EXHIBIT 10.1
FORM OF WARRANT EXCHANGE AGREEMENT
          THIS WARRANT EXCHANGE AGREEMENT (the “Agreement”) is dated as of
January 18, 2011, by and between OXiGENE, Inc., a Delaware corporation with
offices located at 701 Gateway Blvd, Suite 210, South San Francisco, CA 94080
(the “Company”), and _______________ (the “Investor”).
          WHEREAS:
          A. The Company, the Investor and certain other investors (the “Other
Investors” and together with the Investor, the “Investors”) are parties to that
certain Securities Purchase Agreement, dated as of March 10, 2010, as amended by
that certain Amendment and Exchange Agreement dated as of March 25, 2010 (the
“Existing Securities Purchase Agreement”), pursuant to which, among other
things, the Investor purchased from the Company (i) certain shares of the
Company’s common stock, par value $0.01 per share (the “Common Stock”), (ii) a
Series A Warrant, which is currently exercisable into _______ shares of Common
Stock (the “Series A Warrant”), (iii) a Series B Warrant, which was exercisable
into shares of Common Stock and which has expired prior to the date of this
Agreement, (iv) a Series C Warrant, which is currently exercisable into _______
shares of Common Stock (the “Series C Warrant”), and (v) a Series D Warrant,
which was exercisable into shares of Common Stock and which has expired prior to
the date of this Agreement.
          B. The Company and the Investor desire to enter into this Agreement,
pursuant to which, among other things, the Company and the Investor shall (x) at
the Initial Closing (as defined below), exchange the Series A Warrant and the
Series C Warrant currently held by the Investor for (i) ______ shares of Common
Stock (the “Initial Closing Shares”), and (ii) a warrant in the form attached
hereto as Exhibit A (the “Series E Warrant”), initially exercisable into
________ shares of Common Stock (the “Series E Warrant Shares”) and (y) subject
to occurrence of the Stockholder Approval (as defined below), at the Second
Closing (as defined below), exchange the Series E Warrant then held by the
Investor for ________ shares of Common Stock (the “Second Closing Shares”), each
as described below.
          C. As a closing condition to the transactions contemplated hereby,
each of the Other Investors are executing agreements identical to this Agreement
(other than proportional changes in the numbers reflecting (x) such different
number of shares of Common Stock (the “Other Initial Closing Shares”) and such
warrants (the “Other Series E Warrants”, and together with the Series E Warrant,
the “Series E Warrants”) exercisable into such different number of shares of
Common Stock (the “Other Series E Warrant Shares”) to be issued to each such
Other Investor in exchange for the Series A Warrant (as defined in the Existing
Securities Purchase Agreement) and Series C Warrant (as defined in the Existing
Securities Purchase Agreement) of such Other Investor concurrently with the
Initial Closing and (y) such different number of shares of Common Stock (the
“Other Second Closing Shares”, and together with the Initial Closing Shares, the
Other Initial Closing Shares and the Second Closing Shares, collectively, the
“Exchange Shares”) to be issued to each such Other Investor in

 

