Document:

EXHIBIT 4.7

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.

 

	
  Warrant No. IVOWDJ- 

  	
   

  	
   

  	
   

  	
  Number of Shares:

  	
   

  	
   

  
	
  Date of Issuance:

  	
   

  	
  , 2006

  	
   

  	
  (subject to adjustment)

  
								

 

IVOW, INC.

 

Common Stock Purchase Warrant

 

IVOW, Inc. (the “Company”), for value received, hereby certifies
that _____________ or its registered assigns (the “Registered Holder”),
is entitled, subject to the terms set forth below, to purchase from the
Company, at any time after the date hereof and on or before ______, 2011
(subject to Section 1(c) below) (the “Expiration Date”), up to _____ shares (as
adjusted from time to time pursuant to the provisions of this Warrant) of
Common Stock of the Company, at a purchase price of $ _____ per share. The
shares purchasable upon exercise of this Warrant and the purchase price per
share, as adjusted from time to time pursuant to the provisions of this Warrant,
are sometimes hereinafter referred to as the “Warrant Stock” and the “Purchase
Price,” respectively.

 

This Warrant is issued in connection with that certain Subscription
Agreement, dated as of ________, 2006, by and between the Company and the Registered
Holder (the “Subscription Agreement”) and is subject to the terms and
conditions of the Subscription Agreement. The Warrant Stock possesses certain
registration rights pursuant to the Subscription Agreement. Capitalized terms
used but not defined herein shall have the meanings as defined in the
Subscription Agreement.

 

1.             Exercise.

 

(a)                   Manner of Exercise. This Warrant may be
exercised by the Registered Holder, in whole or in part, by surrendering this
Warrant, with the purchase/exercise form appended hereto as Exhibit A
(“Exercise Form”) duly executed by such Registered Holder or by such Registered
Holder’s duly authorized attorney, at the principal office of the Company, or
at such other office or agency as the Company may designate, accompanied by
payment in full of the Purchase Price payable in respect of the number of
shares of Warrant Stock purchased upon such exercise. The Purchase Price may be
paid only by cash, check or wire transfer.

 

 

(b)                   Effective Time of Exercise. Each
exercise of this Warrant shall be deemed to have been effected immediately
prior to the close of business on the day on which this Warrant shall have been
surrendered to the Company as provided in Section 1(a) above. At such time, the
person or persons in whose name or names any certificates for Warrant Stock
shall be issuable upon such exercise as provided in Section 1(d) below shall be
deemed to have become the holder or holders of record of the Warrant Stock
represented by such certificates.

 

(c)                   Early Termination. If on any date after
the effectiveness of the Registration Statement (as defined in the Subscription
Agreement), the closing price of the Common Stock, as quoted on the Nasdaq
National Market, the Nasdaq SmallCap Market or the principal exchange on which
the Common Stock is listed, or if not so listed then in the over-the-counter
market as published in The Wall Street Journal, for 20 consecutive trading days
equals at least $ ____ (subject to adjustment in the event of any subdivision,
combination or reclassification affecting the Common Stock), the Company shall
have the right, as its option and upon 30 days written notice (the “Notice”) to
the Registered Holder, to terminate this Warrant; provided that (i) the
Registered Holder shall have the right to exercise this Warrant at any time
prior to such termination pursuant to Section 1(a), and (ii) the Registration
Statement shall be effective at all times during such 30-day notice period. Upon
such termination, the Registered Holder shall have no further rights hereunder.
The Registered Holder shall have the right to exercise the Warrant until the
earlier of (i) the termination of the 30 day notice period or (ii) the
Expiration Date.

 

(d)                   Delivery to Holder. As soon as
practicable after the exercise of this Warrant in whole or in part, and in any
event within ten (10) days thereafter, the Company at its expense will cause to
be issued in the name of, and delivered to, the Registered Holder, or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct:

 

(i)      a certificate or certificates
for the number of shares of Warrant Stock to which such Registered Holder shall
be entitled, and

 

(ii)     in case such exercise is in part
only, a new warrant or warrants (dated the date hereof) of like tenor, calling
in the aggregate on the face or faces thereof for the number of shares of
Warrant Stock equal (without giving effect to any adjustment therein) to the
number of such shares called for on the face of this Warrant minus the number
of such shares purchased by the Registered Holder upon such exercise as
provided in Section 1(a) above.

 

2.             Adjustments.

 

(a)                   Stock Splits and Dividends. If
outstanding shares of the Company’s Common Stock shall be subdivided into a
greater number of shares or a dividend in Common Stock shall be paid in respect
of Common Stock, the Purchase Price in effect immediately prior to such
subdivision or at the record date of such dividend shall simultaneously with
the effectiveness of such subdivision or immediately after the record date of
such dividend be proportionately reduced. If outstanding shares of Common Stock
shall be combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the effectiveness
of such combination, be proportionately increased.

