exv4w1






Exhibit 4.1




FORM OF SERIES D WARRANT




NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES
INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER
(IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.




OXiGENE, Inc.




Series D Warrant To Purchase Common Stock



Series D Warrant No.: DE — [    ]

Date of Exchange: March 26, 2010 (“Exchange Date”)




     OXiGENE, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [                    ],
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined
below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any
Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the
“Warrant”), at any time or times on or after the Initial Adjustment Time (as defined below), but
not after 11:59 p.m., New York time, on the Expiration Date (as defined below), [     ]
(subject to adjustment as provided herein) fully paid and nonassessable shares of Common Stock (as
defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in
this Warrant shall have the meanings set forth in Section 16. This Warrant is one of the Warrants
to Purchase Common Stock (the “SPA Warrants”) issued pursuant to that certain Securities Purchase
Agreement, dated as of March 10, 2010 (the “Subscription Date”), by and among the Company and the
investors (the “Buyers”) referred to therein (as amended from time to time, the “Securities
Purchase Agreement”), as amended by those certain Amendment and Exchange Agreements, dated as of
March 25, 2010, each by and between the holder of Existing Warrants as of the Exchange Date and the
Company (the “Exchange Agreements”), and has been issued in exchange for the Existing Series D
Warrant (as defined in the Exchange Agreement) of the Holder, dated March 11, 2010 (the “Issuance
Date”).



 









 





1. EXERCISE OF WARRANT.




     (a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without
limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder
on any day on or after the Initial Adjustment Time, in whole or in part, by delivery (whether via
facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day
following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the
number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise Price”)
in cash or via wire transfer of immediately available funds if the Holder did not notify the
Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as
defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant
in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect
to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number
of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining
Warrant Shares shall have the same effect as cancellation of the original of this Warrant after
delivery of the Warrant Shares in accordance with the terms hereof. On or before the second
(2nd) Trading Day following the date on which the Company has received an Exercise
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of
such Exercise Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or
before the third (3rd) Trading Day following the date on which the Company has received
such Exercise Notice, provided that the Aggregate Exercise Price has been paid or notice of a
Cashless Exercise has been received, the Company shall (X) provided that the Transfer Agent is
participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit/ Withdrawal at Custodian system, or (Y) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the
Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or
designee, in each case, sent by reputable overnight courier to the address as specified in the
applicable Exercise Notice, a certificate, registered in the Company’s share register in the name
of the Holder or its designee (as indicated in the applicable Exercise Notice), for the number of
shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of
an Exercise Notice and the payment of the Aggregate Exercise Price (or notice of a Cashless
Exercise), 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 DTC account or the date of delivery of
the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted
in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares
represented by this Warrant submitted for exercise is greater than the number of Warrant Shares



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being acquired upon such exercise, then, at the request of the Holder, the Company shall as
soon as practicable and in no event later than three (3) Business Days after any exercise and at
its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of Warrant Shares with
respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued
upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all taxes which may
be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant. Notwithstanding any provision of this Warrant to the contrary, no more than the Maximum
Eligibility Number of Warrant Shares shall be exercisable hereunder.




     (b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.001, subject
to adjustment as provided herein.



     (c) Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any
reason or for no reason, to issue to the Holder within three (3) Trading Days after receipt of the
applicable Exercise Notice and payment of the applicable Aggregate Exercise Price (or receipt of a
notice of Cashless Exercise), a certificate for the number of shares of Common Stock to which the
Holder is entitled and register such shares of Common Stock on the Company’s share register or to
credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be), and if on or
after such third (3rd) Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of
Common Stock issuable upon such exercise that the Holder anticipated receiving from the Company,
then, in addition to all other remedies available to the Holder, the Company shall, within three
(3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to
the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the “Buy-In Price”), at which
point the Company’s obligation to deliver such certificate or credit the Holder’s balance account
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the Holder’s balance account with DTC for the
number of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise
hereunder (as the case may be) and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock times (B) the
Closing Sale Price of the Common Stock on the Trading Day immediately preceding the date of the
applicable Exercise Notice.



