Document:

EXHIBIT 10.4

 

Confidential

 

iVOW,
Inc

2101 Faraday Avenue

Carlsbad, CA 92008

 

May 3, 2005

 

Dawson James Securities

925 South Federal Highway

6th Floor

Boca Raton, FL 33432

 

Re:  Selling
Agreement (the “Agreement”)

 

Gentlemen:

 

IVOW, Inc., a Delaware corporation (the “Seller”),
proposes to offer and sell (the “Offering”), to selected investors, upon the
terms set forth herein and in the Confidential Private Placement Memorandum and
other documents to be supplied to the investors (which collectively, together
with the attachments and exhibits thereto, is referred to as the “Offering
Document”), a copy of which has been delivered to you, up to 8,500,000 units
(the “Units”); each Unit consisting of 1 share of Common Stock (the “Common
Stock”) and a warrant to purchase 1 share of Common Stock (the “Warrants”).  The Common Stock and Warrants shall have
those provisions described in Exhibit B hereto, and shall be acceptable to
the Selling Agent.  (The Units are
sometimes referred to hereafter as the “Offered Securities”).  Dawson James Securities, Inc. (the “Selling
Agent”) agrees to offer and sell on an exclusive “best efforts, all or none”
basis, that number of Units that results in an aggregate sales price of at
least $2,000,000  (the “Minimum Number”),
and on a best efforts basis with respect to additional Units having an
aggregate sales price of no more than $2,500,000 during the offering period
described in the Offering Document (the “Offering Period”). Capitalized terms
used and not otherwise defined herein shall have the respective meanings set
forth in the Offering Document.  It is
intended that the offer, offer for sale and sale of the Offered Securities will
be exempt from the federal registration requirements of the Securities Act of
1933, as amended (the “1933 Act”), pursuant to Regulation D promulgated
under Section 3(b) and/or Section 4(2), respectively, of the
1933 Act and will qualify for an exemption from registration, if necessary,
under the applicable state securities laws and regulations.

 

The Seller hereby confirms its agreement with
Selling Agent as follows:

 

1.             Offer
and Sale of Offered Securities by Selling Agent; Compensation; Closing.

 

1.1           On
the basis of Selling Agent’s representations, covenants and warranties, the
Seller appoints Selling Agent the agent of the Seller for the period commencing
on the date of the completion of the Offering Document and ending on the date
set forth in the Offering Document, unless extended by the Seller and Selling
Agent by their mutual

 

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agreement for a period not to exceed an additional thirty (30) days (“Offering
Termination Date”), to use Selling Agent’s best efforts to offer and sell, on
the terms and conditions set forth in this Agreement and in the Offering
Document, subject only to Selling Agent’s right to engage participating broker-dealers
pursuant to Section 2 hereof.  The
Selling Agent hereby accepts such appointment and agrees pursuant to the terms
and conditions set forth herein and in the Offering Document to use its best
efforts to offer and sell the Offered Securities as agent for the Seller during
the period specified above, and to attempt to find suitable accredited
purchasers for the Offered Securities acceptable to the Seller.

 

1.2           Prior
to and subject to the closing, subscription proceeds from the sale of the
Offered Securities will be deposited in an escrow account at Silicon Valley
Bank (the “Escrow Agent”).  The Seller
will be responsible for setting up the Escrow Account, pursuant to an escrow
agreement among the Seller, the Selling Agent and the Escrow Agent, which
escrow agreement will be approved by the Selling Agent.  Subscribers will be instructed to make their
checks payable to “Silicon Valley Bank, Escrow Agent for IVOW, Inc.,” or
shall cause the wire transfer of immediately available funds in favor of
Silicon Valley Bank, Escrow Agent for IVOW, Inc., in accordance with
instructions provided by the Selling Agent. 
Unless at least the Minimum Number of Units have been sold during the
Offering Period (as the same may be extended by the mutual agreement of the
Selling Agent and the Seller), the Offering will be terminated at the end of
the Offering Period, no Offered Securities will be sold in the Offering and all
subscription proceeds will be refunded to subscribers by the Escrow Agent,
without interest thereon.  If
subscriptions for at least the Minimum Number of Units are received by the end
of the Offering Period (as the same may be extended by the mutual agreement of
the Selling Agent and the Seller), a closing (the “First Closing”) will occur
as soon as possible after subscriptions for the Minimum Number have been
accepted by the Seller.  After the First
Closing, one or more subsequent closings (the “Additional Closings”) will occur
thereafter on such dates as mutually determined by the Seller and the Selling
Agent, but in no event later than ten (10) days after the end of the
Offering Period.  (The First 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”).

 

1.3           For
purposes hereof, the Minimum Number of Units shall not be deemed to have been
sold unless (x) subscription agreements, completed and fully executed by
subscribers who are accredited investors have been received covering the
Minimum Number of the Units and (y) all checks, drafts and wire transfers
submitted by such subscribers in payment of the purchase price of such Units
have been received by the Escrow Agent and have cleared so that there are “good
funds” in the Escrow Account at least equal to the aggregate purchase price of
the Minimum Number of Units.

