**EXHIBIT 10.18**

 

***Confidential***

 

 

**iVOW, Inc.**

 

 

**SUBSCRIPTION AGREEMENT**

 

Datedas of February __, 2006

 
| **Name of  Subscriber:**          | ** ** | ** ** |
|-----------------------------------|------------|------------|
|                              |
| **Address  of Subscriber:**       | ** ** | ** ** |
| ** **                        |
| ** **                        |
| **Facsimile  Number:**            | ** ** | ** ** |
|                              |
| **Telephone  Number:**            | ** ** | ** ** |
|                              |
| **E-Mail  Address:**              | ** ** | ** ** |
|                              |
| **Tax ID  Number of Subscriber:** | ** ** | ** ** |
|                                   |            |            |  |  |  |  |  |

 

 

**TO:****                         ****iVOW, Inc., a DelawareCorporation** (the “Company”).

 

**SUBSCRIPTIONTO PURCHASE,** units (a“Unit” or the “Units”) consisting of shares of Common Stock,$0.01 par value per share, and warrants (the “Common Stock Warrants”)exercisable for the purchase of shares of Common Stock of the Company, on theterms and conditions set forth on Exhibit A hereto. Each Unit consistsof one share of Common Stock and a Common Stock Warrant to purchase one-halfshare of Common Stock of the Company. The Common Stock and the Common StockWarrants, and the shares of Common Stock issuable upon the exercise of theCommon Stock Warrants, are collectively referred to herein as the “Securities.”  The Units will be offered until February 17,2006, unless such date is otherwise extended by the Company and the PlacementAgent (as defined herein) by their mutual agreement for a period not to exceedan additional thirty (30) days (the “Offering Period”). The initialclosing (the “Initial Closing”) of the offering will occur during theOffering Period as soon as practicable after subscriptions for at least$500,000 (the “Minimum Offering Amount”) shall have been received andthe funds

 

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representing the MinimumOffering Amount shall have been placed into an escrow account. After the InitialClosing, one or more subsequent closings (the “Additional Closings”) mayoccur thereafter on such dates as mutually determined by the Company and thePlacement Agent (as defined herein), but in no event later than ten (10) daysafter the end of the Offering Period. (The Initial Closing and any AdditionalClosing shall each be referred to herein as a “Closing” and the last ofthe Closings shall be referred to as the “Final Closing.”)  The maximum number of Units to be sold in theaggregate of all Closings shall be 290,000 Units.

 

**Price PerUnit:****            **The “Per Unit Price” will be equal to70% of the price of the Company’s common stock, based on the average closingprice of the Company’s common stock at quoted on the Nasdaq SmallCap Market forthe ten (10) trading days immediately preceding the Initial Closing.

 

**SubscriptionAmount:**  $ _______________ (the “SubscriptionAmount”) delivered herewith (as provided by paragraph “A” below).

 

**Theundersigned Subscriber hereby irrevocably subscribes****for,**and agrees to purchase, the Securities, at the Subscription Amount (this “Subscription”),in accordance with and subject to the terms, provisions and conditions setforth herein and the exhibits hereto. When this Subscription Agreement iscompleted, signed and returned, with payment, by the undersigned Subscriber,and accepted by the Company, the Subscriber will become entitled to all of itsbenefits and subject to all of the obligations, restrictions and limitationsset forth herein and in the exhibits hereto.

 

The Subscriber understandsthat this Subscription is an irrevocable offer to purchase the Securities andmay be accepted or rejected in whole or in part for any reason whatsoever bythe Company, at any time on or prior to February 17, 2006, unless otherwiseextended by the Placement Agent (as defined herein) and the Company (but in noevent later than ten (10) days after the end of the Offering Period).

 

This Subscription is subjectto the Company’s receipt, at the Initial Closing, of executed SubscriptionAgreements that have been accepted by the Company to purchase Units withaggregate gross proceeds to the Company in an amount equal to at least$500,000.