      (d) Cashless Exercise. Notwithstanding anything contained herein to the contrary (other
than Section 1(f) below), the Holder may, in its sole discretion, exercise this Warrant in whole or
in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company
upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such
exercise the “Net Number” of shares of Common Stock determined according to the following formula
(a “Cashless Exercise”):



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Net
Number = (A x B) - (A x C)




B





For purposes of the foregoing formula:




A= the total number of shares with respect to which this Warrant is then being
exercised.




B= as applicable: (i) the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day
that is not a Trading Day or (2) both executed and delivered pursuant to Section
1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal
securities laws) on such Trading Day, (ii) the Bid Price of the Common Stock as of
the time of the Holder’s execution of the applicable Exercise Notice if such
Exercise Notice is executed during “regular trading hours” on a Trading Day and is
delivered within two (2) hours thereafter pursuant to Section 1(a) hereof and (iii)
the Closing Sale Price of the Common Stock on the date of the applicable Exercise
Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice
is both executed and delivered pursuant to Section 1(a) hereof after the close of
“regular trading hours” on such Trading Day.




C= the Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.



     (e) Disputes. In the case of a dispute as to the determination of the Exercise Price or
the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms
hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not
disputed and resolve such dispute in accordance with Section 13.



     (f) Limitations on Exercises.




(i) Beneficial Ownership. Notwithstanding anything to the contrary contained in this
Warrant, this Warrant shall not be exercisable by the Holder hereof to the extent (but only
to the extent) that the Holder together with any of its affiliates would beneficially own in
excess of 4.99% (the “Maximum Percentage”) of the Common Stock after giving effect to such
exercise. To the extent the above limitation applies, the determination of whether this
Warrant shall be exercisable (vis-à-vis other convertible, exercisable or exchangeable
securities owned by the Holder or any of its affiliates) and of which such securities shall
be exercisable (as among all such securities owned by the Holder) shall, subject to such
Maximum Percentage limitation, be determined on the basis of the first submission to the
Company for conversion, exercise or exchange (as the case may be). No prior inability to
exercise this Warrant pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of
exercisability. For the purposes of this paragraph, beneficial ownership and all
determinations and calculations (including, without limitation, with respect to



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calculations of percentage ownership) shall be determined in accordance with Section 13(d)
of the 1934 Act (as defined in the Securities Purchase Agreement) and the rules and
regulations promulgated thereunder. The provisions of this paragraph shall be implemented in
a manner otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the
intended Maximum Percentage beneficial ownership limitation herein contained or to make
changes or supplements necessary or desirable to properly give effect to such Maximum
Percentage limitation. The limitations contained in this paragraph shall apply to a
successor Holder of this Warrant. The holders of Common Stock shall be third party
beneficiaries of this paragraph and the Company may not waive this paragraph without the
consent of holders of a majority of its Common Stock. For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one (1) Business Day confirm
orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable
securities into Common Stock, including, without limitation, pursuant to this Warrant or
securities issued pursuant to the Securities Purchase Agreement. By written notice to the
Company, any Holder may increase or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% specified in such notice; provided that (i) any such increase will
not be effective until the 61st day after such notice is delivered to the Company, and (ii)
any such increase or decrease will apply only to the Holder sending such notice and not to
any other holder of SPA Warrants.