 

1.4           As
compensation for the Selling Agent’s services hereunder, the Seller shall pay
to Selling Agent in cash a selling commission (“Commission”) upon each Closing,
in an amount equal to five percent (5%) of the aggregate offering price of the
Offered Securities sold by the Selling Agent or its authorized agent at such
Closing. At each Closing of the Offering, the Seller shall pay the Selling
Agent its Commission relating to the sale of the Offered Securities that are
subject of the Closing provided that the Seller or counsel for the

 

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Seller has received all documents, including but not limited to, an
executed Subscription Agreement for each investor (“Subscription Documents”)
previously furnished to Selling Agent which the Selling Agent is required to
deliver to the Seller or counsel for the Seller prior to Closing.  All or any portion of such Commission may be
re-allowed to Participating Broker-Dealers (as hereinafter defined).  No Offered Securities shall be considered to
have been sold by Selling Agent or any Participating Broker-Dealer selected by
Selling Agent unless the purchaser is acceptable to the Seller, and no
compensation will be payable with respect to any agreement for the purchase of
Offered Securities if the Subscription Agreement therefor is not actually
accepted by the Seller.  Anything in this
Agreement to the contrary notwithstanding, the Seller shall not be required to
pay a Commission to Selling Agent and Selling Agent shall not be entitled to a
Commission, pursuant to this Section 1.4 or any other provision, if to do
so would cause the Seller to violate federal or state securities laws,
regulations or rules or any other law applicable to the Offering.

 

1.5           The
Seller will pay all of its costs relating to the Offering contemplated hereby,
including, without limitation, audit expenses, issuance costs and taxes,
counsel fees for the preparation of the Offering Documents, filing fees and
disbursements of counsel relating to the qualification of the Offered
Securities under federal securities laws, and legal fees and expenses of
counsel in connection with qualifying the Offered Securities under the state
blue sky laws.  To the extent required by
law, the Seller shall qualify the Offered Securities for offer and sale in
those jurisdictions designated by the Selling Agent.  The Seller’s counsel shall be responsible for
state blue sky securities laws compliance by the Seller.

 

1.6           The
Seller shall pay the Selling Agent at each Closing a non-accountable expense
allowance of 1.0% of the aggregate dollar value of Units sold at such Closing,
$5,000 of which shall be advanced to Selling Agent contemporaneous with the
execution of this Agreement.

 

1.7           Once the Offered Securities are sold, or the Offering Period terminates,
the agency between the Seller and the Selling Agent shall terminate.  The Selling Agent, on the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, accepts such appointment as the limited agent of
the Seller and agrees to use its best efforts to find purchasers for the
Offered Securities.

 

1.8           Upon
each Closing of the sale of the Offered Securities offered by the Seller
hereunder, the Seller will issue to the Selling Agent at a purchase price of
$.001 per warrant, warrants to purchase five percent (5%) of the Units sold in
the Offering (“Selling Agent’s Warrants”). 
The Selling Agent’s Warrants shall be exercisable at any time during the
five (5) years from the date of First Closing at an exercise price equal
to one hundred and twenty percent (120%) of the offering price. The Selling
Agent’s Warrants shall be in the form and shall contain the provisions set
forth in Exhibit A attached hereto.

 

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1.10         Each Closing shall be held at the offices of the Selling Agent, 925 S.
Federal Highway, 6th Floor, Boca Raton, FL 33432, or in an
alternative location and at such time and date as Selling Agent and the Seller
may mutually agree.

 

2.             Participating
Broker-Dealers.  The Seller hereby
authorizes Selling Agent to engage other qualified broker-dealers (the “Participating
Broker-Dealers”) to assist the Selling Agent in the placement of the Offered
Securities; provided that during all times that each such Participating Broker-Dealer
shall offer and sell the Offered Securities, each such Participating Broker-Dealer
shall be registered as a broker-dealer under the Securities Exchange Act of
1934 (the “1934 Act”), shall be a member in good standing of the National
Association of Securities Dealers, Inc. (“NASD”), and shall be authorized
to offer and sell the Offered Securities under the laws of the jurisdictions in
which the Offered Securities will be offered and sold by such Participating
Broker-Dealer.  All Participating Broker-Dealers
will be required to execute a Participating Broker-Dealer Agreement, the form
of which is subject to the reasonable approval of the Seller, with Selling
Agent containing substantially the same terms and conditions as this Agreement,
including, without limitation, the representations and warranties contained in Section 3.2
below and provisions for indemnification of the Seller to the same extent as
your indemnification provided in Section 7 below.  Any commissions, fees, or expenses payable to
such Participating Broker-Dealers will be paid by the Selling Agent and not by
the Seller.

 

3.             Representations,
Warranties and Covenants.

 

3.1           The Seller
represents, warrants and covenants to Selling Agent that, except as set forth
in Schedule 3.1 hereof:

 

(a)           The Seller
and each subsidiary is a corporation duly formed and validly existing and in
good standing under the laws of the jurisdiction of its incorporation as in
effect on the date of this Agreement, with adequate power and authority to
enter into and perform this Agreement and to own its property and to conduct
its business as described in the Offering Document; and the Seller and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which it owns or leases substantial
properties or in which the conduct of its business requires such qualification
except for such jurisdictions in which the failure to qualify in the aggregate
would not have material and adverse effect on the earnings, affairs or business
prospects of the Seller or any such subsidiary (a “Material Adverse Effect”)
and in which jurisdictions such failure may be cured without such Material
Adverse Effects; the execution and delivery of this Agreement by the Seller has
been duly and validly authorized and will not result in a breach of its
Certificate of Incorporation or By-laws; and when executed and delivered by
both parties hereto, this Agreement will be a valid and binding obligation of
the Seller, assuming the due execution by the Selling Agent, enforceable in
accordance with its terms (except to the extent that enforceability of the
indemnification provisions may be limited under applicable securities laws and
except as enforcement may be limited by bankruptcy, moratorium or other laws
affecting creditors’ rights or general principles of equity); and the execution
and delivery of this Agreement, the consummation of the transactions herein
contemplated and compliance

 

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with the terms of this
Agreement by the Seller do not and will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
agreement or any applicable law, rule, regulation, judgment, order or decree of
any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Seller, to which the Seller is a party or by which
it is bound;

 

(b)           The
Offering Document does not contain and will not contain, at any time between
the date hereof and to and including the date of each Closing, any untrue
statement of a material fact and does not omit nor during such period will omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;

