Exhibit 10.68

Warrant to Purchase shares

Warrant Number 

Warrant to Purchase Common Stock
of
Cytokinetics, Incorporated

THIS CERTIFIES that        or any subsequent holder hereof (“Holder”) has the
right to purchase from Cytokinetics, Incorporated, a Delaware corporation, (the
“Company”),       (      ) fully paid and nonassessable shares of the Company’s
common stock, $0.001 par value per share (“Common Stock”), subject to adjustment
as provided herein, at a price equal to the Exercise Price as defined in
Section 3 below, at any time during the Term (as defined below).

Holder agrees with the Company that this Warrant to Purchase Common Stock of the
Company (this “Warrant” or this “Agreement”) is issued and all rights hereunder
shall be held subject to all of the conditions, limitations and provisions set
forth herein.

1. Date of Issuance and Term.

This Warrant shall be deemed to be issued on       ,        (“Date of
Issuance”). The term of this Warrant begins on the date that is six months after
the Date of Issuance and ends at 5:00 p.m., New York City time, on the date that
is four (4) years after the Date of Issuance (the “Term”).

Notwithstanding anything herein to the contrary, the Company shall not issue to
the Holder, and the Holder may not acquire, a number of shares of Common Stock
upon exercise of this Warrant to the extent that, upon such exercise, the number
of shares of Common Stock then beneficially owned by the Holder and its
Affiliates and any other persons or entities whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
(including shares held by any “group” of which the Holder is a member, but
excluding shares beneficially owned by virtue of the ownership of securities or
rights to acquire securities that have limitations on the right to convert,
exercise or purchase similar to the limitation set forth herein) would exceed
9.98% of the total number of shares of Common Stock then issued and outstanding
(the “9.98% Cap”), provided, however, that the 9.98% Cap shall not apply with
respect to the issuance of shares of Common Stock pursuant to a Cashless Major
Exercise (as defined below) in connection with a Major Transaction (as defined
below) covered by the provisions of Section 5(c)(i)(A)(1) below in which the
Company is not the surviving entity (a “Qualified Change of Control
Transaction”) to the extent that the number of shares beneficially owned by the
Holder and its Affiliates in the successor entity immediately following
consummation of such Qualified Change of Control Transaction does not exceed
9.98% of the outstanding common stock of such successor entity and provided,
further, that the 9.98% Cap shall only apply to the extent that the Common Stock
is deemed to constitute an “equity security” pursuant to Rule 13d-1(i)
promulgated under the Exchange Act. For purposes hereof, “group” has the meaning
set forth in Section 13(d) of the Exchange Act and applicable regulations of the
Securities and Exchange Commission (the “SEC”), and the percentage held by the
Holder shall be determined in a manner consistent with the provisions of
Section 13(d) of the Exchange Act. Upon the written request of the Holder, the
Company shall, within three (3) Trading Days, confirm in writing to the Holder
(which writing may be via email) the number of shares of Common Stock then
outstanding.

“Affiliate” means any person or entity that, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with a person or entity, as such terms are used in and construed under Rule 144
under the Securities Act of 1933, as amended (the “Securities Act”). With
respect to a Holder of Warrants, any investment fund or managed account that is
managed on a discretionary basis by the same investment manager as such Holder
will be deemed to be an Affiliate of such Holder.

“Holder” means        and any transferee or assignee pursuant to the terms of
this Warrant.

2. Exercise.

(a) Manner of Exercise. During the Term, this Warrant may be Exercised as to all
or any lesser number of whole shares of Common Stock covered hereby (the
“Warrant Shares” or the “Shares”) upon surrender of this Warrant, with the
Exercise Form attached hereto as Exhibit A (the “Exercise Form”) duly completed
and executed, together with the full Exercise Price (as defined below, which may
be satisfied by a Cash Exercise or a Cashless Exercise, as each is defined
below) for each share of Common Stock as to which this Warrant is Exercised, at
the office of the Company, Attention: Stock Administrator, 280 East Grand
Avenue, South San Francisco, California 94080; Phone: (650) 624-3000, Fax:
(650) 624-3200, with an electronic copy (for informational purposes only, and
not constituting delivery hereunder) to: stockadministrator@cytokinetics.com, or
at such other office or agency as the Company may designate in writing, by
overnight mail, with an advance copy of the Exercise Form sent to the Company
and its transfer agent (“Transfer Agent”) by facsimile (such surrender and
payment of the Exercise Price hereinafter called the “Exercise” of this
Warrant).

(b) Date of Exercise. The “Date of Exercise” of the Warrant shall be defined as
the date that the Exercise Form attached hereto as Exhibit A, completed and
executed, is sent by facsimile to the Company and the Exercise Price is
satisfied, provided that the original Warrant and Exercise Form are received by
the Company within two (2) Trading Days. Alternatively, the Date of Exercise
shall be defined as the date the original Exercise Form is received by the
Company and the Exercise Price is satisfied, if Holder has not sent advance
notice by facsimile. Upon delivery of the Exercise Form to the Company by
facsimile or otherwise, the Holder shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which
this Warrant has been Exercised, irrespective of the date such Warrant Shares
are credited to the Holder’s Depository Trust Company (“DTC”) account or the
date of delivery of the certificates evidencing such Warrant Shares, as the case
may be; provided, however, that in the event of a Cashless Major Exercise in
respect of a Qualified Change of Control Transaction, the Holder shall be deemed
to have become the holder of record of the shares issuable upon such exercise
immediately prior to the consummation of such Qualified Change of Control
Transaction and provided, further, that in the event of a Cashless Major
Exercise triggered by an event set forth in Section 5(c)(i)(G), the Holder shall
be deemed to have become the holder of record of the shares issuable upon such
exercise immediately following the occurrence of the Major Transaction.

(c) Delivery of Common Stock Upon Exercise. Within three (3) business days after
any Date of Exercise, or in the case of a Cashless Major Exercise or a Cashless
Default Exercise (each as defined in Section 5(c) below), within the period
provided in Section 5(c)(iv) or Section 3(c), as applicable (the “Delivery
Period”), the Company shall issue and deliver (or cause its Transfer Agent to
issue and deliver) in accordance with the terms hereof to or upon the order of
the Holder that number of shares of Common Stock (“Exercise Shares”) for the
portion of this Warrant exercised as shall be determined in accordance herewith.
Upon the Exercise of this Warrant or any part hereof, the Company shall, at its
own cost and expense, take all commercially reasonable actions, including
obtaining and delivering an opinion of counsel, to assure that the Transfer
Agent shall issue stock certificates in the name of Holder (or its nominee) or
such other persons as designated by Holder and in such denominations to be
specified at Exercise representing the number of shares of Common Stock issuable
upon such Exercise. Notwithstanding the foregoing, the Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for Exercise Shares in any name
other than that of the original registered holder of this Warrant, and in such
case the Company shall not be required to issue or deliver any stock certificate
until such tax or other charge has been paid or it has been established to the
Company’s satisfaction that no tax or other charge is due. The Company warrants
that no instructions other than these instructions have been or will be given to
the Transfer Agent and that this Warrant and the Exercise Shares have been
registered under the Securities Act and, when issued in accordance with the
terms of this Warrant, will be freely tradeable, and freely transferable, and
will not contain a legend restricting the resale or transferability of the
Exercise Shares.

