Document:

EXHIBITS 10.9

 

WARRANT

 

To
Purchase 320,178 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 Twenty Thousand One Hundred
Seventy-Eight (320,178) fully paid and nonassessable shares of the Common Stock
of the Company at the price of $0.70 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.

 

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(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

 

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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

 

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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

 

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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

 

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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

 

6

 

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

 

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

 

8

 

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.

 

9

 

(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

 

10

 

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]

 

11

 

IN WITNESS WHEREOF, MedicalCV, Inc. has caused this Warrant to be
signed by its duly authorized officer and this Warrant to be dated July 1,
2003.

 

 

	
   

  	
  MEDICALCV, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By 

  	
  /s/ Jules L. Fisher

  	
   

  
	
   

  	
   

  	
   

  	
  Jules L. Fisher

  
	
   

  	
   

  	
   

  	
  Its

  	
  Chief Financial Officer

  	
   

  
						

 

12

 

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.

 

13

 

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.

 

14

 

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.

 

15Exhibit 4.1

               EXECUTIVE SALES AND MARKETING CONSULTING AGREEMENT

     THIS EXECUTIVE SALES AND MARKETING CONSULTANT AGREEMENT (this "Agreement")
is between Marc Jablon (the "Consultant") and Raven Moon Entertainment, Inc.
(the "Company"). Each of the Consultant and the Company are also referred to in
this agreement as the "Parties."

     WHEREAS, the Company intends to develop a market for the Company's products
and services offered from time to time by the Company (the "Products and
Services") for potential customers of the Products and Services; and

     WHEREAS, the Consultant is an executive and marketing professional who will
assist the company with its day to day operations and marketing objectives; and

     WHEREAS, the Company desires to utilize the services of the Consultant to
promote and develop a market for the Company's Products and Services; and

     NOW THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement, the Parties hereby agree as follows:

     1. Scope of Services. The Company hereby retains the Consultant to assist
the company as an executive advisor to the CEO of the company on an as needed
24/7 basis for mergers, acquisitions, meetings, conventions, and travel, and to
initiate new contracts and increase sales of the company's products, merchandise
and services with distributors, licensing companies, major labels, productions
facilities, attorneys, and all other opportunities and assignments given to him
by the company's Chief Executive Officer.

     2. Term. This Agreement shall become effective as of the date set forth on
the signature page of this Agreement, and shall continue for a period of (3)
years (the "Term"). Notwithstanding the foregoing, the Company or the Consultant
shall be entitled to terminate this Agreement for "cause" upon 90 days' written
notice, which written notice shall be effective upon mailing by first class mail
accompanied by facsimile transmission to the Consultant at the address and
telecopier number last provided by the Consultant to the Company. "Cause" shall
be determined solely as to the violation of any rule or regulation of any
regulatory agency, and other neglect, act or omission detrimental to the conduct
of Company or the Consultant's business, material breach of this Agreement or
any unauthorized disclosure of any of the secrets or confidential information of
Company, and dishonesty related to independent contractor status.

     3.             Compensation; Grant of Stock Option. In consideration for
                    the services to be provided by the Consultant to the Company
                    under the terms of this Agreement, the Company agrees to
                    grant to the Consultant upon the execution of this Agreement

          A)   Year One: $200,000.00 or 15 million shares of Raven Moon
               Entertainment Inc. common stock to be registered in a S-8 filing,
               15 million restricted shares of stock to be registered in the

<PAGE>

               SB-2and a non-qualified stock option (the "Option") to purchase
               up to the number of shares (the "Shares") of the Company's common
               stock (the "Common Stock") as set forth below, which shall vest
               and be exercisable at the prices and on the terms set forth
               below:

                    1)   30,000,000 shares of common stock @ a 50% discount from
                         the closing "bid" price for the ten (10) trading days
                         immediately preceding the date of exercise of the
                         option.

                    2)   10% Gross Commission on any sales of Merchandise and
                         Products sold by the company from any deal approved by
                         the company that was initiated, arranged and closed on
                         by Marc Jablon during the term of this Agreement.

          B)   Year Two: $250,000 of S-8 stock based upon the average closing
               share price for the previous 10 trading days from the end of the
               term; 10% Gross Commission on any sales of Merchandise and
               Products sold by the company from any deal approved by the
               company that was initiated, arranged and closed on by Marc Jablon
               during the term of this Agreement.