 

(c)           Except
as is otherwise disclosed in the Offering Document, there is no litigation or
governmental proceeding pending or, to the best of its knowledge, threatened
against or involving the property or business of the Seller or any subsidiary
of the Seller;

 

(d)           Except
as is otherwise disclosed in the Offering Document, no material defaults exist
in the due performance and observance of any material obligation, term,
covenant or condition of any agreement or instrument to which the Seller or any
subsidiary is a party or by which they are bound;

 

(e)           The offer,
offer for sale, and sale of the Offered Securities have not been and will not
be registered with the Securities and Exchange Commission (the “SEC”) except as
contemplated in the Offering Document. 
The Company’s actions with respect to the offer, offer for sale and sale
of the Offering Securities will be pursuant to the exemptions from the
registration requirements of Section 5 of the 1933 Act provided by Section 4(2) thereof
and/or by Regulation D thereunder;

 

(f)            To
the best of its knowledge and belief, assuming the offer, offer for sale and
sale of the Offered Securities is made in compliance with the terms of the
Offering Document, the applicable filings with the SEC and any applicable Blue
Sky States, and subject to the performance of the Selling Agent’s obligations
hereunder, the Seller will have complied in all material respects with the 1933
Act and with all state securities laws and regulations applicable to it in
connection with the offer, offer for sale, and sale of the Offered
Securities.  The Seller has not taken and
will not take any action in conflict with the 1933 Act or applicable state or
foreign securities or Blue Sky laws, or which would make the exemption, qualification
or registration pursuant to applicable federal or state securities or Blue Sky
laws unavailable with respect to the offer, offer for sale and sale of the
Offered Securities.  The Seller and its
officers, directors or partners are not subject to any disqualification,
including but not limited to any judgment, decree, order or decision issued by
the SEC, any state or foreign securities regulatory authority, any court of
competent jurisdiction or the United States Postal Service.  In offering the Offered Securities, the
Seller will comply with all applicable federal, state or foreign securities
laws, including the rules covering exemptions from registration;

 

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(g)           Subject to
the performance of the Selling Agent’s obligations hereunder, the Offered
Securities, upon the payment therefor and issuance thereof, will conform to all
statements and descriptions in relation thereto contained in the Offering
Document and will have the rights set forth in the Seller’s Certificate of
Incorporation;

 

(h)           To the best
of the Seller’s knowledge, the Seller has neither been engaged in, nor been the
subject of, any of the actions or proceedings specified in subsection (a) of
Rule 262 promulgated under Section 3(b) of the 1933 Act, or any
substantially similar provisions under the securities laws of any state in
which the Offered Securities are to be sold, such that no exemption from
registration would be available for the offering of the Offered Securities by
the Seller under applicable federal or state securities laws;

 

(i)            Since the
respective dates as of which information is given in the Offering Document,
there has been no material adverse change in the condition, business, property,
capital commitments, working capital and liabilities or prospects of the Seller
or any subsidiary, financial or otherwise; and the property and business of the
Seller materially conform to the descriptions thereof contained in the Offering
Document; there have been no material liabilities or obligations incurred or
material transactions entered into by the Seller or any subsidiary other than
those in the ordinary course of business; there have been no dividends or
distributions of any kind declared, paid or made by the Seller on its capital
stock; there has not been any change in the capital stock, or any material
increase in the current or long-term debt except as disclosed in the Offering
Document, or any issuance of options, warrants, convertible securities or other
rights to purchase the capital stock of the Seller or any subsidiary; and there
have been no transactions between the Seller, shareholders owning five percent
(5%) or more of its issued and outstanding capital stock, the Seller’s officers
and/or directors, nor have there been any corporate opportunities taken or
assumed by controlling shareholders, officers or directors, that are not fully
disclosed in the Offering Document.

 

(j)            The Seller
will notify the Selling Agent immediately and confirm the notice in writing (i) of
the issuance by the SEC or by any state attorney general or securities
administrator of any order enjoining the sale of the Offered Securities or
suspending the effectiveness of any qualification of the Offered Securities for
sale or (ii) of the initiation of any proceedings for that purpose.  The Seller will make every reasonable effort
to prevent the issuance of any such order and, if any such order shall at any
time be issued, to obtain the lifting thereof at the earliest possible moment;

 

(k)           The audited
and unaudited combined financial statements of the Seller (including the
related notes) included in the Offering Document present fairly the financial
position of the Seller and its subsidiaries at the dates indicated; said
financial statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis, except as
expressly qualified therein, and are in conformity with Regulation S-X
promulgated under the Act;

 

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(l)            Except as
set forth in the Offering Document, the Seller does not have any subsidiaries
and does not own any interest in any other corporation, partnership, joint
venture or other entity;

 

(m)          As of the
date of this Agreement, the Seller and its subsidiaries have not agreed, or agreed
in principle, to any merger or acquisition, or combination with, of any other
corporation, partnership, person, party, entity or trust or the sale of its
business or assets to any other corporation, partnership, person, party, entity
or trust;

 

(n)           The Seller
and its subsidiaries have not, directly or indirectly, at any time during their
existence (i) made any unlawful contribution to any candidate for
political office, or failed to disclose fully any contribution in violation of
law, or (ii) made any payment to any federal, state or foreign
governmental officer or official, or other person charged with similar public
or quasi-public duties, other than payments required or permitted by the laws
of the United States or any jurisdiction thereof;

 