(ii) Principal Market Regulation. The Company shall not issue any shares of Common
Stock upon exercise of this Warrant if the issuance of such shares of Common Stock (together
with any Common Shares issued pursuant to the Securities Purchase Agreement and any shares
of Common Stock previously issued pursuant to any SPA Warrant) would exceed the aggregate
number of shares of Common Stock which the Company may issue upon exercise of the SPA
Warrants without breaching the Company’s obligations under the rules or regulations of the
Principal Market (the number of shares which may be issued without violating such rules and
regulations, the “Exchange Cap”), except that such limitation shall not apply in the event
that the Company (A) obtains the approval of its stockholders as required by the applicable
rules of the Principal Market for issuances of shares of Common Stock in excess of such
amount or (B) obtains a written opinion from outside counsel to the Company that such
approval is not required, which opinion shall be reasonably satisfactory to the Holder.
Until such approval or such written opinion is obtained, no Buyer shall be issued in the
aggregate, upon exercise of any SPA Warrants, shares of Common Stock in an amount greater
than the product of (i) the Exchange Cap multiplied by (ii) the quotient of (1) the Purchase
Price paid by such Buyer pursuant to the Securities Purchase Agreement divided by (2) the
Purchase Price paid by all Buyers pursuant to the Securities Purchase Agreement (with
respect to each Buyer, the “Exchange Cap Allocation”). In the event that any Buyer shall
sell or otherwise transfer any of such Buyer’s SPA Warrants, the transferee shall be
allocated a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such
portion of such SPA Warrants so transferred, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange Cap Allocation so
allocated to such transferee. Upon exercise in full of a holder’s SPA Warrants, the excess
of such



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holder’s Exchange Cap Allocation over the number of shares of Common Stock actually issued
to such holder upon such holder’s exercise in full of such SPA Warrants shall be allocated
to the respective Exchange Cap Allocations of the remaining holders of SPA Warrants on a pro
rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held
by each such holder.



     (g) Insufficient Authorized Shares. The Company shall at all times keep reserved for
issuance under this Warrant a number of shares of Common Stock as shall be necessary to satisfy the
Company’s obligation to issue shares of Common Stock hereunder (without regard to any limitation
otherwise contained herein with respect to the number of shares of Common Stock that may be
acquirable upon exercise of this Warrant). If, notwithstanding the foregoing, and not in limitation
thereof, at any time while any of the SPA Warrants remain outstanding the Company does not have a
sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of the SPA Warrants at least a number of shares of Common Stock
equal to the number of shares of Common Stock as shall from time to time be necessary to effect the
exercise of all of the SPA Warrants then outstanding (the “Required Reserve Amount”) (an
“Authorized Share Failure”), then the Company shall promptly take all action necessary to increase
the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to
reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the
generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of
an increase in the number of authorized shares of Common Stock. In connection with such meeting,
the Company shall provide each stockholder with a proxy statement and shall use its reasonable best
efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock
and to cause its board of directors to recommend to the stockholders that they approve such
proposal.


2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price
and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 2.




     (a)
Stock Dividends and Splits. Without limiting any provision of Section 4, if the
Company, at any time on or after the date of the Securities Purchase Agreement, (i) pays a stock
dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes
of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by
combination, reverse stock split or otherwise) one or more classes of its then outstanding shares
of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. If any event



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requiring an adjustment under this paragraph occurs during the period that an Exercise Price
is used in any calculation hereunder, then in such calculation such Exercise Price shall be
adjusted appropriately to reflect such event.




      (b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to paragraph (a) of this Section 2, the number of Warrant Shares that may be purchased
upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment
(without regard to any limitations on exercise contained herein). At each Adjustment Time (without
giving effect to any Exercise Notices delivered to the Company on or prior to such Adjustment
Time), the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased as necessary, so that as of such Adjustment Time the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall equal the Adjustment Share Amount.



      (c) Calculations. All calculations under this Section 2 shall be made by rounding to the
nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issue or sale
of Common Stock.


3. RIGHTS UPON DISTRIBUTION OF ASSETS. Except with respect to such dividends or other
distributions in which an adjustment has been made to the Exercise Price pursuant to Section 2(a)
above, if the Company shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Warrant, then, in each such case, following the exercise of this Warrant, the
Holder shall be entitled to participate in such Distribution to the same extent that the Holder
would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon a complete exercise of this Warrant (without regard to any limitations on exercise
hereof, including without limitation, the Maximum Percentage) immediately before the date on which
a record is taken for such Distribution, or, if no such record is taken, the date as of which the
record holders of shares of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that the Holder’s right to participate in any such
Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall
not be entitled to participate in such Distribution to such extent (or the beneficial ownership of
any such shares of Common Stock as a result of such Distribution to such extent) and such
Distribution to such extent shall be held in abeyance for the benefit of the Holder until such
time, if ever, as its right thereto would not result in the Holder exceeding the Maximum
Percentage).