          C)   Year Three: $300,000 or S-8 stock based upon the average closing
               share price for the previous 10 trading days from the end of the
               term 10% Gross Commission on any sales of Merchandise and
               Products sold by the company from any deal approved by the
               company that was initiated, arranged and closed on by Marc Jablon
               during the term of this Agreement.

     Exercise Price per Share: 50% of the average of the closing "bid" price for
the ten (10) trading days immediately preceding the date of exercise of the
option.

     Floor Price: In no event may any Option Shares be exercised or purchased
for a price less than $0.01 per share.

     Expiration of Options: Any options that remain unexercised as of the
termination of this Agreement or the expiration of the Term shall automatically
and immediately expire and no longer be of any force or effect.

Detailed terms of the Option shall be set forth in the form of Non-Qualified
Stock Option Agreement between the Company and the Consultant, substantially in
the form attached as Exhibit A to this Agreement. The Company agrees to register
the Shares promptly after signing of this agreement for resale under the
Securities Act of 1933, as amended, pursuant to a registration statement filed
with the Securities and Exchange Commission on Form S-8 (or, if Form S-8 is not
then available, such other form of registration statement available), pursuant
to the terms of such registration set forth in the Non-Qualified Stock Option
Agreement.

     5. Confidentiality. The Consultant covenants that all information
concerning the Company, including proprietary information, which it obtains as a
result of the services rendered pursuant to this Agreement shall be kept
confidential and shall not be used by the Consultant except for the direct
benefit of the Company nor shall the confidential information be disclosed by
the Consultant to any third party without the prior written approval of the

                                       2

<PAGE>

Company, provided, however, that the Consultant shall not be obligated to treat
as confidential, or return to the Company copies of any confidential information
that (i) was publicly known at the time of disclosure to Consultant, (ii)
becomes publicly known or available thereafter other than by any means in
violation of this Agreement or any other duty owed to the Company by the
Consultant, or (iii) is lawfully disclosed to the Consultant by a third party.

     6. Independent Contractor. The Consultant and the Company hereby
acknowledge that the Consultant is an independent contractor. The Consultant
agrees not to hold himself out as, nor shall he take any action from which
others might reasonably infer that the Consultant is a partner or agent of, or a
joint venturer with the Company. In addition, the Consultant shall take no
action, which, to the knowledge of the Consultant, binds, or purports to bind,
the Company to any contract or agreement.

     7. Miscellaneous.

          (a) Entire Agreement. This Agreement contains the entire agreement
     between the Parties, and may not be waived, amended, modified or
     supplemented except by agreement in writing signed by the Party against
     whom enforcement of any waiver, amendment, modification or supplement is
     sought. Waiver of or failure to exercise any rights provided by this
     Agreement in any respect shall not be deemed a waiver of any further or
     future rights.

          (b) Governing Law. This Agreement shall be construed under the
     internal laws of the State ofFlorida, and the Parties agree that the
     exclusive jurisdiction for any litigation or arbitration arising from this
     Agreement shall be in Orlando, FL.

          (c) Successors and Assigns. This Agreement shall be binding upon the
     Parties, their successors and assigns, provided, however, that the
     Consultant shall not permit any other person or entity to assume these
     obligations hereunder without the prior written approval of the Company,
     which approval shall not be unreasonably withheld and written notice of the
     Company's position shall be given within ten (10) days after approval has
     been requested.

          (d) Counterparts. This Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but which when
     taken together shall constitute one agreement.

          (e) Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, such provision(s) shall be
     excluded from this Agreement and the balance of this Agreement shall be
     interpreted as if such provision were excluded and shall be enforceable in
     accordance with its terms.

                            (Signature Page Follows)

                                       3

<PAGE>

     IN WITNESS WHEREOF, the Parties hereto have executed or caused this
Agreement to be executed as of the date set forth below.

Date:                                       CONSULTANT:
       ----------------------

                                            /s/
                                            ---------------------------------
                                                 Marc Jablon

                              Address for Notices:

                                            Use home address

                                            COMPANY:

                                            Raven Moon Entertainment, Inc.

                                            By:  /s/
                                               ------------------------------
                                                      Joey DeFrancesco, CEO

                                       4

<PAGE>

                                    EXHIBIT A
                                    ---------

                                     FORM OF
                      NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement") is between
Marc Jablon (the "Grantee") and Raven Moon Entertainment, Inc. (the "Company").
Each of the Grantee and the Company are also referred to in this agreement as
the "Parties."