 

**A.****                                   ****Payment****.**In connection with this SubscriptionAgreement and subject to acceptance by the Company, the Subscriber herebydelivers the Subscription Amount. The Subscription Amount will be held in aseparate escrow fund pending the Company’s acceptance or rejection of thisSubscription. If the Company rejects this Subscription, the Subscription Amountshall be returned in full without interest; and the Subscriber shall have nofurther rights or obligations under or in respect of this Subscription. **See Exhibit B for payment instruction.**

 

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**B.****                                   ****Representations and Warranties****.**           In connection with this Subscription, theSubscriber hereby represents and warrants to, agrees with the Company,acknowledges and confirms as follows:

 

(1)                                  The Securities being subscribed for by theSubscriber will be purchased for the account of the Subscriber for investmentonly and not with a view to, nor with any intention of, a distribution orresale thereof, in whole or in part, or the grant of any participation therein.The Subscriber has no agreement or other arrangement with any other person tosell, transfer or pledge any part of the Securities or any agreement orarrangement that would guarantee the Subscriber any profit or against any losswith respect to such Securities, and the Subscriber has no plans to enter intoany such agreement or arrangement. The Subscriber acknowledges and confirmsthat it understands that the Securities, and those securities issuable uponexercise or conversion of the Securities, as the case may be, have not beenregistered under the Securities Act of 1933, as amended (the “Securities Act”),and the rules and regulations promulgated thereunder, or the securities laws ofany state or other jurisdiction, and cannot be disposed of unless subsequentlyregistered under the Securities Act and any applicable laws of states or otherjurisdictions or an exemption from such registration is available.

 

(2)                                  The Securities are being offered and sold bythe Company under an exemption from registration provided by the Securities Actand the rules and regulations promulgated thereunder in reliance, in goodfaith, upon the representations and warranties of the Subscriber containedherein.

 

(3)                                  The Subscriber:

 

(A)has been furnished a copy of the Company’s confidential offering package datedFebruary 13, 2006 (the “PPM”);

 

(B)has carefully read, has carefully considered and fully understands theprovisions of:

 

(i)the PPM (including, without limitation, the terms of this offering and theSecurities offered by the Company as described in the “OFFERING” section of thePPM and the materials under the “RISK FACTORS” section of the PPM);

 

(ii)all documents and information included as exhibits, or incorporated in the PPMby reference, including but not limited to the filings and information made bythe Company under the Exchange Act (as defined in the PPM); and

 

(iii)this Subscription Agreement (and the exhibits and annexes hereto).

 

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(C) has been givensufficient access and opportunity to:

 

(i)examine all material books and records, and material contracts and documents ofthe Company and such other information and documents as the Subscriber hasrequested; and

 

(ii)ask questions of the Company and its management, and, if the Subscriber askedquestions of the Company or its management, has received satisfactory answers.

 

(D) represents and warrantsthat in making the decision to invest in the Securities, the Subscriber hasrelied on independent investigations made by the Subscriber and the Subscriber’sown professional advisors. The Subscriber acknowledges that no representationhas been made by the Company or otherwise by or on behalf of the Companyconcerning the Securities (including any current value of the Securities or asto any prospective return on investment in the Securities), the Company, itsbusiness or prospects, or other matters, except as set forth in the PPM.

 

(4)                                  The Subscriber is able (i) to bear theeconomic risk of the Subscriber’s investment in the Securities; (ii) to holdthe Securities for an indefinite period of time and understands that theSecurities cannot be resold unless subsequently registered under the SecuritiesAct or unless an exemption from such registration is available, as establishedby an opinion of counsel satisfactory to the Company; and (iii) currently, andbased on existing conditions, hereafter will be able to afford a complete lossof such investment.

 

(5)                                  The Subscriber understands the business inwhich the Company is engaged and has such knowledge and experience in financialand business matters that the Subscriber is capable of evaluating the meritsand risks of the Subscriber’s investment in the Securities and of making aninformed investment decision with respect thereto.

 

(6)                                  The Subscriber hereby acknowledges andconfirms that, except as set forth in the PPM, neither the Company nor any ofits officers, directors, affiliates, agents or representatives has made anyrepresentations or warranties (oral or written) concerning (i) the Securities;(ii) the Subscriber’s investment in the Securities; or (iii) the Company, itsbusiness, prospects, or anticipated financial or other results, or othermatters.

 

(7)                                  The Subscriber understands that allcertificates or other documents evidencing the Securities will bearsubstantially the following legend:

 

THE SECURITIES REPRESENTEDBY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES OR “BLUE SKY” LAWS, AND MAY NOTBE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, OR OTHERWISE DISPOSED OFUNLESS

 

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REGISTERED PURSUANT TO THEPROVISIONS OF SUCH ACT AND BLUE SKY LAWS OR AN EXEMPTION THEREFROM IS AVAILABLEAS ESTABLISHED BY A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION.

