EXHIBIT 10.3


 


NEITHER THIS WARRANT NOR THE
SECURITIES UNDERLYING THIS WARRANT HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION (“COMMISSION”) UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (“ACT”) OR UNDER APPLICABLE STATE SECURITIES LAWS.  THIS WARRANT AND THE SECURITIES UNDERLYING
THIS WARRANT MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF
FOR VALUE WITHOUT REGISTRATION UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT THE PROPOSED OFFER FOR SALE, SALE OR OTHER
DISPOSITION 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 of
common stock, $0.01 par value per share, of the Company (“Common Stock”),
issuable upon exercise of this Selling Agent’s Warrant (“Selling Agent’s
Warrant”), Dawson James Securities or any assignees of directors or officers of
Dawson James Securities as it may direct in its sole discretion (the “Selling
Agent”), is entitled, subject to the terms set forth in this Selling Agent’s
Warrant, at any time or from time to time, commencing on May     ,
2005 (the “Issue Date”), to purchase from the Company                
(               )
shares of Common Stock (the “Shares”), of the Company at the exercise price per
share as follows:                    
Shares at an exercise price of                       
($             )
per Share and                  
Shares at an exercise price of                  
($           ) per Share
(collectively each of the exercise prices per Share shall hereinafter be
referred to as the “Exercise Price”), all as more particularly described in the
Company’s Confidential Private Placement Memorandum, dated May          ,
2005, as amended (the “Memorandum”).  The
Shares issuable upon exercise of this Selling Agent’s Warrant have the same
respective terms as the Shares offered pursuant to the Memorandum except that (i) the
holder of this Selling Agent’s Warrant (the “Holder”) shall have registration
rights under the Securities Act of 1933, as amended (the “Act”), for the Shares
as more fully described in Section 8 of this Selling Agent’s Warrant, and (ii) the
securities subject hereof are subject to adjustment in accordance with Section 5
hereof.  This Selling Agent’s Warrant and
all 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 to
exercise any portion of this Selling Agent’s Warrant prior to 5:00 p.m.,
Eastern Time, on May         ,
2010.


 





















 


1.             Exercise
of Warrant.


 


(a)           All
or any part of this Selling Agent’s Warrant may be exercised by the Holder
hereof by surrendering it, with the form of subscription at the end hereof duly
executed by such Holder, to the Company at its principal executive office or at
the Company’s transfer agent accompanied by payment in full of the Exercise
Price payable in respect of all or part of this Selling Agent’s Warrant being
exercised.  If less than the entire
Selling 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 the
same form as this Selling Agent’s Warrant evidencing the Selling Agent’s
Warrant to the extent not exercised. 
This Selling Agent’s Warrant shall be deemed to have been exercised
prior to the close of business on the date this Selling Agent’s Warrant is
surrendered and payment is made in accordance with the foregoing provisions.


 


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


 


2.             Fractional
Shares.


 


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


 


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(a)           If
the security is listed on a national securities exchange or admitted to
unlisted trading privileges on such exchange, the current market value shall be
the last reported sale price of the security on such exchange on the last
business day prior to the date of exercise of this Selling Agent’s Warrant, or
if no such sale is made on such day, the average closing bid and asked prices
for such day on such exchange; or


 


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


 


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


 


3.             Exchange,
Assignment or Loss of Warrant.


 


Subject to the transfer limitations contained herein
and to compliance with applicable laws, this Selling Agent’s Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company, for other Selling Agent’s Warrants of
different denominations entitling the Holder thereof to purchase in the
aggregate the same number of securities purchasable hereunder.  Any assignment shall be made by surrender of
this Selling Agent’s Warrant to the Company with the Form of Assignment
annexed hereto duly executed and funds sufficient to pay any transfer tax;
whereupon the Company shall, without charge, cause to be executed and delivered
a new Selling Agent’s Warrant in the name of the assignee named in such
instrument of assignment and this Selling Agent’s Warrant shall promptly be
cancelled.  This Selling Agent’s Warrant
may be divided or combined with other warrants that carry the same rights upon
presentation hereof to the Company together with a written notice specifying
the names and denominations in which new Selling Agent’s Warrants are to be
issued and signed by the Holder hereof. 
The term “Selling Agent’s Warrant” as used herein includes any warrants
issued in substitution for or replacement of this Selling Agent’s Warrant, or
into which this Selling Agent’s Warrant may be divided or exchanged.  Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Selling Agent’s Warrant, and, in the case of loss, theft or destruction, of
reasonably satisfactory indemnification including a surety bond, and upon
surrender and cancellation of this Selling Agent’s Warrant, if mutilated, the
Company will cause to be executed and delivered a new Selling Agent’s Warrant
of like tenor and date.  Although the
Company may require a surety bond or other indemnity in connection with each
new issuance, any such new Selling Agent’s Warrant executed and delivered shall
constitute an