4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.




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     (a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at
any time the Company grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record holders of any class
of shares of Common Stock (the “Purchase Rights”), then following the exercise of this Warrant,
the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of
shares of Common Stock acquirable upon a complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock
are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to
the extent that the Holder’s right to participate in any such Purchase Right would result in the
Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a
result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held
in abeyance for the Holder until such time, if ever, as its right thereto would not result in the
Holder exceeding the Maximum Percentage).



     (b) Fundamental Transactions. The Company shall not enter into or be party to a
Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of
the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written
agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder
prior to such Fundamental Transaction, ensuring that such agreements shall effect the delivery to
the Holder in exchange for this Warrant of a security of the Successor Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant, including, without
limitation, which is exercisable for a corresponding number of shares of capital stock equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without
regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction,
and with an exercise price which applies the exercise price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such
Fundamental Transaction and the value of such shares of capital stock, such adjustments to the
number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction). Upon the consummation of each Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents 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 and the other
Transaction Documents with the same effect as if such Successor Entity had been named as the
Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall
deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of
Common Stock (or other securities, cash, assets or other property (except such items still issuable
under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon
the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of
publicly traded common stock (or its



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equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have
been entitled to receive upon the happening of the applicable Fundamental Transaction had this
Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard
to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions
of this Warrant. Notwithstanding the foregoing, the Holder may elect, at its sole option, by
delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to and not in substitution for any
other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which
holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make
appropriate provision to insure that the Holder will thereafter have the right to receive upon an
exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property (except such items still issuable under Sections 3 and
4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or
any other property whatsoever (including warrants or other purchase or subscription rights) which
the Holder would have been entitled to receive upon the happening of the applicable Fundamental
Transaction had this Warrant been exercised immediately prior to the applicable Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant). Provision made
pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.



     (c) Application. The provisions of this Section 4 shall apply similarly and equally to
successive Fundamental Transactions and Corporate Events and shall be applied as if this Warrant
(and any such subsequent warrants) were fully exercisable and without regard to any limitations on
the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit
of the Maximum Percentage, applied however with respect to shares of capital stock registered under
the 1934 Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).


5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by
amendment of its Articles of Incorporation (as defined in the Securities Purchase Agreement),
Bylaws (as defined in the Securities Purchase Agreement) 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 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, (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, and (iii) shall, so long as any of the SPA Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of effecting the exercise of the SPA
Warrants, the maximum number of shares of Common Stock as shall from






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time to time be necessary to effect the exercise of the SPA Warrants then outstanding (without
regard to any limitations on exercise).



6. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided
herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to
vote or receive dividends or be deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its
capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any reorganization, issue
of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive
notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance
to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of
this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with
copies of the same notices and other information given to the stockholders of the Company
generally, contemporaneously with the giving thereof to the stockholders.



7. REISSUANCE OF WARRANTS.




     (a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender
this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order
of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant Shares being transferred by the
Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right
to purchase the number of Warrant Shares not being transferred.



     (b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to
which a written certification and the indemnification contemplated below shall suffice as such
evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a
new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares
then underlying this Warrant.



     (c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender
hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in
accordance with Section 7(d)) representing in the aggregate the right to purchase the number of
Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to
purchase such portion of such Warrant Shares as is designated by the Holder at the time of such
surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.



10









 





     (d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant
pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this
Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued
pursuant to Sections 7(a) or 7(c), the Warrant Shares designated by the Holder which, when added to
the number of shares of Common Stock underlying the other new Warrants issued in connection with
such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date and exchange date, as indicated on the face of such new Warrant which
is the same as the Issuance Date and the Exchange Date, respectively, and (iv) shall have the same
rights and conditions as this Warrant.