 

(8)                                  The Subscriber understands that no federal orstate agency has passed on or made any recommendation or endorsement of theSecurities.

 

(9)                                  The Subscriber hereby represents and warrantsthat:

 

*(Pleasecheck the boxes opposite each of the items in clauses (a) and (b) below whichis true of the Subscriber. If clause (a) is checked, the Subscriber need notcomplete the items under clause (c). If clause (a) is not checked, pleasecomplete each blank in clause (c) below. Please also initial each item checkedor completed.)*

 

o                                    (a)                                  The Subscriber is an “accredited investor”(as such term is defined in Rule 501(a) of Regulation D promulgated by theSecurities and Exchange Commission under the Securities Act) for at least oneof the reasons specified below:

 

o                                    The Subscriber’s net worth (together with thenet worth of the Subscriber’s spouse) exceeds $1,000,000.

 

o                                    The Subscriber’s individual income in each ofthe two immediately previous calendar years has been $200,000 or more and hiscurrent year’s income is reasonably expected to be at least equal to thatamount; or, the Subscriber’s joint income with his spouse in each of the twoimmediately previous calendar years has been $300,000 or more and the currentyear’s joint income is reasonably expected to equal at least that amount.

 

o                                    The Subscriber is a director or executiveofficer of the Company.

 

o                                    The Subscriber, if other than an individual,either (A) is a corporation, partnership, business trust or 501(c)(3)organization which has total assets in excess of $5,000,000 and has not beenformed for the specific purpose of purchasing the Securities, or (B) is anentity (other than a trust) with only accredited investors as its partners,members or stockholders, or (C) is a trust other than a business trust whichhas assets in excess of $5,000,000, has not been organized for the purposes ofacquiring the investment in the Securities and has its investment hereunderdirected by a person described in the first sentence of the following clause(b). The Subscriber, if other than an individual, represents that thisSubscription has been duly authorized by all necessary corporate, partnershipor other governance action on its part.

 

o                                    (b)                                 The Subscriber has (or, if other than anindividual, is directed by a person who has) such knowledge and experience infinancial and business

 

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matters that he or she iscapable of evaluating the risks of an investment in the Securities. TheSubscriber has adequate means of providing for current financial needs andcontingencies, has no need for liquidity in the investment in the Securitiesand is able to bear the substantial economic risks of the investment in theSecurities for an indefinite period.

 

(c)                                  The Subscriber (if an individual) hereby representsand warrants that:

 

*(If thebox opposite Paragraph (9)(a) above has notbeen checked, please complete the blanks below in this clause (c).)*

 

TheSubscriber’s higher education consists of the following (include college oruniversity, any graduate programs and any other specialized education programsrelevant to the Subscriber’s business experience):

 

 

 

TheSubscriber’s principal business and professional activities during the lastfive years are as follows:

 

 

 

(10)                            The Subscriber hereby represents and warrantsas to the following personal information:

 

*(EachSubscriber should furnish all of the information called for below in thisParagraph (10).)*

 

The Subscriber’s residenceaddress (or, if other than an individual, principal office address) is as follows:

 

 

 

The Subscriber (if anindividual) maintains a house or apartment in the following state(s) inaddition to his or her residence:

 

 

 

TheSubscriber (if an individual) pays state income taxes in the following state:

 

 

 

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The Subscriber (if anindividual) holds a driver’s license in the following state:

 

 

 

The Subscriber (if anindividual) is registered to vote in the following state:

 

 

 

(11)                            This Subscription Agreement and any otherdocuments executed and delivered by the Subscriber in connection herewith havebeen duly executed and delivered by the Subscriber, and are the legal, validand binding obligations of the Subscriber enforceable in accordance with theirrespective terms.

 

(12)                            The execution and delivery of thisSubscription Agreement and any other documents executed and delivered by theSubscriber in connection herewith do not, and the performance and consummationof the terms and transactions set forth or contemplated herein will not, contraveneor result in a default under any provision of existing law or regulations towhich the Subscriber is subject, or any indenture, mortgage or other agreementor instrument to which the Subscriber is a party or by which he, she or it isbound and does not require on the part of the Subscriber any approval,authorization, license or filing from or with any foreign, federal or state ormunicipal board or agency.

 

(13)                            The Subscriber acknowledges that SiliconValley Bank is acting only as an escrow agent in connection with the offeringof the Securities described here, and has not endorsed, recommended orguaranteed the purchase, value or repayment of such Securities.