 


3





















 


additional
contractual obligation on the part of the Company, whether or not this Selling
Agent’s Warrant so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.


 


4.             Rights
of the Holder.


 


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


 


5.             Adjustments.


 


(a)           The
number of securities purchasable upon exercise of this Selling Agent’s Warrant
and the exercise prices therefor shall be subject to adjustment from time to
time in the event that the Company shall: 
(1) pay a dividend in, or make a distribution of, shares of Common
Stock or other securities, (2) subdivide its outstanding shares of Common
Stock into a greater number of shares, (3) combine its outstanding shares
of Common Stock into a smaller number of shares or (4) spin-off a
subsidiary by distributing, as a dividend or otherwise, shares of the
subsidiary to its Common Stock stockholders. 
In any such case, the total number of securities purchasable upon
exercise of this Selling Agent’s Warrant immediately prior thereto shall be
adjusted so that the Holder shall be entitled to receive, at the same aggregate
exercise price, the number of shares of Common Stock or other securities that
the Holder would have owned or would have been entitled to receive immediately
following the occurrence of any of the events described above had this Selling
Agent’s Warrant been exercised in full immediately prior to the occurrence (or
applicable record date) of such event. 
An adjustment made pursuant to this Section 5(a) shall, in the
case of a stock dividend or distribution, be made as of the record date and, in
the case of a subdivision or combination, be made as of the effective date
thereof.  If, as a result of any
adjustment pursuant to this Section 5(a), the Holder shall become entitled
to 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 allocation
of the adjusted exercise price between or among shares of the Holder of such
allocation.


 


(b)           In
the event of any reorganization or recapitalization of the Company or in the
event the Company consolidates with or merges into or with another entity or
transfers all or substantially all of its assets to another entity, then and in
each such event, the Holder, on exercise of this Selling Agent’s Warrant as
provided herein, at any time after the consummation of such reorganization,
recapitalization, consolidation, merger or transfer, shall be entitled, and the
documents executed to effectuate such event shall so provide, to receive the
stock or other securities or property to which the Holder would have been
entitled upon such consummation if the Holder had exercised this Selling Agent’s
Warrant immediately prior thereto.  In
such case, the terms of this Selling Agent’s Warrant shall survive the
consummation of any such reorganization,


 


4





















 


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


 


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


 


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


 


(e)           The
Company will not, by amendment of its certificate of incorporation or through
any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issuance or sale of securities or any other voluntary
action, avoid or seek to avoid the performance of any of the terms of this
Selling Agent’s Warrant, but will at all times in good faith take all necessary
action to carry out the intent of all such terms.  Without limiting the generality of the
foregoing, the Company (1) will not cause the par value of any securities
receivable on exercise of this Selling Agent’s Warrant to be in excess of the
amount payable therefor on such exercise, (2) will take all action as may
be necessary or appropriate so that the Company may validly and legally issue
fully paid and nonassessable shares (or other securities or property
deliverable hereunder) upon the exercise of this Selling Agent’s Warrant, and (3) will
not transfer all or substantially all of its assets to any other person
(corporate or otherwise), or consolidate with or merge into any other person or
permit 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 be
bound by all the terms of this Selling Agent’s Warrant.  If any event occurs as to which the other
provisions of this Selling Agent’s Warrant are not strictly applicable or if
strictly applicable would not fairly protect the purchase rights of this
Selling Agent’s 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, in order to protect such purchase rights.  This Selling Agent’s Warrant shall bind the
successors and assigns of the Company.


