**EXHIBIT 10.3**

 

**NEITHER THIS WARRANT NOR THESECURITIES UNDERLYING THIS WARRANT HAVE BEEN REGISTERED WITH THE SECURITIES ANDEXCHANGE COMMISSION (“COMMISSION”) UNDER THE UNITED STATES SECURITIES ACT OF1933, AS AMENDED (“ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT AND THE SECURITIES UNDERLYINGTHIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OFFOR VALUE WITHOUT REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIESLAWS, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY WITH AN OPINION OF COUNSELSATISFACTORY TO THE COMPANY THAT THE PROPOSED OFFER FOR SALE, SALE OR OTHERDISPOSITION IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS.**

 

## **SELLING AGENT’S WARRANT**

 
| No. SAW2-1 |   | Number of Shares of Common      |
|-----------------|--------|---------------------------------|
|            |   | Stock Purchasable Upon Exercise |
|            |   | of Warrant:                     |

 

IVOW, Inc., a Delaware corporation (the “Company”),hereby certifies that for the Exercise Price stated herein for each share ofcommon stock, $0.01 par value per share, of the Company (“Common Stock”),issuable upon exercise of this Selling Agent’s Warrant (“Selling Agent’sWarrant”), Dawson James Securities or any assignees of directors or officers ofDawson James Securities as it may direct in its sole discretion (the “SellingAgent”), is entitled, subject to the terms set forth in this Selling Agent’sWarrant, at any time or from time to time, commencing on May     ,2005 (the “Issue Date”), to purchase from the Company                (               )shares of Common Stock (the “Shares”), of the Company at the exercise price pershare as follows:                    Shares at an exercise price of                       ($             )per Share and                  Shares at an exercise price of                  ($           ) per Share(collectively each of the exercise prices per Share shall hereinafter bereferred to as the “Exercise Price”), all as more particularly described in theCompany’s Confidential Private Placement Memorandum, dated May          ,2005, as amended (the “Memorandum”).  TheShares issuable upon exercise of this Selling Agent’s Warrant have the samerespective terms as the Shares offered pursuant to the Memorandum except that (i) theholder of this Selling Agent’s Warrant (the “Holder”) shall have registrationrights under the Securities Act of 1933, as amended (the “Act”), for the Sharesas more fully described in Section 8 of this Selling Agent’s Warrant, and (ii) thesecurities subject hereof are subject to adjustment in accordance with Section 5hereof.  This Selling Agent’s Warrant andall rights hereunder, to the extent such rights shall not have been exercised,shall terminate and become null and void to the extent the Holder fails toexercise any portion of this Selling Agent’s Warrant prior to 5:00 p.m.,Eastern Time, on May         ,2010.

 

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**1.****             Exerciseof Warrant.**

 

(a)           Allor any part of this Selling Agent’s Warrant may be exercised by the Holderhereof by surrendering it, with the form of subscription at the end hereof dulyexecuted by such Holder, to the Company at its principal executive office or atthe Company’s transfer agent accompanied by payment in full of the ExercisePrice payable in respect of all or part of this Selling Agent’s Warrant beingexercised.  If less than the entireSelling Agent’s Warrant is exercised, the Company shall, upon such exercise,execute and deliver to the Holder thereof a new Selling Agent’s Warrant in thesame form as this Selling Agent’s Warrant evidencing the Selling Agent’sWarrant to the extent not exercised. This Selling Agent’s Warrant shall be deemed to have been exercisedprior to the close of business on the date this Selling Agent’s Warrant issurrendered and payment is made in accordance with the foregoing provisions.

 

(b)           Formsof Payment Authorized.  Payment ofthe Exercise Price may be made (i) in cash, by certified or official bankcheck, or cash equivalent, (ii) by tender to the Company of shares of theCompany’s stock owned by the Holder having a value, as determined by theCompany’s Board of Directors (but without regard to any restrictions ontransferability applicable to such stock by reason of federal or statesecurities laws or agreements with an underwriter for the Company), not lessthan the Exercise Price, or (iii) “cashless exercise” by the assignment toa broker-dealer registered under the Securities Exchange Act of 1934, asamended (“Exchange Act”), of the proceeds of a sale of some or all of theshares being acquired upon the exercise of this Selling Agent’s Warrant,provided such assignment complies with Regulation T as promulgated under theExchange Act by the Board of Governors of the Federal Reserve System, (iv) -bytender to the Company of a portion of this Selling Agent’s Warrant, whichportion shall be deemed to have a value equal to the difference between the exerciseprice and the fair market value per share of the Common Stock purchasable uponexercise of the portion of this Selling Agent’s Warrant tendered (as determinedby reference to the closing transaction price or in the absence thereof, theclosing bid price, on the trading date preceding the date that such tender ismade, or if no trading market exists, then pursuant to section 2(c) below),or (v) by any combination thereof.