 

**C.**                                    **Effectiveness ofSubscription****.**

 

(1)                                  This Subscription shall be binding upon thesuccessors and permitted assigns of the Subscriber and, when accepted by theCompany, shall be binding upon the successors and assigns of the Company.

 

(2)                                  All of the agreements, representations andwarranties made by the Subscriber in this Subscription Agreement shall survivethe execution and delivery hereof. The Subscriber shall immediately notify theCompany upon discovering that any of the representations or warranties madeherein were false when made or has, as a result of changes in circumstances,become false. Every provision of this Subscription Agreement is intended to beseverable, and if any term or provision hereof is held to be illegal or invalidfor any reason whatsoever, such illegality or invalidity shall not affect thevalidity of the remainder hereof.

 

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(3)                                  The agreements of the Subscriber and theCompany set forth herein shall become effective and binding upon theundersigned, without right of revocation, upon the Company’s acceptance of thisSubscription.

 

**D.****                                   ****Hedging****.****                                              **Subscriber will not engage in any hedging orother transaction which is designed to or could reasonably be expected to leadto or result in a disposition of the Securities by the Subscriber or any otherperson or entity. Such prohibited hedging or other transactions include withoutlimitation effecting any short sale or having in effect any short position(whether or not such sale or position is against the box and regardless of whensuch position was entered into) or any purchase, sale or grant of any right(including without limitation any put or call option) with respect to theSecurities.

 

**E.****                                     ****Brokers or Finders****.**                                  The Subscriber has not engaged any brokers,finders or agents, and the Company has not, and will not, except with respect toDawson James Securities (the “Placement Agent”), incur, directly orindirectly, as a result of any action taken by the Subscriber, any liabilityfor brokerage or finders’ fees or agents’ commissions or any similar charges inconjunction with this Subscription Agreement. In the event that the precedingsentence is in any way inaccurate, the Subscriber agrees to indemnify and holdharmless the Company from any liability for any commission or compensation inthe nature of a finder’s fee (and the costs and expenses of defending againstsuch liability) for which the Company, or any of its officers, directors,employees or representatives, is responsible, except such as related to thePlacement Agent for which the Company is solely responsible in accordance withthe terms and provisions of that certain Selling Agreement dated February 13,2006 by and between the Company and the Placement Agent.

 

**F.****                                     ****Legal Advice****.****                      **The Subscriber understands that nothing inthe Company’s filings under the Exchange Act, this Subscription Agreement orany other materials presented to the Subscriber in connection with the purchaseand sale of the Securities constitutes legal, tax or investment advice. TheSubscriber has consulted such legal, tax and investment advisors as she, he orit, in her, his or its sole discretion, has deemed necessary or appropriate inconnection with this Subscription Agreement, and his, her or its subscriptionfor the purchase of the Securities.

 

**G.****                                   ****Miscellaneous****.**              Unless otherwise indicated, the address onthe front page of this document is the legal residence of the Subscriber andall offers and communications in connection with the offering of the Securitiessubscribed to herein have been conducted at such address.

 

**H.****                                   ****Communications****.**                                                 Any notice, demand, request or othercommunication which may be required or contemplated herein shall besufficiently given if (i) given either by facsimile transmission, by reputableovernight delivery service, delivery charges prepaid, or by registered orcertified mail, postage prepaid and return receipt requested, to the addressindicated herein or to such other address as any party hereto may specify asprovided herein, or (ii) delivered personally at such address.

 

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**I.****                                        ****Confidentiality****.**     TheSubscriber agrees to maintain in strict confidence all non-public informationregarding the Company obtained from the Company or its representatives oragents during the course of this Subscription. The Subscriber also agrees notto trade in the securities of the Company (other than pursuant to thisSubscription Agreement) at any time that the Subscriber is in possession of anynon-public information regarding the Company obtained from the Company or itsagents during the course of this Subscription.

 

**J.****                                     ****Applicable Law****.**     ThisSubscription Agreement and all legal relations, claims or obligations arisingout of this transaction shall be governed by and construed in accordance withthe internal substantive laws of the Commonwealth of Delaware.