(o)           To the best
of Seller’s knowledge, the Seller and its subsidiaries have filed all necessary
federal, state, local, foreign and other tax returns required to be filed by
them and have paid all taxes shown as due thereon; the Seller and its
subsidiaries have not been notified, either orally or in writing, that any
state, local, federal or foreign taxing authority is conducting or intends to
conduct an audit of any tax return or report filed by the Seller and its
subsidiaries or concerning their business or properties; and the Seller has no
knowledge of any tax deficiency which has been asserted or threatened against
the Seller and any subsidiary which would materially and adversely affect the
business, properties, financial condition, results of operations, liabilities
or working capital of the Seller;

 

(p)           The Seller
and its subsidiaries make and keep accurate books and records and maintain
internal accounting controls which provide reasonable assurance that (i) transactions
are executed in accordance with management’s authorization, (ii) transactions
are recorded as necessary to permit preparation of its financial statements and
to maintain accountability for its assets, (iii) access to their assets is
permitted only in accordance with management’s authorization, and (iv) the
reported assets are compared with existing assets at reasonable intervals;

 

(q)           There
are no pre-emptive rights applicable to any of the Seller’s outstanding
securities, or granted by the Seller to any person or party;

 

(r)            The
capitalization of the Seller is as described in the Offering Document and the
Seller has outstanding no more than 11,062,346 shares of its Common Stock as of
the date hereof; all presently outstanding shares of the Seller’s Common Stock
are duly and validly authorized and issued, fully paid and non-assessable and
contain no preemptive rights; the Seller has not contracted for the issuance of
any additional equity securities other than as set forth herein or as
contemplated or described in the Offering Document; and no shares of any other
classes of equity securities are issued and outstanding;

 

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(s)           The Seller
agrees that, for a period of six months (6) months from the date hereof,
it shall not solicit any offer to buy from or offer to sell to any person
introduced to the Seller by the Selling Agent in connection with the Offering,
with the exception of MedCap Partners and their related funds and the Dugdale
family and friends who invested in Seller’s February 2004 private placement,
directly or indirectly, any securities of the Seller or provide the name of any
such person to any other securities broker or dealer or selling agent.  In the event that the Seller or any of its
affiliates, directly or indirectly, solicits, offers to buy from or offers to
sell to any such person any such securities, or provides the name of any such
person to any other securities broker or dealer or selling agent, and such
person purchases such securities or purchases securities from any other securities
broker or dealer or selling agent, the Seller shall pay to the Selling Agent an
amount equal to five percent (5.0%) of the aggregate purchase price of the
securities so purchased by such person.

 

3.2           The Selling
Agent represents and warrants to the Seller as follows:

 

(a)           The Selling
Agent is, has been and will be at all times during the Offering Period, a
Delaware corporation duly organized and validly existing under the laws of the
state of its incorporation, with all requisite power and authority to enter
into and perform this Agreement; the execution and delivery of this Agreement
by the Selling Agent has been duly and validly authorized; and when executed
and delivered by the Seller, this Agreement will be a valid and binding
obligation of the Selling Agent enforceable in accordance with its terms
subject to:  (i) due authorization,
execution and delivery hereof by the Seller; (ii) the enforcement of
remedies under applicable bankruptcy, insolvency and other laws affecting
creditors’ rights generally and moratorium laws from time to time in effect; (iii) general
equitable principles which may limit the right to obtain the remedy of specific
performance; and (iv) the public policy limitation on indemnification
under the federal securities laws;

 

(b)           The Selling
Agent shall not offer or sell the Offered Securities in any state or states
without the approval of the Seller and completion by the Seller of all, or any,
Blue Sky filings for such states and shall not offer or sell the Offered
Securities in any state or states in which it is not qualified or registered as
a broker-dealer or authorized to engage in the brokerage business; and

 

(c)           The Selling
Agent is (i) a broker-dealer registered with the SEC pursuant to the 1934
Act, and no proceeding has been initiated to revoke such registration; (ii) a
member in good standing of the NASD; and (iii) a broker-dealer registered
with the securities authorities of each jurisdiction in which it is required to
be registered in connection with the offers or sales of the Offered Securities,
and all such offers or sales will be made only by individuals licensed as
required by all applicable federal and state securities laws.  The Selling Agent agrees to maintain each of
the foregoing memberships and registrations in good standing throughout the
Offering Period.

 

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(d)  The Selling
Agent has no material litigation pending against it or its affiliates.

 

(e)  The Selling
Agent does not currently have any material enforcement action or disciplinary
procedure against it or its affiliates.

 

(f)  The Selling
Agent will require that each purchaser of Offered Securities hereunder
represent that such purchaser is an accredited investor and will solicit only
accredited investors.

 

4.             Sale
and Delivery of Offered Securities.

 

4.1           No sale of
Offered Securities shall take place or be regarded as effective unless and
until accepted by the Seller, such acceptance to occur at Closing, and the
Seller reserves the right in its sole and absolute discretion to refuse to sell
Offered Securities to any or all persons at any time.  Selling Agent shall send to the Seller and to
the Escrow Agent designated in Section 1.2, with copies to counsel for the
Seller, all acceptable executed Subscription Documents, promptly upon receipt
of the same, subject to any reasonable delay occasioned by further inquiry as
to a prospective purchaser’s qualification or requests by the Seller or Selling
Agent for further information from a prospective purchaser.  The Seller shall notify Selling Agent as to
whom to send the originals of such executed Subscription Documents and to whom
to send copies.  Selling Agent shall
promptly send each such prospective purchaser’s payment for his Offered
Securities to Silicon Valley Bank, the Escrow Agent.  Subject to review by counsel for the Seller,
the Seller shall notify Selling Agent whether such prospective purchaser will
be accepted by the Seller at Closing within ten (10) business days after
receipt of the executed subscription documents for each prospective purchaser
of Offered Securities, but in no event later than the earlier of (i) the
date the parties have agreed to for Closing or (ii) the Offering
Termination Date.  For every prospective
purchaser of Offered Securities whose subscription is rejected, the Seller will
promptly return all of such prospective purchaser’s executed Subscription
Documents to Selling Agent for return to the prospective purchaser, and will
notify the Escrow Agent to return the funds received to such prospective
purchaser without interest and without deduction.