(d) Delivery Failure. In addition to any other remedies which may be available
to the Holder, in the event that the Company fails for any reason to effect
delivery of the Exercise Shares by the end of the Delivery Period (a “Delivery
Failure”), the Holder will be entitled to revoke all or part of the relevant
Exercise Form by delivery of a notice to such effect to the Company not later
than three (3) Trading Days after the end of the Delivery Period, whereupon the
Company and the Holder shall each be restored to their respective positions
immediately prior to the delivery of such notice, except that the liquidated
damages described herein shall be payable through the date notice of revocation
or rescission is given to the Company.

(e) Reserved.

(f) Cancellation of Warrant. This Warrant shall be canceled upon the full
Exercise, of this Warrant, and, as soon as practical after the Date of Exercise,
Holder shall be entitled to receive Common Stock for the number of shares
purchased upon such Exercise of this Warrant, and if this Warrant is not
Exercised in full, Holder shall be entitled to receive a new Warrant (containing
terms identical to this Warrant) representing any unexercised portion of this
Warrant in addition to such Common Stock.

(g) Holder of Record. Each person in whose name any Warrant for shares of Common
Stock is issued shall, for all purposes, be deemed to be the Holder of record of
the shares resulting from such Exercise on the Date of Exercise of this Warrant,
irrespective of the date of delivery of the Common Stock purchased upon the
Exercise of this Warrant.

(h) Delivery of Electronic Shares. In lieu of delivering physical certificates
representing the Common Stock issuable upon Exercise or legend removal, or
representing Failure Payment Shares, provided the Transfer Agent is
participating in the DTC Fast Automated Securities Transfer (“FAST”) program,
upon written request of the Holder, the Company shall use commercially
reasonable efforts to cause its Transfer Agent to electronically transmit the
Common Stock issuable upon Exercise to the Holder by crediting the account of
the Holder’s prime broker with DTC through its Deposit Withdrawal Agent
Commission (DWAC) system. The time periods for delivery and penalties described
herein shall apply to the electronic transmittals described herein. Any delivery
not effected by electronic transmission shall be effected by delivery of
physical certificates.

(i) Buy-In. In addition to any other rights available to the Holder, if the
Company fails to cause its Transfer Agent to transmit to the Holder a
certificate or certificates, or electronic shares through DWAC, representing the
Exercise Shares pursuant to an Exercise on or before the Delivery Period (other
than a failure caused by incorrect or incomplete information provided by the
Holder to the Company hereunder), and if after such date the Holder is required
by its broker to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Exercise Shares that the Company was
required to deliver to the Holder in connection with such Exercise (a “Buy-In”),
then the Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Exercise Shares that the Company was required to
deliver to the Holder in connection with the Exercise at issue times and (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Exercise Shares for which such Exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its Exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted Exercise to cover the sale of Common Stock with an aggregate sale
price giving rise to such purchase obligation of $10,000, under clause (1) of
the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice, within three
(3) Trading Days after the occurrence of a Buy-In, indicating the amounts
payable to the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
Exercise of the Warrant as required pursuant to the terms hereof.

3. Payment of Warrant Exercise Price for Cash Exercise or Cashless Exercise;
Cashless Major Exercise and Cashless Default Exercise.

(a) Exercise Price. The exercise price under this Warrant (“Exercise Price”)
shall initially equal $1.65 per share, subject to adjustment pursuant to the
terms hereof, including but not limited to Section 5 below.

Payment of the Exercise Price may be made by either of the following, or a
combination thereof, at the election of Holder:

(i) Cash Exercise: Subject to subsection 3(d) hereof, the Holder may exercise
this Warrant in cash, bank or cashier’s check or wire transfer (a “Cash
Exercise”); or

(ii) Cashless Exercise: The Holder, at its option, may exercise this Warrant in
a cashless exercise transaction. In order to effect a Cashless Exercise, the
Holder shall surrender this Warrant at the principal office of the Company
together with notice of cashless election, in which event the Company shall
issue Holder a number of shares of Common Stock computed using the following
formula (a “Cashless Exercise”):

X = Y (A-B)/A

where: X = the number of shares of Common Stock to be issued to Holder.

Y = the number of shares of Common Stock for which this Warrant is being
Exercised.

A = the Market Price of one (1) share of Common Stock (for purposes of this
Section 3(a)(ii), where “Market Price,” as of any date, means the Volume
Weighted Average Price (as defined herein) of the Company’s Common Stock during
the ten (10) consecutive Trading Day period immediately preceding the date in
question.

B = the Exercise Price.

As used herein, the “Volume Weighted Average Price” for any security as of any
date means the volume weighted average sale price on The NASDAQ Global Select
Market (“NASDAQ”) as reported by, or based upon data reported by, Bloomberg
Financial Markets or an equivalent, reliable reporting service mutually
acceptable to and hereafter designated by holders of a majority in interest of
the Warrants and the Company (“Bloomberg”) or, if NASDAQ is not the principal
trading market for such security, the volume weighted average sale price of such
security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg, or, if no volume weighted
average sale price is reported for such security, then the last closing trade
price of such security as reported by Bloomberg, or, if no last closing trade
price is reported for such security by Bloomberg, the average of the bid prices
of any market makers for such security that are listed in the over the counter
market by the Financial Industry Regulatory Authority, Inc. or in the “pink
sheets” by the Pink OTC Market, Inc. If the Volume Weighted Average Price cannot
be calculated for such security on such date in the manner provided above, the
volume weighted average price shall be the fair market value as mutually
determined by the Company and the Holders of a majority in interest of the
Warrants being Exercised for which the calculation of the volume weighted
average price is required in order to determine the Exercise Price of such
Warrants. “Trading Day” shall mean any day on which the Common Stock is traded
for any period on NASDAQ, or on the principal securities exchange or other
securities market on which the Common Stock is then being traded.

For purposes of Rule 144 and sub-section (d)(3)(ii) thereof, it is intended,
understood and acknowledged that the Common Stock issuable upon Exercise of this
Warrant in a Cashless Exercise transaction shall be deemed to have been acquired
at the time this Warrant was issued. Moreover, it is intended, understood and
acknowledged that the holding period for the Common Stock issuable upon Exercise
of this Warrant in a Cashless Exercise transaction shall be deemed to have
commenced on the date this Warrant was issued.