 

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When
any adjustment is required to be made in the Purchase Price, the number of
shares of Warrant Stock purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior
to such adjustment, multiplied by the Purchase Price in effect immediately
prior to such adjustment, by (ii) the Purchase Price in effect immediately
after such adjustment.

 

(b)                   Reclassification, Etc. In case of any
reclassification or change of the outstanding securities of the Company or of
any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) or any similar corporate reorganization on or after the date hereof,
then and in each such case the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such reclassification, change,
reorganization, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise hereof
prior to such consummation, the stock or other securities or property to which
such holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in Section 2(a); and in each such case, the terms of
this Section 2 shall be applicable to the shares of stock or other
securities properly receivable upon the exercise of this Warrant after such
consummation.

 

(c)                   Price-Based Exercise Price Adjustment. If
at any time within twelve (12) months following the date of the issuance of
this Warrant, (i) the Company completes a Qualified Financing and (ii) the
Effective Purchase Price Per Share of Common Stock issued or issuable to the
participants in such Qualified Financing is less than the Purchase Price, the
Purchase Price shall be automatically reduced to the Effective Purchase Price
Per Share of Common Stock in such Qualified Financing. For purposes of clarity,
the Purchase Price adjustment provided for in this Section 2(c) shall only
apply to the first Qualified Financing the Company completes after the date of
this Warrant. Notwithstanding anything to the contrary in this Warrant, (i) the
number of shares of Warrant Stock purchasable upon the exercise of this Warrant
shall remain unchanged despite any change to the Purchase Price provided for
under this Section 2(c) and (ii) in no event, shall the Purchase Price be
reduced below $0.001 per share based on the adjustment provided for under this
Section 2(c). The term “Qualified Financing” shall mean any equity
and/or debt financing by the Company in which the Company receives gross
proceeds of at least $1,000,000 from investors and the security issued in such
financing is convertible and/or exercisable for shares of the Company’s Common
Stock. The term “Effective Purchase Price Per Share of Common Stock”
shall mean the (i) the aggregate maximum number of shares of Common Stock
issued or issuable in such Qualified Financing (assuming the conversion and
exercise of all convertible and/or exercisable securities issued in such
Qualified Financing and the satisfaction of any conditions to convertibility or
exchangeability, including without limitation the passage of time, but without
taking into account potential antidilution adjustments) divided by (ii) the
aggregate gross proceeds received by the Company in such Qualified Financing
plus any additional gross proceeds (without taking into account potential
antidilution adjustments) to be received by the Company upon the conversion
and/or exercise of such securities or the exercise of any related options or
rights. This Section 2(c) shall terminate upon a Change of Control of the
Company, where the term “Change of Control” shall include: (i) any bona
fide sale, conveyance or disposition of all or substantially all of the
Company’s assets

 

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(including,
without limitation, a grant of an exclusive license or exclusive licenses to
all or substantially all of the corporation’s intellectual property) or (ii)
the acquisition of the Company by means of consolidation, merger or other form
of corporate reorganization by a single or related series of transactions in
which the outstanding shares of the Company are converted or exchanged for
securities or other consideration issued, or caused to be issued, by the
acquiring corporation or its subsidiary, unless the Company’s stockholders of
record as constituted immediately prior to such sale, conveyance, disposition
or acquisition will hold more than a majority of the voting power of the
surviving entity immediately following such sale, conveyance, disposition or
acquisition.

 

(d)                   Adjustment Certificate. When any
adjustment is required to be made in the Warrant Stock or the Purchase Price
pursuant to this Section 2, the Company shall promptly mail to the Registered
Holder a certificate setting forth (i) a brief statement of the facts requiring
such adjustment, (ii) the Purchase Price after such adjustment and (iii) the
kind and amount of stock or other securities or property into which this
Warrant shall be exercisable after such adjustment.

 

3.             Transfers.

 

(a)                   Unregistered Security. Each holder of
this Warrant acknowledges that this Warrant and the Warrant Stock have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise
in the absence of (i) an effective registration statement under the Act as to
this Warrant or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable U.S. federal or state
securities law then in effect or (ii) an opinion of counsel, satisfactory to
the Company, that such registration and qualification are not required. Each
certificate or other instrument for Warrant Stock issued upon the exercise of
this Warrant shall bear a legend substantially to the foregoing effect.

 

(b)                   Transferability. Subject to the
provisions of Section 3(a) hereof (and any other restrictions conferred herein)
this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of the Warrant with a properly executed assignment (in the form
of Exhibit B hereto) at the principal office of the Company provided,
however, that this Warrant may not be transferred unless the transferee
agrees in writing to be bound by the terms of this Warrant and the terms of the
Subscription Agreement.