 

5.             Conditions
to the Obligations of the Seller.

 

The obligations of the
Seller hereunder are subject to the accuracy of Selling Agent’s representations
and warranties, to the observance and performance by Selling Agent of its
obligations hereunder, and to the following further conditions (any of which
may be waived in writing in whole or in part by the Seller):

 

(a)           Selling
Agent shall not have taken or failed to take any action at any time at or prior
to Closing, which, in the opinion of the Seller or counsel for Seller,
conflicts or would conflict with, or otherwise make unavailable, the exemption
from registration requirements for the offer and sale of the Offered Securities
under applicable securities laws and regulations.

 

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(b)           If
any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, all the
obligations of the Seller under this Agreement may be terminated in writing at
any time at or prior to Closing, and any such termination shall be without
liability to the parties, and further provided that the obligations under Section 7
and Section 9.1 shall nevertheless survive and continue thereafter.

 

6.             Conditions
of the Obligations of the Selling Agent.

 

The obligations of the Selling Agent to act
as agent hereunder, to find purchasers for the Offered Securities, and to
attend and to deliver documents at Closing shall be subject to the following
conditions:

 

(a)           Between the
date hereof and Closing, the Seller and its subsidiaries shall not have
sustained any loss on account of fire, explosion, flood, accident, calamity or
other cause, of such character as results in a Material Adverse Effect on the
Seller and its subsidiaries, whether or not such loss is covered by insurance.

 

(b)           Between the
date hereof and Closing, there shall be no material litigation instituted or
threatened against the Seller or any subsidiary (other than as set forth in the
Offering Document) and there shall be no material proceeding instituted or
threatened before or by any federal or state commission, regulatory body or
administrative agency or other governmental body, domestic or foreign, wherein an
unfavorable ruling, decision or finding would materially adversely affect the
business, franchises, licenses, permits, operations or financial condition or
income of the Seller.

 

(c)           Except
as contemplated herein or as set forth in the Offering Document, during the
period subsequent to the date hereof, and prior to Closing, the Seller and each
subsidiary:  (i) shall have
conducted its business in the usual and ordinary manner as the same was being
conducted on the date hereof, and (ii) except in the ordinary course of
its business, the Seller and each subsidiary shall not have incurred any
liabilities or obligations (direct or contingent), or disposed of any assets,
or entered into any material transaction or suffered or experienced any
substantially adverse change in its condition, financial or otherwise, or in
its working capital position.  At
Closing, the capitalization of the Seller shall be substantially the same as
set forth in the Offering Document.

 

(d)           The
authorization for the issuance and delivery of the Offered Securities and the
Offering Document and related materials, and for the execution and delivery of
this Agreement, and all other legal matters incident thereto, shall be
reasonably satisfactory in all respects to counsel for Selling Agent.

 

(e)           The Seller
shall have furnished to the Selling Agent the opinion, dated the Closing Date,
of its counsel, which opinion shall be acceptable to the Selling Agent.

 

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(f)            The
representations and warranties of the Seller made in this Agreement or in any
document or certificate delivered to the Selling Agent pursuant hereto shall be
true and correct on and as of the Closing with the same force and effect as
though such representations and warranties have been made on and as of the
Closing, and the Selling Agent shall have received a certificate, dated the
Closing Date, to such effect executed by the Chairman of the Board or President
of the Seller.

 

(g)           The Seller
shall have performed and complied in all material respects with all covenants,
terms and agreements to be performed and complied with by the Seller on or
before the Closing.

 

(h)           The Seller
shall have provided such certificates as the Selling Agent shall reasonably
request.

 

(i)            The Seller
and its President shall provide certificates to the Selling Agent certifying
that the proceeds of the Offering will be used in accordance with the uses
designated in “Use of Proceeds” in the Offering Document.

 

7.             Indemnification.

 

7.1           The Seller
agrees to indemnify and hold harmless Selling Agent and each person, if any,
who controls Selling Agent within the meaning of the 1933 Act or the 1934 Act
(together, the “Acts”), the Selling Agent’s affiliated entities, partners,
employees, legal counsel and agents (the “SA Indemnified Parties”) against any
losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements (and any and all actions, suits,
proceedings and investigations in respect thereof and any and all legal and
other costs, expenses and disbursements in giving testimony or furnishing
documents in response to a subpoena or otherwise), joint or several, to which
Selling Agent or such person may be subject, under the Acts or otherwise,
including, without limitation, the costs, expenses and disbursements, as and
when incurred, of investigating, preparing or defending any such action, suit,
proceeding or investigation (whether or not in connection with litigation in
which the Selling Agent is a party), directly or indirectly, caused by,
relating to, based upon, arising out of, or in connection with (i) the
violation or breach of any representation, warranty or covenant or agreement of
the Seller set forth in this Agreement or in any instrument, document,
agreement or certificate delivered by the Seller in connection herewith; (ii) any
untrue statement or omission or any alleged untrue statement or omission in the
Offering Document or selling material, excluding information contained in or
omitted from the Offering Document or selling material in reliance upon, and in
conformity with, information furnished to the Seller by Selling Agent or any
Participating Broker-Dealer specifically for use in preparation of the Offering
Document or selling material, as the case may be; (iii) any information
provided by or on behalf of Seller in order to qualify or exempt the Offered
Securities for sale in any jurisdiction; or (iv) the failure of the Seller
to comply with the provisions of the Acts and the regulations thereunder, including
Regulation D; and will reimburse the SA Indemnified Parties for any legal
or other expenses reasonably incurred by

 

11

 

the SA Indemnified
Parties in connection with investigation of or defending against any such loss,
claim, expense, damage, liability, (or actions in respect thereof); provided,
however, that the Seller shall not be required to indemnify the SA Indemnified
Parties for any payment made to any claimant in settlement of any suit or claim
unless such payment is agreed to by the Seller (which agreement shall not be
unreasonably withheld) or by a court having jurisdiction of the
controversy.  This indemnity agreement
shall remain in full force and effect notwithstanding any investigation made by
Selling Agent or on Selling Agent’s behalf, shall survive consummation of the
sale of the Offered Securities hereunder and shall be in addition to any
liability which the Seller may otherwise have.