(b) Cashless Major Exercise: To the extent the Holder shall exercise this
Warrant or any portion thereof as a Cashless Major Exercise pursuant to
Section 5(c)(i) below, the Holder shall surrender this Warrant at the principal
office of the Company together with the Exercise Form indicating that the Holder
is exercising this Warrant (or such portion thereof) pursuant to a Cashless
Major Exercise, in which event the Company shall issue a number of shares of
Common Stock equal to the Black-Scholes Value (as defined in Section 5(c)(iii)
below) of the Warrant (or such applicable portion being exercised) divided by
the closing price of the Common Stock on the principal securities exchange or
other securities market on which the Common Stock is then traded on the Trading
Day immediately preceding the date on which the applicable Major Transaction is
consummated.

(c) Cashless Default Exercise. To the extent the Holder exercises this Warrant
as a Cashless Default Exercise pursuant to Section 11(b)(i) below, the Holder
shall surrender this Warrant to the principal office of the Company together
with the Exercise Form indicating that the Holder is exercising this Warrant
pursuant to a Cashless Default Exercise, in which event the Company shall issue
to the Holder, within five (5) Trading Days of the applicable Default Notice, a
number of shares of Common Stock (which shares shall be valued at the Volume
Weighted Average Price for the five (5) Trading Days prior to the applicable
Default Notice) equal to the greater of (A) the Black-Scholes value (determined
by use of the Black-Scholes Option Pricing Model using the criteria set forth on
Schedule I hereto) of the remaining unexercised portion of this Warrant on the
date of such Default Notice and (B) the Black-Scholes value (determined by use
of the Black-Scholes Option Pricing Model using the criteria set forth on
Schedule I hereto) of the remaining unexercised portion of this Warrant on the
Trading Day immediately preceding the date that the Exercise Shares in respect
of such Cashless Default Exercise are issued to the Holder.

(d) Cash Exercise; Effective Registration Statement. In the event that the
Company does not have an effective registration statement covering the issuance
of shares of Common Stock pursuant to a Cash Exercise, the Holder may only
exercise this Warrant by means of a Cashless Exercise, and in such
circumstances, and for so long as such circumstances continue, a Cash Exercise
shall be prohibited. In the event of either a Cash Exercise or a Cashless
Exercise as contemplated by this Section 3, under no circumstances would the
Company be required to deliver cash in settlement of this Warrant.

(e) Dispute Resolution. In the case of a dispute as to the determination of the
closing price or the Volume Weighted Average Price of the Company’s Common Stock
or the arithmetic calculation of the Exercise Price, Market Price or any Major
Transaction Warrant Early Termination Price, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two
(2) business days of receipt, or deemed receipt, of the Exercise Notice or Major
Transaction Early Termination Notice, or other event giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the Company are
unable to agree upon such determination or calculation within two (2) business
days of such disputed determination or arithmetic calculation being submitted to
the Holder, then the Company shall, within four (4) business days submit via
facsimile (i) the disputed determination of the closing price or the Volume
Weighted Average Price of the Company’s Common Stock to an independent,
reputable investment bank selected by the Company and approved by the Holder,
which approval shall not be unreasonably withheld or (ii) the disputed
arithmetic calculation of the Exercise Price, Market Price or any Major
Transaction Warrant Early Termination Price to the Company’s independent,
outside accountant, or another accounting firm of national standing selected by
the Company. The Company shall cause the investment bank or the accountant, as
the case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than the later of (i) five
(5) business days from the time it receives the disputed determinations or
calculations or (ii) five (5) business days from the selection of the investment
bank and accounting firm, as applicable. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

4. Transfer Rights. Subject to the provisions of Section 8 of this Warrant, this
Warrant may be transferred on the books of the Company, in whole or in part, in
person or by attorney, upon surrender of this Warrant properly completed and
endorsed. This Warrant shall be canceled upon such surrender and, as soon as
practicable thereafter, the person to whom such transfer is made shall be
entitled to receive a new Warrant or Warrants as to the portion of this Warrant
transferred, and Holder shall be entitled to receive a new Warrant as to the
portion hereof retained.

5. Adjustments Upon Certain Events.

(a) Participation. The Holder, as the holder of this Warrant, shall be entitled
to receive such dividends paid and distributions of any kind made to the holders
of Common Stock of the Company to the same extent as if the Holder had Exercised
this Warrant into Common Stock (without regard to any limitations on exercise
herein or elsewhere and without regard to whether or not a sufficient number of
shares are authorized and reserved to effect any such exercise and issuance) and
had held such shares of Common Stock on the record date for such dividends and
distributions. Payments under the preceding sentence shall be made concurrently
with the dividend or distribution to the holders of Common Stock.

(b) Recapitalization or Reclassification. If the Company shall at any time
effect a stock split, payment of stock dividend, recapitalization,
reclassification or other similar transaction of such character that the shares
of Common Stock shall be changed into or become exchangeable for a larger or
smaller number of shares, then upon the effective date thereof, the number of
shares of Common Stock which Holder shall be entitled to purchase upon Exercise
of this Warrant shall be increased or decreased, as the case may be, in direct
proportion to the increase or decrease in the number of shares of Common Stock
by reason of such stock split, payment of stock dividend, recapitalization,
reclassification or similar transaction, and the Exercise Price shall be, in the
case of an increase in the number of shares, proportionally decreased and, in
the case of decrease in the number of shares, proportionally increased. The
Company shall give Holder the same notice it provides to holders of Common Stock
of any transaction described in this Section 5(b).

(c) Rights Upon Major Transaction.