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exchange for the Series E Warrant of such Other Investor concurrently with the
Second Closing, in each case, pursuant to separate agreements dated of even date
herewith) (the “Other Agreements,” and together with this Agreement, the
“Agreements”).
          D. The exchange of (x) the Series A Warrant and the Series C Warrant
for the Initial Exchange Shares and the Series E Warrant at the Initial Closing
and (y) the Series E Warrant for the Second Closing Shares at the Second Closing
are each being made in reliance upon the exemption from registration provided by
Section 3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”); and
          E. The Initial Closing Shares, the Other Initial Closing Shares, the
Second Closing Shares, the Other Second Closing Shares, the Series E Warrants,
the Other Series E Warrants, the Series E Warrant Shares and the Other Series E
Warrant Shares are collectively referred to herein as the “Securities”.
          F. Capitalized terms used but not otherwise defined herein shall have
the meanings as set forth in the Existing Securities Purchase Agreement as
amended hereby.
          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants hereinafter contained, the parties hereto agree as follows:
     1. EXCHANGES.
          1.1 Initial Exchange. Subject to the satisfaction or waiver of the
conditions with respect to the Initial Closing set forth in Sections 5 and 6
below, at the Initial Closing the Investor and the Company shall, pursuant to
Section 3(a)(9) of the 1933 Act, exchange the Series A Warrant and the Series C
Warrant for the Initial Exchange Shares and the Series E Warrant, as follows
(the “Initial Exchange”):
          (a) Initial Closing. The issuance of the Initial Closing Shares and
the Series E Warrant (the “Initial Closing”) shall occur at the offices of
Greenberg Traurig, LLP, MetLife Building, 200 Park Avenue, New York, NY 10166.
The date and time of the Initial Closing shall be 10:00 a.m., New York time, on
the first (1st) Business Day on which the conditions to the Initial Closing set
forth in Sections 5 and 6 below are satisfied or waived (or such later date as
is mutually agreed to by the Company and each Investor).
          (b) Consideration. At the Initial Closing, the Initial Closing Shares
and the Series E Warrant shall be issued to the Investor in exchange for the
Series A Warrant and the Series C Warrant without the payment of any additional
consideration.
          (c) Delivery. In exchange for the Series A Warrant and the Series C
Warrant, the Company shall, at the Initial Closing, (i) deliver or cause to be
delivered to the Investor certificates for the Series E Warrant and (ii) cause
American Stock Transfer & Trust Company, LLC (together with any subsequent
transfer agent, the “Transfer Agent”) through the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer Program, to credit the Initial
Closing Shares to the Investor’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system. The Investor shall deliver
or cause to be delivered to the Company (or its designee) the

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original Series A Warrant and the original Series C Warrant, as soon as
commercially practicable following the Initial Closing. As of the Initial
Closing Date, all of the Investor’s rights under the Series A Warrant and the
Series C Warrant shall be extinguished.
          1.2 Second Exchange. Subject to the satisfaction or waiver of the
conditions with respect to the Second Closing set forth in Sections 5 and 6
below and the Company obtaining the Stockholder Approval (as defined below), at
the Second Closing the Investor and the Company shall, pursuant to
Section 3(a)(9) of the 1933 Act, exchange the Series E Warrant for the Second
Closing Shares, as follows (the “Second Exchange”, and together with the Initial
Exchange, the “Exchanges”):
          (a) Special Meeting. The Company shall use its reasonable best efforts
to provide each of its stockholders entitled to vote at a special meeting of
stockholders of the Company (the “Stockholder Meeting”), which shall be promptly
called and held not later than February 28, 2011 (or in the event that such
proxy statement is subject to a full review by the SEC, March 31, 2011), a proxy
statement, substantially in a form which shall have been previously reviewed by
Greenberg Traurig LLP, at the expense of the Company but in any event such
expense not to exceed $10,000 without the prior written approval of the Company;
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting
for the approval of resolutions (“Stockholder Resolutions”) providing for the
Company’s issuance of all of the Securities as described in the Agreements in
accordance with applicable law and the rules and regulations of the Principal
Market (such affirmative approval being referred to herein as the “Stockholder
Approval”, and the date such Stockholder Approval is obtained, the “Stockholder
Approval Date”), and the Company shall use its reasonable best efforts to
solicit its stockholders’ approval of such resolutions and to cause the Board of
Directors of the Company to recommend to the stockholders that they approve such
resolutions. The Company shall be obligated to seek to obtain the Stockholder
Approval by the Stockholder Meeting deadline set forth above. If, despite the
Company’s reasonable best efforts the Stockholder Approval is not obtained on or
prior to such Stockholder Meeting deadline and the Company’s stockholders
authorize an adjournment of the Stockholder Meeting to solicit additional
proxies, then, for the sake of economy, the Company shall so adjourn the
Stockholder Meeting and continue using its reasonable best efforts to solicit
sufficient additional proxies to obtain the Stockholder Approval through and
until the sooner of such time as the Company obtains the Stockholder Approval or
May 18, 2011. If, however, the Company’s stockholders do not approve the
adjournment of the Stockholder Meeting, the Company shall cause an additional
Stockholder Meeting to be held once in each subsequent calendar quarter
thereafter, provided however that the Company shall have no obligation to seek
Stockholder Approval after May 18, 2011.
          (b) Second Closing. The issuance of the Second Closing Shares (the
“Second Closing”) shall occur at the offices of Greenberg Traurig, LLP, MetLife
Building, 200 Park Avenue, New York, NY 10166. The date and time of the Second
Closing shall be 10:00 a.m., New York time, on the first (1st) Business Day on
which the conditions to the Second Closing set forth in Sections 5 and 6 below
are satisfied or waived (or such later date as is mutually agreed to by the
Company and each Investor).