     WHEREAS, the Board of Directors of the Company (the "Board of Directors")
has authorized the grant to the Grantee, for services to be rendered by the
Grantee as a consultant to the Company pursuant to the terms of a Consulting and
Marketing License Agreement of even date herewith (the "Consulting Agreement")
between the Company and the Grantee, of a non-qualified stock option (the
"Option") to purchase up to the number of shares of the Company's common stock
(the "Common Stock") specified in paragraph 1 of this Agreement, at the prices
specified in paragraph 1 of this Agreement.

     NOW THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement, the Parties hereby agree as follows:

     1. Number of Shares; Exercise Price. Pursuant to action taken by the Board
of Directors, the Company hereby grants to the Grantee, in consideration of
consulting services to be performed for the benefit of the Company pursuant to
the Consulting Agreement, an option ("Option") to purchase the number of shares
("Option Shares") of the Company's Common Stock set forth below, at the exercise
price and terms set forth below:

     Number of Shares: _____shares in total Exercise Price per Share: 50% of the
average of the closing "bid" price for the ten (10) trading days immediately
preceding the date of exercise of the option.

     Expiration of Options: Any options that remain unexercised as of the
termination of this Agreement shall automatically and immediately expire and no
longer be of any force or effect.

     2. Term. The Options and this Agreement shall expire one year from the date
of this Agreement.

     3. Shares Subject To Exercise. The Option shall be exercisable and shall
remain exercisable as set forth in Paragraph 1 of this Agreement.

     4. Method and Time of Exercise. The Option may be exercised as to vested
Option Shares in whole or in part by written notice delivered to the Company
stating the number of Option Shares with respect to which the Option is then
being exercised, together with a check and/or a wire transfer made payable to
the Company in the amount equal to the Exercise Price multiplied by the number
of Option Shares then being issued pursuant to the written notice of exercise,
plus the amount of applicable federal, state and local withholding taxes,
provided, however, that such taxes may be satisfied by the withholding of Option
Shares then issuable upon the exercise of the Option pursuant to paragraph 5 of
this Agreement. Not less than one hundred (100) Option Shares may be purchased
upon exercise of the Option at any one time unless the number of Option Shares
for which exercise of the Option is being made is all of the Option Shares then
issuable upon exercise of the Option. Only whole shares shall be issued upon
exercise of the Option.

<PAGE>

     5. Tax Withholding. As a condition to exercise of the Option, the Company
may require the Grantee to pay to the Company all applicable federal, state and
local taxes which the Company is required to withhold with respect to the
exercise of the Option.

     6. Transferability. The Option and this Agreement may not be assigned or
transferred except by will or by the laws of descent and distribution, and with
prior written consent of the Company.

     7. Grantee Not a Shareholder. The Grantee shall have no rights as a
shareholder with respect to the Option Shares issued from time to time upon
exercise of the Option until the earlier of: (1) the date of issuance of a stock
certificate or stock certificates to the Grantee applicable to the Option Shares
then issuable to the Grantee upon exercise of the Option and (2) the date on
which the Grantee or his nominee is recorded as owner of such Option Shares on
the Company's stock ledger by the Company's registrar and transfer agent, which
may be the Company. Except as set forth in paragraph 12 of this Agreement, no
adjustment will be made for dividends or other rights for which the record date
is prior to the earlier of the events described in clauses (1) and (2) of this
paragraph.

     8. Restrictions on Transfer. The Grantee represents and agrees that, upon
the Grantee's exercise of the Option, in whole or in part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the Option Shares, the Grantee will acquire the Option Shares for
the purpose of investment and not with a view to their resale or further
distribution, and that upon such exercise hereof, the Grantee will furnish to
the Company a written statement to such effect, satisfactory to the Company in
form and substance.

     9. Shares Qualified for Listing. Company represents that its Common Stock
is qualified for trading or quotation on a nationally recognized securities
exchange or stock quotation system, including, the NASDAQ Bulletin Board.