 

*[signature page follows]*

 

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| **IN  WITNESS WHEREOF,** the undersigned has executed this  Subscription Agreement this __  day of the month of _______________________,  2006. |
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| ** **                                                                                                                                           |

 

 
|   | By:                                                                                                                                                                                          |   |   |
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|   | Name:                                                                                                                                                                                        |   |   |
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|   | Taxpayer Identification  No.                                                                                                                                                                 |   |   |
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|   | Purchase Price:                                                                                                                                                                              | $      |   |   |
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|   | Number of Shares to be  acquired:                                                                                                                                                            |   |   |
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|   | Underlying Shares subject  to warrants:                                                                                                                                                      |   |   |
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|   | Address for Notice:                                                                                                                                                                          |   |
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|   | Facsimile No.:                                                                                                                                                                               |   |   |
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|   | Telephone No.:                                                                                                                                                                               |   |   |
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|   | Attn:                                                                                                                                                                                        |   |   |
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|   | If the Subscriber is an  institution, provide the name of the natural person (or persons) who has  voting and/or investment power with respect to the shares and warrants issued  hereunder: |
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____________________________ 

 

_____________________________

 

_____________________________

 

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Please indicate below thenumber and type of Company securities beneficially held (as determined underRule 13d-3 under the Securities Exchange Act of 1934) as of the date hereof,but excluding the Company securities identified above that you are purchasing. Thisinformation will be included in the Registration Statement (as defined on AnnexA attached hereto) and, by signing above, you acknowledge that the Company mayrely on this information for inclusion in the Registration Statement.

 

 

(Identify the number ofsecurities and type (e.g., common stock, warrants, etc.)

 

 

(Identify theextent to which you may not exercise sole voting and/or dispositive power ofsuch securities and the reason(s) why)

 

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**ACCEPTANCE**

 

The foregoing Subscriptionis hereby accepted upon the terms and conditions set forth herein.

 
|   | **iVOW,  INC.** |
|--------|-----------------|
|   | ** **      |
|   |            |
|   | By:             |   |   |
|   | Name:           |   |   |
|   | Title:          |   |   |
|   |            |
| Date:  |            | , 2006 |   |
|        |                 |  |  |  |  |  |  |

 

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EXHIBITA

 

*ThisExhibit A is qualified in its entirety by Annex A hereto. Capitalized termsused in this Exhibit A and not otherwise defined shall have the meanings setforth in the Subscription Agreement.*

 

 
| *Securities  Offered:* |   | Each Unit consists of one  (1) share of Common Stock of the Company and a Warrant to purchase one-half  (0.5) of a share of Common Stock of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Offering  Amount:*    |   | The Company intends to issue  a minimum of $500,000 in Units (the “Minimum Offering Amount”) and a maximum  of 290,000 Units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Closing:*             |   | The Units will be offered  until February 17, 2006, unless such date is otherwise extended by the  Company and the Placement Agent (as defined herein) by their mutual agreement  for a period not to exceed an additional thirty (30) days (the “Offering  Period”). The initial closing (the “Initial Closing”) of the offering will  occur during the Offering Period as soon as practicable after subscriptions for  at least $500,000 (the “Minimum Offering Amount”) shall have been received  and the funds representing the Minimum Offering Amount shall have been placed  into an escrow account. After the Initial Closing, one or more subsequent  closings (the “Additional Closings”) may occur thereafter on such dates as  mutually determined by the Company and the Placement Agent (as defined  herein), but in no event later than ten (10) days after the end of the  Offering Period. (The Initial Closing and any Additional Closing shall each  be referred to herein as a “Closing” and the last of the Closings shall be  referred to as the “Final Closing.”) The maximum number of Units to be sold  in the aggregate of all Closings shall in no event exceed 290,000 Units. |
|                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Per Unit  Price:*     |   | 70% of the Company’s  common stock price, based on the average closing price of the Company’s  common stock for the ten (10) ten trading days immediately preceding the  Initial Closing (the “Per Unit Price”).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Warrants:*            |   | The Warrants will have an  exercise price equal to the Per Unit Price and shall be exercisable for  Common Stock of the Company and have a five-year term. The Warrants will  contain provisions providing for same-day exercise and sale. The Warrants  will provide full-ratchet exercise price protection in certain circumstances.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| *Forced  Exercise:*    |   | The Company can require  holders of Warrants to exercise their Warrants within 30 days of receiving  notice from the Company (or forfeit such Warrants) when the price of the  Company’s common stock closes at six (6) times the Per Unit Price per share  or greater                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

 