(i) Major Transaction. In the event that a Major Transaction (as defined below)
occurs, then (1) in the case of a Cash-Out Major Transaction and in the case of
a Mixed Major Transaction to the extent of the percentage of the cash
consideration in the Mixed Major Transaction (determined in accordance with the
definition of a Mixed Major Transaction below), the Holder, at its option, may
require the Company to redeem the Holder’s outstanding Warrants in accordance
with Section 5(c)(iii) below and (2) in the case of all other Major Transactions
and in the case of a Mixed Major Transaction to the extent of the percentage of
the consideration represented by securities of a Successor Entity in the Mixed
Major Transaction, the Holder shall have the right to exercise this Warrant as a
Cashless Major Exercise. Except with respect to a Cash-Out Major Transaction, in
the event the Holder shall not have exercised any of its rights under clauses
(1) or (2) above within the applicable time periods set forth herein, then the
Major Transaction shall be treated as an Assumption (as defined below) in
accordance with Section 5(c)(ii) below. However, the Holder may waive any of its
rights under this Section 5(c) with respect to a Major Transaction. Each of the
following events shall constitute a “Major Transaction”:

(A) a consolidation, merger, purchase or exchange of shares, recapitalization,
reorganization, business combination, tender or exchange offer or other similar
event, (1) following which the holders of Common Stock immediately preceding
such consolidation, merger, purchase, exchange, recapitalization,
reorganization, combination tender or exchange offer or event either (a) no
longer hold a majority of the shares of Common Stock or (b) no longer have the
ability to elect a majority of the board of directors of the Company or (2) as a
result of which shares of Common Stock shall be changed into (or the shares of
Common Stock become entitled to receive) the same or a different number of
shares of the same or another class or classes of stock or securities of the
Company or another entity (collectively, a “Change of Control Transaction”);

(B) the sale or transfer of significant assets of the Company which, without
limitation, shall include, but not be limited to, a sale or transfer in one
transaction or a series of related transactions of more than 50% of the
Company’s assets as reflected on its latest balance sheet (including proprietary
rights), provided, however, that notwithstanding the foregoing, none of the
following shall constitute a Major Transaction: (1) a collaborative arrangement,
licensing agreement, manufacturing agreement, development agreement, joint
venture or partnership or similar business arrangement on an arm’s length basis
providing for the research, development or commercial exploitation, or right to
research, develop or commercially exploit, the Company’s technology,
intellectual property or products (including arrangements that involve the
assignment or licensing of any existing or newly developed intellectual property
or other assets under such arrangements) whereby income or profits are to be
shared (including, without limitation, by lump sum royalty or running royalty)
with any other entity shall not constitute a Major Transaction, unless such
transaction results in a sale of all or substantially all of the Company’s
assets, (2) a transfer in the ordinary course of business of the Company’s
technology (including a non-exclusive license under its intellectual property)
to a service provider or academic collaborator, (3) the sale, transfer or
license of assets to a wholly-owned subsidiary of the Company, so long as such
subsidiary remains wholly-owned by the Company and so long as the assets of such
subsidiary are reflected on the consolidated balance sheet of the Company, and
(4) the granting of a security interest in the Company’s assets so long as there
is a no foreclosure, or other enforcement of remedies, with respect to the
assets that are the subject of such security interest;

(C) the liquidation, bankruptcy, insolvency, dissolution or winding-up (or the
occurrence of any analogous proceeding) affecting the Company;

(D) the shares of Common Stock cease to be listed, traded or publicly quoted on
NASDAQ and are not promptly re-listed or requoted on an Eligible Market (as
hereinafter defined); or

(G) the Common Stock ceases to be registered under Section 12 of the Exchange
Act.

(ii) Assumption. The Company shall not enter into or be party to a Major
Transaction that is to be treated as an Assumption pursuant to Section 5(c)(i),
unless (i) any Person purchasing the Company’s assets or Common Stock, or any
successor entity resulting from such Major Transaction (in each case, a
“Successor Entity”), assumes in writing all of the obligations of the Company
under this Warrant in accordance with the provisions of this Section (ii),
including agreements, for the benefit of the Holder, to deliver to each holder
of Warrants in exchange for such Warrants a security of the Successor Entity
evidenced by a written instrument substantially similar in form and substance to
the Warrants, including, without limitation, representing the appropriate number
of shares of the Successor Entity, having similar exercise rights as the
Warrants (including but not limited to a similar Exercise Price and similar
Exercise Price adjustment provisions based on the price per share or conversion
ratio to be received by the holders of Common Stock in the Major Transaction),
satisfactory to the Holder and (ii) any Successor Entity (including its Parent
Entity) is a publicly traded corporation whose common stock is quoted on or
listed for trading on an Eligible Market. Upon the occurrence of any Major
Transaction, any Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Major Transaction, the provisions of this
Warrant referring to the “Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall assume all of
the obligations of the Company under this Warrant with the same effect as if
such Successor Entity had been named as the Company herein. Upon consummation of
the Major Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon exercise or redemption of this
Warrant at any time after the consummation of the Major Transaction, in lieu of
the shares of Common Stock (or other securities, cash, assets or other property)
issuable upon the exercise of the Warrants prior to such Major Transaction, such
shares of publicly traded common stock (or their equivalent) of the Successor
Entity, as adjusted in accordance with the provisions of this Warrant. The
provisions of this Section shall apply similarly and equally to successive Major
Transactions and shall be applied without regard to any limitations on the
exercise of this Warrant other than any applicable beneficial ownership
limitations. Any assumption of Company obligations under this paragraph shall be
referred to herein as an “Assumption”

(iii) Notice; Major Transaction Early Termination Right; Notice of Cashless
Major Exercise. At least fifteen (15) days prior to the consummation of any
Major Transaction, but, in any event, within five (5) business days following
the first to occur of (x) the date of the public announcement of such Major
Transaction if such announcement is made before 4:00 p.m., New York City time,
or (y) the day following the public announcement of such Major Transaction if
such announcement is made on and after 4:00 p.m., New York City time, the
Company shall deliver written notice thereof via facsimile and overnight courier
to the Holder (a “Major Transaction Notice”). At any time during the period
beginning after the Holder’s receipt of a Major Transaction Notice and ending
five (5) Trading Days prior to the consummation of such Major Transaction (the
“Early Termination Period”), the Holder may require the Company to redeem (an
“Early Termination Upon Major Transaction”) all or any portion of this Warrant
not eligible to be treated as a Cashless Major Exercise (without taking into
consideration the 9.98% Cap) by delivering written notice thereof (“Major
Transaction Early Termination Notice”) to the Company, which Major Transaction
Early Termination Notice shall indicate the portion of the principal amount (the
“Early Termination Principal Amount”) of the Warrant that the Holder is electing
to have redeemed. The portion of this Warrant subject to early termination
pursuant to this Section 5(c)(iii) (the “Redeemable Shares”), shall be redeemed
by the Company at a price (the “Major Transaction Warrant Early Termination
Price”) payable in cash equal to the “Black Scholes Value” of the Redeemable
Shares determined by use of the Black Scholes Option Pricing Model using the
criteria set forth in Schedule 1 hereto (the “Black Scholes Value”).

To the extent the Holder shall elect to effect a Cashless Major Exercise in
respect of a Major Transaction, the Holder shall deliver its exercise notice in
accordance with Section 3(b), within the Early Termination Period.

