record holder or holders of the
Warrant Shares issued upon exercise, whether in whole or in part, of the
Warrant; the term “Common Stock” means the Company’s Common Stock, $.01 par
value.

 

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

 

1.                                       Exercise; Conversion Right; Transferability

 

(a)                                  The rights represented by this Warrant may be
exercised by the Holder hereof at any time, for a period of ten (10) years
commencing on the date hereof, in whole or in part (but not as to a fractional
share of Common Stock), by written notice of exercise (in the form attached
hereto) delivered to the Company at the principal office of the Company prior
to the expiration of this Warrant and accompanied or preceded by the surrender
of this Warrant along with a check in payment of the Warrant Exercise Price for
such shares.

 

(b)                                 Subject to the restrictions on transfer of
this Warrant or the Warrant Shares set forth herein, the Holder of this Warrant
shall have the right to require the Company to convert this Warrant (the “Conversion
Right’) at any time after the date hereof and prior to its expiration into
shares of Common Stock as provided for in Sections 1(b) through 1(d)
hereof.  Upon exercise of the Conversion
Right, the Company shall deliver to the Holder (without payment by the Holder
of any Warrant Exercise Price) that number of shares of Company Common Stock
equal to the quotient obtained by dividing (i) the value of the Warrant at the
time the Conversion Right is exercised (determined by subtracting the aggregate
Warrant Exercise Price for the Warrant Shares in effect immediately prior to
the exercise of the Conversion Right from the aggregate Fair Market Value (as
defined in Section 10 hereof) for the Warrant

 

 

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

 

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

 

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

 

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

 

2.                                       Exchange and Replacement. 
Subject to Sections 1 and 7 hereof, this Warrant is exchangeable upon
the surrender hereof by the Holder to the Company at its office for new
Warrants of like tenor and date representing in the aggregate the right to
purchase the number of Warrant Shares purchasable hereunder, each of such new
Warrants to represent the right to purchase such number of Warrant Shares (not
to exceed the aggregate total number purchasable hereunder) as shall be
designated by the Holder at the time of such surrender.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of
this Warrant, and, in case of loss, theft or destruction, of indemnity
reasonably satisfactory to it, and upon surrender and cancellation of this
Warrant, if mutilated, the Company will make and deliver a new Warrant of like
tenor, in lieu of this Warrant.  This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange or replacement. 
The Company shall pay all expenses, taxes (other than stock transfer
taxes), and other charges incurred by it in connection with the preparation,
execution, and delivery of Warrants pursuant to this Section 2.

 

3.                                       Issuance of the Warrant Shares.

 

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

 

(b)                                 Notwithstanding the foregoing, the Company
shall not be required to deliver any certificate for Warrant Shares upon
exercise of this Warrant except in accordance with exemptions from the applicable
securities registration requirements or registrations under applicable
securities laws.  Nothing herein,
however, shall obligate the Company to effect registrations under federal or
state securities laws, except as provided in Section 9.  If registrations are not in effect and if
exemptions are not available when the Holder seeks to exercise the Warrant, the
Warrant exercise period will be extended, if need be, to prevent the Warrant
from expiring, until such time as either registrations become effective or
exemptions are available,

 

 

and
the Warrant shall then remain exercisable for a period of at least 30 calendar
days from the date the Company delivers to the Holder written notice of the
availability of such registrations or exemptions.  The Holder agrees to execute such documents and make such
representations, warranties, and agreements as may be required solely to comply
with the exemptions relied upon by the Company, or the registrations made, for
the issuance of the Warrant Shares.

 

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

 

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

 

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

 