8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with Section 9(f) of the Securities
Purchase Agreement. The Company shall provide the Holder with prompt written notice of all actions
taken pursuant to this Warrant, including in reasonable detail a description of such action and the
reason therefor. Without limiting the generality of the foregoing, the Company will give written
notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the number of
Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such
adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its
books or takes a record (A) with respect to any dividend or distribution upon the shares of Common
Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or
rights to purchase stock, warrants, securities or other property to holders of shares of Common
Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the
public prior to or in conjunction with such notice being provided to the Holder and (iii) at least
ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the
SEC (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It
is expressly understood and agreed that the time of execution specified by the Holder in each
Exercise Notice shall be definitive and may not be disputed or challenged by the Company.



9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this
Warrant (other than Section 1(f)(i)) may be amended and the Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it, only if the Company
has obtained the written consent of the Holder. No consideration shall be offered or paid to the
Holder to amend or consent to a waiver or modification of any provision of this Warrant unless the
same consideration is also offered to all of the holders of the other SPA Warrants. No waiver
shall be effective unless it is in writing and signed by an authorized representative of the
waiving party.



10. SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that
would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of
such provision shall not affect the validity of the remaining provisions of this Warrant so long






11









 







as this Warrant as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or
unenforceability of the provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical realization of the benefits
that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid
provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).



11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in
accordance with, and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York.



12. CONSTRUCTION; HEADINGS. The headings of this Warrant are for convenience of reference
and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this
Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such
terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other
Transaction Documents unless otherwise consented to in writing by the Holder.



13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise
Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market value or the
arithmetic calculation of the Warrant Shares (as the case may be), the Company or the Holder (as
the case may be) shall submit the disputed determinations or arithmetic calculations (as the case
may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice
giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice
gave rise to such dispute, at any time after the Holder learned of the circumstances giving rise to
such dispute (including, without limitation, as to whether any issuance or sale or deemed issuance
or sale was an issuance or sale or deemed issuance or sale of Excluded Securities). If the Holder
and the Company are unable to agree upon such determination or calculation (as the case may be) of
the Exercise Price, the Closing Bid Price, the Closing Sale Price, the Bid Price or fair market
value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such
disputed determination or arithmetic calculation being submitted to the Company or the Holder (as
the case may be), then the Company shall, within two (2) Business Days submit via facsimile (a) the
disputed determination of the Exercise Price, the Closing Bid Price, the Closing Sale Price, the
Bid Price or fair market value (as the case may be) to an independent, reputable investment bank
selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of
the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its
expense the investment bank or the accountant (as the case may be) to perform the determinations or
calculations (as the case may be) and notify the Company and the Holder of the results no later
than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the
case may be) shall be binding upon all parties absent demonstrable error.







12









 







14. REMEDIES, CHARACTERIZATION, 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 and the other Transaction Documents, 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 covenants to the Holder that there shall be no characterization
concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, exercises and the like (and the computation thereof) shall be
the amounts to be received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). 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,
without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is
requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and
conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The
issuance of shares and certificates for shares as contemplated hereby upon the exercise of this
Warrant shall be made without charge to the Holder or such shares for any issuance tax or other
costs in respect thereof, provided that the Company shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance and delivery of any certificate in a
name other than the Holder or its agent on its behalf.



15. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without
the consent of the Company, except as may otherwise be required by Section 2(g) of the Securities
Purchase Agreement.



16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the
following meanings:




     (a) “Additional Adjustment Share Amount” equals the greater of (I) zero and (II) if as of the
Initial Adjustment Time the Initial Adjustment Share Amount was greater than the Eligible Share
Amount, the difference of (i) the quotient of (x) the Purchase Price of the initial Holder divided
by (y) the Market Price as of the Additional Adjustment Time, less (ii) the number of Common Shares
previously issued to the initial Holder.



     (b) “Additional Adjustment Time” means the close of business on the Market Price Measuring
Period Termination Date with respect to the Market Price Measuring Period commencing on the
Additional Market Price Measuring Period Commencement Date.