 

(c)                   Warrant Register. The Company will
maintain a register containing the names and addresses of the Registered
Holders of this Warrant. Until any transfer of this Warrant is made in the
warrant register, the Company may treat the Registered Holder of this Warrant
as the absolute owner hereof for all purposes; provided, however,
that if this Warrant is properly assigned in blank, the Company may (but shall
not be required to) treat the bearer hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary. Any Registered Holder
may change such Registered Holder’s address as shown on the warrant register by
written notice to the Company requesting such change.

 

4

 

4.             Representations and Warranties of Registered Holders. The
Registered Holder represents and warrants to the Company as follows:

 

(a)                   This Warrant
and the Warrant Stock issuable upon exercise thereof are being acquired for its
own account, for investment and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the Act.
Upon exercise of this Warrant, the Registered Holder shall, if so requested by
the Company, confirm in writing, in a form satisfactory to the Company, that
the securities issuable upon exercise of this Warrant are being acquired for
investment and not with a view toward distribution or resale.

 

(b)                   The
Registered Holder understand that this Warrant and the Warrant Stock have not
been registered under the Act, and that they must be held by the Registered
Holder indefinitely, and that the Registered Holder must therefore bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Act or is exempted from such registrations.

 

(c)                   The
Registered Holder has such knowledge and experience in financial and business
matters that is capable of evaluating the merits and risks of the purchase of
this Warrant and the Warrant Stock purchasable pursuant to the terms of this
Warrant and of protecting its interests in connection therewith.

 

(d)                   The
Registered Holder is able to bear the economic risk of the purchase of the
Warrant Stock pursuant to the terms of this Warrant.

 

(e)                   The
Registered Holder confirms all representations made by it in the Subscription
Agreement.

 

5.             Reservation of Stock. The Company will at all times
reserve and keep available, solely for the issuance and delivery upon the
exercise of this Warrant, such shares of Warrant Stock and other stock,
securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.

 

6.             Exchange of Warrants. Upon the surrender by the Registered
Holder of any Warrant or Warrants, properly endorsed, to the Company at the
principal office of the Company, the Company will, subject to the provisions of
Section 3 hereof, issue and deliver to or upon the order of such Holder, at the
Company’s expense, a new Warrant or Warrants of like tenor, in the name of such
Registered Holder or as such Registered Holder (upon payment by such Registered
Holder of any applicable transfer taxes) may direct, calling in the aggregate
on the face or faces thereof for the number of shares of Common Stock called
for on the face or faces of the Warrant or Warrants so surrendered.

 

7.             Replacement of Warrants. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and (in the case of loss, theft or destruction) upon
delivery of an indemnity agreement (with surety if reasonably required) in an
amount reasonably satisfactory to the Company, or (in the case of mutilation)
upon surrender

 

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and cancellation of this
Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

 

8.             Notices. Any notice required or permitted by this Warrant
shall be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by courier, overnight delivery service or confirmed facsimile, or
forty-eight (48) hours after being deposited in the regular mail as certified
or registered mail (airmail if sent internationally) with postage prepaid,
addressed (a) if to the Registered Holder, to the address of the Registered
Holder most recently furnished in writing to the Company and (b) if to the
Company, to the address set forth below or subsequently modified by written
notice to the Registered Holder.

 

9.             No Rights as Stockholder. Until the exercise of this
Warrant, the Registered Holder of this Warrant shall not have or exercise any
rights by virtue hereof as a stockholder of the Company.

 

10.           No
Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share
of Common Stock on the date of exercise, as determined in good faith by the
Company’s Board of Directors.

 

11.           Amendment
or Waiver. Any term of this Warrant may be amended or waived
only by an instrument in writing signed by the party against which enforcement
of the amendment or waiver is sought.

 

12.           Headings.
The headings in this Warrant are for purposes of reference only and shall
not limit or otherwise affect the meaning of any provision of this Warrant.

 

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13.           Governing
Law. This Warrant shall be governed, construed and interpreted
in accordance with the laws of the State of California, without giving effect
to principles of conflicts of law.

 

 

	
   

  	
  IVOW, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Michael H. Owens, M.D., Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
  11455 El Camino Real

  
	
   

  	
   

  	
   

  	
  Suite 140

  
	
   

  	
   

  	
   

  	
  San Diego, CA 92130-2098

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax Number:

  	
  (858) 847-4811

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED

  	
   

  
	
   

  
	
  REGISTERED HOLDER

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title: 

  	
   

  	
   

  
										

 

7

 

EXHIBIT A

 

PURCHASE/EXERCISE FORM

 

	
  To:

  	
  IVOW, Inc

  	
  Dated:

  
	
   

  	
  11455 El Camino Real

  	
   

  
	
   

  	
  Suite 140

  	
   

  
	
   

  	
  San Diego, CA 92130-2098

  	
   

  

 

1.             Choose one:

 

o            The undersigned, pursuant to the
provisions set forth in the attached Warrant No. ________, hereby irrevocably
elects to purchase __________ shares of the Common Stock covered by such
Warrant and herewith makes payment of $ __________, representing the full
purchase price for such shares at the price per share provided for in such
Warrant.