     10. Registration Rights. Promptly after this Agreement has been fully
signed, the Company shall, at the Company's expense, file with the Securities
and Exchange Commission ("SEC") a registration statement ("Registration
Statement") on Form S-8, or if such form is not then available, such other form
of registration statement then available, in such form as to comply with
applicable federal and state laws for the purpose of registering or qualifying
the Option Shares for public resale by the Consultant.

     11. Notices. All notices to the Company shall be addressed to the Company
at the principal office of the Company at the address and facsimile number set
forth on the signature page of this Agreement, and all notices to the Grantee
shall be addressed to the Grantee at the address and facsimile number of the
Grantee set forth on the signature page of this Agreement or, if different, the
last address and facsimile number on file with the Company, or to such other
address and facsimile number as either may designate to the other in writing. A
notice shall be deemed to be duly given if and when enclosed in a properly
addressed sealed envelope deposited, postage prepaid and followed by facsimile
to the addressee. In lieu of giving notice by mail as aforesaid, written notices
under this Agreement may be given by personal delivery to the Grantee or to the
Company (as the case may be) by nationally recognized courier or overnight
delivery service.

                                       2

<PAGE>

     12. Adjustments. If there is any change in the capitalization of the
Company after the date of this Agreement affecting in any manner the number of
kind of outstanding shares of Common Stock of the Company, whether by stock
dividend, stock split, reclassification or recapitalization of such stock, or
because the Company has merged or consolidated with one or more other
corporations (and provided the Option does not thereby terminate pursuant to
paragraph 13 of this Agreement), then the number and kind of shares then subject
to the Option and the exercise price to be paid for the Option Shares shall be
appropriately adjusted by the Board of Directors; provided however, that in no
event shall any such adjustment result in the Company being required to sell or
issue any fractional shares. Any such adjustment shall be made without change in
the aggregate exercise price applicable to the unexercised portion of the
Option, but with an appropriate adjustment to the exercise price of each Option
Share or other unit of security then covered by the Option and this Agreement.

     13. Cessation of Corporate Existence. Notwithstanding any other provision
of this Agreement, in the event of the reorganization, merger or consolidation
of the Company with one or more corporations as a result of which the Company is
not the surviving corporation, or the sale of substantially all the assets of
the Company or of more than fifty percent (50%) of the then outstanding stock of
the Company to another corporation or other entity in a single transaction, the
Option grated hereunder shall terminate, provided however, that not later than
five (5) days before the effective date of such merger or consolidation or sale
of assets in which the Company is not the surviving corporation, the surviving
corporation may, but shall not be so obligated to, tender to the Grantee an
option to purchase a number of shares of capital stock of the surviving
corporation equal to the number of Option Shares then issuable upon exercise of
the Option, and such new option or options for shares of the surviving
corporation shall contain such terms, conditions and provisions as shall be
required substantially to preserve the rights and benefits of the Option and
this Agreement.

                                       3

<PAGE>

     14. Miscellaneous.

          (a) Entire Agreement. This Agreement and the Consulting Agreement
     contain the entire agreement between the Parties and may not be waived,
     amended, modified or supplemented except by agreement in writing signed by
     the Party against whom enforcement of any waiver, amendment, modification
     or supplement is sought. Waiver of or failure to exercise any rights
     provided by this Agreement and the Consulting Agreement in any respect
     shall not be deemed a waiver of any further or future rights.

          (b) Governing Law. This Agreement shall be construed under the
     internal laws of the State of Florida, and the Parties agree that the
     exclusive jurisdiction for any litigation or arbitration arising from this
     Agreement shall be in Orlando, FL

          (c) Counterparts. This Agreement may be executed in two or more
     counterparts, each of which shall be deemed an original, but which when
     taken together shall constitute one agreement.

          (d) Severability. If one or more provisions of this Agreement are held
     to be unenforceable under applicable law, such provision(s) shall be
     excluded from this Agreement and the balance of this Agreement shall be
     interpreted as if such provision were excluded and shall be enforceable in
     accordance with its terms.

                            (Signature Page Follows)

                                       4

<PAGE>

     IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of
the date set forth below.

Date:                                       OPTIONEE:
       ----------------------
                                            /s/
                                            ---------------------------------
                                                 Marc Jablon

                              Address for Notices:

                                            HOME

                                            COMPANY:

                                            Raven Moon Entertainment, Inc.

                                            By:  /s/
                                               ------------------------------
                                                      Joey DeFrancesco, CEO

                                            Address for Notices:

                                       5

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