 

**2.****             FractionalShares.**

 

No fractional securitiesor scrip representing fractional securities shall be issued upon the exerciseof this Selling Agent’s Warrant.  Withrespect to any fraction of a share of Common Stock otherwise issuable upon anysuch exercise hereof, the Company shall pay to the Holder an amount in cashequal to such fraction multiplied by the current market value of suchfractional securities, determined as follows:

 

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(a)           Ifthe security is listed on a national securities exchange or admitted tounlisted trading privileges on such exchange, the current market value shall bethe last reported sale price of the security on such exchange on the lastbusiness day prior to the date of exercise of this Selling Agent’s Warrant, orif no such sale is made on such day, the average closing bid and asked pricesfor such day on such exchange; or

 

(b)           Ifthe security is not listed or admitted to unlisted trading privileges, thecurrent value shall be the last reported sale price on the National Associationof Securities Dealers Automated Quotation (“NASDAQ”) National Market System (“NASDAQ/NMS”)or the mean of the last reported bid and asked prices reported by the NASDAQSystem or the NASD OTC Bulletin Board (or, if not so quoted, by the NationalQuotation Bureau, Inc.) on the last business day prior to the date of theexercise of this Selling Agent’s Warrant; or

 

(c)           Ifthe security is not so listed or admitted to unlisted trading privileges andprices are not reported on NASDAQ, or the NASD OTC Bulletin Board (or by theNational Quotation Bureau, Inc.), the current value shall be an amount,not less than the book value, determined in such reasonable manner as may beprescribed by the Board of Directors of the Company.

 

**3.****             Exchange,Assignment or Loss of Warrant.**

 

Subject to the transfer limitations contained hereinand to compliance with applicable laws, this Selling Agent’s Warrant isexchangeable, without expense, at the option of the Holder, upon presentationand surrender hereof to the Company, for other Selling Agent’s Warrants ofdifferent denominations entitling the Holder thereof to purchase in theaggregate the same number of securities purchasable hereunder.  Any assignment shall be made by surrender ofthis Selling Agent’s Warrant to the Company with the Form of Assignmentannexed hereto duly executed and funds sufficient to pay any transfer tax;whereupon the Company shall, without charge, cause to be executed and delivereda new Selling Agent’s Warrant in the name of the assignee named in suchinstrument of assignment and this Selling Agent’s Warrant shall promptly becancelled.  This Selling Agent’s Warrantmay be divided or combined with other warrants that carry the same rights uponpresentation hereof to the Company together with a written notice specifyingthe names and denominations in which new Selling Agent’s Warrants are to beissued and signed by the Holder hereof. The term “Selling Agent’s Warrant” as used herein includes any warrantsissued in substitution for or replacement of this Selling Agent’s Warrant, orinto which this Selling Agent’s Warrant may be divided or exchanged.  Upon receipt by the Company of evidencesatisfactory to it of the loss, theft, destruction or mutilation of thisSelling Agent’s Warrant, and, in the case of loss, theft or destruction, ofreasonably satisfactory indemnification including a surety bond, and uponsurrender and cancellation of this Selling Agent’s Warrant, if mutilated, theCompany will cause to be executed and delivered a new Selling Agent’s Warrantof like tenor and date.  Although theCompany may require a surety bond or other indemnity in connection with eachnew issuance, any such new Selling Agent’s Warrant executed and delivered shallconstitute an

 

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additionalcontractual obligation on the part of the Company, whether or not this SellingAgent’s Warrant so lost, stolen, destroyed or mutilated shall be at any timeenforceable by anyone.

 

**4.****             Rightsof the Holder.**

 

The Holder of thisSelling Agent’s Warrant shall not, by virtue hereof, be entitled to any votingor other rights of a stockholder in the Company, either at law or equity, andthe rights of the Holder are limited to those expressed in this Selling Agent’sWarrant.

 

**5.****             Adjustments.**

 