(iv) Escrow; Payment of Major Transaction Warrant Early Termination Price.
Following the receipt of a Major Transaction Early Termination Notice or a
Cashless Major Exercise from the Holder, the Company shall not effect a Major
Transaction that is being treated as an early termination or is eligible to be
treated as a Cashless Major Exercise unless (a) it has entered into written
agreements that specifically provide that it shall be a condition precedent to
the consummation of such Major Transaction that the Holder be issued or paid, as
the case may be, an amount in shares of Common Stock or cash, as applicable,
equal to the Major Transaction Warrant Early Termination Price and/or applicable
Exercise Shares and (b) it shall first place into an escrow account with an
independent escrow agent, at least three (3) business days prior to the closing
date of the Major Transaction (the “Major Transaction Escrow Deadline”), an
amount in shares of Common Stock (or irrevocable instructions to the Transfer
Agent to issue such shares) or cash, as applicable, equal to the Major
Transaction Warrant Early Termination Price and/or applicable Exercise Shares;
provided, however, the Company will not be required to deposit cash in escrow to
the extent it does not have sufficient liquid assets to reasonably fund the
escrow. Concurrently upon closing of such Major Transaction, the Company shall
pay or shall instruct the escrow agent to pay the Major Transaction Warrant
Early Termination Price and/or to deliver the applicable Exercise Shares to the
Holder. For purposes of determining the amount required to be placed in escrow
pursuant to the provisions of this subsection (iv) and without affecting the
amount of the actual Major Transaction Warrant Early Termination Price and/or
applicable Exercise Shares, the calculation of the price referred to in clause
(1) of the first column of Schedule 1 hereto with respect to Stock Price shall
be determined based on the Closing Market Price (as defined on Schedule I) of
the Common Stock on the Trading Day immediately preceding the date that the
funds and/or applicable Exercise Shares, as applicable, are deposited with the
escrow agent.

(v) Injunction. Following the receipt of a Major Transaction Early Termination
Notice or notice of a Cashless Major Exercise from the Holder, in the event that
the Company attempts to consummate a Major Transaction without either placing
the Major Transaction Warrant Early Termination Price or applicable Exercise
Shares, as applicable, in escrow in accordance with subsection (iv) above or
without payment of the Major Transaction Warrant Early Termination Price or
issuance of the applicable Exercise Shares, as applicable, to the Holder prior
to consummation of such Major Transaction, the Holder shall have the right to
apply for an injunction in any state or federal courts sitting in the State of
Delaware to prevent the closing of such Major Transaction until the Major
Transaction Warrant Early Termination Price is paid to the Holder, in full or
the applicable Exercise Shares are delivered, as applicable.

An early termination required by this Section 5(c) shall be made in accordance
with the provisions of Section 12 and shall have priority to payments to holders
of Common Stock in connection with a Major Transaction to the extent an early
termination required by this Section 5(c)(iii) are deemed or determined by a
court of competent jurisdiction to be prepayments of the Warrant by the Company,
such early termination shall be deemed to be voluntary prepayments.
Notwithstanding anything to the contrary in this Section 5, until the Major
Transaction Warrant Early Termination Price is paid in full, this Warrant may be
exercised, in whole or in part, by the Holder into shares of Common Stock, or in
the event the Exercise Date is after the consummation of the Major Transaction,
shares of publicly traded common stock (or their equivalent) of the Successor
Entity pursuant to Section 5(c). The parties hereto agree that in the event of
the Company’s early termination of any portion of the Warrant under this
Section 5(c), the Holder’s damages would be uncertain and difficult to estimate
because of the parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any premium due under this Section 5(c) is intended
by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty.

For purposes hereof:

“Cash-Out Major Transaction” means a Major Transaction in which the
consideration payable to holders of Common Stock in connection with the Major
Transaction consists solely of cash.

“Cashless Default Exercise” shall mean an exercise of this Warrant as a
“Cashless Default Exercise” in accordance with Section 3(c) and 11(b) hereof.

“Cashless Major Exercise” shall mean an exercise of this Warrant or portion
thereof as a “Cashless Major Exercise” in accordance with Section 3(b) and
5(c)(i) hereof.

“Eligible Market” means the over the counter Bulletin Board, the New York Stock
Exchange, Inc., the NYSE Arca, the NASDAQ Capital Market, the NASDAQ Global
Market, the NASDAQ Global Select Market or the NYSE Alternext U.S. or any
successor exchanges or markets thereof.

“Mixed Major Transaction” means a Major Transaction in which the consideration
payable to the stockholders of the Company consists partially of cash and
partially of securities of a Successor Entity. If the Successor Entity is a
Publicly Traded Successor Entity, the percentage of consideration represented by
securities of such Successor Entity shall be equal to the percentage that the
value of the aggregate anticipated number of shares of the Publicly Traded
Successor Entity to be issued to holders of Common Stock of the Company
represents in comparison to the aggregate value of all consideration, including
cash consideration, in such Mixed Major Transaction, as such values are set
forth in any definitive agreement for the Mixed Major Transaction that has been
executed at the time of the first public announcement of the Major Transaction
or, if no such value is determinable from such definitive agreement, based on
the closing market price for shares of the Publicly Traded Successor Entity on
its principal securities exchange on the Trading Day preceding the first public
announcement of the Mixed Major Transaction. If the Successor Entity is a
Private Successor Entity, the percentage of consideration represented by
securities of such Successor Entity shall be determined in good-faith by the
Company’s Board of Directors

“Parent Entity” of a Person means an entity that, directly or indirectly,
controls the applicable Person and whose common stock or equivalent equity
security is quoted or listed on an Eligible Market, or, if there is more than
one such Person or Parent Entity, the Person or Parent Entity with the largest
public market capitalization as of the date of consummation of a Major
Transaction.

“Person” means an individual, a limited liability company, a partnership, a
joint venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

“Private Successor Entity” means a Successor Entity that is not a Publicly
Traded Successor Entity.

“Publicly Traded Successor Entity” means a Successor Entity that is a publicly
traded corporation whose common stock is quoted on or listed for trading on an
Eligible Market (as defined above).

“Successor Entity” means any Person purchasing the Company’s assets or Common
Stock, or any successor entity resulting from such Major Transaction, or if the
Warrant is to be exercisable for shares of capital stock of its Parent Entity
(as defined above), its Parent Entity.

(d) Exercise Price Adjusted. As used in this Warrant, the term “Exercise Price”
shall mean the purchase price per share specified in Section 3(a) of this
Warrant, until the occurrence of an event stated in this Section 5 or otherwise
set forth in this Warrant, and thereafter shall mean said price as adjusted from
time to time in accordance with the provisions of said subsection. No adjustment
made pursuant to any provision of this Section 5 shall have the net effect of
increasing the Exercise Price in relation to the split adjusted and distribution
adjusted price of the Common Stock.