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          (c) Consideration. At the Second Closing the Second Closing Shares
shall be issued to the Investor in exchange for the Series E Warrant without the
payment of any additional consideration.
          (d) Delivery. In exchange for the Series E Warrant, the Company shall,
at the Second Closing, cause the Transfer Agent through the DTC Fast Automated
Securities Transfer Program, to credit the Second Closing Shares to the
Investor’s or its designee’s balance account with DTC through its
Deposit/Withdrawal at Custodian system. The Investor shall deliver or cause to
be delivered to the Company (or its designee) the original Series E Warrant as
soon as commercially practicable following the Initial Closing. As of the Second
Closing Date, all of the Investor’s rights under the Series E Warrant shall be
extinguished.
          1.3 Other Documents. The Company and the Investor shall execute and/or
deliver such other documents and agreements as are reasonably necessary to
effectuate the Exchanges.
     2. AMENDMENTS TO TRANSACTION DOCUMENTS.
          2.1 Ratifications. Except as otherwise expressly provided herein, the
Existing Securities Purchase Agreement and each other Transaction Document, is,
and shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that on and after the Closing Date: (i) all
references in the Existing Securities Purchase Agreement to “this Agreement”,
“hereto”, “hereof”, “hereunder” or words of like import referring to the
Existing Securities Purchase Agreement shall mean the Existing Securities
Purchase Agreement as amended by this Agreement, and (ii) all references in the
other Transaction Documents, to the “Securities Purchase Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Securities
Purchase Agreement shall mean the Existing Securities Purchase Agreement as
amended by this Agreement.
          2.2 Amendments to Transaction Documents. On and after the Closing
Date, each of the Transaction Documents and Schedule 3.2 hereof are hereby
amended as follows:
          (a) The defined term “Common Shares” is hereby amended to include “the
Exchange Shares” (as defined in the Warrant Exchange Agreements)”.
          (b) The defined term “Series A Warrants” is hereby amended to include
“the Series E Warrants (as defined in the Warrant Exchange Agreements)”.
          (c) The defined term “Series A Warrant Shares” is hereby amended to
include “the Series E Warrant Shares (as defined in the Warrant Exchange
Agreements) and the Other Series E Warrant Shares (as defined in the Warrant
Exchange Agreements)”.
          (d) The defined term “Warrant Exchange Agreements” shall mean “those
certain Warrant Exchange Agreements, dated as of January 18, 2011, each by and
between the Company and each Buyer”.