 


6.             Notices
of Record Dates, Etc.


 


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


 


5





















 


Warrant) for the purpose
of 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 of
any securities, or to receive any other right contemplated by Section 5 or
otherwise; or


 


(b)           In
the event of any reorganization or recapitalization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation or any transfer of all
or substantially all of the assets of the Company to another entity; or


 


(c)           In
the event of the voluntary or involuntary dissolution, liquidation or winding
up 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 the
purpose of such dividend, distribution or right and stating the amount and
character of such dividend, distribution or right, or (2) the date on
which 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 to
take place and the time, if any is to be fixed, as of which the Holder of
record of Shares shall be entitled to exchange its Shares for securities or
other property deliverable on such reorganization, recapitalization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding up.  Such notice shall be
mailed at the same date as the Company shall inform its stockholders, but in no
event less than ten days preceding such record date.


 


7.             Reservation
of Shares.


 


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


 


8.             Registration.


 


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


 


(i)            The
terms “register,” “registered” and “registration” shall refer to a registration
effected by preparing and filing a registration statement or similar document
in compliance with the Act, and the declaration or ordering of the
effectiveness of such registration statement or document.


 


6





















 


(ii)           The term “Registrable
Securities” shall mean:  (A) the
Common Stock issued or issuable upon exercise of this Selling Agent’s Warrant;
and (B) Common Stock or other securities of the Company issued (or
issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) as a dividend or other distribution with respect
to, 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 a
registration under the Act or an applicable exemption therefrom.


 


(b)           Demand
Registration Rights.  If, at any time during the period commencing
on the Issue Date and ending five (5) years thereafter, the Company shall
receive a written request (a “Request”), from Holders who in the aggregate own
(or upon exercise of all Registrable Securities then outstanding or issuable
would own) a majority of the total number of shares of Common Stock then
included (or which upon such exercise would be included) in the Registrable
Securities (the “Majority Holders”), to register the resale of at least a
majority of the Registrable Securities then outstanding, the Company shall, as
promptly as practicable, prepare and file with the Securities and Exchange
Commission (“SEC”) a registration statement sufficient to permit the public
offering and sale of the Registrable Securities through the facilities of all
appropriate securities exchanges and the over-the-counter market, and will use
its best efforts through its officers, directors, auditors, and counsel to
cause such registration statement to become effective as promptly as
practicable; provided that the Company shall only be obligated to register
Registrable 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, the
Company shall give written notice to all the other Holders, advising each of
them that the Company is proceeding with such registration and offering to
include therein all or any portion of any such other Holder’s Registrable
Securities, provided that the Company received a written request to do so from
such Holder within thirty (30) days after receipt by him or it of the Company’s
notice.  Notwithstanding anything
contained in this Section 8(b) to the contrary:  (i) no person may make a Request that
the Company file, nor shall the Company be obligated to file, a registration
statement on any date that is within ninety (90) days of the effective date of
any registration statement filed by the Company and pursuant to which such
person was given full “piggyback” registration rights in accordance with Section 8(c) hereof
including without limitation the ability to include all Registrable Securities
requested to be included therein; and (ii) the Company may delay the
registration of the securities to which a Request relates if upon receipt of
such Request (A) the Company notifies the person making the Request that
it is contemplating filing a Registration Statement within ninety (90) days of
such request, or (B) the Company notifies the person making the request
that the Board of Directors of the Company has determined that a material event
has occurred that has not been publicly disclosed and which if disclosed would
have a material adverse effect on the Company; provided that (x) in the case of
clause (ii)(A)


 


7





















 


of
this paragraph, the Company shall, as soon as practical, upon the first to
occur of the abandonment of such contemplated registration statement or the
expiration of such ninety (90) day period, register the securities to which the
Request 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 the
registration statement for more than thirty (30) days from the date of the
Request unless such Request is withdrawn.