(a)           Thenumber of securities purchasable upon exercise of this Selling Agent’s Warrantand the exercise prices therefor shall be subject to adjustment from time totime in the event that the Company shall: (1) pay a dividend in, or make a distribution of, shares of CommonStock or other securities, (2) subdivide its outstanding shares of CommonStock into a greater number of shares, (3) combine its outstanding sharesof Common Stock into a smaller number of shares or (4) spin-off asubsidiary by distributing, as a dividend or otherwise, shares of thesubsidiary to its Common Stock stockholders. In any such case, the total number of securities purchasable uponexercise of this Selling Agent’s Warrant immediately prior thereto shall beadjusted so that the Holder shall be entitled to receive, at the same aggregateexercise price, the number of shares of Common Stock or other securities thatthe Holder would have owned or would have been entitled to receive immediatelyfollowing the occurrence of any of the events described above had this SellingAgent’s Warrant been exercised in full immediately prior to the occurrence (orapplicable record date) of such event. An adjustment made pursuant to this Section 5(a) shall, in thecase of a stock dividend or distribution, be made as of the record date and, inthe case of a subdivision or combination, be made as of the effective datethereof.  If, as a result of anyadjustment pursuant to this Section 5(a), the Holder shall become entitledto receive shares of two or more classes or series of securities of the Company,the Board of Directors of the Company shall equitably determine the allocationof the adjusted exercise price between or among shares of the Holder of suchallocation.

 

(b)           Inthe event of any reorganization or recapitalization of the Company or in theevent the Company consolidates with or merges into or with another entity ortransfers all or substantially all of its assets to another entity, then and ineach such event, the Holder, on exercise of this Selling Agent’s Warrant asprovided herein, at any time after the consummation of such reorganization,recapitalization, consolidation, merger or transfer, shall be entitled, and thedocuments executed to effectuate such event shall so provide, to receive thestock or other securities or property to which the Holder would have beenentitled upon such consummation if the Holder had exercised this Selling Agent’sWarrant immediately prior thereto.  Insuch case, the terms of this Selling Agent’s Warrant shall survive theconsummation of any such reorganization,

 

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recapitalization,consolidation, merger or transfer and shall be applicable to the shares ofstock or other securities or property receivable on the exercise of thisSelling Agent’s Warrant after such consummation.

 

(c)           Whenevera reference is made in this Section 5 to the issue or sale of shares ofCommon Stock the term “Common Stock” shall mean the Common Stock of the Companyof the class authorized as of the date hereof.

 

(d)           Wheneverthe number of securities purchasable upon exercise of this Selling Agent’sWarrant or the exercise prices thereof shall be adjusted as required herein,the Company shall forthwith file such information with its Secretary at itsprincipal office in the form of a certificate of an authorized officer of theCompany, with the price determined as herein provided and setting forth indetail the facts requiring such adjustment. Each such officer’s certificate shall be made available at allreasonable times for inspection by the Holder and the Company shall, forthwithafter such adjustment, deliver a copy of such certificate to the Holder.

 

(e)           TheCompany will not, by amendment of its certificate of incorporation or throughany reorganization, recapitalization, transfer of assets, consolidation,merger, dissolution, issuance or sale of securities or any other voluntaryaction, avoid or seek to avoid the performance of any of the terms of thisSelling Agent’s Warrant, but will at all times in good faith take all necessaryaction to carry out the intent of all such terms.  Without limiting the generality of theforegoing, the Company (1) will not cause the par value of any securitiesreceivable on exercise of this Selling Agent’s Warrant to be in excess of theamount payable therefor on such exercise, (2) will take all action as maybe necessary or appropriate so that the Company may validly and legally issuefully paid and nonassessable shares (or other securities or propertydeliverable hereunder) upon the exercise of this Selling Agent’s Warrant, and (3) willnot transfer all or substantially all of its assets to any other person(corporate or otherwise), or consolidate with or merge into any other person orpermit any such person to consolidate with or merge with or into the Company(if the Company is not the surviving person), unless such other person shall bebound by all the terms of this Selling Agent’s Warrant.  If any event occurs as to which the otherprovisions of this Selling Agent’s Warrant are not strictly applicable or ifstrictly applicable would not fairly protect the purchase rights of thisSelling Agent’s Warrant in accordance with the essential intent and principlesof such provisions, then the Board of Directors shall make an adjustment in theapplication of such provisions, in accordance with such essential intent andprinciples, in order to protect such purchase rights.  This Selling Agent’s Warrant shall bind thesuccessors and assigns of the Company.

 

**6.****             Noticesof Record Dates, Etc.**

 

(a)           Ifthe Company shall fix a record date of the holders of the Common Stock  (or other securities at the time deliverableupon exercise of this Selling Agent’s

 

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Warrant) for the purposeof entitling or enabling them to receive any dividends or other distribution,or to receive any right to subscribe for or purchase any shares of any class ofany securities, or to receive any other right contemplated by Section 5 orotherwise; or

 

(b)           Inthe event of any reorganization or recapitalization of the Company, anyreclassification of the capital stock of the Company, any consolidation ormerger of the Company with or into another corporation or any transfer of allor substantially all of the assets of the Company to another entity; or

 

(c)           Inthe event of the voluntary or involuntary dissolution, liquidation or windingup of the Company;