(e) Adjustments: Additional Shares, Securities or Assets. In the event that at
any time, as a result of an adjustment made pursuant to this Section 5 or
otherwise, Holder shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common Stock) then,
wherever appropriate, all references herein to shares of Common Stock shall be
deemed to refer to and include such shares and/or other securities or assets;
and thereafter the number of such shares and/or other securities or assets shall
be subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

(f) Notice of Adjustments. Whenever the Exercise Price is adjusted pursuant to
the terms of this Warrant, the Company shall promptly mail to the Holder a
notice (an “Exercise Price Adjustment Notice”) setting forth the Exercise Price
after such adjustment and setting forth a statement of the facts requiring such
adjustment. The Company shall, upon the written request at any time of the
Holder, furnish to such Holder a like Warrant setting forth (i) such adjustment
or readjustment, (ii) the Exercise Price at the time in effect and (iii) the
number of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon Exercise of the Warrant. For
purposes of clarification, whether or not the Company provides an Exercise Price
Adjustment Notice pursuant to this Section 5(f), upon the occurrence of any
event that leads to an adjustment of the Exercise Price, the Holder would be
entitled to receive a number of Exercise Shares based upon the new Exercise
Price, as adjusted, for exercises occurring on or after the date of such
adjustment, regardless of whether the Holder accurately refers to the adjusted
Exercise Price in the Exercise Form.

6. Fractional Interests.

No fractional shares or scrip representing fractional shares shall be issuable
upon the Exercise of this Warrant, but on Exercise of this Warrant, Holder may
purchase only a whole number of shares of Common Stock. If, on Exercise of this
Warrant, Holder would be entitled to a fractional share of Common Stock or a
right to acquire a fractional share of Common Stock, such fractional share shall
be disregarded and the number of shares of Common Stock issuable upon Exercise
shall be the next higher whole number of shares.

7. Reservation of Shares.

From and after the date hereof, the Company shall at all times reserve for
issuance such number of authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) as shall be sufficient
for the Exercise of this Warrant and payment of the Exercise Price. If at any
time the number of shares of Common Stock authorized and reserved for issuance
is below the number of shares sufficient for the Exercise of this Warrant (a
“Share Authorization Failure”) (based on the Exercise Price in effect from time
to time), the Company will promptly take all corporate action necessary to
authorize and reserve a sufficient number of shares, including, without
limitation, calling a special meeting of stockholders to authorize additional
shares to meet the Company’s obligations under this Section 7, in the case of an
insufficient number of authorized shares, and using commercially reasonable
efforts to obtain stockholder approval of an increase in such authorized number
of shares. The Company covenants and agrees that upon the Exercise of this
Warrant, all shares of Common Stock issuable upon such Exercise shall be duly
and validly issued, fully paid and nonassessable and not subject to preemptive
rights, rights of first refusal or similar rights of any Person.

8. Assignment. The Holder may sell, transfer, assign, pledge, or otherwise
dispose of this Warrant, in whole or in part, provided that Holder may not sell,
transfer, assign, pledge or otherwise dispose of any portion of this Warrant
with respect to the lesser of (x) one hundred thousand (100,000) Warrant Shares
or (y) all remaining Warrant Shares underlying this Warrant. Holder shall
deliver a written notice to Company, substantially in the form of the Assignment
attached hereto as Exhibit B, indicating the Person or Persons to whom the
Warrant shall be assigned and the respective number of warrants to be assigned
to each assignee. The Company shall effect the assignment within five
(5) business days (the “Transfer Delivery Period”), and shall deliver to the
assignee(s) designated by Holder a Warrant or Warrants of like tenor and terms
for the appropriate number of shares. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Holder. The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder.

9. Noncircumvention.

The Company hereby covenants and agrees that the Company will not, by amendment
of its certificate of incorporation, bylaws or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Warrant, and
will at all times in good faith carry out all the provisions of this Warrant and
take all action as may be reasonably required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (ii) shall
take all such actions as may be reasonably necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant.

10. Events of Failure; Definition of Black Scholes Value.

(a) Definition.

The occurrence of each of the following shall be considered to be an “Event of
Failure.”

(i) A Delivery Failure occurs, where a “Delivery Failure” shall be deemed to
have occurred if the Company fails to use its reasonable best efforts to deliver
Exercise Shares to the Holder within any applicable Delivery Period;

(ii) a Transfer Delivery Failure occurs, where a “Transfer Delivery Failure”
shall be deemed to have occurred if the Company fails to use its reasonable best
efforts to deliver a Warrant within any applicable Transfer Delivery Period; and

(b) Failure Payments; Black-Scholes Determination. The Company understands that
any Event of Failure (as defined above) could result in economic loss to the
Holder. In the event that any Event of Failure occurs, as compensation to the
Holder for such loss, the Company agrees to pay (as liquidated damages and not
as a penalty) to the Holder an amount payable, at the Company’s option, either
(i) in cash or (ii) in shares of Common Stock that are valued for these purposes
at the Volume Weighted Average Price on the date of such calculation (“Failure
Payments”), in each case equal to 18% per annum (or the maximum rate permitted
by applicable law, whichever is less) of the Black-Scholes value (as determined
below) of the remaining unexercised portion of this Warrant on the date of such
Event of Failure (as recalculated on the first business day of each month
thereafter for as long as Failure Payments shall continue to accrue), which
shall accrue daily from the date of such Event of Failure until the Event of
Failure is cured, accruing daily and compounded monthly, provided, however, the
Holder shall only receive up to such amount of shares of Common Stock in respect
of Failure Payments such that Holder and any other persons or entities whose
beneficial ownership of Common Stock would be aggregated with the Holder’s for
purposes of Section 13(d) of the Exchange Act (including shares held by any
“group” of which the Holder is a member, but excluding shares beneficially owned
by virtue of the ownership of securities or rights to acquire securities that
have limitations on the right to convert, exercise or purchase similar to the
limitation set forth herein) shall not collectively beneficially own greater
than 9.98% of the total number of shares of Common Stock of the Company then
issued and outstanding. For purposes of clarification, it is agreed and
understood that Failure Payments shall continue to accrue following any Event of
Default until the applicable Default Amount is paid in full and that shares of
Common Stock issued as Failure Payments will not be registered for issuance
under the Securities Act.

For purposes hereof, the “Black-Scholes” value of a Warrant shall be determined
by use of the Black Scholes Option Pricing Model using the criteria set forth on
Schedule 1 hereto.

(c) Payment of Accrued Failure Payments. The Failure Payment Shares representing
accrued Failure Payments for each Event of Failure shall be issued and delivered
on or before the fifth (5th) business day of each month following a month in
which Failure Payments accrued. Nothing herein shall limit the Holder’s right to
pursue actual damages (to the extent in excess of the Failure Payments) for the
Company’s Event of Failure, and the Holder shall have the right to pursue all
remedies available at law or in equity (including a decree of specific
performance and/or injunctive relief). Notwithstanding the above, if a
particular Event of Failure results in an Event of Default pursuant to
Section 11 hereof, then the Failure Payment, for that Event of Failure only,
shall be considered to have been satisfied upon payment to the Holder of an
amount equal to the greater of (i) the Failure Payment, or (ii) the Default
Amount, payable in accordance with Section 11.