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|                         |   | for 20 consecutive trading  days subsequent to the effectiveness of the registration statement pertaining  to the resale of the Common Stock underlying the Warrants; provided that the  registration statement described below shall be effective at all times during  such 30-day notice period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
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|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Registration  Rights:*      |   | The Company has agreed  with the Placement Agent to file a registration statement within 45 days of  Final Closing covering the resale of the Common Stock and the Common Stock  underlying the Warrants offered herein. The Company has also agreed to use  its best efforts to cause such registration statement to become effective as  promptly as practicable and to remain effective until the first anniversary  of the Closing (except as otherwise set forth above). Without limiting the  foregoing, the Company will promptly respond to all SEC comments, inquiries  and requests, and shall request acceleration of effectiveness at the earliest  possible date. In the event a registration statement is not filed with the  SEC within 45 days or is not declared effective within 150 days from the date  of the Final Closing, then in such event a fee of 1% per month (or portion  thereof) shall be assessed against the Company as a default payment and in  favor of the holders of the Common Stock and Warrants for each such 30 day  period until such time as the registration statement is declared effective. |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Transfer  Restrictions:*    |   | The Shares will initially  be unregistered and may not be transferred absent registration under the  Securities Act of 1933 (the “Securities Act”) or the availability of an  exemption therefrom.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Use of  Proceeds:*          |   | The Company intends that  the net proceeds of the Offering and, if any, the additional proceeds to be  received upon exercise of Warrants, will be used for working capital, funding  of anticipated operating losses, infrastructure development, expenses  associated with marketing efforts and payment of corporate overhead.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Risk  Factors:*             |   | The Securities offered  hereby involve a high degree of risk. See Risk Factors in the PPM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Placement  Agent:*          |   | Dawson James Securities,  Inc. See a summary of the Placement Agent’s fees in the PPM.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                         |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| *Confidential  Information:* |   | The recipient of this  Subscription Agreement and the materials attached hereto agrees with the  Company to maintain in confidence this disclosed information, together with  any other non-public information regarding the Company obtained from the  Company or their agents during the course of the proposed Offering. The  recipient also agrees not to trade in the securities of the Company (other  than pursuant to this Offering) at any time that the recipient is in  possession of any non-public information regarding the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

 

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| * * |   | obtained from the Company  or its agents during the course of this Offering. The Company has caused  these materials to be delivered to you in reliance upon such agreement and  upon Rule 100(b)(2)(ii) of Regulation FD as promulgated by the Securities and  Exchange Commission. |
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EXHIBITB

 

PaymentInstructions

 

**RemittanceVia Check:**

 
| Payable To: | iVOW, Inc. |
|-------------|------------|

 

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Annex A

 

RegistrationRights

 

1.                                       Registration of Shares. The Company will (i) use best efforts toprepare and file, within 45 days after the Final Closing, a RegistrationStatement (the “Registration Statement”) with the SEC to registerresales under the Securities Act of the Common Stock and the Common Stockissuable upon the exercise of the Common Stock Warrants by the Subscriber, (ii)use its reasonable best efforts to cause the Registration Statement to become effectiveas soon as practicable after such filing, (iii) use its reasonable best effortsto cause such Registration Statement to remain effective until the firstanniversary of the Final Closing (except as otherwise set forth above); providedthat the Company may suspend sales at any time under the RegistrationStatement immediately upon notice to the Subscriber, for a period or periods oftime not to exceed 90 days in the aggregate during any 12-month period, ifthere then exists material, non-public information relating to the Company,which in the reasonable opinion of the Company, would not be appropriate fordisclosure during that time, and (iv) prepare and file with the SEC suchamendments and supplements to the Registration Statement and the prospectus usedin connection therewith as may be necessary to keep such Registration Statementeffective for the period specified in this sentence above. Without limiting theforegoing, the Company will promptly respond to all SEC comments, inquiries andrequests, and shall request acceleration of effectiveness at the earliestpossible date. In the event a registration statement is not filed with the SECwithin 45 days or is not declared effective within 150 days from the date ofthe Closing, then in such event a fee of 1% per month (or portion thereof)shall be assessed against the Company as a Default Payment and in favor of theholders of the Common Stock and Warrants for each such 30 day period until suchtime as the registration statement is declared effective. The Subscriber shallprovide all information and materials, including, without limitation, allinformation requested in a questionnaire to be provided to the Subscriber bythe Company, and take all such action as may be required in order to permit theCompany to comply with all applicable requirements of the Securities Act andthe Exchange Act and to obtain any desired acceleration of the effective dateof the Registration Statement, such provision of information and materials tobe a condition precedent to the obligations of the Company hereunder toregister the Common Stock issued or issuable upon the exercise of the CommonStock Warrants. The offerings made pursuant to the Registration Statement shallnot be underwritten.