 

then, in any such event,the Company shall mail or cause to be mailed to the Holder a notice specifying,as the case may be, (1) the date on which a record is to be taken for thepurpose of such dividend, distribution or right and stating the amount andcharacter of such dividend, distribution or right, or (2) the date onwhich a record is to be taken for the purpose of voting on or approving such reorganization,recapitalization, reclassification, consolidation, merger, conveyance,dissolution, liquidation or winding up and the date on which such event is totake place and the time, if any is to be fixed, as of which the Holder ofrecord of Shares shall be entitled to exchange its Shares for securities orother property deliverable on such reorganization, recapitalization,reclassification, consolidation, merger, conveyance, dissolution, liquidationor winding up.  Such notice shall bemailed at the same date as the Company shall inform its stockholders, but in noevent less than ten days preceding such record date.

 

**7.****             Reservationof Shares.**

 

The Company shall at alltimes reserve, for the purpose of issuance on exercise of this Selling Agent’sWarrant, such number of Shares or other securities as shall from time to timebe sufficient to comply with this Selling Agent’s Warrant, and the Companyshall take such corporate action as may in the opinion of its counsel benecessary to increase its authorized and unissued shares of Common Stock orother securities in such number as shall be sufficient for such purpose.

 

**8.****             Registration.**

 

(a)           Definitions.  As used in this Section 8, the followingterms shall have the meanings set forth below:

 

(i)            Theterms “register,” “registered” and “registration” shall refer to a registrationeffected by preparing and filing a registration statement or similar documentin compliance with the Act, and the declaration or ordering of theeffectiveness of such registration statement or document.

 

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(ii)           The term “RegistrableSecurities” shall mean:  (A) theCommon Stock issued or issuable upon exercise of this Selling Agent’s Warrant;and (B) Common Stock or other securities of the Company issued (orissuable upon the conversion or exercise of any warrant, right or othersecurity which is issued as) as a dividend or other distribution with respectto, in exchange for or in replacement of such warrant or Common Stock,referenced in (B) or (C) immediately above, excluding in all cases,however, any Registrable Securities sold to the public pursuant to aregistration under the Act or an applicable exemption therefrom.

 

(b)           DemandRegistration Rights.  If, at any time during the period commencingon the Issue Date and ending five (5) years thereafter, the Company shallreceive a written request (a “Request”), from Holders who in the aggregate own(or upon exercise of all Registrable Securities then outstanding or issuablewould own) a majority of the total number of shares of Common Stock thenincluded (or which upon such exercise would be included) in the RegistrableSecurities (the “Majority Holders”), to register the resale of at least amajority of the Registrable Securities then outstanding, the Company shall, aspromptly as practicable, prepare and file with the Securities and ExchangeCommission (“SEC”) a registration statement sufficient to permit the publicoffering and sale of the Registrable Securities through the facilities of allappropriate securities exchanges and the over-the-counter market, and will useits best efforts through its officers, directors, auditors, and counsel tocause such registration statement to become effective as promptly aspracticable; provided that the Company shall only be obligated to registerRegistrable Securities on two (2) occasions (at least 12 months apart)pursuant to this Section 8(b). Within five (5) business days after receiving a Request, theCompany shall give written notice to all the other Holders, advising each ofthem that the Company is proceeding with such registration and offering toinclude therein all or any portion of any such other Holder’s RegistrableSecurities, provided that the Company received a written request to do so fromsuch Holder within thirty (30) days after receipt by him or it of the Company’snotice.  Notwithstanding anythingcontained in this Section 8(b) to the contrary:  (i) no person may make a Request thatthe Company file, nor shall the Company be obligated to file, a registrationstatement on any date that is within ninety (90) days of the effective date ofany registration statement filed by the Company and pursuant to which suchperson was given full “piggyback” registration rights in accordance with Section 8(c) hereofincluding without limitation the ability to include all Registrable Securitiesrequested to be included therein; and (ii) the Company may delay theregistration of the securities to which a Request relates if upon receipt ofsuch Request (A) the Company notifies the person making the Request thatit is contemplating filing a Registration Statement within ninety (90) days ofsuch request, or (B) the Company notifies the person making the requestthat the Board of Directors of the Company has determined that a material eventhas occurred that has not been publicly disclosed and which if disclosed wouldhave a material adverse effect on the Company; provided that (x) in the case ofclause (ii)(A)

 

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ofthis paragraph, the Company shall, as soon as practical, upon the first tooccur of the abandonment of such contemplated registration statement or theexpiration of such ninety (90) day period, register the securities to which theRequest relates unless such Request is withdrawn; and (y) in the case of clause(ii)(B) of this paragraph, the Company may not delay the filing of theregistration statement for more than thirty (30) days from the date of theRequest unless such Request is withdrawn.