(b)                                Except for (i) options, warrants or other
rights to purchase securities outstanding on the date of the issuance of this
Warrant (provided there is no adjustment to the terms of such options, warrants
or other securities on or after the date of issuance of this Warrant); (ii)
options to purchase shares of Common Stock and the issuance of awards of Common
Stock pursuant to stock option or employee stock purchase plans adopted by the
Company and shares of Common Stock issued upon the exercise of such options
granted pursuant to such plans (provided there is no adjustment to the terms of
such options, awards or other securities on or after the date of issuance of
this Warrant) (appropriately adjusted to reflect stock splits, combinations,
stock dividends, reorganizations, consolidations and similar changes); (iii) up
to four separate issues or sales by the Company during any twelve month period,
none of which shall exceed 25,000 shares of Common Stock or securities
convertible into or exercisable for the purchase of Common Stock; and (iv)
Common Stock or securities convertible into or exercisable for the purchase of
Common Stock issued in connection with any merger or acquisition of any
business or tangible or intangible assets which is approved by the Company’s
Board of Directors; if and whenever the Company shall issue or sell any
additional securities, warrants or rights or any security convertible or
exchangeable into equity, securities, warrants or rights (collectively, “Convertible
Securities”) for a consideration per share less than the Warrant Exercise Price
in effect immediately prior to the time of such issue or sale, then, forthwith
upon such issue or sale, the Warrant Exercise Price shall be adjusted to a
price determined by multiplying such Warrant Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of Common Stock
that the aggregate consideration received by the Company for such issuance
would purchase at such Warrant Exercise Price; and the denominator of which
shall be the number of shares of such additional Common Stock and the number of
shares of Common Stock outstanding prior to such issuance.  For the purpose of the above calculation,
the number of shares of Common Stock immediately prior to such issuance shall
be calculated on a fully-diluted basis, as if this Warrant and any other
outstanding warrants, options or other rights for the purchase of shares of
stock or Convertible Securities

 

 

had
been fully exercised as of such date. 
Except as provided in Section 5(e) below, no further adjustments of
the Warrant Exercise Price shall be made upon the actual issuance of Common
Stock or of any Convertible Securities upon the exercise of such rights or
options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.

 

(c)                                 For purposes of this Section 5, in case
any shares of Common Stock or Convertible Securities or any rights or options
to purchase any such Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration received therefor shall be deemed to be the
amount received by the Company therefor, without deducting therefrom any
expenses incurred or any underwriting commissions, discounts or concessions
paid or allowed by the Company in connection therewith.  In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase any such Common Stock
or Convertible Securities shall be issued or sold for a consideration other
than cash, the amount of the consideration other than cash received by the
Company shall be deemed to be the fair value of such consideration as
determined by the Board of Directors of the Company, without deducting
therefrom any expenses incurred or any underwriting commissions, discounts or
concessions paid or allowed by the Company in connection therewith.  In case any shares of Common Stock or
Convertible Securities or any rights or options to purchase such Common Stock
or Convertible Securities shall be issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor shall be deemed to be the fair value as determined by
the Board of Directors of the Company of such portion of the assets and
business of the non-surviving corporation or corporations as such Board shall
determine to be attributable to such Common Stock, Convertible Securities,
rights or options, as the case may be. 
In the event of any consolidation or merger of the Company in which the
Company is not the surviving corporation or in the event of any sale of all or
substantially all of the assets of the Company for stock or other securities of
any other corporation, the Company shall be deemed to have issued a number of
shares of its Common Stock for stock or securities of the other corporation
computed on the basis of the actual exchange ratio on which the transaction was
predicated and for a consideration equal to the fair market value on the date
of such transaction of such stock or securities of the other corporation, and
if any such calculation results in adjustment of the Warrant Exercise Price,
the determination of the number of shares of Common Stock issuable upon
exercise immediately prior to such merger, conversion or sale, for purposes of
Section 5(f) below, shall be made after giving effect to such adjustment
of the Warrant Exercise Price.

 

(d)                                In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Warrant Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Warrant Exercise Price in effect immediately
prior to such combination shall be proportionately increased.

 

(e)                                 If (i) the purchase price provided for in any
right or option referred to in Section 5(b), or (ii) the additional
consideration, if any, payable upon the conversion or exchange of Convertible
Securities, or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock, shall change at any time
(other than under or by reason of provisions designed to protect against
dilution), or any Convertible Securities shall terminate, expire or cease to be
outstanding without exercise thereof, the Warrant Exercise Price then in effect
hereunder shall forthwith be increased or decreased to such Warrant Exercise
Price as would have applied had the adjustments made upon the issuance of such
rights, options or Convertible Securities been made upon the basis of
(a) the issuance of the number of shares of Common Stock theretofore
actually delivered upon the exercise of such options or rights or upon the
conversion or exchange of such Convertible Securities, and the total
consideration received therefor, and (b) the issuance at the time of such
change of any such options, rights, or Convertible Securities then still
outstanding for the consideration, if any, received by the Company therefor and
to be received on the basis of such changed price; and on the expiration of any
such option or

 