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          (e) The defined term “Transaction Documents” is hereby amended to
include the Warrant Exchange Agreements.
          2.3 Amendment to Existing Securities Purchase Agreement. On and after
the Closing Date, the Existing Securities Purchase Agreement is hereby amended
as follows:
          (a) Section 4(o)(i) is hereby amended such that:
               (i) the reference to “five (5) Trading Days” is hereby replaced
by “three (3) Trading Days”;
               (ii) the reference to “three (3) Trading Days” is hereby replaced
by “two (2) Trading Days”; and
               (iii) the reference to “two (2) Trading Days” is hereby replaced
by “one (1) Trading Day”.
          (b) Section 4(o)(ii) is hereby amended such that:
               (i) the reference to the “third (3 rd) Business Day” is hereby
replaced by the “second (2 nd) Business Day”; and
               (ii) the reference to the “fifth (5 th) Business Day” is hereby
replaced by the “second (2 nd) Business Day”.
     3. REPRESENTATIONS AND WARRANTIES
          3.1 Investor Bring Down. The Investor hereby represents and warrants
to the Company with respect to itself only as set forth in Section 2 of the
Existing Securities Purchase Agreement (as amended hereby) as to this Agreement
as if such representations and warranties were made as of the date hereof and
set forth in their entirety in this Agreement. Such representations and
warranties to the transactions thereunder and the securities issued pursuant
thereto are hereby deemed for purposes of this Agreement to be references to the
transactions hereunder and the issuance of the securities pursuant hereto.
          3.2 Company Bring Down. Except as set forth on Schedule 3.2 attached
hereto, the Company represents and warrants to the Investor as set forth in
Section 3 of the Existing Securities Purchase Agreement (as amended hereby) as
if such representations and warranties were made as of the date hereof and set
forth in their entirety in this Agreement (other than Sections 3(a), 3(c), 3(e),
3(n) and 3(r) of the Existing Securities Purchase Agreement, which shall be
deemed to be amended and restated in the form attached hereto on Schedule 3.2
(as amended by Section 2.2 hereof)). Such representations and warranties to the
transactions thereunder and the securities issued pursuant thereto are hereby
deemed for purposes of this Agreement to be references to the transactions
hereunder and the issuance of the securities pursuant hereto, references therein
to “Closing Date” being deemed references to the Initial Closing Date or the
Second Closing Date, as applicable, and references to “the date hereof” being
deemed references to the date of this Agreement.

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     4. COVENANTS.
          4.1 Reasonable Best Efforts. The Company shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 6 of this Agreement. The Investor shall use its reasonable
best efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 5 of this Agreement.
          4.2 Disclosure of Transactions and Other Material Information. On or
before 9:30 a.m., New York time, on the first (1st) Business Day following the
date of this Agreement, the Company shall file a Current Report on Form 8-K
describing all the material terms of the transactions contemplated by the
Agreement in the form required by the Securities Exchange Act of 1934, as
amended, and attaching this Agreement and the form of the Series E Warrant
thereto as exhibits (including all attachments, the “8-K Filing”). From and
after the issuance of the 8-K Filing, the Company shall have disclosed all
material, non-public information (if any) delivered to any of the Investors by
the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by this Agreement. On or before 9:30 a.m., New York time, on the Initial Closing
Date, the Company shall file a Current Report on Form 8-K certifying that the
Initial Exchange has been consummated. On or before 9:30 a.m., New York time, on
the Second Closing Date, the Company shall file a Current Report on Form 8-K
certifying that the Second Exchange has been consummated.
          4.3 Fees. The Company shall reimburse Greenberg Traurig, LLP (counsel
to the lead Investor), on demand, for all reasonable, documented costs and
expenses incurred by it in connection with preparing and delivering this
Agreement (including, without limitation, all reasonable, documented legal fees
and disbursements in connection therewith, and due diligence in connection with
the transactions contemplated thereby), provided, however, that the amount
payable by the Company to Greenberg Traurig, LLP in connection with this
Agreement shall not exceed $15,000 in the aggregate unless previously agreed to
in writing by the Company.
          4.4 Holding Period. For the purposes of Rule 144, the Company
acknowledges that the holding period of (x) the Initial Closing Shares, the
Series E Warrants and the Series E Warrant Shares (if acquired using a Cashless
Exercise (as defined in the Series E Warrant)) may be tacked onto the holding
period of the Series A Warrants and the Series C Warrants and (y) the Second
Closing Shares may be tacked onto the holding period of the Series E Warrants,
and the Company agrees not to take a position contrary to this Section 4.4.
          4.5 No Ability to Vote Shares Issued at First Closing. As required by
the rules and regulations of the Principal Market, the Investor covenants and
agrees not vote its Initial Closing Shares at the Special Meeting.
          4.6 No Waiver of Voting Agreements. The Company shall not amend, waive
or modify any provision of the Voting Agreements (as defined below).
     5. CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER.
     The obligations of the Company to the Investor hereunder are subject to the
satisfaction of each of the following conditions (except to the extent such
condition is expressly conditional