 

2.             Please issue a
certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name and address)

  	
   

  

 

 

3.                             The
undersigned hereby represents and warrants that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares. The
undersigned further represents and warrants that all representations and
warranties of the undersigned set forth in Section 4 of the attached Warrant
are true and correct as of the date hereof.

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name
  (print):

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title (if
  applic.)

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Company (if
  applic.):

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
								

 

i

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, ______________________________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the attached Warrant _________ with respect to the number of shares of Common
Stock covered thereby set forth below, to:

 

	
  Name of Assignee

  	
   

  	
  Address/Fax Number

  	
   

  	
  No. of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Witness:

  	
   

  	
   

  
									

 

2EXHIBIT 4.8

 

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.

 

 

iVOW, INC.

 

WARRANT TO PURCHASE UNITS

 

	
  No. IVOWDJ-

  	
   

  	
   

  
	
  Date of Issuance: February 22, 2006

  	
   

  	
  Number of Units

  
	
   

  	
   

  	
  Purchasable Upon Exercise

  
	
   

  	
   

  	
  of Warrant: 23,200

  

 

IVOW, Inc., a Delaware corporation (the “Company”), hereby certifies
that Dawson James Securities, Inc., or its registered assigns (the “Registered
Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company, at any time after the date hereof and on or before February
28, 2011 (subject to Section 1(c) below) (the “Expiration Date”), up to 23,200
Units (the “Units”), each Unit consisting of one share of Common Stock
of the Company (the ”Common Stock”) and a warrant to purchase one-half
share of Common Stock in the form attached hereto as Attachment 1 (the “Common
Stock Warrant”), at a purchase price of         
per Unit (the “Exercise Price”). The Common Stock and the Common Stock
underlying the Common Stock Warrant are sometimes hereinafter referred to as
the “Warrant Shares.”

 

This Warrant is issued in connection with that certain Selling
Agreement, dated as of February 14, 2006, by and between the Company and Dawson
James Securities, Inc. (the ”Selling Agreement”).

 

1.                                      Exercise
of Warrant.

 

(a)                                  All
or any part of this 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 Warrant being exercised. If less than the entire Warrant
is exercised, the Company shall, upon such exercise, execute and deliver to the
Holder thereof a new Warrant in the same form as this Warrant evidencing the
Warrant to the extent not exercised. This Warrant shall be deemed to have been
exercised prior to the close of business on the date this 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 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 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 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 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:

 

(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 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 Warrant; or

 

2

 

(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 Warrant is exchangeable, without expense, at the
option of the Holder, upon presentation and surrender hereof to the Company,
for other 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 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 Warrant in the name of the assignee named in such
instrument of assignment and this Warrant shall promptly be cancelled. This
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 Warrants are to be issued
and signed by the Holder hereof. The term “Warrant” as used herein includes any
warrants issued in substitution for or replacement of this Warrant, or into
which this 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 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 Warrant, if mutilated, the Company will cause to be
executed and delivered a new 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 Warrant executed and delivered shall constitute an
additional contractual obligation on the part of the Company, whether or not
this Warrant so lost, stolen, destroyed or mutilated shall be at any time
enforceable by anyone.

 

4.                                      Rights
of the Holder.

 

The Holder of this 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
Warrant.

 

5.                                      Adjustments.

 

(a)                                  The
number of securities purchasable upon exercise of this 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

 

3

 

case, the total number of securities purchasable upon exercise of this
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 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 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 Warrant immediately prior
thereto. In such case, the terms of this Warrant shall survive the consummation
of any such reorganization, 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 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 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
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

 

4

 

securities receivable on exercise of this 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 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 Warrant. If any event occurs as to which the other
provisions of this Warrant are not strictly applicable or if strictly
applicable would not fairly protect the purchase rights of this Warrant in
accordance with the essential intent and principles of such provisions, then
the Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, in order
to protect such purchase rights. This 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 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 Units shall be entitled to exchange
its Units 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.

 

5

 

7.                                      Reservation
of Warrant Shares.

 

The Company shall at all times reserve, for the purpose of issuance on
exercise of this Warrant, such number of Warrant Shares or other securities as
shall from time to time be sufficient to comply with this 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.