 

7.2           Selling
Agent agrees to indemnify and hold harmless the Seller and each person, if any,
who controls the Seller within the meaning of the Acts, Seller’s affiliated
entities, partners, employees, legal counsel and agents (the “Seller
Indemnified Parties”) against any losses, claims, expenses, damages or liabilities
(or actions in respect thereof), joint or several, to which the Seller
Indemnified Parties or any such controlling person may become subject, under
the Acts or otherwise, insofar as such losses, claims, expenses, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or omission or any alleged untrue statement or omission in the
Offering Document contained in or omitted from the Offering Document in
reliance upon, and in conformity with, information furnished to the Seller by
Selling Agent or any Participating Broker-Dealer or either of them specifically
for use in preparation of the Offering Document or selling material, as the
case may be; and will reimburse the Seller Indemnified Parties for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending against any such loss, claim, expense, damage, liability, (or actions
in respect thereof); provided, however, that Selling Agent shall not be
required to indemnify the Seller Indemnified Parties for any payment made to
any claimant in settlement of any suit or claim unless such payment is approved
by a court having jurisdiction over the controversy or Selling Agent agrees to
such settlement (which agreement shall not be unreasonably withheld); and
provided further that Selling Agent shall not be liable under this Section 7.2
for any losses, claims, expenses, damages or liabilities arising out of any act
or failure to act on the part of any other person except Selling Agent, its
partners, employees and agents (including registered representatives) or any
Participating Broker-Dealer.  This
indemnity agreement shall remain in full force and effect notwithstanding any
investigation made by or on behalf of the Seller and shall survive consummation
of the sale of the Offered Securities hereunder and the termination of this
Agreement, and shall be in addition to any liability which Selling Agent may
otherwise have.  Notwithstanding the
foregoing, in no event shall the amount that the Selling Agent is required to
indemnify the Seller Indemnified Parties, exceed in the aggregate the
compensation received by the Selling Agent hereunder, except in the case of
fraud on the part of the Selling Agent.

 

7.3           The
indemnified party shall notify the indemnifying party in writing promptly after
the summons or other first legal process giving information of the nature of
any and all claims which have been served upon the indemnified party.  In case any action is brought against any
indemnified party upon any such claim, the indemnifying party shall be entitled
to participate at its own expense in the defense, or if it so elects, in
accordance with arrangements satisfactory to any other indemnifying party or
parties similarly notified, to

 

12

 

assume the defense
thereof, with counsel who shall be satisfactory to such indemnified party and
other indemnified parties who are defendants in such action; and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof and the retaining of such counsel by the
indemnifying party, the indemnifying party shall not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than the reasonable costs of investigation, unless the
indemnified party shall have reasonably concluded that there are or may be
defenses available to it which are different from or in addition to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to direct the defense of such action on behalf of the
indemnified party), in any of which circumstances such expenses shall be borne
by the indemnifying party.

 

8.             Termination
of Agreement.

 

8.1           This
Agreement shall terminate:

 

(a)           If at any
time after commencement of the Offering, any material condition of Selling
Agent’s obligations hereunder shall not have been met or shall cease to be met
and Selling Agent shall have given to the Seller notice of Selling Agent’s
desire to terminate this Agreement on account of the nonfulfillment of such
condition; or

 

(b)           If the
Seller, at any time, gives notice to Selling Agent to terminate the Offering;
or

 

(c)           At such time
as all of the Offered Securities shall have been sold and the subscriptions
therefor have been accepted or the Offering Termination Date has been reached,
whichever shall first occur.

 

Notwithstanding the termination
of this Agreement in accordance with the foregoing provisions of this Section 8,
the respective indemnities, covenants, agreements, representations, warranties
and other statements of the Seller and Selling Agent set forth in or made
pursuant to this Agreement will remain operative and in full force and effect.

 

8.2           If this
Agreement is terminated pursuant to Section 8.1(a) above, the Selling
Agent shall have no liability to the Seller, and if this Agreement is
terminated pursuant to Section 8.1(b) above, the Seller shall have no
liability to the Selling Agent.

 

9.             Miscellaneous.

 

9.1           Except as
otherwise specifically provided in this Agreement or as may be otherwise agreed
between the parties hereto, Selling Agent, on the one hand, and the Seller, on
the other, shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby (including, without limitation, the
fees and disbursements of their respective counsel), and no party to the
Agreement shall have any liability for such expenses incurred by any other
party.

 

13

 

9.2           It is
understood and agreed that Selling Agent’s relationship to the Seller is that
of an independent contractor and that nothing herein shall be construed to
create a relationship of partners, affiliates, joint venturers or employer and
employee between Selling Agent or either of them and the Seller.

 

9.3           No rights or
interests arising hereunder may be assigned except with the prior written consent
of both the Seller and the Selling Agent. 
Subject to this limitation, this Agreement shall inure to the benefit
and be binding upon Selling Agent and the Seller and their respective
successors and assigns.  This Agreement
is intended to be and is for the sole and exclusive benefit of the parties
hereto, and their respective successors and assigns and for the benefit of no
other person.  Except as provided in this
Agreement, nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, other than the parties to it and their
respective successors and assigns, any legal or equitable right, remedy or
claim under or with respect to this Agreement or any of its provisions.  No purchaser of Offered Securities shall be construed
as a successor or assign merely by reason of such purchase.