     (c) “Additional Market Price Measuring Period Commencement Date” means the later of (i) the
Stockholder Approval Date and (ii) such date whereafter all Registrable Securities (assuming the
cashless exercise of any SPA Warrants) may be sold under Rule 144 (as defined in the Securities
Purchase Agreement).



13









 





     (d) “Adjustment Share Amount” equals the greater of (I) the Initial Adjustment Share Amount
and the Additional Adjustment Share Amount.



     (e) “Adjustment Time” means each of the Initial Adjustment Time and the Additional Adjustment
Time.



     (f) “Adjustment” shall have the meaning as set forth in the definition of “Maximum Eligibility
Number” below.



     (g) “Bid Price” means, for any security as of the particular time of determination, the bid
price for such security on the Principal Market as reported by Bloomberg as of such time of
determination, or, if the Principal Market is not the principal securities exchange or trading
market for such security, the bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg as of such time of
determination, or if the foregoing does not apply, the bid price of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as
of such time of determination, the average of the bid prices of any market makers for such security
as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.)
as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as
of such time of determination shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved in accordance with the procedures in Section 13.
All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.



     (h) “Black Scholes Consideration Value” means the value of the applicable Option or
Convertible Security (as the case may be) based on the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg determined as of the close of business on the Trading Day
immediately following the public announcement of the execution of definitive documents with respect
to the issuance of such Option or Convertible Security (as the case may be) and reflecting (i) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining
term of such Option or Convertible Security (as the case may be) as of the date of issuance of such
Option or Convertible Security (as the case may be), (ii) an expected volatility equal to the 100
day volatility obtained from the HVT function on Bloomberg (using 360 as the input for the
annualization factor and the Rogers-Satchell volatility estimator model), which volatility shall in
no event be more than 150% or less than 80%, and (iii) the underlying price per share used in such
calculation shall be the highest Closing Bid Price for any Trading Day during the ten (10) Trading
Day period ending on and including the Trading Day immediately preceding the public announcement of
the execution of definitive documents with respect to the issuance of such Option or Convertible
Security (as the case may be).



     (i) “Black Scholes Value” means the value of this Warrant based on the Black Scholes Option
Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation
of the applicable Fundamental Transaction for pricing purposes and reflecting (i) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to



14









 




the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section
4(c), (ii) an expected volatility equal to the 100 day volatility obtained from the HVT function on
Bloomberg as of the Trading Day immediately following the public announcement of the applicable
Fundamental Transaction (using 360 as the input for the annualization factor and the
Rogers-Satchell volatility estimator model), which volatility shall in no event be more than 150%
or less than 80%, and, if applicable, (iii) the underlying price per share used in such calculation
shall be the sum of the price per share being offered in cash, if any, plus the value of any
non-cash consideration, if any, being offered in the applicable Fundamental Transaction.




     (j) “Bloomberg” means Bloomberg, L.P.



     (k) “Business Day” means any day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to remain closed.



     (l) “Change of Control” means any Fundamental Transaction other than (A) any merger of the
Company or any of its direct or indirect wholly-owned Subsidiaries with or into any of the
foregoing Persons, (B) any reorganization, recapitalization or reclassification of the Common
Stock, in which holders of the Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or indirectly, the voting power
of the surviving entity or entities necessary to elect a majority of the members of the board of
directors (or their equivalent if other than a corporation) of such entity or entities, (C)
pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company or (D) a merger in connection with a bona fide acquisition by the
Company of any Person in which (x) the gross consideration paid, directly or indirectly, by the
Company (as calculated in accordance with Section 2 above, but treating any assumption of
indebtedness, directly or indirectly, by the Company as an increase in the consideration paid on a
dollar-for-dollar basis) in such acquisition is not greater than 20% of the Company’s market
capitalization as calculated on each of (1) the date of the public announcement of such merger and
(2) the date of the consummation of such merger and (y) such merger does not contemplate any change
to the identity of the board of directors of the Company or any of the members of the senior
management of the Company, including, without limitation, the chief executive officer and the chief
financial officer of the Company.