 

2.                                       Registration Procedures. With respect to the registration of CommonStock under this Annex A, the Company will: (i) furnish to theSubscriber such number of copies of the Registration Statement, each amendmentand supplement thereto, the prospectus included in such Registration Statement(including each preliminary prospectus) and such other documents as theSubscriber may reasonably request in order to facilitate the disposition of theCommon Stock and the Common Stock acquired by the Subscriber upon the exerciseof Common Stock Warrants and owned by the Subscriber; (ii) use its best effortsto register or qualify the Common

 

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Stock included in suchregistration under such other securities or blue sky laws of such jurisdictionsas the Subscriber reasonably requests and do any and all other acts and thingswhich may be reasonably necessary or advisable to enable the Subscriber toconsummate the disposition in such jurisdictions of the shares of Common Stockto be sold by the Subscriber (providedthat the Company will notbe required to qualify generally to do business in any jurisdiction where itwould not otherwise be required to qualify but for this subparagraph, subjectitself to taxation in any such jurisdiction, or consent to general service ofprocess in any such jurisdiction); (iii) notify the Subscriber at any time whena prospectus relating thereto is required to be delivered under the SecuritiesAct, upon discovery that, or upon the discovery of the happening of any eventas a result of which, the prospectus included in such registration statementcontains an untrue statement of a material fact or omits any fact necessary tomake the statements therein not misleading in the light of the circumstancesunder which they were made, and the Company will promptly prepare and file withthe SEC and, at the request of any the Subscriber, furnish to the Subscriber areasonable number of copies of, a supplement or amendment to such prospectus sothat, as thereafter delivered to the Subscriber, such prospectus will notcontain an untrue statement of a material fact or omit to state any factnecessary to make the statements therein not misleading in light of thecircumstances under which they were made; and (iv) promptly reissue, orpromptly authorize and instruct its transfer agent to reissue, unlegendedcertificates at the request of the Subscriber upon such Subscriber’s deliveryof original certificates representing the shares of Common Stock tendered forsale pursuant to the effective Registration Statement, and to promptly respondto broker’s inquiries made of the Company in connection with such sales, ineach case with a view to reasonably assisting the Subscriber to complete suchsale during such period of effectiveness.

 

3.                                       Registration Expenses. All of the out-of-pocket expenses incurredby the Company in complying with its obligations under this Annex A inconnection with the registration of the Common Stock and the Common Stockissuable upon the exercise of the Common Stock Warrants, including, withoutlimitation, all SEC, Nasdaq SmallCap Market and blue sky registration andfiling fees, printing expenses, transfer agents’ and registrars’ fees, and thefees and disbursements of the Company’s outside counsel and independentaccountants shall be paid by the Company. The Company shall not beresponsible to pay any legal fees for any Subscriber or any selling expenses ofany Subscriber (including, without limitation, any broker’s fees orcommissions, including underwriter commissions).

 

4.                                       Indemnification.

 

(a)                                  The Company agrees to indemnify and holdharmless, to the extent permitted by law, the Subscriber, its officers,directors, employees and agents and each Person who controls such Subscriber(within the meaning of the Securities Act), if applicable, against any losses,claims, damages or liabilities, joint or several, to which such the Subscriberor any such director, officer, employee, agent or controlling Person may becomesubject under the Securities Act or otherwise, insofar as such losses, claims,damages or liabilities (or actions or proceedings, whether

 

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commenced or threatened, inrespect thereof) arise out of or are based upon (i) any untrue or allegeduntrue statement of a material fact contained (A) in the Registration Statementor prospectus or preliminary prospectus or any amendment thereof or supplementthereto used in connection with this Annex A or (B) in any applicationor other document or communication (in this Annex A collectively calledan “application”) executed by or on behalf of the Company or based upon writteninformation furnished by or on behalf of the Company filed in any jurisdictionin order to qualify any securities covered by such Registration Statement underthe “blue sky” or securities laws thereof, (ii) any omission or allegedomission of a material fact required to be stated therein or necessary to makethe statements therein not misleading or (iii) any violation by the Company ofthe Securities Act or any state securities law, or any rule or regulationpromulgated under the Securities Act or any state securities law, or any otherlaw applicable to the Company relating to any such registration orqualification, and the Company will reimburse the Subscriber and each suchdirector, officer and controlling Person for any legal or any other expensesincurred by them in connection with investigating or defending any such loss,claim liability, action or proceeding; providedthat the Companyshall not be liable in any such case to the extent that any such loss, claim,damage, liability (or action or proceeding with respect thereof) or expensearises out of or is based upon an untrue statement, any such prospectus orpreliminary prospectus or any amendment or supplement thereto, or in anyapplication, in reliance upon and in conformity with written informationprepared and furnished to the Company by the Subscriber or any other subscriberexpressly for use therein or by the Subscriber’s failure to deliver a copy ofthe prospectus or any amendments or supplements thereto after the Company hasfurnished the Subscriber with a sufficient number of copies of the same.