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to a specific closing, in which case such condition shall only apply to such
specific closing), provided that these conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole discretion by
providing the Investor with prior written notice thereof:
          5.1 The Investor shall have duly executed this Agreement and delivered
the same to the Company.
          5.2 Each of the Other Investors shall have duly executed the Other
Agreement of such Other Investor and delivered the same to the Company.
          5.3 The representations and warranties of the Investor shall be true
and correct in all material respects as of the date when made and as of each
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date which shall be true and correct as
of such specified date), and the Investor shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Investor at or prior to each Closing Date.
          5.4 With respect to the Second Closing only, the Stockholder Approval
shall have occurred.
     6. CONDITIONS TO INVESTOR’S OBLIGATIONS HEREUNDER.
     The obligations of the Investor hereunder are subject to the satisfaction
of each of the following conditions (except to the extent such condition is
expressly conditional to a specific closing, in which case such condition shall
only apply to such specific closing), provided that these conditions are for the
Investor’s sole benefit and may be waived by the Investor at any time in its
sole discretion by providing the Company with prior written notice thereof:
          6.1 The Company shall have duly executed and delivered this Agreement
to the Investor.
          6.2 At the Initial Closing, the Company shall have duly executed and
delivered (or caused to be delivered) to the Investor the certificate with
respect to the Series E Warrant and electronically delivered to the Investor (or
its designee) through DTC the Initial Closing Shares. At the Second Closing, the
Company shall have electronically delivered to the Investor (or its designee)
through DTC the Second Closing Shares.
          6.3 The Company shall have delivered to the Investor a copy of each
Other Agreement, duly executed and delivered by the Company and each Other
Investor party thereto.
          6.4 The Investor shall have received the opinion of Mintz, Levin,
Cohn, Ferris, Glovsky and Popeo, P.C., the Company’s counsel, dated as of the
applicable Closing Date, in the form reasonably acceptable to the Investor.
          6.5 The Company shall have delivered to the Investor a copy of the
Amended and Restated Irrevocable Transfer Agent Instructions, in the form
acceptable to the Investor,

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which instructions shall have been delivered to and acknowledged in writing by
the Company’s transfer agent.
          6.6 The Company shall have delivered to the Investor a certificate, in
the form acceptable to the Investor, duly executed by the Secretary of the
Company and dated as of each Closing Date, as to (i) the resolutions authorizing
the transactions contemplated hereby as adopted by the Company’s board of
directors, in a form reasonably acceptable to the Investor, (ii) the Certificate
of Incorporation of the Company and (iii) the Bylaws of the Company, each as in
effect at each Closing.
          6.7 Each and every representation and warranty of the Company shall be
true and correct in all material respects as of the date when made and as of
each Closing Date as though originally made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct as of such date) and the Company shall have performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required to be performed, satisfied or complied with by the
Company at or prior to each Closing Date. The Investor shall have received a
certificate, duly executed by the Chief Executive Officer of the Company, dated
as of each Closing Date, to the foregoing effect and as to such other matters as
may be reasonably requested by the Investor in the form acceptable to the
Investor.
          6.8 The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the transactions
contemplated by this Agreement, including without limitation, those required by
the Principal Market, except for the Stockholder Approval.
          6.9 No statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or endorsed by any
court or governmental authority of competent jurisdiction that prohibits the
consummation of any of the transactions contemplated by this Agreement.
          6.10 The Company and its Subsidiaries shall have delivered to the
Investor such other documents relating to the transactions contemplated by this
Agreement as the Investor or its counsel may reasonably request.
          6.11 The Company shall have duly executed and delivered to such
Investor voting agreements in the form of Exhibit B hereto (the “Voting
Agreements”), by and between the Company and each of its executive officers,
directors and Symphony Capital LLC (the “Principal Stockholders”) and the
Principal Stockholders shall have duly executed and delivered to such Investor
the Voting Agreements.
          6.12 With respect to the Second Closing only, the Stockholder Approval
shall have occurred prior to May 18, 2011.
     7. TERMINATION.
     In the event that the First Closing does not occur on or before five
(5) Business Days from the date hereof due to the Company’s or the Investor’s
failure to satisfy the conditions