 

(ii)                                  The
term “Registrable Securities” shall mean: 
(A) the Common Stock issued or issuable upon exercise of this Warrant,
and the Common Stock issued or issuable upon exercise of the Common Stock 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

 

6

 

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) 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:

 

7

 

(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.

 

(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.

 

8

 

(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 (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

 

9

 

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 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

 

10

 

extent) that such Violation occurs in 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.

 

11

 

(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 3, 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 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.

 

10.                               Survival.

 

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

 

12

 

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 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 LLP

4350 La Jolla Village Dr., 7th Floor

San Diego, CA 92122

Attention:  Jeffrey Thacker, Esq.

 

If to the Holder, to:                                                                                                                                           Dawson
James Securities, Inc.

925 S. Federal Highway

6th Floor

Boca Raton, FL 33432

Attention:  Robert Keyser

 

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

 

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

 

This 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
Warrant shall be governed by and construed and interpreted in accordance with
the laws of the State of Florida. The headings in this Warrant are for
convenience of reference only and are not part of this Warrant.

 

DATED:  February 22, 2006

 

	
   

  	
  iVOW, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  

 

14

 

FORM OF ASSIGNMENT

 

(To be executed upon transfer of Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
to
                                                  
the right represented by the within Warrant, No.
IVOWDJ-     , as such right may apply to
               
Units which are the subject of the within Warrant, together with all rights,
title and interest therein, and does hereby irrevocably constitute and appoint                                      
attorney to transfer such Warrant on the warrant register of the within named
Company, with full power of substitution.

 

DATED: 
                          ,
200  

 

	
   

  	
  Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Signature must conform in

  all respects to name of

  Holder as specified on the

  face of the Warrant)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

SUBSCRIPTION

 

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

 

TO:                            ___________ 

 

The undersigned, the Holder of the attached Warrant (“Warrant”), hereby
irrevocably elects to exercise the purchase right represented by the Warrant
for, and to purchase thereunder, ________ Units (as such term is defined in the
Warrant dated February 22, 2006), 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 Warrant to
purchase fewer than all of the Units (or other securities or property) to which
the undersigned is entitled under such Warrant, please issue a new Warrant, of
like date and tenor, for the remaining portion of the Warrant (or other
securities or property) in the name(s), and deliver the same to the
address(es), as follows:

 

	
  Name:

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  DATED:

  	
  ______________,
  200_

  
					

 

	
   

  
	
  (Social Security or Taxpayer Identification (Name of Holder)

  

(Number of Holder)

 

 

	
   

  	
   

  
	
   

  	
  (Signature of Holder or Authorized

  Signatory)

  
	
   

  	
   

  
	
   

  	
  Signature Guaranteed:

  
	
   

  	
   

  
	
   

  	
   

  

 

 

ATTACHMENT 1

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF
1933.

 

	
  Warrant No. IVOWDJ- ____

  	
   

  	
  Number of Shares: _______ 

  
	
  Date of Issuance: ________, 2006

  	
   

  	
  (subject to adjustment)

  

 

IVOW, INC.

 

Common Stock Purchase Warrant

 

IVOW, Inc. (the “Company”), for value received, hereby certifies
that ___________ or its registered assigns (the “Registered Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company, at
any time after the date hereof and on or before __________, 2011 (subject to
Section 1(c) below) (the “Expiration Date”), up to __________ shares (as
adjusted from time to time pursuant to the provisions of this Warrant) of
Common Stock of the Company, at a purchase price of $________ per share. The
shares purchasable upon exercise of this Warrant and the purchase price per
share, as adjusted from time to time pursuant to the provisions of this
Warrant, are sometimes hereinafter referred to as the “Warrant Stock”
and the “Purchase Price,” respectively.

 

This Warrant is issued in connection with that certain Subscription
Agreement, dated as of _________, 2006, by and between the Company and the
Registered Holder (the “Subscription Agreement”) and is subject to the
terms and conditions of the Subscription Agreement. The Warrant Stock
possesses certain registration rights pursuant to the Subscription Agreement. Capitalized
terms used but not defined herein shall have the meanings as defined in the
Subscription Agreement.

 

1.                                       Exercise.

 

(a)                                  Manner of Exercise. This Warrant may be
exercised by the Registered Holder, in whole or in part, by surrendering this
Warrant, with the purchase/exercise form appended hereto as Exhibit A (“Exercise
Form”) duly executed by such Registered Holder or by such Registered Holder’s
duly authorized attorney, at the principal office of the Company, or at such
other office or agency as the Company may designate, accompanied by payment in
full of the Purchase Price payable in respect of the number of shares of
Warrant Stock purchased upon such exercise. The Purchase Price may be paid only
by cash, check or wire transfer.