 

right
or the termination of any such right to convert or exchange such Convertible
Securities, the Warrant Exercise Price then in effect hereunder shall forthwith
be increased to such Warrant Exercise Price as would have been obtained had the
adjustments made upon the issuance of such rights or options or Convertible
Securities been made upon the basis of the issuance of the shares of Common
Stock theretofore actually delivered (and the total consideration received
therefor) upon the exercise of such rights or options or upon the conversion or
exchange of such Convertible Securities. 
If the purchase price provided for in any right or option referred to in
Section 5(b), or the rate at which any Convertible Securities referred to in
Section 5(b) are convertible into or exchangeable for Common Stock, shall
decrease at any time under or by reason of provisions with respect thereto
designed to protect against dilution, then in case of the delivery of Common
Stock upon the exercise of any such right or option or upon conversion or
exchange of any such Convertible Security, the Warrant Exercise Price then in
effect hereunder shall forthwith be decreased to such Warrant Exercise Price as
would have applied had the adjustments made upon the issuance of such right,
option or Convertible Security been made upon the basis of the issuance of (and
the total consideration received for) the shares of Common Stock delivered as
aforesaid.

 

(f)                                   If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be effected in
such a way that holders of Common Stock shall be entitled to receive stock,
securities or assets with respect to or in exchange for Common Stock, then, as
a condition of such reorganization, reclassification, consolidation, merger or
sale, and except as otherwise provided herein, lawful and adequate provision
shall be made whereby the holder of this Warrant shall thereafter have the
right to receive upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of the Common Stock of the Company immediately
theretofore receivable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Common Stock equal to the number of
shares of such stock immediately theretofore receivable upon the exercise of
this Warrant had such reorganization, reclassification, consolidation, merger
or sale not taken place, and in any such case appropriate provision shall be
made with respect to the rights and interests of the holder of this Warrant to
the end that the provisions hereof (including without limitation provisions for
adjustments of the Warrant Exercise Price and of the number of shares
receivable upon the exercise hereof) shall thereafter be applicable, as nearly
as may be in relation to any shares of stock, securities or assets thereafter
receivable upon the exercise of this Warrant. 
The Company shall not effect any such consolidation, merger or sale,
unless prior to the consummation thereof the successor corporation (if other
than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument executed
and mailed to the registered holder of this Warrant, at the last address of
such holder appearing on the books of the Company, the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to receive.

 

(g)                                Upon any adjustment of the Warrant Exercise
Price, the Company shall give written notice thereof, by first-class mail,
postage prepaid, addressed to the registered holder of this Warrant, as shown
on the books of the Company, which notice shall state the Warrant Exercise
Price resulting from such adjustment and the increase or decrease, if any, in
the number of shares purchasable at such price upon the exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. 
No adjustment to the Warrant Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least five cents
($0.05); provided, however, that any adjustments which by reason of this
Section 5(g) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment; and, provided further, that
adjustment shall be required and made in accordance with the provisions of this
Section 5 (other than this Section 5(g)) not later than such time as
may be required in order to preserve the tax-free nature of a

 

 

distribution
to the holders of shares of Common Stock. 
All calculations under this Section 5 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.  Anything in this Section 5 to the contrary
notwithstanding, the Company shall be entitled to make such increases in the
conversion rate in addition to those required by this Section 5 as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distribution of rights to purchase stock or securities,
or distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.

 

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

 

(i)                                    If any event occurs as to which in the
opinion of the Board of Directors of the Company the other provisions of this
Section 5 are not strictly applicable or if strictly applicable would not
fairly protect the rights of the holder of this Warrant in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such rights as
aforesaid.

 

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

 

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

 

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

 

(a)                                  The Holder, by acceptance hereof, agrees to
give written notice to the Company before transferring this Warrant or transferring
any Warrant Shares of such Holder’s intention to do so, describing briefly the
manner of any proposed transfer. 
Promptly upon receiving such written notice, the Company shall present
copies thereof to the Company’s counsel and to counsel to the original
purchaser of this Warrant.  If in the
opinion of each such counsel the proposed transfer may be effected without
registration or qualification (under any federal or state securities laws), the
Company, as promptly as practicable, shall notify the Holder of such opinion,
whereupon the Holder shall be entitled to transfer this Warrant or to dispose
of Warrant Shares received upon the previous exercise of this Warrant, all in
accordance with the terms of the notice delivered by the Holder to the Company;
provided that an appropriate legend may be endorsed on this Warrant or the
certificates for such Warrant Shares respecting restrictions upon transfer
thereof necessary or advisable in the opinion of counsel and satisfactory to
the Company to prevent further transfers which would

 

 

be
in violation of Section 5 of the Securities Act of 1933, as amended (the
“Securities Act”) and applicable state securities laws; and provided further
that the prospective transferee or purchaser shall execute such documents and
make such representations, warranties, and agreements as may be required solely
to comply with the exemptions relied upon by the Company for the transfer or
disposition of the Warrant or Warrant Shares.