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set forth in Sections 5 and 6 hereof (and the nonbreaching party’s failure to
waive such unsatisfied conditions(s)), the nonbreaching party shall have the
option to terminate this Agreement with respect to such breaching party at the
close of business on such date without liability of any party to any other
party. Upon such termination, the terms hereof shall be null and void and the
parties shall continue to comply with all terms and conditions of the
Transaction Documents, as in effect prior to the execution of this Agreement;
provided further that no such termination shall affect any obligation of the
Company under this Agreement to reimburse Greenberg Traurig LLP for the expenses
described in Section 4.3 above.
     8. MISCELLANEOUS.
          8.1 Miscellaneous Provisions. Section 9 of the Existing Securities
Purchase Agreement is hereby incorporated by reference herein, mutatis mutandis.
          8.2 Legends. No restrictive legends shall be placed on the
certificates representing the Securities.
          8.3 Most Favored Nation. The Company hereby represents and warrants as
of the date hereof and covenants and agrees from and after the date hereof that
none of the terms offered to any Person with respect to any consent, release,
amendment, settlement or waiver relating to the terms, conditions and
transactions contemplated hereby (each a “Settlement Document”), is or will be
more favorable to such Person than those of the Investor and this Agreement. If,
and whenever on or after the date hereof, the Company enters into a Settlement
Document, then (i) the Company shall provide notice thereof to the Investor
immediately following the occurrence thereof and (ii) the terms and conditions
of this Agreement, the other Exchange Documents and the Securities (other than
any limitations on conversion or exercise set forth therein) shall be, without
any further action by the Investor or the Company, automatically amended and
modified in an economically and legally equivalent manner such that the Investor
shall receive the benefit of the more favorable terms and/or conditions (as the
case may be) set forth in such Settlement Document, provided that upon written
notice to the Company at any time the Investor may elect not to accept the
benefit of any such amended or modified term or condition, in which event the
term or condition contained in this Agreement or the Securities (as the case may
be) shall apply to the Investor as it was in effect immediately prior to such
amendment or modification as if such amendment or modification never occurred
with respect to the Investor. The provisions of this Section 8.3 shall apply
similarly and equally to each Settlement Document.
          8.4 No Commissions. Neither the Company nor the Investor has paid or
given, or will pay or give, to any person, any commission or other remuneration,
directly or indirectly, in connection with the transactions contemplated by this
Agreement.
          8.5 No Registration or Listing. Notwithstanding anything set forth
herein or in the Transaction Documents as amended hereby, the Investor hereby
acknowledges and agrees that the Company shall have no obligation to register
the Series E Warrant Shares with the Securities and Exchange Commission, nor
shall the Company have any obligation to cause the Series E Warrants to be
listed on the OTC Bulletin Board.

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          IN WITNESS WHEREOF, the Investor and the Company have caused their
respective signature pages to this Agreement to be duly executed as of the date
first written above.

            COMPANY:

OXIGENE, INC.
      By:           Name:   Dr. Peter J. Langecker        Title:   Chief
Executive Officer   

 

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     IN WITNESS WHEREOF, the Investor and the Company have caused their
respective signature pages to this Agreement to be duly executed as of the date
first written above.