 

 

(b)                                 Effective Time of Exercise. Each exercise
of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which this Warrant shall have been surrendered
to the Company as provided in Section 1(a) above. At such time, the person or
persons in whose name or names any certificates for Warrant Stock shall be
issuable upon such exercise as provided in Section 1(d) below shall be deemed
to have become the holder or holders of record of the Warrant Stock represented
by such certificates.

 

(c)                                  Early Termination. If on any date after the
effectiveness of the Registration Statement (as defined in the Subscription
Agreement), the closing price of the Common Stock, as quoted on the Nasdaq
National Market, the Nasdaq SmallCap Market or the principal exchange on which
the Common Stock is listed, or if not so listed then in the over-the-counter
market as published in The Wall Street Journal, for 20 consecutive trading days
equals at least $__________ (subject to adjustment in the event of any
subdivision, combination or reclassification affecting the Common Stock), the
Company shall have the right, as its option and upon 30 days written notice
(the “Notice”) to the Registered Holder, to terminate this Warrant; provided
that (i) the Registered Holder shall have the right to exercise this Warrant at
any time prior to such termination pursuant to Section 1(a), and (ii) the
Registration Statement shall be effective at all times during such 30-day
notice period. Upon such termination, the Registered Holder shall have no
further rights hereunder. The Registered Holder shall have the right to exercise
the Warrant until the earlier of (i) the termination of the 30 day notice
period or (ii) the Expiration Date.

 

(d)                                 Delivery to Holder. As soon as practicable
after the exercise of this Warrant in whole or in part, and in any event within
ten (10) days thereafter, the Company at its expense will cause to be issued in
the name of, and delivered to, the Registered Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct:

 

(i)                                     a
certificate or certificates for the number of shares of Warrant Stock to which
such Registered Holder shall be entitled, and

 

(ii)                                  in
case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof
for the number of shares of Warrant Stock equal (without giving effect to any
adjustment therein) to the number of such shares called for on the face of this
Warrant minus the number of such shares purchased by the Registered Holder upon
such exercise as provided in Section 1(a) above.

 

2.                                       Adjustments.

 

(b)                                 Stock Splits and Dividends. If outstanding
shares of the Company’s Common Stock shall be subdivided into a greater number
of shares or a dividend in Common Stock shall be paid in respect of Common
Stock, the Purchase Price in effect immediately prior to such subdivision or at
the record date of such dividend shall simultaneously with the effectiveness of
such subdivision or immediately after the record date of such dividend be
proportionately reduced. If outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Purchase Price in effect
immediately prior to such combination shall, simultaneously with the
effectiveness of such combination, be proportionately increased. When any
adjustment is required to be made in the Purchase Price, the number of shares
of

 

2

 

Warrant Stock purchasable upon the exercise of this Warrant shall be
changed to the number determined by dividing (i) an amount equal to the
number of shares issuable upon the exercise of this Warrant immediately prior
to such adjustment, multiplied by the Purchase Price in effect immediately
prior to such adjustment, by (ii) the Purchase Price in effect immediately
after such adjustment.

 

(c)                                  Reclassification, Etc. In case of any
reclassification or change of the outstanding securities of the Company or of
any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) or any similar corporate reorganization on or after the date hereof,
then and in each such case the holder of this Warrant, upon the exercise hereof
at any time after the consummation of such reclassification, change,
reorganization, merger or conveyance, shall be entitled to receive, in lieu of
the stock or other securities and property receivable upon the exercise hereof
prior to such consummation, the stock or other securities or property to which
such holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in Section 2(a); and in each such case, the terms of
this Section 2 shall be applicable to the shares of stock or other
securities properly receivable upon the exercise of this Warrant after such
consummation.

 

(d)                                 Price-Based Exercise Price Adjustment. If
at any time within twelve (12) months following the date of the issuance of
this Warrant, (i) the Company completes a Qualified Financing and (ii) the
Effective Purchase Price Per Share of Common Stock issued or issuable to the
participants in such Qualified Financing is less than the Purchase Price, the
Purchase Price shall be automatically reduced to the Effective Purchase Price
Per Share of Common Stock in such Qualified Financing. For purposes of clarity,
the Purchase Price adjustment provided for in this Section 2(c) shall only
apply to the first Qualified Financing the Company completes after the date of
this Warrant. Notwithstanding anything to the contrary in this Warrant, (i) the
number of shares of Warrant Stock purchasable upon the exercise of this Warrant
shall remain unchanged despite any change to the Purchase Price provided for
under this Section 2(c) and (ii) in no event, shall the Purchase Price be
reduced below $0.001 per share based on the adjustment provided for under this
Section 2(c). The term “Qualified Financing” shall mean any equity and/or debt
financing by the Company in which the Company receives gross proceeds of at
least $1,000,000 from investors and the security issued in such financing is
convertible and/or exercisable for shares of the Company’s Common Stock. The
term “Effective Purchase Price Per Share of Common Stock” shall mean the (i)
the aggregate maximum number of shares of Common Stock issued or issuable in
such Qualified Financing (assuming the conversion and exercise of all
convertible and/or exercisable securities issued in such Qualified Financing
and the satisfaction of any conditions to convertibility or exchangeability,
including without limitation the passage of time, but without taking into
account potential antidilution adjustments) divided by (ii) the aggregate gross
proceeds received by the Company in such Qualified Financing plus any
additional gross proceeds (without taking into account potential antidilution
adjustments) to be received by the Company upon the conversion and/or exercise
of such securities or the exercise of any related options or rights. This
Section 2(c) shall terminate upon a Change of Control of the Company, where the
term “Change of Control” shall include: 
(i) any bona fide sale, conveyance or disposition of all or
substantially all of the Company’s assets (including, without limitation, a
grant of an exclusive license or exclusive licenses to all or substantially all
of the corporation’s intellectual property) or (ii) the acquisition of the
Company