(d) Maximum Interest Rate. Nothing contained herein or in any document referred
to herein or delivered in connection herewith shall be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest or
dividends required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Holder and thus refunded to the
Company.

 

11. Default.

(a) Events Of Default. Each of the following events shall be considered to be an
“Event of Default,” unless waived by the Holder:

(i) Failure To Deliver Common Stock. A Delivery Failure (as defined above)
occurs and remains uncured for a period of more than twenty (20) days after
written notice thereof by Holder to the Company; or at any time, the Company
announces or states in writing that it will not honor its obligations to issue
shares of Common Stock to the Holder upon Exercise by the Holder of the Exercise
rights of the Holder in accordance with the terms of this Warrant and

(ii) Corporate Existence; Major Transaction. (A) The Company has failed to place
the Major Transaction Warrant Early Termination Price or the Exercise Shares
issuable upon exercise of a Cashless Major Exercise, as the case may be, into
escrow or to instruct the escrow agent to release such amount or such shares, as
the case may be, to the Holder as required by Section 5(c)(iv), (B) the Company
has failed to enter into the agreements required by Section 5(c)(iv)(a) or
(C) with respect to a Major Transaction that is to be treated as an Assumption
under the terms hereof, the Company has failed to meet the Assumption
requirements of Section 5(c)(ii).

(b) Mandatory Early Termination.

(i) Mandatory Early Termination Amount; Cashless Default Exercise. If any Events
of Default shall occur then, unless waived by the Holder, upon the occurrence
and during the continuation of any Event of Default, at the option of the
Holder, such option exercisable through the delivery of written notice to the
Company by such Holder (the “Default Notice”), the Company shall have the right
to terminate the outstanding amount of this Warrant and pay to the Holder (a
“Mandatory Early Termination”), in full satisfaction of its obligations
hereunder by delivery of a notice to such effect to the Holder within two
(2) business days following receipt of the Default Notice, an amount payable in
cash (the “Mandatory Early Termination Amount” or the “Default Amount”) equal to
the greater of (i) the Black-Scholes value (as determined in accordance with
Section 10(b)) of the remaining unexercised portion of this Warrant on the date
of such Default Notice and (2) the Black-Scholes value (also as determined in
accordance with Section 10(b)) of the remaining unexercised portion of this
Warrant on the Trading Day immediately preceding the date that the Mandatory
Early Termination Amount is paid to the Holder. In the event the Company does
not exercise its right to consummate a Mandatory Early Termination, then the
Holder shall have the right to exercise this Warrant pursuant to a Cashless
Default Exercise in accordance with Section 3(c) above.

The Mandatory Early Termination Amount shall be payable within five (5) business
days following the date of the applicable Default Notice.

(ii) Liquidated Damages. The parties hereto acknowledge and agree that the sums
payable as Failure Payments or pursuant to a Mandatory Early Termination shall
be deemed to be liquidated damages and not penalties. The parties further
acknowledge that (i) the amount of loss or damages likely to be incurred by the
Holder is incapable or is difficult to precisely estimate, (ii) the amounts
specified bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred by the Holder, and
(iii) the parties are sophisticated business parties and have been represented
by sophisticated and able legal and financial counsel and negotiated this
Agreement at arm’s length.

The Default Amount, together with all other amounts payable hereunder, shall
immediately become due and payable, all without demand, presentment or notice,
all of which hereby are expressly waived, together with all costs, including,
without limitation, legal fees and expenses, of collection, and the Holder shall
be entitled to exercise all other rights and remedies available at law or in
equity.

(c) Posting Of Bond. In the event that any Event of Default occurs hereunder,
the Company may not raise as a legal defense (in any Lawsuit, as defined below,
or otherwise) or justification to such Event of Default any claim that such
Holder or any one associated or affiliated with such Holder has been engaged in
any violation of law, unless the Company has posted a surety bond (a “Surety
Bond”) for the benefit of such Holder in the amount of 130% of the aggregate
Surety Bond Value (as defined below) of all of the Holder’s Warrants (the “Bond
Amount”), which Surety Bond shall remain in effect until the completion of
litigation of the dispute and the proceeds of which shall be payable to such
Holder to the extent Holder obtains judgment.

For purposes hereof, a “Lawsuit” shall mean any lawsuit, arbitration or other
dispute resolution filed by either party herein pertaining to this Warrant.

“Surety Bond Value,” for the Warrants shall mean 130% of the of the
Black-Scholes value of the remaining unexercised portion of this Warrant on the
Trading Day immediately preceding the date that such bond goes into effect).

(d) Injunction And Posting Of Bond. In the event that the Event of Default
referred to in subsection (c) above pertains to the Company’s failure to deliver
unlegended shares of Common Stock to the Holder pursuant to a Warrant Exercise,
legend removal request, or otherwise, the Company may not refuse such unlegended
share delivery based on any claim that such Holder or any one associated or
affiliated with such Holder has been engaged in any violation of law, unless an
injunction from a court, on prior notice to Holder, restraining and or enjoining
Exercise of all or part of said Warrant shall have been sought and obtained by
the Company and the Company has posted a Surety Bond for the benefit of such
Holder in the amount of the Bond Amount, which Surety Bond shall remain in
effect until the completion of litigation of the dispute and the proceeds of
which shall be payable to such Holder to the extent Holder obtains judgment.

(e) Remedies, Other Obligations, Breaches And Injunctive Relief. The remedies
provided in this Warrant shall be cumulative and in addition to all other
remedies available under this Warrant, at law or in equity (including a decree
of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to pursue actual damages for any failure by
the Company to comply with the terms of this Warrant. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holder of this Warrant shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach.

12. Holder’s Early Terminations.

(a) Mechanics of Holder’s Early Terminations. In the event that the Company does
not deliver the applicable Major Transaction Warrant Early Termination Price or
Default Amount or the Exercise Shares in respect of a Cashless Major Exercise or
a Cashless Default Exercise, as the case may be, to the Holder within the time
period or as otherwise required pursuant to the terms hereof, at any time
thereafter the Holder shall have the option, upon notice to the Company, in lieu
of early termination, Cashless Major Exercise or Cashless Default Exercise, as
the case may be, to require the Company to promptly return to the Holder all or
any portion of this Warrant that was submitted for early termination or
exercise. Upon the Company’s receipt of such notice, (x) the applicable early
termination or exercise, as the case may be, shall be null and void with respect
to such applicable portion of this Warrant and (y) the Company shall immediately
return this Warrant, or issue a new Warrant to the Holder representing the
portion of this Warrant that was submitted for early termination or exercise.
The Holder’s delivery of a notice voiding an early termination or exercise and
exercise of its rights following such notice shall not affect the Company’s
obligations to make any payments of Failure Payments which have accrued prior to
the date of such notice with respect to the Warrant subject to such notice.