 

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

 

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

 

9.                                       Registration Rights.

 

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

 

(i)                                     if a greater number of Warrant Shares is
offered for participation in the proposed offering than in the reasonable
opinion of the managing underwriter of the proposed offering can be
accommodated without adversely affecting the proposed offering, then the amount
of Warrant Shares proposed to be offered by such Holders for registration, as
well as the number of securities of any other selling shareholders
participating in the registration, shall be proportionately reduced to a number
deemed satisfactory by the managing underwriter

 

(ii)                                  the Company may, at its sole discretion and
without the consent of any holder of the Warrant Shares, withdraw such
registration statement and abandon the proposed offering in which any such
holder had requested to participate;

 

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

 

 

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

 

(b)                                 Further, on a one-time basis only, at any
time until two (2) years after complete exercise or expiration of this Warrant,
upon request by the Holder or Holders of a majority in interest of this
Warrant, of any Warrants issued pursuant to Section 2 and/or Section 3(a)
hereof, and of any Warrant Shares, the Company will promptly take all necessary
steps to register or qualify, under the Securities Act and the securities laws
of such states as the Holders may reasonably request, such number of Warrant
Shares issued and to be issued upon conversion of the Warrants requested by
such Holders in their request to the Company; provided that the Company shall
not be obligated to include any Warrant Shares in any such registration for any
Holder who is able to sell all of the Warrant Shares in a single transaction
pursuant to Rule 144 under the Securities Act (or any other similar rule or
regulation) during the three-month period beginning on the date such notice is
received by such holder, calculated as of the date of such receipt.  The Company shall keep effective and
maintain any registration, qualification, notification, or approval specified
in this Paragraph (b) for such period as may be reasonably necessary for such
Holder or Holders of such Warrant Shares to dispose thereof and from time to
time shall amend or supplement the prospectus used in connection therewith to
the extent necessary in order to comply with applicable law.

 

(c)                                  Upon the exercise of registration rights
pursuant to this Section 9, Holder agrees to supply the Company with such
information as may be required by the Company to register or qualify the shares
to be registered.

 

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

 

(e)                                  The Company hereby indemnifies each of the
Holders of this Warrant and of any Warrant Shares, and the officers and
directors, if any, who control such Holders, within the meaning of Section 15
of the Securities Act, against all losses, claims, damages, and liabilities
caused by (i) any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus (and as amended or
supplemented if the Company shall have furnished any amendments thereof or
supplements thereto), any Preliminary Prospectus or any state securities law
filings; (ii) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading except insofar as such losses, claims, damages, or liabilities are
caused by any untrue statement or omission contained in information furnished
in writing to the Company by such Holder expressly for use therein; and each
such Holder by its acceptance hereof severally agrees that it will indemnify
and hold harmless the Company, each of its officers who signs such Registration
Statement, each underwriter of the Common Stock so registered, and each person,
if any, who controls the Company or such underwriter, within the meaning of
Section 15 of the Securities Act, with respect to losses, claims, damages, or
liabilities which

 

 

are
caused by any untrue statement or omission contained in information furnished
in writing to the Company by such Holder expressly for use therein.

 

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

 

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

 

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

 

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

 

[signature page follows]

 

 

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

 

 

	
   

  	
  MEDICALCV, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Jules L. Fisher

  	
   

  
	
   

  	
   

  	
  Jules L. Fisher

  
	
   

  	
   

  	
  Chief Financial Officer

  

 

 

NOTICE
OF EXERCISE OF WARRANT

 

(To
be signed upon the exercise of the Warrant)

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

*                                         The signature on the Notice of Exercise of
Warrant must correspond to the name as written upon the face of the Warrant in
every particular without alteration or enlargement or any change
whatsoever.  When signing on behalf of a
corporation, partnership, trust or other entity, PLEASE indicate your
position(s) and title(s) with such entity.

 

 

CONVERSION
NOTICE

 

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

 

The undersigned hereby
irrevocably elects to exercise the Conversion Right provided in Sections 1(b)
through 1(d) of the within Warrant for, and to acquire thereunder,
                 
shares of Common Stock.  If said number
of shares shall not be all the shares purchasable under the within Warrant, a
new Warrant is to be issued in the name of said undersigned for the balance
remaining of the shares purchasable thereunder rounded up to the next higher
number of shares.

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

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

 

 

ASSIGNMENT
OF WARRANT

 

(To
be signed only upon authorized transfer of the Warrant)

 

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

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Address)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Social
  Security or Tax Ident. No.)

  

 

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

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