 

(c)           Piggy-backRegistration Rights.  If (but withoutany obligation to do so) at any time during the five (5) year periodcommencing on the Issue Date, the Company proposes to register (including forthis purpose a registration effected by the Company for securityholders otherthan the Holder) any of its securities under the Act in connection with thepublic offering of such securities solely for cash (other than a registrationon Form S-4, Form S-8 or any form which does not includesubstantially the same information as would be required to be included in aregistration statement covering the sale of the Registrable Securities), theCompany shall, each such time, promptly give the Holder written notice of suchregistration.  Upon the written requestof the Holder given within twenty (20) days after receipt of such writtennotice from the Company, the Company shall, subject to the provisions of this Section 8,cause to be registered under the Act all of the Registrable Securities that theHolder has requested to be registered; and provided further, however, that theRegistrable Securities shall be subject to restrictions on transfer forforty-five (45) days after the effective date of the subject registrationstatement.  The inclusion of any of theHolder’s Registrable Securities in a registration statement filed by theCompany and declared effective by the Securities and Exchange Commission (“SEC”)shall be deemed to be the exercise by such Holder of the piggy-backregistration rights granted herein to such Holder.

 

(d)           Obligationsof the Company.  Whenever requiredhereunder to effect the registration of any Registrable Securities, the Companyshall, as expeditiously as reasonably possible:

 

(i)            Prepareand file with the SEC a registration statement with respect to such RegistrableSecurities and use its best efforts to cause such registration statement tobecome effective, and, upon the request of the Holders of a majority of theRegistrable Securities registered thereunder, keep such registration statementeffective for at least twelve (12) months.

 

(ii)           Prepareand file with the SEC such amendments and supplements to such registrationstatement and the prospectus used in connection with such registrationstatement as may be necessary to comply with the provisions of the Act withrespect to the disposition of all securities covered by such registrationstatement.

 

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(iii)          Furnishto the Holders such numbers of copies of a prospectus, including a preliminaryprospectus, in conformity with the requirements of the Act, and such otherdocuments as they may reasonably request in order to facilitate the dispositionof Registrable Securities owned by them.

 

(iv)          Use itsbest efforts to register and qualify the securities covered by suchregistration statement under the securities laws of such jurisdictions as shallbe reasonably requested by the Holders for the distribution of the securitiescovered by the registration statement, provided that the Company shall not berequired in connection therewith or as a condition thereto to qualify to dobusiness or to file a general consent to service of process in any suchjurisdiction.

 

(v)           Inthe event of any underwritten public offering, enter into and perform itsobligations under an underwriting agreement with terms generally satisfactoryto the managing underwriter of such offering.

 

(vi)          Notifythe Holders, promptly after the Company shall have received notice thereof, ofthe time when the registration statement becomes effective or any supplement toany prospectus forming a part of the registration statement has been filed.

 

(vii)         Notifythe Holders of any stop order suspending the effectiveness of the registrationstatement and use its reasonable best efforts to remove such stop order.

 

(e)           FurnishInformation.  It shall be a conditionprecedent to the obligations of the Company to take any action pursuant heretothat the Holder, having chosen to have its Registrable Securities included forregistration, shall furnish to the Company such information regarding theHolder, its Registrable Securities and the intended method of disposition ofsuch securities as shall be required to effect the registration thereof.  The Holder shall be required to represent tothe Company that all such information which is given is complete and accuratein all material respects.  The Holdershall deliver to the Company a statement in writing from the beneficial ownersof such securities that such beneficial owners bona fide intend to sell,transfer or otherwise dispose of such securities.

 

(f)            Expenses.

 

(i)            RegistrationExpenses.  All expenses incurred bythe Company in complying with Subsections 8(b), 8(c) and 8(d) hereof,including without limitation, all registration and filing fees, printingexpenses, fees and disbursements of counsel for the Company, “Blue Sky” feesand expenses, and the expense of any special audits incident to or required byany such registration

 

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(but excluding thecompensation of regular employees of the Company which shall be paid in anyevent by the Company) shall be borne by the Company.

 

(ii)           SellingExpenses.  All underwritingdiscounts, underwriters’ expense allowance, and selling commissions applicableto the sale of Registrable Securities by the Holders and all fees anddisbursements of any special counsel (other than the Company’s regular counsel)shall be borne by the Holders of the Registrable Securities so registered prorata on the basis of the number of Registrable Securities so registered.