13. Benefits of this Warrant.

Nothing in this Warrant shall be construed to confer upon any person other than
the Company and Holder any legal or equitable right, remedy or claim under this
Warrant and this Warrant shall be for the sole and exclusive benefit of the
Company and Holder.

14. Governing Law.

All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and enforced
in accordance with the internal laws of the State of Delaware, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement (whether brought against a party
hereto or its respective affiliates, directors, officers, stockholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the State of Delaware. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
State of Delaware for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or is an
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law. The parties hereby waive
all rights to a trial by jury. If either party shall commence an action or
proceeding to enforce any provisions of this Agreement, then the prevailing
party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or proceeding.

15. Loss of Warrant.

Upon receipt by the Company of evidence of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Company, and upon surrender
and cancellation of this Warrant, if mutilated, the Company shall execute and
deliver a new Warrant of like tenor and date.

16. Notice or Demands.

Notices or demands pursuant to this Warrant to be given or made by Holder to or
on the Company shall be sufficiently given or made if sent by certified or
registered mail, return receipt requested, postage prepaid, and addressed, until
another address is designated in writing by the Company, to the address set
forth in Section 2(a) above. Notices or demands pursuant to this Warrant to be
given or made by the Company to or on Holder shall be sufficiently given or made
if sent by certified or registered mail, return receipt requested, postage
prepaid, and addressed, to the address of Holder set forth in the Company’s
records, until another address is designated in writing by Holder.

1

IN WITNESS WHEREOF, the undersigned has executed this Warrant as of the       
day of      , 2011.

CYTOKINECTICS, INCORPORATED

By:
Print Name:
Title:

2

EXHIBIT A

EXERCISE FORM FOR WARRANT
TO: CYTOKINETICS, INCORPORATED

CHECK THE APPLICABLE BOX:

       Cash Exercise or Cashless Exercise

The undersigned hereby irrevocably exercises the attached warrant (the
“Warrant”) with respect to        shares of Common Stock (the “Common Stock”) of
Cytokinetics, Incorporated, a Delaware corporation (the “Company”), and, if
pursuant to a Cashless Exercise, herewith makes payment of the Exercise Price
with respect to such shares in full, all in accordance with the conditions and
provisions of said Warrant.

       Cashless Major Exercise

The undersigned hereby irrevocably exercises the Warrant with respect to      %
of the Warrant currently outstanding pursuant to a Cashless Major Exercise in
accordance with the terms of the Warrant.

       Cashless Default Exercise

The undersigned hereby irrevocably exercises the Warrant pursuant to a Cashless
Default Exercise, in accordance with the terms of the Warrant.

1. Capitalized terms used but not otherwise defined in this Exercise Form shall
have the meaning ascribed thereto in the Warrant.

Dated:       

Signature

Print Name

Address

NOTICE

The signature to the foregoing Exercise Form must correspond to the name as
written upon the face of the attached Warrant in every particular, without
alteration or enlargement or any change whatsoever.

3

EXHIBIT B
ASSIGNMENT
(To be executed by the registered holder
desiring to transfer the Warrant)

FOR VALUE RECEIVED, the undersigned holder of the attached warrant (the
“Warrant”) hereby sells, assigns and transfers unto the person or persons below
named the right to purchase       shares of the Common Stock of Cytokinetics,
Incorporated, a Delaware corporation, evidenced by the attached Warrant and does
hereby irrevocably constitute and appoint        attorney to transfer the said
Warrant on the books of the Company, with full power of substitution in the
premises.

Dated:       

Signature

Fill in for assignment of Warrant:

Name

Address

Please print name and address of assignee
(including zip code number)

NOTICE

The signature to the foregoing Assignment must correspond to the name as written
upon the face of the attached Warrant in every particular, without alteration or
enlargement or any change whatsoever.

Schedule 1
Black-Scholes Value

              Calculation Under Section 5(c)(iii)   Calculation Under
Section 10(b) or 11(b) Remaining Term  
Number of calendar days from date of public announcement of
the Major Transaction until the last date on which the
Warrant may be exercised.
  Number of calendar days from date of the Event of Failure
until the last date on which the Warrant may be exercised.

Interest Rate  
A risk-free interest rate corresponding to the yield to
maturity, prevailing in the market place, on United States
Treasury Notes with a remaining term approximating, but in no
event less than, the Remaining Term.
  A risk-free interest rate corresponding to the yield to
maturity, prevailing in the market place, on United States
Treasury Notes with a remaining term approximating, but in no
event less than, the Remaining Term. Volatility  
If the first public announcement of the Major
Transaction is made at or prior to 4:00 p.m., New
York City time, the arithmetic mean of the historical
volatility for the 10, 30 and 50 Trading Day periods
ending on the date of such first public
announcement, obtained from the HVT or similar
function on Bloomberg.
If the first public announcement of the Major
Transaction is made after 4:00 p.m., New York City
time, the arithmetic mean of the historical volatility for the
10, 30 and 50 Trading Day periods ending on the
next succeeding Trading Day following the date of
such first public announcement, obtained from the
HVT or similar function on Bloomberg.
  If the first public announcement of the Major
Transaction is made at or prior to 4:00 p.m., New
York City time, the arithmetic mean of the historical
volatility for the 10, 30 and 50 Trading Day periods
ending on the date of such first public
announcement, obtained from the HVT or similar
function on Bloomberg.
If the first public announcement of the Major
Transaction is made after 4:00 p.m., New York City
time, the arithmetic mean of the historical volatility for the
10, 30 and 50 Trading Day periods ending on the
next succeeding Trading Day following the date of
such first public announcement, obtained from the
HVT or similar function on Bloomberg. Stock Price  
The greater of (1) the closing price of the Common Stock on
NASDAQ, or, if that is not the principal trading market for
the Common Stock, such principal market on which the Common
Stock is traded or listed (the “Closing Market Price”) on the
trading day immediately preceding the date on which a Major
Transaction is consummated, (2) the first Closing Market
Price following the first public announcement of a Major
Transaction, or (3) the Closing Market Price as of the date
immediately preceding the first public announcement of the
Major Transaction.
  The volume Weighted Average Price on the date of such
calculation.

Dividends  
Zero.
  Zero. Strike Price  
Exercise Price as defined in section 3(a).
  Exercise Price as defined in section 3(a).

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