 

3

 

by means of consolidation, merger or other form of corporate
reorganization by a single or related series of transactions in which the
outstanding shares of the Company are converted or exchanged for securities or
other consideration issued, or caused to be issued, by the acquiring corporation
or its subsidiary, unless the Company’s stockholders of record as constituted
immediately prior to such sale, conveyance, disposition or acquisition will
hold more than a majority of the voting power of the surviving entity
immediately following such sale, conveyance, disposition or acquisition.

 

(e)                                  Adjustment Certificate. When any adjustment
is required to be made in the Warrant Stock or the Purchase Price pursuant to
this Section 2, the Company shall promptly mail to the Registered Holder a
certificate setting forth (i) a brief statement of the facts requiring such
adjustment, (ii) the Purchase Price after such adjustment and (iii) the kind
and amount of stock or other securities or property into which this Warrant
shall be exercisable after such adjustment.

 

3.                                       Transfers.

 

(a)                                  Unregistered Security. Each holder of
this Warrant acknowledges that this Warrant and the Warrant Stock have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”),
and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Stock issued upon its exercise
in the absence of (i) an effective registration statement under the Act as to
this Warrant or such Warrant Stock and registration or qualification of this
Warrant or such Warrant Stock under any applicable U.S. federal or state
securities law then in effect or (ii) an opinion of counsel, satisfactory to
the Company, that such registration and qualification are not required. Each
certificate or other instrument for Warrant Stock issued upon the exercise of
this Warrant shall bear a legend substantially to the foregoing effect.

 

(b)                                 Transferability. Subject to the
provisions of Section 3(a) hereof (and any other restrictions conferred herein)
this Warrant and all rights hereunder are transferable, in whole or in
part, upon surrender of the Warrant with a properly executed assignment (in the
form of Exhibit B hereto) at the principal office of the Company provided,
however, that this Warrant may not be transferred unless the transferee agrees
in writing to be bound by the terms of this Warrant and the terms of the
Subscription Agreement.

 

(c)                                  Warrant Register. The Company will
maintain a register containing the names and addresses of the Registered
Holders of this Warrant. Until any transfer of this Warrant is made in the
warrant register, the Company may treat the Registered Holder of this Warrant
as the absolute owner hereof for all purposes; provided, however, that if this
Warrant is properly assigned in blank, the Company may (but shall not be
required to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary. Any Registered Holder may
change such Registered Holder’s address as shown on the warrant register by
written notice to the Company requesting such change.

 

4

 

4.                                      Representations
and Warranties of Registered Holders. The Registered Holder represents
and warrants to the Company as follows:

 

(a)                                  This
Warrant and the Warrant Stock issuable upon exercise thereof are being acquired
for its own account, for investment and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Act. Upon exercise of this Warrant, the Registered Holder shall, if
so requested by the Company, confirm in writing, in a form satisfactory to the
Company, that the securities issuable upon exercise of this Warrant are being
acquired for investment and not with a view toward distribution or resale.

 

(b)                                 The
Registered Holder understand that this Warrant and the Warrant Stock have not
been registered under the Act, and that they must be held by the Registered
Holder indefinitely, and that the Registered Holder must therefore bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the Act or is exempted from such registrations.

 

(c)                                  The
Registered Holder has such knowledge and experience in financial and business
matters that is capable of evaluating the merits and risks of the purchase of
this Warrant and the Warrant Stock purchasable pursuant to the terms of this
Warrant and of protecting its interests in connection therewith.

 

(d)                                 The
Registered Holder is able to bear the economic risk of the purchase of the
Warrant Stock pursuant to the terms of this Warrant.