 

9.4           If any
portion of this Agreement shall be held invalid or inoperative, then so far as
is reasonable and possible:

 

(a)           the
remainder of this Agreement shall be considered valid and operative; and

 

(b)           to
the extent possible under applicable law, effect shall be given to the intent
manifest by the portion held invalid or inoperative.

 

9.5           This
Agreement may be executed in a number of identical counterparts and by
facsimile, each of which shall be deemed to be an original, but all of which
constitute, collectively, one and the same Agreement; but, in making proof of
this Agreement, it shall not be necessary to produce or account for more than
one counterpart.

 

9.6           This
Agreement may not be modified or amended except by written agreement executed
by each of the parties to this Agreement.

 

9.7           Whenever
the context so requires, the masculine shall include the feminine and neuter,
and the singular shall include the plural, and conversely.  The words “shall” and “will” and “agrees” are
mandatory, “may” is permissive.

 

9.8           The
parties to this Agreement covenant and agree that they will execute any other
and further instruments and documents which reasonably are or may become
necessary or convenient to effectuate and carry out this Agreement.

 

9.9           This
Agreement (and the other documents and agreements referenced herein) contains
the entire understanding between the parties and supersedes prior

 

14

 

understandings or written or oral agreements between the parties with
respect to the subject matter of this Agreement.

 

9.10         This
Agreement shall be construed and governed by the laws of the State of
Florida.  Any terms and conditions of
this Agreement which are inconsistent with the terms and conditions of the
Offering Document, shall be modified to conform to the terms and conditions set
forth in the Offering Document.

 

9.11         All notices
or communications, except as otherwise specifically provided, shall be in
writing, and, if sent to any party, shall be mailed, delivered or telegraphed
and confirmed to that party at the address set forth below:

 

	
  If to the Seller:

  	
  iVOW, Inc.

  
	
   

  	
  2101 Faraday Avenue

  
	
   

  	
  Carlsbad, CA 92008

  
	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
   

  
	
  With a copy contemporaneously

  	
   

  
	
  by like means:

  	
  Heller Ehrman White & McAuliffe, LLP

  
	
   

  	
  4350 La Jolla Village Dr. 7th
  Floor

  
	
   

  	
  San Diego, CA 92122

  
	
   

  	
  Attention: Jeffrey Thacker, Esq.

  
	
   

  	
   

  
	
  If to Selling Agent, to:

  	
  Dawson James Securities,

  
	
   

  	
  925 S. Federal Highway

  
	
   

  	
  6th Floor

  
	
   

  	
  Boca Raton, FL 33432

  
	
   

  	
  Attention: Robert Keyser

  
	
   

  	
   

  
	
  With a copy contemporaneously

  	
   

  
	
  by like means:

  	
  Blank Rome LLP

  
	
   

  	
  1200 North Federal Highway, Suite 417

  
	
   

  	
  Boca Raton, FL 33432

  
	
   

  	
  Attention: Bruce C. Rosetto, Esq.

  

 

9.12         All of the
terms of this Agreement, including all representations, warranties, covenants
and agreements of Selling Agent and the Seller, shall survive completion of the
Offering for three years.

 

9.13         Section titles
or captions contained in this Agreement are inserted only as a matter of
convenience and for reference.  Those
titles in no way define, limit, extend or describe the scope of this Agreement,
or the intent of any provision of this Agreement.

 

15

 

If the foregoing correctly sets forth the
understanding between us, please indicate acceptance by signing in the space
provided below for that purpose and return to us a counterpart hereof so
signed, whereupon this letter and Selling Agent’s acceptance shall constitute a
binding agreement between us.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Howard Sampson

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Howard Sampson

  	
   

  
	
   

  	
   

  	
  (Authorized Officer)

  
					

 

The foregoing Selling Agreement for IVOW, Inc.
is hereby accepted and agreed to as of the date first above written.

 

 

	
  DAWSON JAMES SECURITIES, INC.

  
	
  As Selling Agent

  
	
   

  
	
  By:

  	
  /s/ Robert Keyser

  	
   

  
	
   

  	
  (Authorized Officer)

  	
   

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  (Authorized Officer)

  	
   

  

 

16EXHIBIT
10.1

 

WAIVER AGREEMENT 

 

 

WAIVER AGREEMENT (this “Waiver Agreement”), dated as of August 12,
2005, with respect to the AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of June 30, 2001 (the “Effective Date”), between Plains All American
GP LLC, a Delaware limited liability company (the “Company”), and Greg L.
Armstrong (the “Employee”).

 

RECITALS:

 

A.             Capitalized terms not
otherwise defined in this Waiver Agreement 
are used with the meanings ascribed to such terms in the Agreement.

 

B.               Section 8(d)(ii) of the
Agreement provides that if the Employee shall terminate his employment upon a
Change in Control of the Company pursuant to clause (D) of Section 7(d)(i),
then the Employee will be paid a lump sum amount.

 

C.               A transaction is
contemplated pursuant to which the membership interest in the Company currently
owned by Sable Investments, L.P. will be sold to the other owners of membership
interests in the Company.  Vulcan Energy
Corporation or a subsidiary thereof (as 
applicable, “Vulcan Energy”)  will
purchase all or a portion of the membership interests being sold (the “Vulcan
Purchase”).

 

D.              The Company and the Employee
wish to clarify and agree with respect to the effect of the Vulcan Purchase
under the Agreement.