     (m) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the
last closing bid price and last closing trade price, respectively, for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing trade price (as
the case may be) then the last bid price or last trade price, respectively, of such security prior
to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the
principal securities exchange or trading market for such security, the last closing bid price or
last trade price, respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not
apply, the last closing bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg,



15









 




the average of the bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation
Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing
Sale Price (as the case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to
agree upon the fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 13. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during
such period.




     (n) “Common Shares” shall have the meaning as set forth in the Securities Purchase Agreement.



     (o) “Common Stock” means (i) the Company’s shares of common stock, $0.01 par value per share,
and (ii) any capital stock into which such common stock shall have been changed or any share
capital resulting from a reclassification of such common stock.



     (p) “Convertible Securities” means any stock or other security (other than Options) that is at
any time and under any circumstances, directly or indirectly, convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common
Stock.



     (q) “Effective Date” means such date on which the applicable Registration Statement (as
defined in the Registration Rights Agreement) filed pursuant to the Registration Rights Agreement
shall be declared effective by the SEC and the prospectus contained therein shall be available for
the resale by the Buyers of all of the Registrable Securities.



     (r) “Eligible Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global
Select Market, the Nasdaq Capital Market or the Principal Market.



     (s) “Eligible Share Amount” means, as of the initial Effective Date, the difference of (x) the
number of shares of Common Stock available for resale by the Buyers pursuant to such Registration
Statement, less (y) the number of Common Shares issued to the Buyers on the Closing Date.



     (t) “Expiration Date” means the date that is the later of (x) the sixteen (16) month
anniversary of the Issuance Date and (y) ninety (90) days after the Additional Adjustment Time or, if such date falls on a day other than a Business Day or on which trading does not take
place on the Principal Market (a “Holiday”), the next date that is not a Holiday.



     (u) “Fundamental Transaction” means that (i) the Company or any of its Subsidiaries shall,
directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into
(whether or not the Company or any of its Subsidiaries is the surviving corporation) any other
Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or
substantially all of its respective properties or assets to any other Person, or (3) allow any
other Person to make a purchase, tender or exchange offer that is accepted by the holders of more
than 50% of the outstanding shares of Voting Stock of the Company (not



16









 




including any shares of Voting Stock of the Company held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such purchase, tender or
exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme
of arrangement) with any other Person whereby such other Person acquires more than 50% of the
outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the
Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business
combination), or (5) reorganize, recapitalize or reclassify the Common Stock, or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act and
the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary
voting power represented by issued and outstanding Voting Stock of the Company.




     (v) “Initial Adjustment Share Amount” equals the greater of (I) zero and (II) the difference
of (i) the quotient of (x) the Purchase Price of the initial Holder divided by (y) the Market Price
as of the Initial Adjustment Time, less (ii) the number of Common Shares previously issued to the
initial Holder.



     (w) “Initial Adjustment Time” means the close of business on the Market Price Measuring Period
Termination Date with respect to the Market Price Measuring Period commencing on the Initial Market
Price Measuring Period Commencement Date.



     (x) “Initial Market Price Measuring Period Commencement Date” means the later of (i) the
Stockholder Approval Date and (ii) such date on which the initial Registration Statement (as
defined in the Registration Rights Agreement) filed pursuant to the Registration Rights Agreement
shall be declared effective by the SEC and the prospectus contained therein shall be available for
the resale by the Buyers of Registrable Securities.



     (y) “Market Price Measuring Period Commencement Date” means each of (x) Initial Market Price
Measuring Period Commencement Date and (y) Additional Market Price Measuring Period Commencement
Date .



     (z) “Market Price Measuring Period Termination Date” means the last Trading Day in the
applicable Market Price Measuring Period in which the applicable Adjustment Time occurs.



     (aa) “Market Price Measuring Period” means the thirty (30) Trading Days period commencing on
the Market Price Measuring Period Commencement Date or, if requested by the Holder in a written
notice to the Company, such lesser period (an “Alternate Market Price Measuring Period”) of Trading
Days commencing on the Market Price Measuring Period Commencement Date, which Alternate Market
Price Measuring Period shall not be less than seven (7) Trading Days.