 

(g)           UnderwritingRequirements.  All Holders proposingto distribute their Registrable Securities through an underwriting in which theCompany has proposed or is proposing to participate, shall (together with theCompany and any other Holders distributing their securities through suchunderwriting) enter into an underwriting agreement in customary form with theunderwriter or underwriters selected for underwriting by the Company andperform their obligations thereunder. Notwithstanding any other subsection of this Section 8, at therequest of the managing underwriter, the Holder shall delay the sale ofRegistrable Securities which such Holder has requested be registered hereunderfor up to 90 days following the effective date of the registrationstatement.  If any Holder disapproves ofthe terms of any such underwriting, such Holder may elect to withdraw therefromby written notice to the Company and the managing underwriter.  Any Registrable Securities excluded orwithdrawn from such underwriting shall not be withdrawn from such registrationexcept at the election of the Holder.

 

(h)           Delayof Registration.  No Holder shallhave any right to obtain or seek an injunction restraining or otherwisedelaying any such registration as the result of any controversy that mightarise with respect to the interpretation or implementation of this section.

 

(i)            Indemnification.  In the event that any Registrable Securitiesare included in a registration statement pursuant hereto:

 

(i)            Tothe extent permitted by law, the Company will indemnify and hold harmless eachHolder, the officers, directors, partners and legal counsel of each Holder, anyunderwriter (as defined in the Act) for such Holder and each person, if any,who controls such Holder or underwriter within the meaning of the Act or theExchange Act, against any losses, claims, damages or liabilities (joint orseveral) to which they may become subject under the Act, the Exchange Act orother federal or state law, insofar as such losses, claims, damages orliabilities (or actions in respect thereof) arise out of or are based upon anyof the following statements, omissions or violations (collectively, a “Violation”):  (A) any untrue statement or allegeduntrue statement of a material fact contained in such registration statement,including any preliminary

 

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prospectus or finalprospectus contained therein or any amendments or supplements thereto; (B) theomission or alleged omission to state therein a material fact required to bestated therein, or necessary to make the statements therein not misleading; or (C) anyviolation or alleged violation by the Company of the Act, the Exchange Act, anyapplicable state securities law or any rule or regulation promulgatedunder the Act, the Exchange Act or any applicable state securities law; and theCompany will reimburse the Holder for any legal or other expenses reasonablyincurred by them in connection with investigating or defending any such loss,claim, damage, liability or action; provided, however, that the indemnityagreement contained in this Subsection 8(i)(i) shall not apply toamounts paid in settlement of any such loss, claim, damage, liability or actionif such settlement is effected without the consent of the Company (whichconsent shall not be unreasonably withheld), nor shall the Company be liable inany such case for any such loss, claim, damage, liability or action to theextent that it arises out of or is based upon a Violation which occurs in relianceupon and in conformity with information furnished expressly for use inconnection with such registration by any such Holder, underwriter orcontrolling person; provided, however, that the Company will not be liable inany such case to the extent that any such loss, claim, damage or liabilityarises out of or is based upon an untrue statement or alleged untrue statementor omission or alleged omission made in said registration statement, saidpreliminary prospectus, said final prospectus or said amendment or supplementin reliance upon and in conformity with information furnished by such Holder orany other Holder, for use in the preparation thereof; and further provided,however, that the foregoing indemnity agreement is subject to the condition that,insofar as it relates to any untrue statement, alleged untrue statement,omission or alleged omission made in any preliminary prospectus but eliminatedor remedied in a subsequent or final prospectus, such indemnity agreement shallnot inure to the benefit of any underwriter or broker, if a copy of such asubsequent or final prospectus was not sent or given to such person with orprior to the confirmation of the sale of such securities to such person.

 

(ii)           Tothe extent permitted by law, each selling Holder will indemnify and holdharmless the Company, its directors, its officers, its employees, any personwho controls the Company within the meaning of the Act or the Exchange Act, anyunderwriter (within the meaning of the Act) for the Company and any person whocontrols such underwriter against any losses, claims, damages or liabilities(joint or several) to which the Company or any such director, officer,employee, controlling person, or underwriter or controlling person may becomesubject, under the Act, the Exchange Act or other federal or state law, insofaras such losses, claims, damages or liabilities (or actions in respect thereto)arise out of or are based upon any Violation, in each case to the extent (andonly to the extent) that such Violation occurs in

 

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reliance upon and inconformity with information furnished by the Holder expressly for use inconnection with such registration; and the Holder will reimburse any legal orother expenses reasonably incurred by the Company or any such director,officer, employee controlling person, underwriter or controlling personthereof, in connection with investigating or defending any such loss, claim,damage, liability or action; provided, however, that the indemnity agreementcontained in this Subsection 8(i)(ii) shall not apply to amounts paidin settlement of any such loss, claim, damage, liability or action if suchsettlement is effected without the consent of the Holder, which consent shallnot be unreasonably withheld.