 

WAIVER

 

In that regard, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Employee
hereby agree as follows:

 

 1.            Acknowledgement of Change in Control.  The Company and the Employee both acknowledge
that the proposed Vulcan Purchase would constitute a Change in Control as
defined in Section 7(d) of the Agreement, and that without this Waiver
Agreement Employee would have the power under Section 7(d) of the Agreement to
terminate his employment (the “Termination Power”) and, having done so, would
have the right to the lump sum payment contemplated by Section 8(d)(ii) of the
Agreement (the “Payment Right”).

 

 2.            Waiver. 
Subject to the terms and conditions contained herein, the Employee
waives his Termination Power and Payment Right, in each case only with respect
to the Vulcan Purchase (the “Waiver”). 
The Waiver shall not apply to any future purchases of membership
interests in the Company by Vulcan Energy.

 

 3.            Excess Voting Rights Agreement.  The Waiver is contingent upon and will be
effective upon the execution by Vulcan Energy and the Company of an Excess
Voting Rights

 

 

 

Agreement in the form of Exhibit A to this Waiver (the “Voting
Agreement”).   The Company will
immediately inform the Employee of any Notice (as defined in the Voting
Agreement) received from Vulcan Energy under the Voting Agreement.

 

 4.            Termination of Waiver.  The Waiver will terminate, and a Change in
Control will be deemed to have occurred coincident with, (a) any breach by Vulcan
Energy of the terms of the Voting Agreement, (b) any termination of the Voting
Agreement by Vulcan Energy or any notice of termination given by Vulcan Energy,
other than any termination (or notice thereof) pursuant to clause (a) of
Section 4 of the Voting Agreement, where Vulcan Energy is no longer a Majority
Holder (as defined in the Voting Agreement) due to any merger, consolidation or
similar transaction involving the Company or the Partnership; provided,
however; this provision shall not reduce or otherwise supercede the Employee’s
rights if any such merger, consolidation or similar transaction involving the
Company or the Partnership would otherwise have resulted in a Change in
Control, (c) during the two-year period following the execution of this Agreement,
the failure of at least two Designated Independent Directors to be members of
the Board of Directors of the Company, provided, that with respect this clause
(c) the Waiver will be deemed not to have terminated, and no Change in Control
will be deemed to have occurred unless the Employee exercises the Termination
Power within 180 days following the first day on which there shall fail to be
at least two Designated Independent Directors on the Board of Directors of the
Company, or (d) the provision of any economic incentive or other consideration
(including any concession or forbearance) by Vulcan Energy directly or
indirectly to any other member of the Company that has the intent or effect of
terminating, obviating or circumventing the Voting Agreement; provided that for
the avoidance of doubt, the foregoing clause (d) shall not be deemed to include
conversations with other members of the Company regarding the Independent
Directors or other matters where Vulcan Energy attempts to persuade such other members
to vote in a specified manner as long as Vulcan Energy’s solicitations do not
involve the direct or indirect provision of any economic incentives or other
consideration.  In addition,
notwithstanding anything contained herein to the contrary, if the Employee is
terminated for any reason other than for Cause within two years of the
execution of this amendment, the Waiver will be deemed to have terminated on
the date immediately preceding such termination or notice of such termination,
a Change in Control will be deemed to have occurred as of such date and the
Employee will be paid the lump sum payment contemplated by Section 8(d)(ii) of
the Agreement as if the Employee had terminated his employment for Good Reason
following a Change in Control.  In addition,
upon such termination without Cause or for Good Reason, the Employee shall
immediately vest in any and all unvested long-term incentive arrangements
outstanding under the 1998 Long-Term Incentive Plan or the 2005 Long-Term
Incentive Plan.  For purposes of this
Agreement, “Designated Independent Director” means each of the Independent
Directors currently serving on the Board of Directors of the Company and, in
the event of the death or disability of any such Independent Directors, any
replacement director who is nominated for election or elected or appointed to
the Board with the approval of the remaining Designated Independent Director or
Directors.

 

 5.            Limited Waiver. 
The Waiver is limited to the effects of the Vulcan Purchase under the
Agreement, and does not waive any other provisions of the Agreement nor the
effects

 

 

 

2

 

of any past, present or future transaction
constituting a Change in Control (or any other Good Reason), including without
limitation any other direct or indirect purchase or sale by Vulcan Energy of
any portion of the membership interest in the Company.

 

6.  No other Changes to
Agreement.  Other than the Waiver as
described herein, the Agreement remains in full force and effect.

 

7.  Notice.  For the purpose of this Waiver Agreement,
notices and all other communications provided for in this Waiver Agreement must
be in writing and will be deemed to have been duly given when delivered or
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the parties at their addresses set forth below, or to
such other addresses as either party may have furnished to the other in writing
in accordance herewith except that notices of change of address will be
effective only upon receipt.

 

If to the Company:

 

Plains All American GP LLC

333 Clay Street

Houston, Texas  77002

Attention:  General Counsel

 

If to the Employee:

 

Greg L. Armstrong

11120 N. Country Squire Lane

Houston, TX  77024

 

8.  Miscellaneous.  No provisions of this Waiver Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing.  No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.  The validity, interpretation, construction
and performance of this Waiver Agreement shall be governed by the laws of the
State of Texas.

 

14.  Entire Agreement.  This Waiver Agreement contains the entire
understanding of the parties in respect of its subject matter and supersedes
all prior oral and written agreements and understandings between the parties
with respect to such subject matter.

 

 

3

 

IN WITNESS WHEREOF, the parties have executed this Waiver Agreement as
of the date first above written.

 

 

	
   

  	
  PLAINS ALL AMERICAN GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tim Moore

  
	
   

  	
   

  	
  Tim Moore

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GREG L. ARMSTRONG

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Greg L. Armstrong

  
	
   

  	
   

  	
  Employee

  

 

 

 

 

4

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