            INVESTOR:
      By:           Name:           Title:        
o Notwithstanding anything contained in this Agreement to the contrary, by
checking this box (i) the obligations of the above-signed to exchange the
securities set forth in this Agreement to be exchanged from the Company by the
above-signed, and the obligations of the Company to sell such securities to the
above-signed, shall be unconditional and all conditions to Closing shall be
disregarded, (ii) the Closing shall occur no later than the third (3rd) Trading
Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause
(i) above) that required delivery by the Company or the above-signed of any
agreement, instrument, certificate or the like or purchase price (as applicable)
shall no longer be a condition and shall instead be an unconditional obligation
of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or exchange securities (as applicable) to
such other party on the Closing Date.

 

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Schedule 2.2:
     3(a): Organization and Qualification. Each of the Company and each of its
Subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have
the requisite power and authorization to own their properties and to carry on
their business as now being conducted and as presently proposed to be conducted.
With the exception of the Company’s “forfeited” status in the State of
California, each of the Company and each of its Subsidiaries is duly qualified
as a foreign entity to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, “Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations
(including results thereof), condition (financial or otherwise) or prospects of
the Company or any Subsidiary, individually or taken as a whole, (ii) the
transactions contemplated hereby or in any of the other Transaction Documents or
(iii) the authority or ability of the Company or any of its Subsidiaries to
perform any of their respective obligations under any of the Transaction
Documents (as defined below). The Company has no Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns at least
fifty percent (50% of the outstanding capital stock or holds at least fifty
percent (50%) of the equity or similar interest of such Person or (II) controls
or operates all or any part of the business, operations or administration of
such Person, and each of the foregoing, is individually referred to herein as a
“Subsidiary.”
     3(c): Issuance of Securities. The Common Shares, when issued, will be
validly issued, fully paid and nonassessable and free from all preemptive or
similar rights, taxes, liens, charges and other encumbrances with respect to the
issue thereof, with the holders being entitled to all rights accorded to a
holder of Common Stock. The Warrants are duly authorized and upon issuance in
accordance with the terms of the Transaction Documents shall be validly issued,
fully paid and non-assessable and free from all preemptive or similar rights,
taxes, liens, charges and other encumbrances with respect to the issue thereof.
As of the Closing, the Company shall have reserved from its duly authorized
capital stock not less than 100% of the maximum number of Warrant Shares
issuable upon exercise of the Warrants as of such date (without taking into
account any possible adjustments pursuant to the anti-dilution rights attendant
thereto or any limitations on the exercise of the Warrants set forth therein).
Upon exercise in accordance with the Warrants, the Warrant Shares, when issued,
will be validly issued, fully paid and nonassessable and free from all
preemptive or similar rights, taxes, liens, charges and other encumbrances with
respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. Subject to the accuracy of the
representations and warranties of the Buyers in this Agreement, the offer and
issuance by the Company of the Securities is exempt from registration under the
1933 Act.
     3(e): Consents. Other than the Stockholder Approval (as defined in the
Warrant Exchange Agreements), neither the Company nor any Subsidiary is required
to obtain any consent from, authorization or order of, or make any filing or
registration with (other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, a Form D with the SEC and any other filings as may be required
by any state securities agencies), any court, governmental agency or any
regulatory or

 