 

(iii)          Promptlyafter receipt by an indemnified party under this Subsection 8(i) ofnotice of the commencement of any action (including any governmental action),such indemnified party will, if a claim in respect thereof is to be made againstany indemnifying party under this Subsection 8(i), notify the indemnifyingparty in writing of the commencement thereof and the indemnifying party shallhave the right to participate in, and, to the extent the indemnifying party sodesires, jointly with any other indemnifying party similarly notified, toassume the defense thereof with counsel mutually satisfactory to the parties;provided, however, that an indemnified party shall have the right to retain itsown counsel, with the fees and expenses to be paid by the indemnifying party,if representation of such indemnified party by the counsel retained by theindemnifying party would be inappropriate due to actual or potential differinginterests between such indemnified party and any other party represented bysuch counsel in such proceeding.  Thefailure to notify an indemnifying party within a reasonable time of thecommencement of any such action, to the extent prejudicial to its ability todefend such action, shall relieve such indemnifying party of any liability tothe indemnified party under this Subsection 8(i), but the omission so tonotify the indemnifying party will not relieve it of any liability that it mayhave to any indemnified party otherwise than under this Subsection 8(i).

 

(j)            ReportsUnder Exchange Act.  Followingregistration of the Company’s securities under the Exchange Act and with a viewof making available to the Holders the benefits of Rule 144 promulgatedunder the Act and any other rule or regulation of the SEC that may at any timepermit a Holder to sell securities of the Company to the public withoutregistration, the Company agrees to:

 

(i)            useits best efforts to make and keep public information available, as those termsare understood and defined in Rule 144, at all times; and

 

(ii)           useits best efforts to file with the SEC in a timely manner all reports and otherdocuments required of the Company under the Act and the Exchange Act.

 

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(k)           Terminationof the Company’s Obligations.

 

(i)            TheCompany shall have no obligations pursuant to Subsections 8(b) or 8(c) withrespect to any request made by the Holder after May          ,2008.

 

(ii)           Notwithstandingany provision hereof to the contrary, the Company shall not be required toeffect any registration under the Act or under any state securities laws onbehalf of any Holder or Holders if, in the opinion of counsel for the Company,the offering or transfer by such Holder or Holders in the manner proposed(including without limitation, the number of shares proposed to be offered ortransferred and the method of offering or transfer) is exempt from theregistration requirements of the Act and the securities or “Blue Sky” laws ofapplicable states.

 

(iii)          TheCompany’s obligations under Sections 8(b) and 8(c) shall terminatewith respect to a particular Holder at such time as Rule 144, or anothersimilar exemption, is available for the sale, without registration, of all ofsuch Holder’s Registrable Securities in any three (3) month period;provided, however, and subject to compliance with the requirements of Rule 144,that the Company shall consent to such Rule 144 sale and provide theappropriate legal opinion to the transfer agent of the Company so as allow the Rule 144transfer or legend removal to occur as may be appropriate.

 

(l)            Holder’sAcceptance of Obligations. Acceptance of this Warrant by its Holder(s) shall be deemed toconstitute the unqualified acceptance by the Holder of all of the terms andconditions set forth herein.

 

**9.****             Approvals.**

 

The Company shall fromtime to time use its best efforts to obtain and continue in effect any and allpermits, consents, registrations, qualifications and approvals of governmentalagencies and authorities and to make all filings under applicable securitieslaws that may be or become necessary in connection with the issuance, sale,transfer and delivery of this Selling Agent’s Warrant, the issuance ofsecurities on any exercise hereof, and if any such permits, consents,qualifications, registrations, approvals or filings are not obtained orcontinued in effect as required, the Company shall immediately notify theHolder hereof.

 

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**10.****          Survival.**

 

All agreements,covenants, representations and warranties herein shall survive the executionand delivery of this Selling Agent’s Warrant and any investigation at any timemade by or on behalf of any parties hereto and the exercise, sale and purchaseof this Selling Agent’s Warrant for three years.

 

**11.****          Remedies.**

 

The Company agrees thatthe remedies at law of the Holder, in the event of any default or threateneddefault by the Company in the performance or compliance with any of the termsof this Selling Agent’s Warrant, may not be adequate and such terms may, inaddition to and not in lieu of any other remedy, be specifically enforced by adecree of specific performance of any agreement contained herein or by aninjunction against a violation of any of the terms hereof or otherwise.