 


(c)           Piggy-back
Registration Rights.  If (but without
any obligation to do so) at any time during the five (5) year period
commencing on the Issue Date, the Company proposes to register (including for
this purpose a registration effected by the Company for securityholders other
than the Holder) any of its securities under the Act in connection with the
public offering of such securities solely for cash (other than a registration
on Form S-4, Form S-8 or any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, each such time, promptly give the Holder written notice of such
registration.  Upon the written request
of the Holder given within twenty (20) days after receipt of such written
notice 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 the
Holder has requested to be registered; and provided further, however, that the
Registrable Securities shall be subject to restrictions on transfer for
forty-five (45) days after the effective date of the subject registration
statement.  The inclusion of any of the
Holder’s Registrable Securities in a registration statement filed by the
Company and declared effective by the Securities and Exchange Commission (“SEC”)
shall be deemed to be the exercise by such Holder of the piggy-back
registration rights granted herein to such Holder.


 


(d)           Obligations
of the Company.  Whenever required
hereunder to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:


 


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


 


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


 


8





















 


(iii)          Furnish
to the Holders such numbers of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Act, and such other
documents as they may reasonably request in order to facilitate the disposition
of Registrable Securities owned by them.


 


(iv)          Use its
best efforts to register and qualify the securities covered by such
registration statement under the securities laws of such jurisdictions as shall
be reasonably requested by the Holders for the distribution of the securities
covered by the registration statement, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
jurisdiction.


 


(v)           In
the event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement with terms generally satisfactory
to the managing underwriter of such offering.


 


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


 


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


 


(e)           Furnish
Information.  It shall be a condition
precedent to the obligations of the Company to take any action pursuant hereto
that the Holder, having chosen to have its Registrable Securities included for
registration, shall furnish to the Company such information regarding the
Holder, its Registrable Securities and the intended method of disposition of
such securities as shall be required to effect the registration thereof.  The Holder shall be required to represent to
the Company that all such information which is given is complete and accurate
in all material respects.  The Holder
shall deliver to the Company a statement in writing from the beneficial owners
of such securities that such beneficial owners bona fide intend to sell,
transfer or otherwise dispose of such securities.


 


(f)            Expenses.


 


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


 


9





















 


(but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company) shall be borne by the Company.


 


(ii)           Selling
Expenses.  All underwriting
discounts, underwriters’ expense allowance, and selling commissions applicable
to the sale of Registrable Securities by the Holders and all fees and
disbursements of any special counsel (other than the Company’s regular counsel)
shall be borne by the Holders of the Registrable Securities so registered pro
rata on the basis of the number of Registrable Securities so registered.


 


(g)           Underwriting
Requirements.  All Holders proposing
to distribute their Registrable Securities through an underwriting in which the
Company has proposed or is proposing to participate, shall (together with the
Company and any other Holders distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for underwriting by the Company and
perform their obligations thereunder. 
Notwithstanding any other subsection of this Section 8, at the
request of the managing underwriter, the Holder shall delay the sale of
Registrable Securities which such Holder has requested be registered hereunder
for up to 90 days following the effective date of the registration
statement.  If any Holder disapproves of
the terms of any such underwriting, such Holder may elect to withdraw therefrom
by written notice to the Company and the managing underwriter.  Any Registrable Securities excluded or
withdrawn from such underwriting shall not be withdrawn from such registration
except at the election of the Holder.


 


(h)           Delay
of Registration.  No Holder shall
have any right to obtain or seek an injunction restraining or otherwise
delaying any such registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this section.


 


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


 


(i)            To
the extent permitted by law, the Company will indemnify and hold harmless each
Holder, the officers, directors, partners and legal counsel of each Holder, any
underwriter (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 the
Exchange Act, against any losses, claims, damages or liabilities (joint or
several) to which they may become subject under the Act, the Exchange Act or
other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively, a “Violation”):  (A) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement,
including any preliminary


 


10





















 


prospectus or final
prospectus contained therein or any amendments or supplements thereto; (B) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading; or (C) any
violation or alleged violation by the Company of the Act, the Exchange Act, any
applicable state securities law or any rule or regulation promulgated
under the Act, the Exchange Act or any applicable state securities law; and the
Company will reimburse the Holder for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Subsection 8(i)(i) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be liable in
any such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in reliance
upon and in conformity with information furnished expressly for use in
connection with such registration by any such Holder, underwriter or
controlling person; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with information furnished by such Holder or
any 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 eliminated
or remedied in a subsequent or final prospectus, such indemnity agreement shall
not inure to the benefit of any underwriter or broker, if a copy of such a
subsequent or final prospectus was not sent or given to such person with or
prior to the confirmation of the sale of such securities to such person.