 

(b)                                 In connection with the RegistrationStatement, the Subscriber will furnish to the Company in writing suchinformation and documents concerning the Subscriber as the Company reasonablyrequests for use in connection with the Registration Statement or prospectusand, to the extent permitted by law, will indemnify and hold harmless theCompany and its directors and officers and each other Person who controls or iscontrolled by the Company and the directors and officers of each such Personcontrolling or controlled by the Company and the directors and officers of eachsuch controlling or controlled Person (within the meaning of the SecuritiesAct) against any losses, claims, damages, liabilities, joint or several, towhich the Company or any such director or officer or controlling or controlledPerson may become subject under the Securities Act or otherwise, insofar assuch losses, claims, damages or liabilities (or actions or proceedings, whethercommenced or threatened, in respect thereof) arise out of or are based upon (i)any untrue or alleged untrue statement of a material fact contained in theRegistration Statement, prospectus or preliminary prospectus or any amendmentthereof or supplement thereto or in, any application or (ii) any omission oralleged omission of a material fact required to be stated therein or necessaryto make the statements therein not misleading, but only to the extent that suchuntrue statement or omission or alleged omission is made in such RegistrationStatement, any such prospectus or preliminary prospectus or any amendment orsupplement thereto, or in any application, in reliance upon and in conformitywith written information concerning

 

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the Subscriber prepared andfurnished to the Company by or on behalf of the Subscriber in writing expresslyfor use therein, and the Subscriber will reimburse the Company and each suchdirector, officer and controlling or controlled Person for any legal or anyother expenses incurred by them in connection with investigating or defendingany such loss, claim, liability, action or proceeding.

 

(c)                                  Any person entitled to indemnificationhereunder will (i) give prompt written notice to the Company of any claim withrespect to which it seeks indemnification and (ii) unless in such indemnifiedparty’s reasonable judgment a conflict of interest between such indemnifiedparties and the Company may exist with respect to such claim, permit theCompany to assume the defense of such claim with counsel reasonablysatisfactory to the indemnified party; provided, however, thatthe failure of any indemnified party to give notice as provided herein shallnot relieve the indemnifying party of its obligations hereunder unless thefailure to give such notice is materially prejudicial to an indemnifying party’sability to defend such action. If such defense is assumed, the indemnifiedparty will not be subject to any liability for any settlement made by theCompany without its consent (but such consent will not be unreasonablywithheld). Anything to the contrary appearing in this Annex Anotwithstanding, the Company will not be obligated to pay the fees and expensesof more than one counsel for all parties indemnified hereunder with respect tosuch claim, unless in the reasonable judgment of any indemnified party aconflict of interest may exist between such indemnified party and any other ofsuch indemnified parties with respect to such claim. If the Company assumes thedefense, the indemnified party may engage its own counsel at its own sole costand expense. All fees and expenses of counsel to any indemnified party requiredto be paid by the Company shall be paid by the Company as incurred by suchindemnified party.

 

(d)                                 The indemnification provided for herein willremain in full force and effect regardless of any investigation made by or onbehalf of the indemnified party or any officer, director, employee, agent orcontrolling or controlled Person of such indemnified party and will survive thetransfer of securities issued hereunder by the Subscriber. If theindemnification provided for herein is unavailable to an indemnified party orinsufficient in respect of any losses, claims, damages or liabilities referredto therein, then the Company, in lieu of indemnifying such indemnified partythereunder, shall contribute to the amount paid or payable by such indemnifiedparty as a result of such losses, claims, damages or liabilities in suchproportion as is appropriate to reflect the relative fault of the Company, onthe one hand, and the indemnified party or parties, on the other hand, inconnection with the statements or omissions that resulted in such losses,claims, damages or liabilities, as well as any other relevant equitableconsiderations.

 

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