 

**12.****          Notices.**

 

All demands, notices,consents and other communications to be given hereunder shall be in writing andshall be deemed duly given when delivered personally or five days after beingmailed by first class mail, postage prepaid, properly addressed, as follows:

 
| If to the Company, to:           |                                           |
|----------------------------------|------------------------------------------------|
|                             | IVOW, Inc.                                |
|                             | 2101FaradayAvenue                              |
|                             | Carlsbad,  CA 92008                       |
|                             | Attention: Chief  Financial Officer            |
|                             |                                           |
| With a copy by                   |                                           |
| contemporaneous like  means, to: | Heller Ehrman  White & McAuliffe, LLP |
|                             | 4350 La Jolla Village  Dr., 7th Floor          |
|                             | San Diego, CA 92122                            |
|                             | Attention: Jeffrey  Thacker, Esq.         |
|                             |                                           |
| If to the Holder, to:            | Dawson James  Securities,                      |
|                             | 925 S. Federal Highway                         |
|                             | 6th Floor                                      |
|                             | Boca Raton, FL 33432                           |
|                             | Attention: Robert  Keyser                      |

 

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| With a copy by |                                   |
|----------------|----------------------------------------|
|           | contemporaneous like  means, to:       |
|           | Blank Rome LLP                         |
|           | 1200 North Federal  Highway, suite 417 |
|           | Boca Raton, FL 33432                   |
|           | Attention: Bruce C. Rosetto, Esq. |

 

The Company and eachHolder may change such address at any time or times by notice hereunder to theother.

 

**13.****          Amendments;Waivers; Terminations; Governing Law; Headings.**

 

This Selling Agent’sWarrant and any term hereof may be changed, waived, discharged or terminatedonly by an instrument in writing signed by the party against which enforcementof such change, waiver, discharge or termination is sought.  This Selling Agent’s Warrant shall begoverned by and construed and interpreted in accordance with the laws of theState of Florida.  The headings in thisSelling Agent’s Warrant are for convenience of reference only and are not partof this Selling Agent’s Warrant.

 
| DATED: |            | , 2005 |   |
|--------|-----------------|--------|--------|
|   |            |
|   | iVOW, Inc. |
|   |            |
|   |            |
|   | By:             |   |   |

 

FORM OFASSIGNMENT

 

(To be executedupon transfer of Selling Agent’s Warrant)

 

FOR VALUE RECEIVED, theundersigned hereby sells, assigns and transfers to                                the right represented by the within Selling Agent’s Warrant, No. SAW2-1,as such right may apply to              shares of Common Stock which are the subject of the within Selling Agent’sWarrant, together with all rights, title and interest therein, and does herebyirrevocably constitute and appoint                                    attorney to transfer such Selling Agent’s Warrant on the warrant register ofthe within named Company, with full power of substitution.

 

 
| DATED: |                                                                            | , 2005. |   |
|--------|---------------------------------------------------------------------------------|---------|--------|
|   |                                                                            |    |   |
|   | Signature:                                                                      |
|   |                                                                            |
|   |                                                                            |
|   |                                                                            |    |
|   | (Signature must conform in  all respects to name of  Holder as specified on the |

 

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|   | face of the Selling Agent’s  Warrant) |
|--------|--------------------------------------------|
|   |                                       |
|   |                                       |
|   | Signature Guaranteed:                      |
|   |                                       |
|   |                                       |   |

 

**SUBSCRIPTION**

 

(To be completed andsigned only upon an exercise of the Selling Agent’s Warrant in whole or inpart)

 

TO:

 

The undersigned, theHolder of the attached Selling Agent’s Warrant (“Warrant”), hereby irrevocablyelects to exercise the purchase right represented by the Warrant for, and topurchase thereunder,                  shares of Common Stock  (as such term isdefined in the Selling Agent’s Warrant dated                    ,2005, from                          to Dawson James Securities, Inc or its assignees (or other securities orproperty), and herewith makes payment of $                   therefor in cash, by certified or official bank check or such other form ofpayment as may be permitted under the Warrant. The undersigned hereby requests that the Certificate(s) for suchsecurities be issued in the name(s) and delivered to the address(es) asfollows:

 

Name:

Address:

Social Security Number:

Deliver to:

Address:

 

If the foregoingSubscription evidences- an exercise of the Selling Agent’s Warrant to purchasefewer than all of the Shares (or other securities or property) to which theundersigned is entitled under such Selling Agent’s Warrant, please issue a newSelling Agent’s Warrant, of like date and tenor, for the remaining portion ofthe Selling Agent’s Warrant (or other securities or property) in the name(s),and deliver the same to the address(es), as follows:

 

Name:

Address:

 
| DATED: |   | , 200    |   |
|--------|--------|-------------------------|--------|

 

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|                                                          |
|---------------------------------------------------------------|
| (Social Security or  Taxpayer Identification (Name of Holder) |
| (Number of Holder)                                            |
|                                                          |
|                                                          |   |   |
|                                                          | (Signature of Holder or  Authorized Signatory) |
|                                                          |   |
|                                                          | Signature Guaranteed: |
|                                                          |   |
|                                                          |   |   |

 

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