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self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its respective obligations under or contemplated by the
Transaction Documents, in each case, in accordance with the terms hereof or
thereof. Other than the Stockholder Approval, all consents, authorizations,
orders, filings and registrations which the Company or any Subsidiary is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the Closing Date, and neither the Company nor any of its
Subsidiaries are aware of any facts or circumstances which might prevent the
Company or any Subsidiary from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents. Except as set
forth in the SEC Documents, the Company is not in violation of the requirements
of the Principal Market and has no knowledge of any facts or circumstances which
could reasonably lead to delisting or suspension of the Common Stock in the
foreseeable future.
     3(n): Conduct of Business; Regulatory Permits. Neither the Company nor any
of its Subsidiaries is in violation of any term of or in default under its
Certificate of Incorporation, Bylaws, any certificate of designation,
preferences or rights of any other outstanding series of preferred stock of the
Company or any of its Subsidiaries or their organizational charter, certificate
of formation or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree
or order or any statute, ordinance, rule or regulation applicable to the Company
or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries
will conduct its business in violation of any of the foregoing, except in all
cases for possible violations which could not, individually or in the aggregate,
have a Material Adverse Effect. Without limiting the generality of the
foregoing, other than as set forth in the SEC Documents, the Company is not in
violation of any of the rules, regulations or requirements of the Principal
Market and has no knowledge of any facts or circumstances that could reasonably
lead to delisting or suspension of the Common Stock by the Principal Market in
the foreseeable future. Since January 1, 2008, other than as set forth in the
SEC Documents, (i) the Common Stock has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Stock has not been suspended
by the SEC or the Principal Market and (iii) the Company has received no
communication, written or oral, from the SEC or the Principal Market regarding
the suspension or delisting of the Common Stock from the Principal Market. The
Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to
conduct their respective businesses, except where the failure to possess such
certificates, authorizations or permits would not have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit.
     3(r): Equity Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of (i) 300,000,000 shares of Common Stock, of
which, subject to Schedule 3(r), 110,244,595 are issued and outstanding and
64,861,822 shares are reserved for issuance pursuant to securities (other than
the Warrants) exercisable or exchangeable for, or convertible into, shares of
Common Stock and (ii) 15,000,000 shares of Preferred Stock, $0.01 par value, of
which none are outstanding. No shares of Common Stock are held in treasury. All
of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. 28,294,274 shares
of the Company’s issued and outstanding Common Stock on the date hereof are as
of the date hereof owned by Persons who are “affiliates” (as defined in Rule 405
of the 1933 Act and calculated based on the assumption

 

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that only officers, directors and holders of at least 10% of the Company’s
issued and outstanding Common Stock are “affiliates” without conceding that any
such Persons are “affiliates” for purposes of federal securities laws) of the
Company or any of its Subsidiaries. To the Company’s knowledge, as of the date
hereof, except as set forth in the SEC Documents, no Person owns 10% or more of
the Company’s issued and outstanding shares of Common Stock (calculated based on
the assumption that all Equivalents, whether or not presently exercisable or
convertible, have been fully exercised or converted (as the case may be) taking
account of any limitations on exercise or conversion (including “blockers”)
contained therein without conceding that such identified Person is a 10%
stockholder for purposes of federal securities laws). Except as disclosed in the
SEC Documents: (i) none of the Company’s or any Subsidiary’s capital stock is
subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company or any Subsidiary; (ii) there
are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any capital stock of the
Company or any of its Subsidiaries; (iii) there are no outstanding debt
securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing Indebtedness of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may become
bound; (iv) there are no financing statements securing obligations in any
amounts filed in connection with the Company or any of its Subsidiaries;
(v) there are no agreements or arrangements under which the Company or any of
its Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to the Registration Rights Agreement);
(vi) there are no outstanding securities or instruments of the Company or any of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (vii) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities; (viii) neither the Company nor any
Subsidiary has any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (ix) neither the Company nor
any of its Subsidiaries have any liabilities or obligations required to be
disclosed in the SEC Documents which are not so disclosed in the SEC Documents,
other than those incurred in the ordinary course of the Company’s or its
Subsidiaries’ respective businesses and which, individually or in the aggregate,
do not or could not have a Material Adverse Effect. The Company has made
available to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”), the Company’s bylaws, as amended and as in
effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, shares of Common Stock and
the material rights of the holders thereof in respect thereto that have not been
disclosed in the SEC Documents.

 

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Exhibit A — Form of Series E Warrant

 

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Exhibit B — Form of Voting Agreement