 

(e)                                  The
Registered Holder confirms all representations made by it in the Subscription
Agreement.

 

5.                                       Reservation of Stock. The Company will
at all times reserve and keep available, solely for the issuance and delivery
upon the exercise of this Warrant, such shares of Warrant Stock and other
stock, securities and property, as from time to time shall be issuable upon the
exercise of this Warrant.

 

6.                                       Exchange of Warrants. Upon the
surrender by the Registered Holder of any Warrant or Warrants, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 3 hereof, issue and deliver to or
upon the order of such Holder, at the Company’s expense, a new Warrant or
Warrants of like tenor, in the name of such Registered Holder or as such
Registered Holder (upon payment by such Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant or Warrants so surrendered.

 

7.                                       Replacement of Warrants. Upon receipt
of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and (in the case of loss, theft or
destruction) upon delivery of an indemnity agreement (with surety if reasonably
required) in an amount reasonably satisfactory to the Company, or (in the case
of mutilation) upon surrender and cancellation of this Warrant, the Company
will issue, in lieu thereof, a new Warrant of like tenor.

 

8.                                       Notices. Any notice required or permitted
by this Warrant shall be in writing and shall be deemed sufficient upon
receipt, when delivered personally or by courier, overnight

 

5

 

delivery service or confirmed
facsimile, or forty-eight (48) hours after being deposited in the regular mail
as certified or registered mail (airmail if sent internationally) with postage
prepaid, addressed (a) if to the Registered Holder, to the address of the
Registered Holder most recently furnished in writing to the Company and (b) if
to the Company, to the address set forth below or subsequently modified by
written notice to the Registered Holder.

 

9.                                       No Rights as Stockholder. Until the
exercise of this Warrant, the Registered Holder of this Warrant shall not have
or exercise any rights by virtue hereof as a stockholder of the Company.

 

10.                                 No Fractional Shares. No fractional shares
of Common Stock will be issued in connection with any exercise hereunder. In
lieu of any fractional shares which would otherwise be issuable, the Company
shall pay cash equal to the product of such fraction multiplied by the fair
market value of one share of Common Stock on the date of exercise, as
determined in good faith by the Company’s Board of Directors.

 

11.                                 Amendment or Waiver. Any term of this
Warrant may be amended or waived only by an instrument in writing signed by the
party against which enforcement of the amendment or waiver is sought.

 

12.                                 Headings. The headings in this Warrant are
for purposes of reference only and shall not limit or otherwise affect the
meaning of any provision of this Warrant.

 

6

 

13.                                 Governing Law. This Warrant shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

 

	
   

  	
   

  	
  IVOW, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Michael H. Owens, M.D., Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
  11455 El Camino Real

  
	
   

  	
   

  	
  Suite 140

  
	
   

  	
   

  	
  San Diego, CA 92130-2098

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax Number:(858) 847-4811

  
	
   

  	
   

  	
   

  
	
  ACKNOWLEDGED AND AGREED

  
	
   

  
	
  REGISTERED HOLDER

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  
	
  Title:

  	
   

  	
   

  
							

 

 

7

 

EXHIBIT A

 

PURCHASE/EXERCISE FORM

 

	
  To:

  	
  IVOW, Inc

  	
  Dated:

  
	
   

  	
  11455 El Camino Real

  	
   

  
	
   

  	
  Suite 140

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  San Diego, CA 92130-2098

  	
   

  

 

1.                                       Choose
one:

 

o                                    The
undersigned, pursuant to the provisions set forth in the attached Warrant No. _____,
hereby irrevocably elects to purchase __________ shares of the Common Stock
covered by such Warrant and herewith makes payment of $ ________, representing
the full purchase price for such shares at the price per share provided for in
such Warrant.

 

2.                                       Please
issue a certificate or certificates representing said shares in the name of the
undersigned or in such other name as is specified below:

 

	
   

  	
   

  	
   

  
	
   

  	
  (Name and address)

  	
   

  

 

3.                                                                                       The
undersigned hereby represents and warrants that the aforesaid shares are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale, in connection with the distribution thereof, and that the
undersigned has no present intention of distributing or reselling such shares. The
undersigned further represents and warrants that all representations and
warranties of the undersigned set forth in Section 4 of the attached Warrant
are true and correct as of the date hereof.

 

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name (print):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title (if applic.)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Company (if applic.):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

Exhibit A-1

 

EXHIBIT B

 

ASSIGNMENT FORM

 

FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
and transfers all of the rights of the undersigned under the attached Warrant _______
with respect to the number of shares of Common Stock covered thereby set forth
below, to:

 

	
  Name of Assignee

  	
   

  	
  Address/Fax Number

  	
   

  	
  No. of Shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  Witness:

  	
   

  	
   

  
							

 

Exhibit B-1

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