 


(ii)           To
the extent permitted by law, each selling Holder will indemnify and hold
harmless the Company, its directors, its officers, its employees, any person
who controls the Company within the meaning of the Act or the Exchange Act, any
underwriter (within the meaning of the Act) for the Company and any person who
controls 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 become
subject, under the Act, the Exchange Act or other federal or state law, insofar
as 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 (and
only to the extent) that such Violation occurs in


 


11





















 


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


 


(iii)          Promptly
after receipt by an indemnified party under this Subsection 8(i) of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Subsection 8(i), notify the indemnifying
party in writing of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel mutually satisfactory to the parties;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying party,
if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by
such counsel in such proceeding.  The
failure to notify an indemnifying party within a reasonable time of the
commencement of any such action, to the extent prejudicial to its ability to
defend such action, shall relieve such indemnifying party of any liability to
the indemnified party under this Subsection 8(i), but the omission so to
notify the indemnifying party will not relieve it of any liability that it may
have to any indemnified party otherwise than under this Subsection 8(i).


 


(j)            Reports
Under Exchange Act.  Following
registration of the Company’s securities under the Exchange Act and with a view
of making available to the Holders the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration, the Company agrees to:


 


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


 


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


 


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(k)           Termination
of the Company’s Obligations.


 


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


 


(ii)           Notwithstanding
any provision hereof to the contrary, the Company shall not be required to
effect any registration under the Act or under any state securities laws on
behalf 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 or
transferred and the method of offering or transfer) is exempt from the
registration requirements of the Act and the securities or “Blue Sky” laws of
applicable states.


 


(iii)          The
Company’s obligations under Sections 8(b) and 8(c) shall terminate
with respect to a particular Holder at such time as Rule 144, or another
similar exemption, is available for the sale, without registration, of all of
such 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 the
appropriate legal opinion to the transfer agent of the Company so as allow the Rule 144
transfer or legend removal to occur as may be appropriate.


 


(l)            Holder’s
Acceptance of Obligations. 
Acceptance of this Warrant by its Holder(s) shall be deemed to
constitute the unqualified acceptance by the Holder of all of the terms and
conditions set forth herein.


 


9.             Approvals.


 


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


 


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10.          Survival.


 


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


 


11.          Remedies.


 


The Company agrees that
the remedies at law of the Holder, in the event of any default or threatened
default by the Company in the performance or compliance with any of the terms
of this Selling Agent’s Warrant, may not be adequate and such terms may, in
addition to and not in lieu of any other remedy, be specifically enforced by a
decree of specific performance of any agreement contained herein or by an
injunction 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 and
shall be deemed duly given when delivered personally or five days after being
mailed 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 each
Holder may change such address at any time or times by notice hereunder to the
other.


 


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


 


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


 


	
  DATED:

  	
   

  	
  , 2005

  	
   

  
	
   

  	
   

  
	
   

  	
  iVOW, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  



 


FORM OF
ASSIGNMENT


 


(To be executed
upon transfer of Selling Agent’s Warrant)


 


FOR VALUE RECEIVED, the
undersigned 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’s
Warrant, together with all rights, title and interest therein, and does hereby
irrevocably constitute and appoint                                    
attorney to transfer such Selling Agent’s Warrant on the warrant register of
the 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

  



 


15





















 


	
   

  	
  face of the Selling Agent’s

  Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


SUBSCRIPTION


 


(To be completed and
signed only upon an exercise of the Selling Agent’s Warrant in whole or in
part)


 


TO:


 


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


 


Name:


Address:


Social Security Number:


Deliver to:


Address:


 


If the foregoing
Subscription evidences- an exercise of the Selling Agent’s Warrant to purchase
fewer than all of the Shares (or other securities or property) to which the
undersigned is entitled under such Selling Agent’s Warrant, please issue a new
Selling Agent’s Warrant, of like date and tenor, for the remaining portion of
the 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   

  	
   

  



 


2





















 


	
   

  
	
  (Social Security or
  Taxpayer Identification (Name of Holder)

  
	
  (Number of Holder)

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature of Holder or
  Authorized Signatory)

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


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