     (bb) “Market Price” means the quotient of (x) the sum of the seven (7) lowest Closing Bid
Prices of the Common Stock for any Trading Day during the Market Price Measuring



17









 




Period, divided by (II) seven (7). All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination, reclassification or similar transaction during
such Market Price Measuring Period.




     (cc) “Maximum Eligibility Number” means initially zero and shall be increased (such increase,
an “Adjustment”) upon each Adjustment Time to such number of shares of Common Stock equal to the
Adjustment Share Amount.



     (dd) “Options” means any rights, warrants or options to subscribe for or purchase shares of
Common Stock or Convertible Securities.



     (ee) “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 the
Fundamental Transaction.



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



     (gg) “Principal Market” means the Nasdaq Global Market.



     (hh) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity)
formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected
by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered
into.



     (ii) “Trading Day” means any day on which the Common Stock is traded on the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the
principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to
trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is
suspended from trading during the final hour of trading on such exchange or market (or if such
exchange or market does not designate in advance the closing time of trading on such exchange or
market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.



     (jj) “Voting Stock” of a Person means capital stock of such Person of the class or classes
pursuant to which the holders thereof have the general voting power to elect, or the general power
to appoint, at least a majority of the board of directors, managers or trustees of such Person
(irrespective of whether or not at the time capital stock of any other class or classes shall have
or might have voting power by reason of the happening of any contingency).



     (kk) “VWAP” means, for any security as of any date, the dollar volume-weighted average price
for such security on the Principal Market (or, if the Principal Market is not the principal trading
market for such security, then on the principal securities exchange or securities market on which
such security is then traded) during the period beginning at 9:30:01 a.m., New



18









 




York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its
“Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average
price of such security in the over-the-counter market on the electronic bulletin board for such
security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m.,
New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported
for such security by Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If VWAP cannot be
calculated for such security on such date on any of the foregoing bases, the VWAP of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder.
If the Company and the Holder are unable to agree upon the fair market value of such security, then
such dispute shall be resolved in accordance with the procedures in Section 13. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during such period.




[signature page follows]






19









 








     IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Exchange Date set out above.



	 	 	 	 	 
	 	OXiGENE, Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 











 





EXHIBIT A




EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK




OXIGENE, INC.




     The undersigned holder hereby exercises the right to purchase ____________ of the shares
of Common Stock (“Warrant Shares”) of OXiGENE, Inc., a Delaware corporation (the “Company”),
evidenced by Series D Warrant No. ________ (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.



     1. Form of Exercise Price. The Holder intends that payment of the Exercise Price
shall be made as:




	 	_________ 	 	 a “Cash Exercise” with respect to __________________

Warrant
Shares; and/or
	 
	 	_________ 	 	a “Cashless Exercise” with respect to _______________

Warrant Shares.





     In the event that the Holder has elected a Cashless Exercise with respect to some or all of
the Warrant Shares to be issued pursuant hereto, the Holder hereby represents and warrants that (i)
this Exercise Notice was executed by the Holder at _________ [a.m.][p.m.] on the date set forth
below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice
was $_________.



     2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise
with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder shall
pay the Aggregate Exercise Price in the sum of $_____________________
to the Company in accordance
with the terms of the Warrant.



     3. Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee
or agent as specified below, _____________ Warrant Shares in accordance with the terms of the Warrant.
Delivery shall be made to Holder, or for its benefit, to the following address:



 





 





 







 





Date: __________________ ___, _____




	 	 	 	 	 
	 	 	 
	 	 	 
	Name of Registered Holder
 	 	 













 






	 	 	 	 	 



	 	 	 	 	 
	 	 	 
	By:  	
 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 













 






	 	 	 	 	 



ACKNOWLEDGMENT





     The Company hereby acknowledges this Exercise Notice and hereby directs
____________ to
issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent
Instructions dated March ___, 2010, from the Company and acknowledged and agreed to by
_______________.



	 	 	 	 	 
	 	OXiGENE, Inc.

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title: